Friday, October 21, 2022

Voltage Mass Drift Net Default Judgment Test Case - The Appeal

I blogged last year about Voltage’s troubling test case effort to get a default judgment against dozens of alleged infringers all at once identified through aggressive investigation and Norwich orders.

Those dozens could, if Voltage’s procedural tactic succeeds, quickly become many thousands at several thousand dollars each. In this test case, Voltage was seeking staturory damages of $2,250 to $5,000 plus costs from each defendant caught in the drift net.

CIPPIC had intervened in this proceeding. Voltage was dealt a serious setback by the Federal Court in a well-reasoned order by Justice Furlanetto dated June 6, 2022. See Voltage Holdings, LLC v. Doe#1, 2022 FC 827 (CanLII), https://canlii.ca/t/jpncb

Not surprisingly, Voltage has appealed. CIPPIC has been given leave to intervene in the appeal.  Here is Voltage’s Memorandum of Fact and Law for the appeal.

There’s a lot at stake here. If these mass default proceeding tactics are sanctioned by the Court, we will almost certainly see a parade of  thousands of default judgments in dozens or more cases involving up to $5,000 in statutory damages against each and every defendant – whether of not each defendant actively downloaded, simply had their Wi-Fi used by someone else (e.g. teenage kid, babysitter, neighbour, tenant, etc.) or were just misidentified.

This would be unacceptable and would require a legislative remedy.

Also, not to be forgotten, is the so-called “reverse” class action against Mr. Robert Salna, a landlord who happened to be in the wrong place at the wrong time and is being forced to defend this very complex test case, which still grinds on in the Federal Court as action #T-662-16 - now with several intervenors.

HPK

PS - October 30, 2022: Here's is CIPPIC's very well researched intervener factum dated October 28, 2022 in Voltage's appeal.

Friday, October 07, 2022

Canadian Copyright Today – Confrontations & Opportunities

Robarts Library – University of Toronto

Here is my overview of the state of Canadian copyright law developments at this time.

Bottom Line:

Access Copyright (“AC”) and the Association of Canadian Publishers (“ACP”) are on the warpath against Canadian education. AC had planned a “day of action” on Thursday, October 6, 2022 (postponed “because of unforeseen technical issues”) to “fix Canada’s Copyright Act”. (the “Act”). Guess what? The Act isn’t broken and doesn’t need fixing. As the Supreme Court of  Canada (“SCC”) recently said in what can only be seen as yet another consistent affirmation of users’ rights and setback for overly zealous and self-serving collectives:

[5]       I cannot agree with the Board’s interpretation of s. 2.4(1.1). The Copyright Act does not exist solely for the benefit of authors. Its overarching purpose is to balance authors’ and users’ rights by securing just rewards for authors while facilitating public access to works. When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users gain access to works which they can use to inspire their own original artistic and intellectual creations.

Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (CanLII), <https://canlii.ca/t/jqgw0>

The ACP has made dangerous and outrageous copyright recommendations in its recent Pre-Budget Consultations in Advance of the 2023 Budget. These are:

ACP joins colleague associations in recommending that:

● Fair dealing for education should only apply when a work is not commercially available under licence by the owner or a collective.

● The Copyright Act be amended to clarify that tariffs approved by the Copyright Board are enforceable against infringers of copyright protected works subject to a tariff.

● Adequate statutory damages must be available to all copyright collectives.

Of course, we know that publishers and more recently collectives, despite their rhetoric,  don’t necessarily care about the best interests of creators and, indeed, sometimes act against such interests. Neither the Copyright Board not the Courts have yet directly confronted the issue of whether authors’ interests are adequately served by collectives. But this could happen sooner rather than later as authors figure out how to deal directly with users and bypass inefficient collectives and their law firms who too often seem intent on making simple things very complex and prolonged. Is this recently reported lawsuit by some Quebec songwriters against SOCAN the tip of a potentially huge iceberg?

The victories of the PSE (post secondary education) sector are in peril – not only because of AC and its collaborators but because of sometimes unwise strategies in the PSE sector itself. Recall this important analysis by Prof. Ariel Katz following York’s defeat at the trial level in 2017: Access Copyright v. York University: An Anatomy of a Predictable But Avoidable Loss. The fact that the AC litigation against York was not struck down early on and had to go the SCC and that York chose to bet the farm on a bad set of fair dealing guidelines and risk a severe smack down overall on fair dealing does not bode well for the future unless basic lessons have been learned – which is hopefully happening but is not yet evident. York very nearly lost that litigation. Fortunately, my brave client the Canadian Association of Research Libraries (“CARL”) and Prof. Ariel Katz were very instrumental in saving York from this fate – though it’s far from clear that all those responsible for York’s strategy actually appreciate our work.

It seems clear that the PSE sector needs to update fair dealing guidelines and to follow Justice Abella’s wise words in the York decision:

[106] At the end of the day, the question in a case involving a university’s fair dealing practices is whether those practices actualize the students’ right to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Act. Since we are not deciding the merits of the fair dealing appeal brought by York, there is no reason to answer the question in this case.

The process of updating and actualizing is too important to be entrusted to any single organization. A way must be found to assimilate all valid inputs. The U of T fair dealing guidelines from a decade ago were developed in a cooperative collaboration between usually contrasting viewpoints (Casey Chisick and I) under the wise leadership of now retired U of T general counsel Steve Moate. I was pleased to have been part of this process. These were, IMHO, the best fair dealing guidelines to date and suggest a method and process of going forward.

Meanwhile, at the Government, the Minister of ISED – who should be primarily responsible for the copyright file – is apparently MIA – though his officials are still hopefully minding the fort.

The Minister of Heritage, who is also responsible for two very controversial bills - C-11 and C-18 – has been seduced by a dangerous mix of Quebec politics and sophisticated content industry lobbying into thinking that great glory lies ahead in maximalist copyright law revision. However, those who don’t know history are condemned to repeat it. This Minister and his controversial Parliamentary Secretary have yet to learn the lessons of their predecessors – such as Sheila Copps and Sarmite Bulte, who did so much wrong when it came to copyright and suffered the consequences. Better still, they should talk to James Moore and Tony Clement who managed to get a lot right.

Access Copyright and its allies, such as the ACP, are peddling what amount to Trumpian fictions and falsehoods about fair dealing in Canada. AC’s income has dropped in the last decade but NOT because of the addition of the word “education” to the fair dealing provision of the Act in 2012.

AC’s income has dropped because AC tariffs as certified by the Copyright Board are NOT MANDATORY – which Prof. Katz and I have been saying for a decade, as many institutions came to believe, and which the SCC has now TWICE confirmed. See also Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> brought to you by Prof. Katz, Prof. David Lametti as he then was, and yours truly.

The word “education” was added to the Act in 2012 after the Copyright Board and the Federal Court of Appeal held, erroneously, that teaching and instruction were categorically outside the ambit of s 29 and while an appeal of these decision was pending before the Supreme Court. But when the SCC decided the 2012 Alberta case, without regard to the 2012 amendment, it corrected the error and affirmed that “education” has been part of fair dealing even before the amendment, dating back to the fair dealing provision as enacted in the UK act of 1911 and the Canadian act of 1921. There is no court case yet that confirms that the addition of the word “education” has expanded the ambit of research and private study. Copyright nerds may be interested in the factum, which proved to be very influential, that Prof. Katz and I filed for the 2012 Alberta case in this respect. 

That said, even if, assuming (incorrectly), that the list of allowable purposes was meant to be closed, it is arguable that adding “education” may potentially add something that didn’t exist before.

 While “education” is potentially capable of covering things that research and private study may not cover, this doesn’t change the fact that, as far as teaching practices at schools, colleges and universities are concerned, these educational institutions can rely  and apparently are relying on the holding in the Alberta case without reliance on the fact that Parliament did indeed add the “education” in 2012.  Once again, and for emphasis, the addition of the word “education” to the Act in 2012 is NOT the reason why AC’s revenues have gone down.

 According to Universities Canada, Canadian universities “have spent over $1 B in the last three years combined on purchasing library content – and it’s increasing annually”. And that’s not counting colleges and K-12 schools. These massive and increasing expenditures – more and more through electronic purchases and licenses – better ensure that creators and publishers get paid without having to depend on AC and its very inefficient distribution system, especially for individual creators. BTW, I’m a “fly on the wall” member of AC and probably more prolifically published than average. Last year, AC send me something like $82.00, which is more than some widely published academics. But that’s hardly enough to make me quit my day job.

AC’s most recent 2021 audited annual report describes the decline in revenues from the educational sector over the last decade and acknowledges the court cases, along with significant potential contingent liability for substantial refunds and the litigation seeking refunds.

The federal Government has arguably unnecessarily been paying many millions of dollars to AC since the 1980’s and still may be doing so to a significant extent. It is hard to see how AC has much repertoire of any possible interest to federal civil servants and what the Feds may do with that material is very likely fair dealing in any event. Is this more of a sweetheart deal than a rational arrangement? This is something that requires further analysis and exposure. These payments may have helped to keep AC on life support.

What Lies Ahead?

Currently, one hears that the Government’s agenda is roughly as follows.

The Government is looking to develop a legislative package for the spring of 2023 that could deal with some of all of the following issues:

  • Small radio station liability
  • Indigenous concerns
  • Crown copyright
  • “Educational copying” including:
    • Fair dealing
    • Should tariffs be “Mandatory”?
    • Licensing
    • Statutory damages

Since there have been consultations for years, there may not be much if any further formal consultations – though that won’t stop the lobbying which will then become even less transparent.

 The Government has already decided to legislate a resale right for artists.  This decision is interesting, given that the US Congress has taken a pass on this following an exhaustive 2013 study by the US Copyright Office that raised concerns about the potential impact on the American art market While some Indigenous artists may see promise in such a measure, there are existing mechanisms in place that may be even more effective for most living and less than famous artists – such as the long-standing certification mark provisions under the Trademarks Act, which are probably being under-utilized in this context.  Also, Canadian art dealers will surely oppose such a measure – since there is a concern that it would harm the art market and drive sales and resales underground or out of the country. This issue is far from straightforward and not likely to be a slam-dunk success for the Government.

 The Government needs to get over the notion and the unfortunate provision in s. 92 of the Act that copyright law needs to be reviewed every five years. Such a perspective benefits only consultants, lobbyists and lawyers. This has never been the approach in the UK, USA or Canada – where decades have passed before major changes are made. As always, the fundamental things apply as time goes by. New shiny objects don’t necessarily need new shiny laws. For example, the American and Canadian governments were very wise to resist that notorious and nonsensical attack on the VCR by the late Jack Valenti on behalf of the American film industry in 1982 where he told a congressional committee “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” Indeed the VCR ended up being Hollywood’s salvation. But Valenti’s hysterical hyperbole set the stage for cacophonous copyright confrontation for decades to follow, including from the motion picture industry in Canada, and indeed up the present time.

If the Act is to be re-opened at this time – which on balance is neither necessary nor desirable – amendments should include the following that are simple and long overdue:

  • Clarify that circumventing a TPM for fair dealing purposes and other exceptions is legal;
  • Clarify that the list of fair dealing purposes in s. 29 is not exhaustive by including the two simple words “such as” – as we have seen in the USA since 1976; 
  • Making term extension to life + 70 years conditional upon registration according to regulations to be determined; and,
  • Ensure that fair dealing rights and other statutory exceptions cannot be pre-empted by contract.

 A final thought and call to action. While there is lots of disaggregated data about the vast sums of money being spent in the educational sector for print and digital material, it would be very helpful if the post-secondary university sector, at least, would provide global data for the last decade on such things as:

  • Amounts spent directly by students on traditional printed books and e-books;
  • Amounts spent by institutions on printed books, e-book purchases and e-book licences;
  • Amounts spent by institutions on site licences;
  • Amounts spent by institutions on transactional licences; and,
  • Amounts spent by institutions on OER development.

 As always, comments and copyright gossip always welcome on or offline.

 HPK