Access Copyright’s excessive $45 per university student proposed tariff - August 11, 2010 deadline

This is the first in more to come about the proposed $45 per university student tariff - a more than 1,300 % increase over the current basic charge. Access Copyright (“AC”),the proponent, is probably Canada’s fastest growing and least understood collective. It started out as a reprography collective right after the 1988 reform package was proclaimed. Its initial cash flow came conveniently from a lucrative multimillion dollar contact with the Federal Government. It has since managed, with little effective resistance, to convince Canadian provincial governments, school boards, colleges and universities to pay well over $30 million a year into its coffers. The only actual Copyright Board challenge to date that has gone to fruition resulted in a big loss for the K-12 school boards and the provinces ultimately behind them under the umbrella of the Council of Ministers of Education, Canada (“CMEC”). This loss was recently confirmed by the Federal Court of Appeal. More about this and whether this case will go to the Supreme Court of Canada below.

But reprography is becoming obsolete and AC has already decided to move on to “digital”. This ought to be interesting because, in addition to certain other potential serious problems, AC lacks digital rights from a lot of creators and publishers who have been understandably reluctant to involve third parties such as Access Copyright.

Here’s a good piece on AC’s problems in terms of future legislation and its attempted incursion into digital rights by Gary Rodrigues, a former Co-Chair of AC when it was known as CanCopy.

AC also wants to push back on the CCH v. LSUC decision from the Supreme Court of Canada. It has won a temporary partial but significant victory on this front in the Board’s K-12 decision and the recent Federal Court of Appeal decision upholding it. But that may not hold and AC has been understandably muted about its victory proclamations.

Now, AC wants to impose a $45 per head digital, etc. tariff on post secondary students at universities and $35 at colleges. The date for filing an objection is AUGUST 11, 2010. Lots of people and institutions may wish to object. How to do so is explained below.

$45 is not a misprint. Moreover, it’s more than 13 times the current base amount per student. The good news, as if anyone would possibly see it that way, is that it’s all inclusive and doesn’t require the intensely disliked $0.10 per page course pack fee. That’s not really much of a concession since the use of photocopied course packs is rapidly becoming obsolete, rather like blank CDs. The future lies in e-reserves and other legitimate uses of the new technology that could soon make Access Copyright itself obsolete if universities decide to exercise their technological and legal options.

The bad news is that this figure is exorbitant and AC is arguably not entitled to much if not most of this money. It is seeking to charge for all sorts of uses that are simply not covered by copyright law or which are or should be regarded as fair dealing according to the Supreme Court of Canada’s landmark decision in the 2004 CCH v LSUC decision. AC also has serious “repertoire” and rights problems, discussed below. AC wants educators and students (i.e. taxpayers) to pay for much stuff and uses that are or should be free, if the law is properly understood and applied. And, as indicated above, AC may have a big gap in terms of digital rights in the very limited actual repertoire that it has in its system. I will, at a later date, blog about its other “repertoire” problems for those who have not read my analysis published about a decade ago.

There is no comparable tariff or other mechanism in the USA to the proposed digital tariff.

Incredibly, the tariff defines a “copy” to include “posting a link or hyperlink to Digital Copy”. So, that would presumably include any website with copyrighted material. For example, take this blog - please! AC apparently expects to be paid whenever a professor posts a link on his or her website to my blog, or Michael Geist’s blog or the Globe and Mail or eBay. That is simply absurd.

Merely linking does not create liability. If it did, the entire internet would grind to a halt instantly. The whole raison d’être of the world wide web is “linking.” Linking requires neither permission nor payment. The Copyright Board should not even consider the issue of “linking”, because it is not covered by copyright law. This issue is a non-starter and should be eliminated as soon as possible by the Copyright Board before a lot of time and money is wasted on it.

The same for “displaying” a copy on a computer. How, precisely, is one supposed to read anything otherwise? The concept of “display” does not occur in the Copyright Act, other than in connection with dry erase boards.

Of course, in the university context, much or most of the remaining uses will be for a purpose covered by fair dealing under the current s. 29 of the Copyright Act - i.e. research, private study, criticism or review.

Or, these uses will simply be permitted by virtue of an “implied license.” When someone posts a work on the internet without any technical barrier to printing, saving, emailing it, etc. there is very arguably an implied license to do those things (notwithstanding CMEC’s views to the contrary) and most if not all of the other things that AC purports to cover.

The Copyright Board has shown itself to be quite sympathetic to AC in the K-12 matter, which was the first AC file to actually result in a contested hearing at the Board. The Board more than doubled the previously negotiated rate, despite the Supreme Court of Canada’s CCH decision, which was not adequately considered by the parties or the Board - although there was more than sufficient time to do so. The hit on the school boards was enormous. As I blogged last summer:

There will be a whopping four year retroactive liability here of about $18 million a year starting in 2005-2006. That's about $72 million to date, of which about $40 million is additional to what was already presumably being paid at the old rate, allowing for a token discount of 10% to soften this blow. It'll be really interesting to see what AC does with all of this. Almost two of this four year period involved waiting for the Board to issue its decision after the hearing concluded. In fact, most of the hearing took place in June, 2007 with some follow up delayed until October of 2007 due to the illness of a key AC witness.

This at a time when school boards are desperate for money for far more useful and immediate purposes.

The Federal Court of Appeal (FCA) has decided on July 23, 2010 a judicial review case involving this decision, in which I represented the Canadian Association of University Teachers (“CAUT”). Here’s CAUT's response to that decision.

All I will say at this point and, as is always the case here on this blog, in my own my own personal capacity, is that leave to appeal to the Supreme Court of Canada should be sought by CMEC if for no other reason than this decision appears, in my view, to be fundamentally inconsistent with a decision of different panel of the FCA a few weeks earlier. In the May 14, 2010 SOCAN “Previews” case wherein it was held that the research purpose of the consumer of the user or consumer must be considered:

We must consider previews from the point of view of the person for whom they are intended: the consumer of the subject-matter of the copyright. Their purpose is to assist the consumer in seeking and finding the desired musical work.

Substitute “student” for “consumer” and the issue should be quite apparent. However, the Court in the K-12 decision did not even refer to the previews decision, concerning which ample submissions were made. There are also several other grounds for seeking leave to appeal - but I won’t deal with them here.

There can be no doubt that AC will use the Copyright Board’s K-12 decision and the recent FCA decision as spring board’s to achieve a good chunk of what is being sought in the proposed post-secondary tariff.

The proposed $45/year tariff would also require extremely onerous record keeping obligations on the part of the institutions, and privacy and operationally invasive rights to conduct surveys. Not to mention invasive audit rights concerning which CCRA (Canada’s tax collectors) would be envious. This would give a whole new level of irony to the term “Access”. Even professors’ emails must be recorded and reported.

There are about 1.5 million students registered in universities and colleges in Canada, most of whom are borrowing heavily to finance their careers and Canada’s future in scholarship and innovation.

AC wants to take $45 per year from each of university students and $35 for each of the college students per That’s about $60,000,000 a year for those who keep track of taxpayers’ money. That’s in addition to the retroactive windfall of tens of millions of dollars in addition to what had already been paid during the period b given to AC last year by the Copyright Board for K-12. That figure doesn’t include colleges. With actual and potential revenue figures like those above, it’s no wonder that AC can easily budget over $3.1 million for lawyer and other “professional fees” for 2010 as revealed at AC’s recent AGM. That goes a long way, even at the Copyright Board.

Think of all the advanced research chairs or library books that could be bought for these tens of millions of dollars. That might create real innovation.

There is no comparable regime in place in the USA to impose similar restrictions, bureaucracy, copyright chill and costs on the K-12 and post secondary educational systems. American law has codified such that most if not all of the copying activity in schools and on campuses is “fair”, including the use of multiple copies in the classroom. While the FCA clearly did not agree with this approach, hopefully the Supreme Court of Canada would do so if given the opportunity.

What should be done about the new proposed $45 p.a. annual “tax” on university students?

If this hearing follows the usual course, it will take several years to unfold, will cost several million dollars in legal fees, surveys, etc. and result in a fairly predictable amount of $23-$26 per year per student - more or less the average of the overreaching amount sought and the previous basic amount paid. Some of the more outrageous “rights” would be dropped as well. Both sides would claim victory.

However, that would hardly be a victory if the end amount should really be more like $2 per student - or maybe even much less - which is not unreasonable in a post CCH and mostly digital and networked world.

I understand that the Association of Universities and Colleges of Canada AUCC has decided to fight the tariff at the Board. Others are expected to file objections and it is important that this be done in order to ensure that all possible arguments are made at the Board hearing stage and that the record before the Board is as adequate as possible. Part of the problem in the K-12 decision was that the record was inadequate. Even according to CMEC, which represented the K-12 school boards, the basic underlying survey should have been done “differently” in light of the CCH v. LSUC, which it did not fully take into account when the survey methodology was agreed to. While objectors other than AUCC may have limited direct input or control into the expected mega-survey, they should arguably be given an opportunity to comment on the adequacy of the proposed methodology.

People and institutions contemplating objection should understand that:

1. there are no “costs” consequences in terms of the other sides’ legal costs when filing an objection at the Copyright Board, even if one later withdraws.

2. The sometimes controversial “interrogatory” process at the Copyright Board can only be used to demand production of relevant information. And it works two ways.

Thus, a number of institutions, and even interested professors, students, librarians and other interested members of the post secondary community may wish to object. In the private copying cases, there were as many as 3,500 objections.

Canadian teachers, students, post secondary administrators and taxpayers should not want to unnecessarily pay tens of millions of dollars per year to exercise rights that they already have or do not need or don’t even exist, or that AC may not be entitled to enforce. Our educational system cannot afford such inefficiency.

Bill C-32, even if passes with the word “education” included in s. 29, will not necessarily solve any problems here. Given the Copyright Board’s rulings to date on what is “fair”, and the FCA’s reluctance to interfere, the legalisation needs more clarity - such as the “such as” wording we see in the USA and an explicit reference to “multiple copies.” Besides, waiting for Parliament to enact copyright legislation may be like Waiting for Godot. The educational community has been “waiting” for adequate exceptions since Flora MacDonald promised them in the “fall” - of 1988.

The Supreme Court of Canada may provide the necessary clarity in this situation as it did with the legal research issue. However, we must wait upon CMEC to see whether it will seek leave to appeal and whether such leave will be granted. There is a good chance here that leave would be granted, if sought, because the K-12 decision of the FCA seems inconsistent with the SOCAN previews decision of a few weeks earlier and rumours are strong that SOCAN will also seek leave. It would seem very important that this discrepancy be resolved. The Supreme Court of Canada sometimes likes to hear cases that come in contrasting “pairs”. In this case, the cases are from different panels of the same Court.

The Copyright Board seems to have an unstated “rocket docket” policy when it comes to AC. One can see this not only in the previous K-12 file but the currently unfolding attempt by AC to get $24 per FTE provincial government employee. Important decisions are likely to be made at an early stage, even while events are brewing in Parliament and the Courts that could and should provide game changing developments. Given AC’s very substantial revenues of well over $30 million a year even before the K-12 windfall, there would seem to be no need to move too quickly on the post-secondary file. That is why, in this case, additional voices may be needed to make these and other points.

How does one file an objection? It’s quite simple:

• Fax it or email it to:

GILLES MCDOUGALL

Acting Secretary General

56 Sparks Street, Suite 800

Ottawa, Ontario

K1A 0C9

613-952-8624 (telephone)

613-952-8630 (fax)

gilles.mcdougall@cb-cda.gc.ca (email)

• Indicate who you are and generally and why you are objecting - i.e. if you think that the amount sought is excessive and exorbitant, that AC is seeking to license rights it doesn’t have in respect of repertoire it doesn’t have, etc.

• You don’t need any detail. Details come much, much later. Anything much longer than one or two pages is longer than necessary at this stage. And details at this stage won't have any effect on the outcome. The objection is simply a necessary step to full participation.

• Provide your full contact information.

Note that the Board’s Model Directive on Procedure can be found here.

DO SO ON OR BEFORE AUGUST 11, 2010.

BTW, I should disclose that I am a member of AC and I do cash their little cheques each year, and hopefully redistribute the sum to good causes. However, I and many AC members - at least those in the academic and professional communities - would happily write what we write with or without this payment and would happily see this amount substantially reduced or eliminated if AC’s tariffs were to be substantially cut down to size for the benefit of the Canadian educational system, which is spending tens of millions of unnecessary dollars each year, not to mention the bureaucratic costs and the chill factors inside the educational system which are so significant that they are “priceless”.

The largest single creator beneficiary of AC’s mechanism has received about $7,000 per year, a figure which falls off very quickly, according to the 2007 Friedland report. So, whatever the purpose of AC may be, it is not doing a lot to keep individual writers writing. And that’s a very tiny fraction of the $3.1 budget for legal costs alone for 2010.

HK

PS - the above has provoked a huge and interesting discussion at Michael Geist's blog and at Techdirt.