Friday, December 16, 2022

Copyright Board Annual Report 2021-2022

The Copyright Board’s recently posted 2021-2022 Annual Report (“Report”) covers the period from April 1, 2021 to March 31, 2022.

(Copyright Board)

What does this full-page collage with this uncredited photograph on page 13 the Board’s Report possibly have to do with Canada’s Copyright Board? I, for one, have no idea. But it takes up a whole page, along with several other diverting and uninformative photographs in this Report that is overall mostly devoid of any actual useful information.

That’s regrettable as the deadline for objecting to proposed tariffs looms and potential objectors have to decide whether or not to become vulnerable to potentially extremely intrusive and invasive interrogatories, expert witness costs, and huge legal expenses to deal with tariffs that the Supreme Court of Canada (“SCC”) has confirmed with crystalline clarity are NOT MANDATORY. More on this below…

The Chairman’s “Message” to the Report notes that:

The 2021‒2022 fiscal year was also marked by the Supreme Court of Canada’s decision in York v. Access Copyright, an important decision that clarifies, among other things, the scope of tariffs approved by the Board. This decision will certainly have an impact on the Board’s ability to deliver on its mandate, but it will be some time before we see the concrete results of this decision, including the cumulative effect of the decision and the changes made to the Copyright Act in 2019.(highlight and emphasis added)

The York decision from the Supreme Court of Canada (“SCC’) is, of course, the elephant in the room at the Copyright Board. It is difficult to comprehend what “concrete results” of the York decision the Board does not understand. The SCC clearly ruled that:

Access Copyright’s tariff as approved by the Copyright Board is not mandatory for users

It was unnecessary and inappropriate for the Courts below to issue a declaration about fair dealing in these circumstances

Nonetheless, there were serious errors in the Courts below noted concerning their pronouncements about fair dealing, e.g. re “aggregate” copying.

While there may be more “results” in the future, the above is already as clear as can be. The SCC decision more than “clarifies, among other things, the scope of tariffs approved by the Board”. It unambiguously declares that Board tariffs for Access Copyright are NOT mandatory and not enforceable and makes important statements about fair dealing. BTW, I was honoured to have played a very major role and to have made the prevailing arguments as counsel for my esteemed client CARL in the SCC in getting this result.

These are rulings that the Board must follow – now and not if and when the Board finally can “see the concrete results of this decision”. The Board may not like the decision – but the Board is bound by it. Even if the SCC’s statements about fair dealing are technically “obiter dicta” under the circumstances, SCC obiter dicta – especially when it is so pointed, on point, and  precise as in the instance – is as good as law.

In the past, the Board has at times appeared to be hostile to the SCC and Federal Court of Appeal. One had hoped that this had passed. I wrote here  in 2009 about how former and then sitting Board Chair Justice William Vancise expressed his frank views.

The Board cannot even bring itself to use the “M” word, i.e. “mandatory”, in relation to its tariffs  - or more precisely “not mandatory” - in this Report – which was the essence of the SCC case.

Indeed, the only place the Board uses the “M” word is:

“mandatory training required as part of organizational measures to prevent and address workplace harassment and violence”

The Board is no doubt hoping, along with Access Copyright and other collectives and content owner lobbyists, that the Government will try to undo the SCC’s York ruling and curtail fair dealing in the educational sector. That, of course, would be an enormous legislative, political, and legal mistake that will likely result in costly litigation and uncertainty for years to come. Of course, the Board would probably use such uncertainty to justify more deflection and delay and, no doubt, to demand and even bigger budget so that it can analyze the obvious.

Interestingly, although the period of the report ends on March 31, 2022, it does NOT mention the ESA v. SOCAN “making available” case that was argued in the SCC in January of 2022 and decided on July 15, 2022.  That result was another existential body blow to the Copyright Board, holding, in effect, that the Board got it very wrong in its ill-advised and very wasteful venture into international law and that the Board “will be held to the “correctness” standard of review when it comes to interpreting the Copyright Act because it shares concurrent first instance jurisdiction with the Superior Courts. The Board will be given no deference for being “reasonable” in its interpretation of the substantive provisions of Copyright Act. It must be correct. Importantly, this is the first new category of correctness review since the landmark SCC Vavilov decision.

The Report contains some interesting language about how the Board is “constrained” by decisions of the Courts. It would have been more accurate and more respectful to say that the Board is subject to  and guided by rulings of the Courts – both in the form of judicial review and other decisions that may call into question the reasonableness or even the correctness of the Board’s decisions – as was the case in the York University litigation, in which Access Copyright sought – ultimately unsuccessfully – to enforce the Board’s tariff ruling.

If the Board is to serve any useful purpose and to have a long-term future, it would do well to focus on its mandate and to stay in its lane – which is all about and only about:

  • Rate setting
  • Establishing tariffs that – while not mandatory – are sufficiently attractive and reflect good enough value that users will voluntarily adopt and maybe even embrace them.

I have always said that there are tariffs that are “de facto” if not “de jure” mandatory – such as those of SOCAN and Re:Sound. If you operate a radio or TV station, there is no other way to clear these music rights other than to avoid the process by playing only public domain music and public domain sound recordings. Those tariffs have mostly been fairly reasonable because there has been sufficient competent organized opposition over the years.

On the other hand, inexperienced objectors with insufficient resources to spend easily five and even six or seven figures opposing a tariff will eventually be worn down by the inevitable irrelevant and oppressive interrogatories that the Board has shown little or no commitment to curtailing. Even the AUCC (now Universities Canada) was forced to withdraw from the Access Copyright tariff case in 2012, although it might have handled the whole matter very differently.

 The major collectives have only limited interest in making the Board better. It seems that their limited interest is only in making the Board a faster and cheaper place to do business.

Many users are now going to be asking themselves whether there’s any point in getting into the quagmire and quicksand of a Copyright Board tariff proceeding at potentially enormous expense  and opening their doors to offering collectives such as Access Copyright a potential treasure trove of interrogatory material. If the Board somehow manages to come up with a tariff that offers good value, a user can then sign a licence based upon it. Otherwise, for example with Access Copyright, the user can ignore the tariff and get licences, when needed, in other more efficient ways for far better value – which is precisely what so many institutions have been doing for nearly a decade with total vindication since the Access Copyright’s “tariffs” have been declared as NOT MANDATORY by the SCC in 2021.

Collectives have almost always done very well at the Board, though not so much in the Federal Court of Appeal and definitely not so much in the Supreme Court of Canada. Board proceedings have almost always been very profitable – with the costs being borne by members and the public.

In the past, tariff proceedings were usually a bankable cash cow for collectives. One notable but apparently isolated exception was Access Copyright’s attempt to get lots of money from provincial governments, outside Quebec. I wrote about this at some lengthy back in 2015:

To recapitulate, the Board awarded a tariff of 11.56 ¢ per FTE (full time equivalent) for the period 2005-2009 and 49.71 ¢ per FTE for 2010-2014. That’s less than 1% and about 2% respectively of what AC asked for.  According to the Board, the tariff will generate a total of only about $370,000 over its ten year period – which is likely only a small fraction of the costs involved in obtaining the tariff.

Here is that decision, interestingly with Justice Vancise as chair of the panel, which hopefully will be kept in mind by all concerned as Access Copyright attempts to impose a tariff for 2024-2026 for post-secondary institutions as follows:

(a) $15.65, if the educational institution is a university; or

(b) $6.01, if another educational institution.

The 2021-2022 Report contains virtually nothing new or interesting. Is all about management platitudes, e.g.:

Expected Outcomes

The Board strives to be a credible institution, well-respected both by the creators and the users of copyrighted material, because of the efficiency of its operations and its unique expertise in copyright matters.

It has adapted and will adapt with resilience and agility to the challenges posed by a constantly evolving legal and economic environment, whether at the national or international level, while offering high-quality support to parties and the public requesting its services.

The never ending tinkering with procedures – such as requiring “grounds” for new tariffs and objections at an early stage – is simply obvious and won’t change anything. The requirement for “fair and equitable” tariffs is hardly new – what else has the Board and its predecessor supposedly been doing for the last eight decades?

Bottom line:

The vast majority of the “tariffs” approved by the Board are no brainer unopposed rubber stamp exercises that somehow still take a very long time.

The unlocatable owner regime is an embarrassing waste of time and resources. Hopefully, it doesn’t still consume a whole FTE resource as then Chair William Vancise confirmed in 2014. With only one  inconsequential rulings visible in the 2021-2022  reporting period, it would be difficult to understand how this took more than a very few hours at the most to deal with. The Copyright Act could be amended to deal with these increasingly rare situations as an exception along with other specific exceptions.

The Board is continuing to try to justify itself as an important and essential quasi-judicial tribunal, which it once was. However, it has failed to clearly get beyond the “dysfunctional” description conferred by a Senate Committee in 2016 and continues to be an expensive and unproductive though paradoxically high profile presence in the Canadian administrative tribunal landscape. It has held only one hearing in the last five years.

Its proposed new Rules of Practice and Procedure will likely accomplish little or nothing – other than to provide an excuse for the Board to demand an additional $1 million a year to its already inflated budget:

The costs of the proposal are expected to be less than $1 million annually. While Parties would be required to provide information earlier on in proceedings, the amount or type of information required from Parties would be the same as under the current Model Directive. (emphasis added)

If the Board is to have any credibility and serve any useful purpose going forward, it needs competent, independent and balanced management with legal expertise in both civil and common law and – of course – in copyright law. The Board’s Members should, of course, reflect these requirements.

It’s really too bad that the ISED Minister @FP_Champagne seems to be apparently 100% missing in action on what is going on here – although it’s 100% his responsibility.

Happy Holidays to one an all!