Thursday, June 09, 2011

AUCC complains to Copyright Board re AC Refusal to Provide Transactional Licenses

In the Access Copyright quest for a 1,300% increase in its post secondary tariff, Athabasca University - one of Canada’s smallest but definitely most innovative universities and bravest advocates - initially put forward some of the strongest arguments against the tariff and - particularly the very controversial so-called “interim” tariff that is likely to last for at least three years and to cost taxpayers and students about $48 million as I have earlier explained. After the objectors lost the battle on the interim tariff and it was clear that there would not even be an attempt at judicial review, Athabasca eventually stopped filing its own submissions, and threw its lot in with the AUCC, to which it had contributed its portion of an approximately $2 million budget to fight this tariff. 

Athabasca had pointed out to the Board on several occasions in connection with “interim” tariff application that AC should at least be required to continue to provide “transactional” licenses so as to facilitate an institution’s presumably voluntary choice to clear material only when such clearance was necessary without being forced to sign on for more repertoire, more rights and more money than was necessary and that AC may have lacked the power to license in any case. Ariel Katz, who also provided cogent and forceful arguments, had similar submissions related to the need for continuing the status quo of voluntary transactions, given that the Board supposedly did not intend that the interim tariff be mandatory. The Board declined Athabasca’s very reasonable request regarding transactional licenses.

To the surprise and disappointment of some, neither of the main objector associations, namely AUCC and ACCC, sought judicial review of the interim decision, despite their apparently vigorous protest against it and despite what appeared to be arguably solid grounds for review. Contrary to beliefs held by some, this ruling arguably went well beyond a mere fact finding and procedural exercise by the Board. It was eminently reviewable and reversible in my view. It may be that the decision not to seek judicial review - which is normally quick and relatively inexpensive - was motivated more by practical and political rather than legal reasons. The interim tariff provided institutions with the comfort of the status quo, if they chose to use it, and the ability to pass the costs along to the students anyway to a very large if not total extent.

So, armed with the Board’s refusal to impose a requirement for transactional licenses, as explicitly and reasonably sought by Athabasca, AC is now entirely predictably as foreseen by Athabasca, allegedly refusing to issue such licenses. Whatever the motivation for this refusal, the result is pressure on institutions to sign on to the supposedly voluntary interim license.

After many copyright administrators have complained privately about AC’s refusal to issue transactional licenses, and Michael Geist made this public,  AUCC is now protesting this to the Board and asking the Board to amend the interim tariff. AUCC relies on Athabasca’s and Ariel Katz’s earlier submissions. Here is AUCC’s submission, which states that “this tactic is a gross abuse of the collective administration of copyright and an improper use of collective monopoly power.”

If the Board does not provide appropriate relief here very quickly, some may wish to consider seeking remedies under the Competition Act, or persuading the Commissioner of Competition to intervene in this proceeding.  There is also a procedure whereby any “six citizens” can effectively force the Commissioner to launch an “inquiry” into an issue. Competition law and procedures are quite complex - but potentially the Commissioner will take on appropriate cases and fight them at taxpayers’ expense. Here, there may be good reasons to think about whether there is an illegal  “refusal to deal” or an illegal “abuse of dominance”, and if so, what should be done about it.

If the Copyright Board does not provide a remedy rather quickly, the Competition Act may prove to be an interesting and fertile potential resource since this “interim” tariff could last for several years, given the usual rate of proceedings at the Board and likely subsequent judicial review.

The Commissioner of Competition - despite an explicit statutory invitation which is really not necessary - has never before become involved in a Board hearing or file. Perhaps it is now time. Better late than never. 


1 comment:

  1. I am wondering how you feel IPEG (Intellectual Property Enforcement Guidelines) for the Competition Bureau will factor into this. It was my impression that the Competition Bureau waives interest in anti-competitive behavior where state-granted intellectual monopolies are concerned.

    I wish there was some way to "encourage" the Competition Bureau to re-visit IPEG, given an increasing number of competition issues are going to be abuses of exclusive rights.