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Copyright Vindication: Supreme Court Confirms Access Copyright Tariff Not Mandatory, Lower Court Fair Dealing Analysis Was “Tainted”

The Supreme Court of Canada brought a lengthy legal battle between Access Copyright and York University to an end last week, issuing a unanimous verdict written by retiring Justice Rosalie Abella that resoundingly rejected the copyright collective’s claims that its tariff is mandatory, finding that it had no standing to file a lawsuit for copyright infringement on behalf of its members, and concluding that a lower court fair dealing analysis that favoured Access Copyright was tainted with “a fairness assessment that was over before it began.” The decision removes any doubt that the Supreme Court remains strongly supportive of user’s rights in copyright and vindicates years of educational policy in shifting away from Access Copyright toward alternative means of ensuring compliance with copyright law.

Access Copyright launched the lawsuit against York over copying it said took place from 2011 to 2013, seeking to enforce a Copyright Board approved tariff. York argued that it was not bound by the tariff because it had not agreed to its terms and counter-claimed that any copying at issue was in any event covered by fair dealing. The federal court issued its ruling in July 2017, giving Access Copyright a resounding victory. At the time, I argued there were strong grounds for appeal given that the decision largely ignored Supreme Court fair dealing jurisprudence.

The Federal Court of Appeal followed with its decision in 2020, dealing Access Copyright a huge blow by ruling that its tariff was not mandatory, though maintaining the fair dealing finding from the lower court. Last week, the Supreme Court got the last word, upholding the mandatory tariff ruling and casting significant doubt on the fair dealing findings. The decision leaves York – and by extension the Canadian education community and those favouring balanced copyright – as the ultimate winners.

On the mandatory tariff issue, the Supreme Court follows the Federal Court of Appeal approach by again canvassing the legislative history, much of it persuasively discussed by Professor Ariel Katz in the Spectre 1 and Spectre 2 articles (and on this Law Bytes podcast episode). Citing Katz, the court notes “if a collective society does not have a large enough repertoire or other sources emerge to provide better value, users may find that the collective is not ‘the most cost-effective way to obtain licences’, and might prefer to ‘negotiate with the right-holders directly, or through other intermediaries’.” This is precisely what many in the education community have long argued, namely that site licensing, open access, and a myriad of alternatives provide better value than the Access Copyright licence. The issue is not whether educational institutions must clear rights, which they obviously do. The real question is whether Access Copyright is the only way to do so, which even Access Copyright’s counsel acknowledged it is not.

As for Access Copyright’s longstanding claim of a mandatory tariff, the Court eviscerates the argument, warning that it would turn tariffs into an anti-competitive tool:

Access Copyright’s interpretation of s. 68.2(1)  is not only unsupported by the purpose of the Board’s price-setting role, it is, respectfully, also in direct conflict with that purpose. Instead of operating as a part of a scheme designed to control collective societies’ potentially unfair market power, Access Copyright’s interpretation would turn tariffs into a plainly anti‑competitive tool, boosting collective societies’ power to the detriment of users.

The legal consequence of Access Copyright’s mandatory tariff theory would be that a user would be liable to pay royalties in full as soon as it became responsible for any infringing use of a work within a collective society’s repertoire. Under the final 2011-2014 Access Copyright tariff for post-secondary educational institutions, for example, York would be liable to pay $24.80 for each of its 45,000 full time equivalent students, totalling over one million dollars per year, as soon as it made a single infringing use within Access Copyright’s repertoire. For a university that attempts to clear its copyright obligations using alternative licences and fair dealing, a single infringing use — one that was not authorized by fair dealing or independently licensed — could thereby become a tripwire making the university liable to pay the full royalties in a tariff. This “Sword of Damocles”, as the intervener the Canadian Association of Research Libraries aptly put it, renders a university’s freedom to clear its copyright obligations without involving Access Copyright completely illusory.

In fact, the court argues that the real concern for Access Copyright is that it is unable to even bring infringement claims on behalf its members:

The source of Access Copyright’s grievance, it seems to me, stems not so much from the voluntary nature of an approved tariff, but from the fact that Access Copyright cannot initiate infringement actions on behalf of its members. To the extent that this is a problem, it has nothing to do with s. 68.2(1)  and is largely outside the scope of this appeal. But it is important to recall that Access Copyright chooses to operate on the terms of a non-exclusive licence that does not give it the right to sue for infringement in respect of the rights it administers. Nothing compels Access Copyright and its members to operate this way.

Since Access Copyright did not have the ability to bring the lawsuit against York University on behalf of its members, the court ruled that there was no live dispute and it therefore could not issue a declaration on the validity of the York fair dealing guidelines. However, it noted that it was not endorsing the fair dealing analysis from the lower courts. In fact, the unanimous court made it clear it disagreed with the analysis, stating “there are some significant jurisprudential problems with those aspects of their judgments that warrant comment.” I pointed to these problems on my initial post on the federal court decision back in 2017.

For example, the federal court’s fair dealing analysis did not effectively consider the perspective of the student, which the Supreme Court says “tainted” its analysis:

The main problem with their analysis was that they approached the fairness analysis exclusively from the institutional perspective. This error tainted their analysis of several fairness factors. By anchoring the analysis in the institutional nature of the copying and York’s purported commercial purpose, the nature of fair dealing as a user’s right was overlooked and the fairness assessment was over before it began.

After re-affirming the importance of the copyright balance and fair dealing, the court notes:

In other words, contrary to the Federal Court of Appeal’s view, in the educational context it is not only the institutional perspective that matters. When teaching staff at a university make copies for their students’ education, they are not “hid[ing] behind the shield of the user’s allowable purpose in order to engage in a separate purpose that tends to make the dealing unfair”.

It was therefore an error for the Court of Appeal, in addressing the purpose of the dealing, to hold that it is only the “institution’s perspective that matters” and that York’s financial purpose was a “clear indication of unfairness” (paras. 238 and 241). Funds “saved” by proper exercise of the fair dealing right go to the University’s core objective of education, not to some ulterior commercial purpose (see Lisa Macklem and Samuel Trosow, “Fair Dealing, Online Teaching and Technological Neutrality: Lessons From the COVID-19 Crisis” (2020), 32 I.P.J. 215, at p. 238). The purpose of copying conducted by university teachers for student use is for the student’s education. But in every case, all relevant facts must be taken into account in order to determine the fairness of the dealing.

This was not the only error in the lower court fair dealing analysis. The analysis on aggregate copying was one of the most obvious errors in that decision and the Supreme Court hones in on the issue:

the trial judge’s criticism of York’s Guidelines on the basis that different portions of a single work could be distributed to different students, such that an author’s entire work could end up being distributed in the aggregate, is also contradicted by SOCAN, which held that “[s]ince fair dealing is a ‘user’s’ right, the ‘amount of the dealing’ factor should be assessed based on the individual use, not the amount of the dealing in the aggregate”.

And while it is true that “aggregate dissemination” is “considered under the ‘character of the dealing’ factor” (SOCAN, at para. 42; see also CCH, at para. 55; Alberta (Education), at para. 29), as this Court cautioned in SOCAN, “large-scale organized dealings” are not “inherently unfair” (para. 43). In SOCAN, where copies could easily be distributed across the internet in large numbers, this Court warned that focussing on the “aggregate” amount of dealing could “lead to disproportionate findings of unfairness when compared with non-digital works” (para. 43). By extension, the character of the dealing factor must be carefully applied in the university context, where dealings conducted by larger universities on behalf of their students could lead to findings of unfairness when compared to smaller universities. This would be discordant with the nature of fair dealing as a user’s right.

Where does the decision leave Access Copyright?

Despite an attempt to spin the ruling as a refusal “to legitimize uncompensated copying by the education sector”, the reality is that the Supreme Court has handed the collective yet another devastating copyright defeat. In the aftermath of the CCH and Alberta cases in 2004 and 2012, the York case completes the trilogy that effectively undermine virtually all of Access Copyright’s legal arguments. In 2004, the court emphasized users’ rights and balanced copyright. In 2012, it ended Access Copyright’s arguments that sought to distinguish between teacher and student copying. And now in the York case, the court has affirmed that Access Copyright does not have standing to sue on behalf its members for copyright infringement, its tariff is not mandatory, and the fair dealing analysis that it has pointed to for the past four years was tainted and contained obvious errors.

The importance of a unanimous decision cannot be overstated. The CCH case was similarly unanimous, but none of the judges from that case are still on the court. In fact, only three justices from the 2012 Access Copyright v. Alberta decision were involved in this decision (Justices Abella, Moldaver, and Karakatsanis). In other words, despite significant changes in the membership of the court, the principles of balanced copyright, user’s rights, and a commitment to fair dealing has remain unchanged. Those hoping that a change in judges might lead to a change in approach will be left sorely disappointed.

Further, this may sound self-serving, but this decision – and the court’s ongoing support for user’s rights – owes much to the exceptional work of the Canadian IP academy. The tariff issue is grounded in the path-breaking work of Ariel Katz and an earlier case involving Katz, David Lametti, and Howard Knopf; Jeremy de Beer and CIPPIC both argued as interveners in the case; and the court cited Katz, Carys Craig, Myra Tawfik, Elizabeth Judge, Daniel Gervais, Sam Trosow, Lisa Macklem, and myself on fair dealing. This represents the very best of academia, combining stellar research with real-world impact.

While the focus will rightly center on yet another Access Copyright defeat at the Supreme Court, it is worth noting what the collective told the justices during oral argument. Under repeated questions from several judges, Access Copyright counsel Sheila Block acknowledged that the Access Copyright licence was just one way for educational institutions to ensure they were compliant with their copyright obligations, since alternative licences were a perfectly acceptable manner of clearing rights without Access Copyright. This is important because educational institutions are spending millions of dollars every year on those alternative licences.

Access Copyright has spent much of the past decade arguing that the 2012 reforms undermined payments for educational copying, but the reality is that those reforms had little to do with the flawed fair dealing analysis from the federal court and nothing to do with the status of their tariff. The collective will undoubtedly accelerate its lobbying campaign for copyright reforms designed severely limit fair dealing for education, but after two decades of litigation that has consistently affirmed the education community’s analysis of the law, perhaps it is time for Access Copyright to compete within the system, not waste millions of creator dollars on lobbying and failed litigation.

10 Comments

  1. Pingback: Supreme Court of Canada Reaffirms Public Access as a "Primary Goal of Copyright" - Internet Archive Blogs

  2. Pingback: ● NEWS ● #MichaelGeist #Copyright #Copyrights #Canada ☞ Copyright V… | Dr. Roy Schestowitz (罗伊)

  3. Matthias Grandy says:

    Spin comes in all shapes and forms. The fact is that the Supreme Court rejected York U.’s appeal. This means the copying that York U does under its guidelines (and by extension copying done by other English Canadian universities that have the same or similar guidelines) can’t be said to fall within fair dealing. This is the third court that has refused to legitimise said guidelines. Perhaps the SC just wanted to kick it back to the Government. Whatever! The result (once the gloating is done) means more uncertainty and the possibility of other forms of litigation against universities, perhaps from publishers, perhaps a class action suit on behalf creators whose work is being pirated under the above mentioned guidelines.

  4. Bob Morris says:

    Most universities now have copyright departments, often with several staff, doing what previously was covered by Access Copyright licences. They also, as Professor Geist notes, buy site licences from publishers. Combined, it’s not clear if they are spending less, as much or more than previously. In any event, the clearance process, despite guidelines drawn to include the old AL licensing limits, is much more complicated. And it excludes most of the smaller publishers and their authors. It also puts Canada outside the collective licensing regime seen in most other countries; and outside what the federal government clearly intended with the 1996 legislation. With what’s happening with newspaper content, and strong government support for the Google and Facebook plans to compensate publishers, as well as the collapse of collective licensing outside Quebec, it seems highly likely that there will be a legislative response to Abella’s long-term goal of eliminating Access Copyright.

  5. Jen Mansell says:

    As an aside, this case might be read as illustrating the difference between the place of creative workers In Quebec v English Canada. The former respects the cultural worker, understands the individual risk and commitment it takes, and there for recognizes that compensation and protection are necessary. The irony is, as Mr. Morris points out, that it will now cost English Canadian Universities more to deal with copyright and they are still open to litigation. Quel victory!

  6. Bob Morris says:

    As a further aside, it’s my understanding that site licences, and journal subscriptions generally, are now exponentially more expensive because universities, have dumped Access Copyright, have nowhere else to go. And as most academics know, the major educational publishers have been stripped of most of their autonomy and now function as divisions of their foreign parents, with less and less Canadian output. There are other reasons for this, but the SCC decisions are part of the equation.

  7. Martha Pims says:

    Let’s put a human lens on this decision because, after all, Supreme Court Justices are human beings, too, and as such they operate within the same range of social and workplace dynamics as the rest of us. Considering the speed of this decision, the brevity of it, the fact that the decision only took the arguments a small number those who made interventions seriously (particularly those who publicly supported recent past SC decisions on copyright) it’s hard not to see that the outcome as a pat on the back to the outgoing Justice Abella, a retirement present of sorts. The fudge in this decision (and it’s thick and gooey) is the fact that the Court refused to endorse York University’s’ copying guidelines as fair dealing. I think this same fudge (if you’ll forgive the use of figurative language) is the glue that allowed the court to reach a unanimous decision. Without it the Court would have had to take seriously many of the other interventions and the outcome may well have been different. This is a theory, of course, and one that will be tested against future Supreme Court Decisions around copyright.

  8. Bob Morris says:

    As I said yesterday, the federal Liberals now have a clear path to legislate. A predecessor Liberal government, in 1996, very clearly mapped out a role for copyright collectives – specifically Access Copyright in fact. The SCC basically gutted that legislation (remember Rothstein in 2012 saying that while there might be room to disagree over the meaning of “private” in “private study”, you can’t just strip it of any meaning?) in the same way they did in the CCH case eight years earlier. The end result is that while collective licensing flourishes worldwide, it’s collapsing in Canada. I doubt that’s an outcome the government will or can countenance.

  9. Pingback: Supreme Court of Canada’s ruling in the York University vs. Access Copyright case deals a significant blow to creators – That Shakespearean Rag

  10. Your writing was really helpful to me, and I eagerly await the opportunity to read more of your work in the future.

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