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MP3 players may pay extra tax in Canada

February 16, 2007

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An old debate about MP3 players in Canada is in motion once again. The Canadian Private Copying Collective, an association of composers, recording artists, publishers, and record labels is asking the Copyright Board of Canada to re-introduce a controversial extra fee into the sale price of MP3 players in Canada.

David Basskin, a member of the CCPC’s board of directors, said it’s time artists be compensated for the copying of their files onto the digital devices.

“We’d all like lots of things to be free. But those who create the music deserve to be compensated. When you go and buy an iPod, the retailer gets paid. So you can’t say that the people who make the music should get a free ride.”

The effort on the part of the CPCC comes just over two years after the Federal Court of Appeal struck down a similar levy attached to the price of the hard drives of MP3 players. At the time, these didn’t fall into the category of “audio recording media” because, unlike CDs and cassettes, they can’t be separated from the device that plays the sound on them. Under current legislation, the Copyright Board isn’t allowed to place a levy on a playing device like a CD or tape player.

The decision meant that manufacturers had to re-imburse the $15 and $25 retail surcharges on MP3 players to consumers. In total, the CCPC had to re-imburse almost $4 million.

Now they’re asking the Canadian Copyright Board to consider MP3 players as a whole, hard drive included, under the category of “audio recording media.”

“When you look at the device as a whole, it’s hard not to believe that its sole purpose is to record audio,” said Basskin. The CCPC is now seeking levies ranging from $5 to $75, based on the capacity of the player’s hard drive.

But some analysts are skeptical about whether the new approach will work given current copyright legislation. The problem, said David Fewer, an intellectual property law professor at the University of Ottawa, is that MP3 players fall into both the categories of “player” and “medium.”

“They’re really getting quite existential here. They’re asking the copyright board to look into the sould of an iPod and determine its true identity. That’s hard to do.”

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