The Effect on the Market Factor in Fair Dealing/Fair Use Law - What IS the law? #C11

Listening out of the corner of my ear to the sometimes insightful but sometimes confused and even misleading testimony at C-11, I thought I heard some suggestions that Parliament should prioritize the “effect on the market” factor in CCH v. LSUC.

Here is how the SCC listed the six factors in CCH (see para. 53 ff.):

1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work.  (emphasis added)

Concerning the last “effect on the market “ factor, the SCC said:

59    Finally, the effect of the dealing on the work is another factor warranting consideration when courts are determining whether a dealing is fair.  If the reproduced work is likely to compete with the market of the original work, this may suggest that the dealing is not fair.  Although the effect of the dealing on the market of the copyright owner is an important factor, it is neither the only factor nor the most important factor that a court must consider in deciding if the dealing is fair.  See, for example, Pro Sieben Media AG v. Carlton UK Television Ltd., [1999] F.S.R. 610 (C.A.), per Robert Walker L.J. (emphasis added)

It is not only presumptuous to suggest that the SCC doesn’t understand the law of fair dealing and that industry lobbyists know better. It’s simply misleading and inaccurate – if I heard it right – to suggest that prioritizing the “effect” factor is the way American law works.

It’s quite the contrary. The American courts now put what the SCC calls the first two factors at the top of the their priorities. For a very short, lucid and readable (by lawyers and non-lawyers alike) analysis of the state of the law on fair use in the USA, see Patricia Aufderheide and Peter Jaszi, Reclaiming Fair Use (2011) available  on Amazon for immediate shipment. The  Committee should have several copies on hand. On this issue, see Chapter 6 and pages 84 and 85 in particular. After the Campbell v. Acuff Rose decision in the USA Supreme Court in 1994, “transformativeness” – which arises from the first of the four American factors which correspond to the first two of the six Canadian factors is the top priority.

By the way, here is the American legislation, which we would do well to emulate:

17 USC § 107 - Limitations on exclusive rights: Fair use
 Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

(emphasis added) 

It is always important that those who are about to change the law should know what the current law actually is. Perhaps I heard wrong, but I thought I heard some misstatements of the current law this morning.  I hope I was wrong, but the above may be useful in any event.

HPK

PS - for those following the C11 hearings closely, the Twitter hash tag is #C11

More on Satire and Parody and the Need for Legislation in Canada

Prof. D’Agostino has posted a thoughtful comment, with which I respectfully disagree, on my posting from yesterday on the BC parody case. It merits a sufficiently lengthy reply to require a new entry.

I think that Prof. D’Agostino and I agree that parody (she doesn't discuss satire) should be part of the law of fair dealing in Canada, but we disagree on whether to leave this to the courts or whether it should be dealt with by Parliament.

Here is what she actually said about "legislative intervention" on the parody issue in her two recently published papers.

At page 41 of her Canadian Heritage paper, she says:

In this context, it is also useful to consider whether fair dealing necessitates clarification to encompass important (and new) uses. In the UK, Gowers recommended that the government should enact a new copyright exception for parody. Before CCH many scholars posited that parodies would be infringing in Canada. Post CCH’s liberal interpretation of the enumerated grounds, it could be argued that “criticism” could now encompass parody. Michelin no longer seems good law. Indeed, parody in the US is not an automatic. Parody still requires analysis of each of the four factors as well as some use of the target to be fair. This can now also be the case in Canada and would likely not require any legislative intervention. (Footnote omitted) (emphasis added)

At page 359 of her McGill paper, which I had not seen until now, she says virtually the same thing:

In this context, it is also useful to consider whether fair dealing necessitates clarification to encompass important (and new) uses. In the United Kingdom, Gowers recommended that the government enact a new copyright exception for parody. Before CCH, many scholars posited that parodies constitute infringement in Canada. In light of CCH’s liberal interpretation of the enumerated grounds, it may be argued that “criticism” could now encompass parody. Michelin no longer seems to be good law. Indeed, the protection of parody in the United States is not a foregone conclusion: parody still requires analysis of each of the four factors as well as some use of the target to be fair. Now this might also be the case in Canada, without the necessity of legislative intervention. In Canada, the issue may turn on the sufficient acknowledgment requirement (not present for research or private study, nor required in the United States). In the United Kingdom, where the same requirement exists, courts have been flexible in overcoming this hurdle in the case of criticism, review and news reporting. This flexibility or, indeed, dispensation with the acknowledgement requirement should be more warranted for parody. In parody, the link between the original and the parodic twin is often obvious since “the parody must be able to ‘conjure up’ at least enough of that original to make the object of its critical wit recognizable.” (Footnotes omitted) (emphasis added)

Prof. D’Agostino seems to prefer more of a soft law approach of “best practices.” Unfortunately, one cannot count on this achieving tangible results in Canadian courts.

She mentions Prof. Peter Jaszi’s work on best practices. I have worked with him over the years and have the highest admiration for him. However, “best practices” initiatives as developed by him and Pat Aufderheide are likely to be more successful in the USA, where fair use is codified only in the most general terms and industry practices are more likely to be accepted by the courts as fair. Indeed, that’s part of the theory and practice of the American system. In Canada, we now have the CCH decision, which follows decades of restrictive literal reading of the mostly very specific and explicit exceptions, of which the “dry erase board” takes the cake. However, as enabling and liberating as CCH seems for users’ rights, it may not permanently throw the door wide open. There are concerted efforts by lobbyists that could result in significantly undoing it, including by some who should know better. Ironically, the efforts of educational community at the management level as exemplified by CMEC and the AUCC could have this result. They don’t seem to get the message from this decision, or if they do, they don’t seem content to rely on it in any possible future litigation.

A “best practices” initiative can’t hurt and may help - as long as any initiative in this respect does not take pressure off the need to legislate. Such "best practices" could be a "complement" to legislation, as Prof. D'Agostino recognizes, but should not be an "alternative" as she also suggests at page 361 of her McGill paper. Such an initiative might provide guidelines for acceptable satire and parody practices, but should not replace legislation needed to enable satire and parody in the first place. Indeed, Prof. D’Agostino is kind enough to give me credit me for an initiative to develop guidelines at page 361 of her McGill paper. This stems from my White Paper on film documentaries from 2006. However, in that same paper, I also explicitly recommended near the top of my list of recommendations a legislative change to establish a satire and parody right. On this issue, I’m taking a “belt and suspenders” approach.

We have had this parody impasse in Canada since the 1996 Michelin decision, which a lot of people believe may have wrong been then and even more wrong now in light of subsequent case law. But it wasn’t clearly wrong and still isn’t clearly wrong. It was a reasoned and lengthy ruling by a highly respected Federal Court judge. It was never appealed. And it’s still the law in Canada, at least in the eyes of Master Donaldson in the BC Supreme Court.

One of these days, we will have a functioning Parliament again. I hope that it does its job by passing clear legislation so that Canada doesn’t stand almost alone amongst comparable countries in rejecting a parody right in the name of copyright law. Even France, which is a civiliste and copyright “maximalist” country allows for parody.

Canada can’t tolerate years of uncertainty and an uncertain outcome if this matter is left to work its way through the development of best practices and further litigation.

HK