Friday, November 11, 2022

Fair Dealing and the University of Toronto

The University of Toronto has sued a tutoring company, Easy Group Inc., for copyright infringement. Here is the U of T announcement dated May 11, 2022.

Since there is growing interest in this case, I have obtained the pleadings and post them here:

I make no comment on this case at this time, other than that it is clear from the pleadings that fair dealing could be a very major issue.

Speaking of fair dealing, U of T has recently revised its 2012 Fair Dealing Guidelines. Here’s the announcement from October 21, 2022 with links.

Unlike the 2012 Guidelines, I had no involvement in the 2022 revision. Other than that, I make no comment at this time on the 2022 U of T revised Fair Dealing Guidelines.

HPK

Friday, October 21, 2022

Voltage Mass Drift Net Default Judgment Test Case - The Appeal

I blogged last year about Voltage’s troubling test case effort to get a default judgment against dozens of alleged infringers all at once identified through aggressive investigation and Norwich orders.

Those dozens could, if Voltage’s procedural tactic succeeds, quickly become many thousands at several thousand dollars each. In this test case, Voltage was seeking staturory damages of $2,250 to $5,000 plus costs from each defendant caught in the drift net.

CIPPIC had intervened in this proceeding. Voltage was dealt a serious setback by the Federal Court in a well-reasoned order by Justice Furlanetto dated June 6, 2022. See Voltage Holdings, LLC v. Doe#1, 2022 FC 827 (CanLII), https://canlii.ca/t/jpncb

Not surprisingly, Voltage has appealed. CIPPIC has been given leave to intervene in the appeal.  Here is Voltage’s Memorandum of Fact and Law for the appeal.

There’s a lot at stake here. If these mass default proceeding tactics are sanctioned by the Court, we will almost certainly see a parade of  thousands of default judgments in dozens or more cases involving up to $5,000 in statutory damages against each and every defendant – whether of not each defendant actively downloaded, simply had their Wi-Fi used by someone else (e.g. teenage kid, babysitter, neighbour, tenant, etc.) or were just misidentified.

This would be unacceptable and would require a legislative remedy.

Also, not to be forgotten, is the so-called “reverse” class action against Mr. Robert Salna, a landlord who happened to be in the wrong place at the wrong time and is being forced to defend this very complex test case, which still grinds on in the Federal Court as action #T-662-16 - now with several intervenors.

HPK

PS - October 30, 2022: Here's is CIPPIC's very well researched intervener factum dated October 28, 2022 in Voltage's appeal.

Friday, October 07, 2022

Canadian Copyright Today – Confrontations & Opportunities

Robarts Library – University of Toronto

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

Bottom Line:

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

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

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

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

ACP joins colleague associations in recommending that:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What Lies Ahead?

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

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

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

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

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

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

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

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

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

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

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

 HPK

Tuesday, August 23, 2022

There is No New “Making Available” Right: The Copyright Board Got It Wrong

 


On July 15, 2022 the Supreme Court of Canada (“SCC”) rendered a lengthy, nuanced and very important judgment  in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (CanLII), <https://canlii.ca/t/jqgw0>.

Objectively, the decision affirmed that:

1)     There is no new “making available right" as such resulting from the 2012 amendments to the Copyright Act. The new definition added as s. 2.4(1.1) merely clarified the meaning of the existing right under s. 3(1)(f) to “communicate to the public by telecommunication”, and did not create a standalone new right or a justification for stacking on an additional tariff.

2)     SOCAN was not entitled to stack a new royalty on top of existing tariffs simply by virtue of a user making a work available for streaming or download. Such activity is already covered by existing rights and tariffs, and the 2012 amendment clarifying the definition of “communication of a work or other subject matter” in s. 2.4(1.1) doesn’t create new liability.

3)     The “definition” provisions in s. 2 of the Copyright Act do not add new rights. The rights of owners of “works” are found in the first paragraph of s. 3(1). As ably stated by ESA, “These rights are the right to reproduce, perform, and publish the work or any substantial part thereof.” The “making available” provision, however, is not contained in this rights-granting section but rather in definition section 2.4(1.1).

4)     The Court once again affirmed the importance and centrality of the doctrine of technological neutrality to applying the Copyright Act.

5)     The Court once again affirmed the principle of balance in copyright law:

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

6)     The Court once again affirmed the rule that one activity (here, streaming or downloading) can only give rise to one royalty payment, and that payment of two royalties for the same activity is prohibited.

7)     The domestic legislation is what is determinative – not the treaty. Without being as blunt and even apparently sarcastic as Justice Statas was in the Federal Court of Appeal when he  he referred to “the vibe” of international law, the SCC affirmed Justice Statas’ general approach to use of international law to interpret domestic statutes.  

8)     The Copyright Board was wrong – i.e. not “correct” - in its interpretation of the 2012 legislation. The Copyright Board will be held to the “correctness” standard of review when it comes to interpreting the Copyright Act because it shares concurrent first instance jurisdiction with the Superior Courts. The Board will be given no deference for being “reasonable” in its interpretation of the substantive provisions of Copyright Act. It must be correct. Importantly, this is the first new category of correctness review since the landmark Vavilov decision. Two of the judges disagreed and would have applied the more deferential “reasonableness” standard. That said, they found that the Board’s decision was unreasonable in this case.

9) Justice Rowe states and reiterates that “If a work is made available for downloading, the author’s right to authorize reproductions is engaged.” (paras. 8, 108). Moreover, the meaning of “authorize” has been considered in greater depth in a number of prior SCC decisions. It will be interesting to see whether future courts look more to ESA or to earlier cases like CCH when confronted with this issue.

10) Finally, this decision may or may not have some potential application to infringement cases, given the closing comment from Justice Rowe:

 [113]  Before concluding, I would note that the value of these rights is not in issue in this appeal. Setting the appropriate royalties to compensate authors when these rights are engaged is a matter for the Board to decide. Similarly, the considerations that a court might have regard to in assessing monetary remedies for infringement is a matter to be decided if and when such a case arises. 

More subjectively:

 1)     To put it bluntly, when the Copyright Board strays out of its permitted and mandated narrow lane of rate-setting (see Prof. Katz’s factum on this point)  and presumes to interpret the substantive provisions of the Copyright Act – much less international law – it had better be “correct” and just not merely “reasonable”. While the SCC recognizes that there can be many “reasonable” outcomes, there is normally only one “correct” outcome.  This clarifies a residual issue from Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (CanLII), [2019] 4 SCR 653, <https://canlii.ca/t/j46kb> concerning the standard of review for the Copyright Board. This is bound to upset the Copyright Board, following less than a year after the SCC declared that Copyright Board tariffs are not mandatory for unwilling users in the York v. Access Copyright decision, which I wrote about herePer Abella, J:

 [39]     As matter of legislative coherence, it would be incongruous if royalties fixed in the context of licence negotiations between a collective society and a specific user were voluntary, but those set in a general tariff were mandatory. https://www.canlii.org/en/ca/scc/doc/2021/2021scc32/2021scc32.html

2)     This clearly very expensive and lengthy detour could have been avoided if the Board had not called for extensive submissions on the implications of the WIPO treaties – which numerous well-resourced parties went along with resulting in a pantheon of experts’ opinions. All of this could and should have been avoided if the Board had simply allowed or denied SOCAN’s submissions on the basis of the Canadian Copyright Act, the 1996 WIPO treaties, and existing authorities on the subject. Then, the FCA could have resolved the issue on judicial review. Canada does not need a panoply of “experts” to read a domestic statute, and if appropriate, an international treaty and published commentary on it. We don’t need a monumentally expensive, dilatory and gratuitous display of the “the vibe” of international and treaty law in what should have been a rate setting exercise. The Board’s decision to proceed the way it did could potentially have set a dreadful precedent in terms of access to justice in situations wherein objectors do not have the resources that were available in this instance.

3)     Ironically, after recognizing that a freestanding “making available right” existed, the Board nonetheless refused to value the making-available tariff because ‘the evidence before it was inadequate to warrant the setting of a tariff for ‘making available’’. This was upheld as “reasonable” in the companion decision of the FCA. CMRRA-SODRAC Inc. v. Apple Canada Inc., 2020 FCA 101 (CanLII), <https://canlii.ca/t/j82gf>. Arguably, that should have been the end of the matter for the Board, especially since the Board recognized more than a decade earlier in another proceeding for a SOCAN tariff on “other sites”  that “in the absence of proper and reliable evidence, it would be irresponsible to certify a tariff that could potentially have such a broad scope of application” and this was upheld by the FCA, in a decision in which I played a leading advocacy role.
Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2010 FCA 139 (CanLII), <
https://canlii.ca/t/29z9n>, which Justice Stratas cited in 202 FCA 101.

4)     Interestingly, the issues of royalty stacking and the effort to twist or elevate definitions into new rights has a long history:

a)     The monumental Report of Judge Parker from 1935 outlined the concerns with the attempts by the predecessors of SOCAN to impose “additional” costs on motion picture exhibitors as a result of the new technology of the day – namely “talking pictures” and such practices as the notorious attempt imposition of a “score charge” to “to recoup for the producer his cost, and perhaps a profit, on what was involved in putting the sound track on the film or record the sound on a disc, timed in relation to the film." This was a blatant and early attempt at royalty stacking – and it prompted the establishment of the Copyright Appeal Board in Canada, which worked very well in Canada until the Copyright Board came along more than five decades later.

b)     Kraft tried to twist the s. 2.7 definition of an “exclusive licence” added in 1997 to the Copyright Act into a right to “thwart” the importation of perfectly authentic Toblerone chocolate bars based on copyright in a small picture on the packaging. I successfully thwarted this argument on behalf the Retail Council of Canada as an intervener when this case went to the SCC resulting in the decision in Kraft Canada Inc. v. Euro Excellence Inc., 2004 FC 652 (CanLII), [2004] 4 FCR 410, <https://canlii.ca/t/1h3qj>

c)     In one of the 2012 “Pentalogy” cases at the SCC, the Motion Picture Association of Canada incongruously argued, in effect, that the word “excludes” in the definition of “sound recording” actually means “includes”. The definition in question was: “sound recording” means a recording, fixed in any material form, consisting of sounds, whether or not of a performance of a work, but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work. (underline added). Needless to say, the SCC wasn’t impressed and the only mystery was why it even heard the case in the first place. See Re:Sound v. Motion Picture Theatre Associations of Canada, 2012 SCC 38 (CanLII), [2012] 2 SCR 376, <https://canlii.ca/t/fs0vc>

BTW, I was not alone in finding the hearing to be rather confusing. Even the judges were wondering at times about who was agreeing or disagreeing with whom and about what. Here’s the webcast.

Some of the parties seemed to depart from their factums – which in some cases were much more clear than their oral arguments. Perhaps the most useful factum was that of ESA, which can be found here.

 HPK

Thursday, July 07, 2022

The Copyright Board Third Town Hall on June 2, 2022: Was This “Three Strikes”?

The Copyright Board of Canada, hosted by the Canadian Bar Association, was given the stage for a third “Town Hall” on June 2nd 2022. Spoiler alert: once again, it was disappointing and mostly devoid of any substance – other than an interesting but very vague hint about how the Board sees possibly increased use of its so-called “arbitration” regime as some kind of response to the SCC’s 2021 decision in the York case that its tariffs are not legally mandatory. There was a follow up CBA event on June 9, 2022 about which I shall blog separately.

I have blogged at some length about the first two town halls in 2019 and 2021.  Expectations for this year's event we're quite low on my part  because there is no apparent evidence that anything significant has happened at the Board since last year. It has held zero hearings in nearly five years, rendered no significant decisions in 2021(with one possible exception noted below) or 2022 other than housekeeping of previous decisions with minor changes and a few “unlocatable” owner decisions of no consequence. It may be observed that it has finally corrected the spelling of “infrigment” [sic] on its website. Moreover, it has finally made almost all (or at least 211 according to CanLII out of 230 according to the Board since 1990) of its decisions searchable and available on CanLII, which is something that could have and should have been done 20 years ago at virtually no cost.

The most recent available Annual Report of the Board for 2020-2021 indicates that:

In spite of these pandemic-related challenges and the slowdown of activities in some industries involved in the rate approval process, the Board’s workload remained significant in 2020-2021. In addition to pending files, the Board received 21 new proposals tariffs submitted on or before October 15, 2020, as stipulated in the new legislative framework, and 21 licence applications for the use of works whose owners cannot be located as per section 77 of the Copyright Act. Also, 110 agreements were filed with the Board pursuant to section 76 of the Act. Finally, in 2020–2021, the Board issued 20 decisions, including two major decisions in complex files: June 26, 2020 SODRAC v. CBC, 2008–2012 [Redetermination] January 27, 2021 SODRAC v. CBC, 2012–2018 [Determination [Sic – this second link is wrong – it’s the same as the previous link] (highlight added)

The new tariff proposals, unlocatable licence applications, and filed agreements would have required a barely minimal “workload”. All of these tariff “decisions”, except two, appear to be rubber stamp repetitions with minor if any variations from previous decisions. The two links provided for the two supposedly “major” decisions are the same, which makes one question whether this report to the Minister was adequately proofread. In any event, these two “major” decisions are probably incomprehensible except perhaps to the lawyers and experts involved. This would appear to be the correct link for the “Determination”.

These two decisions are undoubtedly important to CBC and SODRAC (which is now owned by SOCAN) – and potentially with respect to similar issues arising in the commercial radio and TV worlds. However, the opacity of the reasons to all but a very small number of expert veteran Copyright Board lawyers and consultants is a disappointing departure from the past. The beauty of the common law judicial system is that good judgements on even the most complex issues are normally self-standing and reasonably understandable to any reasonably literate person and certainly to any reasonably knowledgeable lawyer in the field involved and not just the lawyers actually involved. The same should hold true – and usually does – with “expert” tribunals in Canada.

It might be noted that the hearings for these “major” decisions were in September, 2017 but the decisions were not rendered until June 26, 2020 and January 27, 2021 – long after members  Majeau and Landry had retired. They clearly continued for some time to be “seized” of these matters and presumably were paid for their time spent thinking about them. Federal Court and Supreme Court judges, on the other hand, must clear their desks of pending decisions within six months of retirement – and they have far greater case loads that are often much more complex and important.

The Board continues to foster the impression that it has a huge workload and is very productive. This is no doubt nourished by Prof. Jeremy de Beer’s controversial 2015 “statistical” study that parlayed 74 tariffs from 1999-2013 into supposedly 852 tariffs for that period though parsing of paragraphs, division into separate years, etc. This so-called “statistical” analysis  was questionable at the time and has not aged well. My critique of that analysis has not been refuted by anyone, as far as I know. As I further indicated at the time, based upon the Board’s own previous taxonomy and my analysis:

So, if the Board is right, and I am right, then Prof. de Beer’s conclusion that the Board has certified 852 tariffs in the last 15 years is off by a factor of 852 ÷ 74, i.e. ~1,150%. His conclusions that the Board certifies 70 tariffs a year would likewise be off by a factor of 70 ÷ 4.9, i.e. more than 1,400%

The Board has rarely, if ever, issued more than five actual tariffs in a year, and usually even fewer substantively important decisions. In turn, very few of these tariffs are truly new or “inaugural”.  Nonetheless, and do doubt empowered by Prof. de Beer’s study, the Board soon thereafter got a million dollar per annum increase in its annual budget bringing it to about $5 million a year for total expenses. That’s a lot for a Tribunal that hasn’t held a hearing in almost five years and apparently doesn’t adequately proof read its annual report to the Minister.

So, this year’s Town Hall was once again frustrating and disappointing, except for one aspect that may suggest how's the Board will try to find some justification for its continued existence in the face of the “existential” issues raised by the Supreme Court's decision last year in York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 (CanLII), <https://canlii.ca/t/jh8bc>

The first two speakers were the Vice Chair/CEO, Nathalie  Théberge, and Secretary General, Lara Taylor. They said essentially nothing, but did so in a very smooth,  bureaucratic and well rehearsed manner, with several references to their “mighty team”, “Phase I”, “Phase II”, etc. They promised an important forthcoming consultation on new rules, concerning which I’ll have something to say in due course. As I’ve said before, for the first time in the Board's history, neither of the persons occupying these two important positions are lawyers, which is incongruous considering the supposedly quasi-judicial nature of the Board's work in the very esoteric and quintessentially legal field of copyright law.

The somewhat interesting aspect of the remaining time after the long and uninteresting presentation by the Vice Chair and Secretary General was the discussion by its chair, retired Justice Luc Martineau and its general counsel Sylvain Audet. The chair mentioned the Access Copyright case, as he called it which followed the
Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> case “in a certain way” as he put it. There was clearly at least an implicit recognition that the Supreme Court's landmark ruling the copyright board tariffs are not “mandatory” well affect the nature of the Board's work. When I asked in the chat about how it might affect the workload, Maître Audet replied that this “remains to be seen”.

Both gentlemen explicitly suggested that there might be increased utilization of the Boards “arbitration” regime, based up on the 2018 amendments. The Chair noted that there had already previously been 15 arbitrations in the Board's 32 year history.

For my part, I do not see how the 2018 amendments will have any effect on the implications of the Supreme Court's rulings in CBC v. SODRAC and the York case, in both of which I made prevailing arguments. While the legislation may superficially suggest that a tariff applicant can force the party into an arbitration proceeding where they are “unable to agree”, what does that even mean if the user does not have to accept the result of the so-called arbitration? Users in such a situation may conceivably consider simply defaulting or putting in a token case. There have only been 15 uses of the “arbitration” mechanism to date. If anything the CBC v. SODRAC and York cases are likely to reduce its use. There is nothing in the 2018 legislation that would make it more attractive or effectively “mandatory”.

As was suggested, this so-called “arbitration” mechanism may be a useful mechanism where only one or two users are involved and there is a substantial amount of money at stake. However, some users who might be inclined towards so-called arbitration may now see better value by hiring and paying a retired judge or other private arbitrator with actual expertise in copyright or at least intellectual property law and actual serious arbitral experience – especially if the legal or factual issues are complex. These arbitrators are well paid because the most successful of them have the reputation of delivering expert results expeditiously, which frankly is not the case with the Copyright Board in modern times. Whether the Board would bless such a decision would be interesting. In any event, it’s not clear that the Board’s blessing would even be needed, since the result could presumably be “filed” with the Board pursuant to the existing mechanism for filing most agreements.

BTW, in other interesting developments at the Board:

Prof. Adriane Porcin, who was appointed as a part-time member of the Board in September 2022 for a four-year term, resigned in January 2022. She was a Board member with evident academic credentials in copyright law.

At least two prominent collectives have “withdrawn” proposed tariffs in recent months. These are CMRRA-SODRAC Inc. (“CSI”), CMRRA, and COPIBEC (the Quebec counterpart to Access Copyright that was seeking $28 per FTE annually). Could this be related to the SCC’s rulings on “mandatory” tariffs?

I’ll soon post more on the follow up comments by Professors De Beer and Gendreau on June 9, 2022 and the Board’s apparently less than compelling consultation effort regarding the its rules for conduct of its hearings, such as there may be, due on short notice on July 18, 2022.

So, this was the Board’s third time at bat at a CBA Town Hall. Readers can form their own conclusions about whether the Board struck out or maybe somehow will reappear again. If so, let’s hope that they actually have something important and useful to say and/or any actual achievements to speak about.

 HPK


Tuesday, June 21, 2022

Senate Begins Consideration of Bill C-11

The Senate has now begun an unusual “pre-study” of Bill C-11, the very controversial bill designed to force the internet into the broadcasting framework, and to update the Broadcasting Act and, in the process, give enormous new power to the CRTC. Michael Geist has covered this in terrific detail.

Today, June 22, 2022 he and the Hon. Konrad von Finckenstein, Q.C. testified before the Senate on Transportation & Communication. The video is available here.

Konrad von Finckenstein is a long standing legend in the Canadian public service. He was the lead counsel for the Canada/US Free Trade Agreement in the 1980’s, the Commissioner of Competition, a Federal Court Judge, and the Chair of the CRTC. Nobody else in Canada has such a remarkable breadth of knowledge, experience and policy acumen. He is still very active and contributing in the policy space, e.g. here with Jim Mitchell on May 4, 2022 on Bill C-11.

So, his testimony today was and will be very important. Here is the text of his speaking notes (he was only permitted six minutes) and his Annex, which details five specific amendments included below for convenience:

Annex A

I

Clause 2 of the bill is  amended by adding the following subsection 2(4)

Exclusion- Minor Online Undertakings

(4) This Act applies only to on line undertakings which have more than 100 000 subscribers in Canada or revenue in excess of 100 million from Canada.

II

Clause  4 of the Bill is amended by  adding the following subsection 2.1

Limitation on Regulations

2.1 Regulations made under sub section 2 (b)

i)                 apply to on line undertakings with paid subscriptions or embedded advertising that transmit, both their own or commercial content and user generated content, and   

ii)               must be constructed in such a manner that user generated content is not affected.

III

Clause 3(2) of the bill is amended by adding the following :

(2.1) Paragraph 3(1)d)(i) of the Act is amended by adding the following:

(i.1) reflect and be responsive to the preferences and interests of its audiences;

(i.2) to the extent possible rely on market forces to ensure that Canadians obtain the programming of their choice;

IV

Clause 13 of the Bill is amended  by adding  the following subsection  2.1 to section 11 of the act

2.1 For greater certainty

2.1 Conditions imposed or regulations made by the Commission regarding on line undertakings pursuant to sections 9.1, 10 or 11

1) shall

a)     not compel on line undertakings to change the methods by which they ascertain viewer’s choice

b)     respect viewers choices and leave them unaltered

2) may however require on line undertakings to offer Canadian program alternatives as an addition to viewers’ choices

V

Clause 14 of the bill is amended by adding the following after s.11.1 (5)

Eligibility to Benefits

(5.1) Where a foreign owned online undertaking is required pursuant to section 11.1 to pay an expenditure to a person or organization, or into any fund, that undertaking shall be eligible to the benefits available from any such person, organization or fund as if it were Canadian owned and controlled.

Today's hearing was off to a great start - and the Senate will hopefully provide the sober, second and thorough democratic consideration and necessary revision to the proposed legislation that Minister Pablo Rodriquez has denied in the House of Commons.

HPK