Ariel Katz Submission Reapplication for Interim Tariff (Full)

8/8/2019 Ariel Katz Submission Reapplication for Interim Tariff (Full)

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Faculty of Law, 78 Queens Park, Toronto, ON, Canada M5S 2C5

ARIELKATZ

ASSOCIATE PROFESSOR

INNOVATION CHAIR, ELECTRONIC COMMERCE

December 10, 2010 - BY EMAIL -

Mr. Gilles McDougallActing Secretary GeneralThe Copyright Board of Canada56 Sparks Street, Suite 800Ottawa, OntarioK1A 0C9

Dear Mr. McDougall,

Re: Access Copyrights Post-Secondary Educational Institutions Proposed Tariff (2011-

2013); Application for an Interim Decision Imposing an Interim Tariff

Pursuant to the Copyright Board Notice and Ruling, dated Dec. 3 and 8, 2010 respectively, Ihereby make this submission regarding Access Copyrights Application for an interim decisionimposing an interim tariff. As per the Boards suggestion, this submission focuses mainly on thepreliminary question of whether the Board should grant the Application, although I note that thisquestion cannot be fully separated from the other questions suggested by the Board.

I will begin by protesting the fundamental procedural unfairness surrounding this application,which I pointed out in my earlier two submissions of Nov. 30, 2010 and Dec. 6, 2010.Exceptionally tight deadlines such as those imposed by the Board, during an extremely busy andstressful period in the life cycle of the academic year, would cast doubt on the procedural fairnessof any hearing. Those difficulties were compounded by the constant modifications to itsapplication made by Access Copyright, with the result that it is not even clear which documentfiled by Access Copyright constitutes the application. Therefore, it is my position that at thispoint, any decision by the Board other than one dismissing the application would violate thegeneral responsibility of the Board to act in accord with the principle of fairness.1

In addition, and without prejudice to my right to further oppose or challenge the validity of aninterim tariff imposed by the Board, and without limiting or waving any argument that I mayraise against the approval of the (final) Approved Tariff, I am of the opinion that that the Boardhas no power to grant the application and approve an interim tariff, or issue any other orderhaving similar effect. In the present case, an interim tariff would contravene the expresslanguage of the Copyright Actand the legislative scheme created by Parliament, would exceed

1Society of Composers, Authors & Music Publishers of Canada v. Canada (Copyright Board), 47 C.P.R. (3d) 297,

61 F.T.R. 141 (1993) at para. 41.


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Access Copyright filed the Proposed Tariff on March 31, 2010 with an effective date of January1, 2011. The Proposed Tariff was published in the Canada Gazette on June 12, 2010 and

objections were filed by August 11, 2010. The Proposed Tariff did not contemplate anyobligation on prospective users on an interim basis. Instead, as we learned from AccessCopyrights letter of October 7, 2010 and its appendices, Access Copyright sought to securecontinued funding for itself as of January 1, 2011 by means of an Interim Agreement. The plandid not work; only a very limited number of institutions signed this Interim Agreement.5

Therefore, on October 7, 2010 Access Copyright asked to Board to issue an interim decision,which is in effect an interim tariff. Access Copyright modified the terms of the tariff severaltimes, most recently on December 5, 2010. By requesting that the Board approve an interimtariff effective January 1, 2011, Access Copyright proposes a new Licensing Scheme within themeaning of s.70.1. It sets outnew classes of uses that it seeks to authorize, with new royaltiesand new terms and conditions for the effective date of the Proposed Tariff. Given the anticipatedlength of the proceedings (which by Access Copyrights own estimate make take more than fiveyears),6 and given that this period will exceed the period of the Proposed Tariff, in practice, theinterim tariff might well be that only tariff with additional payment imposed sometime in the

future on a retroactive basis. This cannot be done: the statutory deadline has elapsed; thelanguage requirements were not followed; and no notice and opportunity to object as mandatedby theActwere given. Granting the application would circumvent the clear framework createdby theAct.

II.The Power to Make an Interim Decision Does Not Extend to Ordering anInterim Tariff

It is well established that an administrative tribunal cannot issue an order or directive unless it isexpressly authorized to do so by its empowering legislation.7 Further, since express powerscannot be implied, the power to make a particular kind of order cannot be read into or inferred

under theAct, even if a tribunal thinks such a power is necessary to fulfill its mandate.8

5 Unlike all the other documents that it mentioned in its Application, Access Copyright did not attach a copy of this

Interim Agreement. A copy of what I believe to be this proposed Interim Agreement is attached to this

submission as Appendix A. It is easy to understand why very few institution signed this agreement, why many other

rescinded their signatures, and why Access Copyrights current solicitor advised the Board in an email sent on Nov.30, 2010 at 2:39 pm that Access Copyright decided to treat some of these signed agreements as null and void (see

Appendix B). The Interim Agreement would require the signing institution to continue paying as before, continue

reporting as before, but for nothing. Clause 3(i) made it clear that Access Copyright did not grant any license in

return.6 Access Copyright, Application for an Interim Decision on the Access Copyright Post-Secondary EducationalInstitutions Tariff (2011-2013) [AC Application], Appendix C, at p. 47Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722

at para. 50 [Bell Canada]; Curly Posen and Motion Picture Theatres Association of Canada v. Minister of Consumer

and Corporate Affairs Canada, [1980] 2 F.C. 259 at paras. 5-7; Matthews v. Canada (Attorney General), [1996]

F.C.J. No. 1077 at paras. 27-31, affd[1999] F.C.J. No. 830, leave to appeal. denied[1999] S.C.C.A. No. 412.8Nova Scotia Construction Safety Assn. v. Nova Scotia (Human Rights Commission), [2006] N.S.J. No. 210 at

para.143.


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A. The Boards Power to Issue an Interim Decision is Limited to Matters for whichthe Board has Jurisdiction

Section 66.51 provides that [t]he Board may, on application, make an interim decision. Thepower to make interim decision is limited to matters for which the Board has jurisdiction, and itsscope is limited to issues that are necessary and inexorably linked to the exercise of the Boards

function.9

The Boards function in the present case, filed under s. 70.13 is to determine whetherto approve Access Copyrights Proposed License. Fulfilling this function does not requireissuing an interim tariff.

Moreover, the Board does not have jurisdiction to approve a tariff unless and until the proceduraland substantive conditions for such approval are fulfilled. A temporary tariff is a tariff for theperiod in which it is in force. The Board cannot circumvent the procedural and substantiverequirements for approving it by cloaking it in the guise of an interim decision. The objectionsto the Proposed Tariff are not limited to the amount of royalties sought and to some of theadjacent conditions. Some of the objections to the Proposed Tariff are fundamental, and arebased on the argument that no tariff should be approved at all. The Board cannot circumvent theduty to fully hear and consider all these objections. The hearing has not even started.

Furthermore, the express language and structure of theAct, and the broader statutory contextconfirm that the Boards powers with regard to the determination of royalties and terms andconditions are specific, enumerated and limited, and do not extend to the imposition of an interimtariff. TheActcontains clear provisions for the filing of a tariff where previous tariffs have beenapproved (e.g., s. 67.1(1); s. 70.13(1)), and for the filing of new tariffs when no previous tariffhas been approved (e.g., s. 67.1(2); s. 70.13(2)). TheActalso addresses the issue of continuationthat may arise when an old tariff has expired and a new one has not been approved yet (e.g., s.68.2(3); s. 70.19). Nowhere does theActmention the power to approve a temporary tariff, andthis power cannot be inferred.

Nor ought this power be inferred. An approved tariff is law. Not only de jure,10 but also de

facto,11because upon its approval, the collecting society is entitled, according to s. 68.2(1) of theAct, to collect the royalties specified in the tariff and, in default of their payment, to recover themin a court of competent jurisdiction. When a tariff is approved, it becomes mandatory upon anyperson to which the tariff pertains. It is binding even on parties that took no part in theproceeding for its approval. Once approved, it is no longer open to a user to dispute the validityof the approved tariff.12 Nor can the collecting society rescind the license.13 An approved tariffmodifies the standard rules of copyright. The user becomes licensed by law,14 but has an

9CTV Television Network Ltd. v. Canada (Copyright Board), [1993] 2 F.C. 115 at para. 16.10 A tariff is a regulation under theInterpretation Act, R.S.C. 1985, c. I-21, s.2.11I am setting aside for the moment the likelihood that a tariff that specifically targets educational institutions is alaw in relation to education, and therefore falls under the exclusive jurisdiction of the provinces, according to s. 93 ofthe Constitution Act, 1867 (U.K.), 30 & 31 Victoria, c. 3, s. 93. I will return to this issue in due course.12 John S. McKeown,Fox Canadian Law of Copyright and Industrial Designs, 4th ed. (Toronto: Carswell, loose-leaf.

2005 Rel. 2), at 27-11. Even so, the author overstates the inability to dispute the validity of the tariff. For

example, an approved tariff will be invalid if the Board acted ultra vires in approving it, just as an Act of Parliament

will be invalid if unconstitutional.13Ibid.14Ibid.


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obligation to pay, while the collecting society is entitled to collect, but is barred from suing a userwho pays or offers to pay.

That is why a tariff cannot be approved unless all the procedural and substantive requirements asset by theActwere met, including the obligation of the Board, in s. 70.15, to hear and consider allobjections. Before hearing and considering all objections, the Board cannot issue any order that

has the same effect of a tariff, and cannot use its power to make a decision that has the sameeffect as a tariff, by calling it an interim tariff. The question is not whether the tariff is final ornot, but whether it is mandatory or not. If it is mandatory, looks like a tariff and has the effect ofa tariff, it is a tariff. If it is not mandatory, then it is not a tariff. At most, it can be a template fora license, recommended by the Board, that the collecting society and prospective licensees mightuse if they wish to enter into contractual relations.

A footnote in Access Copyrights Application suggests that an interim tariff may not have thesame effect as an approved tariff. Access Copyright maintains that the prohibition onenforcement under s. 70.17 applies only in the case of an approved tariff, but will not apply in thecase of interim decision.15 If Access Copyrights assertion is correct, it means that it will be ableto have its cake and eat it too. But that cannot be right. The bar on proceedings for infringement

in s. 70.17 is the quid pro quo for the collecting societys entitlement to collect under s. 68.2(1),without proving infringement. The two provisions are what distinguish a tariff from a contractuallicense. The one cannot go without the other. If s. 70.17 does not apply, then Access Copyrightcannot be entitled to collect the interim tariff. If Access Copyright asks the Board to issue adecision that looks like a tariff but does not have the power of a tariff, it is not clear what it isasking for, and what is the Boards jurisdiction to grant it. This reinforces the conclusion thatthere is no such thing as an interim tariff.

In sum, Parliament created a cohesive scheme for the approval of tariffs such as the ProposedTariff. This scheme includes no provision for the approval of an interim tariff. This is not alacuna. The Board cannot use its power to make an interim decision to circumvent this scheme.

B. The Act provides continuation of tariffs, not of contractsAccess Copyright spends much of its Application describing its contractual relations with someof the prospective users of the Proposed Tariff and argues that these contractual relationshipsjustify an interim tariff to avoid disruption to the regime built up by the parties over the last 16years.16 Essentially, the entire Application boils down to the following proposition: AccessCopyright has had contractual relationships with many of the parties to this proceeding over thelast 16 years. The contracts, after several renewals and extensions are about to expire. Theparties are unwilling to enter into new contracts. Access Copyrights revenue will decline. TheBoard should prevent that from happening. This argument is based on a fundamental mistake.

While theActaddresses the issue of continuation of tariffs, it grants the Board no power to force

upon an unwilling user the continuation of a voluntary agreement when the agreement expires.17Nor could theActgrant this power, because the governance of contractual relationships is not amatter over which Parliament has jurisdiction.

15AC Application, Appendix C, at 7 note 13.16Ibid., at p. 5.17 The reverse is not true. A monopolist can be compelled under some circumstances to deal with its customers or

rivals, and the regulation of copyright collectives is just one example of that.


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Indeed, theActdemonstrates in several ways that Parliament was very careful to distinguish themandatory tariff regime from the voluntary regime of collective administration of copyrights.

First, section 70.12 provides that a collective society may, for the purpose of setting out bylicenses the royalties and terms and conditions relating to classes of uses: (a) file a proposed tariffwith the Board; or (b) enter into agreements with users.18 By operation of section 70.191, the

Actdoes not allow for the simultaneous application of tariffs and licenses: the collective mustchoose between a mandatory or voluntary regime.

Second, s. 70.18 provides for continuation of rights only when a tariff that has been previouslyapproved expires and a new one has not been approved yet. TheActclearly states that there is nocontinuing right to receive royalties in the case of a tariff filed for the first time. This Boardaffirmed this interpretation inRe Public Performance of Musical Works (July 9, 2010), when itstated in respect of s. 70.18: Those [continuation] provisions apply only once a tariff has beencertified. The collectives' remedy for copies made before a tarifftakes effectis either to negotiatea licence or to sue broadcasters for copyright violation.19

There is no previous tariff in place for this application. The relationship between Access

Copyright and academic institutions were based hitherto on a voluntary regime of licenseagreements. Access Copyrights entitlement to collect royalties is therefore subject to theordinary rules of contract law, and expires on the date specified in the agreement. AccessCopyrights remedy in the interim, between the expiration of its voluntary agreement and untilthe Board decides to approve its Proposed Tariff, if one exists, must therefore be found in privatelaw, and granted by a court of competent jurisdiction, not the Board.

The existence of section 70.18 shows that Parliament expressly directed its attention to thequestion of when it is appropriate for the Board to grant a continuing right to a royalty on aninterim basis.20 The Copyright Actonly grants such a right where there is an existing tariffregime. Had Parliament intended for the Board to permit a continuing right to royalty paymentsunder the licensing regime, it would have codified these powers in the Act as it did for a

continuing right to royalty payments under the tariff regime.

Further, [i]t is a well accepted principle of statutory interpretation that no legislative provisionshould be interpreted so as to render it mere surplusage.21 Legislative schemes are presumed tobe coherent and effective.22 Accordingly, Parliament could not have intended section 66.51 toinclude a right to grant an interim tariff in the absence of an existing tariff regime, since thiswould negate the need for section 70.18 and render the provision mere surplus.

In sum, the legislative scheme of theActprecludes the Board from granting an interim tariff.

While Access Copyright is entitled to file a new tariff proposal, theActdoes not entitle it tocollect any royalties unless and until the Board, according to s. 70.15, approves the new tariff.

18 Copyright Act,supra note 3 at s.70.12.19Re Public Performance of Musical Works, 2010 CarswellNat 2295 at para. 166.20CTV Television Network Ltd. v. Canada (Copyright Board), [1990] 3 F.C. 489 at para. 13 (T.D.), affd[1993]

F.C.J. No. 2, leave to appeal denied[1993] S.C.C.A. No. 74 (Parliament is presumed to know the law and to be

legislating with regard to the state of the law as it exists at the time the legislation is adopted.).21 R. v. Proulx, [2000] 1 S.C.R. 61 at para. 28, per Lamer C.J.; Ruth Sullivan, Sullivan on the Construction of

Statutes, 5th ed. (Markham: Lexis Nexis, 2008) at 210.22 Sullivan, supra note 21 at 206.


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III. Granting an Interim Tariff would be Inconsistent with the Boards ownPrior Decisions

Even if the Board does have the jurisdiction to impose an interim tariff as sought by AC, theBoards own precedents militate strongly against such a tariff. Past instances in which the Board

has granted interim tariffs arose only under the arbitration regime and where continuation-of-

rights provisions existed. These situations are entirely inapplicable to the present case. The onlycase whose facts are similar to the present ones resulted in the Board refusing to grant an interimtariff, as discussed below.

1. The Prior Rulings that Access Copyright Relies On offer no Persuasive Reasonsfor Granting the Application in the Present Case.

a. The Cases Concerning Section 70.2 Deal with a Separate ArbitrationRegime in Which the Board has Additional Power to Impose Interim

Decisions.

Most of the interim decisions cited by the Applicant were made pursuant to an application under

section 70.2.23 These decisions involve the Board fixing royalties and related terms when theparties are already subject to an existing licence, or wish to enter into one, but are unable to agree

on the desired rates. In this sense, the Boards authority to impose interim tariffs is derived fromthe will of the parties who choose to let the Board arbitrate their dispute.

The present case is not about the arbitration of disputed rates. The universities do not merely

object to the terms and rates of Accesss interim offer; they desire not to renew a license withAccess altogether, as discussed below. The universities are legally entitled to decline a newoffer. Neither Access nor the Board can force the universities to renew a contract or enter into alicensing agreement with a collective society. Access made an offer, and it was rebuffed. This isnot a dispute about royalties and their related terms and conditions.

Even if the issue could be characterized as a dispute over rates, these authorities still proveinapplicable. Access brings an application for a tariff under s. 70.13. It has not filed a request to

fix rates pursuant to s. 70.2. Any power the Board may have to arbitrate a dispute and fix rates istherefore irrelevant to the present case.

Notably, in the case ofAUCC v. CanCopy24, which is cited by Access Copyright in itsapplication, the Board granted the request of two universities for the setting of an interim fee,when the universities believed that they needed a license but CanCopy (Access Copyrightsprevious trade name) refused to grant it unless the universities agreed to a substantial fee hike.

This was a classic example of a monopolist that was attempting to use its market power to set anunreasonably high price, and precisely the kind of case for which the Board was given the power

to set rates. In the present case, it would be a perverse result if the Board were to allow themonopolistto use the very same tool to impose itself upon parties who do not wish to deal with it.

23AUCC and Wilfred Laurier University and Canadian Copyright Licensing Agency (CANCOPY), [1996] C.B.D.

No. 7 [AUCC]; SODRAC 2003 Inc. v. CBC, [2009] C.B.D. No. 3; SODRAQ v. ADISQ, [1999] C.B.D. No. 4;

SODRAQ v. MusiquePlus Inc., [1999] C.B.D. No. 6.24AUCC,supra note 23..


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b. The Cases Concerning Sections 67 and 71 Deal with Non-VoluntaryCollective Administration Regimes that Do Not Apply in This Case

Access Copyright also relies on prior decisions concerning the continuation of rights undersections 67 and 71 of theAct..25 These decisions are inapplicable for two reasons. First, thecases concern the continuation of rights where tariffs are already in place, or involve applications

to vary previous decisions pursuant to section 66.52.26 These are not issues presently before theBoard. Second, and more fundamentally, all of these decisions deal with non-voluntary

collective administration regimes and involve the continuation of previously approved tariffs.They are therefore inapplicable to the present case, which involves a voluntary regime (unders. 70.1) and where theActcontains no provisions dealing with continuation of earlier contracts.

2. The Only Decisions Analogous to the Present Case did Not Result in theGranting of an Interim Tariff.

InReproduction of Sound Recordings (29 FEB 2008),27 the Board considered and rejected anapplication for an interim decision pursuant to a tariff application filed under section 70.13(2).28This is the only case the Board has heard on the question of an interim tariff where no previous

tariff was in place.

The facts inReproduction of Sound Recordings (29 FEB 2008) are parallel to the present caseand compel the same outcome. Like Access Copyright, the collectives in that case sought tocollect royalties prior to the approval of a proposed tariff and in the absence of any prior tariff.29The Board stated that the test for granting an interim decision is two-fold. First, the mainapplication must not be plainly without merit. Second, granting the application must relieve theapplication from deleterious effects caused by the length of the proceeding.30

The Board rejected the application on the grounds that the collective society had failed to meet itsburden of persuasion on the question of deleterious effects.31 While it is true that interimdecisions are made in an expeditious manner on the basis of evidence which would often be

insufficient for the purposes of the final decision,32 the Board affirmed that the burden ofshowing cause for interim relief rests with the applicant and cannot be disposed of by argumentsthat are irrelevant, inapplicable to the collectives, or just plain wrong.33

The Board dismissed the collectives argument that they had no tariff income to fund themselvesthroughout the approval process. The Board found this to be untrue, noting that the collectives

25Retransmission of Distant Radio and Television Signals, [1994] C.B.D. No. 1 [Retransmission];Public

Performance of Musical Works 2003-2007 and Public Performance of Sound Recordings 2003-2007, [2006] C.B.D.

No. 8 [Collective 2006]; Collective Administration in Relation to Rights Under Sections 3, 15, 18 and 21 ,[2008]

C.B.D. No. 5;Interim Tariffs for the Retransmission of Distant Radio and Television Signals During 2002 , [2001]

C.B.D. No. 9.26 Retransmission, supra note 2510; Collective 2006 supra note 25.27Online Music 2008, supra note 25.28Ibid.29Ibid.30Ibid.31Ibid.32Bell Canada, supra note 5 at para. 51.33Online Music 2008, supra note 25 at 1.


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are quite capable of supporting the financial burden of these proceedings.34 Regardless, theBoard affirmed the view in CMRRA v. SODRAC Inc. that cost recovery is not a supportingargument for an interim tariff, at least for a collective society with significant income.35

The Board also made clear that any analysis of the potentially deleterious effects of the length ofthe proceedings requires looking at the balance of convenience.36 This balance favours the

copyright users where: (1) the setting of an interim tariff imposes payments that will necessarilyneed to be recalculated; (2) the users are not legion fly-by-night operations from whomretroactive collection creates significant difficulties; and (3) the risk of the collectives not gettingtheir money is non-existent.37 These are precisely the facts in the present case. The universitiesare large public institutions from which Access can collect later if retroactive payment is deemedto be necessary.

Finally, inReproduction, the Board affirmed that it was under no obligation to impose amandatory interim tariff since the collectives are not obliged to pursue proceedings before theCopyright Board in order to collectively administer their rights: These collectives are subject tothe general regime. They are entitled to pursue licensing deals with individual users. In thegeneral regime, such agreements trump the tariff.38 This is an accurate reading of the Boards

jurisdiction under section 70.1 and should apply with equal force to the present case.

It should also be mentioned that this Board has denied two other applications for an interim

decision for an inaugural tariff on the grounds that to do so would set a policy precedent on a

substantive matter not yet properly heard by the Board.39 The Board ruled that such issuesshould be fully addressed at a hearing.40 That reasoning is equally applicable here.

3. Bell Canada v. Canada Does Not Grant a General Power to AdministrativeTribunals to Prevent the Deleterious Effects of Lengthy Proceedings

In its Application, Access Copyright relies on several Board decisions citingBell Canada41tosuggest that the Board has a wide and general jurisdiction to grant interim decisions in order to

prevent the deleterious effects of lengthy proceeding. Bell Canada cannot be read so broadly.The case itself stands for the proposition that interim rates can be varied retrospectively where atribunal possesses sufficient jurisdiction.42 It does not endow administrative tribunals with ageneral power to prevent the deleterious effects of lengthy legal proceedings. The Supreme

Court's comments about the CRTCs powers to remedy the impact of an interim order must beseen in light of the CRTCs particular functions and cannot be applied blindly to the CopyrightBoard, whose mandate is totally different.43

34Ibidat 2.35Ibid. at 3.36

Ibid.37Ibid.38Ibid. at 4.39Ruling on CBRA's Application for an Interim Tariff, May 3, 2001 at 1;Ruling on CBRA's Application for anInterim Tariff (Commercial 2000-2005 and Non-Commercial 2001-2005), June 11, 2003 at 1;40Ibid.41Bell Canada, supra note 5.42Bell Canada, supra note 5 at para. 11.; see also Canadian Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn.,

[1993] S.C.J. No. 114 at para 26.43EnCana Corp. v. Alberta (Energy and Utilities Board), [2004] A.J. No. 852, 2004 ABCA 259 at para.18.


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The CRTC was given comprehensive and continuous jurisdiction over the regulation of telephonetolls, which indirectly also made it responsible for Bells financial viability.44 Bell was aregulated monopoly, operating a critical piece of Canadian infrastructures, over which the CRTChad considerable power, much broader than that of the Board. The Supreme Courts decisionshould not be read as an articulation of a general indiscriminate power accorded to alladministrative tribunals. To the extent that such a power might be applicable in the context of theCopyright Act, the proper analogy would be cases of continuation of tariffs, not inaugural ones.

IV. Regime Change: An Interim Tariff will Radically Change the StatusQuo

Access Copyright asks that the Board preserve the status quo.45 There is nothing more further

from the status quo than an interim tariff. Granting an interim tariff is not a continuation of thestatus quo; it is a regime change, and a radical one as that.

A. The Status Quo is a Scheme of Voluntary Contractual ArrangementsUntil December 31, 2010, the relationships between Access Copyright and some of theprospective users will be based on contractual and voluntary agreements. This is the regime thatAccess Copyright chose, and the one that its licensees agreed to. The parties have consideredtheir legal rights and bound themselves to contracts defining payment, reproduction rights,reporting requirements and indemnification. Moreover, these contracts contain expressprovisions defining their duration, contemplating their renewal and the dealing with conditionsfor their termination. As with many other contractual relations, these contracts are reaching theirend. All of this has been known, contemplated and expected. The nature of voluntary relations isthat they depend on volition. The status quo, even in the face of a monopoly, has been one of freewill. Preserving the status quo means only one thing: allowing academic institutions to decidewhether they want to be licensed by Access Copyright, and allowing those who wish to be

licensed by Access Copyright to negotiate those licenses freely.A tariff, by virtue of its mandatory nature, even if on an interim basis, is an entirely differentregime. Even if theoretically an academic institution may be permitted to claim that it is notbound by the tariff because it does not use any repertoire work (or does not use any worksbeyond lawful unauthorized uses) the burden of proving such a negative renders this optionmeaningless. A tariff, therefore, even an interim one, introduces a radical regime change.Nothing is more antithetical to the status quo than that.

B. The Evidence Shows that Academic Institutions are Not Interested in Continuingtheir Prior Relationships with Access Copyright

In sections 2 and 3 of its Application, Access Copyright describes in great length the history of itscontractual relationships with many parties to this proceeding, and how they are coming to anend. The only conclusion from this description is that vast majority of Canadas academic

44 Railway Act, R.S.C. 1985, c. R-3, s. 335-340; Michael H. Ryan, Canadian Telecommunications Law and

Regulation, looseleaf (Scarborough: Carswell, 1993) at 300 and 600.45AC Application, Appendix C, at 4


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institutions have come to the conclusion that going forward, they do not consider payments toAccess Copyright to be the best method of securing usage rights for published works in Canada.

The number of objections to the Proposed Tariff, the content of the objections, and someuniversities express pronouncements of their desire to sever their ties with Access Copyright,46support the conclusion that Canadas academic institutions are not interested in being compelled

to deal with Access Copyright. Access Copyrights own admission that only a small fraction ofpost-secondary institutions have accepted its Interim Offer47 further affirms this point.

The reasons for that change in the institutions attitude are numerous and most likely will bediscussed extensively during the main proceeding. But in a nutshell, more competitive andvibrant models for lawfully accessing works are thriving and growing, to the benefit of authors,publishers, readers, students, scholars and Canadians as a whole. As described below, manyinstitutions are taking advantage of these benefits. At the same time, Access Copyrightsresponse to this changing environment, and to the change in the academic institutionsunderstanding of their legal rights and obligations following the Supreme Court ruling in CCH48has been to increase the price of its product, encumber it with even more onerous restrictions, andrescind the only real benefit it offered to academic institutions: the indemnity (an outrageous and

unlawful scheme as it may be).49

The status quo consists of a series of voluntary contractual arrangements. Imposing an interimtariff on users against their will would be a radical departure from this status quo, whosevoluntariness is its salient feature.

V.No Deleterious EffectThe Sky is not FallingAccess Copyright dedicates section 7 of its Application to arguing that the sky would fall on itand its members in the absence of an interim tariff, and that an interim tariffin essence anequitable remedyshould be granted to relieve it from the deleterious effects caused by thelength of the proceeding.

It should be noted at the outset that the Board has no jurisdiction to grant any order for thispurpose. The Board is not a court, let alone one of inherent jurisdiction, and guaranteeing thefinancial wellbeing of obsolete monopolies such as Access Copyright is far beyond its limitedjurisdiction. Nor do the members of Access Copyright have any vested right to continuecollecting royalties through Access Copyright or any other collective society. TheActpermitsthem to administer their rights collectively under some conditions, when doing that serves thepublic interest, but it does not follow that maintaining the financial wellbeing of AccessCopyright is presumed to be in the public interest. It is not.

Moreover, even if the Board has such jurisdiction to grant this type of an equitable relief, ananalogy to the standards used by courts of equity in such petitions reveals that the Application is

46 See e.g., Media Release, University decides not to renew Access Copyright licence, Athabasca University, Dec. 9,

2010, online: , a copy of which is attached

as Appendix D.47AC Application, Appendix C, at 648CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 [CCH].49 See Howard P. Knopf, Copyright Collectivity in the Canadian Academic Community: An Alternative to the

Status Quo?? (1999) 14 I.P.J. 109, at 121.


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without merit.50 There can be no presumption that Access Copyright has made aprima facie casethat a final tariff would be approved, when no previous tariff exists, and where the very notion ofthe tariff is being contested; the balance of convenience does not favour Access Copyright; andas shown below, there is not a shred of evidence for any likelihood of irreparable harm, and theclaimed deleterious effectloss of revenueis not irreparable;51 Lastly, Access Copyrightsunlawful scheme, as described below, raises a serious question as to whether it has the necessary

clean hands that an equitable remedy requires.

It should be emphasized that no evidence supports Access Copyrights claims with respect to thealleged deleterious effect. Assertions made in a letter signed by Access Copyrights formersolicitor do not and cannot provide even the minimal evidentiary basis required by a tribunal. IfAccess Copyrights claims about its financial hardship have merit, it should have had no problemproviding evidence. The Board should draw an inference against Access Copyright from itsfailure to furnish the evidence it must have.

Furthermore, while Access Copyright failed to provide any evidence to support its claims aboutdeleterious effects for it or its members, publicly available evidence that is available, such as theevidence discussed below, indicates the opposite.

A. Access Copyright is Not Behaving Like an Organization on the Verge ofFinancial Collapse

According to its own announcements, Access Copyright paid out [f]ifteen percent of allavailable revenue 52 to its writer and visual artist members on November 15, 201053 as part of itsannual Payback. We estimate that the amount distributed was at least $4,000,000.54 WhileAccess Copyrights submission repeatedly refers to the weak financial position it would be in

50 For court to grant an interlocutory injunction, three requirements must be met: (1) the applicant must demonstrate

a prima facie case, showing that its claim is not frivolous or vexatious and there is a serious question to be tried; (2)the applicant must suffer irreperable harm, in the sense that the refusal to grant relief could so adversely affect the

applicants own interests that the harm could not be remedied if the eventual decision on the merits does not accord

with the result of the interlocutory application; and (3) a determination that of the two parties the applicant will suffer

the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits.RJR-

MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at paras. 44-75;American Cyanamid Co. v.

Ethicon Ltd., [1975] A.C. 396; Robert J. Sharpe,Injunctions and Specific Performance (Aurora Ont: Canada Law

Book, 2000).

51RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at para. 59 ("Irreparable" refers to thenature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary termsor which cannot be cured, usually because one party cannot collect damages from the other.)

52Access Copyright, Frequently Asked Questions, online: Access Copyright

.53 Access Copyright, Payback for Writers and Payback for Visual Artists, online: Access Copyright

.54 This estimate is based on the following calculation: assuming Access Copyright has 9000 writer members, each ofwhom was paid a base amount of $175.26, representing 40% of the payback, while the other 60% supplementary

payment was paid on some internal formula. The total can be calculated as ($175.26X9000)/0.4=$3,943,350. The

number of 9000 writer members is based on Brief to the Ministers of Industry and Heritage, on behalf of Canadian

Authors Association Canadian Society of Childrens Authors, Illustrators and Performers League of Canadian Poets

Literary Translators Association of Canada Playwrights Guild of Canada Professional Writers Association of

Canada The Writers Union of Canada, Nov. 9, 2010, attached as Appendix E. To the extent that the number

reported in this brief refers only to writers and excludes visual artists, the sum distributed would be higher.


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absent an interim tariff, these payouts of several millions dollars, equivalent to at least half of theorganizations operating expenses,55 made just a few weeks after its Application, cast seriousdoubts on the credibility of Access Copyrights assertions, which were not supported by anyevidence whatsoever.

B. The Canadian Publishing Industry Has the Resources to Support AccessCopyright in the Event of Financial Hardship

Even if one accepts that without an interim tariff Access Copyright would face financialhardship, this is hardly a valid reason for granting the relief it requests. Many businesses facesuch hardships over their lifetimes. Usually, to overcome hardships, businesses will do one ormore of the following: they may ask their owners to inject additional capital; they may ask thebank or other lenders for bridge financing; or they may simply make their product more attractiveor lower its price. Access Copyright, instead, chose to offer an even less attractive product, at anelevated price, and then asked the Board to force its former customers to finance it. If AccessCopyright truly faces the alleged financial hardship, there is no reason why its members, at leastthe commercial publishers among them, could not provide it with the necessary liquidity for itscontinued operation.

Statistics Canadas most recent available data show that the Canadian book publishing industryhas revenues of over two billion dollars per year, a figure that has remained relatively stable overthe last five years, and a profit margin of approximately 10%, which has similarly remainedstable.56 There is no reason why these publishers would not be able to fund an organizationwhose operating expenses were only $6.2 million (in 2008).57 The graph below reflects thesedata.58

C. Loss of revenue by a monopolist is not a recognizable harm in a market systemThe preamble toBill C-32,An Act to amend the Copyright Act, emphasizes that theCopyright Actis an important marketplace framework law and cultural policy instrument...59There is nothing new about that. As a tribunal charged with operating under this marketplaceframework law, the Board should be concerned with preserving a free market in creative workswhere parties are free to negotiate voluntary agreements instead of imposing a mandatory tariff,unless it is unequivocally clear that a free market cannot function. The Board should be evenmore careful not to create impediments to the operation of the market and to the development ofcompetitive licensing regimes by adopting interim measures to preserve an obsolete monopoly.

55 Access Copyright, Annual Report 2009, online:

at 8 [Annual Report 2009]56 Statistics Canada, Book Publishers 2008, online, Statistics Canada:

57 Annual Report 2009, supra note 53 at 858Ibid.59Bill C-32,An Act to Amend the Copyright Act, 3rd Session, 40th Parliament, 59.


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VI. Post-Secondary Education Will Continue to Function Without anInterim Tariff

Access Copyrights submissions make several references to uncertainty and anxiety60 amongits licensees as to their legal rights during the interim period. More telling than AccessCopyrights perception of the needs of academic institutions is the fact that not a single

institution asked the Board to issue an interim tariff or initiated an arbitration proceeding under s.70.2. As far as we know at this point, most if not all of the parties to this proceeding oppose theApplication.

A. In the Absence of an Interim Tariff, Universities Will Operate Under the NormalCopyright Act Regime

Academic institutions have already shown, by their positions and actions, that they are willingand able to operate without Access Copyright. The University of British Columbia, for example,has already begun to prepare for the expiration of its agreement with Access Copyright bybuilding a library database that clearly shows which library materials are licensed for copyingand which are not.61 The University of Alberta has announced the measures that it is taking in

preparation for the expiry of the current license.62

If there had been any doubt, these actionsindicate that Canadian universities are quite capable of complying with the Copyright Actwithouta license or a tariff from Access Copyright.

Universities are increasingly using materials that are licensed to them directly, without theintermediation of Access Copyright. 20% of the worlds peer-reviewed journals are now freelyavailable online and the Canadian Resource Knowledge Network has purchased licensed accessto thousands of journals.63 The extremely short period given for responding to the Applicationprevents me from providing more detailed evidence, but it will be presented in due course duringthe main proceeding. In any event, Access Canadas repertoire and the holdings of Canadianuniversity libraries are far from coterminous. To illustrate, for the 2008-09 academic year, bookspublished in Canada represented only 3.6% of the titles acquired by University of Toronto

Libraries.64 There is no reason to assume that Access Copyrights repertoire covers even most ofthe new acquisitions, let alone the millions of works that are out of print yet still under copyright.With respect to digital reproductions, by its own admission in section 8 of its Application, and byits three-week-old and quite possibly invalid attempt to secure digital rights by negative option, 65Access Copyright concedes that its digital repertoire is unimpressive.

60AC Application at 561 UBC Library News, Media Release, UBC Library launches licence database (22 November 2010) online:62 University of Alberta ExpressNews, Media Release, Expiration of Access Copyright license looms (22

November 2010), online:

.63 Michael Geist, Struggling students could pay more in copyright battles, Ottawa Citizen (14 September 2010),online:

http://www.ottawacitizen.com/technology/Struggling+students+could+more+copyright+battle/3520730/story.html.64 University of Toronto Libraries, Annual Statistics May 1, 2008 April 30, 2009

at Table 6

[Library Statistics].65 Access Copyright, Important lnformation - A Recent Change to our Licensing Policies (15 November 2010),

Appendix F.


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If university libraries immediately begin illegally copying the Applicants repertoire on January1, 2011, as insinuated in Access Copyrights submissions, copyright owners are perfectly capableof taking legal action against such copying. It would not be a deleterious effect for copyrightowners to have to go to court to enforce their legal rights; in fact, this is exactly the regime setout by the Copyright Act.

B. As a matter of law, the Board cannot presume that universities will infringecopyright

In section 7 of its Application, Access Copyright insinuates that academic institutions willimmediately begin illegally copying its repertoire works on January 1, 2011. While post-secondary institutions have large collections of protected works, the Board cannot presume thatthey will authorize infringing behaviour in the absence of an interim tariff. The Supreme Courthas clearly stated that a person does not authorize infringement by authorizing the mere use ofequipment that could be used to infringe copyright. Courts should presume that a person whoauthorizes an activity does so only so far as it is in accordance with the law 66 (emphasis added).

While this presumption can be rebutted by evidence, there is no such evidence before the Board.

Nor should such evidence be admitted, because even if such evidence exists, it is irrelevant to thecurrent proceeding. The Board is not the copyright police. Its role is limited to thedetermination of fair and reasonable royalties and license terms when the public interest justifiesa tariff. The Board cannot approve tariff for the purpose of preventing infringement under theassumption that academic institutions are presumptive infringers.

The role of preventing infringement, or compensating for the damages resulting therefrom, iswithin the jurisdiction of the courts, upon a complaint filed by the copyright owner, and on thebasis of full judicial hearing. The Board is not a court and it has no jurisdiction to grantinjunction or award damages. Even if it were, Access Copyright is not the owner of the majorityof works under its limited repertoire. Therefore, Access cannot sue and in any event presented noevidence that would allow a court to do anything other than dismiss its claim.

Under such circumstances, invoking s. 66.52 to make an order that is, in effect, an extraordinaryinterlocutory injunction that no court would grant would clearly exceed the Boards limitedjurisdiction and would constitute an error in law.

C. Legal voidsAccess Copyrights submissions refer to the legal void67 that would occur in the absence of aninterim tariff. To refer to the general operation of the Copyright Act, where creators are accordedintellectual property rights and can ask courts to enforce these rights, as a legal void is a seriouserror.

If a person uses a collective societys repertoire without authorization68, as Access envisions,

the creator of those infringed works can sue the infringing person. This is not a legal void orvacuum; it is the very regime set out by the Copyright Act. Simply because theActallows fortariffs to be imposed in some circumstances that does mean that the absence of a tariff constitutesa legal void.

66CCH, supra note 46, at para. 38.67AC Application, Appendix C, at 568Ibid.


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VII. There is no Basis Upon Which to set a TariffAny interim decision must fundamentally be predicated on an understanding of the exact scope of

ACs repertoire. AC has advanced no evidence regarding the size or content of its repertoire, letalone verifiable evidence, and so there is no basis upon which to determine an interim pricingstructure or to assess whether an interim tariff is necessary in light of the copying which occurs at

post-secondary institutions.Moreover, approving a tariff without knowing and without allowing users to know exactly whichare the works to which the tariff applies, would run afoul fundamental principles of legality andthe rule of law.

A. The PreviousAUCC Model License is Not an Adequate Benchmark Upon Which toBase an Interim Decision

TheAUCC Model License states that it encompasses all works published in 21 listed countries,with a short closed (three-page) list of exceptions.69Access Copyright has provided no evidence

to support the suggestion that its repertoire encompasses all non-excepted works published in anyof the listed countries.

However, in practice, theModel License did not need to contain such assurances, because AccessCopyright explicitly undertook to indemnify licensees for any damages relating to their exerciseof rights under the license, provided they adhered to the short list of exceptions. 70 Setting aside

the questionable legality and validity ofsuch indemnity scheme (both as a matter of insurancelaw and as a matter of copyright law), effectively, what academic institutions were interested in,and what Access Copyright was happy to provide, was the indemnity. Because an interimdecision would not contain a similar indemnity provision, it would be fundamentally differentfrom theAUCC Model License, and this license cannot serve as an adequate benchmark for

determining the tariff.

71

Further, the draft interim tariff proposed by Access Copyright contains no restrictions orexceptions at all. It simply defines Repertoire Work as any work protected by copyright in

Canada of which copies have been made available to the public, and for which Access Copyrightadministers the rights.72 Access Copyright does not even attempt to clarify the list of works forwhich it administers the rights, and it must not be left to the Board or to the users to try and guessat what those works might be.

While it may be acceptable for contracting parties to sign agreements without knowing theirexact scope, and while it may be perfectly rational for them not to be interested in thisinformation where the agreement promises to indemnify them for costs arising from the use ofworks outside of the licensed repertoire, the Board cannot legally approve a tariff without firstidentifying the works to which the tariff will apply.

69 See AUCC Model License, Appendix G, at 17-19.70Ibid. at 12.71 Access Copyright, The Draft Statement of Interim Royalties to be Collected by the Canadian Copyright Licensing

Agency, Appendix H, contains no indemnity provision.72Ibidat s. 2.


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B. The Repertoire Question is Real, Fundamental and AcuteThe question of the scope of Access Copyrights repertoire is not an academic one. It is areal,fundamental and acute question. Of the 95,526 newly-published books purchased in 2008-2009

by the University of Toronto Libraries, 3.6% (3,449) were Canadian titles.73

Of these titles, andof the other international titles whose use is authorized by the AUCC Model License, it is unclearwhat proportion is, in fact, covered by ACs repertoire. The uncertainty is even more pronouncedfor periodicals, given the larger set of publishers and writers. Moreover, as the party asking theBoard to approve a tariff, and even more so to approve an inaugural tariff, as an interim decisionthat significantly departs from the status quo, Access Copyright bears the burden of resolving thisquestion by disclosing its repertoire.

The discrepancy between the large universe of works under copyright and the substantiallysmaller subset of those which are actively managed by their copyright owner has grown tobecome a well-known problem, especially since the launch of the Google Books Project. Withrespect to this Project, researchers predicted in 2005 that the proportion of the print book

collection which was still in copyright fell somewhere between 66% and 82%. 74 An EU reportpredicted that approximately 13% of the total UK books in copyright were orphaned works.75 Ifsuch figures can be roughly applied in a Canadian context, then there exists a pronounceduncertainty regarding the scope of Access Copyrights repertoire. This uncertainty is added tothat identified in the previous section, namely the uncertainty regarding the exact list of authorswho have authorized Access Copyright to license the rights to their works.

Absent any evidence from Access Copyright regarding the ambit of its repertoire, it is impossibleto determine an adequate price for any interim tariff, and it will be impossible for users todetermine which are the works which they can use but need to comply with the terms of thetariff, and which are the works they need to license separately or bear the risk of liability. For

digital works and digital copying, the scope of ACs repertoire is even less certain.

C. Absent any Benchmarks or Reliable Evidence on Which to Base an InterimDecision, No Interim Decision Can Be Made

InRe Public Performance of Musical Works, the Copyright Board held that SOCAN was entitledto compensation for any use of its repertoire works. However, with respect to a tariff itemrespecting certain websites for which SOCAN like Access Copyright in the present case hadprovided no evidence regarding its repertoire, the Federal Court of Appeal concluded that inthe absence of proper and reliable evidence, it would be irresponsible to certify a tariff that couldpotentially have such a broad scope of application.76 The Court also found that it wouldhave been unreasonable for the Board to certify this impugned Item of the proposed Tariff in

73Library Stastics, supra note 61 at 24.74 Brian Lavoie et al., Anatomy of Aggregate Collections: The Example of Google Print for Libraries, 11 D-Lib

Magazine 2005. Available online: 75 Anna Vuopala, Assessment of the Orphan Works Issue and Costs for Rights Clearance (May 2010), European

Commission DG Information Society and Media Unit 34 Access to Information online: 76Public Performance of Musical Works, Re (2008), [2008] C.B.D. 7 at para. 117, affd2010 FCA 139.


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the absence of the necessary probative evidence, on mere guesses, speculations andapproximationsSimilarly, in the present application, Access Copyright has advanced noevidence regarding the value or content of the repertoire upon which it asks the Board to imposean interim tariff. The Board should not impose such an overbroad, indeterminate tariff.

VIII. The Board Should not Endorse a Scheme of InfringementOver the last 15 years or so, Access Copyright knowingly and willingly authorized thereproduction of works that it knew were not and could not be part of its repertoire. Moreover, byoffering an indemnity, it actively encouraged and induced such reproduction for the financialgain of its members.

The evidence is laid open before the Board: the Model License, Schedule A, purports to licensebroadly the reproduction of works published in the 22 listed countries and excluding works othercountries (and a tiny list of additional exclusions). It is very unlikely that Access Copyright hasbeen authorized by the owners of all of these works to license their copying. If so, then arguably,

Access Copyright authorized their reproduction without the consent of the copyright owners. 77

Access Copyright now seeks to get the imprimatur of the Copyright Board for its overbroad,infringement-based scheme. The fact that this scheme has enriched some copyright owners,helped a few others, and for a short while provided a makeshift pragmatic short-term solution foracademic institutions does not make it more legal or justified.

The Copyright Board of Canada should not endorse such a scheme of questionable legality and

doubtful constitutionality.

Yours respectfully,

Ariel Katz

77


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Interim AgreementThis INTERIM AGREEMENT is between ACCESS COPYRIGHT, THE CANADIAN COPYRIGHT

LICENSING AGENCY ("Access Copyr igh t") located at 800-1 Yonge Street, Toronto, Ontario, M5E lE5, and___________ the "Institu tion") located at__________WHEREAS:A. Access Copyright and the Institution entered into a blanket reprography licence agreement, which

terminates on August 31, 2010 and a licence extension agreement (which terminates on December 31,2010(together, the "Existing Agreement").

B. Access Copyright filed the Access Copyright Post-Secondary Educational Institution Tariff, 2011-2013 (the "Proposed Tariff') with the Copyright Board of Canada (the "Copyright Board") on March 30, 2010,which once celiified will permit the Institution to make reproductions of copyright-protected works.

C. The Institution and Access Copyright wish to agree that the Institution will make certain interimpayments to Access Copyright covering the period between January 1,2011 to the date the Proposed Tariff iscertified by the Copyright Board (the "Celiification Date").

For good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), thepaIiies agree as follows:1. Interim Payments and Report ing. For the period between January 1,2011 and the Certification Date (the"Interim Period"), the Institution agrees to make interim payments to Access Copyright equal to the amounts theInstitution is obligated to pay Access Copyright under the Existing Agreement. For such period the Institution willalso comply with the record keeping and repOliing requirements in the Existing Agreement.

2. Payment Adjustments. The Institution acknowledges that the tarif f will have an effective date of January1, 2011 and that a payment of fees back to such date may be necessary under the tari ff celiified by the CopyrightBoard. The pmiies agree to be bound by any tarif f celiified by the Copyright Board regarding payments for anyprior or future periods covered by such tariff.3. Acknowledgement . The parties acknowledge and agree that: (i) the agreement in Section 1 (InterimPayments and Reporting) is not an agreement between Access Copyright and the Institution authorizing theInstitution to do any act mentioned in the Copyright Act; and (ii) this Agreement contains interim measures and isnot a reflection or admission of the value or volume of uses that may become licensed under the Tariff.4. Governing Law. This Agreement and its construction will be govemed by the laws of the Province ofOntario and the laws of Canada applicable herein.5. Effectiveness; Date. This agreement will become effective when both paIiies have signed it. The date thisagreement is signed by the second party to sign it (as indicated by the date associated with that paIiy's signature)will be deemed to be the date of this agreement.

Appendix A


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Interim Agreement

6. Entire Agreement. This is the entire agreement between the parties related to the subject matter hereof.There are no other tenns or conditions other than as set out herein including any express or implied tenns. The termsand conditions contained in this Agreement supersede all prior oral or written understandings between the parties,and will constitute the entire agreement between them, concenling the subject matter of this Agreement. There areno other terms or conditions, whether express or implied, other than as set out herein. This Agreement may only beamended by a writing signed by both parties.IN WITNESS WHEREOF the undersigned, on behalfof and authorized by Access Copyright and the Institution,have executed this Interim Agreement.

Date: dAR 2 q! 0r/" I ACCESS COPYRIGHT, THE CANADIAN COPYRI'? LICENSING. . . : : : : : : : : : : : : : ~ By:THE INSTITUTION

Date:By:

Name:Title:

2

Appendix A


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"Mike Laskey" FW: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

December 10, 2010 5:47:38 PM GMT-05:00

4 Attachments, 68.2 KB

From: "HOFLEY,RANDALL"

Date: Tue,30Nov201014:20:110500

To: "[email protected]","[email protected]",

"BROOKS,NANCY","[email protected]","[email protected]"

,"[email protected]","[email protected]",

ArielKatz,"[email protected]","[email protected]"

,"[email protected]","[email protected]",

"[email protected]","[email protected]",DavidFewer,

"[email protected]","[email protected]",

"[email protected]","[email protected]",O'Neill_Aidan

,WandaNoelCc: ErinFinlay,ClaireGillis

Subject: RE:AccessCopyrightPostSecondaryEducationalInstitutionsTariff(20112013)

Dear Mr. McDougall,As directed by the Copyright Board in its Notice of November 26, 2010, below, we set out below our reply to the Boards requestfor"the precise amounts that, in [Access Copyright's] view, are payable by the targeted institutions and ought tobe included in section 14 of the model licence (or any other provision where such figures may be relevant) if the

Board were to issue an interim decision as requested." Access Copyright requests that the institutions targeted in itsapplication of October 13, 2010 pay the following amounts if the Board were to issue an interim decision:(i) section 14(a)(iv) -- the FTE multiplied by $3.38;

(ii) section 14(b)(iv) Except for newspapers (see section 14(d)), $0.10 for each page or printed sheet copied for use in acoursepack. (This section references section 2(b) of the model licence which refers to the coursepacks that are created

and sold by the institutions.);(iii) section 14(c) a maximum of $10.00 for each out of print work copied; and(iv) section 14(d) -- $0.05 for each page or printed sheet of newspaper that is included in a coursepack.These are the amounts that the targeted institutions have historically paid to Access Copyright.Since Access Copyright filed its application on October 13, 2010, Appendices A and A.1 have been updated. Some of theinstitutions were mistakenly included on Appendix A.1 as having signed the interim agreement. At the time Access Copyrightdiscovered this error, we wrote directly to those institutions to advise them that they would be affected by the application. Asample of that correspondence is attached. Also, since Access Copyright filed the application with the Copyright Board, someinstitutions have now signed the interim agreement. They have therefore been added to Appendix A. 1. In addition, some of theinstitutions that had initially signed the interim agreement subsequently advised that they had signed the agreement in error.Access Copyright has agreed to treat those institutions agreements as null and void, and we have removed those institutionsfrom Appendix A.1. Some typos have also been corrected. Attached is a revised Appendix A and A.1, along with a blackline tothe appendices originally filed with the Board, that highlights these changes.We trust this is satisfactory for the Board's purposes - please let me know if you have any questions.Regards,Randall

Blake, Cassels & Graydon LLPBarristers & SolicitorsPatent & Trade-mark Agents45 O'Connor StreetSuite 2000, World Exchange PlazaOttawa ON K1P 1A4 CanadaTel: 613-788-2200 Fax: 613-788-2247blakes.com

This e-mail communication is CONFIDENTIAL AND LEGALLY PRIVILEGED. If you are not the intended recipient, please notify me at the telephone number shownabove or by return e-mail and delete this communication and any copy immediately. Thank you.

Appendix B
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.blakes.com/http://www.blakes.com/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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L'information apparaissant dans ce message lectronique est lgalement PRIVIL GI E ET CONFIDENTIELLE. Si ce message vous est parvenu par erreur, vous tesen consquence pri de nous aviser immdiatement par tlphone ou par courriel. De plus, veuillez dtruire ce message immdiatement. Merci.

From:[email protected] [mailto:[email protected]]

Sent: Friday, November 26, 2010 9:56 AM

To:[email protected]; HOFLEY, RANDALL; BROOKS, NANCY; [email protected]; [email protected]; [email protected];

[email protected]; [email protected]; [email protected]; [email protected]; [email protected];[email protected];[email protected]; [email protected]; [email protected];[email protected]; [email protected];

[email protected]; [email protected]

Subject: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)

NOTICE OF THE BOARD

On October 13, 2010, Access Copyright filed an application, dated October 7, for an interim tariff. The

application and relevant documents are attached. Participants are asked to respond to the application (and to

copy all other participants) no later than Monday, December 6, 2010. Access Copyright may reply to these

comments no later than Monday, December 13, 2010. The response of the Canadian Association of University

Teachers and the Canadian Federation of Students to the application is attached.

Access Copyright shall indicate forthwith the precise amounts that, in its view, are payable by the targeted

institutions and ought to be included in section 14 of the model licence (or any other provision where such

figures may be relevant) if the Board were to issue an interim decision as requested.

Gilles McDougallA/Secretary General | Secrtaire gnral par int.

Copyright Board of Canada | Commission du droit d'auteur du Canada56 Sparks, Suite| Bureau 800Ottawa ON K1A 0C9Telephone | Tlphone [email protected]

10-10-26 Uocx (22.4 KB)Appendix A ocx (19.5 KB) Appendix A ocx (20.7 KB)

Appendix B
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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opyright 2010

habasca University

University decides not to renew Access

Copyright licenceDecember 09, 2010

In order to protect students from a more than ten-fold increase in copyright

fees, Athabasca University, like the majority of universities in Canada, has

decided not to renew its licence with Access Copyright, a Canadian copyright

licencing agency. The current agreement will expire on December 31, 2010.

Access Copyright has applied to the Copyright Board of Canada for

permission to increase its annual fee to $45 per full time student from the

current fee of $3.38. In addition, the agency is asking the Copyright Board

to impose an interim tariff on Canadian universities in advance of its final

ruling on the new application.

"We cannot afford such an exorbitant increase, nor do we want to pass it on

to our students," said Dr. Rory McGreal, Associate Vice-president of

Research. "And the idea that the Copyright Board is considering an order to

pay Access Copyright an advance in order to cover their exorbitant salaries

and to pay for their legal actions against us is outrageous."

McGreal said the university also objects to several provisions in the

proposed new licence put forward by Access Copyright, including reporting

requirements that would impose huge costs upon the university. In addition,

he said the agency is under no obligation to disclose its repertoire to licence

holders, so the university cannot even be sure what it is buying under

licence.

"It's of absolutely no benefit to us, as our cost will remain the same even if

we use none of the content in their repertoire," he said.

With the expiration of the deal with Access Copyright, the university will

move quickly to make more extensive use of open educational resources

(OERs), material such as lectures, texts, lessons and podcasts produced by

other universities and made freely available for use. Where the use of OERs

isn't possible, the university will approach copyright holders directly for

permission to make use of their work.

Athabasca University is also committing to opening its learning content

online for free access to OERs, the first Canadian university to do so.

For more information, contact:

John O'Brien

Manager, Media Relations

Athabasca University

403-298-2931

403-990-1131 (cell)

[email protected]

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Updated December 16, 2009

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Appendix D

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BRIEF

To the Ministers of Industry and Heritage RegardingThe Copyright Modernization Act(Bill C-32)

Who Are We?

A coalition of English-language national writers organizations, including theCanadian Authors Association and the Canadian Society of Children's Authors,Illustrators and Performers, the League of Canadian Poets, the Literary Translators

Association of Canada, the Playwrights Guild of Canada, the Professional WritersAssociation of Canada and The Writers Union of Canada has come together to makeour views known about the Copyright Modernization Actcurrently beforeParliament. We do not speak for Quebec francophone writers but we share concernsabout Bill C-32.

Our Position on Copyright

Professional writers strongly support copyright reform. It is essential that Canadascopyright law reflects the new technological developments that are transforming the

way that writing and other forms of cultural expression are created and distributed.However, Canadian writers have deep concerns about the impact of the long list ofnew exemptions in Bill C-32, particularly the expansion of fair dealing to includeeducation, the exception for non-commercial mash-ups, digital delivery ofinterlibrary loans and copying for private purposes.

It is our view that these changes, in the current, rapidly changing digitalenvironment in which new business models are evolving, encroach too much on theexclusive rights of authors exceeding the limitations permitted by the BerneConvention. The Berne 3-step test restricts permissible exceptions in national

legislation to certain special cases that do not conflict with a normal exploitation ofthe work and do not unreasonably prejudice the legitimate interests of the author.There is a similar provision in NAFTA, in the TRIPs (the agreement on Trade-Related Aspects of Intellectual Property annexed to the WTO Agreement), and alsoin Article 10 of the WIPO Copyright Treaty concluded in 1996, which Canada signedbut has so far failed to implement and ratify. Although Bill C-32 would implementimportant requirements of the WIPO Copyright Treaty, it will put Canada in breach

Appendix E


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Writers on Bill C-32 Page 2 of 1Tuesday, November 9, 2010

of its international obligations if it is passed without deletion or amendment of thesefour proposed changes to the Copyright Act.

Background

Until the 1960s the vast majority of books and poetry read by Canadians and playsperformed in this country were authored by American or British writers, and thesmall numbers of Canadian writers who were writing at that time found it verydifficult to reach an audience. Then, in the 60s, things began to change. A newgeneration of writers emerged, and book publishing houses, magazines and theatrecompanies were founded to bring the works of many more Canadian writers to thepublic. By the 1990s thousands of books were being published every year. Dozens oforiginal Canadian plays were performed in every part of the country, anddocumentary and feature films were finding an audience. Today Canadian writersare recognized as being among the most creative voices and are being read around

the world Canadian works are being studied in other countries and Canadianwriters contribute to the international discussion of issues of global concern. EvenCanadian prime ministers have bragged about our authors.

There are many reasons for this, including the talent of Canadian authors and thestrong support of writers, book and magazine publishers and theatre companies bythe federal and provincial governments, and an essential factor has been copyrightlegislation that has provided protection for writers works. It has been this creativemix of writers, publishers, producers, government support and copyright that hasprovided the foundation for the thriving publishing industry in this country.

But though writing has flourished in this country, it is still a risky and marginalbusiness for those engaged in it. Most independent professional writers cannot liveon the earnings from their writings. As a result, writers and the organizations thatrepresent them are very concerned about protecting their income. Strong, clearcopyright laws are an essential element of an environment that encourages writing.

Collective Societies

Writers are paid by upfront fees or by royalties when they write for publication in

books, magazines and other periodicals. They also are paid for secondary uses oftheir works when these works or excerpts from them appear in subsequentpublications. An important development over the past two decades has been theestablishment of copyright collective societies with a mandate to license or set tariffsand collect payment for some new secondary uses of literary and artistic works andto distribute those funds to copyright holders.

Appendix E


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Collective administration is authorized by the Copyright Actfor two fundamentalreasons:

The copying and distribution of copyright works violates Canadianlaw unless those who hold the rights give permission and are paid.

Collective administration by rights holders collective societies is theonly practical way for rights holders to obtain payment.

SOCAN, the music performing rights collective, is by far the oldest and largestcollective society in Canada. SOCAN collects money from radio stations, bars,restaurants and a huge number of other organizations when copyright-protectedmusic is played in public. For the past twenty years Access Copyright in English-speaking Canada and Copibec in Quebec have been fulfilling a similar role forwriters, visual artists and publishers whose publications are copied, mostly byphotocopying. They license the copying of published works and collect revenue for

this secondary use, which they distribute to the rightsholders. Writers andpublishers cannot respond to every query from a teacher or university professor whomay wish to copy a poem or article to be distributed to students or stand at everyphotocopying machine in the country to give permission and receive payment.Unlike an individual rights holder, a collective society can monitor the use ofcopyright works, encourage users to comply with copyright and, if necessary,undertake enforcement proceedings to ensure that rights holders will be paid for thereproduction of their work.

Collective societies exist in many countries around the world. This means that somemoney flows to Canadian copyright holders when their works are reproduced inother countries, because Canadian collective societies have agreements with similarsocieties in other countries for the exchange of royalties.

To give a brief explanation of how collective administration works in the educationsector: teachers and professors often ask students to study a poem, short story, wellresearched article from a periodical, or excerpt from a play or book. In elementaryand high schools the teacher will photocopy this material and distribute it tostudents for study in the classroom or at home. In colleges and universities,coursepacks of readings selected by the professor are frequently assembled andsold to students as an alternative to having students borrow from the library or

purchase the original publications from which this material is copied. Students alsomake their own copies of articles and other material recommended by theirprofessors.

Under current Ca

Documents

Ariel Katz Submission Reapplication for Interim Tariff (Full)