Last week, the Federal Court of Appeal (FCA) released its decision in the Access Copyright v York University appeal from the Federal Court (FC). My discussion of the trial judgment can be found here.

Michael Geist’s analysis of the FCA’s decision is here.

In summary, the FCA ruled that the interim tariff requested by Access Copyright, and granted by the Copyright Board, is not mandatory; and that copies made under York’s fair dealing guidelines (“Guidelines”) are not necessarily fair dealing. (para. 4)

The decision begins with a summary of the trial court’s decision and reasoning. The FCA’s reasons for judgement start on para. 37 (for the tariff issue) and para. 207 (fair dealing). The court acknowledges that a fair dealing analysis would be moot anyway except that York filed a counterclaim for a declaration that copies made under their guidelines are fair dealing. “The question of fair dealing only arises if the tariff applies to York. It is only if a final tariff is ‘mandatory’ that York must rely on its Guidelines to show that compliance with them is fair dealing, a user’s right.” (para. 33)

Is the interim tariff mandatory?

My discussion of this part of the case will be very basic, since it has been covered in great detail, and with better analysis, by Ariel Katz and Howard Knopf.

The significance of this issue lies in the difference between a license, a tariff, and copyright itself.

Copyright is the exclusive right to copy (or use, perform, adapt, etc.) a work, and is set out in statute (i.e. the Copyright Act). Copyright also includes the user’s rights to copy under certain circumstances (e.g. fair dealing). Copyright infringement is defined as copying without permission (e.g. not under the terms of a license or tariff, or covered by a user’s right).

A license is consensual agreement between two parties where the licensee is given permission by the copyright owner (or a representative) to make certain uses of a work pursuant to paying royalties (either on a case-by-case basis, or a blanket payment). These uses would be in addition to user’s rights, not replacing them.

A tariff is similar to a license, only the terms are set by a government agency rather than negotiations between two private parties. Licenses are voluntary; the issue in this case is whether tariffs are as well.

The question addressed by the court is whether a tariff is mandatory. In other words, if a user copies works in a way that goes beyond user’s rights and into the terms of the tariff, is the user automatically responsible to pay the royalties as set out by the tariff, or would the copyright owner have to seek damages for copyright infringement?

Access Copyright is a collective organization that represents copyright owners. It is permitted to enter into license agreements with users, collect and distribute royalties, and apply to the Copyright Board for tariffs. Importantly, it is not permitted to sue users for copyright infringement. Access Copyright argues in this case that since York’s copying is outside the scope of fair dealing or other user’s rights, that it must pay the royalties set out in the tariff.

The FCA spends some time in the decision going through the history of the Copyright Act and related court decisions. I won’t go into details about it, but the gist of the ruling is the following: historically, damages for copyright infringement have tended to be calculated based on amounts set out in tariffs, even though the damages are for copyright infringement and not payment of royalties per se. This has led to the belief that the tariffs themselves are mandatory. However, copyright infringement and breach of license are two different things and should not be confounded. “Acts of infringement do not turn infringers into licensees so as to make them liable for the payment of royalties.” (para. 205)

If you are interested in the issue of mandatory tariffs, Ariel Katz wrote an in-depth article that the court cites: Spectre: Canadian Copyright and the Mandatory Tariff – Part I, (2015) 27 IPJ 151.

If the tariff is not mandatory, it is not necessary at this time to determine whether the copying made under York’s Guidelines is fair dealing, since there would have to be a separate copyright infringement suit to determine damages, if any. However, York has filed a counterclaim for a declaration that the copying is fair dealing, so the court looked at that issue as well.

Are copies made under York’s Guidelines fair dealing?

Although the court claims to be looking at the Guidelines themselves (para. 209), it’s really looking at the actual copies made. In my opinion, this is very significant and goes to the heart of why the court did not grant the declaration. The thread running through the court’s analysis is the absence of what the court calls “safeguards” (to ensure that the copying is in fact within the scope of the guidelines), but I would prefer to look at it as an issue of education. Furthermore, it’s not easy to apply fair dealing factors to the Guidelines directly because the factors are meant to be addressed on a case-by-case basis, not to defined amounts like “10% of a work” or “one chapter of a monograph”.

Purpose of the dealing (ruling: unfair)

In looking at the purpose of the dealing, the court relies on the 2012 Supreme Court decision in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, where Access Copyright sought to collect royalties under a tariff for copies made by teachers in elementary and secondary schools in the province.

The court distinguishes the case from this one in that  the Alberta schools did not have a particular policy or guidelines related copying, and that it was done on an as-needed basis. (Oddly, the court suggests that having a policy (rather than “ad hoc” copying) makes the copying “systematic” [and therefore less fair?]. (para. 233))

The FCA also agreed with the FC that there are two purposes in play here: the university’s and the end user’s (i.e. the student’s purpose in obtaining an education). In fact, the FCA seems to be very explicit in claiming that the university is primarily motivated by trying to get something for free rather than by the allowable purpose of education.

As I argued in my blog post following the trial court’s decision, it is not necessarily “unfair” to try to get something for free that one was previously paying for, if they have been paying all along for copies that should have been considered fair dealing. However, we don’t know how much of what they were copying could have been fair dealing, and this fact relates to York’s lack of “safeguards” and suggests that the university isn’t ensuring that the copies are being made for an allowable purpose.

Unfortunately, York’s submissions did not include anything having to do with enforcement of the guidelines, such as a survey or sample, or even the education of faculty as to what would be considered an “educational” purpose. York’s primary argument was that the trial court erred, that York’s purpose was and is aligned with the end-users, and that is all that needs to be considered and safeguards are not relevant.

York’s dismissal of the Court’s concerns [about safeguards] as irrelevant underscores the flaw in its analysis of its legal burden. As the copier, it was incumbent on York to to ensure that its Guidelines were implemented according to their intent, since the integrity of the Guidelines and York’s practice are at the heart of its claim of fair dealing. The Federal Court’s finding that the safeguards were virtually absent undermines York’s claim to fair dealing or, to put it another way, tends to show unfairness.” (para. 239)

Character of the dealing (ruling: unfair)

Like the trial court, the FCA noted that there were lots of copies made, many more per student than in Alberta.

The court also notes that the Guidelines did not address downstream uses by students (i.e. whether the students shared their copies or put them on the Internet) and did not instruct faculty to let students know that there might be limitations on what they (the students) can do with their copies (paras. 256, 258). Again, this goes to safeguards and education of the faculty, which was not addressed York in their arguments.

Amount of the dealing (ruling: unfair)

FCA acknowledged that the trial court made an error when it concluded that the aggregate amount of copying led to unfairness. The “amount” of the dealing is meant to refer to the proportion of a work that has been copies, not the total number of copies made.

However, the FCA did not consider this to be an overriding error (para. 279). The court suggested that the trial court got a bit muddled but were trying to made a good point.

I believe that the FCA is wrong here and that the trial court’s interpretation of the amount is an overriding error, as it goes against the Supreme Court’s repeated admonition that the amount of the dealing is to be addressed proportionately, not in the aggregate. Otherwise aggregate use is “counted” twice – in the character of the use, and in the amount of the use.

The court also admonishes York for not trying to explain why the particular proportions enumerated in the Guidelines (10% of a work, a single article from a periodical, an entire poem from an anthology) are consistent or fair. Presumably, the faculty who are doing the copying are also not made aware of why these thresholds were chosen, and the amount of copying that was done reflected that.

Alternatives to the dealing (ruling: fair-ish)

The FCA did not interfere with the lower court’s decision regarding this factor, although it seemed to disagree in theory and again brought up York’s alleged purpose of getting for free what it had previously paid for.

Effect of the dealing (ruling: unfair)

Again, the FCA does not consider the trial court’s ruling on the effect of the dealing to be a palpable and overriding error, despite that the Federal Court did not require evidence that a loss of revenue by Access Copyright and publishers was directly caused by York’s copying. In my opinion, this is contrary to the Supreme Court’s reasoning.

Several copyright scholars (e.g. Michael Geist, Ariel Katz, Meera Nair) have argued that such a loss of revenue could be attributed to a number of factors (e.g. increased use of free or open access materials), and that loss of revenue in one area is offset by an increase of revenue in another area (e.g. direct licensing with publishers rather than through Access Copyright). And as I’ve mentioned above, if the revenue was originally based on payments that were not necessary, then the loss of the revenue cannot be presumed to be unfair.

However, York did not press these arguments; instead it relied on the Supreme Court’s statement in CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 that an institution does not have to show that each individual instance of copying was fair, but that their own practices and policies are fair (para. 63). York apparently took this to mean that as long as there was some kind of guidelines or policy, that they were “covered”.

Nature of the work (ruling: unfair)

The Federal Court did not consider this to be a significant factor but nevertheless concluded that in this case it tended to be unfair. The Federal Court of Appeal does not discuss it much but just takes note of the FC’s conclusion (para. 308).

Conclusion

Although I think the FCA was wrong in several respects in its analysis, and that these errors are appealable, I’m not necessarily disappointed in the court’s refusal to declare York’s guidelines as fair dealing.

Firstly, as mentioned above, there is no material difference since the tariff was ruled to be voluntary, so York does not have to show at this point that their copying was fair dealing.

Secondly I have argued elsewhere that York’s Guidelines, being based on the guidelines crafted by the AUCC (now Universities Canada) are lacking in several respects – see my dissertation Laying the Foundation For Copyright Policy and Practice in Canadian Universities, chapters 5 and 7.

In the main, I feel strongly that safeguards might have made a difference in the final analysis. The existence of safeguards (including education of faculty about fair dealing and copyright generally) demonstrates an attempt to ensure that fair dealing was followed. In other words the safeguards and education are part of the “general practice” that the Supreme Court in CCH says could be relied upon to establish fair dealing.

Merely having a set of guidelines is not sufficient, there needs to be assistance and support available in a formal sense to ensure that those who have to follow the guidelines know what they are for and what they mean.

I have written elsewhere about the importance of copyright literacy in universities:

• • ​Di Valentino, L. (2016). Awareness and Perception of Copyright Among Teaching Faculty at Canadian Universities. Partnership: The Canadian Journal of Library and Information Practice and Research, 10(2). https://doi.org/10.21083/partnership.v10i2.3556 – regarding faculty perception of copyright in their institutions;
  • dissertation, particularly chapter 7

Should York appeal the FCA’s decision not to declare their Guidelines to be fair dealing? Yes,  but only because Access Copyright will surely appeal the decision that the interim tariff is not mandatory, and York still needs to have that safety net. However, it would be a good idea in future to reconsider the Guidelines and their method of implementation.