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Time to Pay the Copyright Piper? A Digital Media Platform Copyright Reckoning for Journalists is Upon Us!

February 19, 2021

By François Larose, Naomi Zener and Tamara Céline Winegust

On February 17, 2021, Senator Claude Carignan introduced a private members Bill in the Canadian Senate. The Bill, S-225 An Act to amend the Copyright Act (remuneration for journalistic works), proposes amendments to the Copyright Act (the “Act”) that would provide remuneration for Canadian copyright owners of journalistic works that are reproduced or published by digital platforms. This new “remuneration right” would apply regardless of whether or not the owner/controller of the digital platform instructed the reproduction or republication. This comes on the heels of Australia’s introduction of a similar law. The backlash from digital platforms to that law has been swift. Google has threatened to shut down its search engine in the country and, this week, Facebook blocked users in Australia from accessing and sharing news articles on their platform.

The policy objective behind the Canadian Bill is to “re-establish” a “certain equilibrium … by creating a right to remuneration for journalistic works and, thus, a right to royalties for those works” (as provided in the Bill’s Preamble) —i.e., to recognize that the current age is one of possible infinite reproduction and provide a means to ensure copyright owners of journalistic works that are “literary works” or “artistic works” (i.e., written articles or photo journalism) are compensated when their work is copied and disseminated. The concern that the rapid and unchecked dissemination of journalistic works will lead to improper compensation for their creators (or owners) is not new—over 100 years ago, the United States Supreme Court grappled with essentially similar issues in International News Service v Associated Press (248 US 215 (1918)). That case involved two competing newswire services during World War One. After being barred from the war’s front lines, the defendant, International News Service (INS), began reviewing and rewriting the plaintiff’s, Associated Press’s (AP), news bulletin reports to publish in their own newspapers before AP could do so in AP’s newspapers. The US Supreme Court recognized a quasi-property right in such “hot news”—though noted there was no copyright in the underlying facts—and determined INS’s behaviour amounted to “misappropriation” of this right.      

Today, the concern stems not from misappropriation of the underlying news story, but of the piece of journalism itself. In a time when the internet and social media has facilitated unchecked access to and sharing of news stories, advertising revenue for news publishers has plummeted. By contrast, social media platforms facilitating such sharing have reaped the benefits of user activity to generate their own ad revenue.  

The Bill seeks to rectify the loss of revenue experienced by Canadian journalism outlets. It proposes adding new sections 26.1–26.4 to the Act, which establish a right of remuneration to copyright holders of journalistic works (defined in the amendments as literary or artistic works, which would include written and photographic journalistic works) where the journalistic work or any substantial part thereof is reproduced or published. It provides for the payment of royalties to a collective society authorized to collect them on the copyright holders’ behalf.

Of note, this right to remuneration is limited to a two-year period that ends after the end of the calendar year in which the work is first published. This short time limited right appears to be designed to address the same “hot news” problem considered by the US Supreme Court—that the value of the journalistic work is often tied to its recency. However, the approach proposed in the Bill is problematic for two reasons. First, many copyrighted works, not only journalistic works, are  routinely reproduced and published on digital platforms—for example, songs, photographs, paintings, and movie clips are posted and shared daily by social media and Internet users and digital platforms themselves. In most instances, the “age” of the work is immaterial—and a news report may still be relevant after the initial two-year protection has lapsed.  Second, restricting the right to be compensated for reproduction of journalistic works to a limited time during the term of protection for that work creates a distinction between works that doesn’t currently exist under the Act. Moreover, no tariffs issued by the Copyright Board, the regulatory body that establishes royalties to be paid for the use of copyrighted works, uses “recency of creation” as a metric for value for any other type of copyright protected work. While older journalistic works may be seen as not as valuable for republication purposes, the Act doesn’t make such distinctions. The introduction of one could create a precedent for such differentiations to be made as between other works—for example, computer programs. Relatedly, this “different treatment” of journalistic works would add a new layer of complexity for users. It may not always be clear when the journalistic work was actually first “published”—particularly for photographs, which may be undated—, and thus, the start of the two-year remuneration period.   

A large potential gap in the legislation stems from its definition of “journalistic work” to be only “literary” or “artistic” work. This would seem to exclude works of video journalism, which, although they may have literary or artistic elements, would more likely be characterized as a “dramatic work”. Such gap is noteworthy as many digital news platforms now publish sharable videos (or make videos of news broadcasts available online) as part of their news reporting.

Another missing element, in view of the Bill’s stated purpose, is that it explicitly excludes the right to remuneration for the reproduction or publication of hyperlinks—which is how most news stories are shared online. Under the Bill, the remuneration right only “kicks in” when the journalistic work is reproduced or published in whole or in part on a digital platform. Practically, this is something that social media platforms and Internet search engines don’t do in relation to written journalistic works. Instead, reproduction or publication typically involves hyperlinking to the article, or hyperlinking with a pull-quote from the article. (The case is slightly different for artistic works, like photographs, which usually appear alongside or below the reproduced/published hyperlink).

Moreover, the proposed model shifts the burden for remuneration from the actual user of the copyright work—i.e., the social media user—to the platform that facilitates the use. For example, a user that republishes a news article and posts it to their individual page, would trigger royalty payments by the social media platform under the Bill even though that platform did not direct the reproduction or publication. This is not an entirely novel approach—universities pay royalties to rights holders for the copying activities of their students/patrons. However, under the university model, the cost is usually passed on to the user in the form of photocopy or student fees. Unlike universities, the largest digital platforms do not charge fees for access or use. Instead, they gather and trade on their users’ data to generate advertising revenue. Should the Bill pass, such digital platforms may need to reconsider their revenue models. They may need to begin charging for certain types of user activities (which they already do in other areas) or simply accept that—like other industries that rely heavily on reproduction or performance of copyrighted works—compensating copyright owners is simply part of the cost of doing business.     

Another potential issue is how the Bill could affect ownership of and compensation for freelance work. As drafted, the Bill deems a Canadian journalism organization to “own the copyright” of a work when it is licensed to reproduce or republish that work by the journalist that owns the copyright. This is problematic for several reasons. First, it essentially negates the purpose of freelance work—to retain the ownership of the work created. Second, the language of the Bill leaves it unclear whether journalists that independently publish—i.e., those that do not license their work to a Canadian journalism organization—could seek remuneration. Third, where a license is granted to a Canadian journalism organization, the draft language is extremely broad.

Furthermore, this subsection (s. 26.3(4)) does not differentiate between exclusive and non-exclusive licenses, and does not limit the license to being in respect of digital platforms only. This could be problematic in the context of licenses that do not cover digital publication, since the Bill may be seen as effectively giving a Canadian journalism organization rights to compensation for all uses on any platform or in any media without restriction, even if not contemplated in the license. Similarly, for non-exclusive licenses that cover digital platform publication, the draft language seems to erase the fact that the freelancer retains their right to license their journalistic work to others—including for reproduction/publication on digital platforms—and may want to be compensated directly instead of through its licensee. As drafted, the language of the Bill also fails to consider employees of journalism publishers whose employment agreements provide for their retention of copyright in their journalistic works (as contemplated by Section 13(3) of the Act)—i.e., their employer would receive the compensation, contrary to the intent of the employment agreement.

Since the Bill has only passed first reading, these issues may be resolved in a later iteration. Moreover, the Canadian government has also announced its intent to introduce similar legislation that would force digital platforms to pay Canadian media companies for their content. This government supported bill may well address some of the issues mentioned herein, especially considering that private members bills seldom become law. In any event, no doubt freelancers may seek changes to the legislation. Moreover, like in Australia, large digital platforms, like Google and Facebook, are anticipated to likely oppose the passing of this proposed Bill or a similar bill to be introduced by the Federal government. It remains to be seen, however, whether other stakeholders, and the general public, will support this particular approach to journalistic compensation as a remedy to the loss of revenue by Canadian journalism organizations in the face of digital access and distribution. Keep your eyes peeled as this Bill progresses through the Senate or similar legislation is tabled before the Canadian Parliament.

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Author(s):

François Larose François Larose
B.A.A., LL.L., LL.M.
Partner
514.871.2109  email François Larose
Naomi Zener Naomi Zener
B.A., J.D., LL.M.
Counsel
416.364.1650  email Naomi Zener
Tamara Céline Winegust Tamara Céline Winegust
B.F.A., J.D.
Associate
416.957.1651  email Tamara Céline Winegust