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Submission to the Copyright Consultations

Access Copyright

The Canadian Copyright Licensing Agency
September 13, 2009


Preface

Access Copyright, The Canadian Copyright Licensing Agency, is a non-profit copyright collective management organization which was established by Canadian authors and publishers in 1988 to facilitate and license public access to copyright protected works such as books, magazines, journals and newspaper articles.

Access Copyright welcomes the opportunity to make this submission on the future of Canada's copyright regime.

1. Introduction

A. The role of collective management organizations

Collective management organizations license the use of materials protected by copyright whenever it is impracticable or impossible for the copyright owner to act individually.

The administrative work involved in securing and granting permission to copy or otherwise use an individual work can be tedious and time consuming, for both the user and copyright owner. Often, the transaction cost would make the process of clearing the copyright before copying the work prohibitive. Collective licences provide simple, (often) pre-authorized permission to use the copyright protected content. A collective licence eliminates the need to locate individual copyright owners to obtain permission, thus significantly reducing transaction costs for all parties.

In the world of printed works, collective licensing was implemented to deal with widespread, large scale photocopying that was taking place everywhere — in schools, offices, libraries and universities across Canada — which resulted in massive, uncompensated uses of copyright protected works. Today, many collective licences for printed works also cover certain digital uses of works.

A collective management organization for printed works generally performs the following tasks:

  • Monitor the use of printed works;
  • Negotiate licences for the use of printed works by users or when negotiations fail, file tariffs with the Copyright Board of Canada;
  • Collect royalties from users; and
  • Distribute royalties to copyright owners.

B. Access Copyright at a glance

Access Copyright recognizes that the ability to access and use published materials is essential for users, but equally important is ensuring that copyright owners are paid for the use of their work. Access Copyright has been working for 20 years to create content licensing solutions that meet the needs of both users — including students, teachers, professors or corporate employees — and creators and publishers across Canada.

Access Copyright is a collective society established pursuant to section 70.1 of the Copyright Act1 to carry out the collective management of copyright for the benefit of copyright owners of publications. Access Copyright's 37 member organizations include both publisher and author organizations, such as the Association of Canadian Publishers, The Writers' Union of Canada, Canadian Educational Resources Council, Professional Writers Association of Canada, Canadian Publishers' Council, League of Canadian Poets, Canadian Association of Learned Journals, Canadian Association of University Teachers, Magazines Canada and the Canadian Newspaper Association. The board of directors of Access Copyright consists of 18 members, nine of which are publishers, and nine of whom are authors, photographers and visual artists.

To further its mandate to represent the reproduction rights of publishers and authors, Access Copyright enters into agreements with copyright owners. The copyright owners who have entered into such agreements are referred to as the "affiliates" of Access Copyright. Affiliates may be either publishers or creators (such as book writers, photographers and visual artists). To date, Access Copyright represents over 8,000 creator affiliates and 600 publisher affiliates.

The affiliation agreements grant Access Copyright an exclusive interest in affiliates' copyright, specifically the exclusive right to exercise, manage and license reproduction rights in their works through collective licensing.

To further Access Copyright's mandate of providing legal access to copyright protected works, Access Copyright enters into licence agreements with a wide-variety of entities, including schools, universities, colleges, government agencies and businesses that wish to acquire the right to reproduce excerpts of published, copyright protected works. The licences provide these users of copyright protected materials with a legal and convenient way to reproduce copyright protected works within the limits and scope of their licence. Access Copyright has licensed approximately 1700 such organizations across Canada and in 2008 collected over $36 million in licensing revenues.

Access Copyright is a member of the International Federation of Reproduction Rights Organizations (IFRRO). Our reciprocal agreements with 30 sister organizations across the globe, including the United States, the U.K. and Australia, have created an international network, which means that Canadian users have access to millions of Canadian and foreign works and that Canadian copyright owners are paid when their works are copied not only in Canada, but also in other jurisdictions around the world. Access Copyright estimates it has over 22 million copyright protected works in its repertoire.

Access Copyright also recognizes the need to offer services and licences that allow users to access and use content electronically, and has served the corporate sector licences that cover both photocopy and digital use of works for a number of years now. Access Copyright is also developing several new services which facilitate the legal use of electronic content by the post-secondary sector. Early this year, Access Copyright piloted a software system for the delivery of course packs called ACE. ACE is a searchable online database of multi-publisher content. Access Copyright is also piloting a licence with several post-secondary institutions which extends the photocopy licence to allow the scanning and digital use of printed works. The institutions that are piloting these licences are pleased and Access Copyright hopes to roll out this type of licence more broadly.

In just over 20 years, Access Copyright has grown from an idea to a thriving collective society ranked seventh largest amongst Reproduction Rights Organizations world-wide. Since its inception, Access Copyright has distributed over $235 million in royalties.

2. The Balance

Access Copyright believes that it is necessary to strike an appropriate balance in the Copyright Act between the exclusive rights of copyright owners and the interests of users in accessing copyright protected works. Fair compensation to copyright owners for the use of their works is a necessary part of a balanced Copyright Act.

3. Fair dealing and other exceptions

A. Background

Fair dealing is a provision in the Copyright Act which permits the use of copyright material without infringing copyright. The extent of the use must be assessed on a case-by-case basis.

The user must first establish that what they were doing was for one of the specific allowable purposes2, which are:

  • Research
  • Private study
  • Criticism
  • Review
  • News reporting

The user must then establish that what they were doing (i.e. the dealing) was fair. The Supreme Court of Canada3 developed a set of criteria to help determine whether the dealing is fair:

  • the purpose of the dealing
  • character of the dealing
  • amount of the dealing
  • alternatives to the dealing
  • nature of the work
  • effect of the dealing on the work

Throughout the consultation's roundtables, town halls and online discussions and submissions many have asked that the Copyright Act be amended by expanding fair dealing and by expanding or introducing new exceptions to the Copyright Act.

When these demands are being made to the government it is imperative to assess whether what is being requested is access to works or free access to works, as in access without payment to the copyright owner. Generally the requests for expanding fair dealing and new exceptions are requests to use works without having to ask for authorization or pay the copyright owner.

Access Copyright believes that exceptions and other limitations to the exclusive rights of copyright owners should only be legislated where:

  • there is a demonstrated public policy need for access to copyright protected materials and the market has not met or is unable to meet that demand; or
  • it would defeat an important public policy objective to require the user to obtain authorization prior to use. (For example, where an author wishes to criticize or review the work of another author.)

It is also important to note that under Canada's international obligations4, exceptions and limitations to copyright are possible but only under certain special cases where the exception or limitation does not conflict with the normal exploitation of a work and does not unreasonably prejudice the legitimate interest of the author. This is known as the three-step test5. In other words, exceptions must be limited in scope and application, must not conflict with business models which exist or may be developed (including collective licensing) and must not unreasonably deprive a copyright owner of the exercise of his or her exclusive rights or cause an unreasonable loss of income to the copyright owner. Except in limited circumstances, the public's interest in accessing works can be met by marketplace solutions.

An example of a limitation that meets the three-step test is the limitation to the exclusive rights of authors introduced by the now defunct Bill C-61 (would have been section 30.02 of the Copyright Act). This limitation extended Access Copyright and Copibec's comprehensive photocopy licences for educational institutions to also cover digital uses of works. It met the three-step test by ensuring that copyright owners were fairly compensated for those additional digital uses of copyright protected works and by permitting a copyright owner to opt out of the collective licence scheme. This is an example of a regime which would successfully balance the rights of creators and owners of copyright with the interest of users in the education sector to access works.

B. Fair Dealing

An open-ended fair dealing provision, created by adding the words "such as", thereby making the list of permitted purposes illustrative rather than exhaustive, would create far more problems than it solves. While it has been promoted as the silver bullet that will address all the woes of the user community, it is not as simple as adding "such as", as some would like the government to believe. The potentially disastrous impacts of an expanded, open-ended fair dealing provision are complex, far-reaching and unpredictable.

Access Copyright therefore urges the government to thoroughly study the implications of any expanded fair dealing provision and to consult with all affected stakeholders prior to introducing any changes to the fair dealing provisions. With that in mind, Access Copyright wishes to raise the following preliminary observations. We would welcome the opportunity to elaborate further on these through whatever review or consultation process the government may wish to put in place.

  1. The government's objective should be to provide clear, predictable and fair rules that support creativity and innovation. Fair dealing is, as currently drafted, a blunt and unpredictable tool to deliver public policy. Turning it into an open-ended provision, similar to fair use in the United States6 would only exacerbate the problem and would significantly increase the uncertainty for both users and copyright owners. In response to the calls by some Canadian commentators to adopt an open-ended fair dealing provision in Canada similar to the US fair use, Giuseppina D'Agostino stated in an article, which was based on a study conducted for the Department of Canadian Heritage, that:

    Some commentators have championed that Canada adopt US fair use. There are problems with this approach. First, as noted from eminent US studies, fair use is 'ill' and not the panacea that many, perhaps in Canada, proclaim. Second, would Canadian courts apply US fair use cases? Would this application ignore the fact that property is not constitutionally entrenched in Canada? One must be very careful when importing legal devices from other jurisdictions. 7

  2. This uncertainty will be met with years of litigation as the parameters of "such as" are determined by the courts, thereby increasing the costs of compliance and enforcement. It is estimated that the cost in the United States to defend a copyright case is just under one million US dollars.8 While we know of no similar cost estimate studies conducted in Canada, Access Copyright believes that this is not far from what it would cost in Canada as well.

    Even Lawrence Lessig, a leading proponent of free culture in the United States, does not share the enthusiasm for fair use that certain Canadians have expressed:

    But fair use in America simply means the right to hire a lawyer to defend your right to create. And as lawyers love to forget, our system for defending rights such as fair use is astonishingly bad—in practically every context, but especially here. It costs too much, it delivers too slowly, and what it delivers often has little connection to the justice underlying the claim. The legal system may be tolerable for the very rich. For everyone else, it is an embarrassment to a tradition that prides itself on the rule of law. 9

    Since the open-ended fair use provision has not delivered on its promise in the United States, why import this concept into Canada's copyright system? It is far from evident that an open-ended fair dealing provision would provide users, students, teachers, librarians and others with the "flexibility" that they claim they need.

  3. An open-ended fair dealing provision is unlikely to be interpreted by the courts in Canada in the same way as in the United States. The Canadian and U.S. legal environment and constitutional environment are significantly different. Most notably, Canada does not have the equivalent of section 8 of article 1 of theU.S. Constitution, which sets out the purpose of laws relating to intellectual property as to "promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive rights to their respective writings and discoveries" or the equivalent to the U.S. right to free speech, enshrined in the First Amendment to the U.S. Constitution. The U.S. Constitution is an important framework within which the courts in the United States interpret the U.S. Copyright Act, including fair use.

  4. The introduction of an open-ended fair dealing provision in Canada would undermine existing business models and compensation systems and would require a review of all the exceptions in the Copyright Act. Existing models of compensation such as Access Copyright's collective licences and the private copying regime may be threatened by an open-ended fair dealing provision. Should this occur, an open-ended fair dealing provision could negatively impact the revenues received by copyright owners and conflict with the normal exploitation of works in violation of Canada's international obligations under the three-step test (mentioned above).

    To date, Access Copyright has distributed over $235 million in royalties to publishers and creators. Creators and publishers alike have come to depend on this revenue stream. For Canadian creators, many of whom struggle to get by on modest incomes, these revenues help pay for basic items essential for survival. For Canadian publishers, who work hard to keep their business going in an industry known for its low profitability, this income pays royalties and advances to creators, salaries to employees, overheads and inputs, and provides their businesses with the means to take risks and make investments as producers of Canadian content. An expansion of fair dealing has the very real potential to diminish this compensation to Canadian copyright owners and take money out of the Canadian creative community.

  5. Open-ended fair dealing provisions delegate policy making responsibility to the courts. Under an open-ended fair dealing provision the courts would have to grapple and determine what "such as" and "fair" mean on an on-going basis, given the evolving marketplace. The responsibility of setting such policy is more appropriately placed with Parliament. Our legislative process is better adapted than our judicial process to consult with affected stakeholders, conduct studies, debate the nature of exceptions and set and amend policies that affect a wide variety of stakeholders in an evolving marketplace.

  6. The introduction of an open-ended fair dealing provision without a review of the existing exceptions in the Copyright Act could create an overlap. The complicated and, at times, conflicting interplay between the exceptions and an open-ended fair dealing provision would require the complete overhaul of the exceptions and limitations regime in Canada's Copyright Act.

  7. Where government is persuaded through rigorous analysis and consultations with affected stakeholders that an exception is required for a specific and legitimate public policy, then it can introduce an exception that complies with the three-step test and is tailored to meet that public policy need, such as the possible introduction of a parody exception.

  8. Rather than an expansion of fair dealing, Access Copyright believes that it may be necessary to qualify the fair dealing provision as set out by the Supreme Court of Canada in the CCH decision10, in order to ensure that Canada is compliant with the three-step test. Access Copyright contends that the fair dealing provision as interpreted by the Supreme Court of Canada conflicts with the normal exploitation of a work and causes an unreasonable loss of income to creators and publishers.

    Access Copyright also does not see a compelling public policy reason to justify creators and publishers subsidizing research that is carried out by organizations for their commercial purposes (for direct or indirect financial gain). Access Copyright urges the government to consider restricting the type of research that can be done under the fair dealing provision to research that is carried out for non-commercial purposes only. Such a restriction would be similar to the one introduced to the UK fair dealing provisions in 2003.

C. Other Exceptions

Access Copyright urges the government to also conduct a thorough review of all existing exceptions to infringement in the Copyright Act to ensure that their economic impact has not increased since they were originally introduced and that they do not conflict with existing or emerging business models, in keeping with the three-step test. This review may lead to the elimination of those exceptions currently in Canada's Copyright Act which are today better served through licensing arrangements.

Interlibrary loan exception

An example of such an exception to infringement is the interlibrary loan provisions which threaten and in some cases compete with existing and emerging markets for copyright owners. Access Copyright is greatly concerned by the expansion of the interlibrary loan exception provided for in both Bill C-60 and Bill C-61, which would have allowed librarians to digitize print material and then send a copy electronically to a library patron through an "interlibrary loan". With library catalogues easily searchable on-line, a person in Prince George, BC can send an interlibrary request for a work to the public library in Toronto, ON and the public library in Toronto can email a digital copy of the work. On the one hand, access to works is greatly enhanced, but on the other hand, the already small niche library market for printed works has suddenly become much smaller. At the extreme, only one library needs to purchase a work so that library patrons across the country can have access to it. And all of this, without remuneration to the copyright owner, except for the purchase of that first and only copy.

Format and time shifting exceptions

The so-called format and time shifting exceptions, also known as personal use exceptions, were apparently included in Bill C-61 to address a practice that has become common among the public. Access Copyright submits that good public policy should not be dictated by legalizing common public practices.

It is worth mentioning here that Article 5(2)(b) of the EU Directive 2001/29/EC allows member states to introduce exceptions and limitations to the reproduction right for private use (which includes format and time shifting) "on the condition that rightsholders receive fair compensation". The requirement for fair compensation is to ensure that the private use exception complies with the three-step test.

Access Copyright believes that copyright owners should be given the opportunity to address these "common practices" through market-based solutions. We caution against the assumption that uses made by individuals for their personal use are inconsequential on the existing or potential market for a work. Format shifting for example is relatively new to printed works. Copyright owners should be given time to develop and test new services and business models for the delivery of content in the digital environment. The introduction of a format shifting exception for books could undermine the development of emerging business models. At the very least, the government should ensure that any restriction of the copyright owner's reproduction right be accompanied by fair compensation.

4. Contribution to Canada's innovative and digital economy

The rapid pace of technological change over the past two decades has triggered seismic transformations of the marketplace for content. As is well known, the digital revolution has contributed to the rapid globalization of these markets, bringing down geographical and other barriers that may once have helped support national cultural policy with a few keystrokes. To remain relevant and effective in today's economy, producers and distributors of Canadian content in particular must be able to compete on an equal footing with content powerhouses across our borders. Only through maintaining a strong focus on innovation and creativity will they be able to meet this challenge.

Investment in innovation and creativity are all the more vital given the need to develop new business models to address the challenges of a rapidly evolving marketplace. Uncertainties in the business environment, in particular with regard to expectations of a return on such investments, act as a strong disincentive. Conversely, providing certainty through clear rules and a legal and policy framework consistent with emerging global standards is a necessary prerequisite and incentive to investments in innovation and creativity.

Canada's Copyright Act is badly outdated. We are years behind our key trading partners in modernizing our copyright laws for the digital age. Canadian copyright law should recognize international standards by implementing and ratifying the WIPO WCT and WPPT Treaties.

In Canada, as elsewhere, creativity and innovation thrive when rewarded. Fair compensation for publishers and creators provides the necessary resources and incentives to support that creativity. Writers and publishers are part of a chain that originates works and takes them to Canadian readers, researchers, educators and students. Canadians all stand to benefit from a sustainable and vibrant business sector and from a strong Copyright Act.

Publishers invest hundreds of thousands of dollars every year in creating textbooks and other resources for the education sector as well as other sectors. These investments in innovative digital content and business models create thousands of high-paying jobs in Canada. They also leverage the work of thousands of Canadian writers, photographers and visual artists.

Canada can be a leader in the digital economy by ensuring that copyright laws protect the livelihoods of creators as well as the businesses of publishers, by providing incentives to produce compelling, professional content that draws international audiences.

5. Conclusion

Instead of resorting to the introduction of new exceptions and an expansion of fair dealing, both of which would diminish the opportunities for market solutions to ensure fair compensation to publishers and creators, the government should ensure the presence of a healthy environment conducive to the development and expansion of user-friendly business models, including an expansion of the existing system of collective licensing. Such market based solutions provide users with easy access to copyright materials and creators and publishers with fair remuneration when their works are used.


1 R.S., 1985, c. C-42. (Return to Text)

2 Ibid at ss. 29–29.2. (Return to Text)

3 CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339, 2004 SCC 13 at para. 53. (Return to Text)

4 Through the Berne Convention for the Protection of Literary and Artistic Works ("Berne Convention"), the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") and the North American Free Trade Agreement ("NAFTA"). (Return to Text)

5 The three step test appears in several international treaties, such as ni Article 9(2) of the Berne Convention and Article 13 of TRIPS. (Return to Text)

6 17 U.S.C. 107. (Return to Text)

7 G. D'Agostino, "Healing Fair Dealing? A Comparative Copyright Analysis of Canadian Fair Dealing to UK Fair Dealing and US Fair Use" (2007) CLPE Research Paper Series Vol. 03 No. 05 at 51. (Return to Text)

8 Ibid at 42. (Return to Text)

9 L. Lessig, Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity, (New York: The Penguin Press, 2004) at p. 187. (Return to Text)

10 Supra note 3. (Return to Text)