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Competitiveness of Nations

Compiler Press

Cultural Economics

 

The Canadian Copyright Act 1921-2006

Historical, Cultural, Economic, Legal & Political Significance

Harry Hillman Chartrand

Revised November 2006

Index

Introduction

Terms

Structure

Significance

Historical

Cultural

Economic

Legal

Political

(i) International: Pursuit of ‘Cultural Sovereignty’

(ii) National: Quebec, the First Nations & Media Concentration

(iii) Provincial: Neighbouring Rights

(iv) Constitutional: The Natural Person and the Crown

Conclusions

References

Introduction

This paper is an edited extract from the introduction of my recent book: The Compleat Canadian Copyright Act 1921-2006: Present, Past & Proposed Provisions (Chartrand Sept. 2006).  It documents 85 years of the shifting balance of power between creators, users, proprietors, Parliament and foreign interests reflected in the changing provisions of the Act.  It is the record of legislative attempts to accommodate new ways, new technologies, to fix the expression of ideas or knowledge into a material matrix thereby creating new subject matter for copyright, e.g., ‘talking’ pictures, radio and television, VCRs, DVDs, WWW, et al and in the process creating streams of royalties to be gained through their exploitation.  The provenance of each section of the current Act is traced out from 1921 to June 2006 compiled from 59 statutes or bills receiving at least first reading in the House of Commons. The work therefore also opens the door on to the parliamentary debates, committee hearings and Canadian case law in which members of the dramatis personae play out their roles in the evolving story of legal rights and obligations that is the Act.

 

Terms

Certain terms of Canadian statutory law are needed to navigate the text.  These include:

a) “S.C.” or the Statutes of Canada followed by the year and chapter number, e.g. S.C. 1988, c. 15 which reads Statutes of Canada 1988, chapter 15”;

b) “R.S.” or the Revised Statutes of Canada followed by the year and consolidated chapter number, e.g. R.S. 1985, c. C-42 which reads “Revised Statutes of Canada 1985, consolidated chapter 42”;

c) “Bill” that stands for a Bill proposing changes to the Act made by the government of the day or by a private member but which nonetheless did not receive Royal Assent, i.e., it did not become law, e.g., Bill C-60, 2005; and,

d) “s.” or “ss.” or, respectively, section or sections of a statute, e.g., S.C. 1988, c. 65, ss. 61-64 which reads “Statutes of Canada 1988, chapter 65, sections 61 to 64”.

 

Structure

The Act currently exists in pieces spread out over many different statutory amendments.  There is no single ‘official’ document presenting all present provisions.  This will occur only with the next Revised Statutes of Canada traditionally published every fifteen or twenty years beginning in 1886 and then in 1906, 1927, 1952, 1970 and 1985.  Such revisions consolidate amendments and make non-substantive changes in wording, styling and structure, e.g., the change of “His Majesty’s Dominions” [R.S. 1927, c. C-32, s. 2(i); R.S. 1952, c. C-55, s. 2(i)] to “Her Majesty’s Realms and Territories” [R.S. 1970, c. C-30, s. 2; R.S. 1985, c. C-42, s. 2] then repealed by S.C. 1997, c. 24, s. 1(5) as is likely in the next Revised Statutes. 

In the process names of individual statutes, chapters and section numbering may also change.  A concordance facilitates transition between the old and new.  It is not clear when the next Revised Statutes of Canada will appear or what amendments to R.S. 1985, c. C-42 will be included and which must wait another fifteen or twenty years.

 

Significance

The Canadian Copyright Act has significance for many facets of Canadian life beyond music downloads and photocopying.  I will examine five: the historical, cultural, economic, legal and political significance of the Act.  My conclusion: the Act, and intellectual property rights (henceforth ‘IPRs’) in general, are too important to be left to industry and politicians.  It defines who we are as a creative, democratic nation.  

 

Historical Significance

The Canadian Copyright Act is an evolving work product of Parliament striving to fulfill its constitutional responsibility for copyright.  That responsibility, however, was not fully assumed until 1921, more than fifty years after Confederation.  Until then it was divided between the Imperial Copyright Act and sections of other Imperial and Canadian statutes, e.g., the Criminal Code of Canada.  During this time, the Parliaments at Westminster and Ottawa were often at odds over which provisions should prevail as the law of the land (Allingham 2001). 

Assumption of full responsibility with a ‘made-in-Canada’ An Act to amend and consolidate the Law relating to Copyright, (S.C. 1921, c. 24) brought with it, however, British common law precedents stretching back long before the historic 1710 Statute of Queen Anne.  This was the first modern copyright act because for the first time in English history authors were granted statutory rights to their works.  The word ‘copyright’ itself, however, did not enter the English language until 1735 (OED, copyright).  These rights, nonetheless, were fully transferable, by contract, to ‘proprietors’, i.e., printers, booksellers or publishers.  The change, in fact, was less a boon to authors than to proprietors because it meant that copyright was to have another function.  Rather than simply being the right of a publisher to be protected against piracy, copyright would henceforth be a concept embracing all the rights that an author might have in a published work. 

It was such ‘proprietors’ who, prior to the Statute of Queen Anne, enjoyed ‘Stationers’ Copyright’.  In 1557, Queen Mary I granted a charter to what became the Company of Stationers of London.  Stationers’ Copyright was based on royal prerogative or letters patent covering the entire publishing industry as an estate.  The monopoly was assigned to members as a freehold interest.  No consideration was given to author’s rights.  It was perpetual at the pleasure of the Crown.  Stationers’ Copyright and patents of invention were, significantly, the only Crown monopolies to escape dissolution under the Statute of Monopolies of 1624 during the reign of James I. 

The reason for its survival was its political usefulness in fostering the political and religious orthodoxy of the day, no matter who was in power – Anglican, Catholic or Protestant (Patterson 1993).  It was intended to limit or to censor the domain of public discourse.  Nonetheless, all rights granted to the author and hence to proprietors after 1710 remain subject to the Crown.  Illustrative is the following Canadian example:

7. Exception to immoral works

No literary, scientific or artistic work which is immoral, licentious, irreligious, or treasonable or seditious, shall be the legitimate subject of such registration or copyright.

R.S. 1906, c.70, s. 7

Copyright is, in fact, historically rooted in censorship, pre-publication licensing and grants of industrial privilege initiated by the Tudor monarchs in response to introduction of the printing press in 1476 (Chartrand 2000).  Its root is therefore not the ‘natural rights’ of the creator associated with the other page of the Canadian statute book: en françaisdrôit d’auteur, i.e., rights of the author.  The British root is printer’s copyright intended to propel works into the marketplace by granting rights to secondary creators like publishers, recording companies and motion picture studios (Vaver 1987).  It is, in effect, trade regulation of a State-sponsored monopoly.  Its root is not the natural rights of the creator cum the European Civil Code which primarily intends to promote culture. 

In this regard the first international intellectual property rights convention was the 1883 Paris Convention for the Protection of Industrial Property covering patents, trademarks and registered industrial designs.  That copyright was not ‘industrial property’ (Keyes & Brunet 1977, 3) was formalized with the 1886 Berne Convention for the Protection of Literary and Artistic Works which introduced Civil Code concepts such as moral rights and the public domain into the English legal lexicon.

There is thus an inherent tension between two distinct legal traditions within the pages of the Canadian Copyright Act itself.  This is evident in Bill C-60, 2005 regarding moral rights in performances, recordings and communications.  While it is proposed that such rights shall not be assignable as in the Civil Code, they may be waived by contract unlike the Civil Code.  The most succinct expression of moral rights is that they are “inalienable, unattachable, impresciptible and unrenounceable” (Andean Community 1993).

Full responsibility for copyright in 1921 also brought Canadian precedents, especially those concerning the predatory U.S. Copyright Act.  Article I, Section 8 of the 1788 U.S. Constitution (known as the Intellectual Property or Copyright Clause) states, in very natural rights terms:

The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Two years later, however, Congress passed the first U.S. Copyright Act of 1790 entitled: An Act for the Encouragement of Learning, by securing the Copies of Maps, Charts and Books, to the Authors and Proprietors of such Copies, during the Times therein mentioned.  The key change is the term “Proprietors’.  The U.S. increasingly looked upon copyright as an instrument of industrial independence from Britain, specifically in the printing trades. It was not and arguably still is not seen primarily as an incentive for creators in the natural rights tradition.  Thus no royalties were paid to foreign authors (generally British) whose works were cheaply re-printed.  Copies were then sold legally in the U.S. and illegally, at very low prices, elsewhere in the English-speaking world including Canada.  American printer/publishers had a field day while Canadian competitors languished under royalties imposed by the Imperial Copyright Act.  While this piratical U.S. regime ended with the Chace Act of 1891, the fact remains that until 1984 no book written by an American author could be sold in the United States unless printed there.  This was known as the ‘Manufacturing Clause’.  It is against this historical backdrop of conflicting legal traditions and national self-interest that the Canadian Copyright Act of 1921 was born. 

 

Cultural Significance

Canada prides itself on being a bilingual and bicultural (English/French) as well as a multicultural society of which I will have more to say below.  For now, however, it is important to note that Canada is also bi-juridic operating with Anglosphere Common Law in English-speaking Canada and European Civil Code in the Province of Quebec.  Just as language structures human thought, law structures attitudes and behaviour contributing to the ethos or distinctiveness of a culture. With the exception of the Republic of South Africa, Canada is the only English-speaking country to operate with both legal traditions.  In this regard McGill University Law School in Montreal was the first and I believe remains the only law school in the world to offer a joint program in Common Law and Civil Code.  One difference between the two is precedent (Common Law) versus principle (Civil Code) (Chartrand 2006). As human artifacts, of course, both have strengths and weaknesses and both are less than ideal in practice.

While the American Republican Revolution overturned the ancient regime of subordination by birth it nonetheless adopted English Common Law and precedent governing business including copyright (Commons 1924).   The French Republican Revolution, on the other hand, overturned not just the regime but also the old French common law.  It was replaced by the Napoleonic Code or what became the Civil Code.  It is a legal code rooted in ‘natural rights’ as seen at the height of the 18th century Republican Revolution, e.g., moral rights of creators. 

Both legal traditions are mutagenicly at play in and out of the Canadian Copyright Act.  In 1986, for example, Canada introduced a ‘neighbouring right’ outside the Act: the Public Lending Right.  This compensates Canadian authors when their books are lent to the public by libraries.   With S.C. 1988, c. 15, the term ‘moral rights’ entered the Act for the first time.  In turn, S.C 1997, c. 24 introduced levies on blank recording materials to compensate creators for private copying.  These rights do not exist in, or out of, the U.S. Copyright Act.  Nonetheless, all moral rights in the Canadian Act are subject to contract, i.e., they are not ‘imprescriptibles’.  By contrast, the Public Lending Right is imprescriptible and cannot be transferred to a publisher or agent, only to an author’s heirs. 

One critical Civil Code concept not in the present Act is ‘the public domain’.  The term entered “Anglo-American copyright discourse through the French of the Berne Convention” in 1886 (M. Rose 2003, 84).  The public domain is where knowledge is at home as a public good, i.e., it is non-excludable and non-rivalrous in consumption.  In the public domain everyone has the right to know and my use does not reduce the knowledge available to you.  Intellectual property rights make new knowledge rivalrous and excludable by law, not by nature.  It is protected, however, only for a limited time after which it too enters the public domain. 

For that period, however, it is ‘enclosed’ (Boyle 2004).  It is fixed in a work that is the exclusive possession of its creator who determines access and application.  Generally, however, this is a corporate proprietor, i.e., a legal rather than a natural person, using an ‘all-rights’ or ‘blanket licence’ granted by the creator and increasingly including a waiver of moral rights.  In other words, where intellectual property rights privatize knowledge limiting access through price and other mechanisms, in the public domain knowledge is free to all without cost or constraint.  In this sense there are two knowledge domains – the public and the private.  To paraphrase Nathan Rosenberg about science (Rosenberg 1994, 143), the public domain is an immense pool to which small annual increments from the private domain are made at the frontier.  The true significance of the public domain is diminished, rather than enhanced, by extreme emphasis on the importance of only the most recent increments to that pool.   

In this regard there has been an observable lack of interest in the Anglosphere legal tradition about common property such as the public domain over the last three hundred years.  Carol Rose concludes questions of private not public property have been the focus of attention (C. Rose 2004).  In recent decades, however, ecology has exposed the tragedy of the public commons of the air, water, oceans and biosphere leading, in turn, to new law.  The public domain too is a public commons but one unlike any other.  The more it is used the bigger it grows; your taking does not decrease my share; or, paraphrasing Isaac Newton’s famous aphorism: “We all stand on the shoulders of giants”.   

There may, however, be a premonition of an Anglosphere concept of the public domain implicit in the titles of the first U.S. Copyright Act of 1790 (noted above) and the 1710 Statute of Queen Anne or more formally, An Act for the Encouragement of Learning, by Vesting the Copies of Printed Books in the Authors or Purchasers of such Copies, during the Times therein mentioned.  The key word in both is ‘learning’.  Copyright is by statutory precedent to be judged by its contribution to learning. 

Canada is, however, not just bi-cultural (English/French) but also multicultural hosting millions of people from other cultural, linguistic and legal traditions – Arabic, Asian, African, Caribbean, European, Hindu, Latin American, et al.  Furthermore, Canada has not two but three founding peoples – English, French and peoples of the First Nations, i.e., its aboriginal peoples with their own varying linguistic and cultural traditions, as well as the Metis peoples of mixed aboriginal and European descent.

Anglosphere copyright and Civil Code author’s rights are both based on the ‘Person’ – natural or legal; many other traditions are not.  The Fourth World of ‘aboriginal’, 'indigenous’ or ‘native’ peoples has a concept of collective or communal intellectual property existing in perpetuity, i.e. not limited to the life of an individual creator plus some arbitrary number of years after death. To tribal peoples, a song, story or icon does not belong to an individual but to the collective.  Rights are, however, often exercised by only one individual in each generation, sometimes through matrilineal descent. 

Unlike the Third World, aboriginal nations do not constitute ‘Nation-States’.  They are therefore seldom represented on the international stage.  Beyond the 1984 draft treaty on folkloric copyright (UNESCO/WIPO 1984), UNESCO passed a Recommendation on Safeguarding Traditional Cultures and Folklore in 1989.  Another instrument was signed in 1994 by several indigenous peoples themselves: The International Covenant on the Rights of Indigenous Nations.  This articulates a distinctive Fourth World view of intellectual property rights including copyright.  At present, however, ‘folkloric’ and ‘aboriginal heritage rights’ have no standing in most courts of the world. 

The United States, however, is an exception.  It has recognized some Native American heritage rights.  The U.S. Congress thus passed Public Law 101-601: The Native American Graves Protection and Repatriation Act of 1990 converting native art and artifacts into “inalienable communal property”.  According to Clair Farrer (1994) this can logically be extended to include the written and spoken word embodied in stories and sacred tales.   In Canada there is no corresponding legislation.

In the Second World of the Communist Revolution, e.g., Russia, China, Cuba, etc., all “means of production” were the property of the State. With respect to intellectual property, moral rights of the creator were recognized, i.e., paternity or authorship were recognized, but economic rights were limited to a onetime cash award or honorarium with all subsequent income flowing to the State.

In the Third World (or ‘the South’) there are historically varied traditions governing copyright. Early Islamic jurists, for example, recognized a creator’s rights and offered protection against piracy (Habib 1998). However, they treated infringement as a breach of ethics, not a criminal act of theft punishable by amputation of the right hand.  Rather, punishment took the form of defamation of the infringer and casting shame on his tribe.  Only in recent years have formal copyright statutes been adopted in many Islamic countries, e.g., Saudi Arabia in 1989. 

In much of the Third World, however, another tradition exists similar to that of the First Nations or aboriginal peoples of the Fourth World.  This recognizes ‘collective’, ‘communal’ or ‘folkloric’ IPRs.  This contrasts with the Western individual-based concept.  Folkloric IPRs recognizes rights to all kinds of knowledge, ideas and innovations produced in what can be called ‘the intellectual commons’, e.g., in villages among farmers, in forests among tribal peoples, etc.  Some of this constitutes ‘TEK’, i.e., traditional ecological knowledge.  TEK has been infringed by Western-based corporations in a number of countries including India (Shiva 1993).  As a multicultural country Canada hosts all these different cultural traditions. None, however, have received legal standing except Anglosphere copyright and, to a lesser extent, French author’s rights.

 

Economic Significance

IPRs including copyright are the legal foundation for the industrial organization of the knowledge-based economy.  They constitute what Harold Innis calls the staple of such an economy.  Innis is arguably the founder of the only indigenous school of Canadian economics based on his ‘staple theory’.  He studied Canada’s development - from cod to fur to timber to wheat.  Each staple, according to Innis, engenders a distinctive patterning to the economy.  Near the end of his career he moved on to study ‘communications’ and its matrix concluding, in effect, that it is the ultimate staple commodity (Innis 1950, 1951). 

A knowledge-based economy is different in a number of ways from the traditional Standard Model of market economics in which manufactured goods are the staple.  First, ideally in a manufacturing economy a consumer acquires all benefits of a good at market price while producers recover all costs including the opportunity cost of entrepreneurship.  In theory, there are no externalities, e.g., there is no pollution.  In such an economy there is, theoretically, no role for government.  In a knowledge-based economy, however, creation of intellectual property rights by the State is necessary before a market can exist, i.e., no government, no knowledge-based economy. 

In the Standard Model, IPRs are justified by market failure, i.e., when market price does not capture all benefits and all costs of production, e.g., pollution costs.  These are called external costs and benefits, i.e., external to market price.  IPRs, in this view, are created by the State as a protection of, and incentive to, the production of new knowledge which otherwise could be used freely by others (the so-called free-rider problem).  In return, the State expects creators to make new knowledge available and that a market will be created in which such knowledge can be bought and sold.  But while the State wishes to encourage creativity, it does not want to foster harmful market power.  Accordingly, it builds in limitations to the rights granted to creators.  Such limitations embrace both Time and Space.  They are granted, assuming full disclosure of such new knowledge: only for a fixed period of time, i.e., either a specified number of years and/or the life of the creator plus a fixed number of years; and, only for the fixation of new knowledge in material form, i.e., it is not ideas but rather their fixation in material form that receives protection. 

Eventually, however, all intellectual property (all knowledge) enters the public domain where it may be used by anyone without charge or limitation.  Even while IPRs are in force, however, there are exceptions such as 'free use', ‘fair use’ or ‘fair dealing’ under copyright.  Similarly, national statutes and international conventions permit certain types of research using patented products and processes.  And, governments retain authority to waive all IPRs in “situations of national emergency or other circumstances of extreme urgency” (WTO/TRIPS 1994, Article 31b), e.g., following the anthrax terrorist attacks in 2001 the U.S. government threatened to revoke Bayer’s pharmaceutical patent on the drug Cipro (BBC News October 24, 2001).

Second, the average cost curve in a knowledge-based economy is not the classical ‘U’ shape of manufacturing but rather it is ‘L’ shaped.  Suppose that the first unit of Windows VISTA cost $500 million to develop but the second and all subsequent units cost a $1.99.   This highlights the economic significance of copyright and IPRs.  Without State-sponsored and enforced IPRs the enormous initial investment required for many innovations would be unprofitable.  Arguably, however, the same holds for the individual artist/creator.  At the extreme, there is Van Gogh, the epitome of the mad starving artist.  He cut off his ear and sent it to his girl friend; spent much of his life in an insane asylum; and, in return, he gave the world sunflowers and starry nights for only $1.99 at the local dollar store.   

Third, fixing expression in a new matrix, e.g., DVDs, creates a new type of work in which copyright may subsist.  It may also generate an entirely new ‘techno-economic regime’ involving a web of related installations and services (David 1990).   In this regard, the printing press was the first engine of mass production.  With Gutenberg’s ‘moveable type’ printing press in 1456 C.E., once a work was ‘fixed’ in type, copies became cheaper and cheaper as the costs of a work and typesetting were spread over a larger and larger print run – the principle of mass production.  It also gave rise, through progressive division and specialization of labour, to a network of new industrial activities and skills like publishing, copy editing, bookstores, newspapers, print advertising, etc.  In this sense, a new matrix acts like what economist Paul David (1990) calls “a general purpose engine’ or I call a general purpose tool (Chartrand 2006).  These tend to generate “network externality effects of various kinds, and so make issues of compatibility standardization important for business strategy and public policy” (David 1990, 356).  This is why so much is riding on the current industrial battle about high definition DVDs, i.e., Sony’s Blu-ray versus Toshiba’s HD-DVD.  Like the previous Betamax/VHS battle which matrix is finally adopted as the ‘standard’ will have a significant impact on consumers but especially on the competitors themselves.

It is not, however, just the matrix or medium that generates network effects.  The expression or message itself can generate ‘spin-offs’.  Consider a literary work, e.g., a short story, which becomes a play through licence of its copyright.  In turn, the play becomes a film which, in turn, is spun off into posters, toys, T-shirts, a soundtrack and video games.  The film and the soundtrack are broadcast on television and radio.  Eventually a book is made about making the movie, and then a sequel is produced.  All flow from the initial work.

Fourth, copyright (and other Anglosphere IPRs) is rooted in precedent, not principle and reason.  The result is:

the complex body of law, judicial interpretation, and administrative practice that one has to grapple with in the area of intellectual property rights has not been created by any rational, consistent, social welfare-maximizing public agency. (David 1992) 

Paul David characterizes the existing Anglosphere IPR regime as ‘a Panda’s thumb’, i.e., “a striking example of evolutionary improvisation yielding an appendage that is inelegant yet serviceable” (David 1992).

Fifth, another economic implication of the Act concerns employment in a knowledge-based economy.  Under the existing Act, copyright and moral rights belong to the employer, not the employee, similarly under Crown copyright.  Under the Civil Code, an employee retains moral rights over his or her work and may even enjoy some ‘neighbouring rights’. 

While the traditional manufacturing economy boasted life-long employment, the knowledge-based economy is increasingly characterized by contract work and self-employment.  The pervasive use in the Anglosphere of blanket or all rights licences extinguishes all future claims of the creator.   If such trends continue, it can be expected that income distribution for contract and self-employed knowledge workers will increasing look like that of self-employed artists and entertainers who are second only to pensioners as an income class recognized by Revenue Canada (Chartrand 1990).  Furthermore, their income distribution is not a pyramid with a broad base, wide middle and a peak.  Rather it is an obelisk with a huge base of poor ‘starving artists’, a thin column of middle class survivors and a tiny peak earning enormous sums, e.g., Pavoratti.   This could be the future of the knowledge-based economy - no middle class.

Sixth, another economic implication of the Act and all State-sponsored IPRs is their predatory rather than defensive use.   This includes ‘patent wars’ and ‘copyright misuse’.   In the case of patents, some corporations spend enormous sums of money on research projects that fail for one reason or another.  Nonetheless, everything that can be patented is patented.  These patents may be retained or sold to a patent holding company of one form or another.  If a rival or competitor emerges who subsequently succeeds in making the technology work then they may be charged with patent infringement.    Whether valid or not the rival faces enormous legal costs or settling out of court.  Both ways, competition is restrained and innovation inhibited. 

Copyright misuse is a relatively new legal concept that emerged in the United States with Lasercomb America v. Reynolds in 1990.  The concept is based on the more developed doctrine of patent misuse.  Copyright misuse occurs when a copyright owner, through a license for example, stops someone from making or using something that competes with the copyrighted work but does not involve use of the original itself.  The leading case in the U.S. is the 2003 Video Pipeline, Inc. v. Buena Vista Home Entertainment.  While not successful:

The defense of copyright misuse was raised … because Disney licensed its movie trailers subject to license terms that prohibit the licensees from using the movie trailers in a way that is “derogatory to or critical of the entertainment industry or of” Disney.  That is, Disney uses the exclusive rights conferred upon it by the Copyright Act, not only to obtain a return for its creative efforts (which is consistent with the purposes of copyright protection), but also to suppress criticism (which is contrary to the purposes of copyright protection). (Tech Law Journal Daily E-Mail Alert, August 27, 2003)

As will be seen below, copyright misuse by repressing ‘free speech’ represents an existential threat to a 21st century information democracy taking copyright back to its origins as censorship of the public domain.

Seventh, finally and ironically, an alternative economic model more consonant with the contemporary knowledge-based economy was proposed just before Adam Smith’s The Wealth of Nations made manufacturing king of economics in 1776.  The alternative was proposed by the pre-revolutionary French Physiocrats who gave us the term ‘economist’.   Behind the Gallic façade of laissez faire and laissez passer, there was a deeper policy implication never realized because of the French Revolution (Samuels 1962, 159).  The Physiocrats wanted to reach below the surface of the marketplace to the legal foundations of capitalism (Commons 1924).  For the Physiocrats, “the public interest is manifest in the continuing modification or reconstitution of the bundle of rights that comprise private property at any given time” (Samuels 1962, 161).  By changing the bundle of rights that is copyright or patents, trademarks and industrial designs, or by creating new ones, the State creates entrepreneurial opportunities in a laissez faire, laissez passer knowledge-based economy (OECD 1996).  This legal strategy is a critical compliment to what the OECD calls the ‘National Innovation System’ (OECD 1997).  Three examples will demonstrate – computer software, copyright collectives and national treatment.

First, until S.C. 1988, c. 15 (1980 in the U.S.) copyright was available only for human-readable ‘works of art’.  Since then Microsoft has become one of the largest and most profitable corporations in the world.  Its foundation is copyright in the Windows operating program.  Computer software, however, is the only work that crosses the copyright/patent barrier, i.e., there are now both software copyrights and patents. The difference in term is striking – in Canada 20 years for a patent and 50 for a corporate copyright.  In the U.S. it is 20 years versus 70.  This suggests software is a sui generis work deserving its own distinct intellectual property classification rather than traditional protection.

Such reconsideration is also appropriate for another reason.  The distinction between ‘machine readable’ and ‘human readable’ codified knowledge fuelled the 1970s debate about software copyright.  Recognition in 1988 was a break with a long legal tradition restricting copyright to ‘artistic works’, i.e., works carrying semiotic meaning from one human mind to another.  A computer program, while codified and fixed in a communications medium, is intended to be decoded by a machine not by a human mind.  It is intended to manipulate the flow of electrons in a circuit.  In turn, such circuits may activate other machines and/or machine parts, e.g., industrial robots in steel mills, auto plants and fabricating industries.  Similarly, genomics programming is also codified and fixed in a communications medium but intended to be decoded by machines and molecules, not by a human mind.  It is intended to manipulate the chemical bonds of atoms and molecules to analyze or synthesize biological compounds and living organisms with intended or designed characteristics.   Software – computer and genomic - constitutes a form of ‘soft-tooled’ rather than ‘codified’ knowledge (Chartrand 2006).

Second, introduction of new rights in S.C. 1988, c. 15 and S.C. 1997 c. 24 was followed by formation of many new collective societies to receive and distribute royalties to creators/copyright proprietors as well as to monitor infringement.  The result as revealed in a web survey shows that there are 6 such societies in the U.K., 10 in the U.S. and 35 in Canada (Chartrand 2003).

Third, public sector support for the production of other goods & services such as cars is subject to harmonization under the rules of the WTO.  Intellectual property rights, however, especially copyright, are subject only to ‘national treatment’.  This means Canada must extend to foreign authors and copyright owners the same rights as granted to Canadian nationals.  These rights, however, need not and are generally not the same between countries.  For example, the term of copyright in Canada is life of the artist plus fifty years.  In the U.S., it is life of the artist plus seventy years.  This means that the work of an American artist will enter the Canadian public domain twenty-five years earlier than in the U.S.  In turn this means, for example, that a web-based entrepreneur could post and sell such work in Canada and the U.S. without infringing copyright in Canada.  In a sense this would parallel what the U.S. did to Canada in the 19th century.

 

Legal Significance

The Canadian Copyright Act is a work in progress: governments change, technology changes and the Act changes and evolves.  Beginning with S.C. 1988, c. 15, however, the Government of Canada began a planned three phase process to modernize the Act.  Phase II was completed with S.C. 1997 c. 24.  Arguably Bill C-60 2005 was a step towards completing Phase III.  With the defeat of the last government, however, the Bill died on the order paper.  It is unclear when and if the new government will re-introduce the Bill or propose another or simply wait.

In the interim the existing Act will continue to be tested in the Courts.  This exposes another critical facet of the Anglosphere copyright tradition.  It is both statutory law enacted by a legislature and case law determined by judges.  In this regard, the most important judicial precedent in the development of copyright (and intangible property like ‘good will’) was a dissenting opinion in the 1769 case of Millar v. Taylor (Commons 1924).  In it Justice Yates explained why ideas are not protected.  Drawing on the Institutes of Justinian (one of the sources of the Civil Code), he observed that ideas are not the object of property rights because they are like wild animals or ferae naturae that once set free belong to no one and everyone at the same time, i.e., they are in the public domain.  It is only their specific expression fixed in material form – commonly known as a work – that qualifies for protection (Sedgwick 1879).

Precedents set in different Anglosphere jurisdictions, e.g., Australia, Canada, the U.K., the U.S., etc., can and do spill over, from time to time, into the courts and legislatures of other jurisdictions.  Thus genetic patents in the U.S. emerged from a 1980 Supreme Court decision in Diamond v Chakrabarty that reinterpreted existing law, i.e., there was no change in the statute.   Similarly, software patents in the U.S. emerged from a 1981 Supreme Court decision in Diamond v. Diehr.  Arguably, these U.S. decisions set the stage for changes in Canadian legislation.  Similarly, the U.S. Digital Millennium Copyright Act of 2000 may have served as a model and/or a warning for provisions proposed in Bill C-60, 2005.  Of course, the growing body of Canadian IPR case law may also set precedents for other jurisdictions including the U.S., e.g., the Supreme Court of Canada’s rejection of a patent for the ‘Harvard mouse’.

Another characteristic of Anglosphere Common Law is use of ‘legal fictions’.  Thus a root tension within the Canadian Copyright Act centres on the Common Law fiction of ‘corporate legal personality’.   A natural person is a living human being; a legal person is a body corporate.  The vast bulk of productive assets are owned by fictitious legal persons such as corporations, companies, sociétés, Gesellschaften.  Such persons are birthed under incorporation statutes that allow them to engage in a wide variety of profit making and charitable activities.  In the Anglosphere tradition, however, legal and natural persons increasingly enjoy the same rights (Nace 2005) while under Civil Code they enjoy different rights. 

It is with respect to knowledge that this difference is most apparent.  Civil Code creator’s rights are justified because the work of a natural person bears the “imprint of personality” that a body corporate cannot possess (Geller 1994).  Such rights are intended to reward creative individuals for their contribution to our collective knowledge, to our culture.  Argument about this imprint has fueled ongoing controversy between the United States and the European Union, especially France, over extending to American media corporations doing business in Europe rights restricted by Civil Code to the Natural Person, i.e., imprescriptible rights.

Following John Dewey’s reasoning (1926) that a ‘corporate legal personality’ is anything the law says it is, so too is copyright.  He also reasons, however, that when the law looks outside itself for insight, about questions such as corporate legal personality, the result can be unfortunate because “the human mind tends toward fusion rather than discrimination, and the result is confusion” (Dewey 1926, 670).  In copyright, the law looks Janus-like two ways at once: towards copyright as trade regulation of a State sponsored monopoly and towards the natural rights of the creator.  This is captured in the title of Part I of the Act: Copyright and Moral Rights in Works.  

The tension between commerce and culture exists throughout the Anglosphere and to a lesser extent in Civil Code countries as well.  In effect, there has been confusion between the natural rights of creators and trade regulation.  It is, however, only a question of degree.  Arguably, the U.S. is at one extreme.  Thus in order to accede to the Berne Convention, Congress in 1989 took steps towards recognizing moral rights, e.g., the Visual Artists Protection Act of 1990 which eventually became Section 106A of the U.S. Copyright Act.  However, rights of paternity and integrity of one’s work is available only to artists of ‘recognized’ reputation.  Recognized by whom?  By the Courts!  Similarly, the Architectural Works Copyright Protection Act, Pub. L. 101-650 was passed in 1990.  Its moral rights provisions, however, are so weak that it has not been incorporated into the U.S. Act.   It is, to my mind, an open question whether the United States has in fact fulfilled its obligations under the Berne Convention.

At the other extreme is France where arguably culture trumps commerce.  This is perhaps most evident in the ‘auteur’ theory of filmmaking which arguably inhibited the commerce success of French filmmaking vis-à-vis Hollywood.  In the Anglosphere, the owner of the ‘print’ (or negative in the case of a photograph) is the initial copyright owner.  In France, the author of a motion picture is the director.  Imperscriptible moral rights belong to the director.  Accordingly, there can never be a ‘colourization’ controversy in France as there is in the United States.  The author/director has the final legal yes or no.    

In France there are also many ‘neighbouring rights’ existing outside the principle Act.  These are intended to reward the individual creator, not the corporate bottom-line.  For example, there is a right of following sales or droite de suite in the visual arts.  A percentage of the resale value of an artwork, painting, sculpture, etc., is returned to the artist each time it is re-sold.  This, like the Public Lending Right, is an imprescriptible.   It should be noted, however, that the State of California has instituted a right of following sales for resident artists.  ‘Neighbouring rights’ offer, as will be seen, a compliment to copyright in development of a distinctive intellectual property rights regime at the national and sub-national level.

So in the emerging knowledge-based economy, what shall it be?  Commerce or culture?  Profit or learning?  The natural or the legal person?  The private or public domain?    What is the appropriate balance?  Who decides and how are questions of growing political significance to a 21st century information democracy.

 

Political Significance

  The Act has significance for Canadian political life at four levels: international, national, provincial and constitutional.  In brief, at the international level it plays a role in maintaining and extending Canadian cultural sovereignty.  Nationally, it recognizes the distinctive contribution of French Canada to Confederation while failing to recognize Aboriginal or Native Heritage Rights and ignoring the growing power and concentration of copyright proprietors, i.e., ‘the media’.  At the provincial level neighbouring rights, i.e., those created outside the Act, can be tailored to foster the ‘creativity haven’ of the 21st century.  Constitutionally, the Act represents a clash between precedent and principle, specifically between the legal fiction of ‘the Crown’ and the Natural Person of the 18th century Republican Revolution.  I will outline each in turn.

 

(i) International: Pursuit of ‘Cultural Sovereignty’

The term ‘cultural sovereignty’ emerged from the French in the 1970s as Quebec independence dawned as the overarching existential Canadian political question of the day.  Like many French public policy concepts it migrated to Ottawa and was absorbed into the English-Canadian public policy lexicon.  Cultural sovereignty today, however, involves the struggle to be heard at home and abroad above the booming voice of the American entertainment industry that penetrates the cultural marketplace of every nation on earth.  The one remaining superpower is also a global cultural colossus spanning East, West, North and South.  Fuelled in part by the peculiar pricing methods of the entertainment industry, i.e., a rate per viewer rather than the production cost of the work itself, American entertainment programming essentially ‘breaks even’ in its domestic market and then earns profits from a global audience.  In fact,