A Canadian copyright royalties agency says a Federal Court of Appeal ruling that copyright tariffs are not mandatory is cause for concern for creators and publishers of written work and images.
“This is deeply detrimental to a well-functioning copyright regime by rendering the tariff process largely futile,” said a statement from the Canadian Copyright Licensing Agency, also known as Access Copyright. “It also deepens the challenges experienced by content creators and publishers to make a sustainable living from their work.”
The court decision issued April 22 related to the legal action between Access Copyright and York University on how copyright royalties might be assessed.
“Access Copyright asks why a collective society would engage in the lengthy, time-consuming tariff process if, at the end of it all, users could simply ‘opt out’ of the tariff,” the court said. “Access Copyright points out that the scheme of the [Copyright Act] provides for the protection of copyright owners’ rights while ensuring, by means of the tariff-setting process, that the fees charged for the use of works in a collective society’s repertoire are fair and reasonable.”
When licence renewal negotiations between York and the agency were stalled, the latter applied to the Copyright Board of Canada for an interim tariff covering copying of copyright protected works in post-secondary educational institutions. The request was granted.
York complied briefly but then opted out, introducing guidelines for faculty and staff.
“Acting pursuant to the guidance offered in the guidelines, York faculty and staff copied significant amounts of material for which York paid no licence fees or royalties,” the court said.
Access Copyright then sued York to enforce the interim tariff, seeking remedies including tariff royalties. York counterclaimed, seeking a declaration that all copying falling within the terms of the guidelines constituted fair dealing.
The concept of fair dealing recognizes certain uses of copyright-protected material can be societally beneficial. That is, with the placement of limits on situations where copyright owners can require payment, fair dealing can lead to the creation of new works, foster innovation and give rise to new scholarship.
The Supreme Court of Canada has recognized this as providing a balance between the rights of users and of copyright owners.
From 1994 to 2010, Access Copyright and York had a license agreement permitting professors to make copies of portions of textbooks and other published works under Access Copyright’s control.
“By 2010, the annual royalty payable pursuant to that licence was $0.10 per page and $3.38 per full-time equivalent (FTE) student,” the court said.
But, in March 2010, when Access Copyright was uncertain of a license renewal, it filed a proposed tariff with the board for post-secondary educational institutions covering the years 2011-2013. That proposed tariff contemplated a flat annual royalty of $45 per FTE student per year.
As the licence expiry approached, Access Copyright applied to the board for an interim decision. On Dec. 23, 2010, the board granted the application, issuing an interim tariff, rate of $0.10 per page and $3.38 per FTE.
York soon opted out.
“Since 2011, several other Canadian universities have also decided to opt out of the Access Copyright tariff,” the court said.
The case eventually found its way to the Federal Court, which found legislative history and statutory interpretation led to the conclusion that board tariffs are mandatory.
York appealed that decision, leading to the latest ruling. The court did, however, rule that York’s own guidelines for use of copyrighted materials did not meet Supreme Court of Canada guidelines.
Access Copyright said the decision presents a mixed outcome for Canadian creators and publishers.
“The decision by the Federal Court of Appeal sends an untenable message for rights holders: educational institutions that are following the education sector’s fair-dealing guidelines are copying unfairly, but the collective that has been authorized by thousands of rights holders to administer and protect their copyright has no avenue to enforce their rights in their work,” Access Copyright president Roanie Levy said.
The agency said the appeal court 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 to ensure compliance with their rights and forcing them to be their own compliance officers.
“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,” the agency said.
Writers’ Union of Canada executive director John Deben said, “As schools have scrambled to move online, the work of creators and publishers is an essential service for education.
“With the Court of Appeal’s decision, I am deeply concerned that creators’ ability to produce the Canadian content that education depends on is in jeopardy if they aren’t paid for their work when it is used.”
Access Copyright is reviewing the ruling to assess its options.