The only
thing that is reasonably clear from this very prolonged, non-transparent, and no
doubt very expensive exercise and the resulting new document is that the Board
is trying to justify yet another budget increase of as much as a million dollars
a year.
The costs of the Rules are expected to
be less than $1 million annually.
While parties will be required to provide information earlier on in
proceedings, the amount or type of information required from parties will be
the same as under the current Model Directive. (highlight and emphasis added)
It bears
repetition that the Board has held only one actual hearing in more than five
years and that almost all of its decisions for a very long time have been unimportant
and mostly unopposed. Indeed, several proposed tariffs have been withdrawn by
collectives.
There is
nothing in the new procedures that warrants optimism that the Board will rise
beyond its dysfunctional doldrums. Meanwhile, the Board will have 25 FTE employees and a net cost of
operations before government funding and transfers $5,171,140 for 2022-2023.
I’ll discuss
only four issues in these “new” Rules, namely
- Interrogatories
- Quorum
- Case Management
- Delays in Decisions
Interrogatories
The elephant
in the room has always been and still remains the issue of interrogatories. Some
collectives have used the interrogatory process to put forward irrelevant and arguably
abusive questions to objectors that require the production of irrelevant and
confidential financial information, etc. The results of overreach on the part of
some collective and failure by the Board to control this process have ranged
from time consuming fishing expeditions to try to build a case to the driving away
of and withdrawal of well-meaning objectors as a result of oppressive and
expensive financial and time costs, not to mention irrelevant disclosure of
financial and other sensitive business information. Another tactic has been the
demand for lengthy interrogatory answers from each member or too many members of associations
representing a large membership. See my blog from 2011 about Access Copyright’s aggressive use of
interrogatories that led to the withdrawal of all objectors even including
major educational associations except from one lone individual whose reason for
involvement was never clear.
The Board
now explicitly gives itself the discretion to rule on the “scope”, etc. of
interrogatories – which it has always had - but absolutely no indication of
what type of information will be considered relevant and how it will refrain
from making the problematic pro-collective rulings it has made in the past,
e.g. as mentioned above:
Interrogatories
34 The Board or the case manager may make an order to
permit interrogatories and to specify their number, type, scope and form, the
time limits for their completion and the person to whom they may be addressed.
BTW, the
Competition Tribunal has had “Rules” in place since 2008
that apparently work well – and are more like the time honoured processes in
the Courts that require the exchange of Affidavits of Documents after adequate
pleadings and subsequent discovery – rather than the endless and often abusive
fishing expeditions enabled by the Copyright Board in the name of
“interrogatories” that have driven worthy and well-intentioned objectors away,
even long before it became clear that Copyright Board tariffs aren’t mandatory.
Courts do not allow for preliminary and lengthy fishing expeditions by
plaintiffs to determine the basis, if any, of their case. Courts do not allow plaintiffs
to put the cart before the horse. Why would a rational objector spend a fortune
engaging in interrogatories or fights about interrogatories and the other procedural
uncertainties endemic at the Board to oppose a tariff that won’t even be
mandatory at the end of the day?
Quorum:
There is a new
and explicit provision re “Quorum”.
Quorum
10 In all proceedings before the Board, the quorum is
one member.
I am not aware
that anyone asked for this. In the past, this has been dealt with pursuant to s. 22 of the Interpretation Act,
meaning that a quorum would be majority of appointed members.
It is bizarre
that the Chair of the Board can now designate just one person to be a quorum.
Even supposedly simple matters may become contentious and complicated for
better or for worse – e.g. the Breaktrhrough Films “unlocatable” case – the
decision for which seems to have disappeared from the Board’s expensive new
website but can be found here
thanks to Prof. Ariel Katz. Although it would seem inconceivable, this new Rule
would allow only one member to decide such complex and economically significant
matters such as the retransmission tariff, which is worth more than $100
million a year.
BTW, the
Copyright Act provides that:
66
(1) There is established a Board to be known as the Copyright Board, consisting
of not more than five members, including a Chair and a Vice-chair, to be
appointed by the Governor in Council.
This suggests
that there must be a least a Chair and a Vice-Chair. The question of whether or not there was a quorum very nearly became an
issue in 2018.
Case Management
It's strange enough
that, under the legislation and rules, a case manger could be merely an
employee or outside consultant who could decide very significant procedural matters,
presumably including such matters as rulings on interrogatories.
Case
manager
66.504
(1) The Chair may assign a member, officer or employee of the Board or a person
engaged under subsection 66.4(3) to act as a case manager of a matter before
the Board.
Staff
66.4
...
(3)
The Board may engage on a temporary basis the services of persons having
technical or specialized knowledge to advise and assist in the performance of
its duties and the Board may, in accordance with Treasury Board directives, fix
and pay the remuneration and expenses of those persons.
In the Federal
Court and the Ontario Superior Court, case managers are Associate Judges and
Masters respectively who invariably have been very experienced lawyers. Even if
case management rulings can be entrusted to one person, that person should at
least be a duly appointed member of the Board and one with adequate legal
qualifications.
Under the new
Rules, the case manager can decide such weighty matters as:
- whether interrogatories should take place and their parameters as applicable;
- documents to be filed with the Board before a hearing, including legal briefs and case records
All that said,
it is hard to see how this sits with s. 66.5(2) of the Copyright
Act, which requires that:
Decisions
(2) Matters before the Board shall be decided by a majority of
the members of the Board and the presiding member shall have a second vote in
the case of a tie. (highlight added)
Delays
What other court
of tribunal allows a decision to be pending for several years AFTER the
adjudicators have “retired” and are presumably being paid while thinking about
the pending decision? Judges of
the Federal Court and Federal Court of Appeal have eight weeks after retirement
to render any pending decisions. Even Supreme Court of Canada justices have
only six months after they retire to participate in decisions in cases on which
they sat. The Canadian Judicial Council has specifically pronounced that “judges should render decisions
within six months of hearing a case, except in very complex matters or where
there are special circumstances.”
Even with the
recently time limits regulations, the Board can still keep a tariff decision pending
for a long time and postpone the date of a decision presumably for years under
the rubric of “exceptional circumstances”.
Someone with a lot
of patience and $5.00, might think
about doing an Access To Information and Privacy (aka “ATIP”) request
seeking documentation, including names of retired members and amounts paid for post-retirement
consideration of decisions in matters of which they have “begun to consider” pursuant
to the open-ended provision of s. 66.5(1). The provision reads as follows:
Concluding
matters after membership expires
66.5
(1) A member of the Board whose term expires may conclude the matters that the
member has begun to consider.
It would
presumably be very easy for the Board to provide this information. The Board
has very good records going back to its inception in 1989. However, one should not
be surprised if the Board were to strongly resist such an ATIP request and even
spend a lot of money on outside counsel in the process.
Concluding
Comments
Currently, for
the first time ever, neither the Vice Chair nor the Secretary General have any
legal qualifications. The appointment of the current Vice Chair expires on September
30, 2023. Moreover, there is a
notable absence of common law perspective at the Board – even more so than in
the past.
On a positive
note, it appears that there will NOT be a Copyright Board “Town Hall” this year
under the auspices of the CBA at the annual CBA IP Day.
This should be a relief for those who
felt obliged to observe this unproductive ritual over the last few years
that resulted in essentially nothing other than management platitudes and promises.
Here is the presentation of Presentation by Nathalie Théberge, Vice-chair and Chief
Executive on Practical results of the Modernization of the Board
from last year’s CBA Town Hall posted some time after the fact.
The viability
of the Copyright Board in the future will depend on two seemingly simple
elements:
- Collectives must propose tariffs for approval that offers good value, terms and conditions that make them attractive for users, preferably without the need for interrogatories and hearings; and,
- The Board must develop the expertise, efficiency, and determination to approve such tariff proposals, and, if appropriate, make them even better in a short period of time measured in weeks or months and not in years and not retroactively.
If the Board can
manage to expeditiously approve truly fair and equitable tariffs that offer
good value and convenience and, above all, provide necessary access to sufficient
repertoire, then there is a strong likelihood that such “tariffs” will be
utilized with enthusiasm.
However, one
can confidently expect that certain collectives, especially any with extremely limited
actual repertoire and a narrow view of what constitutes necessary “access”, are
busy lobbying hard for legislation to make tariffs effectively mandatory – in spite
of two clear Supreme Court of Canada decisions and case law going back decades.
Such legislation would be a very unfortunate move on the part of the Government
– and would likely give rise to prolonged litigation.
HPK
PS – beware the forthcoming Budget on March 28, 2023 and budget implementation legislation – where we have twice seen this Government break a major campaign promise about not burying bad and irrelevant things in omnibus budget bills.
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