Anti-circumvention Legislation and Competition Policy: Defining a Canadian Way?

• Author: Michael Geist
• Pages: 211-250

SEVEN

Anti-circumvention

Legislation

and

Competition Policy:

Michael Geist*

The

Bureau

may use its

mandate

to

promote competition

and the

efficient

allocation

of

resources

to

intervene

in

policy

discussions

and

debates

re-

garding

the

appropriate

scope,

definition,

breadth

and

length

of

IP

rights.1

—

Intellectual

Property

Enforcement Guidelines,

Canadian Competition Bureau,

2000

I

believe

that

the

Internet

is a

transformative

technology.

While

we may

have

overestimated

its

impact

over

the

short term,

I

think that

we may

also

be

underestimating

its

long-term

impact....

If

we

think about what

the

Internet

has

enabled

so

far,

just

think what

could

happen

to

e-business

in the

future.2

—

Sheridan

Scott, Commissioner

of

Competition,

May

2004

Canada

Research Chair

in

Internet

and

E-commerce Law, University

of

Ottawa,

Faculty

of

Law.

Thanks

to

Alex Cameron, Jeremy

deBeer,

David Fewer,

Ian

Kerr,

and

several anonymous reviewers

for

their

helpful comments

on

earlier

versions

of

this

essay;

to

Misha Feldmann, Alistair Forster, Jamie MacDonald,

Michelle

Gordon,

and

Kathi Simmons

for

excellent research assistance;

and to

Rene

Geist

for her

exceptional editorial suggestions.

Any

errors

or

omissions

remain

the

sole responsibility

of the

author.

1

Canada, Competition Bureau,

Intellectual

Property

Enforcement

Guidelines

(Ot-

tawa:

Industry Canada, 2000),

/

ctoi992e.html>

at s. 6

[IPEG].

2

Sheridan Scott, "Competition

Law

Compliance" (Speech

to the

Insight Con-

ference,

May

2004),

/

ct02858e.html>.

211

Defining a Canadian Way?

A.

In the

early

19905,

Digital Equipment

of

Canada

(DEC),

one of the

world's

leading computer

manufacturers,3

established

an

"integrated service pol-

icy"

which tied

the

servicing

of its

equipment

to the

purchase

of

operat-

ing

system

updates.4

The

Director

of the

Canadian Competition Bureau

launched

an

action against

DEC,

arguing

that

its

policy violated

the

Com-

petition

Act's tied selling

provisions.5

The

Director

was

particularly con-

cerned

that

the

policy would impede

the

entry

of

third

party providers

who

might service

DEC

equipment, which would result

in

reduced com-

petition

and the

inability

for

end-users

of

DEC

equipment

to

access lower

prices

and

enhanced services

from

the

third party providers.

In

October

1992,

the

Director

and

DEC

settled

the

matter

as the

company agreed

to

discontinue

the

policy.6

Storage Technology, better known

as

StorageTek,

is a

US-based compa-

ny

specializing

in

data storage

and

tape backup

systems.7

In

July 2004,

the

company

obtained

an

injunction

from

a

federal court

in

Massachusetts

that

prohibited Custom Hardware Engineering

and

Consulting,

a

mainte-

nance consulting company,

from

servicing StorageTek's products. Unlike

the

DEC

case, where

the

computer maker sought

to tie the

sale

of

products

and

services, StorageTek

did not

need system upgrades

or

other entice-

ments

to

keep third party providers

at

bay. Instead,

it was

able

to

rely

on

computer

code

and

copyright

law to

effectively

eliminate

any

third party

competitors

from

servicing

its

products.

The

DEC and

StorageTek cases provide vivid illustrations

of the

shift

over

the

past decade

in the

approach

to

intellectual property protection

and its

impact

on

marketplace competition. Intellectual property protec-

tions have always generated debate about their marketplace

impact.8

Pat-

ents

and

copyrights represent

a

state-sanctioned, limited monopoly

on a

3

Richard Morochove, "IBM staff

cuts

highlight

deeper problems"

The

Toronto

Star

(i

December 1991)

Hi.

4

George

N.

Addy, "Competition Policy

and

Intellectual Property Rights: Comple-

mentary

Framework Policies

for a

Dynamic Market Economy" (Speech

to the

XXXVIth

World Congress

of the

AIPPI,

June

1995),

/

internet/incb-bc.nsf/en/ctoi4O7e.html>.

5

Competition Act,

R.S.C.

1985,

c.

C-34,

s. 77.

6

Above

note

4.

7

Declan McCullagh "StorageTek Wins Copyright Injunction"

CNETNews.com

(July

12,

2004),

n

junction/2ioo-ioi5_3-5266o3i.html>.

8

Above

note

4.

IN THE

PUBLIC INTEREST:

THE

FUTURE

OF

CANADIAN COPYRIGHT

LAW

212

INTRODUCTION

particular

work

or

invention,

forcing

policy makers

and

scholars

to

con-

sider

the

optimum balance between protection

and

access. While competi-

tion policy

in the

19803

and the

early

19905

embraced intellectual property

as

pro-competitive, during

the

past

ten

years,

the

shift toward digital con-

tent,

the

ability

to use

technological protection measures

to

limit access

and the use of

that

content,

as

well

as the

creation

of

legal protections

for

such

technology (rather than

the

underlying content), requires

a

different

framework

for

analysis.

The

legal catalyst

for

these changes

was the

completion

in

1996

of the

World

Intellectual Property

Organization's

Copyright

Treaty

(WCT)9

and

Performances

and

Phonograms

Treaty

(WPPT),10

collectively referred

to the

WIPO

Internet

Treaties.11

The

twin treaties have

had a

transformative

im-

pact

on the

scope

of

copyright law, creating what some experts have

re-

ferred

to as

"super-copyright"12

or

"para-copyright."13

Both treaties feature

a

broad range

of

provisions targeting digital copyright issues; however,

the

most controversial provisions mandate

the

establishment within rati-

fying

states' national

law of

anti-circumvention provisions

that

provide

"adequate

legal protection

and

effective

legal measures" against

the

cir-

9

WIPO

Copyright Treaty,

20

December 1996

36

I.L.M.

65,

adopted

by the

Diplo-

matic

Conference

on 20

December

1996,

/

woo33en.html>

[WCT].

10

WIPO

Performances

and

Phonograms Treaty,

20

December 1996

36

I.L.M.

76,

adopted

by the

Diplomatic Conference

on 20

December 1996,

/

clea/docs/en/wo/woo33en.htm>

[WPPT].

11 The two

WIPO

Internet

Treaties

were formally

adopted

on

December

20,

1996,

though

they

only

took

effect

in

2002 after each

one

reached

the

thirty-country

ratification

mark.

As of

January

2005,

the

WCThad

fifty-one

country

ratifica-

tions,

while

the

WPPT

had

forty-nine country ratifications.

The

United

States

and

Japan

are the two

most

notable

countries

on the

ratification

list.

The Eu-

ropean

Union

has yet to

ratify,

though

some

member

states

have

incorporated

the

necessary

provisions

into

their

national

copyright

law.

The

remainder

of

the

list

is

comprised

of

countries

such

as

Indonesia

and the

Ukraine, often

cited

as

leading

sources

of

pirated

music

and

software,

as

well

as

smaller

developing

countries

from Africa, Latin America,

and

Asia,

including

Burkina

Faso, Gabon,

Saint

Lucia,

and

Togo.

12

Industry

Canada, Memorandum Concerning

the

Implementation

in

Canada

of

Ar-

ticles

11 and 18

of

the

WIPO

Treaties Regarding

the

Unauthorized Circumvention

of

Technological

Measures

Used

in

Connection

with

the

Exercise

of

a

Copyright Right

by

Mark

S.

Hayes

(Ottawa:

Ogilvy Renault, 2000),

/

internet/inippd-dppi.nsf/vwapj/ogilvyrenault_e.pdf/$FILE/ogilvyrenault_e.pdf>

[Hayes].

13 Dan L.

Burk,

"Anticircumention

Misuse" (2002-2003)

50

UCLA

L.

Rev. 1095

at

1096.

Anti-circumvention

Legislation

and

Competition

Policy

213

Chapter Seven