What Could Possibly Go Wrong with the Government’s Proposed Regulations re Time Limits at Canada’s Copyright Board?

A Canadian Glacier

(Wikipedia)

This was in my email earlier today from Mark Schaan, Director General, Marketplace Framework Policy Branch at ISED Canada:

            …

As you know, a transparent and predictable Board is key to a well-functioning copyright marketplace in Canada. Public consultations held in 2017-2018 confirmed that issues with the Board’s decision-making processes were substantial and structural. The Government of Canada has therefore taken comprehensive actions on these issues by introducing legislative reforms to the Copyright Act, which came into force on April 1, 2019. These changes include measures to reduce delays, notably a new regulatory power of the Governor in Council to establish time limits for Board proceedings.

Pursuant to this new power, draft regulations setting out decision-making deadlines for the Board were published in the Canada Gazette, Part I on April 27, 2019, and can be consulted at the following address: Regulations Establishing Time Limits in Relation to Matters Before the Copyright Board.

Interested Canadians have the opportunity to review and provide comments on the proposed regulations until May 27, 2019. Once enacted, the regulations will be published in their final form in the Canada Gazette, Part II

….
(highlight added)

Let’s cut to the chase here. The proposed regulations – which could have been implemented many years ago and which did NOT need any new enabling legislation ­­– may very well make things even worse in terms of delay and may be used to attempt to normalize delays that are already inexplicable and unacceptable.

These essence of the proposed regs is this:

Time Limits

Proposed tariff

2 The Board must make a decision with respect to the approval of a proposed tariff under subsection 70(1) or 83(8) of the Act

    (a) in the case where the Board holds any oral or written hearings in respect of the matter, within 12 months after the conclusion of those hearings; or

    (b) in any other case, before the day on which the effective period for the proposed tariff begins.

Royalty rates or related terms and conditions

3 The Board must fix the royalty rates or their related terms and conditions, or both, as the case may be, under subsection 71(2) of the Act within 12 months after the conclusion of any oral or written hearings that are held by the Board in respect of the matter.

Notice to parties

4 The Board must, within two months after the expiry of the period referred to in subsection 68.3(2) or 83(5) of the Act, notify the collective society that filed a proposed tariff and any person or entity that filed an objection to the proposed tariff of whether the Board will hold an oral or written hearing in respect of the proposed tariff.

Extension of time limit

5 (1) Despite sections 2 and 3, the Board may, to take into account the existence of exceptional circumstances, give a direction or make an order that extends the time limit for the making of a decision by a period that is referred to in the direction or order.

Notice

(2) After giving a direction or making an order referred to in subsection (1), the Board must publish a notice of the direction or order that sets out the extension of the time limit, the exceptional circumstances that justify the extension of the time limit and the extended period.

Board’s decision

(3) The Board must make the decision within the period that is referred to in the direction or order.

(highlight added)

What could possibly go wrong?

The requirement that a tariff where no hearing is required be decided before the effective period is sensible and obvious – though the Board’s discretion as to whether a hearing is required is potentially concerning.

The real problem is that the apparently good news that a tariff be decided “within 12 months after the conclusion of those hearings” is potentially actually rather bad news. Here’s why: 

·        It often takes the Board four years or more from a tariff filing to even get to the hearing stage. In the case of the currently highly fraught Access Copyright proposed PSE tariffs spanning 2011-2013 and 2014-2017, the effectively uncontested hearing was not held until 2016 – almost six years after the tariff was filed – and the decision is still pending and likely going to prove very problematic, as I hinted at earlier today. Nine years and counting for a decision on an effectively uncontested tariff is simply inexplicable and unacceptable.

·       Worse still, it is often far from clear at precisely what time the “conclusion” of a hearing takes place. The Board frequently has afterthoughts and questions and keeps the record open for some time. Despite enormous expense in many cases, the parties don’t always put their best foot forward at the earliest opportunity. Moreover, the Board has rarely been effective in restraining excessive and irrelevant interrogatories. For example it did too little too late to restrain unnecessary submission of dozens of unnecessary interrogatory responses in the Access Copyright Post Secondary proceeding that is still underway. In normal judicial proceedings, Courts reserve judgment at the conclusion of the oral hearing – and that is it – the record is closed. One waits and hopes for the best and a decision is normally rendered within six months. The record is very rarely re-opened – except in very exceptional circumstances such as when an important and potentially binding decision is rendered by another court before judgment is pronounced.

I have written about and testified about the problem of Copyright Board delays at length and for years. The Board is not exactly the busiest tribunal anywhere – it has been about two years since it last held an oral hearing and no more are scheduled until April 28, 2020. It has been given an extra million dollars a year, which may result in even more delays while it figures out how to spend this money. This gives it an even  bigger budget than the Competition Tribunal which already had a smaller budget and fewer staff  than the Board – and which has a much greater workload and cases that are sometimes of immense economic significance and legal complexity compared to most Copyright Board proceedings.

There is a really simple solution to all of this as inspired by the regime in place for the Patented Medicines Notice of Compliance (“PMNOC”) proceedings, which is to fix an absolute time limit and force the Board and parties to comply: 

·       The Copyright Board should be required to render a final decision on contested tariffs within 24 months from the time the proposed tariff is published in the Canada Gazette.

This option was at least mentioned in the above notice. If Federal Court can make this work to get to a decision within 24 months in very complex PMNOC hearings that often involve hundreds of millions of dollars, surely the Copyright Board can make this work.

The US Copyright Tribunal has a hard deadline requirement. It must issue its decisions within 11 months as follows:

§352.2   Timing.

The Copyright Royalty Judges will issue their determination within 11 months of the date of the post-discovery settlement conference or 15 days before the expiration of the existing rates or terms in a proceeding to determine successors to rates or terms that will expire on a specific date, whichever date first occurs. The date the determination is “issued” refers to the date of the order.

(highlight added)

Copyright Board proceedings often take inexplicably and even absurdly long. The outcome is often more or less an average of the figures initially proposed by the main parties, and the Board is frequently subject to successful judicial review. There are powerful interests who are not interested in changing the status quo in any meaningful way.

The current proposals may make things even worse by supposedly “normalizing” extensive delays in scheduling hearings that take years to happen and may have a very indefinite and untimely “conclusion”. Twelve months after an indefinite point in time many years away is hardly comforting and not a good or even adequate solution.

Note the above highlighted date of May 27, 2019 to respond to the Government,

HPK

PS December 23 2020

The regulations are now in place.

Time Limits in Respect of Matters Before the Copyright Board Regulations: SOR/2020-264

http://www.gazette.gc.ca/rp-pr/p2/2020/2020-12-23/html/sor-dors264-eng.html 

This does not appear to solve the main problems I identified on April 29, 2019 above sibly-go-wrong-with.html…. Board often keeps cases open for a long time and there's still an "exceptional circumstances" loophole.

More to follow.

The Copyright Board’s “New Leaf”? Not So Much and Not at All

By Jin Zan - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=43789998

On April 14, 2019 I blogged with great optimism that:

On March 6, 2019 the Copyright Board appears to have turned over one new leaf by asking for comments more than three years after the close of the hearing from “affected persons” on the “feasibility and clarity of the terms of the tariff” with respect to Access Copyright’s proposed tariffs for the Post-Secondary Educational (“PSE”) Institutions.  I reported on this here. Those entitled to comment potentially included lots of people and institutions that may have withdrawn from this nearly nine-year-old saga or may even have never engaged. In the past, the Board has limited acceptance of comments to a short window following the close of the oral hearing.

The invitation resulted in 11 submissions, which have conveniently been made available here from the Board itself – a helpful and timely development and another new leaf in itself. (Publishing filed court and tribunal public documents is a crucial component of access to justice). From the users’ point of view, these submissions feature a comforting degree of consistency and, at the same time, a considerable degree of independent analysis and approach.

(highlight added)

Well – it turns out that the Board intends to disregard and ignore virtually all of the substantive comments regarding:

      1.     the mandatory nature of the tariffs,
2.     the retroactive application of the tariffs,
3.     the structure of the royalties (i.e. FTE vs transactional) and
4.     the scope of acts covered by the tariffs

and presumably many other important submissions from these 11 submissions. It should be noted that these 11 submissions came from very sophisticated parties who responded to the Board’s invitation in good faith and spent a lot of time, resources and expense to do so. Here’s the Board’s Notice dated April 24, 2019 which I reproduce here in full because the Board has apparently not even seen fit to send it to those 11 “affected persons” who went to the trouble of responding to the Board’s invitation.

  

April 24, 2019

[CB-CDA 2019-021]

NOTICE OF THE BOARD

File: Access Copyright – Post-Secondary Educational Institutions (2011-2013

and 2014-2017)

Pursuant to Notice 2019-013, the Board received comments on the draft tariffs. These were provided to the Parties on April 1, 2019. The Parties may now respond to these comments.

The Notice specified that comments are to be on “the feasibility and clarity of the terms of the tariff.” Given the breadth of issues raised by the comments, the Board notes that it is of the view that many issues go beyond “feasibility and clarity.” The Board does not intend to rely on those comments and does not expect the Parties to respond thereto. This includes comments on issues of the mandatory nature of the tariffs, the retroactive application of the tariffs, the structure of the royalties (i.e. FTE vs transactional) and the scope of acts covered by the tariffs. It is also not the case that these issues are new: they were either explicitly made an issue by the proposed tariffs, or their possibility should have been reasonably contemplated (e.g., that a certified tariff may have retroactive effect).

For greater certainty, the Board is of the view that comments made in relation to issues such as record keeping, manner of performing FTE calculations, and specific issues of wording/definitions are within the scope of comments sought by the Notice.

Additionally, while not within the scope of the Notice, the Board notes that certain comments raised the issue of previous payments made for the licensing of material during the tariff period. The Board is of the preliminary view that it does not have the evidence in this proceeding necessary to establish a mechanism in the tariffs that would adjust royalties based on other licensing activities of the user.

The Board asks the Parties to respond to the Board’s preliminary view.

Parties’ responses shall be filed with the Board by no later than Thursday, May 9, 2019.

Gilles McDougall

Secretary General

(highlight added)

It will be interesting to see how the “affected persons” whose submissions are now being ignored in whole or in part react to the above notice, if they somehow become aware of it. Here are some questions I am thinking about that do not necessarily reflect any position of any clients of mine:

      1.     Why did the Board invite submissions from “affected persons” on the “feasibility” of the tariffs – only to now ignore those submissions?
2.     Why has the Board failed to notify the “affected persons” who were invited to make submissions on the draft tariffs that their submissions will be ignored in whole or part and is only interested at this point in hearing further from “the Parties” – which technically means only Access Copyright and Sean Maguire?
3.     Did the Board create a “legitimate expectation” among “affected persons” that their submissions would be accorded fair and adequate consideration?
4.     How can the Board ignore the “retroactivity” issue – especially in the context of this proposed tariff – when “affected persons” may have to try to reconstruct information on course pack content, third party licenses, fair dealing and other considerations going back almost a decade and particularly if the tariff is “mandatory” in any way? How can the Board’s decision to ignore the retroactivity issue in this context be reasonable and how could a lengthy period of retroactivity possibly be feasible in this case?
5.     How can fundamental and even jurisdictional issues such as whether tariffs can be mandatory and to what extent, if any, they can be retroactive not go straight to the core of the “feasibility and clarity of the terms of the tariff”? Surely, if a tariff is inconsistent with the Copyright Act and several Supreme Court of Canada decisions, the “feasibility” of such a tariff would be fundamentally at issue.

Unfortunately, my optimism about new leaves being turned at the Board may have been premature. What I am seeing now looks more like withered leaves. The current situation is unprecedented in my experience with the Copyright Board – which spans more than three decades. 

And that’s not all folks. Wait for my comments on the proposed regulations regarding “Time Limits in Relation to Matters Before the Copyright Board”…

HPK

The Toronto Real Estate Board is Back in the Copyright News

An important milestone in Canadian competition and copyright law was the resounding defeat in 2017 of the Toronto Real Estate Board (TREB) in its attempt to use copyright law to control the use of some key data concerning the Toronto real estate market. See TorontoReal Estate Board v. Commissioner of Competition, 2017 FCA 236. Leave to appeal to the Supreme Court of Canada was dismissed: Toronto Real Estate Board v. Commissioner of Competition, 2014 CanLII 40510 (SCC).

Justice Nadon of the Federal Court of Appeal summarized the issues at the outset of the FCA decision

[2] TREB maintains a database of information on current and previously available property listings in the GTA. TREB makes some of this information available to its members via an electronic data feed, which its members can then use to populate their websites. However, some data available in the database is not distributed via the data feed, and can only be viewed and distributed through more traditional channels. The Commissioner of Competition says this disadvantages innovative brokers who would prefer to establish virtual offices, resulting in a substantial prevention or lessening of competition in violation of subsection 79(1) of the Competition Act, R.S.C. 1985, c. C-34 (Competition Act). TREB says that the restrictions do not have the effect of substantially preventing or lessening competition. Furthermore, TREB claims the restrictions are due to privacy concerns and that its brokers’ clients have not consented to such disclosure of their information. TREB also claims a copyright interest in the database it has compiled, and that under subsection 79(5) of the Competition Act, the assertion of an intellectual property right cannot be an anti-competitive act.

[3] For the reasons that follow, we would dismiss the appeal.

It seems, however, that TREB hasn’t given up trying to control the use of information from its database. It has recently obtained a consent order against a business called MongoHouse.com, presumably the entity behind this website.  

TREB has issued a press release dated April 17, 2019 that states that “The Court has affirmed TREB’s right to protect its proprietary and copyright information and stop any unlawful attempts to sell or monetize TREB MLS® data.” This has been picked up to some extent by main stream media, e.g. here.

Consent orders are not binding precedent and are often a practical conclusion to an unsuccessful encounter by a David with a Goliath. The unreported consent order reads as follows in this instance :

1. It is hereby ordered and declared that as the owner of the TREB MULTIPLE

LISTING SERVICE (“TREB MLS®”) and the TREB MLS® Database, TREB is the

owner of the copyrights associated therewith, pursuant to the Copyright Act, RSC

1985, c C-42 (the “Act”). It is acknowledged in relation to this declaration that the

MLS® logo is a registered trademark of the Canadian Real Estate Association

(“CREA”) and is used under license by TREB in association with the TREB MLS®.

2. It is hereby ordered and declared that the unauthorized copying, data scraping,

downloading, display, distribution, access to make available for distribution,

streaming for public display any TREB MLS® data is a breach of TREB’s

proprietary rights and copyrights associated with the TREB MLS®.

3. It is hereby ordered and declared that any access to the TREB MLS® other than as

authorized by TREB using any means to avoid, bypass, deactivate, impair, or to

circumvent in any manner a technological protection measure (“TPMs”) is a breach

of Section 41 of the Act and is an infringement of TREB’s rights.

Page: 3

4. A permanent injunction is hereby granted against the Mongohouse Defendants

restraining each of them, their officers, directors, employees, agents, assigns,

servants, or any person acting under their instructions, from:

a) accessing, copying, data scraping, downloading, displaying, distributing,

accessing to make available for distribution, streaming for public display any

TREB MLS® data or information, unless expressly authorized in writing by

TREB;

b) using any method to avoid, bypass, remove, deactivate, impair or circumvent any

TPMs put in place to protect or limit access to the TREB MLS® system and data;

c) from operating, conducting, or having any involvement in or providing or offering

means to access the TREB MLS® system, or assisting in the collection or display

of the TREB MLS® data, unless expressly authorized in writing by TREB;

d) from maintaining, operating, implementing, marketing, or having any

involvement with any business or enterprise used in any manner or form for the

purpose of providing or offering a means to access the TREB MLS® system via

any means or method, including any internet based technology, without the

express written permission of TREB.

5. The action is otherwise hereby dismissed on a without costs basis and the

Counterclaim is hereby dismissed on a without costs basis.

(highlight added)

It is far from clear how this order squares with the very clear reasoning of the FCA in the reported decision cited above that concludes, inter alia:

[194] The Tribunal considered a number of criteria relevant to the determination of originality (paragraphs 737 - 738 and 740 - 745). Those included the process of data entry and its “almost instantaneous” appearance in the database. It found that “TREB’s specific compilation of data from real estate listings amounts to a mechanical exercise” (TR at para. 740). We find, on these facts, that the originality threshold was not met. (emphasis and underline added)

Even if it could be argued the FCA’s decision with respect to copyright was technically obiter dicta in light of its findings under the Competition Act, the FCA’s reasons regarding copyright are very clear and detailed (see paras. 176-196) and were meant to have an effect.

It will be interesting to see whether the Competition Bureau follows up on what appears to be a result that may be inconsistent with the Commissioner’s clear victory in the Federal Court of Appeal.

HPK

PS: HT to Alan Macek and Graham Honsa.

Access Copyright Proposed Tariffs: Is the Copyright Board Turning Over New Leaves?

On March 6, 2019 the Copyright Board appears to have turned over one new leaf by asking for comments more than three years after the close of the hearing from “affected persons” on the “feasibility and clarity of the terms of the tariff” with respect to Access Copyright’s proposed tariffs for the Post-Secondary Educational (“PSE”) Institutions.  I reported on this here. Those entitled to comment potentially included lots of people and institutions that may have withdrawn from this nearly nine-year-old saga or may even have never engaged. In the past, the Board has limited acceptance of comments to a short window following the close of the oral hearing.

The invitation resulted in 11 submissions, which have conveniently been made available here from the Board itself – a helpful and timely development and another new leaf in itself. (Publishing filed court and tribunal public documents is a crucial component of access to justice). From the users’ point of view, these submissions feature a comforting degree of consistency and, at the same time, a considerable degree of independent analysis and approach.

There are some common themes throughout most of these submissions. These are as follows:

1.     The tariffs should not be mandatory and should expressly so state. As clearly stated by CARL, for example (to which I was pleased to provide a helping hand):

Our first comment is that there should be text at the outset of both drafts indicating that use of the tariff is voluntary. This flows from the decision of the Supreme Court of Canada in Canadian Broadcasting Corp. v. SODRAC 2003 Inc. The proposed tariffs should therefore clearly state that, while Access Copyright cannot demand higher royalties or more onerous terms and conditions than those approved by the Board, the duty to pay such royalties and comply with the related terms and conditions will only apply to users who have paid or have offered to pay the royalties under such a tariff. (Footnote omitted)

2.     A number of the submissions pointed out the practical and even the legal difficulties with a retroactive tariff that reaches back almost a decade. How are institutions supposed to reconstruct records of what material they used so long ago? How are institutions supposed to known what was in Access Copyright’s repertoire at the time? Even now, that repertoire database, if it even exists, is not available to users. Some institutions pointed explicitly to the potential invalidity of retroactive tariffs in light of the venerable 1954  Maple Leaf Broadcasting v. Composers, Authors and Publishers Association of Canada Ltd., [1954] SCR 624 (“Maple Leaf”)  decision from the Supreme Court of Canada (“SCC”). That decision was concerned with a tariff on radio stations that was retroactive by less than three months and the SCC – with some rather explicit reluctance – permitted it as a “practical necessity” but stated clearly that it was the "implied duty" of the Board to proceed with "all possible expedition" in cases where tariffs may have a retroactive effect. In the recent CBC v. SODRAC 2015 SCC 57 case in the SCC, I cited this same Maple Leaf case in the factum prepared along with Prof. Ariel Katz and Prof. David Lametti (as he then was). There was considerable interest during the oral argument in the retroactivity issue and the SCC commented on it very explicitly in this unusual footnote – which may be seen as a warning signal to collectives and an invitation to users seeking judicial review of retroactive tariffs:

[2] During the hearing before this Court, counsel for the interveners the Centre for Intellectual Property Policy and Ariel Katz briefly raised concerns regarding the Board’s power to issue retroactively binding decisions in general. That issue was not squarely before this Court in this case, and I do not purport to decide broader questions concerning the legitimacy of or limits on the Board’s power to issue retroactive decisions here.

CARL also mentioned the Board’s own 2008 decision in SOCAN 22.B to 22.G Tariffs wherein the Board found that it would be “highly disruptive, and therefore ipso facto unfair”  to certify a tariff that, among other considerations, was for a period (1996 to 2006) that is long past.“ This decision was upheld by the Federal Court of Appeal in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2010 FCA 139 at paras. 20 and 26, a case which I argued. I’ve discussed the Maple Leaf case before.

Clearly, the Board has not proceeded “with all possible expedition” in this nine-year-old proceeding and it would seem inconceivable that there could be any reasonable basis to justify a nine-year retroactive tariff as a “practical necessity”. The University of Toronto has wisely submitted that “The effect of the extreme delay in the present case raises a series of issues that merit full, transparent and detailed review, with input from any affected party, before a final decision regarding the tariffs is made.”  In light of the case law, any retroactivity in this instance may be vulnerable.

There are a number of possible twists and turns ahead on both the “mandatory” and “retroactive” issues. We should get some guidance on the “mandatory” issue in the next weeks or months from the Federal Court of Appeal in the appeal of the York University case, where the issue loomed large, although it was not addressed as fully as it would have been if my client CARL had been allowed to intervene. In any event, this “mandatory” issue may very likely end up in the SCC, unless Parliament clarifies the law as enunciated by the SCC as I have suggested to the INDU Committee.

3.     A number of institutions also raised other important points, such as:

a.      The need for Access Copyright to make its repertoire database accessible online;

b.     The need to point out that fair dealing may permit copying in excess of any bright line set out in the tariff language;

c.      The possible inclusion of a transactional license mechanism;

d.     The overbroad definition of “copy” which goes beyond the legislation, for example by including linking or display; and,

e.      The overreaching and intrusive records and reporting provisions.

Overall, these 11 submissions raise some existentially important points in the terms of the “feasibility” of these tariffs. If the Board intends to approve a tariff that can survive judicial review and/or be enforceable, it may need to turn over even more new leaves, as it were. Maybe that will involve rediscovering the Maple Leaf, as in the landmark 1954 SCC Maple Leaf decision. And following the 2015 SCC decision in CBC v. SODRAC – which would indicate that, if a tariff provided pursuant the voluntary “arbitration” regime is not mandatory, then a fortiori, the use of the general regime cannot result in a tariff that is mandatory as against unwilling institutional users who clear their copyright obligations more efficiently in other ways. How can it be that such an institution, which may have inadvertently made even only a single copy of single work in Access Copyright’s repertoire in manner that might amount to technical infringement, be liable for millions of dollars for maybe tens of thousands of FTEs for the term of the tariff?  And here’s another potentially crucial issue.  If the current proposed tariffs start to involve constitutional issues, as the redoubtable Prof. Katz suggests in his submission, –  given that education is a provincial power – we could see some interesting arguments about a concept  much beloved by the SCC known as the “living tree”.

Enough arborist allusions. No doubt because spring is so late this year. Can’t wait for it and all the little maple saplings in my back yard…

And at the risk of reopening Canada’s national anthem debate, I include a wonderful rendition of “The Maple Leaf Forever More” by the legendary and world-renowned Canadian tenor Edward Johnson (1878 – 1959) – who became the manager of the Metropolitan Opera in New York and whose name is on the Faculty of Music building at U of T, where I played at the opening ceremony and spent many years.

HPK

The WIPO Broadcasting Treaty – A Solution in Search of a Problem?

WIPO has been trying to promote a broadcasting treaty now for about two decades. The 38^th Session of the SCCR opened with an unusually explicit call from Director General Francis Gurry to push this forward soon to a diplomatic conference. Here is the first session, where he delivered the opening remarks. While the world could benefit from a successful return to multilateralism on the IP and other fronts, a badly conceived and unnecessary treaty will not be helpful. 

I attended SCCR 36 last May on behalf of the Civil Society Coalition and this is what I said at that time.

The Canadian delegation is currently entrusted with the responsibility of speaking for Group B. Hopefully this will not stop Canada from making its own points which I hope will address the following:

1.   Will Canada oppose post fixation rights for broadcasters, and if not, why not?

2.   Does the proposed text in SCCR/37/8 deal with the “internet”? What is meant by “computer networks” in the definition of “broadcasting”?

3.   Will Canada support or oppose extending the broadcasters’ right to works that are (a) originated on the Internet, or (b) made available on demand, over the Internet?

4.   Will Canada support or oppose a post fixation right for works where copyright has expired, or which are not protected by copyright?

5.   Will Canada limit the broadcasting right to traditional television and radio delivered without encryption and paid subscriptions?   

6.   Can Canada allow countries to impose formalities on the right, if they want, as they can under the Rome Convention?

It is important that Canada stand up and be counted. Our delegation is well informed. However, both domestic and international audiences need to know where Canada stands. Canada’s profile at WIPO has been too low for too long, as I have pointed out in this book chapter for CIGI.

HPK