Competition policy and Canada's new breed of 'copyright' law.

• Author: Cameron, Alex

Open digital networks present a number of challenges for copyright holders. With a few clicks of a mouse, a digital work can be copied perfectly and distributed globally without the copyright holder's knowledge or permission. In response to these challenges, copyright holders have started using technological means--called technological protection measures ("TPMs")--to control access to and use of copyright works. They have also sought legal protections for their TPMs through amendments to copyright laws. These legal protections typically make it illegal to circumvent TPMs and, in some countries, to make devices that circumvent TPMs. These are commonly known as "anticircumvention" and "anti-device" provisions, respectively. Although often overlooked, anticircumvention and anti-device provisions are a new breed of "copyright" law that may come to be implemented in Canada and that spawns substantial implications and unintended consequences for Canadian competition policy.

Identifying and addressing some of these implications and consequences is the focus of this article. Part I briefly sketches the traditional relationship between competition and copyright policy in Canada. Part II sets out a basic framework for analysis by describing copyright holders' new technological controls, and the possible shape of amendments to Canadian copyright law. Part III explores the new competition policy issues spawned by legal protections for TPMs and digital rights management. Finally, consistent with recent indications from the commissioner of competition that intellectual property will receive increased attention from the Competition Bureau, Part IV discusses concrete ways that Canada's competition authority can ensure dial Canada maintains vibrant competition law and policy in the face of possible changes to copyright law.

Les reseaux numeriques ouverts presentent un nombre de defis aux detenteurs de droits d'auteur. Avec quelques clics de souris, leurs oeuvres numeriques peuvent etre copiees parfaitement et distribuees sans leur connaissance ni leur pemussinn partout dans le monde. En reponse a ces defis, les detenteurs de droits d'auteur adoptent de plus en plus des mesures techniques--surnommees mesures de protection technique (MPT)--afin de controler l'acces et l'utilisation de leurs oeuvres. Ces detenteurs cherchent egalement a obtenir une protection legale pour leurs MPT. Cette forme de protection juridique a generalement pour objet de rendre illicite le contournement des MPT, et, dans quelques pays, la fabrication de dispositifs qui contournent les MPT. Ces mesures anticontournement et and-dispositif constituent une nouvelle espece de droit d'auteur et pourraient eventuellement etre adoptees au Canada. Quoique souvent negligee, cette nouvelle forme de droit d'auteur a des implications importantes et des consequences imprevues sur la politique de la concurrence au Canada.

Cet article a pour objet d'identifier et d'adresser quelques-unes de ces implications et consequences. La Partie I brosse une esquisse de la relation traditionnelle entre les politiques de la concurrence et des droits d'auteur au Canada. La Partie 11 presente un cadre d'analyse par l'entremise d'une description des nouvelles mesures de controle technique employees par les detenteurs de droit d'auteur. La Partie III explore les nouvelles questions de politique engendrees par le developpement de mesures de protection pour les MPT et pour la gestion des droits numeriques. Finalement, a la lumiere des indices recents du commissaire de la concurrence selon lesquels la propriete intellectuelle recevra davantage d'attention de la part du Bureau de la concurrence, la Partie IV de l'article discute des facons concretes grace auxquelles l'autorite de concurrence du Canada peut assurer un droit et une politique de la concurrence vibrants face aux changements eventuels aux droits d'auteur.

Introduction I. Competition and Copyright II. Technological Controls, Contracts, and Canada's New Breed of "Copyright" Law A. Technological Protection Measures and Digital Rights Management B. Canada's Proposed Implementation of the WIPO Treaties C. Motivations for Digital Rights Management and Anticircumvention Laws III. New Competition Law and Policy Issues A. Bigger and Stronger Intellectual Property B. Exercising the Exclusive Right to Circumvent? C. Tied Selling, Abuses, and Anticompetitive Practices D. Security Research E. Product Labelling and Deceptive Marketing Practices IV. Creating a Competition Policy Framework for the Twenty-first Century A. Advocacy on Copyright is Essential B. Infusing Competition Policy into Copyright Reform C. Legislative Reform of the Competition Act D. Enforcement E. Digital Rights Management Technology and Standards Setting F. International Advocacy Conclusion Legal protection for TPMs is the equivalent of making screw-drivers illegal because they can be used to break and enter ... Good legislation targets the illegal act, not the legal tools the crook might use. Canada is already well-served by laws protecting copyright. Outlawing the technological tools--the screw-drivers of the technology community-undermines Canada's commitment to fostering an economy built on innovation and opportunity.

Bob Young, Red Hat Inc. (1)

Introduction

Open digital networks present a number of opportunities and challenges for copyright holders. On the one hand, copyright holders are keen to exploit the increased efficiencies of digital distribution, including the possibility for "[s]uperdistribution", (2) whereby consumers themselves become distributors of content. (3) On the other hand, copyright holders are wary of the fact that, with a few clicks of a mouse, their digital works can be copied perfectly and distributed globally without their knowledge or permission and often in violation of their legal rights.

In response to these challenges, copyright holders have started using technological means--technological protection measures ("TPMs")--to attempt to control individuals' access to and use of copyright works. TPMs are often combined with other technologies to form complex digital rights management ("DRM") systems. As discussed in Part II.C of this article, DRM systems are used principally as contract-enablers; the "rights management" in DRM is all about granting and managing contractual (i.e., licence) rights to access and use creative works. DRM gives copyright holders a powerful new ability to enter and technologically enforce licence agreements with each individual end user. Such licence agreements and the technologies that enforce them can sometimes go beyond the limited bounds of copyright law, allowing copyright holders to replace copyright rules with an automated contractual ordering. Copyright and competition law issues arising from DRM can thus be thought of as being as much about contracting practices as they are about the use of technologies.

Copyright holders have sought legal protections for their TPMs and DRM systems through amendments to copyright laws around the world. These legal protections typically make it illegal to circumvent TPMs or DRM systems and, in some countries, to make or distribute devices that circumvent them. These are commonly known as "anticircumvention" and "anti-device" provisions, respectively. Anticircumvention and anti-device provisions are a new breed of "copyright" law. The use of quotations around "copyright" here and in the title of this article is intentional. One of the concepts explored here is that anticircumvention and anti-device provisions might not be the proper subject matter of copyright, a consideration that has implications for competition law and policy. For example, there are reasons to question whether giving copyright holders the right to sue an individual who circumvents a TPM or DRM technology, as an anticircumvention law would do, fits into copyright's "bundle of rights". Other commentators have picked up on this theme and used the term "paracopyright" to describe the true character of anticircumvention and anti-device provisions. (4) This issue is explored in more depth in Part III.B.

Canada's Copyright Act (5) does not currently contain anticircumvention or anti-device provisions. In June 2005, the Liberal government tabled legislation aimed at making changes to the Copyright Act--Bill C-60, An Act to amend the Copyright Act. (6) Legal protections for TPMs and DRM systems were among the main components of the proposed law. As a result of the change in government in early 2006, Bill C-60 did not proceed past first reading and was not passed into law. The shape of possible copyright reform in Canada remains uncertain. It is widely expected, however, that anticircumvention provisions will again be proposed in Canada.

Although underexamined to date in Canada, anticircumvention and anti-device provisions, along with the DRM technologies and underlying contracting practices that they tend to protect, may spawn substantial implications and unintended consequences for Canadian competition policy, particularly for consumers and for small and medium-sized businesses. (7) Identifying and addressing some of these potential implications and consequences is the focus of this article.

Part I of this article briefly sketches the traditional relationship between competition and copyright in Canada. Part II sets out a basic framework for analysis by describing copyright holders' new technological controls and contracting practices, along with the possible shape of amendments to Canadian copyright law. Part III explores the new competition policy issues that may be spawned by legal protections for TPMs and DRM technologies and the contracting practices that underlie them. Finally, consistent with recent indications from the commissioner of competition that intellectual property will receive increased attention from the Competition Bureau ("Bureau"), (8) Part IV of this article discusses...