What's Wrong With This Picture And Where Does it Come From?

What’s wrong with this picture and where does it come from?

It is presumably meant to be an illustration of the fact that a musical composition embodied in a sound recording may be in the public domain while the sound recording may still be protected by copyright, or vice versa. That may not be totally obvious to everyone.  So far, so good – at least in theory.

Both examples superficially seem to take into account the 2015 Canadian legislation extending the copyright term for sound recordings to 70 years from publication, which was a gratuitous and un-debated (because it was buried in a budget bill shortly before an election) gift from the previous Government to the American recording industry.  This was a true triumph of lobbying over logic and evidence, but I digress. Be that as it may, this change came into effect only in 2015 and is not retroactive. Indeed, the Government did make it absolutely clear that this term extension windfall would not revive expired copyrights in sound recordings or performer’s performances:

2015, c. 36, s. 82No revival of copyright82 Paragraph 23(1)(b) and subsection 23(1.1) of the Copyright Act, as enacted by section 81, do not have the effect of reviving the copyright, or a right to remuneration, in a sound recording or performer’s performance fixed in a sound recording in which the copyright or the right to remuneration had expired on the coming into force of those provisions. (highlight added)

Therefore, the example where the CD was presumably fixed and published in 1945 is clearly wrong. The copyright in that sound recording would have entered the public domain in Canada at the latest 50 years after the end of 1945 -– in other words December 31, 1995. The copyright in this example would not have been revived by either the 2012 or the 2015 legislation so as to get any extra term of protection. In any case, it should be needless to say that there were no CDs in 1945. State-of-the-art at the time was 78s. Even LPs did not come on the market until 1948. CD’s arrived in the only in the 1980’s.

The non-retroactive application of the 2015 twenty year term extension for sound recordings is very important – because there’s a treasure trove of high quality classical, jazz and rock recordings from the 50’s and early to mid-sixties that have now entered the public domain in Canada – subject, of course, to possibly still extant copyright in the music embodied therein. Indeed, there is a very important case (Stargrove) relating to this unfolding at the Competition Tribunal*, which Michael Geist has covered extensively.

The example on the left suggests that if a composer died in 1800 (nine years after Mozart’s death), his or her work entered the public domain in Canada in 1850. However, the first Canadian copyright legislation was not in place until 1832.  The life + 50 term did not become the law of Canada until 1924 and is still the law for literary, dramatic, artistic and musical works.  Therefore, the example is not useful. It would have been more interesting and informative to have a more recent date of death, such as 1911 – the year of death of Gustav Mahler (one of the most important composers of the 19^th and 20^th centuries), concerning whom we have seen even recently surprising confusion and overreaching claims of copyright protection.  See here and here.

These examples show a disappointing misunderstanding of Canadian copyright law, both current and historic. This might not be particularly noteworthy, given so many other misinterpretations and errors that we have seen over the years emanating from trade associations, universities, Government institutions and even authors of books and blogs about copyright, some of which I have chronicled over the years.  Oversimplifying copyright law, despite the best of intentions, can sometimes be dangerous. However, in this case, the source of this problematic posting about Canadian copyright law happens to be the Copyright Board of Canada itself.

It’s from the Copyright Board’s latest attempt to explain – and perhaps to justify - its resource intensive “orphan works” regime. This information is presumably addressed to lay readers. The information provided is certainly not helpful to copyright lawyers.

True, some kind of orphan works regime is required by s. 77 of the Copyright Act. However, why it requires so much resources and has achieved such dubious results is another matter. This regime uses up at least one staff FTE and presumably some member time, since only a Board member can issue a ruling. As I commented in 2014:

…. Even if it is only one person or FTE equivalent who works on these files, I would respectfully suggest that this is one person too many. One person year (FTE) per year since 1989 translates at a probably conservative cost estimate of $75,000 per year, including benefits, to about $1,875,000 to date for a process that was clearly absolutely unnecessary in at least 19% of the files and probably a great deal more (perhaps involving insubstantial copying or fair dealing?) – even under the existing legislation. To the extent that more senior staff, including legal staff, and Board members themselves, may have gotten involved, the real cost may have been substantially more. The Board itself recently states  that “a target of 45 days was set between the file completion date and the issuance of the licence”. This suggests that a lot of time may be spent on these files. 

The Board may have well spent more than $2 million of public money to direct about $75,000 or so to collectives through about 277 licenses in circumstances where the collectives have generally nothing to deserve this little windfall.  It should be pointed out that collectives, as required by s. 67 of the Copyright Act  "must answer within a reasonable time all reasonable requests from the public for information about its repertoire of works, performer’s performances or sound recordings, that are in current use."

Barry Sookman, William Vancise (the former Copyright Board Chair) and I got into a heated discussion about all this back in 2014 at Fordham, which I recounted here in a lengthy blog that was very critical of how the Board described and implemented its orphan works regime and why it is a model that has not been and should not be followed anywhere else.  Here’s Barry’s unconvincing response.

I also had some critical words at the time about how the Board had failed to recognize and inform the public about the meaning, significance, and potential of “fair dealing” to obviate the need in many cases to worry about permissions, much less any need to seek a an unlocatable owner license from the Board. I said at the time in 2014:

The Board could easily provide a useful service to the public by updating its website on providing guidance as when a license is NOT needed in the case of an unlocatable copyright owner. As of now, the Board has apparently not updated its website since 2001 on this issue – and thus ignores several key Supreme Court decisions and legislative changes since then. The Board still continues to suggest that:

"You also do not need a licence if the intended use is not protected by copyright. There are a few specific exceptions to the copyright owners' exclusive right to authorize the use of their works "or any substantial part thereof in any material form whatever". For instance, fair dealing for the purposes of research or private study is allowed. So is copying of sound recordings for a person's own private use. However, the courts tend to interpret these exceptions restrictively."(highlight added)

 Quite apart from the inexplicable reference to private copying, the above material was dubious in in 2001, when the Board’s website on this subject was apparently last modified. It has been clearly very wrong ever since the Supreme Court's landmark 2004 ruling in CCH v. LSUC which confirmed that “Research” must be given a large and liberal interpretation in order to ensure those users’ rights are not unduly constrained.”

 The statement is even more blatantly wrong since the SCC’s “pentalogy” decisions in 2012 and the inclusion of “education”, “parody” and “satire” in the fair dealing provisions of the legislation. It should not take more than a few minutes of the time of one of the Board’s four lawyers to update this page by providing, at the very least, links to the current statutory framework as found in s. 29 of the Copyright Act and the three Supreme Court of Canada decisions on fair dealing plus the Cinar decision rendered since 2004 and indicating how these decisions are relevant.

 It appears that the Board has now done a somewhat but not a much better job of explaining “fair dealing” with the following language:

Sections 29 to 29.2 of the Act provide a number of exceptions by which it is possible to use a work without authorization. They are fair dealing for the purpose of research, private study, education, parody, satire, criticism or review and news reporting. What constitutes fair dealing is determined in conformity with criteria established by the courts that are related to the purpose, character and amount of the dealing, the alternatives, the nature of the work and the effect of the dealing on the work.

Courts have interpreted these exceptions as a user’s right. Some of these exceptions require certain conditions to be met (for example the mention of the source for a criticism, review or news reporting)

However, this stops far short of explaining that the Supreme Court of Canada has made certain aspects of the law of fair dealing crystal clear.  For example, it is the law of Canada that “As an integral part of the scheme of copyright law, the s. 29 fair dealing exception is always available “must be given a “large and liberal interpretation” and that the “availability of a licence is not relevant to deciding whether a dealing has been fair”.  These are not my words. They are the words of the Chief Justice of Canada writing for the Court in CCH v. LSUC.

At the very least, the Board should have provided links to the CCH v. LSUC, SOCAN v. Bell and Province of Alberta v. Access Copyright which are the seminal fair dealing decisions of the Supreme Court of Canada. Decisions of the Supreme Court of Canada are the final and binding on all, which is something that some copyright lawyers and even the Board itself on occasion have seemed sometimes reluctant to accept.

It would have also been useful and trivially simple for the Board to provide hyperlinks to the various other exceptions and statutory provisions referenced in this update. For example, instead of simply referring to section 29 of the Copyright act, why can’t the Board refer to it as “section 29 of the Copyright Act” with an embedded hyperlink?

It would have also been useful for the Board to provide examples, with hyperlinks to its own decisions and announcements, to many of the situations where unlocatable licenses are not needed and where seeking them is a waste of everyone’s time. Perhaps the most obvious example is that of architectural plans filed in countless city halls across Canada for which copies are frequently needed for purposes of home renovation. It took the Board many years and a lot of public pressure from your’s truly for the Board to finally relent on this particular point. Who knows how much time and money was wasted because of the Board’s long standing incorrect approach to this particular issue? At one point, as I documented, about 29% of the licenses issued by the Board involved these architectural plans.

It is commendable that the Board has somewhat improved its information with respect to unlocatable copyright owners and partially corrected some long-standing misinformation, albeit with some new misinformation. However, it would be desirable if the language of the posting could be consistent as between “insubstantial” and “unsubstantial”. It would also be desirable if the Board could refrain from careless use of the word “use”, since many non-expert readers may get the wrong impression that any “use” of a copyrighted work requires permission. For example, reading, watching, listening to, talking about, writing about, criticizing, reporting about a lecture given in public, quoting insubstantial excerpts from, quoting substantial excerpts in a manner consistent with fair dealing, linking to, footnoting, reading from in a public lecture, and probably many common “uses” don’t require anybody’s permission. It is not very helpful for the Copyright Board to provide perfunctory information and then simply tell folks to:

“If you think that you don’t need a licence for the use you intend to make, you could choose to obtain legal advice to confirm that one of the above-mentioned situations applies to you.”

Finally, the Board should make it clear that these licenses have costs – sometimes hundreds of dollars in license fees imposed by the Board. This is in addition to any expenditure in terms of time or legal fees to obtain the license. It would be better still if the Board simply stopped charging for these licenses – because they are simply a windfall to a collective that likely has done nothing to deserve the money. For example, quite apart from its limited actual repertoire, Access Copyright has gone to the other extreme and shown remarkable chutzpah for a long time by being willing to license the use of works that are clearly in the public domain, for example a 1915 edition of Charles Dickens (d. 1870) “A Christmas Carol”. One of the more stranger of many strange licenses issued by the by the Board is the license for the publication of two “jokes” – yes, “jokes”. This is subject to a payment of $7.50 for each joke to Access Copyright. I’m NOT joking! Here’s the ruling.

The Board has a budget of about $3.5 million a year, and a staff five times larger than any other copyright tribunal anywhere else in the world (including the USA Copyright Royalty Board). Surely, with these resources, it can come up with a more accurate and useful explanation for laypersons as to when and how to go about seeking a license when the copyright owner is unlocatable.

HPK

*PS: Update September 21, 2016. I've been alerted to the fact that the Stargrove case at the Competition Tribunal has been settled:

http://www.ct-tc.gc.ca/CasesAffaires/CasesDetails-eng.asp?CaseID=388

http://www.ct-tc.gc.ca/CasesAffaires/CasesDetails-eng.asp?CaseID=383

While the settlement is presumably confidential, it would seem that you can still get the Beatles' 1964 CD "Can't Buy Me Love" and several other early Beatles albums for $5.00 each at Canadian Walmart.  That would seem to suggest that the Canadian music industry blinked and backed down. 

The Blacklock's Hearing - Monday, September 19, 2016 In Ottawa

The hearing in Blacklock's v Attorney General of Canada will take place on Monday, September 19, 2016  at 9:30 AM in the Competition Tribunal hearing room at 90 Sparks St., Ottawa, 6th floor.

The presiding Judge will be  The Honourable Robert L. Barnes.

Here is the searchable Agreed Statement of Facts.

Here's my recent update by way of background.

The hearing is scheduled for five days.

HPK

Further Update on the Blacklock’s “Litany of Litigation” - First Trial Set For September 19, 2016

It is been a while since I’ve updated readers on the “litany of litigation” launched by Blacklock’s. What follows is an update of my earlier postings. See here and here.

Blacklock’s is the very  litigious and controversial “subscription based news Corporation that covers politics, bills and regulations, reports and committees, as well as the Federal Court and Public accounts in Canada”, according to the reasons for judgment dated June 27, 2016 of Justice Denis Gascon in a recent Federal Court ruling dismissing an appeal by Blacklock’s of earlier orders staying all but one of the 10 cases launched in that Court against various federal departments and agencies. One action, (the “Finance Action”) which is the most advanced, will proceed with a trial beginning on Monday, September 19, 2016 for five days here in Ottawa. I’m guessing it will be well attended and I hope that the Court schedules it in a large enough room.  The other nine cases will be stayed “until 45 days following the determination of the Finance Action”.

Justice Gascon’s ruling states:

 [8]   Blacklock alleges that the Defendants have unlawfully distributed its articles within their respective departments or agencies and have breached its copyright after having obtained the articles by way of single-use subscriptions or through third-party sources. According to the Defendants, Blacklock employs a pattern of writing misleading or inaccurate articles about an organization with the expectation that these articles would be accessed and shared internally. Blacklock then makes Access to Information Act requests for evidence of distribution, and claims damages through various means, including litigation.

As they say, none of these allegations have been proven in court.

It is certainly not obvious from a practical or costs standpoint why Blacklock’s would have wanted separate trials on 10 cases against the Federal entities. Alternatively, Blacklock’s wanted to:

"allow all actions to proceed until the pre-trial conference, and only then to consider how to manage the trials."

Perhaps Blacklock’s wanted to pursue each case separately in order to send a message to current and potential defendants that it is serious about litigating and that it expects substantial settlements in order to forestall or stop the litigation. However, that is only my speculation.

Here are Blacklock’s arguments on the appeal of the stay ruling. Here are the arguments of the Attorney General of Canada (“AGC”).

The damage claims in each case are relatively modest as these things go, “ranging from $10,000 to $55,000 when they are specified”. Justice Gascon noted that:

[11]           In her decisions, Prothonotary Tabib acknowledged that the facts of each case are different as both the alleged copyrighted materials and the specific alleged acts of infringement are distinct to each case. However, she stressed that “commonality and similarities” reside in the defences raised in the ten actions. These common defences are: whether Blacklock owns the copyright in the articles alleged to have been infringed; the novel defence of abuse of copyright; the defence of fair dealing when articles are copied/used for internal government reporting purposes; the proper assessment of damages (whether they be loss of profit apportioned per article or the value of an institutional licence); and the availability of punitive damages. Prothonotary Tabib also noted that the amounts claimed in the actions filed by Blacklock are modest, ranging from $10,000 to $55,000 when they are specified. 

From Blacklock’s standpoint, the cost consequences of losing or even winning these cases could conceivably far exceed the upside of winning, given the way the Federal Courts costs rules can work with strategic and timely settlement offers where only modest amounts of money are recovered or recoverable. The most obvious cautionary tale is that of Catherine Leuthold, who sued the CBC for more than $22 million but recovered only US $19,200 damages and $168.74 by way of disgorgement of profits.  While she technically “won” her lawsuit, she was ordered to pay the CBC some $80,000 in costs, which included double costs pursuant to Rule 420, due to her refusal to accept a timely settlement offer of US $ 37,500. The costs order was upheld on appeal.  Needless to say, I have no knowledge of whatever settlement offers may or may not have been made by any party in the Blacklock’s litigation. Even the trial judge will not know about any such offer(s), if they exist, before he or she delivers judgment and will only know afterwards if double costs pursuant to Rule 420 become an issue to be determined by the Trial Judge pursuant to the Rules.  However, all experienced Federal Court litigators are aware of these costs rules. Presumably, the calculations have been done and the bets have been placed, so to speak.

Moreover, Blacklock’s has already faced some significant costs consequences. It lost at first instance with costs payable to each defendant in ten different actions on its efforts to oppose the Government’s stay motion and proceed with separate trials for all ten federal cases, and lost the appeal of Prothonotary Tabib’s ruling of March 3, 2016 before Justice Gascon as noted above. This has resulted in some fairly harsh costs awards as far as these things go against Blacklock’s to date. See here for Justice Gascon’s costs award from August 16,  of 2006 which calls for costs of $10,500 payable within 30 days of the Order and here’s the Court’s Order dated October 26, 2015 which awarded  costs to  the Government of $4,000.  This Order indicates rather strong language and a very significant costs order as far as these things go. Here’s the Court’s Order dated October 26, 2015:

 The motion was contested, it was contested extensively and it took a lot of time. There was a need for cross-examination. In the course of the argument, I made comments to the effect that the Plaintiff’s argument and choice of the way in which it chose to understand questions or construed questions was obtuse to the point of being obstructive. 

Justice Gascon commented on the decision below from Prothonotary Tabib regarding the stay motion: 

[43] In her Orders, Prothonotary Tabib concluded that it was in the interests of justice to stay the Nine Actions given that 1) the issues raised by the various actions significantly overlapped, 2) a stay would avoid costly duplication of judicial and legal resources, 3) a real risk of contradictory decisions existed, 4) Blacklock would not suffer prejudice, and 5) proceeding with the ten actions would cause prejudice to the Defendants. I am of the view that each of these five considerations fall well within the discretion of Prothonotary Tabib and that none of them reflects a reliance on a wrong legal principle or a misapprehension of the facts in granting the stays of proceedings sought by the Defendants.
  [44] In fact, I am convinced that Prothonotary Tabib was right to take these factors into account in her assessment of the interest of justice at stake in this case and in ensuring the just, most expeditious and least expensive determination of the Nine Actions and the Finance Action.
  [45] First, I agree with the Defendants and Prothonotary Tabib that there is a significant overlap of issues and facts between the Nine Actions and the Finance Action, and that this was a proper consideration to retain. This overlap includes the ownership of copyright by Blacklock, the defences of copyright misuse and fair dealing, as well as the proper assessment of damages and the availability of punitive damages. Blacklock tries to distinguish the Finance Action from the other actions because the distributed articles were obtained from a third party and not through its subscription. However, the Finance Action concerns the same pattern of conduct and core issues as the other actions. In addition, the issue of copyright ownership in the Finance Action relates to the defence of abuse of copyright raised in all actions. Lastly, the assessment of Blacklock’s actual damages and availability of punitive damages is a recurring theme in all actions.
… 

[47] Second, Prothonotary Tabib was not clearly wrong in relying on the avoidance of costly duplication of judicial and legal resources in support of her decisions. The Orders considered the judicial resources that would be saved by the stay, such as a multiplicity of pre-trial conferences and likely procedural motions, and several separate trials resulting in weeks of hearings. Prothonotary Tabib further estimated that even a consolidated trial would require at least three weeks and would delay the determination of even the most advanced actions.

 … 

 [54] I emphasize that there are numerous common legal issues raised by the Defendants in the ten actions. The Defendants rely on the doctrine of abuse of copyright as a basis to justify their assertion that Blacklock’s actions in a given context amount to copyright trolling. While this matter will be ultimately determined on the facts adduced in each specific case as to whether there has been copyright misuse, there are nonetheless common underlying legal issues being raised. Similarly, while the questions relating to damages, the value of Blacklock’s license for its product and the defence of fair dealing are questions where the factual assessment of the evidence will play a role, they raise comparable underlying legal questions that can be determined and that could be narrowed in the Finance Action.

(highlight added) 

Blacklock’s is clearly the underdog in terms of resources. It is apparently a family business up against 10 Federal Government departments or agencies. And, notwithstanding its legal victory in an earlier decision from the Ottawa Small Claims Court in 1395804 Ontario Limited (Blacklock’s Reporter) v Canadian Vintners Association (“CVA”), 2015 CanLII 65885 (ON SCSM), it must frankly be said that it faces an uphill battle in the Federal Court. From what I’ve seen of the pleadings, which are linked to below, the Feds would seem to have a very strong case in many ways, including but not limited to fair dealing. After all, if a government department can’t avail itself of the fair dealing users’ rights provisions in the Copyright Act for the purpose of research into or criticism of what the media are saying about its public policy positions and the law itself, then what is the purpose of s. 29 of the Copyright Act?  Moreover, the Government apparently has a serious case on copyright misuse and abuse. The Government explicitly alleges that “The Plaintiff is a copyright troll”.

Here is the Statement of Claim and Amended Statement of Defence in T-1391-14, the “Finance” action which has emerged as the lead case. Both of these pleadings are surprisingly brief and general in nature. However, both sides have very able counsel – and hopefully the issues with be dealt with fully and on the merits.

Commentary on Small Claims Court decisions is rare, given that they have no precedential status in higher courts. However, in this case there was a lot of commentary. See, for example the views of Canadian law professor Teresa Scassa here and the redoubtable Mike Masnick on the internationally widely read Techdirt website.  See also other legal commentary that seems mostly negative or deeply sceptical about the decision, e.g. here and here,  here and  here, and a good comment from an IP Osgoode student here. I’m only aware of one commentator who thinks that the Small Claims Court got it right – and she is not a copyright lawyer or expert, as far as I know. See here.

The fact that the Small Claims Court ruling was not appealed likely results from pragmatic considerations.  Moreover, the Canadian Vintners Association presumably has more compelling concerns from its viewpoint than copyright law. Whatever the reason, one can’t fault the Vintners from not appealing this Small Claims Court decision. In any case, the decision not to appeal doesn’t really matter anyway because the Small Claims Court decision – while it got a lot of media attention – has no precedential effect in the Federal Court or the Ontario Superior Court.

Interestingly, I am advised that Blacklock’s has launched at least three actions in the Ontario Superior Court. One of them is being defended by David Fewer, not in his capacity as Director of CIPPIC, but rather in his personal capacity. See the Fillmore Statement of Claim here and the Statement of Defence here. It is not known where these three matters stand and whether there is any serious possibility of future developments that may conflict with the Federal Court decision(s).

Given the apparently litigation-based strategy of the plaintiff on the one hand and the resources and the apparent concern for public policy on the part of the Government, it seems likely that the outcome of the trial set to begin on September 19, 2016 may very well be appealed by one side or the other. That appeal would be heard by the Federal Court of Appeal, which is normally very receptive to helpful interventions.

I agree with Prof. Teresa Scassa that this is an important case to watch this fall.

HPK

The Canadian Copyright Board: To Be or Not To Be –That Is A Question – ALAI Conference, May 25, 2016

The ALAI symposium on the Copyright Board of Canada – Which Way Ahead took place on May 25, 2016 in Ottawa. I will not summarize everything that everyone said. There was a lot and most of it was quite good. These are just a few highlights that I can remember in no particular order. It was a constructive conference and I hope it was archived and will be webcast soon.

The conference opened with a fairly lengthy speech with fairly familiar content by Prof. Marcel Boyer, O.C., who is a frequent music industry expert witness at the Board. He essentially restated his expert evidence on the valuation of music in the commercial radio context, which has also formed the basis of a C.D. Howe Institute paper.  It is interesting that the C.D. Howe Institute would publish, as a peer reviewed paper, a document that Prof. Boyer himself admits “builds on testimonies I provided over the years as an expert witness before the Copyright Board of Canada and the supporting reports that I co-authored”.  

Prof. Jeremy de Beer then moderated a panel in which he took a major role himself, including a laminated handout, complete with a QR code, summarizing his government funded study published last year, which I have written about at length and, with respect, great skepticism. Here is his QR code, which is one way to get to his study, if you want to read it on your smart phone.

This is my first experience with the use of a QR code by an academic.

According to Prof. de Beer’s methodology, “every certified tariff was broken into its constituent components and subcomponents, dissected by year, number, and letter (where relevant).”  This leads to the confusing, arguably counterfactual and certainly counterintuitive conclusion that:

The Board certified 852 different tariffs in respect of the 15-year study period between 1999 and 2013. Only 8 proposed tariffs were not certified. There remain 209 tariffs proposed during that period but not yet certified. When (and assuming) those tariffs are eventually certified, the Board will have dealt with more than 1050 tariffs applicable to the 15-year period since the 1997 legislative amendments entered into force. That amounts to more than 70 tariffs per year on average. (emphasis added) (footnotes omitted

Such astonishingly high numbers of tariffs may be useful for generating sufficiently large numbers to apparently justify some sort of presumably expensive statistical analysis of Board activity.  But such an arguably artificial methodology, dependent on dissection, unfortunately obfuscates the actual numbers that really matter and exaggerates the ones that do not. The really important numbers, using the Board’s own taxonomy, as seen below, are quite probably much too low to be susceptible to statistical analysis.

This methodology also leads to a result that makes the Board look considerably more productive in a quantitative numerical sense than even the Board itself has ever claimed. Interestingly, however, even the Board has begun to use the number “70”, as in Vice-Chairman Claude Majeau telling the Industry Committee of the House of Commons on May 5, 2016 that:

On average, the board issues about 9 decisions every year, which encompass over 70 tariff units, including a significant proportion that have been the subject of public hearings.

Even former Chair William Vancise cannot resist using this new number of “70 tariff units”. In the written text of his speech at the event - see below - he states "On average, the Board certifies over 70 tariff units annually. This volume alone could justify a marked increase in current resources." 

Note the Board’s careful new use of the term “tariff units” – in contrast with what it has always called simply “tariffs”. And note that, while these comprise “a significant proportion that have been the subject of public hearings”, it is also true that a significant number of them do not because they are unopposed and often economically insignificant. With respect, these numbers are inconsistent with the taxonomy of what the Board itself has always considered to be a “tariff” and a “decision”, which can be readily seen on the Board’s own website and in its annual reports.

The real numbers that matter, as I have shown – which are based on the Board’s own actual numbers from its website - are as follows:

•        During the 15 years study period, the Board certified only 74 tariffs, according to its own taxonomy – many of which were uncontested.
•       The Board certifies on average 4.9 tariffs per year. This is greater than the number of decisions per year, since many of these tariffs are unopposed because they are unimportant or the objectors cannot afford to participate in the Board’s process, or for other reasons – such as the oppressive and intrusive interrogatory process.
•        The Board normally renders only about two or three important decisions per year. It is entirely unclear where the figure of “9 decisions” comes from.
•        It often takes four years or more for a contested tariff to get to a hearing.
•        If often takes two years or more for a decision to be rendered after a hearing. Here are recent example of post-hearing pendency delays before a decision was rendered:

•        Commercial Radio = ~ 30 months

•        K-12 I =  ~ 24 months

•        K-12 II  = ~ 20 months

•        Fitness = ~ 26 months

•        Re:Sound Tariff 8 (“Pandora”) = ~ 18 months

•        SODRAC Tariff 5  = ~ 30 months and has now been remitted by SCC

•        Access Copyright Provincial Tariff = ~ 30 months

•        CMRRA/SODRAC Inc. (CSI) Tariff (2011-2013);
SOCAN Tariff 22.A (2011-2013;
SODRAC Tariff 6 (2010-2013) – still pending since November, 2013

I presented these numbers at the ALAI event and nobody took any issue with them.  Two or three decisions and 4.9 tariffs per annum do not require or even permit any application of statistical methodology.

With only two or three decisions and 4.9 tariffs (by the Board’s pre-de Beer analysis) a year coming from the Board, there is no basis for statistical analysis and absolutely no basis for further analysis, as Prof. de Beer suggests:

At the present time, it is simply unclear whether the Copyright Board is now settling into its role and the process is becoming faster, or whether the complexity continues to grow and the tariff-setting process is in fact taking longer than it was several years ago. Only more time, and more data, will tell.

It does not require even simple arithmetic to see that the Board often takes at least six years to deal with its contested tariffs – and that is before the now seemingly inevitable judicial review. Unfortunately, I must conclude that Prof. de Beer’s study obfuscates these numbers. It seems that everyone other than him, and even the Board’s retired Chairman Justice Vancise, seems to acknowledge that it is often taking the Board 24 months or even longer to render a decision after a hearing, and that the hearing may have been four years or more in the making. We don’t need any more statistics or study to get that point. As for the dozens, or hundreds or however many other unopposed, and usually economically insignificant “tariff units”, we also don’t need more statistics or study. There is clearly a management problem at the Board in dealing with these kinds of routine files – and the implementation of regulations imposing deadlines on the Board would seem to be the only reasonably assured way to solve the problem.

But even the shortened average timelines in Prof. de Beer’s study, which do not reflect the above reality, are still cause for concern, as was apparent at the ALAI event. This was evident in the response of Jason Kee of Google and others who spoke for powerful interests, who emphasized that new technology moves very quickly and delay and retroactivity are serious concerns, even for an enterprise as powerful as Google. Also on Prof. de Beer’s panel was Prof. George Barker, a regular expert at the Board for the music industry – who somewhat surprisingly and frankly pointed out that calls for greater resources should be viewed in light of the inherent self-interest of every government institution and those who manage it to call for more resources. Stephen Ellis of the Canadian Retransmission Collective pointed out that delays and retroactivity can case great problems even for the beneficiaries of such as lucrative tariff as retransmission, where there have been serious problems in the allocation of money years after the fact due to delay and retroactivity.

A new study commissioned by the Government from Prof. Paul Daly was briefly discussed and was the centre piece of a panel moderated by Mario Bouchard, former General Counsel of the Board.  The Daly document:

1.     Proposes that the Board should be able to award costs. This suggestion was dismissed by retired Chairman, William Vancise, who noted that, during his tenure, he had not observed any egregious behavior on the part of parties or their counsel and that he could see no reason for a cost award regime. It would seem obvious that collectives never get what they ask for – and this alone would hardly seem to be the basis of awarding costs. Prof. Daly provides nothing specific on this inherently controversial suggestion.

2.     Proposes a number of fairly obvious recommendations about case management, to be dealt with through regulations proposed by the Board itself and approved by the Governor in Council including the early exchange of Statements of Case.  The report stops short of suggesting or even considering regulations directly from the Governor in Council that could be far more potent and effective.

3.     Recommends that the current Directive on Procedure be retained.

4.     Recommends that “the Copyright Board should continue to attempt to effect culture change through informal changes – including a ‘Best Practices’ manual for (a) conducting discovery, (b) introducing expert evidence and (c) conducting a hearing – and persuasion”

5.     Recommends further study “with a view to developing a metric which would propose benchmarks for the time periods within which regulatory decisions ought to be rendered”

The study contains some useful, even if fairly obvious, references and commentary regarding some other tribunals. The study stops far short of suggesting time limits, qualifications of Board members, etc. or anything else of any specificity that would have any significant impact.  This frankly restrained and inconclusive study will neither cause much offence nor lead to much change, even if followed. Like so many other consultants’ studies, it mainly seems geared towards the need for further study.  Something more concrete would have been more useful.

Interestingly, there is no consensus overall on the widely asked question of why the Board, unlike any other court or tribunal of which I am aware, allows discovery to take place – sometimes seemingly endlessly and without apparent limit – without requiring a collective to file at least some specific basis of the factual and legal underpinning of the reason why it is seeking to collect millions of dollars a year – up to $200,000,000 per annum in the current retransmission case. Likewise, objectors should state why they are opposed. In my experience, the objectors do a better job of this at the beginning, even under the present unregulated system, than the collectives.

Even veteran counsel on both sides of the fence do not agree that anything approaching the equivalent of a “pleading” or “notice of application” should be provided up front – which is what normally happens everywhere else. For my part, I asked why an organization such as SOCAN that has been around for about 90 years and knows very well how the radio and other copyright intensive businesses work, cannot figure at the outset at least the basic factual and legal underpinning of tariffs that could cost it and any objectors millions of dollars to determine and hundreds of millions of dollars to users who have to pay. No court would tolerate such vagueness and lack of particularity – especially from such sophisticated and ultra-experienced parties. Fishing expeditions are not generally tolerated in the justice system – especially when the fish are endangered species.

Several speakers noted the potential financial costs of delayed and highly retroactive decisions, and of course the obvious fact that technology and business practices change so quickly that the uses dealt with by a tariff may be obsolete long before the decision is rendered. A year is a very long time when it comes to things like webcasting, streaming, downloads, etc. Six years or more is an eternity in today’s business world and particularly so in the digital technology space.

I know of no other board or tribunal in Canada that takes so long to hold a hearing or render a decision. Judge David Strickler, from the US CopyrightRoyalty Board (“CRB”), explained that his Board, which has a support staff of only two professionals and one administrative person, is required by statute to render decisions by certain tight and specified deadlines – and it does so.

That is because it has no choice. It’s also notable that the US law requires that all three CRB judges be lawyers, that one has expertise in economics, and one have expertise in copyright law. They presumably hit the ground running. The CRB’s decisions can be much longer and more detailed than those of Canada’s Copyright Board – and issue much quicker. There seems to be much less recourse afterwards to the Courts.

I pointed out that Canada’s sui generis Patented Medicines Notice of Compliance regime cases must result in a written judgment decision within 24 months from the start of the application. This is required by law. The cases can be very complex both technically and legally, involve up to ten experts and may involve far more money than many of the Copyright Board cases. The Federal Court routinely disposes of several dozen of these invariably complicated cases each year – and invariably within the time limit set by regulations – 24 months from start to finish. A substantial number of these dispositions involve hearings with voluminous applications records, and can result in very lengthy decisions replete much science and much law. For example, here’s a PMNOC decision released today that’s 132 pages long (in English) with several diagrams of molecules and other arcane discussions of pharmaceutical chemistry.

The Federal Court now has set the norm that even the most complicated cases should be heard within two years of commencement and a judgment rendered within 3 or four months afterwards. The Supreme Court of Canada normally renders its judgments in less than six months after a hearing. All of this data was in my slide show – see below.

The grand finale of the day was a rather intense speech by retired Justice Vancise with some interesting reminiscences. He is still “seized” of a couple of files if I heard him correctly, even though he retired over two years ago as Chair of the Copyright Board.  A written version of his talk is available here. It lacks some of the frankness and colourful and sometimes even personally specific spontaneity of his actual remarks. Whether one agrees or not with everything Justice Vancise has to say, his enthusiasm, impassioned and sometimes outspoken rhetoric – both written and verbal - on what he believes to be right are certainly noteworthy and unusually interesting for a sitting or former jurist. Michael Geist has also commented on his talk.

While Justice Vancise claimed to be speaking only personally and not for the Board, he was very explicit in concluding with a plea for a “consensus” that the Board needs more money so that that Board can hire more people. He suggested that some of the changes in the 2012 legislation, such as making available right, the user generated content and parody provisions will expand the workload of the Board. I frankly do not understand this point.  Most, if not all, of these amendments will conceivably have only a potentially marginal effect on tariffs that are no longer de jure or even de facto “mandatory”.  Laws evolve – it does not necessarily follow that boards and tribunals need to expand to keep up with this evolution.

In the case of the Copyright Board, the Board is normally blessed with party briefs from some of the best and best paid copyright counsel in Canada – except where parties withdraw or choose not to participate, for whatever reason. The Board also has four very capable lawyers on staff full time – which is more lawyers than the number of significant decisions that the Board normally issues each year. Indeed, for whatever reason, as the Board’s legal staff gets larger, the delays seem paradoxically to get longer.

With respect, I believe that more money and more people for a Board that already has a staff that is already 500% larger than its US counterpart  and substantially larger than Canada’s Competition Tribunal will only slow things down even more. This may even increase the likelihood of administrative law challenges based upon failure to disclose background briefing material and the important maxim that “S/He who hears must decide”.

At the end of the day, what is needed are regulations setting out deadlines and procedures, including case management, that bind not only the parties but the Board. All comparable court and tribunals operate this way. There is nothing unusually complicated about copyright law or rate setting that would justify the culture so clearly entrenched at the Board that assumes that its cases are uniquely complex and require so long and so much resources to determine. Much of this culture is no doubt attributable to some veteran counsel who may understandably be in no hurry to be in a hurry. Long cases usually result in bigger bills than short cases – unless, of course, the client reaches the breaking point and withdraws or declines to engage altogether.  And, in many cases, even the objectors are under no great pressure to minimize costs because legal costs can be passed along, at the ultimate expense of both creators and the general public who pays a bit more for cable bills, or a “wedding tax” each time they get married. Moreover, as Justice Vancise pointed out, tariffs such as the “wedding tax” occasionally make headlines and cause much political consternation.

This culture has also resulted in an attitude on the part of some that the Federal Court of Appeal and even the Supreme Court of Canada should be more deferential to the way the Board works and the results it reaches. The implication that the Board and some of the regular counsel and experts who appear before it are so expert in copyright law that the courts should keep their distance more so than usual is not only inappropriate. It is also symptomatic – and perhaps even a causal factor – of the Board’s unsustainable isolation from the comparable international norms of the regulation of copyright collectives, or any other comparable kind of economic regulation, such as antitrust.

The Copyright Board already gets special treatment in terms of judicial review in Canada, being one of the few elite tribunals whose cases go directly to the Federal Court of Appeal. The Copyright Board should welcome – rather than try to avoid – the teachings and guidance of the Federal Court of Appeal and the Supreme Court of Canada, which have provided very constructive and often essential guidance and occasional correction to the Board.

There were some other interesting themes that came up during the day. There was some interesting discussion later on about the phenomenon of “expert” witnesses who have appeared over and over on behalf of the same clients at the Copyright Board and whether some of them might fail to be “qualified” in the normal courts due to a perceived or perhaps even actual lack of independence. I am not suggesting that this concern applies to any particular person. However, even Justice Vancise and others acknowledged the issue later in the day and Justice Vancise even mentioned one or two individuals by name.

I emphasized that the recent Supreme Court decision in CBC v. SODRAC will force the Board to establish tariffs that will have to be attractive  to users, once users understand and accept that tariffs that are not “de facto” mandatory can be ignored if there is a better and cheaper way to clear their copyright needs. The SCC’s footnote about retroactivity is also an important signal that should be noted by the Board. Overall, I am firmly of the belief that we do not need more studies about the Board – unless they are directed towards specific recommendations for solutions based upon comparative best practices and benchmarks.  The problems and all the essential numbers are already known, as I have shown. And the experience of the US Copyright Royalty Board is transparently available. Also, the Canadian Competition Tribunal – which is receiving increasing attention as a comparative model – is also readily transparent on its excellent website. It’s time for sensible and sustainable solutions – not more inconclusive studies.

My modest suggestions for solutions, which might include the option of merging the Board with the Competition Tribunal, are set forth in my Ficsor-length slide presentation, which follows. I somehow managed to get through all of it in my allotted ten minutes:

   Howard Knopf Alai to Be or Not to Be May 25 2016 Show by hknopf

In conclusion, this was a good conference. Overall, there was general agreement that things need to move much faster and cost much less at the Board – but little agreement on how to get to this result.

There was much frank discussion. But it was all cordial and well balanced.  Even Ariel Katz and Barry Sookman agreed with each other on one or two points, such as the desirability of competitive market based licensing. Justice Vancise and I also agreed on the inappropriateness of the Music Canada campaign to lobby the new Chairman. Indeed, Judge Vancise was even more outspoken than me on this point, using the words “completely unacceptable”.

ALAI is to be thanked and congratulated on this major event in Ottawa. One hopes to see more such conferences in the future.

HPK