A Detailed Look at Bill C-32 – Canada’s Copyright Reform Bill (Part 4)

We are now over half way through reading through and analyzing Canada’s latest copyright reform bill. While there have been many interesting ideas (many of which are, unsurprisingly, controversial), we haven’t gotten through all of the bill yet. We continue with the second half of the legislation.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes


We have already done a detailed citizens analysis of half of the copyright reform bill facing Canadians. There’s already been plenty of material that was covered including educational provisions that seem to require students to destroy their homework 30 days after the end of the course as well as provisions that say that exceptions are being granted only to have those exceptions removed at the presence of a digital lock (legally speaking of course).

We continue our analysis on page 3 of the legislation, but before we continue, we have to stress that this is not a legal opinion and we are not, in any way, shape or form, offering legal advise. This is merely a Canadian citizen reading through the legislation and picking out various interesting topics from within the legislation and discussing them. If you want legal advise, seek that through legal firms or organizations like CIPPIC.

Section 31 Continued – Encryption Research

On the heals of the interoperability exception, we have this:

30.62 It is not an infringement of copyright for a person to reproduce a work or other subject-matter for the purposes of encryption research if

(a) it would not be practical to carry out the research without making the copy;

(b) the person has lawfully obtained the work or other subject-matter; and

(c) the person has informed the owner of the copyright in the work or other subject-matter.

This is particularly interesting given that this paragraph is what follows:

30.63 It is not an infringement of copyright for a person to reproduce a work or other subject-matter for the sole purpose, with the consent of the owner or administrator of a computer, computer system or computer network, of assessing the vulnerability of the computer, system or network or of correcting any security flaws.

It’s interesting that encryption research requires researchers to inform rightsholders that encryption research is taking place. The question that comes to mind is, what if rights holders forbid the use of their work in this manner? This may be a matter that would have to be settled in court for clarification. While it sounds like something that might be a bit of a stretch, just remember that malware creators such as spyware developers might make something that they don’t want researchers looking in to from an encryption standpoint. It’s a possibility from our standpoint.

Section 35 – Safe Harbor

If anyone says that this piece of legislation has nothing to do with and shares no resemblance to the US DMCA would be mistaken because the DMCA in the US, as with the current copyright reform legislation, both appear to contain safe harbor provisions.

31.1 (1) A person who, in providing serv- ices related to the operation of the Internet or another digital network, provides any means for the telecommunication or the reproduction of a work or other subject-matter through the Internet or that other network does not, solely by reason of providing those means, infringe copyright in that work or other subject-matter.

(2) Subsection (1) does not apply in respect of a service provided by the person if the provision of that service constitutes an infringement of copyright under subsection 27(2.3).

(3) Subject to subsection (4), a person referred to in subsection (1) who caches the work or other subject-matter, or does any similar act in relation to it, to make the telecommunication more efficient does not, by virtue of that act alone, infringe copyright in the work or other subject-matter.

In other words, just because you provide the service doesn’t mean you infringe copyright in and of itself. If you provide a service that is designed to infringe copyright, that’s a whole different story. This follows closely with what the US DMCA and subsequent court decisions have suggested for years. It seems that Canada is simply following suit in this respect through this copyright reform legislation.

Section 31 Continued – Network Neutrality Preserved?

The part that immediately followed the above portion of the legislation was very interesting:

(4) Subsection (3) does not apply unless the person, in respect of the work or other subject-matter,

(a) does not modify it, other than for technical reasons;

(b) ensures that any directions related to its caching or the doing of any similar act, as the case may be, that are established by whoever made it available for telecommunication through the Internet or another digital network, and that lend themselves to automated reading and execution, are read and executed; and

(c) does not interfere with the lawful use of technology to obtain data on its use.

What was specifically interesting was section (c) here because it says that lawful uses of a network cannot be interfered with. So, let’s say one uses BitTorrent to obtain the latest version of Open Office. Then, let’s presume that Bell decided to throttle BitTorrent that would affect caching. Technically, they have interfered with the lawful use of their networks. If they chose to interfere with that traffic with respect to caching, that must also mean that they can stop absolutely every potentially copyright infringing activity that could occur thanks to caching and would no longer fall under subsection 3. If you can dabble in control a little, you must be able to control all of it. No half measures, it’s all or nothing. What’s disappointing in this is that this affects such a narrow part of network management and not all of it.

Section 46 – Statutory Damages

This was particularly interesting because it sends the message that a government finally got the message that there is a difference between commercial and non-commercial infringement:

38.1 (1) Subject to this section, a copyright owner may elect, at any time before final judgment is rendered, to recover, instead of damages and profits referred to in subsection 35(1), an award of statutory damages for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally,

(a) in a sum of not less than $500 and not more than $20,000 that the court considers just, with respect to all infringements involved in the proceedings for each work or other subject-matter, if the infringements are for commercial purposes; and

(b) in a sum of not less than $100 and not more than $5,000 that the court considers just, with respect to all infringements involved in the proceedings for all works or other subject-matter, if the infringements are for non-commercial purposes.

Now, contrast this with US copyright law for an even more interesting look at this:

* Statutory damages range from $750 per work to $150,000 per work
* In case of “innocent infringement”, the range is $200 to $150,000 per work. “Innocent” is a technical term. In particular, if the work carries a copyright notice, the infringer cannot claim innocence.[50]
* In case of “willful infringement” (again, “willful” is a technical term), the range is $750 to $300,000 per work.

In other words, the floor and ceiling for infringement is significantly lower when it comes to statutory damages. Bill C-32, in this light, is far more progressive in actually saying, “Hey, there is a difference between commercial and non-commercial infringement here.”

Comparatively speaking, it’s also nice to know that infringement doesn’t mean that rights holders effectively win a lottery worth of money from random people (Just look at the Thomas case or the Tenenbaum case to get what we’re talking about here) Things get more interesting further down:

(3) In awarding statutory damages under paragraph (1)(a) or subsection (2), the court may award, with respect to each work or other subject-matter, a lower amount than $500 or $200, as the case may be, that the court considers just, if

(a) there is more than one work or other subject-matter in a single medium; and

(b) the awarding of even the minimum amount referred to in that paragraph or that subsection would result in a total award that, in the court’s opinion, is grossly out of proportion to the infringement.

So if someone was hauled in to court over an album that person uploaded to another persons iPod, then a court can be convinced to not hand down the minimum sentence and hand down something lower than the minimum sentence. This is great news because it makes it significantly harder for questionable law firms to implement supposedly new business models that is solely based on suing individuals (most would agree that it is based on abusing the legal system set in place) as seen in the US more recently. In other words, good luck extracting a multi-million dollar settlement from a teenager who barely even knows how copyright works.

Section 46 – Proportional Punishment

The idea that there is a difference between commercial and non-commercial infringement was not only further cemented after that, but there was also an interesting concept thrown in about the need for proportional punishment for infringement:

(2) Subsection 38.1(5) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) in the case of infringements for non-commercial purposes, the need for an award to be proportionate to the infringements, in consideration of the hardship the award may cause to the defendant, whether the infringement was for private purposes or not, and the impact of the infringements on the plaintiff.

This is a very progressive and positive concept being added. There is a difference between being a multi-millionaire and being sued for a few hundred thousands of dollars and being on the poverty line and being sued for a few hundred thousand dollars. I personally do not believe there is a one size that fits all when it comes to awards for damages because everyone’s personal situation is different. If a multi-national company is sued for a few million when they make that much in three days in revenue, that’s OK because they can spare the pocket change. If a burger flipper get’s hit with the same award, they are financially ruined for the rest of their life. What message does that send? That corporations — particularly large corporations – are above the law and they can break copyright all they want because there’s no consequence that will hurt them. I’m glad that there’s at least a concept put down that tries to not allow that to be the main message of the legislation.


We haven’t gotten through page 3 yet, but we did cover two big issues and touched on a third — damages, safe harbor and touched on network neutrality.

The thing I don’t understand is why it took so long to understand the basic concept of there being a difference between commercial and non-commercial infringement. It astounds me that such a simple solution, or rather, the starting point of a simple solution to a number of issues surrounding the social aspect of copyright, was something that was lost on so many politicians up to this point. For years, file-sharers were furious at bootleggers selling pirate copies on the street because it, whether justified or not, gives file-sharers a bad name. I think that whenever there is a bunch of people busted for selling pirate copies of movies, many file-sharers are very happy because they know that selling bootleg copies of copyrighted material is wrong. Additionally, they are just as frustrated when non-commercial infringement is legally deemed just as bad. Credit where credit is due, at least those behind this copyright reform bill figured this out.

Previously: A Detailed Look at Bill C-32 – Canada’s Copyright Reform Bill (Part 1)
A Detailed Look at Bill C-32 – Canada’s Copyright Reform Bill (Part 2)
A Detailed Look at Bill C-32 – Canada’s Copyright Reform Bill (Part 3)

See also: Bill C-32 – Canada’s latest copyright reform bill

Drew Wilson on Twitter: @icecube85 and Google+.

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