News

The fight to tax the iPod is far from over.

The Copyright Board of Canada announced a decision yesterday rebutting a ruling made by the Federal Court in 2004 that a private copying levy should applied to iPods and other digital audio recorders, beginning in 2008.

In the decision, the board sided with an argument raised by the Canadian Private Copyright Collective that the Federal Court's ruling that "a digital audio recorder is not a medium" applied only to the storage media installed inside it and did not take into account the digital audio device in its entirety.

"The private copying regime revolves around a single definition, that of audio recording medium. Devices are not excluded from that definition, they are simply not mentioned. A device can be a medium as long as it stores relatively permanent reproductions of sound recordings," the Copyright Board said in its ruling.

Barring an appeal, the door is now open for an MP3 player levy to be introduced effective January 1, 2008. The CPCC has already filed a motion with the Copyright Board that the levy be $5 for each recorder with less than 1 GB of memory, $25 for each device with more than 1 GB but below 10 GB of memory, $50 for each recorder with more than 10 GB and below 30 GB, and $75 for each recorder with more than 30 GB of memory.

Kim Furlong, vice-president of federal government relations with the Retail Council of Canada who opposed the CPCC's argument, says that in light of the Copyright Board's decision, their legal counsel is reviewing their options on what their next steps will be.

"Basically, we believe that this is an unnecessary … hidden tax. It's not beneficial to the consumer or the retail industry," Ms. Furlong said.

David Basskin, a member of the Canadian Private Copyright Collective's board of directors, welcomed the Copyright Board's decision.

"Our view has always been that if you're using our copyrights and getting value from it, it's a matter of simple fairness that those who create those works should receive some compensation."

The Copyright Board has gone further in its decision and stated that it believes that cellphones and personal computers are also not exempt from the Copyright Act and might also be subject to levies of their own in the future.

"A thing that is ordinarily used by individual consumers to make private copies should not be excluded from the private copying regimen for the sole reason that is has other uses," the Copyright Board said.

University of Ottawa law professor Michael Geist said that the Copyright Board's willingness to extend a levy to iPods will catch many by surprise.

"We're in for a long legal fight over this. There's is certainly a likelihood of appeal and given that the Federal Court has already rendered one decision on a similar issue, or the same issue depending on who you believe, it could be years of litigation until it's resolved," Mr. Geist said.

The move to collect a levy on recordable products has always been a contentious issue over the past several years.

The CPCC collected more than $4-million from iPod and other MP3 player sales before the Federal Court rendered the levy invalid on December, 2004.

The money was intended to compensate artists whose works were pirated onto the devices.

The levy, which was collected by the CPCC, has long been applied to blank, recordable products such as CDs, tapes, and mini-discs. But in December, 2003, the Copyright Board said it would begin applying the levy to MP3 players.