A vacuum in digital copyright law has made Canada a haven for DVD pirates, who make bootleg copies of popular American television shows and sell them on-line.
The Internet has become a lucrative platform for Hollywood to distribute top-tier films and television shows. But the pirates are swimming in the wake of the big studios, exploiting the out-of-date copyright laws to set up on-line shops that sell bootleg DVDs of TV shows such as Seinfeld, as well as movies.
For instance, Seinfeld fans with access to the Internet could have bought all nine seasons of the hit series on DVD late last month from at least five websites based in Canada, even though only the first three seasons have been released by distributor Sony Pictures Home Entertainment.
In the United States, laws such as the Digital Millennium Copyright Act (DMCA) make it easier for authorities to get at the pirates, but in Canada, Internet service providers do not disclose information on their subscribers unless a search warrant is issued.
Canada is among the world's piracy hot spots, along with places such as Pakistan and Malaysia, said John Malcolm, the MPAA's senior vice-president and director of worldwide anti-piracy operations in Encino, Calif. "I think that the piracy problem in Canada has a lot more to do with lax laws . . . coupled with high demand by and relative affluence of Canadian citizens, than proximity to the U.S."
The market for television shows on DVD has been growing rapidly. In 2003, it was worth more than $1.5-billion (U.S.), according to Adams Media Research in Carmel, Calif. That was up from just $130-million in 2000. Time Warner said in February that revenue from DVD sales of Warner Bros.' shows alone should top $1-billion in 2005, including sales of Seinfeld.
The MPAA does not have estimates on how much TV piracy is costing, but the potential losses are staggering. The MPAA estimates that the film industry loses more than $3.5-billion in potential worldwide revenue from pirated hard goods. Informa Media Group estimated on-line losses from illegal sales of movies to be nearly $860-million.
The departments of Industry and Canadian Heritage are working on revisions to the Copyright Act that would clarify the responsibility of ISPs. Under the proposed bill, ISPs would be exempt from copyright liability, but would be required to play a role in curbing the misuse of the sites they host for copyright violation, according to a statement on the Canadian Heritage website. "When an ISP receives notice from a rights holder that one of its subscribers is allegedly hosting or sharing infringing material, the ISP would be required to forward the notice to the subscriber . . . Rights holders would have the legal means to compel ISPs to comply with the regime," the statement said.
"[ISPs] tend to ignore cease and desist orders more in Canada," said Craig Winter, MPAA Internet enforcement manager. He said that in the United States, the DMCA "says that ISPs, if they have been notified that there is infringing content, they are obligated to remove access to that content or at least notify the end users. So if Canada doesn't have something as strong and the ISPs don't feel they have any liability, they may ignore requests to take down [sites]."
Even if an ISP shuts down a website, the site will often pop up again, hosted by a different ISP, said Serge Corriveau, national director of the anti-piracy program for the Canadian Motion Picture Distributors Association, the Canadian arm of the MPAA based in Quebec. "If you really want to stop the website and sue the owner, you need to get the [personal] information, and right now [ISPs] don't want to be liable for giving out any information."
Tom Copeland, chairman of the Canadian Association of Internet Providers, explained that an ISP will provide subscriber data only if a search warrant has been issued."