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Digital locks are bad for consumers and innovation

03 Oct

As expected, the federal government on Thursday introduced new copyright legislation. Bill C-11 is an exact duplicate of Bill C-32, which fell into limbo with the calling of the election earlier this year. C-32 was in the process of being discussed and dissected through parliamentary hearings and C-11 will pick up where its predecessor left off, with the final law likely to be passed by the end of the year.

As with the prior legislation, C-11 still contains a major flaw: the anti-circumvention clause. In plain English, should the bill become law as is, it will become illegal for Canadians to break a digital lock placed on any content or devices. This is bad in two ways.

It’s bad news for consumers because it opens the door to a number of scenarios. If a record label such as Sony, for example, decides it doesn’t want people copying its CDs onto their computers and iPods, it can lock such discs down so it can’t be done. Anyone cracking such a lock would be breaking the law. Similarly, if a television producer such as Disney or broadcaster such as CTV decided it didn’t want viewers using their PVRs to record Desperate Housewives or other programs, they could insert code into the broadcast that could do just that. If someone actually figured out how to crack the code, they’d be on the wrong side of the law.

The same goes for gadgets. If consumers were to modify their iPad or Xbox for whatever reason, they would not only void the warranty (as is currently the case), they’d also open themselves up for legal action from Apple or Microsoft, or whoever. As individuals such as Russell McOrmond have suggested, this situation – of non-owner locks being placed on property – is patently wrong. McOrmond has long argued that no individual would accept some company having the keys to a house that they bought and paid for, so why should it be any different for a gadget? It’s not exactly the same thing, but it’s hard to see the flaw with that logic.

In a nutshell, Bill C-11 could criminalize common practices that most people have been engaging in for years.

The argument against any of that happening – a clawing back of the digital rights consumers have naturally accumulated over the years – is that market forces will prevent it. If Apple, for example, were to start suing any Canadians who cracked their iPads, then its competitors – those that opted not to litigate against their customers – would steal its customers.

That position assumes a fully functioning market but in Canada, where very few digital products and services are truly competitive for one reason or another, the opposite is more likely. With just about all these markets touching the closed telecommunications business, it’s more likely that market players will follow each others’ leads: if one sues customers, the rest will follow. Before you know it, copying CDs or recording TV shows are illegal in Canada.

The other way in which the anti-circumvention clause is bad is that it’s anti-innovation. Indeed, it goes against the very notion of how science works.

Sir Isaac Newton famously said, “If I have seen further it is only by standing on the shoulders of giants.” C-11, however, will require innovators to stand way down at the giants’ feet – literally. Inventors and innovators often need to take things apart to see how they work in order to improve on them and create their own new doohickeys. If the law is passed as is, that’ll be illegal.

The result here is easy to predict – as if the world doesn’t already have enough patent lawsuits, the new law is only going to fuel that fire. Besides the “you-stole-our-technology-no-we-didn’t-you-stole-ours” back-and forth currently going on between major tech players, Canada will add an extra layer of, “and-you-cracked-our-locks-too” to that ridiculous game.

That may not deter the mega-big companies who are currently locked in patent armageddon, but it sure will put a chill on smaller inventors. Who’s going to want to try and build a better mouse trap with all of that looming large?

There is still the possibility the government will acquiesce to what just about everyone besides big entertainment and technologies want, which is to introduce an exception to the anti-circumvention clause that would make it okay to crack locks so long as it’s for personal and not commercial use. The government has also left itself the potential for a backdoor by reserving the right to create regulations that would then generate exceptions; it could rule that breaking a lock is okay for news reporting or parody purposes, for example.

It’s possible the government is trying to play both sides against the middle here – the strict anti-circumvention clause is meant to appease the entertainment and technology lobby, while the exceptions can be enacted later through regulation. If that’s the case, it could be seen as a prudent and pragmatic move.

It could, however, also be seen as foolish. As an old saying goes, it’s usually wiser to prevent a wound in the first place because that saves having to apply the bandage later on. Just ask Wind Mobile. Rather than lifting foreign ownership restrictions, which would have allowed the new wireless carrier clear sailing, the government instead patched a band-aid on that situation, a move it now finds itself fighting in the Supreme Court.

Is it wise to tick off the public and potentially spark similar court battles, all for the sake of making a few companies happy? It sure doesn’t seem logical, does it?

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9 Comments

Posted by on October 3, 2011 in copyright, government

 

9 responses to “Digital locks are bad for consumers and innovation

  1. Jean-François Mezei

    October 3, 2011 at 1:31 am

    I am affraid I agree with what you said Mr Nowak.

     
  2. randifer

    October 3, 2011 at 2:12 am

    I have to agree with MOST of what you said. The biggest issue I have is that you no longer buy music for instance, you are now only purchasing an instance of that music for your poarticular device, or in the case of a CD, you purchase a piece of plastic that is expected to contain music.

    If your IPOD goes south, it would be illegal to convert your itunes library to Zune. If your Lady Gaga CD meets an unfortunate death at the hands of your kids playing hockey with it (A fitting ending, but one that not everyone will appreciate to the same degree…) you cannot have made a backup copy of it and simply recreate a new instance of what was rightfully yours.

    The US has laws that are much as you describe called the Digital Millenium Copyright Act, and althought there is room for what is called “Fair Use” such as making a personal backup copy of music, video, or software, this law has also been abused in such cases as DeCSS where a student programmer wrote DVD drivers for Linux (There were none at the time), but because DVD’s are “encrypted” the programmer was charged both in civil and criminal court.

    These laws are meant to protect certain ownership rights, but they can be abused much to easily by those who seek to reduce rights and hold users hostage. In the US these laws have been found to be a huge deterent to innovation, and a big expense on the consumer, even causing issue with your ability to ecconomically entertain yourself. For instance if you have an ipod and some song is not available natively for the Ipod, you could not CONVERT it. You would need to get an MP3 player to play things you cant play on the IPod.

    If a Bluray didn’t play DVD’s you would need to have both side by side, or you would have to re-buy any DVD you still wanted.

    So what you have is a case of the government putting into law what has been shown elsewhere to be a bad idea for 10 years, to the detrement of the consumer and to the benifit of the corporations! Sounds just like what we have come to expect from them.

     
    • Russell McOrmond

      October 4, 2011 at 1:15 pm

      I think the case with DVD’s are an example of digital exceptionalism. The same fact pattern, if discussed outside of the context of digital devices, would be treated entirely different.

      Scenario: You have a consortium of a subset of vendors of one type of product getting together and dictating what set of features would exist in a related but different product line. The ability to purchase the related product line is tied to the purchase of specific brands of products from the first set of vendors.

      Outside of digital devices we would recognize this as an unlawful cartel and an example of tied selling prohibited under Section 77 of Canada’s competition act.

      Enter digital devices, and what we just described is the DVD Copy Control Association. This association doesn’t offer copy control, which is a marketing term, but is a subset of content studios coming together deciding what features will or will not be allowed to exist in the consumer electronics industry. They control the keys required to decrypt the access control placed on nearly all commercially available DVDs, and will deny the keys to any hardware manufacturer who doesn’t agree to draconian contractual requirements disallowing beneficial features to exist in consumer electronics.

      If this was understood as an access control protecting a contractual relationship, the government and courts could evaluate that contract to see whether it was valid or contradicted some existing federal or provincial legislation. It is also important to recognize that the contractual relationship is between motion picture studios and consumer electronics companies, so it is questionable whether it is legitimate for any term in this contract to be enforceable against the eventual owners of the consumer electronics.

      Note: I used a DVD and discussed that specific issue in my intervention in front of the Bill C-32 committee http://flora.ca/own

       
  3. Marc Venot

    October 3, 2011 at 2:29 am

    What is the difference from the Digital Millenium Copyright Act as it is actually applied? Does any major country have done something different?

     
  4. Mychol

    October 3, 2011 at 9:21 am

    As noted in your commentary, Canada’s tech environment is already challenged by somewhat odious and ill-conceived regulation. This is another nail in the coffin of Canadian competitiveness and innovation!

     
  5. Wayne Borean

    October 3, 2011 at 5:35 pm

    Pete,

    You do realize that Bill C-11 isn’t W.I.P.O. compliant? This is supposedly the reason that the law is being tabled, to bring Canada into compliance with the W.I.P.O. Internet Treaties. The law does not however do that.

    When I mentioned this to a conservative cabinet minister, the result was total silence.

    Wayne

     
    • Russell McOrmond

      October 4, 2011 at 1:21 pm

      The TPMs section of the bill contains both the WIPO (use control) language and the DMCA (Access Control) language. http://billc32.ca/faq#wipovsdmca

      I think it can be said to be WIPO compliant, but that it goes far beyond what the WIPO treaties asked for and includes policy that is unique to what the USA has been demanding. It is false political rhetoric for them to suggest access controls were related to WIPO and not a dangerous protectionist US import.

       
  6. Johnny S.

    October 4, 2011 at 4:01 am

    If this law passes, that means DivX players will be useless! Just as a cigarette is a nicotine delivery device, Bill C-11 is a legal tool for the enforcement of the PVR (Personal Video Recorder)! What the distributors of Television programming don’t seem to understand is that there’s a technology out there that most of the public wishes to use. Why not embrace this technology just as the music industry adopted the consumer driven choice of downloading MP3 files. The MP3 epitomizes how the entertainment industry adopted a technology that most of its customers preferred and they did not lobby politicians to make MP3 files illegal to download. Rather than outlawing that technology and forcing consumers to buy CD’s, the law allows customers to legally download and pay for MP3’s.

    There is no need for TV cable and satellite providers to lobby politicians in order to legally wipeout compressed digital files such as AVI, which can be run on computer media players and DivX players! This is an act of desperation by a frighten industry that wishes to exert full control over a perceived threat and thus, rather than embrace the consumers’ choice of technology, they decided to kill AVI’s altogether. The music industry embraced MP3 technology, the world did not end for them and in fact, an entirely new economic niche was serviced by the portable MP3 player. As a result of the MP3 player, jobs were created (in R&D, product design and manufacturing) in order to supply this product to meet the market demands of the consumer.

    The same type of job growth could be created only if the entertainment would embrace the legal distribution of compressed digital files for TV programs and movies. With TV programs, there is absolutely no reason why subscribers of TV from cable and satellite providers can’t be offered the option to download TV shows legally. Customers could have the added luxury of viewing after aired TV programs on their computers or via their DivX player! Rather than perceive AVI’s as a threat, TV cable and satellite providers could adopt this technology in order to meet the needs of their customers. Because after all, more and more Canadians have adopted downloading TV shows in compressed digital files over watching TV programs live when they first air. If TV cable and satellite providers adopted the legal downloading of compressed digital files, this would create jobs and most likely this economic niche would be worth more than the MP3 market! It would also spawn the next generation of DixX players, which of course would create a multimillion-dollar market. But this economic dividend is now gone because of a bunch of frightened and myopic ‘control freak’ TV program providers!

    The irony of Bill C-11 is that the Tories tout it as a jobs creation bill when in fact the opposite is true! There is a very small window of opportunity to amend this bill, unless TV cable and satellite providers can be swayed to see the business model of legalizing AVI’s to download, the DivX industry will shrivel and die! If the music industry could embrace the business model of legal downloading of MP3’s for their consumers, why can’t TV cable and satellite providers embrace the legalization of downloading TV shows via compressed digital files? And AVI’s can be easily encoded with copyright protection along with a password key that customer can enter in order to activate these files. It’s absolutely disgusting and reckless for Canadian politicians to allow the passage of Bill C-11 as is because of an oligopoly’s irrational fear of AVI files! Please write, phone, fax and E-mail your MP about the seriousness of this potentially devastating piece of legislation! Tell your MP that Bill C-11 needs to be amended to allow for the legal downloading of TV shows and movies (which can be done just like MP3’s) because this would reinvigorate the DivX industry. It will spawn off jobs, jobs and more jobs—so go now and act, do it today or otherwise DivX technology will be dumped onto the dustbin of history. And yes—you may use my essay—I claim no copyright to my opinion!

     
    • Wayne Borean

      October 4, 2011 at 4:12 am

      Johnny S:

      If you are a Canadian, and you produce works that are covered by Copyright, you should join the Facebook Group “Copyright for Artists Canada” and make your feelings known.

      Wayne

       
 
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