July 18, 2017
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.
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:
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.
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