October 18, 2012 @ 00:01:27
New Section 29.21 of the Copyright Act - Good Or Bad?
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The Copyright Modernization Act introduces a new kind of exception from the general rule that no one can use works protected by copyright other than with the consent of the copyright owner. The new exception is for the so-called “non-commercial user-generated content”.

Unlike the previously discussed exceptions qualified by the notion of “fair dealing for the purpose of…”, the newly added Section 29.21 of the Copyright Act simply states that “[i]t is not an infringement of copyright to do certain things under certain circumstances.

Adding to the already confusing numbering of the Copyright Act, Section 29.21 is now contained in a separate part of the Act titled “Non-commercial user-generated content”, whereas the part titled “Fair Dealing” now appears to only cover Sections 29, 29.1, and 29.2.

What this means is that no fair dealing analysis appears to be necessary to escape liability for copyright infringement if the use satisfies the conditions set out in paragraphs 29.21(1)(a) to (d), i.e.:

    – non-commercial character;

    – citing the source;

    – reasonable grounds to believe that the underlying work itself did not infringe copyright; and

    – lack of substantial adverse effect on the market.

A simple comparison with the CCH factors shows that the list in Section 29.21 does not include factors such as alternatives to the dealing, nature of the work, and amount of the dealing.

This may lead to the creation of a “super-exception” that would bypass even the already relaxed factors set out in CCH.

While most commentators refer to “user-generated content” provisions as if they are meant to deal only with uses best exemplified by amateur videos uploaded to YouTube, there is nothing in this section that implies that it cannot be used for any non-commercial transformative use. There is nothing to suggest that “users” should be amateurs or fans.

Indeed, the definition of “use” in s. 29.21(2) is “to do anything that by this Act the owner of the copyright has the sole right to do, other than the right to authorize anything.” The language of s. 29.21(1) refers to any individual using an existing work … “in the creation of a new work or other subject-matter”.

So here’s a million-dollar question: if Section 29.21 contains an exhaustive list of factors, does it mean that a non-commercial unauthorized parody will fall both under the specific parody exception that requires a full fair dealing analysis and under the non-commercial user-generated content exception that only requires that the use be non-commercial and that it wouldn’t have adverse impact on the market?

If any non-commercial use that leads to the creation of a new work or subject-matter is a complete defence to a copyright infringement claim, then it would mean that two out of six fair dealing factors (non-commercial purpose of the dealing and effect of the dealing on the work) will be determinative. This creates a completely different legal landscape for copyright owners. Essentially, it deprives them of the right to control the use of their works or other subject-matter for the purpose of creation of derivative works, as long as such use is non-commercial and does not destroy the original work’s market.

As I have said many times, copyright is not about getting paid, it’s not about the money. It’s about control. By taking from copyright owners the right to control the use of their property – even if does not cause immediate financial deprivation, Copyright Modernization Act legalizes intellectual squatting.

Copyright has never been conceived to protect only those interests that an author is currently exploiting or is likely to exploit in the future. By way of analogy, the fact that a house owner does not live on the premises and refuses to rent the house to anyone, does not result in a “market failure” and would not excuse squatting. An author owns their monopoly the same way the house owner owns the house, with the exception that the author cannot install a lock, set up an alarm or hire armed guards to protect their works. Once the work has been disclosed, the law is the only thing that stands between the author and those who wish to use the work without authorization. Even when the author assigns their copyright to corporations, the corporations are only going to be able to reward the author if the law guards their economic interests and allows them to fully exploit the monopoly. It should be up to the copyright owner to determine when, how and by whom the works are to be used.

BOTTOM LINE: Copyright owners should be very concerned about this amendment. It is very unfortunate that your rights to control the works you created or paid to create are being encroached on all fronts. Just because someone is ripping you off without the motive of profit, doesn’t make you feel any better, does it?

PS. This post was updated following a reader's comment. Thank you, Matt.

Categories:Intellectual Property:Copyright
Additional Tags:New Copyright Act
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