Update on Access Copyright – The Demise of a Dubious Enterprise?

As I’ve said before in my February 23, 2024 blog,

In 2018, the Province of Alberta and dozens of K-12 school boards sued Access Copyright for a refund of $25 million they allegedly overpaid for Access Copyright licences for 2010, 2011 and 2012.

Access Copyright, on the other hand, has defended and  counterclaimed for a potentially much larger amount based upon subsequent Copyright Board tariffs.

The Plaintiffs (consisting of “the Ministries of Education of 10 Canadian provinces and territories (excluding British Columbia, Ontario and Québec) and each of the school boards in Ontario” achieved a massive victory in the litigation, as I’ve written. Access Copyright (“AC”) suffered a monumental loss.

AC has, not surprisingly, decided NOT TO APPEAL this decision – presumably because it was so clearly correct, extremely well reasoned, and very thorough at 121 pages. As I said in my previous blog, the decision would have been “ likely to be upheld in any appeal.” The very likely confirmation of its loss in the Federal Court of Appeal would have been even more devastating for AC, not to mention resulting further legal fees, costs, and accruing interest. Moreover, by not appealing, AC can resort more immediately to the old, although desperate and rarely successful, strategy of using a litigation loss to try to convince the Government that the legislation is broken and needs to be fixed.

As the  decision states at para. 36, the Plaintiffs were seeking $25,493,109.36 and succeeded in their  claim. AC’s counterclaim was totally dismissed. Given the considerable passage of time in this litigation, the nature of  the Plaintiffs’ claim, and the accrual of interest, I am estimating that AC is now on the hook for about $30,000,000. That sum represents about half of AC’s total assets of $59,964,000  and almost 50% more than its Net Assets, based upon its last published audited financial statements for 2022. Clearly, this result will have a major and conceivably even existential impact on AC’s operations and the viability of its business model.

The elephant in the room, of course, is the Supreme Court of Canada’s landmark decision on July 31, 2021 in York University v. Canadian Copyright Licensing Agency (“Access Copyright”), 2020 FCA 77 (CanLII), [2020] 3 FCR 515, <https://canlii.ca/t/j6lsb> which held that Copyright Board tariffs, such as those on which AC depended, are NOT mandatory. I made instrumental submissions in that case on behalf of CARL. This was preceded by the Court’s 2015 decision in Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> in which  Professor Ariel Katz, Prof. David Lametti (as he then was in 2015) and I were very influential in the important result that helped to pave the way for the York decision.

As a result of the York decision, the Copyright Board can do nothing to rescue AC – absent a drastic revision of the Copyright Act that would undo decades of jurisprudence and be not only unwise but quite possibly even unconstitutional.

Sadly, the Copyright Board has a history of incongruously keeping at least one obsolete collective on life support. The Board has managed to keep the Canadian Private Copying Collective (“CPCC”) artificially alive based on a very different legislative mechanism, namely the de jure mandatory private copyright levy, which I, on behalf of the Retail Council of Canada, played a major role in managing to all but eliminate. When is the last time anyone you know bought a blank CD, much less used it to record music? The last publicly reported financial data from the CPCC is from 2017. So, the CPCC has had enough oxygen to pay its small staff,  lawyers, and lobbyists etc. enough to lobby for another day. Here's what they are currently  absurdly seeking in the Pre-Budget Consultations in Advance of Budget 2024:

The CPCC asks that the government amend the Copyright Act to make the private copying regime technologically neutral, requiring large technology companies to finally pay their fair share to copyright holders. The focus of these amendments would be to allow the regime to apply to both audio recording media and devices.

This would supposedly require “minimal revisions to the Copyright Act ” to “make it possible for the CPCC to ask the Copyright Board of Canada to approve a levy on the smartphones and tablets where Canadians now make their private copies”.  They say that these proposed changes will “reinstate a true marketplace solution.” A truly “marketplace solution” for private copying levies would be to see them disappear through repeal of Part VII of the Copyright Act. There are very few, if any, other comparable jurisdictions with comparable private copying regimes that provide comparable levies  and these notably do NOT include the USA, Australia or the UK. Hopefully, the Canadian Government will, upon reviewing the history of this levy and the previous absurd attempts by CPCC to impose it on other types of media and devices, will know how to say no – or better still, to just ignore the ridiculous request and repeal Part VII. The Federal Budget 2024 appears to have wisely ignored the CPCC’s absurd advocacy.

AC has already announced that it is downsizing and falsely blames its troubles on the 2012 legislation that added the word “education” to the fair dealing provisions. That legislation only confirmed the obvious and is totally consistent with several Supreme Court of Canada decisions. IMHO, as I’ve suggested many times, AC can only justify its continued existence if it can provide a valid license for a viable repertoire offering real value at a low enough price to attract the educational community. It should not be coddled with bad legislation or licensing deals with the Federal government that have arguably unnecessary and perhaps even “sweetheart” deals, such as the initial licences that was key to its launch in the 1980s and which apparently and inexplicably continues to date.  The royalty rate for 2016 to 2017 was $621,755.25 and has increased since then by the Consumer Price Index. The deal also includes Copibec, the Quebec counterpart to Access Copyright.

Now, just in time for Passover 2024, the Federal Budget 2024 does NOT accede to Access Copyright’s perennial, incessant, and misleading whining about trying to eviscerate fair dealing rights for educators and others. It bears frequent repetition that Canadian fair dealing rights for users – as spelled out in the statute and upheld consistently by the Supreme Court of Canada – stop far short of what the American’s have provided for users’ fair use rights since 1976 in 17 USC 107.  OTOH, Budget 2024 does include a potentially positive copyright item “to allow the circumvention of digital locks to diagnose, maintain, or repair a product. This will enable consumers to repair their devices where they choose.”

 We shall watch with interest the potential demise of unnecessary, dubious, and obsolete copyright collectives facing existential challenges and which serve nobody’s interest beyond the lawyers, lobbyists, and executives that persist in prolonging their inevitable demise. 

 

A New and Important Book by Prof. Myra Tawfik on Canada’s Copyright History

Canada has slowly asserted an independent copyright position on the domestic and international fronts in spite of intense and immense pressure from the USA and the UK. That independence has taken a long time to achieve, and it has been denied or imperiled many times – including now.

Being something of a copyright nerd, I have a lot of books on Canadian and international copyright. Three of these books deal in various ways with the origins of copyright law in Canada in the 19^th century.

The latest and most detailed book is by Prof. Myra Tawfik of the University of Windsor law faculty.  Her monograph published in 2023 is For the Encouragement of Learning: The Origins of Canadian Copyright Law  Myra Tawfik (Toronto, ON: University of Toronto Press, 2023). (388 pages). Prof. Tawfik has excellent credentials and was cited twice in the landmark 2021 Supreme Court of  Canada decision of York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 (CanLII), <https://canlii.ca/t/jh8bc>. I am honoured that I was also cited in that decision, along with Prof. Ariel Katz and others. I also provided arguments on behalf of CARL that were very instrumental in the decision.

Prof. Tawfik’s book examines in great detail early Canadian statutes and practice from 1824 to 1867, and a summary of how all of these early developments were influential in what was to follow up to January 1, 1924 when the essence of Canada’s current Copyright Act was proclaimed into force “100 years after Francois Blanchet rose in the  Lower Canadian House of Assembly to introduce his Bill for the encouragement of learning” in 1824. 2024 is the centenary of this 1924 milestone which was itself a centenary of the 1824 event. It is too bad that the Canadian copyright academy appears to have thus far overlooked this centenary.

Canada finally stood on its own when in 1924, paradoxically by implementing a statute very similar the UK act of 1911, and finally cut the legal cord with the UK of the Colonial Laws Validity Act with the Statute of Westminster of 1931.

This 19^th century history has been ignored for too long, perhaps because it has generally not been seen as immediately or very obviously relevant to the kind of copyright litigation we have seen in the last many decades and are now seeing.  That said, the Courts occasionally do explicitly reference the origins of Canadian copyright law – for example in Justice Binnie’s opinion in the 2002 Théberge decision, which Prof. Tawfik does indeed mention.

Her book begins with an interesting introduction that highlights her thesis that Canadian copyright is a fusion of British common law tradition and European civil law tradition. She suggests that, in spite of the  colonial treatment of Canada in the 19^th century, Canada (consisting mainly of “Upper Canada” and “Lower Canada” as they were then known) developed a normative approach aimed at “the encouragement of learning”.  The struggle to achieve these “imperatives” continues to this day, as Access Copyright and its protagonists deny the history and destiny of Canadian copyright law and seek to cut back on fair dealing by, among other thigs,  eliminating the word “education” from s. 29 of the Copyright Act.

In the period on which she mostly focuses, namely 1824 to 1867, registration was required for those seeking copyright rights. She has spent 15 years meticulously examining available data about the registrations from that time. Interesting lists are included in the appendices. She goes into great detail about the differences between Upper and Lower Canada in those days. Indeed, there are still some significant differences in how Quebec institutions, collectives, practitioners, and scholars approach copyright law compared to the rest of Canada. So, this background is not only interesting but potentially important.

The main theme of her book is that “…copyright’s earliest focus was on advancing literacy and learning by providing incentives to authors to disseminate their works. These authors were teachers, and the works they were producing  were school books.” This is well documented by her painstaking examination of registration activities and legislative developments in the 19^th century and up to 1924.

Her first chapter deals with “Contextualizing Copyright in Nineteenth-Century British North America” and how British law, deriving from the 1710 Statute of Anne, and British common law, were imported to a certain extent into pre-confederation Upper and Lower Canada. This provides a fascinating political and historical perspective of the early 19^th century in Canada and makes one wonder all the more about how confederations even took place in 1867 and the differences that still survive. There is a discussion about the “Right of Petition”, whereby persons could petition a legislature to buy multiple copies of a book for educational purposes.

Chapter 2 deals with the crucial role of the 1710 Statute of Anne and of American law, as enshrined in the US Constitution to “promote the progress of science and the useful arts.”

Chapter 3 deals mainly with the evolution of copyright law in Lower Canada. Interestingly, it shows that French law was not a part of the 19^th century developments in Lower Canada and the “droit d’auteur” doctrines played no role until the early 20^th  century, when Canada implemented moral rights in its copyright law.

Most of the balance of Prof. Tawfik’s book focuses on the importance of school books, their essential role in the education of children, and the politics and legal efforts to achieve these goals. This includes Chapters 5 and 6 on the 1832 Copyright Act, and Chapters 7 and 8 on the UK Copyright Act of 1842, including how it “put a tax on knowledge in Canada”.

Chapter 9 is an important look at copyright in the “Province of Canada” and a look at registrations as “proxies for overall trends in authorship and printing and publishing.”

Chapter 10 recounts the post-Confederation attempts by Canada to sever copyright ties with England, still very much our colonial master, by virtue of being able to disallow any Canadian law it did not fancy. The heroic Prime Minister Sir John Thompson even made a special voyage to London in 1894 to deal with Canadian copyright but tragically died en route. Canadians should never forget his efforts and his famous quote cited by Sara Bannerman and myself characterizing Canadian authors at that time  as “belonging rather to the future than the present.”

The book lives up to its promise in the introduction of showing how the “normative tradition of a particular body of law” can be useful to judges to “interpret its modern applications”. Indeed, Prof. Tawfik has demonstrated the focus on the encouragement of Canadian books and their essential production, protection, and injection into the Canadian educational system as a guiding principle throughout the 19^th century in the various components of what is now Canada. Accordingly, it is fitting that there has been great interest in the last decade or so in the historical background of Canadian copyright law – and in tracing this back to the early, mid and late 19^th century.

An indispensable companion to Prof. Tawfik’s book is Prof. Sara Bannerman’s 1913 The Struggle for Canadian Copyright, which begins with the 1842 British legislation and goes up to and including up to and even after 1971, the last major milestone in the extremely important Berne Convention.  This book “deals primarily with Canada’s experience  with the Berne Convention between 1886 and 1971.” I am quite honoured to see my name mentioned in the acknowledgments of this important book. Prof. Bannerman, who holds a Canada Research Chair at McMaster University, brings the perspective of an accomplished scholar who is not a lawyer to this important period. Another useful book is Dominion and Agency: Copyright and the Structuring of the Canadian Book Trade, 1867-1918. by Eli MacLaren of the Department of English at McGill University,. This was published in 2011. I am pleased to have both of these books on my shelf. Together with Prof. Tawfik’s recent book, they comprise a remarkable trilogy.

I can enthusiastically recommend all three of these books to any and all of the following:

·       Lawyers who may need to point out the normative tradition, the DNA, and other aspects of early Canadian copyright law and their relevance to modern Canadian copyright;

• All Canadian copyright academics;
•  Members of Canada’s library and archive community;
•  All Canadian post-secondary and public libraries;
•   Policy decision makers at the K-12 and post-secondary levels in Canada;
• Any public servants concerned with copyright policy in Canada; and,
• UK, American, Australian and other foreign copyright scholars who wish to be well informed about Canada’s copyright history.

 HPK