As Barry said, “A member of the audience at Fordham suggested that the unlocatable
copyright owner process occupied too much of the Board’s resources to
administer and was not a useful process. This was categorically disputed by Mr. Justice William J. Vancise, the Chairman of the Copyright
Board who was also at Fordham.”
I was indeed that “member of the audience.” I suggested
to Barry that he was looking at this through rose-coloured glasses and challenged
him on some of the many issues he did not mention. Granted, Barry had very
little time to speak, since he was only a “panelist” (and apparently a late addition
at that) and not a full-fledged “speaker” on the session. Panelists get only a
couple of minutes at Fordham. Even actual “speakers” rarely get more than 8
minutes, unless they are very prominent people such as judges or senior
government or WIPO people speaking on very important topics.
Nonetheless, Barry made his very supportive pitch
of the Canadian Copyright Board’s implementation of its role in the “unlocatable”
issue, which is reflected on his blog. In the few moments I could command the
mike, I questioned whether Canada’s approach was a wise use of resources for a Board
that is already the largest board of its kind by far anywhere in the world. I
pointed out that the Board had unnecessarily insisted for a very long time on
charging homeowners for copies of architectural plans needed to renovate their
own houses on file with city halls. I also pointed out that the Board was facilitating
the collection of license fees on behalf of collectives that had done absolutely nothing
to deserve this money. Chairman Vancise - who is a retired judge from
Saskatchewan and whose term as the Chair of the Copyright Board expires in a few days on May 13, 2014 – was in the audience and stated very clearly that
he disagreed with me.
One would think that it’s fair and legitimate to
question whether the 1988 legislative mandate on orphan works makes any sense now and whether the Board is
fulfilling it in an efficient and effective manner. Given the fact that even
collectives are now unhappy with the enormous costs and long delays inherent in
Copyright Board proceedings (i.e. sometimes several years to get to a hearing, then sometimes 18 months or even two years or more to render a decision after a relatively
brief oral hearing),
the question of efficient use of supposedly scarce Board resources would appear
to be a legitimate and even unavoidable one.
With about 16 full time equivalent employees (FTEs), plus up to five full or part
time Board members themselves, this Board is already by far the largest organization of its kind anywhere in
the world.
It will have a net cost of operations for 2014 in excess of $3.5 million.
S. 77 of the Copyright Act enables the obtaining
of a license from the Board when a copyright owner cannot be found. The Board
has been involved in this since 1989. To date, it has issued 277 licenses and denied requests in 8
cases because a license wasn’t needed or the work in question had not been
published.
In fact, I am hardly the only one who has
questioned whether Canada’s unlocatable regime and the way it is implemented by
the Board make good sense.
On the resource issue, the Department of Canadian
Heritage itself stated in its 2002 “Section 92” report from Canadian Heritage:
There are
concerns that the in absentia licensing
process for unlocatable copyright owners has overburdened the resources of the
Copyright Board, and that improvements to the process are needed.
In 2009, the Board published a lengthy study on this regime written by Professor Jeremy de
Beer and the Board’s then own (now former) General Counsel, Mario Bouchard. The conclusion of the study,
which was paid for by the Board and Canadian Heritage, notes the rejection of a
Canadian type system by the US Copyright Office:
After reviewing hundreds of
comments, holding several public roundtables and more private meetings, the authors
of the US Report concluded that legislation is necessary to provide a
meaningful solution to the very real problems posed by orphan works. They rejected a system requiring
government involvement because it would entail more resources and efforts than
are readily available without providing offsetting benefits.
That the
Canadian system was given short shrift, and not seriously considered as a
viable policy alternative in the US, might call into question whether it is an
appropriate solution in Canada. Moreover, some entities
contemplating mass digitization of works are attracted to the level of
certainty the Canadian approach can provide, and have commented favourably on
it. Still, many questions remain
about the interpretation, administration and effectiveness of Canada’s system
for licensing the works of unlocatable copyright owners.
(page 40, footnotes omitted, emphasis
added)
The 2006 Report of the US Register of Copyrights, referred to by De Beer and
Bouchard, recites a number of criticisms of the Canadian system. For example,
the Report states:
Generally, the critics of the
Canadian system felt that it would impose an undue administrative burden on
whatever agency reviewed the applications, would lead to lengthy delays in the
approval process, and would provide little benefit. (page 83, footnote omitted)
On the escrow payment system, the
Register’s Report states:
Most other commenters strongly
disfavored the Canadian approach, and also opposed an escrow system of any kind. (page 114)
Prof. Ariel Katz has also
written in a very scholarly way about problems with the way the Board deals
with its mandate in a recent 2012 paper published in the Berkeley Technology Law Journal,
available here. Prof. Ariel Katz’s “remedy tweaking” solution, which basically entails reducing the
liability to a very small amount for anyone who
has engaged in good faith due diligence, is a far more sensible solution than
the current Canadian regime. He analyzes the data and information provided by
de Beer and Bouchard and suggests that the Board’s unlocatable regime is “a radical shift
from the mechanism contemplated by Parliament (or, perhaps more precisely, such
a subversion of that mechanism)” (at p. 1329). Prof. Ariel Katz has calculated that the average
license fee for unlocatable licenses is C$326. The proceeds are turned over to the
collective society deemed appropriate by the Board, and if not claimed by the
rightful owner, eventually belong to the collective. This seems inexplicable, since the collective
has typically done nothing to entitle it to receive the proceeds and the owner
apparently did not see fit to join the collective.
As I mentioned in my brief
comment from the floor at Fordham, for a long time, the Board was spending significant
time on requests for licenses for reproduction of architectural plans for home
renovations. Until 2007, these amounted to 29% of the s. 77 applications.
Finally, after I pointed out that licenses were not required in view of a
well-known 1971 Supreme Court of Canada decision allowing the owner of a
building a right to repair it
and in view of the SCC’s large and liberal interpretation of fair dealing, the Board finally stopped entertaining such applications in 2007 and unnecessarily
taking money from home owners. Chairman Vancise appears to deserve some credit for having solved this particular problem.
Interestingly, one of the few cases
in which all five board members have ever all been actively engaged arose in
the “unlocatable” context. The most well-known of these concerned the issue
what constitutes a “substantial part” of a work. After ten months of deliberation, the Board eventually issued a
25 page 3/2 split decision about the quotation
in a film of eight excerpts comprising 325 words out of a 342 page book on WWII
published in 1954 by Vantage Press, which is a vanity press. The
Board’s decision in the Breakthrough Films case was a missed opportunity to help documentary film makers, who are
frequently given overly cautious and even bad advice on such matters. In fairness to the Board, it
must be pointed out that this was not an adversarial proceeding and the Board
may not have had the benefit of satisfactory research. Fortunately, the Supreme
Court of Canada has since provided some considerable and definitive guidance on
the meaning of “substantial part” in the decision in Claude Robinson
and Les Productions Nilem inc., 2013 SCC 73,
[2013] 3 S.C.R. 1168
The Board could easily
provide a useful service to the public by updating its website on providing guidance as
when a license is NOT needed in the case of an unlocatable copyright owner. As
of now, the Board has apparently not updated its website since 2001 on this
issue – and thus ignores several key Supreme Court decisions and legislative
changes since then. The Board still continues to suggest
that:
You also do not need a licence if the intended
use is not protected by copyright. There are a few specific exceptions to the
copyright owners' exclusive right to authorize the use of their works "or
any substantial part thereof in any material form whatever". For instance, fair
dealing for the purposes of research or private study is allowed. So is copying of
sound recordings for a person's own private use. However, the courts tend to interpret these exceptions
restrictively.
(highlight added)
Quite apart from
the inexplicable reference to private copying, the above material was dubious
in in 2001, when the Board’s website on this subject was apparently last modified.
It has been clearly very wrong ever since the Supreme Court's landmark 2004 ruling in
CCH v. LSUC which confirmed that ““Research” must be given a large and liberal
interpretation in order to ensure those users’ rights are not unduly
constrained.”
The statement is even more blatantly wrong since
the SCC’s “pentalogy” decisions in 2012 and the inclusion of “education”,
“parody” and “satire” in the fair dealing provisions of the legislation. It
should not take more than a few minutes of the time of one of the Board’s four lawyers to update this page by providing, at the very
least, links to the current statutory
framework as found in s. 29 of the Copyright Act and the three Supreme
Court of Canada decisions on fair dealing plus the Cinar decision rendered
since 2004 and indicating how these decisions are relevant.
Indeed, on the resource question, Chairman Vancise
confirmed in his response to my comment that “There is one person at the Board
dedicated to dealing with this matter.” He also stated that “Every license that
is issued, Howard, is seen by the Board and an order is issued.”
QED. Even if it is only one
person or FTE equivalent who works on these files, I would respectfully suggest
that this is one person too many. One person year (FTE) per year since 1989 translates
at a probably conservative cost estimate of $75,000 per year, including
benefits, to about $1,875,000 to date for a process that was clearly absolutely
unnecessary in at least 19% of the files and probably a great deal more (perhaps
involving insubstantial copying or fair dealing?) – even under the existing legislation.
To the extent that more senior staff, including legal staff, and Board members
themselves, may have gotten involved, the real cost may have been substantially
more. The Board itself recently states that “a target of 45 days was set between the file completion date and the
issuance of the licence”. This suggests that a lot of time may be spent
on these files.
The Board may have well spent more than $2 million of public
money to direct about $75,000 or so to collectives through about 277 licenses
in circumstances where the collectives have generally nothing to deserve this
little windfall. It should be pointed
out that collectives, as required by s. 67 of the Copyright Act:
must
answer within a reasonable time all reasonable requests from the public for
information about its repertoire of works, performer’s performances or sound
recordings, that are in current use.
If a relatively little country like Canada in
terms of population needs to devote so much bureaucratic resources to issuing
unlocatable licenses and has already the largest copyright board bureaucracy
anywhere, this is not necessarily a model to commend to other bigger countries.
Barry calls this “the Canadian solution”. Perhaps a more informative title
would have been “the Canadian problem”. The US Register of Copyrights clearly
sees our system as more of a problem than a solution.
The Board could also usefully
provide a “soft law” check list of how to go about searching for an unlocatable
copyright owner. Bouchard and de Beer themselves make such as suggestion, at
page 19 of their report, noting that “It is conceivable
that creating and promoting best practices could reduce the amount of time and
resources the Board currently spends walking applicants through possible search
procedures, liaising with collective societies or performing aspects of
searches itself.”
Moreover, if such a checklist were followed in
good faith, Canadian courts might well see such a protocol as a reasonable
standard and “best practice” and might be reluctant to award anything more than
the lower end of statutory minimum damages – which could be as low as $100 in
non-commercial situations with double costs to the defendant on the basis of
the Federal Court settlement offer rules – in the highly unlikely event that an
unlocatable copyright owner should ever actually spring forth and successfully sue.
Obviously, a copyright owner who is unlocatable with diligent effort and whose
work is long since out of print and has become commercially unavailable would likely
have a difficult if not impossible task in proving any actual damages.
So – in the true Fordham spirit of “learn, debate,
and have fun” – we certainly had a brief and intense debate here between Barry,
me and Board Chairman William Vancise. The debate should be continued in Canada
– where the Government may wish to consider implementing regulations that might
deal with this and many other issues that increasingly call out for resolution
concerning the Copyright Board.
The unlocatable owner issue is just one of these
issues, and many of the others are even more serious and concern both
collectives and users, not to mention the efficient use of public resources. In
fairness to the Board, many of the problems that have arisen have been caused
by the parties before the Board or choices some have taken that may have
greatly prolonged some proceedings that might have been greatly shortened, or been
dealt with more effectively, efficiently and decisively by means of timely and
vigorous judicial review or other court proceedings. For whatever reason, the
Board has not always been willing or able to deal with these situations.
Regulations could help. Needless to say, regulations do not require legislation and the authority to implement useful and appropriate regulations is clearly already in place.
Perhaps a fully informed discussion of this “unlocatable” issue could be an opportunity
to serve as a catalyst for the implementation of regulations that would enhance the
efficiency and effectiveness of the Copyright Board of Canada.
HPK
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