Federal Court Finds University’s Fair Dealing Guidelines Are Not So Fair. When is Fair Foul, and Foul Fair?

July 13, 2017

By Catherine Lovrics and Tamara Céline Winegust

The Federal Court yesterday ruled in Canadian Copyright Licensing Agency (Access Copyright) v York University, 2017 FC 669, that York University’s “Fair Dealing Guidelines” do not excuse it from having to pay royalties to Access Copyright—a collective that administers the rights of authors and publishers—for copying activities of the University’s staff and students.  In 2010, the Copyright Board of Canada issued an Interim Tariff requiring post-secondary educational institutions to pay royalties to Access Copyright for certain copying activities, including with respect to digital copies. The University took the position that the Interim Tariff was not enforceable or mandatory, and if it was, that the University had implemented its own “Fair Dealing Guidelines” which, when followed, excused copying activities as fair dealing. The Court upheld the Interim Tariff issued by the Copyright Board, and denied the University’s claim that such copying activities were nevertheless excused. 

The case has particular significance given the transition over the last 20 years to an increasingly digitized landscape. As recognized by the Court, educational institutions have become reliant on digital and digitized resources, as well as peer-to-peer sharing and other databases and portals as a means to distribute and give access to resources.   

Of particular interest is the Court’s assessment of the thresholds in the University’s “Fair Dealing Guidelines” that set bright lines as to the amount of a work that could be copied. The Guidelines set out that “short excerpts” could be copied, and defined such excerpts as being the greater of either (1) 10% or less of a work; or (2) no more than other set amounts (e.g. one chapter from a book, a single article from a periodical, etc.); and, with the caveat that no more of the work should be taken than required to achieve the fair dealing purpose. While certainly probative, the “amount” of the work copied is not the only inquiry when assessing fair dealing—it is one of several factors to be assessed in weighing the “fairness” of the dealing.

Determining “Fair Dealing” is a two-part test: (1) whether the dealing is for an allowable purpose identified in the Copyright Act (including education, research and private study); and, if so (2) whether the dealing is fair in the circumstances. To assess the “fairness” of a dealing, the Supreme Court has identified six non-exhaustive factors: (1) the purposes of the dealing; (2) the character of the dealing; (3) the amount of the dealing (i.e. the amount copied); (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work. The Supreme Court has held that, at the first step of the test, the enumerated purposes should be given a “large and liberal interpretation” resulting in the “analytical heavy hitting” being done under the second step.

The Federal Court found there was no real issue that the University’s dealing was for allowable education, research, or private study purposes. The dealings, however, were not found to be fair.  With respect to the “amount of the dealing” factor, the Court considered the fixed thresholds in the University’s Guidelines, and found them to be arbitrary and not soundly based in principle. The University could not explain why such thresholds were set, and why they were “presumptively fair”, and neither could a witness for the Association of Universities and Colleges of Canada (“AUCC”), which had drafted its own “fair dealing guidelines” upon which the University’s Guidelines were based. The University’s failure to justify the choice of threshold was seen by the Court to seriously undermine the overall fairness of the Guidelines.

The Court considered the quantitative amounts that could be taken, as well as the qualitative importance of such amounts, in considering the fairness of the Guideline’s thresholds. With respect to the “quantitative” amount, the Court identified that the University’s Guidelines set thresholds for the amount of a work that could be copied. The primary focus was on the “qualitative” side of the analysis. First, the Court considered the aggregate volume of copying by the University, as well as by all post-secondary institutions that could be allowed if the Guidelines or similar policies were widely adopted. The Supreme Court’s decision in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36 found, however, that “aggregate” assessments properly fall under the “character of the dealing” factor, and the “amount of the dealing” factor should be assessed based on the individual use. In that case, the Supreme Court cautioned against focusing on the “aggregate” to assess the “amount of the dealing” since such focus could run the risk, particularly in a digital context, of disproportionate findings of unfairness.

Second, the Court in York held the Guidelines arbitrary as they allowed for different amounts of a single work to be copied depending on their source. As an example, the Court pointed to a Canadian children’s story, The Hockey Sweater, which it found “could be copied freely if it appeared in an anthology, but would [be limited] if copied on its own”. The Court concluded: “Where a chapter from a book can stand alone and be important enough to be taken from the whole for inclusion in a course’s required reading, there is little doubt that the copied part is qualitatively significant to the work and to the author’s contribution.” The Court appears to have given little weight to the Guidelines, expressly stating that a short excerpt must contain no more of the work than is required to achieve the fair dealing purpose.  

While in York the bright lines set by the Guidelines were not found to weigh in favour of fairness, there have been cases where threshold amounts have been accepted. For example, in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, a 30–90 second excepts of musical works was found to be a “modest dealing” compared to an entire (minutes long) work. Likewise, in 2012, the Supreme Court of Canada, held that a teacher’s copying of resources for students fell within the “fair dealing” provisions, in Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37. The AUCC Guidelines, upon which the University’s Guidelines were based, were developed considering this Supreme Court decision, an earlier decision of that Court involving library copying, as well updates to the Copyright Act passed in 2012.

The Court in York considered each of the six factors finding, on the balance, the factors weighed against a finding of “fairness”. For example, in the “character of the dealing” analysis, that there were no limitations on the number of copies that could be made, or the life of such copies, which weighed against fairness. Further, the Court found that the University had reasonable alternatives to the dealing that were not “free”, and could have, for example, purchased individual chapters or articles from the publishers. Of interest, the Court recognized that while the copying in York occurred on an institutional scale, such institutional copying (compared to situational or spontaneous copyright) was not “inherently less fair”. 

An additional consideration that appears to have been material to the Court’s assessment of “fairness” was that the University did not review, audit, or enforce the Guidelines, finding that this “autopilot” approach to compliance underscored the unfairness of the Guidelines. For example, some instructors used a non-licensed print shop called the Keele Copy Centre (“Keele”), rather than the print shops supposed to be licensed by Access Copyright, including the University Printing Services.  The University sent a memorandum listing authorized copy shops to faculty and staff. However, no sanctions were imposed against instructors that used Keele, and as noted by the Court “The events at Keele seem to have the same impact in the context of the Access-York relationship as the shot fired at Sarajevo in 1914”. This suggests that auditing for compliance may be an important factor in tipping the scale towards copy guidelines being found “fair”.   

The parties face a deadline of the end of September to appeal the decision. Stay tuned for developments.

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