Thoughts on Canada's Committee Study on Counterfeiting and Piracy of Intellectual Property

By Russell McOrmond 5/9/07

While I don't have the time availability at the moment to compose a formal submission to the Standing Committee on Industry, Science and Technology (INDU) for their study on Counterfeiting and Piracy of Intellectual Property, I did submit the following as an email to the Clerk of the Committee. I asked him to forward to committee members.

Dear members of the Standing Committee on Industry, Science and Technology,


Russell McOrmond

I am a self employed technology consultant and volunteer policy coordinator for CLUE: Canada's Association for Free/Libre and Open Source Software. I also coordinate two petitions from Canadians to the house of common, one focused on protecting IT property rights from proposed policy changes that will greatly harm the interests of software authors and the owners of information technology.

I am concerned about the advise you are receiving in your study on Counterfeiting and Piracy of Intellectual Property. I have been told about witnesses who seem to be deliberately confusing counterfeiting and the various different laws that are all too often lumped under the name "Intellectual Property". Each has very different types of problems that they try to deal with, as well as very different types of activities and people that they regulate. Lumping them together is like lumping jaywalking, grand theft auto, and the September 11 attacks together and calling them "transportation related problems".

A simple dictionary definition of something being counterfeit is "made in imitation so as to be passed off fraudulently or deceptively as genuine; not genuine; forged". People who are sharing music without permission are not trying to be deceptive in any way. In fact, there are many proposals to legalize and monetize the sharing of music in much the same way that cable television and commercial radio was legalized and monetized. I see no way that these two very different concepts can be claimed to be the same, or claimed to have related solutions.

Statistics

The statistics that are presented to you are only rough estimates being used to try to scare MPs into accepting the lobbiest's solutions. As someone from the software sector I will focus on the statistics from the Business Software Alliance (BSA) and their Canadian arm CAAST.

For their so-called "Piracy Statistics" they make use of a fairly simple methodology. They count the number of computers which are shipped and then "estimate" the demand for their members software. They then count the number of boxes of software, subtract the two, and declare the difference as software copyright infringement.

I am a author, user, and commercial support person for Free/Libre and Open Source Software (FLOSS). All of my machines, and the machines of my customers, have been "estimated" to have a demand for BSA member software, and yet we use competing software. The only piece of BSA member software I have on any computer I own is the Adobe Flash player for Linux, and it is distributed royalty-free by Adobe and thus should never count in their statistics as infringement.

The reality is that the BSA has no way to accurately differentiate between computer owners who are infringing software copyright from those who have chosen to switch to software developed using competing methods of production, distribution and funding.

Competitive Threat

In March I heard of a speech from Microsoft business group president Jeff Raikes who in San Francisto said, "If they're going to pirate somebody, we want it to be us rather than somebody else". I believe the hierarchy is likely similar to the following.

a) They would most like people to use and pay for Microsoft software

b) Less preferable is that people use Microsoft software but not pay for it

c) The least desirable for Microsoft is that people switch to competing software, especially Free/Libre and Open Source Software which uses royalty-free alternative methods of creation, distribution and funding.

Given the stated worst case scenario for BSA member companies like Microsoft is that people switch to competing software, can they or people they have hired be relied upon to "estimate the demand" for their software? This estimation forms the core of all so-called software piracy statistics, and it is these numbers which are often used to try to advance changes in the law which would favour these companies against their legitimate competition.

Opposed to copyright infringement

I need to be clear: I am not in favour of copyright infringement. I believe that people infringing BSA member software harms the competitive Free/Libre and Open Source Software sector more than it does BSA members. One of the major competitive advantages we have over BSA members is that we don't charge royalty fees for our software, but use alternative methods of production such as peer production. When people infringe BSA member copyright they are wiping out one of our competitive advantages. and discourages people from paying the one-time up-front or ongoing support fees that we rely on for our businesses.

We need to adopt ways of reducing software and other copyright infringement without at the same time reducing competition. As a growing number of less industrialized countries are realizing, moving towards FLOSS is itself a way to reduce software copyright infringement by reducing the greatest motivation for infringement: the payment of
per-copy royalty fees.

USTR Special 301 report

I would like to talk about the USTR's Special 301 report. This is not a report documenting countries who are not adequately protecting the moral and material interests of authors and inventors. In some cases it relates to the fact that we have stronger privacy laws with PIPEDA, the most critical way in which lawsuits against unauthorized P2P sharing of music has been different between our countries.

I wrote a more detailed response to the report in an article on my BLOG, which I would recommend members of the committee read.

USTR 2007 Special 301 Report: accepting the good while rejecting the bad. http://www.digital-copyright.ca/node/3910

I believe this report is a form of protectionism aimed at protecting specific business models dominated by US firms. The only outcome I can see from blindly following the advise from the US would be an increase our trade deficit on intangibles with the United States. We already have a situation where over half the value of all royalty and license fees paid in 2002 were received by the United States (See: http://www.worldmapper.org/display.php?selected=168 ), with the specific rules which the US government is proposing aimed at protecting this trade surplus.

We need rules which protect the interests of authors and inventors, not rules which increase our trade deficit by protecting the incumbent business models of foreign companies.

Anti-circumvention laws circumventing other rights

The issue that brought me into the Copyright debate was the attack on the rights of software authors and information technology owners we see in the 1996 WIPO treaties. There is a thinking in these treaties that originated in the early 1990's in the United States that goes as follows: If new communications technologies can be abused to infringe copyright, then private citizens should not be allowed to own and control these new technologies.

I strongly disagree with this thinking. I believe that private citizens must be allowed to own and control their own communications technology. I believe the benefits to enabling private citizens to fully participate in cultural and political life far outweighs the harm to incumbent content industries from competition or copyright infringement.

I am specifically opposed to the legalization and legal protection of specific controversial uses of technical protection measures by copyright holders and hardware manufactures.

a) The expansion of copyright to allow copyright holders the legally protected right to dictate brands of software and/or hardware on users of their works

b) Legally protecting hardware manufacturers who wish to impose software choices on hardware owners

Before we can talk about any benefits of copyright to software authors, software authors need hardware owners to have the right to make their own software choices. If hardware owners have software choices imposed on them, by either the content industry or hardware manufacturers, then they have no possibility that they can choose the software of any specific software author. A core property right for technology should be the right for the owner to decide what software rules the technology obey.

See article: Protecting property rights in a digital world http://www.flora.ca/documents/digital-ownership.html

Controversial use of TPMs also ineffective

Anyone with a computer security will tell MPs that using digital locks and keys to impose software choices is technologically ineffective. In order to display the content to audiences the keys must be embedded within hardware/software in a persons home, and it will always be possible for a technically competent person to extract those keys. Once content is decrypted it can be shared with less technical people in the same way that it would be if the digital locks never existed. The reality is that these abuses of digital locks only affect law abiding citizens by circumventing their rights, while at the same time not impacting any copyright infringer.

To summarize: having Canada ratify the 1996 WIPO treaties with the anti-circumvention component would be a matter of "Robbing Peter to pay Paul, and then never paying Paul". Not only are anti-circumvention laws harmful to the interests of the majority of software authors and technology owners, but there is no evidence that they benefit the incumbent content industry.

I live and work in Ottawa, and would be willing to meet with MPs to discuss this issue.

Russell McOrmond
http://www.flora.ca/
http://www.cluecan.ca/policy

Russell McOrmond, the editor of Digital Copyright Canada, is an independent author (software and non-software) who uses modern business models and licensing (Free/Libre and Open Source Software, Creative Commons).

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