CANADIAN COURT STRIKES DOWN IPOD LEVY

UNCLAS OTTAWA 000071 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/CAN AND EEB/TPP/MTA/IPC STATE PASS USTR FOR SULLIVAN, MELLE, AND GARDE E.O. 12958: N/A TAGS: ECON ETRD KIPR CA SUBJECT: CANADIAN COURT STRIKES DOWN IPOD LEVY ¶1. (U) Federal Court of Appeals of Canada ruled on January 11 that the Copyright Board of Canada does not have the authority to place a copyright levy on iPods and other digital music players. It is possible that the board will appeal this decision to the Supreme Court of Canada. The Copyright Board had planned to charge a levy of up to $75CAD on digital music players sold in Canada. This levy, similar to ones on blank CDs, would "compensate" Canadian musicians (and only Canadian musicians) for music sales allegedly lost to piracy. ¶2. (SBU) Most retailers and consumers are pleased by the decision, and it may inspire renewed calls for the Government to make format shifting (e.g., moving music from a legally owned CD to an iPod) clearly legal. Format shifting is currently a legal gray area in Canada. Although the Canadian music industry is concerned about piracy, many industry insiders, including the Canadian Recording Industry Association (CRIA),believe that a levy on digital music players is a poor solution. Because a levy forces consumers to pay compensation for downloaded music, a legal argument might be made that the levy legalizes unlimited file sharing. This legal theory has yet to be tested in a Canadian court. Visit Canada,s Economy and Environment Forum at http://www.intelink.gov/communities/state/can ada WILKINS