Prof. Ariel Katz's Submission to Copyright Board - Dec, 6, 2010

Prof. Ariel Katz is a an expert in copyright and competition law and teaches at the University of Toronto Faculty of Law, where he is Innovation Chair, Electronic Commerce Director, Centre for Innovation Law and Policy. He is also an "intervenor" as ruled by the Copyright Board – though he asked to be an "objector" – re AC’s proposed $45/$35 tariff for 20111-2013. Here’s his important submission to the Board dated December 6, 2010:

HK

***************************************************

From: Ariel Katz

[email addresses omitted]

Sent: 12/6/2010 11:14:06 PM

Subject: Urgent Request for a Temporary Moratorium

Dear Mr. McDougall:

Although the Board denied my application to extend the period for responding to Access Copyright's Application for an Interim Decision, I urge the Board to order a temporary moratorium on its consideration of AC's Application.  This is without prejudice to other arguments below, including an argument that the present application for an interim tariff should simply dismissed, and without prejudice to any argument that I fully reserve the right to make should this proceeding go forward. Cleary, if the Board is prepared to dismiss the application at this time, there is no need for a moratorium.

Under the current circumstances, which have changed fundamentally since last Friday, it will be impossible for me-and I believe for any other party in these proceedings-to respond adequately to the application.  I write "application" with a lower-case "a", because at this point it is very difficult even to determine what document constitutes the application that I, as a party, has to respond to.  The application, at this point, seems to have become a rapidly moving target.

As per the Board's instruction from last Friday, AC sent yesterday a "draft interim tariff".  It is a new document-in effect a new "licensing scheme" within the meaning of s. 70.1 of the Copyright Act-intended to take effect Jan. 1, 2011.   Leaving aside for the moment the important question of whether the clear deadlines and language requirement set in s. 70.13(2) of the Act, as well as the requirements of s. 67.1(5), will be circumvented if the Board proceeds to consider this application, the simple reality is that practically impossible to respond to the application (whatever the application may be) within the extremely short period prescribed by the Board.

The Board's order from today, asking AC to provide further clarification by the end of Wednesday, Dec. 8, 2010 further emphasizes the difficulty of responding to the application.  It demonstrates, on the one hand, that even the Board finds it difficult to fully understand the terms of the application.  At the same time, the Board's order aggravates the problem the responding parties face if they need to respond to the application within less than two working days.

Let me state very briefly, and without prejudice to any other argument, just a few problems demonstrating the serious lack of procedural fairness that would result if the parties would have to respond to this unprecedented application by this Friday.

1)      For many participants in this proceeding, this is an extremely busy and stressful time of year.  Instructors need to draft and mark examinations within very strict deadlines, students need to write exams.  University administrators and librarians, which clearly need to be consulted if an informed response to the application is to be made, are also extremely busy making sure that these critical days in the life of an academic institution proceed without disruption.  It is very difficult for instructors, students, administrators and librarians, to set these firm commitments aside and devote considerable time to analyze the language of the new application and address the novel and unprecedented legal question that it brings forth.

2)      The "draft interim tariff" combines some elements from the expiring AUCC Model License with elements from the Proposed Tariff.  This combination is significantly different from both the Proposed Tariff, the Model License, as well as from the combination contemplated in AC's letter of Oct. 7, 2010.  Understanding what the new proposal is and responding to it within 4 days is impossible.  The need to provide wide notice with ample time for all prospective users to analyze a proposed tariff and respond to it has been acknowledged by Parliament, when it provided a period of 60 days to file objections.  The Board should follow this rule.

3)      The uncertainty of the situation is confirmed and will be exacerbated by the delivery of yet more material by Wednesday, December 8, 2010. With all respect, it is not the Board's role or responsibility to accommodate the inadequacy of AC's material and in so doing to cause prejudice to the position of objectors and intervenors.

4)      AC's counsel letter of Oct. 7, 2010 refrained from using the term "interim tariff", and insisted on using the term "interim decision".  It further emphasized (in footnote 13) that the benefit accorded to users by s. 70.17 of the Act, will not apply in the present case.  Does the fact the AC presently uses the term "interim tariff" mean that s. 70.17 will apply? Will the corresponding s. 68.2(1) apply?

In light of the above, I think all parties would benefit from having a moratorium of several weeks on this application for an interim tariff.   If the application proceeds, it should be heard orally in light of the complexity, controversy, and unprecedented nature of this application. I specifically request that the hearing be an oral one and that I be allowed full participatory rights at this hearing, either with or without counsel as I may later decide.

Naturally, there is another option. For reasons such as those outlined by Howard Knopf today on his blog (his earlier blog posting today can be found at: http://excesscopyright.blogspot.com/2010/12/confrontation-at-copyright-board-big.html , there are compelling reasons why the Board could and should summarily dismiss this application at the outset. Naturally, if the Board so rules based on its current schedule, there will be no need for a moratorium and I would accept such a ruling which I believe is called for and would not result in any difficulties that could not be resolved with good faith on the part of those concerned.  All parties will benefit from using their resources and the skills of their legal advisors to find solutions to whatever licensing problem they face, if any, rather than spending them on trying to respond to moving targets.

Indeed, dismissing the present application may have the salutary effect of creating a market place environment wherein rationale economic and legally sound solutions can be negotiated, consistent with the intent of the legislation and the Board's commendable emphasis over the years on rates and conditions that emulate market place proxies or preferably even realities.

I would stress that there is no urgency in deciding anything prior to the end of this year.  Presumably, all course packs for the winter term have already been printed or will be printed prior to the expiry of the current licenses and there should be no serious disruption in the work of academic institutions.  In the case of digital copies, most academic institutions already have in place contractual relations with various publishers and other content providers (see, e.g., the License Information Database set up by the UBC Library, at http://licenses.library.ubc.ca/).  These arrangements authorize the academic institutions to access and use to a repertoire that is clearly wider than that which AC can legally authorize.

If any academic institution still feels a need to obtain a license from AC on an interim or permanent basis, there is no reason why AC and the institution will not be able to agree on that, and should they fail, they can always seek the Board's assistance as an arbitrator, as per s. 70.2, or perhaps in some other capacity as proposed by Mr. Knopf.

I would therefore suggest that the Board dismiss the present application, or at least provide a significant moratorium to allow all parties fairly to understand the application and formulate their response.

Best regards.

Ariel Katz

Associate Professor

Innovation Chair, Electronic Commerce

Director, Centre for Innovation Law and Policy

Faculty of Law, University of Toronto

78 Queen's Park

Toronto ON, M5S2C5

Tel: (416) 978-8892; Fax: (416) 978-2648

e-mail:  ariel.katz@utoronto.ca

http://www.law.utoronto.ca/faculty/katz

__________________________________

P.S. Please view works on SSRN at http://ssrn.com/author=114637.  You can also see my selected writings site and sign up for notifications of my new work:  http://works.bepress.com/ariel_katz/.

Crookes v. Newton - some useful links and "break a leg" & Long Live Links!

Jon Newton is a brave and principled man.Tomorrow, he and his very capable counsel, Dan Burnett,  will fight for the fundamental right to hyperlink on the internet. Here, he tells about his case. Notice that I used a hyperlink to take you to his site. What's at stake in this case is the right of internet users to use these hyperlinks in the way they are normally used.

In other words, is it legal for me to link to Jon's website, if perchcance Jon's website contains some defamatory material and I make now comment on this material?

That, of course, is the basis of the itnernet. If one cannot use links to other sites, in which the content can and often does change, and use the links merely as one would use a footnote, the Internet as we know it will simply cease to exist. I normally deplore "the sky is falling" arguments, as are currently so fashionable in Canadian music and publishing circles re Bill C-32. But in this case, the sky would fall if the Supreme Court of Canada reaches an unexpected result.

To hold otherwise would be equivalent making footnotes or references to any material that turns out to be defamatory themselves defamatory, even if there is no comment endorsing the material or conceivably if there were comment deploring it and analyzing why it is to be deplored.

The decision, if it goes the wrong way, could have clear implications for copyright law as well. This was addressed to some extent by the Supreme Court of Canada in SOCAN v. CAIP in 2004.

In a sense, it is curious that the SCC took this case because the outcome seems so inevitable and obvious. This makes one nervous because good lawyers NEVER can guarantee the outcome of case, and the British Columbia Court of Appeal was split on this one.

One hopes that the SCC will affirm the decision below and hold that linking to third party content without comment is not and cannot be by itself be considered to be "publication" for purposes of defamation law. While that seems obvious, it will be useful to have it affirmed from on high.

PS - here is  a link to the Court's site which now includes the parties (though not the several interveners')  facta. See how useful links can be!

Break a leg, Jon - as they say in show biz.

And long live links!

HK

More Confusion At the Copyright Board - more time for AC to get it right?

Here’s the latest from the Copyright Board from this afternoon. If the Board can’t figure out what AC is up to, how are all the objectors and users supposed to do so? Interesting comment re French version. S. 70.13 requires new tariff to be filed in BOTH official languages. 

 

This is another example of why the interim tariff should be refused outright at this time  - or a lengthy delay and oral hearing should be provided to ensure fairness.

Wednesday - (or is it today December 6???) - gives objectors and intervenors virtually no time respond to yet more surprises by new due date of Dec. 10. 

This is shaping up to be very questionable from a "fairness" standpoint.

HK

PS - the Board has corrected the error referred to above:

Please note that in the Order below, which was just released, the first line of paragraph 1) should have read:

 

1) Access shall file, no later than by 5 p.m. (EST) on Wednesday, December 8, 2010 (and not Wednesday, December 6, 2010):

 

We apologize for any inconvenience this might have created.

That's not enough time in my view. It gives the objectors only two days to respond to the full picture, whatever that may be. AC has had years to figure this out. 

**********************

From: "Gilles.McDougall@cb-cda.gc.ca" <Gilles.McDougall@cb-cda.gc.ca>
Date: Mon, 6 Dec 2010 15:54:47 -0500
To:

[email addresses omitted[

Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

ORDER OF THE BOARD

Further to Access Copyright filing a draft interim tariff pursuant to the Board's notice of December 3, last, the Board further orders as follows.

1) Access shall file, no later than by 5 p.m. (EST) on Wednesday, December 6, 2010:

    (a) a table indicating precisely the source for each provision of the proposed interim tariff. If any provision in the interim tariff is new, its purpose shall be explained.

   

    (b) a table correlating the model licence with the provisions of the proposed interim tariff. Where a provision of the licence is not in the interim tariff, an explanation shall be provided.

Any question Access may have in this regard should be directed to the Board's General Counsel.

2) Access shall also file at the same time any existing French version of the model licence or any other licence.

Gilles McDougall
A/Secretary General | Secrétaire général par int.

Copyright Board of Canada | Commission du droit d'auteur du Canada
56 Sparks, Suite| Bureau 800
Ottawa ON K1A 0C9
Telephone | Téléphone 613.952.8624



Gilles.mcdougall@cb-cda.gc.ca

Confrontation at the Copyright Board? Big Problems - Proposed Solution

Yesterday, on a snowy Sunday afternoon, with a deadline to object looming in five business days as Christmas approaches, AC sent out this new proposal labelled “Draft Statement of Interim Royalties to Be Collected by the Canadian Copyright Licensing Agency (Access Copyright)”. Here's the covering email.

In other words, this is a proposed supposedly binding interim tariff that will likely last for the SEVERAL years (probably at least four) required to resolve the proposed tariff before the Copyright Board and the Federal Court of Appeal, given the history of previous files at the Board. BTW, the proposed tariff on its face will expire at the end of 2013.

This latest iteration of an “interim tariff” is substantially different than anything seen to date. It combines some elements of the old expired agreements and some elements of the new proposed tariff. It does not include the “indemnity” scheme, which, although very controversial,  served a useful purpose by getting around AC’s problem of lack of repertoire for practical purposes.

The Board would be well within its power and arguably is indeed  required  to dismiss this application for an interim tariff outright for any one of the following reasons, amongst others:

•    It is a vague and imprecise moving target, of which inadequate notice has been given. There are only five working days notice to consider the legal and practical ramifications of a brand new document that changes many if not most of the rules and moves the goal posts to unclear new places;
•    It offends the Board’s own precedents because there is no previous tariff in place and AC doesn’t need and doesn’t deserve to get funding from its adversaries; 
•    The Board lacks statutory authority to grant this interim tariff, for several reasons, not least of which is s. 70.13 of the Copyright Act, which requires that any new tariff be filed by March 31 in the year preceding the proposed application of the tariff. To repeat, AC does NOT have a previous tariff in place;
•    It is intended to impose a mandatory regime that will likely last for at least four years on institutions that may well have regarded the previous voluntary arrangement as unsatisfactory and may have been planning in good faith and perfectly legally to do without AC by using internal material, source licencing, open access material, e-reserves, etc., etc.; 
•    Even the new proposed tariff does not purport to go beyond 2013 - and there could be all kinds of problems with eventual retroactive application of a new tariff and/or refunds (although the latter are unlikely, given past history at the Board) if this interim tariff is in place. In fact, if AC’s cash possible flow problems are as dire as it claims in their letter of October 7, 2010, it may be unable to pay any refunds due and there are good arguments that any new tariff should be substantially less than amounts that the recently expired regime imposed (i.e. with the full implications of  CCH v. LSUC duly considered); and,
•    The interim tariff is, in effect, a sweeping mandatory injunction to pay a LOT of money and forfeit a lot of academic freedom through unduly restrictive provisions (post CCH v. LSUC) when NONE of the three required tests for an injunction are met here (serious issue, irreparable harm, and balance of convenience) and AC has created the very problem that it now wants to resolve.  Besides, the Board is not a Court, which has far greater inherent jurisdiction, and even a Court must follow the statute.

There is a solution to this very convoluted situation which is causing considerable stress on post secondary institutions of all shapes and sizes and their administrators, faculty and students at one of the busiest times of the academic and personal year for everyone concerned.
   
The solution is this:

1.    The Board could “bless” a voluntary licensing scheme under the old rates and conditions for those institutions that may wish to use it, with suitable amendments, such as including the indemnity scheme, etc. The Board would make it clear that institutions that wish to remain outside of this regime are free to ensure that they comply with copyright obligations in any manner that they see fit.  It goes without saying that such compliance could include voluntary transactional licenses with AC, if such licenses are available on reasonable negotiated terms;
2.    AC should withdraw its deeply flawed proposed tariff for 2011 to 2013. It is ridden with problems such as its references to linking, display etc. that can’t be sustained under the legislation, the extraordinarily privacy invasive and arguably illegal reporting arrangements, etc. This tariff, as framed, will likely drag on for years before the Board and the Federal Court of Appeal, and very likely the Supreme Court of Canada at enormous costs to all concerned. Even AC will eventually feel the costs pain; and,
3.    AC should file a new and more reasonable licencing scheme by next March 31, 2011 for a five year period that would reflect what the legislation (possibly new legislation) provides and respects the needs of post secondary institutions. Such a proposed regime should available to institutions that want it and optional for those that don’t. If reasonable and if developed in a consultative manner, it would encounter far less resistance - possibly none - and come into effect much sooner and at much less legal costs for all concerned than the current proposal - which is arguably the most problematic proposed tariff that has ever been filed at the Board. And I say this as a veteran of the private copying wars.

HK

PS - here's the submission of BCAIU dated December 6, 2010.

Curiouser & Curiouser @ Copyright Board's AC Hearings

Here’s another extraordinary ruling below from the Board from earlier today offering AC a chance to rehabilitate its clearly vague and inadequate material to date in support of an interim tariff.

This is another illustration of the fact that objectors or intervenors really can have no idea of what is actually being sought here and to what they must respond on a few day’s notice. For example:

• There is a world of difference between a “license” (which one can take or leave) and a tariff, which arguably has the force of law (leaving aside questions such as whether it was validly issued or whether an “interim” tariff can ever have such a force).

• AC did not even ask for an “interim tariff” as such. The “relief sought” in AC’s former lawyer Barry Sookman’s letter of October 7, 2010 asks rather for a decision “licensing the respondents for the uses described in the proposed Tariff” and requiring compliance with certain aspects of the Existing Agreements, such as record keeping, payment, auditing, and sampling.

• Will the post-secondary institutions get the benefit of the “indemnity” arrangement that was previously in place? As dubious as this was from a legal standpoint, it was perceived as very useful and valuable by many parties as long as nobody asked too many questions.

This is quickly morphing into something completely different - and as yet unknown - from what AC’s asked for in the letter of October 7, 2010 that was not even provided to about 99 of the 101 initial objectors.

The lengths to which the Board is going to accommodate AC in this case are very interesting and noteworthy. Given the vagueness, inadequacy, inaccuracy and even uncertainty of the material filed, and the incredibly short time lines and the apparent decision of the Board not to convene an oral hearing on this matter, issues  are bound to arise with respect to fairness, jurisdiction, etc. that could well raise questions that could be pursued on judicial review.

HK

**************************************

From: "Gilles.McDougall@cb-cda.gc.ca"

Date: Fri, 3 Dec 2010 11:31:17 -0500

To: [email addresses omitted]

"Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

NOTICE OF THE BOARD

The Board has received from Access Copyright the royalty rate information it requested in its order of November 26, 2010. Whether the application for an interim decision will be granted remains an open issue. However, if the application is granted, it is probable that the decision will take the form of a tariff, not a licence. For this reason, the Board would appreciate receiving forthwith from Access Copyright a draft interim tariff that reflects the terms of the model licences, with such modifications as necessary.

Gilles McDougall

A/Secretary General | Secrétaire général par int.

Copyright Board of Canada | Commission du droit d'auteur du Canada

56 Sparks, Suite| Bureau 800

Ottawa ON K1A 0C9

Telephone | Téléphone 613.952.8624

Gilles.mcdougall@cb-cda.gc.ca

**************************************

Statutory Damages - Canada, USA v. Almost Everywhere Else in the World

Michael Geist has a good post today on statutory minimum damages and how Canada is so atypical in this respect.

I did a post in 2008 about Israel's clever statutory damages regime, which features a max of about US $27,000 and no minimum. This apparently also applies to commercial infringers.

Israel - which depends more on the USA than any other country in the world - indeed for its very existence - has learned that it will get serious respect and support from the USA only by having a mind of its own and not simply imitating America and doing whatever America asks without serious questioning.

Or, is Canada's rush toward American copyright values, part of the "inferiority complex" that American diplomats suggest we have?

HK

AC Interim Tariff Coming For Christmas? December 10 deadline to proteest

Here are more rulings from the Board, which is moving with astonishing speed on this file by any measure and certainly by its own normal pace.

It appears that it would be very surprising is there is not going to be an interim tariff in time for Christmas. The Board is certainly setting the stage for this. It could, however, rule against the interim tariff and there are many reasons why it should.

To the extent that this may be an unwelcome gift to some participants, they have to make their views known by December 10, 2010 and to make whatever points may be necessary and to submit whatever evidence may be necessary to sustain an application for judicial review (i.e. “appeal”), if they are so inclined.

HK
*******************************

From: "Gilles.McDougall@cb-cda.gc.ca"
Date: Fri, 3 Dec 2010 10:55:21 -0500
To: [addresses omitted]
Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

RULING OF THE BOARD
The November 30, 2010, motion that Colleges Ontario be allowed to act as objector in these proceedings is denied. ACCC filed a timely objection as representative of certain institutions, including those Colleges Ontario now purports to represent. These institutions are not now entitled to split up from ACCC and continue to claim status as autonomous objectors, either individually or in groups. ACCC, not the institutions, is an objector in these proceedings.

Colleges Ontario remains free to apply for intervenor status in these proceedings. Given the number of participants, any application will need to state very clearly how its participation will be useful in this matter. The model directive on procedure provides more information on applications for intervenor status. It can be found at http://www.cb-cda.gc.ca/about-apropos/directive-e.html.

For reasons already explained in today's earlier Notice of the Board, the application of December 2, 2010 of Mr. Neufeldt on behalf of St. Mary's University College for a seven-week extension to the deadline to respond to Access Copyright's application for an interim tariff is denied.

Gilles McDougall
A/Secretary General | Secrétaire général par int.


***********************

From: "Gilles.McDougall@cb-cda.gc.ca"
Date: Fri, 3 Dec 2010 09:17:01 -0500
To: [addresses omitted]

NOTICE OF THE BOARD

On Friday, November 26, 2010, participants were asked to respond no later than Monday, December 6, 2010 to the application of Access Copyright for an interim tariff.
On November 29, the Board was advised that ACCC had retained counsel with respect to the application for an interim decision. Counsel for ACCC asked a one week extension until Monday, December 13 to provide "meaningful written representations". That same day, AUCC informed the Board that it supported ACCC’s application and that it intended to co-ordinate its response to the application with ACCC. The following day, Access Copyright submitted that since both ACCC and AUCC had been provided with a copy of the application on or about October 13, 2010, the extension sought was unwarranted. Access Copyright did suggest a somewhat shorter extension, with a view to the Board receiving "meaningful written representations" that are coordinated as between the Objectors to the greatest extent possible, as proposed by AUCC.

The November 30, 2010 application by Mr. Katz that all participants be granted a period of at least 7 weeks to respond to the application is denied. Under the amended timelines, participants have two weeks to respond. This is not unreasonably short, when compared to the time allowed to deal with interim issues before other jurisdictions. The fact that two of the participants received early notice is not relevant. Access has now provided the precise amounts of royalties it believes should be inserted in an interim decision, as requested in the Board’s order of November 26, 2010. As a result, the issue raised by Mr. Katz in this respect is now moot. In any event, such a short delay in providing that information is not reason enough to postpone the examination of this matter. The relevant amounts can be derived from the documents already sent to all participants. The Board asked for that information out of an abundance of caution and to avoid unnecessary debates on the issue. Participants were therefore perfectly able to prepare their argument for or against an interim tariff even though they only got the information today.

The November 30, application of Colleges Ontario will be addressed separately.
Participants have until Friday, December 10 to respond to the application for an interim tariff. Access Copyright may reply to these comments no later than Wednesday, December 15.


Gilles McDougall
A/Secretary General | Secrétaire général par int.
*************

AC's Tries Negative Option to Sustain Digital Rights Licensing

As I pointed out on October 26, 2010:

Many if not most creator and publisher affiliates have refrained from giving AC any digital rights.

It now looks like AC is going to attempt use a "negative option" scheme to get digital rights it currently does not have in order to try to sustain the basis of its proposed $45/$35 tariff.

Previously, creators were asked to specifically agree and check off their agreement to license a the "digital conversion right" and the "digital importation right". Now, AC is apparently purporting to do this by negative option. Here is the November 15, 2010 communication (with my highlight and underline) to creator affiliates, of which I am one. Here is the key excerpt:

Access Copyright's board of directors also approved a change in the way we license works for digital uses. We will now license the scanning and posting of works from a paper source the same way we currently license photocopying; on an exclusions basis. This means that, unless you tell us otherwise. we will license users to scan, post and distribute portions of your works.
(emphasis added)

Based upon the documentation I have seen, this simply won't work. It's an attempt at a unilateral amendment not permitted by the basic agreement. If there is other documentation or an opinion that AC will reveal that leads to a different conclusion, I'd like to see it. Moreover, this seems like a pretty explicit admission that, at least in respect of creators, AC does indeed lacks the digital rights for which it is all ready to collect about $50 million a year, i.e.the difference between the $11 million it now collects and that $60 million it seeks. The current publisher affiliation agreement also holds back digital rights, unless specifically agreed to - so it may be that AC is also trying to rely on "negative option" with the publishers as well.

Hopefully, this will be raised before the Copyright Board, which will hopefully reach the right conclusion. If intellectual property is to be taken seriously as "property", then "chain of title" matters.

There is stormy weather is ahead for AC, if AUCC or ACCC choose to push this button. If they don't, others definitely should.

HK

More "Correcting" and Apology from AC

This was just passed on to me.

HK

*******************

From: HOFLEY, RANDALL
Sent: December 1, 2010 5:34 PM
To: Gilles.mcdougall@cb-cda.gc.ca;

[addresses omitted]

Subject: Re: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Mr. McDougall:

I write to follow up my email to you of November 30, 2010 (below), for purposes of correcting - effectively supplementing - the information provided therein. This is necessary because the rate currently paid (and payable) by educational institutions that have signed the Proprietary College Licence is different from the rates we indicated yesterday "for the institutions targeted in" Access Copyright's application for an interim tariff and it remains Access Copyright's intention (as per its application) that the interim tariff, effectively, maintain the statusquo, i.e. that each Educational Institution pay the same rates it has been paying under its existing licences for purposes of an interim tariff. Thus, as regards “the precise amounts that, in [Access Copyright's] view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue aninterim decision as requested”, Access Copyright's request is as follows:

For Educational Institutions that have signed the Proprietary College Licence:

(i) Schedule “F”, section 1(iii) – the FTE multiplied by $3.58

(ii) Schedule “F”, section 2(iii) – Except for newspapers, $0.11 for each page or printed sheet copied for use in a coursepack

(iii) Schedule “F”, section 3, a maximum of $10.00 for each out of print work copied;

and

(iv) Schedule “F”, section 4, $0.055 for each page or printed sheet of newspaper that is included in a coursepack.

As per my email of yesterday, November 30, for all other Educational Institutions:

(i) section 14(a)(iv) -- the FTE multiplied by $3.38;

(ii) section 14(b)(iv) – Except for newspapers (see section 14(d)), $0.10 for each page or printed sheet copied for use in a coursepack. (This section references section 2(b) of the model licence which refers to the ‘
coursepacks’ that are created and sold by the institutions.);

(iii) section 14(c) – a maximum of $10.00 for each out of print work copied;

and

(iv) section 14(d) -- $0.05 for each page or printed sheet of newspaper that is included in a coursepack.

We apologize for the failure to include the rates for Educational Institutions that have signed the Proprietary College Licence in my email of yesterday, and trust that this information is satisfactory for the Board's purposes.

Please let me know if you have any questions

Regards,

Randall


Randall Hofley
Partner | Blakes randall.hofley@blakes.com
Dir Toronto: 416-863-2387
Dir Ottawa: 613-788-2211
Mobile: 613-203-3084

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blakes.com

AC in Damage Control if not Retreat Mode

Here’s a very interesting email from AC’s new lawyer, Randall Hofley, who replaces Barry Sookman. Note the following rather remarkable concession letting those who have asked off the hook regarding the controversial “interim agreement” that even AUCC recommended against. I have repeatedly indicated that it conveys no rights and amounts to a blank cheque for years to come. So why would anyone sign it? It appears that several institutions have figured this out.

Note also that AC had previously erroneously indicated that certain parties had signed the interim agreement. One wonders whether this "error" induced others to sign as well.

AC seems to be going into damage control if not retreat mode.

Here’s an excerpt from the email below:

In addition, some of the institutions that had initially signed the interim agreement subsequently advised that they had signed the agreement in error. Access Copyright has agreed to treat those institutions’ agreements as null and void, and we have removed those institutions from Appendix A.1.

HK

From: "HOFLEY, RANDALL" <RANDALL.HOFLEY@blakes.com>
Date: Tue, 30 Nov 2010 14:20:11 -0500
To: "Gilles.McDougall@cb-cda.gc.ca" <Gilles.McDougall@cb-cda.gc.ca>,

[other email addresses omitted]

Subject: RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Mr. McDougall,

As directed by the Copyright Board in its Notice of November 26, 2010, below, we set out below our reply to the Board’s request for "the precise amounts that, in [Access Copyright's] view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested." Access Copyright requests that the institutions targeted in its application of October 13, 2010 pay the following amounts if the Board were to issue an interim decision:

(i) section 14(a)(iv) -- the FTE multiplied by $3.38;

(ii) section 14(b)(iv) – Except for newspapers (see section 14(d)), $0.10 for each page or printed sheet copied for use in a coursepack. (This section references section 2(b) of the model licence which refers to the ‘coursepacks’ that are created and sold by the institutions.);

(iii) section 14(c) – a maximum of $10.00 for each out of print work copied; and

(iv) section 14(d) -- $0.05 for each page or printed sheet of newspaper that is included in a coursepack.

These are the amounts that the targeted institutions have historically paid to Access Copyright.

Since Access Copyright filed its application on October 13, 2010, Appendices A and A.1 have been updated. Some of the institutions were mistakenly included on Appendix A.1 as having signed the interim agreement. At the time Access Copyright discovered this error, we wrote directly to those institutions to advise them that they would be affected by the application. A sample of that correspondence is attached. Also, since Access Copyright filed the application with the Copyright Board, some institutions have now signed the interim agreement. They have therefore been added to Appendix A. 1. In addition, some of the institutions that had initially signed the interim agreement subsequently advised that they had signed the agreement in error. Access Copyright has agreed to treat those institutions’ agreements as null and void, and we have removed those institutions from Appendix A.1. Some typos have also been corrected. Attached is a revised Appendix A and A.1, along with a blackline to the appendices originally filed with the Board, that highlights these changes.

We trust this is satisfactory for the Board's purposes - please let me know if you have any questions.

Regards,

Randall

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Blake, Cassels & Graydon LLP
Barristers & Solicitors
Patent & Trade-mark Agents
45 O'Connor Street
Suite 2000, World Exchange Plaza
Ottawa ON K1P 1A4 Canada
Tel: 613-788-2200 begin_of_the_skype_highlighting              613-788-2200      end_of_the_skype_highlighting

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ACCC gets counsel and seeks delay on AC’s Interim Tariff – Katz nails fairness & delay issue

The Association of Universities and Colleges (“ACCC”) has retained Wanda Noel and Aidan O’Neill. They are the solicitors who represented CMEC and the countless named school boards, etc. in the K-12 case before the Copyright Board that resulted in a decision more than doubling the previously negotiated rate to $5.16 per student.

Much of the reasoning in that CMEC K-12 decision will be used by Access Copyright to justify its effort to extract $60 million a year from Canada’s post secondary educational institutions outside of Quebec. AC will surely argue that if a kindergarten student is worth $5.16 per annum, a university/college student is surely a bargain at $45/$35 a year or even twice the price. Moreover, AC will surely argue that if what a Grade 6 teacher tells her students to read cannot be fair dealing, then neither can what a professor tells a grad student to read be fair dealing – even if it is for “research”.

One will watch with interest to see whether ACCC will raise certain arguments in this case that CMEC, for whatever reason, did not raise in the K-12 file before the Board, or in its unsuccessful appeal in the Federal Court of Appeal, or its pending attempt to get leave to appeal in the Supreme Court of Canada. (Full disclosure – I acted for CAUT in an intervention in the Federal Court of Appeal, raising arguments that neither CMEC nor AC had advanced).

One will also watch to see whether there is a better evidentiary record this time around. For example, in the K-12 matter, CMEC eventually admitted to the Copyright Board that the fundamentally important survey evidence that had been gathered using a methodology it had agreed to several months after the CCH v. LSUC decision was rendered in 2004 did not adequately take that decision into account.

Meanwhile, ACCC has asked for a delay on the December 6, 2010 deadline to respond to the Interim Tariff application.

Prof. Katz quite neatly points out that AUCC and ACCC have had about 7 weeks notice of this application – whereas he and the other intervenors that are supposedly equal have had only a few days notice. He asks for 7 weeks as well. Given the controversy and complexity of this matter, that seems more than reasonable. There is no urgency here other than what AC itself has created and no “evidence” has even been filed by AC. A lawyer’s letter is not “evidence” – and should certainly not suffice for imposing an “interim tariff” worth about $11 million a year that could last for several years and serve as a spring board for the much higher tariff AC seeks. It would be very unlikely that the Board would eventually impose a lower rate and order a retroactive refund.

HK

From: Ariel Katz [omitted
Date: Tue, 30 Nov 2010 13:58:41 -0500
To: [omitted]

Subject: Re: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Mr. McDougall,

Mr. O'Neill and Mr. Bloom were quicker than me, but otherwise I would have applied for an extension on my own. While Mr. Randall may be correct in pointing out that both the ACCC and the AUCC were provided with a copy of Access Copyright's application on or about October 13, 2010, he does not mention that AC never sent copies of its application to me and to many other parties to this proceedings. AC chose to ignore all other parties and sent copies only to the parties listed in Appendix A of its application. All other parties were fully notified about the application only last Friday, when the Board attached it to its notice.

While 7 weeks may be a reasonable time for responding to AC unprecedented application, 10 days is an extremely short time. Requiring some participants to respond within such a tight schedule is not only unfair, it would be contrary to the Board's ruling from Nov. 25 according to which all parties will be treated equally. Accordingly, I request that all parties would be granted the same amount of time to respond to AC's application.

I would also note that AC has not yet responded to the Board's instruction to "indicate forthwith the precise amounts that, in its view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested." I am sure you would appreciate the fact that responding to an application for a tariff that does not indicate the amounts sought would be a difficult exercise.

Accordingly, I suggest that all parties would be granted a period of at least 7 weeks to respond to the application, beginning on the day they received it, and that may be extended depending on when AC specifies the amounts it seeks to collect.

There is no urgency that requires compromising procedural fairness, because all the delays so far are of AC's own making: AC decided to create delay by filing an application to deny standing from various objectors; it decided not to notify all parties of its application for an interim tariff; and it still hasn't specified the amounts it seeks to collect as of Jan 1, 2011.

Regards,

Ariel Katz

From: "HOFLEY, RANDALL"

Subject: RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Mr. McDougall,

I write on behalf of Access Copyright in response to the email communications of Mr. O'Neill, on behalf of ACCC, and Mr. Bloom, on behalf of AUCC, of November 29, 2010 (both reproduced below) seeking an extension of time within which to provide a response to Access Copyright's application for an interim tariff.

Both ACCC and AUCC were provided with a copy of Access Copyright's application on or about October 13, 2010. ACCC has, therefore, had approx. 7 weeks (prior to the Board's Notice) to retain counsel and for such counsel to prepare a response to the application. As Access Copyright's application makes clear, the current (extended) licences expire on December 31, 2010 and thus the issuance of a decision by the Board in respect of Access Copyright's application is required on an urgent basis. In this context Access Copyright does not believe that the extension sought by ACCC (and supported by AUCC) is warranted (or is in any way required by any applicable principle of law). Having said that, and understanding the Board's interest in receiving "meaningful written representations" that are coordinated as between the Objectors (to the greatest extent possible), should the Board wish to grant an extension, Access Copyright suggests that the Objectors be provided until Friday, December 10 at Noon ET to provide their submissions and that Access Copyright be provided until Wednesday, December 15 at Noon to provide its reply.

Access Copyright sincerely hopes that, with the decision of the Board as to Objectors and Interveners and the retention of counsel by certain parties, Access Copyright's application for an interim tariff (and the proposed tariffs, generally) may be pursued on an expedited basis with efficiency brought about, inter alia, by parties' adherence to any schedule set by the Board.

Please do not hesitate to contact me should you have any questions regarding the above.

Regards,

Randall

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Blake, Cassels & Graydon LLP
Barristers & Solicitors
Patent & Trade-mark Agents
45 O'Connor Street
Suite 2000, World Exchange Plaza
Ottawa ON K1P 1A4 Canada
Tel: 613-788-2200 begin_of_the_skype_highlighting 613-788-2200 end_of_the_skype_highlighting begin_of_the_skype_highlighting 613-788-2200 end_of_the_skype_highlighting begin_of_the_skype_highlighting 613-788-2200 end_of_the_skype_highlighting Fax: 613-788-2247
blakes.com

From: Bloom, Glen
Sent: Monday, November 29, 2010 5:15 PM
To: O'Neill_Aidan; Gilles.McDougall@cb-cda.gc.ca
Cc: HOFLEY, RANDALL

Subject: RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Mr. McDougall, I am writing to you on behalf of the Association of Universities and Colleges of Canada (“AUCC”) in respect of the request below of ACCC to extend the deadline for it to response to Access Copyright’s application for an interim tariff.

AUCC support’s ACCC’s request for the reasons specified below.

There are certain similarities between the post secondary institutions that AUCC and ACCC represent. The application for an interim in augural tariff is a very serious matter. AUCC intends to co-ordinate its response to the application with ACCC. We therefore request that the extension requested by ACCC apply to AUCC.

From: O'Neill_Aidan []
Sent: Monday,

Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

Dear Gilles,

As you are aware, Wanda Noel and I were just retained today by the Association of Canadian Community Colleges ("ACCC") with respect to the Board's Notice dated November 26, 2010. That Notice (set out below) requested participants in the Access Copyright tariff proceeding under reference to respond to Access Copyright's application for an interim tariff by no later than Monday, December 6.

Given the fact that Ms. Noel and I have only just been retained by the ACCC with respect to this matter, we will obviously need a reasonable opportunity to confer with our client and determine what position to take with respect to Access Copyright's application. Moreover, as the Board is also aware, Ms. Noel and I have other deadlines to meet this week in relation to the ongoing interrogatory process before the Board in the Access Copyright provincial and territorial governments tariff proceeding. (Finally, speaking personally for myself, I am in the United States for most of this week.)

Given these circumstances, Ms. Noel and I do not feel that we will have enough time to "come up to speed" on this tariff case and prepare meaningful written representations on behalf of the ACCC in response to Access Copyright's application for an interim tariff -- which is a very important matter -- before next Monday. As such, we would like to ask the Board if the ACCC could be granted a one week extension until Monday, December 13 to provide its response. Access Copyright could then respond to the ACCC's representations, as well as those of the other participants, by Monday, December 20. Ms. Noel and I would, of course, appreciate it very much if the Board could consider this request.

If you have any questions about this matter, please let me know. Thank you.

Aidan

J. Aidan O'Neill

Partner

Fasken Martineau DuMoulin LLP

Barristers & Solicitors

Patent & Trade-mark Agents

55 Metcalfe Street

Suite 1300

Ottawa, ON K1P 6L5

Canada

http://www.fasken.com

aoneill@fasken.com

Tel: 613-236-3882

Fax: 613-230-6423

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From: Gilles.McDougall@cb-cda.gc.ca
To:

Sent: Fri Nov 26 09:56:18 2010
Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

NOTICE OF THE BOARD

On October 13, 2010, Access Copyright filed an application, dated October 7, for an interim tariff. The application and relevant documents are attached. Participants are asked to respond to the application (and to copy all other participants) no later than Monday, December 6, 2010. Access Copyright may reply to these comments no later than Monday, December 13, 2010. The response of the Canadian Association of University Teachers and the Canadian Federation of Students to the application is attached.

Access Copyright shall indicate forthwith the precise amounts that, in its view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested.

Gilles McDougall
A/Secretary General | Secrétaire général par int.

Copyright Board of Canada | Commission du droit d'auteur du Canada
56 Sparks, Suite| Bureau 800
Ottawa ON K1A 0C9
Telephone | Téléphone 613.952.8624
Gilles.mcdougall@cb-cda.gc.ca

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Warp Speed at the Copyright Board - Towards an Interim AC Tariff?

If you think that the Copyright Board has been moving quickly on the AC proposed $45/$35 1,300% increase tariff up to now, it has just pushed the warp speed button.

As I predicted here, the Board, through its ruling below from November 26, 2010, seems clearly determined to set the stage an “interim decision” or “interim tariff” which it and AC would regard as legally binding with the force of law on ALL post secondary institutions (outside of Quebec) which use ANY supposed AC repertoire – and to make this ruling well before the Christmas break season begins in Ottawa, which is just over two weeks from now.

On Friday November 26, 2010 the Board gave the remaining participants – a fraction of the original 101 objectors after the first (but likely not last) cull – just five full working days until December 6, 2010 to respond to AC’s unprecedented attempt to impose an interim tariff that would enshrine an obsolete and seriously over-valued voluntary arrangement into an effectively state imposed “tariff” regime that the Board and AC will insist is legally binding. This “interim tariff” would last for the several years that AC and AUCC will take to conclude this proceeding, only for the Board to very likely arrive at the perfectly predictable conclusion that the tariff should be something a little less than half of the $45/$35 and shouldn’t contain some of its outlandish items such as those dealing with linking, displaying and illegal reporting requirements. That, however, would hardly be a victory – other than for AC, which of course will complain all the way to the bank.

There are several problems with this interim application, which I have basically already outlined here. To summarize,

· The Board arguably lacks legal jurisdiction to do this. It can make interim procedural decisions, for example on interrogatories, scheduling, etc. It probably can even extend existing tariffs on an interim basis, where warranted. But it arguably cannot impose what in effect would be an enormously invasive and expensive mandatory injunction imposing enormous costs and restrictions on the entire post-secondary educational framework in Canada (outside of Quebec). It has no authority from Parliament to do so and has no “inherent jurisdiction” on such substantive matters as this, especially as they involve “equitable” principles. The Board has only the powers specifically given to it by Parliament. Even the Federal Courts are limited to the powers given to them by Parliament, and the Board is in turn is subject to review by the Federal Court of Appeal. To state the obvious, the Board is not a court.

· There is NO reliable evidence on file here to address an “interim tariff”. There is not a single affidavit in support of this sweeping application. A Court would not rely on the material filed by Access Copyright in support of such sweeping relief. Affidavits can be cross-examined upon. Affidavits are evidence. Letters from lawyers are not.

· In any case, AC’s application runs contrary to the Board’s own precedents, since there is no pre-existing tariff and the AC most certainly doesn’t need or deserve to have an interim tariff to fund its own battle against objectors by using the objectors' (i.e. students’ and taxpayers’) money.

· An interim tariff in these circumstances would violate numerous legal canons of procedural fairness and natural justice. For example, AC gave no notice of this application to almost all of the original 101 objectors. The remaining few now have only a few days to respond – and their only “official” notice comes from the Board itself. (My blog is NOT the same as “notice”.)

The remaining intervenors need to realize that:

• Although AUCC has indicated that it will oppose an interim tariff, it has filed one of the noticeably less vigorous objections, even though it has budgeted about $2 million of what is ultimately students’ and taxpayers’ money to deal with this matter. AUCC has never fully confronted AC on several very basic issues, and has, apparently, chosen over the years to negotiate mainly about the rate. Indeed, it agreed to renew the standard pre CCH v. LSUC license at the same rate even after the Supreme Court’s landmark 2004 decision.
• The Board is moving at unprecedented to speed to deal with what it clearly perceives to be some kind of critical drop dead deadline, when that deadline is imposed solely by AC’s strategy to make all previous agreements run out and its essentially failed strategy to procure voluntary “interim agreements” that very few institutions have signed and rightly so, even according to AUCC.
• This warp speed attitude of the Board to AC proposed tariffs is being reflected in another AC matter, which is the astonishing attempt to impose a $24 per full time employee tariff on ALL employees of provincial governments. This would set Canadian taxpayers (outside of Quebec) back more than $6.5 million a year. What do these civil servants do? Presumably, a few of them occasionally photocopy articles from newspapers, download research material from the internet and copy occasional items from their libraries. This would normally be called “research”. The rest of the copying is likely entirely internal administrative material. That matter is also proceeding at virtually supersonic speed by Board standards, even though there could be fundamental questions as to whether it should proceed at all and there is no apparent case of urgency.
• Not even SOCAN – the granddaddy of all Canadian collectives – gets this warp speed approach by the Copyright Board. Very often, proposed tariffs take months or years just to set a schedule that will in turn take many more years to unfold and 18 months to two years from a hearing to a decision.
• AC on its own has a very flimsy basis at best to sue anyone after January 1, 2011 once its agreements all run out, as it has deliberately planned. This is for legal reasons I’ve mentioned, which include lack of repertoire, lack of rights, and lack of sufficient standing under the Copyright Act. So – it’s very unlikely indeed that the sky will fall on January 1, 2011 on any post secondary institution in Canada, even without a license.
• UBC and University of Alberta have apparently decided that they won’t need a license after January 1, 2011. It won’t be the first time if trends start out West and move East prompted by controversial payment demands and policies from Ottawa and Toronto.
• AC would almost certainly never get an injunction against any institution from any Court, given its behaviour in engineering the very crisis that it now urges the Board to resolve with an interim tariff
• An interim tariff would arguably bootstrap AC into a hugely advantageous position that it simply doesn’t deserve
• The remaining objectors should consider demanding on oral hearing on this interim tariff matter and the right to be heard in person or through counsel.
• There is a good chance that an interim tariff as proposed could be overturned in the Federal Court of Appeal – but it would be advisable if not essential to make certain arguments at the Board stage. Remaining objectors and intervenors will need to evaluate whether they are content to leave all of this to AUCC.

Remaining objectors have a brief window now to coalesce and to stand up and be counted. Their responses are expected by the very unusually short deadline of December 6, 2010.

The Board’s decision of Friday, November 26, 2010 follows below:

******************

Sent: 11/26/2010 11:47:06 AM
Subject: FW: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

[EMAIL ADDRESSES OMITTED]

Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

NOTICE OF THE BOARD

On October 13, 2010, Access Copyright filed an application, dated October 7, for an interim tariff. The application and relevant documents are attached. Participants are asked to respond to the application (and to copy all other participants) no later than Monday, December 6, 2010. Access Copyright may reply to these comments no later than Monday, December 13, 2010. The response of the Canadian Association of University Teachers and the Canadian Federation of Students to the application is attached.

Access Copyright shall indicate forthwith the precise amounts that, in its view, are payable by the targeted institutions and ought to be included in section 14 of the model licence (or any other provision where such figures may be relevant) if the Board were to issue an interim decision as requested.

Gilles McDougall
A/Secretary General | Secrétaire général par int.

Copyright Board of Canada | Commission du droit d'auteur du Canada
56 Sparks, Suite| Bureau 800
Ottawa ON K1A 0C9
Telephone | Téléphone 613.952.8624
Gilles.mcdougall@cb-cda.gc.caGilles.mcdougall@cb-cda.gc.ca>

*****************

HK