Monday, December 06, 2010

Prof. Ariel Katz's Submission to Copyright Board - Dec, 6, 2010

Prof. Ariel Katz is a an expert in copyright and competition law and teaches at the University of Toronto Faculty of Law, where he is Innovation Chair, Electronic Commerce Director, Centre for Innovation Law and Policy. He is also an "intervenor" as ruled by the Copyright Board – though he asked to be an "objector" – re AC’s proposed $45/$35 tariff for 20111-2013. Here’s his important submission to the Board dated December 6, 2010:



From: Ariel Katz

[email addresses omitted]

Sent: 12/6/2010 11:14:06 PM
Subject: Urgent Request for a Temporary Moratorium

Dear Mr. McDougall:

Although the Board denied my application to extend the period for responding to Access Copyright's Application for an Interim Decision, I urge the Board to order a temporary moratorium on its consideration of AC's Application.  This is without prejudice to other arguments below, including an argument that the present application for an interim tariff should simply dismissed, and without prejudice to any argument that I fully reserve the right to make should this proceeding go forward. Cleary, if the Board is prepared to dismiss the application at this time, there is no need for a moratorium.

Under the current circumstances, which have changed fundamentally since last Friday, it will be impossible for me-and I believe for any other party in these proceedings-to respond adequately to the application.  I write "application" with a lower-case "a", because at this point it is very difficult even to determine what document constitutes the application that I, as a party, has to respond to.  The application, at this point, seems to have become a rapidly moving target.

As per the Board's instruction from last Friday, AC sent yesterday a "draft interim tariff".  It is a new document-in effect a new "licensing scheme" within the meaning of s. 70.1 of the Copyright Act-intended to take effect Jan. 1, 2011.   Leaving aside for the moment the important question of whether the clear deadlines and language requirement set in s. 70.13(2) of the Act, as well as the requirements of s. 67.1(5), will be circumvented if the Board proceeds to consider this application, the simple reality is that practically impossible to respond to the application (whatever the application may be) within the extremely short period prescribed by the Board.

The Board's order from today, asking AC to provide further clarification by the end of Wednesday, Dec. 8, 2010 further emphasizes the difficulty of responding to the application.  It demonstrates, on the one hand, that even the Board finds it difficult to fully understand the terms of the application.  At the same time, the Board's order aggravates the problem the responding parties face if they need to respond to the application within less than two working days.

Let me state very briefly, and without prejudice to any other argument, just a few problems demonstrating the serious lack of procedural fairness that would result if the parties would have to respond to this unprecedented application by this Friday.
1)      For many participants in this proceeding, this is an extremely busy and stressful time of year.  Instructors need to draft and mark examinations within very strict deadlines, students need to write exams.  University administrators and librarians, which clearly need to be consulted if an informed response to the application is to be made, are also extremely busy making sure that these critical days in the life of an academic institution proceed without disruption.  It is very difficult for instructors, students, administrators and librarians, to set these firm commitments aside and devote considerable time to analyze the language of the new application and address the novel and unprecedented legal question that it brings forth.
2)      The "draft interim tariff" combines some elements from the expiring AUCC Model License with elements from the Proposed Tariff.  This combination is significantly different from both the Proposed Tariff, the Model License, as well as from the combination contemplated in AC's letter of Oct. 7, 2010.  Understanding what the new proposal is and responding to it within 4 days is impossible.  The need to provide wide notice with ample time for all prospective users to analyze a proposed tariff and respond to it has been acknowledged by Parliament, when it provided a period of 60 days to file objections.  The Board should follow this rule.
3)      The uncertainty of the situation is confirmed and will be exacerbated by the delivery of yet more material by Wednesday, December 8, 2010. With all respect, it is not the Board's role or responsibility to accommodate the inadequacy of AC's material and in so doing to cause prejudice to the position of objectors and intervenors.
4)      AC's counsel letter of Oct. 7, 2010 refrained from using the term "interim tariff", and insisted on using the term "interim decision".  It further emphasized (in footnote 13) that the benefit accorded to users by s. 70.17 of the Act, will not apply in the present case.  Does the fact the AC presently uses the term "interim tariff" mean that s. 70.17 will apply? Will the corresponding s. 68.2(1) apply?

In light of the above, I think all parties would benefit from having a moratorium of several weeks on this application for an interim tariff.   If the application proceeds, it should be heard orally in light of the complexity, controversy, and unprecedented nature of this application. I specifically request that the hearing be an oral one and that I be allowed full participatory rights at this hearing, either with or without counsel as I may later decide.

Naturally, there is another option. For reasons such as those outlined by Howard Knopf today on his blog (his earlier blog posting today can be found at: , there are compelling reasons why the Board could and should summarily dismiss this application at the outset. Naturally, if the Board so rules based on its current schedule, there will be no need for a moratorium and I would accept such a ruling which I believe is called for and would not result in any difficulties that could not be resolved with good faith on the part of those concerned.  All parties will benefit from using their resources and the skills of their legal advisors to find solutions to whatever licensing problem they face, if any, rather than spending them on trying to respond to moving targets.

Indeed, dismissing the present application may have the salutary effect of creating a market place environment wherein rationale economic and legally sound solutions can be negotiated, consistent with the intent of the legislation and the Board's commendable emphasis over the years on rates and conditions that emulate market place proxies or preferably even realities.

I would stress that there is no urgency in deciding anything prior to the end of this year.  Presumably, all course packs for the winter term have already been printed or will be printed prior to the expiry of the current licenses and there should be no serious disruption in the work of academic institutions.  In the case of digital copies, most academic institutions already have in place contractual relations with various publishers and other content providers (see, e.g., the License Information Database set up by the UBC Library, at  These arrangements authorize the academic institutions to access and use to a repertoire that is clearly wider than that which AC can legally authorize.

If any academic institution still feels a need to obtain a license from AC on an interim or permanent basis, there is no reason why AC and the institution will not be able to agree on that, and should they fail, they can always seek the Board's assistance as an arbitrator, as per s. 70.2, or perhaps in some other capacity as proposed by Mr. Knopf.

I would therefore suggest that the Board dismiss the present application, or at least provide a significant moratorium to allow all parties fairly to understand the application and formulate their response.

Best regards.

Ariel Katz
Associate Professor
Innovation Chair, Electronic Commerce
Director, Centre for Innovation Law and Policy
Faculty of Law, University of Toronto
78 Queen's Park
Toronto ON, M5S2C5
Tel: (416) 978-8892; Fax: (416) 978-2648

P.S. Please view works on SSRN at  You can also see my selected writings site and sign up for notifications of my new work:

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