Ottawa's MP3 fee quashed
By JACQUIE McNISH AND RICHARD BLOOM
From Friday's Globe and Mail
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Consumers may soon be paying less for MP3 players after the Federal Court of Appeal ruled that special copyright levies applied to digital music players are not legal.
A 71-page decision by Mr. Justice Marc Noël found that although the Copyright Board of Canada was seeking to protect music writers and performers from the harm caused by digital copying of music when it imposed the MP3 levies last December, the board did not have the legislative authority to do so.
Canada's Copyright Act gives the federal board the authority to apply levies on blank media such as compact discs and audio cassettes. But the wording of the act has not kept up with the new technology of MP3 players, represented by the wildly popular iPod, which use an embedded memory rather than discs or cassettes, to store digital copies of songs.
As desirable as bringing such devices within the ambit of [the Act] might seem, the authority for doing so still has to be found in the Act, Judge Noël said in his decision.
While the decision is expected to lower the price of MP3 players, it will erode the stream of revenues to musicians at a time of widespread digital pirating.
It's a significant setback to getting remuneration for private copying, said Paul Audley, a consultant to the Canadian Private Copying Collective. The collective is a non-profit agency that collects and distributes private copying royalties to musicians, songwriters and record companies.
This year, MP3 sales are expected to generate $5-million of the $25- to $30-million in levies collected for musicians. The levies range from as little as $2 to $25 per device.
The biggest charge is paid by consumers of the iPods, which have among the largest capacity to store music. In Canada, the $400 price tag for an iPod includes a $25 copyright levy.
As a result of Thursday's decision, Mr. Audley said the levy can no longer be collected. Representatives for Apple and other MP3 makers could not be reached to comment on whether a price decrease is in the works.
It is abundantly clear that this is not the last word on the issues, said Michael Geist, a University of Ottawa professor who specializes in technology law.
Mr. Audley said the collective is considering whether to appeal the court's decision to the Supreme Court of Canada, potentially paving the way for a prolonged legal battle over the rights of musicians in a digital age.
For example, a debate emerged immediately after Thursday's decision on whether copying music onto MP3 players now violates the Copyright Act.
Mr. Audley argued, for example, that the judge's ruling that MP3 players are not a recording medium could technically place the devices into a kind of legal purgatory.
He said the Copyright Act clearly defines media that legally can be used for private duplication of copyrighted material and MP3 players no longer meet that criteria.
The big impact of this is, if you got an iPod for Christmas, on Dec. 13 you were okay copying music on to it; on Dec. 15, you weren't.
However, a lawyer representing makers of MP3 players, who declined to be identified, scoffed at Mr. Audley's interpretation.
If that is true, then all music-copying equipment such as CD players, computers and tape recorders are illegal.
