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 The Canadian government has recently introduced Bill C-32, the Copyright Modernization Act. Although some of the proposed changes may affect businesses operating in the high tech industry, many relate more to other industries, such as entertainment, e-commerce and internet focused businesses.
For people in the high tech industry, copyright is important because it protects software. People generally understand that “pirating” software is an infringement, but besides blatant mass copying of programs, often they are confused as to the extent to which copyright protects software. For example, they often do not understand the boundaries between patent and copyright protection.
 Generally speaking, copyright protects “expression.” The expression can be fixed in various forms including music, sound recordings, visual art and literature. Software is protected under copyright as a literary work with the computer code being a form of expression. However, the pure functional features of a program are not protected by copyright, but may be protectable by patents.
Accordingly, it is generally not copyright infringement to “copy” the pure functionality of software, as long as one does not copy the “expression” (i.e. the code, or, in appropriate cases, an original layout design or interface). One could copy the functionality and not the expression, for example, by writing code from scratch (i.e. without ever having viewed the original program’s code) to achieve the same desired functionality. Although this may not infringe copyright, if the software is patented, it could infringe a patent.
From the perspective of high tech companies, the changes proposed in Bill C-32 do not alter this basic division between copyright and patent protection for software. They are more directed to legal issues arising from new developments with the Internet and other digital technologies which have permitted wide spread unauthorized copying and distribution of entertainment content, such as movies, sound recordings and videos.
For example, in an effort to curb Internet services such as bit torrent websites, which facilitate online file sharing of copyright content, Bill C-32 makes it “an infringement of copyright for a person to provide, by means of the Internet or another digital network, a service that the person knows or should have known is designed primarily to enable acts of copyright infringement.”
 Bill C-32 also better defines and limits the liability of more passive Internet parties, such as Internet service providers (ISPs – e.g. Rogers and AOL), who merely provide Internet access to subscribers who use this access to transmit data of all types.
Such services are not “designed primarily” to enable acts of infringement. Therefore, absent the ISPs receiving some benefit from infringing activities on their servers, the Bill would hold their services exempt from liability, although, if a copyright owner gives notice to an ISP of a specific infringement, the ISP, under new “notice and notice” provisions contained in the Bill, may need to forward such notice to the alleged infringing subscriber in order to retain its protection from liability.
Another issue of interest in Bill C-32 to high tech businesses are the sections regarding “technological protection measures,” which are defined as “any effective technology, device or component” that controls or restricts access to a copyrighted work (sometimes called “digital locks”).
Under the proposed legislation it would be an infringement of copyright to circumvent any such measures to gain access to a copyrighted work, even if the person disabling the digital lock intends to use the work for non-infringing purposes, expressly permitted under the Act, such as fair dealing for the purposes of time shifting a television show or format shifting (e.g. CD to iPod) a musical recording.
These protections for digital locks are controversial for this reason and from a high tech perspective would be a concern if they also impacted one’s ability to reverse engineer software when necessary to ensure interoperability of one’s own software with third party software. However, the draft legislation would exempt liability for circumvention when it is done for the purpose of ensuring interoperability, or for testing the security of computer systems or networks or for performing encryption research, provided the owner of the encrypted software is notified of this intended research.
The final form that the Act will take is not yet known. Bill C-32 is still in draft form and, before the prospect of it being enacted into law arises, is expected to be revised as it passes through legislative committee review and further readings before Parliament. Even that will not be the end of the story as Bill C-32 includes a provision for the Act to be reviewed every five years. This will allow the Act to be regularly updated to correct any unintended consequences and to take account of new technological developments.
On that note, one goal of Bill C-32 is to be technology neutral. The hope is that as technology evolves, the Act can remain relevant and revisions can be kept to a minimum by not tying it to any particular technology.
Alexander Anishchenko, B.A.Sc. (Elec. Eng.), MBA, J.D., is an associate lawyer with Bereskin & Parr LLP. He can be reached in Toronto at 416.364.7311 or
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