The Federal Court of Appeal recently released an important decision on the subject of fair dealing in the K-12 educational sector. It upheld the Copyright Board’s ruling that teachers’ copying of textbooks and other copyright materials for classroom use does not qualify under the fair-dealing exception for private study. The decision means that educators are liable for copyright royalties when they make multiple copies of copyright works for use in Canadian classrooms, as such dealings are not "fair" in the meaning of the Copyright Act.

The fair-dealing exception in the Copyright Act allows people to make non-infringing use of copyrighted material provided the use is made for an allowed enumerated purpose and is fair. One of those purposes, as set out in Section 29, is "research or private study."

Access Copyright asked the Board to set a royalty to compensate owners and publishers for the photocopying of copyrighted materials in K-12 schools during the years 2005-2009 outside of Québec. Provincial education ministers and Ontario school boards argued that the copying of textbooks and other copyright materials for classroom use constituted fair dealing. The Board applied the test from the CCH v. Law Society decision, found that the purpose of that photocopying was not for private study, and certified Access Copyright’s tariff.

The provincial education ministers and Ontario school boards then sought judicial review of the Board’s decision. In ruling on the application, the Federal Court of Appeal held that the "Board laid out the appropriate test from CCH and, through clear and comprehensible reasons, came to a justifiable conclusion" and committed no reviewable error on the fair-dealing issue.

In the reasons for decision, the Court of Appeal made a number of important findings.

The court confirmed the holding in CCH that in order to show that a dealing is fair under Section 29 of the Act, a defendant must prove both: (1) that the dealing was for the purpose of either research or private study, and (2) that it was fair.

The court also confirmed that the second step, whether the dealing is fair, "is a question of fact and depends on the facts of each case." Repeating what the Supreme Court said in CCH, the Court of Appeal held that fairness is determined by examining six non-exhaustive factors: (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work.

As the Board had accepted as fact that the copies at issue were made for an allowable purpose, the court focused on whether the Board had erred in finding that copying for classroom use was fair.

In looking at the purpose of the dealing, the court accepted that "private" study could not be equated with non-commercial study. "Private study" means "study by oneself." The court observed that "When students study material with their class as a whole, they engage not in ‘private’ study but perhaps just ‘study.’"

After canvassing the jurisprudence from Canada, UK, New Zealand, and the US, the court also held that courts must make an assessment of the true motive or purpose of the alleged infringer in assessing whether a dealing is fair.

On the facts, the court held that it was reasonable for the Board to consider whether a student had requested the copies him/herself or whether the teacher made the copies at his/her own initiative. The Board was also entitled to find that, when a student is instructed to read the material, it is likely that the purpose of the copying was for classroom instruction rather than the student’s private study.

The court held that Board’s findings with respect to the other CCH factors were reasonable, observing that:

In terms of the character of the dealing, the applicants point to testimony that students normally destroy or lose photocopies; however, the Board made a finding of fact that students often keep their copies in binders for an entire school year. In terms of the effect of the dealing, the Board found on the evidence that it was likely that the dealing hurt textbook sales. While the Board admitted there was no conclusive evidence to this effect, it did not act unreasonably in considering the overall decline in sales when conducting its fairness analysis.

In the court’s opinion, the Board’s determination that the copying did not properly qualify as private study, and was unfair, constituted "a legitimate conclusion that was open to the Board based on the evidence before it."

The court’s decision is of considerable importance: while it acknowledges that "user rights" such as fair dealing must be given a "large and liberal interpretation," such an interpretation cannot override the actual language of the Copyright Act and create exceptions beyond those established by Parliament.

The court did remit the decision back to the Board as to whether the photocopying came within a claimed exception under Section 29.4 of the Copyright Act. The section entitles people to reproduce copyrighted work for educational purposes provided the work is not commercially available in a medium appropriate for the purpose. The court found that the Board had failed to interpret the words "in a medium appropriate for the purpose," and ordered the Board to undertake a complete analysis of liability for such copies.

The Ministers of Education are now seeking leave to appeal the Court of Appeal decision to the Supreme Court of Canada.