Access Copyright Adds To Its Lengthy Litany Of Litigation Losses

It is easy to lose track of how many major decisions that Access Copyright has LOST in the last twenty years, which include three straight losses in the Supreme Court of Canada (CCH in 2004, Alberta in 2012, and York in 2021) and now a very notable Federal Court decision that is likely to be upheld in any appeal.

The latest is the landmark ruling by Justice Aylen of the Federal Court in Province of Alberta et al v. Access Copyright 2024 FC 292, rendered February 22, 2024.

I have quoted at length from Justice Aylen’s ruling because it is very long (121 pages) and detailed and will be a challenge even to experienced copyright lawyers to read carefully on short notice. For whatever reason, it does not have a table of contents. But it is a “must read” for every copyright lawyer, educator and copyright policy official in Canada. It was issued very quickly and decisively, following final arguments just over a month ago on January 17 and 18, 2024. At times in this blog, I refer to Access Copyright as “AC”. I refer to the plaintiffs, Province of Alberta et al, as the “Consortium”.

 Justice Aylen states the issues, as agreed by the parties, at the outset:

 

[3] The parties have brought a motion for summary trial in which they have jointly asked the Court to answer the following three questions:

1. Have the Plaintiffs been licensees from 2013 onward?

2. If the Plaintiffs have not been licensees from 2013 onward, are the Plaintiffs nevertheless liable in equity to pay Access Copyright?

3. If the Plaintiffs are not liable in equity to pay Access Copyright, is Access Copyright entitled to retain the 2010-2012 overpayment in any event?

 Spoiler alert – here is the bottom line of the ruling at page 121:

THIS COURT ORDERS that:

1. It is declared that the Plaintiffs overpaid Access Copyright for tariff royalties during the years 2010, 2011 and 2012 by an amount equal to $2.35 per full-time equivalent student [Overpayment]. The total amount of the Overpayment as paid by each Plaintiff, exclusive of pre-judgment and post-judgment interest and inclusive of the Copyright Board-set interest factor and taxes, is as set out in Schedule B to the Statement of Claim.

2. It is declared that the Plaintiffs were not licensees of the Approved 2010-2015 Tariff from 2013 to 2015.

3. It is declared that the Plaintiffs are not liable to Access Copyright in equity, or otherwise, in relation to any of the claims advanced by Access Copyright in this proceeding.

4. It is declared that Access Copyright is not entitled to retain the Overpayment.

5. Access Copyright shall pay to each of the Plaintiffs a refund of the Overpayment, in the amounts as set out in Schedule B to the Statement of Claim.

6. Access Copyright shall pay to the Plaintiffs pre-judgment interest on the Overpayment, calculated pursuant to subsection 36(1) of the Federal Courts Act.

7. Access Copyright shall pay to the Plaintiffs post-judgment interest on the Overpayment, calculated pursuant to subsection 37(1) of the Federal Courts Act.

8. Access Copyright shall pay to the Plaintiffs their costs of this motion and the underlying proceeding calculated based on the mid-point of Column III of Tariff B [the Tariff], with the exception of the documentary production costs which shall be calculated based on the mid-point of Column IV of the Tariff.

9. Access Copyright shall pay to the Plaintiffs their reasonable disbursements of the motion and the underlying proceeding. In the event that the parties are unable to reach an agreement, the disbursements shall be assessed by an assessment officer.

10. Access Copyright’s counterclaim is hereby dismissed.

 “Mandy Aylen”

Judge

 

The essence of the Consortium’s claim as stated by Justice Aylen in the very lengthy and detailed recitation of facts was this:

 

[36] On February 16, 2018, prior to the Supreme Court’s decision in York University, the Plaintiffs commenced this action against Access Copyright seeking, among other relief: (a) a declaration that Access Copyright’s tariffs as certified by the Board are not mandatory; (b) a declaration that the Plaintiffs overpaid Access Copyright for the years 2010, 2011 and 2012 by an amount equal to $2.35 per FTE student; and (c) payment by Access Copyright of a refund or monetary damages to the Plaintiffs in the amount of the overpayment, namely $25,493,109.36, together with pre-judgment and post-judgment interest. (highlight added)

 Further:

 

[83] In a letter dated May 4, 2016 [2016 Letter], the Plaintiffs requested a refund from Access Copyright of the difference between the per FTE student rate of $4.81 that was paid in 2010 through 2012 under the continuation tariff and the $2.46 per FTE student rate that was ultimately certified, in accordance with section 15(5) of the Approved 2010-2015 Tariff. The total amount sought by the Plaintiffs was $25,493,109.36. (highlight added)

 

Note that this figure does NOT include interest due.

 This is a  lot of money but the matters of principle are even more important. Justice Aylen pays significant attention and reliance on the Supreme Court’s 2021 decision in the York case, which came down in the midst of this litigation, and the SCC’s 2015 decision in CBC v. SODRAC. I was counsel for CARL in both these cases. I acted for David Lametti, as he then was, and Ariel Katz in the SODRAC case, and made complementary submissions to Ariel Katz in the York case. The York decision relied on the brilliant scholarship of Ariel Katz in his “Spectre I” and “Spectre II” papers. I am proud to have worked with Ariel over the years to demolish the myth of the “spectre” of mandatory tariffs. He deserves the main credit.

 AC’s main argument was that it was entitled, based on the very amorphous mostly common law of “equity”  and other stretches of the common law, to keep this money. But the Copyright Act does not provide for equitable relief for an entity such as AC that is neither a rights owner or exclusive licensee. She rules that:

 

[259] Accordingly, I find that none of Access Copyright’s asserted common law doctrines apply so as to prevent the Plaintiffs from seeking a return of their royalty overpayments.

 

Justice Aylen has some scathing findings re other aspects of AC’s submissions:

 

[192] While this is sufficient to dispose of Access Copyright’s meritless assertion that participating in the tariff-setting process at all levels (before the Board, this Court, and the Federal Court of Appeal) constituted an offer to pay, the rationale for why the Plaintiffs would have participated sheds further light on the absurdity of Access Copyright’s assertion. At the relevant time, the Supreme Court had not yet decided York University, so it was possible that the Plaintiffs would be bound to a statutory licence. If that were ultimately the case, it is obvious that it was in the Plaintiffs’ interests to participate and advocate for a tariff lower than the one being proposed by Access Copyright ($15.00 for 2010 to 2012 and $9.50 for 2013 to 2015), which was an increase of $10.19 and $4.69 per FTE over and above the royalty under the Approved 2005-2009 Tariff.  (highlight added)

 

[224] To interpret the Copyright Act as allowing equitable remedies that permit recovery of a remedy provided for under subsection 68.2(1), but not otherwise available to Access Copyright under the Copyright Act (because the Plaintiffs were not licensees), would be incompatible with the object of the Copyright Act and result in absurdity. Parliament has struck a careful balance between users’ and creators’ rights, as well as with respect to the risk of collective societies developing monopolistic powers. In striking that balance, Parliament chose to make statutory licenses voluntary. To permit Access Copyright to obtain through equity what it cannot obtain under the Copyright Act would turn the copyright regime on its head, by effectively making voluntary statutory licences mandatory through the use of equitable remedies. Under the circumstances, it is “irresistibly clear” that the statutory scheme precludes Access Copyright from seeking the equitable remedies it claims in the circumstances of this proceeding [see Moore, supra at para 70]. (highlight added)

 

[227] This concern lays bare one of the problems with Access Copyright’s equitable claims. While Access Copyright has gone to great lengths to assert in its submissions that it is not making an infringement claim (notwithstanding the language used in its pleading), Access Copyright grounds its equitable claims in the Plaintiffs’ acts of compensable copying. But compensable copying in the absence of a licence is merely an act of infringement—an unauthorized exercise of the owner’s exclusive right. As stated by the Supreme Court in York University, a person who has not paid or offered to pay is not licensed and may be liable for infringement. To permit Access Copyright to obtain an equitable remedy for compensable copying would have the effect of using equity to make the tariff de facto mandatory or permitting Access Copyright (a non-exclusive licensee) to recover for infringement, either of which would turn the copyright regime on its head. (highlight added)

 

[228] Through its equitable claims, considered collectively, Access Copyright ultimately seeks payment by the Plaintiffs of an amount equivalent to the royalties the Plaintiffs would have owed had they been licensees, which would result in the inequities and absurdities addressed above. (highlight added)

 

[229] For these reasons, I conclude that, in the circumstances, it is not open to this Court to award the equitable remedies sought by Access Copyright as to do so would turn the copyright regime on its head. (highlight added)

 

[273] For the reasons stated above, my determination in relation to each of the issues is as follows:

1. Were the Plaintiffs licensees in 2013, 2014 and 2015? No.

2. If the Plaintiffs were not licensees from 2013 to 2015, are the Plaintiffs nevertheless liable in equity, or otherwise, to pay Access Copyright an amount equivalent to the tariffs royalties for 2013 to 2015? No.

3. If the Plaintiffs are not liable in equity, or otherwise, to pay Access Copyright an amount equivalent to the tariff royalties for 2013 to 2015, is Access Copyright entitled to retain the 2010 to 2012 overpayment in any event? No.

 

As to costs, Justice Aylen rules:            

 

[296] Accordingly, I find that the Plaintiffs are entitled to their costs to be calculated in accordance with the mid-point of Column III of the Tariff for all steps in this proceeding, other than documentary production steps which shall be calculated in accordance with the mid-point of Column IV of the Tariff.

 My overall assessment:

 

1.      This ruling is  incredibly important, detailed, meticulous, and comprehensive. It reviews the evidence, the arguments, and the applicable case law in unusual and commendable detail.

2.      I would say, in my opinion and based upon my long experience, that any appeal by AC is unlikely to succeed.

3.      Needless to say, an affirmation by the Federal Court of Appeal would be even further devastating to Access Copyright.

4.      Moreover, any appeal might spark a cross appeal as to costs, which is the one aspect where AC got some sympathy. Column 3 costs, as awarded to the Consortium, are at most a small fraction of actual costs.

5.      Although his cases technically began in 2018, there was a lengthy leadup between the parties at the Copyright Board and in the lobbying corridors. The Consortium deserves credit  for fighting for justice for Canadian educators for so long.

6.      This ruling is anything but shocking. It confirms that Canada, like the USA, does NOT have mandatory tariffs and that fair dealing is important and a key aspect of the copyright bargain.

7.      Given the recent downsizing and restructuring of AC and the departure of Roanie Levy, it will be interesting to see if it now takes a less aggressive litigation approach or doubles down and becomes even more aggressive.

 Finally, this case provided an interesting contrast in advocacy and approach:

·       AC’s positions were very aggressive and sought to turn the Copyright Act “on its head”, as the ruling repeatedly states. AC’s oral advocacy, as led by Sarit Batner of McCarthy’s, was very dramatic, perhaps even melodramatic and too much so, even allowing for the “meritless” and “absurdity” aspect of many of AC’s key submissions..

·       The Consortium’s positions and oral advocacy, led by Aidan O’Neill of Fasken,  were much more restrained, concise, and even understated. In the result, this approach was clearly far more convincing in this instance.

 

Let me remind readers, as  always, that nothing in this blog is legal advice.

 HPK

Note: I've corrected the above to reflect that the final arguments were on January 17 & 18, not February 17 & 18.

Province of Alberta et al v. Access Copyright, Federal Court T-326-18 - Next Steps in Summary Trial Motion

 For those following the proceedings in Province of Alberta et al v. Access Copyright, Federal Court T-326-18 (the K-12 proceeding), which I wrote about on October 5, 2023, here is what to expect following the conclusion of the opening statements and evidentiary phase of the summary trial motion. This is the Direction of the Federal Court from presiding Justice Aylen dated October 17, 2023:

Ottawa, Ontario

K1A 0H9

October 17, 2023

BY EMAIL ONLY

Counsel for the Plaintiffs:

Wanda Noel wanda.noel@bell.net, wanda.mary.noel@gmail.com

Ariel Thomas law@arielthomas.ca

J. Aidan O’Neill aoneill@fasken.com

Alexandra Logvin alogvin@fasken.com

Counsel for the Defendant:

Sarit Batner sbatner@mccarthy.ca

Barry B. Sookman bsookman@mccarthy.ca

Daniel G.C. Glover dglover@mccarthy.ca

Laura E. MacDonald lmacdonald@mccarthy.ca

Allison Spiegel aspiegel@mccarthy.ca

RE: THE PROVINCE OF ALBERTA ET AL v. THE CANADIAN COPYRIGHT

LICENSING AGENCY

Court File No: T-326-18

This will confirm the Directions of the Court (Madam Justice Aylen) issued on October

17, 2023

“The following timetable shall apply to the closing arguments on the summary trial motion:

(a) Access Copyright shall serve and file their further written representations (which shall

not exceed 60 pages in length, without leave of the Court) by no later than November 10, 2023,

which shall replace their original written representations.

(b) The Plaintiffs shall serve and file their further responding written representations

(which shall not exceed 60 pages in length, without leave of the Court) by no later than

December 4, 2023, which shall replace their original written representations.

(c) Access Copyright shall serve and file any reply written representations by no later than

December 18, 2023.

(d) The oral closing arguments shall be held, in person, at the Federal Court in Toronto

on January 17 and 18, 2024 commencing at 9:30 am (Eastern).

(e) The parties shall ensure that their further representations address, among other things,

the following issues:

a. Who bears the burden of proof on each issue;

b. How the limitation period issue factors into each of the three issues put forward by the

parties, if at all;

c. Substantive submissions on the asserted limitation bar (including in relation to any

equitable relief), with reference to the relevant evidence (such as the presence or absence of

FTE forms, FTE reporting, invoicing, etc.);

d. Can someone “offer to pay” under the Copyright Act by way of their conduct?

e. Where the Court finds the terms of the licence that Access Copyright asserts that the

Plaintiffs offered to pay for;

f. The distinction between the tariff and a licence, if any;

g. What documents shed light on the parties’ understanding of the term of the licence

that Access Copyright asserts that the Plaintiffs offered to pay for (annual, 3 years, 6 years);

h. Did the Copyright Board amalgamate the two proposed tariffs or simply hear them

together? What impact, if any, does this have on the term of the licence?

i. How, if at all, the principles applicable to oral contracts come into play in establishing

the terms and conditions of the licence that Access Copyright asserts that the Plaintiffs offered

to pay for;

j. How does a continuation tariff impact the term of the asserted licence, if it all;

k. Is there an ability to terminate the licence that Access Copyright asserts that the

Plaintiffs offered to pay for and if so, on what basis and where does that ability come from?

l. Clear submissions as to the evidence relied upon and theory of liability for Access

Copyright’s assertion that the Plaintiffs offered to pay for a licence for each of 2016, 2017,

2018, 2019, 2020, 2021, 2022 and 2023;

m. Is Access Copyright asking the Court to find that the Plaintiffs have engaged in serial

infringement and if so, what evidence supports that assertion?

n. To grant the equitable remedies sought by Access Copyright, does the Court need to

make a finding of infringement?

o. What use can be made of the Copyright Board’s decision and the 2005-2006 volume

study on the issue of infringement;

p. Can the Court consider the agreement between the parties regarding the uses to be

made of the volume study? If so, is this proceeding off-side that agreement?

q. Can the Plaintiffs assert a lack of clean hands on the part of Access Copyright given

the state of the Plaintiffs’ pleadings?

r. Whether Access Copyright has standing to assert each form of equitable relief sought;

s. Whether equitable relief is available under the Copyright Act and if so, pursuant to

which provision(s) thereof;

t. The framing of issue 3 and whether a claim for equitable set-off can be made out if the

answer to issue 2 is “no”; and

u. The specific relief sought by each party in the form of a draft order.”

Yours truly,

Aline Longin

Registry Officer

(highlight added)

 

A Fair Deal for Canada on Fair Dealing

Kate Taylor - Globe and Mail

The recent sadly and badly misinformed “opinion” dated May 20, 2023 by veteran Globe and Mail cultural columnist Kate Taylor entitled “Copyright loophole for education should be plugged”  highlights the need for the educational sector to step up to the plate on fair dealing and copyright revision. Her “opinion”, which some might mistake for journalism given her 34 year tenure with the Globe and Mail (which regards itself as “Canada’s National Newspaper”), could have been written by lobbyists for Access Copyright and publisher interests, though it would lack her hallmark and that of the Globe and Mail.

This is not the first time she has blatantly opined for Access Copyright. Here she is in 2016 using her Globe and Mail podium, which does not even pretend to be an “opinion” piece as does the current effort.

• She doesn’t seem to understand that fair dealing rights are “users’ rights” that must be given a “large and liberal interpretation” and are “always available.” She needn’t take my word for this. Those statements come from the Chief Justice of Canada, Beverly McLachlin in the landmark 2004 CCH v. LSUC decision. Above all, fair dealing is not a “loophole”. Fair dealing rights are absolutely essential and integral to the concept of copyright in Canada and every other comparable jurisdiction.
• She doesn’t seem to know the difference in terminology between “fair dealing” (Canada) and “fair use” (USA).
• She is apparently unaware that the USA has provided more and more explicit rights to educators since 1976 than Canada has ever done, i.e. by hard wiring teaching (including multiple copies for classroom use), scholarship, or research” into its copyright law since 1976. See 17 USC 107. Nobody could credibly suggest that this is non-compliant with international treaties. It’s simply absurd to suggest that Canada is an “outlier” in this respect; if anything, our fair dealing users’ rights need to go even farther to catch up with the USA.
• She is apparently unaware that key Canadian SCC fair dealing decisions, including the landmark 2012 Alberta v. Access Copyright and the SOCAN v. Bell  iTunes preview cases, were decided on the pre-2012 law that goes back to 1921 before the word “education” was added to s. 29. 
• She is misleading readers by suggesting that the addition of the word “education” to s. 29 of the Copyright Act via the 2012 Copyright Modernization Act caused the decline in Access Copyright’s revenues. Indeed, the 2019 INDU Committee Report from Parliament confirms that:
• ... in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright),5 the SCC concluded that teachers could rely on the fair dealing exception when reproducing works for their students since these students were engaging in “private study.” The SCC reached this conclusion without relying on an explicit fair dealing exception for “education”—which, as noted above, has since been added to the Act.
• See also:

Prof. Ariel Katz’s 2018 testimony at the INDU hearings explaining that  correlation does not imply causation and outlining the many of the actual reasons for Access Copyright’s declining revenues
Prof. Ariel Katz’s 2014 blog about The Loss of Access Copyright Royalties and the Effect on Publishers: Sifting Fact from Fiction, which debunks the myths about the Oxford University Press “OUP”)decision close its Canadian K-12 division. Ms. Taylor in her current opinion to continues to attempt to refloat the OUP fiction

There have been no court cases since 2012 that have specifically considered the effect, if any, of the 2012 addition of the word “education” with respect to the fair dealing rights of educators, librarians, students and other essential “users” of the copyright system. In any event, the effect of the dealing on the market for the work being copied is one of the factors that courts would consider in determining fairness or lack thereof and, if Ms. Taylor is somehow correct in her assertion of causal connection, then copyright owners are already protected – so there’s another reason why there’s no loophole that needs to be fixed.

She is apparently unaware of the greatly increased spending since 2012 that bypasses Access Copyright not just because tariffs aren’t mandatory (as Ariel Katz and I have been preaching for a decade or so and the SCC agreed in 2021) but because Access Copyright’s “tariff” offers such poor value. Its repertoire is very limited – especially in the post-secondary educational (“PSE”) sector – and its terms of use are too limited to justify any more than a small fraction of their “approved” tariff, which is:

• $24.80 per FTE student, if the educational institution is a university.
• $9.54 per FTE student, if another educational institution (i.e. college)

The PSE sector is spending more money than ever though acquisitions, direct licensing, and dealing with the much more responsible and responsive American Copyright Clearance Center for transactional licences. Access Copyright is notoriously inefficient in its distribution, offers very limited “rights”, and its repertoire is focussed on Canadian literature – which is not a major component in the PSE sector. Most Canadian university or college grads will never need to read Margaret Atwood or Alice Munro. Maybe they should for their literary betterment. But such material is not part of the curriculum for engineers, doctors, lawyers, computer programmers, and the overwhelming majority of PSE students.

Access Copyright persists in attempting to collect revenues based upon repertoire for which it has NO rights. It once was able to get educational institutions to hold their noses on its dubious and now defunct “indemnity” scheme, which may have appeared to offer some practical value to some institutions. I’ve written a lot about this in the past, including this from 2009.

I have often suggested that Access Copyright could serve a useful purpose if it offered decent value to license its actual repertoire based upon useful terms and conditions at a reasonable price. But that price would presumably be a fraction – perhaps 10% - of what it currently sees itself entitled.

BTW, Access Copyright’s website is deceptively out of date regarding the PSE tariff case law, where it stops in 2017.

Ms. Taylor concludes her perfect puff piece for Access Copyright by saying “The legalized robbery of Canadian authors by the education sector is an international embarrassment and a national shame.” (emphasis and highlight added) Frankly, the national shame is that Canada’s national newspaper would publish something this misinformed, outrageous, and imbalanced that might get mistaken, due to its provenance and the Globe and Mail’s status, for credible journalism or analysis. BTW, I posted several timely tweets about this “opinion” and compiled  them for the comments section for the Globe and Mail, which has apparently decided not to publish my comment  in the “comments” feature following her opinion.

All that said, Ms. Taylor’s analytically and factually challenged “opinion” should at least be useful as a wakeup call for the educational sector – which frankly has not stepped up to the plate with sufficient vigor and confidence since its great victory in the SCC in the 2021 Access Copyright case, for which Ariel Katz laid the legal foundation and influentially intervened and I made the prevailing arguments on behalf of the intervener Canadian Association of Research Libraries (“CARL”).

The good copyright news overall now is that we recently passed Passover this year without the feared fatal budget announcement regarding fair dealing or mandatory tariffs that this Government might have hidden away in Federal Budget. That’s the good news.

The bad news is that this doesn’t mean these dangers have passed, as Ms. Taylor’s opinion piece blatantly demonstrates. Although the Hon. Pablo Rodriguez has his hands full with his incredibly misguided legislation in the form of Bills C-11 (now passed)  and C-18 (the “link tax” bill), that doesn’t mean that he or his enabling officials have forgotten about copyright and the shrill and misinformed voices from Quebec (of which he is Trudeau’s “Lieutenant”) and Bay Street.

Wiser ministers know that copyright revision – other than very careful incremental changes – is not a hill to die on in Canada. Fortunately, there are two other ministers who will hopefully bring some essential legal and policy wisdom to the table, should this become necessary.  The Hon. F-P Champagne, the ISED minister, is actually the minister with historically primary responsibility for copyright. The Minister of Justice – the Hon. David Lametti – who is mentioned by name by Ms. Taylor – may also play a role. He was a leading copyright law professor at the McGill Faculty of Law for about 15 years before he ran for office. His department is responsible for ensuring the constitutionality of any legislation and is responsible for the review and drafting of legislation for the government. He was my client and appeared with me in his capacity as law professor and head of the Centre for Intellectual Property Policy at McGill in another important SCC case that helped to pave the way to the definitive 2021 SCC York ruling that Access Copyright tariffs aren’t mandatory. See Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615.

In the lull before the possible copyright storm, the best thing that the user community can do would be to follow the suggestion of Justice Abella in her last and crowning SCC decision of her illustrious career, namely to “actualize” their fair dealing rights as she puts it in the 2021 Access Copyright v. York University decision from the SCC.

As I’ve said before:

The victories of the PSE (post secondary education) sector are in peril – not only because of AC and its collaborators but because of sometimes unwise strategies in the PSE sector itself. Recall this important analysis by Prof. Ariel Katz following York’s defeat at the trial level in 2017: Access Copyright v. York University: An Anatomy of a Predictable But Avoidable Loss. The fact that the AC litigation against York was not struck down early on and had to go the SCC and that York chose to bet the farm on a bad set of fair dealing guidelines and risk a severe smack down overall on fair dealing does not bode well for the future unless basic lessons have been learned – which is hopefully happening but is not yet evident. York very nearly lost that litigation. Fortunately, my brave client the Canadian Association of Research Libraries (“CARL”) and Prof. Ariel Katz were very instrumental in saving York from this fate – though it’s far from clear that all those responsible for York’s strategy actually appreciate our work.

It surely suggests that the PSE sector needs to update fair dealing guidelines and to follow Justice Abella’s wise words in the York decision:

[106] At the end of the day, the question in a case involving a university’s fair dealing practices is whether those practices actualize the students’ right to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Act. Since we are not deciding the merits of the fair dealing appeal brought by York, there is no reason to answer the question in this case.

(underline highlight & emphasis added)

This can only mean that the PSE sector needs to come up with viable fair dealing guidelines that are:

• Neither too permissive nor too defensive
• Sufficiently specific to be actually useful.
• Sufficiently to broad to enable adult responsibility by individual professors and library personnel without the need to seek legal advice or permission from so-called rights owners or their licensees (after all, that is what fair dealing is all about)
• Likely to stand up to scrutiny in the event of litigation.

As I’ve said before:

Perhaps York should have been rather more careful about what it wished for. Both the Federal Court and the FCA had to respond to the counterclaim, which they did as asked. I am on record from the beginning as having questioned not only the guidelines themselves, which emanate from AUCC (now UC) guidelines but York’s decision to needlessly, in my view, put them on trial. Essentially, I had suggested that York get a summary ruling on whether the tariff was mandatory – which should have been very easy at least after the 2015 SCC judgment – and not unnecessarily “bet the farm” on the controversial fair dealing guidelines. Here are some of my blogs in reverse chronological order.

The process of actualizing educators’ fair dealing rights, which includes updating fair dealing guidelines, is essential and may suffice to head off any improvident legislation, such as Ms. Taylor and her supporters would like to see. It is too important to be entrusted to any single organization. That said, it should not be unduly complicated, given the good beginning of the 2012 U of T guidelines with which I was closely involved. These could be satisfactorily updated relatively quickly by a very small number of experts. If different organizations separately develop new guidelines, then let the market decide which approach is better. This may prove more efficient than attempting to form a coalition that could result in delays and devolution to the lowest common denominator. Above all, the mistakes that almost resulted in defeat being snatched from the jaws of victory in the long saga of the York litigation as a result of problematic guidelines and litigation strategy must not be repeated.

The original 2012 U of T fair dealing guidelines were developed in a cooperative collaboration between usually contrasting viewpoints (Casey Chisick and I) under the wise leadership of the now retired and much missed U of T general counsel Steve Moate. I was pleased to have been part of this process. These were, IMHO, the best fair dealing guidelines to date and suggest a method and process of going forward. If Casey and I can agree on anything concerning copyright, chances are that it must be right!

U of T has recently controversially updated its fair dealing guidelines, supposedly in response to the 2021 York decision from the SCC. Here is the new version. I was NOT involved in this update because I was not invited. I and many others are very disappointed with these new guidelines which are a big step backwards and, in some respects, simply wrong and even harmful. I will not go into any detail now as to how they are less than helpful, other than to say this.

Overall, these revised 2022 (as slightly updated in early 2023) guidelines are a disappointing and, in several instances, questionable and even inaccurate revision and update. They are more restrictive for the PSE sector than the 2012 guidelines.

Overall, the guidelines have gone from a reasonably balanced “safe harbour” approach that  enabled and empowered fair dealing to a much more risk-averse restrictive approach that overly protects publishers and needlessly errs on the side of caution at the cost of good education, research, and private study. With three strong SCC fair dealing victories in the last decades and two recent strong SCC judgements that tariffs aren’t mandatory, why wouldn’t U of T offer more assertive and empowering guidelines for the benefit of teachers and, above all, students – in other words, the university community.

If the current government is unwise enough to follow the histrionic hyperbole of Access Copyright and powerful publishers as presented by Ms. Taylor, then the PSE sector must be ready to defend itself with a good offence. This might include:

• Clarifying that TPMs can be circumvented for fair dealing purposes
• Ensuring that users’ fair dealing rights cannot be overridden by contract or waiver
• Ensuring that if crown copyright is not abolished in its present form, then republication of any crown work that is not officially “secret” should be permitted as fair dealing. This would be almost as good as in the USA where the federal government has no copyright rights in its works
• Adding the two little words “such as” to the s. 29 fair dealing provision, consistent with American law.

Anyway, thank you to @ThatKateTaylor this unintentional call to arms to all those who care about a fair deal for fair dealing and other essential aspects of copyright in Canada.

HPK

Copyright Board Annual Report 2021-2022

The Copyright Board’s recently posted 2021-2022 Annual Report (“Report”) covers the period from April 1, 2021 to March 31, 2022.

(Copyright Board)

What does this full-page collage with this uncredited photograph on page 13 the Board’s Report possibly have to do with Canada’s Copyright Board? I, for one, have no idea. But it takes up a whole page, along with several other diverting and uninformative photographs in this Report that is overall mostly devoid of any actual useful information.

That’s regrettable as the deadline for objecting to proposed tariffs looms and potential objectors have to decide whether or not to become vulnerable to potentially extremely intrusive and invasive interrogatories, expert witness costs, and huge legal expenses to deal with tariffs that the Supreme Court of Canada (“SCC”) has confirmed with crystalline clarity are NOT MANDATORY. More on this below…

The Chairman’s “Message” to the Report notes that:

The 2021‒2022 fiscal year was also marked by the Supreme Court of Canada’s decision in York v. Access Copyright, an important decision that clarifies, among other things, the scope of tariffs approved by the Board. This decision will certainly have an impact on the Board’s ability to deliver on its mandate, but it will be some time before we see the concrete results of this decision, including the cumulative effect of the decision and the changes made to the Copyright Act in 2019.(highlight and emphasis added)

The York decision from the Supreme Court of Canada (“SCC’) is, of course, the elephant in the room at the Copyright Board. It is difficult to comprehend what “concrete results” of the York decision the Board does not understand. The SCC clearly ruled that:

Access Copyright’s tariff as approved by the Copyright Board is not mandatory for users

It was unnecessary and inappropriate for the Courts below to issue a declaration about fair dealing in these circumstances

Nonetheless, there were serious errors in the Courts below noted concerning their pronouncements about fair dealing, e.g. re “aggregate” copying.

While there may be more “results” in the future, the above is already as clear as can be. The SCC decision more than “clarifies, among other things, the scope of tariffs approved by the Board”. It unambiguously declares that Board tariffs for Access Copyright are NOT mandatory and not enforceable and makes important statements about fair dealing. BTW, I was honoured to have played a very major role and to have made the prevailing arguments as counsel for my esteemed client CARL in the SCC in getting this result.

These are rulings that the Board must follow – now and not if and when the Board finally can “see the concrete results of this decision”. The Board may not like the decision – but the Board is bound by it. Even if the SCC’s statements about fair dealing are technically “obiter dicta” under the circumstances, SCC obiter dicta – especially when it is so pointed, on point, and  precise as in the instance – is as good as law.

In the past, the Board has at times appeared to be hostile to the SCC and Federal Court of Appeal. One had hoped that this had passed. I wrote here  in 2009 about how former and then sitting Board Chair Justice William Vancise expressed his frank views.

The Board cannot even bring itself to use the “M” word, i.e. “mandatory”, in relation to its tariffs  - or more precisely “not mandatory” - in this Report – which was the essence of the SCC case.

Indeed, the only place the Board uses the “M” word is:

“mandatory training required as part of organizational measures to prevent and address workplace harassment and violence”

The Board is no doubt hoping, along with Access Copyright and other collectives and content owner lobbyists, that the Government will try to undo the SCC’s York ruling and curtail fair dealing in the educational sector. That, of course, would be an enormous legislative, political, and legal mistake that will likely result in costly litigation and uncertainty for years to come. Of course, the Board would probably use such uncertainty to justify more deflection and delay and, no doubt, to demand and even bigger budget so that it can analyze the obvious.

Interestingly, although the period of the report ends on March 31, 2022, it does NOT mention the ESA v. SOCAN “making available” case that was argued in the SCC in January of 2022 and decided on July 15, 2022.  That result was another existential body blow to the Copyright Board, holding, in effect, that the Board got it very wrong in its ill-advised and very wasteful venture into international law and that the Board “will be held to the “correctness” standard of review when it comes to interpreting the Copyright Act because it shares concurrent first instance jurisdiction with the Superior Courts. The Board will be given no deference for being “reasonable” in its interpretation of the substantive provisions of Copyright Act. It must be correct. Importantly, this is the first new category of correctness review since the landmark SCC Vavilov decision.

The Report contains some interesting language about how the Board is “constrained” by decisions of the Courts. It would have been more accurate and more respectful to say that the Board is subject to  and guided by rulings of the Courts – both in the form of judicial review and other decisions that may call into question the reasonableness or even the correctness of the Board’s decisions – as was the case in the York University litigation, in which Access Copyright sought – ultimately unsuccessfully – to enforce the Board’s tariff ruling.

If the Board is to serve any useful purpose and to have a long-term future, it would do well to focus on its mandate and to stay in its lane – which is all about and only about:

• Rate setting
• Establishing tariffs that – while not mandatory – are sufficiently attractive and reflect good enough value that users will voluntarily adopt and maybe even embrace them.

I have always said that there are tariffs that are “de facto” if not “de jure” mandatory – such as those of SOCAN and Re:Sound. If you operate a radio or TV station, there is no other way to clear these music rights other than to avoid the process by playing only public domain music and public domain sound recordings. Those tariffs have mostly been fairly reasonable because there has been sufficient competent organized opposition over the years.

On the other hand, inexperienced objectors with insufficient resources to spend easily five and even six or seven figures opposing a tariff will eventually be worn down by the inevitable irrelevant and oppressive interrogatories that the Board has shown little or no commitment to curtailing. Even the AUCC (now Universities Canada) was forced to withdraw from the Access Copyright tariff case in 2012, although it might have handled the whole matter very differently.

 The major collectives have only limited interest in making the Board better. It seems that their limited interest is only in making the Board a faster and cheaper place to do business.

Many users are now going to be asking themselves whether there’s any point in getting into the quagmire and quicksand of a Copyright Board tariff proceeding at potentially enormous expense  and opening their doors to offering collectives such as Access Copyright a potential treasure trove of interrogatory material. If the Board somehow manages to come up with a tariff that offers good value, a user can then sign a licence based upon it. Otherwise, for example with Access Copyright, the user can ignore the tariff and get licences, when needed, in other more efficient ways for far better value – which is precisely what so many institutions have been doing for nearly a decade with total vindication since the Access Copyright’s “tariffs” have been declared as NOT MANDATORY by the SCC in 2021.

Collectives have almost always done very well at the Board, though not so much in the Federal Court of Appeal and definitely not so much in the Supreme Court of Canada. Board proceedings have almost always been very profitable – with the costs being borne by members and the public.

In the past, tariff proceedings were usually a bankable cash cow for collectives. One notable but apparently isolated exception was Access Copyright’s attempt to get lots of money from provincial governments, outside Quebec. I wrote about this at some lengthy back in 2015:

To recapitulate, the Board awarded a tariff of 11.56 ¢ per FTE (full time equivalent) for the period 2005-2009 and 49.71 ¢ per FTE for 2010-2014. That’s less than 1% and about 2% respectively of what AC asked for.  According to the Board, the tariff will generate a total of only about $370,000 over its ten year period – which is likely only a small fraction of the costs involved in obtaining the tariff.

Here is that decision, interestingly with Justice Vancise as chair of the panel, which hopefully will be kept in mind by all concerned as Access Copyright attempts to impose a tariff for 2024-2026 for post-secondary institutions as follows:

(a) $15.65, if the educational institution is a university; or

(b) $6.01, if another educational institution.

The 2021-2022 Report contains virtually nothing new or interesting. Is all about management platitudes, e.g.:

Expected Outcomes

The Board strives to be a credible institution, well-respected both by the creators and the users of copyrighted material, because of the efficiency of its operations and its unique expertise in copyright matters.

It has adapted and will adapt with resilience and agility to the challenges posed by a constantly evolving legal and economic environment, whether at the national or international level, while offering high-quality support to parties and the public requesting its services.

The never ending tinkering with procedures – such as requiring “grounds” for new tariffs and objections at an early stage – is simply obvious and won’t change anything. The requirement for “fair and equitable” tariffs is hardly new – what else has the Board and its predecessor supposedly been doing for the last eight decades?

Bottom line:

The vast majority of the “tariffs” approved by the Board are no brainer unopposed rubber stamp exercises that somehow still take a very long time.

The unlocatable owner regime is an embarrassing waste of time and resources. Hopefully, it doesn’t still consume a whole FTE resource as then Chair William Vancise confirmed in 2014. With only one  inconsequential rulings visible in the 2021-2022  reporting period, it would be difficult to understand how this took more than a very few hours at the most to deal with. The Copyright Act could be amended to deal with these increasingly rare situations as an exception along with other specific exceptions.

The Board is continuing to try to justify itself as an important and essential quasi-judicial tribunal, which it once was. However, it has failed to clearly get beyond the “dysfunctional” description conferred by a Senate Committee in 2016 and continues to be an expensive and unproductive though paradoxically high profile presence in the Canadian administrative tribunal landscape. It has held only one hearing in the last five years.

Its proposed new Rules of Practice and Procedure will likely accomplish little or nothing – other than to provide an excuse for the Board to demand an additional $1 million a year to its already inflated budget:

The costs of the proposal are expected to be less than $1 million annually. While Parties would be required to provide information earlier on in proceedings, the amount or type of information required from Parties would be the same as under the current Model Directive. (emphasis added)

If the Board is to have any credibility and serve any useful purpose going forward, it needs competent, independent and balanced management with legal expertise in both civil and common law and – of course – in copyright law. The Board’s Members should, of course, reflect these requirements.

It’s really too bad that the ISED Minister @FP_Champagne seems to be apparently 100% missing in action on what is going on here – although it’s 100% his responsibility.

Happy Holidays to one an all!

HPK