Canadian Copyright Today – Confrontations & Opportunities

(Robarts Library - University of Toronto)

Here is my overview of the state of Canadian copyright law developments at this time.

Bottom Line:

Access Copyright (“AC”) and the Association of Canadian Publishers (“ACP”) are on the warpath against Canadian education. AC had planned a “day of action” on Thursday, October 6, 2022 (postponed “because of unforeseen technical issues”) to “fix Canada’s Copyright Act”. (the “Act”). Guess what? The Act isn’t broken and doesn’t need fixing. As the Supreme Court of  Canada (“SCC”) recently said in what can only be seen as yet another consistent affirmation of users’ rights and setback for overly zealous and self-serving collectives:

[5]       I cannot agree with the Board’s interpretation of s. 2.4(1.1). The Copyright Act does not exist solely for the benefit of authors. Its overarching purpose is to balance authors’ and users’ rights by securing just rewards for authors while facilitating public access to works. When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users gain access to works which they can use to inspire their own original artistic and intellectual creations.

Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (CanLII), <https://canlii.ca/t/jqgw0>

The ACP has made dangerous and outrageous copyright recommendations in its recent “Pre-Budget Consultations in Advance of the 2023 Budget”. These are:

ACP joins colleague associations in recommending that:

● Fair dealing for education should only apply when a work is not commercially available under licence by the owner or a collective.

● The Copyright Act be amended to clarify that tariffs approved by the Copyright Board are enforceable against infringers of copyright protected works subject to a tariff.

● Adequate statutory damages must be available to all copyright collectives.

Of course, we know that publishers and more recently collectives, despite their rhetoric,  don’t necessarily care about the best interests of creators and, indeed, sometimes act against such interests. Neither the Copyright Board not the Courts have yet directly confronted the issue of whether authors’ interests are adequately served by collectives. But this could happen sooner rather than later as authors figure out how to deal directly with users and bypass inefficient collectives and their law firms who too often seem intent on making simple things very complex and prolonged. Is this recently reported lawsuit by some Quebec songwriters against SOCAN the tip of a potentially huge iceberg?

The victories of the PSE (post secondary education) sector are in peril – not only because of AC and its collaborators but because of sometimes unwise strategies in the PSE sector itself. Recall this important analysis by Prof. Ariel Katz following York’s defeat at the trial level in 2017: Access Copyright v. York University: An Anatomy of a Predictable But Avoidable Loss. The fact that the AC litigation against York was not struck down early on and had to go the SCC and that York chose to bet the farm on a bad set of fair dealing guidelines and risk a severe smack down overall on fair dealing does not bode well for the future unless basic lessons have been learned – which is hopefully happening but is not yet evident. York very nearly lost that litigation. Fortunately, my brave client the Canadian Association of Research Libraries (“CARL”) and Prof. Ariel Katz were very instrumental in saving York from this fate – though it’s far from clear that all those responsible for York’s strategy actually appreciate our work.

It seems clear that the PSE sector needs to update fair dealing guidelines and to follow Justice Abella’s wise words in the York decision:

[106] At the end of the day, the question in a case involving a university’s fair dealing practices is whether those practices actualize the students’ right to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Act. Since we are not deciding the merits of the fair dealing appeal brought by York, there is no reason to answer the question in this case.

The process of updating and actualizing is too important to be entrusted to any single organization. A way must be found to assimilate all valid inputs. The U of T fair dealing guidelines from a decade ago were developed in a cooperative collaboration between usually contrasting viewpoints (Casey Chisick and I) under the wise leadership of now retired U of T general counsel Steve Moate. I was pleased to have been part of this process. These were, IMHO, the best fair dealing guidelines to date and suggest a method and process of going forward.

Meanwhile, at the Government, the Minister of ISED – who should be primarily responsible for the copyright file – is apparently MIA – though his officials are still hopefully minding the fort.

The Minister of Heritage, who is also responsible for two very controversial bills - C-11 and C-18 – has been seduced by a dangerous mix of Quebec politics and sophisticated content industry lobbying into thinking that great glory lies ahead in maximalist copyright law revision. However, those who don’t know history are condemned to repeat it. This Minister and his controversial Parliamentary Secretary have yet to learn the lessons of their predecessors – such as Sheila Copps and Sarmite Bulte, who did so much wrong when it came to copyright and suffered the consequences. Better still, they should talk to James Moore and Tony Clement who managed to get a lot right.

Access Copyright and its allies, such as the ACP, are peddling what amount to Trumpian fictions and falsehoods about fair dealing in Canada. AC’s income has dropped in the last decade but NOT because of the addition of the word “education” to the fair dealing provision of the Act in 2012.

AC’s income has dropped because AC tariffs as certified by the Copyright Board are NOT MANDATORY – which Prof. Katz and I have been saying for a decade, as many institutions came to believe, and which the SCC has now TWICE confirmed. See also Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> brought to you by Prof. Katz, Prof. David Lametti as he then was, and yours truly.

The word “education” was added to the Act in 2012 after the Copyright Board and the Federal Court of Appeal held, erroneously, that teaching and instruction were categorically outside the ambit of s 29 and while an appeal of these decision was pending before the Supreme Court. But when the SCC decided the 2012 Alberta case, without regard to the 2012 amendment, it corrected the error and affirmed that “education” has been part of fair dealing even before the amendment, dating back to the fair dealing provision as enacted in the UK act of 1911 and the Canadian act of 1921. There is no court case yet that confirms that the addition of the word “education” has expanded the ambit of research and private study. Copyright nerds may be interested in the factum, which proved to be very influential, that Prof. Katz and I filed for the 2012 Alberta case in this respect. 

That said, even if, assuming (incorrectly), that the list of allowable purposes was meant to be closed, it is arguable that adding “education” may potentially add something that didn’t exist before.

 While “education” is potentially capable of covering things that research and private study may not cover, this doesn’t change the fact that, as far as teaching practices at schools, colleges and universities are concerned, these educational institutions can rely  and apparently are relying on the holding in the Alberta case without reliance on the fact that Parliament did indeed add the “education” in 2012.  Once again, and for emphasis, the addition of the word “education” to the Act in 2012 is NOT the reason why AC’s revenues have gone down.

 According to Universities Canada, Canadian universities “have spent over $1 B in the last three years combined on purchasing library content – and it’s increasing annually”. And that’s not counting colleges and K-12 schools. These massive and increasing expenditures – more and more through electronic purchases and licenses – better ensure that creators and publishers get paid without having to depend on AC and its very inefficient distribution system, especially for individual creators. BTW, I’m a “fly on the wall” member of AC and probably more prolifically published than average. Last year, AC send me something like $82.00, which is more than some widely published academics. But that’s hardly enough to make me quit my day job.

AC’s most recent 2021 audited annual report describes the decline in revenues from the educational sector over the last decade and acknowledges the court cases, along with significant potential contingent liability for substantial refunds and the litigation seeking refunds.

The federal Government has arguably unnecessarily been paying many millions of dollars to AC since the 1980’s and still may be doing so to a significant extent. It is hard to see how AC has much repertoire of any possible interest to federal civil servants and what the Feds may do with that material is very likely fair dealing in any event. Is this more of a sweetheart deal than a rational arrangement? This is something that requires further analysis and exposure. These payments may have helped to keep AC on life support.

What Lies Ahead?

Currently, one hears that the Government’s agenda is roughly as follows.

The Government is looking to develop a legislative package for the spring of 2023 that could deal with some of all of the following issues:

• Small radio station liability
• Indigenous concerns
• Crown copyright
• “Educational copying” including:
• Fair dealing
• Should tariffs be “Mandatory”?
• Licensing
• Statutory damages

Since there have been consultations for years, there may not be much if any further formal consultations – though that won’t stop the lobbying which will then become even less transparent.

 The Government has already decided to legislate a resale right for artists.  This decision is interesting, given that the US Congress has taken a pass on this following an exhaustive 2013 study by the US Copyright Office that raised concerns about the potential impact on the American art market While some Indigenous artists may see promise in such a measure, there are existing mechanisms in place that may be even more effective for most living and less than famous artists – such as the long-standing certification mark provisions under the Trademarks Act, which are probably being under-utilized in this context.  Also, Canadian art dealers will surely oppose such a measure – since there is a concern that it would harm the art market and drive sales and resales underground or out of the country. This issue is far from straightforward and not likely to be a slam-dunk success for the Government.

 The Government needs to get over the notion and the unfortunate provision in s. 92 of the Act that copyright law needs to be reviewed every five years. Such a perspective benefits only consultants, lobbyists and lawyers. This has never been the approach in the UK, USA or Canada – where decades have passed before major changes are made. As always, the fundamental things apply as time goes by. New shiny objects don’t necessarily need new shiny laws. For example, the American and Canadian governments were very wise to resist that notorious and nonsensical attack on the VCR by the late Jack Valenti on behalf of the American film industry in 1982 where he told a congressional committee “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” Indeed the VCR ended up being Hollywood’s salvation. But Valenti’s hysterical hyperbole set the stage for cacophonous copyright confrontation for decades to follow, including from the motion picture industry in Canada, and indeed up the present time.

If the Act is to be re-opened at this time – which on balance is neither necessary nor desirable – amendments should include the following that are simple and long overdue:

• Clarify that circumventing a TPM for fair dealing purposes and other exceptions is legal;
• Clarify that the list of fair dealing purposes in s. 29 is not exhaustive by including the two simple words “such as” – as we have seen in the USA since 1976; 
• Making term extension to life + 70 years conditional upon registration according to regulations to be determined; and,
• Ensure that fair dealing rights and other statutory exceptions cannot be pre-empted by contract.

 A final thought and call to action. While there is lots of disaggregated data about the vast sums of money being spent in the educational sector for print and digital material, it would be very helpful if the post-secondary university sector, at least, would provide global data for the last decade on such things as:

• Amounts spent directly by students on traditional printed books and e-books;
• Amounts spent by institutions on printed books, e-book purchases and e-book licences;
• Amounts spent by institutions on site licences;
• Amounts spent by institutions on transactional licences; and,
• Amounts spent by institutions on OER development.

 As always, comments and copyright gossip always welcome on or offline.

 HPK

The ACP’s [Mis]Statement of Principles on Fair Dealing in Education

The Associations of Canadian Publisher’s (“ACP”) has worked hard and apparently spent lots of money over the years fighting against fair dealing. It has fought against fair dealing twice in the Supreme Court of Canada and lost both times. The ACP is also a very active lobbyist in Ottawa, as a search of the lobbyist registry readily shows, seeking on the one hand to get grants from the Government and on the other hand “lobbying to amend the Copyright Modernization Act…to limit fair dealing exemption for education”. That lobbying against fair dealing also didn’t work. Again, the ACP lost badly.

So, it seems that the ACP has reverted to more blunt tactics. It has recently been sending out this document dated December 2013 to post-secondary institutions entitled “STATEMENT OF PRINCIPLES ON FAIR DEALING IN EDUCATION”. It provides seven (7) principles of fair dealing that are at best misleading and are, at worst, clearly wrong.  The document might more accurately be entitled “[MIS]STATEMENT OF PRINCIPLES ON FAIR DEALING IN EDUCATION”.

Don’t just take my word for this. As everyone knows, there are have been three Supreme Court of Canada (“SCC”) decisions on fair dealing since 2004 and the word “education” is now included as one of the recognized general allowable purposes of fair dealing in the statute. Despite the monumental and concerted efforts of the ACP and their colleagues, the word “education” has not been defined or limited by Parliament.

Despite all the disinformation and denial from the ACP and others, the law of fair dealing in Canada is actually now remarkably straightforward due to Parliament and the acclaimed jurisprudence of the SCC. However, it’s taking a long time for this clarity to sink in, at least in ACP circles.

Parliament has said – and this is the now law, like it or not:

29. Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright. (Emphasis added)

There were many ingenious and some rather disingenuous attempts to limit or qualify the addition of the word “education” in 2012 when the fair dealing amendment was being debated in Parliament – but the attempts failed. The legislative history will confirm that those opposed to the word “education” feared its very broad coverage. They now need to live with consequences of these dire predictions and they may be haunted by their own words in any litigation attempting to limit the meaning of the word “education”. As I always say to copyright maximalists, “be careful what you wish for”. And the addition of the word “education” was passed and given Royal Assent even BEFORE the SCC ruled in the K-12 case and the iTunes previews case. 

And, the SCC made it clear in the CCH case in 2004 that that, once the use is determined to be for a legitimate “purpose”, such as “of research, private study, education”, then there are six factors to consider to see if it is really “fair”.  These are:

60 To conclude, the purpose of the dealing, the character of the dealing, the amount of the dealing, the nature of the work, available alternatives to the dealing and the effect of the dealing on the work are all factors that could help determine whether or not a dealing is fair. These factors may be more or less relevant to assessing the fairness of a dealing depending on the factual context of the allegedly infringing dealing. In some contexts, there may be factors other than those listed here that may help a court decide whether the dealing was fair.

It should be noted that:

-          No single factor has priority

-          Not all factors need be satisfied

-          There may be additional relevant factors

-          These factors closely resemble the American four factors, which are: (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.

So – with all this in mind, let’s look at the ACP’s astonishing misstatements about Canadian copyright law. What ACP says is in Blue. My comments follow in Red.

1. Quantitative limits on fair dealing are not at the heart of defining what is fair. In the absence of a permission negotiated with copyright owners or their representatives, an arbitrary amount becomes a guideline for unfair copying: regardless of the purpose or impact of copying, the analysis starts and ends with calculating a quantity. That is not fair.

HPK: This is seriously misleading. Fair dealing – by definition – does not require “a permission negotiated with copyright owners or their representatives”.  There is nothing wrong with “guidelines” that suggest quantitative norms in line with “best practices” in Canada and comparable jurisdictions and which indicate, as in the case of the U of T fair dealing guidelines, that the application of these suggestions (e.g. “up to 10% of a copyright-protected work (including a literary work, musical score, sound recording, and an audiovisual work)” may “vary depending on the exact nature of the work being used, and of the use itself, all in the context of consideration and application of the fair dealing factors”. Quantitative guidelines are useful so that users can enjoy their rights without having to “negotiate” every use. There will be cases where these guideline suggestions are too high – or too low. Training, experience and good faith will prevail. The existence of good fair dealing policy guidelines is a key element in any institution’s copyright approach. Indeed the Law Society’s “Access Policy” was repeatedly mentioned by the SCC in the CCH decision, and was instrumental in the LSUC’s successful defence.

2. “Textbook-like collections” are created by instructors during their course planning and are most often presented as course outlines. For any resource that appears as required material on an instructor’s course outline, copyright owners should be paid. Although the copying of short excerpts to complement core resources may be fair, fair dealing is not intended to enable the assembly of textbook-like collections, whether digitally or on paper. That is not fair.

HPK: This is wrong. The SCC has explicitly ruled that the fact that a teacher takes the initiative to tell a student what to be read does NOT ipso fact preclude that material from being “fair dealing”. When it is fair dealing, the user does NOT need permission and the copyright owner does NOT get paid. That’s the whole point about fair dealing.

3. Fair dealing is intended to facilitate transformative uses of copied material, such as new research, criticism, and satire. When copying is simply duplication for distribution, it is not fair dealing.

HPK:  This is wrong. The term “transformative” use can be found in American case law, but is only one of many potentially relevant aspects. It is NOT an essential requirement of American fair use, much less Canadian fair dealing. Copying that is “simply duplication for distribution” may very well be fair dealing, if it is for one of the recognized purposes and meets the SCC’s factors.

4. Fair dealing is intended to enable situational uses of copyright-protected material, in support of free expression, expanded discourse, and creativity. Fair dealing is spontaneous—not planned, organized, coordinated for maximum value gained, or designed specifically to avoid payment. If copying is not spontaneous, it is not fair dealing.

HPK: This is wrong. Most fair dealing will involve careful analysis as to whether the dealing meets the requirements of the statute and the SCC factors. That is why all educational institutions are disseminating guidelines and educating their communities. Would intelligent copyright owners want it any other way? The use of fair dealing to minimize costs and maximize quality of education and research is the fundamental part of the foundation of copyright law and is the reason why the SCC tells us that is a “users’ right” that must be given a “large and liberal” interpretation.

5. Fair dealing depends on copying from a legal source. Copying from an illegally acquired original is not fair dealing.

HPK:  There’s no basis for this statement as such a general and categorical proposition. It’s conceivable that “copying from an illegally acquired original” might be an additional factor above and beyond the SCC’s six factors in some hypothetical instance in determining whether the copied material involved fair dealing – but equally conceivable that it may not be.

6. Fair dealing is not intended to exclude paying for the work of authors and all those involved in the original publishing of the material when those doing the copying are being paid for their work, or when students are being charged for the materials. That is not fair.

HPK: This is wrong and very seriously misleading. The SCC clearly ruled in the CCH decision that lawyers have the right to engage in fair dealing for the purpose of research. Lawyers normally get paid for their work. Professors and teachers also get paid for their work. And it’s OK to charge students for materials incorporating copying that is fair dealing, as long as it’s on a not-for-profit cost recovery basis.

7. Fair dealing is not intended to cause damage to the markets for works, along with the livelihoods of authors and publishers, and their ability to create new works. Depending on the work, such damage can occur at any level of copying, but damage is very likely when large amounts of a work are copied, or when multiple copies are made. If copying damages the market for a work, it is not fair dealing.

HPK: This is very seriously misleading. There is nothing in Canadian law that prevents the making of multiple copies, if such copying meets the requirements of the statute and the SCC fair dealing factors. Even If there are thousands of students in a MOOC, the provision of material to each and every one can be fair dealing, if the purpose is for education or another allowable purpose and the SCC’s factor test is satisfied.

Conclusion:

Those in the educational community should ignore the ACP misstatements – or perhaps use them as a teaching tool about how NOT to inform the Canadian public accurately about copyright law.

Those in the educational community should acquaint themselves with good fair dealing guidelines that apply in their context. While the basic underlying principles are the same for everyone, there may be some differences between certain types of institutions and situations. K-12 is obviously not quite the same environment as and advanced research university – though there is more in common than not when it comes to fair dealing. Overall, I am partial to the U of T fair dealing guidelines, which are nuanced, sophisticated and yet very clear and logical. I should reiterate, as I have previously disclosed, that I had some involvement in their creation.

The final paragraph of the ACP document is particularly ironic:

As long-term, effective partners in education, Canadian-owned higher-education publishers are open to discussion and negotiation on the limits of fair dealing. We propose that copyright users adopt policies based in the principles we outline here, an approach that recognizes that authors, publishers, professors, learners, universities, colleges and schools are partners, not adversaries, in education.

One may well ask how parallel efforts in seeking a mandatory tariff, suing a major university, and disseminating wrong and misleading statements of principle are likely to promote a relationship of “partners, not adversaries, in education”.

HPK