In April 2013, Access Copyright commenced legal proceedings against the provincial Ministries of Education (including Ontario school boards) and York University for refusing to pay tariff royalties. Access sued York University in the Federal Court, and filed an application with the Copyright Board for an interim tariff against the Ministries. In both proceedings, Access argues that the parties justified non-payment of royalties based on an incorrect interpretation of the Canadian copyright fair dealing exception.

These proceedings are important for educational institutions that are considering relying on the fair dealing exception (or another organization’s interpretation of the exception) as a substitute for their Access Copyright license or tariff.

Background on Access Copyright and Tariffs

Access Copyright (“Access”) is a collective society. It administers authors’ and publishers’ rights in literary and artistic works by licensing the works as a repertoire to others. The license can be an individual agreement, or a tariff certified by the Copyright Board. Access divides the proceeds from individual licenses and tariffs amongst its authors and publishers.

Tariffs are approved by the Copyright Board. Tariffs obligate certain parties (by referring to the party specifically or as a class, or by reason of the acts of the parties) to remit royalties to the corresponding collective. Before commencing legal proceedings in April 2013, Access had an expired public elementary and secondary school tariff for 2005 to 2009. Although expired, the tariff allowed Access to collect royalties from the Ministries because Access also had proposed tariffs pending before the Copyright Board for the years after 2009. Access also currently has an interim tariff for post-secondary educational institutions.

Changes to Copyright Law in 2012

In July 2012, the Supreme Court of Canada expanded the Canadian copyright fair dealing exception in the decision ofAlberta (Education) v. Access Copyright.1 The fair dealing exception is a user’s right which provides an exception for acts which otherwise would amount to copyright infringement. To be a fair dealing, the allegedly infringing act must have been for an allowable purpose, and the dealing must have actually been fair. What is fair, however, depends on the facts of the case and an assessment of certain factors. The allowable purposes under the Copyright Act at the time of the decision included “research or private study”, “news reporting”, and “criticism or review”. In its decision, the majority of the Supreme Court of Canada gave a broad interpretation to the meaning of “research and private study.” They found that copies of a copyrighted work made by a teacher to distribute to students as part of class instruction are, unless made for an ulterior or commercial motive, for the purpose of the students’ “research or private study.”

Shortly after the Supreme Court’s decision, in November 2012, statutory changes to the Copyright Act (Canada) came into force further expanding the types of allowable purposes to include “education” and “parody or satire”.2

In response to the Supreme Court of Canada’s decision and the changes to the Copyright Act, the Council of Ministers of Educational Canada, Copyright Consortium published updated fair dealing guidelines in their 3rd edition of the Copyright Matters! publication. Copyright Matters! is distributed to school boards and educators across Canada to assist with copyright usage. The updated fair dealing guidelines purportedly describe the uses non-profit K-12 schools may make of copyrighted materials, which are permitted under the expanded fair dealing exception. The uses are essentially the same, however, as those specified in Access’ elementary and secondary school tariff.

In October 2012, the Ontario Public School Boards’ Association advised its members that, starting January 1, 2013, school boards would no longer operate under the 2005-2009 Access Copyright tariff. The decision to “opt-out” was, according to some reports, prompted by advice from the Council of Ministers of Education Canada, Copyright Consortium that most copying by K-12 teachers fell under the  fair dealing exception.

In December 2012, the Ministries’ notified Access that they would stop operating under the tariff and stop paying royalties beginning January 1, 2013. The Ministries gave no reasons for this change.

Proceedings Against The Ministries Of Education

In April 2013, Access filed an application for an interim tariff with the Copyright Board so it could sue the Ministries for unpaid royalties. Access believed that its expired tariff provided no right to sue the Ministries for unpaid royalties.

In its application, Access argued that the Ministries justified not paying royalties for one of two reasons: 1) either the Ministries had ceased copying the 200 million pages of copyright-protect works the Supreme Court of Canada (and the Copyright Board) had found to trigger a royalty payment;3 or 2) the Ministries considered those copies were no longer compensable since they fell within the recently expanded fair dealing exception. Access believed the latter was the true reason and pointed to the fair dealing guidelines in Copyright Matters! for support.

On May 29, 2013, the Copyright Board partially allowed Access’ interim tariff. In its decision, the Copyright Board agreed that the Ministries’ decision to do without the tariff may be grounded in part in the conclusions set out in Copyright Matters! The Copyright Board questioned, however, the correctness of the view expressed by the guidelines stating that they rely on an interpretation of Supreme Court of Canada decisions that has not yet been tested before a competent forum. In other words, no court or tribunal has found that the acts permitted by the guidelines amount to fair dealing. The Board explained that the Supreme Court of Canada decision in Alberta (Education) v. Access Copyright – the very case that expanded the fair dealing exception – pertained to only a small subset of copying by the Ministries. In fact, the Ministries had taken this very position (that the decision only affected a small portion of the Ministries’ total copyright usage) in oral submissions before the Supreme Court of Canada and during redetermination of the tariff before the Copyright Board.

Although the Board certified Access’ interim tariff, the Board disagreed that Access needed the interim tariff to sue the Ministries in court for failure to pay royalties. The Board appears to suggest that this remedy was already available to Access under its expired tariff. The Board’s reason for certifying the interim tariff was to account for statutory changes of November 2012 that expanded the fair dealing exception to include examination copies.4

Proceedings Against York University

Other educational institutions – including York University – also adopted fair dealing guidelines essentially identical to those found in Copyright Matters! York University, however, had notified Access on September 1, 2011 (more than 1 year prior to the Ministries) that it would stop operating under the tariff and stop paying the royalties.

Unlike with the Ministries, Access had an unexpired certified interim tariff for post-secondary educational institutions when it sued York University in April 2013. That interim tariff was certified by the Board in December 2010 in response to certain educational institutions (including York University) refusing to enter into individual licensing agreements with Access.5 Access’ lawsuit against York University seeks royalty payments based on its interim tariff (but does not claim copyright infringement).

In its statement of claim, Access alleges York University operated under the interim tariff up until August 31, 2011. After that date, York University did not pay any royalties but continued to copy works in Access’ repertoire. For support, Access points to copies made by five York University educators.

With respect to the issue of fair dealing, Access argues that York University’s fair dealing guidelines authorize and encourage educators and students to copy and deal with copyright in a manner that is not covered by the fair dealing exception. Access also argues that, even if the guidelines are correct, educators and students do not comply with, and York University does not enforce, the guidelines.

York University filed a statement of defence and counter claim in September, 2013. In its statement of defence, York University argues, among other things, that Access Copyright’s interim tariff is voluntary and that there is no basis under the Copyright Act to assert a claim for royalties allegedly due under an interim tariff, that York University’s fair dealing guidelines are consistent with those of the Association of Universities and Colleges of Canada (AUCC), and that York University already compensates copyright owners for use of their copyrighted works through other mechanisms.

The AUCC’s “fair dealings” guidelines are essentially the same as those found in Copyright Matters! The AUCC has committed up to $100,000 and has encouraged contributions from other Canadian institutions to fund York University’s lawsuit against Access Copyright.

Relevance to Educational Institutions

Educational institutions should exercise caution when drafting and adopting fair dealing guidelines. Using the guidelines of another organization, without assessing the institution’s individual copyright licensing situation and customizing the guidelines, could expose the educational institution to liability. The Supreme Court of Canada has clearly stated that what is fair depends on the facts of each case. Notwithstanding the risk that the other organization’s guidelines may not be generally supported at law, the guidelines may also not account for specific differences between organizations with respect to copyright usage, licensing, and individual factors affecting the scope of the fair dealing exception. A copyright assessment would also allow the educational institution to tailor the guidelines to its risk appetite and its processes for communicating and enforcing policies.