Motion Picture Association - Canada

May 31, 2021

Delivered by E-Mail

Jennifer Miller
Director General
Marketplace Framework Policy Branch
Innovation, Science and Economic Development Canada

Owen Ripley
Director General
Broadcasting, Copyright and Creative Marketplace Branch
Canadian Heritage

SUBMISSION IN RESPONSE TO "CONSULTATION ON A MODERN COPYRIGHT FRAMEWORK FOR ONLINE INTERMEDIARIES"

A. Introduction

The Motion Picture Association – Canada (MPA-Canada) serves as the voice and advocate of the major international producers and distributors of movies, home entertainment and television programming in Canada and is an affiliate of the Motion Picture Association, Inc. (MPA). The global studios we represent – including Walt Disney Studios Motion Pictures; Netflix Studios, LLC; Paramount Pictures Corporation; Sony Pictures Entertainment Inc.; Universal City Studios LLC; and Warner Bros. Entertainment Inc. – are major investors in the Canadian economy through the production of long-running television series, major feature films, and world-renowned post-production, visual effects, and digital animation projects.

More broadly, the film, television, and streaming industry supports a dynamic creative economy in Canada, employing people in every province, across a diversity of skill sets and trades. In 2019/20 alone, more than 244,500 people – from special effects technicians to makeup artists to sound editors, carpenters and more – worked in jobs supported by the industry, with the total volume of film and television production reaching $9.32-billion and generating $12.24-billion in gross domestic product (GDP) for Canada's economy.^{Footnote 1}

Copyright is the foundation of Canada's creative economy. Works of art, culture, and entertainment not only enrich the lives of Canadians, but drive economic and technological developments that fuel progress in Canada and around the world. Essential to this creativity are robust copyright laws that encourage creators and makers to continue their work, provide the right incentives to make sure everyone has access to content across multiple platforms, and ensure that the people who make that content are able to continue to do so.

MPA-Canada therefore welcomes the opportunity to provide this submission in response to the consultation paper on a modern copyright framework for online intermediaries ("Consultation Paper").

For the reasons set out below, MPA-Canada respectfully submits the following recommendations. The implementation of these recommendations will ensure that Canada's copyright framework for online intermediaries reflects the evolving digital world and achieves the policy objectives of encouraging the availability of copyright-protected content for legitimate use online, safeguarding individual rights and freedoms, and facilitating a flourishing digital market.

B. Expressly Allow Rights Holders to Obtain Modern Forms of No-Fault Injunctive Relief

Internet intermediaries that facilitate access to illegal content are often best-placed to reduce the harm caused by online copyright infringement. This principle has been long recognized by the European Union (EU) where Article 8(3) of the EU Information Society Directive^{Footnote 2} has provided the foundation for rights holders to obtain no-fault injunctive relief against intermediaries whose services are used by third-parties to infringe copyright. This includes not only judicial site-blocking orders against Internet service providers (ISPs) but also other forms of no-fault injunctive relief, including delisting orders against search engines, injunctions against hosting providers, and injunctions against domain name registrars and registries.

Building on precedents that already exist in Canada, we agree that the Copyright Act should be amended to expressly allow rights holders to obtain no-fault injunctions against intermediaries whose services are used to infringe copyright, including "dynamic" and "live" site-blocking orders that provide flexibility to cover repeat infringement,^{Footnote 3} delisting orders, as well as injunctions against payment processors and ad networks.

As noted in the Consultation Paper, while there is already a legal basis in Canada for rights holders to obtain such orders through the courts' equitable jurisdiction,^{Footnote 4} we agree that amending the Copyright Act to expressly allow rights holders to obtain expedient and effective forms of no-fault injunctive relief against intermediaries whose services are utilized by commercial-scale online infringers, as rights holders are able to do in other jurisdictions (e.g. the EU, United Kingdom, Australia, etc.), would help clarify and strengthen the tools available in Canada to rights holders in their online enforcement efforts while protecting consumers from the harms associated with infringing sites, including serious privacy, hacking, identity theft, and malware risks.^{Footnote 5}

Such modern forms of injunctive relief are also needed since the current tools in the Copyright Act are insufficient to appropriately deal with the new forms of online copyright infringement not present, dominant, or contemplated when the Copyright Act was last amended in 2012, including streaming sites, illicit subscription services, and illicit streaming devices (ISDs).^{Footnote 6} ISDs in particular have been globally recognized as being extremely damaging to the creative industries, undermining innovation and intellectual property rights, posing serious cybersecurity threats, and a pressing concern for creators, owners, and rights holders internationally.^{Footnote 7}

The "notice-and-notice" regime is an insufficient tool to address online copyright infringement due to the lack of meaningful consequences associated with the issuance/receipt of such notices and the limited scope of the regime to address only illegal downloading. Accordingly, we agree with the Consultation Paper's proposal to expressly provide for no-fault injunctive relief, via a court process that ensures procedural fairness without the need first to obtain judgment directly against the alleged infringer. Not only would this ensure consistency in the application of the law and provide legal certainty by codifying existing norms already recognized by courts in Canada as noted above, doing so would also assist in streamlining costly and time-consuming litigation while encouraging intermediaries, rights holders and others to work together to establish a suitable, efficient, and effective^{Footnote 8} framework for dealing with alleged infringements facilitated by the intermediaries' services.

We therefore agree that clarifying and strengthening the tools available to rights holders in their online enforcement efforts would not only better protect and encourage the lawful distribution and consumption of copyright-protected content online, it would also achieve the Government of Canada's additional stated policy goals of dissuading online piracy as a commercial venture, facilitating a flourishing digital market, and safeguarding individual rights and freedoms.

C. Clarify that Safe Harbours Only Apply When Intermediaries Act in a Neutral Manner

As noted in the Consultation Paper, the Copyright Act contains safe harbour provisions that shield certain intermediaries from liability even when such intermediaries knowingly have their systems used for infringing purposes. As a result, we agree that the Copyright Act should be amended to appropriately recalibrate the knowledge standard for eligibility of safe harbour protection and codify the principle that safe harbours only apply when an intermediary acts in a neutral manner (i.e. processing the information provided by the recipient of the service in a merely technical, automatic, and passive manner) with respect to copyright-protected content concerned. Needless to say, intermediaries whose main purpose is to engage in or facilitate infringing activities should not qualify for safe harbour protection. Such amendments, and avoiding broad exceptions that are inconsistent with these principles, would help ensure that Canada's copyright framework for online intermediaries better achieves its underlying policy objectives in an evolving digital world. However, in updating Canada's safe harbour provisions, regard must be had to the lessons learned in other jurisdictions to avoid importing formulations that have led to "unbalanced" results.^{Footnote 9}

D. Avoid Introducing Inappropriate Licensing Tools for the Audiovisual Sector

The Consultation Paper identifies compulsory licensing and extended collective licensing (ECL) schemes as mechanisms to dispense with negotiating directly with rights holders or obtaining the requisite authorization in exchange for remuneration. There are at least two overarching concerns with this suggestion.

First, compulsory licensing and ECL schemes are inappropriate solutions to address online infringement, which reduces rights in content to mere remuneration rights. Aside from whether compulsory licensing is permissible under international copyright norms (other than simultaneous unaltered and unabridged retransmissions of broadcasts), compulsory licensing regimes must not allow or promote copyright infringement, or more generally give users unfettered rights to use content that the rights holder has not granted. In other words, the content must be legally authorized at source as a first qualifying step. Simply put, the damage to audiovisual (AV) interests from online infringement cannot be remedied by remuneration given the incalculable worldwide damage that results from content becoming available outside the intended channel of distribution. As a result, not only are compulsory licensing and ECL schemes inappropriate for AV content in general, such mechanisms do not represent appropriate solutions for online infringement since they interfere with the prerogative of copyright owners to determine how and where their content is seen by the public.

Second, globally, the licensing of AV content is based on individual negotiations directly between the relevant parties. As a result, compulsory and ECL schemes are not appropriate tools for the primary licensing of AV content with intermediaries, particularly given the crossborder nature of their operations. Even with opt-out possibilities from ECL regimes, these licensing schemes: (1) usurp the prerogatives of individual rights holders; (2) derogate from the principle that authorization can only be obtained from rights holders themselves as opposed to a forced authorization resulting from a non-voluntary license; and (3) interfere with the concept of exclusive rights anchored by international copyright conventions, which clearly distinguishes between exclusive rights and mere rights to obtain equitable remuneration.

Careful consideration must therefore be given to the viability of compulsory licensing and/or ECL schemes, which if introduced in Canada, could endanger the commercial viability of the entire universe of offline and online AV distribution channels.

E. Lack of Clarity in the Consultation Paper on Other Issues

Given the lack of clarity on the intention and intended outcome on some of the options in the Consultation Paper (e.g. it is unclear whether the general reference to "transparency in the remuneration process" is intended to reference such issues outside the bounds of online intermediaries in the context of addressing online infringement), this submission focusses on key recommendations that are based on international best practices that will help the Government of Canada ensure that Canada's copyright framework for online intermediaries achieves its underlying policy objectives. MPA-Canada's silence on other options canvassed in the Consultation Paper should not be viewed as either support or opposition for such measures but rather that additional clarity and more fulsome consideration is needed to provide appropriate recommendations on these complex issues.

MPA-Canada, on behalf of its members, appreciates the opportunity to provide this submission in response to the Consultation Paper and we look forward to engaging further with you on these important issues.

Yours very truly,

Hafeez Rupani
VICE PRESIDENT, LEGAL AFFAIRS

20 Eglinton Ave West, Suite 1004, Toronto, ON, M4R 1K8 • (416) 961-1888 • www.mpa-canada.org