A recent copyright ruling by the Supreme Court of Canada could have lasting implications on software development and related research, according to one industry expert.

“”It now seems safer for software developers to use unlicensed copies of software for research activities (without paying a

licensing fee),”” said Thierry Moreau, a software developer and consultant with Montréal-based CONNOTECH Experts-conseils Inc.

Accordingly, this could force vendors such as Microsoft to forgo large portions of licensing fees, he said, adding the ruling could also entice foreign researchers to come to Canada due to a relaxed IP regime.

Moreau referred to a Supreme Court decision made earlier this month. The longstanding case pitted three legal publishers — CCH Canadian Ltd., Canada Law Book Inc., and Carswell Thomson Professional Publishing — against the Law Society of Upper Canada. The publishers claimed the Law Society was in breach of copyright laws when it sold their work at the Great Library at Osgoode Hall in Toronto without paying a licence fee. The library supplied single photocopies of case material to lawyers and other patrons, totaling over 100,000 copies per year.

The country’s highest court ruled that the photocopies were made and distributed for research purposes. The copy service ensured lawyers could access the materials necessary to do their jobs, the ruling said.

Under section 29 of the Copyright Act, “”fair dealing”” for the purpose of research or private study does not infringe copyright, said the ruling, and the term “”‘research’ must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained.””

Experts were quick to point out the decision, especially its liberal interpretation of research, affects a wider group of people, including software developers, journalists, sellers of MP3 technology, economists, and students.

“”Let’s say the police comes to my workplace and says, ‘You didn’t pay for all the software copies you are using,’”” said Moreau. In his defence, Moreau could cite section 29 and say, “”This is a research centre so we don’t have to pay for these licenses.””

Dominic Gourges, an IP lawyer with Ogilvy Renault, emphasized a software developer still needs to show “”fair dealing”” when using proprietary software for research.

If it’s impossible to complete the research without the proprietary software, then it’s fair game to use it, he said. But it’s not fair if the developer uses proprietary software when the research could have been completed in its absence, he said.

Moreau contends the ruling also means software vendors such as Microsoft could forgo a significant portion of licensing revenues.

But Kelly Gill doesn’t think the ruling will affect vendors all that much.

“”I can’t think of a scenario where (vendors) would have gotten a large amount of licensing revenue for limited research copying,”” said the partner at Gowling Lafleur Henderson LLP in Toronto who appeared as counsel for the Law Society during the Supreme Court case.

One of the most significant trends behind the ruling is one that tips the scale toward users of proprietary material in their pursuit of knowledge versus the need of vendors to recoup their investment through licensing fees, suggested Gourges.

This trend mirrors that of the open source software movement, added Gill.

“”The purpose of open source … is really what the fair dealing principle is doing. It’s saying this limited sphere of activity of research is required so the common knowledge base of society grows.””

The ruling could also create an incentive for more foreign software developers to locate in Canada because copyright obligations may be perceived as less stringent than in other countries like the U.S., Moreau said.

For such researchers, coming to Canada would make sense if their home territory doesn’t allow that “”kind of activity and the copyright owner itself would not allow the copying to be done,”” said Gill.

Moreau added the ruling could also improve the level of fairness between Microsoft, which has a giant monopoly and “”outrageous gross profit margins”” in the software space, and those who wish to build on existing code.

Microsoft executives were not available for comment Friday.

Comment: info@itbusiness.ca

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