The Association of Canadian Publishers (ACP) this week said that Canada’s “copyright framework is broken” after an appeals court dealt Canadian publishers and authors a major setback in a closely watched copyright case.
On April 22, the Canadian Federal Court of Appeal upheld a lower court decision in Access Copyright v. York University, which held that copying guidelines used by York University in Toronto did not comply with the Canadian Supreme Court’s test for fair dealing (fair use in the U.S.). But, in a major blow, the court also held that "tariff" payments for the university’s copying—under rates set by the Canadian government’s national Copyright Board—are not mandatory.
“Through Access Copyright, Canadian publishers have participated in the Copyright Board’s multi-year tariff process in good faith, and with an expectation of fair and reasonable compensation for the use of their content,” said ACP executive director Kate Edwards. “The Court of Appeal’s decision on mandatory tariffs makes future engagement in this process futile, and leaves small and medium-sized rightsholders in the untenable position of pursuing compliance on their own, rather than through their collective.”
The copyright battle dates back to April of 2013, when Access Copyright, a major collective society representing thousands of authors and some 650 publishers, filed suit alleging that York University was improperly using its fair dealing guidelines to avoid paying copyright tariffs for materials used in the classroom.
In July, 2017, the Federal Court of Canada delivered a resounding win for Access Copyright, holding that York’s guidelines were unfair, and that the tariffs issued by Canada’s Copyright Board—a regulatory body authorized to establish royalty rates for the use of copyright protected works administered by collective societies—were mandatory.
But in its decision last week, the Federal Court of Appeal—despite upholding that York University’s copyright guidelines were not fair dealing—ruled that the Copyright Board’s role is to approve, not to implement tariffs. And because York University opted out of the tariff system in 2011, after balking at paying higher rates, York was not bound by those tariffs.
“Acts of infringement do not turn infringers into licensees so as to make them liable for the payment of royalties,” the court held.
In a statement, Access Copyright said it is considering next steps, which could include a possible appeal to Canada's Supreme Court.
"The Court of Appeal’s decision on mandatory tariffs deprives creators of fair and affordable payment for the use of their work by stripping them of the ability to rely on their collective," the statement reads. "The purpose of the tariff regime is to provide collective societies with a practical, effective solution to ensure that the rights holders they represent receive fair compensation for the use of their works."
To be clear, the decision does not leave copyright holders without recourse. While Access Copyright cannot sue for copyright infringement and damages, individual copyright holders can. But, given the high cost of litigation for individual authors and small publishers, ACP said that’s simply not feasible.
“In essence, the decision reaffirms that the Canadian education sector has engaged in illegal and unfair copying on a systematic basis,” reads the ACP release, “and makes the prospect of enforcement for small and medium-sized publishers impossible.”
The situation has been exacerbated, Canadian publishers have maintained, by Canada's 2012 Copyright reforms, which expanded fair dealing in an educational setting, and, ACP said, has contributed to to a major decline in Collective licensing revenue across the industry. ACP put the cumulative loss to date at around C$150 million.
In its release, the ACP is calling on legislators to move to "correct market damage and provide a policy framework that supports future investment in Canadian writing and publishing." And it is urging the education sector "to come back to the table," and negotiate with authors and publishers.
Edwards said that educational institutions agreeing to pay the current license rates (C$2.41 per student for K-12; C$14.31 per student for universities; and C$5.50 per student for colleges) would "go a long way to restoring the marketplace."
"I have to remain optimistic that the education sector will do the right thing in reviewing the decision, though no talks are currently planned," Edwards told PW. "The guidelines they have been using have now been tested in court twice, with the same result."