Canada's placement on U.S. piracy list just bluster: lawyers
But business group warns it could scare off investors
Last Updated: Tuesday, May 5, 2009 | 8:09 AM ET
By Emily Chung, CBC News
Canada's addition to a "priority watch list" of countries deemed soft on copyright piracy by the United States shouldn't and probably won't perturb the Canadian government, say Canadian researchers who study copyright and Canada-U.S. trade relations.
'It would be nice if the U.S. were told this were not helpful and frankly it's harmful — and to stuff it.'— David Fewer, Canadian Internet Policy and Public Interest Clinic
"We've been placed in a spotlight, but the United States has not indicated that it's prepared to take any action," said Chi Carmody, a law professor at the University of Western Ontario and the Canadian director of the Canada-United States Law Institute.
"My sense is that Canada's inclusion on the list this year is not really something that the United States is concerned about in our bilateral relationship, but more as an example to the rest of the world."
He added that Canada is a sovereign country with the right to make its own decisions, and that he believes the government is committed to a "made in Canada" approach to copyright and intellectual property, "as we should be."
Canada was among 12 countries that made the "priority watch list" in an annual report released by the Office of the U.S. Trade Representative last week on intellectual property rights protection by 77 U.S. trading partners. Canada had long been on the office's "watch list," but this is the first time Canada, Algeria and Indonesia made the higher-priority tier long occupied by countries such as China and Russia.
The Office of the U.S. Trade Representative said Canada was added mainly because the U.S. is concerned that:
- Canada has not yet updated its Copyright Act and implemented World Intellectual Property Organization treaties concerning the internet that it signed in 1997.
- It considers Canada's border enforcement against counterfeit goods is too weak.
Being on the list subjects countries to extra scrutiny by the U.S.
In response to questions about how the government plans to respond, Industry Canada referred CBCNews.ca to Foreign Affairs and International Trade Canada, and Foreign Affairs and International Trade Canada referred back to Industry Canada.
However, David Fewer, acting director of the University of Ottawa's Canadian Internet Policy and Public Interest Clinic, said he thinks the government will recognize that Canada's addition to the list is nothing more than advocacy by a country trying to protect the interests of its entertainment industry.
"I expect that our decision makers won't be overreacting to this," he said Monday, adding that he thinks Canada should respond by standing up for itself.
"It would be nice if the U.S. were told this were not helpful and frankly it's harmful — and to stuff it." But he said he doesn't think that will happen.
Fewer's clinic researches copyright and other legal issues arising from new technologies.
U.S. is frustrated: IP council
A group representing Canadian businesses is concerned, however, that Canada's presence on the priority watch list could drive away companies that are looking around the world for a place to invest.
"It's another mark against investing here," Chris Gray, director of the Canadian Intellectual Property Council, said Monday. "It could just be the tipping point.… IP theft is a major problem for business, and it's something that our businesses and businesses around the globe need to try and help stem."
'It's not just the United States that goes around being the heavy.'— Chi Carmody, Canada-United States Law Institute
The council advocates on behalf of the Canadian Chamber of Commerce for stronger intellectual property protection in Canada.
Gray said he could not comment on whether Canada has levels of piracy similar to those of other countries on the priority watch list, but he said he does believe that China has stronger legislation than Canada in some ways, even if the enforcement of those Chinese laws may be weak.
The U.S. has been waiting a long time for Canada to amend its copyright legislation, Gray added.
"I can see they're growing more and more frustrated."
Prime Minister Stephen Harper's Conservative government did introduce a copyright reform bill last spring, but it died when an election was called in the fall.
Gray said the Chamber of Commerce was told two weeks ago by Industry Minister Tony Clement that the government will be introducing a new bill, probably in the fall. Heritage Minister James Moore also indicated as much in a recent committee hearing.
Canadian IP laws meet international obligations: CBSA
Gray said the Chamber of Commerce would prefer to see a new bill sooner than that, and would also like the government to give the Canada Border Services Agency the authority to seize counterfeit goods at the border — a power the agency confirmed it does not currently have.
At the moment, the agency can legally seize goods only if they have been smuggled or falsely declared, spokeswoman Patrizia Giolti said. However, the agency will notify the RCMP if it believes that goods it seized on other grounds also violate intellectual property laws. It doesn't track the number of such cases referred to police.
"Canada takes the issue of intellectual property rights protection very seriously," Giolti wrote in an email Monday, adding that the country's regime for protection and enforcement of such rights is "fully consistent with its international obligations."
Gray said he believes Canada's addition to the U.S. priority watch list is mainly to put pressure on Canadian legislators to make intellectual property issues a higher priority.
However, neither Fewer nor Carmody said the U.S. pressure will in fact speed up the process of introducing new copyright legislation in Canada. Both said it is an issue that has been discussed for a long time, both domestically and in trade talks.
Canada critical of U.S. IP laws, too: researchers
Carmody said it appears most of the other countries on the U.S. priority watch list have much higher software piracy rates than Canada, based on 2008 figures from the Business Software Alliance cited by University of Ottawa law professor Michael Geist on his blog.
Fewer said he has seen no evidence that Canada is a "counterfeiting heaven," either, or that counterfeiting is a worse problem in Canada than in the U.S. or other developed countries.
While he acknowledged that counterfeit goods such as low-grade pharmaceuticals pose a very real public safety risk, he said he is not convinced that giving border guards enhanced search and seizure rights will necessarily solve that problem. He is therefore very cautious about that proposal, he said.
With regard to copyright, in many ways Canada has stronger laws than the U.S., Fewer said. For example Canada compensates artists for public performances of their music and other work — something the U.S. does not do.
"I just don't think United States is in a very good place to be chiding us on our intellectual property statutes," he said.
Carmody said that, in fact, Canada has issues with the way the U.S. enforces intellectual property laws. He cited a report by International Trade Canada last summer — a report on Canada's trading partners that is similar in some ways to the recent U.S. report containing the piracy watch lists — that flagged the U.S. as a place where the administrative and judicial system encourage excessive court action concerning patents.
"Canadian companies that rely primarily on patents to carry out operations in the U.S. may have to devote significant resources to litigation, which in turn affects their ability to do business," the report said.
Carmody observed, "It's not just the United States that goes around being the heavy."
Issues of concern to both sides are dealt with constantly during trade negotiations unless they cross a line and violate international law, in which case they move to a different arena, Carmody said.
When it comes to the United States' complaints about Canada, however, Fewer said he doesn't think there is much Canada can do to quell them.
Music, movies and other such intellectual property are an area where the U.S. feels it has an advantage amid an overall trade deficit, he said, and he imagines that if he were an American looking at that situation, he would take a similar position.
Fewer suggested Canada might get off the priority watch list if it were to impose "the most draconian intellectual property laws in the world without any semblance of balance," but that wouldn't necessarily get Canada off the lower-tier U.S. watch list it was on for years before.
"We'll never get off their watchlist, not until our entire entertainment industry's been outsourced to the United States," he said. "I just trust Canada's politicians to understand the trade implications... [and] to understand both the style and the true substance of the American position."
