The Latest in Access Copyright's Quest for a “Mandatory” Tariff for 2010 to What is Now Suddenly 2017

Below are some recent filings at the Copyright Board concerning Access Copyright’s proposed post-secondary tariffs. Prof. Ariel Katz is trying to convince the Board to seek a “reference” to the Federal Court of Appeal on the fundamental legal issue of whether a tariff is “mandatory”.  At the same time, AC is suddenly attempting at the last moment to “consolidate” its 2014-2017 tariff hearing with that for 2010-2013, which is scheduled to begin on February 11, 2013.

Readers will recall that AUCC and ACCC have withdrawn their objections on behalf of universities and colleges respectively, after having spent about $3 million and after having handed Access Copyright  ("AC") a treasure-trove of interrogatory evidence that AC can now use to its own advantage, without any responding material, argument, expert analysis or reports, or cross-examination by AUCC and ACCC. The remaining participants cannot possibly be expected to even begin to fill this void. It appears at this point as if the overall contribution of AUCC and ACCC to this hearing has been to be very helpful to AC by providing evidence at the considerable expense of their members (and ultimately the students and taxpayers) that could reinforce AC’s case and bolster the legitimacy of the Board’s ultimate fact finding. We also shouldn’t forget that AUCC’s and ACCC’s failure to even attempt to seek judicial review of the initial “interim” tariff in this matter set the stage for the current York University litigation. Such an application would have had a good chance of success if vigorously pursued at the time, in my view. It could have also been very incredibly inexpensive in relation to what has followed and is likely to unfold.

The notion of the Board stepping in with a vigorous and full-fledged “inquisitorial” approach at this late stage under all these circumstances is probably both very unrealistic and very problematic. All of this raises a lot of questions that should be answered, but likely won’t be.

At issue at the moment, as Christmas and various deadlines loom, are the following immediate issues:

• Should the Board refer the issue of whether there can be a “mandatory tariff” to the Federal Court of Appeal for determination at this stage, rather than in the course of the Board’s hearing or in some other forum?
•  Should the Board adjourn the current deadlines and the hearing itself set to begin on February 11, 2014 and/or, indeed, stay the whole proceeding pending final determination of a reference to the Federal Court of Appeal? 
• Should AC be permitted, at this very late stage, to consolidate the 2014 – 2017 tariff hearings with the 2010-2017 process, even though the former arguably raise significant new factual and legal issues?

So, with the foregoing in mind, here are the following key recent filings: 

• CIPPIC’S submission of November 26, 2013 on behalf of CIPPIC and CFS re “consolidation”, filed several days late but with the permission of the Board and consent of AC
• Prof. Ariel Katz’s reply re the reference question, filed November 29, 2013 
• Access Copyright’s reply re the consolidation issue, filed November 29, 2013 
• A comment by Frits Pannekoek, Ph.D., President of Athabasca University in support of Prof. Katz’s request for a reference and stay. This follows the comment by Cheryl Regehr, V-P & Provost of the University of Toronto, filed November 18, 2013.

HPK

Justice Marhsall Rothstein on Advocacy in IP Litigation in the Supreme Court of Canada

Here's a remarkable recent talk by Justice Rothstein on Advocacy in IP Litigation in the Supreme Court of Canada. Among other things, he provides frank, wise,and often witty remarks on:

• leave applications, including the recent rare example of oral argument in the Eli Lilly case
• the use of a "glossary" in factums
• the dangers of using disrespectful rhetoric
• the relative importance of written arguments and some very good tips on how to write them
• the recent development of a conference amongst the judges 15 minutes before the hearing
• the recent changes in intervener factum lengths and time limits
• some insights into split decisions
• the role of precedent
• some interesting comments on some specific recent SCC cases and issues

This is a "must" for all law students and even experienced appellate counsel.

Thanks to IP Osgoode for this.

HPK

Bill C-8 re Anti-Counterfeiting: Is Parliament Rushing to Respond to a Fake Crisis About Fake Products?

Bill C-8 is a huge and complicated bill that would drastically change existing trade-marks and copyright law, criminalize ordinary “infringement” and impose complex responsibilities on border officials, who have much more serious things to worry about such as dangerous persons who pose risks to national security.  Bill C-8 is intended to allow Canada to sign on to the very controversial #ACTA treaty, an American initiative, and something that even the IP friendly EU has decided against.

Apparently, Bill C-8 is going to “clause by clause” as early as next Monday, December 2, 2013 without hearing from some potentially helpful witnesses, including me. The Committee has heard from a number of lobbyists and had some very general comments from a couple of law professors. The Committee and the Government apparently believe that ratcheting up IP laws to deal with “counterfeiting” will save the world from dangerous fake products and will promote innovation. Nobody supports counterfeiting or piracy, but hasty overreaction in the form of complex and compendious changes to longstanding well working laws won’t necessarily help. Indeed, such rushed changes – when there is no emergency – could cause a lot of harm, except perhaps to the interests of litigation lawyers who will have to clean up the predictable messes.

What this exercise it will do – and has done – is to allow lobbyists with a maximalist agenda to use this fake problem of fakes to create the potential for interference with legitimate trade in parallel imports, vastly increased criminalization of everyday “infringement”, shifting of enforcement costs from the private sector to the taxpayer, and the interference with the transshipment of generic drugs and other legitimate products. The new law will allow incredible opportunity for abusive or even simply incompetent enforcement. This can be very costly to large and SME business, not to mention consumers. This is perhaps the most sweeping legislation in Canadian IP law in 70 years, and it is being done without adequate hearings, study or the demonstration of any need. Anyone looking for counterfeit products can find them on the street in mid-town and downtown Manhattan. One doesn’t find this kind of flagrant counterfeiting in Canada. The “evidence” of a major problem with counterfeit good that can’t already be dealt with via existing laws almost entirely anecdotal or absent. Piling on of responsibility to border officials is an unnecessary and costly mistake. The DNA and fingerprints of the movie and record industries are all over this bill.

However, if there is to be a bill – we need to get it right. Here is my offer to appear sent to the Committee on November 11, 2013. It seems that that the Committee does not wish to hear me on this.

HPK

 *********

Dear Honourable Members of the Standing Committee on Industry, Science & Technology (“INDU”)

Re: Bill C-8 (“Anti-Counterfeiting”) – Request to Appear as Witness

I would like to offer to appear before your Committee in my own personal pro bono capacity as a witness in order to address certain issues of serious concern regarding Bill C-8. While the overall purpose of the Bill is commendable, namely to reduce commercial counterfeiting and piracy, and the drafting shows very diligent work and great competence overall, the devil is in the details and there are 50 pages of highly technical details in this instance – some of which have profound policy implications.

I have resigned from the Canadian Bar Association Anti-Counterfeiting Committee because I have become a “minority of one” on certain key aspects of this Bill, and would like to make my views known to you with sufficient particularity and in person. I attach a short version of my CV, which demonstrates that I have been involved in this area in several capacities for over 30 years.

For the purposes of this Bill, it is useful that you be aware that I made the winning arguments in the very important 2007 Supreme Court of Canada judgement in Kraft v. Euro-Excellence, which involved the issue of parallel imports and copyright. Here is a short analysis I did about that case for the Law Society of Upper Canada.

As I am sure you are aware, questions involving parallel imports loom large in this discussion. If the Bill “gets it wrong” on parallel imports, competition will lessen and prices will rise in Canada and the Government’s specific promises on “consumers first” and cross-border price parity will be seriously frustrated. These questions are extremely complex and there is a great danger that the legislation will lead to unintended consequences and confusion between parallel imports and legitimate goods. Moreover, if the nine judges of the Supreme Court of Canada split several ways on this topic, and if the US Supreme Court recently split on a similar case (Kirtsaeng v. Wiley), are we not asking too much of our border guards to be able to distinguish between a legitimate parallel import and an illegal pirated or counterfeit good?

Here are the main points I would address, if invited. I would need some lead time to prepare a proper brief:

1.    The numerous references apparently intended not to interfere with the free flow of parallel imports are inconsistent and present potentially serious drafting problems that require further study. The bill should propose appropriate declaratory language for both the Copyright Act and Trade-marks Act that makes is absolutely clear that, with the exception of the sui generis book importation scheme now found in s. 27.1 of the Copyright Act, neither of these acts shall in any restrict the importation, distribution or sale of any product, whether tangible or digital, that has been manufactured or first put on the market anywhere in the world with authorization

2.    It would be mistaken and harmful to criminalize routine copyright and trade-mark infringement activity and there is no need to add additional criminal sanctions, much less wiretap enablement provisions or any provisions that would authorize the warrantless search of travelers to determine whether they have infringing items in their baggage or on their electronic devices. Past experience shows the potential for abuse of such provisions both by the state and by the private sector. See  R. v. Laurier Office Mart Inc., 1995 CanLII 7322 (ON SC)

3.    The Bill should contain no provisions that are not essential for the purpose of combatting counterfeit or pirated products. In particular, such provisions as those that would fundamentally change the definition of trade-mark and would allow an examiner to be able to block a registration on the basis that “the trade-mark is not distinctive” should be removed from the Bill.  Such changes to the Trade-marks Act would upset a careful balance and practices that have worked well since 1954, and are totally inessential and irrelevant to the purpose of combatting counterfeiting.

4.    The Committee should resist expected attempts to have Bill deal with transshipment (aka “in-transit shipments”). Customs officers cannot possibly be expected to understand enough about international law to decide what shipments should or should not go forward. There is ample evidence of harmful interference with legitimate shipments of drugs that were mistakenly interfered with even in such a “liberal” jurisdictions as The Netherlands. See New EU Customs Regulation Might Allow Wrongful Seizures Of Generic Drugs In Transit, NGOs Say, Intellectual Property Watch, October 17, 2013 http://bit.ly/HAqqDe ; ACTA: Risks of Third Party Enforcement for Access to Medicines American University College of Law, 10-01-2010 http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1001&context=research

I look forward to addressing the Honourable Members of this Committee, as I have done at several other Parliamentary Committees in various capacities in the past.

Yours sincerely,

Howard Knopf

PS - Interestingly, the Committee has heard  both from Lorne Lipkus and his son David Lipkus, both of the same anti-counterfeiting law firm, in separate presentations that were presumably both very much in favour of this legislation, and presumably both advocating for it to go even further. (David's testimony is now posted - Lorne's not yet). Lorne is a colleague at the bar who I like and respect - and I'm sure his is son is a good lawyer too.  However, it is one thing to have an unbalanced and incomplete list of witnesses, or even lobbying organizations that duplicate and reinforce one another. But, a Committee that is rushing to judgement and refusing to hear testimony that it might not like, while hearing separate testimony from a father and son in the same law firm with the same focus, is really rather unusual - even by Parliamentary Committee standards.

Latest Filings at Copyright Board in Response to Access Copyright's Consolidation Motion

Prof. Ariel Katz has made a timely and very important response  to the incredibly short two day deadline set by the Copyright Board for Access Copyright’s extraordinary attempt to consolidate its proposed 2014-2017 proposed tariff with its 20110-2013 proposed tariff.

One other objector, a graduate student named Sean Maguire, filed a very brief submission.

As far as I have been informed, CIPPIC, representing CAUT and CFS pro bono, apparently has filed nothing in response to this deadline.

HPK

Access Copyright’s Coincidentally Convenient Copyright Board Consolidation Motion: Concern for the Administration of Justice and Judicial Economy?

The late breaking news is that Access Copyright (“AC”) is now proposing at the last minute by letter of November 18, 2013 to combine the deeply troubled 2010-2013 proposed post-secondary tariff hearing with the even more problematic 2014-2017 hearing in the hearing set to begin on February 11, 2014. The Board has allowed just two days (see below) for comments on this unprecedented situation in which the future of the collective administration of copyright in Canada’s educational sector and beyond will likely be decided by default.

Since October 25, 2013 we have seen the withdrawal of ACCC from the current and future (2014-2017) proposed AC post-secondary tariffs (following AUCC’s withdrawal in April of 2012). We have also seen Prof. Katz’s significant submission of November 6, 2013 requesting a reference to the Federal Court of Appeal on the issue of whether the Board’s final tariff can be “mandatory” and a request for an adjournment and stay while this is being considered by the Board and potentially referred to the Court. We have seen the Board’s quick and summary denial without reasons of Prof. Katz’s perfectly logical request for a three week or so adjournment of the hearing set to commence on February 11, 2014 while the Board considers submissions on his request for the reference, and his request for a stay, if the reference is indeed sought, pending final determination by the Courts.

AC expressed its view in its letter of November 11, 2013 that “there is no reason why the tariff proceeding must await the outcome of a decision on a reference, if any”. It is interestingly coincidental that, given the Board’s abrupt rejection of both an adjournment and a stay, AC suddenly expresses great concern in its letter of November 18, 2013 for the “administration of justice” and “judicial economy” by proposing to consolidate the 2010-2013 proposed tariff with the 2014-2017 proposed tariff, set to begin in less than three months, and when the remaining objectors have to file their cases in exactly a month from tomorrow. AC justifies this because, in its view, the absence of AUCC and ACCC will leave enough time so that the Board can dispose of two hearings in the time allocated for one – with substantial new evidence of an unknown nature to be introduced on the record at an unknown time.

As Prof. Katz explained compellingly in his request, a reference and a stay are necessary to promote judicial economy and ensure the administration of justice in the face of the collapse of the adversarial process before the Board. AC, not unexpectedly, has objected to a stay of the Board hearing, but now requests to compound the problem by using a single fundamentally flawed hearing to approve two tariffs, not only one.

Moreover, AC, which could have asked to consolidate the hearings many months ago, has waited until a month before the remaining objectors have to file their Statements of Case, before filing this surprising request, and before casually requesting to file substantial new evidence of an unknown nature to be introduced on the record at an unknown time, all while the Board holds the remaining objectors up in the air, having to file their Statements of Case with respect to two, not one, proposed tariffs in a month, without even having all the evidence the AC wishes to rely on before them. All of this, of course, is said to be in the interest of “judicial economy” and the “administration of justice”.

Moreover, AC has not even requested to amend its Statement of Case so that it would explain why what it claims to be justified for the years 2011-2013 is necessarily justified to 2014-2017. Needless to say, in this highly dynamic environment, no such assumption can be made.

Furthermore, AC says that the two tariffs are “are effectively identical save for the royalty rate that Access Copyright seeks to have set by the Board. A comparison of the two tariffs is attached for the Board’s convenience.”

However, a quick look at AC’s “comparison” document reveals at least one rather notable and definitive difference, namely the inclusion of a “making available” right that AC somehow manages not to mention in its letter of yesterday. Whether this new supposed “right” even exists is the subject of much current contention before the Board and is likely headed to the Supreme Court of Canada – again. One would have thought that this issue was laid to rest by the Supreme Court and Parliament in 2012 – but evidently many entities including SOCAN, AC and apparently the Board itself are not convinced that this is the case. It looks like this will be déjà vu all over again, in a similar way to how the Court had to reiterate twice in 2012 what is said about fair dealing in 2004, and the Federal Court of Appeal had to reiterate in 2008 what it said about an iPod levy in 2004. Sometimes, it seems that some copyright collectives in denial (but with lots of their members’ money to spend) need to be reminded from time to time that Courts tend to say what they mean and mean what they say. Moreover, even if such “making available to the public by telecommunication in any material form whatever” exists, it is not clear on what basis AC claims to have the power to license it on behalf of its members.

So, the 2014-2017 AC proposed tariff is a brand new ball game, with the “making available” addition and the new evidence, whatever it may be. Except, of course, that both the AUCC and ACCC have gone from being objectors to effectively (even though doubtlessly inadvertently) to becoming “enablers” by dropping out, walking away and withdrawing objections – after having spent millions resulting only in the provision of ample evidence for the resulting benefit of AC in the forthcoming hearing (or maybe combined hearing), where they won’t even be present to challenge the characterization, relevance or use of this evidence..  

Only the CFS and AUCC CAUT remain as objectors in the proposed 2014-2017 tariff through pro bono representation by the student law clinic CIPPIC. However, with its limited resources, CIPPIC’s visible role to date has not been very substantial. It is absurd to expect Prof. Katz, capable as he may be, to single-handedly defend the Canadian public interest and the entire educational sector on his  own without resources or a mandate – although he has made some remarkably good and important efforts to date that have benefitted these interests or at least preserved some battleground turf for them. The appearance of the University of Toronto on the record pursuant to Section 2 of the Board’s Directive On Procedure on November 18, 2013 may prove to be significant.

All in all, there are many reasons for great concern in the educational community at all levels. These include the inexplicable abdication of AUCC and ACCC from their expected roles, the summary and unexplained refusal of the Board to even temporarily adjourn the forthcoming hearing in the face of a highly credible request for a reference to the Federal Court of Appeal, and now this interestingly timed attempt to promote “judicial economy” and to “enhance the administration of justice” by proceeding at the last minute by effective default with  two major new tariffs – one with a startling, completely new and untested “making available right”. Let us see how interested parties on the record and in the public as well as the Board react. And if the finally result is controversial, it will be interesting to see if, when and how the Government reacts.

If ever there were a time and a reason to call “time out” on this proceeding that has devolved into an unfortunate failure of the adversarial system, it would seem to be now.

In the face of this unprecedented situation, the Board this morning issued this Notice with a very short fuse (highlight added):

From: "Gilles.McDougall - at - cb-cda.gc.ca" <Gilles.McDougall - at - cb-cda.gc.ca>
Date: Tuesday, 19 November, 2013 9:48 AM
To: "NANCY.BROOKS - at - blakes.com" <NANCY.BROOKS - at - blakes.com>, Ariel Katz <ariel.katz - at - utoronto.ca>, "RANDALL.HOFLEY - at - blakes.com" <RANDALL.HOFLEY - at - blakes.com>, David Fewer <dfewer - at - uottawa.ca>, "smagu039 - at - uottawa.ca" <smagu039 - at - uottawa.ca>
Subject: Access Copyright Post-Secondary Educational Institution Tariffs, 2011-2013 and 2014-2017

NOTICE OF THE BOARD

Objectors in the files mentioned above can respond to the attached Access request no later than Thursday, November 21, 2013. Access can reply no later than Monday, November 25, 2013.

Gilles McDougall
Secretary General | Secrétaire général

Copyright Board of Canada | Commission du droit d'auteur du Canada
56 Sparks, Suite| Bureau 800
Ottawa ON K1A 0C9
Telephone | Téléphone 613.952.8624
Gilles.mcdougall - at - cb-cda.gc.ca

Members of the public can provide comments c/o Secretary General McDougall (see above) pursuant to s. 2 of the Board’s Directive On Procedure which reads as follows:

2. Comments

Anyone may comment in writing on any aspect

of these proceedings. As a general rule,

comments received later than the date by which

participants must present or file oral or written

arguments will not be considered. In due course,

the Board will forward these comments to

participants.

HPK