Meera Nair

York; some initial thoughts

In Posts on May 6, 2020 at 8:05 am

On 22 April 2020, the Federal Court of Appeal released its decision concerning the dispute between York University and Access Copyright. Two issues were probed by the Court: (i) Were tariffs mandatory? and (ii) Were York’s fair dealing guidelines essentially fair? The outcome resembles a draw, with the university prevailing on the first point (tariffs are not mandatory), and Access Copyright emerging victorious on the second as the Court of Appeals could not provide a stamp of approval to York’s guidelines.

The decision has generated much commentary from advocates of both sides of this debate (i.e., Michael Geist, The Writers’ Union of Canada, Lisa Di Valentino, The Association of Canadian Publishers, Adrian Sheppard, Access Copyright). A potential next step is an appeal to the Supreme Court of Canada; Michal Jaworski and David Bowden of Clark Wilson have written, “Given the interests at stake on both sides, there is a reasonably high likelihood that one or both parties will be seriously exploring leave to appeal (or cross-appeal) to the Supreme Court of Canada.”

Writing for the Court, Justice Pelletier tended to the tariff issue first. After detailing the events which led to the appeal, he writes: “In my view these textual arguments are best dealt with in the legislative context in which they arose (para 47).” Distilling the appeal to a central question—whether the relationship between a user and copyright-owner changes with the involvement of the Copyright Board—Pelletier further writes, “This is a question with a long history, which is best understood through the laborious process of a step by step historical review (para 56).”

Integral to Pelletier’s analysis is a Supreme Court case, Vigneux v. Canadian Performing Right Society Ltd., [1943]. At that time, then-Chief Justice Duff had traced historical details relating to the development of collective licensing in Canada:

… the legislature evidently became aware of the necessity of regulating the exercise of the power acquired by such societies (I shall refer to them as dealers in performing rights) to control the public performance of such musical and dramatico-musical works. […]  … it is evident that the legislature realized in 1931 that this business in which the dealers were engaged is a business affected with a public interest (para 57).

Pelletier continues: “It can thus be seen that the mischief which Parliament sought to correct was the quasi-monopoly which performing rights societies had achieved by acquiring performing rights from the original owners of the copyright (para 58).” He describes in detail the criteria Parliament stipulated as necessary conditions to be met by the performing rights societies (including “mandatory filing of a statement of the works in a society’s repertoire”.)

As befitting a commitment to historical exploration, multiple Canadian copyright statutes are examined in order to trace the evolution (or not) of relevant provisions regarding collective licensing. A systematic unearthing of facts leads to a decisive conclusion: “A final tariff would not be enforceable against York because tariffs do not bind non-licensees. If a final tariff would not be binding, the conclusion can hardly be different for an interim tariff (para 204).”

But when reading the examination of the second issue, the analysis of fair dealing, I could not help but be struck by the difference in the judicial treatment of the two sections. The absence of historical reflection with respect to fair dealing in Canada left an aura of mystery—as if the decision had been crafted by two different parties.

Readers may wish to pay particular attention to an acknowledgement from Pelletier: “Both York and these interveners cite an article by Professor Ariel Katz, “Spectre: Canadian Copyright and the Mandatory Tariff – Part I”, (2015) 27 IPJ 151, that I found very useful in addressing the question of the enforceability of tariffs (para 32).” Such restraint is perhaps the norm among the judiciary; I hope it is not taken as disrespect to the FCA, if I point out that the laborious step by step historical review was wrought in large part by Ariel Katz. He explored every aspect related to Access Copyright’s claim that tariffs were mandatory; more specifically, he probed both caselaw and revisions of the Copyright Act, over the span of the twentieth century.

Ariel’s work is well worth reading in its entirety. He reminds us that Duff’s salient words reflected the sentiment of the Parker (Royal) Commission of 1935, “whose recommendations formed the basis for statutory amendments in 1936.” That in fact Parliament sought to address, as Ariel writes, “the mischief occurring as control over musical repertoire had become concentrated in one society’s hands, with no protection to the public interest. He quotes Judge Parker at length; abbreviated here:

… Competition no longer exists. A monopoly, or super-monopoly, has arisen. No one quarrels with the author, composer and publisher pooling their rights and placing them in a central bureau for the purpose of collecting a fair fee for the same and of preventing infringement thereof. It is an inevitable monopoly existing for the convenience of the owner and the user; but it should not be exercised arbitrarily and without restraint (180).

For readers interested in further details about the Parker Commission, Louis J. D’Alton’s MA Thesis, The Copyright Board and Tribunals Process: Users in the Balance (2016), adds to our understanding of present events. He emphasizes the dysfunction of the time; i.e., “Complaints about the [society’s] activities by music users had been raised in the Canadian House of Commons, where vivid debate characterized the [society] as ‘evil and that some form of control was needed to ‘put an end to price fixing and extortion (p.43).’” The Commission report itself is here.

From a close examination of Duff’s language, Ariel identifies the Canadian Parliament’s response as refining the process of collective licensing along two dimensions.

i. “regulating the exercise of power” by CMOs, i.e., the opposite of enhancing their power,

ii. [ensuring that] participation in a collective “qualified” copyright owners’ rights, i.e., the opposite of expanding them. Copyright holders’ discretion was replaced with “a statutory license vested in everybody who pays or tenders to the dealer [the CMO] fee, charge or royalty which has been fixed by the Copyright Appeal Board” …

As is evident from Ariel’s work, these axes remained consistent throughout subsequent evolution of the Copyright Act, to the conclusion that: “The ‘mandatory tariff’ theory is based on dubious legal foundations. Established case law debunks it, standard principles of statutory interpretation contradict it, and the legislative history discredits it (p.210).” A sentiment echoed by Pelletier: “While there have been modifications in the statutory language used between 1936 and 2012, the continous references to licensing schemes and the retention of the key elements of the 1936 Act leave little doubt that tariffs are not mandatory (para 202).”

It is regrettable that York and its legal team failed to make better use of Ariel’s work at the outset of this dispute.

Some commentary on the fair dealing aspect remains necessary — that will follow another day. For now, the dual personalities of the FCA decision is no longer so mysterious.

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