The Reasonable Expectation of the Consumer on the Permitted

Scope of Use of Digital Music

Pascale ChapdelaineSeptember 18, 2009

The IP Bargain: Consumer Perspectives

in a Global Economy, an IP Osgoode Conference

Background

The CCA is almost silent about users and consumers

Copyright law is copyright holder centric

International Developments confirm trend

Background

Copyright holders and consumers in independent spheres….until recently

Copyright, new technology…and consumers

Sony Corp. (1984); MP3.com (2000);

Napster (2001); Grokster (2005)

Copyright holders and consumers getting closer and closer

Music recording industry took action against 30,000 individuals

Average settlements between $3,000 and $12,000

Joel Tenenbaum refused to settle

If Joel found to have willfully infringed copyright, could face $1,000,000 for downloading seven songs (under Digital Theft Deterrence Act).

Support by Professor Charles Nessen and Harvard Law Students

Source:

Consumers and Copyright holders

Music Recording Industry not yet in Canadians living rooms….

Techno-empowerment of consumers and copyright holders

Standard form agreements

Consumers as specific group of copyright users

Individual

Non commercial purpose

Specific sphere of interests and values

Imbalance in bargaining power, information, choice

How adequate are current copyright, contract and consumer laws to address interests of this group ?

The “balance” in the CCA

• Théberge v. Gallerie d’art du petit Champlain Inc. [2002] 2 S.C.R. 336

• CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339, 2004 SCC 13.

• Socan v. Canadian Association of Internet Providers, [2004] S.C.J. No. 44 (S.C.C.)

Copyright

Exclusive rights are “act based”

Creation of statute yet CCA an “incomplete code”

Copyright heavy reliance on contract as vehicle to grant access to works

Outer limits of Copyright

Pertinent to digital music

Non substantial part (s. 3 CCA)

Private Copying (Part VIII CCA)

Fair Dealing (s. 29 CCA)

Non Substantial part (s. 3 CCA)

Users allowed to produce, reproduce,… non substantial part of digital music without authorization of copyright holder

Ringtone substantial part of a musical work Public Performance of Musical Works, Re Copyright Board decision 2006 (“Ring tone” tariff)

Previews substantial part of musical work

Little practical use for consumer of digital music

Private Copying (Part VIII CCA)

Allows consumers to reproduce a musical work onto an “audio recording medium” for the private use of the person who makes the copy.

Levy on blank audio recording medium and right of remuneration to various copyright holders

Private Copying (Part VIII CCA)

Does not apply to copies of digital music on a MP3 player Canadian Private Copying Collective v. Canadian Storage Media Alliance 2004 FCA 424

Does not apply to reproduction with purpose to sell, rent out, distribute, with or without commercial purpose, communicating to the public by telecommunication

Very fragmented right for the consumer

Private Copying under scrutiny

technological protection measures

new trends of digital music use

Fair Dealing for purpose of research or Private Study (s. 29 CCA)

SCC in CCH:

Fair dealing provisions to be interpreted broadly

Fair dealing provisions can always be invoked even if other exceptions available

Non exhaustive list of criteria on what is “fair”

Fair Dealing for purpose of Research or Private Study (s. 29 CCA)

Digital music use for research and private study ?

Public Performance of Musical Works, Re Copyright Board, 2007 – (Socan Tariff 22A)

Offering music preview is fair dealing for the purpose of research

The Consumer and Digital Music under the CCA

Fragmented, limited and unclear rights

CCH affirmation of “user rights” and call to broad interpretation, opens up new avenues, yet test unclear, especially for consumers

The Consumer and Digital Music under the CCA

Scope of permitted uses prerogative of copyright holder

In the hands of “Freedom” of contract

Tightened by copyright holders technology controls

Digital Music Terms of Use

myplay.comAmazon.com

Digital Music Terms of Use

Personal, non commercial useNo right to shareLimited copies and downloadsLimited copying devicesNo derivative worksunlimited duration or tied to subscription

Notification of tracking measures of useRight to take action if outside permitted use

Consumer Surveys

Digital Music Usage and DRM, Results from a European Consumer Survey, INDICARE

2005

Consumer habits:

80% of all digital music users have burned their own mixes to CD over the past 6 months

73% of the digital music users have shared music files with family members and friends over past 6 months

60% have shared music files with other people

Digital Music Usage and DRM, Results from a European Consumer Survey, INDICARE

2005

Usage preferences

84 % state that transferability important to them

75% want to share with family and friends

45 % afraid files unusable in the future

24 % want to resell “purchased” files

Digital Music Usage and DRM, Results from a European Consumer Survey, INDICARE

2005

Usage rights

55 % users online music stores did not know what they were allowed to do with downloads

59% P2P network users did not know what they were allowed to do with the music downloads

63% of all digital music users never heard of DRM

57 % of digital users do not care or know about copyright

2007/8 Rockbridge National Technology Readiness Survey (NTRS)

Defining Consumers’ Interests to Enjoyment of Digital Music

Situating the Consumer

The Passive or Active Consumer

The “Consumer-as-Participant”

use of works for self-consumption, for their personal benefit alone.

taking part in creative process through “meaning-making” processes

Niva Elkin-Koren, “Making Room for the Consumer under the DMCA”

(2007)

Defining the Consumer Interests

Greater need of protection with copyright works than with ordinary goods

Liberty and Autonomycommunicate, share, copy, “creative self-expression” within defined circles

Privacy BMG Canada Inc. v. John Doe FCA 2005 193

Participation in innovation process

Defining “Private Purpose”

Non commercial exploitation v. non commercial setting

Not limited to own personal use

Private sphere

can include in work setting

could include “closed” social networks

Include derivative works and “acts of mini-authorship” (J. Liu)

Defining “Private Purpose”

Would probably not include

some peer to peer networks

Tension zones:

Act vs. purpose driven scope of Copyright

Broad definitions:

“Communication to the public”

“Performance in public”

NORMATIVE VALUE OF “REASONABLE EXPECTATION” TO ARTICULATE

CONSUMER INTERESTS IN DIGITAL MUSIC

Consumers reasonable expectation

Contract interpretation tool

No terms: ex. CDs

Terms unclear

ex: Privacy and technological measures

Sale of goods warranties

Quality

purpose for which good/service was intended

Reinforced by Consumer Protection Laws

Consumers’ Reasonable Expectations

Shaped by:

Contract terms

Custom

Surrounding technology copying devicesnetworks

Copyright; Private Copying Regime

Custom

Reasonable expectations: warranties of quality and intended

use

Defective CD or service

Guilbert v. Sony BMG Musique (Canada) inc. [2007] R.J.Q. 983 (Que. S.C.)

Scope of use of digital musicinteroperability issuesuse on multiple devicescontrary to fair dealing or private copying

Auchan and Warner Music French cases

Existence of technological measures and privacy

Guilbert v. Sony BMG Musique (Canada) inc. [2007] R.J.Q. 983 (Que. S.C.)

Warranty of quality and intended use: scope of use of digital music

Françoise M. / EMI France, Auchan France Tribunal de Grande Instance de Nanterre 6ème chambre, Jugement du 2 septembre 2003, available at : http://www.legalis.net/jurisprudence-decision;

Christophe R., UFC Que Choisir / Warner Music France, Fnac, Tribunal de grande instance de Paris 5ème chambre, 1ère section Jugement du 10 janvier 2006 available at : http://www.legalis.net/jurisprudence-decision; reversed on appeal: Cour d’appel de Paris 4ème chambre, section A Arrêt du 20 juin 2007 Fnac Paris / UFC Que Choisir et autres available at : http://www.legalis.net/jurisprudence-decision; confirmed by Cour de cassation 1ère chambre civile 27 novembre 2008 UFC Que Choisir / Fnac, Warner music France, available at: http://www.legalis.net/jurisprudence-decision

Consumers reasonable expectations - Shortcomings

As contract interpretation tool

How to define it ?

Largely dictated by non negotiated contract terms

Custom and Expectations shaped by copyright holder offering

Lack of clarity of copyright law on permitted scope of use as anihilating any expectation

Consumers Reasonable Expectations - Merits

Flexible and evolutive

“Reasonableness” element

In Copyright Policy setting:

“Ground” consumer Interests in copyright materials and counter weight to copyright holder centric regime

Judiciary:

to assess fair dealing or other copyright exceptions to copyright infringement

Clarifying users rights

Information disclosure requirements in CCA for copyright holders, of users rights similar to consumer protection law approach

Advantageous to users, authors and copyright holdersWould stimulate “best practices” and guidelines Potential for competition between scope of usage

Copyright exclusive rights in the digital age

Articulating copyright objectives:

incentive to innovate and disseminate

acknowledging stakeholders interests

users as active participants in innovation process

More “purpose” and less “act” driven

incentive driven commercial exploitation right

“Private purpose” right beyond private copying regime

Clarity and simplicity