Canada has greatly contributed to copyright infringement around the world, said Barry Sookman of McCarthy Tétrault LLP at an event hosted by the Canada Institute. The program brought together Sookman and Eric Schwartz, authors of the Canada Institute's latest One Issue Two Voices publication, to discuss the critical challenges and issues posed by new digital technologies and the controversial approaches to copyright reform and enforcement in their respective countries. The session was moderated by Steven Tepp, senior counsel for policy and international affairs, U.S. Copyright Office.

Copyright and intellectual property issues remain a major trade irritant between the United States and Canada. Earlier this year, the United States Trade Representative (USTR) added Canada to its 2009 "Special 301" Report Priority Watch List over growing concern that Canada had not followed through on implementing key copyright reforms under the World Intellectual Property Organization (WIPO) Internet Treaties. The report noted that Internet piracy is a significant concern with the United States' most important trading partner.

A Dark Situation in Canada

Although Canada signed the WIPO Internet Treaties in 1997, the country has done little to implement and enforce its provisions, said Sookman. Since 1997, there have been 12 government, department, and committee reports issued with recommendations on copyright reform in addition to three throne speeches urging reform. However, Canada has yet to pass and implement stronger copyright laws that prohibit the widespread digital exploitation of creative products that is becoming a widespread and serious issue in the country. Canada's major trading partners have harshly criticized Canada for its continued inaction in the area of copyright reform, said Sookman. Reports issued both by the European Union and the United States have been highly critical of Canada's lack of copyright protection.

Sookman presented overwhelming evidence that the Canadian government's failure to enact effective copyright legislation has led Canada to emerge as a safe haven for companies digitally distributing copyrighted material. He noted that not only are the use of P2P networks extensive among Canadians, but many of the major illegitimate file-sharing internet sites operate out of Canada. These companies are drawn to operate in Canada, maintained Sookman, because of the country's reputation for weak, ineffective, or non-existent digital copyright law.

According to Sookman, five of the most heavily used BitTorrent websites currently operate in Canada. IsoHunt, the largest BitTorrent website operating in Canada, receives 5.1 million visits per month. Though the site received a copyright infringement complaint from the Motion Picture Association of America in 1996, IsoHunt has been able to avoid legal repercussions because it operates in Canada, despite having users from around the globe access the website. Sookman also noted that many "pirate websites" based in Canada boldly proclaim on their homepage that because they operate in Canada their operation is completely legal.

In addition to digital copyright reform, Sookman said that Canada also needed to do more to prevent pirated products from physically crossing in and out of Canadian borders. Currently, the Canada Border Services Agency does not have the authority to confiscate and destroy pirated material. Sookman urged the Canadian government to enact stronger border laws to prevent pirated goods from freely crossing in and out of Canada. He also argued that Canada should enact tougher secondary infringement liability laws to make it more difficult for companies such as IsoHunt to operate in the country. Finally, introducing a "graduated response" to penalize users for downloading pirated material would go a long way to deter illegal downloads.

Assessing the Direction of U.S. Copyright Law

Schwartz offered a brief overview of U.S. copyright law, noting that protection of intellectual property is written in the U.S. constitution. He added that while the United States does not subsidize the arts, it relies on laws to encourage artistic production; copyright, he said, promotes incentives to invest, create, and distribute. Schwartz commented that while the United States was historically late to the game, major changes in U.S. copyright regulations began to emerge in the 1980s as books, music, and film began to be disseminated globally on a larger scale. Consequently, an effort was made by the U.S. government to harmonize its copyright policies with international norms. This was followed by the U.S. government's ratification of the Digital Millennium Copyright Act in 1998, designed to update its copyright law to cope with new and emerging digital technology. Schwartz maintained that 11.7 million jobs in the United States depend on having a strong and functioning copyright regime in the country.

He said that despite the progress made in strengthening U.S. copyright law, several areas need to be improved. One major area is in the realm of enumeration of rights. Schwartz explained that the enforcement of rights pertaining to reproduction, public performance, and adaptation of copyrighted materials must go hand in hand with strong laws defining exclusive licensing rights. Another area highlighted by Schwartz relates to the adoption of efficient and effective enforcement mechanisms. One step the United States can take to improve its enforcement mechanisms is denial of service for repeat offenders of copyright infringement. In addition, the introduction of a more effective "notice and takedown" of those websites that disseminate copyrighted material illegally should be introduced in the United States. To this end, noted Schwartz, U.S. policymakers should consider the introduction of a "graduated response" to address those who facilitate the delivery of materials illegally.

View the full publication: "Copyright Law in Canada and the United States: The Digital Challenge."

By Ken Crist, Program Associate, Canada Institute