ARCHIVED — Vol. 146, No. 23 — November 7, 2012

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Registration

SOR/2012-226 October 18, 2012

COPYRIGHT ACT

MicroSD Cards Exclusion Regulations (Copyright Act)

P.C. 2012-1370 October 18, 2012

His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to sections 79 (see footnote a) and 87 (see footnote b) of the Copyright Act (see footnote c), makes the annexed MicroSD Cards Exclusion Regulations (Copyright Act).

MICROSD CARDS EXCLUSION REGULATIONS (COPYRIGHT ACT)

MICROSD CARDS

1. Memory cards in microSD form factor, including microSD, microSDHC and microSDXC cards, are excluded from the definition “audio recording medium” in section 79 of the Copyright Act.

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Background

The private copying regime (Part VIII of the Copyright Act, sections 79–88) is a legislative framework that aims to remunerate rights holders for the private copying of sound recordings by individuals onto a “blank audio recording medium.” This is accomplished by placing levies on blank audio recording media that are “ordinarily used by individual consumers” for the private copying of music.

The question of whether a medium is an eligible blank audio recording medium and the amount of the levy for the importation or manufacture of that medium are determined by the Copyright Board of Canada. However, any audio recording medium may be exempted from the private copying regime by regulation.

Issues and objectives

A proposal has been filed with the Copyright Board of Canada seeking a levy on microSD cards. Such a levy would increase the costs to manufacturers and importers of these cards, resulting in these costs indirectly being passed on to retailers and consumers.

As a result, the cost of all technologies that use or require microSD cards, such as smartphones, is likely to be affected, thereby negatively impacting e-commerce businesses and Canada’s participation in the digital economy.

The objectives of these Regulations are to

  • support the Government of Canada’s commitment to promoting a digital economy that encourages the development and early adoption of new technologies; and
  • avoid an additional cost on the manufacture or importation of microSD cards, which are commonly used in smartphones and other technologies that drive the digital economy.

Description

The MicroSD Cards Exclusion Regulations (Copyright Act) exclude microSD cards (the technical standards of which are set by the SD Association) from the definition of “audio recording medium” for the purposes of the private copying regime, meaning that no tariff can be certified for their importation or manufacture.

Consultation

On July 3, 2012, the Minister of Industry announced the Government’s intention to exempt microSD cards from the application of the private copying regime. The Retail Council of Canada (RCC) welcomed this announcement, while the Canadian Private Copying Collective (CPCC) criticized it. The positions of both organizations were known in advance of the July 3 announcement.

The RCC is an association that represents retail merchants. It previously joined other business associations in a letter sent to the ministers of Industry and Canadian Heritage requesting that the Government exempt electronic memory cards from the private copying levy. The letter was co-signed by the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, Canadian Wireless Telecommunications, Electro-Federation Canada, Hewlett-Packard (Canada) Co., Intel Corporation, the Information Technology Association of Canada, LG Electronics Canada, Inc., Microsoft Canada Inc., Nokia Products Limited, Panasonic Canada Inc., Research in Motion, SanDisk Corporation, SaskTel, Telus Communications Company, and ZTE Canada.

The CPCC is a non-profit organization that administers and collects the private copying levies and distributes the money to rights holders. The CPCC previously sent a letter to the ministers of Industry and Canadian Heritage objecting to any potential regulation to exempt microSD cards from the private copying regime.

No further consultations were undertaken.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small businesses.

Rationale

Digital technologies are ubiquitous and are increasingly being integrated into our economy and society. These technologies enable businesses to be innovative and productive, help governments to provide services, and allow citizens to interact and to transmit and share information and knowledge. As a component in some of these technologies, microSD cards play a role in the devices that drive the digital economy.

An increase in the cost of digital technologies acts as a barrier to access and full participation in the digital economy, as higher costs may discourage the adoption of new technologies by businesses and consumers. These Regulations seek to promote the digital economy by ensuring that no new costs will be added to microSD cards and to associated digital technologies that use these cards, such as smartphones. In so doing, these Regulations will also prevent the added cost of a levy from ultimately being passed on to retailers and consumers.

These Regulations only seek to exempt a narrow subset of audio recording media. It will be open to the Copyright Board of Canada to consider future proposals on new forms of blank audio recording media, in addition to previously approved media, such as blank CDs.

There are no expected costs to the public, industry or copyright owners since the Regulations seek to maintain the current no-levy status of microSD cards.

Contacts

Anne-Marie Monteith
Director
Copyright and Trade-mark Policy Directorate
Industry Canada
235 Queen Street
Ottawa, Ontario
K1A 0H5
Telephone: 613-952-2527
Fax: 613-941-8151

Lara Taylor
Acting Director
Policy and Legislation
Copyright and International Trade Policy Branch
Canadian Heritage
25 Eddy Street
Gatineau, Quebec
K1A 0M5
Telephone: 819-934-8963
Fax: 819-953-6720

Footnote a
 S.C. 2001, c. 27, s. 240

Footnote b
 S.C. 1997, c. 24, s. 50

Footnote c
 R.S., c. C-42