1. McCarthy Tétrault Advance™
Building Capabilities for Growth
McCarthy Tétrault LLP / mccarthy.ca 12847612
User Generated Content under
Canadian Copyright Law:
Is the UGC exception in conformity
with international treaty standards?
Barry B. Sookman
Direct Line: (416) 601-7949
E-Mail: bsookman@mccarthy.ca October 10, 2013

2. The UGC Exception
29.21(1) It is not an infringement of
copyright for an individual to use an
existing work or other subject-matter or
copy of one, which has been published or
otherwise made available to the public, in
the creation of a new work or other subject-
matter in which copyright subsists and for
the individual — or, with the individual’s
authorization, a member of their household
— to use the new work or other subject-
matter or to authorize an intermediary to
disseminate it, if
(a) the use of, or the authorization to
disseminate, the new work or other
subject-matter is done solely for non-
commercial purposes;
(b) the source — and, if given in the source, the name of
the author, performer, maker or broadcaster — of the
existing work or other subject-matter or copy of it are
mentioned, if it is reasonable in the circumstances to do
so;
(c) the individual had reasonable grounds to believe that
the existing work or other subject-matter or copy of it, as
the case may be, was not infringing copyright; and
(d) the use of, or the authorization to disseminate, the
new work or other subject-matter does not have a
substantial adverse effect, financial or otherwise, on the
exploitation or potential exploitation of the existing work
or other subject-matter — or copy of it — or on an
existing or potential market for it, including that the new
work or other subject-matter is not a substitute for the
existing one.
¬ “intermediary” means a person or entity who regularly provides space or means for works or other subject-matter to be
enjoyed by the public.
¬ “use” means to do anything that by this Act the owner of the copyright has the sole right to do, other than the right to
authorize anything.
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3. Applicable treaties
¬ Berne Convention for the Protection of Literary and Artistic Works
(“Berne”),
¬ International Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organizations (“Rome”)
¬ Agreement on Trade-Related Aspects of Intellectual Property Rights
(“TRIPS”)
¬ World Intellectual Property Organization Copyright Treaty (“WCT”) and
the World Intellectual Property Organization Performances and
Phonograms Treaty (“WPPT”)
¬ North American Free Trade Agreement (“NAFTA”)
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4. Applicable treaties
¬ Treaties require Canada to provide protection in respect of copyrights and
other subject matter.
¬ Exclusive rights include the right to authorize
¬ the reproduction of a work
¬ adaptation, arrangement and making other alterations of literary and
artistic works (s12 Berne)
¬ adaptations of literary and artistic works to create cinematographic
works and right to communicate them to the public by wire (s14
Berne)
¬ performance, communication to the public including making available
to the public
¬ Some require the protection of moral rights.
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5. Permitted exceptions
¬ Treaties permit exceptions in certain circumstances, generally if
exceptions conform to the “Three-Step Test”.
¬ TRIPS applies the test to all exclusive copyrights and related rights.
¬ WCT applies test to rental, distribution, and communication to the
public and making available rights.
¬ Berne only expressly applies the Three-Step Test to the reproduction
right in works.
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6. UGC compliance with Berne?
¬ Berne right to create “adaptations, arrangements and other alterations of their
works” would include the right to authorize:
¬ creation of derivative works of all types
¬ creation of sequels and abridgements
¬ localizing a work for the Canadian market
¬ modifying, enhancing, porting computer programs or video games
¬ converting a book to a movie or movie to a game
¬ creating arrangements of pre-existing works
¬ creation of mash-ups, fan fiction
¬ Berne right to make adaptations to create cinematographic works and to
communicate them to the public by wire would also apply.
¬ UGC exception permits creation of “new work” from existing works and to
authorize the dissemination of the new works. What is a “new work”?
¬ Which exception in Berne applies to the rights in ss12 and 14?
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7. The Three-Step Test
¬ Berne Article 9(2)
¬ It shall be a matter for legislation in the countries of the Union to permit the
reproduction of such works in certain special cases, provided that such
reproduction does not conflict with a normal exploitation of the work and does not
unreasonably prejudice the legitimate interests of the author.
¬ TRIPs Article 13
¬ Members shall confine limitations or exceptions to exclusive rights to certain
special cases which do not conflict with a normal exploitation of the work and do not
unreasonably prejudice the legitimate interests of the right holder.
¬ WCT Article 10
¬ (1) Contracting Parties may, in their national legislation, provide for limitations of or
exceptions to the rights granted to authors of literary and artistic works under this
Treaty in certain special cases that do not conflict with a normal exploitation of the
work and do not unreasonably prejudice the legitimate interests of the author.
¬ (2) Contracting Parties shall, when applying the Berne Convention, confine any
limitations of or exceptions to rights provided for therein to certain special cases
that do not conflict with a normal exploitation of the work and do not unreasonably
prejudice the legitimate interests of the author.
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8. “certain special cases”
¬ Predictability requirement e.g., the exception must be clearly
defined; known and particularized; provide a sufficient degree of
legal certainty.
¬ Should be finite and limited in scope; must be well-defined and be
of limited application.
¬ Be narrow in scope and reach; be specifically focused; be the
opposite of non-special, i.e. it cannot be a normal case.
¬ Some argue it must also serve some specific and sound public
policy objective e.g. public education, public security, freedom of
expression, the needs of disabled persons, or the like.
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9. Is the UGC exception a certain special case?
¬ Applies to all existing works and subject matter.
¬ Exempts all “uses” of existing works and other subject matter. Is there
a proportionality or transformative requirement?
¬ Exempts all “uses” of the new work or other subject matter.
¬ Authorizes dissemination of the new work or other subject matter.
¬ Subject to conditions including that it is done for non-commercial
purposes.
¬ Is the scope of the right predictable, clearly defined, limited in scope
and reach?
¬ Does an exception for “non-commercial” uses serve a specific and
sound public policy objective?
¬ Do other exceptions in the Copyright Act affect its scope and reach?
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10. “normal exploitation” of the work
¬ Normal exploitation covers a usage that the copyright owner
would ordinarily expect or seek to exploit.
¬ Covers all forms of exploiting a work which have, or are likely to
acquire, considerable economic or practical importance.
¬ Must not undermine the market for the work; undermine the
ways that right holders normally extract economic value from the
right; deprive rights holders of significant or tangible commercial
gains.
¬ Applies to each exclusive right.
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11. Does the exception conflict with a
“normal exploitation”?
¬ The UGC exception has the condition that “the use of, or the authorization to
disseminate, the new work or other subject-matter does not have a substantial
adverse effect, financial or otherwise, on the exploitation or potential
exploitation of the existing work or other subject-matter — or copy of it — or on
an existing or potential market for it, including that the new work or other
subject-matter is not a substitute for the existing one.”
¬ What are the limits to the use of the existing work?
¬ What is the relationship between the “substantial adverse effect” and “not a
substitute” conditions and “normal exploitation”?
¬ Does the condition apply to each right or to all rights in the aggregate?
¬ How will the test be applied e.g. at the individual level or by examining the
possible implications of the use and dissemination?
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12. “unreasonably prejudice” “legitimate
interests”
¬ Applies to interests of “authors” under Berne and WCT and “rights
holders” under TRIPS.
¬ Covers actual or potential economic detriment such as an unreasonable
loss of income.
¬ Covers non-economic interests that are “justifiable” e.g. those supported
by relevant public policies or other social norms that underlie the
protection of exclusive rights and moral rights such as controlling
adaptations or other uses of works.
¬ “Not unreasonably prejudice” imposes a requirement of proportionality
that implies that there may be conditions placed on the usage that will
make any prejudice that is caused “reasonable” e.g., where there is
attribution, or in some cases where there is a compulsory licensing or
remuneration regime.
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13. Does the exception unreasonably
prejudice legitimate interests?
¬ Will the interests of authors be sufficiently protected by their moral right
of integrity?
¬ Is there protection for the reasonable interests of authors in being able to
authorize the creation and dissemination of adaptations which they might
find objectionable on literary, artistic, moral, political, or other grounds?
¬ Is there protection for the reasonable interests of authors in being able to
authorize the juxtaposition of their works or adapted works with other
works or new works, or causes which they may find objectionable on any
number of grounds?
¬ Do the permissionless uses undermine legitimate interests?
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14. References
¬ Dr. Mihály Ficsor, Comments on the UGC provisions in the Canadian Bill C-32: potential dangers for unintended
consequences in the light of the international norms on copyright and related rights, October 23, 2010,
http://www.copyrightseesaw.net/archive/?sw_10_item=31
¬ Mihály Ficsor, Guide to the Copyright and Related Rights Treaties Administered by WIPO and Glossary of
Copyright and Related Rights Terms (Geneva: WIPO, 2003)
¬ Mihály Ficsor, The Law of Copyright and the Internet (2002)
¬ Jörg Reinbothe and Silke von Lewinski, The WIPO Treaties 1996. Butterworths Lexis Nexis, London, 2002
¬ Sam Ricketson & Jane C. Ginsburg, International Copyright and Neighbouring Rights: The Berne Convention
and Beyond (Oxford: Oxford University Press, 2006)
¬ Martin R. F. Senftleben, Copyright, Limitations, and the Three-step Test, Kluwer Law International, 2004
¬ Barry Sookman “The SAC Proposal for the Monetization of the File haring of Music in Canada: Does it Comply
with Canada’s International Treaty Obligations related to Copyright?” (2008), 1 Osgoode Hall Rev.L.Pol’y 101,
http://ohrlp.ca/wp-content/uploads/2012/10/volume-1-issue-2-osgoode-hall-review-of-law-and-policy-
november-24-2008.pdf
¬ Barry B. Sookman and Daniel G.C. Glover, “Why Canada Should Not Adopt Fair Use”, (2009), 2 Osgoode Hall
Rev.L.Pol’y 139, http://ohrlp.ca/wp-content/uploads/2012/10/why-canada-should-not-adopt-fair-use.pdf
¬ WTO Panel Report on United States – Section 110(5) of the US Copyright Act, WTO Doc. WT/DS160/R (15
June 2000)
¬ WTO Panel Report on Canada – Patent Protection of Pharmaceutical Products WTO Doc. WT/DS114/R (7
April 2000)
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