The Canadian DMCA – The Actual Text – Damages – $500 – $20,000 Per Infringement

One of the many headline grabbers is the damages that could be awarded. Downloading copyrighted works for private use would be pegged at $500 per infringement while uploaders run up to $20,000 per infringement. We explore the bill and the Copyright act to find specifically where all this comes from.

This is the second part of our running series on Bill C-61.
Part 1 of our series can be found here.

One of the news outlets that reported on the $500 per infringement was The National Post. Michael Geist meanwhile says that infringement damages (namely uploading) can run upwards of up to $20,000 per infringement. With all this in mind, it may quickly become confusing as to where the $20,000 per infringement even comes from – so much so that we had to ask Michael Geist for clarification on the matter.

First of all, the act has the following:

30. (1) Subsection 38.1(2) of the Act is replaced by the following:

(1.1) If a copyright owner has made an election under subsection (1), a defendant who is an individual is liable for statutory damages of $500 in respect of all the defendant’s infringements that were done for the defendant’s private purposes and that are involved in the proceedings.

(1.2) However, the copyright owner may not recover statutory damages from a defendant referred to in subsection (1.1) in respect of the defendant’s infringements that

(a) were done for the defendant’s private purposes before the institution of the proceedings in which the election was made; and

(b) are not involved in those proceedings.

(1.3) If a copyright owner has made an election under subsection (1) in respect of a defendant referred to in subsection (1.1), no other copyright owner may elect statutory damages in respect of that defendant for the defendant’s infringements that were done for the defendant’s private purposes before the institution of the proceedings in which the election was made.

(1.4) Subsections (1.1) to (1.3) do not apply with respect to infringements that were made possible because the defendant circumvented or caused to be circumvented a technological measure that protected the work or other subject-matter, within the meanings of the definitions “circumvent” and “technological measure” in section 41.

(2) If subsection (1.1) does not apply and the defendant satisfies the court that the defendant was not aware and had no reasonable grounds to believe that the defendant had infringed copyright, the court may reduce the amount of an award under subsection (1) to less than $500, but not less than $200.

On a quick breeze through of the legislation, it really does look like not only would there only be a $500 per infringement provision, but claim that you didn’t know this was an infringement and damages would fall to $200 per infringement. There’s also the provision that suggests that a defendant can only be liable for an infringement only once and no other rights holders can claim damages on the specific infringement.

Now, consider the fact that typical claims of copyright infringement deal with more than one work. Consider the fact that, typically, an entire organization usually ends up being the rights holder of the works. In a specific case, an album might hold 12 songs. In this hypothetical situation, a copyright collective could claim damages on all 12 songs totaling up to $6,000 for merely downloading these works. A producer might claim infringement on one song, a manager might claim infringement of another song, etc. If a person downloads numerous albums, the total amount of damages can multiply and add up very quickly because it’s a different infringement in question. This was the easy part to understand.

Where does the $20,000 per infringement for uploading come from. First look at 1.2 (a) of this section and note that the $500 per infringement is for “were done for the defendant’s private purposes” This pretty much hints at the mere act of downloading. What about uploading or posting content? A simple word search for “20,000” in the entire legislation will turn up with no results. In order to find “20,000”, one must look up the copyright act in section 38.1 (named Statutory Damages – author note: the anchor link points to the French version) This contains the following:

38.1 (1) Subject to this section, a copyright owner may elect, at any time before final judgment is rendered, to recover, instead of damages and profits referred to in subsection 35(1), an award of statutory damages for all infringements involved in the proceedings, with respect to any one work or other subject-matter, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $500 or more than $20,000 as the court considers just.

Where defendant unaware of infringement

(2) Where a copyright owner has made an election under subsection (1) and the defendant satisfies the court that the defendant was not aware and had no reasonable grounds to believe that the defendant had infringed copyright, the court may reduce the amount of the award to less than $500, but not less than $200.

Hang on a second, doesn’t act suggest that 38.1 would be replaced? This is what we asked Michael Geist and he responded, “The bill replaces 38.1(2). 38.1(1) is untouched.”

Of course, he’s referring to the first line in the section of the act which reads: “Subsection 38.1(2) of the Act is replaced by the following:”

The number 2 is important because it points specifically to the paragraph after the paragraph which specifically mentions the $20,000 in damages which, of course, renders 38.1 (1) untouched as Geist said. It’s a very ingenious part of the act because only the trained eye would catch something like this.

Of course, applying this in real life for the average file-sharer would make this act even more draconian. Bearing in mind what was mentioned in our hypothetical scenario of ‘per infringement’, most file-sharing applications, namely LimeWire, Azureus, uTorrent, eMule, etc. have uploading built-in to help the network grow. Most, file-sharing clients allow partial uploading, thus making it very easy to put a hypothetical defendant into the $20,000 per infringement category, not the $500 per infringement. Of course, there’s also the much publicized YouTube example of posting content as well, but this would also apply to anything else that involves some form of posting or uploading of content.

So really, there would be very few examples of copyright infringement that involves solely downloading content (outside of FTP and UseNet that is) especially considering that pretty much all of the copyright infringement cases in the United States only deal with uploading in the first place.

On a side note, there’s two great comic strips from Artizans making fun of the new Copyright legislation. The first one is by Michael de Adder and the second one is by Sue Dewar.

The current hope is that the legislation in question was really designed to not be passed and die on the order paper much like the Liberal copyright reform bill, Bill C-60.