The Canadian government’s consultation on reform to the Copyright Board recently closed and the 60 written responses were just posted online (my response – which focuses on the public interest role of the Board – can be found here). I will have a more fulsome review of the responses in the weeks ahead, but in the meantime one of the most radical recommendations, from Access Copyright, is worthy of comment. The copyright collective has called for a massive expansion of damage awards, seeking a new statutory damages provision that could result in damage awards ten times the size of actual applicable royalties.
Access Copyright argues that the massive escalation in potential damage awards are needed for three reasons: deterrence, promotion of settlement negotiations, and efficient use of court resources. Yet none of the arguments ring true. Deterrence is used in the context of small establishments that might use music without paying the appropriate licence. But that is far different from the current situation with educational institutions that have not paid the Access Copyright licence because of a good faith analysis of the scope of fair dealing under Canadian copyright law (and still spend millions on access rights). For Access Copyright to argue that non-payment of its licence is a function of low risk of penalties rather than a different view of copyright law badly (and knowingly) mischaracterizes the situation.
Further, the so-called public policy benefit of promoting settlement negotiations amounts to little more than the hope that increasing liability risk will convince educational institutions – and by extension students and taxpayers – to cave to Access Copyright’s shaky legal claims. The litigation costs sparked by the Access Copyright lawsuit are significant. To accept Access Copyright’s argument, it would be beneficial to encourage the collective to file lawsuits against educational institutions with the added threat that failure to settle could lead to hundreds of millions in liability beyond what even Access Copyright would argue are the applicable royalties.
As for efficient use of court resources, it is Access Copyright that filed the most recent lawsuit. To maintain that it is a waste of resources to determine actual damages is to dismiss how most litigation unfolds and suggests that the collective’s insistence of good faith negotiation has instead devolved into being primarily interested in a huge windfall at the expense of students and taxpayers.