Monday, April 29, 2019

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

A Canadian Glacier

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.


(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,


PS December 23 2020

The regulations are now in place. 

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

More to follow.

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