Digital Copyright Reform in Canada
Copyright and the Public Interest
One undercurrent that runs through the debates about copyright reform is the question of balance and the public interest: what is the purpose of copyright, and whose interests does it serve? Is it primarily a mechanism to protect the interests of authors and creators, or is it also intended to maintain and replenish a rich cultural public domain and to encourage new forms of expression? This section briefly examines the rationale behind copyright law and summarizes recent Canadian jurisprudence on copyright and the notion of "public interest." As one can see, the influence of the public interest has taken on a stronger presence in this line of cases.
Rationale for Copyright
Although there are a number of theoretical rationales for the existence of copyright (as well as other areas of IP), two general schools of thought have emerged. One believes that copyright exists to protect "natural rights" of authors stemming from creation of a particular work; the other takes on a more utilitarian or economic view of copyright, where limited protections of works are granted in order to provide incentive to creation and facilitate greater dissemination of useful and creative works throughout society.
The utilitarian view of copyright has constitutional authority in the United States, where Article I, Section 8, Clause 8 of the US Constitution empowers the United States Congress:
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
Copyright in American law is thus based on the desire to promote the progress of arts and science – a utilitarian approach – rather than on any form of inherent or natural property right that vests in an author by virtue of creation.
Although s. 91 of Canada's Constitution Act, 1867 gives the federal government the authority to legislate for copyright, there is no guiding principle in the Canadian constitution that is comparable to the US. The traditional view of Canadian courts was that copyright was designed to protect the rights of the authors in their works. The Supreme Court applied this rationale in Vigneux v. Canadian Performing Rights Society [1943] SCR 348, where Duff CJC said, quoting Hanfstaengl v. Empire Palace, [1894] 3 Ch. 128 with approval:
Copyright, like patent right, is a monopoly restraining the public from doing that which, apart from the monopoly, it would be perfectly lawful for them to do. The monopoly is itself right and just, and is granted for the purpose of preventing persons from unfairly availing themselves of the work of others, whether that work be scientific, literary, or artistic. The protection of authors, whether of inventions, works of art, or of literary compositions, is the object to be attained by all patent and copyright laws. The Acts are to be construed with reference to this purpose. On the other hand, care must always be taken not to allow them to be made instruments of oppression and extortion
In recent years, there has been a shift in the tenor of the Supreme Court towards the recognition that copyright is not just a mechanism to reward authors, but a tool to provide both incentives and adequate dissemination of knowledge throughout the community.
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Théberge
The first in this line of cases was Théberge v. Galerie d'Art du Petit Champlain Inc. [2002] 2 S.C.R. 336. The case dealt with the meaning of "reproduction" in the Copyright Act. Théberge, a successful artist, sought to enjoin the defendants from selling canvas copies of his artwork. The defendants had created the canvas copies by lawfully purchasing paper copies and using a chemical process to lift the ink from the paper and transfer it to canvas.
Binnie J., for the majority of the court, held the transfer of the work was not copyright infringement. He rejected the argument that, simply because the plaintiff’s economic rights were affected by the transfer, an infringement had occurred. He discussed the balancing between incentives and dissemination of works at paras. 30 – 32:
The Copyright Act is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator (or, more accurately, to prevent someone other than the creator from appropriating whatever benefits may be generated).
The proper balance among these and other public policy objectives lies not only in recognizing the creator's rights but in giving due weight to their limited nature. In crassly economic terms it would be as inefficient to overcompensate artists and authors for the right of reproduction as it would be self-defeating to undercompensate them. Once an authorized copy of a work is sold to a member of the public, it is generally for the purchaser, not the author, to determine what happens to it.
Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long-term interests of society as a whole, or create practical obstacles to proper utilization.
The proper balance among these and other public policy objectives lies not only in recognizing the creator's rights but in giving due weight to their limited nature. In crassly economic terms it would be as inefficient to overcompensate artists and authors for the right of reproduction as it would be self-defeating to undercompensate them. Once an authorized copy of a work is sold to a member of the public, it is generally for the purchaser, not the author, to determine what happens to it.
Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long-term interests of society as a whole, or create practical obstacles to proper utilization.
It should be noted that in the dissent, Gonthier J. adhered to a more traditional conception of copyright, where consideration was primarily the owners right in excluding others, regardless of what use may be made of the work. At para. 114 he stated:
Generally, copyright enables the owner to prevent the unauthorized plagiarism and distribution of an original work. It is therefore these acts themselves that are prohibited, without regard to their purpose, be it mercenary or otherwise.
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The public interest in the dissemination of works was expanded on in CCH v. Law Society of Upper Canada [2004] 1 SCR 339. The case concerned the photocopying of case reporters, texts, and other legal materials in the Great Library at Osgoode Hall. Several questions were before the court, including: (a) whether certain materials, including case reporters, were ‘original’ enough to be copyrightable; and (b) whether LSUC’s use of the work was covered under fair dealing. In finding that the headnotes and topical index possessed sufficient originality, but that the decisions themselves were not copyrightable, McLachlin CJ commented on public interest in the context of originality at para. 23:
As mentioned in Théberge, this Court stated that the purpose of copyright law was to balance the public interest in promoting the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator. When courts adopt a standard of originality requiring only that something be more than a mere copy or that someone simply show industriousness to ground copyright in a work, they tip the scale in favour of the author’s or creator’s rights, at the loss of society’s interest in maintaining a robust public domain that could help foster future creative innovation … By way of contrast, when an author must exercise skill and judgment to ground originality in a work, there is a safeguard against the author being overcompensated for his or her work. This helps ensure that there is room for the public domain to flourish as others are able to produce new works by building on the ideas and information contained in the works of others.
Requiring that an original work be the product of an exercise of skill and judgment is a workable yet fair standard. The “sweat of the brow” approach to originality is too low a standard. It shifts the balance of copyright protection too far in favour of the owner’s rights, and fails to allow copyright to protect the public’s interest in maximizing the production and dissemination of intellectual works. On the other hand, the creativity standard of originality is too high. A creativity standard implies that something must be novel or non-obvious — concepts more properly associated with patent law than copyright law. By way of contrast, a standard requiring the exercise of skill and judgment in the production of a work avoids these difficulties and provides a workable and appropriate standard for copyright protection that is consistent with the policy objectives of the Copyright Act.
Requiring that an original work be the product of an exercise of skill and judgment is a workable yet fair standard. The “sweat of the brow” approach to originality is too low a standard. It shifts the balance of copyright protection too far in favour of the owner’s rights, and fails to allow copyright to protect the public’s interest in maximizing the production and dissemination of intellectual works. On the other hand, the creativity standard of originality is too high. A creativity standard implies that something must be novel or non-obvious — concepts more properly associated with patent law than copyright law. By way of contrast, a standard requiring the exercise of skill and judgment in the production of a work avoids these difficulties and provides a workable and appropriate standard for copyright protection that is consistent with the policy objectives of the Copyright Act.
The Court also made some important comments regarding the public interest in the context of fair dealing at para. 48:
Before reviewing the scope of the fair dealing exception under the Copyright Act, it is important to clarify some general considerations about exceptions to copyright infringement. Procedurally, a defendant is required to prove that his or her dealing with a work has been fair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing exception will not be an infringement of copyright. The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right. In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively. As Professor Vaver, supra, has explained, at p. 171: “User rights are not just loopholes. Both owner rights and user rights should therefore be given the fair and balanced reading that befits remedial legislation. [emphasis added]
…
To conclude, the purpose of the dealing, the character of the dealing, the amount of the dealing, the nature of the work, available alternatives to the dealing and the effect of the dealing on the work are all factors that could help determine whether or not a dealing is fair. These factors may be more or less relevant to assessing the fairness of a dealing depending on the factual context of the allegedly infringing dealing.
…
To conclude, the purpose of the dealing, the character of the dealing, the amount of the dealing, the nature of the work, available alternatives to the dealing and the effect of the dealing on the work are all factors that could help determine whether or not a dealing is fair. These factors may be more or less relevant to assessing the fairness of a dealing depending on the factual context of the allegedly infringing dealing.
From these passages, copyright should be interpreted with its overall purpose in mind: namely, that it aims to both reward creators for their efforts and to provide for the dissemination of these useful works to the general public. In economic terms, this means by providing enough incentive for creators, while at the same time allowing for fair public access to these works. Moreover, CCH has come to represent the notion that fair dealing is better understood as a user right than a defence, also contributing to the belief that copyright is more about promoting an appropriate balance, rather than merely to reward the interests of copyright holders.
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SOCAN v. CAIP (Tariff 22)
The public interest was again discussed by the Supreme Court in Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] 2 S.C.R 427. One of the questions addressed in the case was whether ‘caching’ of content by Internet Service Providers (ISPs) constituted secondary infringement within the meaning of ‘communication to the public by telecommunication’ as defined in s. 2.4(1)(b) of the Copyright Act, which states:
[A] person whose only act in respect of the communication of a work or other subject-matter to the public consists of providing the means of telecommunication necessary for another person to so communicate the work or other subject-matter does not communicate that work or other subject-matter to the public.
Binnie J, for the majority of the court, held that as long as an internet intermediary does not itself engage in acts relating to the content of the communication and merely provides a "conduit" for information provided by others, it is protected under s. 2.4(1)(b). This decision was reached in part because of the public interest in the expansion of technology, technology which might be hampered by unnecessarily restrictions on copyright. The following excerpts from the judgment of Binnie J are relevant:
The capacity of the Internet to disseminate "works of the arts and intellect" is one of the great innovations of the information age. Its use should be facilitated rather than discouraged, but this should not be done unfairly at the expense of those who created the works of arts and intellect in the first place. (para 40)
…
Parliament has decided that there is a public interest in encouraging intermediaries who make telecommunications possible to expand and improve their operations without the threat of copyright infringement. To impose copyright liability on intermediaries would obviously chill that expansion and development, as the history of caching demonstrates…As the Board noted, at p. 433: "Caching reduces the cost for the delivery of data by allowing the use of lower bandwidth than would otherwise be necessary."…Section 2.4(1)(b) reflects Parliament's priority that this entrepreneurial push is to continue despite any incidental effects on copyright owners.
…
Parliament has decided that there is a public interest in encouraging intermediaries who make telecommunications possible to expand and improve their operations without the threat of copyright infringement. To impose copyright liability on intermediaries would obviously chill that expansion and development, as the history of caching demonstrates…As the Board noted, at p. 433: "Caching reduces the cost for the delivery of data by allowing the use of lower bandwidth than would otherwise be necessary."…Section 2.4(1)(b) reflects Parliament's priority that this entrepreneurial push is to continue despite any incidental effects on copyright owners.
In the Board's view, the means "necessary" under s. 2.4(1)(b) were means that were content neutral and were necessary to maximize the economy and cost-effectiveness of the Internet "conduit". That interpretation, it seems to me, best promotes "the public interest in the encouragement and dissemination of works of the arts and intellect" without depriving copyright owners of their legitimate entitlement. The creation of a "cache" copy, after all, is a serendipitous consequence of improvements in Internet technology, is content neutral, and in light of s. 2.4(1)(b) of the Act ought not to have any legal bearing on the communication between the content provider and the end user (paras. 114-5).
Euro-Excellence
The most recent case to comment on the public interest and copyright is that of Euro-Excellence v. Kraft Canada 2007 SCC 37. Kraft Canada was the exclusive distributor of certain chocolate bars in Canada (including Toblerone) from its parent company KFB. Euro-Excellence bought the same chocolate bars overseas and imported them into Canada to compete with Kraft Canada. KFB, in response, registered the logos in Canada as copyrighted artistic works and gave Kraft Canada the exclusive license to use them. Kraft Canada then sued Euro-Excellence for secondary infringement.
One issue of relevance was an attempt to read in an equitable doctrine of ‘legitimate economic interest’ into copyright law. It was the opinion of a minority of judges (Bastarache, LeBel, and Charron JJ) that secondary infringement would only be found where there is a legitimate economic interest in the copyright of a work - not where it is merely a tool to protect a monopoly or otherwise used in the restraint of trade. The judges though that the section was not meant to protect manufacturers from unauthorized parallel importation, and that where the work in question is merely incidental to a consumer good, the public interest dictated that secondary infringement under s. 27(2) not apply. The following excerpts from the judgment of Bastarache J (dissenting on this point) are relevant:
The CCH decision thus confirms that in order to protect the essential balance which lies at the heart of copyright law, care must be taken to ensure that copyright protection is not allowed to extend beyond the legitimate interests of a copyright holder…[O]nce copyright is granted in a given work, the protection that it provides must not be extended beyond its natural limits, and must take proper account of user rights such as the right to deal fairly with a copyrighted work…[T]he rights transferred to a licensee must be limited in the same way as those of the original creator of the work to the legitimate economic interests resulting from the exercise of skill and judgment (para 80).
…
[Section 27 grants] protection to the interests of the copyright holder as author. That is, only those distributions which affect the legitimate economic interests protected by copyright will be held to affect prejudicially the owner of the copyright. Economic consequences of unauthorized importation of consumer goods are not, generally speaking, the types of legitimate economic interests protected by the copyright in a work which is merely incidental to the sale or distribution of the consumer good to which it is attached. The effects of such importation do not meet the requirement of prejudice… (para 90).
…
[Section 27 grants] protection to the interests of the copyright holder as author. That is, only those distributions which affect the legitimate economic interests protected by copyright will be held to affect prejudicially the owner of the copyright. Economic consequences of unauthorized importation of consumer goods are not, generally speaking, the types of legitimate economic interests protected by the copyright in a work which is merely incidental to the sale or distribution of the consumer good to which it is attached. The effects of such importation do not meet the requirement of prejudice… (para 90).
A plurality of judges however, rejected this attempt to constrain copyright to only protect ‘legitimate economic interests’ when consumer interests warrant it. Rothstein J expressed this at paras 4-5:
…This Court’s holding in CCH confirms that all artistic works receive the protection of copyright if they meet the requisite standards of “skill and judgment”. The Copyright Act does not exempt so-called “incidental” works from its protection. Neither Bastarache J. nor any of the parties contest that the Côte d’Or and Toblerone logos resulted from exercises of skill and judgment. As such, they are legitimate subjects of copyright.
In this case, Bastarache J. expands the concept of “legitimate economic interest” to exclude logos on wrappers from the domain of copyright. Notably, there is nothing the Act or in Canadian jurisprudence supporting Bastarache J.’s theory of “legitimate economic interests”.
Similarily, McLachlin CJ (agreeing with Rothstein J on this point) stated at paras. 111-112 that:
To inject an exception for logos on the basis that they are “incidental” would be to introduce unnecessary uncertainty, inviting case-by-case judicial explorations into the uncharted area of what is “merely” incidental, “somewhat” incidental, or not incidental at all. Such an approach also takes insufficient account of the reality that many products are, to a significant extent, sold on the basis of their logo or packaging.
Nor do I share the view that s. 27(2)(e), which on its face appears to me to be applicable, “protects only the legitimate economic interests of copyright holders”, that is, “the unauthorized importation of works which are the result of their skill and judgment” It seems to me … there is no scope for a judicially created limit to that protection based on what might — or might not — be a “legitimate economic interest”. I do not believe that Théberge stands for such a proposition.
Nor do I share the view that s. 27(2)(e), which on its face appears to me to be applicable, “protects only the legitimate economic interests of copyright holders”, that is, “the unauthorized importation of works which are the result of their skill and judgment” It seems to me … there is no scope for a judicially created limit to that protection based on what might — or might not — be a “legitimate economic interest”. I do not believe that Théberge stands for such a proposition.
In this case, the court seems to struggle with the notion of public interest. On one hand, the statutes should be read as encompassing the purpose of the statute (which includes considerations of the public interest); on the other, they cannot disregard clear statutory language or import uncertain equitable concepts into the law.
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