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Collective Licenses Under Copyright Are Not Mandatory

The Canadian Copyright Licensing Agency (Access Copyright) is a copyright collective meaning that it manages certain rights on behalf of copyright holders. Importantly Access Copyright does not itself hold any of the copyrights that it manages.

York University (York) is Canada’s third-largest university with over 50,000 students and approximately 1,500 full-time faculty members. York had a license to use some of the works licensed by Access Copyright from 1994 to 2010. Access Copyright applied to the Copyright Board for an interim tariff during a period when renewal negotiations were languishing. York initially complied with the interim tariff but then advised Access Copyright that it was opting out. York chose to manage copyright infringement using its fair dealing guidelines.

York had based its fair dealing guidelines on a model prepared by the the Association of Universities and Colleges of Canada following the decision of the Supreme Court in CCH Canadian Ltd. v. Law Society of Upper Canada[1] and revised following the Supreme Court’s decision in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright)[2] and the passage of the Copyright Modernization Act.[3] In both CCH and Alberta (Education) the Supreme Court had found certain uses of copyrighted written materials by a library and by a school were for research purposes and the conduct was fair dealing. The Copyright Modernization Act added “education” as a specific purpose eligible in the fair dealing analysis.

Access Copyright sued York and was successful at the Federal Court in enforcing the interim tariff. The Federal Court held that the interim tariff was mandatory. The Federal Court took a much criticized approach to assessment of York’s fair dealing guidelines and found the dealing not fair.

York appealed the finding that the interim tariff was mandatory and sought a declaration that any copying under its guidelines was fair dealing.

After an extensive review of the history of the applicable provisions, the Federal Court of Appeal found that an interim or final tariff would not be enforceable against York because tariffs do not bind non-licensees.[4]

The result was that the Federal Court of Appeal found that Access Copyright could not enforce its tariffs against non-licensees, such as York, and, further, since Access Copyright does not have an assignment of copyright from the copyright owners, Access Copyright could not sue York for any alleged infringement. As a result, the Court of Appeal noted that the validity of York’s Guidelines as a defence to Access Copyright’s action do not arise because the tariff is not mandatory and Access Copyright cannot maintain a copyright infringement action against York.[5]

While acknowledging that York’s counter claim was not relevant to its decision, the Federal Court of Appeal then considered if the Guidelines would result in fair dealing. As an aside this becomes a somewhat theoretical exercise as it would seem that should a copyright owner pursue York for copyright infringement then the facts as they may then exist would be applicable and the evidentiary defects that the Court identified in York’s defences would be presumably be addressed in such a case.

The Federal Court of Appeal’s assessment was not actually a review if the Guidelines would result in fair dealing nor if the Trial decision was correct at law but rather it was reviewing the decision of the trial court and if it was patently unreasonable.

The analysis had to confront the 3 Supreme Court decisions that had set the stage for fair dealing. CCH was a case dealing with provision of requested copies made by a library under a policy so has some elements similar to the case in York where a policy sought to guide what was fair. In CCH the choice of what to copy was made by the user. Society of Composers, Authors and Music Publishers of Canada v. Bell Canada[6] was a case where a user could hear previews of music using Bell’s system. Like CCH, in Bell the user chose what to listen to. Alberta (Education) was a case where teachers or schools[7] made copies of materials to supplement the subjects and other materials that the students had. Alberta (Education) is factually the closest to York as in both cases someone other than the student chose what to copy.

Perhaps a key difference was that Alberta (Education) dealt with elementary and second schools whereas York deals with a University. Another key difference is that in Alberta (Education) the teacher was unconstrained as to what he or she might copy whereas in York, like CCH, there was a policy in place to seek to guide the fairness of copying.

There was no dispute whether or not the conduct in question came within the permitted purposes now that “education” had been added by the Copyright Modernization Act.

The Federal Court of Appeal did review the trial court’s application of the fair dealing fairness factors set out in CCH to the York Guidelines. Observations on each of the factors are below.

Purpose of the dealing

In the appeal, the Federal Court of Appeal did not take issue with the Federal Court’s finding that there were two users – the student and the University who was assembling the material for the student while in the Supreme Court only the role of the user was focused upon and not the role of the person or entity that facilitated the user’s exercise of the user right. In each case CCH, Bell and Alberta (Education) the Supreme Court found no goal of the facilitator apart from the user’s goal.[8] The appeal court noted that a focus on the student’s purpose would tend towards the fairness of this factor.

This was a key issue in Alberta (Education). In Alberta (Education), Justice Abella writing for the majority, noted that the Federal Court of Appeal and Copyright Board had rejected fair dealing as the user had not requested the copies, as follows:

In my view, the key problem is in the way the Board approached the “purpose of the dealing” factor. The Board concluded that since the Category 4 copies were not made as a result of a student request, they were no longer for the purpose of research or private study at the second stage. This was based on its observation that in CCH, the Great Library was making copies at the request of lawyers. Because there was no such request for Category 4 copies[9], the Board concluded that the predominant purpose was that of the teacher, namely, “instruction” or “non-private study”. The Board therefore found that this factor tended to make the Category 4 copies unfair. The Federal Court of Appeal, agreeing with the Board, stated that the real purpose or motive behind the copies was instruction, not private study.

After finding that certain foreign cases relied on by the Copyright Board and Federal Court of Appeal not applicable, in Alberta (Education) Justice Abella noted:

In the case before us, however, there is no such separate purpose on the part of the teacher. Teachers have no ulterior motive when providing copies to students. Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study. It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers. They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying. The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study. Instruction and research/private study are, in the school context, tautological.[10]

One may recall that Alberta (Education) was a 5/4 decision. The Federal Court of Appeal decision in York appears, with respect, to be writing with a preference to the minority decision of Justice Rothstein, writing for the dissent in Alberta (Education). He found that the predominate purpose was that of the teacher which was instruction[11], whereas the majority found the teacher found no separate purpose from the student.[12] It is noteworthy that even the dissent in Alberta Education did not do a fair dealing analysis with multiple different purposes but only one predominate purpose.

In CCH, Bell and Alberta (Education) the Supreme Court considered the role of the facilitator from the end user’s perspective but did examine if the facilitation was fair. In CCH the Supreme Court considered if the Access Policy was fair noting the safeguards in place. The appeal court critiqued York’s apparent lack of safeguards to support the fairness of its policies.[13] Key to the fairness of a practice are efforts to implement the practice according to its intent. One might expect that if ever sued for copyright infringement, a future defence would include more focus on safeguards and practices to implement the Guidelines.

With respect, the multiple purpose analysis creates a primary and recurring focus in the trial decision on the facilitator’s role. The appeal court acknowledged this approach differs in the exercise of the fair dealing analysis as it creates a separate focus on the facilitator although the Court did seek to critique the Supreme Court’s decisions.[14] The appeal court argued that in CCH the Supreme Court’s focus on the Great Library’s practices did show a focus on the facilitator.

The appeal court noted there was no evidence of the York student’s uses of the materials copied so the Court found this to mean that there was no effort to show the fair dealing of its students.[15] One might expect that if ever sued for copyright infringement, a future defence would include evidence on the student’s uses of the relevant materials.

The appeal court, discounted the student’s purposes entirely and did not critique the trial court’s strong language in describing York’s purpose, “specifically that York’s purpose was “to obtain for free that which [it] had previously paid for” and “to keep enrolment up by keeping student costs down and to use whatever savings there may be in other parts of the university’s operation”.[16] Note that in Alberta (Education), should one adopt multiple purposes as an approach, it is possible that one could say the same things about a school board or Education ministry. However, Justice Abella did not. The Provinces had been paying for copies from Access Copyright but after the decision would not thereafter need to pay for conduct that was found to be fair dealing.

In any event on this factor the appeal court found “The Federal Court fell into palpable and overriding error in importing education as an “allowable purpose” into its analysis of the “goal” of the dealing. Its conclusions with respect to York’s purpose in adopting its Guidelines are unequivocal and are a clear indication of unfairness.”[17]

The character of the dealing

The appeal court in York supported the federal court’s misreading the Supreme Court by switching the focus from an individual copy made versus York where the court focus was on the aggregate magnitude of the copies made.[18] The focus was on a total of some 29 million copies included in course packs over a 4 year period. Neither court confronted that should a system wide focus be adopted then in Alberta (Education) at issue were some 16.9 million copies made over a 13 month period.

The appeal court acknowledged that this approach was prejudicial to larger organizations but noted the jurisprudence did not provide guidance (with respect, without noting that maintaining the focus on the user’s purpose as directed by the Supreme Court does provide that guidance, and also that the two purpose analysis lead to the aggregate focus which is absent in any of the Supreme Court’s decisions).[19]

In the end the appeal court decided “Since the issue in this case is the fairness of York’s Guidelines, the application of the CCH analysis means that the Federal Court did not err when it concluded that the Guidelines tended towards unfairness either in the aggregate or from the point of view of an individual student receiving 360 copies, an amount which York did not justify beyond invoking education as an allowable purpose. One could attempt to nuance this analysis using the SOCAN analysis by arguing that Guidelines which called for the destruction of copied works at the conclusion of a class and prohibited the retention and redistribution of copied works were indices of fair dealing. The difficulty is that instructions of this kind do not appear in the York Guidelines.”[20]

One might expect that York might consider adding such an admonition to its Guidelines.

The amount of the dealing

The appeal court in York noted that this element was the core of the trial court’s decision.[21] The appeal court noted that trial judge”muddied the waters” by including a quantitative analysis into what should have been a focus on “the proportion of a protected work which is copied and not the amount of copying in the aggregate”.[22]

The appeal court reinforced that the onus is on the facilitator to justify both the quantitative and qualitative part copied under the guidelines as well as the portions permitted (such as no more than 10% of a work) without acknowledging or addressing that in CCH arbitrary guidelines had been acceptable and were not required to be defended. One might expect that if ever sued for copyright infringement, a future defence would include evidence or argument on the reasonableness of the standards.

The appeal court found that the trial courts “digression into aggregate copying as its attempt to show that the copying in this case was anything but trivial or insignificant. In doing so, the Court may have given more importance to a non-contentious point than it deserved, but that is not a reason to set aside the substance of its findings. In other words, the error may be palpable but it is not overriding.”[23]

Again the appeal court noted a lack of effort to justify the Guidelines as fair. One might expect that one might re-assess steps that could be taken to enhance the fairness of the Guidelines for any future case.

Alternatives to the dealing

In York, the Federal Court of Appeal distinguished the copying in Alberta (Education) as ad hoc versus the case in York where the Court claimed that the copying was systematic … although that was not a distinct finding in Alberta (Education) and teachers generally teach in provincially based curriculum that tend to look systematic when viewed at that aggregate level.[24] However, the appeal court, like the trial court, found that this factor favoured York.

The effect of the dealing

While in Alberta (Education) there was no link established of a decline if book sales and the impugned copying, in York, the focus was on Access Copyright’s loss of royalty payments (since York opted out in late 2012 presumably due to the change in law) and the main assumption that York’s conduct would contribute to those losses without recognition that this analysis was circular. In York, the Federal Court of Appeal retained the focus of the trial court on the aggregate amount of copying as the key factor that underlies its analysis and that appears to have been the factor that was determinative.[25]

Nature of the work

This factor did not play effectively in either the analysis of the trial or appeal in York.

With respect, the analysis of the Guidelines appears coloured by the dual purpose deviation from the Supreme Court’s guidance and the prejudicial observation made by the Federal Court that York was merely seeking to get for free what it formerly paid for without any acknowledgement, observation or analysis that the Supreme Court decisions in CCH and Alberta (Education) and the enactment of the Copyright Modernization Act profoundly brought a new balance to copyright law in Canada and, as a result, collectives should not expect to be able to extract the same amount of payment for some kinds of conduct that may be quite properly free under the law.

It will be likely another case that will need to assess if the novel dual purpose analysis adopted by the trial judge and accepted by the appeal court take hold. If so, it will make fair dealing assessments much more complicated and less predictable in the future.

That said, the fair dealing analysis in York was irrelevant as Access Copyright was unable to sue York for infringement of copyright. It is anticipated that Universities that study this decision will address the positions and arguments found lacking should they rely on similar guidelines to manage the fairness of copying in those educational institutions.

 

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[1] 2004 SCC 13, [2004] 1 S.C.R. 339 [CCH]

[2] 2012 SCC 37, [2012] 2 S.C.R. 345 [Alberta (Education)]

[3] S.C. 2012, c. 20.

[4] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 204.

[5] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 206.

[6] 2012 SCC 36, [2012] 2 S.C.R. 326 (Bell)

[7] It was not clear in Alberta (Education) of how many cases was the teacher him or herself making the copies versus a secretary or other aide making the copies for the teacher.

[8] See CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 where the Supreme Court did not create a focus on either the library or the librarians role in facilitating the user’s research; See Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326 where the Supreme Court did not focus on the role of Bell Canada in facilitating the user’s previews of the musical works; See Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, [2012] 2 S.C.R. 345 where the Supreme Court did not create any focus on either the schools, school boards or teachers in their role in facilitating the student’s exercise of their user’s rights. In CCH and Alberta Education the Supreme Court found no goal of the facilitator apart from the user’s goal.

[9] Category 4 copies were copies made by the teacher or someone else but not at the request of the student..

[10] See Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 at para. 23.

[11] See Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 at paras. 42-45.

[12] See Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 at para. 23 stating “Instruction and research/private study are, in the school context, tautological”.

[13] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 239.

[14] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 225 – 233.

[15] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 237.

[16] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 240. Contrast with CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 where the Supreme Court did not comment on cost reduction for the Great Library; See also Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326 where the Supreme Court did not comment on the profit making role of Bell Canada in selling copies of the musical works; See also Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, [2012] 2 S.C.R. 345 where the Supreme Court did not comment on cost savings or other efficiencies achieved by the schools, school boards or teachers.

[17] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 241.

[18] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at paras 242 -255. Contrast with CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 where the Supreme Court did not comment on the total number of copies made by the Great Library under its access policy, rather like York’s policy, focused on a single copy per user; See also Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326 where the Supreme Court did not negatively comment on the total number of copies made by Bell Canada in providing previews of the musical works even where the evidence was 10 previews occurred for each full length sale; See also Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, [2012] 2 S.C.R. 345 where the Supreme Court did not comment on total number of copies made by the schools or teachers but did note 4.5 exposures of works per student (versus the evidence in York of 360 exposures per student in 2013).

[19] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 256.

[20] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 258.

[21] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 259.

[22] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 259.

[23] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 279.

[24] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 290.

[25] See York University v. The Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 77 at para. 306.

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