Bill C-32, the proposed new copyright legislation, currently before Parliament will impact consumers and businesses across Canada. Three areas that could have profound consequences for business are the privileges given to ‘digital locks’ on software and digital media, the exception copyright infringement for ‘parody’ and ‘satire’ as ‘Fair Dealing,’ and illegal downloads.
Tony Edwards, with Horsepower Intellectual Property Law in West Kelowna, sat down to explain some of the potential ramifications of the proposed law and a few of the surprising ways your business might be affected.

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New bill carries new promise and new complications

ISP companies have been given a reprieve in C-32. The proposed changes allow ISPs to pass through warnings from copyright holders to the ISP customer in cases where the copyright holder may or may not be aggrieved.
The onus is left on the end user to defend their actions to the copyright holder, knowing that once the customer has been warned, the ISP may be compelled to give up the customer’s identity. There is no doubt the ISP is ‘off the hook’ in the new legislation says Edwards. For Edwards, “The real question is how will the government balance the rights of copyright holders against the market and political pressures of a generation that perceives the internet and media as being free?”
Two other crucial questions: How will record companies be able to prove an infringer has relinquished ill-gotten downloads? Will enforcement be worth the effort and expense? C-32 calls for statutory penalties, but the ‘hardship’ escape hatch could reduce damages for a penniless college student.
The separate issue of digital locks on software will be a huge wake-up call for businesses says Edwards, “We are in for a digital hangover, after all the years of free and unlimited copying.”
Software hasn’t been outright owned for years. Licenses for software are the real product and End User License Agreements (EULAs) contain fine print that slowly but surely filches control from the end user licensee. “When was the last time you read a EULA?” asks Edwards. “The enforcement of digital locks will highlight how much control users have given away.”
The ready example is to look at how often your company backs up its information, which treads across various EULA agreements attached to different software programs. To prevent illegal copying, multiple downloads of software could be curtailed, affecting the interoperability of various software and systems that make your company tick.
“You could have many EULAs in use in your company and until the digital locks are put in place by software vendors during upgrades, you won’t know how your business will be affected,” says Edwards.
To Edwards the most interesting philosophical change is the introduction of parody and satire as legitimate fair dealing in regard to other creative work. In the past Canadian courts ruled that parody and satire were not legitimate defenses for copyright infringement. This shift is ‘radical’ says Edwards and it brings Canada closer in line with the U.S.
For the first time Canadians will be able to parody brands and other copyright eligible work with a ready defense under the law. It is conceivable your company could be on the receiving end of this parody. A recent example is the BP logo, with satirical artist renditions of the stylized flower dripping with oil.
In the end it comes down to politics. Bill C-32 is a massive undertaking on a short time schedule.
Its first reading was held June 5, less than a month before summer recess. In the long term the issue won’t die, as Canada is signatory to multiple international agreements on copyright, and a target of the U.S, which claims we aren’t doing our part. Reconciling the divergent interests of the U.S. and Europe remains a challenge, including the ongoing free trade negotiations with the EU. Domestic interests, for politicians seeking votes, must be satisfied including a generation used to free access to digital media and businesses that rely on copyright for their living.
Copyright law is always playing catch-up, and that defines the underlying weakness in any legislative effort. In Edwards opinion, if Bill C-32 is made law as it stands, “We are not going to understand the impacts until it is too late.”