The Ottawa Sun is reporting that a record store owner felt that he had to plead guilty for copyright infringement after possessing just under 300 unauthorized CDs. It was a case lead by the RCMP with non other than CRIA acting as an expert witness in the case.

While the case has more to do with laws surrounding the importing of CDs, the interesting part was found in the following:

Nolan will receive a conditional discharge if he makes a $1,000 charitable donation within three months.

Lawyer Mark Lazarovitz said it was outrageous that his client is being prosecuted when CRIA members, including such names as Sony, EMI and Universal, are the target of a class action lawsuit worth up to $6 billion for allegedly infringing artists’ copyright.

“Yet my client is before the court,” Lazarovitz said.

Nolan said the 100 CDs represent a tiny fraction of the hundreds of thousands of recordings in his collection and that the discs at issue are mostly imports.

This may be the first known case where CRIA being sued for billions for commercial distribution of pirated material has had a very visible effect on any anti-piracy operations CRIA is involved in. It’s not hard to imagine that this would be the last either. How can CRIA have the power to convict anyone for copyright infringement when they themselves have allegedly headed off the biggest commercial piracy operation in Canadian history?

It would appear that it’s extremely easy to make any piracy operation seem like a hollow victory for the major record labels thanks to this lawsuit against CRIA. It makes anti-piracy operations seem more like pirates busting pirates more than anything else and seriously puts into question to whom the law serves. Legitimate and otherwise morally acceptable anti-piracy cases for many – namely busting commercial bootleggers – has been put into serious moral jeopardy for many. It doesn’t really matter whether or not they are completely separate cases at this point.

In the case in question here, some of the imported CDs didn’t contain UPC bar codes. While BoingBoing had their own choice words for the case, one commenter suggested that not every independently produced CD has a UPC bar code to begin with.

“I worked at several independent record stores that brought in foreign copies of records on American labels that were unavailable in the states all the time. Back then,” scifijazznik commented, “there were entire artists’ catalogs the majors in the states didn’t seem to think there was a market for: Bootsy Collins, Julie London, Graham Central Station, tons of classic Blue Note records, etc., that were available out of Japan or Germany. If they were available in the states, both we and our customers would gladly pay less for them. But they were not and we had a loyal following of collectors more than willing to pay for $30 for Japanese imports of CDs that should have been available at reissue prices.”

The commenter added, “There was mention of “live CDs” and some “without bar codes.” Bootlegs are one thing. There are laws against that and the owner’s use of the word “pirated” is likely chosen carefully to address that. But I run an independent label and on our last CD, the manufacturer forgot to print the bar code on the cover. Some perfectly legit labels don’t use bar codes at all, though I imagine that’s not as common as it used to be.”

It’s interesting that there is word that not every single CD in existent that is legitimately sold has a bar code as mentioned in the original story. Whether or not the owner of the recently busted store is being totally honest is another story since there isn’t much evidence being offered publicly at this time through the Sun. What is clear is that the moral standing of the major record labels has fallen off a cliff in the publics eyes and CRIA in the defence of a $6 Billion lawsuit will prove to be a point that keeps biting them in the end whether or not the anti-piracy operation they partake in is clear cut.

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One can’t help but note the interesting timing of this study. It should be noted though, that the study is showing what is happening in the United States. So the connection between Canada and the United States is purely hypothetical from looking at the numbers presented in this particular study (although countless studies have shown Canadian digital sales growth outperforming growth in the United States) but if there is a similar trend happening in Canada, no wonder the primary concerns from Canadians have to do with fair dealings and digital locks. We’re witnessing an industry who is pointing at their paying customers and screaming “illegal pirates!”

The NPD group study also suggests that Apple’s iTunes has a 25% market share in the digital music sales as well.

In fact, many who point to the digital revolution and say that it’s the future may find the comments by a vice president surprising as well.

“Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products,” said Russ Crupnick, vice president of entertainment industry analysis “But with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010.”

The trend of moving from physical to digital is particularly evident, even if digital music buyers are still the minority:

CDs comprised 65 percent of all music sold in the first half of 2009 compared to paid digital downloads, which comprised 35 percent of music sales. By comparison, paid digital music downloads comprised just 20 percent of sales in 2007 – growing to 30 percent of the music market last year.

“The growth of legal digital music downloads, and Apple’s success in holding that market, has increased iTunes’s overall strength in the retail music category,” said Russ Crupnick, entertainment industry analyst for The NPD Group. “But the importance of the big box retailers shouldn’t be dismissed, as long as the majority of music consumers continue to buy CDs.”

Still, if in 2007, digital sales accounts for 20% of all sales, then in 2008, it accounts for 30%, then in 2009, it accounts for 35%, one wonders what the market will look like in, say, 2019. If the percentage goes up by 5% every year from now till then, that means 80% of music sold would be online download sales. Who knows what technology would bring us by then on top of it all provided copyright law doesn’t continue to prohibit innovation as seen in the RealDVD case.

Perhaps one of the concerns that record labels should address is how to market sales online to the public. Clearly physical sales is dominant, but it’s a very real possibility that this market domination of the physical CD won’t last forever if this study is anything to go by.

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There’s an interesting report from The times of India where there is a problem – there’s not enough piracy courts to deal with the load of busted pirates.

Of course, for the average North American, the concept of a “piracy court” is pretty much unheard of. Generally speaking, when someone gets sued for copyright infringement, they go through a regular court system just like any other case. Judging by what this report suggests, there is a court set aside in India to deal specifically with alleged pirates.

It may seem like overkill, but not only is there a court specifically set aside for piracy cases, the court is bogged down by the sheer volume of cases it has to deal with. The cases are “bailable” but people caught up in the system, it’s been extremely difficult. From the report:

Take the case of Madala Krishna Prasad who was arrested on charges of video piracy in Ongole on July 22, 2008.

He was remanded in judicial custody the next day. But when the bail petition was moved by his counsel, the judge expressed his helplessness as the case did not fall under his jurisdiction.

Then the counsel, K Venkata Reddy, moved another bail petition before the additional chief metropolitan magistrate court, which is the designated court for such offences. He rejected to hear the petition because the remand was in a different court.

Then the counsel moved a lunch motion in the high court on Friday. Justice P Swarup Reddy granted bail to the accused in this case. Now the counsel has to go to the Ongole court again to submit the bail documents to secure freedom for the accused . In all the accused will be in jail for more than 12 days for an offence that is bailable. “We have heard of similar cases in Anantapur and elsewhere in the state in this type of offences,” he said.

It’s not entirely clear what the report is specifically referring to when it says ‘video piracy’ and a Google search of the persons name only refers to the above article. Whether it means videos being sold on bootleg DVDs or videos being downloaded online is unclear. One might hope that resorting to courts being set aside in North America won’t be necessary.

There are a number of countries that have implemented a blank media levy on portable media. The idea, when one boils it down, seems simple and straight forward. There are those that record or burn copyrighted material without authorization, therefore copyright holders should have a system of compensation.

In Canada, for instance, royalties collected on CDs are collected by an organization known as the CPCC. The CPCC takes the money that was collected through the levy on CDs and redistributes it to copyright holders. It’s a system that has been under appreciated by the major copyright industry when discussing things such as copyright reform mainly because it has undermined their typical argument that their profits have dropped (though there are pieces of evidence to suggest otherwise) While Canada and France are two completely separate countries on two separate continents, the underlying principle seems, at least, fairly similar.

Like in Canada, there has been opposition towards the levy, but now new developments as pointed to on French news site 01Net (Google translation) suggest that the underlying principle has been overturned – thus prompting a rethinking of the blank media levy.

The French courts seem to have annulled decision “No. 7″ From the report (Google translation):

To calculate the amount of the fee levied on such equipment and returned to the rightful claimants, the commission had taken into account, wrongly, of damages resulting from unauthorized copies of video or phonograms, “justifies the Council. That is to say that piracy for the Council of State, should not be considered to determine the scales. In summary, this fee (5 to 50 euros) no longer be in the state.

Judging by that paragraph alone, this could prompt a major legal, civil, and business headache. If the blank media can’t be based off of supposed piracy going on through, among other things, private copying, then how does one base royalty calculations to keep the major copyright industry in France happy?

Obviously, going back to simply outlawing things like CDs won’t be a feasible option since burning CDs and DVDs is simply a common occurrence these days – whether it’s making a simple mix of your favorite tunes or losing nearly half the population of Britain in the mail, things like CD burning is just commonplace at this point in time – and people suggest the internet genie is out of the bottle.

What will be fascinating to watch is what France comes up with now that the method of calculation based off piracy has been overruled. It may be something all sides of the copyright debate may want to keep an eye on.

Music companies launched DRM in a bid to curb piracy but the software means that the discs are incompatible with the iPod, the market-leading digital music player made by Apple Computer Inc.

Critics also argue that the system has not worked as consumers could be driven to illegal sites to download music to the popular iPod instead.

A spokeswoman for EMI said it had not manufactured any new disks with DRM, which restricts consumers from making copies of songs and films they have purchased legally, for the last few months.

A hacker known as Muslix64 posted on the Internet details of how he unlocked the encryption, known as the Advanced Access Content System, which prevents high-definition discs from illegal copying by restricting which devices can play them.

The AACS system was developed by companies including Walt Disney, Intel, Microsoft, Toshiba and Sony to protect high-definition formats, including Toshiba’s HD DVD and Sony’s Blu-ray.

Muslix64 posted a video and decryption codes showing how to copy several films, including Warner Bros’ Full Metal Jacket and Universal Studios’ Van Helsing, on a popular hacker Internet blog and a video-sharing site.

The hacker also promised to post more source code on Tuesday that will allow users to copy a wider range of titles.

They feel copyright issues have been steered too much by the music industry in the past and that should change. IPPR deputy directory Dr. Ian Kearns feels “it is not the music industry’s job to decide what rights consumers have that is the job of the government.”

Intellectual property laws are currently being looked at by government in Britain, but changes certainly need to be made to laws such as this that keep someone from utilizing the music they bought. Now that we are in a digital age, intellectual property laws could change to reflect personal use.

DRM has taken such a hold on the music industry that libraries and other archive systems are having a hard time making things available that before were no issue. Digital Rights Management technologies, which restrict the sharing of music or other intellectual property, are bashing attempts to preserve electronic content.

When attention is called to these matters in the US, maybe the music industry will realize there are some issues to take into account when considering DRM and other like-services. We are moving fast with technology and the laws need to move just as fast to keep up.

The Institute for Public Policy Research (IPPR) is calling for a “private right to copy”.

It would decriminalise millions of Britons who break the law each year by copying their CDs onto music players.

Making copies of CDs and DVDs for personal use would have little impact on copyright holders, the IPPR argues.

Copyright issues have, in the past, been steered too much by the music industry, the report said.

“The CD as it is right now is dead,” Levy said, adding that 60% of consumers put CDs into home computers in order to transfer material to digital music players.
EMI Music is part of EMI Group PLC (EMI.LN). But there remains a place for physical media, Levy said.

“You’re not going to offer your mother-in-law iTunes downloads for Christmas,” he said. “But we have to be much more innovative in the way we sell physical content.”
Record companies will need to make CDs more attractive to the consumer, he said.
“By the beginning of next year, none of our content will come without any additional material,” Levy said.

CD sales accounted for more than 70% of total music sales in the first half of 2006, while digital music sales were around 11% of the total, according to music industry trade body the International Federation of the Phonographic Industry. CD sales were worth $6.45 billion and digital sales $945 million, the IFPI said.

The irregularly-shaped “XCD” is the thickness of a normal optical disc and can still play in any CD or DVD drive. But it also has a smart card, with its own memory and processing components, embedded in the plastic. The embedded chip is connected to a line of electrodes on the surface of one side of the disc. The outer edge of the disc is cut away so that the electrodes protrude and can plug straight into a USB socket.

But why bother inserting a chip into a DVD or CD in the first place? Aladdin thinks it could provide a clever way to digitally lock content sold on optical discs. Music, video or data can be stored optically and read by computer’s CD or DVD player, while encryption keys can be stored on the embedded chip and read by USB. The encryption keys could be used to lock information so that it can only be played having plugged the original disc in to the USB.