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EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 7, 1996

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[English]

The Chairman: I'll call the session to order.

[Translation]

The meeting will now come to order. We are continuing our study of Bill C-32, an Act to amend the Copyright Act.

[English]

This is a study of Bill C-32, an act to amend the Copyright Act. Today we welcome the Canadian Music Publishers Association, and Mr. David Basskin, who is the executive director.Mr. Basskin, the floor is yours.

Mr. David A. Basskin (Executive Director, Canadian Music Publishers Association): Good morning, and thank you very much.

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I'll give you a little background on our organization. CMPA is a trade association founded in 1949. We represent the interests of the majority of music publishers doing business in Canada. We're very grateful for the opportunity you've given us to present our views on this vital and long-awaited piece of legislation.

I'm going to make some general comments on the subject of copyright reform, and then I'll move to the key areas of Bill C-32 on which we wish to comment. Finally, I'd like to say a few words about the future of the copyright reform process. I'm very much looking forward to your questions. Like the rest of the cultural industries, we've been waiting a long time for this.

You might not be familiar with the term ``music publisher''. Though our profile may not be as high as that of our colleagues in the record business, music publishers are a vital link in the chain, along with songwriters, performers and producers, all working for the creation of music. Perhaps the best way to put it is that we're the research and development arm of the music industry. Music publishers hunt for songwriting talent. They work with songwriters to help them develop their craft. They stake them, in many cases, the first money they see in the music business and work to get them record deals.

Publishing is also the treasury of the songwriting industry. On behalf of their songwriters, publishers work with the performing rights society, SOCAN, and CPMA's licensing subsidiary, the Canadian Musical Reproduction Rights Agency, CMRRA, to ensure we're paid for the use of our copyrights.

Who are the publishers? They range from two-employee small businesses all the way up to multinationals. They've all made significant investments in the development of Canadian songwriting talent. Many songwriters act as their own publishers, including Gordon Lightfoot, Loreena McKennitt and Dan Hill.

What they all have in common is that they're entrepreneurs. They all take significant risks in the hope of reward. In the recent report of the task force on the future of the Canadian music industry, we saw that of all the money contributed to the arts by federal, provincial and municipal governments in Canada, only one-tenth of one percent goes to the music industry. This is no publicly financed boondoggle. This is ``in your face, you bet your house'' risk taking. That reality to a very great extent underlines and drives our approach to Bill C-32 and the issue of copyright reform generally.

It's been said that a true artist creates works of art because he or she simply has to because of an innate compulsion. The artist, in this view, is driven by the muses to write, to compose, to paint - ad gloriam artes, ars gratia artis - all for the glory of art, art for art's sake. Perhaps this is so, but most of the songwriters I know have at least an equal commitment to eating on a regular basis. Every musician knows this elemental truth. If the band doesn't get paid, the band doesn't play.

We've heard a lot of clichés lately about the electronic highway and cyberspace, but I want to stress that living is cyberspace is nothing new for songwriters and music publishers. The product of our efforts can be performed in public and reproduced on a host of media, but the assets themselves have no physical existence. How many times have we heard that the workforce of the future is going to consist, to a great extent, of knowledge workers? We've been there all along.

Copyright is all we have. Without strong copyright laws that enable creators to fairly exploit and effectively and affordably protect their works, there would be very few songs written. The only lyric most writers would be producing would be ``do you want fries with that?''

During these hearings you've heard and will continue to hear skilful pleading by special interest groups - educators, librarians, broadcasters - all of whom argue that their special circumstances warrant either reduced copyright protection for creators or an entirely free ride. They've told you this follows from the need to achieve a balance between the interests of creators and users.

Of course, some degree of balance is called for. But when songwriters and music publishers get up in the morning, they don't have the benefit of a taxpayer-supported milieu like educators, or a government guaranteed slot on the dial like broadcasters. Every song a songwriter writes represents a risk, an entrepreneurial undertaking. Every writer a publisher signs up is a risk as well. Every new song launched hopefully into the marketplace - and a world marketplace, I might add - competes with every other song, past and present. The stunning success of Canadian songwriters like Tom Cochrane, k.d. lang, and so many others is proof that Canadian songwriters can compete with the best.

In appearing before you today, we're not asking for guarantees. We're not asking for public money. We're asking you to respect the investment, the creativity and the dedication of Canada's songwriters and music publishers. Copyright is all we have.

I'll go on to Bill C-32. I'm not going to repeat our written submission, but I'd like to stress some of the issues we dealt with.

First of all, I want to say we're very grateful that this bill has been brought forward. CMPA, along with our colleagues in the Music Copyright Action Group, has worked closely with the ministers and their staffs since the last phase of copyright reform. There's much in the bill that we support, as is detailed in our written brief.

We're particularly gratified that the minister took up our suggestions for the creation of a statutory damages remedy. This will make it far easier to successfully fight record pirates and, let's be frank, deadbeats who want to release products into the marketplace without paying the songwriters and publishers.

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The Chairman: Mr. Basskin, could you slow down a bit for the translators?

Mr. Basskin: These deadbeats - I love that word, ``deadbeats'' - want to release products into the marketplace without paying the songwriters and publishers who made the music possible in the first place.

I'm now going to turn to some of the specific elements of the bill.

First, there's a provision at proposed section 70.11 that would require collectives such as our licensing subsidiary, CMRRA, to make available for consultation ``the repertoire of all works...in respect of which the collective society has authority to grant such licences''.

While CMRRA makes no particular secret of who we represent or the identity of the works that form our clients' repertoire, the details of song ownership change literally every day. There are millions of songs of which to keep track. We'd like to see this section amended to allow CMRRA and other collectives to meet this obligation by answering specific queries within a reasonable time rather than by imposing a costly and frankly impossible-to-meet obligation to publish our entire repertoire.

Another point is proposed section 30.7, which deals with the incidental or inadvertent inclusion of one work within another. Frankly, we are at a loss to know why this provision is in the bill. As matters now stand in Canadian law, it's no defence to a copyright infringement lawsuit to say you didn't know you infringed a copyright and it wasn't your intent to do so. In other words, intention has never been a factor in infringement.

I think you can easily see why. If you allow an unauthorized user of a copyright to escape the consequences of his act on the basis that his use was unintentional, you're going to have this thrown in your face every time you try to protect your copyrights. And let's not forget, he may have profited significantly along the way. This will impose enormous costs on copyright owners and introduce an entirely unnecessary level of uncertainty into the process.

This is not mere theorizing. You may have heard of sampling. It's a very popular practice among producers of recordings who are using digital keyboards and other devices. They can incorporate a short excerpt, a sample of another recording, frequently manipulating it or mixing it with other samples. While it's a popular practice, it represents the incorporation of at least one copyright owner's work, and frequently more works, into the new recording. Sometimes the sample work is very current; sometimes it isn't. Lately there have been a lot of samples from Blue Note records from the 1960s.

In the U.S., litigation resulted in a clear statement of the law. If you include someone else's work in your own, you have to pay for it. If you don't, it's an infringement. Intention has nothing to do with it. Although the point has not been litigated in Canada, it's widely accepted that the law is the same here.

Now let's consider the proposed section 30.7. By introducing intention as a test of infringement, the unauthorized inclusion of one work within another just might not be an infringement if the user can prove that he never intended the inclusion or simply didn't know about it. Let's not be naive. Every producer and his brother will start claiming the samples were included unintentionally, thus forcing copyright owners to engage in completely unnecessary and expensive litigation.

The acid test of legislation is that it is supposed to be remedial. It's supposed to fix a problem. Where is the problem that proposed section 30.7 is supposed to fix? We don't think there is one, and CMPA would like to see this section struck entirely out of the bill.

I'd like to talk about educational exemptions. Schools are special. The educational process is special. As the father of a twelve-year-old girl, I'm not going to tell you that schools must be treated on the same basis as a commercial user of works. However, we have major problems with the way the educational exemptions have been drafted in the bill. In this regard, we support the position taken by CANCOPY.

Music publishers got their start centuries ago printing sheet music, and it's a business that survives today, although barely in some cases. I wonder how many of you took piano lessons, or your children or grandchildren. Quite a few, I'm willing to bet, and perhaps even a majority. If you studied piano in Canada from coast to coast, in English or en français, you probably used these books or their predecessors, which are the piano course books published by the Royal Conservatory of Music in Toronto. They didn't look quite like this when any of you played the piano. They used to have plain-coloured paper covers.

One of our members of CMPA, the Frederick Harris Music Company, purchased the piano study business from the Royal Conservatory. They invested approximately $400,000 in the creation of new materials, new music and new arrangements. What we have here are repertoire books, study handbooks, teachers' guides. They also produce CDs and cassettes of the music. It's all Canadian right down to the cover art. It's very nice-looking stuff.

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This stack I have is a small portion of the approximately 60 books the project contains. It's been very successful. For a music publisher this is an enormous investment. Like any business, it's an investment that can be made only if there's a reasonable expectation of return.

Let's take a look at what Bill C-32 would do. The proposed subsection 29.4(2) is extremely broad. It would create an exemption for, and I quote:

Doesn't any purpose related to setting questions and communicating answers describe the whole educational process? Where would it stop?

And what's an educational institution? Where are its premises? In an age of distance learning over the Internet, its premises certainly aren't its building any more. The definition of ``educational institution'' in clause 1 of the bill gives us very little guidance. What about courses run for a fee by schools? The definition refers to non-profit institutions as schools qualifying for the exemption, but it doesn't say anything about activities undertaken by those schools that are done with a view to a profit.

These are real concerns for our members. Book publishers may be less concerned with the prospect of mass photocopying of just a few pages from one of their books, but in the case of music, a choir teacher may be interested in just one page, one song. It isn't fair to allow uncompensated copying to take place when publishers have shown themselves willing to meet the needs of educators for rapid turnaround on licensing requests.

I can talk about that if you'd like to hear what we've been doing with CANCOPY for quick turnaround licensing.

Doesn't the bill give us some comfort in the proposed subsection 29.4(3), which would eliminate the exemption? I quote: ``if the work or other subject-matter is commercially available in a medium and of a quality that is appropriate for the purpose referred to''. Again, this is vague. Who gets to determine appropriateness? Who gets to define what constitutes commercial availability?

This entire provision is dangerously vague. If educational exemptions are not stated with clarity, we can expect schools, in a time of ever-shrinking budgets, to look for savings wherever they can. While we sympathize with the challenge faced by schools, we think it entirely inappropriate that copyright owners should be called upon to involuntarily subsidize them in this fashion. Everyone else gets paid. Copyright owners deserve the same respect for the investments they make. We'd like to see this issue sent back for better drafting and more extensive consultation with copyright owners. I'll come back to consultation later on.

Proposed section 30.7 would deal with photocopying and would turn schools, libraries, archives and museums into what many have called ``copyright-free zones''. To grant these institutions immunity from the consequences of unauthorized copying on their premises just by putting a band-aid sign over their Xerox machines in the form of a ``notice warning of infringement of copyright'' is completely unacceptable.

Current and impending advances in tracking technology, combined with the availability of blanket collective licensing from CANCOPY and UNEQ, are an acceptable alternative to this wholesale gutting of the rights of creators and copyright owners. As with the other educational exemption, we think this one should go back to the drawing board.

Let's move on to statutory damages. Earlier I noted our pleasure at the introduction of a statutory damages remedy, but a couple of comments are in order. It's been suggested in the course of these hearings that the statutory damages remedy is going to put music publishers in the position of being able to inflict $20,000 fines on hapless infringers with almost trivial ease. I wish.

Litigation is the real sport of kings. It's horrifically expensive, time-consuming, soul-destroying. It's no picnic. Canadians, unlike Americans, are not predisposed to litigation as a first resort. Our system of imposing the legal costs of the winner onto the loser, and the modest prospects for reward - yes, even with statutory damages - make litigation an infrequent activity, particularly in the music business.

I'm a copyright lawyer and I advise music publishers on these issues constantly. I can say with complete assurance that in the seven years I've been running CMPA and CMRRA, I haven't seen a frivolous infringement lawsuit.

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Let's bear in mind that the statutory damages regime proposed by Bill C-32 is not an automatic $20,000 award. Proposed section 38.1 sets out a range of damages from $500 to $20,000 in the case of deliberate infringement, and lowers the minimum award to $200 in the case of inadvertent infringement. There's even provision for the judge to lower this amount below $500 or $200 if in the court's opinion it would be ``grossly out of proportion to the infringement'', in which case the court can award an amount it deems just. This is hardly the spectre of ruination. Frankly, CMPA would like to see the maximum amounts increased, as set out in our written brief.

One issue goes beyond a mere preference. Proposed subsection 38.1(4) would impose a limitation on the availability of statutory damages where a collective society like CMRA is involved. We don't see the point of this. If collective societies are not allowed to pursue claims on the basis of statutory damages, our members will only be forced to commence a multiplicity of lawsuits, where lawsuits are appropriate, to achieve the same end. The courts have always been reluctant to endure an excess multiplicity of lawsuits. We think this particular provision should be removed.

Let's move on to the home taping levy. It's about time, but it's not likely to be about a lot of money. In earlier testimony we heard it suggested that vast numbers of blank tapes are purchased to copy church sermons, for dictation and home recordings and a host of other purposes - anything but the private copying of commercially available CDs and cassettes. I'd like to let the tape manufacturers speak for themselves. I'm aware they've already appeared before you. Let's let their products do the speaking.

I purchased these products this week at various convenience stores in Toronto. Not one of these tapes costs more than $4. Have a look at the packaging: ``Great for CD'', ``Ideal for CD'', ``Best for CD'', even a brand called ``CD It''. I'm a great believer in demonstrative evidence. Each of those tapes costs no more than $4, but you could copy music worth anywhere from $10 to $25 onto each of those, assuming, perhaps inaccurately, that you only use it once.

Who doesn't get paid when private copying occurs? Songwriters, music publishers, performers, producers, and record companies don't. Who does get paid? The tape company. The blank tape sells for much less than the pre-recorded music. I think you have the point.

We strongly endorse the tape levy provisions of the bill, but it's likely the amount raised by this levy won't come close to repatriating the money lost through home taping. It's better to have something than nothing. However, we do have two important points to raise.

First, the definition of ``eligible owner'' in proposed section 79 would exclude music publishers from participating in the revenue raised from the tape levy. It's been our understanding throughout the process that led up to this bill that music publishers would participate on an equal footing with authors. We've asked in our brief that this understanding be reflected in an amendment to this proposed section.

Second, we concur with the view expressed by CRIA and others that the creation of a tape levy should not create an exemption from the right of the copyright owner to control reproduction of works. In the context of the information highway this would be an unwelcome precedent. Rather, the levy should create a compulsory licence allowing the reproduction of musical works and recordings as a consequence of the payment of the levy. I'd be happy to address this point later if you wish. Our preference is for licensing, not exemptions.

I'd like to talk about an issue we didn't deal with in our brief, the so-called ephemeral exception. We didn't deal with it because the minister made the right decision and didn't include such an exemption in the bill. An ephemeral exemption is unnecessary, dangerous and entirely unjustified. I'll deal with this subject issue by issue.

Radio broadcasters have told you that they're at the risk of catastrophic lawsuits because they copy music from one medium to another. They copy music from disks to tape, or from CD to hard disk, or otherwise, for the purpose of convenience in scheduling their stations. They claim they are at risk thereby.

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CMPA members and CMRRA's 30,000 publisher clients represent approximately 85% of the music used in Canada. Not one of these rights owners has ever approached a radio station and demanded payment for this type of transfer of medium. Not one. Music publishers recognize that such copying is integral to the operation of radio stations, and also realize that any publisher foolish enough to demand payment for such copying would likely find himself frozen out of the station's playlist in short order. Once again, it ain't broke, so don't fix it.

But you may ask, if this kind of copying poses no problem to publishers, why not then formalize it in an exemption? As I said at the beginning, all we have is copyright. Unlike broadcasters, music publishers don't have a CRTC licence that guarantees they won't face new competitors. Before taking the drastic step of expropriating part of our rights, you have to be satisfied that the current situation is so unacceptable, so patently unfair to the broadcasters, that you have no alternative.

I should tell you that we met recently with the Canadian Association of Broadcasters and we are talking to them about finding a way of dealing with this problem by way of a very low-cost licence - possibly even a gratis licence - which we regard as far preferable to the drafting of an exemption. There is no crisis, and an exemption that's pushed in at the last moment may have unintended and very negative consequences.

Moving on to television, the current state of the law is simple. If a film, a television program or a commercial contains a reproduction of a copyrighted musical work, the permission of the owner of that work must be obtained for such reproduction. This permission is granted in a synchronization licence - that's a fancy name for a contract - the terms of which are negotiated on a case-by-case basis between the producer and the copyright owner or the owner's agent, such as CMRRA. This applies to all films, television programs or commercials, whether they're produced by independent companies or by broadcasters acting as program producers. As you may know, the Supreme Court of Canada confirmed this point in the case of broadcaster-produced programs in the Bishop case in 1991.

So how is a synchronization, or ``sync'', licence granted? The producer makes an application to the copyright owner or its agent, identifying the song it wishes to use and the terms of use, such as the territory, the number of plays, the medium and so on. If the copyright owner and the broadcaster are able to agree on terms, a licence is issued. One of the terms that is always included in a synchronization licence is the authorization to make copies of the program. The licensee, the program producer, is granted the right to make all the copies it needs in order to exploit the rights it has licensed from the copyright owner.

Let's take an example. Suppose you were a producer and you licensed the song ``White Christmas'' by Irving Berlin for use in your program on the basis of the program being shown up to five times on free and pay television in Canada and the United States. In that licence, you would be granted the right to make all copies necessary to actually make use of that right. To put it another way, why would you negotiate and pay for a licence to include the song if the one and only copy you were allowed to make was the single master copy of the program that would reside in your film storage vault? Would that make any sense? No.

Television broadcasters get their programming from two sources: they either make it themselves or they buy it from somebody else. Where they acquire the programming from an independent producer, the producer has already obtained licences to include copyrighted music in the program. Those licences allow him to make necessary copies. They also allow the buyers of the programs, the broadcasters, to make the necessary copies. In other words, the ``transfer of medium'' right, which the broadcasters are telling you they need and which they can only achieve by the butchering of a right that we have actively fought to protect, is already in their hands by virtue of synchronization licences granted to independent producers of the programming they buy.

If that's the case, then why are they so upset? It has to do with the programming they produce themselves. For many years, broadcasters took the position that they didn't have to pay - ever - for the inclusion of copyrighted music in their own produced programs because there was an implied exception in the law for them. In other words, an independent producer had to pay for the inclusion of a copyrighted song in his program, but a broadcaster didn't have to pay. Why? It was, they said, the industry custom.

This was the background to the Bishop case heard by the Federal Court, the Federal Court of Appeal, and subsequently the Supreme Court of Canada. In each successive court the judgment was the same: if you use a copyrighted song, you have to pay for it. There's no free ride for broadcasters just because they're broadcasters, which is really quite simple and fair when you think about it.

The acquisition of the right to incorporate a song is just one of the many transactions that goes into the making of a television program. Everything else has to be paid for - the on-air talent, the cameras, the studios, the film or tape, even the catering. Broadcasters, just like any other producers, have to pay for all of this. Why should music be excepted? Simply because it can be? This is no basis on which to make laws.

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But wait a minute. Weren't we talking about transfer of medium? How did this ``something for nothing'' stuff get in here?

Recall that the right to transfer between media is always included in the synchronization licences that music publishers grant. The real reason broadcasters want an ephemeral exemption is to entirely eliminate their obligation to pay for music in their productions. The real agenda of the broadcasting industry is that they want you to unwind the effect of the Bishop case and enshrine their right to free music in the Copyright Act.

If you doubt that, I suggest you look, for example, at the brief filed by CHUM Ltd. It is a lengthy diatribe against the music publishing industry's insistence on getting paid for the use of its music. CHUM goes on and on about how unfair it is that they should have to find the owners, how difficult and time-consuming it is, and how expensive it is to license the music. They even accuse CMRRA of quoting fees with a bias in favour of its music publisher clients instead of in favour of CHUM Ltd. Well, I guess I have to plead guilty on that one.

Broadcasters aren't schools. They aren't the disabled. They aren't national archives. They're in business, just like music publishers. The licensing of music is a business-to-business transaction that goes on every day. CMRRA issued thousands of synchronization licences last year and this year, and music publishers issued thousands more on a direct basis to program producers. There is no justification for the expropriation of our rights to satisfy the desires of broadcasters for the free use of music.

Is it hard to license music? Yes, sometimes it can be time-consuming. There are times when a publisher's licence fee expectations are higher than the market will bear, but that's just it. This is a fully functioning marketplace in which buyers and sellers are each looking for deals. Why is the intervention of Parliament called for?

Let's turn the tables. I don't like the fact that broadcasters charge more than I'd like to pay for commercial time. I don't like the fact, as an advertiser, that I can't buy exactly the commercial in exactly the show that I want. The broadcasters keep trying to make me buy a package of commercials. Will you, members of Parliament, do me a favour and cancel their right to control the sale of their commercials to satisfy me?

Let's say I'm an independent producer and I have a great idea for a television series, but I can't persuade any broadcaster to give me the pre-production broadcast commitment that Telefilm Canada insists upon before it will make an investment. No broadcast letter and no funds - then no production. Will you intervene by taking from the broadcasters the right to determine which programs they will buy? Of course not.

Both of these cases would be unacceptable interference with the private affairs of broadcasters. It's no more acceptable to suggest that our rights as music copyright owners should be expropriated because broadcasters don't like the fact that they can't use our music for free.

You've heard that other countries have ephemeral exemptions in their laws. What you haven't heard is that those exemptions, particularly in the U.S., are disasters in practice from the perspective of copyright owners. I'll go over a few points.

The U.S. exemption runs for six months from the first broadcast of the program, but there's no obligation on the broadcaster to keep any record of what music was included in a program, what program was created, when it was broadcast, or how often. Without the availability of this information, music publishers are forced to play ``catch me if you can'' when a program is used beyond the six-month limit, when it would have to be destroyed or the music would have to be licensed for further use.

The U.S. law requires that programs created pursuant to the exemption be destroyed. In practice, this never happens. There's no effective way to monitor or control this.

The U.S. law extends the exemption only to the licensed broadcaster, not to a producer working on behalf of the broadcaster. Yet extensive amounts of television programming are produced where the producer claims the benefit of the exemption to which it's not entitled. This necessitates lengthy, difficult, expensive litigation.

There are other flaws in the U.S. exemption that the broadcasters have held out for you as the model to follow.

Finally, there is the most lucrative market of all for the reproduction of music: commercials. Today, advertisers are prepared to pay very large sums to include copyrighted music in commercials, as we saw recently with the Bank of Montreal - although I don't know how much they paid for ``The Times They Are A-Changin''. Under an ephemeral exemption, nothing would stop broadcasters from creating commercials for their advertising clients and including our members' music without permission or payment, on the grounds that it was an ephemeral, short-term use. Again I ask, would the broadcasters accept such an intrusion on their rights by anyone else?

By now, obviously you have our point. The right to transfer media is included in sync licences already. The television broadcasters' push for an ephemeral exemption is a trojan horse aimed at the de facto elimination of our right to control the reproduction of our songs in television programs. There is no justification for it. Synchronization licensing of music in television programs is a business-to-business transaction in a real, working marketplace. There's no valid case for parliamentary intrusion or the elimination of our members' rights in this regard.

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Finally, I'd like to say a word about access to our members' repertoire. I'd like to show you a new feature of our World Wide Web site at CMRRA.

What you see here is the home page of the CMRRA-CMPA web site. You can see a headline at the top, and there's nothing ephemeral about it: ``CMPA Slams Broadcasters' Rights Grab''. That's somewhat editorial. What it does say here is that you can apply for sync licences right from your browser.

I want to show you just how accessible this process is. Anybody with a World Wide Web browser, which is pretty accessible these days, can click here and a form will pop up on the screen. This form is based on the form we use for fax purposes. It lets you fill in all the information. You identify who the producer is and how to contact him. In the second section you identify the musical work you want, and then you describe the production. We've made adequate provision there to describe almost any kind of production: the language, the running time. You describe the use of the music you're making, say how many times you're using it, give the duration and scene description, and name the territories you want. You can check off ``Canada or U.S.A.'', ``World Excluding U.S.A.'', etc. You can indicate what markets you're interested in - and you can see there are an awful lot of different markets here, everything from the theatrical to direct satellite to airlines to film festivals and so on. As well, we want to know about the overall budget of the film so that we get an idea of what kind of production we're talking about, and any other information.

You can see at the bottom a button that says ``Submit''. When the user clicks on that, if all those fields with blue dots - the required fields - are filled in, he gets a message back thanking him for his application. Two minutes later, a fax comes out of his fax machine confirming all the details of his application. In other words, we're not asking people to make applications into thin air. They get a fax right back confirming what they did, and within less than sixty minutes a fax will go out to our client asking him to quote on it.

We're eventually going to rope all of the process into the web. Eventually, I hope we will be able to confirm licensing details by e-mail. This is very much in a state of rapid development right now.

As far as I know, this is the only system in the world that allows you to apply on-line and get a confirming fax back. It's indicative of the fact that we are accessible by phone, by fax, by mail, by the World Wide Web. We do not hide our light under a bushel. We're in business. It's not in our interest to make it hard for people to find us or to license rights. We just don't want them to be expropriated.

Finally, I have a couple of words on the copyright reform process. We've been told for many years now that the reform of copyright law is going to be an ongoing process. This is phase two, a mere eight years after phase one. We cannot endure delays like this. Technology is not standing still.

Not only do we need phase three to get under way at the ministry level almost immediately, but we need to see a greater willingness from the ministries to consult with the copyright creator and user communities in a way we didn't see much of this time around. Although we had lots of consultation, I'm referring to the drafting of legislation in particular. Obviously, parliamentary privilege requires that the final form of bills be kept secret until they are tabled in the House, but there's nothing to keep ministries from circulating possible language for comment on a ``no commitments'' basis. We and many other copyright groups feel this bill would have been better drafted had the text been circulated in an earlier stage.

Well, my thanks for your patience. Once again, I want to stress how glad we are that this legislation has been tabled, and how vital and necessary a step we see it to be in our ongoing copyright form process.

I thank you again, and I would be delighted to hear your questions.

The Vice-Chair (Ms Phinney): Thank you, Mr. Basskin. You've made it clear for laypeople who aren't necessarily working in this field every day, so it's a very good presentation.

Mr. Leroux.

[Translation]

Mr. Leroux (Richmond-Wolfe): Mr. Basskin, thank you for presenting your brief. I want to assure you that we are extremely mindful of the concerns of the music publishing industry. You have demonstrated rather convincingly that the recognition of this industry's rights is by no means assured.

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In your submission, you voiced the same concerns as many other holders of rights and authors, particularly as regards exemptions. For a number of groups that have testified before the committee, exemptions represent an expropriation of rights and a failure to acknowledge free negotiation and in particular the principle of awarding licenses to holders of rights.

Let me assure you that we are very sensitive to the issue of authors' rights and neighbouring rights. You indicated that some of the exemptions should be clarified.

Yesterday, the Copyright Board told us that as far as it was concerned, these exemptions were fairly clear. Some fine-tuning may be in order, but whatever licenses are granted will be a function of the industry's ability to pay.

Your final comment concerns modern or new technologies. What you have just told us demonstrates the need to review the bill.

Of course, the bill does contain a provision which stipulates that the legislation must be reviewed in five years. Unfortunately, the department has not been able to confirm that Phase III would be reviewed in five years' time.

We are being told that in some respects, the bill is already outdated even before it is adopted. I would like you to discuss this point a little more. I was surprised to learn from the Internet demonstration that as things now stands, you cannot satisfy the legislation's requirement that the repertoire be accessible to the public.

Is it technologically possible to update your repertoire on an on-going basis? In what way does this legislation block the public's access to your repertoire?

[English]

Mr. Basskin: Thank you for your support of our views on the value of licensing over exemption.

You've asked why we have difficulty with the idea of publishing our repertoire. I don't mean to boast, but if you name it, we'll do it. If we have to do it, we'll do it. Right now a listing of our repertoire would use an enormous amount of paper. It's certainly not ecologically sound. I suppose we could issue it on diskette.

I have a department of fifteen people who do nothing every day but record the details of newly created songs, songs that have changed ownership, songs that have gone into the public domain and songs that are unrepresented by CMRRA or that have come into our repertoire. I could go to all the trouble of putting that information out there, but I'm not sure what task it would serve.

Right now, we get lots of inquiries from members of the public who want to know who owns a song. We answer them. We do it now and we're quite content to do it. What I would like to see, rather than the bill imposing a requirement on us to make the whole repertoire available...that may not be feasible. Obviously, we want to be in compliance with the law. As an alternative, we'd like to have the ability for collectives to answer queries on a timely basis, which is something we already do. Again, it can be done over the web. It can -

[Translation]

Mr. Leroux: What do you mean by a ``timely basis''? There must be a concrete reason for this.

[English]

Mr. Basskin: In 24 hours. If you send us an e-mail or a fax or make a phone call and ask us if we represent a song and who owns it, we'll tell you. We do it now. I just don't feel that it's necessary or practical to impose a requirement on us to publish a list of several million songs when we're capable of answering questions in a direct fashion. It's a question of practicalities.

If I were to send you a list of people I represent, just the names of the publishers I represent, it would be 300 pages long. We'd much rather answer inquiries than waste time by sending huge lists when it's a particular targeted piece of information you want.

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[Translation]

Mr. Leroux: Do you have a suggestion as to how this provision should be worded in order to correspond to the actual situation?

[English]

Mr. Basskin: On this particular issue?

Mr. Leroux: Yes.

Mr. Basskin: I'm not going to try to invent it out of thin air, but I'd be very happy to submit it to the committee for consideration before the end of the week if you would like.

[Translation]

Mr. Leroux: It would be interesting if you could submit a proposed section worded in such a way that it clearly reflects the actual situation.

You also raised the issue of rights associated with parallel importation. Could provisions similar to those in place for the book publishing industry also apply to the music publishing industry? Are there similarities between the two? How does this relate to parallel importation?

[English]

Mr. Basskin: At this point, of course, there is no protection for the rights of exclusive licensees, and there is no similar protection for parallel importation of sound carriers. We certainly agree with CRIA's position here.

I'll be very brief on this point. Our publishers in Canada have the right to represent songs in Canada. It frequently happens that a different publisher or publishing organization has the rights in the United States or in various countries in Europe. When products are imported into Canada without proper licensing, the royalties end up being collected by somebody outside Canada, even when there is a Canadian entity that in many cases has paid for the right to distribute it in Canada.

We need better controls at the customs level and we need better controls in the act to give us the same protection against parallel imports that book publishers have. We think it's a good idea for book publishers and we think it's a good idea for sound carriers.

[Translation]

Mr. Leroux: In reference to the subject of statutory damages, you suggested in your brief that the maximum amount should be set at $100,000. Could you comment further on this? Since you are also a lawyer, could you tell me why you have proposed this ceiling?

[English]

Mr. Basskin: For my sins.... We'd simply like to see parity with the American situation.

I recognize that the inclusion of proposed section 38.1 is a major breakthrough in Canadian law. There are very few statutory damages provisions anywhere in Canadian law, and this one represents a real breakthrough. We think the maximum amount of damages - and bear in mind that the discretion of the courts would be very much at work here - would be appropriate in some cases, but we recognize that this is a breakthrough.

This issue of the height of the ceiling may be something we come back to when Parliament reviews this in five years, as I hope and trust it will. We can bring some experience to the table then. We think there are going to be cases, particularly of piracy and unauthorized manufacture, where a higher amount of damages is warranted. We may ultimately have to demonstrate that to you with further evidence.

The Vice-Chair (Ms Phinney): Thank you, Mr. Leroux. We'll go on to Mr. Abbott.

Mr. Abbott (Kootenay East): I notice that on page 8 of your presentation you say, ``CMPA members and CMRRA's publisher clients represent approximately eighty-five percent...'' You then make the point that no one would bring any type of action against a broadcaster when you say:

From previous testimony before this committee, I understand that this isn't the case in Quebec. In fact, in Quebec that has been defined. They can. If that's the case, do you think if that action were undertaken in Quebec it might possibly cross the minds of some of your members to do the same thing?

Mr. Basskin: My members are entirely aware of the current state of the law. The current state of the law today is that when radios put songs on carts and hard disks, they are making unauthorized copies. This has been the law since 1924.

We haven't done anything about it because we don't feel it's merited. Obviously, I am not speaking for the Quebec music publishing industry, and I certainly don't speak for SODRAC. I'm speaking on behalf of my members. We have not seen fit and I don't think we will see fit. After all, we are the people who were concerned enough about synchronization licensing to bring the Bishop case. We do it where we think it's appropriate.

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Here we don't think it's appropriate, but we far prefer a negotiated licensing environment to an exemption that can go all over the map, as in the case of the U.S. exemption. Once you tell people there's an exemption, a lot of people think it applies to them when it really doesn't.

Mr. Abbott: It's interesting. It seems to me knives cut going in both directions.

With respect to the question Mr. Leroux posed to you, you were saying that you would like to see parity with the American situation. I wonder if the Canadian broadcasters would also like to see parity with the American situation.

I have been really impressed with the candour and transparency of this presentation today as well as the meeting that you and I had previously, so I was rather puzzled when I got to page 11 of your presentation today, where you are talking about the U.S. exemption that runs for six months from the first broadcast to the program. There's no obligation on the broadcaster to keep any record of ephemeral copying.

If I may say this very gently, it struck me as a tad disingenuous, because the fact is that the situation could be resolved, couldn't it? In other words, instead of the open-ended situation that currently exists in the U.S., if they were to change and have a proper reporting function, and if in fact there was an ephemeral exemption in Canada and you had a reporting function...it seems to me that this is a bit of a straw man that can blow over fairly easily.

Mr. Basskin: You won't be surprised to hear that I disagree. I spent eight years as general counsel to the CTV television network, so I have some idea of what goes on inside a broadcasting organization. Sorry, ``general counsel'' is overstating it. Let's say in-house lawyer or corporate secretary.

Broadcasters don't like to have to keep track of this material. We met with the CAB and we've discussed this very issue with them. They're not at all anxious to have to keep track of the music they use and when it's used and what happens to it. In the course of broadcasting programs now, people don't keep track of this stuff, and I can tell you they would not like and would not want to have to bear the cost of keeping track of this information.

If an ephemeral exemption were to be imposed upon us - and I'm quite clear on this: it is not acceptable to us - it would need to have a full reporting obligation, but not just a reporting obligation, an obligation on the broadcasters to make the information available upon demand. I've played ``catch me if you can'' with too many broadcasters in this country. I call them up to say that I understand one of their programs used one of our songs, so I would like the chance to view it and see for myself. The response is ``get a court order''. I note that they broadcast it to 25 million Canadians, and they say, ``get a court order; we don't owe you any favours.''

Is it a state secret? They say it's a secret and they say who cares? They say they don't owe us anything.

Of course, the greatest offender there is the Canadian Broadcasting Corporation, which we are suing at this point because we were told, frankly, that we could put it in our hat, or words to that effect. They say they don't owe us any favours. They make it virtually impossible now for us to check up and find out what happens.

What kind of confidence do you think I have that we're really going to get cooperation? Something for nothing is a very powerful emotion.

Mr. Abbott: I suppose so. I'm really trying to stay away from being argumentative. I'm just suggesting that.... Again, on page 12 where you talk about the fact that broadcasters might create commercials for their advertising clients and include your members' music without permission or payment on the grounds that it was an ephemeral, short-term use, isn't that just a tad extreme?

Mr. Basskin: I wish it were.

Mr. Abbott: Aren't you just a little bit over the top when you're presenting it to us that way?

Mr. Basskin: I invite you to reread the CHUM brief if you think I'm over the top. I will be happy to provide you with detailed examples of situations where radio stations in this country have made advertisements for their local retail clientele and used very valuable music. When we eventually catch up with them - and it's only by chance that somebody reports it to us or that we have a chance to hear it on the car radio - the answer is, oh, we're paying SOCAN. We didn't know we had to pay you guys for this.

I don't think the Allan Slaights and Doug Bassetts of this world sit around conspiring to steal music. They know what the situation is, but they also don't take much trouble to train their staff on these questions. We have encountered, again and again, line staff in radio and television broadcasting operations who have never had a word said to them about copyright. They are told to just put it together, to take the record off the shelf and use it. It's a real problem.

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If you create an exemption as opposed to recognizing the reality of licensing, the misinformation will spread far and wide. It will be like in the United States, where on a program like The Tonight Show, which is not produced by NBC, the producer says, well, NBC has that exemption and it applies to me; if you disagree, Mr. Music Publisher, I suppose you can take me on in court. This program is not made by a broadcaster. It is very profitable. The producer says, if the broadcaster has the exemption, I have the exemption. I can quote you out of the U.S. copyright act that this is not the case, but it goes on every day.

We believe in licensing our rights and we think we do a good job of it.

The Chairman: We are 15 minutes late and I have requests from Mr. Bélanger, Mr. O'Brien, Ms Phinney and Mr. Arseneault. Would you please keep your questions brief?

Mr. Basskin, please keep your answers brief as well. There are two other groups we are hearing and we have to be back in the House after.

Monsieur Bélanger.

Mr. Bélanger (Ottawa - Vanier): I've had a chance to meet with Mr. Basskin and I've covered a lot of this ground, so I'll skip some of the things dealing with ephemeral exceptions, if I can call them this.

Mr. Basskin: Thank you.

Mr. Bélanger: It will please you, no doubt, to hear me calling them this.

I would like to revisit one question that my colleague asked initially. This is the notion of making the repertoire available. We checked it again, and proposed subsection 70.11(1) of the bill is about making available for consultation, yet you choose to interpret this as publishing entire repertoires. Do you believe that making available entails publishing?

Mr. Basskin: I suppose it depends. I believe there is a reference there to regulations, is there not?

Mr. Bélanger: Yes, but those regulations don't exist as yet.

Mr. Basskin: One of our concerns about the act is there is a lot left to regulation that is really substantive.

Mr. Bélanger: [Inaudible - Editor]

Mr. Basskin: Well, I thank you for that. We're obviously prepared to work with it. I don't want to blow this up into more than it is. If we have to publish, we'll publish. I just think -

Mr. Bélanger: It doesn't state ``publish'' anywhere at this stage.

Mr. Basskin: I know, but as I read this it imposes a fairly substantial obligation. I think people can honestly -

Mr. Bélanger: How do you consult now?

Mr. Basskin: How do we consult with people?

Mr. Bélanger: No, how do you consult your repertoire?

Mr. Basskin: We look it up on the computer.

Mr. Bélanger: Couldn't someone else do this?

Mr. Basskin: A lot of the information is proprietary. Some rights bodies around the world have gone to great lengths to put some of the information on-line. Finding a way to do this without releasing the proprietary information is not easy.

Again, we answer questions as quickly as we can. We think this is the best kind of consultation. We make some sales this way too.

Mr. Bélanger: For the rest of it, I think it is really straightforward. Having chosen to interpret an act by saying ``published'', which is not the requirement -

Mr. Basskin: If I'm mistaken and it doesn't impose a full publishing requirement, then I guess I'm satisfied on this one.

Mr. Bélanger: Thank you.

For the rest, Mr. Chairman, I'll have to pass. That's too bad.

The Chairman: Mr. O'Brien.

Mr. O'Brien (Labrador): Similarly, Mr. Chairman, I have three questions but I guess I'll limit myself to one.

I would like to pursue the ephemeral exemption/rights issue with you for a minute. We have the unenviable task of trying to find a balance between the various parties with this legislation. Do you agree that as the bill now stands, from the broadcasters' point of view, if there is no exemption they would be contravening the law? I think this is obvious.

You said, Mr. Basskin - I'm pleased to hear it and I'm sure broadcasters are too - that there is really no intention by rights owners to change the status quo and go after broadcasters. Indeed, you mention that talks are ongoing. I've heard this before and it is good news.

Where I don't have much of a comfort level, though, as somebody who has to vote on this eventually, is that we keep hearing talks are ongoing. When are we going to see a conclusion? It would be really wonderful for us as a committee if those discussions came to fruition before we have to make a decision on this exemption/rights, a decision that would have people breaking the law who don't want to be breaking the law.

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Where are these talks going? Is there any possibility that they will come to fruition before we have to bring this bill to the House?

Mr. Basskin: First of all, let's stress here that you're talking about radio's request for a transfer of medium exemption. It's not a trivial question. Rights go with works. Exemptions are exemptions from the obligation to use them.

For years broadcasters have used the phrase ``ephemeral right''. Speaking as the former chairman of the CAB television copyright committee, I know all about this. They use the phrase ``ephemeral right'' because a right sounds like an important entitlement. It is not an entitlement. Rights go with works. If you don't believe this, try taking a broadcaster's product and using it without his permission. He'll say those are his rights.

We are talking to them. We will continue to talk to them. I would love to have this thing wrapped up as soon as possible. If it could be done before the date anticipated for the finish of this committee's work and possibly before the end of the year, I couldn't be more pleased.

I cannot speak for everybody, but I think I can speak for my board of directors who represent the largest and best-known interests. On the radio side, we don't seek to change the status quo. If this results in an agreement at a very low or gratis rate, I think we'd be entirely happy. I can't predict, but we'll certainly try our best and we'll keep the committee apprised of our work in this regard.

Mr. O'Brien: I'm pleased to hear this. I just urge you to press on with those talks. We are going to have to find enough balance points in this legislation. It would be wonderful if these talks were able to eliminate one irritant from the whole discussion. Carry on, and I wish you success with this.

Mr. Basskin: Thank you.

The Chairman: Ms Phinney.

Ms Phinney (Hamilton Mountain): I'll pass.

The Chairman: Mr. Arseneault.

Mr. Arseneault (Restigouche - Chaleur): First of all, I appreciated the type of presentation you made. It was very clear. We could follow the pattern there.

I would like to make a point and to clarify something in my mind. When the broadcasters were here, they seemed to indicate the need for this ephemeral exception. They said if it wasn't in the act, local programming would not be available to the viewing public. We're talking more or less about television here. They made allusions to Santa Claus parades. They made allusions to hockey games and local church services. They didn't mention it, but they probably meant talk shows. One of the examples also was a variety show. I think the local one in Ottawa is Homegrown Café. They said it would be too difficult to air those programs. I'm not saying they would disappear, but there would be less and less local programming. Could you comment on this?

Mr. Basskin: Absolutely. In practice, the dividing line publishers look at is the question of whether or not the program was, in effect, produced programming. Was there was a conscious decision to put the music in there?

When the band goes down the street in the Santa Claus parade playing ``White Christmas'', the owners of this song don't bother pursuing a synchronization licence. Let's say, on the other hand, that the station decides to produce a five-night news special about the coming Christmas season, and they produce a little intro and extro footage using ``White Christmas''. This is a conscious decision to include the music in the programming, just as it was a conscious decision to take one picture or another or use one announcer or another.

Where the music represents one of the production elements the station has taken off the shelf and decided to use, we deserve the right to have our rights respected and to have our works paid for, just like everybody else who contributed to the production. We have not pursued, and we have no intention of pursuing, the live actuality event such as the Santa Claus parade or the Dominion Day celebration or something of this nature. Did I say Dominion Day? I beg your pardon. I meant the Canada Day celebration. This was not a political comment. I'm just inadvertently showing my age.

When it comes to live events, the marketplace works. Don't forget, publishers are out there competing with each other in the marketplace. If you had a publisher who regarded every trivial use as something he should pursue to the ends of the earth, he would quickly find nobody was willing to do business with him.

Mr. Arseneault: Are you familiar with Homegrown Café? It is a variety show.

Mr. Basskin: I am familiar with variety programming. Variety programming trades on the value of music. It is the reason why the performers are there. It is no different from the fact that they had to put electricity in the camera to make the camera go. As it happens, variety programming has not been really popular on television for many years. It exists, if at all, on a local basis.

.1205

We get applications all the time from producers, large and small, to clear music. If an independent producer has to pay for the music, there's no reason why the broadcaster shouldn't have to pay for the music. The broadcasters' argument to you is essentially that they're in some kind of magic circle within which they get it for free, but the people on the outside who might produce Homegrown Café and sell it to them have to pay for it. They're not talking to you about that aspect. They're trying to hold up the process of synchronization licensing as an impossible, insuperable task. It isn't. You apply for a licence.

Mr. Arseneault: Say a fourteen-year-old comes on Homegrown Café and wants to imitate a song he's heard on the radio. Where does that fit into all of this?

Mr. Basskin: If the program goes out live and there is no fixation, then there is no licence required. If the program is taped, then a licence is required.

The last time I looked, the broadcaster was still accepting Canadian dollars for the sale of advertising during the program. The lighting technician was paid for the program. Everybody else got paid. We're the only people to whom it is said ``you must give it up for nothing because it's inconvenient for us to clear it''. I don't accept that. This is still a business-to-business transaction. It doesn't matter whether it's Céline Dion or a fourteen-year-old amateur.

Mr. Arseneault: What about the replay of a figure skating championship with a song in the background?

The Chairman: Make it brief please, Mr. Basskin. We really are exceeding our time because your presentation was extremely long.

Mr. Basskin: I thank you for your indulgence, sir. Unfortunately, the answer to that question is a very long one. I would be happy to submit a written response or to go on, depending on what the chair would like me to do.

The Chairman: We have a brief question from Ms Phinney before we go.

Ms Phinney: Could you also give your position on the time the program is made? It starts off on the east coast at a certain time and then there's a time change. Do you feel the broadcaster should pay for that?

Mr. Basskin: Where the broadcaster has licensed the song, the right to make those copies is already included in the licence.

Ms Phinney: What about something like the Grey Cup? It's shown at different times. They have a half-time show and there's music in the Grey Cup program. It will be in Hamilton this year, by the way.

Mr. Basskin: Very simply, live events like the Grey Cup aren't time delays - they happen.

If you're talking about an event that started off live, the track record of my members is that if it came from a live actuality event, they do not pursue licensing of this nature. But if somebody wanted to take that tape and run it two weeks later as the greatest Grey Cups of the past decade, with the greatest half-time shows of the past decade, then that represents a use for which we are entitled to be compensated.

Ms Phinney: They could maybe play the game on a sports commentary, but they couldn't play the half-time show again.

Mr. Basskin: The basis we look at is live actuality. If it started out as a live actuality event and the broadcaster didn't choose to put the music in that event, then essentially we don't pursue it. Again, I'll be happy to give the committee some more written information on this if you would like.

The Chairman: Thank you, Mr. Basskin, for appearing here and for your information. We appreciate it.

Mr. Basskin: Thank you, and I thank the committee for your patience.

.1208

.1210

The Chairman: We would like to welcome the Photo Marketing Association International of Canada, represented by Mr. John Asa, president of Japan Camera Centre Limited; Mr. Robert Gauthier, de la société L.L. Lozeau; and Mr. G. Fisk. The floor is yours.

Mr. George Fisk (Legal Counsel, Photo Marketing Association International - Canada): Thank you, Mr. Chairman. Good morning, members of the committee. We're very pleased to present the brief of the Photo Marketing Association.

No doubt you'll be very pleased to know that we don't have too much to say. The reason we don't have too much to say is that most of the issues of concern to our members, especially things like digital technology, are not before the committee today because they're not part of phase two.

Our comments today relate only to proposed section 38.1, the statutory damages section. That section, if enacted, is likely to cause severe problems for PMAI Canada members. We have proposed in our brief three possible solutions, and were encouraged that the Canadian Creators Coalition, which will follow us and which includes the professional photographers, has endorsed one of our proposed solutions.

I'm here as counsel to the association. I've advised PMAI Canada since the early 1980s. Many of the problems it presents to me are ones of copyright, although there are also questions relating to the full spectrum of activities that its 1,318 Canadian member companies have.

To give you an idea of the range of the organization and the way proposed section 38.1 will affect it, we've asked two people to come today from the organization.

The photo-finishing industry in Canada has about 2,000 stores with mini-labs - you know, those big machines in the front of the store where film goes in one end and prints come out the other. There are also about 2,800 stores that are photo drops. They're just drugstores where they take the films, put them in envelopes and send them out to labs. There are also wholesale labs that receive work from photo drops and stores with mini-labs. Also in our organization there are photographers, colour labs and film manufacturers. There is a great range.

To give you some idea of the range, Mr. Asa has come to show what it's like to have a primarily individual customer-oriented organization. Mr. Asa is the co-founder of a company called Japan Camera Centre Limited. It's a fully Canadian-owned company. Mr. Asa and his co-founder are both Canadian citizens.

Mr. Asa came from Japan when he was very young and opened his first camera store in 1959 in Toronto. In 1979 he was the one who introduced this one-hour photo finishing to Canada. He now has 26 corporate stores and 103 franchise stores with locations in all ten provinces.

He's been a member of the photo marketing association since 1963 and he was international president of the organization, not only for Canada but worldwide, last year. He'll tell about how proposed section 38.1 affects retail operations.

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Robert Gauthier is the director of operations of L.L. Lozeau Ltée. This is a company in Montreal that has a business relating to the high end of photo finishing. Thus, it does photo finishing for advertising companies, magazines and professional photographers. It also duplicates slides to make negatives and prints from them. It does a large amount of retouching and restoring of damaged prints, using the latest electronic laboratory techniques.

Mr. Gauthier will tell of the effect of proposed section 38.1 on that business.

I'd ask Mr. Asa to present to you.

Mr. John Asa (President, Japan Camera Centre Limited): Mr. Chairman, members of the committee, good afternoon.

At Japan Camera we are consumer retail photo finishers with mini-labs, and we sell cameras as well. As you know, most of our stores are located primarily in regional shopping centres, and 65% of our customers are mainly women. Annually, throughout the chain we process approximately$4 million worth of film. This is called development printing.

This afternoon I'd like to explain life at the counter, what takes place at the mini-lab sales counter when a customer brings in a roll of film.

There are four aspects to our business. One is when the customer brings a roll of film to the counter. We ask the customer basic questions to fill out their envelope - name, phone number, how many prints and what kind of prints they want and when they want them. We have no idea what subjects were photographed in this roll of film.

The second encounter at the counter is the reprint order. After a customer has received negatives, they take them home and decide they want to make extra prints or reprints, so they bring the sleeve of negatives to us and say they want more prints. Neither our counter people nor our customers tell us that this is the original or that they're a copyright owner. We don't know that.

In that reprint, sometimes they want to get enlargements - 8 by 10 or 11 by 14 - and at most of our stores we do not offer that service. What we become, then, rather than the processor, is the agent to the wholesale photo finisher or the large photo finisher to whom we send to have the enlargement made.

The third area concerns the fact that not all films are colour negative film. About 8% to 10% of films are colour slides. Again, in each of our stores we do not have the facility to process these colour slides in-house, so when the colour slide film is brought in, once again we fill out the envelope and send the roll to the wholesale photo finishers to be processed. We become the agent. Once again, we have no knowledge of what the subject is on the film.

The fourth type of customer is one who brings in a print. They can't find the negative and ask if we can make a copy. Most stores, again, send this order to a wholesale photo finisher, because it takes extra machinery to do it.

In essence, the mini-lab at Japan Camera, as a consumer photo finisher, is an agent for a majority of things to the wholesale photo finisher. We have a company policy saying that if the original print has any marking as to copyright, even to the extent that the original photograph has the name of a studio on it, we do not accept these to make a copy. This is standard procedure.

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We have no practical way of knowing whether any order is copyrighted or not. This is a fact of life. Therefore, we could at any time be sued if this recommended section 38.1 is adopted. In fact, as a mini-lab operator, we would be scared stiff if the recommended section on statutory damage were adopted.

We do not see how we can take any further steps to verify whether the order should continue. To ask customers to verify whether it is copyrighted or not would only delay and add further cost to customers, which is not a very good idea. As it is, it's competitive enough.

We, as a mini-lab operator at Japan Camera Centre, would like to state that this is the dilemma we face if this statutory damage proposal is adopted.

This is my witness to that situation.

[Translation]

Mr. Robert Gauthier (Director of Operations, L.L. Lozeau Ltée, Photo Marketing Association International-Canada): The bulk of L.L. Lozeau's clientele is made up of professional photographers, wedding photographers, press photographers, commercial photographers, still photographers, and so forth. Our remaining clientele consists of various kinds of amateur photographers.

We offer the following in-store services: film processing, enlargements, slide processing, electronic retouching, traditional photograph reproduction or reproduction using electronic image numbering, negative copying and slide copying.

Clients bring the work to us, we take down their instructions and we deliver the finished product to them.

We have always refused to reproduce copyright material out of respect for the photographer who is often one of our clients. If we hurt him, we hurt ourselves.

The copyright question remains unresolved if the copyright holder delivers his products without indicating that no one can reproduce his photographs, slides or negatives without his authorization. Let me give you one example of a problem that can occur. One of our professional clients brings in bill board photographs to be copied. We are unable to verify this client's contract to see whether he is indeed authorized to copy these bill board posters.

The same principle applies to still photographers who request enlargements of photographs taken during the recording of television programs. How can we ascertain the true facts? We have to believe our clients.

In conclusion, we do not want to find ourselves in a situation where we could be prosecuted for copyright infringement because we had no way of verifying if copyright material was involved.

[English]

The Chairman: Mr. Fisk, are you ready for questions now?

Mr. Fisk: Yes, any of the three of us would be glad to answer any questions.

The Chairman: Thank you.

Mr. Leroux.

[Translation]

Mr. Leroux: I have a question, and my colleague has one as well.

You state the following on page 4 of your submission:

Does the proposed section 38(2) not correspond to the situation where the defendant convinces the court that he was unaware or had no reasonable motive to believe that he had infringed copyright provisions? In this case, the court can reduce the preset amount of damages by up to $200.

Mr. Fisk: May I answer the question in English?

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[English]

Of course, if there is something done without knowledge, there is still a minimum amount that can be charged as statutory damage. The problem is that in order to prove that it is done without knowledge, you have to go to court. Therefore, the photographer - Mr. Asa, for example, or his clerk in his mini-lab takes in a film and develops it. The next thing he knows a statement of claim is sent to him. He has to go to court. Somewhere in the four million rolls of films he has done this year - and remember, he doesn't have records of this either - he is alleged to have copied something that is subject to copyright and has improperly copied it.

First, he has no records left. He has processed that roll of film long ago. He doesn't have the film. He doesn't have anything. He has to prove that he did this without knowledge. Now he has to get a lawyer. He has to go through discoveries and so on. He is probably going to end up paying something in the order of at least $7,000 or $8,000 by the time he gets through - maybe even more - and this is for having done a $25 photo-finishing order. Even if he wins and doesn't pay the $200 - and remember, it may be more than $200 because if it's a 36-frame roll of film it can be36 times $200 - he has still had to pay all that money. He may get some of that back as court costs, but he may not.

[Translation]

Mr. Leroux: I understand very well.

[English]

Mr. Fisk: Of course, if the person gets the statutory damages, the person has then won. Mr. Asa won't get costs. The person who sued will get costs from Mr. Asa because he has recovered damages. Mr. Asa won't get costs for having appeared and defended the thing. He may have to pay costs.

[Translation]

Mr. de Savoye (Portneuf): I read your submission carefully and I see that you are proposing a solution. However, I still have some concerns and I would like you to enlighten me.

When a client such as myself comes into one of Mr. Asa's stores and hands over a roll of film to the clerk, when the clerk accepts it, there is indeed a contract that has been concluded. There is a contract and an obligation to give results. As a customer, I expect to get in return developed photos in good condition, otherwise I will get a new roll of film. The penalty in the case of failure to deliver is known in advance.

Wouldn't it be possible for the photographer to indicate on the envelope with the small receipt that the client assures him that he holds all of the rights and that, if prosecuted, he would be entitled in turn to take action against the client?

Other organizations have adopted a similar stance. I'm thinking here, among other things, of these small businesses that make photocopies and that take pains to ensure that copyright is respected. As Mr. Gauthier said, in the case of a book, the issue is clear, but in other cases, it is less so.

Why is it you feel that the approach taken in other areas would not be appropriate for photofinishers?

[English]

Mr. Fisk: Those approaches are utilized in this industry. In fact, I have not asked Mr. Gauthier about this subject, but I would not be at all surprised if he has something similar in the documents he has with the commercial people who present things to him.

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The problem with this for the ordinary consumer, though, the person in the shopping centre who hands in the film, is that first, he may not have any money. So if you do claim over against him, he will not have any money for you to claim over against. I cannot imagine demanding financial security from everyone who hands over a roll of film to be developed. Even if he does, it would be quite easy for anybody who wanted to conceal his traces merely to give a wrong address or name or telephone number on that slip.

So as Mr. Gauthier said, you essentially have to trust your customers. Practically speaking, your customers can easily fool you.

[Translation]

Mr. de Savoye: I have a bit of a problem with this argument. Most people have a place to live; they are either homeowners or tenants. The owner of a rental property takes a chance with each tenant because property damage could occur. Consequently, tenants and owners usually have insurance, including liability insurance in the event action is taken against them. Therefore, some recourse is always available.

As for your argument that someone could always provide a false address, if a suit is ever brought, the file of the person who has the processed photographs in his possession would reveal that person's true address and identity, and you would therefore be in a position to take legal action.

I am not very comfortable with your explanation. My question remains.

[English]

Mr. Fisk: When a roll of film is given in at a place, such as Mr. Asa's place, there is no verification, because the roll of film is given in. You do not send anything to the address of the person. The person comes back in an hour, pays his money, and walks away.

All that Mr. Asa's company has done is developed a film. That film is merely put into one end of a machine. It comes out of the other end and the product is given. There is no intention of infringing copyright. There is no knowledge of the copyright.

At the moment, as you know, the way the copyright in film arises is the owner of the negative is the owner of copyright. One has, with some crossed fingers, taken the hope that the person who hands in the film is the owner of the film and he has not stolen it from somebody.

He hands in the film. The money is paid. He gets his pictures. There is nothing further. There is no way of verifying....

I cannot imagine, for example, that it should be reasonable to have to ask for proof of address of anybody handing in a film. This would probably be making the business far more difficult.

[Translation]

Mr. de Savoye: Mr. Fisk, imagine us 20 years down the road in Mr. Asa's store. All of the clerks have been replaced by electronic equipment and robots. I'm not hoping that this will happen, because you create jobs and that is a positive thing. However, imagine these circumstances. The customer interacts with a machine, not with a human being, and ultimately obtains his processed film. Would that change anything for you?

[English]

Mr. Fisk: Not really, because when you talk about infringement of copyright, until now, until the time of these statutory damages, there has been a dimension to infringement of copyright of some sort of intention, despite the comments that were made by the previous speaker from the music publishers.

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The reason there has been a dimension of intention was that you had to want to copy a particular thing. In this case, if you were going to take a picture of it, you had to point the camera at the particular thing and take the picture. So there was some volition to it. If you copied a book, you had to point the photocopier at a particular page of the book and so on.

So there was always some intention. What is being done in the case of the photo finisher, though, is he is merely a step on the way. He does something a machine could do. This is why, when you asked about your....

Mr. Asa points out that in Japan there are already vending machines where you walk in, pay your money, and they process and print your film.

Mr. de Savoye: Would your concern apply to those booths we have in the shopping centres, where the customer goes in, puts in a piece of money, waits for the flash, and then collects his thing? Could he just show let's say a Mona Lisa there and have a copy of that?

Mr. Fisk: He could, and he would be infringing copyright. But should the person who put the booth in have to pay statutory damages?

I thank you very much for that question, because it points out the difference in role between the photo finisher and the person who wants to do the copying. The photo finisher is just like that machine. Somebody gives him money or puts money in the machine and he produces the picture that is wanted, but he has no intention of doing any particular picture or copying any particular person's work.

Mr. Bélanger: Is there still copyright on the Mona Lisa?

The Chairman: Ms Phinney.

Ms Phinney: Thank you, Mr. Chair, and thank you, sir.

Could you tell us how many lawsuits there have been so far involving photocopiers? Are you aware of how many or how often this has happened?

Mr. Fisk: There have been lawsuits against photo finishers. There have not been any for this particular problem, though, and for a very simple reason. Until now you could only get actual damages for infringement of copyright, or punitive damages, of course. But if you were to sue a photo finisher, what is the actual damage from what he did? He did $15 worth of processing. That processing could have been done by anybody else and was not any use that damaged your rights very much. So you might get $15.

However, when there's -

Ms Phinney: So you think there will be an escalation of lawsuits now, because of the way the bill is written?

Mr. Fisk: Now you may well look around for whoever has the money and you then sue that person; anyone in the chain with the money.

Ms Phinney: You have suggested as a change in the act, the way you have written it.... I would presume if somebody is that eager to sue they could still sue and then it would be up to you to prove the person doesn't know the development of the film was not authorized. If they were going to sue.... It's good the way you've written this and I'm glad you've given us the suggestion for a change, because a lot of people come here and say they don't like this and this and this and they don't give us any suggestions, but I'm wondering.... I'm not a lawyer, but I would think if I wanted to sue somebody, I could still look at this and say, well, I'm going to sue to prove that what they've signed here is...that they did know, even though they claim they didn't.

Mr. Fisk: There's a truism that anybody can always sue anybody for anything. The question is whether you can sue successfully.

Ms Phinney: It's to scare some people off from suing.

Mr. Fisk: Yes. What we hoped to do was to arrange this in such a way that if a lawsuit begins it could be terminated by a summary judgment motion. I hope that's been successful.

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Ms Phinney: Could you not do both things? If this were in the law, wouldn't it also be good for you to have everybody sign when they bring their films in, in order to say that you're not responsible if there's something on there that has not been copyrighted or if they don't have the licence to have it photocopied? I wouldn't mind. I assure you, I'd give you people lots of business. I'd be quite willing to sign a little piece of paper saying that there's nothing on here that shouldn't be on here. Have the two things going at the same time.

Mr. Asa: At the signing, we could have something like a claim check. In case of loss or damage we'd have a condition there. But in the case of a copyright, we can make a poster -

Ms Phinney: No, I don't mean that. You give me a piece of paper as I take the film in. You give me the stub. Before you give me the stub back and say you'll develop my film, I have to sign something relieving you of any responsibility for any pictures on there that aren't licensed.

A voice: How long do you keep these little slips?

Ms Phinney: I wouldn't mind doing that.

Mr. Asa: When a customer brings claim checks back, we just throw them out.

Ms Phinney: No, no. When I take the film in and I want it developed, you say you'll develop my film. You ask for my name, my address, and whatever other things you ask for. You then ask me to fill this out, I read it, and I sign it. After I've read it the first time I do this, I'll know what it is that I'm signing. Wouldn't that protect you from any damages? If I've already signed before you develop it, I'm responsible for that. You're not developing anything....

Mr. Asa: Yes, it sounds reasonable to make four million copies in however long we have to keep it. But this is fifty years later. How long do we have to keep this piece of paper? It may be small, but....

Ms Phinney: You keep it until I pick up my pictures, and when I go in the next time I fill out a little piece of paper again.

Mr. Asa: No, that's not.... You may have to see the pictures, and then somebody else decides to sue Japan Camera. So I would have to keep it for fifty years at least.

Ms Phinney: Oh, I see. But you're not keeping all of those how many millions of pictures in one store. It might be a box this big or something. In each store, in each photo-finishing place, there aren't going to be millions. I'm just trying to make it easier for you. I'm trying to protect you from being sued.

Mr. Asa: I appreciate that.

The Chairman: Monsieur Bélanger.

Mr. Bélanger: Ms Phinney asked questions about the number of lawsuits that are pending out there, the number that have occurred, and that's none. I just want to make sure we're not making a mountain out of a molehill here.

You recognize two things in your brief. One is that an unscrupulous plaintiff - or anyone, if you will - can bring any action to court. You recognize that nothing we do and nothing you suggest will stop that. Do we agree on that?

Mr. Fisk: Yes, we do.

Mr. Bélanger: All right. You also recognize in your brief that, by and large, the judicial system is fairly rational and reasonable. Is that..?

Mr. Fisk: Mostly it is, yes.

Mr. Bélanger: By and large, yes.

A concept that has been proposed by two other groups is that there be a trigger point of damages. Only if damages are assessed to be at a certain level - the suggestion that has presented to this committee is $5,000 - could there be some criminal prosecutions. Would that relieve a lot of your concern?

Mr. Fisk: This is, of course, not a section on criminal prosecution.

Mr. Bélanger: Well, you could be prosecuted criminally as well.

Mr. Fisk: Yes, that would relieve a concern against criminal prosecutions. I agree with that. But the section we are dealing with, of course, is a section that covers statutory damages. So there is no threshold point of damages, because if you choose that then you get whatever damages -

Mr. Bélanger: You did also recognize in your brief that in proposed subsection 38.1(3), there is even further discretion given to the judicial system, which by and large is reasonable and rational. A judge could go to whatever seems just, even beyond the $200 minimum. Your concern there is the single medium, correct?

Mr. Fisk: Yes, but my concern is also that in order to get to that stage, you've had to get to a trial. You've had to go through the preliminary -

Mr. Bélanger: Yes, but we've agreed that nothing we do, nothing you suggest, and nothing that's passable could stop that, sir. Someone can always try to sue you, and then you have to rely on the system.

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Mr. Fisk: But there's a difference between somebody trying to sue you and getting to a trial. In all the courts of Canada now - since the Federal Court recently got this amendment - there are summary judgment proceedings in which an action is thrown out at an early stage on the basis of affidavits if an action appears to be without merit. That means it is very difficult for somebody to come in with an action that is completely contrary to statute or something of that sort.

Mr. Bélanger: Are you saying this would prohibit such an exercise of discretion from getting into the system?

Mr. Fisk: No. In a summary judgment proceeding - or, properly, a summary judgment motion - somebody has sued you. You file a defence, and you then make a motion to the court and say -

Mr. Bélanger: But my question is whether or not there is anything here to prevent someone from making such a motion under the system.

Mr. Fisk: No, but there is nothing here that permits the court to take it.

Mr. Bélanger: Okay.

Mr. Fisk: Right at the moment, since there are damages available, the court will have to say it can't decide this because there are damages available under the statutory damages provision. You therefore have to have your day in court to see how many damages you get. You can't limit that by any preliminary procedure.

Mr. Bélanger: Mr. Chairman, I think that is an interpretation that we should verify with the department, or perhaps with the justice department: if something is pursued under these sections, could a judge entertain a motion to summarily dismiss the whole thing? I guess we're hearing here that because it's not explicitly stated, it couldn't be done. Perhaps we ought to verify that as a committee with the appropriate authorities.

Merci.

The Chairman: Mr. O'Brien, you'll be the final -

Mr. O'Brien: Yes, thank you, Mr. Chairman.

After hearing all of this, I wonder if we wouldn't be smarter to take the picture of the person who brings in his film.

Some hon. members: Oh, oh!

Mr. O'Brien: You'd have a little booth like the one Mr. de Savoye talked about, but I guess that would cause a storage problem too.

Mr. Arseneault: Would there be a number across it as well?

Mr. O'Brien: That's right, a number and everything else.

I think you proposed your own solution to this problem, as I understand it from my colleague Ms Phinney's question, so I'll leave that and go to what we can learn from the American situation, if anything.

They have statutory damages. What's the situation there. Are photo copiers and photo finishers exempted in the U.S.?

Mr. Fisk: That's quite an interesting question. Mr. Asa was the chairman of the international PMA at the time when this arose.

John, can you talk about that?

Mr. Asa: The same question came up in a similar subcommittee situation in Washington. PMA took a bagfull, not just one roll of film, and we asked committee members to identify which one had copyrighted pictures. So in the United States, the PMA successfully said these were innocent infringements, and we are exempt from that.

Mr. O'Brien: You're exempted in the U.S.

Mr. Asa: Yes.

Mr. O'Brien: Are you essentially saying that that's what we should do here? You're not actually saying that, are you? You're proposing a different solution to the legislation, as I understand it.

Mr. Fisk: It's a generally similar approach.

I might add that there is one other thing in the United States as well. PMA has entered into an agreement - it's a voluntary agreement and not something that's enforceable by the courts - with most of the other major organizations that deal with photographers, whereby PMA members are bound not to copy something that is brought in by somebody and is apparently a copyright infringement. As you've seen, this is what both Mr. Asa's company and Mr. Gauthier's company do as a matter of course as well.

Mr. O'Brien: Mr. Chairman, I have just a quick follow-up that I guess I might as well ask.

What is the norm internationally, and not just in the U.S.? Mr. Asa would probably have knowledge of this. What is done throughout the world? What's the most prevalent way to handle this problem that you're explaining to the committee?

Mr. Asa: I have been to Brazil, Australia, Japan and Korea, and the copyright issue is actually not much of an issue. It's never been raised.

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In the United States, as Mr. Fisk mentioned, it's voluntary. There are the Professional Photographers of America, the photo lab associations and the PMA. Of course, the PMA membership includes many photographers. I was a signatory to the agreement saying that common sense prevails.

It's slightly different from music writers - I was listening to the other members - and artists. With anything relating to the photographic...we had a general agreement among our various associations about photo-imaging. That was resolved after about eight years, I might add.

Mr. O'Brien: Thank you very much for the help with that question.

The Chairman: Thank you, Mr. Fisk, Monsieur Gauthier, and Mr. Asa.

I would like to welcome the Canadian Creators Coalition,

[Translation]

represented by Mr. André Amyot, Chair of the Copyright Committee, Professional Photographers of Canada;

[English]

Mr. Duncan Read, the executive director of the Canadian Association of Photographers and Illustrators in Communications, CAPIC; Mr. Struan Campbell-Smith, the president of CAPIC;Mr. John Harquail, secretary of the Canadian Creators Coalition; and Mr. Richard Bell, copyright liaison, PPOC.

Who wants to lead?

[Translation]

You have the floor, Mr. Amyot.

Mr. André Amyot (Chair of the Copyright Committee, Canadian Creators' Coalition, Professional Photographers of Canada): Members of the Standing Committee on Canadian Heritage, we are pleased to be here today to participate in this important process to reform Canada's copyright law as it relates to photographic creators.

I would like to begin by introducing my colleagues. They are: Mr. Struan Campbell-Smith, a fashion photographer; Mr. John Harquail, a corporate and industrial photographer; Mr. Duncan Read, an attorney who is not a photographer; and Mr. Richard Bell, also a commercial and industrial photographer. I am a commercial photographer as well.

We are here today to work with the Standing Committee on Canadian Heritage in partnership to explore the needed reforms to the Copyright Act to better protect the nearly 12,000 photographers who work everyday in communities across this country.

As creators, we thought the best way to show you who we are is to use the photographic images we create for Canadians on a daily basis. Your document contains examples of such images.

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We open and operate small entrepreneurial businesses every day in communities across Canada. We create the images that appear in magazines, newspapers, bill boards, annual reports and point-of-purchase displays that assist companies in advertising their products and telling their stories. We create the lasting images of your children and grandchildren during special events, from birth to graduation and weddings. We create the images used by each of you during your election campaigns.

Most portrait and commercial photographers pursue their profession as independent business people, either working alone or sharing a studio with a fellow professional.

As an example, 84% of photographers are part of a one- to three-person team in the studio. In 62% of these cases, the photographer works alone in his studio.

Canadian professional photographers and illustrators are presently represented by two national associations: the Professional Photographers of Canada (PPOC) and the Canadian Association of Photographers and Illustrators in Communications (CAPIC). In order to provide the committee with a collective voice, we have come together to form the Canadian Creators Coalition.

There are 12,000 full and part-time photographers across Canada. Many operate small studios, making an important contribution to Canada's economy. For example, in the purchase of film alone, full and part-time professional photographers spend between $60 and $75 million annually in Canada on this very important resource in the creative process.

According to our studies, they account for annual sales of between $500 and $600 million. Therefore, this industry has an important impact on the economy.

Collectively, the Coalition represents over 10,000 Canadian photographers, creators, illustrators and freelance writers of many disciplines. These Coalition partners, along with industry allies including the film manufacturers, the colour labs and stock photo agencies, developed in August our submission which we tabled with the committee in early September. They continue to support our efforts.

[English]

Mr. Struan Campbell-Smith (President, Canadian Association of Photographers and Illustrators in Communications (CAPIC)): For more than a decade CAPIC and PPOC members have been actively pursuing improvements to copyright legislation to better protect the rights of Canadian creators. We have made presentations to the federal government in the interest of reforming Canada's copyright legislation, with little success or measurable results.

We have presented briefs and submissions to a number of parliamentary committees and task forces, including the subcommittee of the Standing Committee on Communications and Culture in June of 1985, and more recently, the Information Highway Advisory Council. Both CAPIC and PPOC testified before the Consumer and Corporate Affairs parliamentary committee during phase one of the copyright reform process.

The time for equity in copyright protection for photographers is now. The current Copyright Act is inadequate to deal with current and future developments of intellectual property, new technologies and new media.

The photographic industry in Canada has been described as being on the bleeding edge of technological change. Over the past ten years the emergence of digital technology and the Internet have obscured the demise of typesetting, the introduction, development and maturation of electronic photo retouching, the growth of computer-based illustration, and the creation of photo CDs.

The amendments within Bill C-32, an act to amend the Copyright Act, and the view being undertaken by the Standing Committee on Canadian Heritage provide an opportunity to raise some concerns on behalf of photographers across Canada.

The coalition supports the government's ongoing efforts to reform copyright protection in Canada. As proposed, the amendments seek to provide additional rights to producers and performers of sound recordings, compensate creators for private copying of their musical works, and provide greater protection for distributors of Canadian books.

There are few measures being offered that speak to the long-standing demands from photographers for equal protection that is already afforded to other creators of cultural works. That is why we are here today. We are here to assist committee members in understanding the issues impacting our industry and the reason why it is critical that our proposed amendments for reform be adopted.

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In the Liberal Party's Creating Opportunity: The Liberal Plan for Canada, there is a recognition that at a time when globalization and the information and communications revolution are erasing national boarders, Canada needs more than ever to commit itself to cultural development.

Few would argue with the fact that Canadian photographers have contributed significantly to our cultural development in Canada. A visit to the Canadian Museum of Contemporary Photography, located a few minutes from Parliament Hill, while recalling the famous photograph of British Prime Minister Winston Churchill glaring defiantly at the photographer, will remind us of the importance of this cultural sector.

Copyright protection is recognized as critical to bolstering Canadian culture and fulfilling Canada's social and economic objectives. In announcing the proposed amendments within Bill C-32, Canadian Heritage Minister Sheila Copps stated ``these measures are about fairness and they acknowledge the rights of creators to receive recognition and remuneration for the use of their works''.

We agree with Minister Copps and the federal government and therefore have developed the following policy recommendations in an effort to meet these stated goals and the needs of photographers across Canada.

Mr. Richard Bell (Copyright Liaison, Professional Photographers of Canada): On the recommendations for copyright reform, we have included the specific amendments to Bill C-32 in the appendix of this presentation and would be pleased to speak to them during the question and answer period following these remarks. The most important of our proposed amendments are those relating to the author defined and life plus fifty years.

First, on the author defined amendment, the coalition is seeking a clearer definition of the term ``author''. Equally important and critical to the future protection for photographers is recognition within the Copyright Act that photographers be recognized as the first owners of copyright, regardless of how it is created. Present law requires the photographer who wishes to control his or her commissioned images to negotiate a contract prior to shooting the photograph or picture. Without these contracts, photographers lose control of their work; other creators do not.

The denial of basic protections afforded to other creators requires photographers to use the legal system to protect their rights at great expense. For example, in October 1995 a Toronto photographer won a judgment in the Ontario Court of Justice against a major Canadian newspaper over the use of a photograph taken in 1985 of the current Minister of Canadian Heritage, the Honourable Sheila Copps, who was dressed in leather and sitting astride a Harley Davidson motorcycle.

The newspaper used the photograph as it appeared on the cover of Saturday Night magazine in 1990 as part of a profile of her during the Liberal leadership campaign. The newspaper claimed that since the photograph had appeared on the magazine cover, the copyright was lost and the photographer was not entitled to further compensation.

In October 1995 the court awarded judgment to the photographer equivalent to his reuse fee. However, his legal fees were fifteen times in excess of the judgment he was awarded.

Had the Copyright Act provided photographers with similar protection that illustrators and writers enjoy, the fight over this commissioned work would not have occurred. An amendment within the Copyright Act recognizing photographers as the first owners of copyright would provide the needed legislative protection to guard against those who would try to use photographic images for projects, without properly compensating us for our creations.

Recognizing that economic rights are freely assignable, we understand that copyright protection could be negotiated away within a contractual agreement. However, by providing legislative protection for photographers' rights to their creations, the federal government would be providing a tool that would assist photographers to seek a level playing field with other creators who are properly compensated for the future use of their works.

On the photograph as an artistic work, as technology changes there is a need to define more clearly what a photograph is in order to protect the author of the work. The expression of a photographer's ideas should be continually recognized in the form in which they were presented. Even if there is no plate or negative, there is still a photographic image. We have recommended a specific definition for the committee to consider within the appendix of this presentation.

Under life plus fifty years, the principle of granting a term of copyright protection for any creator is to encourage creators to create while making it economically viable for the work to be purchased by members of the public.

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The Copyright Act provides a shorter period of copyright protection for photographers as compared with other artists. This means it is less viable for photographers to create and photographers must charge more for their copyright over a shorter period, which makes their works more expensive.

As I outlined earlier, a famous photograph of Winston Churchill is not afforded the same protection as works by other creators. The copyright for this work has now expired. Journalists of the day, such as Bruce Hutchison, the noted writer and editor, have the ownership of the copyright of their written account of Prime Minister Churchill's visit to Canada. With the death of Mr. Hutchison in 1992, the copyright for his work will endure until 2042.

As long as the inequity of the periods of protection of copyright continues to exist, photographers will continue to be denied needed protection for their work. This is why we are supporting Industry Canada in its efforts to establish an international treaty through the World Intellectual Property Organization. This organization will consider a number of copyright reform issues, including the application of the life plus fifty years to photographic images. We have met with Industry Canada officials to discuss our reform proposals and have agreed to support their efforts publicly at the WIPO conference in December of 1996.

About statutory damages, the Canadian Creators Coalition supports the proposed provisions of Bill C-32 on statutory damages. We believe these provisions will provide an enhanced measure of protection for all creators and a fair process for all Canadians. The five-year period of review will provide both the government and the creative community with the opportunity to test the proposed law through practical experience and education to ensure no particular sector is unfairly harmed.

Mr. John Harquail (Member, Board of Directors, Canadian Association of Photographers and Illustrators in Communications (CAPIC)): The debate on emerging copyright issues has already begun. The Information Highway Advisory Council final report and the subsequent response by the federal government clearly outline the critical copyright issues as they relate to the Internet and the emerging new technologies.

A phase three process is envisioned to address copyright issues within the information highway policy field. We have already participated in the IHAC deliberations and are committed to working with the federal government during future consultations. However, before we are able to participate with other creators in these future deliberations it is critical for photographers to achieve equal protection under the current Copyright Act.

In conclusion, we appreciate this opportunity to share our important reform proposals with the standing committee. We look forward to your questions, during which we can provide additional examples of abuses photographers have experienced over the years...which now require additional protection under Canada's copyright law. What we are seeking is not a fundamental change to the Copyright Act but protection equal to that which all other creators currently enjoy.

We have been consistent in our reform proposals for more than a decade. We seek your support for our proposed amendments. We appreciate the ongoing assistance provided to us by the officials within Industry Canada and the Department of Canadian Heritage and we look forward to working with committee members in achieving these critical reforms.

The Chairman: Mr. Amyot, Mr. Harquail, and your colleagues, they say a picture is worth a thousand words - at least, I suppose. Anyway, you've been very creative and extremely intelligent in presenting us with the tools of your trade in beautiful expressions.

I see, Mr. Harquail, you have a whole page in there, one of your photographs. Is Randy Harquail a relation?

Mr. Harquail: Randy is a distant cousin. He's sitting behind me. I would point out that Malak is also here.

The Chairman: Congratulations. It's almost a work of art. Is it copyrighted?

Mr. Harquail: If you look at the back page, sir, you will see all rights are reserved.

The Chairman: I'll invite questions from the members.

[Translation]

Mr. Leroux.

Mr. Leroux: Thank you for your eloquent, well-chosen comments.

We are very pleased to have you testify before the committee. We support your long-standing demand for recognition as authors.

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With the development of photography as artistry, photographers have made their mark in the visual arts world. There is a museum of photography in Ottawa and there are many clear indicators that photographers are creators. However, there is still work to be done and I hope the committee and the government, working together with you, will agree on a way to have you recognized as authors in this legislation.

You have made a proposal regarding recognition. I would like us to discuss it a little. You say that you have an amendment to propose. I did not see it.

The Chairman: You'll find it at the end of the booklet.

Mr. Leroux: I see. The proposed wording is found in amendment no. 3. As far as you are concerned, the words ``photographic image'' should be included in the general provisions.

[English]

Mr. Duncan Read (Executive Director, Canadian Association of Photographers and Illustrators in Communications (CAPIC)): Yes, we do feel it should be under the general provisions. By simply deleting section 13.2, we then create the situation where our works are treated on an equal level.

Mr. Leroux: Okay.

Mr. Read: The essence of the amendment is to restore to us the full ownership of the copyright under that section. Under section 10, the other part of the provision gives us parity on the life plus fifty years, and then we end up being equal in all respects under the act to all other creators.

[Translation]

Mr. Leroux: With respect to the proposed section 10(2), you suggest that section 2 of the act be amended so that the photographer is defined as the owner of the initial negative. That is clear enough. I hadn't seen it before.

In your brief, you state that collectively, you should work together to form an association of photographers. Would this make it easier for you to be recognized as authors-photographers?

Do you think you will be able to develop mechanisms to assist you in obtaining your rights as a collective society, something which doesn't exist at present? A collective society will facilitate matters. Are you prepared to join with other authors who are demanding to be recognized not only as authors, but also as negotiators? The bill provides for numerous exceptions which will prevent you from negotiating rights with certain people.

Do you agree with the other groups of authors who are demanding their rights to form collective societies, to negotiate and to obtain exemption licenses, if necessary?

Mr. Amyot: That is one of the reasons why we have come together under the umbrella of the Canadian Creators Coalition which represents writers and the like. That is indeed our objective. The two associations here today represent a good many of the photographers who are in business.

Our search for an equitable level of negotiation in the field of photography will help our association considerably to grow and to be representative. Photographers have been waiting for years for the Copyright Act to grant them some kind of right over their work.

The idea of forming a collective society was well viewed and this is why we initiated this process.

Mr. de Savoye: I have a comment, and then a question. First of all, I want to congratulate you on your very attractive submission. It's truly a work of art. I have never before seen anything so pleasant to read and to look at.

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I would like you and my colleagues to know that this year, as in years past, I have commissioned an artist in my riding to produce a photograph that I will use on my Christmas and New Year card. This year, purely by coincidence, I contacted a photographer whose name appears in your submission, Mr. Étienne Du Sablon of Saint-Casimir.

This was purely coincidental and I am surprised. Mr. Du Sablon didn't tell me that he was so well known. I asked Mr. Du Sablon in writing for the right to reproduce a certain number of copies of his photograph on my card and I brought his consent to the printer. As a result, Mr. Du Sablon will receive a royalty.

Moreover, some time ago, I also asked Mr. Du Sablon to take my own photograph. As you know, MPs have home pages on the Internet on which our pictures appear. I asked Mr. Du Sablon to take a photograph with this in mind. Take a look at my picture! Mr. Du Sablon is not only an artist, he's also a miracle worker.

Since the photograph became available on the Internet, it has been copied at various sites. I don't see how I could control this. I don't see how copyright could be invoked in this case. What do you think?

[English]

Mr. Read: It ties very much, sir, into copyright, but it ties very much into phase three of the copyright legislation. When Parliament is ready to deal with phase three, we will be coming forward with specific material and proposals, but those proposals are beyond the scope of this phase of the copyright legislation.

It's a big problem in the industry. We are working with and trying to negotiate with people in the industry to control the process, but we think we will have to come back and deal with it through legislation in the next phase.

Mr. de Savoye: The aim of my question was this. Is what we are doing right now counter to what could be done in phase three? Or could phase three be easily built up on what we're doing right now? Is there any concern we should have now to make sure we are not cornering ourselves for phase three?

Mr. Read: What we are asking you to do today puts us on a level playing field so that we can deal with phase three with the same rights and opportunities as other creators.

Mr. de Savoye: I thank you for that answer.

[Translation]

Mr. Leroux: First step: author.

[English]

Mr. Harquail: You will also discover the problems that we as creators have -

The Chairman: Ms Phinney.

I'm sorry, Mr. Harquail.

Mr. Harquail: I was just going to mention, sir, that you have discovered one of the major problems that we as creators have, especially in regard to the Internet. It's easy access and easy rip-off.

Mr. de Savoye: Thank you.

The Chairman: Mr. Arseneault, then Ms Phinney.

Mr. Arseneault: Thank you, Mr. Chairman.

I would also like to congratulate the presenters for the imaginative way of presenting their brief. I note that they have included photos from each member's area.

Some hon. members: Oh, oh!

Mr. Arseneault: In my area, I know the two individual Studio 2000s quite well, and I can assure you that they are excellent ambassadors for their profession. In fact, they contribute many hours of volunteer work by using their profession for activities such as the Bon Ami Festival in my home town.

The question I have has to do with your brief and the idea of author defined - I guess that goes right to the major thrust of your brief - that photographers should be recognized as the first owners. As it is now, someone takes photos for an individual and the individual who has commissioned those photos is the actual owner, I assume.

You want to reverse that. In other words, if someone is getting married on the weekend and a law was passed with the changes that you want, the photographer who is hired would own the photos of that wedding. Am I reading you right?

.1320

[Translation]

Mr. Amyot: I'm sorry, Mr. Arseneault. He would not be the owner of the photographs; he would be the owner of the photographic image. The photographs themselves, if we're talking about a product, are the property of the client, but the creative right would be owned by the photographer, not by the client.

Mr. Arseneault: And he wouldn't need the client's permission to use them in another capacity?

Mr. Amyot: I can give you an example.

Mr. Arseneault: I'm thinking about advertisements.

Mr. Amyot: That's correct. In a contract situation where the photographer should have copyright... We can imagine the ideal situation. The photographer puts his heart and soul into creating photographs and bases his fee on the fact that he is the owner of the photographs. He has a contract with a client stating that for a specific sum of money, he will provide a particular service and product.

Increasingly, photographers today are creating images and presenting proofs to the client. The client then makes a choice. Often, the client might say: ``Listen, I can't decide this evening. Can I bring the photographs home to make a more judicious choice?'' ``No problem'', answers the photographer, who wants to be accommodating and serve his client as well as he can.

Occasionally - and this is a concern of ours - clients do not come back. They take the proofs and have copies made at a local photocopy shop. You all know the quality of the images that these machines can produce today. Clients make up their own album or obtain photographs for the entire family.

Consequently, photographers find themselves in a difficult economic situation, not only because the clients have not kept their end of the bargain, but also because in a majority of cases, there is still an outstanding balance. When the photographer telephones the client to ask him to place an order, the usual hemming and hawing occurs and ultimately, no order is placed.

I can give you a very clear example in response to your question, Mr. Arseneault. A Granby photographer called me recently to tell me about a local framer who had called to advise her that he often received photographs from her clients. He knew that she was the photographer because he recognized her style. People were not showing up with photographs, but rather with photocopies to be framed. These photocopies were produced in local photocopying shops. When questioned about the copyright, they answered that the people operating the photocopying business had told them that there was no copyright over photographs and not to worry about that.

The photographer checked out the situation herself. She called the photocopying business posing as a consumer and asked the following question: ``If I have a photograph carrying a copyright symbol, can you still go ahead and copy it for me?'' She received the following answer: ``Madam, there is no problem. Don't worry about that. We'll make you as many copies as you like.'' This occurs frequently.

Mr. Arseneault: What happens if you take a photograph of me and in two years' time, you want to use it for publicity purposes? Do I have the right to refuse or is the decision up to you?

Mr. Amyot: If I use your photograph for publicity purposes...? Yes, you absolutely have the right to refuse. We are not entitled to do whatever we want with the photograph.

Mr. Arseneault: Then you need my permission?

Mr. Amyot: Absolutely. Moreover, we strongly encourage our members to arrange contracts with their clients in the event they want to use the photograph as part of an exhibit. They can negotiate with their client. They can ask: ``Do you have any objections to my using the photograph of your family or of your wedding in my storefront?'' In cases like this, the parties can work out some kind of arrangement.

Mr. Arseneault: Do you have the right to sell the rights to someone else?

.1325

Mr. Amyot: I can tell you that personally...

Mr. Arseneault: Without my permission.

Mr. Amyot: I wouldn't act without your permission.

Mr. Arseneault: I understand, but would you have the right to do it? The proposal that you wish to make will give you certain rights over the photograph.

Can you sell this right to someone else without my permission?

[English]

Mr. Harquail: Mr. Arseneault, I would just like to clarify this. Are you speaking about personal portrait photographs, say, of yourself?

Mr. Arseneault: For any type of photograph you take of an individual - not of a scene, of an individual - you now want photographers to be recognized as the first owners.

Mr. Harquail: The first owners of the copyright.

Mr. Arseneault: So you own it. Now maybe a company approaches you and they want that photo. For instance, you have a photo here of a young fellow from Edmonton. Heinz comes by and says ``I saw that photo in your window''. You had permission to use it in your window, and this is maybe in three or four years' time. They say, ``Would you mind selling me the rights to that photo so I could use it to promote Heinz foods?''

Mr. Harquail: Industry practice would dictate.

Mr. Arseneault: Not practice; by the law you propose, the changes you want made, would that be permitted? That's what I want to know.

Mr. Read: No, sir, by law it would not be permitted.

Mr. Arseneault: At present not.

Mr. Read: At present not, and not even by the changes we propose, because there is a provision in the law about using your image, your face. We can't use it without your permission.

Mr. Arseneault: Can you take a photo without permission and use it?

Mr. Read: No.

Mr. Arseneault: Not of a crowd?

Mr. Read: In general no, you cannot. There's a recent Quebec Court of Appeal decision on a case called Duclos that has reaffirmed the principle that you cannot take pictures of a crowd and use them where the members of the crowd are clearly recognizable. If we make a crowd shot that shows 15,000 or 20,000 people in the Molson Centre, where nobody can be recognized, that's one thing, but the shot of a section of the crowd that is clearly showing and invading the privacy of people, as with the gentleman who is there with his mistress instead of his wife, causing scandal by the thing being published - that you cannot do.

Mr. Arseneault: That is not my concern. It's the privacy part of the -

Mr. Read: This would not change that part of the law.

Mr. Harquail: You have the right to control your own likeness, regardless of copyright -

The Chairman: Ms Phinney.

Ms Phinney: You seem to have been left out of the bill. In a way we can understand this, because you're a new art and you developed long after people who were painting pictures and writing books. But there's something I don't understand. You shouldn't have been left out even the last few years you have been, it would appear. The part about life plus fifty years....

The Copyright Act provides a shorter period of copyright protection for photographers as compared with other artists. I don't understand how that would happen. Maybe you could explain how that could happen. Why should you have a shorter period of copyright protection than any other artist? The whole principle of almost being left out of the bill I can understand, because you are a new arts group, but this one was specifically put in there with you having a shorter time.

Mr. Harquail: If I remember correctly, this was formed in 1924, when photography was a relatively new occupation, shall I say. For a long time photography was viewed as a mechanical device to reproduce artistic things. If you had ``artistic talent'' and could paint or sketch, you could do a beautiful landscape. If you didn't have that talent, you could take a mechanical device and recreate that landscape. The way I understand it, historically photography was not accorded the same status as an art as it currently enjoys in the late 1990s.

That's the only thing I can attribute that to. I don't think it was done on purpose. I think at the time it was regarded as a non-art.

Ms Phinney: If they gave you any kind of copyright protection, which they did, why did they make it shorter? This is what I don't understand. Do you have any idea why it was done like that?

Mr. Harquail: I have no idea.

Ms Phinney: Did you have a comment?

Mr. Read: One comment. It's simply that times were different when the people sat around in this room seventy years ago, reviewing the copyright law clause by clause. Times were different, and perceptions were different about how long photography would last and how important it would be. From all the research we've been able to do, that's all we can find as a rationale for it.

.1330

[Translation]

The Chairman: Mr. Bélanger.

Mr. Bélanger: I would like to speak briefly about the proposed amendment no. 2 which relates to section 13(2). You have put forward three different amendment proposals. In option A, you would delete the subsection, which would likely cause the most problems. In option B, you are saying that the photographer is essentially the owner of the copyright. In option C, you are saying that the copyright could be owned by the photographer until the time he has paid for his work. Is that correct? Are you following me, Mr. Amyot?

Mr. Amyot: Yes.

Mr. Bélanger: I would like us to focus mainly on option C. If we were to insert the words ``and the consideration was paid'', when you were asked as professionals to take photographs of any kind, you would keep the copyright until you were paid for your work. Then, you would basically sell the copyright. Would that accurately describe the situation?

[English]

Mr. Read: No. The relationship is fairly simple. That part of the thing is solely focused on the economic realities of the present time. I'll use the specific recent example of a company called Consumers Distributing.

When Consumers Distributing entered into bankruptcy, the photographer who shot their catalogue for them phoned me and said he had just sent them $177,000 worth of work in commissioned photographs. It looked like he was not going to get paid, and he wondered if they still owned the copyright on all of his photos. The short answer at the present time is yes. Under the present law not only will he not get paid, but the trustee in bankruptcy owns the copyright on the photos. However, if the catalogue had been illustrated, the copyright of the work would still belong to the illustrator.

Mr. Bélanger: Okay, I want to make sure I understand this. Adding these words would make sure that for commissioned work, the photographer - the professional - retains the copyright until he or she is paid.

Mr. Read: Yes.

Mr. Bélanger: At that point copyright switches to the person who commissioned the work. Is that correct?

Mr. Read: That is correct, if there has been no contract to the contrary.

Mr. Bélanger: Fair enough. I just wanted to be clear on that. On the face of it, I think it's a rather reasonable request.

Mr. Read: It is a reasonable request, but I must, as a sort of supplementary response, indicate that it's clearly our third choice.

Mr. Bélanger: I understand that, but you put it in there.

Mr. Read: We clearly put it in there because we recognize it as an existing commercial problem. But I don't want to leave the impression with you, sir, that if we get choice number three we would be as happy as if we get choice number two or choice number one.

Mr. Bélanger: I think that's clear.

[Translation]

Thank you, sir.

[English]

Mr. Bell: If I may, I'd like to answer Ms Phinney's question about 1924 and why a photographer was treated a little differently then. From my historical understanding of it, photographers were primarily chemists or pharmacists, people like that, because they actually had to make their own plates. They had to deal with chemical things. They may have been treated a little differently when copyright was brought up, and they may not have even been at the table and been considered very much. That may be more of the reason why there were some omissions in those days.

.1335

The Chairman: Mr. Read.

Mr. Read: Mr. Chairman, very quickly, I wanted to allude to one area. Two other lawyers have appeared and talked about statutory damages. You've chosen not to talk with us about statutory damages. I simply want to suggest two things.

We support the provisions of the bill. We think they are practical. I would also suggest thatMr. Bélanger's comments about consulting the legal people in Justice about the legal interpretations are very sound. I would be content to ride with whatever opinions Justice gives you on that.

Mr. Bélanger: That's more than some of us are willing to do.

Mr. Read: It's with this caveat, sir: that when you're talking about legal actions, what was not addressed by the other parties this morning is the practical point of view. If one of these people wants to launch a lawsuit in terms of innocent infringement or any other thing, the first thing the lawyer will say is that it will take about three years, and he will need a retainer of $4,000 or $5,000 before starting the process. Significant dollars have to be involved before the process is triggered. Because of the fiscal realties of the marketplace there is not going to be an inundation of legal actions.

The Chairman: Mr. Read, so that there should be no misunderstanding, we have notedMr. Bélanger's request. I don't think at this time the committee is going to get a legal opinion as such from the Department of Justice. We have two very expert copyright lawyers here assisting the committee. They have taken note of the request and they'll be looking into it and speaking to other copyright lawyers and reporting to the committee. I don't think at this time we're going to look for formal legal opinions before a bill comes before the House. I would like to get more guidance on that before this happens. But certainly we've made note of it and we're going to pursue the question.

Mr. Read: Mr. Chairman, I certainly do not intend to debate. I was picking up onMr. Bélanger's -

The Chairman: Oh, no.

Mr. Read: - comment. I recognize that it was an oversight on my part in my comments. I recognize the committee has competent counsel, and I would trust their responses.

The Chairman: I think we understand each other.

Just before you leave, there's one brief question I would like to ask.

When I have a collection of paintings and I buy a painting, the painter, if he wants to reproduce it, would have to ask my permission because there's no duplicate. He has made only one. In the case of a photographer the only difference is that you might have a negative with you which you keep and can reproduce. Isn't the element of control much more difficult in the realm of photography than in other realms such as painting? Is that not a very tricky element? How do you control the fact that despite damages or something, somebody who has given you a commission to have a family photograph or some private works.... If a photographer, mistakenly or in one way or another, uses it for advertising or some other way, how do you control this?

Mr. Harquail: To use your example, if the owner of the work were you and it was a portrait of your family, you would have the same recourse as under the current law. If there were no agreement to the contrary beforehand and you had commissioned the work, you would be the first owner of the copyright. You would have all the remedies available to copyright owners available to you in order to pursue what you would perceive to be the damage done to you by the unauthorized use of that photograph. That's the way I would interpret it.

The Chairman: Thank you very much. Your presentation was extremely inspiring and stimulating. I think you've found out from the questions of the members that there's a lot of sympathy for your case here.

The meeting is adjourned.

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