The final chapter in the York University v Canadian Copyright Licensing Agency (Access Copyright)[1] saga has left York University with a major win, and leaves questions for the future of collective administration of traditional copyrights in Canada.
History of the Proceedings
After initially paying Access Copyright an interim tariff relating to the copying of works by post-secondary educational institutions, York University opted out of it, instead creating a fair dealing policy and copying the materials without remitting payment to Access Copyright. Access Copyright started litigation in the Federal Court seeking to compel York to pay the tariff, and in response York asserted fair dealing as a defence. At trial, the Federal Court ruled in favour of Access Copyright, and held that Access Copyright was entitled to payment of royalties by York University, concluding that an interim tariff is mandatory and enforceable [2].
On appeal [3] the Federal Court of Appeal considered two questions:
1) Whether the Access Copyright tariff was mandatory or optional? and
2) Whether York could rely on its ‘Fair Dealing Guidelines’ to avoid paying royalties?
After an in-depth review of the legislative history of the Copyright Act, the Court of Appeal held that the copyright tariff was not mandatory, Access Copyright could not maintain a copyright infringement action on behalf of its members, and the tariff could not be enforceable against York because tariffs do not bind non-licensees. The Court also found that York had not justified its Guidelines such that the Court could declare that copying compliant with the Guidelines constituted fair dealing.
The Supreme Court’s Findings on Whether Copyright Tariffs Are Mandatory or Optional
On July 30, 2021, the Supreme Court of Canada found that Access Copyright’s tariff is not enforceable against York. The SCC agreed with York’s argument, namely that,
[a] collective society is required to provide licences pursuant to the terms of an approved tariff… the licence cannot be forced on a user. A user is entitled to obtain its rights through other means and, if the user makes an unauthorized use, the appropriate remedy is an action for infringement.[4]
After observing that the Act is silent on the conditions under which collective societies that administer traditional copyrights are able to collects royalties, the Court observed:
Where Parliament sees fit to create a mandatory duty to pay, it generally does so with ‘clear and distinct legal authority showing that this was its intent’…There is no such language creating a duty to pay approved royalties to a collective society that operates a licensing scheme anywhere in the Act.[5]
Accordingly, the Court refused to ‘read words’ into the Act that were not intended. It confirmed that two distinct payment regimes exist under the Act. One regime creates a mandatory duty to for the user to pay royalties or equitable renumeration rights, for example, section 19(2) provides that users are “liable to pay royalties” in certain circumstances and section 82(1)(a) stipulates that manufacturers or importers of blank tapes are “liable … to pay a levy to the collecting body”. In contrast, under section 70.1 collective societies operate a “licensing scheme” where collectives have the autonomy to set out the uses, royalties and terms and conditions as it relates to works. Users under this regime, however, have no statutory duty to pay royalties to the collective.
In examining the provisions of the Act, the Court noted that sections 68.2(1) and 70.17 only ensure that a collective society has a remedy for defaulted payments from those who choose to be licensed on approved terms. The statute does not bind an unwilling user to the terms of a licence, as to do so would be discordant with the purpose of the regime.
In short, under a collective licensing regime, the remedy against users that opt not to accept a license on Board-approved terms is an infringement action. Under the Copyright Act, only a person with an ownership interest in the copyright can sue for infringement. Therefore, collective societies such as Access Copyright who are not assignees or exclusive licensees of the copyright held by its members do not have standing to sue for infringement. Conversely, for example, members of SOCAN, another collective, assign their rights to the society who in turn have standing to bring a claim of infringement.
Are Fair Dealing Guidelines fair?
With regards to York’s Fair Dealing Guidelines, the SCC declined to make a finding, as any assessment of such guidelines must occur in the context of a genuine dispute between the proper parties (in this case, the copyright owners rather than Access Copyright) thereby allowing them to advance arguments or adduce evidence applicable to how the Guidelines interacted with the copyrighted works. However, the Court observed both lower courts had erred by approaching the fair dealing analysis exclusively from an institutional perspective as opposed to the perspective of the students who use the materials, and this error tainted their analysis of several fairness factors.
The purpose of copying conducted by university teachers for student use is for the student’s education. But in every case, all relevant facts must be taken into account in order to determine the fairness of the dealing.[6]
The SCC therefore dismissed York’s appeal, including whether York’s fair dealing practices actualized the students’ right to receive course material for educational purposes in a fair manner consistent with the Act.
What might the decision mean?
Short of legislative reform, the SCC’s decision represents the final nail in the coffin on the in characterizing tariffs as mandatory. It remains to be seen how this decision will ultimately affect Access Copyright and other collective societies across Canada that administer traditional copyrights and are not assignees or exclusive licensees of the copyright held by their members. Whether collectives move towards a model requiring members to assign exclusive rights of the works in their repertoire to the collective in order to bring infringement proceedings in the future, or there is an influx of class action proceedings advancing copyright infringement claims where users opt not to accept a license on Board-approved terms, and don’t reach a separate agreement, remains to be seen. It is also possible this decision will prompt legislative change to provide greater clarity to the regimes going forward.
For York and other educational institutions who permit copying and have not agreed to a tariff, the decision gives some guidance to establishing fair dealing guidelines, but as the issue is not fully resolved care and caution remain prudent.
[1] 2021 SCC 32
[4] Para 30
[5] Para 32
[6] Para 103
