Levy on blank CDs to continue – but Board Says “No” to microSD levy

The Copyright Board has decided to continue the levy on blank CDs until 2014 at the current rate of $0.29 per CD. This will provide a small amount of revenue to the CPCC, as long as blank CDs are being sold in Canada in any quantities, which may not be for very long. CPCC's latest disclosed revenues are for 2011, and were less than $13 million and declining rapidly as the medium becomes obsolete.

The Board has also decided that it will not proceed with Phase II of the process of setting a levy for microSD cards. It will be recalled that the Government published a regulation on November 7, 2012 prescribing that microSD cards are excluded from the definition of “audio recording medium”.

While the Board concluded that it still had the jurisdiction to proceed with the process of awarding a retroactive tariff for approximately 10 months in 2012, it chose not to do so. In the Board’s words:

[86] Private parties are free to litigate even when this makes no economic sense. An application before the Board is not a civil cause of action. We must balance competing interests, some of which are not represented. As an economic regulator, we must heed economic considerations. Any “friction” that may result from the retroactive collection of royalties is a relevant consideration in deciding whether it is possible to certify a fair and equitable tariff in the first place. A new tariff (or a rate increase) can be phased in to make it more acceptable. A completely retroactive tariff cannot be phased in.

…

[89] When taken as a whole, the circumstances of this case make any attempt at certifying a fair and equitable tariff for microSD cards impossible. The determination, implementation and enforcement of any potential tariff will almost inevitably be largely futile, certainly unfair and considerably disruptive. This is an exceptional situation, one that lends itself to the proper exercise of our discretion to refuse to certify a tariff not because of a lack of evidence, but because any tariff we would set would be, under these very special circumstances, manifestly unfair and inequitable.

HPK

(I should point out that I acted for the Retail Council of Canada in this matter. However, my comments are solely my own.)

Canadian Copyright and Related Issues - Suspense at Summer’s End

Here are some developments we can expect soon in Canadian copyright law:

• York University will likely very soon file a statement of defence in the lawsuit by Access Copyright. This has already taken months longer than usual. York’s position and strategy will inevitably attract much scrutiny, since an adverse outcome for York could profoundly and negatively affect the entire Canadian educational community at all levels.
• The Federal Court could rule at any time in the Voltage Pictures effort to compel Teksavvy to hand over the identities of thousands of its customers. Teksavvy, it will be recalled, has spent a lot of money not to take a position on this issue and to buy time for a law school clinic to get involved as an intervener. Teksavvy’s counsel spoke briefly at the end of the hearing, which took place on June 25, 2013 but Teksavvy had not previously taken any position.
• The Copyright Board has just advised that “the Tariff of Levies to Be Collected by CPCC in 2012, 2013 and 2014 on the Sale, in Canada, of Blank Audio Recording Media is scheduled to be published in the Canada Gazette this Saturday, August 31, 2013. The links to the certified Tariffs, as well as the decision in respect of each Tariffs will be available on our web site under the heading “What’s New” on Friday, by the end of the business day.” The Board will also, at some point, rule on whether it intends to proceed with a hearing on whether there can be a levy on microSDs for the period of January 1 to November 6, 2012. The Government published a regulation on November 7, 2012 that stated that “Memory cards in microSD form factor, including microSD, microSDHC and microSDXC cards, are excluded from the definition “audio recording medium” in section 79 of the Copyright Act.”
• The Supreme Court of Canada could at any time now deliver its judgment in the case involving Cinar and Claude Robinson, et al which will presumably focus on the question of what is a “substantial part”.

In the somewhat longer term, we know that we will see:

• The hearing in the Federal Court of Appeal on the Warman v. Fournier case, which involves fair dealing, substantial copying, limitation periods, etc. and in which there are now some prominent interveners.
• A ruling by the Copyright Board in Access Copyright’s quest to get a tariff on copying by provincial civil service employees.
• A hearing next May by the SCC on the interplay between the Status of the Artist Act and the Copyright Act and whether the National Gallery must negotiate exhibition rights, etc. with respect to pre-existing art works under the aegis of the former act rather than the latter, under which the artists have apparently never even tried to get a tariff at the Board.
• A hearing by the Federal Court of Appeal on whether Catherine Leuthold gets the $22 million or so that she believes she is owed by CBC for the few apparently inadvertently unlicensed re-uses of a few of her still photos from 9/11 that the Federal Court said was worth less than $20,000 and what the cost consequences may be to her if she does not succeed.
• A hearing beginning February 11, 2014 by the Copyright Board of the Access Copyright proposed Post-Secondary Tariff, in which the AUCC has spent almost $2 million that we know about and withdrawn its objections, leaving its members without any representation in a hearing in which Access Copyright is seeking what it considers to be a “mandatory” tariff.
• A hearing by the Copyright Board beginning April 29, 2014 into Access Copyright’s proposed tariff for K-12 schools, which is taking place notwithstanding that the K-12 school boards have stopped paying anything to AC under the previous tariff.

Other issues to watch in the medium term will include:

• How will the educational community react to York’s defence of the Access Copyright litigation?
• Will Access Copyright sue one or more K-12 school boards?
• Whether the Government will look at growing calls to deal with certain issues involving the Copyright Board, some of which could be dealt with by regulation, rather than legislation.
• Whether Canada gives into expected American and/or European pressure to extend the copyright term to life + 70 years, etc. and other potentially controversial US and EU IP demands in the TPP and/or CETA negotiations.
• Whether the far reaching Bill C-56 dealing with anti-counterfeiting – but which goes far beyond what might be required even by ACTA – is reintroduced after the expected prorogation, whether changes will be made before it is re-introduced, and what will happen to it if it proceeds through the committee process.

Most of the above issues have been discussed before on this blog. Watch here for further developments.

HPK