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Technology law column by Michael Geist

In Search of a Canadian Digital Action Strategy

In recent months, there has been growing support for a national digital strategy. The Canadian Radio-television and Telecommunications Commission explicitly identified the need for a strategy in its new media decision as have prominent leaders in the technology, telecommunications, broadcast, and education communities.  

The issue now appears to be resonating within government. Industry Minister Tony Clement has convened a digital strategy summit later this month, Canadian Heritage Minister James Moore has emphasized the importance of online platforms, and Ontario Premier Dalton McGuinty has pledged to support a national strategy.

The need for a national strategy stems from the realization that Canada is rapidly falling behind much of the developed world on digital issues. The gradual hollowing out of the Canadian technology sector (one-time giants such as Nortel, JDS, Corel, Newbridge Networks, and Entrust are all either gone or unrecognizable today), the absence of a strategy to digitize Canadian content, the inability of the CRTC to make sense of its governing legislation as it applies to the Internet, and the plummeting rankings of Canadian high-speed Internet and wireless services all point to a problem that can no longer be ignored.

Time To Slay File Sharing Myths

This month marks the tenth anniversary of the debut of Napster, the file sharing service that had a transformative effect on the music and Internet services industries.  While many commentators have marked the anniversary by reassessing Napster’s impact and speculating on what lies ahead, now is also a suitable time to put to rest two myths about file sharing in Canada.  

There are far more than just two myths (see textbox below), but the ones that have dominated debate is that all file sharing is legal in Canada and, perhaps as a consequence of this, that Canada leads the world in illegal file sharing activity. Neither claim is true.

The belief that Canada is a veritable “Wild West” where it is legal to upload and download to your heart’s content has its genesis in the recording industry’s failed file sharing lawsuits in 2004.  Following the U.S. example, the Canadian Recording Industry Association filed lawsuits against 29 alleged file sharers at five Canadian Internet Service Providers.

Panel Strikes Blow Against Business Method Patents in Canada

Most people think of patents in terms of legal protection for new technological inventions. There is another form of patent, however.  A business method patent is one awarded for a special technique for doing business such as improvements to a company's accounting or sales department.

Business method patents have proven very controversial in the United States, which has been home to dozens of lawsuits over their validity.  By contrast, Canada has tried to craft a balance that neither embraces nor completely rejects them.  That policy may be changing, however, as the Canadian Patent Appeal Board recently denied an appeal by Amazon.com over a "one-click" ordering system patent with strong language that challenged the notion that business method patents are patentable under Canadian law.

Business method patents took off in the U.S. in 1998, when the U.S. Court of Appeals for the Federal Circuit (one notch below the U.S. Supreme Court) ruled that patents could be awarded for business methods in a case called State Street Bank v. Signature Financial Corp.

Report Finds Canadian High-Speed Internet Slow, Expensive

In recent months, much of the discussion about high-speed Internet service in Canada has focused on two key issues - net neutrality and the need to bring broadband access to the remaining underserved areas in rural Canada.  Both of these issues are now squarely on the public agenda with the CRTC conducting hearings on net neutrality next month and the government committing millions toward rural broadband initiatives in this year’s budget.

Missing is a third, fast-growing concern, however.  According to a new OECD report, Canada has one of the slowest and most expensive consumer broadband networks in the developed world. The OECD report, widely viewed as the leading global benchmark on broadband networks, compared Canada with 29 other countries on a range of metrics.  These included broadband availability, pricing, speed, and bandwidth caps.

At first glance, the numbers do not seem that bad, with Canada ranking ninth out of 30 countries for broadband penetration. While that represents a sharp decline from years ago when Canada prided itself in standing second worldwide, its current position is unchanged from last year.

Yet the situation becomes far more troubling once the OECD delves deeper into Canadian broadband pricing and speed.

Anti-Spam Bill Faces Fight Over Consumer Protections

The recent introduction of the Electronic Consumer Protection Act, Canada's long-awaited anti-spam bill, has been greeted with initial all-party support in the House of Commons. The bill just passed second reading with committee hearings the next step in the legislative process.

Looking ahead, the big fight seems destined to focus on the government's desire to establish a comprehensive regime with tough penalties that apply to most commercial communications to consumers.  Consumer groups will likely welcome the reforms, while some business and marketing organizations may paint a gloomy picture of the costs associated with the new regulations.

The bill strives to address most Internet-related consumer harms.  These include email and text message spam, software programs that are secretly installed on users' computers ("spyware"), the use emails and websites that trick users into thinking they are visiting a trusted site ("phishing"), as well as the use of computers infected by viruses to send spam ("botnets").  

Anti-Spam Bill Faces Fight Over Consumer Protections

The recent introduction of the Electronic Consumer Protection Act, Canada's long-awaited anti-spam bill, has been greeted with initial all-party support in the House of Commons. The bill just passed second reading with committee hearings the next step in the legislative process.

Looking ahead, the big fight seems destined to focus on the government's desire to establish a comprehensive regime with tough penalties that apply to most commercial communications to consumers.  Consumer groups will likely welcome the reforms, while some business and marketing organizations may paint a gloomy picture of the costs associated with the new regulations.

The bill strives to address most Internet-related consumer harms.  These include email and text message spam, software programs that are secretly installed on users' computers ("spyware"), the use emails and websites that trick users into thinking they are visiting a trusted site ("phishing"), as well as the use of computers infected by viruses to send spam ("botnets").  

MPs Miss Chance To Embrace YouTube Generation

In the spring of 2007, Friends of Canadian Broadcasting, the well-known broadcasting advocacy group, began to post videos and podcasts of Parliamentary committee proceedings on their website.  When officials at the House of Commons caught wind of their activities, they promptly sent a cease and desist letter, demanding that the videos and podcasts be removed from the Internet.  A lawyer for the House of Commons argued that posting excerpts from committee proceedings could be treated as "contempt of Parliament."

The group responded that they did not want to remove the videos, but would be willing to follow a reasonable procedure to obtain the necessary permissions.  That response did not sit well with the Chairs of the Finance and Canadian Heritage Standing Committees, who upon learning that the group was offering webcasts and downloads of their proceedings, asked the Standing Committee on Procedure and House Affairs (SCPHA) to examine the issue to prevent further infringement.

U.S. List Unfairly Tarnishes Canada's Digital Reputation

Each April, the U.S. releases the Special 301 Report, which examines the intellectual property laws of its main trading partners.  For the past fourteen years, Canada has been included on the list of countries the U.S. believes need reform.

Canada was typically placed on the low level "Watch List," but that changed last week, when it was elevated to the "Priority Watch List," joining Russia, China, Indonesia, and a host of other countries with sky-high piracy rates.  While the elevation will undoubtedly heighten pressure for reforms, it also points to the need for the Canadian government to reassess how it manages the Special 301 process and its bilateral relationship with the U.S. on this issue.

In previous years, Canadian officials have done little more than express disappointment with the U.S. findings.  According to documents obtained under the Access to Information Act, the Minister of Foreign Affairs has been repeatedly advised that "Canada does not recognize the Special 301 process due to its lacking of reliable and objective analysis, and we have raised this issue regularly with the U.S. in our bilateral discussions."

Government Quietly Lays Groundwork For Overhaul of Do-Not-Call List

Four years after the National Task Force on Spam unanimously recommended that the Canadian government introduce anti-spam legislation, last Friday the Government took action by tabling Bill C-27, the Electronic Commerce Protection Act.  The ECPA provides that marketers must obtain consumer consent before sending commercial electronic messages (including email and text messages).

While the introduction of anti-spam legislation is long overdue, one of the most significant changes was not reported or even included in the government’s briefing materials.  Buried at the very end of the 69-page bill, are provisions that would lay the groundwork to kill the National Do-Not-Call list.  

The proposed approach is very complicated, but boils down to the government repealing the provisions that establish and govern the do-not-call list.  In its place, the ECPA approach of requiring an opt-in would apply, meaning that Canadians would no longer need to register their phone numbers on a do-not-call list.  Instead, the presumption would be that telemarketers could not call without prior consent.  The ECPA would also bring with it stronger penalties (up to $10 million) and fewer exceptions.

Policy Toolkit Nearly Empty In Bid To Support Local TV

This week a steady stream of television and cable executives will appear in Ottawa before the Standing Committee on Canadian Heritage to discuss the "evolution of the television industry in Canada and its impact on local communities."  Members of Parliament from all parties will demand to know what companies like Rogers, CTV, and Canwest are prepared to do to ensure that local television broadcasting does not disappear in many smaller and medium sized communities. 

The current "crisis" feels new, yet the issues are nearly as old as Canadian broadcasting itself.  The economics of Canadian broadcasting have relied on a range of policy support mechanisms that include: lucrative commercial substitution, which lets broadcasters substitute Canadian commercials during the simulcast of popular U.S. programs; market protection that has limited local competition; declining programming commitments that allows broadcasters to fill airtime with cheaper foreign programming; and corporate convergence approvals that have resulted in only a handful of big Canadian broadcasters.

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