One of the most frequently discussed issues at the hearings on Bill C-32 was the implications of extending the fair dealing categories to include education, parody, and satire. Throughout the discussion, the starting point was the Supreme Court of Canada’s approach to fair dealing, which consists of a two-stage analysis. First, the use must qualify for one of the fair dealing categories. Second, assuming it does qualify under one of the categories, the court identified six factors to consider to gauge the fairness of the dealing in Law Society of Upper Canada v. CCH Canadian, the seminal case on fair dealing in Canada. The six factors identified by the court are:
- The Purpose of the Dealing – the Court explained that â€œallowable purposes should not be given a restrictive interpretation or this could result in the undue restriction of users’ rights.â€
- The Character of the Dealing – one should ask whether there was a single copy or were multiple copies made. It may be relevant to look at industry standards.
- The Amount of the Dealing – â€œBoth the amount of the dealing and importance of the work allegedly infringed should be considered in assessing fairness.â€ The extent of the copying may be different according to the use.
- Alternatives to the Dealing – Was a “non-copyrighted equivalent of the work” available?
- The Nature of the Work – “If a work has not been published, the dealing may be more fair, in that its reproduction with acknowledgement could lead to a wider public dissemination of the work – one of the goals of copyright law. If, however, the work in question was confidential, this may tip the scales towards finding that the dealing was unfair.”
- Effect of the Dealing on the Work – Will copying the work affect the market of original work? “Although the effect of the dealing on the market of the copyright owner is an important factor, it is neither the only factor nor the most important factor that a court must consider in deciding if the dealing is fair.”
University of Western Ontario professor Sam Trosow now notes that the Canadian Recording Industry Association has taken aim at the fair dealing test, submitting a factum to the Supreme Court in a forthcoming case on whether song previews may constitute fair dealing that argues that the court’s analysis is, well, wrong (Trosow also notes the surprise of finding the lawyer representing Canadian universities arguing in favour of this fair dealing test now also arguing against it for the recording industry).
For example, in CCH the Supreme Court of Canada stated:
The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right. In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively.
CRIA plays with the court’s wording to arrive at a very different conclusion:
the proper approach to the construction of the Act is to focus upon a construction that achieves the appropriate balance. A large and liberal construction of the Act that unduly constrains the rights of owners or users should be avoided.
It should be immediately apparent that CRIA’s wording is not what the court said. The court said that fair dealing is a user’s right that should not interpreted restrictively. CRIA instead says that a large and liberal interpretation that constrains rights holders should be avoided, which is not even close to the same thing.
CRIA then proceeds to argue for an entirely new fair dealing analysis, just a few years after the Supreme Court of Canada clarified the issue. CRIA’s far more restrictive framework, which it claims is based on the objects of the Copyright Act and the Berne Convention’s three-step test:
(a) exceptions form a balance to protect against excessive control of copyright holders that would limit the ability to incorporate and embellish creative innovation on the public domain;
(b) exceptions should be clearly defined and narrow in scope and reach;
(c) exceptions should not permit uses which enter into economic competition with the ways that copyright holders normally extract economic value and thereby deprive copyright holders of significant or tangible commercial gains; and
(d) exceptions should not cause or have the potential to cause an unreasonable loss to the copyright holder.
The CRIA proposal would significantly undermine fair dealing as it currently stands in Canada. The first prong’s focus on the public domain is entirely misplaced since exceptions are not even needed for public domain works – those works can be used without limitation. The second prong on narrow exceptions is a given, but the notion that research (which is widely found as an exception) is offside international law is a major stretch. While CRIA argues for narrow categories, the reality is countries such as the U.S., Israel, and the Philippines have all adopted fair use provisions that are far broader than any exception under Canadian law.
The third and fourth prongs seek to distill the court’s six factor test into one – the economic impact of fair dealing. The Supreme Court of Canada took a very different view on the economic impact issue:
Finally, the effect of the dealing on the work is another factor warranting consideration when courts are determining whether a dealing is fair. If the reproduced work is likely to compete with the market of the original work, this may suggest that the dealing is not fair. Although the effect of the dealing on the market of the copyright owner is an important factor, it is neither the only factor nor the most important factor that a court must consider in deciding if the dealing is fair. [emphasis added]
CRIA proceeds to use its test (“if the framework for the construction of exceptions developed above is applied”) on several occasions in the factum, displaying remarkable hubris of telling the Supreme Court of Canada that it is wrong and its manufactured test for fair dealing is right. CRIA’s legal arguments are weak – they rely almost entirely on non-Canadian law since Canadian law clearly does not support its position – but in doing so, it is taking aim at fair dealing in an effort to revert back to a time when there was little pretense of trying to strike a balance in Canadian copyright law.