US labels to Canada: stop giving us free money, we prefer to sue

The Canadian Recording Industry Association (which represents multinational, US, and other non-Canadian record labels exclusively) has come out against the "private copying levy," a tax on blank media that it lobbied hard for over the past 15 years. The levy is charged against blank media, and the money raised is paid to copyright holders in exchange for the right to copy music and other works onto the media. CRIA apparently fears that the levy can be used to legalize P2P music-trading in Canada (an activity whose legality is in dispute right now), thereby breaking the P2P deadlock, decriminalizing millions of music fans, and paying millions of dollars to their members. The record industry giants would prefer to go on suing music fans and technology companies -- an activity that pays the record companies handsomely, while encouraging fans to defect from buying music in the future, and which does not pay one cent to any artist.

The Canadian Recording Industry Association this week quietly filed documents in the Federal Court of Appeal that will likely shock many in the industry. CRIA, which spent more than 15 years lobbying for the creation of the private copying levy, is now fighting to eliminate the application of the levy on the Apple iPod since it believes that the Copyright Board of Canada's recent decision to allow a proposed tariff on iPods to proceed "broadens the scope of the private copying exception to avoid making illegal file sharers liable for infringement."

Given that CRIA's members collect millions from the private copying levy, the decision to oppose its expansion may come as a surprise. Yet the move reflects a reality that CRIA has previously been loath to acknowledge - the Copyright Board has developed jurisprudence that provides a strong argument that downloading music on peer-to-peer networks is lawful in Canada. Indeed, CRIA President Graham Henderson provides a roadmap for the argument in his affidavit:

"First, the Board has stated, in obiter dicta, on several occasions that the Private Copying regime legalizes copying for the private use of the person making the copy, regardless of whether the source is non-infringing or not. Therefore, according to the Board, downloading an infringing track from the Internet is not infringing, as long as the downloaded copy is made onto an 'audio recording medium'...

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