CRIA calls on Ottawa to strengthen copyright legislation, get tough on unauthorized file-swapping

The Canadian Recording Industry Association (CRIA) welcomed a landmark court ruling in Australia today that effectively outlaws Internet file-swapping operator Kazaa.

The Federal Court of Australia today ruled that Kazaa is an illegitimate business that deliberately profited from mass-scale copyright infringement. The judgment, coming 10 weeks to the day after the unanimous United States Supreme Court ruling against the file-swapping operator Grokster, is one of the most significant court actions against Internet piracy since the shutdown of the original Napster in 2001 and helps to lay down the law for the new generation of unauthorised peer-to-peer operators.

"Courts and legislators in Canada and around the world are sending a powerful message that unauthorized file-swapping is illegal, and they're taking decisive action to stamp it out," says CRIA President Graham Henderson. "Today's court decision is a wake-up call to Canadians who continue to engage in illegitimate downloading and should also send an important message to Parliamentarians in Ottawa debating new copyright rules."

Kazaa is one of the largest and most widely known Internet piracy operations, with millions of users worldwide. Today's judgement against Kazaa follows successful actions around the world against operators of servers hosting other leading peer-to-peer services, including eDonkey, BitTorrent and Direct Connect.

Henderson comments, "Illegitimate file-swapping services are on the run worldwide. The message to Internet pirates is simple: 'You can run but you can't hide. Go legitimate or face the consequences.' "

The Australian court found, "Far from taking steps that are likely effectively to curtail copyright file-sharing, (they) included on the Kazaa website exhortations to users to increase their file-sharing and a web page headed 'Join the Revolution' that criticizes record companies for opposing peer-to-peer file-sharing. They also sponsored a 'Kazaa Revolution' campaign attacking the record companies. . . . The effect of this web page would be to encourage visitors to think it 'cool' to defy the record companies by ignoring copyright constraints."

"We're grateful that an Australian court has benched Kazaa," Henderson remarks, noting that attitudes toward unauthorized file-swapping are undergoing a dramatic shift worldwide.

"In other countries, legal music downloading services are thriving, with legions of consumers attracted by the convenience, selection and high quality that are provided. By contrast, Canada's legal digital music sales continue to be hamstrung by antiquated copyright laws and widespread Internet piracy. Digital sales in this country run at one-half of one percent of US levels, but should be in the 12 to 15 percent range given relative broadband penetration in the two countries."

An Organization for Economic Co-operation and Development (OECD) report released in June of this year found that Canada has the highest per capita rate of unauthorized file-swapping in the world. Canada has been reported as having the second highest level of broadband penetration in the world.

Legislation introduced by the federal government this spring and scheduled for debate this fall will have an effect on this, notes Henderson, but only if the law that finally makes it onto the books is robust.

"We cannot end up with a watered-down 'WIPO Lite,' " says Henderson, referring to the World Intellectual Property Organization's (WIPO) landmark treaty that is designed to protect intellectual property from theft on the Internet and gave birth to Canada's belated Bill C-60. The WIPO treaties were signed by Canada in 1997, but have yet to be implemented here. Some commentators, viewing the proposed provisions of Bill C-60, question whether the draft will be effective and whether it will allow Canada to implement its international treaty obligations.

Some legal experts who have reviewed the draft Canadian legislation have indicated that provisions intended to shield Internet service producers (ISPs) and Internet search engines from liability are so broadly drafted that they may unintentionally immunize file-swapping services such as Kazaa and Grokster from liability in Canada. "This is something that even the ISPs can't want given their commitment to building legal music download and subscription services," says CRIA General Counsel Richard Pfohl.

"As it is drafted, the Canadian bill would have the perverse effect of protecting traffickers in stolen intellectual property from liability at the same time that other countries around the world are enacting laws prohibiting such illegitimate trafficking schemes," comments Pfohl, pointing to the Australian Kazaa case, the US Grokster case, and similar actions in other countries. "This is directly contrary to the Canadian Government's stated intentions, and we are confident that Ottawa will take steps to amend the legislation and correct these drafting errors when the bill is considered by Parliament this fall."

Henderson continues, "We run the danger of perpetuating our status as a piracy haven, a modern day digital Barbary Coast, unless Parliamentarians step in. We are confident this will happen because ineffective copyright laws ultimately hurt consumers and the public interest most by hurting artists and thwarting investment in the arts and legitimate online businesses. This is increasingly being recognized throughout the world. Today's Kazaa decision is merely the latest in a long string of victories worldwide for creators of intellectual property and those who invest in them."

The Canadian Recording Industry Association (CRIA) promotes the interests of Canadian record companies and their partners, the artists. CRIA represents more than 95 per cent of all records produced and sold in Canada.