Update on Access Copyright's Proposed Educational Tariffs at the Copyright Board

This is an update regarding the pending Access Copyright hearings scheduled at the Copyright Board.

Regarding the Access Copyright (“AC”) proposed Post-secondary tariff, the most noteworthy point at this time is that the proceeding has become a default event. AUCC and ACCC withdrew long ago. CIPPIC (representing CAUT and CFS) has now withdrawn. Prof. Ariel Katz, has also decided not to file a Statement of Case, though he sent a letter making some very important submissions, as is explained below. The only objector who has submitted a Statement of Case and who plans to appear is a student named Sean Maguire, who makes some perceptive points. However, the Board cannot realistically treat this hearing as anything other than a default proceeding. That such an important Board hearing with so much at stake is proceeding by default is unprecedented and raises many very important and even troubling questions.

It will be recalled that the Board has rejected Prof. Katz’s request that the overwhelming “elephant in the room” issue about whether any tariff in this matter can be “mandatory” be referred to the Federal Court of Appeal, pursuant to an established procedure that can be used in such a situation. Such a reference would have been a very good idea from every point of view. Indeed, even Access Copyright did not disagree with making such reference, and there were only some minor semantic points of distinction between it and Prof. Katz over the proposed wording of the reference question, and there were really no facts in dispute. It seemed like the perfect case for a reference. However, the Board declined to seek this reference, and issued some fairly explicit hints that it may devise a tariff that is supposedly not mandatory. However, a tariff can appear to be optional in form but effectively be mandatory in substance.

Nonetheless, the fact is that the dozens of post-secondary institutions have concluded, based upon careful analysis and advice, that they don’t need an AC license in view of the extensive licensing deals that they already have in place, the new legislation, the three SCC decisions on fair dealing in the last nine years, and the measures that they have taken to comply with the current legal regime as they see it. They will find any tariff certified by the Board at any price to be unacceptable if it is “mandatory” in any sense.  Even a tariff for a nominal rate or some other scheme that lies between the extreme of all or nothing would still be highly problematic because of the inevitably “onerous obligations such as auditing, accounting and reporting”. There could very well be consequential legal and political repercussions if the Board certifies any tariff under these circumstances, unless such a tariff is truly and explicitly optional. And even then, it will be of interest to institutions only if it offers something clearly of value upon reasonable terms and conditions.

There is a lot at stake in this default proceeding. To mention just a few obvious points:

• Whether any final certified tariff can be “mandatory”, either in form or in substance
• Tens of millions of taxpayers’ and/or students’ dollars per year
• Whether AC’s limited vision of fair dealing, its denial of the impact of SCC and relevant jurisprudence from other jurisdictions, its restrictive views on academic freedom and access to knowledge, and its agenda that is inimical to research and teaching have any legal foundation
• Whether such views will adversely affect the quality of post-secondary education in Canada, the competitiveness of Canadian students, researchers and teachers, and, ultimately, even the ability of Canadians to innovate
• The very existence of AC (i.e. if its clients see insufficient value in it licenses and these licenses are not legally “mandatory”, why would any rational institution sign on? OTOH, even if the licences are somehow ultimately held to be “mandatory” by the Courts but provide insufficient value, can government intervention be far behind?)
• Whether the professors and instructors who provide most of the material that is used in Canada’s post-secondary institutions may see the need or the utility of forming their own collective that might be more efficient and responsive to the needs of Canada’s post-secondary educational system, something I have been talking and writing about for at least 15 years. 
• The future of the Board itself, since an unacceptable result could provoke the Government to implement regulations sooner rather than later and eventually, if necessary, legislation that might deal with some of the problems that have arisen in this proceeding that are not simply attributable to the controversial withdrawal of the two essential institutional objectors.

Some key recent documents and links are provided below: 

• On December 9, 2013, the Board denied Prof. Katz’s request for the reference to the Federal Court of Appeal, even though AC did not disagree with the idea and there was really nothing more than a semantic difference between it and Prof. Katz on the proposed wording. 
• On December 11, 2013 both U of T and Western announced that they would NOT be renewing their agreements with AC set to expire at the end of 2013. 
• On December 13, 2013, two days after the announcement that U of T would not be renewing its license, AC asked the Board to allow it to file, several months later than its deadline for its “Statement of Case”, certain new “evidence” allegedly based upon data provided to it by U of T.  Since this attempt by AC to put this material on the record is the subject of unresolved dispute, I will not provide a link to the material itself that AC wishes to file and which may not get to be on the record as “evidence” in the proceedings.
• On December 18, 2013 U of T and others objected to the filing of this new material.  
• On December 19, 2013, AC replied to these objections and agreed to U of T’s request to have until January 13. 2014 to provide further submissions on whether the proposed new material could be filed as evidence, to which the Board has agreed. 
• On December 20, 2013, CIPPIC (on behalf of CAUT and CFS) withdrew, stating that “The experience of CAUT and CFS to date in these proceedings has led them to conclude that their resources will be more productively deployed elsewhere in support of student and teacher authors and learners.” 
• On December 20, 2013 Prof. Katz filed a lengthy and very important letter with supporting documents explaining why he feels compelled to withdraw from this hearing but seeks to place some very important material on the record that the Board could use, if the Board is so inclined, to test some basis assertions of AC, for example with respect to its repertoire claims. Prof. Katz offers another constructive suggestion to the Board in his presumably parting submission, which is backed up by the documents that he is attempting to file. That suggestion is, essentially, that the Board should refuse to certify any tariff because AC has fundamentally failed to provide sufficient evidence as to its repertoire to warrant the certification of a tariff. The Board itself has refused to certify a tariff on one occasion where SOCAN filed virtually no evidence on key points. I was pleased to have made key submissions at the hearing that led to the FCA upholding the Board on that particular occasion. BTW, this is yet another viable lifeline that Prof. Katz has offered in this proceeding that would enable the Board to ensure that the public interest is protected. He had earlier suggested inviting the Commissioner of Competition to intervene on the transactional license issue, which was a perfectly reasonable suggestion that the Board tersely rejected. 
• Late on December 20, 2013, the Board invited comments from AC on Prof. Katz's request to put on the public records some documents that AC has designated as confidential. 
• AC has replied on January 8, 2014 to Prof. Katz’s submission – notably objecting to allowing its list of affiliates to become public, even though it is asking for tens of millions of dollars per year on their behalf. 
• Prof. Katz has responded in turn on January 10, 2014, offering an excellent summary of the law on why AC’s list of affiliates should be treated as a public document.

BTW, virtually all of the above is also at stake in the K-12 hearing that is scheduled to commence on April 29, 2014.  AC has recently filed its statement of case for this hearing.  AC’s Statement of Case in the K-12 proceeding contains the following formulation of a “mandatory tariff”, which is notable not only for its breadth and scope but for its astonishing assertion about the burden on institutional objectors to prove that “every act of copying in K-12 schools during each year covered by the Proposed Tariffs was for an allowable purpose and was fair”.

10. A legal and factual issue in this proceeding will be the effect of the fair dealing exception under s. 29 of the Act. As of January 1, 2013, the Objectors have taken the position that all copying authorized under the Proposed Tariffs is “fair dealing” and they therefore are not obligated to pay a royalty to Access Copyright for any such copying. The Objectors have the legal burden of establishing that every act of copying in K-12 schools during each year covered by the Proposed Tariffs was for an allowable purpose and was fair. Access Copyright submits that the Objectors will be unable to discharge that burden. Simply, the copying at issue in this proceeding is not fair. Access Copyright bears the evidential burden in respect to one of the recognized fair dealing factors – the effect of the dealing on the published works. Access Copyright will discharge that burden by tendering the expert and factual testimony identified in Part V below.

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The K-12 proceeding will be defended by the school boards, which will be represented by experienced counsel.

HPK