Thursday, July 07, 2022

The Copyright Board Third Town Hall on June 2, 2022: Was This “Three Strikes”?

The Copyright Board of Canada, hosted by the Canadian Bar Association, was given the stage for a third “Town Hall” on June 2nd 2022. Spoiler alert: once again, it was disappointing and mostly devoid of any substance – other than an interesting but very vague hint about how the Board sees possibly increased use of its so-called “arbitration” regime as some kind of response to the SCC’s 2021 decision in the York case that its tariffs are not legally mandatory. There was a follow up CBA event on June 9, 2022 about which I shall blog separately.

I have blogged at some length about the first two town halls in 2019 and 2021.  Expectations for this year's event we're quite low on my part  because there is no apparent evidence that anything significant has happened at the Board since last year. It has held zero hearings in nearly five years, rendered no significant decisions in 2021(with one possible exception noted below) or 2022 other than housekeeping of previous decisions with minor changes and a few “unlocatable” owner decisions of no consequence. It may be observed that it has finally corrected the spelling of “infrigment” [sic] on its website. Moreover, it has finally made almost all (or at least 211 according to CanLII out of 230 according to the Board since 1990) of its decisions searchable and available on CanLII, which is something that could have and should have been done 20 years ago at virtually no cost.

The most recent available Annual Report of the Board for 2020-2021 indicates that:

In spite of these pandemic-related challenges and the slowdown of activities in some industries involved in the rate approval process, the Board’s workload remained significant in 2020-2021. In addition to pending files, the Board received 21 new proposals tariffs submitted on or before October 15, 2020, as stipulated in the new legislative framework, and 21 licence applications for the use of works whose owners cannot be located as per section 77 of the Copyright Act. Also, 110 agreements were filed with the Board pursuant to section 76 of the Act. Finally, in 2020–2021, the Board issued 20 decisions, including two major decisions in complex files: June 26, 2020 SODRAC v. CBC, 2008–2012 [Redetermination] January 27, 2021 SODRAC v. CBC, 2012–2018 [Determination [Sic – this second link is wrong – it’s the same as the previous link] (highlight added)

The new tariff proposals, unlocatable licence applications, and filed agreements would have required a barely minimal “workload”. All of these tariff “decisions”, except two, appear to be rubber stamp repetitions with minor if any variations from previous decisions. The two links provided for the two supposedly “major” decisions are the same, which makes one question whether this report to the Minister was adequately proofread. In any event, these two “major” decisions are probably incomprehensible except perhaps to the lawyers and experts involved. This would appear to be the correct link for the “Determination”.

These two decisions are undoubtedly important to CBC and SODRAC (which is now owned by SOCAN) – and potentially with respect to similar issues arising in the commercial radio and TV worlds. However, the opacity of the reasons to all but a very small number of expert veteran Copyright Board lawyers and consultants is a disappointing departure from the past. The beauty of the common law judicial system is that good judgements on even the most complex issues are normally self-standing and reasonably understandable to any reasonably literate person and certainly to any reasonably knowledgeable lawyer in the field involved and not just the lawyers actually involved. The same should hold true – and usually does – with “expert” tribunals in Canada.

It might be noted that the hearings for these “major” decisions were in September, 2017 but the decisions were not rendered until June 26, 2020 and January 27, 2021 – long after members  Majeau and Landry had retired. They clearly continued for some time to be “seized” of these matters and presumably were paid for their time spent thinking about them. Federal Court and Supreme Court judges, on the other hand, must clear their desks of pending decisions within six months of retirement – and they have far greater case loads that are often much more complex and important.

The Board continues to foster the impression that it has a huge workload and is very productive. This is no doubt nourished by Prof. Jeremy de Beer’s controversial 2015 “statistical” study that parlayed 74 tariffs from 1999-2013 into supposedly 852 tariffs for that period though parsing of paragraphs, division into separate years, etc. This so-called “statistical” analysis  was questionable at the time and has not aged well. My critique of that analysis has not been refuted by anyone, as far as I know. As I further indicated at the time, based upon the Board’s own previous taxonomy and my analysis:

So, if the Board is right, and I am right, then Prof. de Beer’s conclusion that the Board has certified 852 tariffs in the last 15 years is off by a factor of 852 ÷ 74, i.e. ~1,150%. His conclusions that the Board certifies 70 tariffs a year would likewise be off by a factor of 70 ÷ 4.9, i.e. more than 1,400%

The Board has rarely, if ever, issued more than five actual tariffs in a year, and usually even fewer substantively important decisions. In turn, very few of these tariffs are truly new or “inaugural”.  Nonetheless, and do doubt empowered by Prof. de Beer’s study, the Board soon thereafter got a million dollar per annum increase in its annual budget bringing it to about $5 million a year for total expenses. That’s a lot for a Tribunal that hasn’t held a hearing in almost five years and apparently doesn’t adequately proof read its annual report to the Minister.

So, this year’s Town Hall was once again frustrating and disappointing, except for one aspect that may suggest how's the Board will try to find some justification for its continued existence in the face of the “existential” issues raised by the Supreme Court's decision last year in York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 (CanLII), <https://canlii.ca/t/jh8bc>

The first two speakers were the Vice Chair/CEO, Nathalie  Théberge, and Secretary General, Lara Taylor. They said essentially nothing, but did so in a very smooth,  bureaucratic and well rehearsed manner, with several references to their “mighty team”, “Phase I”, “Phase II”, etc. They promised an important forthcoming consultation on new rules, concerning which I’ll have something to say in due course. As I’ve said before, for the first time in the Board's history, neither of the persons occupying these two important positions are lawyers, which is incongruous considering the supposedly quasi-judicial nature of the Board's work in the very esoteric and quintessentially legal field of copyright law.

The somewhat interesting aspect of the remaining time after the long and uninteresting presentation by the Vice Chair and Secretary General was the discussion by its chair, retired Justice Luc Martineau and its general counsel Sylvain Audet. The chair mentioned the Access Copyright case, as he called it which followed the
Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> case “in a certain way” as he put it. There was clearly at least an implicit recognition that the Supreme Court's landmark ruling the copyright board tariffs are not “mandatory” well affect the nature of the Board's work. When I asked in the chat about how it might affect the workload, Maître Audet replied that this “remains to be seen”.

Both gentlemen explicitly suggested that there might be increased utilization of the Boards “arbitration” regime, based up on the 2018 amendments. The Chair noted that there had already previously been 15 arbitrations in the Board's 32 year history.

For my part, I do not see how the 2018 amendments will have any effect on the implications of the Supreme Court's rulings in CBC v. SODRAC and the York case, in both of which I made prevailing arguments. While the legislation may superficially suggest that a tariff applicant can force the party into an arbitration proceeding where they are “unable to agree”, what does that even mean if the user does not have to accept the result of the so-called arbitration? Users in such a situation may conceivably consider simply defaulting or putting in a token case. There have only been 15 uses of the “arbitration” mechanism to date. If anything the CBC v. SODRAC and York cases are likely to reduce its use. There is nothing in the 2018 legislation that would make it more attractive or effectively “mandatory”.

As was suggested, this so-called “arbitration” mechanism may be a useful mechanism where only one or two users are involved and there is a substantial amount of money at stake. However, some users who might be inclined towards so-called arbitration may now see better value by hiring and paying a retired judge or other private arbitrator with actual expertise in copyright or at least intellectual property law and actual serious arbitral experience – especially if the legal or factual issues are complex. These arbitrators are well paid because the most successful of them have the reputation of delivering expert results expeditiously, which frankly is not the case with the Copyright Board in modern times. Whether the Board would bless such a decision would be interesting. In any event, it’s not clear that the Board’s blessing would even be needed, since the result could presumably be “filed” with the Board pursuant to the existing mechanism for filing most agreements.

BTW, in other interesting developments at the Board:

Prof. Adriane Porcin, who was appointed as a part-time member of the Board in September 2022 for a four-year term, resigned in January 2022. She was a Board member with evident academic credentials in copyright law.

At least two prominent collectives have “withdrawn” proposed tariffs in recent months. These are CMRRA-SODRAC Inc. (“CSI”), CMRRA, and COPIBEC (the Quebec counterpart to Access Copyright that was seeking $28 per FTE annually). Could this be related to the SCC’s rulings on “mandatory” tariffs?

I’ll soon post more on the follow up comments by Professors De Beer and Gendreau on June 9, 2022 and the Board’s apparently less than compelling consultation effort regarding the its rules for conduct of its hearings, such as there may be, due on short notice on July 18, 2022.

So, this was the Board’s third time at bat at a CBA Town Hall. Readers can form their own conclusions about whether the Board struck out or maybe somehow will reappear again. If so, let’s hope that they actually have something important and useful to say and/or any actual achievements to speak about.

 HPK


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