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Submission of Music Canada to the Consultation on a Modern Copyright Framework for Artificial Intelligence and the Internet of Things

September 17, 2021

Table of Contents


Music Canada represents Canada’s major record labels: Sony Music Entertainment Canada, Universal Music Canada, and Warner Music Canada. We advocate for a healthy and dynamic Canadian music ecosystem, which includes labels, performing artists, publishers, songwriters, managers, and others. Part of our aims include the protection of intellectual property for artists and the businesses who partner and invest with them.

The music industry’s position at the crossroads of creative and technological innovation provides it a unique perspective to address the role of copyright in the development of artificial intelligence (“AI”). Our members are constantly utilizing new technologies and innovations, collaborating with artists to develop and use new tools to advance the creative process. Many businesses in the music industry, including streaming services, labels, and producers, have begun using machine learning and AI in creative and exciting ways. For example, AI can assist in analyzing streaming or fan data, or compiling playlists, and AI can be an element of the creative process, such as in mastering or remixing tracks.

In spite of burgeoning use, AI technology is currently nascent, and its scope and future applications are yet to be fully understood. As such, we appreciate the Government’s interest in consulting with relevant stakeholders and we welcome the opportunity to respond to the consultation paper of July 16, 2021 (the “Consultation Paper”).

Music Canada rejects the premise that AI and copyright are in opposition.  Policymakers should reject opportunistic invocations of AI “innovation” as a reason to dismantle Canada’s current system of copyright protections. A robust, modern, and balanced copyright framework is not antithetical to technological change, but rather creates an environment which promotes innovation and creation. Considerations of AI and copyright reform should ensure that Canada’s stable copyright regime, and the principles upon which it is based, are affirmed.

As demonstrated by the extensive list of considerations and questions raised in the Consultation Paper, in addition to the invitation for stakeholders to provide evidence on how AI is used in their respective industries, it is evident that it would be premature for the Government to undertake substantive revisions to Canada’s copyright framework at this time for the purpose of encouraging AI development, when much about this technology and its future course remains undetermined. Importantly, the copyright framework has also been shown historically to be flexible and adaptable to change, and we believe it will remain so.

Consultations about the relationship between AI and copyright are taking place not only through the Canadian Government’s work but in other fora around the world, including WIPO. Given the relative infancy of AI uses in creative contexts, and these ongoing parallel discussions, we welcome the opportunity to provide further insights on AI in the creative industries, while urging caution about moving fast to decision on any future policy direction in this emerging field of development.

I. Artificial Intelligence

A. Artificial Intelligence and Music

The music industry’s position at the crossroads of creative and technological innovation positions it uniquely to address the role of copyright in the development of AI. The music sector music was among the first to be affected by and to embrace the opportunities of digital technology, including exploring the opportunities of AI. Music companies have begun to use AI in a number of ways: utilizing its potential to tackle copyright infringement, and as a tool in the creative process and in enhancing the listening experience of fans. Examples of this include:

  • Streaming music services employ AI to analyse data and personalize a user’s experience of their service by creating playlists or recommendations;
  • Artists use tools based on AI in their creative processes, e.g., tools that can “master” or remix a recording automatically using algorithms derived from data on previous recordings; and to find suitable samples for use in a recording;
  • Labels and start-ups use AI to analyse streaming and social data, or recordings themselves, to identify potentially successful artists (A&R), and to plan marketing campaigns and tours;
  • Music production companies attempt to use AI to generate music that can be used as background music online and in advertisements.

Emerging technological innovations in the creative sector, particularly in music, underscore that copyright and AI are not binary or in conflict. Copyright and related rights are not an impediment to technological advances. Canada is a leading example of this point. We are home to world class creative industries, with artists and businesses working at the cutting edge of technology, but we are also home to an incredibly innovative and successful tech sector -- both of which rely on copyright to support and protect their innovations.

The rapid development of AI under current Canadian copyright rules demonstrates that copyright has not been an obstacle. The music industry has developed a broad range of licensing solutions in the last decade and works continually with technology companies to facilitate licensed innovation, including in relation to AI. Accordingly, the markets can and do address uses of creative works in AI processes.

The market has demonstrated that enabling the development of AI does not require or justify new exceptions to copyright. Weakening copyright protection, e.g., by introducing new exceptions, would, however, harm creators and reduce the quality of the output of different AI applications.

B. Text and Data Mining (TDM)

1. Protections for Creative Works and AI Innovation Are Not Mutually Exclusive

Some companies engaged in text and data mining (TDM), and academics dealing in hypotheticals, argue for broad and sweeping copyright exceptions to ensure that TDM can be employed without consideration of the rights involved. They argue that without such exceptions, AI will fail to evolve and develop, thus chilling technological innovation. This is a fallacy. Broad exceptions to copyright only force artists and the broader creative industries to subsidize that technological innovation, without return for the use of their works, even if the use of their creations is commercialized by others. If it weren’t for creators and their skill, talent and work, there would be no input by which to develop AI.

The interplay between copyright and emerging technologies is already dealt with in the marketplace. Users can acquire or license the use of creative works, or avail themselves of an exception or limitation under the Copyright Act (the “Act”), such as fair dealing or for temporary reproductions for technological processes.Footnote 1 Given that the development and output of AI are still evolving, we submit that the current copyright framework should be maintained in order to preserve the balance between rights holders and users that the Act aims to achieve.

Previously, some called for the rights of copyright owners to be limited or circumscribed in the name of technology (e.g., the “move fast and break things” mantra). Today, we better understand the consequences of trampling rights in the name of innovation. Just as privacy or human rights should not be ignored for the cause of technological innovation, nor should the rights of copyright owners.

As the Government considers the interplay between AI and copyright, we urge it to reject an oppositional binary that prioritizes AI development over the rights of copyright owners. If anything, a stable and robust copyright regime best supports TDM activity. AI processes depend upon the input of creative works or recordings and derive their purpose and value from the creativity and investment of the authors and producers who create those works or recordings. When the quality of the output of AI processes depends on the quality of the input material, it would be counterproductive to undermine copyright protection and thereby reduce incentives for the creation of and investment in new works and other subject matter.

Maintaining incentives for the creation and production of new works or other subject matter through a strong copyright framework will in turn lead to a more sustainable development of AI and investment in AI processes. Ensuring the preservation of a strong copyright framework will encourage creative industries and the technology sector to develop new and innovative partnerships, thus benefiting all Canadians.

2. The Copyright Act Provides Sufficient Exceptions to Accommodate TDM for AI Purposes

As the Consultation Paper notes, the Act provides existing exceptions that could apply to TDM activity, such as fair dealing, and courts are beginning to apply such exceptions to define their parameters in the context of TDM.Footnote 2  Fair dealing, at its essence, requires that any exception apply fairly to both rights holders and users. The Consultation Paper notes that whether a use is fair and whether it is for an allowable purpose is a fact-specific inquiry, which is entirely proper for evolving uses of TDM. The common law is well suited to ensure that the exception continues to apply fairly as uses evolve. The fact that the precise parameters of TDM allowed under the fair dealing exception are still being defined by Canadian common law is not a reason to remove fairness from the equation.  Where the use falls outside of an existing exception, those developing or carrying out AI processes can either acquire the underlying copyright or negotiate a license for its desired use.

The Consultation Paper cites an INDU recommendation that the fair dealing exception be rewritten to make the enumerated list of allowable purposes illustrative rather than exhaustive.  The Consultation Paper appropriately notes that this would have implications beyond TDM activity.Footnote 3  In fact, this would fundamentally change the nature of fair dealing, rendering a century of case law obsolete, radically shifting the balance between users and creators, and creating more, rather than less, uncertainty. 

The Consultation Paper also cites an INDU recommendation that the Copyright Act be amended to facilitate the use of intellectual property for the purpose of informational analysis,Footnote 4 but there is no evidence that existing exceptions and licensing practices can’t accommodate such use, and where it is for commercial purposes, it is entirely appropriate that affected rights holders should be able to negotiate the use of their rights and be compensated through licensing.

The Consultation Paper notes that businesses have complained that certain exceptions may not apply to TDM conducted for commercial purposes,Footnote 5 but the exclusion of commercial exploitation from certain exceptions was a deliberate choice by Parliament in creating exceptions, to encourage a functioning marketplace that enables the licensing of intellectual property. Again, the Government should allow the marketplace to function, rather than picking favorites among industries.

The Consultation Paper notes that the ephemeral copying exception doesn’t apply where uses of TDM store copies of works indefinitely.Footnote 6 Again, this is precisely the point of limiting the exception to ephemeral copies, which means that where companies make permanent copies, they must license them.

The Consultation Paper cites three European countries and Japan, which have introduced TDM-specific exceptions, as well as TDM exceptions required under the European Union DSM Directive. A few things are worth noting. First, with the exception of the United Kingdom, none of the countries have fair dealing exceptions, and the UK’s fair dealing exception is significantly narrower than Canada’s. Second, the TDM exceptions generally apply solely to non-commercial uses, for example by research organisations and cultural heritage institutions for scientific research, and are limited to lawfully accessible works, where the rights holder has not chosen to limit access to the work for such purposes, i.e., where the rights holder hasn’t reserved the right to license.Footnote 7 While Music Canada does not believe an express TDM exception is needed or would be beneficial, any such exception should be subject to these limits, and be conditional on the works or other subject matter having been legally obtained through ownership or license.

Further, any exceptions for non-commercial use should not be permitted to be exploited by commercial users down the chain. For example, some online platforms have created source separation AI that was trained on unspecified music files and then released it as open source software. Subsequently, other parties used that software to create source separation sites with advertising and paid subscriptions.

3. Licensing Options are Available and Sufficient to Meet the Needs of AI Development

While third party intellectual property harvested through TDM can potentially be valuable to companies utilizing certain types of AI, there is no need to create a new copyright exception permitting TDM without the consent and compensation of the creators of that input, and such an exception to copyright protection could cause considerable harm to creators and the creative economy.

The market can address the use of creative material in AI processes, such as through licensing arrangements, and should be given time and freedom in this nascent space to develop appropriate contractual arrangements. The Consultation Paper indicates that licensing arrangements are adapting, for example, to accommodate large quantities of works often involved in TDM.Footnote 8 The government should not disrupt a functioning, organically evolving marketplace by effectively allowing users to expropriate the intellectual property of rights holders who have invested in and created it.

The music industry, like all creative industries, functions because the copyright framework enables the proper licensing of works and other subject matter, and the remuneration of creators. The licensed use of music directly benefits creators; introducing an exception would undermine the ability of creators to license and upset the balance between rights holders and users. As the Government considers the interplay between copyright and TDM, protecting rights holders’ ability to retain control of their exclusive rights, including the exploitation of their works for TDM, should be a requisite.

The unwillingness of those engaged in TDM activity to negotiate a license to use works or subject matter is not an indication that the copyright framework is inhibiting the development of AI or that additional exceptions are required. Rather, it demonstrates that the framework is working as intended, by allowing rights holders to determine whether and how to license their intellectual property and the marketplace to properly value such use and remunerate rights holders accordingly. The government should not displace the marketplace and pick sides by allowing users to expropriate the work of creative industries without their consent or compensation.

Requiring companies to obtain the necessary permissions for even large volumes of data is not a novel or unique issue. Take, for example, Spotify, one of the world’s largest online music streaming platforms. All applicable rights in the 70 million+ tracks available for listening on Spotify (including the more than 60,000 tracks uploaded daily) are licensed under relevant regimes around the world. The fact that Spotify wished to deal in massive catalogues of music is not a sufficient justification to allow it to avoid seeking permissions and remunerating rights holders for the inputs, i.e., the music, used to build the commercial value of their platform. The same responsibilities to copyright owners should apply to all technology innovators, including those developing or carrying out AI processes.

A general exception for TDM activity could also run counter to Canada’s obligations under the three-step-test established in the Berne Convention for the Protection of Literary and Artistic Works. Any TDM exception would have to comply with the requirements of the three-step test, namely:

  1. it is limited to certain special cases,
  2. it does not conflict with a normal exploitation of the work or other copyrightable matter, and
  3. it does not unreasonably prejudice the legitimate interests of the rightsholder.

For example, the reproduction or other uses of sound recordings for the purposes of analytics or creating new sound recordings are activities already licensed or controlled by record companies. A TDM exception that allowed operators of AI applications to generate competing products without seeking permission or payment of royalties to rights holders would be an unreasonable and unfair outcome, and incompatible with the Three-Step-Test.

C. Authorship and Ownership of Works Generated by AI

Existing Copyright Laws are Sufficient to Address Authorship and Ownership of AI-Assisted Works

Human creative expression is at the core of the music business -- and it is vital to Canadian culture and the economy. Maintaining adequate levels of protection for copyright is vital to this.

With respect to AI, the spectrum of human contribution that will be associated with AI outputs and how they affect determinations of authorship, ownership, and copyrightability is complex and evolving and likely to be highly fact specific. Policymakers should approach these issues with caution, particularly as new technologies evolve.

Copyright in works is designed to protect the unique value of human intellectual expression – more specifically, to help incentivize and reward the output of human skill and judgment by the exercise of intellectual effort.Footnote 9 It does not protect a purely mechanical exercise.Footnote 10 The idea of “intellectual creation” was implicit in the notion of literary or artistic work under the Berne Convention for the Protection of Literary and Artistic Works (1886), to which Canada adhered in 1923, and which served as the precursor to Canada’s first Copyright Act.Footnote 11 

Indeed, what might take a human author weeks or months of skill and labour to create, might take a computer program a fraction of a second. It cannot be the purpose of copyright to measure the labour involved in the artificially generated output of a computer program. That said, if a computer program itself has been created by sufficient human skill, labour, and judgment, then, as the Consultation Paper notes, the program itself is protected by copyright as a literary work.Footnote 12 This reflects the human expression embodied in the computer code. But the law should not ‘double-dip’ by also giving full copyright work status to the solely artificially generated output by itself.

In any event, it is too early to set new policy measures to address authorship and ownership of AI outputs. Established copyright doctrines can adequately address these questions at this time. Currently, AI is used as a tool that assists with human creation. Existing copyright laws and principles on authorship would continue to apply in this context so long as sufficient skill and judgement is exercised. Similarly, the rules regarding ownership are sufficient to provide guidance. AI is not yet at the stage of generating works or other subject matter autonomously, and, as such, it is presently premature to consider fundamental changes to Canada's copyright framework to address AI-generated outputs.

Perhaps in time and as the situation continues to develop, it might, depending on all of the circumstances, be appropriate to consider a new category of subject matter, as the Consultation Paper suggests in its third alternative.Footnote 13 We note that for some of the copyright subject matter at the heart of the music industry, namely, sound recordings and performances, originality is not required and authorship is attributed. Accordingly, we urge the Government to continue the consultations concerning protection, but not to take any steps at this time that could have serious unforeseen consequences as this field develops.

D. Infringement and Liability Regarding AI

1. Policy Options That Address Liability Should not Shield Infringers

As the Consultation Paper rightly points out,Footnote 14 a variety of parties could be liable where an AI process or output infringes copyright. Liability will need to be determined on a case-by-case basis, depending on a multitude of factors, such as the role of each party in developing or carrying out the AI process or output. Trying to establish a single, uniform solution to apply to a multitude of situations may not accommodate future developments and could create additional confusion.

In any event, it is imperative that an AI process not be a shield that infringers can use to avoid liability. Existing liability rules are sufficient at this time to ensure that parties are held accountable if an AI output, or the AI process itself, infringes copyright. While TDM practices may create difficulties in determining which works or other subject matter an AI process accesses and utilizes, it does not excuse the liability of the parties that initiate or otherwise have control over the infringing AI processes or outputs.

2. Transparency Requirements Can Support Balance by Ensuring That Rights Holders can Enforce Their Rights

As initially noted, supporting AI development and ensuring that Canada’s copyright framework provides adequate copyright protection are not mutually exclusive goals. With the proper parameters in place, both can be achieved. As also noted, TDM practices may create difficulties in determining which works or other subject matter an AI process accesses and utilizes. As it pertains to liability, one parameter that the Government should consider is the adoption of record keeping requirements for those involved in the development or carrying out of AI processes. This transparency requirement would help to maintain a balance between the rights of copyright owners and the responsibilities of users.

The Consultation Paper notes that “copyright owners may find it difficult to enforce their rights and seek remuneration in the context of TDM, particularly for their works or other copyright subject matter that are publicly available online.”Footnote 15  One cause of this is the information imbalance, where rights holders are unaware of who is exploiting their works or other copyright subject matter without proper authorization. 

One means to address this information imbalance would be to require those involved in the development or carrying out of AI processes to develop best practices for keeping adequate records of the works and other copyright subject matter that are used for TDM and the purpose or output for which they are used. These parties could be required to further record whether works and other copyright subject matter are licensed or otherwise cleared for use for TDM activity. This would address transparency issues and help rights holders make liability determinations so that they can more fully enforce their rights. As an additional requirement, failure to comply with these obligations could be a factor in assigning liability or could result in a rebuttable presumption of infringement.

E. Conclusion

Stable copyright regimes are an integral element of innovation and technological development, particularly when it comes to the development of AI. While AI development may “stress test” the current copyright framework, significant changes to the framework are unwarranted at this time, and would be premature while this technology continues to evolve.

Music Canada commends the Government’s decision to consult and gather evidence on this topic. However, we urge the Government to take a cautious approach to ensure that Canada’s copyright framework continues to support and nurture both technological innovation and the creative industries.

II. Internet of Things (new TPM exceptions for repair & interoperability)

The Consultation Paper asks whether new exceptions that allow for the circumvention of technological protection measures (TPMs) should be created for purposes of allowing repair or interoperability of products. A wide range of issues are raised by the proposed new exceptions for TPMs. The Consultation asks for evidence on 25 topics, raising important and complex issues, such as cybersecurity, public health and safety, and privacy. As demonstrated by the quantity and technical nature of questions that the Consultation Paper poses, it may be premature to consider exceptions intended to facilitate repair or interoperability by allowing the unauthorized circumventing of TPMs. However, as the Government begins to consider policymaking in this area, there are certain core principles that should be at the forefront of these discussions.

First, Music Canada applauds the Government’s stated objective of ensuring that any new TPM exception “does not interfere with the creative industries’ ability to rely on TPMs to protect their investments.”Footnote 16 Music Canada concurs in this guiding principle. TPMs have played an important role in facilitating increased dissemination of creative works in new and convenient formats and through new and innovated methods by encouraging copyright owners to make these works and recordings available. In turn, users have had unprecedented access to and can make exciting new uses of these works and recordings, for example through licensed services.

It is imperative that any new TPM circumvention exception contain appropriate safeguards for rights holders.  Circumventing a TPM for any purpose provides access to the copyrighted material, and as such it must be protected from unauthorized access and use outside of the specified purpose.  Furthermore, exceptions must be narrowly drawn to avoid misapplication or overreach.

Second, any potential measure must take into account the rapid pace of technological change. Making decisions too hastily or without sufficient information and evidence could result in policy measures that are ineffective, or soon rendered obsolete or inapt.

Third, new exceptions to TPM protections should be enacted only if they will have a practical positive effect. To this end, any consideration of amendments to TPM protections must include consideration of their efficacy, particularly whether such changes would, in fact, facilitate interoperability or ability to repair in light of non-TPM related obstacles. The Consultation Paper identifies non-TPM barriers to both repair and interoperability. It identifies specific barriers to repair, such as end-user license agreements, and difficulties that repairers face in accessing required proprietary diagnostic, servicing and repair materials or tools owned and closely held by original equipment manufacturers.Footnote 17  Similarly, the consultation identifies “non-TPM-related barriers to interoperability,” noting that, “Along with, or instead of TPMs, manufacturers may also use various proprietary technologies that can make it more difficult for others to make interoperable products.”Footnote 18  The Consultation Paper notes:

“As with repair, the Government recognizes that many issues outside copyright law are impacting interoperability in the digital economy. For example, terms of use on software-enabled products may prohibit consumers from making some uses of their products, including installing or developing interoperable add-on products. As noted above for repair, this consultation aims to find solutions to only the copyright issues.” [emphasis added]

Music Canada submits that amendments to the Copyright Act should not be considered in a vacuum. The Government should not consider upsetting the carefully balanced scheme of TPMs and exceptions under the Act in order to impose copyright-related “solutions” to problems of interoperability or barriers to repair that it knows will not work in practice due to non-copyright barriers. Such an exercise is at best pointless, and at worst could create real damage to the regime set up to protect creativity in the digital realm for no purpose. Given the Consultation Paper’s express identification of non-copyright barriers, any consideration of copyright amendments should proceed solely in the context of a full consideration of both TPM and non-TPM barriers. 

Fourth, a contextual analysis is required as well with respect to non-copyright issues at stake. The Consultation Paper identifies a host of additional issues raised by removing TPM protections. It notes that, “Consideration must also be given to preserving product safety and maintaining cyber-security,”Footnote 19 issues that the Consultation Paper notes are addressed in the Canada Consumer Product Safety Act, the Radio Standards Specifications, Health Canada’s Safety Code 6, and the Radiocommunication Act. The Consultation Paper nevertheless notes, “While the Government acknowledges the role these issues outside copyright play in facilitating the repair of software-enabled products, the consultation aims to find solutions to only the copyright issues.”Footnote 20 [emphasis added]

Music Canada submits that such a blindered approach is short-sighted and perilous. The Government should consider all issues that may arise by removing digital protections on products or services. Critical issues such as preserving product safety and maintaining cyber-security should not be ignored in considering policy prescriptions. The fact that these issues are addressed in a wide range of statutes and regulations indicates the importance, variety, and complexity of issues at stake. 

Despite the Consultation Paper’s statement that the consultation does not intend to consider such issues, we note that the Paper requests evidence on the effects of circumvention on a range of issues, such as cybersecurity, public safety, and the disclosure of personal information.Footnote 21 We would hope that these issues are considered in the consultation process and that a holistic approach is taken to the issues at stake and the effects of creating new TPM exceptions.

Fifth, any revisions to the TPM protections should be made with the least amount of disruption to the statutory scheme. The TPM provisions of the Copyright Act are a carefully crafted balance of providing the protection that rights holders need to operate in the digital environment while providing necessary exceptions for limited, specific purposes. New exceptions threaten that balanced scheme.

Music Canada submits that there is no need for statutory amendment of the Copyright Act. As the Consultation Paper notes, “Section 41 of the Act sets out two Governor in Council (GiC) authorities to make regulations.”Footnote 22 Sec. 41.21 allows the GiC to make regulations limiting the scope of the TPM protections to the extent that it would unduly restrict competition in the aftermarket sector, which could encompass both repair and interoperability. The GiC is also empowered to make regulations limiting the scope of the prohibition on circumvention of TPMs for a wide range of specified purposes, including “any other relevant factor.”Footnote 23 As the Consultation Paper notes, this authority “also permits the GiC to make associated regulations to require the owner of the copyright in a work protected by a TPM to provide access to the work, and to “prescribe the manner in which, and the time within which, access is to be provided, as well as any conditions that the owner of the copyright is to comply with.”Footnote 24 

Music Canada submits that any new exception is better accommodated through such regulations, rather than a statutory amendment, because they can be narrowly tailored and more easily revised over time to address specific concerns, while avoiding overbreadth or unintended consequences. By contrast, statutory amendments in the copyright realm can take upwards of a decade and do not allow the level of detailed specificity that regulations can provide. 

Sixth and finally, Canada must ensure that any new exceptions do not conflict with Canada’s obligations to protect TPMs under the WIPO Treaties and trade agreements such as the Canada-United States-Mexico Agreement (CUSMA).

III.  Conclusion

Music Canada thanks the Government for the opportunity to submit on these issues. We are happy to answer any questions or provide any further information that would be helpful.