Changes to Section 20 of the Copyright Act cement the incomprehensible intention to create separate regimes of protection for performers and makers of sound recordings having connection to Canada, WPPT countries and the Rome Convention countries. More on that in my posts Changes to Section 19(1) of the Copyright Act - Good Or Bad?, New Subsections 19(1.1) and 19(1.2) of the Copyright Act - Good Or Bad? and New Sections 19.1 and 19.2 of the Copyright Act – Good Or Bad?.

Sections 19(1), 19(1.1) and 19(1.2) set out the right to remuneration “subject to subsections” 20(1), 20(1.1) and 20(1.2) respectively.

Section 20(1) sets out that s. 19(1) applies only if the maker of the sound recording was, at the date of the first fixation, a Canadian citizen or permanent resident, or a corporation with its headquarters in Canada; or if all the fixations done for the sound recording occurred in Canada. Section 20(1.1) sets out analogous requirements with respect to s. 19(1.1) with the exception that instead of connection to Canada, a connection to a Rome Convention country is required. Likewise, Section 20(1.2) sets out the requirements with respect to s. 19(1.2), however instead of connection to Canada, a connection to a WPPT country is required.

The reciprocal limitations whereby the Minister could, by a statement published in the Canada Gazette, limit the scope and duration for sound recordings having connection to a country that does not provide similar level of protection, will not cover not only the Rome Convention countries, but also WPPT countries. This is done by splitting the former s. 20(2) into s.20(2) and s. 20(2.1).

The right of the Minister to grant the right to remuneration conferred by s. 19(1.1) has been tweaked to refer to the right of remuneration available to Rome Convention countries. You may remember that unlike the right of remuneration available to Canadians and WPPT Countries, the right conferred by s. 19(1.1) through bad drafting also appears to cover the right of remuneration for making available right.

BOTTOM LINE: If one of the declared intentions of the Copyright Modernization Act had been to make the Copyright Act easier to read, understand, apply and enforce, the cross-referencing mess between sections 2.4(1.1), 19 and 20 shows a spectacular failure. Even if the result of creating separate regimes for the Rome Convention countries was intended, the language used to do so is virtually incomprehensible. Even worse, if it hand’t been the intention.

More horrible drafting here…

Buckle up as I will guide you through a maze of exceptions from exclusions.

As I wrote in my comments on section 19(1) of the Copyright Act, despite the general definition of communication to the public by telecommunication, which includes the making available right, performers and makers of published sound recordings will only have the right to equitable remuneration for communication of such published sound recordings by telecommunication, but not for the making available right.

That provision is modified in the new subsections 19(1.1) and 19(1.2) of the Copyright Act, which (if interpreted to read what they say) set forth that only performers and makers of sound recordings having connection with the Rome Convention countries will be able to enjoy the equitable right to remuneration for communication of the sound recordings to the public, including the making available right. This appears to be the exception from the rule that will exist for performers and makers having connection to Canada and the WPPT countries.

It gets better from here.

The new Copyright Act will have sections 19.1 and 19.2, which set out that for the purpose of application of Sections 19(1) and 19(1.2), if a work is made available to the public over the Internet, then, for the purposes of the equitable remuneration provisions of s. 19, such making available will be deemed to be publication of the sound recordings. (Remember, s. 19 only vests the equitable right in respect of published sound recordings?)

Now, it is easy to see that the new Sections 19.1 and 19.2 do not address sound recordings having a connection with Rome Convention countries.

So we end up with absolute insanity:

Performers and makers of sound recordings having a connection with Canada and WPPT countries will NOT have the right to equitable remuneration for the making available right, even though the making available of the sound recordings will be deemed to render such recordings “published” for the purposes of the equitable remuneration provisions.

On the other hand, performers and makers of sound recordings having a connection with Rome Convention countries WILL have the right to equitable remuneration for the making available right, even though the making available of such sound recordings will NOT be deemed to render such recordings “published”, and so sound recordings the copies of which that have not been made available to the public other than through communication to the public by telecommunication, will be disqualified.

It’s great to have a “modernized” Copyright Act! If you found my explanations too convoluted, I don’t blame you. The provisions hardly make any sense.

So, let’s recap:

For Canada and WPPT countries:

– making of the sound recordings available through the Internet qualifies them for equitable remuneration;

– the equitable remuneration does not cover cases when the sound recordings are made available through the Internet.

For the Rome Convention countries:

– making of the sound recordings available through the Internet does not render them “published” for the purpose of equitable remuneration;

– the equitable remuneration covers cases when the otherwise published sound recordings are made available through the Internet.

If there is a method to this madness, I surely am incapable of comprehending it.

Are you?

Tonight I attended an amazing event put up in Vancouver by Roger Killen.

He invited 4 Vancouver entrepreneurs who have recently appeared on Dragons’ Den. Brad Friesen with Last Call, Scott Lim with B.K.H. Jerky, Dougieluv with Dougie The Modern Dog Dog and Dan Plante with Chawel were all in the same room, sharing secrets of their success in and outside of Dragons’ Den.

I had a chance to ask them all a question that was very important to me. Pay attention to their answers. They are instructive for anyone who is starting or is about to start a business.

My question went something like this:

As an IP lawyer, I am trained to tell my clients that it is crucial to have their intellectual property and other legal issues sorted out as early as possible.

Nobody really argues that having good contracts is better than not having good contracts, just as being healthy and wealthy is better than being sick and miserable.

However, aspiring entrepreneurs often tell me that their budgets are tight, and that they’ll deal with their legal stuff later, when their business has grown to be successful.

So in your experience, what’s the last stage at which startups can safely get away without having their legal affairs in order?

Dougie said that it’s imperative to take care of the legal stuff right away, ideally even before you actually start the business. You need to have your whole legal organized before you get out of the gate.

Brad said essentially the same thing and added that he regrets not having dealt with a U.S. trademark issue before he made his pitch before millions of people.

Dan backed the other two, and shared some great ideas about naming his product and difficulties surrounding patenting an invention on a tight budget.

The lesson is simple. Every successful entrepreneur fully understands the value of legal advice and intellectual property in creating a competitive advantage for their business.

Having your legal stuff organized does not guarantee your business success.

But if you do not have your contracts and intellectual property taken care of, you will never be able to enjoy a long-lasting success, simply because even if your business does become successful, there will always be enough leeches ready, willing and able to steal that success away from you.

Granted, as a copyright and trademarks lawyer, I have an direct interest in turning entrepreneurs into my clients.

So don’t take my word for it. Take it from those who have every right to be admired. Take it from people who grew their businesses from nothing.

Protect Your Ideas as early as you can and make sure to Cover Your Assets!

More flawed drafting…

Before the amendments to the Copyright Act, s. 19 only had a simple subsection (1), which stated that performers and makers of sound recordings had a right to be paid equitable remuneration for performance of in public or communication to the public by telecommunication of sound recordings, except for any retransmission. This provision was the same for anyone covered by the Act.

Now, s. 19 will create three separate regimes for performers and makers with a connection to Canada (s. 19(1)), performers and makers with a connection to a Rome Convention country (s. 19(1.1)) and performers and makers with a connection to a WPPT country (s. 19(1.2)).

This hardly makes any sense, especially if we look at potential consequences.

I wrote in my previous post on s. 19(1) of the Copyright Act that it sets out that performers and makers will have the right to equitable remuneration for communication of sound recordings by telecommunication but not for the making available right. Section 19(1.2) sets the same limitation for performers and makers of sound recordings with a connection to a WPPT country. That’s logical.

Now, here comes the inexplicable.

Section 19(1.1) sets out that performers and makers with a connection to Rome Convention countries will have the right to equitable remuneration for communication of sound recordings to the public by telecommunication, period. Under s. 2.4(1.1) of the Copyright Act, the term “communication to the public by telecommunication” also includes what is generally referred to as the “making available right”.

The Rome Convention does not set out a closed list of rights that states must grant to their nationals and thus to nationals of other Convention member-states. Rome Convention sets out a bare minimum of rights to be recognized and, more importantly, an obligation for member-states to set out the national regime of protection.

Just because the Rome Convention did not provide for the making available right, does not mean that nationals of Rome Convention countries should not be able to enjoy the right that Canada vests in Canadian performers and makers of sound recordings.

Just because Canada limits the right to equitable remuneration for communication to the public by telecommunication by removing the making available part out of it with respect to Canadians and those with a connection to WPPT countries, and just because the Rome Convention does not contain the making available right, does not mean that s. 19(1.1) will also have such limitation with respect to sound recordings with a connection to a Rome Convention country.

As I wrote in my post about new sections 17.1 and 17.2 of the Copyright Act, Canada will be violating its obligations under the Rome Convention.

Section 19 does the opposite by granting more rights with respect to sound recordings having a connection to Rome Convention countries, at the expense of Canadians and WPPT countries, because performers and makers of sound recordings with a Rome Convention connection will be entitled to equitable remuneration for communication of the sound recordings to the public by telecommunication, which, under s. 2.4(1.1) also includes the making available right.

Given that most WPPT members are also Rome Convention members, we will end up with a strange result: the right that was introduced by WPPT will not be available to performers and makers through WPPT, but it will be available to them through Rome Convention, which doesn’t guarantee such a right.

Well, at least they got the digital lock provisions right, right?

Copyright Modernization Act introduces several changes to the right of performers and sound recording makers in s. 19 of the Copyright Act.

Section 19(1) used to vest in performers and makers of sound recordings a right to be paid equitable remuneration for public performance of sound recordings that have been published and for their communication to the public by telecommunication, the only exception to that being made in the case of retransmission.

The Copyright Modernization Act adds another exception, which, honestly, I find utterly incomprehensible. I will quote it in full and then make a few comments:

If a sound recording has been published, the performer and maker are entitled, subject to subsection 20(1), to be paid equitable remuneration for its performance in public or its communication to the public by telecommunication, except for

(a) a communication in the circumstances referred to in paragraph 15(1.1)(d) or 18(1.1)(a), if the person entitled to the equitable remuneration is entitled to the right referred to in those paragraphs for that communication;…

And then we wonder why people frown upon the legalese.

To use the word “entitled” three times in different contexts in the same section of the Act requires some sophistication, I’m sure.

The first one quite clearly refers to the entitlement to be paid equitable remuneration.

The second one refers to “the person entitled to the equitable remuneration”, i.e. the performer and the maker of a published sound recording.

The third one refers to the entitlement to the making available right, referred to in paragraphs 15(1.1)(d) and 18(1.1)(a). Paragraphs 15(1.1)(d) and 18(1.1)(a), as you may recall from my comments on new subsections in Section 15 of the Copyright Act, are about distilling the making available right back from the general right of communication to the public by telecommunication, into which the making available right was merged by virtue of s. 2.4(1.1) of the Act.

So what the new s. 19(1)(a) is trying to say is that performers and makers of sound recordings are entitled to equitable remuneration for communication of the sound recordings to the public by telecommunication, except for situations when the sound recording is made available over the Internet.

I can understand a policy decision to only recognize an entitlement to equitable remuneration in respect of some forms of use and not others.

I can’t understand two things:

1. Why it is that the provision could not be written in a clear language?

2. What was the purpose of blending the making available right into the communication to the public right if for all meaningful intents and purposes it is treated differently in the Act? It’s not a case when a court is forced to interpret the law as it exists. The Copyright Modernization Act was supposed to be the most important reformulation of Canadian copyright laws in years. It’s a lesson from the first year law school legal interpretation class: don’t use the same term to refer to two distinct notions. If you plan to have separate rules for cats and dogs, don’t add a provision stating that for the purposes of the Act, a “cat” also includes a “dog”.

BOTTOM LINE: Bad. Incomprehensible language. Inconceivable why the term “communication to the public by telecommunication” that “for the purposes of the Act” was supposed to assimilate the making available right doesn’t cover the making available right for the purposes of s. 19(1).