IPA Names Canada ‘a Bad-Case Example’ for ‘Interfering With Copyright’

In Feature Articles by Porter Anderson

In some of the most pointed commentary yet on the crisis created by the 2012 Copyright Modernization Act, the IPA testifies that Canada is ‘internationally an outlier’ for failing to protect intellectual property.

Image – iStockphoto: Golden Brown

By Porter Anderson, Editor-in-Chief | @Porter_Anderson

‘Canada Has Obligations’
The International Publishers Association (IPA) has been compelled “to argue that Canada is a bad-case example of governments interfering with copyright and undermining the local market.”

That’s the message that the IPA’s vice president, Hugo Setzer, delivered on Wednesday (May 9) to a hearing of Canada’s Standing Committee on Industry, Science, and Technology.

The hearing, set in Toronto, was one of a series of such public feedback sessions being held through Friday (May 11) in various cities in Canada as part of a five-year review of the country’s 2012 Copyright Modernization Act.

“Our concern,” Setzer told the legislative hearing in Toronto, “is that Canada is now considered internationally an outlier, not only with its ‘fair dealing’ exception for education, but with its court-made law that equates fair dealing exceptions with so-called ‘user rights,’ all of which has resulted in loss of income for Canadian publishers and authors.”

Additionally, the standing committee has heard from Richard Prieur, director general of the Association nationale des éditeurs de livres (ANEL), and from Kate Edwards and Glenn Rollans of the Association of Canadian Publishers (ACP).

“A well-balanced educational publishing infrastructure includes collective licensing.”Hugo Setzer for the International Publishers Association

While we expect to report on some of the testimony offered by Prieur, Edwards, and Rollans, we want to focus today on the Setzer commentary to the hearing because until now, we have heard of no outside agency such as the International Publishers Association—which represents more than 76 member organizations from 65 nations’ publishing industries—having a chance to speak directly to Canadian legislators, who need to understand the damage that a loosely interpreted copyright exception is causing to their nation’s creative culture and character.

The IPA’s world membership includes three Canadian publishers’ organizations: the Association of Canadian Publishers, the Canadian Publishers’ Council, and L’Association nationale des éditeurs de livres.

And as readers will remember, the problems with the Copyright Modernization Act—as examined in a Toronto conference in November—have to do with the scope of a “fair dealing” exception (called “fair use” in some cultures) in education. Canadian universities have worked along the lines of a “10 percent” approach, which other educational institutions, including K-12 schools, have then adopted. In some settings, instructors have allowed themselves to copy up to 10 percent of a book, or a full chapter, and to then distribute this copied material to students without a publisher’s permission and without paying a licensing fee, sometimes called a tariff.

This idea of an exception to copyright regulations for educational purposes has led to Canadian publishers’ estimates that they’re losing more than $50 million annually in copyright revenue.

Of course, copyright law and its impact on the creative industries isn’t necessarily a core concept for a nation’s lawmakers. In these hearings, Canada’s parliamentarians—some of them perhaps quite surprised—are getting a crash course in the copyright crisis that has been a topic of conversation in world publishing for years.

‘An Unfortunate but Direct Consequence’

The current set of hearings–they move to Winnipeg today (May 10) and to Vancouver on Friday (May 11)—are part of a nation’s effort to focus on what many in the international book publishing industry consider, as Setzer was saying, to be a catastrophic blunder in copyright legislation.

Hugo Setzer

Setzer was a scheduled speaker Wednesday, representing the international industry’s perspective and delivering to the parliament committee the news that when the IPA has been called on to comment on copyright issues, the message hasn’t been pleasant.

“It is an unfortunate but direct consequence of the 2012 copyright law changes,” Setzer told the hearing, “that Canada now sits with countries like Venezuela, Kuwait and China on the Priority Watch List of the Section 301 Report of the United States Trade Representative.”

In a legal test, there was a resounding victory for the publishers and Access Copyright in a ruling by Canadian federal court judge Michael L. Phelan last summer that rejected outright the educational systems’ assertions that it should have a “10 percent” formula for opting out of paying copyright license fees.

“There is no opting out” of the obligation to pay for copyrighted content, as Phelan wrote in the case Access Copyright v. York University

“Canada is now considered internationally an outlier, not only with its ‘fair dealing’ exception for education, but with its court-made law that equates fair dealing exceptions with so-called ‘user rights.'”Hugo Setzer for the International Publishers Association

And as you might recall, the most recent—and in many ways baffling—development arrived in late February after the parliamentary review of Canada’s Modernization Act had been activated: Close to 100 school boards and education ministries sued Access Copyright, the country’s English-language copyright collection agency. After not paying the prescribed copyright licensing fees for students since the implementation of the Modernization Act in 2013, these education systems actually demanded a return of funds paid for copyright licensing (about CDN$2.35 per student) for the three years prior–2010, 2011, and 2012.

Needless to say, the Canadian situation has been made increasingly complex by such moves, and the level of rancor underlying many of these actions is remarkable: there is real heat, genuine animosity behind the claims of some in the academic community that they should not have to pay the government’s mandated copyright collection agency for students’ use of copyrighted content.

‘A Sustainable Local Publishing Ecosystem’

Publishing Perspectives has been provided with a copy of Setzer’s talking points.

“When there are too many exceptions or when they are too broad, they undermine the very business model that produces high quality educational content in the first place.”Hugo Setzer for the International Publishers Association

In his IPA testimony, Setzer was careful to make the point that “Publishers are not, in principle, against exceptions.

“They have their place in a well-balanced ecosystem,” he told the hearing’s parliamentarians, referencing as an example, the universal exception that’s created by the Marrakesh Treaty for people with reading challenges—you can read more on that here.

“But when there are too many exceptions or when they are too broad,” Seltzer told the hearing, “they undermine the very business model that produces high quality educational content in the first place. When considering educational exceptions, we think that legislators should consider broader policy objectives; notably to establish a sustainable local publishing ecosystem that supports a knowledge- and information-based economy.

“Exceptions for specific, well-defined and narrow educational purposes are part of the copyright landscape,” he said, “and publishers accept that. Publishers’ experience is that exceptions that are designed for a specific case, as contemplated by the Berne Convention’s Three-Step Test, work best, since all parties have a common understanding of how the exception works. We consider the ‘fair dealing’ exception introduced into Canadian law in 2012 to be much too broad.”

A couple of clarifications here: The Berne Convention for the Protection of Literary and Artistic Works of 1886 is the internationally recognized copyright agreement that remains the essential touchstone of copyright regulation in the world today. Setzer also referred to the World Trade Organization’s (WTO) TRIPS agreement, which stands for Trade-Related Aspects of Intellectual Property Rights.

“Canada has obligations under the Berne Convention and TRIPS,” he told the committee, “that its exceptions must pass muster under a ‘Three-Step Test'” consisting of:

  • Special case
  • Not conflicting with normal exploitation of the work
  • Does not unreasonably prejudice the legitimate interests of the rights owner

“We are hearing arguments,” Setzer said, “from noted scholars that the ‘fair dealing for education exception,’ as subsequently interpreted by the Canadian Supreme Court and by a number of educational institutions (like York University), does not meet the Three-Step Test.”

‘A Strategic Resource’

The main message that Setzer’s commentary was meant to offer to the parliamentary committee was that in the judgment of the community of the international publishing industry, “the ‘fair dealing’ exception introduced into Canadian law in 2012 allows the educational sector to assume that much of its use of copyrighted material is simply without charge.

“Nowhere in the industrialized world outside Canada is ‘education,’ in the generic sense, a permitted purpose for an unremunerated fair dealing exception, as shown by many studies.”Hugo Setzer for the International Publishers Association

Setzer said that Canada stands alone on this: “Nowhere in the industrialized world outside Canada is ‘education,’ in the generic sense,” he said in his testimony, “a permitted purpose for an unremunerated fair dealing exception, as shown by many studies.”

In his concluding testimony, Setzer on Wednesday told the Standing Committee on Industry, Science, and Technology in Toronto, “A well-balanced educational publishing infrastructure includes collective licensing. We all know that copying exists and finding a mechanism that remunerates creators and publishers fairly for income forgone when teachers and students copy material is unquestionably the best way of dealing with this activity.

“Students perform best when they have high-quality resources to work with. Collective licensing in the educational field is done at a very low cost per head, we understand the highest rates in tertiary education are of $26 per student per year for universities and $10 per student per year for colleges,” in Access Copyright rates.

“Education is a strategic resource for all countries that want to be part of the knowledge economy of the future. Educational publishers and the authors they employ–many of whom are former teachers–are the professionals best placed to translate curricula into quality textbooks and learning materials.

“It is publishers who are keenly aware of the latest research into teaching and learning; it is publishers who will use all available and appropriate formats; and publishers’ materials are specifically designed to stimulate academic success.”


More from Publishing Perspectives on Canada’s Copyright Modernization Act is here. And more on copyright in the wider world industry is here.

About the Author

Porter Anderson

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Porter Anderson is Editor-in-Chief of Publishing Perspectives. He is also co-owner and editor with Jane Friedman of The Hot Sheet, the newsletter for trade and indie authors. He formerly was Associate Editor for The FutureBook, at London's The Bookseller. Anderson has also worked with CNN International, CNN.com, CNN USA, the Village Voice, the Dallas Times Herald, and other media.