Friday, April 15, 2016

Review of Peter S. Grant's USERS’S GUIDE TO CANADIAN COPYRIGHT TARIFFS 2016 Second Edition

The unique and ubiquitous Peter S. Grant  and his team (including Grant Buchanan
Daniel G.C. Glover, and Keith D. Rose)  have recently published a book entitled USERS’S GUIDE TO CANADIAN COPYRIGHT TARIFFS 2016 Second Edition.

This book contains some introductory information about Canadian copyright collectives, the mandate of the Copyright Board, the Board’s record in judicial review, and an interesting and useful summary of how the Supreme Court of Canada has treated the Board with respect to the “sempiternal” issue of standard of review, as the great retired Justice L├ętourneau called it. The introduction concludes with a chart of how the $438 million of annual tariff revenues in 2014 was split between the various collectives.  It should be noted that not all of the revenue of all of the copyright collectives in Canada falls under Board tariffs. Moreover, in the educational sector virtually all of the K-12 school boards and many if not most universities and colleges have ceased payments to Access Copyright. 

There are then about 100 pages of Summary Tables of Rates, conveniently broken down into the major categories. One can quickly find out actual numbers. There are numerous references to the Board’s certified and pending tariffs, including URL hyperlinks. However, these UR hyperlinks are, unfortunately, not useful since the book is only available in paper and not electronic format. More on the book’s format below…

There is a fairly detailed and interesting discussion of the recent CBC v. SODRAC so-called “arbitration” case, and how the SCC dealt with it.

The balance of the book’s nearly 600 pages consists of currently certified or pending tariffs. This section contains the most useful aspect by far of the book, which is a “chronology” of summaries of previous Board decisions dealing with the particular tariff and summaries of Court cases that may have dealt with the particular tariff. These summaries are fairly detailed and appear to be generally accurate. This aspect of the book represents considerable added value and clearly required an enormous amount of hard work on the part of the many people at Mr. Grant’s firm who assisted him in this project.

There is an alphabetical index to tariffs and an index organized by collective and tariff number.

Finally, there is an alphabetical list of judicial decisions discussed in the book that relate to current tariffs. Older decisions, some of which are extremely relevant to Board practice, such as Vigneux or Maple Leaf are not included in this edition. The book covers only the modern Copyright Board which was established in 1989 as a successor to the previous Copyright Appeal Board, which existed for over fifty years.

This book complements another publication by Mr. Grant entitled Communications Law and the Courts in Canada 2014  which I reviewed back in 2014 here.

By and large, the book avoids any editorial comment on the merits of any particular Board or court decision. However, Mr. Grant cannot resist repeating his comment made in the Communications Law books about how the Federal Court of Appeal has twice overturned the Board on the interpretation of “audio recording medium”, thereby creating what Mr. Grant calls a “significant loophole” in Part VIII of the Act. I must confess to being rather proud of my involvement in those two court decisions and the exclusion of smart phones, thumb drives, hard drives, microSD and all kinds of other media now known or presumably to be known in the future from the reaches of the Canadian Private Copying Collective.

This book once again reminds me of how easy and useful it would be for the Board to improve its website by providing links to each court case dealing with judicial review of its decisions. This would be a simple task that shouldn’t take more than a few days all told of research and website updating. It would also be useful to list all of those decisions and a brief note or even head note about what they held on a separate webpage on the Board’s site. That might take a bit more time, but Mr. Grant has already provided a model for such a task.

This book will be very useful – indeed indispensable – for anyone in the small circle if counsel who practice before the Board, works at the Board, works for a collective, or works in Government and is interested in how the Board functions.

The book will help to make the work of the Board more transparent. The Board’s website and its annual reports are a good start in this respect. But the Board’s website does not measure up in terms of utility in important ways to other comparable ones. I’ll deal with this some other day, but for the moment, one can readily note:

  • A very frustrating “search” function
  • Lack of “docket” tracking for past and pending cases, as we have for the Federal Courts, the Supreme Court of Canada, the Competition Tribunal, e.g. here for the Stargrove case, etc.  Note that the SCC and the Competition Tribunal actually provide online virtually all important documents filed – subject to confidentiality issues, naturally, but even those exclusions are premised on the presumption that courts should be “open”. The Competition Tribunal manages to provide an excellent website, despite its smaller staff and budget than that of the Copyright Board.

Although the book is a useful step forward towards understanding how the Copyright Board works and what its decisions and tariffs actually do, it still requires a fair amount of prior knowledge on the part of readers in terms of “inside baseball” to take full advantage of all of the work that went into the book. The index helps – but is not sufficiently detailed to find out, for example, how much a “busker” has to pay to SOCAN. One has to know what tariff that particular activity would fall under.Once again, searchable electronic format would be very useful. 

Indeed, the book is very timely as attention is now being escalated and focussed in government, amongst several strange bedfellow stakeholders and counsel and, hopefully at the Board itself on how it can shorten its proceedings, lower the cost of these proceedings and render its decisions within an acceptable time frame. That conversation may now become even more urgent in light of the most recent decision of the SCC dealing with a Board decision, namely CBC v. SODRAC, which held, following arguments that I made on behalf of and with Ariel Katz and David Lametti, that Board tariffs are not de jure mandatory. 

That decision also acknowledged that there could be “broader questions concerning the legitimacy of or limits on the Board’s power to issue retroactive decisions” in the words of Justice Rothstein. Perhaps this was a hint. With respect to timelines of Board decisions, a useful feature for future editions of the book might be the inclusion of key milestone dates for each current pending or decided tariff, such as the date filed, the dates of the hearing, the date of the Board’s decision and the time period covered by the tariff. Compiling that information would be somewhat tedious but simple, since it is all already online in various bits and pieces at the Board’s website.

Clearly, Mr. Grant and his colleagues are not publishing this book in order to make money. The market for it is obviously quite small.  We should be grateful to them for making it available to interested folks at a relatively modest cost of $70.

However, I can’t help but note that the quality of paper and the very small font size of most of the book make it difficult to read in places. The paper is so thin that the ink on the other side of the page is visible. The book is published by Mr. Grant’s law firm and not by a major publisher, which may explain why it doesn’t meet the usual aesthetic, paper quality or legibility standard one would expect from my publisher, Carswell, or Irwin Law, for example – whose paper back publications are convenient and easy to read. 

Perhaps the potential market for the book is too limited to attract an established law publisher. However, given that the likely audience of this book consists of collective executives, public servants, law libraries, and  a small number of mostly very well paid Copyright Board practitioners,  it is likely that these purchasers might be willing to pay a bit more for a more legible edition. The obvious improvement in terms of format and utility would be to make the book available in electronic format either online or on DVD or both – so that the thousands of URL hyperlinks would actually work, and one could search quickly for what one wants.  Far be it from me to suggest business advice to Mr. Grant and his partners, but perhaps Westlaw might include the book one day in its very useful WestlawNext Canada website as part of its IP Source package.
Mr. Grant’s book will be a useful tool to those interested in the work of Canada’s Copyright Board, and an indispensable one to those closely involved with its work.


Thursday, April 14, 2016

Access Copyright v. CMEC re K-12 – Is it “Mission Accomplished” or "The End of the Beginning"?



I originally wrote about the Copyright Board’s February 19, 2016 K-12 Tariff decision and its immediate aftermath here. Below are some further developments.

Not surprisingly, Access Copyright (“AC”) is pursuing judicial review (“JR”, or an “appeal” in layperson’s terminology). Except for the surprising outcome that would potentially give it almost $10 million per annum based almost solely on the reproduction of “consumables” (assuming all school boards actually decide to pay – which is very doubtful - see below), AC lost badly on just about every other conceivable aspect – including some very important ones such as fair dealing, insubstantial copying, and its agency by ratification argument, about which the Board has effectively, even if belatedly, done a 180 degree turn around. Here is AC’s comparatively fulsome JR Notice of Application.

Somewhat surprisingly in view of the arguably much too high FTE rate of $2.46, CMEC, which represents school boards outside of Quebec, is not seeking JR. For those interested in Federal Court of Appeal procedure, there is no such thing as “cross” judicial review. Each party needs to launch its own JR on or before the 30 day deadline. In this case, only AC did so. CMEC (Council of Ministers of Education, Canada) will no doubt ably defend AC’s JR but has not commenced its own, perhaps for the reasons I speculate about below.

Moreover, CMEC’s counsel have now come out and proclaimed in a Lexology posting dated April 7, 2016 that
This decision represents a complete victory for the K-12 schools with respect to a number of important legal issues addressed by the Board in its decision, including the application of the fair dealing provisions contained in the Copyright Act (the "Act") to K-12 schools, the adoption of a quantitative test to determine the scope of "non-substantial" copying under the Act, and Access Copyright's ability to represent the interests of rights holders in relation to whom it has not formally entered into an affiliation agreement.

In terms of the specific rates approved by the Board, Access Copyright had initially proposed annual rates of $15.00 per student for the period of 2010-2012 and $9.50 per student for the period of 2013-2015. In its tariff decision, however, the Board certified royalty rates of $2.46 per student for the first tariff period and $2.41 for the second tariff period. If this tariff is ultimately taken up by the K-12 schools, these rates are expected to generate approximately $9.4 million per year for Access Copyright, or about $56 million over the course of the six years covered by the tariff.
          (Highlight added)

As I’ve suggested before, obtaining a rate lower than what AC seeks is not necessarily a major victory per se. AC is notorious for overreaching at the Copyright Board. Its currently proposed Post-Secondary tariff would represent a 1,300% increase over a previously negotiated rate that in turn pre-dated the CCH decision. AC got smacked down very badly by the Board in its Provincial Tariff, where it got only a fraction (1% and 2% for the periods involved) of what it sought. That decision is subject to JR. I should remind readers that the Province of Ontario, inexplicably and at great expense to its much beleaguered taxpayers, settled for an amount exponentially in excess of what the Board ultimately ruled – namely $7.50 per FTE.

For reasons which I explain in more detail on my earlier blog, the rates of $2.46 per student for the first tariff period and $2.41 for the second tariff period, based almost entirely on “consumables”) seem surprisingly high by a factor of about 500%. However, I will not speculate on whether there might have been grounds for CMEC to attack that result by way of JR.

So, I can only speculate that CMEC’s decision not to pursue its own JR may be based – perhaps in large measure - upon a possible assessment that it need not expend any more resources than necessary to fight a tariff that may not matter and be effectively optional in the end. Note CMEC counsel’s interesting wording in the Lexology piece: “If this tariff is ultimately taken up by the K-12 schools…”  (emphasis and highlight added)

CMEC may have concluded that its members can rely on fair dealing and clear whatever rights they may need in a more efficient and less expensive manner than pursuant a non-mandatory AC Copyright Board tariff. CMEC may be taking comfort in the recent CBC v. SODRAC decision from the Supreme Court of Canada, which indicates that the Board’s tariffs are not de jure mandatory. Indeed, even before that decision, the CMEC school boards stopped paying anything to AC in after 2013, as AC’s 2014 annual report confirms. I emphasize that I am only speculating, since CMEC naturally has not disclosed its strategy publicly.

Regarding the “mandatory tariff” issue, all eyes are naturally now turning to York University and its forthcoming three week trial at the suit of AC dues to begin on May 16, 2016. This case is based upon the mandatory tariff theory, now debunked by the Supreme Court of Canada. Indeed, York is being sued under the Board’s “interim tariff” imposed just before Christmas in 2010, which was not even a final certified tariff. This is not a copyright infringement action, and could not have been because AC has no standing on its own to sue for copyright infringement.

Of course, if York University - even with the authority of the recent CBC v. SODRAC decision of the Supreme Court of Canada  - should somehow fail to decisively prevail against AC on the “mandatory tariff” aspect which is the basis of AC’s forthcoming Federal Court case due to start on May 16, 2016, there could be big trouble for the entire educational establishment, including CMEC’s school board members.

 It’s also worth noting that many of the issues that will presumably be argued in this AC K-12 JR, such as those concerning fair dealing, will likely be argued much sooner in the JR of the Provincial tariff, which could be heard and decided even in the next few months. 

That decision from the Federal Court of Appeal could also come after the hearing but before the judgment in the AC v. York University trial. That could be interesting. And there is also the pending decision by the Copyright Board in the AC Post-Secondary case that concluded in January of 2016. While the Board has, in recent times, taken two years or even more to render a decision, one hopes that this time frame will now lessen dramatically to the judicial norm in Canada of six months or less. What the Federal Court of Appeal decides is binding on the Federal Court. What the Copyright Board decides could be influential, even if not binding. There are a lot of things up in the air now – and where, when and how they all finally land will be very interesting.

So, as far as the K-12 Tariff goes, CMEC may purport to consider that this is a case about “Mission Accomplished” and there’s only a little bit of clean up left to do in defending the AC JR, which may be largely determined in any event by the JR of the Provincial tariff.  It may be that things turn out that way, although we all know how recent history shows that “Mission Accomplished” is not always a safe conclusion.

Moreover, as in the Middle East, where the “Mission Accomplished” motto has achieved such notoriety, there are many players engaged in Canada’s copyright collective battles and each have complex agendas and nobody is in control. Thus, “Mission Accomplished” may not turn out to be the appropriate phrase. Is it possible that Winston Churchill’s immortal words may turn out to be applicable?

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

However, here is something a bit more concrete from Roanie Levy, AC’s Executive Director, in AC’s recently published Annual Report for 2015:

Post-secondary revenues are projected to drop from over $10 million in 2015 to less than $2 million in 2016, and the resumption of K-12 schools revenue remains uncertain, even after the recently certified tariff for K-12 schools.Our strategic plan anticipated that we would operate in the red for a certain time in order to complete the transformation—and we are prepared for that possibility.
In the Provincial-Territorial tariff decision and recent K-12 tariff decision, the Copyright Board’s troublingly opaque assessments lead to outcomes that are simultaneously unfair for rightsholders and impractical for users. These decisions highlight the systemic dysfunction in the Canadian copyright landscape today and further underscore the importance of legislative reform.
(highlight added)

All I can do, however, is to conclude, as Yogi Berra once said, “It's tough to make predictions, especially about the future.”


Thursday, April 07, 2016

More On Mandatory Tariffs – the York U Conference Video & the York U Litigation

Here’s the video of the session on “Mandatory Tariffs” from the UNPACK SODRAC conference held at Osgoode on February 25, 2016.
The session starts at about the 21:30 mark. Ariel Katz speaks at about the 22 minute mark. I speak at about the 1:09:40 mark.

Mario Bouchard, Adriane Porcin and Bobby Glushko are in between.

Here are the slides from the participants:

Here is my most recent blog about all of this.

It is not without irony that this event took place at York University. Indeed, all eyes are now on York University to see if and how it will utilize the SCC’s ruling that Copyright Board tariffs are not de jure mandatory in its upcoming Federal Court trial where is it being sued by Access Copyright . This SCC ruling is set forth in about a dozen relevant paragraphs in the recent ruling from the Supreme Court of Canada in the CBC v. SODRAC case, quoted and further discussed here.  The three week long hearing is set to begin on May 16, 2016. This comes up, of course, in my talk.