The Copyright Board's August 18, 2011 Rulings on AC's Interrogatories, etc. - Summertime is Over - Subpoenas Next?

The ruling below dated August 18, 2011 from the Copyright Board is bound to cause concern amongst senior administrators, advisers and even presidents of Canadian post-secondary institutions. This will especially be so for those universities and colleges that have opted out of the interim tariff - and particularly for those that have not responded to the onerous interrogatory requests from Access Copyright. Here is AC's list of the latter, which it says have not submitted interrogatory responses. These institutional entities are potentially directly and immediately affected by this decision: 

Acadia University

Algoma University

Atlantic School of Theology

Brandon University

Canadian Coast Guard College

Canadian University College

Cape Breton University

Concordia University College of Alberta

First Nations University

Grant MacEwan University

Holland College

Lethbridge College

Mount Saint Vincent University

NorQuest College

Nova Scotia Community College (NSCC)

Nunavut Arctic College

Portage College

Saskatchewan Institute of Applied Science and Technology (SIAST)

St. Thomas University

University College of the North

University of Guelph

University of Guelph, Kemptville Campus

University of Manitoba

University of New Brunswick

University of Prince Edward Island

University of Regina

University of Windsor

The Board's ruling contains several warning, essentially as I had predicted in my recent blog here. The most important are these:

- It warns that "An institution that does not respond as required may be compelled by way of subpoena to do so."

My comment: The individual institutions in question are not actual parties before the Board, which may raise questions about the extent of the Board's jurisdiction over them. Moreover, insofar as the Copyright Board's jurisdiction is concerned, everyone is in uncharted waters in this instance because the Board has never before issued a hostile subpoena.  As I have written not long ago in a 2008 published paper originally presented at a Law Society of Upper Canada conference, “the Board’s power to issue a subpoena under hostile circumstances is uncertain and has never been directly tested, though the sabre has been rattled on occasion." I have also pointed out that the Board, unlike the Competition Tribunal, lacks any explicit power to cite for contempt. If it were come to this, it is arguable that the Board's powers and orders may ultimately only be enforced via the Federal Court or another Superior Court. For AC to even seek a subpoena in these circumstances would be very controversial. Any subpoena issued in these circumstances could give rise to a number of very interesting legal questions and arguably might be open to judicial challenge. This may not be the best of cases for AC to test the limits and, indeed, the very basis of the Board's long-standing procedures (which differ greatly from those of normal courts) and the extent of the powers that some assume it has with respect to interrogatories and jurisdiction over non-parties or parties that have withdrawn.  Still other questions concerning interrogatories and other aspects of the Board’s procedures could arise out of its ruling yesterday that has “terminated” the Province of Alberta.

- It warns that "Objectors may be prohibited from adducing evidence about an institution that does not respond as required."

My comment: Many of these post-secondary institutions may not be concerned about this.

- It warns that "A lack of information concerning copying habits at opt-out institutions might tend to increase any FTE royalty the Board may decide to certify." 

My comment: The Board's reasons for saying this are different than the reasons I suggested in my recent posting, but the result may well be similar - namely some serious tension amongst the internal membership of AUCC and ACCC.

- It points out that the final tariff may be mandatory and retroactive and that even opt-out institutions may have to report all the information sought by AC from January 1, 2011 in accordance with whatever terms that the Board may impose.

My comment: Among many things about these possibilities that will cause concern is that the reporting requirements sought by Access Copyright are very controversial and would allow it get access for audit and survey purposes to the "secure network" and "course collection" of a university or college, which would include emails, among other things. Some institutions have openly called this "unacceptable". Indeed, even the RCMP would presumably not be allowed such unfettered access to an institution's secure network and, moreover, whatever access it would be allowed would only result from a judicially issued search warrant in the course of an investigation into a serious criminal matter and would be limited in scope to the precise needs of that investigation. 

The comments by the Board – particularly in paragraph 8 below of the ruling below – may cause some considerable concern at institutions that relied upon the Board’s statement that the interim tariff was “not mandatory” and that they could, if they made good faith efforts to clear what needs to be cleared, including through AC transactional licenses when needed, operate without having to be bound by an unwanted  license from AC. The Board states:

The Board reminds the objectors that an institution’s decision not to avail itself of the interim tariff in no way guarantees that it will bear no liability under the final tariff, that its liability will not be retroactive or that it will not be compelled, pursuant to the final tariff, to provide information about its copying habits during the period between January 1, 2011 and the date on which the final tariff is certified, unless it is certain that neither the institution nor its agents make any protected use of the relevant repertoire during the relevant period or periods to be set out in the final tariff.  (emphasis added)

This goes well beyond the Board's March 16, 2011 reasons for its December 23, 2010 interim tariff. In those March reasons, the Board said:

In any event, the interim tariff we adopt in this matter is not mandatory. An Institution can avoid its application by purchasing the work, negotiating a licence to copy the work with Access or its affiliates, not using any work in the repertoire of Access or engaging only in conduct exempt from liability.

The current statement of the Board seems to indicate that the full weight of a retroactive tariff - doubtless several years away at minimum – could fall on any institution that cannot prove a negative - i.e. “that neither the institution nor its agents make any protected use of the relevant repertoire during the relevant period or periods to be set out in the final tariff.”

That would appear to be an impossible task, since it conceptually would require the review of every single "copy" made by the institution during the previous several years to verify that no copy ever involved unlicensed use of AC's repertoire. That would be impossible enough, considering the enormous quantity of such copies involved, and could not be done unless records of each and every "copy" had been kept. And, recall that AC's proposed definition of "copy" includes a display on a computer screen, the posting of a link, and transmission by email. 

However, the ultimate irony is that AC has not disclosed its "repertoire" and is apparently unable or unwilling to do so.  How can an institution prove that it has not used any AC repertoire when it cannot even find out what AC's repertoire consists of? 

Indeed, one of the reasons why Prof. Katz argued back in December that the Board should refuse to impose an interim tariff was that it would effectively be mandatory. This was because an institution may not be able to avoid its application because it would have to prove a negative, namely that it didn’t use any work from AC's repertoire.  The Board dismissed this argument, stating that: 

[46] In addition, an interim tariff does not force Institutions to prove a negative, i.e. that they do not need the tariff. In order to succeed in an action for copyright infringement, Access must first prove unauthorized uses of its repertoire in a way that is prima facie protected.

So, some will wonder whether the Board is now being consistent with its March 16, 2011 reasoning that states that the interim tariff is "not mandatory" and that AC must " first prove unauthorized uses of its repertoire in a way that is prima facie protected" and its August 18, 2011 ruling that seems to require a reverse onus and the "certain" proof of a negative.

As this blog has discussed at great length, no party sought judicial review of the interim tariff ruling and the deadline for doing so has long since passed. Many of the present and predictable future difficulties might have been avoided had judicial review been sought. Indeed, there was a good chance that it would have succeeded. And, predictably, others are now trying to jump on the interim tariff bandwagon.  The unchallenged AC interim tariff has now inspired SOCAN to seek its own interim tariff.

The August 18, 2011 decision of the Board arguably presents  another opportunity to seek judicial review. Indeed, many institutions could be immediately and adversely affected if the decision stands. Moreover, the Board itself has indicated just some of the longer range possibilities that could be very problematic not only for the many institutions that want to sever relations with AC as soon as possible but for all of post-secondary institutions in Canada that are opposed to AC's current tariff application for whatever reason. In principle, any "directly affected" entity  can seek judicial review. The deadline to file the required notice of application, which begins the process, would be September 19, 2011.

HK

PS - Canadian Lawyer Magazine has picked up on the subpoena aspect of this ruling in this article.

PS - The AUCC has filed an application for judicial review dated September 19, 2011, which can be seen here.

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

From: "[email protected]" <[email protected]>
Date: Thu, 18 Aug 2011 14:05:07 -0400
To:     XXXXXXXXXXXXXXXXXXXXXXXXXX

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

RULING OF THE BOARD

This ruling is in regards to the applications made by Access Copyright in its letter dated July 20, 2011.

The application for an extension of time to deal with interrogatories is granted. The schedule is modified as follows:

– Deadline for exchanges of notices of the grounds for deficiencies with respect to unsatisfactory/incomplete responses to interrogatories: Friday, September 16, 2011.

– Deadline for filing replies to notices of the grounds with respect to any remaining issue: Friday, October 7, 2011.

[Ruling of the Board]

– Deadline for filing of complete/satisfactory responses to interrogatories: Friday, November 18, 2011.

The application for an order preventing objectors to file supplementary responses is denied. If better information exists, it should be provided. Adding to a response is the very purpose of dealing with deficiencies, which the Board will be asked to address after October 7. That being said, parties should not respond in a manner that forces the recipient to unnecessarily reanalyse that which has already been scrutinised. Any supplementary response should clearly indicate what is changed from the original response.

The application for an order allowing Access to obtain information from institutions that do not avail themselves of the interim tariff (the "opt-out institutions") is granted. The June 6, 2011 ruling is clear: information concerning these institutions is relevant. AUCC and ACCC shall provide complete answers to the interrogatories, including (for the reasons set out by Access) interrogatories that were held in abeyance pending the negotiation of a survey, from a representative sample of opt-out institutions. The matter shall be dealt with as follows.

1) No later than on Friday, August 26, 2011, AUCC, ACCC and Access Copyright shall agree on

– A list of opt-out institutions that will be required to answer interrogatories;

– A letter to be addressed by them jointly to the selected institutions, requiring their participation, and;

– A timetable to deal with the selected institutions’ responses (filing of responses, complaints about deficiencies, etc.).

2) The letter to the selected institutions shall mention the following:

– It is pursuant to an Order of the Board that the institution is required to answer the questions addressed to it;

– An institution that does not respond as required may be compelled by way of subpoena to do so;

– Objectors may be prohibited from adducing evidence about an institution that does not respond as required. If such an order is made, Access will still be allowed to adduce evidence about the institution, but objectors will not be allowed to refute such evidence except with leave of the Board;

– An institution that does not avail itself of the interim tariff cannot take for granted that it will bear no liability under the final tariff, that its liability will not be retroactive or that it will not be compelled, pursuant to the final tariff, to provide information about its copying habits during the period between January 1, 2011 and the date on which the final tariff is certified, unless it is certain that neither the institution nor its agents make any protected use of the relevant repertoire during the relevant period or periods to be set out in the final tariff.

3) The list, letter and timetable shall be filed with the Board no later than Monday, August 29, 2011.

4) The Board will advise the parties of any changes it wishes to make to the list, letter or timetable no later than Friday, September 2, 2011.

5) The letter shall be sent to the head of the institution (or to such other person as Access and the relevant association may agree) no later than Thursday, September 8, 2011.

6) Access may file with the Board an application prohibiting any objector from adducing evidence about an institution that does not provide responses by the date provided to do so, or that does not remedy a deficient response by the date provided to do so. Once such order has been issued, Access will be allowed to adduce evidence about the institution, but objectors will not b allowed to refute such evidence except with leave of the Board.

7) A lack of information concerning copying habits at opt-out institutions might tend to increase any FTE royalty the Board may decide to certify. This would happen if the average volume of copying of works from Access Copyright’s repertoire by opt-out institutions was less than by other institutions. This will not prevent the Board from certifying such a royalty based on an imperfect record.

8) The Board reminds the objectors that an institution’s decision not to avail itself of the interim tariff in no way guarantees that it will bear no liability under the final tariff, that its liability will not be retroactive or that it will not be compelled, pursuant to the final tariff, to provide information about its copying habits during the period between January 1, 2011 and the date on which the final tariff is certified, unless it is certain that neither the institution nor its agents make any protected use of the relevant repertoire during the relevant period or periods to be set out in the final tariff. Indeed, the absence of evidence on the copying practices of opt-out institutions can only make it more difficult for the Board to design the final tariff so as to respond to any legitimate concerns of these institutions.

 Gilles McDougall
Secretary General | Secrétaire général

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
[email protected]

 ***********************************

Ruling of the Copyright Board re AC's Proposed Tariff: The Province of Alberta's "status as intervenor is terminated".

The Province of Alberta, which is responsible for funding a large portion of the costs of post-secondary education within its borders, has been "terminated" in the current AC tariff hearing.

This is a ruling that could raise many questions. I have highlighted certain portions of the ruling and may comment further.

HK

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

From: "[email protected]" <[email protected]>

Date: Tue, 23 Aug 2011 12:53:48 -0400
To: XXXXXXXXX
Subject: Access Copyright - Post-Secondary Educational Institutions Tariff (2011-2013)

RULING OF THE BOARD

Twice in these proceedings, Alberta sought to obtain a status that would allow it to intervene without having to answer interrogatories. Both times the Board refused.


Alberta is now declining to respond to some questions on two accounts.


Alberta claims that it is not responsible for establishing copyright policies for the institutions targeted in the proposed tariff and has no direct responsibility, nor direct knowledge of copyright arrangements made by them. Institutions are autonomous agencies responsible for establishing their own policies and procedures. As a result, Alberta is unable to provide "substantial information" for a number of questions. However, Alberta relies on its strategic interest in these proceedings, due to its role as the primary funding source for these institutions, to ask that it remain as an active intervenor. Access responds that if Alberta can offer no useful information that will assist the Board in setting a fair tariff, its participation as intervenor serves no useful purpose. Alberta replies that its participation is a settled matter, that it has a clear interest and that the perspective of the primary funder is crucial and useful.

Alberta has little relevant information to provide, given its role within the educational system. It wants to provide the "perspective" of the "primary funder" of targeted institutions. It does not intend to file evidence or cross-examine witnesses. This is precisely what the Board would expect of a person acting as commentator pursuant to the Directive on Procedure. The application of Access is granted. Alberta’s status as intervenor is terminated.

Alberta relies on its freedom of information and privacy protection legislation to decline providing documents it claims are privileged or confidential. Access counters that the legislation does not apply, that nothing is personal information and that the Board’s confidentiality order settles the issue. Alberta replies that the legislation either allows or compels it to refuse disclosure.
On the one hand, Access’ comment on personal information is besides the point: Alberta is not claiming that Access seeks to disclose personal information. On the other, Alberta’s non-disclosure claim fails on three accounts. First, paragraph 3(d) of the Freedom of Information and Protection of Privacy Act (Alberta) provides that it "does not affect the power of any court or tribunal in Canada to compel a witness to testify or to compel the production of documents." Second, the exceptions to disclosure on which Alberta relies are for the purposes of dealing with access to information requests and are therefore irrelevant. Third, it is difficult to conceive that provincial legislation could prevent a federal agency from either gaining access to information or at least making the continued participation of a province to a proceeding contingent on gaining such access.


Had Alberta retained its status as intervenor, the Board would have ordered that it answer the questions. Had Alberta wished to prevent disclosure of certain documents, it would have had to rely on the Canada Evidence Act and convince the Board that a relevant privilege or some form of specific public interest justified that the information not be provided to Access Copyright. However, since Alberta hereby ceases to be an intervenor, the issue is moot.

Gilles McDougall
Secretary General | Secrétaire général
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[email protected]

More Update on Opt-outs from the Access Copyright Interim Tariff & Some Questions That May Arise

There have been two more recent and indeed very interesting and informative statements about opting-out from the Access Copyright interim tariff.

One comes from very senior officials of UBC - David H. Farrar, Provost and Vice President Academic (Vancouver) and Doug Owram, Deputy Vice Chancellor and Principal (Okanagan). (HT Michael Geist). They note that AC’s demands would increase UBC’s payments to AC “from $650,000 to $2 million per annum”. They further note that:

Moreover, the proposed tariff would require universities to give AC access to their records and systems to conduct annual surveillance of copying activities undertaken by their faculty, staff, and students. UBC considers this to be unacceptable. (emphasis added)

Another comes from the University of Northern British Columbia (“UNBC”), which states that:

The terms and definitions of the Interim Tariff are very similar to the terms and definitions of the suggested new Access Copyright Post-Secondary Educational Institutions Tariff, 2011-2013 filed by AC to Copyright Board of Canada on March 31, 2010 and would have significant impact on how we teach and learn at the university and will be unacceptable for an academic institution. For example, some of these definitions identify provision of links to resources and displaying resources on computer screens as “copies”. The new tariff would also require that UNBC provides Access Copyright with unrestricted access to University secure networks, systems and records (e-mails, etc.) to conduct annual surveys of copying activities undertaken by faculty, staff, and students. This particular term is not only extremely invasive and labour intensive but UNBC also considers this unacceptable. We cannot condone this level of intrusion into our operations. (emphasis added)

UNBC goes on to quantify the expected increase in costs, and states that the “terms and definitions that would hinder core academic teaching and research practices”. Furthermore, it notes that AC’s repertoire is “not very large at this point” and that “Access Copyright is also not willing to share with institutions the list of items included in their repertoire.” 

The list below indicates that 16 out of 23 (the “opt-outs”) - that is about 70% - of the non-Quebec universities whose libraries are members of the Canadian Association of Research Libraries (“CARL”) have decided to opt out of the Access Copyright (“AC”) interim tariff as approved on December 23, 2010 by the Copyright Board. This is a much more meaningful number than the percentage of total AUCC members, which I have mentioned before. AC does not operate in Quebec. All told, there are at least 34 “opt outs” to date - see below. The decisions to opt out  were presumably all made with due diligence involving careful cost/benefit and risk analysis.

CARL members admittedly do not include all Canadian universities. But CARL members clearly tend to include the larger and more research intensive Canadian universities. The 95 members of AUCC include some very small universities and many non-degree granting colleges. In making these distinctions, I am in no way intending to make value judgments. Indeed, some very well known institutions are AUCC members but not CARL members.  It is simply that the CARL list is probably much more relevant for present purposes than the overall AUCC list.

Here are the CARL universities outside of Quebec that have not yet opted out:

1.    Brock University(ON)
2.    McMaster University (ON)
3.    Ryerson University(ON)
4.    Simon Fraser University (BC)
5.    University of Ottawa (ON)
6.    University of Toronto (ON)
7.    University of Western Ontario (ON)

Interesting questions may arise from this situation, such as:

-    What effect will this clear opt-out trend have on the current Copyright Board hearing in terms of such issues as interrogatories, e.g  can and should universities that have opted out be required answer AC’s interrogatories?  The latter question has been put to the Board by AC and is now under consideration.  Procedural sabres with potentially very serious impact on the opt-outs are being rattled. How far is AC prepared to go on this? Would AC conceivably go so far as to seek the issuance of hostile subpoenas and even ultimately a finding of “contempt”, both of which would be unprecedented at the Copyright Board? If so, what would happen? Here’s a list of the 27 opt-outs on the line on this issue at this time. They range, in alphabetical order, from Acadia to the University of Windsor.
-    What effect, if any, will this opt-out trend have on AUCC’s and ACCC’s positions in the Board case and their resources to fund this case?
-    Will those institutions that have opted-out accept a tariff that is explicitly or even just  effectively universally mandatory for ALL post secondary institutions, if this is what the Board imposes? Note that AC currently takes the position that the interim tariff - which the Board expressly says is “not mandatory” - is “virtually impossible” to opt out of.  AC says that “Just one copy of one page by one professor is sufficient to trigger the tariff...” And AC allegedly is refusing to issue transactional licenses.
-    Will that final tariff, if somehow mandatory, be retroactive as Board tariffs usually are and what would be the effect on the opt-outs? A final decision from the Board will likely not come for at least another three or four years and maybe even more, based upon time lines in recent hearings.
-    Are there any members of AUCC and ACCC that actually want a universally mandatory tariff, perhaps if only because they may believe that a truly optional tariff that may only be adopted by relatively few institutions may end up being more expensive than a mandatory one? One would think that it should not. However, past history at the Board suggests that this could, rightly or wrongly, become an issue and a very divisive one at that.
-    In light of the above, is there a potential for tension between opt-out institutions wanting a truly optional tariff and others than may want, or at least accept,  a universally mandatory one? If so, how would such tension be resolved?

In any event, here is the current opt-out list with 34 institutions, based upon information provided to me:
   
Have Already Opted-out (August 2010, January 2011 or August 2011) 

1.    Acadia University (NS)
2.    Athabasca University (AB) - as of August 31, 2011
3.    Carleton University (ON)
4.    Columbia Bible College (BC)
5.    Concordia University College of Alberta - January 1, 2011
6.    Dalhousie University (NS)
7.    Grant MacEwan University - January 1. 2011
8.    Holland College (PEI)
9.    Lethbridge College (AB) - August, 2010
10.    Memorial University (NL)
11.    Mount Saint Vincent University (NS)
12.    Mount Royal University (AB)
13.    NorQuest College (AB)
14.    Northern Lights College (BC)
15.    Portage College (AB) - August, 2010
16.    Queens University (ON)
17.    Quest University (BC)
18.    Royal Roads University (BC)
19.    Saskatchewan Institute of Applied Science and Technology  - January 1, 2011 (SK)
20.    University of Alberta (AB)
21.    University of British Columbia (BC) - as of August 31, 2011
22.    University of Calgary (AB) - as of August 31, 2011
23.    University of Guelph (ON)
24.    University of Lethbridge (AB) - as of August 31, 2011
25.    University of Manitoba (MB)
26.    University of New Brunswick (NB)
27.    University of Northern British Columbia (BC) - as of August 31, 2011
28.    University of PEI (PEI)
29.    University of Regina (SK)
30.    University of Saskatchewan (SK) - as of August 31, 2011
31.    University of Waterloo (ON)
32.    University of Windsor (ON)
33.    York University (ON) - as of August 31, 2011

Intend To Opt-out in 2012

34.    University of Victoria (BC)

If there is new information about opt-outs, please notify me directly or add a comment below and the list will be updated again.

HK

Intervener Factums in SOCAN Previews Case in SCC

The following are the intervener factums in the SOCAN Supreme Court of Canada "previews" case:

1. CAUT
2. CCIA
3. CIPPIC
4. Federation of Law Societies

HK

UK to Liberalize and Widen Copyright Exceptions - including Private Copying Exception with No Levy and No Memory Card Tax

The UK will expand the scope of copyright exceptions as follows: 

The Government will bring forward proposals for a
substantial opening up of the UK’s copyright exceptions
regime, including a wide non-commercial research
exception covering text and data mining, limited private
copying exception, parody and library archiving. We will
consult widely on the basis of sound evidence.

Here's the full Government report.

Here's an excerpt below, with some reasoning of particular interest to Canadian policy makers - especially the proposal to legalize private copying with no levy. (Meanwhile, back in Canada, the CPCC is trying to rush through its controvesial "memory card tax" at the Copyright Board with extraordinary and undue haste and to start this process going at warp speed in the middle of the summer).

**********

6. “Copying should be lawful where it is for private purposes, or does not damage the underlying aims of copyright…”

There is a fundamental role for copyright in providing appropriate incentives for the creation of valuable works. The Government has no intention of prejudicing this role, on which much value for the UK depends. We nonetheless believe the Review is right to identify activities that copyright currently over-regulates to the detriment of the UK, and to propose changes to tackle the problem (Recommendation 5).

The Government sees the areas where copyright restricts activity to no direct commercial benefit as doubly wasteful: neither new opportunities nor incentive to invest in copyright works result from them. Nor does the Government regard it as appropriate for certain activities of public benefit such as medical research obtained through text mining to be in effect subject to veto by the owners of copyrights in the reports of such research, where access to the reports was obtained lawfully. We recognise that some publishers view licensing of text mining as a legitimate commercial opportunity; however we are not persuaded that restricting this transformative use of copyright material is necessary or in the UK’s overall economic interest. We also share the Review’s concern that a widespread flouting of copyright through private copying in particular brings the law into disrepute: it is not appropriate simply to tolerate unlawful private copying where it is not commercially damaging. For these reasons, the Government agrees with the Review’s central thesis that the widest possible exceptions to copyright within the existing EU framework are likely to be beneficial to the UK, subject to three important factors:

·         That the amount of harm to rights holders that would result in “fair compensation” under EU law is minimal, and hence the amount of fair compensation provided would be zero. This avoids market distortion and the need for a copyright levy system, which the Government opposes on the basis that it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax. [footnote omitted] 

·         Adherence with EU law and international treaties.

·         That unnecessary restrictions removed by copyright exceptions are not re-imposed by other means, such as contractual terms, in such a way as to undermine the benefits of the exception.

The Government will therefore bring forward proposals in autumn 2011 for a substantial opening up of the UK’s copyright exceptions regime on this basis. This will include proposals for a limited private copying exception; to widen the exception for non-commercial research, which should also cover both text- and data-mining to the extent permissible under EU law; to widen the exception for library archiving; and to introduce an exception for parody. We are committed to doing so in ways that do not prejudice the provision of appropriate incentives for creation of works through the copyright system and will consult widely on the basis of sound evidence.


(highlight & underline added)

HK

AUCC’s Reply to Access Copyright on Transactional Licenses

There are some interesting aspects to AUCC’s reply to Access Copyright’s submission on the transactional licensing issue as submitted to the Board on July 19, 2011 and available here:

• It confirms certain information about the license fees that universities have been paying to AC.  It is well known that the previous blanket license agreements with AUCC members provided for payment of $3.38 per FTE plus $0.10 per page for copies of published works sold to students (i.e. course packs). The Interim Tariff continues the royalty rate and structure of the blanket license agreements. The most recent information of AUCC is that in 2008 the average course pack cost per student per year was $15.26. Thus, the average amount per FTE university student paid to AC in 2008 was $18.64.
• That may not sound like much but readers of this blog will know that this amount of $18.64 is about 500% higher than the recently revealed “middle of the range” blanket license FTE rate charged (which includes course packs) by the Copyright Clearance Centre (AC’s counterpart in the USA) for university students. This is the rate for US universities and colleges that actually choose to get a blanket license. Most don’t and it’s not mandatory.
• The formula that generates this result was agreed to by AUCC in 2007 when the 2003 pre- CCH v. LSUC model license with AC was renewed on the same pre- CCH terms.  Not surprisingly, the Board noted in its reasons for the interim decision that the negotiated FTE rates did not go down in the post-CCH negotiations. Why this was the case will perhaps eventually become clear in the hearing. In the meantime, one can only wonder why not, because one might have expected a significant post-CCH reduction as a result of the Supreme Court’s more “large and liberal” conception of fair dealing that would seem to suggest that much less of the ‘Part “A”’ copying (i.e. which includes copying for “research and private study” purposes in libraries, etc.) should be compensable.
• For reasons that are not apparent, AUCC appears to gratuitously dismiss the application of s. 45 and s. 90.1 of the Competition Act at this time.  If the AUCC is serious in its complaints about AC’s anti-competitive behaviour, one would expect it to pursue, rather than downplay, provisions in the Competition Act that would appear to support its case.
• This concession is particularly curious in light of the evidence filed by AUCC itself and AUCC’s own statement in the next paragraph following the above concession that:

We have addressed this issue and provided above what Access has told its publisher affiliates. These statements are clearly intended to convince its publisher affiliates not to grant transactional licenses to post-secondary educational institutions in an attempt to cause those institutions to operate under the Interim Tariff.  (Emphasis added).

• S. 45 and s. 90 deal not only with “conspiracy” (which is difficult to establish) but with “arrangements”. Whether these sections might be applicable here would seem to be an interesting question - at least to Prof. Katz - who teaches both competition and copyright law at the U. of T. Faculty of Law, and who has just written an important comparative law working paper on copyright law and & refusal to deal, etc.  But if these provisions are applicable, then the AUCC clearly has relevant information.  Indeed, it provided it to the Board.
• There is nothing on the record to date suggesting that AC and its publisher affiliates could invoke the regulated conduct defence in competition law - at least with respect to a new practice of allegedly refusing to provide transactional licenses, a practice which the Board clearly did not sanction. Indeed, since AC and its publisher affiliates would seem to be clearly (or at least prima facie) governed by these provisions of the Competition Act in this respect, and the AUCC and ACCC have provided what is arguably cogent and relevant information and evidence, it would seem that this concession is arguably not only unnecessary but potentially even damaging to AUCC. This could be the case if it has the effect of dissuading the Commissioner of Competition from getting involved on the side of the universities and colleges and the public interest generally, or if it has the effect of generally downplaying the severity of AC’s behaviour.
• Also rather interesting is AUCC’s non-reply to Prof. Katz’ detailed submissions and proposed remedy. “AUCC makes no reply to Access’s response to Professor’s Katz’s suggested remedy for Access’s anti-competitive acts”. Prof. Katz is on the same side as AUCC on this issue, but arguably has a much more effective remedy proposal that would foster competition between various copyright holders, AC, and even CCC in the USA.  The AUCC’s proposed remedy, on the other hand, would simply require AC to issue transactional licenses. That is something that AC clearly doesn’t want to do and which AC may well attempt to frustrate with delays, red tape and other obstacles.  Whether and to what extent the Copyright Board would be willing and able to enforce the order AUCC seeks would be interesting. Whether or not AUCC would even seek such enforcement in the event of non-compliance would also be interesting. After all, AUCC barked but did not bite on the interim tariff issue, having stated that it was “vigorously” opposed the imposition of an interim tariff but having failed to even attempt what arguably would have been an easy and successful judicial review exercise to get rid of it. In any event, Prof. Katz’ suggested remedy avoids all of these problems by requiring AC rightsholders themselves to issue transactional licenses when so requested in good faith. He suggests a potentially simple review mechanism in the event that they refuse to do so, with the onus being on the rights holder to justify the refusal and a license being deemed to have been given upon request in the meantime provided the Board has been notified of the refusal. His proposal is here.
• Not replying to Prof. Katz’ suggested remedy is especially odd, because he took issue with the AUCC's proposed remedy on two serious fronts that should be of great interest to university administrators. The first was that AUCC’s remedy is arguably strategically misguided in the long run because it will not promote an essential degree of competition, and the second is that the fee that the AUCC is proposing (now up to $0.15 per page plus a five per cent administrative fee from the figure of  $0.10 that AUCC itself proposed last month) is very high, and could amount to presumably unforeseen astronomical figures in the case of digital copying. After all, AC considers and the Board adopted for interim tariff purposes that EACH, EVERY and “ANY” act of scanning, transmitting, displaying, posting, and linking) count as a digital copy. At a minimum, any use by a student would appear to entail several such “copies”. Does each time a student views a document (i.e. displays it on a screen) generate a $0.15 payment? The answer is unclear but the result could be extremely costly. Prof. Katz’s remedy avoids this. AUCC’s proposed remedy arguably invites this potentially extremely expensive result - at $0.15 a page.
• As was the case with the AUCC fair dealing guidelines, the positions put forward by AUCC concerning the transactional licensing issue have raised questions. Indeed, Prof Katz said in his submission of June 27, 2011 that:

While I am confident that this was not the AUCC’s intention, I believe that the remedy that it proposes could inadvertently backfire and serve the interests of Access Copyright to the detriment of Canadian academic institutions.

• One would have thought that Prof. Katz’ submissions on the transactional license matter called for a substantial response from AUCC not only because of the importance of the issues they raise but the careful reasoning behind them that is clearly intended to benefit AUCC members.  The AUCC might agree or disagree with Prof. Katz’s concerns and proposals. At the very least, it would have been useful to many in the university community to know AUCC’s position in this regard.

HK