In the last decade, users of copyrighted works in Canada have enjoyed major victories in the Supreme Court of Canada. In three cases, CCH v. LSUC, SOCAN v. Bell, and Province of Alberta v. Access Copyright the Court repeatedly recognized fair dealing as a “users’ right” that must be given a “large and liberal” interpretation. Moreover, the centrality of users’ rights has been further entrenched in two additional cases, ESA v. SOCAN, and the CRTC Reference. In addition to the judgments from the Court, Parliament added explicit reference to education, parody, and satire in s. 29 of the Copyright Act. However, there have been persistent, extensive and expensive attempts in proceedings at the Copyright Board and the Courts to deny, erode and even implode these victories, financed by revenues derived from those very users who thought they had achieved victories in these battles and maybe even the overall war.
For
those who unambiguously favour a large and liberal view of fair dealing, who
wish to preserve their users’ rights as confirmed by the Supreme Court of
Canada and Parliament, and who may be concerned that defeat on the fair dealing
front could yet be snatched from the jaws of victory, the following recent
developments may be of interest.
K-12 Hearing
at the Copyright Board
The
Board issued a notice on June 6, 2014 asking certain legal questions of the
parties, which are Access Copyright and the Council of
Ministers of Education Canada. The Board itself has raised some
very interesting questions concerning fair dealing, Access
Copyright’s repertoire, CMEC’s proposed rates, and its publication Copyright
Matters!, the lead author of which, as it happens, is CMEC’s
lead counsel at the Board hearing, Ms. Wanda Noel.
The
responses were filed on August 8, 2014. Here is the response of
Access Copyright and here is that of CMEC.
Reply arguments were filed on August 29,
2014 by Access
Copyright and by CMEC.
The
oral hearing will resume for one day on Friday, September 12, 2014 at 9:00 9:30AM
at the Copyright Board and may be worth attending for those in Ottawa. This
should be an intense and intensely interesting day indeed.
The Access
Copyright Post-Secondary Hearing at the Copyright Board
This
is the tariff proceeding from which AUCC and ACCC withdrew, and indeed withdrew their
objections, after having spent millions of dollars, providing an
enormous amount of interrogatory information to Access Copyright and leaving
the fate of their members to be decided by default. I have explained why, as a
result of this unprecedented failure (for whatever reasons) of the adversarial
process, the Board is
now in a very difficult position.
There has been no publicly visible sign of life on this file for several
months. On January 17, 2014 the Board indicated that “After having received and
analysed all answers from Access, and replies from Mr. Maguire, the Board will
either decide when to reschedule the hearing or proceed on paper.” No doubt, fair dealing could loom large in
the Board’s decision, if it gets that far. Prof. Katz has
arguably left the Board enough basis, in principle, for the
Board to decline to proceed with this matter or to reject the tariff out of
hand.
In
any event, the Board has presumably received all the documentation and answers
it was looking for by April 22, 2014. Still,
there has been no indication of how the Board plans to proceed. The file
appears, to the public at least, to be in a state of limbo. The term of the
Board’s previous Chairman, William Vancise, expired on May 13, 2014. It is not clear
whether he can, or would even wish to, continue to be involved in this file.
The position of Chairman of the Copyright Board remains vacant. It is not known
when that vacancy will be filled. The next Chair will clearly face a major
challenge concerning how to deal with this very problematic file.
Access
Copyright v. York University
There
has been some movement on this litigation.
The Court has issued a “bifurcation
order”, which divides the case into two parts, which – at the
risk of oversimplification - are as follows.
Phase
I will deal with the issue surrounding the allegedly illegal copying by the
five named individuals, “whether Access Copyright is entitled to any relief in
connection with such activities and the issues raised by York in its
counterclaim, including whether the Interim Tariff is voluntary or mandatory.
That could still leave unresolved the question about whether a final certified
tariff can be mandatory, something that York has, for whatever reason,
apparently chosen not to confront. Phase I will also deal with York’s Fair
Dealing Guidelines. The Case Management Judge’s order notes that “While the parties differ as to how
Fair Dealing Guidelines are to be applied, it appears that a factual matrix
must be established before their application can be ascertained.”
The
Phase I trial hearing will take place over the course of 15 days in May of 2016.
A 15 day hearing is a very long time for
a copyright case, especially one that is supposedly NOT an infringement
proceeding and, in this instance, only the first phase. The remaining Phase II issues
will be dealt with thereafter “if necessary, depending on the outcome of Phase
I.” Access Copyright will, however, in
the meantime have a limited right to pursue discovery on Phase II issues that
could impact on York’s defence based on its Fair Dealing Guidelines. See para.
2 of the bifurcation order. This bifurcation order still leaves some
significant potential uncertainty.
The Role of
the CMEC and AUCC Fair Dealing Guidelines
Without
commenting in any detail on the above developments, it is important to note
that the CMEC fair dealing guidelines for K-12 that will be considered by the Copyright
Board are virtually the same as those that will be considered by the Federal
Court in May, 2016 in Phase I of the York University case. See below for links.
These common guidelines cover a vast range of activity ranging from
kindergarten to post-doctoral (and beyond) private study, research and education.
Moreover, these essentially identical documents will be considered in two very
different fora, namely the Copyright Board and the Federal Court. So, it will
be interesting to see how the Copyright Board and the Federal Court react to
these guidelines.
Timing and
Procedure
It
is impossible to predict the timing of the Board’s decisions – since the K-12 hearing
is still far from over and there will still be some “technical questions” up in
the air following the resumption of the hearing in September. However, the Copyright
Board often reserves and deliberates on its decisions for at least 18 months
and sometimes even two years or more following the conclusion of a hearing, and
whatever it decides may be judicially reviewed by the Federal Court of Appeal,
a process that usually adds at least another year or more. Moreover, it should
not be forgotten that the Supreme Court of Canada decided five cases from the
Copyright Board in 2012 and has now taken
on yet another.
The
Post-secondary file is even harder to predict. Although it is unopposed, it
presents a potentially existential
challenge to the Board. Ironically, the very fact that such an
important matter has, for unexplained and perhaps inexplicable reasons, turned
into a default proceeding will ensure that whatever the Board does will be
looked at very closely by all concerned on the sidelines and well beyond, even
if there may not be much that they can do about it. Because the AUCC and ACCC
withdrew their objections and withdrew from the proceedings, it is unclear as
to who, if anyone, on the “objector” side would have the legal status – not to
mention both the will and the resources – to seek judicial review in the event
that the outcome might call for it. The
fallout of all of this – and there will be fallout – will be very interesting,
regardless of the outcome.
Whatever
the Board decides in its K-12 decision or Post-secondary decisions, even if such
decisions are released before the Phase I Federal Court hearing, will in
principle have no effect on that court case, since Board decisions are not binding
judicial precedents unless and until they are upheld by the Federal Court of
Appeal in judicial review proceedings. In this instance, the cases clearly involve
different parties and different facts in different fora. While it is
theoretically possible that the Board could – unusually – render a decision that
deals with fair dealing guidelines and/or the concept of a “mandatory tariff” on
a much shorter than usual timeline that could in turn be considered by the
Federal Court of Appeal and result in a judicial precedent in time for the York
University trial in May of 2016, that is highly unlikely given the normal timelines
of the Board and the Federal Court of Appeal.
The Mandatory
Tariff Issue
One
thing seems very clear. There is no quick answer in store on the issue of
whether an Access Copyright Board tariff – interim or final – can be
“mandatory” in the sense of liability for the whole tariff amount for the whole
period of the tariff if one infringing copy is made of one work that is in
Access Copyright’s repertoire for which an institution can be held responsible.
Just to remind readers, that could mean a liability of millions of dollars for
one infringing copy of one work for one large institution. Extravagant as this
theory is, it is the position being taken by Access Copyright, and so far, at
least, has been encouraged by various pronouncements and positions of the Copyright
Board itself. CMEC has, apparently, decided not to raise this issue in the K-12
hearing, and has instead suggested a fairly nominal tariff of $0.49 per FTE per
year. Interestingly, the Board has asked
CMEC why it did not ask for “zero”. And it should be recalled that even a
nominal tariff will likely have far from nominal administrative and reporting requirements.
So
far, despite Ariel Katz’ noble but
unsuccessful attempt to get the Board to promptly resolve the
question by direct reference to the Federal Court of Appeal (to which Access
Copyright to its credit essentially agreed other than regarding details on the
wording that surely could been resolved), there is no shortcut in sight. It
might have been possible at one point for York to get a quick
ruling based upon an attack on the pleadings insofar as they were premised on a “mandatory tariff” theory.
However, it is now presumably too late for this. It will be interesting to see whether York
will, at some point, seek a preliminary determination on a point of law, or
move for summary judgment in the Federal Court. Such moves can sometimes be used to dramatically and
quickly shorten, if not conclude, some otherwise lengthy and expensive
litigation. While their success cannot be guaranteed, the Supreme
Court of Canada has recently, with respect to summary judgment, strongly
encouraged recourse to this procedure in appropriate cases. See
here
and here in the Hryniak decisions. There is no
indication on the record to date that
York is currently planning anything along these lines, and the terms and the
discussion by Prothonotary Aalto, the Case Management Judge, suggest that it is
not. In fact, a story dated
September 5, 2014 in Canadian Lawyer suggests that
the parties now “are in the discovery phase of the proceeding…” So, it looks for
now as if York sees this as going on at least until May, 2016.
More FUDD?
So
it looks like the attempts by Access Copyright to instill fear, uncertainty,
doubt and denial
(“FUDD”) about fair dealing will go on for a very long time – with the possibility
of huge retroactive liability in the future for some institutions, if CMEC
and/or York manage to lose their cases and if the “mandatory tariff” notion is
somehow given judicial sanction. Naturally, such a result could come from the
Post-Secondary tariff as well, from which AUCC and ACCC have withdrawn, leaving
the fate of their members to be determined in default proceedings
From
Access Copyright’s standpoint, all of this will be funded by the dwindling but
still significant revenues it receives mostly from educators and
governments. This activity will also be
funded, indirectly, by creator and publisher members of Access Copyright whose
cheques are getting smaller as the overall revenues decline and the legal bills
continue to be generated. But in the meantime, there will be lots of FUDD for
lots of authors, educators, scholars, students and those in the library and
other communities that serve them. And Access Copyright will continue to
withhold royalties from its creator members at the unusually very
high rate of 35% to fund this strategy. That is about twice the
normal rate for collectives. All of this will be very rewarding for the lawyers
involved in these protracted proceedings – but not so much for actual creators and
certainly not for users. See here, for a major example of general
discontent about Access Copyright’s approach even from within the writer
community and eloquently voiced in 2012 by Brian Brett, a former Chair of the
Writers' Union of Canada.
All
of this could be resolved, of course, if Access Copyright were to withdraw its
aggressive proposed tariffs at the Copyright Board and discontinue its
litigation against York. Although I don’t and can’t speak for any of them about
this, I am hopeful and even confident that the school boards and universities
would be sympathetic to paying a reasonable amount for actual rights to actual
repertoire in a manner that would actually enhance access and reduce costs of copyright
compliance. Contrary to the disinformation that has been widely disseminated,
nobody in these communities expects that all uses of all material should be
completely “free”. All of the litigation and the Board proceedings to date have
been and will be extremely expensive – with the outcomes very uncertain.
There was a
productive and very civilized debate in an academic context between me and Roanie
Levy at Brock a few weeks ago about many of these issues. However,
we are now about to re-enter a much more Hobbesian world wherein the litigators
are far more likely to benefit overall than writers, educators, students or
taxpayers. This long war of attrition will likely have a lot of collateral
damage.
Deus
Ex Machina?
It
may be recalled that CMEC made an attempt to intervene in the York University
litigation, which unsurprisingly was denied at this stage. Even if this attempt
had succeeded, it would have done nothing to shorten the proceedings. It will
be interesting to see if there will be other third party “Deus ex machina” attempts
to get involved in a different manner that could, perhaps, dramatically shorten
this litigation or otherwise resolve the issue of a “mandatory tariff”.
Here
are some further key documents for those who are interested in these developments:
HPK
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