Paradigm Shift 2: More recommended changes to Canadian copyright law announced

05 June 2019

On June 3, 2019, Parliament's Standing Committee on Industry, Science and Technology released its Statutory Review of the Copyright Act. Section 92 of the Copyright Act mandates that the Act must be reviewed every five years by a parliamentary committee, and this Statutory Review was the first comprehensive review conducted since the overhaul of Canada's copyright legislation in 2012 with the adoption of the Copyright Modernization Act.

The Statutory Review follows closely on the heels of a recent report by the Standing Committee on Canadian Heritage entitled "Shifting Paradigms" containing numerous recommended changes to Canada's copyright regime, which we reported on here.

The Statutory Review was the product of over 50 meetings in which the Committee heard testimony from a total of 263 witnesses, received 192 written briefs, and also received 6,000 emails and other correspondence from Canadians, over the course of more than a year. Written and oral submissions were made by a wide range of stakeholders, including creators, industry representatives, broadcasters, online service providers, academics, and legal practitioners.

These extensive consultations led to a lengthy report by the Committee containing a total of 36 varied recommendations for specific legislative changes to the Copyright Act or identifying topics for further study by the government.

Several of the Committee's recommendations echoed earlier proposals found in the Shifting Paradigms report, but offered additional nuances and refinements:

  • Extending the term of copyright from 50 to 70 years from the author's death.
    The Committee recognized that the current term of copyright in Canada is shorter than most of Canada's main economic partners. The Committee therefore recommended enacting this change extending the term of copyright (provided that the new Canada – United States – Mexico Agreement is ratified) but suggested that such term-extended copyright not be enforceable beyond the current term of 50 years unless copyright had been registered. The policy rationale behind this recommendation would be to promote copyright registration and increase the overall transparency of the copyright system.
  • Establishing an artist's resale right. Under this proposal, visual artists would be entitled to receive a royalty payment each time their work is resold publicly. The policy rationale behind the artist's resale right concept is to generate revenues for visual artists who otherwise only derive revenue from the first sale of their works. While such a right is recognized under the Berne Convention and has been adopted in some other jurisdictions, the concept would represent a departure from existing Canadian law. While an artist's resale right is conceptually associated with copyright, the Committee recognized that it is closer in nature to a personal property right associated with a tangible good. As a result, and given the particular division of powers in Canada's constitution between federal and provincial authorities, the enactment of an artist's resale right in the federal Copyright Act could face constitutional challenges. As a result, the Committee recommended that the government play a leadership role towards cooperation between provincial governments to find ways to implement the artist's resale right in Canada outside the scheme of the Copyright Act and report back to Parliament after further study.
  • Updating the rules governing first ownership of cinematographic works. The Committee noted the ongoing debate between attributing first ownership of such works to directors and screenwriters on one hand, or producers on the other. The Committee recognized the risks of adopting too rigid a rule and instead recommended that the government update the rules around ownership of copyright in cinematographic works following further study of applicable policy rationales

Other notable proposals for reform contained in the Statutory Review included:

  • Introducing a non-assignable right to terminate any copyright assignment no earlier than 25 years after the transfer. A proposed "termination right" similar to provisions found in U.S. copyright law was championed by Canadian recording artist Bryan Adams in testimony before the Committee. The policy objective here would be to address the bargaining imbalance between creators and other industry players (such as publishers) and grant creators the opportunity to resell their copyright with better knowledge of its market value 25 years after its assignment. The Committee found that because creators typically receive little remuneration for their work, and the effective lifespan of most copyrighted content tends to be short, creators should have the opportunity to increase the revenues they draw from it. The Committee recommended, however, that any termination right provision be made predictable by providing a short five year window where the right could be exercised, and providing that it take effect only five years after the creator registers its notice of an intent to exercise the right.
  • Reforming the rules surrounding the reversion of copyright. Currently, the Copyright Act provides a reversion mechanism to provide the benefits of copyright to descendants of a creator which automatically re-vests copyright in his or her heirs 25 years after death. The Committee proposed increasing the predictability of the reversion mechanism by requiring registration of a notification to exercise the reversion 10 years prior to any reversion taking effect.
  • Reforming Crown copyright. The Committee found that the rationale under which Canadian governments exercise copyright over publicly funded works they may prepare and publish in the public interest was "questionable at best", and proposed reforms to adopt open licenses for such works. The Committee found, however, that other aspects of the Crown copyright concept which permit Canadian governments to disseminate works they may not own for policy purposes remains relevant, and recommended that the Act contain exceptions to permit governments to avoid liability for copyright infringement when their activities are for purposes related to national security, public safety, or public health or otherwise under statutory authority.  The concept of Crown copyright remains particularly fraught in Canada, with members of the Committee representing both the political right and left advocating in dissenting opinions that Crown copyright be entirely abolished. It should also be noted that a case dealing with several aspects of Crown copyright was recently argued before the Supreme Court of Canada and a decision is expected from the Court later this year.
  • Making the list of allowable "fair dealing" purposes enumerated in the Act illustrative rather than exhaustive. While noting that such a change may result in greater uncertainty and increased litigation, the Committee recommended this change to effectively broaden the number of allowable fair dealing purposes to increase the flexibility of the application of the Copyright Act.
  • Increasing the upper and lower limits of statutory damages. The Committee recognized that the available quantum of statutory damages must remain relevant and effective at deterring copyright infringement. As a result, the Committee proposed raising the current lower and upper limits provided under the Copyright Act to keep pace with inflation.

Additionally, in a move that will no doubt be welcomed by all Canadians, the Committee provided a general recommendation that the government find ways to simplify the wording and structure of the Copyright Act. The Committee noted that there was a general consensus from testifying witnesses that the Copyright Act is "notoriously complex" and "in need of a comprehensive overhaul". While recognizing that this endeavour would require "much effort", the Committee noted the benefits: if stakeholders can better understand the Act, they can more easily comply with, or benefit from, its provisions.

Finally – and somewhat ironically given its mandate – the Committee recommended that the government repeal the section of the Copyright Act which requires a comprehensive statutory review every five years. The Committee found that periodic reviews can undermine the stability of the copyright system if key provisions are called into question every few years, particularly in the absence of sufficient evidence that technology, industry practices, socio-economic circumstances and case law change at a rate that justifies reviewing the Act every five years. Instead, the Committee proposed that Parliament only review the Act, in whole or in part, when the need and opportunity arise.

At this time it is unclear when and in what form the recommendations in the Statutory Review may result in specific legislative changes to the Copyright Act. Parliament is scheduled to adjourn in late June 2019 and will not resume until after the Federal election scheduled for October of this year.

Nonetheless, the recommendations in the Statutory Review will undoubtedly provide future Parliaments with concrete proposals and policy direction for reform to important aspects of Canadian copyright law.

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