Mac Musings

Canada, Copyright, and Levies: Buy an iPod Now

Daniel Knight - 2004.12.17

Copyright laws vary around the world, but the general notion is that the copyright holder decides who can publish and sell their material, while the purchased of the copyrighted material has a "fair use" right to make a private copy.

Beyond that point, rights vary from nation to nation. In the US, the rule of thumb is that if you own the CD, you can rip tracks into iTunes, copy them to your iPod, and create your own mix CDs to your heart's content. That's fair use, while selling or giving away CDs with the same tracks violates fair us.

Things are a bit different in Canada, where it's apparently illegal to give away CDs you've copied but legal for someone to borrow a CD and rip their own copy. At least that's my understanding of Canadian copyright law.

To remunerate artists for lost income, Canada has been collecting a levy on blank cassettes, CDs, DVDs, and MP3 players. This money is distributed to Canadian recording artists based on things like airplay and sales. In essence, the levy pretty much makes it legal to copy music.

That levy adds a few cents to the cost of a CD-R - and up to $25 to the cost of an iPod. But that just changed. As noted in the Globe and Mail:

"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...."

Judge Noël didn't say that iPods and other MP3 players couldn't be covered by the Copyright Act, only that the current Act doesn't cover them. It's quite possible Parliament will remedy this by amending the Act.

Digital Rights Management

I'm not going to deal with the injustice of stealing copyrighted material vs. the injustice of paying a levy for media that might not be used to duplicate copyrighted material. That's for Canada to decide.

I am going to suggest that Parliament is likely to extend the levy to MP3 players, but I hope they don't do so indiscriminately. There's a new factor that wasn't in play when the MP3 player levy was first imposed - digital rights management (DRM).

Whether we're looking at the DRM used by Apple on music purchased from the iTunes Music Store or the Microsoft DRM used by the bulk of Apple's competitors, people around the world are now purchasing music with specific use rights built in. With iTunes, for instance, tracks you buy can only be authorized on a fixed number of computers, the software limits how many CDs you can burn from a playlist, and you can copy your music to as many iPods as you own.

In light of that, it seems an unfair double taxation to levy the same fees on a device that supports DRM as on a music player with no rights management. Should Parliament decide to impose this levy on MP3 players, I hope they will set a lower rate on hardware with DRM. (I'm not arguing that they should be exempt from the levy, since some music will come from ripped CDs while other music will be purchased online with DRM in place.)

Until Parliament acts, I suggest that Canadians interested in iPods buy them while Justice Noël's ruling stands. You'll save Cdn$25 on a Cdn$400 iPod.