On April 22, 2020, the Federal Court of Appeal released a long-awaited decision in the ongoing dispute between York University and Access Copyright – a dispute that has turned into an epic copyright battle. In a nutshell, the case overall represents a major win for York University, although it suffered a partial loss since it was unable to convince the Court of Appeal that its ⦥uro;SFair Dealing Guidelines⦥uro; were fair for the purposes of copyright law.
Background:
Access Copyright is a collective society which administers the reproduction rights in published books, and other literary works, collects royalties, and distributes them to the copyright owners.
York University is one of Canada's largest universities. Over time, York University became a proxy for a broad coalition of those wishing to challenge the scope of Access Copyright's tariffs, including Universities Canada, the Canadian Association of University Teachers, and the Canadian Federation of Students.
Arguments by Access Copyright, in turn, were supported by other copyright industry groups such as the Association of Canadian Publishers, the Canadian Publishers' Council and The Writers' Union of Canada.
This started almost a decade ago, when York opted out of the standard license agreement with Access Copyright. At that time, Access Copyright and York University were parties to a licence agreement that ran from 1994 to 2010. Under this license, York was permitted to make copies of portions of textbooks and other published works in Access Copyright's repertoire, for a set tariff based on a per-page or per student calculation.
When the 2010 license expired, Access Copyright sought a new tariff, which took effect in January 2011. York opted out, and instead relied upon its own ⦥uro;SFair Dealing Guidelines⦥uro; to permit use and copying of materials by faculty and students.
Access Copyright sued York.
Since many other Canadian universities use guidelines similar to those used by York, the case generated interest across the post-secondary education community.
A Reminder about Fair Dealing:
Since this case turns, in part, on the concept of ⦥uro;Sfair dealing⦥uro;, it's worth a quick refresher: A central element of York's defence is that it shouldn't be held to account to Access Copyright since any reproductions made in compliance with its Guidelines constitute ⦥uro;Sfair dealing⦥uro; under section 29 of the Copyright Act. So what is ⦥uro;Sfair dealing⦥uro;?
Fair dealing is a set of user's rights – rights in the hands of the user of the copyright (as opposed to the rights in the hands of the owner of the copyright). The concept of fair dealing is embedded within the Copyright Act itself, and courts have taken this concept and given it some additional nuance and colour.
To assess whether copying is ⦥uro;Sfair⦥uro; for these purposes, the Supreme Court identified six 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.
Section 29 of the Copyright Act tells us clearly that fair dealing for the purpose of ⦥uro;Sresearch, private study, education⦥uro; does not infringe copyright. The test for fair dealing articulated by the court involves two steps.
- The first is to determine whether the dealing is for the purpose of either ⦥uro;Sresearch⦥uro; or ⦥uro;Sprivate study⦥uro;, or ⦥uro;Seducation⦥uro;, three of the allowable purposes listed under s. 29 of the Act.
- The second step assesses whether the dealing is ⦥uro;Sfair⦥uro;. The onus is on the person invoking ⦥uro;Sfair dealing⦥uro; to satisfy both aspects of this test.
Based on this concept, and the guidance from the courts, York University developed Guidelines that would permit copying for fair dealing purposes that would not infringe the copyright of the copyright owners. To put this another way, the Guidelines were created to help the university avoid copyright infringement by its faculty and students.
The Federal Court of Appeal Decision:
There are two main issues here:
(1) the Fair Dealing issue – in other words, whether the copying by the university qualified as ⦥uro;Sfair dealing⦥uro;, because if the copying constituted ⦥uro;Sfair dealing⦥uro; then there could be no infringement; and
(2) whether the tariff itself was mandatory or optional in other words, could Access Copyright compel York University, to pay the tariff, or was participation in the tariff a purely voluntary affair?
(1) Decision on Fair Dealing:
When the original case went to the Federal Court, York lost on one of the main issues: the trail-level court decided that York's "Fair Dealing Guidelines⦥uro; were not fair for the purposes of copyright law.
Unfortunately for York, the university was unable to convince the Court of Appeal that this earlier decision was wrong. As a result, the Federal Court of Appeal agreed that there was ⦥uro;Snothing fair about the amount of the [York's] dealing⦥uro;: York lost again on this point.
After going through the six-factor analysis, the Court of Appeal found no reason to displace the trial level decision. This does represent a loss for York, since a win here would have essentially retroactively blessed all of York's copying as ⦥uro;Sfair⦥uro; under copyright law. In light of the court's decision, the copying that complied with York's Guidelines is not necessarily fair dealing.
However, as seen below, the validity of York's Guidelines as a defence to Access Copyright's action is not an issue after all, because the tariff is not mandatory and Access Copyright cannot sue York for copyright infringement.
(2) Decision on Whether a Tariff is Mandatory:
Access Copyright always argued that the tariff was not an optional mechanism, but one that copyright holders could unilaterally impose upon users like York University, by virtue of the tariff and license regime imposed through Access Copyright.
By paying the royalties under the tariff, users like York University were given a license to copy, thus avoiding any liability for infringement. The court here made an important distinction between liability for royalties and liability for damages for infringement.
If no tariff or license exists, a user who infringes copyright is liable for damages for infringement. There are ways to calculate infringement damages suffered by the owner of the copyright as set out in various court decisions and the Copyright Act. Damages of that type are assessed by a court in a copyright infringement lawsuit. Remember this was never a copyright infringement lawsuit, it was a lawsuit about enforcement of the tariff.
However, infringement is to be distinguished from the way a tariff operates. In the case of a tariff, the copyright owner cannot sue for infringement damages. Their remedy is to enforce the tariff. In effect, the court explained that the royalties set by the tariff are almost like statutory damages – a set fee that, when paid, accounted for the copying that would otherwise be considered infringement.
Since the court decided that tariffs are not mandatory and do not bind non-licensees, the tariff in this case is not enforceable against York. In that sense, the failure of York's Fair Dealing Guidelines is academic since the failure of its Guidelines do not trigger any liability under the tariff: the tariff is not mandatory for the university.
The court clearly explained that ⦥uro;SActs of infringement do not turn infringers into licensees so as to make them liable for the payment of royalties. Infringers are subject to an action for infringement and liability for damages but only at the instance of the copyright owner⦥uro;¦⦥uro;
Access Copyright cannot sue York for infringement in the event that any of the copies made by York are infringing copies; that right to sue for infringement rests with the copyright owners, not Access Copyright.
In conclusion, the tariff is not mandatory. Since York University opted out, it is not liable for the tariff and Access Copyright has no right to enforce it.
An Access Copyright licence, even if it is certified by the Copyright Board, is merely one option available to users like York University, but there are other options. This will come as welcome news to users like universities and educational institutions.
The decision is likely to be appealed to the Supreme Court of Canada.
What this decision means for Post-Secondary Institutions:
Many Canadian universities have been awaiting the outcome of this case. If the Federal Court of Appeal decision is appealed by either side, the legal forecast will remain cloudy until the Supreme Court of Canada issues a final decision.
A number of universities have, like York University, already communicated with Access Copyright, taking the position that their copying activities do not run afoul of the Copyright Act, and that the rights of copyright owners are appropriately compensated through license agreements with publishers or aggregators, transaction permissions from publishers, or other copyright collectives, or existing fair dealing exceptions under the Copyright Act. This decision validates that strategy.
For educational institutions who wish to review their strategy or fair dealing guidelines in light of this decision, please contact our Education and Post-Secondary Practice Group
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
