Did the Supreme Court eviscerate Access Copyright’s business model? A reply to Michael Geist

September 12th, 2012 by Barry Sookman Leave a reply »

Michael Geist in a series of recent blog posts claims that the decisions of the Supreme Court in the SOCAN v. Bell Canada, 2012 SCC 36 (SOCAN v Bell) and Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 (Access Copyright) cases eviscerated Access Copyright’s business model.[1] He asserts that the cases make all copying that would be subject to a license from Access Copyright fair dealings. Moreover, he claims that publishers would not suffer significant economic harm if all copying permitted under Access Copyright licenses or model licenses were fair dealings and no educational institution, whether elementary, secondary, or post-secondary, paid a penny for all such uses.

Michael Geist’s claims, which rely extensively on the decision of the Supreme Court in the Access Copyright case, are flawed and cannot be supported by the reasons of the Supreme Court. The decision in the case, which deals with “short excerpts”, such as a page from a supplementary math textbook used for classroom instruction, is no precedent that all copying in K-12 and post-secondary institutions that would be covered by an Access Copyright tariff or license is covered by fair dealing. Similarly, there is no basis in the decision or in the evidence before the Court for his conclusion that this uncompensated copying would not create “significant economic harm” to publishers.

The Access Copyright Ruling

The appeal in the Access Copyright case arose from a judicial review of the Copyright Board decision which certified a tariff requiring elementary and secondary schools to pay royalties to compensate authors and publishers for reprographic copying. The issue in the appeal related to whether a single class of copying in these schools was a fair dealing under the Copyright Act. Specifically, the question was whether the Copyright Board was correct to conclude that copying of short excerpts from supplementary books in K-12 schools for distribution to students for use during class instruction was a fair dealing.

The Copyright Board did not define the length of the short excerpts in issue. It stated in its reasons that “teachers generally limit themselves to reproducing relatively short excerpts from a work”. However, in its Supreme Court Appeal Factum, the Council of Ministers explained that what was in issue was the copying of an occasional page from a book, amounting to no more than 4.5 pages per student per school year.

“The factual record of the Board proceeding establishes that teachers in Canadian elementary and secondary schools (outside of Quebec) typically copy “short excerpts.” The purpose of this copying is to supplement material in the textbook which has been provided to a student. For example, a teacher might occasionally provide a page of math problems from a different math textbook to supplement the problems in a student’s textbook, in order to address the needs of a particular student, a group of students or a class of students.”

“The four and a half pages per student per year are the pages that the Board placed in Category 4 of its fair dealing analysis”. (emphasis added)

The Copyright Board ruled that this copying was not covered by fair dealing and had to be paid for by schools. The Federal Court of Appeal dismissed a judicial review from this holding. The Supreme Court ruled that the Board had misapplied three of the six non-exclusive fairness factors used to determine whether a dealing is fair and instructed the Board to reconsider its decision. Specifically, the Court was of the opinion that the Board made the following errors:

  • In considering the purpose of the dealing factor, the Board concluded that the predominant purpose was that of the teacher, namely, “instruction” or “non-private study”. The Board therefore found that this factor tended to make the copies in issue unfair. The Court ruled that the purpose of the copying was private study. The Board had not considered whether copying for this purpose tended to make the dealing fair or unfair.
  • The Board considered the total aggregate copying that took place in the schools under the amount of the dealing factor. It was appropriate for the Board to consider the aggregate copying. However, this was to be considered under the “character of the dealing” factor. The “amount” factor is intended to be “an examination ofthe proportion betweenthe excerpted copy and the entire work, not the overall quantity of what is disseminated.” By “reapplying this same quantitative concern when assessing the “amount of the dealing”, it conflated the two factors, which had the effect of erasing proportionality from the fairness analysis.”
  • The Board concluded that the impact of the photocopying was sufficiently important to compete with textbook sales in assessing the effect of the dealing on the work. But the Court said there was “no evidence from Access Copyright demonstrating any link between photocopying short excerpts and the decline in textbook sales”.

Michael Geist’s Claims

Immediately after the decision in the Access Copyright case was released, Michael Geist, a longtime critic of Access Copyright, published a series of blogs.[2] In these blogs he makes the following three claims:

Assertion: As a result of the decision of the Supreme Court, no elementary, secondary, or post-secondary educational institution needs a license from Access Copyright to cover the reprographic and digital copying that would be covered by an Access Copyright tariff or by the AUCC or ACCC model licenses.

“More broadly, the decision eviscerates the current Access Copyright business model that is heavily reliant on educational revenues…the need for an additional Access Copyright licence for schools at all levels is now unquestionably in doubt.”

“With the court’s strong endorsement of fair dealing in the classroom, it completely eviscerates much of Access Copyright’s business model and calls into question the value of the model licence signed by many Canadian universities.”

“Since the Access Copyright – AUCC model licence only covers up to ten percent of a print work, the licence largely duplicates fair dealing and is likely to be viewed by educational institutions as unnecessary.”

“the Access Copyright licence – which typically only covers 10 percent of a work – will rarely add value beyond what is permitted under fair dealing.”

“the Supreme Court decision has eliminated need for the additional Access Copyright licence”.

Assertion: As a result of the decision of the Supreme Court, all or almost all copying licensed by Access Copyright through tariffs or the AUCC or ACCC model licenses is fair dealing. Further, publishers would not suffer any significant economic harm if all copying that would be covered by the Access Copyright tariffs or model licenses is not compensated.

“Claiming that the last 6% is fair dealing is consistent with the law and does not pose a significant threat to Canadian publishers and authors, who have granted permission for the vast majority of copying that takes place in schools.”

“At issue is only 5.8 percent of copying for which Access Copyright is demanding millions in compensation. Yet the Court’s analysis of fair dealing provides very strong guidance that the overwhelming majority of these remaining copies qualify as fair dealing and do not require additional compensation.”

“Moreover, given that there is permission for 88% of copying, claims that Canadian publishing is at risk or that the fair dealing copying creates significant economic harm are simply false (a unanimous court found no evidence of economic harm).”

Assertion: As a result of the decision of the Supreme Court, educational institutions should change or consider their policies and practices and not pay for the copying that would be covered by the Access Copyright tariffs or model licenses.

When combined with the addition of education to the list of fair dealing categories, all Canadian educational institutions should reexamine their copyright practices with the view to adopting a far more aggressive, user-oriented approach.

More broadly, the decision eviscerates the current Access Copyright business model that is heavily reliant on educational revenues…the need for an additional Access Copyright licence for schools at all levels is now unquestionably in doubt.

[I]t will be very difficult for educational institutions to justify the Access Copyright licence in light of this decision… the licence largely duplicates fair dealing and is likely to be viewed by educational institutions as unnecessary.

The schools argue that this tiny portion of copying qualifies as fair dealing and given the Supreme Court’s analysis of the six factors, there is no doubt that position has been strengthened and schools should be developing their copying practices with that in mind.

Misinterpretations of the Access Copyright decision by Michael Geist

Michael Geist exaggerates what the Court decided and ignores that the Court’s opinion was on a very narrow issue

The Supreme Court has said on three occasions that whether something is a fair dealing is a question of fact. In the CCH and SOCAN v Bell cases, the Court stated “The Copyright Act does not define what will be “fair”; whether something is fair is a question of fact and depends on the facts of each case”. In the Access Copyright case it re-iterated this saying “whether something is “fair” is a question of fact and “a matter of impression””.

In the Access Copyright case, the Supreme Court was concerned with the following facts:

  • Copying by teachers only in K-12 schools.
  • The copying was limited to “short excerpts”.
  • The “short excerpts” were from textbooks used to supplement/complement texts already purchased.
  • These excerpts were equivalent to a “page of math problems” not exceeding 4.5 pages a year per student on average.
  • The supplemental texts were purchased by the school and were in the library or already in class.
  • The excerpts were used for class instruction.
  • There was, according to the Court, no evidence of any link showing harm to the market from the copying of the 4.5 pages per year per student.
  • The short excerpts were not substitutes for buying textbooks. The court found that schools would not have purchased the various texts for each student to make the short excerpts.

Michael Geist’s claims assume that all copying in all schools is the same as what was in issue in the Access Copyright case. He ignores the fundamental principle that fair dealing is a question of fact and fails to recognize that the Access Copyright decision did not address any other forms of copying including for example only:

  • Copying in post-secondary institutions
  • Copying of primary textbooks to facilitate book sharing
  • Copying of other types of works e.g. workbooks, short stories, articles, newspapers
  • Reprographic copying for course packs, digital copying of course collections, copying of primary textbooks for students for other purposes
  • Multiple copying of short excerpts from the same textbook
  • Digital storage and storage and distribution through learning management systems
  • Electronic reserve systems
  • Other digital copying, scanning, downloading, emailing
  • Copying by other staff members

Michael Geist misinterprets or exaggerates what the Supreme Court said about the fairness factors in the Access Copyright case

Michael Geist’s arguments in support of his claims based on what the Court said about the fairness factors also cannot be supported.

He claims that the purpose of the dealing factor will always tend to be weighted as fair given that most copying in schools will be regarded as research or private study, or after Bill C-11 is enacted, as education. He says:

“purpose of the dealing now clearly favours education as the court concluded (1) that research is extremely broad; (2) that instruction is covered by research and private study; and (3) that teachers share a symbiotic purpose with students.”

He wrongly assumes that merely because a dealing is for an allowable purpose that all uses will weigh in favor of being fair. But CCH held “some dealings, even if for an allowable purpose, may be more or less fair than others”. There would be no use for the “purpose” factor if all allowable purposes were ipso facto fair.

The Access Copyright case only addressed the purpose of copying short excerpts of supplementary/complementary texts for classroom instructional use by K-12 students. Yet, even here the Court made no finding that the purpose of such copying tended to be fair. It remitted this issue to the Board for consideration. Other purposes, even for the purposes of education, may not be regarded as “fair”; for example, copying by copy shops, copying by commercial educational institutions, or dealings that fail to meet conditions of other educational exceptions that were intended to ensure those exempted activities were fair.

There may also be cases where the copying may be for an allowable purpose, but the real motivation for the uncompensated copying is some ulterior purpose that makes the dealing unfair. The Court alluded to this twice. It said: “copiers cannot camouflage their own distinct purpose by purporting to conflate it with the research or study purposes of the ultimate user.” It also said: “If, as in the “course pack” cases, the copier hides behind the shield of the user’s allowable purpose in order to engage in a separate purpose that tends to make the dealing unfair, that separate purpose will also be relevant to the fairness analysis.”

Michael Geist attempts to lead his readers to conclude in discussing the amount of the copying factor, that the Court rejected that the aggregate amounts of copying by educational institutions was a relevant consideration. He says:

Abella then rejects Access Copyright’s claims that fair dealing analysis depends on examining the aggregate amount of copying.

The overall quantity of copying has long been a major Access Copyright argument (it is even raised again in response to media coverage of the decision), but the court ruled it is not relevant in considering the amount of the dealing.

The Court did not rule that the overall quantity of copying was not relevant. This copying is to be considered under the “character of the dealing factor”. In CCH the Court stated If multiple copies of works are being widely distributed, this will tend to be unfair. If, however, a single copy of a work is used for a specific legitimate purpose, then it may be easier to conclude that it was a fair dealing.” This was repeated in the Access Copyright case.

Moreover, as discussed in the companion case SOCAN v. Bell, the “amount” factor is not a quantitative assessment based on aggregate use, it is an examination of the proportion between the excerpted copy and the entire work, not the overall quantity of what is disseminated. The quantification of the total number of pages copied, as the Court noted in CCH, is considered under a different factor: the “character of the dealing”.

In discussing the character of the dealing factor, Michael Geist acknowledged that “The character of the dealing might favour Access Copyright if there is widespread copying of the particular work”.

He also suggests under the alternatives to the dealing factor that buying books for students is not a practical alternative to fair dealing. For example, he says:

“alternatives to the dealing also favour education since the court concluded that buying books for every excerpt for every student is not a realistic alternative.” “Buying books for all students is not a realistic alternative to fair dealing copying”.

The decision does not, however, suggest that in general “buying books for all students is not a realistic alternative to fair dealing copying”. The Court’s reasons were based on the facts before the Court. The copying was limited to short excerpts of supplementary/complementary texts for schools that had already purchased original copies that were kept in class or in the library. In that situation, on the facts, the Court expressed the view that buying texts as an alternative to copying short excerpts for students was not reasonable. According to the Court:

“In my view, buying books for each student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks. First, the schools have already purchased originals that are kept in the class or library, from which the teachers make copies. The teacher merely facilitates wider access to this limited number of texts by making copies available to all students who need them. In addition, purchasing a greater number of original textbooks to distribute to students is unreasonable in light of the Board’s finding that teachers only photocopy short excerpts to complement existing textbooks. Under the Board’s approach, schools would be required to buy sufficient copies for every student of every text, magazine and newspaper in Access Copyright’s repertoire that is relied on by a teacher. This is a demonstrably unrealistic outcome. Copying short excerpts, as a result, is reasonably necessary to achieve the ultimate purpose of the students’ research and private study.”

On the facts of the case, the Court was considering the proposition of buying books instead of copying 4.5 pages per student per year. Michael Geist gives no reasons for jumping to the conclusion that a court would make the same finding in other situations such as where hundreds of pages per student/per year are copied into course packs or posted on course management sites, as is routinely the case in the post-secondary sector.

Michael Geist argues that copying without paying license fees under an Access Copyright license would be a fair dealing because it would have no detrimental effect on publishers. He relies on what the Court stated in the Access Copyright case on the effects on the market factor:

“a unanimous court dismissed claims of economic harm from the copying”.

“a unanimous court found no evidence of economic harm”

“Abella also dismisses claims that copying in schools has a detrimental economic impact.”

But, the Court did not decide that copying by educational institutions could not affect the market or have detrimental effects on publishers and authors. The Court found no evidence on the facts before it of any link between the copying of the short excerpts in issue and a decline in book sales. That finding was premised on the specifics of the case where the Court doubted that the schools would have purchased more copies of the texts to make copies of these short excerpts.

The final problematic application of a fairness factor by the Board was its approach to the “effect of the dealing on the work”, which assesses whether the dealing adversely affects or competes with the original work. Access Copyright pointed out that textbook sales had shrunk over 30 percent in 20 years. However, as noted by the Coalition, there was no evidence that this decline was linked to photocopying done by teachers…

other than the bald fact of a decline in sales over 20 years, there is no evidence from Access Copyright demonstrating any link between photocopying short excerpts and the decline in textbook sales.

In addition, it is difficult to see how the teachers’ copying competes with the market for textbooks, given the Board’s finding that the teachers’ copying was limited to short excerpts of complementary texts. If such photocopying did not take place, it is more likely that students would simply go without the supplementary information, or be forced to consult the single copy already owned by the school.

The Court in discussing the effect on the market factor was not making any general finding that all or any other copying that takes place in educational institutions would not harm or have effects on the market. The decision, therefore, is no precedent for uses where the copying would be a substitute for or reduce book sales. Michael Geist’s assertion that copying 10% of a book for any and all uses in educational institutions would not harm markets for works is not supported by the reasons of the Court. It is an assertion not backed up with any analysis or evidence.

Michael Geist argues that even if publishers and authors are paid nothing under Access Copyright licenses that those losses would not cause significant economic harm. According to Access Copyright’s financial statements its license revenues in 2010 were over $32 million. They were over $33 million in 2009. None of these revenues included royalties for digital copying that would be covered under the AUCC and ACCC model licenses.

Michael Geist gives no reasons why the year over year losses of tens of millions of dollars in licensing revenues would not be considered as a significant loss. He does not even mention these losses. His sole argument is that publishers are paid for a large percentage of their book, periodical, and newspaper copying and can afford not to be paid for other unlicensed copying. One need not even consider the scope of what would be lost. He says:

Access Copyright is simply irrelevant for the overwhelming majority of copying even before anyone conducts a fair dealing analysis. Moreover, given that there is permission for 88% of copying, claims that Canadian publishing is at risk or that the fair dealing copying creates significant economic harm are simply false (a unanimous court found no evidence of economic harm).

Michael Geist’s argument is essentially that a publisher cannot suffer any significant economic harm from the uncompensated copying of some books if the publisher or some other publisher is paid for the copying of those books or some other books. Under this Geistonomics-moral-legal theory a seller of products has no cause to complain if someone walks off without paying for merchandise as long as the seller (or another seller of these types of products) is paid for a large percentage of the goods offered for sale by the seller.

Leaving aside the illogic of his argument, Michael Geist’s summary of the Circum Network Inc. study to support his claim about how much textbook copying in schools is licensed is misleading. He suggests that 88% of the copying that was the subject of the study was licensed by the publishers. His number includes “reproducibles”. These are often referred to as “Blackline Masters” such as exercise sheets that come with the purchase of textbooks and which can be copied for classroom use. It also included consumables such as workbooks. When copying reproducibles (approx. 2.6 billion pages) and consumables (approx. 170 million pages) are removed from the volume, the schools covered by the study had permission to copy a very small percentage of texts. So even his argument that the Circum study shows that publishers are paid for the vast amounts of textbook copying in schools is premised on an inaccurate interpretation or presentation of the study.

Michael Geist also seeks to draw conclusions that span all educational institutions even though the Circum study was a snapshot of copying in K-12 schools only. He gives no explanation and does no analysis that even tries to show how the study might be applicable to post-secondary institutions.

Conclusions and Comments

Michael Geist’s claim that the Supreme Court’s decision eviscerates Access Copyright’s business model does not stand up to scrutiny. His assertions are devoid of legal analysis. His claims also completely ignore the teachings of the Supreme Court that whether something is a fair dealing is a question of fact.

His arguments essentially can be reduced to two unsupported propositions: (1) if copying a total of 4.5 pages per year per student in elementary and secondary schools, in many cases a single page at a time, from supplementary textbooks for classroom use may be a fair dealing (the Board still has to decide if it is), then all copying in all schools that would be covered by Access Copyright’s tariffs or model licenses must also be fair dealings; and (2) publishers won’t be hurt by this uncompensated copying because they, or some other publishers, will be paid for other copying.

For whatever reasons, Michael Geist wants to persuade educational institutions that they don’t need Access Copyright, or any licenses from publishers, for the copying that would be covered by Access Copyright licenses. A simple consideration of Access Copyright’s licenses shows that much more is permitted under the licences than under the fair dealing that was considered in the Supreme Court case. His lack of analysis of the licenses to support his claims should be recognized by those making decisions about their institution’s copyright policies. If the basic tenets of academia include verification of one’s “facts”, then someone should double-check Michael Geist’s “facts” in order to satisfy themselves that they have been presented with ‘the straight goods”.

His claims about the implications of the Supreme Court decision should also be assessed in light of his well-known antipathy and ideological antagonism towards copyrights and copyright owners.[iii] His argument that publishers will not suffer harm from unlicensed and uncompensated copying is another instance of the claims he has repeatedly made that unauthorized copying doesn’t hurt rights holders who should, accordingly, be left without recourse or remedies. For example, he has opposed laws to reduce counterfeiting by denouncing statements that counterfeiting is a significant problem in Canada, views expressly rejected by a Parliamentary Committee which concluded otherwise.[iv] He also opposed giving rights holder the tools needed to shut down online piracy services arguing that unauthorized online file sharing didn’t hurt rights holders.[v]

Educational institutions have long histories of working collaboratively with authors and publishers and respecting their copyrights. In fact, many teachers and professors are authors and owners of copyright works and have strong moral compasses about honoring copyrights. As authors of works they understand the investments of time, money, and intellectual energy which are necessary to produce textbooks. In light of the serious flaws in Michael Geist’s arguments, teachers, professors, and educational institutions might well consider whether the information they are using to inform their decisions is analytically sound and, if followed, could break with their most fundamental values.

 

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[1] Neil Finkelstein of my firm McCarthy Tétrault, was co-counsel in the Access Copyright appeal with Claude Brunet of Norton Rose Canada. Dan Glover and I were counsel for the interveners the Canadian Publishers’ Council, the Association of Canadian Publishers and the Canadian Educational Resources Council.

[iii] See, Barry Sookman A question of values

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