Federal Court of Appeal delivers much-anticipated ruling on York v. Access Copyright dispute

Editor’s note: In June 2020, Access Copyright filed with the Supreme Court an application for leave to appeal the Federal Court of Appeal decision rendered on April 22, 2020.

On April 22, the Federal Court of Appeal delivered a long-awaited ruling that will have widespread impact on how copyrighted materials are distributed in postsecondary institutions. The decision also marks the end of a legal dispute between Access Copyright and York University that’s been simmering since the copyright collective sued York in 2013.

The appeals court upheld a previous decision that found York’s guidelines for distributing copyrighted material under the “fair dealing” exemption of the Copyright Act unfair. However, the court also concluded that Access Copyright, an organization that collects and distributes royalties on behalf of Canadian authors and publishers, is not entitled to impose a tariff on institutions, like York, that have opted out of a licensing agreement with the collective. This new decision effectively leaves Access Copyright unable to enforce its tariff system.

Background

Access Copyright had a license agreement with York University between 1994 and 2010, which allowed York’s professors to reproduce copyrighted works from its repertoire for course use. Access Copyright eventually raised its licensing fees from $3.38 per full-time equivalent (FTE) student and 10 cents per page for coursepack copying to a flat $26 per FTE student. When the collective was unable to reach a new licensing agreement with York in 2011, it implemented an interim tariff of $24.80 per FTE, approved by the Copyright Board, which York paid for a short time.

The university soon “opted out” of the tariff, choosing to navigate copyright on its own through other product licenses, subscriptions and open-access content. As part of this move, the university created a set of guidelines on how to copy material in a way that constitutes “fair dealing” under Canadian copyright law. The guidelines allowed for copying “short excerpts” of a work, which the university generally defined as 10 percent or less of a work.

Fair dealing provisions of Canada’s Copyright Act allow the use of copyright-protected work without the rightsholder’s permission or payment of royalty fees if the material is used for research, private study, parody, satire or education purposes (“education” was added as a fair dealing exemption in 2012).

Access Copyright took York to court to force the university to comply with the interim tariff for works in its repertoire, and was initially successful. In 2017, the Federal Court deemed that York owed royalty fees to Access Copyright for a period between 2011 and 2013. And, despite York’s submission of a counterclaim seeking a declaration that its guidelines for copying materials for education purposes constituted “fair dealing” under the Copyright Act, the court essentially deemed those guidelines an unfair workaround. York then appealed the trial court’s decision, leading to deliberation by the Federal Court of Appeal that came to an end this spring.

“Good news” for universities

The Federal Court of Appeal’s ruling on tariffs is “very good news for colleges and universities,” says Sam Trosow, a professor in the faculties of information and media studies and law at Western University. “It would be absolutely disastrous for colleges and universities if there was a final ruling saying that these tariffs are mandatory, because you’d be forced into this terrible position of either engaging with Access Copyright or running the risk of them coming after you for the full amount of the tariff.”

He argues that the Access Copyright license may not be worth paying, and that it imposes significant compliance and audit burdens on licensees. “When you look carefully at the Access Copyright license, what you start to see is they’re not giving you the right to do a whole lot that you don’t already have the right to do under fair dealing,” Dr. Trosow says. “Having said this, this does not excuse infringement. Individual copyright owners have to bring infringement actions and universities have to worry about that.”

Instructors must be concerned about the materials they use for courses, he adds. “You can’t take an in-print commercial textbook and reproduce 100 percent of it, and throw it up on the world wide web. You always have to worry a little bit.” But if instructors work within the parameters of fair dealing and put materials on a password protected course management site, they have a lot of latitude, Dr. Trosow says. “It’s important for instructors to spend their time and attention worrying about what they’re supposed to do, and that is instructing, and not get caught up in a lot of copyright worries.”

Michael Geist, who holds the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, notes that there are now many licenses available so that universities have access to a range of different materials without infringing copyright law. “You add in open access materials, and you add in individual transactional licenses, and you add in fair dealing for what is a very relatively small proportion of the overall sets of materials. What you’re left with is an alternative mechanism to pay for and clear rights to materials that are used on campus that does not include the Access Copyright.”

Both experts say the Federal Court of Appeal’s decision on fair dealing was inconsistent with previous Supreme Court of Canada rulings on the issue.

“I think there were a lot of mistakes in the ruling,” Dr. Trosow says. The general rule from a Supreme Court case in 2012 between Access Copyright and Alberta’s Ministry of Education states that there’s harmony between the educational institution and its end user, the student. Ultimately, the reason why educational copying is considered fair dealing and why universities have fair dealing guidelines is to benefit students, he says.

“My recommendation to other schools certainly is do not panic because of this decision,” Dr. Trosow adds. “The important thing is universities have to demonstrate that they have flexible fair dealing guidelines where there is some level of human judgment and human intervention.”

Publishers weigh in

Some publishers in Canada are not fans of the education sector’s use of fair dealing in copyright. In fact, according to Dr. Geist, Access Copyright has been lobbying the federal government for the past decade to try to reverse the Copyright Act reforms that added education as a fair dealing exemption.

“Amendments made to the Copyright Act in 2012 opened the door to illegal and systematic copying by the K-12 and postsecondary education sector, which has now accrued cumulative liabilities of more than $150M,” says the Association of Canadian Publishers (ACP) in a statement following the ruling on the Access Copyright and York case. The Writers’ Union of Canada is also taking issue with the court’s ruling on tariffs, claiming the decision gutted the authority of the Copyright Board, removing the ability for collectives to turn to the board when users refuse to license content.

ACP executive director Kate Edwards says that through Access Copyright, “Canadian publishers have participated in the Copyright Board’s multi-year tariff process in good faith, and with an expectation of fair and reasonable compensation for the use of their content. The Court of Appeal’s decision on mandatory tariffs makes future engagement in this process futile, and leaves small- and medium-sized rightsholders in the untenable position of pursuing compliance on their own, rather than through their collective.”

Access Copyright released a statement following the ruling, saying that while the collective is “pleased the [Court of Appeal] upheld the trial court’s decision and the rights of creators and publishers with its judgment on fair dealing, we are disappointed that the [appellate court] found that tariffs are not mandatory, which exacerbates the challenges faced by content creators to receive fair compensation.”

In York’s response to the appellate court’s decision, the university says fair dealing is an important way to balance the rights of the copyright owner with the interests of users. “Our fair dealing guidelines were designed to reflect that balance and are used within a system in which the university spends millions of dollars per year on licenses and acquisitions,” the university says. “Fair dealing remains a crucial users’ right in the educational sphere.”

Neither party has indicated if they will seek to appeal the latest decision, but Dr. Geist suggests that’s likely what will happen, especially in Access Copyright’s case. “At the end of the day, the mandatory tariff is the dominant issue here and it’s a bit of an existential one [for Access Copyright], at least for its current business model. So they don’t have a whole lot to lose.”