Video Games And Circumvention of Technological Protection Measures

In late 2012, the Canadian Copyright Act was amended to prohibit the circumvention of technological protection measures (TPMs – e.g. digital locks). ,  The relevant section of the Act reads:
Definitions
41 The following definitions apply in this section and in sections 41.1 to 41.21.
circumvent means,
• (a) in respect of a technological protection measure within the meaning of paragraph (a) of the definition technological protection measure, to descramble a scrambled work or decrypt an encrypted work or to otherwise avoid, bypass, remove, deactivate or impair the technological protection measure, unless it is done with the authority of the copyright owner; and
• (b) in respect of a technological protection measure within the meaning of paragraph (b) of the definition technological protection measure, to avoid, bypass, remove, deactivate or impair the technological protection measure. (contourner)
technological protection measure means any effective technology, device or component that, in the ordinary course of its operation,
• (a) controls access to a work, to a performer’s performance fixed in a sound recording or to a sound recording and whose use is authorized by the copyright owner; or
• (b) restricts the doing — with respect to a work, to a performer’s performance fixed in a sound recording or to a sound recording — of any act referred to in section 3, 15 or 18 and any act for which remuneration is payable under section 19. (mesure technique de protection)
Prohibition
• 41.1 (1) No person shall
(a) circumvent a technological protection measure within the meaning of paragraph (a) of the definition technological protection measure in section 41;
(b) offer services to the public or provide services if
 (i) the services are offered or provided primarily for the purposes of circumventing a technological protection measure,
 (ii) the uses or purposes of those services are not commercially significant other than when they are offered or provided for the purposes of circumventing a technological protection measure, or
 (iii) the person markets those services as being for the purposes of circumventing a technological protection measure or acts in concert with another person in order to market those services as being for those purposes; or
(c) manufacture, import, distribute, offer for sale or rental or provide — including by selling or renting — any technology, device or component if
 (i) the technology, device or component is designed or produced primarily for the purposes of circumventing a technological protection measure,
 (ii) the uses or purposes of the technology, device or component are not commercially significant other than when it is used for the purposes of circumventing a technological protection measure, or
 (iii) the person markets the technology, device or component as being for the purposes of circumventing a technological protection measure or acts in concert with another person in order to market the technology, device or component as being for those purposes.

The Copyright Act sets out various exceptions that permit reproduction of works subject to copyright.  However, even the various exceptions that allow reproduction do not permit circumvention to make such reproduction.  A reproduction will only be permitted under the various exceptions if the person making the reproduction:
“in order to make the reproduction, did not circumvent, as defined in section 41, a technological protection measure, as defined in that section, or cause one to be circumvented”
The first court decision considering the circumvention of TPMs is Nintendo of America Inc v King et al.,  (Go Cyber Shopping (2005) Ltd) a decision of the Federal Court of Canada, which issued in March 2017
Nintendo’s game consoles and game cartridges contain technological protection measures (TPM)  which are intended to prevent persons from using their game consoles with unauthorized copies of Nintendo game cartridges.   Go Cyber Shopping (2005) Ltd sold “game copiers” that would mimic the function of Nintendo game cartridges so that they could be used on Nintendo’s game consoles.  Go Cyber Shopping (2005) Ltd. sold “mod chips” that would enable the user to disable the TPM in order to use pirated game cartridges.
A first issue considered by the Federal Court was whether the Nintendo protection should be considered a TPM as contemplated by the Act. The court found that it was.

A second issue considered by the Court was whether Go Cyber Shopping (2005) Ltd could claim protection under the exception that allows modifications for the purpose of compatibility, which reads:
Permitted acts
30.6 It is not an infringement of copyright in a computer program for a person who owns a copy of the computer program that is authorized by the owner of the copyright, or has a licence to use a copy of the computer program, to
• (a) reproduce the copy by adapting, modifying or converting it, or translating it into another computer language, if the person proves that the reproduced copy
(i) is essential for the compatibility of the computer program with a particular computer,
(ii) is solely for the person’s own use, and
(iii) was destroyed immediately after the person ceased to be the owner of the copy of the computer program or to have a licence to use it

The Federal Court found that the exception did not apply to these facts.

A third issue considered by the Court was, while Go Cyber Shopping (2005) Ltd was facilitating copying, they were not actually infringing copyright themselves. Members of the public that used the Go Cyber Shopping (2005) Ltd circumvention technologies were the actual infringers.  Upon a reading of the section, the Court found that Go Cyber Shopping (2005) Ltd did not have to actually infringe copyright to be caught by section as “the uses or purposes of the technology, device or component are not commercially significant other than when it is used for the purposes of circumventing a technological protection measure”.

Nintendo sought statutory damages.  Section 38.1 of the Copyright Act, which allows a Court to award statutory damages reads:
Statutory damages
• 38.1 (1) Subject to this section, a copyright owner may elect, at any time before final judgment is rendered, to recover, instead of damages and profits referred to in subsection 35(1), an award of statutory damages for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally,
(a) in a sum of not less than $500 and not more than $20,000 that the court considers just, with respect to all infringements involved in the proceedings for each work or other subject-matter, if the infringements are for commercial purposes;

A fourth issue was how to apply the statutory damages calculation. The Court determined that it would base a statutory damages award upon the number of “works” (games) that Go Cyber Shopping (2005) Ltd technology made illegally accessible.  Citing a need for deterrence the Court awarded the maximum amount of $20,000.00 per work (game).   The Go Cyber Shopping (2005) Ltd technology allowed access to 585 of Nintendo’s catalog of games.  The award, therefore, amounted to $20,000.00 x 585 for a total of $11,700,000.00.

In addition, Nintendo sought punitive damages to punish Go Cyber Shopping and further deter other would be infringers. The Court considered the disregard for Nintendo’s rights and the length of time Go Cyber Shopping had continued their activities and awarded a further $1,000,000 in punitive damages.

In summary, the award in the Nintendo Case totalling 12,700,000.00 should deter potential infringers and encourage game developers to include technological protection measures in their products.