The IP Year 2007 In Review: Copyright (Part 3)

This third part of The IP Year 2007 in Review covers the year's developments in copyrights. See parts 1 and 2 for a discussion of patents and trade-marks.

TABLE OF CONTENTS

TOPIC

PROFESSIONAL

COPYRIGHT

CAMCORDING CRIMINALIZED

Jason Kee & Peter Armstrong

DISCUSSING COPYRIGHT LAW REFORMS

Peter Armstrong

EXCLUSIVE COPYRIGHT LICENSEE CANNOT STOP PARALLEL IMPORTATION

Jean-Philippe Mikus

WHAT A DIFFERENCE A YEAR MAKES! RECORD STATUTORY DAMAGES AGAINST COUNTERFEITERS

Jason Kee & Peter Armstrong

PREVIEWS OF SONGS FROM ONLINE MUSIC SERVICES NOT INFRINGING

Jay Kerr-Wilson

BETTER LATE THAN NEVER? NEW TARIFF FOR ONLINE MUSIC SERVICES

Jay Kerr-Wilson

PRIVATE COPYING LEVY MAY NOW APPLY TO PORTABLE MEDIA PLAYERS

Jay Kerr-Wilson

KEY CANADIAN DEVELOPMENTS IN COPYRIGHTS

As a result of significant judicial and legislative action, the year 2007 saw several important developments in Canadian copyright law. As a result of amendments to the Criminal Code stemming from complaints by movie industry groups such as the Canadian Motion Picture Distributors Association, "camcording" a film in a movie theatre was made an offence. There were also rumblings of more substantial upcoming amendments to the Copyright Act. The Supreme Court of Canada also addressed whether an exclusive copyright licensee can stop parallel importation of "grey market" chocolate bars. In addition, the Federal Court awarded record damage awards in two cases under the statutory damages provision of the Canadian Copyright Act. Finally, a number of decisions of the Copyright Board set the tariffs applicable to various electronic media used for recording and downloading music.

IMPORTANT COPYRIGHT RELATED AMENDMENTS

"Camcording" Criminalized In a response to complaints by the Canadian movie industry, the Federal Government of Canada made the act of recording a film in a movie theatre ("camcording") without authorization an offence under the Criminal Code.56 In June, An Act to Amend the Criminal Code (Unauthorized Recording of a Movie),57 came into force with the stated purpose of closing a perceived loophole in Canadian copyright law and deterring the creation of illegal movie recordings in Canada.

Under the Copyright Act,58 camcording is an infringement of copyright, and anyone who knowingly makes for sale or rental, sells or rents, or otherwise distributes an infringing copy of a work is subject to criminal sanctions. Industry groups have long argued, however, that these sanctions are insufficient.

Upon coming into force, two new offences have been added to the Criminal Code. The first offence, referred to as 'simple camcording', prohibits the recording of a "cinematographic work" (as defined by the Copyright Act) or its soundtrack in a movie theatre without the consent of the theatre manager. The second offence, referred to as 'camcording for the purpose', prohibits the recording of a "cinematographic work" or its soundtrack in a movie theatre without the consent of the theatre manager for the purpose of sale, rental or other commercial distribution of a copy. In addition to creating these new offences, the amendments also grant courts the authority to order the seizure of anything used in the commission of these offences, such as the recording device itself.

Already someone has been charged wearing night vision goggles and in possession of recording equipment and tools to upload data to the internet, which gave him the dubious honour of being the first individual in Canada to be charged under these new provisions!

Discussing Copyright Law Reforms Under growing domestic and international pressure, new copyright legislation may soon be introduced in Canada. In its current form the Copyright Act does not encompass downloading and sharing music files. It is expected that the upcoming copyright reforms may seek to protect the rights of copyright holders in the digital and online marketplace. The Canadian Recording Industry Association has long campaigned for changes that would protect the interests of copyright holders by facilitating the prosecution of those who share files of copyright material. However, not all industry groups share this perspective. For example, the Canadian Music Creators Coalition is promoting amendments that would allow file-sharing in certain circumstances that are of benefit to the Canadian copyright holder. While it is unclear what the reforms will be, it is hoped that any amendments will take into account the digital marketplace and help to determine issues arising there from.

NOTEWORTHY COPYRIGHT DECISIONS

Exclusive Copyright Licensee Cannot Stop Parallel Importation In 2007, the Supreme Court of Canada has considered copyright as a means of stopping parallel imports. In Euro-Excellence Inc. v. Kraft Canada Inc.,59 the Supreme Court held that Kraft Canada Inc. could not use copyright law to prohibit the parallel importation of "grey market" chocolate bars from Europe. Kraft Canada was granted an exclusive license in Canada for the copyright in "logos" printed on the labels of TOBLERONETM and COTE D'ORTM chocolate bars. Kraft Canada had previously been successful in obtaining damages for copyright infringement and obtained an injunction forcing former Canadian exclusive distributor Euro-Excellence Inc. to cover up the copyright material on chocolate bars bought in Europe and imported into Canada.

The Supreme Court had to consider "secondary" infringement under the Copyright Act. Kraft Canada was not claiming that Euro-Excellence had printed infringing labels or had obtained infringing labels from a source outside of Canada. In fact, the chocolate bars imported by Euro-Excellence were manufactured by Kraft Canada's licensors. Kraft Canada instead relied on the provisions of the Copyright Act that secondary infringement in Canada occurs when a retailer or distributor deals in goods manufactured abroad that would infringe copyright had they been hypothetically manufactured in Canada. As Justice Rothstein pointed out, the purpose of this provision is to prevent dilution of the independent value of the Canadian copyright through foreign imports.

All judges recognized "logos" as legitimate subjects of copyright protection, but the majority of the Court agreed that Kraft Canada as exclusive licensee of copyright in the logos could not prevent parallel importation of chocolate bars. Although the majority judges agreed on the end result, it was for two very different sets of reasons. Justice Rothstein wrote one set of reasons that held that the exclusive licensee does not gain a property interest and, therefore, merely has a contractual claim against the copyright owner if the promised exclusivity is not respected by reason of the copyright owner's action. In Rothstein's...