This record is a partial extract of the original cable. The full text of the original cable is not available.

041821Z Oct 05

UNCLAS SECTION 01 OF 03 OTTAWA 002970 
 
SIPDIS 
 
SENSITIVE 
 
DEPT PASS USTR FOR CHANDLER AND ESPINEL 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR CA
SUBJECT: CANADIAN STAKEHOLDERS' CONCERNS ON COPYRIGHT 
AMENDMENT, SPECIAL 301 OCR, AND ENFORCEMENT 
 
REF: A. OTTAWA 2833 (DEMARCHE ON SPECIAL 301 
 
        OUT-OF-CYCLE REVIEW) 
     ¶B. SECSTATE 173476 (DEMARCHE ON SPECIAL 301 
        OUT-OF-CYCLE REVIEW) 
     ¶C. OTTAWA 1168 (CANADIAN REACTION TO GOC'S PROPOSED 
        COPYRIGHT LAW AMENDMENTS) 
 
¶1. (SBU)  Summary:  We have met again with intellectual 
property (IP) rightsholders to discuss their views of GOC 
moves on IPR.  Canadian industry frustration with ineffective 
IPR enforcement continues to grow, and further review of the 
proposed copyright amendment legislation (C-60) has revealed 
some complexities and emerging disagreement among 
stakeholders.  The Canadian Motion Picture Distributors 
Association (CMPDA) also raised a new issue: camcording of 
new-release movies in theaters, which seems to be a 
significant problem in Canada.  End Summary. 
 
COMMENTS ON PROPOSED AMENDMENTS TO THE COPYRIGHT ACT 
--------------------------------------------- ------- 
¶2. (SBU)  In our meetings with IP rightsholders in Ottawa and 
Toronto, we found that most stakeholder concerns with C-60, 
the draft legislation to amend Canada's Copyright Act, were 
familiar (see Ottawa 1168).  However, time has fine-tuned 
industry concerns and highlighted subtle differences in 
stakeholder positions. 
 
¶3. (SBU)  Internet Service Provider (ISP) Liability:  For 
example, while the current USG action plan and U.S. 
stakeholders emphasize the need for a notice-and-takedown 
regime, Canadian industry opinions are mixed on the need to 
push for notice-and-takedown.  The Canadian Motion Picture 
Distributors Association (CMPDA) is satisfied with the 
current notice-and-notice proposal in the draft legislation, 
hoping that the record-keeping requirements for ISPs will 
help their industry keep track of actions against online 
infringers.  In CMPDA's view, the advent of peer-to-peer 
filesharing has lessened the need for notice-and-takedown, 
since fewer users are downloading their files from large 
websites of infringing material.  On the other hand, the 
Canadian Recording Industry Association (CRIA), Canadian 
Alliance Against Software Theft (CAAST) and U.S.-based 
Business Software Alliance (BSA) representatives strongly 
believe that their industries still need a 
notice-and-takedown regime.  This divergence seems to depend 
on how an industry's products are pirated and how 
recalcitrant they anticipate the GOC will be on the issue. 
Entertainment Software Association (ESA) representatives 
opined that the GOC "isn't going to budge" on the issue of 
notice-and-notice, possibly because of fears that a 
notice-and-takedown regime could be unconstitutional in 
Canada.  C-60's general waiver of ISP liability was deemed 
overly broad by all stakeholders; they felt that the waiver 
of liability shouldn't be a blank check and that ISPs should 
be held responsible for the content of their users' websites 
once they become aware of the presence of copyright 
infringing files. 
 
¶4. (SBU)  Trafficking in circumvention "tools" (devices and 
software): Even in this area, which generally prompts a 
chorus seeking a ban against trafficking in tools to 
circumvent technological protection measures (TPM), industry 
associations were not entirely in agreement. CMPDA, CRIA, 
CAAST, and ESA are all firmly pushing for trafficking in TPM 
circumvention tools to be made illegal.  Currently the draft 
legislation requires that the rightholder prove "intent to 
infringe" for trafficking in tools to be illegal, and as one 
industry representative points out, they already need to 
prove intent and therefore this legislative change doesn't 
give them any more ability to fight piracy.  Industry 
representatives would also like a law that allows them to go 
after the larger-scale pirates selling circumvention tools, 
rather than continuing to have to go after the "little guys" 
who use them. However, the Information Technology Association 
of Canada (ITAC) represents security firms who occasionally 
circumvent TPMs, either to test their efficacy or to create 
fixes for various holes in the security.  ITAC says that 
these niche activities need the protection of the "intent" 
clause, although others argue that circumvention for reasons 
other than infringement could be specifically exempted in the 
legislation or could fall under 'fair use'.  Prompted by its 
cyber-security members, ITAC therefore opposes any move to 
make trafficking in or creating TPM circumvention tools 
illegal and supports the current requirement to prove intent 
to infringe.  (SBU comment:  In an off-hand remark, an ITAC 
VP mentioned that ITAC may feel the need to "push the other 
side" to balance the anticipated lobbying from ESA, who will 
push strongly for trafficking in circumvention tools to be 
illegal regardless of intent.  End comment.) 
 
¶5. (SBU) Circumvention of TPMs intended to prevent access: 
In what the CMPDA characterizes as a possible oversight in 
the draft legislation, C-60 does not seem to make 
circumvention of TPMs intended to prevent access (as opposed 
to distribution) an offense.  As with other issues of TPM 
circumvention, the major industry associations hope to fix 
this omission in the upcoming committee hearings on the draft 
legislation. 
 
¶6. (SBU) No criminal sanctions for infringement:  CRIA, ESA 
and CMPDA note that the WIPO treaties require "effective" 
deterrents to copyright infringement.  C-60 as drafted does 
not provide any criminal provisions for circumvention, which 
CRIA and CMPDA believe will mean that Canada does not have 
adequate legal protection and effective remedies against 
copyright infringement.  An ESA representative pointed out 
that the original Heritage Committee recommendations for 
legislation included a recommendation for criminal provisions 
for circumvention. (Comment: Per reftels, Heritage Canada's 
stronger stance on IPR protection has been generally 
undermined by Industry Canada's pressure for "balance."  End 
comment.) 
 
¶7. (SBU) Can C-60 be saved?:  One of the most contentious 
insights that has arisen during recent consultations with IPR 
stakeholders is the question of whether stakeholders even 
want the bill to pass.  Some industry representatives 
predicted that the bill will "die on paper" and criticized 
the potential for amending it in committee as likely to 
result in "a mess".  These representatives expressed the 
expectation and hope that the legislation would be scrapped 
and described as a best-case-scenario the legislation dying 
after oral submissions (so that industries could make 
comments.)  On the other hand, when asked if they wanted the 
bill to die, other industry representative seemed surprised 
and explained that their members would rather see this draft 
fixed, since if the bill dies, progress will be delayed for 
another year. 
 
CUSTOMS ENFORCEMENT 
-------------------- 
¶8. (SBU) Numerous stakeholders noted that Justice Ministry, 
Canadian Border Services Agency (CBSA) and Royal Canadian 
Mounted Police (RCMP) top priorities--terrorism, the border, 
and counterfeits with safety issues like fake 
pharmaceuticals--do not currently leave much attention or 
funding for copyright protection.  Anecdotal evidence of 
progress, including RCMP training and minor counterfeit 
seizures, was countered by general frustration over CBSA's 
lack of power and all three agencies' inaction.  Since RCMP 
and Customs often do not respond to industry information on 
infringement, Embassy has requested greater industry feedback 
on industry's own enforcement actions.  CMPDA gave an example 
of a private seizure of 11,000 counterfeit DVDs from one 
store in Toronto's Pacific Mall.  (After giving the owner a 
list of counterfeit DVDs that the owner agreed to hand over, 
CMPDA officials were not surprised to return the next day to 
find the store completely restocked...with counterfeit DVDs.) 
 ESA representatives also indicated that they intend to lobby 
for more RCMP resources to combat copyright infringement; 
they also hope to find a way for CBSA to have more power to 
seize shipments (although ESA and CMPDA mentioned that the 
border may become less important as Canadian-made 
counterfeiting increases).  Obviously enforcement is an 
ongoing issue for IPR stakeholders, and we will provide 
further information as we receive it.  (Comment:  one contact 
told econoff of a recent discussion with a prominent IPR 
lawyer who suggested that industry associations not even try 
for criminal sanctions for TPM circumvention in C-60, since 
it would not be enforced and therefore would be just one more 
toothless law on the books.  End comment.) 
 
CAMCORDING IN THEATERS 
----------------------- 
¶9.  CMPDA raised a new issue in meetings last week: 
camcording new-release movies in theaters to create 
counterfeit DVDs that often hit the streets within hours of 
the official movie premiers.  Because movies open in Canada 
at the same time as in the United States, and because movies 
in Canada are shown in both French and English, Canada has 
become a primary source for camcorded counterfeits.  In fact, 
according to CMPDA, of all theaters which are used for 
camcording new-release movies, 40 percent are in Canada, with 
the majority of that 40 percent coming from just two theaters 
in Montreal.  CMPDA has worked with the theater owners in 
question and is engaged in training their staff to combat 
this activity, but without any law against camcording in 
theaters, options are limited.  RCMP and the local police 
can't do anything without proof of commercial intent, and 
generally the best CMPDA can hope for is that the offenders 
will be ejected from the theater for that particular showing. 
 CMPDA is developing an estimate of the economic loss from 
this sort of piracy, which they hope to use to prompt an 
amendment to the criminal code outlawing camcording in 
theaters. We have requested a copy of their loss estimates 
when compiled, and we will continue to follow this issue 
closely. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS