The Shrill Shrieking of Access Copyright and the Coming Copyright Confrontation

(Captain Copyright ~ 2006)

For the second time in recent weeks, the Globe Mail – supposedly Canada’s “newspaper of record” - has published highly misleading and embarrassingly over the top op eds from authors who really should know better, given their notable backgrounds. No doubt they mean well and aren’t beholden to Access Copyright – but their opinions are so over the top and poorly informed that they have a very bad look:

Kate Taylor, May 26, 2023

Hugh Stephens, July 15, 2023

Hugh Stephens’ opinion piece conveniently follows up just two days later on the announcement by Access Copyright (“AC”) that it was downsizing and restructuring.

And this, from the shrill Quill and Quire piece dated July 19, 2023.

First, let’s get some big misunderstandings (including what some might say are “big lies”, but I presume no deliberate intent to prevaricate or be mendacious) off the table. More detail follows below:

• AC does NOT collect for the mainstream of creators whose works are used in the Post Secondary Education (“PSE”) sector. It is believed to mainly represent authors of Canadian literature, which is a fringe area overall in the curricula of the PSE sector. AC’s actual repertoire remains something of an impenetrable black hole. Full disclosure – I’m a member and earn enough for one very modest lunch a year – which is more than some serious academic friends of mine.
• AC’s incompetence and inability to fairly distribute its revenues to its creators has been known and documented for a long time, most famously in the 2007 report by Martin Friedland, former Dean of U of T Law School. There is no apparent reason to believe that things have significantly improved since then.
• The decline in AC revenues over the last 11 years had NOTHING to do with the 2012 legislation that added the word “education” to s. 29 of the Copyright Act. The users’ fair dealing rights relied on by the PSE sector have been in place for more than a century since at least 1921 and have been affirmed and confirmed by countless judicial decisions, including four from the Supreme Court of Canada between 2004 and 2021, including the two of the 2012 “pentalogy” decisions and the 2021 York decision, that were not based the 2012 amendment.
• The basic right of “fair use” (American counterpart to fair dealing) has been hardwired into US law since 1976, i.e. “teaching (including multiple copies for classroom use), scholarship, or research”. See 17 USC 107. There is no imaginable reason for Canadian educators and students to be at a comparative disadvantage to their American counterparts, especially when American publishers are a driving force – maybe even the main driving force - behind AC.
• Since 2012, the Canadian PSE sector has been spending far more and far smarter on fair payment for authors by way of licenses of various kinds, acquisitions of print or digital material, and targeted procedures to ensure that deserving authors get paid. See this, for example, from CARL.  It’s just that AC is apparently the worst possible vehicle to ensure such payment. We don’t use a stagecoach anymore to get from Ottawa to Toronto – and there are no “mandatory tariffs” that require using one source or method of getting to there from here – especially via stagecoach.
• AC was born and nourished by a sweetheart deal with the Federal Treasury Board in 80’s. It has been protected since then by the Feds the Copyright Board – but any justification for such protection, if it ever existed, has long expired.
• The bottom line is that AC offers virtually no value at any price for its PSE licenses. And, of course, these “licences” are NOT MANDATORY.

Some History:

Once upon a time Access Copyright was known as CanCopy – until I and others inspired by former York University President Harry Arthurs - nicknamed it “Can’t Copy” – which was much more accurate.

My own blog is called Excess Copyright – a name inspired by Access Copyright.

Well, it seems that “excess” has not served Access Copyright (“AC”) very well. AC has excessively overreached with respect to:

• Demanding excessive FTE payments for PSE students
• Blaming the Conservative government for the 2012 (“Copyright Modernization Act” “CMA”) amendment that added the word “education” to the fair dealing purposes in the Copyright Act
• Blaming the Liberal Government for not undoing this innocuous amendment, which has not resulted in any extension of users’ fair dealing rights not already explicitly blessed by three Supreme Court of Canada (“SCC”) decisions based on the law prior to the CMA
• Purporting to have actual repertoire that is of any significance overall on the PSE system. AC’s actual repertoire – which is anything but transparent – is believed to consist mainly of Canadian literature. Such repertoire plays a minimal role in the PSE sector. Very few university and college graduates will ever be required to read Margaret Atwood, Alice Munroe or lesser literary luminaries in the course of their studies
• Purporting to collect and remit payments for foreign repertoire
• Refusing to meaningfully engage in transactional licenses, which are often successfully obtained from Acs overall more reasonable cousin in the USA, namely the Copyright Clearance Center
• Barking noisily with no teeth to bite. Remember that AC has no standing to sue anyone for copyright infringement, since it is neither an assignee nor exclusive licensee of anyone. This was explicitly confirmed by the SCC in 2021 in the York case.

Once upon a time, AC was able to convince universities to hold their noses and pay a $3.38 FTE cost and offload the $0.10 per page “course pack” charge directly to students. Of course, paper course packs have gone the way of the horse and buggy. Moreover, the legally questionable “indemnity” that AC once offered that was an incentive to that dubious business model has long since been unavailable. I pointed out 24 years ago that AC never has been a licensed insurance company.

It will be recalled that for 2011-2013 AC wanted a mandatory FTE tariff to be set by the Copyright Board of (a) $45.00CAD for Universities; or (b) $35.00 CAD for all other Educational Institutions.

As AC excessively escalated its litigation strategy by then suing York University to enforce its “interim” tariff improvidently provided by the Copyright Board, from which no judicial review was sought due to the strategy of AUCC (now Universities Canada). While AUCC and York continued to spend money and go nowhere, some institutions realized that there was no need and no point in spending lots of money for little or no value. Ariel Katz started in his “hall of fame” and “hall of shame” list. He and I blogged at length about why tariffs should not be mandatory.

Ariel and I, along with a very smart young law professor named David Lametti, who later became Minister of Justice, made the prevailing arguments in the SCC in the 2015 case of
Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> namely that:

[113] I find that licences fixed by the Board do not have mandatory binding force over a user; the Board has the statutory authority to fix the terms of licences pursuant to s. 70.2, but a user retains the ability to decide whether to become a licensee and operate pursuant to that licence, or to decline.

That message did not, however, sink in to AC, AUCC or York. Instead, after years more of unnecessary litigation, during which York unnecessarily and unwisely “bet the farm” on the very poor AUCC fair dealing guidelines,  the SCC finally made it sufficiently explicit that AC’s tariffs are NOT MANDATORY in the PSE sector or elsewhere. Naturally, where tariffs are de facto in contrast to de jure mandatory, e.g. SOCAN tariffs for radio and TV stations, users will still keep on paying and the Copyright Board will hopefully do a much better job than it has done in recent decades of adjudicating any disagreements quickly and correctly.

Fast forward to the landmark SCC York decision in 2021 wherein York University very nearly snatched defeat from the jaws of victory but finally after 8 years fully and frontally faced the “mandatory tariff” and brought in the highly charismatic and ultra competent barrister Guy Pratte to adequately make the argument, at least on the “mandatory” issue, that York had effectively sidestepped before.

With all due credit to Mr. Pratte, my client CARL deserves full credit for empowering me to make the finally prevailing argument that:

• Tariffs aren’t mandatory
• Because the tariff isn’t mandatory, there was no live controversy about fair dealing that required the SCC to look at the bad AUCC/Universities Canada/York fair dealing guidelines devised by AUCC’s counsel years earlier.
• While not necessary, the SCC at our behest did comment on some of the more egregious errors in the Courts below, e.g. re aggregate copyright.

Ariel Katz made his own supportive intervention that helped carry the day, ably presented by Sana Halwani.

Americans would shake their heads in total disbelief at the notion of a “mandatory tariff”, which would be a poorly disguised Canadian subsidy masquerading somehow as an authors’ “right” – like that $0.29 per blank CD we are forced to pay due to Copyright Board impotence (to be charitable) to prop up another long due for extinction collective, namely the CPCC.

Canada throws billions in subsidies at Volkswagen & Stellantis that will likely go down the toilet even if the EV bubble doesn’t burst soon given the competition from far more productive and efficient sources in China, Thailand or eve the USA….

Warning for Ministers

Do not pander to noisy demands from Quebec, where the mantra that more copyright is always better has caused mischief and damage for decades. If the Quebec government wants to shovel money at COPIBEC, let them. There is no reason for this folly to spread throughout Canada at the federal level.

Speaking of the federal level, the kind of changes that that AC and its supporters are calling for may very well be unconstitutional.  Education and property and civil rights are provincial jurisdiction. Freedom of expression is guaranteed by the Charter. There are many other issues. Proceed at your peril.

Liberal governments have tended to pander to copyright maximalists. But this hasn’t always had good results in either policy or politics. Ask Sheila Copps and Sarmite Bulte, for example.

What Lies Ahead

The current campaign of Access Copyright – and its gullible and shrill supporters ranging from Kate Taylor and Hugh Stephens to the usual and much  less credible suspects – should be disregarded by Government as the highly orchestrated public interest scam that it is.

And now  – we just now have had a cabinet shuffle. Sadly, Hon. David Lametti – Minister of Justice – is out. While copyright was never directly part of his portfolio, he was by far the most legally learned member of the previous Cabinet – or any cabinet for a very long time. His potentially moderating influence may be missed. He was certainly very knowledgeable about copyright – and was, as noted above,  involved in the important CBC v. SODRAC case that resulted in an important SCC decision that led up to the 2021 York decision.

And we now have Pascale St-Onge replacing Pablo Rodriguez as Heritage Minister. Her qualifications for this job include that she is from Quebec, played bass in a punk rock band, is the first out lesbian minister in Trudeau’s cabinet and was Minister of Sport. That’s enough to play out very well in Quebec, which is ultra-important to this government. Meanwhile, Pablo Rodriguez – who has left her with a huge mess – remains Quebec Lieutenant and is now, inexplicably, Minister of Transport. If Minister St-Onge is well advised, she will realize that copyright law is not a hill to die on. She might wish to ask Sheila Copps, Sarmite Bulte, and others about that.

The other minister, who should historically be primarily responsible for copyright law and policy, is FP Champagne of ISED, who remains in place. H may be mindful that the copyright file is presumptively toxic and is best avoided at all costs, especially for someone who may have leadership aspirations.

We wait in trepidation to see what the PMO will tell these ministers to do in  new mandate letters. The unfortunate breakdown of the old cabinet system and the centralization of policy making in a politicized and non-expert PMO means that professional public servants – whose policy influence has declined precipitously since the days of Pierre Trudeau – will be of little significance other than to make the PMO’s wishes their command.

Above all, the PSE sector and other use groups need to step up to the plate. Universities Canada cannot be counted upon for leadership. It has failed badly on this file for three decades – and particularly in the most recent. U of T’s new fair dealing guidelines are a major step backwards and are disappointing to most informed observers in the PSE sector. The retirement of U of T’s former general counsel Steve Moate has been a setback for balance and leadership within the influential “U15” group of leading Canadian research universities.

In searching for a new President, Universities Canada now has an opportunity to show more competence and leadership on these issues than it has in the las in the last three decades or so. Let us hope that that the right person can be found. However, this recruitment could take a while and the resulting course correction much longer in turn.

We need to see the responsible smaller organizations with less resources but more insight and ability step forward and write their own op-eds, do their own effective lobbying (i.e. meeting with Ministers), and develop their own updated fair dealing guidelines. Their silence after that Kate Taylor travesty was deafening. I believe that I was the only one who stepped forward and that was purely in my personal capacity.

We need to see a response to all of these big lies. Otherwise, given the absence of any competent ministerial leadership, we could be facing an impending debacle.

 HPK

 PS: A reminder that I was involved in litigation regarding Access Copyright and the CPCC for a long time. However, I am now “not practicing law”.

Access Copyright Gets its Wish for a Post-Secondary Tariff Hearing at the Copyright Board

http://accesscopyright.ca/media/bulletins/impacts-of-the-education-sector%E2%80%99s-interpretation-of-fair-dealing/

Access Copyright (“AC”) is finally getting what it wishes for, which is a consolidated hearing at the Copyright Board on its post-secondary tariffs for 2011-2013 and 2014-2017.

Here is a recent Notice from July 3, 2015 from the Copyright Board regarding Access Copyright (“AC”):

From: <Gilles.McDougall@cb-cda.gc.ca>
Date: Fri, Jul 3, 2015 at 4:28 PM
Subject: Access Copyright - Post-Secondary Educational Institution Tariffs, 2011-2013 and 2014-2017 - Ruling of the Board - July 03, 2015 [CB-CDA 2015-045]
To: arenaud@accesscopyright.ca, cgillis@accesscopyright.ca, efinlay@accesscopyright.ca, smagu039@uottawa.ca

[CB-CDA 2015-045]

RULING OF THE BOARD

In its Ruling of December 4, 2013, the Board denied Access’ application to consolidate the examination of the above-cited tariffs for essentially two reasons. First, the Board did not want to disrupt the then current proceedings in respect of the period 2011-2013, slated for a hearing that was to begin two months later, by adding new issues for examination. Second, it did not want to be in a position to have to certify a tariff for the period 2014-2017 on “what may happen” in a then potentially unstable market.

The first reason is now moot, and the second, much less relevant. Parties are now in a better position to provide useful information on this new, 2014-2017 period. In addition, both Access and Mr. Maguire agree that the consolidation would reduce costs for the parties. The Board thus confirms the consolidation of the examination of the above-cited tariffs.

Mr. Maguire’s application for intervenor status is granted. Access Copyright did not object to Mr. Maguire’s request.

No later than Wednesday, July 8, 2015, Access Copyright shall propose a process and a schedule for a hearing to start on Tuesday, January 19, 2016. This process should minimally provide for the filing of a supplementary statement of case by Access, the filing of a supplementary statement of case by Mr. Maguire and a reply case by Access. Mr. Maguire is allowed to respond to Access’ proposed process and schedule no later than Friday, July 10, 2015.

Finally, Access shall provide answers to the Board’s questions of June 3, 2015 (attached, for convenience) as part of its supplementary statement of case.

Gilles McDougall
Secretary General | Secrétaire général

Copyright Board of Canada | Commission du droit d'auteur du Canada
56 Sparks, Suite| Bureau 800
Ottawa ON K1A 0C9
Telephone | Téléphone 613.952.8624
Gilles.mcdougall@cb-cda.gc.ca

          (highlight added)

In a subsequent Notice from the Board dated July 15, 2015, the Board sets out further deadlines:

• Access Copyright is to file its supplementary case no later than Friday, October 30, 2015;
•  Mr. Maguire is to file his supplementary case no later than Friday, November 27, 2015;
• Access Copyright is to file its reply case no later than Friday, December 18, 2015;
• Hearing is scheduled for Tuesday, January 19, 2016 at 10:00 a.m. in the Copyright Board’s Hearing room.

So, there will be a consolidated hearing for the proposed tariffs for 2011-2014 and 2014-2017 and it will start on January 19, 2016. At issue could be, amongst other things:

• Fair dealing
• Substantiality
• AC’s repertoire and lack thereof
• AC’s chain of title to the rights it purports to license
• Whether any AC post-secondary tariff can be a “mandatory tariff”

Interestingly, AC in its letter of June 16, 2015 indicates that:

As the Board is aware, Access Copyright licensed post-secondary institutions under consensual agreements in the period 1991 to 2010. Beginning in 2011, a number of post-secondary educational institutions chose not to renew their licences with Access Copyright. Some institutions paid royalties under the Interim Tariff approved by the Board but have since stopped making those payments.  

Access Copyright has a number of licences in place in the post-secondary sector that are due to expire at the end of December 2015. Some of those institutions have already given notice that they will not renew their licences upon expiry. Access Copyright projects that its royalty flow from the post-secondary sector will be virtually eliminated as of January 2016.

          (highlight added)

AC provides no information in this letter about take-up of its “Choice” and “Premium” license packages, but the foregoing statement suggests that the response has been virtually zero, since AC is projecting “that its royalty flow from the post-secondary sector will be virtually eliminated as of January 2016.”

Notably, Access Copyright will now be required to answer the Board’s clearly pertinent questions posed in the Board’s the Board’s Order of June 3, 2015.  These include questions about the “Premium” and “Choice” offerings and the state of AC’s licensing negotiations.

It is also notable that Mr. Sean Maguire, a university student, is continuing as an unrepresented “intervenor”. He is to be commended for his interest and persistence. However, his involvement can hardly be considered to be a proxy or even a remote substitute for representation of the public interest generally or the post-secondary educational sector and does not change the fact that these hearings are proceeding by way of default for all realistic purposes. One would have expected that the interests of the college and university communities should have been represented by their respective associations, namely ACCC (now Colleges and Institutes Canada) and AUCC (now Universities Canada), which presumably had the resources (assuming the resources were well managed) and the responsibility to confront AC in this normally adversarial arena.

However, these associations are notably absent now, having long ago withdrawn as objectors, and having also withdrawn their objections.  As I have pointed out several times, AUCC and ACCC had already by mid-2012 spent almost three million dollars ($3,000,000) that we know about to accomplish apparently little if anything other than providing a huge amount of interrogatory information for the benefit of AC and reaching model agreements that have been widely rejected by their own members. Even this amount of expenditures may not have been necessary if the associations had taken advantage of the Board’s well-established policy of requiring only “a reasonable amount of relevant information, from a reasonable number of institutions…”, which I have pointed out many times before, including here.

There are also some interesting parallel developments underway elsewhere in the Federal Court concerning the AC v. York U litigation. The trial in that matter is set to begin on May 16, 2016 and is scheduled to last for 15 days, which is a rather long time for a trial in the Federal Court. I will refrain, for the moment, from further public comment about the potential interplay between the Board case and the Federal Court case and how all of this could potentially affect the post-secondary community.

The Board has been thrust into a difficult position here “twixt a rock and a hard place”. This is a result of the apparent over-reaching of Access Copyright and the apparently underwhelming efforts of AUCC and ACCC.

The Board seems to have lately increasingly realized that it can and should, when appropriate, exercise inquisitorial powers (i.e. to ask its own questions and do its own investigations) in order to deal with the lack of submissions or inadequate submissions or evidence from one or more parties. As long as the Board ensures procedural fairness, this kind of approach is not only OK. It may indeed become more common and potentially necessary – not only when hearings proceed by default but when there are inadequate adversarial efforts as we have sometimes seen, even when large amounts of money have been spent. Will this be how this case plays out? I would not be surprised.

Access Copyright has long had an opportunity to negotiate a useful licencing scheme at a reasonable rate for post-secondary institutions. This would almost certainly have been a transactional license-based system, since AC may have serious problems with its entitlement to blanket license the repertoire for which it purports to claim entitlement. I debated this and related points with AC’s CEO Roanie Levy over a year ago at Brock University.

Instead, it is pressing ahead for a consolidated blanket license-based tariff hearing and seeking some arguably highly overreaching tariff rates for rights that it arguably doesn’t have for repertoire that it arguably doesn’t have – and, of course, wants these tariffs to be retroactive and “mandatory”. Indeed, AC is pressing for a result that is apparently very inconsistent with the Board’s recent provincial government tariff, not to mention considerable and consistent Supreme Court of Canada jurisprudence.  For university students, AC wants $35 per year for the period 2014-2017. That is approximately 70 times or 7,000% higher than the current rate for provincial government employees. While one can conceive that there is more copying per capita in universities than in government, it is also conceivable that AC’s share of the relevant repertoire in universities is even less than in the government realm and that fair dealing is even more applicable, especially given the inclusion of the word “education” in s. 29 of the Copyright Act in 2012.

Moreover, AC has just released an obviously very expensive study from Price Waterhouse Coopers  predicting doom and gloom in the Canadian publishing industry and the Canadian educational sector as a result of “the education sector’s interpretation of “fair dealing”.  See the dramatic downward spiral graphic from AC above, announcing this study, the most interesting and useful part of which may be the final “limitations” section at page 96 which includes the statement:

The findings of this Assessment are conditional upon such completeness, accuracy and fair presentation of the Information, which has not been verified independently by PwC. Accordingly we provide no opinion, attestation or other form of assurance with respect to the results of this Assessment.

AC will probably try to put this report in front of the Copyright Board. Of course, ACCC (now Colleges and Institutes Canada) and AUCC (now Universities Canada), have both long since withdrawn from this hearing as noted above and won’t be there to object or to do to the heavy lifting of cross-examination or to offer any responding evidence if the report is allowed in as evidence. Hopefully, if the report is somehow allowed in, the Board will at least have some appropriate questions. An excellent starting point for questions about this “sky is falling” approach is the three-part detailed analysis by Prof. Ariel Katz from about a year ago, aptly entitled  The Loss of Access Copyright Royalties and the Effect on Publishers: Sifting Fact from Fiction, the last part of which is here, with links to the earlier instalments. Ironically, the current PwC study is locked up tight for cutting and pasting purposes – thereby inhibiting “access” to a significant degree. Thank goodness for OCR technology. Further comments may follow from yours truly and others.

So, AC is getting its wish for an oral hearing on its proposed post-secondary tariffs. By pressing for such a hearing, all the while apparently ignoring the wishes of its best customers (and even suing one of them to set an example), the public interest, and the rulings of the Copyright Board and the Supreme Court of Canada, AC may learn that, when it comes to certain copyright matters, it’s important to be “careful what you wish for”.

HPK

The Access Copyright Post-Secondary Hearing – the Narrowing Space Twixt the Rock and Hard Place

As I have suggested before in some detail on April 11, 2014, the Copyright Board is caught between a rock and hard place on the Access Copyright (“AC”) Post-Secondary file and the gap is narrowing.  The withdrawal of the two main objectors – AUCC and ACCC – has not been publicly explained, but may well be for budgetary reasons, since they had already by mid-2012 spent almost three million that we know about to accomplish apparently little if anything other than providing a huge amount of interrogatory information for the benefit of AC and to reach model agreements that have been widely rejected by their own members.

If indeed their withdrawal was for budgetary reasons, perhaps a lot of money could have been saved (not to mention time and resources amongst their members) if they had followed the well-established practice of responding to interrogatories only from a representative sample of members – as explicitly though belatedly reminded by the Board on June 6, 2011. Perhaps the Board assumed that they would have done just that. However, their failure to follow this practice remains unexplained, at least in public.

As I said back in 2011:

Unfortunately, it only now appears that a very large number of universities and colleges may have spent an incalculable amount of time providing answers that could turn out to have been unnecessary. Even the smallest of the two hundred or so affected institutions has probably spent hundreds of person/hours on this process. One can only imagine the resources put in by the larger ones. 

In any event, this is water under the bridge and the AUCC and ACCC have indeed withdrawn, and also inexplicably withdrawn their objections, paving the way for a default decision that may be very harmful for their members and which may leave their members in a very difficult if not impossible position in terms of judicial review or other recourse in the event that there is a “mandatory tariff” and Access Copyright sets about to enforce it. The situation will be even more serious if York loses its litigation against AC, which won’t even get to trial before May of 2016.

In any event, the Board is clearly troubled by this situation and has issued no indication as to how it will proceed with a hearing in this file since its cryptic notice on January 17, 2014 that:

Finally, the withdrawal of CAUT and CFS as well as Mr. Katz implies that the Board staff needs to play a more active role in the file.

For these reasons, and because of the additional drain on Board's resources this implies, the Board postpones sine die the hearing in this matter. After having received and analysed all answers from Access, and replies from Mr. Maguire, the Board will either decide when to reschedule the hearing or proceed on paper

Now, it seems that even Access Copyright is getting worried. It recently filed this letter dated October 6, 2014  with the Board. The letter says:

In Access Copyright’s submission, an oral hearing is needed as a matter of procedural fairness and in view of Access Copyright’s reasonable expectation, based on directives and Notices of the Board, that there would be an oral hearing. The Directive on Procedure issued by the Board on October 16, 2012 stipulated that an oral hearing will be held. Notices issued by the Board on a number of occasions before Access Copyright filed its case1 confirmed that the Board would be holding an oral hearing. Access Copyright accordingly filed its case in the reasonable expectation that there would be an oral hearing. The Board adjourned the hearing sine die only after Access Copyright had filed its case. Given the reasonable expectation created by the Board’s directives and Notices, Access Copyright respectfully submits that the principles of natural justice and procedural fairness require that an oral hearing be scheduled in order to permit Access Copyright to put its entire case before the Board.

There remains one objector, Mr. Maguire, in these tariff proceedings. It is not the fault of Access Copyright that the Association of Universities and Colleges of Canada (“AUCC”), the Association of Canadian Community Colleges (“ACCC”) and other institutions and individuals all withdrew as objectors. Access Copyright should not be prejudiced by the decision of those objectors to withdraw. We note that the Board has held hearings in other proceedings where there have been no objectors.

(emphasis and highlight added)

It is quite clear that AC is setting the stage for judicial review here, if for any reason the default proceeding does not go their way and as far they want it to go, i.e. to a “mandatory tariff” that could render a large university liable for millions for making just one infringing copy of just one work that happens to be in AC’s repertoire, no matter how much money and effort that the university has spent in good faith on other means of copyright clearance and compliance.

This file has been plagued with problems from the beginning, not least of which was the interim tariff imposed on the eve of Christmas  in 2010 and the blatant failure of the AUCC and ACCC to even try have it set aside, which may have been quite possible at the time on several grounds as I have outlined many times.

The current system in place at the Board is based upon the adversarial system, which has fundamentally failed in this instance due to the withdrawal of the main adversaries.

The members of the AUCC and ACCC have a lot to be worried about. But so does AC. This is not a pretty picture.

As I said back on April 11, 2014:

An oral hearing would provide at least some measure of transparency. It would provide the Board with an opportunity to publicly question AC’s witnesses to the extent that the Board believes it can and should do so, and to the extent of the Board’s resources, given that the Board does not seem to be contemplating the involvement of an amicus curiae. It would give the public the opportunity to attend and some basis to provide informed written comments, pursuant to the Board’s usual Directive on Procedure, especially if the Board were to promptly post a transcript of the hearing and set a deadline that would allow for meaningfully sufficient time for such comments.  

Perhaps the Board should grant AC’s wish, with AC being mindful, as many copyright collectives and NGOs have learned the hard way, of the old adage about being “careful what you wish for.”

It may fall to the next Chair of the Board to decide how to proceed, since the past Chair’s appointment expired on May 13, 2014 due to the operation of the statute. In any event, the silence is beginning to get louder and the suspense is building.

HPK

Update on Fair Dealing in Canada – A Future Full of “FUDD”?

In the last decade, users of copyrighted works in Canada have enjoyed major victories in the Supreme Court of Canada. In three cases, CCH v. LSUC, SOCAN v. Bell, and Province of Alberta v. Access Copyright the Court repeatedly recognized fair dealing as a “users’ right” that must be given a “large and liberal” interpretation. Moreover, the centrality of users’ rights has been further entrenched in two additional cases, ESA v. SOCAN, and the CRTC Reference. In addition to the judgments from the Court, Parliament added explicit reference to education, parody, and satire in s. 29 of the Copyright Act.  However, there have been persistent, extensive and expensive attempts in proceedings at the Copyright Board and the Courts to deny, erode and even implode these victories, financed by revenues derived from those very users who thought they had achieved victories in these battles and maybe even the overall war.

For those who unambiguously favour a large and liberal view of fair dealing, who wish to preserve their users’ rights as confirmed by the Supreme Court of Canada and Parliament, and who may be concerned that defeat on the fair dealing front could yet be snatched from the jaws of victory, the following recent developments may be of interest.

K-12 Hearing at the Copyright Board

The Board issued a notice on June 6, 2014 asking certain legal questions of the parties, which are Access Copyright  and the Council of Ministers of Education Canada. The Board itself has raised some very interesting questions concerning fair dealing, Access Copyright’s repertoire, CMEC’s proposed rates, and its publication Copyright Matters!, the lead author of which, as it happens, is CMEC’s lead counsel at the Board hearing, Ms. Wanda Noel.

The responses were filed on August 8, 2014. Here is the response of Access Copyright and here is that of CMEC.  Reply arguments were filed on August 29, 2014 by Access Copyright and by CMEC.

The oral hearing will resume for one day on Friday, September 12, 2014 at 9:00 9:30AM at the Copyright Board and may be worth attending for those in Ottawa. This should be an intense and intensely interesting day indeed.

The Access Copyright Post-Secondary Hearing at the Copyright Board

This is the tariff proceeding from which AUCC and ACCC withdrew, and indeed withdrew their objections, after having spent millions of dollars, providing an enormous amount of interrogatory information to Access Copyright and leaving the fate of their members to be decided by default. I have explained why, as a result of this unprecedented failure (for whatever reasons) of the adversarial process,  the Board is now  in a very difficult position. There has been no publicly visible sign of life on this file for several months. On January 17, 2014 the Board indicated that “After having received and analysed all answers from Access, and replies from Mr. Maguire, the Board will either decide when to reschedule the hearing or proceed on paper.”  No doubt, fair dealing could loom large in the Board’s decision, if it gets that far. Prof. Katz has arguably left the Board enough basis, in principle, for the Board to decline to proceed with this matter or to reject the tariff out of hand.

In any event, the Board has presumably received all the documentation and answers it was looking for by April 22, 2014.  Still, there has been no indication of how the Board plans to proceed. The file appears, to the public at least, to be in a state of limbo. The term of the Board’s previous Chairman, William Vancise, expired on May 13, 2014. It is not clear whether he can, or would even wish to, continue to be involved in this file. The position of Chairman of the Copyright Board remains vacant. It is not known when that vacancy will be filled. The next Chair will clearly face a major challenge concerning how to deal with this very problematic file.

Access Copyright v. York University

There has been some movement on this litigation. The Court has issued a “bifurcation order”, which divides the case into two parts, which – at the risk of oversimplification - are as follows.

Phase I will deal with the issue surrounding the allegedly illegal copying by the five named individuals, “whether Access Copyright is entitled to any relief in connection with such activities and the issues raised by York in its counterclaim, including whether the Interim Tariff is voluntary or mandatory. That could still leave unresolved the question about whether a final certified tariff can be mandatory, something that York has, for whatever reason, apparently chosen not to confront. Phase I will also deal with York’s Fair Dealing Guidelines. The Case Management Judge’s order  notes that “While the parties differ as to how Fair Dealing Guidelines are to be applied, it appears that a factual matrix must be established before their application can be ascertained.”

The Phase I trial hearing will take place over the course of 15 days in May of 2016.  A 15 day hearing is a very long time for a copyright case, especially one that is supposedly NOT an infringement proceeding and, in this instance, only the first phase. The remaining Phase II issues will be dealt with thereafter “if necessary, depending on the outcome of Phase I.”  Access Copyright will, however, in the meantime have a limited right to pursue discovery on Phase II issues that could impact on York’s defence based on its Fair Dealing Guidelines. See para. 2 of the bifurcation order. This bifurcation order still leaves some significant potential uncertainty.

The Role of the CMEC and AUCC Fair Dealing Guidelines

Without commenting in any detail on the above developments, it is important to note that the CMEC fair dealing guidelines for K-12 that will be considered by the Copyright Board are virtually the same as those that will be considered by the Federal Court in May, 2016 in Phase I of the York University case. See below for links. These common guidelines cover a vast range of activity ranging from kindergarten to post-doctoral (and beyond) private study, research and education. Moreover, these essentially identical documents will be considered in two very different fora, namely the Copyright Board and the Federal Court. So, it will be interesting to see how the Copyright Board and the Federal Court react to these guidelines.

Timing and Procedure

It is impossible to predict the timing of the Board’s decisions – since the K-12 hearing is still far from over and there will still be some “technical questions” up in the air following the resumption of the hearing in September. However, the Copyright Board often reserves and deliberates on its decisions for at least 18 months and sometimes even two years or more following the conclusion of a hearing, and whatever it decides may be judicially reviewed by the Federal Court of Appeal, a process that usually adds at least another year or more. Moreover, it should not be forgotten that the Supreme Court of Canada decided five cases from the Copyright Board in 2012 and has now taken on yet another.

The Post-secondary file is even harder to predict. Although it is unopposed, it presents a potentially existential challenge to the Board. Ironically, the very fact that such an important matter has, for unexplained and perhaps inexplicable reasons, turned into a default proceeding will ensure that whatever the Board does will be looked at very closely by all concerned on the sidelines and well beyond, even if there may not be much that they can do about it. Because the AUCC and ACCC withdrew their objections and withdrew from the proceedings, it is unclear as to who, if anyone, on the “objector” side would have the legal status – not to mention both the will and the resources – to seek judicial review in the event that the outcome might call for it.  The fallout of all of this – and there will be fallout – will be very interesting, regardless of the outcome.

Whatever the Board decides in its K-12 decision or Post-secondary decisions, even if such decisions are released before the Phase I Federal Court hearing, will in principle have no effect on that court case, since Board decisions are not binding judicial precedents unless and until they are upheld by the Federal Court of Appeal in judicial review proceedings. In this instance, the cases clearly involve different parties and different facts in different fora. While it is theoretically possible that the Board could – unusually – render a decision that deals with fair dealing guidelines and/or the concept of a “mandatory tariff” on a much shorter than usual timeline that could in turn be considered by the Federal Court of Appeal and result in a judicial precedent in time for the York University trial in May of 2016, that is highly unlikely given the normal timelines of the Board and the Federal Court of Appeal.

The Mandatory Tariff Issue

One thing seems very clear. There is no quick answer in store on the issue of whether an Access Copyright Board tariff – interim or final – can be “mandatory” in the sense of liability for the whole tariff amount for the whole period of the tariff if one infringing copy is made of one work that is in Access Copyright’s repertoire for which an institution can be held responsible. Just to remind readers, that could mean a liability of millions of dollars for one infringing copy of one work for one large institution. Extravagant as this theory is, it is the position being taken by Access Copyright, and so far, at least, has been encouraged by various pronouncements and positions of the Copyright Board itself. CMEC has, apparently, decided not to raise this issue in the K-12 hearing, and has instead suggested a fairly nominal tariff of $0.49 per FTE per year.  Interestingly, the Board has asked CMEC why it did not ask for “zero”. And it should be recalled that even a nominal tariff will likely have far from nominal administrative and reporting requirements.

So far, despite Ariel Katz’ noble but unsuccessful attempt to get the Board to promptly resolve the question by direct reference to the Federal Court of Appeal (to which Access Copyright to its credit essentially agreed other than regarding details on the wording that surely could been resolved), there is no shortcut in sight. It might have been possible at one point for York to get a quick ruling based upon an attack on the pleadings insofar as they were premised on a “mandatory tariff” theory. However, it is now presumably too late for this.  It will be interesting to see whether York will, at some point, seek a preliminary determination on a point of law, or move for summary judgment in the Federal Court. Such moves can sometimes be used to dramatically and quickly shorten, if not conclude, some otherwise lengthy and expensive litigation. While their success cannot be guaranteed, the Supreme Court of Canada has recently, with respect to summary judgment, strongly encouraged recourse to this procedure in appropriate cases. See here and here in the Hryniak decisions. There is no indication on the record to date that York is currently planning anything along these lines, and the terms and the discussion by Prothonotary Aalto, the Case Management Judge, suggest that it is not. In fact, a  story dated September 5, 2014 in Canadian Lawyer suggests that the parties now “are in the discovery phase of the proceeding…” So, it looks for now as if York sees this as going on at least until May, 2016.

More FUDD?

So it looks like the attempts by Access Copyright to instill fear, uncertainty, doubt and denial (“FUDD”) about fair dealing will go on for a very long time – with the possibility of huge retroactive liability in the future for some institutions, if CMEC and/or York manage to lose their cases and if the “mandatory tariff” notion is somehow given judicial sanction. Naturally, such a result could come from the Post-Secondary tariff as well, from which AUCC and ACCC have withdrawn, leaving the fate of their members to be determined in default proceedings

From Access Copyright’s standpoint, all of this will be funded by the dwindling but still significant revenues it receives mostly from educators and governments.  This activity will also be funded, indirectly, by creator and publisher members of Access Copyright whose cheques are getting smaller as the overall revenues decline and the legal bills continue to be generated. But in the meantime, there will be lots of FUDD for lots of authors, educators, scholars, students and those in the library and other communities that serve them. And Access Copyright will continue to withhold royalties from its creator members at the unusually very high rate of 35%  to fund this strategy. That is about twice the normal rate for collectives. All of this will be very rewarding for the lawyers involved in these protracted proceedings – but not so much for actual creators and certainly not for users. See here, for a major example of general discontent about Access Copyright’s approach even from within the writer community and eloquently voiced in 2012 by Brian Brett, a former Chair of the Writers' Union of Canada.

All of this could be resolved, of course, if Access Copyright were to withdraw its aggressive proposed tariffs at the Copyright Board and discontinue its litigation against York. Although I don’t and can’t speak for any of them about this, I am hopeful and even confident that the school boards and universities would be sympathetic to paying a reasonable amount for actual rights to actual repertoire in a manner that would actually enhance access and reduce costs of copyright compliance. Contrary to the disinformation that has been widely disseminated, nobody in these communities expects that all uses of all material should be completely “free”. All of the litigation and the Board proceedings to date have been and will be extremely expensive – with the outcomes very uncertain.

There was a productive and very civilized debate in an academic context between me and Roanie Levy at Brock a few weeks ago about many of these issues. However, we are now about to re-enter a much more Hobbesian world wherein the litigators are far more likely to benefit overall than writers, educators, students or taxpayers. This long war of attrition will likely have a lot of collateral damage.

Deus Ex Machina?

It may be recalled that CMEC made an attempt to intervene in the York University litigation, which unsurprisingly was denied at this stage. Even if this attempt had succeeded, it would have done nothing to shorten the proceedings. It will be interesting to see if there will be other third party “Deus ex machina” attempts to get involved in a different manner that could, perhaps, dramatically shorten this litigation or otherwise resolve the issue of a “mandatory tariff”.

Here are some further key documents for those who are interested in these developments:  

York U Fair Dealing guidelines11/13/12

AUCC Fair Dealing guidelines

CMEC Fair Dealing Guidelines

HPK