The Good News and the Bad News
The only good news for the Canadian educational community about the
recent Federal Court decision in Access
Copyright v. York University is that the
judgment is, with respect, so clearly and consistently wrong that there is a
strong likelihood of a successful appeal – assuming that York decides to
appeal. An application for a stay of the judgment is presumably being
considered. Otherwise, it is very bad news. It could prove to be very
disruptive very quickly not only to York University but to the entire
educational community in Canada. Moreover, unless the decision is overturned
and preferably stayed in the meantime, there will be greatly increased costs,
chill on innovation and education, and potential chaos.
I am getting a lot of questions about this decision and requests for a
blog comment. Unfortunately, I do not have a lot of time at the moment to do a
lengthy analytical blog by my usual measure. So, here are some quick
observations. Some of this is recycled from my many previous blogs, which can
be retrieved by searching for “mandatory tariff” or “York University”,
etc. Here is one of my more detailed postings
from March 22, 2016.
The Judgment
The Court’s conclusion that the interim tariff is mandatory and
enforceable is incorrect. York made a very narrow and technical argument on why
an interim tariff is it is not mandatory, which essentially entailed that it
was not an “approved” tariff within the meaning of s. 68.2 and it
was not published in the Canada Gazette, as required for an “approved tariff”
pursuant to s. 68(4). The Court stated
in para. 234 that “York’s position, if accepted, would
be a triumph of form over substance. That argument is unsustainable.”
York had chosen not to rely heavily on the CBC v. SODRAC case decided on November
26, 2015 in which the Supreme Court of Canada (“SCC”) ruled that licenses fixed
by the Board under s. 70.2 are not mandatory, having accepted the argument I
made on behalf of Professors Ariel Katz and David Lametti (whose McGill
institute was an intervener and who is now an MP and Parliamentary Secretary
to the Minister of ISED). York said in
its written argument that the decision is “very instructive” and that the
principles are “equally applicable” here. However, York’s lead counsel said
repeatedly in oral argument that the Court need not decide whether a final tariff
would be “mandatory”.
This
issue should clearly be appealed and all possible arguments should be made to
the Federal Court of Appeal, which will hopefully be more attentive to the
reasoning of the SCC and where interveners can make additional useful and
possibly essential arguments that would assist the court. For the convenience
of readers, I reiterate from previous postings that Justice Rothstein stated as follows in
the CBC v. SODRAC decision:
(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.
…
(113) 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.
To
those hung up upon a possible distinction between s. 70.2 and s. 68.2, in fact,
s. 68.2 was specifically referred to twice in our SCC factum. We also referred to universities
several time in our factum and oral argument at the SCC. The case before the
SCC involved s. 70.2 but the arguments are actually even better for s. 68.2 –
the more general regime.
Indeed,
if a tariff is not mandatory when parties voluntarily come to the Board to
“arbitrate” a dispute, it should be all the more (“a fortiori” as lawyers say) non-mandatory when parties are dragged
kicking and screaming before the Copyright Board and would prefer to clear
their copyright needs in other ways.
The
Court did not appreciate the nature of a tariff – which is that it is mandatory
on the provider of a service but not on a user who doesn’t need the service. As
I’ve said before, for those not familiar with or interested in the technical details
of our argument in the SCC factum that Ariel Katz, David Lametti and I submitted
to the Supreme Court, consider this simple layperson’s analogy. In the old
days, there were “tariffs” for passenger travel on railroads. Such tariffs
would set a maximum cost of, say $10, to travel from Ottawa to Toronto and
required that CN Rail run four trains every day and stop in certain places, or
whatever, etc. But such tariffs did not require the passenger to buy a
Canada-wide all year pass for $3,000 if they only needed to travel to Toronto
or Montreal or Smith’s Falls a few times each year. And above all, such tariffs
did not prevent any passenger from using a plane, car, a Greyhound bus or even
a bicycle to get there from here. That is how “tariffs” work. In return for
some degree of privilege from the government, the regulated party providing the
service and seeking to be paid must submit to upper limits on what can be
charged and accept other terms and conditions, such as the nature and quality
of services that must be offered. Moreover, except in very rare examples such
as a sole bridge crossing with no practical alternatives, there are usually
competitive substitutes available.
The
Court’s reasoning on fair dealing is lengthy and largely oblivious to the
teaching of the SCC in its fair dealing trilogy and particularly in the Alberta
decision of the SCC, which accepted the point I made on behalf of Prof.
Katz’s intervener institute that is absolutely vital to the educational
context, which is that a teacher can decide what is useful for a student and
provide excerpts – or in some cases the whole of a work – for such legitimate
fair dealing purposes. In Alberta, the SCC stated:
[23]
In
the case before us, however, there is no such separate purpose on the part of
the teacher. Teachers have no ulterior motive when providing copies to
students. Nor can teachers be characterized as having the completely
separate purpose of “instruction”; they are there to facilitate the students’
research and private study. It seems to me to be axiomatic that most
students lack the expertise to find or request the materials required for their
own research and private study, and rely on the guidance of their
teachers. They study what they are told to study, and the teacher’s
purpose in providing copies is to enable the students to have the material they
need for the purpose of studying. The teacher/copier therefore shares
a symbiotic purpose with the student/user who
is engaging in research or private study. Instruction and
research/private study are, in the school context, tautological.
The
Court’s failure to appreciate the significance of the three Supreme Court
Canada fair dealing decisions since 2004 is clear in the following comment:
[272] It is evident that
York created the Guidelines and operated under them primarily to obtain for
free that which they had previously paid for. One may legitimately ask how such
“works for free” could be fair if fairness encompasses more than one person’s
unilateral benefit.
While
York’s Guidelines are not perfect and there are better guidelines elsewhere,
that comment is not only harsh but shows a lack of understanding of the basis
of fair dealing. Indeed, the fair dealing provisions (“users’ rights” that must
be given a large and liberal interpretation according to the SCC) are there
precisely to allow “free” use under certain circumstances of material where
permission and/or payment might otherwise be required. That has always been a
cornerstone of copyright law in common law countries and has been codified in
Canadian law since 1924 and American law since 1976.
What’s Next?
In
any case, the main question on everyone’s mind at the moment is what comes
next.
The
immediate issue is how this will affect whatever submissions are made by way of
objection to the Access Copyright’s proposed post-secondary tariff. Objections
are due on July 19, 2017. Presumably, Universities Canada and others are
looking at filing objections and what to say. It will be interesting to see who
represents whom on these objections and what the objections will contain. Obviously,
there is precious little time to factor in the impact of the decision rendered
just one week in advance of this deadline.
Naturally,
everyone is wondering whether York will appeal this decision. The educational
ecosystem from Kindergarten to Post-Doctoral studies is at stake. One cannot
overstate the importance of an appeal in this case, which would no doubt
attract the attention of interveners on both sides of the fence.
However,
it cannot simply be assumed that York will appeal. It will be recalled that
AUCC (now Universities Canada) failed to seek judicial review (“JR”, i.e. an appeal
in layperson’s terms) of the December 23, 2010 Interim Tariff decision from the
Copyright Board that gave rise to the present proceedings. This is an important
point emphasized by the Judge in the current case and was definitely not
helpful to York’s cause. See paras 226 to 231 of the decision.
A
JR application at the time might very well might have succeeded and would have
cost a tiny fraction of all the money that has been spent since on the Board
proceedings and on this current case, not to mention all of the ensuing cost
and chaos in the post-secondary world with opting out, model agreements,
etc. The worst thing that could have
happened would have been the Court could have said no at that time. AUCC withdrew a couple of years later, having spent at
least $1.7 million that we know about. Although no explicit explanation of
AUCC’s withdrawal was ever publicly provided, presumably the well ran dry. AUCC
was represented then by the same firm that has represented York U in the
current case that has just been decided. The current court case has presumably already
cost at least $1,000,000 or so according to a 2015
estimate by York University counsel. It is now 2017. So, it may have now cost
a lot more. We don’t know.
Needless
to say, if York doesn’t appeal, there can be no appeal. That is the way the
procedural law and rules work. Even though other universities and colleges
will be directly affected, only York can launch an appeal in this instance. This is not
“judicial review”, where directly affected parties may in principle have standing
in certain circumstances to initiate review. If York fails to step up to the
plate now for any reason, the game is over for everyone in terms of an appeal
of the current decision.
It
is also apparent that the decision may cause immediate problems for York, given
that the Judge issued this very unusual invitation for Access Copyright to apply
immediately for an injunction:
3. The Plaintiff may apply
for an injunction prohibiting the Defendant from reproducing or authorizing
reproduction of all copyright protected works falling within the Approved
Tariff and offering such reproduction for sale, rent or distribution until all amounts of royalties plus
interest are paid.
…
7. The Court shall remain seized of this matter to address
issues arising from this Judgment and Reasons including but not limited to the
calculation of amounts which are due or may become due.
(emphasis added)
How this can be squared with the fact that
Phase II - which was supposed to deal with issues of what is actually in Access
Copyright’s repertoire and questions relating to quantum – is potentially years
away? Indeed, paragraph 219 of the judgment says that:
[219] The copying of works in Access’s repertoire,
the scope of that repertoire, and the accounting and payment by York for such
copying by its employees is deferred to Phase II of this action (the Damages
Phase).
So,
it’s not clear that there is any basis at this time to determine “all amounts
of royalties”.
Given
the potential for chaos at York as the fall semester approaches and if there is
an injunction in place, not to mention at countless other campuses if Access
Copyright succeeds in getting a new interim tariff from the Copyright Board
based on this decision, one would assume that some urgent thought is presumably
being given to seeking a stay of this judgment. Stays of judgments pending
appeal are unusual. But here is a case where there are clearly serious issues,
a strong likelihood of success, irreparable harm and even chaos in the educational
sector and where the balance of convenience clearly favours the academic
community carrying on with the status quo. Potential interveners may be also interested
in this, but the first move has to come from York.
Normally,
a Notice of Appeal must be filed within 30 days. However, days in July and
August do not count for this calculation. So, York technically has until
October 2, 2017 to file any notice of appeal. However, one hopes that York will
file it as soon as possible along with any motion for a stay, so that the rest
of the academic community in Canada can have some confidence and hopefully some
degree of certainty as to how it should proceed.
Not
only is the content of this decision, which is seriously disparaging to York in
innumerable ways, unfortunate. The timing could hardly be worse. It comes more than
a year after the final argument that took place on June 22-24, 2016. It comes
after the holiday weekend, which means that a large number of people in the
academic community will be on holidays or off campus for other reasons during
July and August. It comes less than two months before the fall term. It comes
well after the six month norm for judges to
issue decisions.
This
is potentially the most disruptive copyright decision we have ever
seen in Canadian jurisprudence. Whatever happens at the Copyright Board on the
new proposed tariff will likely take many years to determine, given past experience
– except of course for another interim tariff, which the Board has shown
remarkable alacrity in granting in this instance on the day before Christmas
eve in 2010. If the Federal Court of
Appeal won’t or worst of all is not even asked to fix this situation immediately,
some kind of legislative fix may become necessary.
Access
Copyright naturally issued a very quick “feel good” press release about the
current case stating that:
Access Copyright would welcome the opportunity for all
interested stakeholders to entertain a meaningful dialogue with a view to
resolving any outstanding issues between them and establish a relationship that
emphasizes the common ground between those who create and those who teach and
learn.
However,
with its windfall victory that will presumably be undone on appeal and even
stayed in the meantime (assuming that York University steps up to the plate),
now is not likely a very propitious time for the academic community to resolve
any outstanding issues with Access Copyright anywhere but in the Courts. The resolution
that might work would be for Access Copyright to offer a useful license at a sufficiently
low rate that would attract post-secondary institutions. Not to mention
refraining from suing its clients. That is unlikely to happen as long as the
current decision is in place.
Let’s
hope that those in the educational copyright community can somehow enjoy what’s
left of the summer.
HPK
