Federal Court Ruling Shows Fair Dealing Fears Greatly Exaggerated

While concern over Bill C-32’s digital lock rules has garnered the lion share of attention, the other major issue in the bill is the extension of fair dealing to cover education, parody, and satire.  I have characterized those changes as a reasonable compromise – not the full “such as” flexibility that would have been preferable, but helpful extensions that attempt to strike a balance.  Some writers groups have reacted angrily to the changes, claiming it will cost them millions in revenue and arguing that it amounts to an “expropriation of property.”

Last week, the Federal Court of Appeal issued its much-anticipated ruling in the K-12 case, which specifically addressed fair dealing in the context of education.  The ruling was a major win for Access Copyright, as the court dismissed objections from education groups on a Copyright Board of Canada ruling and paved the way for millions in compensation from school boards. 

The case is notable since it demonstrates how critics of greater fair dealing flexiblity have greatly exaggerated claims of potential harm.  For example, former PWAC Executive Director John Degen wrote this week that “the introduction of an overly broad exception to copyright for educational use would all but eliminate fair compensation for this established use.”  Access Copyright reacted to the court victory by stating it was “bittersweet” given the C-32 changes.  While there is no doubt that extending fair dealing to education (the law currently covers many educational activities under research, private study, criticism, and review) will bring more potential copying within the scope of fair dealing, this case reinforces the fact that fair dealing is a fair for all, not a free for all and that fears that the extension of categories will wipe out all revenues bear little relation to reality.

The court held that Canadian fair dealing analysis involves a two-part test.  First, does the use (or dealing) qualify for one of the fair dealing exceptions (the Supreme Court of Canada has called these user rights).  Second, if it does qualify, is the use itself fair.  In this particular case, the court affirmed that the copying in question qualified under the first part of the test (ie. for research or private study), but that it did not meet the six-part test for fairness and thus was not fair dealing.  In other words, claims that a new category would eliminate compensation is plainly wrong since the copying in question already qualified under a category of fair dealing.

It is critical to note that extension of fair dealing to education, parody and satire in Bill C-32 only affects the first part of the test.  In other words, while the bill will extend the categories of what qualifies as fair dealing, it does not change the need for the use itself to be fair.  The Supreme Court of Canada has identified six non-exhaustive factors to assist a Court‘s fairness inquiry: (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work. 

Whether the use of the work qualifies as fair dealing depends upon both meeting both parts of the test.  In fact, the court notes:

I am also aware that Bill C-32, An Act to amend the Copyright Act, 3rd Session, 40th Parliament, 59 Elizabeth II, 2010, section 21 would amend section 29 to state that “Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright”. However, this amendment serves only to create additional allowable purposes; it does not affect the fairness analysis. As the parties agree that the dealing in this case was for an allowable purpose, the proposed amendments to the Act do not affect the outcome of this case and no more will be said about Bill C-32.

The case represents a big win for the copyright collectives, but it also demonstrates that their concerns about C-32’s fair dealing reforms are overstated.  The bill will open the door to other potential uses being treated as fair dealing, but the requirements for fairness remain unchanged. 


  1. Laurel L. Russwurm says:

    I’m only a writer but…
    … it certainly seems as though copyright collectives spend a disproportionate energy on fighting for their own power to the detriment of both society and the very creators they are supposed to support.

    Art is NOT created in a vacuum. Art is built on and out of the world from which it sprang. That’s healthy.

    Creators self-editing because of fear of absurd legal consequences is not.

  2. The same logic can be applied to the consumer side of C-32. Under the proposed bill, as I understand it, breaking the digital lock on a DVD is not permitted under any circumstance. While this logically (though not in the real world) would prevent someone from copying the DVD and sharing it with others in physical or digital form, it would also prevent me from making a backup for personal use, or using a portion for other allowed fair uses.

    Copyright holders seem to think that the more restrictions on ANY fair use the better off they will be. Putting aside their desire to monetize additional revenues streams for the same content, their fears are similarly misfounded.

  3. end user
    I guess this is why I’m not the head of a greedy corporation/business association. I just don’t get the need to be compensated for ones work being used to teach kids or others. If I had a school teacher pick up my work and use it to teach kids about the world I’d be more then happy to see my work get used for free. Why the hell could you not want that?

    Makes home schooling look that much better.

  4. Crockett Said:
    “Copyright holders seem to think that the more restrictions on ANY fair use the better off they will be. Putting aside their desire to monetize additional revenues streams for the same content, their fears are similarly misfounded.”

    The problem they fail to see is that the more restrictions they impose, the less intrinsic value the product holds for the consumer. Am I going to pay $20+ for a right to download a movie I potentially cannot back up, and cannot sell? I think not. Taking bandwidth value in to account, a HD movie download from iTunes would often end up costing me more than going out and buying the BD. Just the fact that I cannot resell it makes it much less valuable to me. There is at least some return on my investment then. On top of that, if something were to happen and say I had a fire, my insurance will cover the hardware and my physical DVD/BD collection, which I meticulously catelog on-line, but not the digital content on the hard-drive!!

    So, under C-32 with digital locks, we have content we have no legal way to back up and protect, content that is not insurable, content we cannot resell, content we cannot even give away. To me a downloaded movie with DRM (I don’t do a lot of music) is worth no more than a rental…actually less to me, since I can rent a movie for 7 days at Blockbuster and watch it as many times as I want, anywhere I want, with whomever I want on any supporting device I want.

    Let’s be realistic, the **AA’s wouldn’t be pushing so hard for the digital locks provision if they didn’t plan to use them. They say most aren’t production companies aren’t using them at the moment anyway, so it’s not a big deal, I say this is just a smokescreen to try and get the legislation through, then they’ll ALL start using them.

  5. Anarchist Philanthropist says:

    Another paid off corrupt official. When will we learn, justice isn’t blind, she just looks the other way when offered enough “incentives”.

  6. I fail to see how this is a positive note, or how this would benefit the consumer at all. The costs of education are already way to high with a Provincial Government here in Ontario paying Directors of Education $150,000/year less than Pres. Obama makes. McGuinty is to chicken to go up against these unions. The costs of this will be passed on to the tax payer for sure. I’m not impressed.

  7. pat donovan says:

    fair drop
    I cannot call the court idiots without breaking various laws, but YOU, mike, are fair game.

    parody? = satire, disgusting and scandal. (if you can’t keep up. get out of the kitchen) Name dropping is the LEAST of this.

    we NEED protection for ANY of the above as applied to social properties.

    NOT libel. NOT copyright. NOT trademark.

    ‘ the rcmp replace horses with computers because thye wanted a stable economy.’
    will be illegal.

    get a grip, wouldja?


  8. Um .. I think you missed the point.
    @pat donovan

    I don’t think the point of Mr. Geist’s article is saying the court ruling in favor of Access copyright is necessarily a good thing for fair use. Rather, I understood his point to be that the courts can and sometimes will rule with measured rulings to one side or the other. The screams from those opposed to fair dealing is that the sky is going to fall if an inch is given, this is just an example of that not happening after all.

  9. strunk&white says:

    who is opposed to fair dealing?

  10. So Strunky, you agree fair dealing/use should trump DRM then?

  11. Captain Hook says:

    Who is opposed to fair dealings you ask?
    Well I suppose that would be Access Copyright.

    Here is some of what they said in their submission to the copyright consultation

    “Access Copyright urges the government to consider restricting the type of research that can be done under the (existing) fair dealing provision to research that is carried out for non-commercial purposes only.”

    I.E. reduce the breadth of current fair dealings.

    “Access Copyright urges the government to also conduct a thorough review of all existing exceptions to infringement in the Copyright Act to ensure that their economic impact has not increased since they were originally introduced and that they do not conflict with existing or emerging business models”

    Again, they are looking to narrow the scope of fair dealings exceptions. As examples they pick inter library loans and media format/time shifting. From reading their submission one can easily see that they would like to very narrowly define fair dealings so that they can impose levies and licensing fees on everything else. Good for them. Not so good for us.

    This is all of course without even touching DRM which makes your fair dealing rights a prerogative of the vendor which they may or may not decide to give you. At extra cost of course.

  12. strunk&white says:

    and so I repeat – who is opposed to fair dealing?

    No actual answer yet.

    As a reminder… “The screams from those opposed to fair dealing…”

    If you position someone as opposed to fair dealing, it seems only, um, fair that they actually hold that view.

    Also, who is screaming?

  13. “and so I repeat – who is opposed to fair dealing?”
    Obviously someone with enough influence to play a part in the sabotage of the fair dealing aspects in Bill C-32.

    Hey, while you’re making petty troll attacks, can I do one too?

  14. In case you are wondering, the article I linked too discusses a book by William Strunk and E.B. White that has been heavily criticized for encouraging bad language conventions and general grammar ignorance.

    I think our friend stunk@stupid’s name now makes a whole lot more sense. His arguments promote bad copyright conventions and general ignorance on the subject.

  15. Disney’s lemming lies
    > In case you are wondering, the article I linked too discusses a book by William Strunk and E.B. White that has been heavily criticized for encouraging bad language conventions and general grammar ignorance.

    Great link!! In case anyone else thinking lemmings jumping off a cliff is natural, it is not. If you saw that video in a science class or anywhere, don’t believe it. The Disney film crew hearded or chased the lemmings off a cliff and presented that as fact. My science teacher at the time could have done a little research into the matter and not have shown the video to the class. However, he showed and presented it as fact and the whole class bought it.