Simon Chester is a member of the KNOWlaw Group of the Toronto law firm of McMillan Binch. This article was prepared with the assistance of david kent, bruce mcwilliam and brian hilbers.

Copyright law is the war zone where the conflicts between traditional protections for creativity run headlong into the forces of technological advance and globalization. In Canada, a long-running series of reforms has tried to bring our old laws up to date. The last six months have seen developments on both sides of the u.s. border which show how the conflict is playing out, and how copyright law is adapting.

Blame it on Rio

According to Oasis’ record boss, Alan McGee, the music industry is facing a global recession. Music sales are falling off, and global consolidation in the industry has meant that conglomerates have cut hundreds of small bands from company lists.

The turmoil is also being fed by a concern that advancing digital technologies and the Internet may develop into a way for bands to reach their audience directly, without the middlemen of the recording industry. For bands like hard-rappers Beastie Boys and Chuck d, the prospects of direct marketing have been liberating.

The fears were theoretical (given the tinny quality of much Web music) until a Silicon Valley multimedia company released a new format for compressing music last year. The so-called MP3 (MPEG Layer 3) broke onto the news pages when Diamond Multimedia released a portable music player, Rio PMP300, which supported the MP3 format. cd-quality music could be downloaded from the Web, though it would take hours to download as much as a cd.

So threatened was the industry that the Recording Industry of America sued to stop its release. riaa said that the Rio was a recording device and so was subject to a royalty payment under the Audio Home Recording Act. Diamond denied the Rio could record and said it was simply a playback device.

riaa failed in a bid in November to get the Rio off the market until the trial took place.

Meanwhile, technology marches on at a pace unknown to the law. Hackers in England and at Stanford succeeded in writing code so the Rio could record, thus torching Diamond’s defence.

And technology may devise a solution to the whole problem. One company is now pushing a digital signature and watermark for music, so listeners will be able to tell if it has been pirated. riaa and its international counterpart have formed a Secure Digital Music Initiative to try and protect copyrighted music in all delivery channels, in all digital formats, present and future. The law, meanwhile, straggles behind.

Mickey Mouse Law

In late October, the u.s. Congress passed the Sonny Bono Copyright Term Extension Act. Despite its title the bill does not make immortal the collected works of Sonny and Cher. What it does is show how smoothly Hollywood can muscle lawmakers.

The tale begins back in 1929 when a young cartoonist sketched a figure he called Mortimer Mouse. The doodler was Disney, the mouse became Mickey and the rest is history.

Disney realized that in 2004, u.s. law was scheduled to let the Mouse copyright lapse into the public domain. Similar fears struck those who controlled Bugs Bunny and the song library of George Gershwin. The actual creators had been dead for years, but millions of royalties came to their families and estates.

In a display of power lobbying, the entertainment industry filled the campaign chests of the Republican party and convinced Congress that the u.s. needed to extend copyright protection for an additional 20 years. The competing interests respectively argued that creation deserves a fair reward, and on the other side that new creations often grow in the fertile soil of public domain material.

Disney itself has taken The Hunchback of Notre Dame, Little Mermaid, Pocahontas and Mulan from the public domain. Despite a vigorous counter-campaign with the New York Times and Washington Post publishing editorials against extension, Disney won and Sonny Bono was remembered in a statute. Creative works would be copyrighted for the life of the author plus 70 years. In doing so, America was simply playing catch-up with the European Union, which went to similar terms back in 1993.

Canada is now the odd one out. Here the term of copyright protection is still 50 years after the death of the creator. Expect pressure to extend Canadian law soon.

The new millennium – surfing USA

October was a busy month. Congress also passed the Digital Millennium Copyright Act. Among the Act’s most notable features is the creation of a ‘safe harbor’ from copyright infringement for online service providers.

Before the dmca, online service providers could in theory be liable for copyright infringement if some third party posted infringing materials on their site, even if the provider did not actually know that the material was infringing.

Under the dmca, the definition of a service provider is very broad. However, if it follows the Act’s detailed rules, it can avoid liability for infringing material. The specific rules depend on whether the service provider merely transmits material to its customers, caches it, provides search results or other links to sites, or stores information provided by users (for example, Web pages or Usenet postings).

The compliance ground rules include the following:

* the service provider must not provide or select material to be transmitted or stored;

* copies of material are kept for no longer than necessary;

* infringing materials are removed or access to them is disabled as soon the provider is made aware of the infringement;

* the provider does not know and is not aware of information showing that the material is infringing;

* the provider does not receive a financial benefit directly attributable to the infringing activity;

* the provider has designated an agent with the u.s. Copyright Office to receive notifications;

* the provider develops and posts a notice regarding termination of services for repeat offenders;

* the service provider accommodates industry standards used to protect copyright.

Besides providing protection for service providers, the dmca also contains various other provisions, including elimination in certain cases of copyright infringement liability for persons who make copies of computer programs while maintaining and repairing computer systems.

Blank tape levy

In 1997, the federal government amended the Copyright Act to introduce a levy on blank audio recording media – the so-called ‘blank tape levy.’ Ottawa designed the levy to respond to illegal private copying of sound recordings, e.g. from radio broadcasts or from tapes or cds. The new regime imposes a levy on certain blank media, on the implied assumption that they are used for illegal copying, in return for declaring that ‘home taping’ is no longer illegal.

The levy will be paid:

* by everyone who manufactures in Canada or imports into Canada blank audio recording media ‘for the purpose of trade’;

* to a coalition representing the interests of the authors, publishers, producers and performers of musical works;

* for ‘audio recording media’ of any kind (for example, cds and analog or digital tapes) on which sound recordings may be reproduced and that are of a kind ordinarily used by individual consumers for that purpose but on which no sounds have ever been recorded (namely recordable but blank and unused);

* in an amount set by the Copyright Board, an independent federal tribunal.

The regime became effective Jan. 1. However, the Copyright Board has not yet held a hearing to determine what the size and structure of the levy should be and is unlikely to set the levy before late 1999.

This delay has caused a serious problem for the blank media importers and manufacturers. If the levy is effective Jan. 1, but not determined until (for example) September, it will be difficult for them to either implement appropriate price increases now or recoup any retroactive levies later. As a result, the potential recipients have recently stated that they would forego any retroactive royalties for 1999.

Although only manufacturers and importers for the purpose of trade (rather than for their own use) must pay the levy, others stand to be indirectly affected. Some commercial consumers of blank media who use those media for their own (legal) purposes (e.g. television and radio stations) may have to pay price increases designed to compensate for previously illegal copying by others. And others are concerned that this levy will lead to similar levies on other storage devices such as hard drives and computer memory.

Permission and

forgiveness

And finally from a story in The Globe and Mail, a screw-up at the recently launched National Post shows how important it is to check on copyright releases and permissions.

In its first weekend issue the Post did a full-page spread featuring poems from Michael Ondaatje’s new book, Handwriting. Problem was – no one asked Ondaatje whether he agreed. As it happens, he minded – because of earlier quarrels with the Post’s editor and its proprietor – a major embarrassment for the new national paper. Creators should take nothing in copyright for granted.