Wednesday, November 16, 2016

Judicial Review of Access Copyright K-12 Tariff to be Heard November 22, 2016 in Ottawa

The Federal Court of Appeal (“FCA”) judicial review (“JR”) hearing of the Copyright Board’s Access Copyright (“AC”) K-12 tariff will take place next Tuesday, November 22, 2016 at 9:30 AM at the 10th floor, 90 Sparks St., Ottawa. The hearing is scheduled for four hours. The panel will consist of Justices Nadon, Dawson and Gauthier. Here is Access Copyright’s factum. Here is the respondent CMEC’s factum.

I wrote at length on March 15, 2016 about the Board’s K-12 decision and what might happen. The consumables aspect makes it a surprisingly expensive tariff, as I pointed out at the time. The tariff as it stands is worth almost $10 million per year, if the school boards actually regard it as mandatory and actually pay it. AC is clearly trying to increase this amount through the JR. But even that amount is enough oxygen to keep AC in business indefinitely. However, the CMEC school boards did not file a JR application with respect to “consumables”, which account for most of the cost of the tariff. It appears that CMEC will not be dealing with the issue of whether the tariff is “mandatory” in this forum. I do not know whether CMEC intends to treat whatever the final version of the tariff may be as “mandatory”.

If CMEC’s school boards can find a less expensive and more efficient way of clearing their copyright needs than by paying the AC tariff, they now have an extremely powerful argument as why the tariff can be treated as non-mandatory. The Supreme Court of Canada “SCC”) last year accepted the argument I made on behalf of Prof. Ariel Katz and the McGill research institute run at the time by Prof. David Lametti (as he then was) in the in the CBC v. SODRAC  and ruled as follows in the words of Justice Rothstein:
(112) I conclude that the statutory licensing scheme does not contemplate that licences fixed by the Board pursuant to s. 70.2 should have a mandatory binding effect against users.

I find that licences fixed by the Board do not have mandatory binding force over a user; the Board has the statutory authority to fix the terms of licences pursuant to s. 70.2, but a user retains the ability to decide whether to become a licensee and operate pursuant to that licence, or to decline.

However, there is denial on the part of some copyright counsel who argue that the SCC ruling does not apply outside the so-called and misnamed “arbitration” regime of the Board. Such an argument is counterintuitive. If anything, the argument that tariffs, such as the K-12 tariff, imposed on objectors outside of the “arbitration” regime (and countless others not even represented) at the Board are not mandatory is even stronger.  As I said in my earlier blog about this:
So, it would appear that,  if a party to a so-called “arbitration” – which really wasn’t an “arbitration” in any normal or legal sense of the word – can treat the Board’s ruling as non-mandatory, then a fortiori, parties who are not involved in the “arbitration” mechanism and who are supposedly affected by the “general regime” and who may make a single copy of a single work in the limited repertoire of a  collective in circumstances that may amount to technical infringement  should not suddenly be liable for many millions of dollars for that one copy. For a university, that liability could amount to millions of dollars retroactively for several years – a possibility of which the SCC was clearly aware, if you read our factum and watch the hearing or read the transcript. That’s simply a ridiculous possibility – but it’s what some collectives and their lawyers, lobbyists or spokespersons want users and their often overly risk averse advisors to believe is still possible. Which brings me to the present and the future.

With respect to the “mandatory” issue, we await the decision of the Federal Court in Phase I the Access Copyright v. York University case, where closing arguments took place June 22 – 24, 2016. At issue in Phase I is mainly whether the interim tariff imposed by the Copyright Board on December 23, 2010 is “mandatory” and whether York’s fair dealing guidelines, which are very similar to those involved in next week’s hearing, fall within Canadian copyright law.

We also await a decision from the FCA in the judicial review of the Access Copyright Provincial Government tariff, which also involves fair dealing and which was heard on June 20, 2016.

And speaking of pending FCA decisions, we await the decision from the FCA in the Re:Sound Tariff 8 “Pandora” case that was heard in February 2016. This delay is unusual for the FCA, which usually renders decisions in less than six months. Here are my comments on the Board decision. This was the Board decision that prompted the shameful and disgraceful campaign by Music Canada to lobby the Board’s new Chairman. This decision may not have much to do with the present fair dealing proceedings, but it will be interesting to see what the FCA has to say about the Board’s procedures.

Last but not least, we await a decision from the Copyright Board on Access Copyright’s Post-Secondary tariff, in which the hearing concluded last January. Hopefully, we will not need to wait the usual 2+ post-hearing years that the Copyright Board takes to issue a decision on a tariff that has long been proceeding effectively unopposed and by default. There is one student who technically remains on the record, but his involvement does not make this an “opposed” tariff. Such a decision will then presumably be retroactive by 7 or 8 years. The proposed tariff was filed in 2010.

Obviously, nobody knows when, whether and how all of these decisions will come out and how they will or will not fit with each other.

What we do know is that there will be a concerted and well-funded effort to push back on the SCC’s fair dealing jurisprudence and the 2012 legislation in the course of the 2017 review.  This would be unfortunate, since Parliament and the Supreme Court have given Canada a fair dealing framework that is probably the best in the world. It is the most balanced, most clear and most consistent with the very purpose of copyright and Canada’s aspiration for innovation. Even the Copyright Board is finally “getting it” on fair dealing, after some apparent reluctance to accept the rulings from the SCC. Canada’s fair dealing regime is no more permissive than the law of “fair use” in the USA, and incorporates several specific exceptions that provide some additional comfort and certainty when the overall categories found in section 29 may not clearly be applicable.


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