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Home > Our Insights > The Federal Court of Canada Puts the “Fair” in the Copyright Act’s “Fair Dealing” Exceptions in Canadian Copyright Licensing Agency v. York University
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The Federal Court of Canada Puts the “Fair” in the Copyright Act’s “Fair Dealing” Exceptions in Canadian Copyright Licensing Agency v. York University

Published:

July 18, 2017

Author(s):

  • Donna MacEwen, KC

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On July 12, 2017, the Federal Court of Canada made it clear that there are but two ways to avoid a tariff set by the Copyright Board of Canada Board under Canada’s Copyright Act: by obtaining permission to copy, or by falling within an exemption under the Act. And what’s “fair” in the context of the “fair dealing” exception under the Act isn’t determined solely from the copier’s perspective – even when that copier is a post-secondary educational institution.

As a result of the Court’s decision in Canadian Copyright Licensing Agency v. York University, all educational institutions, whether they’ve adopted the Association of Universities and Colleges Canada (AUCC) (now Universities Canada) Fair Dealing Guidelines, have their own, or have none at all, are well-advised to revisit them and their copying activities generally. And the Court’s decision isn’t limited to those seeking to rely on the Act’s fair dealing exemption for the purposes of research, private study, education, parody or satire; the fair dealing test the Court set out also applies to the Act’s fair dealing exemptions for the purposes of criticism, review and news reporting, so those relying on either of these exemptions should similarly revisit their guidelines, policies and practices.

  • Write down the what – and the why. Organizations seeking to rely on a fair dealing exemption under the Act should put their limits or thresholds into writing. And they should also be prepared to set out not just what those limits are, but also to explain exactly why the particular thresholds are “fair” – preferably also in writing.
  • Substance and form. In setting fair dealing limits or thresholds, test the quantitative “thresholds” in a qualitative manner. For example, a quantitative threshold of 10% of a book or articles in a journal, etc. (the threshold in York’s Guidelines) might seem, on its face, “fair”, apparently prohibiting the copying of an entire work. But when put into practice, that same threshold could yield a result that is qualitatively unfair – practically permitting the complete copying of a work that forms 10% or less of a larger work, such as an anthology.
  • Actions speak louder than words. It’s critical that those relying on any fair dealing thresholds do more than just set the limits (ideally in writing): it must take steps to actively police and enforce it, and document those activities so it can prove it did so should it ever need to do so.

In Canadian Copyright Licensing Agency v. York University, The Canadian Copyright Licensing Agency (Access Copyright, an organization that collects and distributes royalty fees on behalf of writers and publishers) sued York University (a member of Universities Canada, formerly AUCC) to enforce its royalty fees under an Interim Tariff the Copyright Board of Canada issued respecting York employees’ copying activities for a specified period between 2011 and 2013. York, however, claimed its copying fell within the Act’s exception for “fair dealing” for research, educational and private study purposes, and therefore the fees weren’t payable. York had Fair Dealing Guidelines, based on the AUCC’s Fair Dealing Guidelines. Among other things, the Guidelines set a “threshold” of 10% of a book or articles in a journal, with no explanation; York also didn’t enforce the Guidelines. The Federal Court, in a lengthy decision that underscores the highly fact-specific nature of this issue, confirmed the determining whether a dealing is “fair” within the meaning of the Act’s exceptions is a two-part test, as set out in the Canada’s leading decision on “fair dealing” (the Supreme Court of Canada’s 2004 decision in CCH Canadian Ltd. v Law Society of Upper Canada) – but decided that in this case, York didn’t pass it:

The Act authorizes the purpose. First, the dealing must fall within one of the Act’s three “fair dealing” exceptions: dealing for the purposes of research, private study, education, parody or satire; dealing for the purposes of criticism or review; and dealing for the purposes of news reporting. In this case, York’s dealing with copyrighted material easily falls within the authorized purpose of research, private study or education.

The dealing must be “fair”. Second, the dealing must be “fair”. The Act doesn’t define the word “fair”, so what’s “fair” is a question of fact, depending on the particular circumstances of each case and requiring a balancing of interests – those of the copier and those of the author and/or publisher – assessed by reference to six non-exhaustive factors:

  • The purpose of the dealing. The court will assess why the dealing is being done. In this case, this factor replicates the inquiry in the first step of the test: York’s dealing with copyrighted material falls within an authorized purpose. However, it could entail a different inquiry; for example, in CCH Canadian Ltd. v Law Society of Upper Canada, the Law Society’s purpose was educational, even though it’s not an educational institution.
  • The character of the dealing. The court will consider how the work was dealt with, the number of copies made, and the extent of dissemination; the industry custom or practice might also be relevant. But “character” and “amount” are different: character involves the aggregate total number of pages copied; amount involves the proportion between the excerpted copy and the entire work. In this case, this factor is more meaningful when considered with the others, but the broad and large volume of the copying – based on the big picture number of copies rather than the per student exposure York argued for – tended toward unfairness.
  • The amount of copying. This factor focuses on the proportion between the excerpted copy and the entire work: how much of a work was copied and, in this case, whether the Guidelines’ 10% “threshold” (10% of a book or articles in a journal, etc.) is fair both quantitatively and qualitatively. It’s neither. Quantitatively, the Guidelines set fixed and arbitrary copying limits without explaining what makes them fair, and practically allows for copying of 100% of an author’s work, if it’s divided between courses or depending on the publication format. For example, if a story were copied as one story it would be copyright protected; if copied from a book containing a collection of works, it’s not. These are indicators the Guidelines are arbitrary. Qualitatively, the parts copied can be the core of (and up to 100% of) the work, also without explaining why that’s fair.
  • Alternatives to the dealing. This factor assesses whether and what alternatives to copying to which the copier has access. The Court was clear that the justification of cheaper access isn’t determinative: it’s always better for users to get for free that which they have had to pay for in the past. In this case, York didn’t prove there are no alternatives to its dealing: its dealing includes copying entire required course readings (called “coursepacks”) without compensating the author or publisher, simply because it could be done digitally.
  • Effect of the dealing. This factor examines the impact of the dealing on the writers, publishers and broader market. The Court noted the effect of the dealing on the market is, in this case, complicated, particularly in light of increased digitalization, peer-to-peer sharing, and use of databases and programs to distribute materials to students. The Court acknowledged the impossibility of isolating and individually weighing its contribution to market impacts, but ultimately concluded that allowing universities to freely copy material for which they used to pay directly and adversely affects writers and publishers.
  • The nature of the work. Though not a determinative factor, this examines whether the work of such a nature that its reproduction would lead to a wider public dissemination of the work, one goal of copyright law. In this case, this factor leans to unfairness because of how the nature of the works is treated and the way the Guidelines are applied: the works are published original works created with skill and judgment, typically requiring research, judgment, expertise and merit, created and published by people who, mostly, earn their income from writing and publishing.  There was no evidence the Guidelines were meant to motivate, nor needed to assist in, dissemination.

No enforcement. In this case, the Court also placed considerable weight on an additional factor: York’s failure to make any meaningful effort to ensure compliance with the Guidelines.

What’s academic freedom got to do with it. Nothing; the Court flatly rejected York’s evidence that compliance with copyright laws infringes professors’ academic freedom.

How this case is different from the CCH case. The Court applied the same test as did the Supreme Court of Canada in CCH Canadian Ltd. v Law Society of Upper Canada, but the outcome is different because the facts are different, emphasizing the fact-specific nature of the test. There, CCH sued the Law Society alleging the copying activities of its “Great Library” without payment of royalties infringed the Copyright Act. But there, the Supreme Court of Canada decided the Law Society’s dealings did fall within the fair dealing exemption for the purposes of research, private study, education, parody or satire for reasons including the control the Great Library exerted over the dealings by way of strict policies that were enforced, that single copies were made, and the absence of adverse impact on publishers.

The Final Tally. The Court confirmed, with little trouble, that the Tariff is mandatory and enforceable against York, even though “Interim” – and Access Copyright is entitled to payment from York of the royalties it claimed in its lawsuit for copying between 2011 and 2013. The Court also retained jurisdiction to settle the calculation of amounts owing, if necessary.

To Appeal or Not to Appeal. York University has the right to appeal this decision, and gets the benefit of the “Summer Break”: if it’s going to appeal, it has 30 days to do so – not counting the months of July and August. In the meantime, copiers will have to decide whether to act now, or to wait and see, bearing in mind that there could be a financial cost to its decision.


Please contact your McInnes Cooper lawyer or any member of the Intellectual Property Team @ McInnes Cooper to discuss this topic or any other legal issue.


McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2017. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at [email protected] to request our consent.

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    On January 14, 2016, the Ontario Superior Court decided that Canadians have a clear privacy interest in their records of their cellular…

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    Publication
  • Canada’s Anti-Spam Legislation (CASL): The Top 3 Lessons Businesses Can Learn from Year 1

    Sep 29, 2015

    The anti-spam sections of Canada’s Anti-spam Legislation (CASL) took effect on July 1, 2014 amidst hype, controversy and dire warnings. Were…

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    Publication
  • The New NS Missing Persons Act: 5 Privacy Implications for Businesses, Organizations & Public Bodies

    Jun 2, 2015

    Effective April 22, 2015 the NS Government enacted the NS Missing Persons Act, lowering the threshold for police to get an order to access…

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    Publication
  • SCC Gives Municipalities (& Other Government Authorities) 3 Reasons Not to Say A Little Prayer in Mouvement laïque québécois v. Saguenay (City)

    Apr 15, 2015

    On April 15, 2015 the Supreme Court of Canada decided the City of Saguenay’s recitation of a religious - though non-denominational – prayer…

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  • Wait a Minute Mr. Postman … 3 Lessons Health Canada’s Privacy Breach Delivers to the Private Sector

    Mar 25, 2015

    On March 3, 2015 Canada’s Privacy Commissioner determined that Health Canada breached privacy laws by mailing letters to over 40,000 Marihuana…

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    Publication
  • No Messing Around – $1.1M First Penalty for Canada’s Anti-Spam Legislation (CASL) Violations by Compu-Finder

    Mar 6, 2015

    On March 5, 2015, the Canadian Radio and Television Commission (the CRTC, the main agency charged with administering and enforcing most of CASL)…

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    Publication
  • No More Criminalization of Physician-Assisted Dying: The Ripple Effects of A Watershed Decision in Carter v. Canada (Attorney General)

    Feb 9, 2015

    NOTE: On April 14, 2016, the federal government proposed legislation setting out the conditions that a person wishing to undergo…

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    Publication
  • Charter Protects the Right to Strike

    Feb 2, 2015

    On January 30, 2015 the Supreme Court of Canada decided that the Canadian Charter of Rights and Freedom’s protection for freedom of…

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    Publication
  • Changes to Canada’s Trademarks Law: The Good, The Bad & The Ugly

    Jan 26, 2015

    NOTE: Substantial changes to Canada’s Trademarks Act took effect on June 17, 2019 Learn more at New Canadian Trademarks Regime Effective June…

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  • Privacy in Basic Cell Phones: SCC Continues Trend of Privacy Protection in R. v. Fearon

    Dec 11, 2014

    On December 11, 2014 the Supreme Court of Canada continued its trend to recognize privacy rights – and develop the law to protect them –…

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    Publication
  • Canada’s Anti-Spam Legislation (CASL) Software Installation Sections: 10 FAQs

    Dec 11, 2014

    On January 15, 2015, the software provisions of Canada’s Anti-Spam Legislation (CASL) will take effect.  CASL’s anti-spam sections, touted…

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    Publication
  • Complying with Canada’s Anti-Spam Legislation (CASL): A blueprint for the construction industry

    Dec 1, 2014

    The construction industry - project owners, contractors, subcontractors and trades - might be relaxing, ignoring the hype around Canada’s…

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    Publication
  • Complying With Canada’s Anti-Spam Legislation (CASL): Protecting Directors & Officers from Personal Liability

    Oct 14, 2014

    CASL’s anti-spam sections came into force on July 1, 2014. Every organization that CASL affects should now be complying with it – and their…

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    Publication
  • Complying With Canada’s Anti-Spam Law (CASL) – Foreign Organizations Doing Business in Canada Need to Pay Attention

    Aug 1, 2014

    Most Canadians have heard about Canada’s Anti-Spam Legislation (CASL): we’ve been bombarded with “CASL Compliant” emails asking us to…

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    Publication
  • SCC Protects Internet Users’ Expectation of Privacy In Online Activities in R. v. Spencer

    Jun 16, 2014

    On June 13, 2014 the Supreme Court of Canada decided that Canadians have a reasonable expectation of privacy in their online activities, and…

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    Publication
  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – The Last Minute Guide to Preparing For CASL

    Jun 12, 2014

    The countdown to CASL is almost over: there are only 13 business days until the anti-spam provisions of CASL – and most of the penalties for…

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    Publication
  • Counting Down to Canada’s Anti-Spam Legislation (CASL) –10 Steps to Prepare for CASL

    May 8, 2014

    On July 1, 2014 – less than two months from now - the anti-spam sections of Canada’s Anti-Spam Legislation (CASL) take effect. Individuals…

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    Publication
  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – Does CASL Make You A “Spammer”?

    Apr 15, 2014

    The countdown to CASL is on: on July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (“CASL”) take effect. Individuals…

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    Publication
  • Counting Down to Canada’s Anti-Spam Legislation (CASL): 10 Reasons Why You Should Care About The Upcoming CASL Right Now

    Feb 28, 2014

    On July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (aka “CASL”) will take effect. CASL is: Broad. It applies…

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    Publication
  • Counting Down to Canada’s Anti-Spam Legislation (CASL) – What You Need to Know Now

    Feb 28, 2014

    On July 1, 2014, the anti-spam sections of Canada’s Anti-Spam Legislation (aka “CASL”) take effect. CASL will apply to just about every…

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    Publication
  • Students with Learning Disabilities Have a Right to Education Comparable to that of the General Student Population in Moore v. British Columbia (Education)

    Jan 8, 2013

    On November 19, 2012, the Supreme Court of Canada (SCC) unanimously ruled a B.C. public school system’s failure to provide adequate and…

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  • Legal Alert: SCC Finds Limited Reasonable Expectation of Privacy In Work Computer But Evidence Still Admissible

    Oct 22, 2012

    Mr. Cole was a high school teacher with an employer owned and issued laptop computer.  He also used it for incidental personal purposes, which…

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  • Ontario Court of Appeal Finds Reasonable Expectation of Privacy in Work Computer

    May 6, 2011

    In March 2011, the Ontario Court of Appeal found that an employee had a limited expectation of privacy in the contents of a work computer. The…

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