Access Copyright

Access copyright’s submission to the consultation on a modern copyright framework for online intermediaries

Submitted: May 31, 2021

Introduction and overview

Access Copyright welcomes efforts to address uneven bargaining power between copyright owners and the users of their works. At present, many rights holders are involved in an expensive, time-consuming, and often ineffective struggle to monitor and enforce their rights online. Increasing obligations of online intermediaries is necessary to ensure that creators and publishers can control - and be fairly compensated for - the use of their works on the Internet. 

Access Copyright supports the policy goals of protecting and encouraging the use of copyright-protected content online, safeguarding individual rights and freedoms in an open Internet, and facilitating a flourishing digital market. However, ensuring that any reform balances these goals and respects stakeholder interests will require further review and discussion once specific proposals are clarified.

At this time, we recommend the following:

• Implementing a “Notice and Stay-down” system to replace the current “Notice and Notice” regime;
• Ensuring that the safe harbour provisions do not apply where an intermediary either (A) engages in activities relating to copyright-protected content in a way that is not purely technical, automatic and passive or (B) has a financial stake in the infringing activity at issue;
• Rejecting proposals for compulsory collective licensing;
• Providing further details regarding the extended collective licensing scheme for online intermediaries under consideration, with a view to engaging in further study and consultation regarding same;
• Clarifying that tariffs approved by the Copyright Board of Canada are enforceable against users who make unauthorized uses of works in a copyright collective’s repertoire; and
• Legislating the availability of no-fault injunctive remedies against intermediaries, such as website blocking and de-indexing orders.

4.0 Potential options for reform

The Consultation Paper notes that significant changes to Canada's basic model of intermediary liability are not being contemplated. Access Copyright urges this be reconsidered.

Canada’s present “Notice and Notice” regime is ineffective and inefficient. Access Copyright is regularly contacted for assistance by creators whose works are being infringed online. Creators are forced to expend considerable resources policing use of their content on the Internet and have few cost-effective methods to take action against infringers.

Under the present “Notice and Notice” regime, rights holders are generally left to fall back on repeated action and litigation to ensure that infringing content is removed and not re-posted elsewhere.  In many cases of online infringement, recourse to the courts is not feasible. Even undefended cases may take months or years to conclude, cost awards generally do not cover actual expenses, and damages may be low or difficult to collect. The end result is that online infringement continues to proliferate, and the market for creative works suffers.

In light of these challenges, Access Copyright strongly recommends that Canada adopt a “Notice and Stay-down” regime, which would require online intermediaries to not only take down infringing content, but to prevent its re-posting. This is an international best practice and has been successfully adopted elsewhere.^{Footnote 1} This type of system avoids the need for copyright owners to chase infringers across the Internet, repeatedly requesting that the same infringing content be removed from new URLs in a lengthy game of “whack-a-mole”. Online intermediaries are in the best position to remove infringing content quickly and economically. They can also leverage automatic content recognition software and systems developed to identify and delete such content if re-posted. As such, a Notice and Stay Down regime can effectively deter infringement and encourage greater collaboration between online intermediaries and rights holders.

4.1 Clarify intermediaries' safe harbour protections

Access Copyright supports efforts to clarify intermediaries’ safe harbour provisions, with a view to ensuring they apply more equitably and only in appropriate circumstances. The safe harbour provisions should not apply where an intermediary engages in activities relating to copyright-protected content that are not purely technical, automatic, and passive. Many online intermediaries significantly benefit from the use of copyright-protected works and play an active role in, for example, curating, aggregating, ranking, optimizing, and/or promoting content. Accordingly, intermediaries’ role in ensuring that copyright is respected should be commensurate with the extent to which their businesses engage with copyright-protected content.

Intermediaries who have a financial stake in infringing activities should also not be permitted to benefit from safe harbour provisions. However, persons or non-profit entities that infringe or facilitate the infringement of copyright-protected works, even without a profit motive, can still inflict significant damage on rights holders and undermine Canada’s creative economy. For example, the Internet Archive’s large-scale unauthorized digitization and making available online of books under its “Emergency National Library” and “Open Library” projects caused significant harm to authors and publishers. While these activities were not commercial in nature, they allowed users to substitute paid or licensed works for free pirated copies. As such, protections should not be afforded to intermediaries if they act otherwise than in a purely technical, automatic, and passive manner with respect to copyright-protected content, regardless of whether their actions are commercial or non-commercial in nature.

Further, as discussed in section 4.0, above, the current system disadvantages rights holders. It requires them to expend significant resources in attempting to control the use of their works, as well as to receive fair remuneration for same. The “Notice and Action” options discussed in the Consultation Paper do not fully address these issues.  On the other hand, implementing a “Notice and Stay-down” regime would improve enforcement options for copyright infringement, encourage greater collaboration between intermediaries and rightsholders, and would help address uneven bargaining power. It would foster greater control for rights holders to determine if and how they license their works through a particular intermediary.

4.2 Compelling remuneration through collective licensing

It is essential that online intermediaries obtain authorization for the use of copyright-protected content and provide adequate remuneration for same. However, the starting point for any discussion on this topic must be to ensure that the onus is on online intermediary compliance, and not on forcing rights holders to license their works in ways that may directly interfere with existing and future business models. It is a bedrock principle of Canadian and international copyright law that copyright owners have the exclusive right to use or authorize the use of their works. Online intermediaries should therefore be required to seek licences from rights holders either individually or through collective management (to the extent that the relevant rights holders have determined that collective management is the most efficient mechanism to license the particular use or user group at issue).

Collective licensing allows rights holders to efficiently negotiate licences, and enforce tariffs, in situations when individual negotiations or litigation would be uneconomical. It is an indispensable tool in a functioning market for creative works. However, rights holders must be able to decide for themselves the circumstances in which they will authorize collectives to act on their behalf.

Compulsory collective licensing could significantly undermine rights holders’ existing revenue streams. For example, many authors’ primary market for their literary works involves selling complete copies directly through authorized publishing channels (including e.g. audio books or e-books), with a secondary market in licensing the copying or accessing of portions of their works through collective licensing. Compulsory collective licensing would risk undercutting markets for these works, ultimately causing creator revenues to drop and disincentivizing the creation of new works. In order to avoid such unintended consequences, rights holders should be free to decide the appropriate licensing mechanism for any particular context, rather than having it imposed on them.

With respect to extended collective licensing (“ECL”), further particulars of the type of scheme contemplated are needed to determine if this could be mutually beneficial for rights holders and users. In theory, ECL could be a useful tool for ensuring fair compensation for rightsholders while facilitating access to content for users in specific circumstances. For example, it has proven to be an effective mechanism for licensing educational copying in the Nordic countries. ECL may be appropriate in circumstances involving a high percentage of rights holders authorizing collective administration for specific uses (perhaps owing to ineffectiveness of individual licensing) provided that individual rights holders are able to opt out of collective licensing without penalty. Rights holders who opt out should still be able to sue for infringement. 

The European Union has adopted a similar requirement for ECL schemes, requiring that they only be applied "within well-defined areas of use, where obtaining authorisations from rightholders on an individual basis is typically onerous and impractical to a degree that makes the required licensing transaction unlikely, due to the nature of the use or of the types of works or other subject matter concerned", and only provided that the legitimate interests of rights holders are safeguarded.^{Footnote 2}

However, in the context of online intermediaries, in practice it is hard at this time to isolate activities or types of intermediaries that could be subject to ECL without undermining the primary market for text-based works. Reproduction rights organizations, such as Access Copyright, have the potential to create new licensing opportunities for rights holders, but it is necessary for rights holders to give them a mandate to act collectively on their behalf.

Given the above, creators and publishers need a better understanding of the licensing activities that are being considered for an ECL scheme before being able to comment further on this proposal. It is critical that any licensing mechanism have the support of rights holders before being implemented.

Before consideration is given to further expanding collective licensing, it is also important to address the uncertainty and damage caused by the Federal Court of Appeal’s decision that tariffs approved by the Copyright Board are not enforceable against users who make unauthorized uses of works in a collective’s repertoire.^{Footnote 3} This decision seriously undermines the entire Canadian regime of collective administration of rights and renders useless the Copyright Board tariff process for many rights holders.

4.3 Increase transparency in remuneration processes

Access Copyright supports initiatives to require intermediaries to provide usage data relating to copyright-protected works. Under the current system, it can be challenging for rights holders to acquire this data from users. This lack of data leads to market inefficiencies and materially impacts creators’ ability to effectively administer their rights and to receive fair remuneration for the use of their works.

Access Copyright, as a copyright collective, has always provided detailed reporting in its distributions to rights holders whenever that information is provided by users. Efforts to improve transparency in reporting on the part of users will further enhance reporting by collective societies.

The development of best practices for rights holder organizations, such as those set out in the WIPO Good Practice Toolkit for Collective Management Organizations,^{Footnote 4} is beneficial. However, collectives should not be subject to regulation by the Copyright Board. Collectives already have legal obligations to their affiliates and members, and, as not-for-profit organizations, are ultimately governed by same through their boards and memberships. Adding in a layer of government regulation will increase administrative costs and complications, without providing increased benefit.

4.4 Clarify or strengthen enforcement tools against online infringement

Access Copyright fully supports the strengthening of enforcement tools against online infringement, including confirming the availability of no-fault injunction remedies against intermediaries (such as orders for de-indexing and website blocking). There is a need to clarify the availability of such tools in the Copyright Act to remove legal uncertainty and to streamline and expedite the enforcement process. This can be done in such a way to ensure that appropriate checks and balances are in place to prevent abuse, while at the same time enhancing the efficiency of enforcement proceedings and deterring infringement.

Text-based and visual works are routinely pirated online. Infringing copies of these works are frequently substituted for purchased or licensed copies, eating directly into copyright owner revenues. This significantly harms the market for literary and visual works, and harms creators’ ability to earn a livelihood.

Many rights holders do not have the means to pursue legal action and do not have effective enforcement tools for individual instances of infringement. Measures that provide certainty for both intermediaries and rights holders, and consequently promote negotiated solutions, are therefore most important.

Further, Access Copyright encourages the government to also consider implementing new mechanisms available to rights holders to address smaller scale infringement.  We note that the United States is setting up the Copyright Claims Board as an alternative to federal court for small claims copyright disputes. This development should be monitored closely with a view to determining if any new practices or procedures could be implemented in Canada to resolve small-scale infringement matters where traditional litigation proceedings may be uneconomical.