- Email: [email protected]
Copyright law reform - Canada
THE COMPUTER LAW A N D S E C U R I T Y REPORT
MAY - JUNE
(i) If he can prove that he had taken such care as in all the circumstances was reasonably required to ensure the accuracy of the data at the material time (s.22(3)); or (ii) if the data are an accurate record of information received from the data subject or a third party and this fact (together with any notification from the data subject to the effect that the information is incorrect or misleading) is indicated on the data (s.22(2)).
which contains sensitive information - e.g. records of bankruptcies - should take much more care to ensure that the information is accurate.
(b) Defamation Publication of the truth cannot, except in one instance, give grounds for an action in defamation. The exception is that publication of a spent conviction within the meaning of the Rehabilitation of Offenders Act 1974 can give rise to a successful action if it is proved that the publication was made with malice. Where a database owner or operator is not sure of the truth of information about individuals or companies which he is disclosing to others there will always be the possibility that an action for defamation would be brought. The extent of his liability will depend largely on whether or not he is the author, printer or first publisher. If he is none of these and merely distributes information which has already been published (eg. newspaper articles on a database) then he may have a defence provided he could show that he did not know of the libel and had no reason to believe that the document in question contained a libel. Republication of journals which have a bad reputation for libel will put the database owner or operator at risk. (cf. Vizetelly v Mudie's Library 119001 2 Q.B. 170; Goldsmith v Sperrings [1977! 1 W.R.R. 478.) An action for defamation in respect of incorrect information disclosed by a credit reporting service succeeded in Dun
(3) Wrongful Receipt of Information Reference has already been made to the Official Secrets Act, which in certain circumstances makes it a criminal offence to receive information from an 'official' source. In the Prestel hackers case (R v Gold and Schifreen, [19871 3 All E.R. 618) the Court of Appeal held that transmitting someone else's customer identification number and password to the Prestel System and thereby inducing it to accept instructions could not constitute making a false instrument within s.1 of the Forgery and Counterfeiting Act 1981. However if and when s.269 of the Copyright, Designs and Patents Bill comes into force the Crown will be able to take some action: this provision will make it a criminal offence to receive dishonestly a programme contained in any broadcasting or cable programme service with the intent to avoid payment of any charge applicable.
5. Conclusion In practice the three most important areas for the database owner, operator or user to watch are breach of contract, copyright infringement and data protection. How significant the last item will be remains to be seen; the Registrar's muscles are powerful but largely untested. To date there has been only a handful of prosecutions under the data protection legislation: in December 1987 a garage was fined £500 for failing to register. The Registrar's office is currently considering other cases, however, and these in turn will undoubtedly attract considerable publicity which no selfrespecting holder of personal data would wish to receive.
& Bradstreet Inc. v Greenmoss Builders Inc., U.S. Supreme Court, 472 U.S. 749 (1985).
(c) Data Protection Act Reference has already been made to the right of an individual to require correction to personal data relating to him and of the power of the court to order rectification or erasure of data under s.24 of the DPA. Under s.22 an individual is entitled to compensation from the data user both for damage suffered by reason of the inaccuracy and for any distress which he has suffered. Data are inaccurate if they are "incorrect or misleading as to any matter of fact" (s.22(4)). However the data user has the following defences:-
COPYRIGHT
Quentin Archer, Solicitor Lovell, White & King
LAW REFORM
-
CANADA
third and final reading to Bill C-60, an Act to amend the Copyright Act. Once Bill C-60 is passed into law, the Canadian Copyright Act will, among other things, expressly extend copyright protection to computer programs. The bill is now working its way through the Canadian Senate, the upper chamber of Parliament, and is expected to become law in the very near future. The provisions of Bill C-60 dealing with computer programs represent the culmination of a number of years of study and debate. In 1984 the Canadian government (then in the hands of Pierre Trudeau and the Liberal Party) issued a White Paper entitled From Gutenberg to Telidon on proposed revisions to the Canadian Copyright Act. 3 The Canadian government proposal was unique but at the same time reflected an ongoing international debate. 4 Canada is the signatory to both the Berne Convention and the Universal Copyright Convention. As such it has an international obligation to protect literary and artistic works by means of copyright. The Canadian White Paper recognised that there was a growing
CANADA TO AMEND COPYRIGHT ACT TO PROTECT COMPUTER SOFTWARE The Canadian Copyright Act has not been amended in any substantial way since it came into force on January 1, 19241. Needless to say, it does not expressly address copyright in computer programs. The Act merely states as it always has that copyright arises at the time of creation "in every original literary, dramatic, musical and artistic work". For some time Canadian courts have been grappling with the question of whether a computer program is a literary work and therefore capable of protection under the Copyright Act. To date, the consensus is that computer programs are in fact literary works. This was in effect the holding of the Federal Court of Appeal in the case of Apple Computer Inc. v Mackintosh Computers Ltd. 2 which has been discussed previously in
the Computer Law and Security Report. While the Canadian judiciary has been wrestling with this problem, the Canadian Parliament has been considering amendments to the Act. On February 3, 1988 the House of Commons, the lower house of the Canadian Parliament, gave 24
THE C O M P U T E R LAW A N D S E C U R I T Y REPORT
1 CLSR
medium or semi-conductor chip, will enjoy protection for the period of the life of the author plus 50 years. The amendments also provide that translations of a literary work are themselves a literary work capable of independent protection. This should remove some of the concerns expressed by certain members of the Canadian Federal Court of Appeal in the Apple case and those expressed by the Australian High Court with respect to the Australian Act in the Apple v Computer Edge case. 5 In each court the concern was expressed that a computer program on a chip might not be protected by copyright because while it might be regarded as a translation of the protectible source code such a translation could not be considered a literary work.
international consensus that source code or as it was referred to in the White Paper "programs in human readable form" were a form of literary work and therefore deserving of copyright protection. The Canadian government therefore felt compelled to extend traditional copyright protections to computer programs in that form. There was, nevertheless, some debate among the various signatories to the international copyright conventions about the appropriateness of traditional copyright protection for computer software. To some extent the Canadian government shared the concerns expressed and this was reflected in their proposal to grant only a limited form of protection for computer programs in object code or "machine readable" form. Computer programs in this form were to enjoy protection for only a five year period following the year of publication.
Exceptions As originally drafted, Bill C-60 provided two significant exceptions to the copyright owner's exclusive rights. First, a licensee or person in lawful possession of a copy of a computer program was to have been entitled to modify or adapt the program or translate it into another computer language provided that this was done for his own use, that no more than one reproduction was used at any one time and that the reproduction was destroyed when he ceased to be authorised to have the original copy. Second, such a person would have been permitted to make a reasonable number of back-up copies on the same conditions. Presumably, the first exception arose because some computer programs need to be modified or adapted by the user in order to make full use of the programs. The second exception recognised the current industry practice of protecting computer programs from accidental damage or destruction by maintaining back-up copies. There was concern in the computer industry that these exceptions provided too much latitude to persons other than the owners of the programs. Casey P. August of IBM Canada Ltd. reflected the accepted industry view in his article "B/// C-60: An Industry View."s In that article, August stated that although software developers normally grant the aforementioned rights to licensees of their programs, the necessity for them continuing to do so may cease in the future as technological advances make the need to modify programs or make back-up copies obsolete. He argued that whether or not this in fact proves to be the case, the licensee's ability to modify or reproduce programs should be left to the mechanisms of the marketplace, i.e., to the contract between the software developer and the licensee: [W]ould it not be better to allow the software developer to determine how he wishes to distribute his software? Surely, if he chooses to distribute it without permission for his customers to use the programs in a manner consistent with the fragility of the media at the time, as well as any actual need for customers to modify his programs, he wil find that his programs will be unsuccessful in the marketplace until he permits his customers to do what they require. Under this industry pressure, the federal government amended the exceptions set out in Bill C-60 by replacing the words "in lawful anc/ actual possession of a copy" with "owner of a copy". As a result, under the new legislation it seems that licensees will not be able to make any modifications to a program or make archival copies without the express permission of the copyright owner. Only in the event that a software developer sells copies of a program rather than licensing them will the exceptions provided for in clause 5 be applicable. But what of the case where the software developer sells the medium on which the program is stored
Source and object code Both the proposed differentiation between source code and object code versions of computer software and the limited protection offered object code were greeted with dismay by the Canadian computer industry. Extensive lobbying took place. Perhaps the most fortuitous event for those who opposed the proposals was the fall of the Liberal government and the election of a Conservative government under Prime Minister Brian Mulroney. Mr Mulroney's government submitted the White Paper to a special Parliamentary sub-committee for review. That committee held extensive hearings and received hundreds of submissions. In October 1985, the sub-committee published its report on copyright revision. The report, entitled A Charter of Rights for Creators, recommended the abandonment of the distinction between human readable and machine readable forms of programs and proposed adoption of full copyright protection for computer programs. The sub-committee was not, however, in favour of treating computer programs as literary works. Instead, they suggested that computer programs be protected "as a separate category of subject matter with the full regime of protection on the basis of reciprocity." In other words, works created by foreign nationals could only be protected in Canada to the extent that the authors' native country provided a similar form of copyright protection for computer programs. In intrcducting Bill C-60 in May 1987, the Canadian government took a slightly different approach. They accepted the concept of full, traditional copyright protection for computer programs but rejected both the notion of creating a separate new category for computer programs and also the concept of reciprocity. The amending legislation received second reading in Parliament on June 26, 1987 and was thereafter referred to a legislative committee for review. After hearing submissions from the computer industry and members of the public, the committee tabled an amended version of Bill C-60 in the House of Commons on December 11, 1987 and it was this amended version that received third reading in the Commons on February 2, 1988. Bill C-60 amends the definition of a "literary work" as it appears in the Copyright Act to include a "computer program" which it defines as: a set of statements or instructions that is expressed, fixed, embodied or stored in any manner and that is to be used directly or indirectly in a computer in order to bring about a specific result. Thus, under the new legislation, computer programs, in both source code and object code and whether on paper, magnetic 25
MAY - JUNE
THE COMPUTER LAW AND SECURITY REPORT
and licenses use of the program itself? Will the exceptions apply in this case? Equally significant, will Canadian courts recognise the distinction being drawn between ownership and possession pursuant to a license?
Where moral rights are waived, that waiver may be invoked by any person authorised by the owner of licensee to use the work unless there is an indication to the contrary in the waiver. Moral rights are co-terminus with copyright in the work and they pass on the death of the author to anyone to whom they are specifically bequeathed or in the absence of a specific bequest, to the person to whom the copyright is bequeathed or in the absence of either of those two parties, to the person entitled to the residue of the author's estate. Those concerned about the implications of extending moral rights to computer programmers should require those programmers to waive their moral rights. This will remove the possibility of a computer programmer objecting to subsequent modifications to his work on the basis that such modifications would represent distortions, mutilations or other modifications of the work or a represent use in association with a product, service, cause or institution to the prejudice of his honour or reputation. The amendments apply to programs made prior to the day on which the Act comes into force but nothing done in respect of a computer program before May 27, 1987 (the date on which the Bill was introduced into Parliament) shall be construed to constitute infringement of copyright unless copyright would have subsisted in that computer program under the old Act. If the decision of the Federal Court of Appeal in the Apple case remains the law in Canada this shall be no significance since that case extended copyright protection to all forms of computer programs.
Penalties and moral rights Two other aspects of Bill C-60 are worthy of special note by international computer lawyers. Firstly, the Bill provides that the Act will provide that every person who knowingly makes for sale or hire any infringing copy of a work in which copyright subsists, or offers such copies for sale or hire, or imports such copies into Canada shall be guilty of an offence and liable on summary conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding six (6) months or to both, or on conviction on indictment to a fine not exceeding $1,000,000 or imprisonment for a term not exceeding five (5) years or to both. Under the unamended Act, such offences could only be prosecuted by way of summary conviction and could only result in a fine of $10 per copy to a maximum of $200 for the same transaction. The unamended Act does provide that in the case of a second or subsequent offence, such person can be sent to imprison with or without hard labour for a term not exceeding two (2) months, but even this provision is an anachronism. The monetary limits are so low as to virtually invite infringement and the reference to hard labour harkens back to a now past era of the Canadian penal system. The second aspect worthy of note in Bill C-60 is the clear extension of moral rights (i.e. the right of an author to claim ownership and prevent distortion or mutilation of the work that would prejudice his reputation) to computer programs. Moral rights are not new to Canadian Copyright. What is significant is that Canada has decided not to follow the lead of countries like the United Kingdom where moral rights are to be denied to authors of computer programs. Moral rights may not be assigned. They may only be waived in whole or in part. It should be noted that an assignment of copyright does not in and of itself constitute a waiver of moral rights.
TRADE SECRETS PROPOSED CANADIAN LEGISLATION
C. lan Kyer, Attorney
Report Correspondent
Notes: 1 There have been a number of minor amendments to adapt the Act, for example, to the Access to Information and Privacy Acts and the new National Archives of Canada Act. 2 (1987),61 National Reporter 3. 3 See Eischen, "Proposed Revisions to Canada's Copyright Act", (1984), 1 Canadian Computer Law Reporter 157. 4 See Kyer, "The Canadian Copyright Debate in the International Context", (1986) 3 The Computer Lawyer1. 5 (1986) F.S.R. 537, 65 A.L.R. 33. 6 (1987)4 Canadian Computer Law Reporter 157.
REFORM
-
CANADA
The Report outlined the application of the existing law to trade secrets and considered the policies which ought to underpin the law in contemporary Canadian circumstances. It concluded that there are deficiencies in the present law which require legislative solutions. The Report recommended legislation rather than judicial development. Because the law of trade secrets is considered to fall within the legislative head "Property and Civil Rights''7 in Canada's Constitution Act, 1867,,and therefore is the subject of provincial jurisdiction, it stated that there is a need for enactment of a statute by each of the Canadian provinces to assist business in protecting its valuable trade secrets. The Report recommended that trade secrets should be treated separately from other forms of confidential information. This would reflect a change from the traditional Commonwealth approach, but would be in harmony with recent developments in the United States. It also proposed both civil and criminal
TRADE SECRET
As reported by Professor Grant Hammond in his article entitled "Trade Secrets Reform" in the January-February, 1988 issue of The Computer Law and Security Report, a Canadian Federal-Provincial working party, under the auspices of the Institute of Law Research and Reform of Alberta, has canvassed the common law of trade secrets.1 There is presently in Canada no distinct body of law relating to trade secrets as such. Trade secrets are protected under laws of general application. At common law, trade secrets may be the subject of express or implied terms of a contract. 2 One who has had a trade secret or confidential information improperly appropriated may also have a remedy in tort. 3 Equity may provide a remedy for breach of confidence, 4 breach of a fiduciary duty 5 or for unjust enrichment. 6 However, it is often unclear where one basis for pursuit of misappropriation ends and the next begins.
legislation. This note summarises the legislative proposal, to which Professor Hammond made reference.
26
MAY - JUNE
(i) If he can prove that he had taken such care as in all the circumstances was reasonably required to ensure the accuracy of the data at the material time (s.22(3)); or (ii) if the data are an accurate record of information received from the data subject or a third party and this fact (together with any notification from the data subject to the effect that the information is incorrect or misleading) is indicated on the data (s.22(2)).
which contains sensitive information - e.g. records of bankruptcies - should take much more care to ensure that the information is accurate.
(b) Defamation Publication of the truth cannot, except in one instance, give grounds for an action in defamation. The exception is that publication of a spent conviction within the meaning of the Rehabilitation of Offenders Act 1974 can give rise to a successful action if it is proved that the publication was made with malice. Where a database owner or operator is not sure of the truth of information about individuals or companies which he is disclosing to others there will always be the possibility that an action for defamation would be brought. The extent of his liability will depend largely on whether or not he is the author, printer or first publisher. If he is none of these and merely distributes information which has already been published (eg. newspaper articles on a database) then he may have a defence provided he could show that he did not know of the libel and had no reason to believe that the document in question contained a libel. Republication of journals which have a bad reputation for libel will put the database owner or operator at risk. (cf. Vizetelly v Mudie's Library 119001 2 Q.B. 170; Goldsmith v Sperrings [1977! 1 W.R.R. 478.) An action for defamation in respect of incorrect information disclosed by a credit reporting service succeeded in Dun
(3) Wrongful Receipt of Information Reference has already been made to the Official Secrets Act, which in certain circumstances makes it a criminal offence to receive information from an 'official' source. In the Prestel hackers case (R v Gold and Schifreen, [19871 3 All E.R. 618) the Court of Appeal held that transmitting someone else's customer identification number and password to the Prestel System and thereby inducing it to accept instructions could not constitute making a false instrument within s.1 of the Forgery and Counterfeiting Act 1981. However if and when s.269 of the Copyright, Designs and Patents Bill comes into force the Crown will be able to take some action: this provision will make it a criminal offence to receive dishonestly a programme contained in any broadcasting or cable programme service with the intent to avoid payment of any charge applicable.
5. Conclusion In practice the three most important areas for the database owner, operator or user to watch are breach of contract, copyright infringement and data protection. How significant the last item will be remains to be seen; the Registrar's muscles are powerful but largely untested. To date there has been only a handful of prosecutions under the data protection legislation: in December 1987 a garage was fined £500 for failing to register. The Registrar's office is currently considering other cases, however, and these in turn will undoubtedly attract considerable publicity which no selfrespecting holder of personal data would wish to receive.
& Bradstreet Inc. v Greenmoss Builders Inc., U.S. Supreme Court, 472 U.S. 749 (1985).
(c) Data Protection Act Reference has already been made to the right of an individual to require correction to personal data relating to him and of the power of the court to order rectification or erasure of data under s.24 of the DPA. Under s.22 an individual is entitled to compensation from the data user both for damage suffered by reason of the inaccuracy and for any distress which he has suffered. Data are inaccurate if they are "incorrect or misleading as to any matter of fact" (s.22(4)). However the data user has the following defences:-
COPYRIGHT
Quentin Archer, Solicitor Lovell, White & King
LAW REFORM
-
CANADA
third and final reading to Bill C-60, an Act to amend the Copyright Act. Once Bill C-60 is passed into law, the Canadian Copyright Act will, among other things, expressly extend copyright protection to computer programs. The bill is now working its way through the Canadian Senate, the upper chamber of Parliament, and is expected to become law in the very near future. The provisions of Bill C-60 dealing with computer programs represent the culmination of a number of years of study and debate. In 1984 the Canadian government (then in the hands of Pierre Trudeau and the Liberal Party) issued a White Paper entitled From Gutenberg to Telidon on proposed revisions to the Canadian Copyright Act. 3 The Canadian government proposal was unique but at the same time reflected an ongoing international debate. 4 Canada is the signatory to both the Berne Convention and the Universal Copyright Convention. As such it has an international obligation to protect literary and artistic works by means of copyright. The Canadian White Paper recognised that there was a growing
CANADA TO AMEND COPYRIGHT ACT TO PROTECT COMPUTER SOFTWARE The Canadian Copyright Act has not been amended in any substantial way since it came into force on January 1, 19241. Needless to say, it does not expressly address copyright in computer programs. The Act merely states as it always has that copyright arises at the time of creation "in every original literary, dramatic, musical and artistic work". For some time Canadian courts have been grappling with the question of whether a computer program is a literary work and therefore capable of protection under the Copyright Act. To date, the consensus is that computer programs are in fact literary works. This was in effect the holding of the Federal Court of Appeal in the case of Apple Computer Inc. v Mackintosh Computers Ltd. 2 which has been discussed previously in
the Computer Law and Security Report. While the Canadian judiciary has been wrestling with this problem, the Canadian Parliament has been considering amendments to the Act. On February 3, 1988 the House of Commons, the lower house of the Canadian Parliament, gave 24
THE C O M P U T E R LAW A N D S E C U R I T Y REPORT
1 CLSR
medium or semi-conductor chip, will enjoy protection for the period of the life of the author plus 50 years. The amendments also provide that translations of a literary work are themselves a literary work capable of independent protection. This should remove some of the concerns expressed by certain members of the Canadian Federal Court of Appeal in the Apple case and those expressed by the Australian High Court with respect to the Australian Act in the Apple v Computer Edge case. 5 In each court the concern was expressed that a computer program on a chip might not be protected by copyright because while it might be regarded as a translation of the protectible source code such a translation could not be considered a literary work.
international consensus that source code or as it was referred to in the White Paper "programs in human readable form" were a form of literary work and therefore deserving of copyright protection. The Canadian government therefore felt compelled to extend traditional copyright protections to computer programs in that form. There was, nevertheless, some debate among the various signatories to the international copyright conventions about the appropriateness of traditional copyright protection for computer software. To some extent the Canadian government shared the concerns expressed and this was reflected in their proposal to grant only a limited form of protection for computer programs in object code or "machine readable" form. Computer programs in this form were to enjoy protection for only a five year period following the year of publication.
Exceptions As originally drafted, Bill C-60 provided two significant exceptions to the copyright owner's exclusive rights. First, a licensee or person in lawful possession of a copy of a computer program was to have been entitled to modify or adapt the program or translate it into another computer language provided that this was done for his own use, that no more than one reproduction was used at any one time and that the reproduction was destroyed when he ceased to be authorised to have the original copy. Second, such a person would have been permitted to make a reasonable number of back-up copies on the same conditions. Presumably, the first exception arose because some computer programs need to be modified or adapted by the user in order to make full use of the programs. The second exception recognised the current industry practice of protecting computer programs from accidental damage or destruction by maintaining back-up copies. There was concern in the computer industry that these exceptions provided too much latitude to persons other than the owners of the programs. Casey P. August of IBM Canada Ltd. reflected the accepted industry view in his article "B/// C-60: An Industry View."s In that article, August stated that although software developers normally grant the aforementioned rights to licensees of their programs, the necessity for them continuing to do so may cease in the future as technological advances make the need to modify programs or make back-up copies obsolete. He argued that whether or not this in fact proves to be the case, the licensee's ability to modify or reproduce programs should be left to the mechanisms of the marketplace, i.e., to the contract between the software developer and the licensee: [W]ould it not be better to allow the software developer to determine how he wishes to distribute his software? Surely, if he chooses to distribute it without permission for his customers to use the programs in a manner consistent with the fragility of the media at the time, as well as any actual need for customers to modify his programs, he wil find that his programs will be unsuccessful in the marketplace until he permits his customers to do what they require. Under this industry pressure, the federal government amended the exceptions set out in Bill C-60 by replacing the words "in lawful anc/ actual possession of a copy" with "owner of a copy". As a result, under the new legislation it seems that licensees will not be able to make any modifications to a program or make archival copies without the express permission of the copyright owner. Only in the event that a software developer sells copies of a program rather than licensing them will the exceptions provided for in clause 5 be applicable. But what of the case where the software developer sells the medium on which the program is stored
Source and object code Both the proposed differentiation between source code and object code versions of computer software and the limited protection offered object code were greeted with dismay by the Canadian computer industry. Extensive lobbying took place. Perhaps the most fortuitous event for those who opposed the proposals was the fall of the Liberal government and the election of a Conservative government under Prime Minister Brian Mulroney. Mr Mulroney's government submitted the White Paper to a special Parliamentary sub-committee for review. That committee held extensive hearings and received hundreds of submissions. In October 1985, the sub-committee published its report on copyright revision. The report, entitled A Charter of Rights for Creators, recommended the abandonment of the distinction between human readable and machine readable forms of programs and proposed adoption of full copyright protection for computer programs. The sub-committee was not, however, in favour of treating computer programs as literary works. Instead, they suggested that computer programs be protected "as a separate category of subject matter with the full regime of protection on the basis of reciprocity." In other words, works created by foreign nationals could only be protected in Canada to the extent that the authors' native country provided a similar form of copyright protection for computer programs. In intrcducting Bill C-60 in May 1987, the Canadian government took a slightly different approach. They accepted the concept of full, traditional copyright protection for computer programs but rejected both the notion of creating a separate new category for computer programs and also the concept of reciprocity. The amending legislation received second reading in Parliament on June 26, 1987 and was thereafter referred to a legislative committee for review. After hearing submissions from the computer industry and members of the public, the committee tabled an amended version of Bill C-60 in the House of Commons on December 11, 1987 and it was this amended version that received third reading in the Commons on February 2, 1988. Bill C-60 amends the definition of a "literary work" as it appears in the Copyright Act to include a "computer program" which it defines as: a set of statements or instructions that is expressed, fixed, embodied or stored in any manner and that is to be used directly or indirectly in a computer in order to bring about a specific result. Thus, under the new legislation, computer programs, in both source code and object code and whether on paper, magnetic 25
MAY - JUNE
THE COMPUTER LAW AND SECURITY REPORT
and licenses use of the program itself? Will the exceptions apply in this case? Equally significant, will Canadian courts recognise the distinction being drawn between ownership and possession pursuant to a license?
Where moral rights are waived, that waiver may be invoked by any person authorised by the owner of licensee to use the work unless there is an indication to the contrary in the waiver. Moral rights are co-terminus with copyright in the work and they pass on the death of the author to anyone to whom they are specifically bequeathed or in the absence of a specific bequest, to the person to whom the copyright is bequeathed or in the absence of either of those two parties, to the person entitled to the residue of the author's estate. Those concerned about the implications of extending moral rights to computer programmers should require those programmers to waive their moral rights. This will remove the possibility of a computer programmer objecting to subsequent modifications to his work on the basis that such modifications would represent distortions, mutilations or other modifications of the work or a represent use in association with a product, service, cause or institution to the prejudice of his honour or reputation. The amendments apply to programs made prior to the day on which the Act comes into force but nothing done in respect of a computer program before May 27, 1987 (the date on which the Bill was introduced into Parliament) shall be construed to constitute infringement of copyright unless copyright would have subsisted in that computer program under the old Act. If the decision of the Federal Court of Appeal in the Apple case remains the law in Canada this shall be no significance since that case extended copyright protection to all forms of computer programs.
Penalties and moral rights Two other aspects of Bill C-60 are worthy of special note by international computer lawyers. Firstly, the Bill provides that the Act will provide that every person who knowingly makes for sale or hire any infringing copy of a work in which copyright subsists, or offers such copies for sale or hire, or imports such copies into Canada shall be guilty of an offence and liable on summary conviction to a fine not exceeding $25,000 or to imprisonment for a term not exceeding six (6) months or to both, or on conviction on indictment to a fine not exceeding $1,000,000 or imprisonment for a term not exceeding five (5) years or to both. Under the unamended Act, such offences could only be prosecuted by way of summary conviction and could only result in a fine of $10 per copy to a maximum of $200 for the same transaction. The unamended Act does provide that in the case of a second or subsequent offence, such person can be sent to imprison with or without hard labour for a term not exceeding two (2) months, but even this provision is an anachronism. The monetary limits are so low as to virtually invite infringement and the reference to hard labour harkens back to a now past era of the Canadian penal system. The second aspect worthy of note in Bill C-60 is the clear extension of moral rights (i.e. the right of an author to claim ownership and prevent distortion or mutilation of the work that would prejudice his reputation) to computer programs. Moral rights are not new to Canadian Copyright. What is significant is that Canada has decided not to follow the lead of countries like the United Kingdom where moral rights are to be denied to authors of computer programs. Moral rights may not be assigned. They may only be waived in whole or in part. It should be noted that an assignment of copyright does not in and of itself constitute a waiver of moral rights.
TRADE SECRETS PROPOSED CANADIAN LEGISLATION
C. lan Kyer, Attorney
Report Correspondent
Notes: 1 There have been a number of minor amendments to adapt the Act, for example, to the Access to Information and Privacy Acts and the new National Archives of Canada Act. 2 (1987),61 National Reporter 3. 3 See Eischen, "Proposed Revisions to Canada's Copyright Act", (1984), 1 Canadian Computer Law Reporter 157. 4 See Kyer, "The Canadian Copyright Debate in the International Context", (1986) 3 The Computer Lawyer1. 5 (1986) F.S.R. 537, 65 A.L.R. 33. 6 (1987)4 Canadian Computer Law Reporter 157.
REFORM
-
CANADA
The Report outlined the application of the existing law to trade secrets and considered the policies which ought to underpin the law in contemporary Canadian circumstances. It concluded that there are deficiencies in the present law which require legislative solutions. The Report recommended legislation rather than judicial development. Because the law of trade secrets is considered to fall within the legislative head "Property and Civil Rights''7 in Canada's Constitution Act, 1867,,and therefore is the subject of provincial jurisdiction, it stated that there is a need for enactment of a statute by each of the Canadian provinces to assist business in protecting its valuable trade secrets. The Report recommended that trade secrets should be treated separately from other forms of confidential information. This would reflect a change from the traditional Commonwealth approach, but would be in harmony with recent developments in the United States. It also proposed both civil and criminal
TRADE SECRET
As reported by Professor Grant Hammond in his article entitled "Trade Secrets Reform" in the January-February, 1988 issue of The Computer Law and Security Report, a Canadian Federal-Provincial working party, under the auspices of the Institute of Law Research and Reform of Alberta, has canvassed the common law of trade secrets.1 There is presently in Canada no distinct body of law relating to trade secrets as such. Trade secrets are protected under laws of general application. At common law, trade secrets may be the subject of express or implied terms of a contract. 2 One who has had a trade secret or confidential information improperly appropriated may also have a remedy in tort. 3 Equity may provide a remedy for breach of confidence, 4 breach of a fiduciary duty 5 or for unjust enrichment. 6 However, it is often unclear where one basis for pursuit of misappropriation ends and the next begins.
legislation. This note summarises the legislative proposal, to which Professor Hammond made reference.
26