Monday, May 05, 2014

Canada’s Unlocatable Copyright Owner Regime – A Canadian “Solution” or a Canadian Problem or a Canadian Opportunity?

A fellow Canadian, Barry Sookman, recently spoke at the 22nd Annual Fordham conference for a about two or three minutes or so about the virtues of Canada’s unlocatable copyright owner regime and the Copyright Board’s role therein as a solution to the orphan works problem, which he has referred to as the “Canadian Solution”. The panel was about “Orphan Works & Extended Collective Licensing”.  Barry has done a blog, which indirectly refers to me, about this brief presentation. Naturally I would be remiss if I didn’t at least give him the courtesy of a response.

As Barry said, “A member of the audience at Fordham suggested that the unlocatable copyright owner process occupied too much of the Board’s resources to administer and was not a useful process. This was categorically disputed by Mr. Justice William J. Vancise, the Chairman of the Copyright Board who was also at Fordham.” 

I was indeed that “member of the audience.” I suggested to Barry that he was looking at this through rose-coloured glasses and challenged him on some of the many issues he did not mention. Granted, Barry had very little time to speak, since he was only a “panelist” (and apparently a late addition at that) and not a full-fledged “speaker” on the session. Panelists get only a couple of minutes at Fordham. Even actual “speakers” rarely get more than 8 minutes, unless they are very prominent people such as judges or senior government or WIPO people speaking on very important topics.

Nonetheless, Barry made his very supportive pitch of the Canadian Copyright Board’s implementation of its role in the “unlocatable” issue, which is reflected on his blog. In the few moments I could command the mike, I questioned whether Canada’s approach was a wise use of resources for a Board that is already the largest board of its kind by far anywhere in the world. I pointed out that the Board had unnecessarily insisted for a very long time on charging homeowners for copies of architectural plans needed to renovate their own houses on file with city halls. I also pointed out that the Board was facilitating the collection of license fees on behalf of collectives that had done absolutely nothing to deserve this money. Chairman Vancise - who is a retired judge from Saskatchewan and whose term as the Chair of the Copyright Board expires in a few days on May 13, 2014 – was in the audience and stated very clearly that he disagreed with me.

One would think that it’s fair and legitimate to question whether the 1988 legislative mandate on orphan works makes any sense now and whether the Board is fulfilling it in an efficient and effective manner. Given the fact that even collectives are now unhappy with the enormous costs and long delays inherent in Copyright Board proceedings (i.e. sometimes several years to get to a hearing, then sometimes 18 months or even two years or more to render a decision after a relatively brief oral hearing), the question of efficient use of supposedly scarce Board resources would appear to be a legitimate and even unavoidable one.

S. 77 of the Copyright Act enables the obtaining of a license from the Board when a copyright owner cannot be found. The Board has been involved in this since 1989. To date, it has issued 277 licenses and denied requests in 8 cases because a license wasn’t needed or the work in question had not been published.

In fact, I am hardly the only one who has questioned whether Canada’s unlocatable regime and the way it is implemented by the Board make good sense.

On the resource issue, the Department of Canadian Heritage itself stated in its  2002 “Section 92” report from Canadian Heritage:
There are concerns that the in absentia licensing process for unlocatable copyright owners has overburdened the resources of the Copyright Board, and that improvements to the process are needed.

In 2009, the Board published a lengthy study on this regime written by Professor Jeremy de Beer and the Board’s then own (now former) General Counsel, Mario Bouchard. The conclusion of the study, which was paid for by the Board and Canadian Heritage, notes the rejection of a Canadian type system by the US Copyright Office:
After reviewing hundreds of comments, holding several public roundtables and more private meetings, the authors of the US Report concluded that legislation is necessary to provide a meaningful solution to the very real problems posed by orphan works. They rejected a system requiring government involvement because it would entail more resources and efforts than are readily available without providing offsetting benefits.

That the Canadian system was given short shrift, and not seriously considered as a viable policy alternative in the US, might call into question whether it is an appropriate solution in Canada. Moreover, some entities contemplating mass digitization of works are attracted to the level of certainty the Canadian approach can provide, and have commented favourably on it. Still, many questions remain about the interpretation, administration and effectiveness of Canada’s system for licensing the works of unlocatable copyright owners.
(page 40, footnotes omitted, emphasis added)

The 2006 Report of the US Register of Copyrights, referred to by De Beer and Bouchard, recites a number of criticisms of the Canadian system. For example, the Report states:
Generally, the critics of the Canadian system felt that it would impose an undue administrative burden on whatever agency reviewed the applications, would lead to lengthy delays in the approval process, and would provide little benefit. (page 83, footnote omitted)

On the escrow payment system, the Register’s Report states:
Most other commenters strongly disfavored the Canadian approach, and also opposed an escrow system of any kind. (page 114)

Prof. Ariel Katz has also written in a very scholarly way about problems with the way the Board deals with its mandate in a recent 2012 paper published in the Berkeley Technology Law Journal, available here.  Prof. Ariel Katz’s “remedy tweaking” solution, which basically entails reducing the liability to a very small amount for anyone who has engaged in good faith due diligence, is a far more sensible solution than the current Canadian regime. He analyzes the data and information provided by de Beer and Bouchard and suggests that the Board’s unlocatable regime is “a radical shift from the mechanism contemplated by Parliament (or, perhaps more precisely, such a subversion of that mechanism)” (at p. 1329).  Prof. Ariel Katz has calculated that the average license fee for unlocatable licenses is C$326.  The proceeds are turned over to the collective society deemed appropriate by the Board, and if not claimed by the rightful owner, eventually belong to the collective.  This seems inexplicable, since the collective has typically done nothing to entitle it to receive the proceeds and the owner apparently did not see fit to join the collective.

As I mentioned in my brief comment from the floor at Fordham, for a long time, the Board was spending significant time on requests for licenses for reproduction of architectural plans for home renovations. Until 2007, these amounted to 29% of the s. 77 applications.

Finally, after I pointed out that licenses were not required in view of a well-known 1971 Supreme Court of Canada decision allowing the owner of a building a right to repair it and in view of the SCC’s large and liberal interpretation of fair dealing, the Board finally stopped entertaining such applications in 2007 and unnecessarily taking money from home owners. Chairman Vancise appears to deserve some credit for having solved this particular problem.

Interestingly, one of the few cases in which all five board members have ever all been actively engaged arose in the “unlocatable” context. The most well-known of these concerned the issue what constitutes a “substantial part” of a work. After ten months of deliberation, the Board eventually issued a 25 page 3/2 split decision about the quotation in a film of eight excerpts comprising 325 words out of a 342 page book on WWII published in 1954 by Vantage Press, which is a vanity press.  The Board’s decision in the Breakthrough Films case was a missed opportunity to help documentary film makers, who are frequently given overly cautious and even bad advice on such matters. In fairness to the Board, it must be pointed out that this was not an adversarial proceeding and the Board may not have had the benefit of satisfactory research. Fortunately, the Supreme Court of Canada has since provided some considerable and definitive guidance on the meaning of “substantial part” in the decision in Claude Robinson and Les Productions Nilem inc., 2013 SCC 73, [2013] 3 S.C.R. 1168

The Board could easily provide a useful service to the public by updating its website on providing guidance as when a license is NOT needed in the case of an unlocatable copyright owner. As of now, the Board has apparently not updated its website since 2001 on this issue – and thus ignores several key Supreme Court decisions and legislative changes since then. The Board still continues to suggest that:
You also do not need a licence if the intended use is not protected by copyright. There are a few specific exceptions to the copyright owners' exclusive right to authorize the use of their works "or any substantial part thereof in any material form whatever". For instance, fair dealing for the purposes of research or private study is allowed. So is copying of sound recordings for a person's own private use. However, the courts tend to interpret these exceptions restrictively.
(highlight added)

Quite apart from the inexplicable reference to private copying, the above material was dubious in in 2001, when the Board’s website on this subject was apparently last modified. It has been clearly very wrong ever since the Supreme Court's landmark 2004 ruling in CCH v. LSUC which confirmed that ““Research” must be given a large and liberal interpretation in order to ensure those users’ rights are not unduly constrained.”

The statement is even more blatantly wrong since the SCC’s “pentalogy” decisions in 2012 and the inclusion of “education”, “parody” and “satire” in the fair dealing provisions of the legislation. It should not take more than a few minutes of the time of one of the Board’s four lawyers to update this page by providing, at the very least,  links to the current statutory framework as found in s. 29 of the Copyright Act and the three Supreme Court of Canada decisions on fair dealing plus the Cinar decision rendered since 2004 and indicating how these decisions are relevant.

Indeed, on the resource question, Chairman Vancise confirmed in his response to my comment that “There is one person at the Board dedicated to dealing with this matter.” He also stated that “Every license that is issued, Howard, is seen by the Board and an order is issued.”

QED. Even if it is only one person or FTE equivalent who works on these files, I would respectfully suggest that this is one person too many. One person year (FTE) per year since 1989 translates at a probably conservative cost estimate of $75,000 per year, including benefits, to about $1,875,000 to date for a process that was clearly absolutely unnecessary in at least 19% of the files and probably a great deal more (perhaps involving insubstantial copying or fair dealing?) – even under the existing legislation. To the extent that more senior staff, including legal staff, and Board members themselves, may have gotten involved, the real cost may have been substantially more. The Board itself recently states  that “a target of 45 days was set between the file completion date and the issuance of the licence”. This suggests that a lot of time may be spent on these files. 

The Board may have well spent more than $2 million of public money to direct about $75,000 or so to collectives through about 277 licenses in circumstances where the collectives have generally nothing to deserve this little windfall.  It should be pointed out that collectives, as required by s. 67 of the Copyright Act:
must answer within a reasonable time all reasonable requests from the public for information about its repertoire of works, performer’s performances or sound recordings, that are in current use.

If a relatively little country like Canada in terms of population needs to devote so much bureaucratic resources to issuing unlocatable licenses and has already the largest copyright board bureaucracy anywhere, this is not necessarily a model to commend to other bigger countries. Barry calls this “the Canadian solution”. Perhaps a more informative title would have been “the Canadian problem”. The US Register of Copyrights clearly sees our system as more of a problem than a solution.

The Board could also usefully provide a “soft law” check list of how to go about searching for an unlocatable copyright owner. Bouchard and de Beer themselves make such as suggestion, at page 19 of their report, noting that “It is conceivable that creating and promoting best practices could reduce the amount of time and resources the Board currently spends walking applicants through possible search procedures, liaising with collective societies or performing aspects of searches itself.”

Moreover, if such a checklist were followed in good faith, Canadian courts might well see such a protocol as a reasonable standard and “best practice” and might be reluctant to award anything more than the lower end of statutory minimum damages – which could be as low as $100 in non-commercial situations with double costs to the defendant on the basis of the Federal Court settlement offer rules – in the highly unlikely event that an unlocatable copyright owner should ever actually spring forth and successfully sue. Obviously, a copyright owner who is unlocatable with diligent effort and whose work is long since out of print and has become commercially unavailable would likely have a difficult if not impossible task in proving any actual damages.

So – in the true Fordham spirit of “learn, debate, and have fun” – we certainly had a brief and intense debate here between Barry, me and Board Chairman William Vancise. The debate should be continued in Canada – where the Government may wish to consider implementing regulations that might deal with this and many other issues that increasingly call out for resolution concerning the Copyright Board.

The unlocatable owner issue is just one of these issues, and many of the others are even more serious and concern both collectives and users, not to mention the efficient use of public resources. In fairness to the Board, many of the problems that have arisen have been caused by the parties before the Board or choices some have taken that may have greatly prolonged some proceedings that might have been greatly shortened, or been dealt with more effectively, efficiently and decisively by means of timely and vigorous judicial review or other court proceedings. For whatever reason, the Board has not always been willing or able to deal with these situations. Regulations could help. Needless to say, regulations do not require legislation and the authority to implement useful and appropriate regulations is clearly already in place.

Perhaps a fully informed discussion of this “unlocatable” issue could be an opportunity  to serve as a catalyst for the implementation of regulations that would enhance the efficiency and effectiveness of the Copyright Board of Canada.



  1. I think this would be more balanced if it included input from users of the scheme. I assisted an applicant, after we determined that it was faster, simpler and probably cheaper than any alternative. Doing and paying nothing would have been nice, but copyright clearance was a condition of the project funding.

    1. Hi, Andrew - I'm happy to post your single anecdotal example. However, isn't it rather circular? Your funder would probably ask whatever the most bureaucratic/maximum assurance that is available. Why shouldn't a simple declaration that a satisfactory check list/protocol as potentially endorsed by the Board been followed suffice?

      See Prof. Katz's paper at p. 1324:

      "Arguably, it would be open to the Board to adopt a very
      minimal threshold. For example, it could be enough for an applicant to fill an
      online form and click “I Agree” below a declaration that she made
      reasonable efforts to locate the owner and could not locate him, and if that
      seems too easy, a sworn declaration of the same could suffice to satisfy the


    2. Actually, no. It was Heritage funding, and the requirements were quite strict. Added to which, given the nature of the project and the content involved, it would have been difficult and very time-consuming to make even reasonable efforts.

  2. Andrew, the Act says

    "...the Board is satisfied
    that the applicant has made REASONABLE efforts
    to locate the owner of the copyright and
    that the owner cannot be located, the Board
    may issue to the applicant a licence.."
    (emphasis added)

    So how did you or the Board get around the word “reasonable” when you say “given the nature of the project and the content involved, it would have been difficult and very time-consuming to make even reasonable efforts.” Isn’t that either a misuse of the provision or a mis-application of it by the Board or both? What am I missing?

    Maybe a link to the ruling would be helpful here?



      But I think we need to be clear that it wasn't a matter of getting "around" the "reasonable" requirement. The challenge was trying to find people who likely changed their names, moved, had written for papers that no longer existed and who in all likelihood would have no objection to the proposed use of the material.

      Your issues with collectives and with the Copyright Board process doesn't make the scheme bad. There may be alternatives, but there are also situations where the unlocatable copyright owner regime is a good solution.

  3. Andrew, a few comments:
    1) On “reasonable effort”: I believe that the very essence of the concept of “reasonableness” is that it is measured with relation to the specific context. So what kind of effort to locate the owner is reasonable is a case specific issue, which may vary with the type of work, and the type of use being contemplated. It’s totally plausible that in the case that you mention, the likelihood of locating the owner is so small, that even no effort will be a reasonable effort.
    2) If “in all likelihood [the owners] would have no objection to the proposed use of the material” then why any additional license is necessary, instead of saying that this is a case of implied license, or that the principle of de minimis no curat lex should bar any claim of infringement?
    3) The decision that you linked to is thin in details, but the few details that do exist there suggest to me that arguing successfully that the project is fair dealing could have been more than plausible.
    4) Maybe you provided the answer already: this was a project funded by Heritage, which insisted on clearing all copyright. In other words, we have public officials that have very good reasons to be extremely risk averse, and are very happy to pay whatever and to whomever to eliminate any risk of controversy. I can see why from their perspective transferring $5000 from the public purse to the private pocket of copyright collectives (which by definition doesn’t and couldn’t represent the unlocatable owners—if it did, the owners wouldn't be unlocatable) might look like a very good idea. And I can also see why such users may not really care that s. 77 doesn't contemplate extended collective licensing or paying to anyone else other than the owner, and that it doesn’t even contemplate paying anything upfront; only if and when the owner emerges. From the perspective of such users paying to whomever the Board says makes perfect sense if they don’t have to worry about copyright anymore. But this doesn’t necessarily makes this a good policy.