Be Careful What You Wish For on the Three-Step Test and Fair Dealing

Once again, my old admonition to copyright maximalists about being “careful what you wish for” is proving to be true.

The US now wants its future TPP partners to benefit from its “fair use” doctrine and the “three-step test” in international law. The USA clearly believes that its own law is fully consistent with the “three-step test”. Those who have been pushing for a certain idiosyncratic notion of what the “three-step test” should mean for Canada are probably not thrilled about the way this is unfolding.

Is this some kind of trick or Trojan horse, i.e. a high stakes policy shopping play on the part of the US Government to change domestic US law? I don’t think so. The epic battles over “fair use” in Congress and the US Supreme Court have been too monumental to get changed in the middle of the night with some “technical” amendment or in some other secretive  sleight of hand, as has been known to happen in US copyright law.

It’s probably a wise concession on the part of the USA in the face of the inevitable realization that large and liberal exceptions are important to education and innovation and always have been and always will be. If countries such as Canada insist on hobbling its own innovators and educators with restrictive and expensive regimes like that of Access Copyright, the USA probably wants to ensure that such short sighted thinking does not hurt the global interests of US corporations operating abroad. 

Here is what the USTR just said about this:

For the first time in any U.S. trade agreement, the United States is proposing a new provision, consistent with the internationally-recognized “3-step test," that will obligate Parties to seek to achieve an appropriate balance in their copyright systems in providing copyright exceptions and limitations for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. These principles are critical aspects of the U.S. copyright system, and appear in both our law and jurisprudence. The balance sought by the U.S. TPP proposal recognizes and promotes respect for the important interests of individuals, businesses, and institutions who rely on appropriate exceptions and limitations in the TPP region.

(Emphasis added)

I couldn’t agree more – namely that §107 of the US law and case law such as Campbell v. Acuff Rose – reflect the “three-step test”. The  1994 Campbell v. Acuff-Rose decision from the US Supreme Court clearly establishes that the fourth factor concerning effect on the market is no more or less important than the other fair use factors.  

Here is 17 USC §107:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

          (emphasis added)

Note the stuff about “teaching (including multiple copies for classroom use”.

It’s hard to imagine but some prominent Canadian lawyers and lobbyists have been arguing lately in fora ranging from the Supreme Court of Canada to Parliament that Canadian fair dealing law does not and should not include the purpose of education or the allowance of multiple copies for classroom use because this could offend the “three-step test” and/or what they inaccurately indicate as a prioritized fourth factor effect on the market test. In fact, there was a heated debate on this blog and elsewhere involving Ariel Katz and I (supported by Bill Patry) with others who had thrown down the gauntlet against such reasonable exceptions in Canada on the spurious and misleading basis that these would contravene the “three-step test”. As I’ve said before, if that argument had any merit whatsoever, which it doesn’t, the USA would have been found to be in violation on this point many years ago.  See also here.

So – the USA, no less, is urging other countries to adopt “balance” as exemplified by its own law on fair use. Sounds like a pretty good idea to me...  Wish I’d thought of it myself ;-)

Actually, Ariel Katz and I did think of it when we urged the Supreme Court of Canada to look at US law in the K-12 case and to treat any suggestion that the “three-step test” should restrict “liberal educational exceptions” in Canadian fair dealing law as a “red herring”. Here’s our factum.

So, maybe this time at least, Canada should not only do as the USA says but as it actually does. In this case, the USA largely gets it right on “fair use”. If the Canadian Supreme Court continues along the path of its own landmark CCH v. LSUC decision and when Bill C-11 becomes law, we will be headed in the right direction with much momentum and well deserved confidence.

HK