(deck chairs you know where awaiting rearrangement...)
On November 3, 2017, I spoke at the University of
Toronto Sixth Annual Patent Law Conference, on
the “promise” issue and its treatment in parallel proceedings with very
interesting timelines by a NAFTA ISDS tribunal and Supreme Court of Canada. I
shall have a lot more to say about that later in a separate posting.
The conference opened with the panel discussion chaired by
Chief Justice Crampton of the Federal Court about how the Court would deal with
the new regime that will eliminate the troubled two track PMNOC applications and
litigation proceedings regime that has existed for many years in the federal
court. Even under the old system, the Court was required by law to deal with
the “NOC Applications” (where in rem validity
and infringement were not determined) within 24 months from start to finish
including the judgment. Under the new system, as required by CETA, the
proceedings will be in the form of an action with discoveries and live
witnesses (in contrast to an application in which there was no oral evidence)
and will also deal with in rem
validity and infringement determinations. All of this must be dealt with within
24 months from beginning to end, which will include a hearing of normally two
weeks maximum to take place at least three months before the end of the
two-year period so as to allow the judge time to write a judgment. Here is how the
Court has spelled out how this will be done. Based on the Court’s admirably
transparent and useful statistics for the last several years, it is safe to assume that there will
be dozens of such proceedings per year for the foreseeable future. There are
about 40 active judges on the Federal Court. However, many are “supernumerary”
which means that they usually carry about half of a normal case load – which
can still be considerable. They each have only one clerk. There is no in-house
research facility. The vast case load of the Federal Court ranges from
admiralty to extradition to land claims to environmental issues and much more in
terms of jurisdiction, including countless immigration files which are
obviously extremely important to the individuals involved. Many cases are
immensely complex both legally and factually and can involve enormous amounts of
money and huge public policy issues. Most Federal Court judges manage to issue
an important judgment every month and judgments are expected normally within
six months after a hearing, which normally takes place within one to two years
at most after the proceeding is commenced. Many proceedings are very
competently and often aggressively “managed” (i.e. moved along) by Case
Management judges (who are sometimes Prothonotaries with more limited powers
than Judges).
This should serve as a much-needed reality check on what is
happening, or more accurately not happening, at the Copyright Board. The
Copyright Board rarely holds
more than two or three contested hearings a year and rarely issues more than
five actual “tariffs” per year. Very few of the matters coming
before the Copyright Board are ever nearly as complex factually or legally as these
pharmaceutical patent cases, which also usually involve very large amounts
of money.
And yet, everyone knows that for contested matters the Board
typically takes more than four years even to get to a hearing and more than
three years thereafter to render a decision that is almost invariably and often
successfully challenged in the Federal Court of Appeal and, six times in the
last five years or so, taken to the Supreme Court of Canada. These decisions
are invariably retroactive for several years causing great doubt and
uncertainty for all concerned, and often unexpected windfalls or liabilities as
the case may be. Even the uncontested matters move at barely more than a
glacial pace.
If the Federal Court, which has a very broad mandate and enormous
caseload based on a vast range of subject matter, can deal with dozens of pharmaceutical
patent cases each year and dispose of actions including discoveries and two-week
trials from beginning to end including judgment in 24 months or less, surely it
is not too much to expect similar performance results from the supposedly
expert and specialized Copyright Board with its tiny fraction of the Federal
Court’s caseload. However, it is clear that the only way that this will happen
is with specifically mandated legally imposed deadlines as we are now seeing in
the Federal Court and have seen elsewhere. All the talk about increased
resources for the Copyright Board, which is not only unnecessary but potentially
even very counterproductive, and the rearranging of specifics, such as they
are, of the procedural steps in the Board’s Model Directive on Procedure,
and other suggested tinkering, will be of no effect in the absence of
legislation and/or regulations that set forth the basic procedural steps and
deadlines for meeting them. Many of the submissions
in the recent consultation effort involving suggestions for
fixing the Copyright appear to be pulling their punches, or not even punching
at all or in the right direction.
The Federal Court, the PMNOC bar and ISED are to be
congratulated for dealing decisively with a very urgent, vast and complex
situation that is, by any measure, much more difficult than that facing the
Copyright Board. The Copyright bar and
the Copyright Board have much to learn from this example and, if they ignore it
or fail to learn from it, may do so at their considerable peril. The Minister
of ISED may wish to consider a process to encourage - and if necessary require
- such learning and instruction.
Note that the Board has recently issued an astonishing
number of notices directed toward holding hearings involving countless parties
and consolidating several proposed tariffs no later than May and June of 2018
in an apparent effort to accelerate the imperceptibly glacial pace of its previous
proceeding. This is notwithstanding the onslaught of judicial review resulting
from the Board’s extremely
belated and very likely incorrect ruling on the so-called “making available”
right and the tariff itself more than 39 months after the retirement of
Chairman William Vancise who presided over that already long
delayed matter. Here are the key notices:
06/10/2017
|
Notice
|
Online Music Services (SOCAN: 2014-2018;
Re:Sound: 2013-2018; CSI: 2014-2018; CMRRA: 2014-2018; SODRAC: 2014-2018;
Artisti: 2016-2018)
|
|
06/10/2017
|
Notice
|
Internet - Audiovisual Content and User
Generated Content (SOCAN: 2014-2018; CMRRA: 2016-2018; SODRAC: 2015-2018)
|
The first matter is very intertwined with the “making
available” morass, which could have and should have been resolved many years
ago by means of a simple reference to the Federal Court of Appeal. Instead, the
Board allowed what should have been at the most a simple legal question to turn
into an immensely complicated and unnecessary battle of international experts
and then, in turn, failed to decide the legal issue quickly and separately from
the rate determination. The result is five judicial review applications that
cannot foreseeably be determined in time to avoid a potential train wreck of a
hearing next June or, at the least, immense wasted expense on interrogatories
and experts. If the Board follows through on this schedule that will result in a
June 2018 hearing before the FCA has ruled (and potential SCC involvement), the
resulting potential for chaos is painful to contemplate. If the parties object
to this sudden rush, the Board may suggest that it is the parties to blame for
the slowness of proceedings. On the other hand, parties may have their own
reasons at this time for being deferential to the Board on this file. There is
plenty of blame to attribute all around for the present state of affairs – and at
this point, undue haste may create even more waste.
On both of the above files, there are a great many other
notices that follow, which can be found here.
The Board’s apparently sudden and frenetic activity - especially in the face of active judicial
review that could render much of this to be a waste of considerable time and
resources - is doubtless going to be perceived as being a reaction to the Senate
and the Government’s concern and consultation
effort concerning the Board and
the S. 92 review about to begin. Whether or not the Board can get to these
hearings by May and June of 2018 - or whether the many parties so accustomed to
slower and more leisurely proceedings let this happen – remains to be seen.
Whether the consequences of this new infusion of administrative adrenalin with lead
to clarity or chaos also remains to be seen.
The obvious solution to the overall problems at the Board that
can no longer be ignored is that the Government should ensure through
regulations and, if necessary, legislation, that:
- Timelines are set, as in the case of PMNOC matters, that result in tariffs being determined with reasons within a finite time. If 24 months works for pharmaceutical patents, it should also work for Copyright Board tariffs with no exceptions.
- Copyright Board tariffs should never be retroactive – or at most only minimally so to the necessary extent, consistent with Supreme Court of Canada jurisprudence going back to 1954. See Maple Leaf Broadcasting v. Composers, Authors and Publishers Association of Canada Ltd. [1954] SCR 624 at p. 631. See also Canadian Broadcasting Corp. v. SODRAC 2003 Inc., [2015] 3 SCR 615, 2015 SCC 57 (CanLII) at paras 109-111 where I, along with Prof. Ariel Katz and Prof. David Lametti, as he then was, succeeded in getting retroactivity on to the Supreme Court’s radar screen in the modern era.
Longer term solutions, such as a change of “machinery” that
might create a new tribunal perhaps merged with the Competition Tribunal,
should also be considered, as I have already suggested to
the Senate and in the current consultation.
HPK
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