File Sharing, Eh

5 April 2004


Canadian Court Says File Sharing Doesn't Violate Copyrights

The recording industry took it on the chin last week when a court in Canada held that file sharing of music did not violate copyrights according to Canadian law. Inevitably, their will be an appeal, but the industry is in a lot of trouble now because all of Canada will be able to swap the latest tunes freely.

Under Canadian law, copying for personal use is perfectly legal, and it has the advantage to keeping information circulating freely through the market and the electorate. The Copyright Board of Canada decided in December that downloading was not illegal but kept mum about uploading. To recompense artists and those who live off them, the Canadian government levies a tax on blank tapes, CD and such and distributes the money to them. The Canadian Recording Industry Association went to court to overturn the Copyright Board's decision -- where it lost and made matters worse.

The judge in the case, with the almost Dickensian name of Konrad von Finckenstein, ruling uploading was legal too, saying, "The mere fact of placing a copy on a shared directory in a computer where that copy can be accessed via a P2P service does not amount to distribution. Before it constitutes distribution, there must be a positive act by the owner of the shared directory, such as sending out the copies or advertising that they are available for copying."

The World Intellectual Property Organization (yes, there is such a beast) treaties spell out that only the copyright holders can make the material available. Canada has yet to ratify these agreements, so anyone may upload, and downloaders may presume that such uploading was done legally, which removes any illegality from their actions.

Add to this a study last week from Harvard Business School associate professor Felix Oberholzer and University of North Carolina, Chapel Hill associate professor Koleman Strumpf which showed "that file sharing has only had a limited effect on record sales," which they measured as "statistically indistinguishable from zero." In other words, "While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing." Perhaps the record companies should fire the lawyers and hire some bands.

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