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A draft paper is almost complete. Meanwhile, here is the abstract:
This paper explores two of the many ways that law can influence the development of business models for distributing digital content online. Specifically, it looks at the relationship between (1) prohibitions against circumventing digital rights management (DRM) systems and (2) levies on products or services used to reproduce or transmit digital materials. This relationship between digital locks and levies is analyzed through a comparative study of developments in Canada and the United States, with additional reference to the European experience.
Significant similarities exist among Canadian and American technological infrastructures, cultural values and business climates generally. Yet the two countries have created distinct legal environments for online businesses. Therefore, technological, cultural and economic circumstances provide rare laboratory-like conditions for studying the impact of legal variables and informing policy-making in North America.
The United States has enacted, in the Digital Millennium Copyright Act, relatively strong prohibitions against circumventing DRM technologies. At the same time, a very narrow levy exists in the United States under the Audio Home Recording Act. Canada, on the other hand, has created a much broader levy to address the issue of private copying. But Canada has not, so far, enacted specific anti-circumvention legislation like the DMCA. In short, the legal situation in Canada is basically the inverse of that in the United States. However, there have been proposals in the United States to expand the role of levies. There have also been proposals to introduce anti-circumvention provisions in Canada. Without careful study, lawmakers in either country could accidentally create a scheme including conceptually and practically incompatible legal regulations. This has already happened in Europe under the EU Copyright Directive, which awkwardly attempts to reconcile the simultaneous use of both locks and levies.
In this paper, alternative approaches are examined from the perspective of all stakeholders—creators, intermediaries and consumers. Unless the relationship between locks and levies is properly understood, consumers risk being caught in the middle of a copyright regime that prohibits the circumvention of DRM systems in order to access or copy digital content, but at the same time mandates levy payments to compensate for copying that either cannot occur or is already licensed. An overview of various stakeholders’ experiences in Canada, the United States and Europe provides valuable insights for North American law and policy makers.
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