Monday, July 23, 2012

Access Copyright’s Fantasy of a “Seven Per Cent Solution”


Access Copyright (“AC”) has gone straight to Freudian denial mode as a result of the Supreme Court's  landmark K-12 ruling of July 12, 2012. See, for example, here, and here. This type of response worked rather well for AC in the past following its huge 2004 setback in CCH v. LSUC, largely because of overall inadequate and ineffective responses by often overly risk-averse and under-informed stakeholders. Sometimes, indeed, these stakeholders and/or their representative associations took positions that seemed best suited, for whatever reason, to the interests of AC itself. However, the increasing dissatisfaction by stakeholders in the university and library communities, at least, about how they have been represented in dealings with AC in the past and present is now plain, palpable and spreading quickly within those communities and beyond.

While it’s true that the K-12 case went to the Supreme Court of Canada on the issue, as narrowly framed by AC and the CMEC K-12 coalition, of 16.8 million out of 246 million copies (i.e. 7%) supposedly in dispute, that doesn’t mean that this will set the boundaries of where the fair dealing issues go from here overall or even in the future unfolding of this particular case. 

That’s one of the wonderful things about the SCC. When it takes a case that is a matter of “public importance”, it can and usually does make rulings that are of considerable “public importance” and that sometimes go well beyond the immediate facts at hand and the issues as so often understandably narrowly framed by the parties. Unlike lower courts, which are usually required to resolve whatever particular disputes come their way and fit within their jurisdiction, it’s the job of the SCC to pick and choose cases where, as in most instances, leave is required. These cases invariably involve issues of “public importance” and the Court decides them in a manner that provides as much guidance for the future as is appropriate and possible in the circumstances. This is necessary because the SCC, despite its extraordinary workload and efficiency, has limited resources and can only hear only a small fraction of the cases where leave is required and sought. Unlike trial courts, the SCC does not hear "evidence" and, unlike normal appeal courts, its function is not primarily one of error correction. In fact, it will rarely, if ever, grant leave simply because a case was wrongly decided below.

Even when the comments from the SCC go beyond the sometimes narrow “ratio decidendi” (what is actually decided and what is generally rooted in the facts) to the those that are “obiter dicta”, the latter type of comments can still be authoritative if they are closely related to “ratio decidendi”.  Those who are curious about the role of SCC “obiter dicta” may want to read the SCC’s own important 2005 decision regarding this issue. See  R. v. Henry.

So,  when AC says that:
… Access Copyright notes with interest and concern the Supreme Court
of Canada’s decision announced today in favour of the Council of Ministers of Education in the appeal of Access Copyright’s Elementary and Secondary Schools Tariff.  This very close decision (5:4)  will have a  limited impact on the importance of the Access Copyright licence to the education community, according to a preliminary analysis by the copyright licensing collective.

"The fact is the Supreme Court was only looking at about seven percent of the copying done in schools,” Maureen Cavan, Executive Director, Access Copyright, said in a statement emailed to media and posted on its website. "The decision absolutely does not mean a free-for-all on copyright-protected materials used in the classroom. On the contrary, it leaves copyright licensing in the education sector alive and well," she said. 

The question before the Supreme Court dealt with only seven percent of copying done in the primary and secondary school sector leaving over 90% of copying by K-12 schools unaffected by the decision. The limited number of uses under appeal at the Supreme Court dealt only with copies made for private study and research in elementary and secondary schools when the
teacher gave instruction to read the material.

In its decision the Supreme Court did not conclude that the copying at issue was "fair" under the terms of the Copyright Act.  The Court said whether something is “fair” is a question of fact and a “matter of impression”. It referred the case back to the Copyright Board for re-determination in light of the Court’s decision. The Copyright Board will decide whether the ruling changes its impression that the dealing was unfair.  (emphasis added),
AC’s comments are inaccurate, incomplete and arguably misleading.

Anything and everything that the Court said about “fair dealing” in both the K-12 and the iTunes previews case are statements and comments that are, at the very least, obviously intended for guidance and which should be accepted as authoritative”, if not decisively and conclusively binding.  

It is quite clear that the Court was looking well beyond these 16.8 million copies and the $0.32 per student supposedly in issue, as described by the lead counsel for the K-12 parties when she stated at the oral hearing:   
If the Appellants are successful in this case and you decide that copying short excerpts for students is permitted under fair dealing, the tariff will go from five dollars and sixteen cents to four dollars and eighty-four cents. So that is the dollar amount that is in issue here.

The Court, however, perhaps in some measure because of submissions made by Ariel Katz and me and some other interveners, went well beyond the questions in issue as precisely posed by the parties.  For example, the Court ruled that "private study" does not mean simply "study by oneself" and put to rest the misinterpretations of the 1916 University of London decision that have caused so much mischief in Canada until now. Ariel and I had dealt with this issue in some detail.  The decision will have profound effects on copyright law generally and fair dealing in particular regardless of what AC may believe or what they Copyright Board may rule in its reconsideration. It should go without saying that the Board can only apply the SCC’s decision. It cannot change it.

The Court sent the matter back to the Copyright Board for “reconsideration based on these reasons.” That means all of the reasons and that means the reasons of the majority. And “these reasons” include specific statements indicating that:
·       Teachers “are there to facilitate the students’ research and private study”
·       “Instruction and research/private study are, in the school context, tautological.”
·       “The fact that some copies were provided on request and others were not, did not change the significance of those copies for students engaged in research and private study.”
·       “…the word “private” in “private study” should not be understood as requiring users to view copyrighted works in splendid isolation.  Studying and learning are essentially personal endeavours, whether they are engaged in with others or in solitude.  By focusing on the geography of classroom instruction rather than on the concept of studying, the Board again artificially separated the teachers’ instruction from the students’ studying.”
·       “…the “amount” factor is not a quantitative assessment based on aggregate use, it is an examination of the proportion between the excerpted copy and the entire work, not the overall quantity of what is disseminated.  The quantification of the total number of pages copied, as the Court noted in CCH, is considered under a different factor: the “character of the dealing”.”
·       “…buying books for each student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks.  First, the schools have already purchased originals that are kept in the class or library, from which the teachers make copies.  The teacher merely facilitates wider access to this limited number of texts by making copies available to all students who need them.  In addition, purchasing a greater number of original textbooks to distribute to students is unreasonable in light of the Board’s finding that teachers only photocopy short excerpts to complement existing textbooks.  Under the Board’s approach, schools would be required to buy sufficient copies for every student of every text, magazine and newspaper in Access Copyright’s repertoire that is relied on by a teacher.  This is a demonstrably unrealistic outcome.  Copying short excerpts, as a result, is reasonably necessary to achieve the ultimate purpose of the students’ research and private study.”
·       A determination of the ““effect of the dealing on the work”, which assesses whether the dealing adversely affects or competes with the original work” cannot be made in an “evidentiary vacuum”.   

All of these statements and even some more general comments in the K-12 and the iTunes previews decision that some might characterize as “obiter dicta” will inform and determine any future consideration by the Copyright Board and the Canadian courts at all levels where “fair dealing” is in issue.

The fact that the K-12 case has been sent back to the Copyright Board will be a real test of how the K-12 coalition reacts to its rights as confirmed by  SCC. While AC will no doubt try to limit the discussion to determining how much of that $0.32 per student or “seven per cent” requires adjustment,  there will arguably be an opportunity – and perhaps even a necessity - to essentially revisit much if not most of the entire proceeding.  This might even include the basic volume survey. 

Since the Board came to not only incorrect but  “unreasonable” conclusions about application of the CCH factors to determine what constitutes fair dealing for the purpose of, at least,  “private study” and “research”, it would appear that the many of the assumptions that informed the volume survey, the parties’ framing of the case, and the Board’s reasons can and likely should now be questioned. Application of the CCH factors to the discussion of “criticism” and “review” may also need revisiting. After all, there are not only tens of millions of dollars a year on table here. There are profound questions of access, dissemination, and innovation involved. There is no place for copyright “chill” in Canadian academia at any level.

Other interesting issues will include:
·       whether other educational sector and other public interest interveners will wish seek and in turn be permitted to intervene
·       whether the K-12 Coalition and AC may both wish to quietly “settle” the matter, to seek approval of such a settlement from the Board, and whether the Board would approve such as settlement without a hearing in these circumstances.

Above all, it will be interesting to see how the reconsideration will take place in the light of the Court’s explicit ruling that:
Because the Board’s finding of unfairness was based on what was, in my respectful view, a misapplication of the CCH factors, its outcome was rendered unreasonable. 

This means that, no matter how much it may be argued that the Board’s determination of what is or is not “fair dealing” may concern factual findings, its conclusions will be vulnerable to reversal if there is any  “misapplication of the CCH factors”.  It is simply inaccurate, incomplete and wrong to suggest that this is all as simple as, in AC’s words,  “The Court said whether something is “fair” is a question of fact and a “matter of impression”.

This raises, once again, the sempiternal question”, as Justice Létourneau aptly called it, of “standard of review”. This was the basic point of departure between the majority and  minority of the Court in the K-12 decision. However, the bottom line is that the majority has spoken. “Misapplication of the CCH factors” will render a decision “unreasonable” – which means that, however the standard of review analysis is applied, in such a case the decision can be overturned. Hopefully, issues about standard of review and the Copyright Board have been put to rest for a while, at least, by this and other decisions in the pentalogy.

I will follow up later with some more detailed comments on what might happen at the Board’s “reconsideration” stage. However, it should come as no surprise that there will be much discussion about what is meant by “short excerpts”. Hopefully, the K-12 coalition will not make the same mistake as many have made in the post-secondary context – which is to voluntarily agree to pay for what the SCC has clearly and now repeatedly said can be done without permission or payment. That does not mean “free for all” and “free text books” for everyone. It simply means that users have the right to engage in “fair dealing” in a manner consistent with the Copyright Act and the now three landmark decisions on fair dealing by the Supreme Court of Canada in eight years.

Interestingly, while AC is in denial about this decision having any effect beyond the “seven per cent” of the copies in issue, it has announced that it will continue to hold onto  the windfall retroactive payments received above and beyond the previously negotiated rate resulting from the Board’s 2009 decision that was five years in the making. On July 13, 2012, AC advised its members:
In light of this decision, Access Copyright may not be able to distribute the retroactive royalties collected until sometime after the Copyright Board makes a decision. Our hope is that this can occur within a time frame of one year but the Copyright Board will determine the actual timing. There remains a risk that any reconsidered decision of the Copyright Board could again be appealed to higher courts.

In its 2011 Annual Report, AC states in note 4 to its Financial Statements that:
…All licence fees invoiced to the Elementary and Secondary Schools for the years 2005 to 2011, in excess of the applicable rate under the previous licence, together with related interest, in the amount of $67,490 (2010 - $56,941) have been recorded as deferred revenue and segregated by the Corporation pending the outcome of the SCC appeal.

AC’s statement suggests, among other things, that it acknowledges that there is no simple  “seven per cent” solution to the enormous problems it now faces in the K-12 sector and, frankly, well beyond as a result of its overreaching approach to collective licensing in copyright law in general and collective licensing in particular.

So – not only will AC almost certainly not be able to contain its immediate, much less long term, losses to “seven per cent”. It may just have provided the needed catalyst for a cure to the needless, destructive and very expensive addiction it has inflicted on the educational sector in Canada.  To AC and other collectives and copyright owners that get too greedy, I say once again “Be careful what you wish for”.


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