AC's Tries Negative Option to Sustain Digital Rights Licensing

As I pointed out on October 26, 2010:

Many if not most creator and publisher affiliates have refrained from giving AC any digital rights.

It now looks like AC is going to attempt use a "negative option" scheme to get digital rights it currently does not have in order to try to sustain the basis of its proposed $45/$35 tariff.

Previously, creators were asked to specifically agree and check off their agreement to license a the "digital conversion right" and the "digital importation right". Now, AC is apparently purporting to do this by negative option. Here is the November 15, 2010 communication (with my highlight and underline) to creator affiliates, of which I am one. Here is the key excerpt:

Access Copyright's board of directors also approved a change in the way we license works for digital uses. We will now license the scanning and posting of works from a paper source the same way we currently license photocopying; on an exclusions basis. This means that, unless you tell us otherwise. we will license users to scan, post and distribute portions of your works.
(emphasis added)

Based upon the documentation I have seen, this simply won't work. It's an attempt at a unilateral amendment not permitted by the basic agreement. If there is other documentation or an opinion that AC will reveal that leads to a different conclusion, I'd like to see it. Moreover, this seems like a pretty explicit admission that, at least in respect of creators, AC does indeed lacks the digital rights for which it is all ready to collect about $50 million a year, i.e.the difference between the $11 million it now collects and that $60 million it seeks. The current publisher affiliation agreement also holds back digital rights, unless specifically agreed to - so it may be that AC is also trying to rely on "negative option" with the publishers as well.

Hopefully, this will be raised before the Copyright Board, which will hopefully reach the right conclusion. If intellectual property is to be taken seriously as "property", then "chain of title" matters.

There is stormy weather is ahead for AC, if AUCC or ACCC choose to push this button. If they don't, others definitely should.

HK

ACCC gets counsel and seeks delay on AC’s Interim Tariff – Katz nails fairness & delay issue

The Association of Universities and Colleges (“ACCC”) has retained Wanda Noel and Aidan O’Neill. They are the solicitors who represented CMEC and the countless named school boards, etc. in the K-12 case before the Copyright Board that resulted in a decision more than doubling the previously negotiated rate to $5.16 per student.

Much of the reasoning in that CMEC K-12 decision will be used by Access Copyright to justify its effort to extract $60 million a year from Canada’s post secondary educational institutions outside of Quebec. AC will surely argue that if a kindergarten student is worth $5.16 per annum, a university/college student is surely a bargain at $45/$35 a year or even twice the price. Moreover, AC will surely argue that if what a Grade 6 teacher tells her students to read cannot be fair dealing, then neither can what a professor tells a grad student to read be fair dealing – even if it is for “research”.

One will watch with interest to see whether ACCC will raise certain arguments in this case that CMEC, for whatever reason, did not raise in the K-12 file before the Board, or in its unsuccessful appeal in the Federal Court of Appeal, or its pending attempt to get leave to appeal in the Supreme Court of Canada. (Full disclosure – I acted for CAUT in an intervention in the Federal Court of Appeal, raising arguments that neither CMEC nor AC had advanced).

One will also watch to see whether there is a better evidentiary record this time around. For example, in the K-12 matter, CMEC eventually admitted to the Copyright Board that the fundamentally important survey evidence that had been gathered using a methodology it had agreed to several months after the CCH v. LSUC decision was rendered in 2004 did not adequately take that decision into account.

Meanwhile, ACCC has asked for a delay on the December 6, 2010 deadline to respond to the Interim Tariff application.

Prof. Katz quite neatly points out that AUCC and ACCC have had about 7 weeks notice of this application – whereas he and the other intervenors that are supposedly equal have had only a few days notice. He asks for 7 weeks as well. Given the controversy and complexity of this matter, that seems more than reasonable. There is no urgency here other than what AC itself has created and no “evidence” has even been filed by AC. A lawyer’s letter is not “evidence” – and should certainly not suffice for imposing an “interim tariff” worth about $11 million a year that could last for several years and serve as a spring board for the much higher tariff AC seeks. It would be very unlikely that the Board would eventually impose a lower rate and order a retroactive refund.

HK

From: Ariel Katz [omitted
Date: Tue, 30 Nov 2010 13:58:41 -0500
To: [omitted]

Subject: Re: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Mr. McDougall,

Mr. O'Neill and Mr. Bloom were quicker than me, but otherwise I would have applied for an extension on my own. While Mr. Randall may be correct in pointing out that both the ACCC and the AUCC were provided with a copy of Access Copyright's application on or about October 13, 2010, he does not mention that AC never sent copies of its application to me and to many other parties to this proceedings. AC chose to ignore all other parties and sent copies only to the parties listed in Appendix A of its application. All other parties were fully notified about the application only last Friday, when the Board attached it to its notice.

While 7 weeks may be a reasonable time for responding to AC unprecedented application, 10 days is an extremely short time. Requiring some participants to respond within such a tight schedule is not only unfair, it would be contrary to the Board's ruling from Nov. 25 according to which all parties will be treated equally. Accordingly, I request that all parties would be granted the same amount of time to respond to AC's application.

I would also note that AC has not yet responded to the Board's instruction to "indicate forthwith the precise amounts that, in its view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested." I am sure you would appreciate the fact that responding to an application for a tariff that does not indicate the amounts sought would be a difficult exercise.

Accordingly, I suggest that all parties would be granted a period of at least 7 weeks to respond to the application, beginning on the day they received it, and that may be extended depending on when AC specifies the amounts it seeks to collect.

There is no urgency that requires compromising procedural fairness, because all the delays so far are of AC's own making: AC decided to create delay by filing an application to deny standing from various objectors; it decided not to notify all parties of its application for an interim tariff; and it still hasn't specified the amounts it seeks to collect as of Jan 1, 2011.

Regards,

Ariel Katz

From: "HOFLEY, RANDALL"

Subject: RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Mr. McDougall,

I write on behalf of Access Copyright in response to the email communications of Mr. O'Neill, on behalf of ACCC, and Mr. Bloom, on behalf of AUCC, of November 29, 2010 (both reproduced below) seeking an extension of time within which to provide a response to Access Copyright's application for an interim tariff.

Both ACCC and AUCC were provided with a copy of Access Copyright's application on or about October 13, 2010. ACCC has, therefore, had approx. 7 weeks (prior to the Board's Notice) to retain counsel and for such counsel to prepare a response to the application. As Access Copyright's application makes clear, the current (extended) licences expire on December 31, 2010 and thus the issuance of a decision by the Board in respect of Access Copyright's application is required on an urgent basis. In this context Access Copyright does not believe that the extension sought by ACCC (and supported by AUCC) is warranted (or is in any way required by any applicable principle of law). Having said that, and understanding the Board's interest in receiving "meaningful written representations" that are coordinated as between the Objectors (to the greatest extent possible), should the Board wish to grant an extension, Access Copyright suggests that the Objectors be provided until Friday, December 10 at Noon ET to provide their submissions and that Access Copyright be provided until Wednesday, December 15 at Noon to provide its reply.

Access Copyright sincerely hopes that, with the decision of the Board as to Objectors and Interveners and the retention of counsel by certain parties, Access Copyright's application for an interim tariff (and the proposed tariffs, generally) may be pursued on an expedited basis with efficiency brought about, inter alia, by parties' adherence to any schedule set by the Board.

Please do not hesitate to contact me should you have any questions regarding the above.

Regards,

Randall

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From: Bloom, Glen
Sent: Monday, November 29, 2010 5:15 PM
To: O'Neill_Aidan; Gilles.McDougall@cb-cda.gc.ca
Cc: HOFLEY, RANDALL

Subject: RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Mr. McDougall, I am writing to you on behalf of the Association of Universities and Colleges of Canada (“AUCC”) in respect of the request below of ACCC to extend the deadline for it to response to Access Copyright’s application for an interim tariff.

AUCC support’s ACCC’s request for the reasons specified below.

There are certain similarities between the post secondary institutions that AUCC and ACCC represent. The application for an interim in augural tariff is a very serious matter. AUCC intends to co-ordinate its response to the application with ACCC. We therefore request that the extension requested by ACCC apply to AUCC.

From: O'Neill_Aidan []
Sent: Monday,

Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Gilles,

As you are aware, Wanda Noel and I were just retained today by the Association of Canadian Community Colleges ("ACCC") with respect to the Board's Notice dated November 26, 2010. That Notice (set out below) requested participants in the Access Copyright tariff proceeding under reference to respond to Access Copyright's application for an interim tariff by no later than Monday, December 6.

Given the fact that Ms. Noel and I have only just been retained by the ACCC with respect to this matter, we will obviously need a reasonable opportunity to confer with our client and determine what position to take with respect to Access Copyright's application. Moreover, as the Board is also aware, Ms. Noel and I have other deadlines to meet this week in relation to the ongoing interrogatory process before the Board in the Access Copyright provincial and territorial governments tariff proceeding. (Finally, speaking personally for myself, I am in the United States for most of this week.)

Given these circumstances, Ms. Noel and I do not feel that we will have enough time to "come up to speed" on this tariff case and prepare meaningful written representations on behalf of the ACCC in response to Access Copyright's application for an interim tariff -- which is a very important matter -- before next Monday. As such, we would like to ask the Board if the ACCC could be granted a one week extension until Monday, December 13 to provide its response. Access Copyright could then respond to the ACCC's representations, as well as those of the other participants, by Monday, December 20. Ms. Noel and I would, of course, appreciate it very much if the Board could consider this request.

If you have any questions about this matter, please let me know. Thank you.

Aidan

J. Aidan O'Neill

Partner

Fasken Martineau DuMoulin LLP

Barristers & Solicitors

Patent & Trade-mark Agents

55 Metcalfe Street

Suite 1300

Ottawa, ON K1P 6L5

Canada

http://www.fasken.com

aoneill@fasken.com

Tel: 613-236-3882

Fax: 613-230-6423

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From: Gilles.McDougall@cb-cda.gc.ca
To:

Sent: Fri Nov 26 09:56:18 2010
Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

NOTICE OF THE BOARD

On October 13, 2010, Access Copyright filed an application, dated October 7, for an interim tariff. The application and relevant documents are attached. Participants are asked to respond to the application (and to copy all other participants) no later than Monday, December 6, 2010. Access Copyright may reply to these comments no later than Monday, December 13, 2010. The response of the Canadian Association of University Teachers and the Canadian Federation of Students to the application is attached.

Access Copyright shall indicate forthwith the precise amounts that, in its view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested.

Gilles McDougall
A/Secretary General | Secrétaire général par int.

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

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Access Copyright - Responding to Copyright Board by November 23, 2010

The Copyright Board issued a procedural ruling on November 15, 2010, though there are elements of it that are rather inconclusive. Here are my initial comments on it. It talks about “being inclined”, etc.

Here’s what those in various categories created by the ruling may wish to do. This is NOT legal advice. As always, if you want legal advice, retain a lawyer.

1. Those apparently singled out for full fledged objector status should indicate to the Board whether they believe that others should be permitted to be intervenors with full rights of participation and otherwise respond to the Board as invited, i.e. ““may make their views known on the participation of the potential intervenors no later than Tuesday, November 23, 2010. They are asked not to deal with issues of duplicative representation or overlapping argumentation at this stage. These matters will be addressed later, when the intentions of all participants are more fully ascertained.”

2. Those who the Board is “inclined” to consider as “intervenor status with full participatory rights” (“ISFPR) should specifically notify Gilles McDougall - Acting Secretary of the Board - that they wish to avail themselves of such rights i.e. “Those who wish to remain as participants in these proceedings are asked to inform the Board no later than Tuesday, November 23, 2010". They may also wish to indicate that they do so without prejudice as to any arguments as to whether they should be full fledged objectors. These persons may wish to express their view on why they do not seem to qualify as full fledged objectors. In this respect, see Prof. Ariel Katz’ very useful submission to the Board dated November 21, 2010 available here. He is a copyright law professor at the University of Toronto Faculty of Law, who is focusing his knowledge of IP and antitrust law on collectives, and at the moment on AC. Note that he has indicated that the Board should provide adequate reasons why he is not being accepted as a full fledged objector. See CAB v. SOCAN 2006 FCA 337 at para. 11.

3. Those in respect of whom the Board has indicated that its “preliminary opinion that the participation of the following persons would not be of assistance” may wish to indicate, if it is the case, why they believe that this “preliminary opinion” is wrong and demand that the Board provide adequate reasons in each and every case. (see above).

4. Note that there is no downside to remaining involved at this point for any individual or association. Unlike civil litigation, one can always withdraw later without being liable for the costs of other parties. It is very likely that AC will attempt to impose “interrogatories” (written questions akin to "discovery") on those who wish to remain involved that will be arguably be unduly onerous and irrelevant. Hopefully, the Board will deal with this in the appropriate fashion. The amount of time required to be present at the ultimate hearing could also be a problem for some. Hopefully, the Board will fashion its hearing schedule to accommodate the needs of individuals who may still be involved at the hearing stage and who may not be able to be present for a hearing that could last two or three weeks. Individual objectors or intervenors may wish to begin to organize themselves to deal with such issues.

HK