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[dvd-discuss] Exceprts from Key case restores copyright balance



 A.  The Present Balance Between the Economic Interest of the Copyright Holder
and
      the Proprietary Interest of the Purchasing Public Would be Significantly
Altered
      to the Public's Detriment

30   The Copyright Act is usually presented as a balance between promoting the
public interest in the encouragement and dissemination of works of the arts and
intellect and obtaining a just reward for the creator (or, more accurately, to
prevent someone other than the creator from appropriating whatever benefits may
be generated).  The elements of this balance are discussed in more detail by
J. S. McKeown, Fox Canadian Law of Copyright and Industrial Designs (3rd ed.
2000), at p. 3.  See also D. Vaver, Intellectual Property Law:  Copyright,
Patents, Trade-marks (1997), at p. 22.  This is not new.  As early as 1769 it
was said by an English judge:

   It is wise in any state, to encourage letters, and the painful researches of
learned men.  The easiest and most equal way of doing it, is, by securing to
them the property of their own works....

   He who engages in a laborious work, (such, for instance, as Johnson's
Dictionary,) which may employ his whole life, will do it with more spirit, if,
besides his own glory, he thinks it may be a provision for his family.
.
.
.

31   The proper balance among these and other public policy objectives lies not
only in recognizing the creator's rights but in giving due weight to their
limited nature.  In crassly economic terms it would be as inefficient to
overcompensate artists and authors for the right of reproduction as it would be
self-defeating to undercompensate them.  Once an authorized copy of a work is
sold to a member of the public, it is generally for the purchaser, not the
author, to determine what happens to it.

32   Excessive control by holders of copyrights and other forms of intellectual
property may unduly limit the ability of the public domain to incorporate and
embellish creative innovation in the long-term interests of society as a whole,
or create practical obstacles to proper utilization.  This is reflected in the
exceptions to copyright infringement enumerated in ss. 29 to 32.2, which seek 
to
protect the public domain in traditional ways such as fair dealing for the
purpose of criticism or review and to add new protections to reflect new
technology, such as limited computer program reproduction and "ephemeral
recordings" in connection with live performances.

33   This case demonstrates the basic economic conflict between the holder of
the intellectual property in a work and the owner of the tangible property that
embodies the copyrighted expressions.
.
.
.
.
39   The Quebec Court of Appeal adopted a more restricted view than does my
colleague, suggesting that the violation of economic rights lay not simply in
"fixation" but in moving the ink film from a paper substrate to a substrate of 
a
more costly material, namely canvas ([2000] J.Q. No. 412 (QL), paras. 18-23). 
(This was thought to place the respondent's work for resale in a different
market niche, as discussed below.)  This too, in my view, goes too far.  If the
"new" substrate material were made of a smooth sheet of vellum (calf) or
papyrus, the result would have the identical appearance to the original paper. 
How has the copyright holder's interest in the "intellectual" property been
harmed by such a change in the material composition of the backing?  Does the
mischief only emerge in appearances, i.e., if the new piece of paper has a
textured finish, or is pebbled to look like canvas?  No one would deny the 
world
of difference between the original artistic work and a mechanically produced
copy, but we are talking here about moving the same physical layer of inks
around different blank substrates.

40   To allow artists to regulate what can or cannot be done with posters in
this way would have the public searching for elusive distinctions.  There would
be no even reasonably "bright line" between infringing and non-infringing
conduct, a deficiency that would be particularly mischievous when dealing with
pre-judgment seizure at the instance of a plaintiff without judicial
supervision.
.
.
.
42   The historical scope of the notion of "reproduction" under the Copyright
Act should be kept in mind.  As one would expect from the very word 
"copyright",
"reproduction" is usually defined as the act of producing additional or new
copies of the work in any material form.  Multiplication of the copies would be
a necessary consequence of this physical concept of "reproduction".  In Massie 
&
Renwick Ltd. v. Underwriters' Survey Bureau Ltd., [1940] S.C.R. 218, at p. 227,
Duff C.J. viewed copyright law as essentially about protecting the right to
multiply copies of a work:
.
.
.
47   This is not to say that the Act recognizes only literal physical,
mechanical reproduction.  The legal concept has broadened over time to 
recognize
what might be called metaphorical copying (transformation to another medium,
e.g. books to films).  It is recognized that technologies have evolved by which
expression could be reproduced in ways undreamt of in earlier periods, such as
evanescent and "virtual" copies in electronic formats.  Transformation of an
artistic work from two dimensions to three dimensions, or vice versa, will
infringe copyright even though the physical reproduction of the original
expression of that work has not been mechanically copied.  Equally, 
translations
or transformations into another medium may be infringements of economic rights. 

Nevertheless, the important evolution of legal concepts in the field of
copyright is not engaged by the facts here.  This is a case of literal 
physical,
mechanical transfer in which no multiplication (metaphorical or otherwise) 
takes
place.

.
.
.
.
55   The position taken by the Quebec Court of Appeal, nevertheless, echoes the
debate in some U.S. courts about the proper allocation of compensation where a
new way has been found to exploit the work in a market or market niche perhaps
not anticipated by the creator of the underlying work, who thus may not have
captured the highest price to be charged for the sale or use of that underlying
work:  see Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th
Cir. 1988); Amy B. Cohen, "When Does a Work Infringe the Derivative Works Right
of a Copyright Owner?" (1999), 17 Cardozo Arts & Ent. L.J. 623, at p. 654.
.
.
.
72   The poster art industry in the United States has been actively litigating
the broad statutory "derivative works" provision against owners of the material
objects that embody the copyrighted work.  In Mirage Editions, Inc., supra, for
example, the copyrighted image was applied to a ceramic tile.  The 9th Circuit
Court of Appeals ruled that the ceramic was an infringing "new" derivative 
work,
a conclusion expressly rejected by the 7th Circuit Court of Appeals in Lee v.
A.R.T. Co., 125 F.3d 580 (7th Cir. 1997), which concluded that the fixation did
not infringe the copyright.  Easterbrook J., for the Seventh Circuit, reasoned
that "an alteration that includes (or consumes) the original lacks economic
significance" (125F. 3d, at p. 581).  He further found that there was no
distinction between framing works of art, an acceptable practice under 
copyright
law, and more permanent methods of display, such as re-fixing the art work on
tile.  The 9th Circuit has taken a different view:  see Mirage Editions Inc.,
supra.  These cases and their progeny typically turn on conflicting
interpretations of the words "recast, transformed or adapted" in the U.S.
statutory definition, but even under that more expansive U.S. definition of
"derivative works" the Seventh Circuit concluded that permanently mounting the
artwork on tile did not "recast, transform, or adapt" the work.  If these words
appeared in our Act, there would presumably be a similar battle of statutory
construction here, with the respondent saying the work was "recast, transformed
or adapted", and the appellants denying that characterization, but the conflict
between the scope of the copyright holders' economic rights to control the end
uses of his work and the purchasers' rights as owners of the material object is
the same.  In the absence of the "recast, transformed or adapted" language (or
equivalent) in our Act, however, the respondent is unable to rely on it as an
additional basis of copyright liability.  As Estey J. noted in Compo Co., 
supra,
at p. 367:

   ... United States court decisions, even where the factual situations are
similar, must be scrutinized very carefully because of some fundamental
differences in copyright concepts which have been adopted in the legislation of
that country.