Op Ed Published in the Hill Times, November 26, 2007

By:

David A. Basskin
President, Canadian Musical Reproduction Rights Agency (CMRRA)/CSI

Jesse Feder
Director of International Trade & Intellectual Property, Business Software Alliance (BSA)

Doug Frith
President, Canadian Motion Picture Distributors Association (CMPDA)

Graham Henderson
President, Canadian Recording Industry Association (CRIA)

Jackie Hushion
Executive Director, Canadian Publishers' Council (CPC)

André LeBel
CEO, Society of Composers, Authors and Music Publishers of Canada (SOCAN)

Guy Mayson
President and CEO, Canadian Film and Television Production Association (CFTPA)

Duncan McKie
President and CEO, Canadian Independent Record Production Association (CIRPA)

Danielle Parr
Executive Director, Entertainment Software Association of Canada (ESAC)

Catharine Saxberg
Executive Director, Canadian Music Publishers Association (CMPA)

Stephen Waddell
National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)

Carolyn Wood
Executive Director, Association of Canadian Publishers

In their efforts to inflame opposition to copyright reforms promised by the federal government, advocates of a continued weak intellectual property (IP) rights regime are once again escalating the rhetoric.

The latest volley appeared in these pages (The Hill Times, Nov. 12, 2007), replete with references to "bombshell studies" that both "surprise" and "shock," "angry stakeholders" and "a copyright reform process that seemingly places politics before policy and fiction above fact."

If it weren't for the facts, and the serious consequences of Canada's lax copyright regime, we'd no doubt run for the hills in the face of such a barrage. In truth, the "bombshells" lobbed by some columnists and bloggers like Michael Geist are really just duds. So we'll continue to stand our ground and explain to Canadians why digital piracy is a threat, and why the government should proceed with legal reforms.

We take this stand not just on behalf of IP creators and the industries in which they work - software, film and television production and distribution, books and music - but on behalf of all Canadians who are concerned about the corrosive effects of weak IP rights protection on job creation and economic prosperity.

First, let's clear the stray ordnance from the copyright battlefield, starting with the recent Industry Canada-commissioned study which found that music "file sharing increases CD purchases" among P2P users. Its findings have been authoritatively cast into doubt.

According to Dr. Stan Liebowitz, an economics professor at the University of Texas, "the authors find a result that is … impossible to be true." Among the errors and inconsistencies he identified, CD sales claimed by the study "are off by a factor of 270%" compared to reported sales.

Similarly, Drs. George Barker and Richard Tooth of the Australian National University found "errors in the report to be so serious as to completely undermine the conclusion it draws." Commenting separately on a CBC.ca forum, Barker concluded: "One is left with a question for Professor Geist - why has he so uncritically accepted and promoted a study which is so deeply flawed?"

As for the StatsCan study, which reported "relatively healthy" music industry profits, this does indeed come as a "surprise" to an industry that has seen its sales cut in half since the advent of widespread unauthorized file sharing. On the contrary, as music writer and industry consultant Larry LeBlanc told CP in a Nov. 7 story about the report, "The doctor is on call," adding, "I don't think the industry is as robust as those figures would show."

Accuracy aside, studies like these serve to divert attention away from the real issues and the many industries, artists and other individuals negatively affected by Canada's weak copyright laws - far beyond music alone. For example, it is estimated that 34 percent of all business software in Canada was obtained illegally last year, according to an IDC study commissioned by the Business Software Alliance. On the flip side, cutting Canada's software piracy rate by 10 percent could create 14,000 new jobs in the IT sector and $8.1 billion in economic growth, according to another IDC study, from 2005. Artists in Canada and around the world have seen their rights diminished and their earnings reduced.

The call for government action on IP rights has come not just from the IP industries, but also from the Canadian Chamber of Commerce, Canadian Council of Chief Executives and two parliamentary committees, among many others. The Ontario Chamber of Commerce is also taking up the call in a soon-to-be-released report that will call for stronger IP protection in Canada and implementation of the World Intellectual Property Organization (WIPO) Copyright Treaty.

In other jurisdictions, concern over digital piracy has extended beyond the IP industries to Internet service providers and leading online players. At a recent Anti-Counterfeiting and Piracy Summit hosted by the US Chamber of Commerce, the Executive Director of NetCoalition, a coalition of leading search engines and Internet sites that includes Google, came out squarely in support of "a copyright framework that ensures that we are protecting creative works and penalizes entities and individuals that are stealing."

Among our major trading partners, Canada stands almost alone in having failed to modernize its laws in keeping with our decade-old WIPO commitments. This failure has harmed our international reputation and landed us on several IP rights watch lists.

The hard costs of inaction are even more worrisome, from the lost jobs, growth and prosperity we can expect as a result of reduced investment and innovation. Consumers lose as well when IP rights are not adequately protected. As AT&T's Brent Olson noted at the US Chamber's Summit: "Piracy … disincents content providers from putting more content online for more people to use in more new and innovative ways. In fact piracy simply makes it more difficult for the vast majority of consumers who want to consume content legally."

Closer to home, there is growing recognition of the link between IP rights protection and the incentive to innovate. Tom Corr, Associate Vice-President of Commercialization at the University of Waterloo, recently told the Ottawa Citizen: "There's no question that intellectual property and the solid ownership and protection of it is crucial to a culture of innovation."

The government got it right when it promised stronger IP rights safeguards in the Throne Speech. The time has come for an orderly, legal and safe online marketplace in Canada.