On February 19, 2016 the Copyright Board issued its long-awaited decision in relation to Access Copyright's proposed Elementary and Secondary Educational Institutions Tariff for the years 2010 to 2015. The Board's decision establishes the tariff rates payable by Canadian K-12 schools, outside of Quebec, for the right to reproduce published works such as books, newspapers, periodicals, and student exercise books.

This decision represents a complete victory for the K-12 schools with respect to a number of important legal issues addressed by the Board in its decision, including the application of the fair dealing provisions contained in the Copyright Act (the "Act") to K-12 schools, the adoption of a quantitative test to determine the scope of "non-substantial" copying under the Act, and Access Copyright's ability to represent the interests of rights holders in relation to whom it has not formally entered into an affiliation agreement.

In terms of the specific rates approved by the Board, Access Copyright had initially proposed annual rates of $15.00 per student for the period of 2010-2012 and $9.50 per student for the period of 2013-2015. In its tariff decision, however, the Board certified royalty rates of $2.46 per student for the first tariff period and $2.41 for the second tariff period. If this tariff is ultimately taken up by the K-12 schools, these rates are expected to generate approximately $9.4 million per year for Access Copyright, or about $56 million over the course of the six years covered by the tariff.

Another Loss for Access Copyright Before the Board

Notwithstanding the rates approved by the Board, read in conjunction with the Board's earlier May 22, 2015 decision in the provincial and territorial government copying proceeding, this decision represents another loss for Access Copyright with respect to a number of fundamental copyright law issues that affect its long-term interests. In a nutshell, the Board's decision constitutes yet another rejection of the arguments that Access Copyright has consistently advanced over the course of several years relating to these important legal issues on behalf of its author and book publisher affiliates.

In view of the magnitude of Access Copyright's loss before the Board, it is not surprising that, just as it did in response to the Board's May 2015 government copying decision, Access Copyright has now initiated a judicial review application of the Board's decision before the Federal Court of Appeal. In this regard, Access Copyright filed a "notice of application" with the Federal Court of Appeal on March 21, 2016 seeking an order referring the decision back to the Board for re-determination in accordance with the Court's directions. On judicial review, Access Copyright will argue that the Board made similar errors of law to those it claims the Board made in its earlier government copying decision, including errors relating to the fair dealing provisions and the test for non-substantial copying. The K-12 schools will obviously defend the Board's decision before the Federal Court of Appeal and will argue that the Board's conclusions with respect to the various legal issues raised by Access Copyright were correctly made.

Fair Dealing and the Supreme Court's Jurisprudence

The most important legal issue dealt with by the Board in its decision relates to the scope of the fair dealing provisions set out in section 29 of the Act. This is because the extent to which copyright "users" can rely on fair dealing has been the focus of three important decisions issued by Supreme Court of Canada in recent years, CCH Canadian Ltd. v. Law Society of Upper Canada (2004), Alberta v. Access Copyright (2012) and SOCAN v. Bell Canada (2012). Even though the Supreme Court has repeatedly dealt with the fair dealing issue, how it operates in the context of the copying of published works on an institutional level, such as in the case of governments or K-12 and post-secondary educational institutions, has been the continuing subject of vigorous debate between copyright collectives and users.

To put this issue in its historic context, in 2009, when the Board considered the question of fair dealing in a previous tariff proceeding involving Access Copyright and K-12 schools, it concluded that only copies of published works that fell within the limited enumerated purposes of "criticism or review," "private study", or "research" could qualify as fair dealing under section 29 of the Act.

However, the K-12 schools subsequently applied for judicial review of the Board's 2009 tariff decision before the Federal Court of Appeal, and then appealed the Court's decision to the Supreme Court of Canada. In its 2012 decision in Alberta v. Access Copyright, the Supreme Court held that the instruction provided to a student by a teacher through the classroom distribution of "short excerpts" of published works could not be separated from the research and private study purposes of the student.

This was the legal landscape that governed the Board's interpretation of the fair dealing provisions at the time it rendered its February 19, 2016 decision. First, the Board had to consider whether the different purposes that were listed for making the copies identified in a 2006 volume study of K-12 copying activities were fair or not. Relying on the Supreme Court's decision in Alberta, the Board held that all but two of these purposes, copies made for the purpose of school "administration" and copies made for the purpose of "entertainment", were fair.

Second, having completed this step of its fair dealing analysis, the Board had to consider each of the six fair dealing factors recognized in the Supreme Court's 2004 CCH decision: the goal, character and amount of the dealing, the nature of the work, alternatives to the dealing, and the effects of the dealing. The Board then reviewed these six factors in relation to each copying event that had been identified in the 2006 volume study to assess whether, in each particular case, the dealing could be considered fair. In its decision, the Board ultimately found that 97.2% of copying from books, 98.1% of newspapers, and 98.5% from periodicals constituted fair dealing and therefore did not generate the payment of any royalties to Access Copyright.

Non-Substantial Copying

In its February 19 decision, the Board also dealt with the question of non-substantial copying. Section 3 of the Act only grants copyright protection for the use of a "substantial part" of a work. This means that any use of a portion of a work that can be described as being non-substantial does not infringe copyright. If only a non-substantial portion of a work is used, the use does not infringe copyright and there is therefore no need to conduct any further legal analysis, such as that relating to the section 29 fair dealing provisions.

In considering this issue, the Board agreed with Access Copyright that, as a general proposition, "whether a part copied is substantial must be decided using a qualitative and holistic approach rather than merely considering the quantity copied". Nonetheless, the Board also recognized the inherent difficulty with such a qualitative approach and concluded that it may, in fact, be unworkable in some situations, such as in tariff proceedings in which there may be little, if any, evidence, about the skill and judgment used to create the portions of published works copied by users. In other words, a qualitative analysis, while preferable to a quantitative one, is not always possible.

In these circumstances, in its decision, the Board adopted the quantitative approach proposed by the K-12 schools, in which one to two pages of a book were considered an "approximation of copying that does not reproduce a substantial part of the copied work". This decision was consistent with the Board's May 2015 decision with respect to government copying where the Board also approved a quantitative test for non-substantial copying. In the case of the copying of newspapers and periodicals, however, because they are invariably shorter in length than books, the Board concluded that there could not be any non-substantial copying of these genres of works.

Repertoire Issues

As it was required to do in its previous 2009 decision with respect to K-12 schools, the Board also had to address Access Copyright's claim that its repertoire consists of all eligible published works. Specifically, Access Copyright argued before the Board that, when a "non-affiliated" rights holder accepts payment from it for a copy made of a published work, an implied agency relationship is automatically created between Access Copyright and the rights holder which confirms, on a retroactive basis, Access Copyright's mandate to act on the rights holder's behalf. What this means in practice is that all works, unless they are explicitly removed from Access Copyright's repertoire by the appropriate rights holder, form part of Access Copyright's repertoire for the purpose of its various tariff filings.

In its February 19 decision, the Board rejected Access Copyright's claim as to the scope of its repertoire. In the Board's view, the mere acceptance by non-affiliated rights holders of payments made by Access Copyright does not mean that the collective is entitled to consider that these rights holders' works form part of its repertoire. As such, the K-12 copying of works belonging to non-affiliated rights holders was not taken into account by the Board in establishing the royalty rates approved in its decision.

Another repertoire issue with respect to which the Board ruled against Access Copyright related to Access Copyright's attempt to include sheet music under its proposed K-12 tariff. Because the 2006 volume study had measured such a small number of copying events that were both identified as sheet music and which could legitimately be said to fall within Access Copyright's repertoire, the K-12 schools argued that a blanket licence for this category of works was entirely valueless to them. The Board agreed, and did not include sheet music in Access Copyright's tariff.

Conclusion

The Board's February 19 decision constitutes a complete rejection of several of the legal arguments advanced by Access Copyright in its dealings with educational institutions that are completely at odds with the provisions of the Act as they have been interpreted in recent years by the Supreme Court. Such being the case, the Board's decision will hopefully put to rest many of these arguments that, notwithstanding the Supreme Court's different decisions, Access Copyright has continued to promote.

From this perspective alone, the decision represents an extremely important contribution to the mutual understanding that should eventually emerge between copyright creators and users as to the current state of the law in Canada in relation to these fundamental copyright issues. Before this can occur, however, the Federal Court of Appeal will have its own opportunity to consider these issues within the context of Access Copyright's application for judicial review of the Board's decision.

The authors, J. Aidan O'Neill and Ariel Thomas, were co-counsel, along with Wanda Noel, who acted together on behalf of the K-12 schools in this proceeding.