Copyright Board Annual Report 2021-2022

The Copyright Board’s recently posted 2021-2022 Annual Report (“Report”) covers the period from April 1, 2021 to March 31, 2022.

(Copyright Board)

What does this full-page collage with this uncredited photograph on page 13 the Board’s Report possibly have to do with Canada’s Copyright Board? I, for one, have no idea. But it takes up a whole page, along with several other diverting and uninformative photographs in this Report that is overall mostly devoid of any actual useful information.

That’s regrettable as the deadline for objecting to proposed tariffs looms and potential objectors have to decide whether or not to become vulnerable to potentially extremely intrusive and invasive interrogatories, expert witness costs, and huge legal expenses to deal with tariffs that the Supreme Court of Canada (“SCC”) has confirmed with crystalline clarity are NOT MANDATORY. More on this below…

The Chairman’s “Message” to the Report notes that:

The 2021‒2022 fiscal year was also marked by the Supreme Court of Canada’s decision in York v. Access Copyright, an important decision that clarifies, among other things, the scope of tariffs approved by the Board. This decision will certainly have an impact on the Board’s ability to deliver on its mandate, but it will be some time before we see the concrete results of this decision, including the cumulative effect of the decision and the changes made to the Copyright Act in 2019.(highlight and emphasis added)

The York decision from the Supreme Court of Canada (“SCC’) is, of course, the elephant in the room at the Copyright Board. It is difficult to comprehend what “concrete results” of the York decision the Board does not understand. The SCC clearly ruled that:

Access Copyright’s tariff as approved by the Copyright Board is not mandatory for users

It was unnecessary and inappropriate for the Courts below to issue a declaration about fair dealing in these circumstances

Nonetheless, there were serious errors in the Courts below noted concerning their pronouncements about fair dealing, e.g. re “aggregate” copying.

While there may be more “results” in the future, the above is already as clear as can be. The SCC decision more than “clarifies, among other things, the scope of tariffs approved by the Board”. It unambiguously declares that Board tariffs for Access Copyright are NOT mandatory and not enforceable and makes important statements about fair dealing. BTW, I was honoured to have played a very major role and to have made the prevailing arguments as counsel for my esteemed client CARL in the SCC in getting this result.

These are rulings that the Board must follow – now and not if and when the Board finally can “see the concrete results of this decision”. The Board may not like the decision – but the Board is bound by it. Even if the SCC’s statements about fair dealing are technically “obiter dicta” under the circumstances, SCC obiter dicta – especially when it is so pointed, on point, and  precise as in the instance – is as good as law.

In the past, the Board has at times appeared to be hostile to the SCC and Federal Court of Appeal. One had hoped that this had passed. I wrote here  in 2009 about how former and then sitting Board Chair Justice William Vancise expressed his frank views.

The Board cannot even bring itself to use the “M” word, i.e. “mandatory”, in relation to its tariffs  - or more precisely “not mandatory” - in this Report – which was the essence of the SCC case.

Indeed, the only place the Board uses the “M” word is:

“mandatory training required as part of organizational measures to prevent and address workplace harassment and violence”

The Board is no doubt hoping, along with Access Copyright and other collectives and content owner lobbyists, that the Government will try to undo the SCC’s York ruling and curtail fair dealing in the educational sector. That, of course, would be an enormous legislative, political, and legal mistake that will likely result in costly litigation and uncertainty for years to come. Of course, the Board would probably use such uncertainty to justify more deflection and delay and, no doubt, to demand and even bigger budget so that it can analyze the obvious.

Interestingly, although the period of the report ends on March 31, 2022, it does NOT mention the ESA v. SOCAN “making available” case that was argued in the SCC in January of 2022 and decided on July 15, 2022.  That result was another existential body blow to the Copyright Board, holding, in effect, that the Board got it very wrong in its ill-advised and very wasteful venture into international law and that the Board “will be held to the “correctness” standard of review when it comes to interpreting the Copyright Act because it shares concurrent first instance jurisdiction with the Superior Courts. The Board will be given no deference for being “reasonable” in its interpretation of the substantive provisions of Copyright Act. It must be correct. Importantly, this is the first new category of correctness review since the landmark SCC Vavilov decision.

The Report contains some interesting language about how the Board is “constrained” by decisions of the Courts. It would have been more accurate and more respectful to say that the Board is subject to  and guided by rulings of the Courts – both in the form of judicial review and other decisions that may call into question the reasonableness or even the correctness of the Board’s decisions – as was the case in the York University litigation, in which Access Copyright sought – ultimately unsuccessfully – to enforce the Board’s tariff ruling.

If the Board is to serve any useful purpose and to have a long-term future, it would do well to focus on its mandate and to stay in its lane – which is all about and only about:

• Rate setting
• Establishing tariffs that – while not mandatory – are sufficiently attractive and reflect good enough value that users will voluntarily adopt and maybe even embrace them.

I have always said that there are tariffs that are “de facto” if not “de jure” mandatory – such as those of SOCAN and Re:Sound. If you operate a radio or TV station, there is no other way to clear these music rights other than to avoid the process by playing only public domain music and public domain sound recordings. Those tariffs have mostly been fairly reasonable because there has been sufficient competent organized opposition over the years.

On the other hand, inexperienced objectors with insufficient resources to spend easily five and even six or seven figures opposing a tariff will eventually be worn down by the inevitable irrelevant and oppressive interrogatories that the Board has shown little or no commitment to curtailing. Even the AUCC (now Universities Canada) was forced to withdraw from the Access Copyright tariff case in 2012, although it might have handled the whole matter very differently.

 The major collectives have only limited interest in making the Board better. It seems that their limited interest is only in making the Board a faster and cheaper place to do business.

Many users are now going to be asking themselves whether there’s any point in getting into the quagmire and quicksand of a Copyright Board tariff proceeding at potentially enormous expense  and opening their doors to offering collectives such as Access Copyright a potential treasure trove of interrogatory material. If the Board somehow manages to come up with a tariff that offers good value, a user can then sign a licence based upon it. Otherwise, for example with Access Copyright, the user can ignore the tariff and get licences, when needed, in other more efficient ways for far better value – which is precisely what so many institutions have been doing for nearly a decade with total vindication since the Access Copyright’s “tariffs” have been declared as NOT MANDATORY by the SCC in 2021.

Collectives have almost always done very well at the Board, though not so much in the Federal Court of Appeal and definitely not so much in the Supreme Court of Canada. Board proceedings have almost always been very profitable – with the costs being borne by members and the public.

In the past, tariff proceedings were usually a bankable cash cow for collectives. One notable but apparently isolated exception was Access Copyright’s attempt to get lots of money from provincial governments, outside Quebec. I wrote about this at some lengthy back in 2015:

To recapitulate, the Board awarded a tariff of 11.56 ¢ per FTE (full time equivalent) for the period 2005-2009 and 49.71 ¢ per FTE for 2010-2014. That’s less than 1% and about 2% respectively of what AC asked for.  According to the Board, the tariff will generate a total of only about $370,000 over its ten year period – which is likely only a small fraction of the costs involved in obtaining the tariff.

Here is that decision, interestingly with Justice Vancise as chair of the panel, which hopefully will be kept in mind by all concerned as Access Copyright attempts to impose a tariff for 2024-2026 for post-secondary institutions as follows:

(a) $15.65, if the educational institution is a university; or

(b) $6.01, if another educational institution.

The 2021-2022 Report contains virtually nothing new or interesting. Is all about management platitudes, e.g.:

Expected Outcomes

The Board strives to be a credible institution, well-respected both by the creators and the users of copyrighted material, because of the efficiency of its operations and its unique expertise in copyright matters.

It has adapted and will adapt with resilience and agility to the challenges posed by a constantly evolving legal and economic environment, whether at the national or international level, while offering high-quality support to parties and the public requesting its services.

The never ending tinkering with procedures – such as requiring “grounds” for new tariffs and objections at an early stage – is simply obvious and won’t change anything. The requirement for “fair and equitable” tariffs is hardly new – what else has the Board and its predecessor supposedly been doing for the last eight decades?

Bottom line:

The vast majority of the “tariffs” approved by the Board are no brainer unopposed rubber stamp exercises that somehow still take a very long time.

The unlocatable owner regime is an embarrassing waste of time and resources. Hopefully, it doesn’t still consume a whole FTE resource as then Chair William Vancise confirmed in 2014. With only one  inconsequential rulings visible in the 2021-2022  reporting period, it would be difficult to understand how this took more than a very few hours at the most to deal with. The Copyright Act could be amended to deal with these increasingly rare situations as an exception along with other specific exceptions.

The Board is continuing to try to justify itself as an important and essential quasi-judicial tribunal, which it once was. However, it has failed to clearly get beyond the “dysfunctional” description conferred by a Senate Committee in 2016 and continues to be an expensive and unproductive though paradoxically high profile presence in the Canadian administrative tribunal landscape. It has held only one hearing in the last five years.

Its proposed new Rules of Practice and Procedure will likely accomplish little or nothing – other than to provide an excuse for the Board to demand an additional $1 million a year to its already inflated budget:

The costs of the proposal are expected to be less than $1 million annually. While Parties would be required to provide information earlier on in proceedings, the amount or type of information required from Parties would be the same as under the current Model Directive. (emphasis added)

If the Board is to have any credibility and serve any useful purpose going forward, it needs competent, independent and balanced management with legal expertise in both civil and common law and – of course – in copyright law. The Board’s Members should, of course, reflect these requirements.

It’s really too bad that the ISED Minister @FP_Champagne seems to be apparently 100% missing in action on what is going on here – although it’s 100% his responsibility.

Happy Holidays to one an all!

HPK

Canadian Copyright Term Extension: Is December 30, 2022 Perhaps Premature Proclamation?

(not the recent proclamation)

 During the CUSMA negotiations with the Trump administration, Canada sadly handed over a gratuitous gift that will mostly by far benefit American copyright owners by extending the term of copyright for 20 years. Canada made a bad decision even worse by ignoring the considered legal and policy analyses by the former US Register of Copyrights, Maria Pallante and Canada’s own Minister of Justice, David Lametti, when he was a law professor, explaining that a registration requirement for the additional 20 years would be perfectly acceptable under international law. Such a requirement would have gone a long way to clearing out deadwood and preserving a more vibrant public domain. I pointed all  this and more out last year to the Government in response to the disingenuous consultation that was based upon faulty analysis and that ignored my and many others carefully researched analyses.

Now, to arguably add insult to injury, the Government has proclaimed the new 20-year extension into force very possibly two crucial days earlier than necessary – namely on December 30, 2022 rather than January 1, 2023. That matters a lot because it deprives Canadians of the cohort of material that would have entered the public domain on January 1, 2023 from the creators who died in 1972. Here is the Proclamation:

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry and the Minister of Canadian Heritage, under section 281 of the Budget Implementation Act, 2022, No. 1, chapter 10 of the Statutes of Canada, 2022, fixes December 30, 2022 as the day on which Division 16 of Part 5 of that Act comes into force.

Perhaps the most notable Canadian death in 1972 was that of  Lester B. Pearson, the great 14^th Prime Minister of Canada and Nobel Peace Prize winner. Historians won’t be happy about waiting another 20 years to gain full access to any of Pearson’s important writings that may be needlessly protected in the meantime.

Here’s what Internet Archive Canada had to say.

For copyright and international law geeks, here’s the CUSMA deal:

For Section H, amendments to Canadian legislation are required to meet the obligations under Article 20.62 and Article 20.67. The CUSMA Implementation Act implements these obligations by amending the Copyright Act. Canada has a transition period of 2.5 years following the date of entry into force of the Agreement to implement the obligation in Article 20.62(a) related to extending Canada’s general term of protection to life of the author plus 70 years (up from plus 50 years).

Here’s where it says we had “2.5 years” to implement this deal from the day that CUSMA came into force:

Article 20.89: Final Provisions

…

4. With regard to obligations subject to a transition period, Canada shall fully implement its obligations under the provisions of this Chapter no later than the expiration of the relevant time period specified below, which begins on the date of entry into force of this Agreement.

· (a) Article 20.7.2(f) (International Agreements), four years;

· (b) Article 20.44 (Patent Term Adjustment for Unreasonable Granting Authority Delays), 4.5 years; and

· (c) Article 20.62(a) (Term of Protection for Copyright and Related Rights), 2.5 years.

 Here’s where it says that CUSMA came into force on July 1, 2020:

On November 30, 2018, Canada, the United States and Mexico signed a protocol to replace the 1994 North American Free Trade Agreement (NAFTA) with the Canada-United States-Mexico Agreement (CUSMA or Agreement). Under the protocol, NAFTA would be formally replaced by CUSMA upon entry into force of the new Agreement. On December 10, 2019, the Parties agreed to modify certain elements of the Agreement to improve the final outcome in the areas of state-to-state dispute settlement, labour, environment, intellectual property and rules of origin. The Parties subsequently provided their formal notifications of the completion of domestic procedures in April 2020. Under the terms of the protocol, entry into force of CUSMA was set for July 1, 2020. The Canada-United States Free Trade Agreement (CUSFTA), which was suspended upon entry into force of NAFTA, remains suspended until such time as the suspension of CUSFTA is terminated.

Now, the arithmetic appears quite simple. Whether “2.5 years” means 2 years and 6 months or 2 years and 183 days, that would take us to January 1, 2023 and NOT December 30, 2022.

See also the Interpretation Act:

           Calculation of a period of months after or before a specified day

28 Where there is a reference to a period of time consisting of a number of months after or before a specified day, the period is calculated by

(a) counting forward or backward from the specified day the number of months, without including the month in which that day falls;

(b) excluding the specified day; and

(c) including in the last month counted under paragraph (a) the day that has the same calendar number as the specified day or, if that month has no day with that number, the last day of that month.

            Construction of year

37 (1) The expression year means any period of twelve consecutive months, except that a reference

(a) to a calendar year means a period of twelve consecutive months commencing on January 1;

(b) to a financial year or fiscal year means, in relation to money provided by Parliament, or the Consolidated Revenue Fund, or the accounts, taxes or finances of Canada, the period beginning on April 1 in one calendar year and ending on March 31 in the next calendar year; and

(c) by number to a Dominical year means the period of twelve consecutive months commencing on January 1 of that Dominical year.

 I don’t profess any great expertise in the machinery of government when it comes to calculations of these kinds of deadlines or proclamations by the Governor in Council. So, if I’m wrong, I would welcome any reasoned correction and be a little more humble and a little less cynical.

But if I’m right about this being a premature proclamation, the Government owes Canadians an overdue explanation. However, given the handling of this term extension issue all along, it would not be prudent to hold one’s breath.

 HPK

 

Fair Dealing and the University of Toronto

The University of Toronto has sued a tutoring company, Easy Group Inc., for copyright infringement. Here is the U of T announcement dated May 11, 2022.

Since there is growing interest in this case, I have obtained the pleadings and post them here:

•   Statement of Claim dated May 9, 2022
•   Statement of Defence and Counterclaim dated June 24, 2022
•  Amended Statement of Defence and Counterclaim dated August 18, 2022
•  Reply and Statement of Defence to Counterclaim dated September 9, 2022

I make no comment on this case at this time, other than that it is clear from the pleadings that fair dealing could be a very major issue.

Speaking of fair dealing, U of T has recently revised its 2012 Fair Dealing Guidelines. Here’s the announcement from October 21, 2022 with links.

Unlike the 2012 Guidelines, I had no involvement in the 2022 revision. Other than that, I make no comment at this time on the 2022 U of T revised Fair Dealing Guidelines.

HPK

Voltage Mass Drift Net Default Judgment Test Case - The Appeal

I blogged last year about Voltage’s troubling test case effort to get a default judgment against dozens of alleged infringers all at once identified through aggressive investigation and Norwich orders.

Those dozens could, if Voltage’s procedural tactic succeeds, quickly become many thousands at several thousand dollars each. In this test case, Voltage was seeking staturory damages of $2,250 to $5,000 plus costs from each defendant caught in the drift net.

CIPPIC had intervened in this proceeding. Voltage was dealt a serious setback by the Federal Court in a well-reasoned order by Justice Furlanetto dated June 6, 2022. See Voltage Holdings, LLC v. Doe#1, 2022 FC 827 (CanLII), https://canlii.ca/t/jpncb

Not surprisingly, Voltage has appealed. CIPPIC has been given leave to intervene in the appeal.  Here is Voltage’s Memorandum of Fact and Law for the appeal.

There’s a lot at stake here. If these mass default proceeding tactics are sanctioned by the Court, we will almost certainly see a parade of  thousands of default judgments in dozens or more cases involving up to $5,000 in statutory damages against each and every defendant – whether of not each defendant actively downloaded, simply had their Wi-Fi used by someone else (e.g. teenage kid, babysitter, neighbour, tenant, etc.) or were just misidentified.

This would be unacceptable and would require a legislative remedy.

Also, not to be forgotten, is the so-called “reverse” class action against Mr. Robert Salna, a landlord who happened to be in the wrong place at the wrong time and is being forced to defend this very complex test case, which still grinds on in the Federal Court as action #T-662-16 - now with several intervenors.

HPK

PS - October 30, 2022: Here's is CIPPIC's very well researched intervener factum dated October 28, 2022 in Voltage's appeal.

Canadian Copyright Today – Confrontations & Opportunities

(Robarts Library - University of Toronto)

Here is my overview of the state of Canadian copyright law developments at this time.

Bottom Line:

Access Copyright (“AC”) and the Association of Canadian Publishers (“ACP”) are on the warpath against Canadian education. AC had planned a “day of action” on Thursday, October 6, 2022 (postponed “because of unforeseen technical issues”) to “fix Canada’s Copyright Act”. (the “Act”). Guess what? The Act isn’t broken and doesn’t need fixing. As the Supreme Court of  Canada (“SCC”) recently said in what can only be seen as yet another consistent affirmation of users’ rights and setback for overly zealous and self-serving collectives:

[5]       I cannot agree with the Board’s interpretation of s. 2.4(1.1). The Copyright Act does not exist solely for the benefit of authors. Its overarching purpose is to balance authors’ and users’ rights by securing just rewards for authors while facilitating public access to works. When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users gain access to works which they can use to inspire their own original artistic and intellectual creations.

Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (CanLII), <https://canlii.ca/t/jqgw0>

The ACP has made dangerous and outrageous copyright recommendations in its recent “Pre-Budget Consultations in Advance of the 2023 Budget”. These are:

ACP joins colleague associations in recommending that:

● Fair dealing for education should only apply when a work is not commercially available under licence by the owner or a collective.

● The Copyright Act be amended to clarify that tariffs approved by the Copyright Board are enforceable against infringers of copyright protected works subject to a tariff.

● Adequate statutory damages must be available to all copyright collectives.

Of course, we know that publishers and more recently collectives, despite their rhetoric,  don’t necessarily care about the best interests of creators and, indeed, sometimes act against such interests. Neither the Copyright Board not the Courts have yet directly confronted the issue of whether authors’ interests are adequately served by collectives. But this could happen sooner rather than later as authors figure out how to deal directly with users and bypass inefficient collectives and their law firms who too often seem intent on making simple things very complex and prolonged. Is this recently reported lawsuit by some Quebec songwriters against SOCAN the tip of a potentially huge iceberg?

The victories of the PSE (post secondary education) sector are in peril – not only because of AC and its collaborators but because of sometimes unwise strategies in the PSE sector itself. Recall this important analysis by Prof. Ariel Katz following York’s defeat at the trial level in 2017: Access Copyright v. York University: An Anatomy of a Predictable But Avoidable Loss. The fact that the AC litigation against York was not struck down early on and had to go the SCC and that York chose to bet the farm on a bad set of fair dealing guidelines and risk a severe smack down overall on fair dealing does not bode well for the future unless basic lessons have been learned – which is hopefully happening but is not yet evident. York very nearly lost that litigation. Fortunately, my brave client the Canadian Association of Research Libraries (“CARL”) and Prof. Ariel Katz were very instrumental in saving York from this fate – though it’s far from clear that all those responsible for York’s strategy actually appreciate our work.

It seems clear that the PSE sector needs to update fair dealing guidelines and to follow Justice Abella’s wise words in the York decision:

[106] At the end of the day, the question in a case involving a university’s fair dealing practices is whether those practices actualize the students’ right to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Act. Since we are not deciding the merits of the fair dealing appeal brought by York, there is no reason to answer the question in this case.

The process of updating and actualizing is too important to be entrusted to any single organization. A way must be found to assimilate all valid inputs. The U of T fair dealing guidelines from a decade ago were developed in a cooperative collaboration between usually contrasting viewpoints (Casey Chisick and I) under the wise leadership of now retired U of T general counsel Steve Moate. I was pleased to have been part of this process. These were, IMHO, the best fair dealing guidelines to date and suggest a method and process of going forward.

Meanwhile, at the Government, the Minister of ISED – who should be primarily responsible for the copyright file – is apparently MIA – though his officials are still hopefully minding the fort.

The Minister of Heritage, who is also responsible for two very controversial bills - C-11 and C-18 – has been seduced by a dangerous mix of Quebec politics and sophisticated content industry lobbying into thinking that great glory lies ahead in maximalist copyright law revision. However, those who don’t know history are condemned to repeat it. This Minister and his controversial Parliamentary Secretary have yet to learn the lessons of their predecessors – such as Sheila Copps and Sarmite Bulte, who did so much wrong when it came to copyright and suffered the consequences. Better still, they should talk to James Moore and Tony Clement who managed to get a lot right.

Access Copyright and its allies, such as the ACP, are peddling what amount to Trumpian fictions and falsehoods about fair dealing in Canada. AC’s income has dropped in the last decade but NOT because of the addition of the word “education” to the fair dealing provision of the Act in 2012.

AC’s income has dropped because AC tariffs as certified by the Copyright Board are NOT MANDATORY – which Prof. Katz and I have been saying for a decade, as many institutions came to believe, and which the SCC has now TWICE confirmed. See also Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR 615, <https://canlii.ca/t/gm8b0> brought to you by Prof. Katz, Prof. David Lametti as he then was, and yours truly.

The word “education” was added to the Act in 2012 after the Copyright Board and the Federal Court of Appeal held, erroneously, that teaching and instruction were categorically outside the ambit of s 29 and while an appeal of these decision was pending before the Supreme Court. But when the SCC decided the 2012 Alberta case, without regard to the 2012 amendment, it corrected the error and affirmed that “education” has been part of fair dealing even before the amendment, dating back to the fair dealing provision as enacted in the UK act of 1911 and the Canadian act of 1921. There is no court case yet that confirms that the addition of the word “education” has expanded the ambit of research and private study. Copyright nerds may be interested in the factum, which proved to be very influential, that Prof. Katz and I filed for the 2012 Alberta case in this respect. 

That said, even if, assuming (incorrectly), that the list of allowable purposes was meant to be closed, it is arguable that adding “education” may potentially add something that didn’t exist before.

 While “education” is potentially capable of covering things that research and private study may not cover, this doesn’t change the fact that, as far as teaching practices at schools, colleges and universities are concerned, these educational institutions can rely  and apparently are relying on the holding in the Alberta case without reliance on the fact that Parliament did indeed add the “education” in 2012.  Once again, and for emphasis, the addition of the word “education” to the Act in 2012 is NOT the reason why AC’s revenues have gone down.

 According to Universities Canada, Canadian universities “have spent over $1 B in the last three years combined on purchasing library content – and it’s increasing annually”. And that’s not counting colleges and K-12 schools. These massive and increasing expenditures – more and more through electronic purchases and licenses – better ensure that creators and publishers get paid without having to depend on AC and its very inefficient distribution system, especially for individual creators. BTW, I’m a “fly on the wall” member of AC and probably more prolifically published than average. Last year, AC send me something like $82.00, which is more than some widely published academics. But that’s hardly enough to make me quit my day job.

AC’s most recent 2021 audited annual report describes the decline in revenues from the educational sector over the last decade and acknowledges the court cases, along with significant potential contingent liability for substantial refunds and the litigation seeking refunds.

The federal Government has arguably unnecessarily been paying many millions of dollars to AC since the 1980’s and still may be doing so to a significant extent. It is hard to see how AC has much repertoire of any possible interest to federal civil servants and what the Feds may do with that material is very likely fair dealing in any event. Is this more of a sweetheart deal than a rational arrangement? This is something that requires further analysis and exposure. These payments may have helped to keep AC on life support.

What Lies Ahead?

Currently, one hears that the Government’s agenda is roughly as follows.

The Government is looking to develop a legislative package for the spring of 2023 that could deal with some of all of the following issues:

• Small radio station liability
• Indigenous concerns
• Crown copyright
• “Educational copying” including:
• Fair dealing
• Should tariffs be “Mandatory”?
• Licensing
• Statutory damages

Since there have been consultations for years, there may not be much if any further formal consultations – though that won’t stop the lobbying which will then become even less transparent.

 The Government has already decided to legislate a resale right for artists.  This decision is interesting, given that the US Congress has taken a pass on this following an exhaustive 2013 study by the US Copyright Office that raised concerns about the potential impact on the American art market While some Indigenous artists may see promise in such a measure, there are existing mechanisms in place that may be even more effective for most living and less than famous artists – such as the long-standing certification mark provisions under the Trademarks Act, which are probably being under-utilized in this context.  Also, Canadian art dealers will surely oppose such a measure – since there is a concern that it would harm the art market and drive sales and resales underground or out of the country. This issue is far from straightforward and not likely to be a slam-dunk success for the Government.

 The Government needs to get over the notion and the unfortunate provision in s. 92 of the Act that copyright law needs to be reviewed every five years. Such a perspective benefits only consultants, lobbyists and lawyers. This has never been the approach in the UK, USA or Canada – where decades have passed before major changes are made. As always, the fundamental things apply as time goes by. New shiny objects don’t necessarily need new shiny laws. For example, the American and Canadian governments were very wise to resist that notorious and nonsensical attack on the VCR by the late Jack Valenti on behalf of the American film industry in 1982 where he told a congressional committee “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.” Indeed the VCR ended up being Hollywood’s salvation. But Valenti’s hysterical hyperbole set the stage for cacophonous copyright confrontation for decades to follow, including from the motion picture industry in Canada, and indeed up the present time.

If the Act is to be re-opened at this time – which on balance is neither necessary nor desirable – amendments should include the following that are simple and long overdue:

• Clarify that circumventing a TPM for fair dealing purposes and other exceptions is legal;
• Clarify that the list of fair dealing purposes in s. 29 is not exhaustive by including the two simple words “such as” – as we have seen in the USA since 1976; 
• Making term extension to life + 70 years conditional upon registration according to regulations to be determined; and,
• Ensure that fair dealing rights and other statutory exceptions cannot be pre-empted by contract.

 A final thought and call to action. While there is lots of disaggregated data about the vast sums of money being spent in the educational sector for print and digital material, it would be very helpful if the post-secondary university sector, at least, would provide global data for the last decade on such things as:

• Amounts spent directly by students on traditional printed books and e-books;
• Amounts spent by institutions on printed books, e-book purchases and e-book licences;
• Amounts spent by institutions on site licences;
• Amounts spent by institutions on transactional licences; and,
• Amounts spent by institutions on OER development.

 As always, comments and copyright gossip always welcome on or offline.

 HPK

There is No New “Making Available” Right: The Copyright Board Got It Wrong

 

On July 15, 2022 the Supreme Court of Canada (“SCC”) rendered a lengthy, nuanced and very important judgment  in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (CanLII), <https://canlii.ca/t/jqgw0>.

Objectively, the decision affirmed that:

1)     There is no new “making available right" as such resulting from the 2012 amendments to the Copyright Act. The new definition added as s. 2.4(1.1) merely clarified the meaning of the existing right under s. 3(1)(f) to “communicate to the public by telecommunication”, and did not create a standalone new right or a justification for stacking on an additional tariff.

2)     SOCAN was not entitled to stack a new royalty on top of existing tariffs simply by virtue of a user making a work available for streaming or download. Such activity is already covered by existing rights and tariffs, and the 2012 amendment clarifying the definition of “communication of a work or other subject matter” in s. 2.4(1.1) doesn’t create new liability.

3)     The “definition” provisions in s. 2 of the Copyright Act do not add new rights. The rights of owners of “works” are found in the first paragraph of s. 3(1). As ably stated by ESA, “These rights are the right to reproduce, perform, and publish the work or any substantial part thereof.” The “making available” provision, however, is not contained in this rights-granting section but rather in definition section 2.4(1.1).

4)     The Court once again affirmed the importance and centrality of the doctrine of technological neutrality to applying the Copyright Act.

5)     The Court once again affirmed the principle of balance in copyright law:

   “[5] I cannot agree with the Board’s interpretation of s. 2.4(1.1). The Copyright Act does not exist solely for the benefit of authors. Its overarching purpose is to balance authors’ and users’ rights by securing just rewards for authors while facilitating public access to works. When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users gain access to works which they can use to inspire their own original artistic and intellectual creations.”

6)     The Court once again affirmed the rule that one activity (here, streaming or downloading) can only give rise to one royalty payment, and that payment of two royalties for the same activity is prohibited.

7)     The domestic legislation is what is determinative – not the treaty. Without being as blunt and even apparently sarcastic as Justice Statas was in the Federal Court of Appeal when he  he referred to “the vibe” of international law, the SCC affirmed Justice Statas’ general approach to use of international law to interpret domestic statutes.  

8)     The Copyright Board was wrong – i.e. not “correct” - in its interpretation of the 2012 legislation. The Copyright Board will be held to the “correctness” standard of review when it comes to interpreting the Copyright Act because it shares concurrent first instance jurisdiction with the Superior Courts. The Board will be given no deference for being “reasonable” in its interpretation of the substantive provisions of Copyright Act. It must be correct. Importantly, this is the first new category of correctness review since the landmark Vavilov decision. Two of the judges disagreed and would have applied the more deferential “reasonableness” standard. That said, they found that the Board’s decision was unreasonable in this case.

9) Justice Rowe states and reiterates that “If a work is made available for downloading, the author’s right to authorize reproductions is engaged.” (paras. 8, 108). Moreover, the meaning of “authorize” has been considered in greater depth in a number of prior SCC decisions. It will be interesting to see whether future courts look more to ESA or to earlier cases like CCH when confronted with this issue.

10) Finally, this decision may or may not have some potential application to infringement cases, given the closing comment from Justice Rowe:

 [113]  Before concluding, I would note that the value of these rights is not in issue in this appeal. Setting the appropriate royalties to compensate authors when these rights are engaged is a matter for the Board to decide. Similarly, the considerations that a court might have regard to in assessing monetary remedies for infringement is a matter to be decided if and when such a case arises. 

More subjectively:

 1)     To put it bluntly, when the Copyright Board strays out of its permitted and mandated narrow lane of rate-setting (see Prof. Katz’s factum on this point)  and presumes to interpret the substantive provisions of the Copyright Act – much less international law – it had better be “correct” and just not merely “reasonable”. While the SCC recognizes that there can be many “reasonable” outcomes, there is normally only one “correct” outcome.  This clarifies a residual issue from Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (CanLII), [2019] 4 SCR 653, <https://canlii.ca/t/j46kb> concerning the standard of review for the Copyright Board. This is bound to upset the Copyright Board, following less than a year after the SCC declared that Copyright Board tariffs are not mandatory for unwilling users in the York v. Access Copyright decision, which I wrote about here. Per Abella, J:

 [39]     As matter of legislative coherence, it would be incongruous if royalties fixed in the context of licence negotiations between a collective society and a specific user were voluntary, but those set in a general tariff were mandatory. https://www.canlii.org/en/ca/scc/doc/2021/2021scc32/2021scc32.html

2)     This clearly very expensive and lengthy detour could have been avoided if the Board had not called for extensive submissions on the implications of the WIPO treaties – which numerous well-resourced parties went along with resulting in a pantheon of experts’ opinions. All of this could and should have been avoided if the Board had simply allowed or denied SOCAN’s submissions on the basis of the Canadian Copyright Act, the 1996 WIPO treaties, and existing authorities on the subject. Then, the FCA could have resolved the issue on judicial review. Canada does not need a panoply of “experts” to read a domestic statute, and if appropriate, an international treaty and published commentary on it. We don’t need a monumentally expensive, dilatory and gratuitous display of the “the vibe” of international and treaty law in what should have been a rate setting exercise. The Board’s decision to proceed the way it did could potentially have set a dreadful precedent in terms of access to justice in situations wherein objectors do not have the resources that were available in this instance.

3)     Ironically, after recognizing that a freestanding “making available right” existed, the Board nonetheless refused to value the making-available tariff because ‘the evidence before it was inadequate to warrant the setting of a tariff for ‘making available’’. This was upheld as “reasonable” in the companion decision of the FCA. CMRRA-SODRAC Inc. v. Apple Canada Inc., 2020 FCA 101 (CanLII), <https://canlii.ca/t/j82gf>. Arguably, that should have been the end of the matter for the Board, especially since the Board recognized more than a decade earlier in another proceeding for a SOCAN tariff on “other sites”  that “in the absence of proper and reliable evidence, it would be irresponsible to certify a tariff that could potentially have such a broad scope of application” and this was upheld by the FCA, in a decision in which I played a leading advocacy role.
Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2010 FCA 139 (CanLII), <https://canlii.ca/t/29z9n>, which Justice Stratas cited in 202 FCA 101.

4)     Interestingly, the issues of royalty stacking and the effort to twist or elevate definitions into new rights has a long history:

a)     The monumental Report of Judge Parker from 1935 outlined the concerns with the attempts by the predecessors of SOCAN to impose “additional” costs on motion picture exhibitors as a result of the new technology of the day – namely “talking pictures” and such practices as the notorious attempt imposition of a “score charge” to “to recoup for the producer his cost, and perhaps a profit, on what was involved in putting the sound track on the film or record the sound on a disc, timed in relation to the film." This was a blatant and early attempt at royalty stacking – and it prompted the establishment of the Copyright Appeal Board in Canada, which worked very well in Canada until the Copyright Board came along more than five decades later.

b)     Kraft tried to twist the s. 2.7 definition of an “exclusive licence” added in 1997 to the Copyright Act into a right to “thwart” the importation of perfectly authentic Toblerone chocolate bars based on copyright in a small picture on the packaging. I successfully thwarted this argument on behalf the Retail Council of Canada as an intervener when this case went to the SCC resulting in the decision in Kraft Canada Inc. v. Euro Excellence Inc., 2004 FC 652 (CanLII), [2004] 4 FCR 410, <https://canlii.ca/t/1h3qj>

c)     In one of the 2012 “Pentalogy” cases at the SCC, the Motion Picture Association of Canada incongruously argued, in effect, that the word “excludes” in the definition of “sound recording” actually means “includes”. The definition in question was: “sound recording” means a recording, fixed in any material form, consisting of sounds, whether or not of a performance of a work, but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work”. (underline added). Needless to say, the SCC wasn’t impressed and the only mystery was why it even heard the case in the first place. See Re:Sound v. Motion Picture Theatre Associations of Canada, 2012 SCC 38 (CanLII), [2012] 2 SCR 376, <https://canlii.ca/t/fs0vc>

BTW, I was not alone in finding the hearing to be rather confusing. Even the judges were wondering at times about who was agreeing or disagreeing with whom and about what. Here’s the webcast.

Some of the parties seemed to depart from their factums – which in some cases were much more clear than their oral arguments. Perhaps the most useful factum was that of ESA, which can be found here.

 HPK