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Forget the Wording? It's the Enforcers You Have to Worry About*

by Normand Tamaro

*Paper prepared for the session on trade-related aspects of intellectual property rights (TRIPS) that took place at the Cancopy head office in Toronto on October 5, 2000.

TABLE OF CONTENTS

Preamble

Copyright was not a burning issue in the corridors of power ten years ago, since it was generally believed then that copyright operated on the basis of unusual technical rules that were quite different from the major categories of legal practice and was thus only of interest to creators themselves. Needless to say, this viewpoint conveniently overlooked the fact that creators have a long “shelf-life” in humanity’s collective memory.

But with time perceptions change, especially now that people like Bill Gates and other dominant figures in the “new economy” are conspicuous examples of the reality that “intangibles” have become a major source of wealth these days. Economic experts are increasingly talking of “content” — a new buzzword that has become almost inextricably associated with creative work, somewhat in the way that artistic materials like stone, metals and wire were associated with creative works in the past.

Now that the business community sees copyright as a means of wealth, this has been all the incentive needed to reach a specific international agreement within the framework of economic globalization. Whereas the copyright field has been characterized since the end of the 19th century by concerns for authors, copyright issues have now become a top priority for economic globalizers as well.

The TRIPS agreement that we now work with originates from concerns over trade and customs duties that were covered by GATT in the Marrakech Agreement signed on April 15, 1994. The underlying purpose of the agreement is to allow for the practical implementation of certain intellectual property rights that are said to be involved in international trade. Thus, as we understand it, the agreement’s main function is to provide for the free international circulation of intellectual property rights.

The TRIPS agreement complements the Berne Convention in that it recognizes the need to protect software and the data contained in data banks. From our perspective, this approach tends to corroborate our view that a primary concern of those who drafted the TRIPS agreement was to protect “content” rather than works as such. And, since the protection of data has now become a primary concern, it is not surprising that the TRIPS agreement seems to exclude authors’ moral rights, inasmuch as the preamble to the agreement apparently indicates that copyright law in individual countries should not become an impediment to international trade.

Needless to say, no one is against some of the “motherhood”-type issues involved and, in theory, we should not be criticizing an agreement that reinforces copyright law in several countries. On the other hand, the main problem that we see looming is that it is now business people, rather than creators, who have been given the responsibility of deciding copyright issues.

For example, to my mind, the United States has clearly exerted enormous pressure to ensure ratification of the TRIPS Agreement. All the same, whereas the United States was a rampant copier of creative work prior to the 20th century, it is now evident that the America’s main concern is now to protect American works. When Mickey Mouse was created, his creator, Walt Disney expected his creation to be protected for a maximum of 56 years, but now each time that Mickey Mouse becomes apparently old enough to fall into the public domain, Congress extends the copyright-protected period. That was the case in 1976 when 19 years were added, and that was also the case in 1998 when 20 more years were added. So, now it looks as if Mickey Mouse will be 95 when he finally becomes public property, although, even then, we cannot rule out the possibility that Congress will give him another extension. While this may still be the “right thing to do,” we should point out that what is motivating the Americans is not so much respect for the artistic integrity of Mickey Mouse products, but rather an eagerness to ensure that foreign money continues to flow in for many years to come. Similar motives are behind the TRIPS agreement.

Thus, it is not the wording of the agreement that worries us, but rather the identity of those of who have been chosen to enforce it.

In our view, the history, sociology and philosophy of legal systems provide us ample evidence that the people who promulgate and apply legislation play a more powerful role in practice than the legislative texts themselves. Thus, although the first English copyright act in 1790 only covered books, the courts, in practice, extended this protection to other works that had very little to do with books as such. And then in 1769, the English Court of Appeal, without any corresponding legislative authority, enunciated what could be considered a classic definition of copyright.1 Several years later, the French courts did the same thing for authors’ moral rights in French law.

Similarly, the history of copyright in Canada clearly shows that legislative text is not as important as the people who promulgate and apply the legislation in practice. Indeed, knowledge of this background is very useful in appreciating the fact that authors should not delegate to business people the responsibility for applying their rights and the same goes for international agreements.

I. CANADIAN POLITICIANS TEND TO INTERVENE QUICKLY TO MAKE EXCEPTIONS TO COPYRIGHT

A) The passing and implementation of the Canadian Copyright Act

In 1911, the British government combined all its previous laws on copyright into a single act. At the time, its colonies were given the option of adopting this act or developing a purely national one in time to replace it. Although this latter approach is what Canada intended to follow, the federal parliament, because of certain constraints, was unable to legislate as it wanted.

The specific nature of these constraints was that, under the British _Copyright Act _of 1911, Canada was obliged to provide adequate copyright protection for British authors so that, in exchange, Canadian authors would have copyright protection in both the United Kingdom and other parts of the British Empire. The future Canadian act was also obliged to comply with the provisions of the Berne Convention to ensure that Canadian authors would also have copyright protection in all the Berne Convention member states. And, since the Berne Convention did not allow any exceptions to copyright at the time, Canada had to provided foreign authors a minimal degree of protection in keeping with the spirit of the convention.

Finally, after several years of discussion that Canadian authors were virtually excluded form, a bill was submitted in 1921 that eventually became, after some amendments, an act in 1921,2 which came into force on January 1, 1924.

But, why did the Canadian Parliament wait almost three years before implementing an act it had passed in 1921? The reason was that if the Berne Convention had been applied to all authors, it would have harmed certain industrial interests in Canada. These interests, in turn, had an extremely powerful hold over certain Canadian politicians who clearly remembered the time when Sir Thompson tried to get a protectionist bill passed, and these politicians, in their turn, were willing to make another attempt.

According to these politicians, the Canadian market was already too open to foreign products and this was harming the Canadian industry. In addition, a high level of protection for foreign authors resulted in substantial capital outflow with a concomitantly negative effect on Canada’s balance of payments. As a result the Canadian government was tempted to ignore authors’ rights, regardless of whether they were Canadian or foreign.

Under the act as it was passed in 1921, both Canadian and foreign authors were to have been obliged to take out mandatory legal licences. These licences would have allowed the production and manufacture in Canada of works that were not available on the market, as well as their eventual distribution under a royalty system. All of this was proposed so that the authors would have nothing to worry about, even though they would not have been in a position to protect the quality of the works reproduced. However, the very principle of granting such licences contravened the rules set by the Berne Convention. As a result, although Canadian authors failed to convince the politicians, foreign authors, including those from Berne Convention member countries, were able to force the Canadian government to respect the provisions of the Berne Convention concerning the rights of foreign authors. This led to the passing of the 1923 act,3 which amended the 1921 one which had not yet come into force.

The main effect of this amending act was to exclude foreign authors from the legal licensing system, while keeping Canadian authors under it. Thus, in terms of certain rights at least, foreign authors by virtue of the Berne Convention were able to receive better protection than their Canadian counterparts.

Also, because the original 1921 act was already in harmony with the Berne Convention, the main obstacles were removed and there was nothing left to prevent the new act’s passing in 1924.

B) The Ford Hotel Affair

In 1935, the Superior Court of Quebec handed down a judgement4 containing certain principles that made it possible to know whether a given case involved a public performance and the person who was truly responsible for this performance. The particular significance of this judgement lay in the overriding importance the court assigned to the transferable right to perform a work, as well as its conclusions that a first public performance of a work authorized by the copyright owner could give rise to many subsequent public performances, each of which would have to be separately authorized by the copyright owner. In other words, a duly authorized first performance, could lead to a second public performance, which too, would have to be authorized, and this second performance, in turn, could lead to a third that would have to be authorized as well. And so on, theoretically, forever…

According to the statement of facts by the Superior Court, the Mount Royal Hotel’s orchestra publicly performed music in the hotel’s common areas. This particular situation involved performances that were authorized by the owner of the performing rights — the Composers, Authors and Performing Artists of Canada (CAPAC), the predecessor organization of the current SOCAN (Society of Composers, Authors and Music Publishers of Canada). However, CAPAC had only granted a restricted licence that was just for the performance of music inside the Mount Royal Hotel. As it happened, this first performance was followed by a second, and a local radio station, after applying for permission to broadcast the performance given by the Mount Royal Hotel orchestra, received a restricted licence allowing it to broadcast the music for domestic or private purposes only. In other words, CAPAC allowed the radio station to broadcast the music it controlled to the general public, but only for private enjoyment.

At the same time, another Montreal Hotel, the Ford, took advantage of this broadcast to retransmit it without permission by using receivers that were linked by wire to its common areas and its guest rooms. Thus, because CAPAC had never authorized this third broadcast, it brought a complaint in the Superior Court on the grounds that its performing rights had been infringed upon. This complaint clearly concerned only the Ford Hotel, since both the Mount Royal Hotel and the radio station had obtained performing licences from CAPAC.

Although the Ford Hotel argued that the public broadcast it was responsible for did not infringe on the performing rights in question, since the permission obtained by the radio station was for reception of the music by the general public, the Court did not see how the permission granted the radio station could justify the reception of the music in a public setting. According to the act, the owner of performing rights may grant restricted licences for certain purposes. But in this case, CAPAC had not granted the radio station general permission for any use whatsoever of its music. It had granted a restricted licence for a radio broadcast for domestic or private enjoyment. As a result, the Ford Hotel was mistaken in arguing that the licence obtained by the radio station gave it specific permission to give a performance that could not be considered domestic or private. The court therefore declared that the Ford Hotel infringed on the plaintiff’s performing rights by retransmitting the plaintiff’s music to its hotel guests.

However, it was not only hotels that were affected by the Superior Court’s decision. In theory, all users of music by means of public broadcast were well aware that they did so within the scope of the Copyright Act. As a result, in 1935, they began to pressure Parliament to approve an exception to the exclusive nature of performing rights as they existed at the time. The government reacted quickly by passing an exception to the Copyright Act whose main purpose was to neutralize certain effects of the decision rendered by the Superior Court of Quebec in the Ford Hotel affair. This exception is contained in the current section 69(2) concerning the broadcast of radio programs in public places of entertainment, apart from theatres. It no longer mattered that all businesses that broadcast music, for example, would normally have been obliged to pay royalties to the composers, since the business interests, unlike the composers, had succeeded in getting their way in Parliament.

C) The retransmission exception

One Canadian judicial decision that has received enormous publicity was the one rendered in the Canadian Admiral case.5 Should we really be so surprised to learn that this decision was interpreted to effectively deprive composers of their rights over the retransmission of their works to such an extent that since 1954 they have literally been deprived of literally millions of dollars in royalties, whereas Canadian cable companies remain among the few sectors in the world that do not pay such royalties? As they continue to live in an ideal world where producers receive raw materials for nothing, Canadian cable companies have quickly become among the most profitable in the world. With hindsight, it is easy to see that the Canadian Admiral decision contained conclusions that should not have been drawn. In addition, it goes without saying that this decision was never appealed, since neither of the parties, a radio broadcaster and a cable company, lost any money because of it.

Since the decision was announced to composers as one that the courts would not go back on, the composers’ only apparent recourse was to turn to parliament, even though the decision itself contained several aspects that could easily have been contested. However, the composers were never informed of this and it was several decades before any action transpired — this time under pressure from American broadcasters.

In its Canadian Admiral decision, the Federal Court repeated practically word for word several pages of a book by Fox that is considered a classic in Canada. Indeed, Fox at the time was probably the only person who realized this since the Court’s decision contained no explicit reference to his book! In his book, Fox had presented an interpretation of Canadian copyright that made it seem quite different from that existing in other countries. Furthermore, both Fox and the Federal Court in Canadian Admiral ignored the Gillette decision6 by the British Court of Appeal, a decision that effectively caused a legal turnabout in terms of certain interpretations that had been accepted until then. Indeed, this British decision should then have been applied to Canadian law at that time.

Nonetheless, even as late as 1988, the prevailing view was that it was practically taken for granted that cable companies were not obliged to pay authors any royalties for the retransmission of their works to cable subscribers. And yet, particularly in light of the subdividable character of the right to perform a work in public, as expressed so well in the Ford Hotel case, the cable companies should have paid composers as of the very first time their music was retransmitted through the cable system. Indeed, we do not see any reason that justifies such a “private” expropriation of composers’ copyright. But history cannot be rewritten and the fact remains that Canadian composers have been deprived of millions of dollars that they could very well have be entitled to.

In 1988, the government presented its introduction of what were called retransmission rights as a victory for composers, but the composers themselves felt it was a victory of the Pyrrhic variety. The real winners were, in fact, the American radio companies.

As a result of the amendments made in 1988, section 31(2) of the Copyright Act now reads as follows:

It is not an infringement of copyright to communicate to the public by telecommunication any literary, dramatic, musical or artistic work if

  1. the communication is a retransmission of a local or distant signal;
  2. the retransmission is lawful under the Broadcasting Act;
  3. the signal is transmitted simultaneously and in its entirety, except as otherwise required or permitted by or under the laws of Canada.

So, could anything be clearer? In simple terms, cable companies do not pay any royalties when they retransmit in its entirety any signal that can be said to be “local” within the meaning of the regulation adopted in 1989. In practice, this means that a cable company has no royalties to pay when it retransmits in the general Montreal area the signal from a radio or TV station that broadcasts in the Montreal area. The same scenario applies to other regions like Quebec City, Ottawa, Toronto, Edmonton and Vancouver.

So, under what circumstances must cable companies pay royalties? First, if they alter the signal they receive — by removing the advertising, for example. Second, if they retransmit a distant signal within the meaning of the regulation — for example, if they receive a signal from Vancouver for retransmission in Montreal or a signal from Montreal for retransmission in Toronto and so on. On the other hand, they obviously have to pay royalties every time they receive an American radio signal for retransmission in Canada.

Finally, as a result of several decisions rendered by the Federal Court, we now know that the Canadian Admiral decision would not have gone beyond the appeal stage if it had been appealed at the time.7 Unfortunately, because of the heavy expenses involved, it is difficult for authors to have access to the court system, and the same more or less goes for their contact with federal MPs.

D) The exception for performing a musical work without motive of gain at any agricultural or agricultural-industrial exhibition

This exception shows that the organizers of agricultural or industrial fairs have had more success with MPs than with the courts.

In 1931, under pressure from the organizers of agricultural and industrial fairs, the Canadian parliament passed an exception whereby such organizers were exempted from paying royalties to music composers. In a nutshell, these organizers were simply unwilling to pay royalties to authors for the performance of musical works during their fairs.

However, the text passed in 1931 was very quickly challenged in court with the result that a restrictive interpretation was introduced whereby fair organizers would have to pay royalties in the future. Needless to say, the fair organizers were not happy with this decision and turned to Parliament once more who responded with an amended exception in 1936. However, the issue went back before the courts once again with the result that another restrictive interpretation was made of the exception authorized by Parliament. So, in 1938, Parliament amended the text concerning this exception for a second time, and the courts again restrictively interpreted this new text. The upshot has been that Parliament has made no further attempts to change the text, since to do so would purely and simply expropriate authors’ copyright in favour of the organizers of fairs, which, at the time, were generating huge profits.

The reason why the federal parliament was unable to satisfy the fair organizers lies in the domain of judicial interpretation in the sense it was unable to find the “right” wording to accomplish its objectives. For example, in a report commissioned by the government,8 it is stated that the fair organizers should have received a favourable response, but it was unfortunately not possible to formulate a text that met the requirements.

We thus continue to live with the text adopted in 1938, which now appears as section 32.2(2):

It is not an infringement of copyright for a person to do any of the following acts without motive of gain at any agricultural or agricultural-industrial exhibition or fair that receives a grant from or is held by its directors under federal, provincial or municipal authority:

  1. the live performance in public of a musical work; …

It should also be mentioned that the last amendment to this clause was made in 1977, a year in which Parliament added many new exceptions to the Copyright Act.

Thus, while authors should continue to be suspicious of the prevailing discourse concerning the scope of their rights, they can take comfort in one judicial interpretation that continues to work in their favour.

II JUDICIAL INTERPRETATION

In terms of legal character and philosophy, copyright is an ownership right over an “intangible” — information. It is also a right that enables authors to make a living from their work and protect their individual reputations. When this ownership right is adapted to the needs of creators, it can in fact foster creative expression, rather than hinder it. In a case involving the Kiwanis Club of West Toronto, Justice Rand of the Supreme Court has explained the court’s viewpoint on the nature of copyright protection.

During the 1950s, this Kiwanis Club attempted to convince the Supreme Court that it should be legally exempt from paying royalties on musical performances since the profit generated by a dinner-dance that it organized were ultimately going to benefit the poor. In their mind, it was not an infringement of composer copyright to perform music for charitable purposes. However, noticing that only well-off people attended the dinner-dance in question, Justice Rand made a restrictive interpretation of the exception provided for in the act:

“We cannot, then, treat the ultimate object here as exempting the performance from the prescribed fees: so to extend the language of the proviso would unnecessarily run counter to those principles of justice which accord to owners, particularly of property which in the truest sense they have created, the accepted privileges of ownership.”9

More recently, the Supreme Court in Bishop v. Stevens noted that under the Copyright Act:

“the Copyright Act, 1911, was passed with a single object, namely, the benefit of authors of all kinds whether the works were literary, dramatic or musical.”10

Thus, for our highest court, copyright is an ownership right granted to authors on the basis of principles of natural justice in return for a property that they themselves have created. In fact, unlike a person who acquires an ownership right on a pre-existing item of property, as in the case of someone who buys a building, an author is the sine qua non condition of the existence of the right. If creative works did not exist, we would have no need of copyright. That is why the Supreme Court spoke of a property (an authors’ right over their own work) that in a totally real sense has been created by the authors themselves.

Indeed, authors do not deprive anyone of what previously existed. Far from prohibiting attacks on authors and their ideas, the Copyright Act only forbids anyone in the circumstances described in the act from making use of an author’s work (i.e., the creative result of the author’s efforts) without the author’s permission.11

Copyright is thus a private property right over a good in the form of a work that its author did not have before and which does not deprive anyone of anything, except the freedom to use what the work’s author has expressed in a characteristically unique way.

From a political and legal standpoint, we can say that copyright must be protected in order to protect authors’ income, creativity and reputation. The Federal Court’s trial division explains this concept as follows:

“In other words, if copyright is not respected and protected, the creative energies of authors and artists in furthering the diversity of ideas will not be adequately compensated or recognized.”12

The same court underscored the principle that copyright was an important social value since it encouraged diversity of ideas and enhanced self-fulfilment.

“Copyright promotes the third value [of expression through encouragement of diversity of ideas and enhancement of self-fulfilment] by protecting and providing an incentive for authors to create works of expression because their works will be protected under the aegis of the Copyright Act from unauthorized reproduction…”13

So, every time that a copyright owner loses control of his or her work, he or she also loses means of livelihood and by extension the income needed to continue creating; the person also loses the means of supporting, at least in part, individual freedom of expression and the ability to protect his or her personal reputation; finally, the copyright owner also loses all or part of the private property that has been created.

“ […] the Plaintiff loses its right to control the use of its copyright, there is little left to the Plaintiff’s right of private property.”14

The consequence of loss of the control that authors must exercise over their works is harmful for society, since copyright would not then achieve its two main objectives, which are “[TRANSLATION] to encourage the publication of works for the ‘advancement of knowledge’, and protect and recompense the intellectual efforts of authors over a certain period of time.”15

The less benefit authors receive from copyright over their work, the less will be their effort to “advance” society’s pool of knowledge. On the other hand:

“The protection of authors and ensuring that their creative energies are recompensed is an important value in a democratic society in and of itself.”16

With our liberal ideas dating from the last several hundred years, it is generally recognized that it is healthy for society to take advantage of the creativity of its authors. The concern to place control over creative works in the hands of their authors rather than in the hands of the “Princes” was already legally explicit in the first western law on copyright that was passed in England in 1709. We are now living in another Age of Enlightenment and we have to be wary of the new “Princes.”

CONCLUSION

On the basis of purely Canadian examples, we have attempted to show that authors have to be on their guard to protect their rights. These are the same type of rights that are still acknowledged as fundamental in our major international statutes, since these instruments recognize the importance of the circulation of ideas and thus of freedom of expression and its corollary, the right to derive income from intellectual production and to protect one’s reputation in this regard. These statutes also imply that without such rights, there would certainly be fewer ideas in circulation.

For example, Article 27 of the Universal Declaration of Human Rights17 states:

  1. Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.
  2. Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

Along the same lines, Article 19 of the International Covenant on Civil and Political Rights18 states:

  1. Everyone shall have the right to hold opinions without interference.
  2. Everyone shall have the right to freedom of expression; this freedom shall include freedom to seek, receive and impart information of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other means of his choice.
  3. The exercise of the rights provided for in paragraph 2 of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary:
    1. For respect for the rights or reputations of others;
    2. For the protection of national security or of public order (ordre public), or of public health or morals.

It is clear from the above-mentioned international instruments that underlying the principle of copyright is the right to freedom of expression that must be considered a fundamental right not only for the individual but also for society itself. While authors in Canada may not be protected by a specific right to freedom of expression, it is totally reasonable to assume that they benefit from a right to freedom of expression that essentially safeguards the freedom to be creative.19

Indeed, such a right contains all the ramifications that authors need so that they can earn a living from their work, without depriving society of anything whatsoever, in the context of a certain property right and all the other legal attributes deriving from an exclusive right. Clearly, once we “go beyond” the somewhat frustrating technical aspects of copyright law, which are quite different from those in the major categories of legal procedure all jurists are familiar with, we can readily see that copyright is a legal tool that has been designed for subjects and objects that are essential to society, since it is now economically very important that copyright law continue to exert a major influence on what could be described as “society’s intelligence.”

On the other hand, because copyright law is a very technical field, people tend to trust the conventional wisdom for a sense of its true scope. I hope that I have at least been able to made the reader aware that if authors are not careful, no one else will preserve their basic rights for them.

NOTES

1 Millar v. Taylor, 98 E.R. 201, 4 Burr. 2303 (C.A., 1769).

2 Act respecting copyright, 1921, 11-12 Geo. V, c. 24, assented to on June 4, 1921.

3 An Act amending the Copyright Act, 1923, 13-14 Geo. V, c. 10, assented to on June 13, 1923.

4 Canadian Performing Right Society (Ltd.) v. The Ford Hotel Co. of Montreal (Ltd.) (1935), 73 S.C. 18.

5 Canadian Admiral Corporation Ltd. c. Rediffusion Inc., [1954] F.C.R.. 382, p. 404 et s.

6 Performing Rights Society Ltd. v. Gillette Industries Ltd., [1943] 1 All E.R. 228 and 413 (C.A.), p. 415, 416-417.

7 See, for example, Canadian Cable Television Association v. Copyright Board (1993), C.P.R. (3d) 359 (F.C.A.).

8 Ilsley Commission, Royal Commission on Patents, Copyright, Trade Marks and Industrial Designs. Report on Copyright. Ottawa: Queen’s Printer, 1958.

9 Composers, Authors & Publishers Association of Canada Ltd. v. Kiwanis Club of West Toronto, [1953] 2 S.C.R. 111, 116.

10 Bishop v. Stevens, [1990] 2 S.C.R. 467, pp. 478-479.

11 Michelin & Cie v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), [1997] 2 F.C. 306, 381.

12 Ibid., p. 373.

13 Ibid., p. 376.

14 Ibid., p. 378.

15 Apple Computer v. MacKintosh Computers, [1987] 1 F.C. 173, 200, cf. [1988] 1 F.C. 673 (C.A.), cf. [1990] 2 S.C.R. 209.

16 Michelin & Cie v. National Automobile, Aerospace, Transportation and General Workers of Canada (CAW-Canada), [1997] 2 F.C. 306, 380-381 (F.C.).

17 Adopted and proclaimed by General Assembly resolution 217 A (III) of 10 December 1948.

18 Adopted and opened for signature, ratification and accession by General Assembly resolution 2200 A (XXI) of 16 December 1966. Entry into force 23 March 1976, in accordance with Article 49.

19 Aubry c. Vice Versa, [1998] S.C.R. 591.