Canadian Copyright Board Rules on Private Copying Levies and P2P Music Downloading

February 2004

Record Labels, Music Publishers

On 12 December 2003, the Copyright Board of Canada issued a decision on private copying levies for 2003 and 2004 and suggested that music downloaded from peer-to-peer (P2P) networks was legal, provided it was in accordance with the private copying exemption found under section 80 of the Canadian Copyright Act . Although the Board froze all existing private copying levies it created new levies for non-removable memory permanently embedded in digital audio recorders. As a result, current levies of 29c on audio cassettes of 40 minutes or longer (no levy applies to tapes of shorter length), 21c on CD-Rs and CD-RWs, and 77c on CD-R Audio, CD-RW Audio, and MiniDiscs will remain in effect until the end of 2004. For devices such as MP3 players that qualify as non-removable memory permanently embedded in audio recorders, new levies were created on a sliding scale related to memory capacity. As a result, units with memory storage of 1 Gigabyte (Gb) or less will be subject to a levy of $2. Recorders with memory capacity ranging from 1 to 10 Gbs will face a levy of $15 per unit. Units with memory storage exceeding 10 Gbs will have a $25 levy imposed.
The Board also denied the request of the Canadian Private Copying Collective (CPCC) for levies on other forms of digital media. The Board denied the CPCC’s request for levies on blank DVDs, removable memory cards, and removable micro hard drives, concluding that these levies were unwarranted. In the Board’s opinion, the evidence presented failed to prove that these types of recording media were ordinarily used by individuals to copy music.

COMMENT : It is interesting to note that the Canadian Copyright Board have addressed the issue of the legality of music downloaded through P2P networks. Part VIII of the Canadian Copyright Act covers the practical problem of enforcement in the private copying context. A compromise had been struck whereby levies were added to blank audio recording media to compensate copyright holders in exchange for the grant of a private copying exception. To that end, the Board affirmed that the electronic distribution of a musical work to the public clearly falls outside this exemption and is an infringement of the copyright holder’s exclusive right under s. 3(1)(f) of the Act to communicate the work to the public by telecommunication. However, the Board stated that the private copying regime does not address the source of the material copied and there is no requirement that the source copy be non-infringing. The Board went on to note that the private copying exemption under s. 80 of the Act will apply as long as the copy is “for private use for the person making it, and must be made onto an audio recording medium”, which includes hard drives on personal computers – even though there is currently no levy on this form of media. No doubt both the record and music publishing industries will lobby strongly to close this apparent loophole in copyright law. In the UK, there is an as yet untested theory law which suggests that downloading could be legal. The UK’s copyright laws do have an exception for the recording of television and cable programmes for private use and viewing. Section 70 of the Copyright Designs & Patents Act 1988 provides that private individuals can make domestic recordings of broadcast and cable programmes solely for the purpose of enabling such to be viewed or listened to at a more convenient time. If this concept is extended to the internet, it is arguable that an internet stream – although not a ‘broadcast’ – is a cable programme and therefore private recordings made from the Internet for domestic use are non-infringing.
See (pdf file) :

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