Canadian Publishers: Supreme Court Copyright Ruling Is ‘Discouraging’

In Feature Articles by Porter Anderson

The Canadian publishing industry has been dealt yet another blow in its long-running dispute over copyright and fair use in educational settings.

The Supreme Court of Canada, Ottawa. Image – Getty iStockphoto: Peter Spiro

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

A Long-Running Copyright Crisis Deepens
Even in October, as it was announced that Canada’s supreme court would hear the case in response to appeals from York University in Toronto and Access Copyright, there were concerns about how the exercise might go.

Today (August 3), the Association of Canadian Publishers has released a statement saying that the organization’s membership “is discouraged by the Supreme Court of Canada’s July 30 judgment in the long-running legal dispute.”

As Jeremy Hainsworth writes for Business Intelligence for British Columbia, “The high court said tariffs set by the copyright board are not mandatory, that a collective society such as [Access Canada] cannot enforce them against a user who chooses not to be bound by them.”

Writing for CTV News, Jim Bronskill confirms, “In its unanimous decision Friday (July 30), the high court said the law does not empower the Access Copyright collective to enforce royalty payments set out in a tariff approved by a federal board if a user chooses not to be bound by a license.”

Publishing Perspectives readers are quite familiar with this long-running, wrenching instance of what the Association of Canadian Publishers has called a “broken copyright framework,” in which legislative action in 2012 triggered one of the world’s most closely watched standoffs between educational institutions and book publishers.

At issue is Canada’s bitterly contested Copyright Modernization Act of 2012. In describing the dispute, Access Copyright—English-language Canada’s officially mandated collective management organization (CMO) for reproduction rights—last year called the long-awaited supreme court response to the appeals “another chapter in a decade-long struggle by creators and publishers to be fairly paid for the copying and use of their works by the education sector.”

“The judgement,” the publishers now write, “dismisses appeals from both parties and leaves the federal court of appeal’s earlier ruling—that tariffs certified by the copyright board are not enforceable—in place. Disappointingly, the supreme court did not offer a ruling on York’s fair-dealing guidelines.

“These guidelines—which are identical to those used by most K-12 and post-secondary institutions across Canada—had previously been found by the federal court to be illegal in both their terms and in their application, a decision that was upheld by the federal court of appeals in 2020.”

Kate Edwards

Kate Edwards, executive director to the publishers association, is quoted, saying, “Canadian publishers have been told consistently by successive governments since 2012 to be patient and to let the courts decide on the question of fair dealing for education.

“After nearly a decade of litigation, we find ourselves facing even greater uncertainty than when the Copyright Act was amended in 2012, and cannot repair the marketplace on our own.

“Bold leadership on the part of government is needed to clarify fair-dealing provisions, and to ensure that effective mechanisms for copyright enforcement are available to all rightsholders.”

“The supreme court decision leaves Canadian publishers to navigate an increasingly challenging marketplace without the necessary legal tools to protect our investments in new educational materials, let alone encourage new investment,” says Ruth Linka, the publishers association’s president.

“Resolution of the fair-dealing issue is essential to our ability to continue to supply the K-12 and post-secondary markets with Canadian-specific resources that tell our stories, use our language and measurement systems, and reflect the Canadian experience.”

The publishers are taking the position, in fact, that the supreme court decision reinforces assertions that Canada’s copyright framework is broken.

“Amendments made to the Copyright Act in 2012,” they write in today’s statement, “opened the door to mass and systematic copying by the K-12 and post-secondary education sector. The sector’s uncompensated copying beyond the legal limits of fair dealing, as determined by the copyright board, is in excess of $150 million. (US$119.4 million).

“At the same time, amendments have limited statutory damages for non-commercial use to a point that enforcement is impractical. Urgent action on the part of the federal government is needed to implement reforms that will correct market damage and provide a policy framework that supports future investment in Canadian writing and publishing.”

Background: When Copyright Legislation Goes Wrong

Briefly, the disputes around the Copyright Modernization Act have to do with the scope of “fair dealing” (also called “fair use”) in educational settings in Canada.

Since the implementation of the 2012 act, universities in the English-language Canadian market have worked along the lines of a “10 percent” approach, which other educational institutions, including K-12 schools, have then adopted. In some university settings, instructors have copied up to 10 percent of a book, or a full chapter, and then distributed this copied material to students without a publisher’s permission and without paying a licensing fee, sometimes called a tariff.

This meant that no authors and no publishers were paid for this use of the material in question.

At the height of what turned into a furious standoff between educational entities and the publishers, all the school boards in Ontario and the ministries of education for all Canadian provinces except British Columbia and Québec filed a lawsuit in February 2018 against the government’s copyright collection agency, Access Copyright.

And what the Association of Canadian Publishers—which represents the Canadian-owned English-language houses—had seen as its greatest victory was a July 12, 2017, ruling in Access Copyright v. York University from the federal court of Justice Michael L. Phelan, who wrote in his decision that the Modernization Act’s guidelines as interpreted by York University were unfair and that tariffs (those licensing fees) certified by the country’s copyright board are enforceable.

Our full write on the court’s 2017 decision is here.

Justice Phelan wrote, in part, “The fact that the guidelines could allow for copying of up to 100 percent of the work of a particular author, so long as the copying was divided up between courses, indicates that the guidelines are arbitrary and are not soundly based in principle.

“York has not satisfied the fairness aspect of the quantitative amount of the dealing,” Phelan writes in his decision. “There is no explanation why 10 percent or a single article or any other limitation is fair. Qualitatively, the parts copied can be the core of an author’s work, even to the extent of 100 percent of the work.”

Thus, Phelan struck down the concept that York and other educational venues had cited, that of being able to “opt out” of paying licensing fees if they wanted to, fees which normally are covered by a several dollars per student per academic term. To accept that educational institutions could simply decide not to participate in the collection of funds federally mandated in the creation of Access Copyright would, the court wrote, certainly lead to economic damage to publishing.

“It is almost axiomatic,” reads the court’s conclusion, “that allowing universities to copy for free that which they previously paid for would have a direct and adverse effect on writers and publishers.”

In April 2020, however, a new decision from an appellate court said that the educational community had acted wrongly but that schools and universities are not required to pay the licensing fees certified by the copyright board.

This new decision, as described in media messaging from the association’s Edwards, asserted that while the “fair dealing” guidelines used by the Canadian education sector “do not meet the Supreme Court’s test for fair dealing, it did not uphold the decision that tariffs certified by the copyright board are mandatory.

“In essence,” Edwards said, “the decision reaffirms that the Canadian education sector has engaged in illegal and unfair copying on a systematic basis—and makes the prospect of enforcement for small- and medium-sized publishers impossible.”

In further comment on the situation, Edwards said 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 rights holders in the untenable position of pursuing compliance on their own, rather than through their collective.”

Announcing that the publishers association was “frustrated and disappointed” by this turn of events, the organization flatly called the Canadian market’s copyright framework “broken,” writing, “Amendments made to the copyright act in 2012 opened the door to illegal and systematic copying by the K-12 and post-secondary education sector. At the same time, amendments have limited statutory damages for non-commercial use to a point that enforcement is impractical.”

And following the supreme court’s action, we now hear a very similar conclusion from the publishers’ association, in what the world publishing community has long agreed is very nearly a “poster child” of how legislative action can damage and diminish the protection of copyright, essential to the work of authors and publishers.

“Urgent action on the part of the federal government is needed to implement reforms that will correct market damage and provide a policy framework that supports future investment in Canadian writing and publishing.”

In Ottawa at Canada’s supreme court. Image – Getty iStockphoto: George Socka

More from Publishing Perspectives on the Canadian market is here, more from us on the Copyright Modernization Act is here, and more on other copyright issues is here.

More from us on the coronavirus COVID-19 pandemic and its impact on international book publishing is here.

About the Author

Porter Anderson

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Porter Anderson has been named International Trade Press Journalist of the Year in London Book Fair's International Excellence Awards. He is Editor-in-Chief of Publishing Perspectives. He formerly was Associate Editor for The FutureBook at London's The Bookseller. Anderson was for more than a decade a senior producer and anchor with, CNN International, and CNN USA. As an arts critic (Fellow, National Critics Institute), he was with The Village Voice, the Dallas Times Herald, and the Tampa Tribune, now the Tampa Bay Times. He co-founded The Hot Sheet, a newsletter for authors, which now is owned and operated by Jane Friedman.