Copyright Board Grants Access Copyright’s Application for Interim Tariff

After a process lasting about 10 weeks, without an oral hearing, and without yet providing reasons, the Copyright Board announced just before 6:00 PM on December 23, 2010 its decision to grant the application by  Access Copyright (“AC”) for an Interim Tariff applicable to post-secondary institutions outside Quebec commencing January 1, 2011 until December 31, 2013 (i.e. three years) or until a final tariff is certified, whichever is earlier. This could be worth about $48,000,000 over its likely three year duration, based upon AC’s own figure for annual revenue for the post-secondary sector outside Quebec. It is possible that an interim tariff could eventually be imposed for a much longer period - perhaps on modified terms - given that inaugural tariffs can take several years to be determined at the Copyright Board, not to mention possible subsequent judicial review and even Supreme Court proceedings. According to the Board, “The interim tariff, as any interim measure, may be modified or replaced at any time, on application.”

Here is the Board’s decision of December 23, 2010. Here is the Interim Tariff dated December 23, 2010. Here is the Board’s redlined version comparing the Interim Tariff as granted to the  AUCC model license.

The justifications advanced by AC for this interim tariff included:
•    preservation of the status quo;
•    promotion of legal certainty; and,
•    relief for AC against the “deleterious effects of the length of the hearing”.

The interim tariff was vigorously opposed by several major associations in the post-secondary establishment, including ACCC, AUCC, CASA, CAUT, and CFS on behalf of their members. There were also forceful objections by the Province of Alberta, Athabasca University and Prof. Ariel Katz. Various objections by one or more of the participants included the following grounds:
•    lack of jurisdiction;
•    lack of evidence; and
•    procedural fairness.

The above summary is very cursory and mentions only some of the many issues raised by the various participants. I have attempted to publish all of the written submissions (without attachments) from AC and all of the participants earlier on this blog.

In an unusual twist, the Board sets dates for further submissions “since this tariff is being issued even though its provisions would benefit from fuller discussion”.  Also, the Board stated that:

This decision is being issued without reasons because the Board considers this matter to be urgent. Reasons will follow.

Naturally, we all await the reasons for decision with great interest.

It will be interesting to see if and, if so, when judicial review proceedings (i.e. “appeal” for non-lawyers) are commenced by one or more participants. If this happens, then it is possible that the interim tariff itself will be set aside by the Federal Court of Appeal in the next several weeks or months and that there could even be, if sought, an interim stay of the interim tariff, pending the full determination of any judicial review application.

Check back on this blog for updates when the Board releases its reasons as well as any news as to judicial review applications or other developments.

As well, another major and potentially relevant event to watch out for in the next weeks in the context of this Copyright Board case will be the judgment of the Supreme Court of Canada (“SCC”) as to whether it will grant leave to appeal in the CMEC K-12 case. This would not be surprising, given that leave was just granted in the SOCAN “previews” case and that the K-12 decision is arguably, inter alia, inconsistent with the slightly earlier “previews” decision in the same Court on the fair dealing issue.  Whether the SCC takes the K-12 case, and if so what it does with it, is bound to be very important in the eventual outcome of the AC posts-secondary tariff application.

On a closing note, Season’s Greetings and best wishes for the New Year to all my readers, including those with whom I may respectfully disagree or critique in the wonderful and efficient marketplace of ideas that the blogosphere makes possible and even inevitable. Thank you all for your interest in this blog, which is approaching its fifth birthday on January 10, 2011.

HK

Leave to Appeal Granted in SOCAN iTunes "Previews" case

Good news from on high, legally speaking:

GRANTED WITH COSTS / ACCORDÉE AVEC DÉPENS

Society of Composers, Authors and Music Publishers of Canada v. Bell Canada et al. (F.C.) (Civil) (By Leave) (33800)

(The application for leave to appeal is granted with costs in the cause. /

La demande d’autorisation d’appel est accordée avec dépens suivant l’issue de la cause.)

Coram: LeBel / Deschamps / Charron

This augurs well for leave to appeal also being granted in the CMEC K-12 case, in which the application was filed a few weeks later. 

If the Supreme Court proceeds in its usual prompt manner, we will likely have a judgment in the CMEC K-12 leave application in late January or February.

The CMEC K-12 case at first sight is much more obviously relevant on its facts than the previews case to the the current Access Copyright tariff applications underway at the Copyright Board. However, if perchance the Court decides to hear only the "previews" case and not the K-12 case, the outcome could still have a profound effect on the AC applications depending on the result and the reasoning.  


I've been predicting that both these cases would be heard by the Court - since both involve important fair dealing issues and present a situation in which the Federal Court of Appeal has seriously contradicted itself not only on the substance of fair dealing but on standard of review as well.

HK

Access Constriction at York University Following AUCC Fair Dealing Policy

An example of the fallout in the form of copyright chill and denial of access that is being promoted by AUCC itself can be seen at York University (my undergrad law alma mater).

Believe or not, York University has advised its faculty:

CHECK with the Libraries to see if there is a licence or subscription that permits copying, posting, or linking to the published material.  (emphasis added)

Even AUCC does not go so far as to suggest that linking requires permission. But maybe York U's administration hasn't heard that linking is not something covered by  Copyright Act. 

Here are documents that York has sent out to its faculty yesterday, on the eve of the “sky is falling” deadline set up by Access Copyright of January 1, 2011:

• Memo re “Copying at York University”

• Notice re Access Copyright

• Fair dealing Guidelines provided by AUCC

Here also is York U’s very unhelpful and very obsolete website material “Copyright and You”

Here, one will find such gems as:

In addition to considerations of personal liability, the staff of the York University Libraries, Archives and Special Collections, and Printing Services have a professional responsibility to respect copyright law and thus may refuse to copy or print something for you if they deem it to be an infringement of copyright law.

and 

Can I digitize copyrighted materials?

Faxing, scanning, and other forms of electronic reproduction and transmission are also considered copying but the copy cannot be kept in digital form. Digital copies are allowed only as an interim format with paper copies being the final product. Even then, the electronic copies must be promptly destroyed.

What are the penalties for copyright infringement?

If one does not obtain appropriate permission from the copyright owner(s) to use protected works, both civil and criminal penalties can be imposed.

(emphasis added)

All of this results from overly cautious advice that could have come from Access Copyright itself. 

One might well ask whether:

• Canadian universities are serving the interests of their faculty and students by self imposing policies and practices  that their counterparts in other countries - particular the USA - would find incomprehensible, unworkable and even risible?

• How Canadian post secondary teachers and students can hope to be competitive with their foreign counterparts when “access” to essential reading material is discouraged or denied?

• The “Can’t Copy” attitude of Access Copyright and AUCC are threatening the economics and quality of higher education in Canada?

• Whether - if AC and Canada's post secondary institutions can’t deal with this in the public interest  - legislative intervention is required.?

HK

AUCC's Final Fair Dealing Policy with Explanatory Memo

AUCC has issued its presumably final final fair dealing policy with a short explanatory memo. The Supreme Court's six part test from CCH v. LSUC, which I noted yesterday had been taken out,  has now been added back in. However, the spirit of that landmark decision seems to be rather distant in this document.

The  explanatory memo, which emphasizes all the things that supposedly can't be done,  follows below.Those with reasonably long memories may recall that Access Copyright used to be called CanCopy - but changed its name - possibly because too many impertinent people, such as former York President Harry Arthurs and myself, were calling it "Can'tCopy".

Anyway, the explanation below and the attached document are what AUCC  - not Access Copyright - thinks can be copied and can't be copied under "fair dealing" in the universities.

HK

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Fair Dealing Policy

The legal counsel for the Association of Universities and Colleges of Canada has prepared, and recommends for adoption by each AUCC member outside Quebec that intends to operate under the Access Copyright Post-secondary Educational Institution Tariff, 2011 to 2013 (the "Proposed Tariff'), the attached fair dealing policy.

The fair dealing policy outlines the copying of published works that can be made in print or electronic format by a university through its staff and faculty members under the exception for fair dealing in sections 29 to 29.2 of the Copyright Act, without seeking permission of the copyright owner. The policy does not apply to audio or video recordings.

The fair dealing policy does not address exceptions in the Copyright Act other than fair dealing. Depending on the circumstances, other exceptions in the Act may also permit the copying of works without the permission of the copyright owner. One example of an exception is section 29.4(1). It provides that it is not an infringement of copyright for an educational institution to make a manual reproduction of a work onto a dry-erase board, flip chart or other similar surface intended for the display of handwritten material. Another example is section 30.2 which provides that it is not an infringement of copyright for a library to do anything on behalf of any patron that the patron could do herself under fair dealing. Your institution may wish to include the fair dealing policy in copyright guidelines or a copyright compliance policy that addresses other exceptions under the Copyright Act.

The fair dealing policy does not restrict any copying that your institution is permitted to do under arrangements that your institution has with publishers, e.g., under a Canadian Research Knowledge Network licence, or a transactional permission with the publisher or the publisher's representative, e.g., Access Copyright or the Copyright Clearance Centre.

The fair dealing policy does not permit making copies for sale to students in course packs, making copies of required readings for library reserve, or posting copies on course management systems, e.g., Blackboard, or on course websites.

Some licence agreements that universities have with publishers that provide access to publications in electronic format restrict the making or dissemination of copies. Where there is a conflict between the terms of a licence agreement and the fair dealing policy, the terms of the licence agreement apply.

The policy contemplates that your institution will appoint a person who will make decisions on whether copying outside the scope of the copying guidelines are for one of the fair dealing purposes of research, private study, review or criticism, and in all the circumstances, whether the making of the copies is fair. Paragraph 10 of the policy sets out the factors to be considered in determining whether the making of a copy for one of the fair dealing purposes is fair. If the copying is for one of such purposes and the making of the copy is fair, the copying can be made under the fair dealing exception without the permission of the copyright owner.

Access Copyright's Reply and Sur-sur-replies Dec 22 2010

AC has filed a lengthy reply  to the submissions filed on December 17, 2010.

This contains rather ample reply to the allegedly "improper"  alleged "sur-reply" from several participants.This might be called "sur-sur-reply".

In any event, this presumably completes the process of written submissions on AC's application for an interim decision in the form of a interim tariff. Amongst many interim rulings in recent days and weeks, the Board refused to have an oral hearing on this matter.

I will say that it would be quite unremarkable if the Board were to completely reject this application for any one of many obvious reasons, including lack of jurisdiction, lack of evidence, and procedural fairness grounds. The many submissions of the objectors and intervenors provide ample evidence and legal reasoning urging this result.

If, on the other hand, the Board decides to issue an interim tariff in this situation, the decision would likely be very controversial and potentially very vulnerable to being overturned on judicial review ("appeal" in non-lawyer parlance) by the Federal Court of Appeal.

If the Board is going to issue an interim tariff, and accepts a version of the notion that the sky will fall on January 1, 2011 without such a tariff, one can expect a ruling potentially at any moment. This would be interesting because the Board often takes many months and sometimes as much as 18 months or more after submissions are complete to deal with matters of much less controversy and financial significance. An interim tariff, in this instance, could be in effect for many, many years. Recall that SOCAN's inaugural internet tariff dates back to 1995 and is far from resolved. Of course, there was no interim tariff in that situation.

HK

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HK

Contrasting Approach to "fair" - US Study v. AUCC "fair dealing policy"

Here’s a contrast in attitudes to the concept of "fair" in the context of copyright in the academic world.

Here’s a brand new study dated December 20, 2010 from Adler, Butler, Aurderheide and Jaszi in the USA. It favours an expansive approach to what is “fair” because the job of librarian is help faculty and students to learn and do research. The authors state:

Failure to employ fair use affirmatively and consistently impairs the accomplishment of
the academic and research libraries’ mission. Interviewees described downsizing,
postponing, and shelving courses, research projects, digitization initiatives, and exhibits
due to costs associated with seeking permission or making what seem to be tedious
case-by-case determinations of fair use. Scholars were denied access to materials, or put
to considerable hardship, because of constraints interviewees imposed on the use of
copyrighted materials. Some interviewees described providing disabled students with
lower levels of access than their peers for fear of violating copyright. Materials with
inherent flaws (e.g., books with acidic paper, and analog tape and film that will warp
and disintegrate over time) and in near-obsolete formats are languishing because some
interviewees were not comfortable acting under fair use where other reformatting
provisions may not apply. Interviewees were typically aware that they could go further,
but felt constrained in exercising fair use in various situations.

And this is in the USA, home of “fair use” , which is potentially far more liberating to teachers and students than “fair dealing”.

Contrast this with the recent “final” AUCC (Association of Universities and Colleges of Canada)  guidelines on fair use, which are so conservative, restrictive and risk averse that one could well wonder whether they originated from AC (Access Copyright ) or  AUCC.

Here’s the final  not quite final revised version of AUCC’s document, and here’s the August draft. For interest, I attach a redlined version comparing the two.  Interestingly, the revised version, which I understand dates from December 7, 2010, omits the reference to the six part test from the SCC in CCH v. LSUC - which would be useful to inform and empower librarians and others in the university community.

Also, interestingly, the document still does not use the precise phrase “research or private study”, which is the carefully drafted terminology in s. 29 that was meant to convey the notion that, while “study” must be “private” (whatever that means), “research” is not so delimited.

HK

Leave to Appeal Judgment to be Rendered in SOCAN iTunes "Previews" case

The SCC will announce this Thursday at 9:45 AM whether it will grant leave to appeal in the SOCAN "iTunes Previews" fair dealing case.


It would be very interesting and potentially very helpful for the Court to  hear both this case and the  CMEC K-12 fair dealing case. These two decisions from different panels of the Federal Court of Appeal and only a few weeks apart essentially contradict each other on the very important issue of whose "purpose" is crucial for a determination of whether or not there is fair dealing.


Both cases deal with very important fair dealing issues. It seems that lots of institutions and people don't "get" or can't agree on what CCH v. LSUC is all about - and this is an opportunity to provide necessary guidance.


As well, the FCA decision in the CMEC case, whether upheld or overturned,  (assuming leave is granted) will have a a profound effect on the pending mega-case involving Access Copyright's proposed 1300% increase and incursion into digital rights at the post-secondary level. The Board case will go on for years. 


If leave to appeal is denied in the CMEC K-12 case, the negative effect on post-secondary institutions will be immense in terms of cost and restrictions on access to copyrighted material. If leave to appeal is granted, it would seem sensible - and perhaps essential - for the Board to put the AC post-secondary file on hold with a "stay" until the SCC outcome is known. The evidence in the Board case would be developed very differently if the Supreme Court reverses the FCA. However, the Board would likely be very loath to grant such a stay. It would be an interesting exercise in judicial review to see if the Board could be forced to stay the case. Needless to say, somebody would have to ask both at the Board and, eventually, the FCA.


Moreover, the Federal Court of Appeal has become - with all respect - quite inconsistent and unpredictable on the "sempiternal" and inevitable question that arises in every case as to the appropriate "standard of review".  This is an issue that nobody wants to deal with - but must be dealt with because we now seem to know less rather than more about how the FCA will deal with cases from the Copyright Board. I'd be interested in hearing about experience on standard of review in judicial review from other Federal tribunals.


It's very important that these issues be clarified.


But as we all know, only about one in ten applications result in leave to appeal being granted.


HK

More Filings at Copyright Board re Access Copyright Proposed Interim Tariff

Recent filings on Access Copyright ("AC)'s proposed 1300% tariff increased and interim tariff:

AC reply of December 15, 2010

ACCC submission of December 17 2010
Alberta (Province of Alberta)  submission of December 17 2010
Athabasca submission of December 17 2010
AUCC submission of December 17 2010
CASA submission of December 17 2010
CIPPIC on behalf of CAUT  and CFS  submission of December 17 2010
Ariel Katz submission of December 17 2010
Saint Paul

HK

Recalling The Great Canadian Penny Perturbation of 2007

As we contemplate sending our Canadian pennies back to heaven, I thought I would "rerun" my post from October 16, 2007 - about how the Canadian penny made it into the NY Times because of excessive copyright claims by the Canadian Mint. I understand that my blogs may have helped to save the City of Toronto a pretty penny...


Canada doesn't often get into the New York Times. This is a hard act to follow...


HK

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October 16, 2007

EXCESS COPYRIGHT: The Penny Perturbation Now In the NY Times 

The great Canadian penny perturbation on the part of the Royal Canadian Mint in its efforts to shake down the Municipality of Toronto has made it to the New York Times, complete with a picture:

According to the Times story, the Mint now admits that it has no trade-mark rights in the words "one cent." That's a promising sign of enlightenment and intergovernmental compromise. Or that the mint has regained a minimum modicum of common cents.

But the Mint is still absurdly asserting copyright. Now here's a picture of a 1937 penny copied from eBay for research purposes:

Notice how the two pennies appear to be virtually identical, except for the date. Is the Mint claiming property rights in the date of 2007? (That could only happen in Canada for the year 2010 - but that's another story).

The copyright claim doesn't work. Any copyright expired in 1987, according to s. 12 of the Copyright Act, as I explained in my first posting on this subject.

According to the Mint's spokesman, as quoted in the Times:

“We have to protect our property from abuse,” he said. “We have to be consistent.”

Now how about protecting the Canadian taxpayer from abuse of non-existent IP rights, needless legal expenditures, and the wasting of a lot of peoples' time?

HK

An “iPod Tax” Election?

 
This blog is non-partisan. But copyright has lately become extremely partisan. So we can’t help but notice.

There are many problems with the Liberal Party position on copyright, just announced today here. I’ll focus for the moment on the private copying levy issue. 

The Liberals say:

The Liberal Party consulted thoroughly with artists across the country before coming up with this balanced solution. Specifically, the Liberal Party will seek to introduce a new Private Copying Compensation Payment of $35 million to be transferred to Canadian artists each year, through the Canadian Private Copying Collective (CPCC).  Liberals are proposing a new statutory program, written in law within the Copyright Act, which will increase at the rate of inflation and be reviewed every five years.

Issues:

1.    Will this still be seen as a “tax”?  The proposed $35,000,000 a year won’t grow on trees. It will come from taxpayers, the  vast majority of whom are businesses or individuals who will have nothing to do with downloading music or private copying.

2.    If this is done as part of the Copyright Act, it’s difficult if not impossible to see how “national treatment” treaty obligations could be avoided. Most of the money then would leave Canada, after the lobbyists, lawyers, consultants and others involved with CPCC take their usual several millions per year off the top.

3.    If the Liberals want to really help Canadian musicians - and to keep the money in Canada - and to keep lawyers and lobbyists out of the picture, why not give more funding to the Canada Council, FACTOR, or other “programs” that are not subject to the Berne Convention or the 1996 WIPO treaties?

4.    Why prop up (how does one spell “BAIL OUT”?)  an obsolete collective that has worked well only for the lawyers, lobbyists, consultants, etc. who run it? If we leave the CPCC alone, it will die in a year or two since the only revenue now comes from blank CDs that are mostly used by businesses to the extent that they are used by anyone anymore - unless the Government prescribes CDs out of the picture earlier - as it easily could.

5.    It should be recalled that this is the legislation that the music industry - led by CRIA - asked for and got in 1997 - when digital media and the internet were in full bloom. CRIA etc. got exactly what it asked for. It’s focus was on an obsolete “home taping" concept from Europe - home of a socialist approach to collectives that has been rejected in England, the USA and Australia - particularly regarding “levies”. BTW, Canada has 36 or so collectives. The USA has only about half a dozen -  depending on definitions.

6.    CPCC’s distribution methodology is slow and non-transparent. It is based on record sales and air play, which are extremely counter-intuitive proxies for downloading behaviour. Payouts to the average working musician are at most $160 each per year and probably very much lower or non-existent in most cases. CPCC has refused to provide mean and/or average payouts to individual artists.

7.    What about downloading - the elephant in the room? Would it be legalized or not? If not, why should Canadians pay more taxes to fund the music industry to sue individual Canadian taxpayers who may or may not download? On the other hand, if downloading is to be legitimized, is $35 million a high enough price to pay and would the regime conform with the three step treaty tests?

8.    What about divisions within the music industry? CRIA is very ambivalent about the levy scheme it more than anyone created. Its big record companies love to cash the cheques - but hate the inevitable implication that all copying - including downloading - has been legalized as long as it is onto a leviable medium - regardless of whether there actually is such a levy in place. (Be careful what you wish for!)

9.    What about other creators? Would this be a “get in line” precedent” for writers, actors, movie producers,  etc.?

10.    How long will it take for the $35 million a year to creep up to $350 million - or $3.5 billion? Think gun registry and other “programs” that have been government funded and started out “small”.

11.    How would this be done, without drastic amendment of Part VIII of the Copyright Act, which would be “out of order” in Bill C-32, given that Part VIII is not part of the bill as it stood on second reading?

But the apparent irony may be that nobody is looking at Bill C-32 anymore.

The Conservatives have lost no time in launching attack ads directed at the coalition “iPod Tax”.  Could this be the first shot across the bow for the next election? An election in which copyright could actually be an issue?

Incredible!

Actually, not really. “Be careful what you wish for”.

HK

CMEC on "making multiple copies for class use"

In its most recent bulletin on Bill C-32, CMEC - which represents the K-12 system in outside of Quebec - says:

Education organizations, including the CMEC Copyright Consortium believe that Bill C‐32 should
clarify how fair dealing applies to copying by a teacher for students in his or her class. The
CMEC Copyright Consortium believes that Bill C‐32 must make it clear that "education" includes
"making multiple copies for class use."

This clarification would result in a Canadian copyright law that is similar to the "fair use"
provision in the United States Copyright Act. The "fair use" provision, like "fair dealing" in
Canada, also involves two tests to determine whether a "use" is fair. Under the first test, the
enumerated purposes are "criticism, comment, news reporting, teaching (including multiple
copies for classroom use), scholarship, or research." Education organizations want Bill C‐32 to
provide a similar provision — that the new enumerated purpose be "education (including
multiple copies for class use)," rather than simply “education.” Such an amendment would
make it clear that a Canadian teacher, like their US counterpart, can make copies for students in
his or her class under the first test. The dealing would still have to be "fair" under the second
test.

(emphasis added)

I agree with this. In fact, I've repeatedly called for this myself.

Such a clarification would avoid years of uncertainty and litigation. While further tweaks to s. 29 may be required or desirable, this one is a good one.
 
Unless the Supreme Court of Canada grants leave to CMEC in its attempt to appeal the decision of the Federal Court of Appeal from last summer that upheld the Copyright Board's K-12 decision and  unless the Supreme Court of Canada ultimately overturns the decisions below, the Canadian educational system will be at a profound disadvantage compared to our American counterparts.

It is difficult to understand why anyone would argue that the Canadian educational system should provide less access at  greater cost than in the USA. Any suggestion that such an amendment would violate the Berne three step test is simply nonsense. If it does, we'd be in good company with the USA.

The state of copyright law as it now applies in Canadian classrooms is very unsatisfactory as a result of the recent Copyright Board and Federal Court of Appeal decisions. It is simply unacceptable and, with respect, quite incorrect that any copying done because a teacher requires or suggests that a student read something cannot be fair dealing. It is the purpose of the student - the researcher - that matters, as the Federal Court of Appeal correctly acknowledged in another earlier decision this year involving iTunes.

Hopefully the Supreme Court of Canada will hear both these cases and clarify the law in Canada.  That, however, is likely to be at least another 18 months away. And there is no guarantee that the Court will grant leave or that, if it does, that it will reverse the FCA on the K-12 decision.Only about one in ten leave applications are granted.

Given what Access Copyright is trying to do to the post-secondary system now at the Copyright Board, and the warp speed treatment that the Board is providing to AC, we need sufficient certainty, clarity and correction from the result of the Board and the FCA and we need it ASAP from Parliament.

CMEC's suggestion in this instance is very helpful and timely..

HK

On Canadian Facts, Fiction, Lobbyists and Levies

Ministers Clement and Moore did the right thing yesterday by saying that no means no.

The levy lobbyists did the wrong thing by denying the incontrovertible truth.

It is absolutely false - as ACTRA boldly states that:

“The $75 dollar figure is pure fiction. The CPCC has not put a price on the levy.”

Do facts not matter any more?

The levy lobbyists are in deep denial about their own collective’ recent demand for a “tax”of $75 per iPod.

Has ACTRA lost its ability to read? Does the truth not matter any more?

The fact is that the Canadian Private Copyright Collective asked the Copyright Board for a tariff of $75.00 per iPod in 2007 for the period 2008-2009. Here’s the precise request from the proposed tariff published in the Canada Gazette:

(e) for digital audio recorders, $5 for each recorder with no more than 1 Gigabyte (GB) of memory, $25 for each recorder with more than 1 GB and no more than 10 GB of memory, $50 for each recorder with more than 10 GB and no more than 30 GB of memory, and $75 for each recorder with more than 30 GB of memory. (emphasis added)

Now, if you think that’s bad, go back only five years to 2002 for the proposed 2003-2004 tariff that would have imposed $21 per GB. Here’s the exact proposal from the Canada Gazette:

(g) $21 for each gigabyte of memory in each non-removable hard drive incorporated into each MP3 player or into each similar device with an internal hard drive that is intended for use primarily to record and play music.

Now, for those who can’t or won’t do simple arithmetic, I’ll do it for you.

A $21 per GB tariff (“tax”) on a 160 GB iPod “Classic” that now sells for about $270 would be - get ready for this - $3,360.00.

On a one Terabyte eternal hard drive that sells for as low as $69 in Canada, the “tax” would be $$21,000.00.

On a three Terabyte terabyte eternal hard drive that now sells for about $220 in Canada, the tariff (“tax”) would now be $63,000.00. This is NOT a misprint.

So much for the forward thinking capacity of the Canadian Private Copying Collective.


This shows the fallacy of taxing technology. And why Minister Moore was right to call the proposed iPod tax "really toxic and, frankly, really dumb".

QED.

Thank goodness we shot these proposals down. (I acted for the Retail Council of Canada - which really does stand up for consumers).

Bravo, Ministers Clement and Moore for yeseterday’s announcement.

The CPCC should start planning for winding up. It should distribute its many remaining millions to artists - and not to lawyers, lobbyists and consultants. They have had their day on this file.

HK

iPod "Tax": Ministers Reiterate That No Means No

Ministers Clement and Moore said today:

“We are here to confirm that the Harper Government will not bring in an iPod tax as part of its copyright legislation. The iPod Tax has been proposed and supported by all opposition parties.

“We simply cannot support the opposition’s massive new iPod Tax on Canadian music lovers. The iPod Tax would add up to $75 to the price of every mp3 player and smart phone on the market. It would hurt the economy, punish consumers and families, and send the wrong message during this fragile economic recovery."

 Here's the press release.

One wonders how many times the proponents of an iPod tax have to be told by the Courts (answer - twice - see here and here)  and Ministers (answer - several times). (disclosure - I was involved in these Court cases and argued against the levy/"tax")

Hopefully, the CPCC will "get it" now and move on.

This is no loss for musicians. whose maximum average payout as supposed beneficiaries of the Canadian private copying levy to date has been about $160 a year - and probably much less in most cases,

It is, however, a big loss for the lobbyists, lawyers, consultants, and others working directly for or with with the  CPCC  - which had expenses of over $3.5 million in 2009.

BTW, the Ministers figure of $75 is absolutely accurate, despite revisionist statements to the contrary. The last official proposal by CPCC  for an iPod "tax" for 2008-2009 at the Copyright Board was for $75 for a 30GB or more iPod.

Collectives can be useful in certain cases to solve failures in the market place and to reduce transaction costs, etc. However, there is nothing in the Charter of Rights, or even the Copyright Act, that guarantees a permanent existence to any particular collective.

HK

Costco v. Omega afffired by equally divided US Supreme Court

 Costco v. Omega has been affirmed by an equally divided US Supreme Court - without any reasons.

Here is the entire judgment. There are no reasons and no indication of who voted which way.

This means that the 9th Circuit opinion stands - but today's decision has no precedential  value. It cannot be read as an endorsement of 9th Circuit's decision.

This is a big setback for American retailers and consumers. It will be interesting to see if there is a push for Congress to weigh in here. However, given the maximalist mood in the USA, one cannot predict what Congress will do here. The lobbying would be intense on both sides. The USA might want to look at what we have in Canada - which is a separate regime for books that allows for exclusivity in order to protect Canadian publishers for cultural reasons. 

Canada, as we know from the factually similar Kraft decision, affirms the exhaustion principle, at least where the foreign manufacturer retains ownership of copyright - which will normally be the case. (disclosure - I acted for the Retail Council of Canada as an intervener in the Supreme Court case, where we made the prevailing arguments).

However, there is language in Bill C-32 that may inadvertently compromise the principle of exhaustion and free trade. Hopefully, this will be fixed. Otherwise, Canadians could be very unhappily surprised by higher prices, less competition and less selection.

HK

PS - New appointed Justice Kagan  recused herself from this case  "presumably because she had been involved with it previously as solicitor general", Reuters reports here.

Interesting to speculate "what if" Justice Stevens had still been on the Court.


***********************************

SUPREME COURT OF THE UNITED STATES
No. 08–1423
COSTCO WHOLESALE CORPORATION, PETITIONER
v. OMEGA, S. A.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[December 13, 2010]
PER CURIAM.
The judgment is affirmed by an equally divided Court.
JUSTICE KAGAN took no part in the consideration or decision of this cas

Objections to AC's proposed Interim Tariff - December 10, 2010

Several objections have been filed to AC's proposed interim tariff. More may come by the end of the evening.

There is overwhelming opposition based upon factors such as:

• procedural fairness
• lack of jurisdiction on the part of the Board 
• lack of any preceding tariff
• inappropriateness of imposing an interim tariff to fund AC's application
• lack of any evidence filed by AC as to its financial hardship or any other issues
• lack of rights and repertoire by AC and evidence showing that AC has a "minuscule" portion of necessary repertoire
• contrary precedents from the Board itself 
• lack of any legal void if no interim tariff is imposed
• how AC has brought the current situation onto itself
• etc.

Here are the main documents (without the numerous attachments) filed so far (in alphabetical order):

• ACCC
• Alberta Government 
• Athabasca University
• AUCC
• CASA
  
• CIPPIC (for CAUT & CFS)
• Prof. Ariel Katz 

There are a lot of important and good arguments here. Quite unlike the AC submissions, there is also a lot of evidence. If the Board does decide to impose an interim tariff, it would seem very likely that judicial review (an appeal) would be pursued and there may well be very good grounds to do so. Indeed, Access Copyright will have its work cut  out for it in the next few days before it files its reply by noon on Wednesday, December 15, 2010. A reply, of course, can only deal with new issues raised in the objections today. It cannot be used to fill in any lacunae in the arguments or evidence filed earlier.

Several of the arguments confirm points I have previously made on this blog, such as AC's inability to sue anyone on its own. For many reasons, including AC's previous track record in major test cases, it would be surprising if any publishers would lend their good names and money to pursuing a Canadian post-secondary institution that is acting in good faith and choosing to do so without being tied to Access Copyright either by a voluntary agreement or a supposedly mandatory interim tariff imposed by the Board. 

Indeed, AC's choices leading up to the current circumstances are mentioned by several participants. These choices might make it very difficult for a plaintiff  in such potential litigation, even if the plaintiff had status to sue, to obtain an injunction. It would also be interesting to see if statutory minimum damages could be pushed down to a nominal or maybe even nil amount under the circumstances.

Hopefully, this material and recent blogs will provide useful insights for many in the post secondary community who may have felt overwhelmed and even intimidated by Access Copyright and who may now see that it is quite possible to move on without AC and without an interim tariff.

HK

Athabasca University decides not to renew Access Copyright license

Athabasca University is an innovative, bold and independent  leader in distance education with a very sophisticated sense of the importance of copyright law and policy in the post-secondary milieu.

Athabasca is an objector in its own right in the current proceeding before the Copyright Board involving AC's attempt to impose a $45 mandatory tariff on each university student, which is a 1,300% increase over the expiring negotiated and voluntary basic license rate. 

It has just announced that it will not renew its Access Copyright license. According to Athabasca:

In order to protect students from a more than ten-fold increase in copyright fees, Athabasca University, like the majority of universities in Canada, has decided not to renew its licence with Access Copyright, a Canadian copyright licencing agency. The current agreement will expire on December 31, 2010.

Here's the full press release.

HK

If Katz and AUCC Have "Common Misconception", What About Everyone Else?

Below is the latest ruling from the Board on the overall process, responding to requests by Prof. Ariel Katz and Glen Bloom on behalf of AUCC for delays of different lengths, different natures and for different reasons.  It is interesting that the Board states that “Both applications proceed from a common misconception”.

If two such sophisticated participants have “a common misconception”, then what about the numerous less sophisticated participants with no legal expertise or access to it?

In any event, some aspects of this ruling are, with respect, unclear to this blogger. Here are some examples why:

• The Board states that “Access proposes maintaining what it refers to as the status quo, with additional, potential uses being allowed at no additional cost.”  However, on its face it combines elements of the old regime with elements of the new “proposed” tariff. And what about what is missing, such as “indemnity” scheme, which, as legally dubious as it was, was seen as valuable by at least some institutions and the exclusion list, which was important in order to avoid troubles from third parties.
• It’s not clear that questions 1 and 2 can be separated for practical purposes. If the Board were to issue a non-binding or optional mechanism on generous terms to users, such a ruling might indeed be welcome. However, we don’t know on what terms and rates the Board will issue an interim tariff, if it does so.
•  There is no “status quo” – other than considerable confusion. All the previous agreements are about to expire – according to AC’s plan. The status quo up until now was that of voluntary agreements. Now expired or expiring – but VOLUNTARY.  ANY tariff is a drastic departure from the status quo because tariffs, by their nature, will be regarded as MANDATORY for all practical and legal purposes. AC will no doubt insist that ANY institution that uses ANY of its supposed repertoire, when such repertoire is not otherwise licensed or such use is not insubstantial or fair dealing, is liable is caught by the tariff and liable for the whole amount as applicable. Since it’s hard to imagine that any university or college can get through the year without some minor slip up in clearance, this means that ALL universities and colleges will be effectively be liable for the tariff for all practical if not legal purposes, even if they don’t wish to be and use best efforts to otherwise comply with the Act.
• Question 4 simply can’t be answered until the Board provides full reasons on questions 1-3.
• The delay granted simply allows the splitting of participants’ memos and may  encourage more confusion, with only a few more days to sort out the existing confusion.

BTW, just before 5:00 PM, AC delivered to all concerned 48 pages of charts in response to the Board’s recent order. Although half of this documentation appears to be “redlined” material, that still amounts to an enormous amount of new material to review in two days. Concerning this material, the Board said below:

It is to make it easier for other participants to understand the relationship between the proposed text of Access Copyright and its application for an interim decision. The Board could have left participants to respond to the application on the sole basis of the documents filed with it,  which are sufficient for anyone to respond to the application and adequate for the purposes of making a decision. (emphasis added)

Participants will need to ponder whether they agree with these conclusions of the Board.  

HK

 ***********************************

From: "Gilles.McDougall@cb-cda.gc.ca" <Gilles.McDougall@cb-cda.gc.ca>
Date: December 8, 2010 1:25:08 PM EST
To:

[email addresses omitted]

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

 RULING OF THE BOARD

 RULING OF THE BOARD

The December 6, 2010 request of Mr. Katz for a "temporary moratorium" is denied. AUCC’s application of the following day to extend the deadline for responding to the application for an interim decision is also denied.

 Both applications proceed from a common misconception. The draft interim tariff is not a new proposal. The only proposal of which the Board is seized is the application filed on October 13, 2010. Access Copyright has not changed the relief requested; nor would the Board allow this to happen without giving other participants additional time to respond, unless the proposed change clearly favours users. The purpose of the Board’s requests for additional information, including the draft interim tariff and tables correlating that draft with the model licence, is not to help the Board understand the terms of the application or "to accommodate the inadequacy of Access Copyright’s material". It is to make it easier for other participants to understand the relationship between the proposed text of Access Copyright and its application for an interim decision. The Board could have left participants to respond to the application on the sole basis of the documents filed with it, which are sufficient for anyone to respond to the application and adequate for the purposes of making a decision.

The application of Mr. Katz for an oral hearing is also denied. The application relies on alleged complexities that cannot be assessed until the Board has read the submissions of all participants. In these matters, the Board’s practice is to hold oral hearings only if the panel seized of the matter finds it necessary to decide the issue. Participants will be informed of this if need be. If not, the matter will be addressed as usual, without a hearing.

The application of Mr. Katz

To help participants focus on relevant issues, the Board would like to remind them that, in order to deal with the application for an interim decision, the Board will have to address, at a minimum, four questions or sets of questions that logically flow from any such application.

1) Should the Board grant Access Copyright's application for an interim decision?

2) If the Board decides to issue an interim decision, which form should that decision take?

3) If the Board decides to issue an interim decision, what should the substantive content of the decision be? Access proposes maintaining what it refers to as the status quo, with additional, potential uses being allowed at no additional cost. Does the proposal achieve what it purports to achieve? Is that what the interim decision should indeed achieve? If not, what else?

4) Once the content or substance of the decision has been determined, does the proposed text reflect that substance or content and if not, how should it be modified?

AUCC’s alternative request is granted in part. Participants still have to file their submissions no later than on Friday, December 10, 2010, but only with respect to the application for an interim decision (question 1 above). Participants shall file their submissions on questions 2 to 4 above, or on any other issue, no later than on Friday, December 17, 2010.

Access shall reply no later than by noon (EST) on Wednesday, December 15, 2010 to the submissions filed on December 10 and no later than by noon (EST) on Wednesday, December 22, 2010 to the submissions filed on December 17.

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

More Confusion and Concern re AC Proposed Tariff

1.    The AUCC’s request from yesterday for a delay that differentiates between what it characterizes as AC’s application for an “interim decision” and an “interim tariff” confirms the problem that AC has created and the confusion that has ensured.   

2.    It is not clear that there is any difference between the so called “interim decision” process and the”interim tariff” process.  If there is any difference, the latter apparently stems from and is inextricably linked with the former. AC filed a lengthy letter dated October 7, 2010 asking for a rather vague “relief” by way of an “interim decision”.  This was clearly a very carefully chosen phrase to take advantage of whatever jurisdiction the Board may have via s. 66.51 of the Act. However, as they say, if something looks like a tariff, walks like a tariff, and smells like a tariff - then it probably is a tariff.

3.    AUCC is calling for a delay of one week only from December 10 to December 17, 2010 on both aspects (i.e. “Interim decision” and “interim tariff”), but is apparently willing to file submissions on the question of an “interim decision” by the current deadline of Friday. This presumably relates to the question of WHETHER there should be an interim tariff, and not the content of such a tariff which would then require subsequent submissions.

4.    As I’ve suggested before, the Act does NOT give the Board any jurisdiction to award an “interim tariff” in these circumstances - for many reasons. Moreover, even the Board’s own precedents militate strongly against such a decision, essentially because there is no previous tariff in place and AC doesn’t need to be funded by its objectors.   
               
5.    Even the Board itself seems confused and lacking in essential information from AC. It has given extraordinary accommodation to AC to repair a flawed record. The Board has set a single deadline of December 10, 2010 for objectors and intervenors to respond, and has asked for yet more material from AC by today, December 8, 2010, which objectors and intervenors will need to assimilate in just two days.

6.    If AUCC  - with all of its resources and a $2 million war chest for this matter - seems concerned about “procedural fairness” and may even be confused itself by this situation, it is no wonder that others may also be confused, concerned and seriously prejudiced.

HK