I have three simple questions.

(1) Do you have an opinion on how market power should impact the copyright misuse doctrine?

(2) Do you have an opinion on the economic aspects of application of the copyright misuse doctrine to anti-circumvention laws or the broadcast flag mandate? (i.e. , when restrictions go substantially beyond copyright rights and/or result in signficant dead weight loss to consumers)

(3) As technical restrictions increasingly replace traditional contractual restrictions in the copyright world, is there any effective way for a court to regulate restrictions-by-technology (when improper, such as hinted at in Assessment Technologies) other than the heavy hammer of copyright misuse doctrine or antitrust? (i.e. Can a court reasonably strike software code like it does a contractual provision?)

Thank you again for your time and your great posts.

Canada has: a �fair dealing� rather than �fair use� doctrine, which supposedly consists of some apparently closed end and tightly defined �exceptions� to infringement.

Some are palpably trivial or even silly, such as �to make a manual reproduction of a work onto a dry-erase board�. What if the black board is then erased with a wet cloth?

Notwithstanding these tightly defined exceptions, the Supreme Court of Canada (�SCC�) has recently opened up the whole issue in a very user friendly way and made the hitherto apparently limited exception for �research or private study� as open ended � possibly even more so � than would be the result in the USA in some fact situations.

They said:

�Research” must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained.

For example, research by lawyers in the course of serving their clients – obviously not non-commercial activity � is now clearly fair dealing in Canada. This may even allow for the copying of entire academic articles and cases, for example,

See:

http://www.lexum.umontreal.ca/csc-scc/en/pub/2004/vol1/html/2004scr1_0339.html

NB – 51, 56

As a result of this decision, few if any Canadian law firms or other research intensive businesses will see any need to take out licenses from a copyright �collective� in respect of normal research activity.

The SCC may have found a really good balance between the American and Canadian concepts.

The Canadian system also suffers from the ill-conceived notion of �commercially available� exceptions to the already limited exceptions, which effectively make several of the fair dealing and the ephemeral recording exceptions nugatory whenever a collective steps up the plate and offers to license certain activities.

As result of this legislative approach (and some direct and indirect Government subsidies), there are probably now more collectives in Canada than in other country as a result. The principal beneficiaries to date of this approach to fair dealing are lawyers and administrators of the collectives. The costs in terms of opposing the tariffs sought by these collectives are horrendous and the payouts to actual creator are relatively minuscule or non-existent. Despite the economic inefficiency, this proliferation of collective activity continues � since the single purpose collectives can use their revenues to seek higher tariffs and lobby for even more friendly legislation. Their major opponents, although much larger in economic terms, also have many other issues to deal with and the collective tend to get their way.

Hopefully, the wisdom of the SCC will percolate down and be used to advantage by users such as educators, librarians and research oriented businesses, who hopefully will not let the collectives undo this result in legislation. Hopefully, too, they will be effective in redressing some of the excesses of the legislation, such as the �commercially available� exceptions to the exceptions.

Until that happens, the American approach may still be more efficient. For example, American educators, scholars and students probably pay much less for reprography �rights� than do Canadians and I don�t see any shortage of brilliant articles and other material worth copying being produced in the USA. In fact, the Canadian system is a serious disincentive to scholarly research and creativity because of the markedly higher costs and prevalent copyright chill instilled by certain collectives, all of which are essentially unchallenged by the academic community.

Howard Knopf
Professor of Law
Director for the Center for Intellectual Property Law
Chair of the Center for Intellectual Property Law and the Center for Information Technology and Privacy Law
John Marshall Law School

Law works best, its seems to me, when it is applied to a slow moving target. If the law applicable to a particular social problem evolves across generations of human development then you have time for people to analyze the problem and to accept the consensus that emerges.

When law has to deal with a fast moving target, which the increasing pace of scientific and technological developments is now producing, the inevitable errors and misunderstanding that the legal system produces are even more devastating. If the legal system looks inefficient when it deals with well-worn types of problems (criminal trials, divorce proceedings etc.), it appears completely impaired when it is confronted with the onslaught of problems created by new technologies and scientific methods (e.g. digital information, or genetic research).

So I would like to read more about what these thinkers you mentioned have to say about the divergence between ‘law on the books and law in action,’ especially if any of them address this in the context of technological developments.

The significant risk imbalance between complainant and alleged copyright violator renders the doctrine of fair dealing/use relatively ineffective to any but the most courageous, the wealthy, or those with literally nothing to lose. This is the area in which judges could begin to tip the scales back towards balance, which is, as I understand it, the philosophical underpinnings of both copyright and patent law.

To get the book published, I effectively had to cede almost all future royalties (and most of the advance) to the estate in question. Good thing I wasn’t counting on book sales to actually pay for anything.

Not-a-writing in that the Rascals use may be too quick and too much in the background to register as expression, independent of the rest of the interview backdrop, for a reasonable interview viewer. Even if you did crop out the non-Rascals portions of the interview scene and frame-by-frame played it, there might simply not be enough of the work to communicate a meaningful quantum of expression. (cf, some designs for mass mailing envelopes have expression and some don’t).

Although this approach wouldn’t solve all fair use type problems, it would: (1) give “fair users” a Constitutional argument; and (2) help distinguish glimpse type fair use from less incidental types (eg, music sampling, book review quotes, parodies). Factor (2) might be helpful in drawing meaningful categories from a legal economics perspective.

“While interviewing students for a documentary about inner-city schools, a filmmaker accidentally captures a television playing in the background, in which you can just make out three seconds of an episode of �The Little Rascals.� He can�t include the interview in his film unless he gets permission from the copyright holder to use the three seconds of TV footage.”

What to do about such abuses of copyright?

well, first of all you could put them in perspective.

you are presenting this as some sort of unreasonable, or insurrmountable hurdle, when it is simply one more an annoyance in a world full of annoyances.

what if the three second clip in the background contained a non-union actor, or a copyrighted advertisement for cigarettes or strong spirits (not allowed to be shown on TV in the US – and the network never gives away free advertising!), a non-copyrighted swastika (not allowed to be shown on TV in Germany), an offensive anti-gay slogan, janet jackson’s boob, an anti-bush slogan (another boob), or any other item of information that would cause the broadcaster headaches or conflict with their sensibilities?

c’mon man, copyright is but one production concern of many, hardly the most significant, and yet it is continually portrayed in this forum as a huge deterrent to innovation and expression.

frankly, it would have been trivial for the filmmaker to blur out the TV screen showing the little rascals in the background. problem solved. now where is that guy’s ASCAP membership number… or we’ll have to blur him out too.

certainly, sir, you can come up with a better example that reflects the true tyranny of copyright as you preceive it.

where are those weapons of mass destruction?

The recommendation is a partial solution only. We already have such a provision for reverse engineering computer programs for interoperability purposes (Copyright Act 1968 s 47H). But time and again one sees software licences prepared in Australia which seek to prohibit this.

The vagueness of the US fair use defence, assuming it is compliant with the TRIPS Agreement, is both its weakness and its greatest strength, particularly in a field developing so quickly as information technology. There are two reasons for this.

First, for example, the Australian law is derived from English law. In 1911, England moved from a fair use defence to specific, explicit fair dealing defences for four enumerated purposes. No change in the law was intended, however, the specific statutory defences quickly became narrow silos and all flexibility was lost.

Secondly, it is simply not possible to anticipate in a statute all the situations that should qualify as fair use, let alone do so in a workable manner under the pressure of lobbying from copyright owners. Like the European Union, we had to introduce a specific statutory provision to allow the reverse engineering justified in Sega v Connectix (9th Cir 2000). Within 2 years of its enactment, however, it was demonstrated to be unworkable. It underwent heavy statutory amendment, but the new regime provided in Copyright Act s 47D seems to bear little relation to how the real works.

In principle, therefore, a call for a doctrine of copyright misuse seems more than timely. Would it be consistent with the TRIPS Agreement?

Most notably, the US-Australia Free Trade Agreement provides for a range of measures designed to boost the position of copyright owners. However, the Agreement fails to adopt features of US law that favour users – such as originality or a defence of fair use.

As a consequence, the Australian law does not recognise that users can employ a copyright work for transformative purposes, time-shifting or space-shifting, or reverse engineering.

The Australian Digital Alliance has been campaigning to recognise a defence of fair use in Australia. See the press release that they have just put out on the subject.

23 August 2004

Fair Use Left Out of Trade Agreement: Government Action Requested Urgently

The Australian Digital Alliance (ADA) and the Australian Libraries Copyright Committee today called on the Government to urgently amend the Copyright Act 1968 (Cth) to recognise an open ended defence of fair use.

The ADA and ALCC stated that such reforms are necessary in light of the deleterious impact of the US Free Trade Agreement Implementation Act 2004 (Cth) upon libraries, universities, cultural institutions, and software developers.

Whilst the Government outlined the benefits of harmonisation of intellectual property laws between Australia and the US throughout AUSFTA negotiations, the ADA and ALCC stated their concerns and disappointment that harmonisation has not been effected across the board in the implementation bill, but only selectively, at the expense of users of copyrighted material.

A broader fair use style doctrine, such as exists in the US in order to balance the strong owner-protective provisions of the US Copyright legislation, has not been incorporated into Australian law. The law in relation to copyright which is currently scheduled to take effect on or about January 2005, harmonises only those aspects of US law which favour copyright owners.

Rather than aligning the US and Australian copyright law through the harmonisation process, the result with respect to fair use provisions will put Australians at a significant disadvantage to US citizens.

The detrimental consequences of this will be felt broadly amongst educational, consumer, cultural and research institutions. Without expansion of the fair dealing provisions to balance the stronger copyright owner rights, institutions functioning for the benefit of the public, will bear the burden of a longer copyright term, more stringent copyright owner rights, and tougher penalties for incidental, minor and non-commercial breaches of Copyright. This will expose institutions to greater costs and greater risks. Ultimately this will adversely affect the end users of these institutions, who will not be able to access the same level of knowledge via copyrighted material.

The ADA and ALCC endorsed recommendations of the Copyright Law Review Committee, the Joint Standing Committee on Treaties, and the Senate Select Committee on the AUSFTA, saying that “without appropriate amendments, the changes envisaged by the FTA will tip the copyright balance unacceptably in favour of copyright owners “. All three Committees have at various times called for implementation of broader protective legislation for copyright users, both prior to and in response to the AUSFTA.

The Implementation Bill has now passed through the Senate, and amendments which extend the rights of copyright owners may be enshrined in law as early as January 2005.

This submission is made on behalf of the Australian Libraries’ Copyright Committee (ALCC) and the Australian Digital Alliance (ADA). The ADA is a coalition of public and private sector interests formed to promote balanced copyright law. ADA members include universities, software companies, libraries, schools, museums, galleries and individuals. The ALCC is a cross-sectoral committee formed to consider the impact of copyright law reform on Australian libraries The ADA and the ALCC are united by the idea that copyright law must balance a fair return to creators with a reasonable level of access to knowledge for the public.

The Submission to Government can be found on the ADA (www.digital.org.au) and ALCC (www.digital.org.au/alcc) websites.