Canada court nixes 'iPod tax'


TORONTO -- A Canadian appeals court on Thursday quashed a proposed levy on digital music players, dubbed the "iPod tax," after opponents declared it unfair to retailers and consumers.

The Federal Court of Appeal ruled the Canadian Copyright Board was wrong to levy a new tax of between CAN$5 ($4.90) and CAN$75 ($74) on digital storage devices to be introduced later this year.

"The Copyright Board erred in law when it concluded that it has the legal authority to certify the tariff that CPCC (Canadian Private Copying Collective) has proposed for 2008-2009 on digital audio recorders," the federal appeals court argued.

The CPCC, representing copyright holders including music labels and publishers, said Canadians were putting content on their iPods and other digital storage devices that they had not purchased legally, and that content creators needed to be compensated for that monetary loss.

But consumer advocates told the federal appeals court during a hearing Wednesday that it should not assume Canadians have engaged in illegal behavior to access and download content on their digital music players.

They instead argued that Canadians should enjoy greater access to copyright works, especially homegrown fare, not less.

Retail Council of Canada president Diane Brisebois welcomed the court decision.

"This has been a very long battle, but a necessary one. Retailers have fought against these levies since their creation in 1997 because it taxes a product based on what a consumer possibly could use it for," she said.

The court ruling is also the latest sign that underlines how Canada does not fall in line with the U.S. over copyright laws and legislation.

Canadian film and music industry groups in December expressed concern after the federal government held back proposed legislation to crack down on copyright infringements.

Federal industry minister Jim Prentice delayed the introduction of amendments to the federal Copyright Act meant to bring Canada in line with the 1997 World Intellectual Property Organization Internet treaties until early 2008.