Monday, December 06, 2010

Confrontation at the Copyright Board? Big Problems - Proposed Solution

Yesterday, on a snowy Sunday afternoon, with a deadline to object looming in five business days as Christmas approaches, AC sent out this new proposal labelled “Draft Statement of Interim Royalties to Be Collected by the Canadian Copyright Licensing Agency (Access Copyright)”. Here's the covering email.

In other words, this is a proposed supposedly binding interim tariff that will likely last for the SEVERAL years (probably at least four) required to resolve the proposed tariff before the Copyright Board and the Federal Court of Appeal, given the history of previous files at the Board. BTW, the proposed tariff on its face will expire at the end of 2013.

This latest iteration of an “interim tariff” is substantially different than anything seen to date. It combines some elements of the old expired agreements and some elements of the new proposed tariff. It does not include the “indemnity” scheme, which, although very controversial,  served a useful purpose by getting around AC’s problem of lack of repertoire for practical purposes.

The Board would be well within its power and arguably is indeed  required  to dismiss this application for an interim tariff outright for any one of the following reasons, amongst others:

•    It is a vague and imprecise moving target, of which inadequate notice has been given. There are only five working days notice to consider the legal and practical ramifications of a brand new document that changes many if not most of the rules and moves the goal posts to unclear new places;
•    It offends the Board’s own precedents because there is no previous tariff in place and AC doesn’t need and doesn’t deserve to get funding from its adversaries; 
•    The Board lacks statutory authority to grant this interim tariff, for several reasons, not least of which is s. 70.13 of the Copyright Act, which requires that any new tariff be filed by March 31 in the year preceding the proposed application of the tariff. To repeat, AC does NOT have a previous tariff in place;
•    It is intended to impose a mandatory regime that will likely last for at least four years on institutions that may well have regarded the previous voluntary arrangement as unsatisfactory and may have been planning in good faith and perfectly legally to do without AC by using internal material, source licencing, open access material, e-reserves, etc., etc.; 
•    Even the new proposed tariff does not purport to go beyond 2013 - and there could be all kinds of problems with eventual retroactive application of a new tariff and/or refunds (although the latter are unlikely, given past history at the Board) if this interim tariff is in place. In fact, if AC’s cash possible flow problems are as dire as it claims in their letter of October 7, 2010, it may be unable to pay any refunds due and there are good arguments that any new tariff should be substantially less than amounts that the recently expired regime imposed (i.e. with the full implications of  CCH v. LSUC duly considered); and,
•    The interim tariff is, in effect, a sweeping mandatory injunction to pay a LOT of money and forfeit a lot of academic freedom through unduly restrictive provisions (post CCH v. LSUC) when NONE of the three required tests for an injunction are met here (serious issue, irreparable harm, and balance of convenience) and AC has created the very problem that it now wants to resolve.  Besides, the Board is not a Court, which has far greater inherent jurisdiction, and even a Court must follow the statute.

There is a solution to this very convoluted situation which is causing considerable stress on post secondary institutions of all shapes and sizes and their administrators, faculty and students at one of the busiest times of the academic and personal year for everyone concerned.
The solution is this:

1.    The Board could “bless” a voluntary licensing scheme under the old rates and conditions for those institutions that may wish to use it, with suitable amendments, such as including the indemnity scheme, etc. The Board would make it clear that institutions that wish to remain outside of this regime are free to ensure that they comply with copyright obligations in any manner that they see fit.  It goes without saying that such compliance could include voluntary transactional licenses with AC, if such licenses are available on reasonable negotiated terms;
2.    AC should withdraw its deeply flawed proposed tariff for 2011 to 2013. It is ridden with problems such as its references to linking, display etc. that can’t be sustained under the legislation, the extraordinarily privacy invasive and arguably illegal reporting arrangements, etc. This tariff, as framed, will likely drag on for years before the Board and the Federal Court of Appeal, and very likely the Supreme Court of Canada at enormous costs to all concerned. Even AC will eventually feel the costs pain; and,
3.    AC should file a new and more reasonable licencing scheme by next March 31, 2011 for a five year period that would reflect what the legislation (possibly new legislation) provides and respects the needs of post secondary institutions. Such a proposed regime should available to institutions that want it and optional for those that don’t. If reasonable and if developed in a consultative manner, it would encounter far less resistance - possibly none - and come into effect much sooner and at much less legal costs for all concerned than the current proposal - which is arguably the most problematic proposed tariff that has ever been filed at the Board. And I say this as a veteran of the private copying wars.


PS - here's the submission of BCAIU dated December 6, 2010.


  1. Australia's constitution makes it impossible for tax-like tariffs to be part of the copyright act. Whilst openly Hypothecated taxes paid to undemocratic, circularly self-appointed, collective groups are theoretically possible under Australia's constitution , Australia being a liberal democracy doesn't do them.
    If a tariff is some how justified then it should solely be a Public elected government matter and definitelyno business of copyright collectives at all

  2. John Walker is not correct in saying that there is no compulsion in Australia. There are compulsoryt licensing schemes for education that have made CAL one of the largest literary works collectives in the world. The Copyright Tribunal sets tariffs and these are binding on schools, colleges and universities.

  3. I can't say that I love them but;
    Whilst far from perfect CAL is a very different proposition to the Canadian equivalents.

    CAL is effectively an agent employed by the Commonwealth of Australia , It is subject to close scrutiny , lobbying is not part of their remit.

    CAL is also something of a 'legacy' entity- it was created prior to the High court (majority) ruling that the blank tapes levy was too tax-like to be part of the copyright act. CAL was also essentially created prior to the massive deregulation/ liberalization of Australia that took place over the past 20 years

    The university/education sector is fairly powerful- hardly a push over. The sector is still largely publicly funded . CAL effectively redistributes public taxpayer money to publishing. Ultimately the total size of the cake that CAL may apply have a slice of is determined by public policy.

    The Public lending right is directly administered by the relevant Commonwealth Department.

    CAL is based on payments for photocopying , with the death of the photocopier and the ease of precisely recording individual digital usage, the education systems continuing need for a compulsory statutory secondary license body ( always a last resort option) is in doubt.

  4. The following is from the Review of Australian Copyright Collecting Societies conducted by Shane Simpson on behalf of the Federal Government in 1995:

    “The general attitude of WIPO to [compulsory] statutory licences is that they should be avoided wherever [voluntary] collective administration is feasible. In brief, it is considered that collective administration recognises that the individual copyright owner has the essential right to control usage - even though, for ease of administration, that individual may choose to license or assign that right to a representative organisation. When that right to control is taken away, all that one is left with is a ‘right to remuneration’, which is a quite different concept to the full rights of copyright” and, “not all rights of copyright benefit from collective administration. Many exercises of the rights are best dealt with on a one-by-one basis. The most simple indicator of this is that no group of Australian copyright owners has transferred all of their rights of copyright to a society for collective administration.”

    In reference to the argument that individual primary rights are obsolete in this modern digital age and should be replaced by statutory rights, Shane Simpson further states:
    “It is very doubtful that this response is in the interest of the general community, although it is certainly in the commercial interest of certain commercial would-be, rights-user groups.”

    The reason for CALs statutory status is the public benefit of making
    education materials easily available, it is not for the benefit of commercial would-be, rights-user groups .
    CAL is very much the exception to the rule