Some announcements are easier than others.

This one sums up my efforts to organize MLC's first Shining Star Contest for talented children.

I did not receive any submissions, and so no prizes will be awarded.

To rephrase the famous words of Thomas Edison: I have not failed. I've just found my first way not to run a contest.

This is a repost of my article that I co-wrote with Robbie Fleming in April of 2011. It was originally published in The Advocate.

Anyone who is familiar with the internet knows that when you do a search you get some results that are advertising.

The way this works is that an advertiser pays Google to post the advertiser’s ad whenever a particular keyword is searched for. When a user next types that keyword into Google, the advertiser’s ad will be displayed at the top of the search results, or sometimes on the right-hand margin of the page.

Does this mean that you can use your competitor’s brand as a keyword so that customers looking for your competitor will find you first?

Courts in California and British Columbia have both answered this question in the last few months, and have come to very different conclusions.

California Decision

In Binder v. Disability Group, Inc.^1., the plaintiffs and defendants were in competition for US social security disability claimants, whom they both wanted to provide services to. The defendants advertised their services on Google, and some of their chosen keywords were the trademarks of the plaintiffs. The plaintiffs sued for statutory trademark infringement and the common law tort of unfair competition, which is broadly similar to the tort of passing off in Canada.

US District Judge King wrote:

“…there was a strong likelihood of confusion. Plaintiffs’ mark and that used by Defendants [as a keyword] are identical – both are Plaintiffs’ registered trademark of “Binder and Binder”. We find that Plaintiffs’ marks are strong based on testimony that Plaintiffs’ extensively marketed and advertised their services and worked to build their reputation based around their name….

The services provided are identical – both Plaintiffs and Defendants are competing for clients for social security disability cases. Defendants intentionally chose Plaintiffs’ mark based on its strength and appeal in the market. Additionally, both Plaintiffs and Defendants market their products through the Internet and rely upon it to obtain clients.”

The judge found that the infringement of the plaintiffs’ trademarks was a willful violation of the plaintiffs statutory and common law rights, and awarded double damages plus reasonable attorneys’ fees and costs against the defendants.

British Columbia Decision

In Private Career Training Institutions Agency v. Vancouver Career College^2., the BC Court of Appeal considered similar issues.

The plaintiff was the local regulator responsible for private colleges, and passed the following bylaw:

“An institution must not engage in advertising or make a representation that is false, deceptive or misleading. Deceptive advertising includes but is not limited to an oral, written, internet, visual, descriptive or other representation that has the capability, tendency or effect of deceiving or misleading a consumer”.

However, some of the colleges advertised their programs on Google using the names of their competitors as keywords. Just as in the California case, these colleges did not pretend that they were their competitors, but they used their competitors’ brands to direct consumer traffic to their own websites instead.

The BC regulator asked the colleges to stop, and when they refused the regulator went to court for an injunction to force them to stop. Unfortunately for the regulator, Mr. Justice Gaul concluded there was nothing wrong with the use of a competitor’s brand as a keyword:

“I find [the defendant’s] advertising program, including its use of Keyword Advertising that incorporates the names of competitor institutions, was not designed to mislead anyone. The two situations of what the [petitioner] says were students who were deceived by [the defendant’s] advertising are, in my opinion, actually examples of students who made mistakes and it was their own actions or inactions that prompted the errors. Had they been more cautious in their reviews of their search results they would have realized that they were looking at a website of an institution other than the one they were initially seeking.

In my opinion, [the defendant’s] internet advertising strategy provided [two students who actually got misled by the advertisement] with the opportunity to investigate and consider other institutions besides the ones they were looking for. Not only do I find there is nothing wrong with that, I think the option to examine a number of institutions offering similar educational programs is a good one for the consumer.”

Accordingly, Mr. Justice Gaul dismissed the regulator’s application for an injunction.

The Court of Appeal upheld Gaul J.’s decision and found that that there was no reasonable grounds to believe that using a keyword to place one colleges’ website in a higher priority on Google than it would otherwise deserve, “was misleading or likely to mislead”.

The Court of Appeal went out of its way to say that the case was not about trademarks or intellectual property, but if Private Career Training was not about IP it is difficult to see what it was about.

It’s hard to see a difference between the Bylaw’s prohibition on advertising that has the “capability… of deceiving or misleading a consumer” and the common law passing off requirement that a defendant’s conduct creates a “likelihood of confusion” – if anything the test in the Bylaw appears less stringent than the common law.

The essence of an action for trademark infringement or passing off is free riding on the goodwill or reputation of another. While in a classic case a defendant is found to be passing off if he is claiming that his goods are the plaintiff’s, in recent years courts have expanded this concept to include more imaginative attempts to exploit someone else’s good reputation. So an Irish distiller cannot claim to be making “scotch whiskey”, and one video store cannot put a competitor’s sign on the highway in order to divert traffic to themselves.

This latter situation was considered by the US Ninth Circuit Court of Appeals Brookfield Communications Inc. v. West Coast Entertainment Corp.^3.:

“Using another’s trademark in one’s metatags is much like posting a sign with another’s trademark in front of one’s store. Suppose West Coast’s competitor (let’s call it “Blockbuster”) puts up a billboard on a highway reading – “West Coast Video: 2 miles ahead at Exit 7” – where West Coast is really located at Exit 8 but Blockbuster is located at Exit 7. Customers looking for West Coast’s store will pull off at Exit 7 and drive around looking for it. Unable to locate West Coast, but seeing the Blockbuster store right by the highway entrance, they may simply rent there. Even consumers who prefer West Coast may find it not worth the trouble to continue searching for West Coast since there is a Blockbuster right there. Customers are not confused in the narrow sense: they are fully aware that they are purchasing from Blockbuster and they have no reason to believe that Blockbuster is related to, or in any way sponsored by, West Coast. Nevertheless, the fact that there is only initial consumer confusion does not alter the fact that Blockbuster would be misappropriating West Coast’s acquired goodwill.”

In Private Career Training, Mr. Justice Gaul concluded that the accused colleges did not use their competitor’s name in their metatags, but it is difficult to see how using the brands in Google adwords is any different – both are tools in which the power of a competitor’s brand is used against it to steer consumer traffic away from the competitor and on to the advertiser’s competing site.

Both Mr. Justice Gaul and the Court of Appeal in Private Career Training concluded that no consumer was ultimately mislead by the use of brands as keywords, because the offending colleges did not pretend to be anything other than themselves in either their ads or their websites, and so any reasonably intelligent consumer clicking on the ‘wrong’ website would have eventually discovered their mistake:

“… the decision to spend thousands of dollars and several years on a course of education was very important. It was reasonable to expect that potential students would approach the issue with some care.”

But this analysis presumes that end point is the only relevant point of analysis. It ignores the fact that the offending colleges were using their competitor’s brand as a springboard to direct initial inquiries to themselves (“initial interest confusion” as in Brookfield), and it also appears inconsistent with the common law passing off likelihood of confusion test, as formulated in Veuve Clicquot^4.:

“The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot on the respondents’ storefront or invoice, at a time when he or she has no more than an imperfect recollection of the VEUVE CLICQUOT trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks.”

Of course the courts in Private Career Training were not considering trademark infringement but the application of consumer protection legislation, and with this idea firmly in mind the Court of Appeal concluded that trademark principles were irrelevant to their analysis.

In fairness to the Court of Appeal, consumer protection legislation has a different purpose than intellectual property laws. IP protects the rights of the intellectual property owners, and so concepts like initial interest confusion matter because any free riding on a business’ brand matters. But consumer protection laws are mostly about final effects – will any consumer be harmed? From this perspective the Court of Appeal’s focus on the final impact of the use of the brand keywords instead of the initial impact is more understandable. However, even this distinction is questionable because of the authority in Canada that consumer protection is one of the fundamental purposes of the tort of passing off: Ciba-Geigy Canada v. Apotex [1992] SCJ 83 at paras 48 to 50.

In any event, whether Private Career Training is about intellectual property or consumer protection is not as significant as the fact that it is the first case in Canada to consider the use of brands in keyword advertising. Because it is the first, and because of its conclusion, this case will be seen by many as an invitation to challenge well established incumbents in the market place by bidding on those incumbents’ own brands on Google adwords. The stronger those brands, the more vulnerable they will be to internet-savvy competitors entering their markets without any brand power of their own.

This is a repost of my article that I published at MINCOV.COM on June 23, 2010.

As negotiations over the Anti-Counterfeiting Trade Agreement (ACTA) progress and more and more information becomes available on the potential wording of the agreement, the usual suspects from all camps are happy to share their views on how ACTA might influence our lives. Quite expectedly, the opinions range from alarmist to pacifying, from wholly positive to Armageddonist, from neutral with a tint of “it’s not going far enough” to neutral with a “they’re still not gonna get us” tongue-in-cheek attitude.

How is it possible that one and the same document can attract such radically differing opinions from indisputably educated and intelligent people? The answer is simple. No assessment of a draft international agreement (or any piece of legislation) is possible in abstraction from the values against which such agreement is to be gauged by the assessor.

This is the reason why any legislation regulating welfare handouts is usually subject to heated debates: the same piece of legislation would necessarily receive incompatible ratings from human rights activists, union leaders, free market economists, those who are to distribute the handouts, the homeless, the working poor or the uber-rich. This happens because everyone has their own system of values, however consistent, and it is through the prism of these values that one evaluates all existing or proposed rules.

It is one’s system of values that allows one to rank various interests in the order of their importance. What is more important – saving a life of someone else’s child or the ability to buy a new toy for one’s own child; establishing higher wages for auto workers at the expense of car buyers or bringing down car prices at the expense of auto workers’ wages; saving an unbeknown species at the expense of a local industry or the prosperity of the industry workers – even if it means extinction of the species; protecting the rights of authors in a way that may result in severe limitations of availability of certain works or protecting the “rights” of “the public” to a rich cultural life at the expense of creators’ freedom to dictate the terms of use of their works?

The answer to all of these questions is – it depends. It depends on the system of values of the person who is to answer these questions. Any attempt to convince others in the “objective rightness” of one’s answers is nothing more than an attempt to inculcate or force one’s system of values upon others. An attempt to find a compromise under the guise of objectivity is either a reflection of one’s subjective system of values or an attempt to shift the Overton window^1. so that one of the conflicting values is marginalized as “too much” and the other one gains weight as the window slowly shifts in its direction. I have already provided one Ayn Rand’s quote about the compromise between food and poison in my recent article, Modernization of the Inconceivable. Here is another one:

“The good has nothing to gain from … the evil, except a share of its failures and crimes; the [evil] has everything to gain from the [good]: a share of its achievements and values. An industrialist does not need the help of a burglar in order to succeed; a burglar needs the industrialist’s achievement in order to exist at all. What collaboration is possible between them and to what end?”^2..

In the beginning, I had no reservations about ACTA, other than that it would probably not go far enough in establishing a system that would provide an efficient mechanism of enforcement against mass violations of copyright on the Internet. I had no problem dismissing most comments from scholars known for their focus on the so called “user rights” – simply because they are based on the system of values that is irreconcilable with mine.

However, after I spent some time getting myself familiar with various opinions on ACTA, I realized that the one problem I do have with ACTA is that it can be used as a tool to set up global regulation of the Internet going far beyond the framework against copyright infringements.

The idea that the international agreement that seemingly could provide enhanced level of protection to copyright owners whose works are being used on the Internet could also become a tool of oppression (and by oppression I do not mean one’s inability to download a new movie free of charge), seemed like an irreconcilable contradiction. Then again, Ayn Rand’s philosophy came to the rescue. In “Atlas Shrugged”, she wrote: “Contradictions do not exist. Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong.”

This is exactly what I did.

Let me start with setting up the framework of my system of values and beliefs in this regard.

1. Individual rights are an absolute priority. A society that does not fully protect individual rights is a society of masters (whether the master is a dictator or the majority) and slaves.

a. Individual rights are impossible without property.

b. Intellectual property, as a result of one’s creative labour, is no less property than any other type of property.

c. Unlike in the case of tangible property, there is no way to physically prevent infringement of intellectual property.

d. If the infringement of intellectual property does occur and is not voluntarily remedied by the violator, the only recourse the owner of the intellectual property may have against the violator would be through the use of coercive force applied towards the violator – which may either be the force applied by the state (through courts and various enforcement procedures) or by the owner of the intellectual property and its agents (i.e. thugs or journalists).

2. The government’s only proper roles are those designed to protect individual rights through monopoly use of coercive force, i.e. the military, the police and the courts.

a. More government involvement and regulations based on protection of interests of some people or groups at the expense of some others means less freedom to all but the ruling clique.

b. Individual rights cannot be voted away by the majority, no matter how overwhelming.

c. Totalitarianism is totalitarianism, regardless of any allegedly virtuous purposes for which it is being instituted. The state does not have to be run by a murderous dictator for the individuals in that society to not be free. What distinguishes totalitarianism (as the ultimate form of statism) from a free society is that it holds a mortgage on its subjects’ property and lives by sacrificing them to a mysterious common good. The difference between a mixed economy and full totalitarianism is only a difference of degree in lack of freedom. Laissez-faire capitalism, with its recognition of individual rights as the ultimate virtue, is the only truly moral politico-economic system that does not sacrifice, under the barrel of the gun of the government’s enforcement machine, the rights of individuals to the interests of others (be it the dictator, a bureaucrat, a particular group in the society, or the “public” in general).

d. While a big government involved in roles improper for the government is bad enough, a global government is disastrous.

3. Given the ease of dissemination of unauthorized content on the Internet and impracticality of initiating a full-blown litigation over each case of infringement, the only sensible solution, if we are to deal with Internet piracy, is through cooperation of ISPs (both hosting providers and Internet connectivity providers).

4. To create a truly totalitarian state or a global government today, the Internet would necessarily need to be heavily regulated, hence the attempts to force net neutrality down our throats.

a. No totalitarian state has existed without drastically limiting freedom of speech or without serious invasion of private lives of the state’s subjects.

b. A system that allows to control ISPs for the purpose of enforcing intellectual property rights can easily be used to impose overreaching control over the Internet.

5. Internet, as any great invention, can be used for good purposes and for bad purposes. Regulation of the Internet can also be done for good and evil purposes.

6. Ends do not justify the means. It is impossible to save the free market system by abandoning free market principles, President George W. Bush to the contrary notwithstanding^1..

So why does there seem to be a contradiction? Those who have read my article, Modernization of the Inconceivable, might have already figured it out. The main problem with ACTA is that it is based on a compromise of underlying principles. Just as a legislative attempt to balance interests of factory owners with those of looters who openly steal from the factory, is nothing more than institutionalized racketeering, an attempt to appease those who claim that they are entitled to “share” the cultural legacy by downloading, without authorization, any packages of ones and zeros, is nothing more than enslavement of creators (and those with whom creators voluntarily trade) by forcing them to give up the product of their labour and investment on terms that are dictated by someone else.

Until the proposed international agreement clearly states that the protection of intellectual property, as its underlying principle, is undertaken for the benefit of whose who create it and invest in it and that it has nothing to do with the interests of the whole “society”, we are doomed to witness the war between various groups lobbying their interests. When the use of one’s property is subjected to undefined interests of the “society”, one is neither the owner nor a free man. If a person is only allowed to have a private home if the society finds it beneficial, then under the same logic, the society can always expropriate the house, if it should find, through an activist claiming to represent the interests of the society, that expropriation would benefit the society even more. This is precisely what happened in the Soviet Russia where if the place you lived at was more spaceous than 9 sq. meters (97 sq. feet) per person, you were considered too rich and the government had the right to let strangers into your “communal” apartment. When it is up to the society (through its elected or self proclaimed representatives) to decide who should own what, one is merely a slave whose property can be taken away at any time in order to meet the demand of the public.

As long as the mechanics of the proposed agreement are designed with the interests of the collective in mind, there will always remain a risk that the enforcement tools created by the agreement will be used for unrelated purposes that are, as will be claimed, equally as important to the society. If even a partial justification for establishing the rules for ISP liability is that it would promote the public interest in the encouragement and dissemination of works of art^2., then there is no reason not to use the same system of ISP liability with respect to dissemination of extremist speech, the definition of extremism being, naturally, left to the discretion of anybody who will claim that shutting down of a particular opposing view is in the interests of the country.

That is the problem with the current wording of ACTA, not that lobbyists from the recording industry cannot come to terms with lobbyists from the electronic gadgets industry; or that both these groups are vehemently opposed by activists of the “masses are (or should be) entitled to use copyrighted works as they please” movement. The problem is that because ACTA does not clearly establish the notion that the only concern for protection of intellectual property is the creator and subsequent voluntary investors in the creator’s work, the treaty members are not precluded from approaching the issue of such protection from the perspective of the “common good”, thus allowing a dubious compromise between two conflicting philosophies.

That ACTA has more chances of being implemented in the world because of its wording being vague enough to accommodate irreconcilable interpretations, is not good enough. If one scholar says that ACTA establishes a three-strikes-you’re-out rule and another scholar says that all it does is that it confirms contributory liability of ISPs, which liability is lifted subject to the ISP’s reasonable cooperation, it means that the same text may equally reasonably be interpreted as providing a global government with a tool of shutting off dissent and establishing total control over who does what on the Internet. What is attempted to be sold as a virtue of ACTA, that it offers a balanced approach to various groups of interests, is precisely its most important flaw.

As soon as the treaty’s purpose becomes to establish a fair balance of interests (based on whichever group succeeds at extorting favours from the drafters and other parties), the implementation of the treaty would always lie in the domain of re-evaluation of what balance is “fair” under the circumstances (the circumstances being, of course, the relative power of various interest groups in a particular country at a particular time). This is nothing more than warfare between various gangs as to which one of them has more power over the others.

Those who understand the importance of intellectual property should not lull themselves into believing that everything is going their way simply because lobbyists from their camp succeeded at squeezing in a rule that would tip the balance in their favour. As long as the protection is not based on a morally consistent principle, there is no guarantee that the balance will not tip the other way tomorrow or that the enforcement mechanism created by ACTA is not used for purposes radically different from those that it will have been introduced for.

The only way to ensure that an international treaty provides a solution to combat Internet piracy without becoming a tool of oppression is to so word the treaty that it would not leave any doubt as to the reasons why intellectual property is granted protection. And that reason should be stated clearly and proudly – intellectual property is being protected because no one has a right to use the results of another’s creative labour, other than on terms put forward by the creator or the subsequent copyright owner who voluntarily purchases said rights from the creator. It has nothing to do with whether the society benefits from such protection.

Unless the collective interest is left out of the equation, there will always remain a risk of this collective interest being used to enslave everyone into submission to whoever claims to be the representative of the society at any given moment. This is precisely the way all collectivist dictatorships of the past have seized power. It should not be forgotten that no dictator has come to power on the promises to murder millions of citizens in their own country. All the atrocities of collectivist regimes (be it Lenin, Stalin, Hitler, Mussolini, Mao, Khmers Rouges, Che or other blood-thirsty monsters) that are presently being laundered by the left, have been accomplished in the name of the common good.

I am not saying that ACTA will necessarily lead to the world holocaust. What I am saying is that the lack of clarity in the reasons for its adoption would make both IP supporters and haters guilty in the demise of our freedoms. The difference, however, is that the haters’ goal is clear – they openly advocate for the submission of creators and investors to the interests of the “society”. It is the position of many IP supporters that is most inglorious: by trying to carve out a piece of the pie for creators, they are prepared to do away with the philosophical basis for the protection. By throwing the creators to the mercy of the collective, even if it benefits the creators in the short run, all that they are achieving is that the paradigm slowly shifts to the one that IP haters embrace – that there should be no protection other than that which benefits the society as a whole.

This is a repost of my article that I published at MINCOV.COM on June 28, 2009.

Recently I wrote a 100-page comparative research paper on the treatment of parody in the copyright laws of common law countries and selected European countries. Thus, I could not help but voice my thoughts regarding the ongoing dispute between J.D. Salinger and the author and publishers of a purported sequel to The Catcher in the Rye (“Catcher”).

J.D. Salinger has sued Swedish author Frederik Colting, who wrote the novel 60 Years Later: Coming Through the Rye (“60 Years”) under the pseudonym J.D. California. The disputed literary work has attracted comments ranging from “rip-off, pure and simple”^1. to “a sequel”^2., to “not a sequel”^3., to “criticism of J.D. Salinger and of Catcher in the Rye”^4., to “tremendously important commentary”^5., to “a parody”^6., and finally to “a complex and undeniably transformative exposition about one of our nation’s most famous authors, J. D. Salinger, and his best known creation, Holden Caulfield."^7.

In his declaration, Mr. Colting concedes that his earlier book cover and some promotional material characterized 60 Years as a sequel^8.. One would find it hard to believe that it is a coincidence that he came to “realize that this description is inaccurate”^9. only after the lawsuit has been filed. Suddenly, the “parodist” realized that his book, on which he spent “an entire year of [his] life”^10.,

“is not designed to satisfy any interest the public might have in learning what happened next to Holden Caulfield or the other characters in Salinger’s book. Rather it is intended to stand on its own as a critical examination of the character Holden Caulfield, the relationship between author and his creation, and the life of a particular author as he grows old but seems imprisoned by the literary character he created”^11..

It is only after the lawsuit was filed that Mr. Colting expressed the view that he “wrote 60 Years as a critical exploration of such themes as the relationship between J. D. Salinger, the famously reclusive author, and Holden Caulfield, his brash and ageless fictional creation”^12..

Granted, I may be overly sceptical about Mr. Colting’s description of 60 Years. I did not read it.

What? You might say, and yet you are writing an article on it?

Please be patient, gentle reader, as I shall expound my logic on this further on.

Indeed, it might be a true gem of a parody. Maybe, it is an “important commentary and criticism of Catcher and its famous author”^13.. Colting acknowledges that he is “fascinated by the widely-reported fact that, after creating Holden, Salinger never published another work and essentially became a recluse, while at the same time exercising ‘iron-clad control over his intellectual property, refusing to allow others to adapt any of his characters or stories in other media’”^14.. He specifically chose Salinger’s famous work as the basis for his “first novel”^15. not only because it is one of the most famous novels of all times, but also because of Salinger’s fierce opposition to any, let alone unauthorized, derivative use of Catcher. The question is, even assuming 60 Years is indeed a true parody, should Colting get away with it?

The attempt of Colting and his lawyers to classify 60 Years as criticism and parody is not unexpected. From the documents and comments I have gathered, it appears very likely that, despite the defendants’ claim to the contrary, 60 Years will be held to constitute an unauthorized use of Catcher and its protagonist. If this happens, the only way for the defendants to avoid the finding of infringement would be to prove that the use of Catcher constitutes fair use under §107 of the U.S. Copyright Act^16.. While the list of purposes that presumptively imply a fair use in §107 is not exhaustive^17., the presumption, if satisfied, of course, makes the defendants’ task much easier.

The fundamental distinction between common law and civil law approaches to the criticism exception is in the fact that the former permits any type of use of the underlying works for the purpose of criticism (provided that such use is fair), whereas the latter only permits quotation of underlying works for such purpose. By implication, quotation only allows unaltered (albeit fragmentary) use of underlying works^18.. Parodic modification of an underlying work, while it still may be regarded as criticism, is beyond the definition of quotation. Quotation presupposes scrupulous copying of the used portions of an underlying work and their separation from what is added by the new author. Parody, on the other hand, normally implies integration of the modified (or, in some cases, mutilated) underlying work into the new resulting work.

In common law countries, the criticism exception seemingly allows any type of use of an underlying work provided that such use is made for the purpose of criticism, without it being expressly limited to quotation. Hence, the willingness of creators of unauthorized derivative works to claim this exception as a defence. I suggest that while the criticism exception in common law countries is not expressly limited to unmodified use of underlying works, this limitation is implicit in the words “fair use” or “fair dealing” (since, perhaps, unauthorized alteration of the work for the purpose of criticism should be regarded as unfair^19.).

Criticism is an extremely broad notion. Any use of an underlying work may be said to be a criticism of something or someone. No doubt, parody is criticism. But there are many “unfair” uses that also fall within the definition of criticism. For example, creation of a DVD collection “100 most boring movies” is criticism. However, unauthorized reproduction of 100 full movies under this title would still be unfair and illegal. Likewise, a CD collection of “100 songs by ugly hairy artists” is also arguably criticism, which cannot be excused as fair use or fair dealing^20.. The mere purpose of criticism does not justify copyright infringement.

The fairness analysis with regard to parody has the same inherent difficulties as that with regard to criticism, with one additional aggravation. There exists no unequivocal legal definition of parody. Because most people (and courts) tend to agree that parody, by definition, requires more extensive use of the underlying work, compared to criticism, the so-called parody exception has become a dominant theme with those driven by the general idea that the balance of interests should tip in favour of the public by limiting the rights of authors and copyright owners (and thus ignoring the fact that the public would only benefit from the use of works if they are created and disclosed by authors).

Their attack on copyright has been carried out on several fronts. The economic irrationality of litigation in case of mass infringement of copyright on the Internet is often used as a pretext to justify the idea that what is done with impunity by so many people cannot logically constitute an infringement. Concepts of freedom of expression, freedom of seeking information and the right to cultural development have been thrown in the mix to rationalize legalization of unauthorized use of heretofore protected works. A separate trend in the so called “fair copyright” movement is represented by calls for extremely broad interpretation of exceptions to copyright.

Parody is a very convenient example for the “fair copyright” movement supporters to use. By providing examples of successful parodies, the supporters of “fair copyright” claim that copyright unfairly prevents creation and use of parodies. That a plethora of successful parodies have been created under “parody-unfriendly” copyright regimes that refuse to recognize an exception for parodies, seems not to disturb the commentators.

For example, in the UK, the proposal to add an explicit exception for parodies was formulated in the Gowers Review of Intellectual Property (“Gowers Report”) in 2006^21.. Surprisingly, to prove the point that “an exception to enable parody can create value”, Gowers offers the example of Weird Al Yankovic who has received 25 gold and platinum albums, four gold certified home videos and two GRAMMYs® by parodying other songs, “but had to ask permission from rights holders”^22.. It is inconceivable how a special exception can be necessary if there is a living example of an artist who sold 25 gold and platinum parody albums, but never had an urge to create unauthorized parodies. Does the report suggest that he would have sold more platinum albums if he was allowed to create parodies without asking permission? Or would his parodies be any better? Indeed, the example of Weird Al Yancovic clearly proves the contrary, that no special exception for parodies is necessary.

It seems illogical to attribute greater importance to the “parody exception” than would be justified by the relative frequency of creation of parodies compared to the use of pre-existing works for the purposes of criticism, news reporting, research or private study. Overly enthusiastic attempts to introduce broadly interpreted exceptions for parody may signal that the proposal is broader than it appears to be, and that it may be only tangentially related to parodies. The parody exception is only one of many exceptions. It is not “the” exception that will significantly change the balance of interests between authors and the public.

However important the transformative element is in the fair use analysis, it does not take away the exclusive right of copyright owners to authorize creation and use of derivative works. The general idea is that there must be something very special about the parody which warrants a substantially different approach compared to other transformative derivative works. It is well known that Salinger turned down requests from Steven Spielberg and Harvey Weinstein to acquire film rights. If 60 Years is a protected criticism or parody, how is it different from an unauthorized motion picture? If 60 Years is found to be legal, how long will take until a new unauthorized commentary emerges?

Unlike in common law countries where the discussions about parody exceptions are a more recent trend, the parody exception has existed peacefully in France since 1957. Article L. 122-5 of the French Code of Intellectual Property provides that “once a work has been disclosed, the author may not prohibit… parody, pastiche and caricature, observing the rules of the genre”. Despite the somewhat vague wording relating to the requirement to observe “the rules of the genre”, the French courts have been extremely cautious in applying this exception.

The disproportionate worldwide interest in the parody exception is largely due to the U.S. Supreme Court decision in Campbell v. Acuff-Rose Music (“2 Live Crew”)^23., the leading (and internationally famous) case dealing with a rap version of Roy Orbison’s song “Oh, Pretty Woman”, as performed by the band 2 Live Crew. There, the concurring^24. Justice Kennedy outlined the dangers of an overly broad interpretation of parody and of creating a presumptive exception with regard to parodies:

“…doubts about whether a given use is fair should not be resolved in favor of the self-proclaimed parodist. We should not make it easy for musicians to exploit existing works and then later claim that their rendition was a valuable commentary on the original. Almost any revamped modern version of a familiar composition can be construed as a ‘comment on the naiveté of the original’, because of the difference in style and because it will be amusing to hear how the old tune sounds in the new genre. Just the thought of a rap version of Beethoven’s Fifth Symphony or ‘Achy Breaky Heart’ is bound to make people smile. If we allow any weak transformation to qualify as parody, however, we weaken the protection of copyright. Any underprotection of copyright disserves the goals of copyright just as must as overprotection, by reducing the financial incentive to create.”^25.

It is hard to disagree with Justice Kennedy's words. Unless we are prepared to create a parody of our copyright laws, it is imperative that the definition of parody be limited to a very circumscribed area, otherwise practically any infringement could be excused under the umbrella of parody. Indeed, the exception cannot be so broad as to allow the creation of any new works over the existing ones under the guise of parody.

It may seem that the dangers of an expansive interpretation of what may constitute a parody identified in 2 Live Crew by Justice Kennedy are in fact seen as a great advantage by “fair copyright” activists. Indeed, an overly broad parody exception effectively creates a shortcut to a general “public benefit” exception, readily allowing an unauthorized use of an existing work if it benefits the society. I suggest that there are two reasons why a general “public benefit” exception is a bad thing. First, it does not take into account the works that may never be created by authors discouraged by the failure of the courts to protect their works from being used against their will. Second, balancing the interests of various parties is not a distinctive characteristic of copyright laws. All laws are presumably premised on the balancing of such interests. General property laws are also adopted with the view of the public interest in mind. Unrestricted unauthorized use of someone else’s physical property may also have “public benefits”, but no one seriously suggests that such measures be taken. Encroachment of property may only be allowed in some very limited and clearly prescribed cases. I posit that it is exactly the same approach that must be taken with regard to parody.

Copyright laws have always been about the balance of the interests of creators and the public, about whether it is more fair to subject the public’s access to works of art to the whim of the creator or whether it is more fair to deprive the creator of a certain degree of control over the use of his works by the public. In my view, the danger that an overly broad parody exception may evolve into an open transformative use exception is far greater than the damage resulting from a “true” parodist’s failure to publish their unauthorized parody. In other words, if lawmakers and the courts cannot provide a clearly delineated system of rules and definitions that would allow some foreseeability as to whether a particular work would qualify as a parody, then I suggest an absolute ban on unauthorized parodies would be more appropriate than the ultimate uncertainty where an infringer can ex post facto claim that the infringing work is a parody.

I do acknowledge the intrinsic value of parodies and do not necessarily fully subscribe to the words of Ernest Hemingway who once said:

“The parody is the last refuge of the frustrated writer... The greater the work of literature, the easier the parody. The step up from writing parodies is writing on the wall above the urinal”^26.

There are some truly great parodies. In my opinion, the best parodies have been those that did not parasite on the popularity of the originals. The more famous the original, the harder it is to create a great parody, since true parody needs to overshadow the original, and it is usually hard to add much to an already famous work.

The courts should never go into evaluating the quality of parody. A brilliant, sharp and socially necessary parody in legal terms bears the same relationship to the original as primitive, nonsensical mockery. Unfortunately, as with any other kind of creative works, truly valuable parodies will only make up a fraction of the bulk of garbage created by wannabe parodists. Creativity should be supported. However, in case of parodies, supporting parodic creativity necessarily means doing so at the original authors’ expense. I firmly believe that unless very strict rules and limitations are introduced to come along with the parody exception, the price payable by original authors is too high. These rules and limitations must cover both what may legally constitute a parody and how unauthorized parodies may be used. Uncertainty creates serious risks for parodists too. If Mr. Colting is permanently enjoined from publishing 60 Years, he and his publisher will have lost time, efforts and money spent on creating and publishing a work that they hoped would meet the vague requirements for parody. Of course, it is the risk one takes when one relies that their actions will be excused under the fair use doctrine. But today the parody exception is too unpredictable – and this cannot encourage parodic creativity either.

Going back to Salinger’s claim, the defendant’s argument regarding market impact deserves a special remark. Indeed, Salinger has not written a novel since Catcher. No doubt, there is no market substitution in the sense that the public will not be inclined to buy 60 Years instead of Catcher. There are three reasons why Salinger’s claim should not fail for lack of negative impact on the market for Catcher.

First, the analysis is not limited to direct market substitution of the original work and the parody. It also covers potential legitimate licensing opportunities the plaintiff may have and the parody’s impact thereupon. With every new day of Salinger’s refusal to authorize anyone to create derivative works, his exclusive right is worth more. While 60 Years may not ruin the market for Salinger per se, it is the legalization of 60 Years that is very likely to do so. In other words, if 60 Years is found to constitute a protected parody, what would prevent a film company from creating a motion picture based on 60 Years, which would incorporate a good deal of reminiscences to Catcher? What would prevent the emergence of new sequels under the guise of important commentaries and parodies? It so happened that a part of the value of Salinger’s copyright is due to the fact that he never authorizes others to touch Catcher. It only takes one shot to break a mirror.

Second, it would be incorrect to use the negative impact on the legitimate economic interests of the original author as the sole or even a dominant factor in the parody analysis, because – by way of analogy – if someone was to make pirated copies of software or music CDs and give them away for free to the homeless, one could say that the homeless would never be able to buy the authentic CDs, therefore the copyright owner suffered no loss. There could even be cases where copyright infringement may have a beneficial economic effect on the market for the original author’s works, because the infringing work may in fact revive interest in the original work. However, it does not make these acts any less an infringement.

Finally, there is nothing wrong with an author’s decision to live secluded from the public eye after publication of a phenomenally successful book. Salinger must have made this decision on the basis of trust in the protection offered by the copyright laws. This is the deal between the author and the public. The public should not attempt to force an author into writing new works by removing protection from the existing ones. That the value of the work is so great that it allows the author the luxury of living as a recluse should not be used against the author by depriving the author of the promised protection.

On June 17, 2009 the federal judge Deborah Batts granted a temporary restraining order enjoining the defendants from publishing, advertising, selling, or otherwise distributing 60 Years. It is clear that this case will go through all possible stages of appeal until the losing party loses the final appeal. Apart from the issue of whether Catcher’s protagonist may be protected by copyright separately from the book itself, this case will set an important precedent for the treatment of parody.

If Salinger fails to permanently enjoin dissemination of 60 Years as a result of the court’s finding that it constitutes protected criticism or parody, it will signify a very substantial diminishing of the value of the right to create and use derivative works. It will mean that a sequel to a pre-existing work may not require authorization from the original author, if the defendant suddenly remembers that the sequel was in fact created as an important commentary or parody. This is precisely what Justice Kennedy was warning against in 2 Live Crew. If 60 Years is anything less than a true parody or criticism, the decision in favour of the defendant would signify the emergence of a general “transformative use” exception, incompatible with the exclusive right to control derivative works.

With today’s attempts of the activists of the so-called “fair copyright” movement to use parody as a flagman ship to break the ice of protection that copyright laws afford, parodists seem to be in a win-win situation. If the author of the original work does not sue them, then they are left to parasite from the fame of the original work. If they do get sued, then the activists will make sure that the parodist becomes widely known as a martyr standing up for the rights of creators of transformative works, if not simply famous as a writer^27.. If the parodist successfully defends the case, they will be able to sell many additional copies of the parody based on the fame attracted by the lawsuit. Even if the parodist loses the case and the distribution of the parody is enjoined, the newly acquired fame generated by the lawsuit will allow the parodist to sell whatever he or she writes next in their new status of celebrity.

The courts need to come up with a pronounced “Enough!” to the attempts to compromise copyright through labelling (often in the alternative) each case of non-literal copying of a pre-existing work, a parody. The parody exception cannot be claimed as an alternative. This has been understood in France^28., where the dual requirement of recognisability and substantial creativity precludes a defendant from using the parody exception as an alternative to the defence of not borrowing from the underlying work. In other words, the defendant cannot say: “I did not copy this work, and if I did, it was a parody”. Parody requires the parodist’s positive intent to borrow from the underlying work to create a new work with a comic effect^29.. An infringement does not become a parody simply because the result it funny. Much less when it is not.

60 Years looks like a blatant attempt to test how decidedly the courts would be prepared to turn their backs on authors for the dubious public benefit of having access to the book whose primary value is that it is either a sequel to or a commentary of the famous pre-existing work. If the courts are unable to defend Salinger, an iconic example of an author who had dedicated his life to preventing unauthorized use of his prior works, then we should ask ourselves, why do we still have copyright laws at all and whom they are supposed to protect.

I am often asked to share my comments about the amendments to the Canadian Copyright Act that are proposed in the Bill C-11.

In my opinion, they are nothing more than the result of an attempt to “balance” the interests which by definition cannot be balanced, to find a viable compromise between food and poison. Bill C-11 looks very much as if the drafters thought, “Let’s take a little bit from this group of people and give it to that group of people, and in order for it to be able to pass, let’s also take from that second group of people and give something back to the first group of people.”

What the law is and what the law should be are two separate issues. No matter what form the amended Copyright Act will take, I will be able to serve my clients’ best interests.

As to what the law should be, I am convinced that this question cannot be answered without first addressing the foundational question of why we have copyright laws at all. In this sense, William Patry is 100% correct in his new book, “How to Fix Copyright”. I am currently writing a long review of the book to show how wrong Mr. Patry is in his analysis and in the remedies he is offering.

Meanwhile, I decided to phase out my personal website at MINCOV.COM and repost some of my older posts from there that deal with the copyright reform and my vision of the philosophy of copyright.

The first one is about the parody exception to copyright. Unfortunately, Canadian legislators decided to include the parody exception in Bill C-11. I wrote that article before this proposal was made, and so I don’t address it in my article.