Misleading Parliament? Really?

Early this week, I opened a lengthy response in Howard Knopf’s blog to my recent post in this blog. Never one to mince his words, Mr. Knopf suggests with sound and fury that I have sought to “mislead Parliament” by posting on the issue of the educational fair dealing provision. Although the House of Commons Committee on Copyright has completed its clause-by-clause review of Bill C-11 without touching this provision, there are certain statements in Mr. Knopf’s blog that need to be addressed.

My chief concern with Mr. Knopf is that while he is a vast repository of copyright lore and legend from both Canada and abroad, he is extraordinarily selective with his references, so as to paint the appearance of a reality elsewhere that does not exist, a phenomenon I referred to as “doublethink” in my recent post. The purpose of this selectivity is to promote his strong beliefs about “excess” in copyright, a belief that is clearly disclosed at the head of his blog. He also appears to believe that heaping scorn on others substitutes for constructive debate.

This response to Mr. Knopf will point out how selectively he treats the way copyright is dealt with elsewhere in the world. The purpose of this selectivity is to paint a picture of the law that accords completely with his views, not to mention those of many of his clients.[i] The problem with this selectivity is that it presents a misleading picture as to how other countries have developed a balance between exclusive rights and user interests in the rest of the world.

As a first example, Mr. Knopf suggests that there is not “much support for [my] views” in U.S. law. He of course ignores the U.S. Supreme Court’s leading decision in Harper & Row and its recent affirmation at the Fourth Circuit in the Bouchat case, each of which clearly state that the effect on the market factor was “undoubtedly the single most important element of fair use”. Though Mr. Knopf doesn’t disclose it, appellate courts in other circuits have stated the same view (see, e.g., here and here). He also doesn’t disclose that the Sony case at the U.S. Supreme Court set a test stating that “every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright” and that for non-commercial uses, a use will be unfair if “the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work”.

In making his case, Mr. Knopf is also careful not to quote the leading U.S. text on copyright, the multi-volume loose-leaf Nimmer on Copyright, which describes the “effect on the market” factor in the following terms:

“If one looks to the fair use cases, if not always to their stated rationale, this emerges as the most important, and indeed, central fair use factor.” (§13.05[A][4])

Nimmer quotes numerous cases from many circuits explaining that:

“this factor… poses the issue of whether restricted or widespread conduct of the sort engaged in by the defendant (whether in fact engaged in by the defendant or by others) would result in a substantially adverse impact on the potential market for, or value of, the plaintiff’s present work.”  (§13.05[A][4])

Readers of my recent post (or Mr. Knopf’s bolded excerpt from it) will recognize that the bolded portion of this quotation restates, in different words, the very same concept Mr. Knopf derides as “very inaccurate in many ways”. So I am not plucking my description out of thin air, but from Supreme Court decisions and leading texts on copyright law.

Nimmer also makes it clear that while the “effect on the market” factor is central, it “cannot substitute for an evaluation of each of the four statutory factors”, a hardly controversial point given that they are all written into law in s. 107 of the U.S. Copyright Act.

Because Nimmer on Copyright represents an inconvenient truth for Mr. Knopf, he resorts to the text authored by William Patry, now the senior copyright counsel at Google, who is himself quoting not decided case law, but a 1996 academic article (“Fair Use Rescued”) by Pierre Leval, a well-known judge formerly at the Second Circuit. The core point here is that Mr. Patry and Judge Leval are (as is their right) criticizing the logic behind the Sony and Harper & Row Supreme Court decisions as being circular or wrong in policy. Mr. Patry also clearly agrees with the user rights analysis of the CCH decision. Their views are an attempt to address, critique and change the law of copyright (as are those of Aufderheide and Jaszi), but they are not a statement of the law as it stands in the United States. They are a statement of the law as they would like to see it.

Mr. Knopf also fails to note that the “latest and controlling U.S. Supreme Court decision on fair use”, Campbell v. Acuff-Rose, applies the Harper & Row case in order to come to its conclusions on fair use in the context of parody. It does not overrule it, as (for example), the U.S. Supreme Court’s decision in Lawrence v. Texas, 539 U.S. 558 (2003) overruled its 1986 decision in Bowers v. Hardwick, 478 U.S. 186. Harper & Row, Sony and Campbell all stand together as statements of the law in the United States. Harper & Row makes it very clear that the “effect on the market” is the predominant factor, but Campbell (a parody case) reminds us of Nimmer’s non-controversial point that fair use is a case-by-case evaluation in which all four mandatory s. 107 factors must be considered. Where there is little or no proof that the effect of a dealing is damaging to the market or the potential market for a work, as in Campbell or in Canada’s CCH decision, the proper result is that the fair use or fair dealing defence is made out.

Mr. Knopf also seems to believe that the Three-Step Test applicable under Article 13 of the TRIPS Agreement and Article 9(2) of the Berne Convention allows Canada freedom to create an educational exception that is not limited to an institutional setting (as it is in the U.S.), and without comprehensive guidelines as to its application (as in the U.S.).

On the specific question of whether the educational fair dealing provision raises international trade issues, the most comprehensive assessment is provided within the recent article by Ysolde Gendreau of the University of Montreal in the Intellectual Property Law Review. This article deals with the C-11 language at great length and concludes that there is a “strong case” the fair dealing for education provision will fail the Three-Step Test and the Article 10(2) test for being too “broadly drafted”, with no limitations on the person making the copy or other criteria for limiting the kinds of use. Mr. Knopf spares us mention of this article because it does not advance his case.

Professor Gendreau’s account is confirmed by leading international scholars who have taken on Mr. Knopf’s suggestion that the Three-Step Test is illusory because the U.S. has never been sued for its fair use regime. One direct example is Sam Ricketson, co-author with Jane C. Ginsburg of the authoritative text International Copyright and Neighbouring Rights. Professor Ricketson has concluded in a WIPO study (link to Word version) that the U.S. fair use formula does not comply with the Three-Step Test from a drafting standpoint:

It is quite possible that any specific judicial application of Section 107 [of the U.S. Act] will comply with the three-step test as a matter of fact; the real problem, however, is with a provision that is framed in such a general and open-ended way.  At the very least, it is suggested that the statutory formulation here raises issues with respect to unspecified purposes (the first step) and with respect to the legitimate interests of the author (third step).

Mr. Knopf is conveniently vague in raising his other international examples. Japan’s Copyright Act does not have a freestanding “fair dealing for education” right: Articles 33-36 of that Act provide targeted and restricted rights of copying that only apply in the non-profit institutional setting for specific considered purposes, such as creating a large-print textbook for visually impaired students (s. 33bis), or reproducing a limited portion of a work for examination purposes as long as “such transmission does not unreasonably prejudice the interests of the copyright owner in the light of the nature and the purpose of the work as well as the form of the transmission” (Art. 36)

So Mr. Knopf’s very example of Japan actually proves my point, not his – that Canada’s major trading partners have taken care not to destabilize publishing in order to promote education. Also happily, Mr. Knopf will recognize that Japan’s domestic law reproduces major components of the Three-Step Test internally, as does Article 5(5) of the European Copyright Directive, which is mandatory law in his other examples of the Netherlands and Germany. If these are great examples for Canadian copyright law, then Parliament might be best advised to follow these countries’ paths and incorporate the Three-Step Test into domestic law.

Mr. Knopf also resorts to his favourite rhetorical tactic of the ad hominem attack. Rather than address why he believes I am wrong that the Supreme Court’s decision in CCH misquoted English law, or take on the reasoning behind the Ashdown case which states that the substitution is “by far the most important factor” in English fair dealing law, he emphasizes my youth, implies that I have no views that belong truly to me, compares CCH to the Magna Carta, and recites the lengthy title of our Chief Justice. Mr. Knopf apparently believes that insult and insinuation qualify as reasoned argument. So much for respect and for any deference to a subject so very important to Canadian expression.

[i] While I respect that Mr. Knopf intensely believes in the views he espouses, it should be noted that he has acted for the Canadian Association of University Teachers and lobbied Parliament for the Retail Council of Canada (enter Mr. Knopf’s name into the “lobbyist” field here), amongst other clients who benefit directly from broad exceptions to copyright. It would be good if Mr. Knopf or Professor Geist could acknowledge for once that counsel on all sides of these issues can and do have views that are authentic and exist independently of the views of their clients. But I won’t hold my breath waiting for this to happen.

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3 thoughts on “Misleading Parliament? Really?”

  1. William Patry says:

    Dear Mr. Glover:

    I posted these remarks on Ariel Katz’s blog, but I would like to repost them here, with some additions. My purpose is not to side with anyone in the debates about who said what in what brief or to take sides in the debates about Canadian law. A half-Canadian (on my father’s side), I leave such matters to 100% Canadians, especially since I can’t vote in Canada.

    But I am qualified to talk about U.S. fair use law since I have been studying it, carefully, for over 30 years. My first treatise, on fair use, was published in 1985, and was cited by the Supreme Court immediately upon publication. It was repeatedly cited in the the Campbell case along with another article I had written on fair use. I also co-authored an article about fair use with Judge Posner. I litigated many cases on fair use, and as copyright counsel to the U.S. House of Representatives, I was very closely involved in the 1992 amendments to fair use. So, I feel qualified to talk about U.S. fair use.

    There are a number of remarks of yours above I take exception to. You dismiss Judge Leval’s and my views as merely expressing criticism of Sony and Harper & Row. It is true that we did criticize those opinions. You neglect to point out that our views have prevailed, in the Supreme Court in Campbell and in many circuit court opinions afterwards. Your view of U.S. law and that of Nimmer have been rejected in the U.S.courts, beginning with Campbell. This is the inconvenient truth you choose to ignore, instead relying on language that appeared in the 1984 version of the Nimmer treatise.

    It is amusing to see cited Nimmer’s language that ‘If one looks to the fair use cases, if not always to their stated rationale, [the effect on the market factor] emerges as the most important, and indeed, central fair use factor.’” The greatest authority on copyright law in the U.S. is the U.S. Congress; after that, the U.S. Supreme Court, and after that the circuit courts of appeals. Commentators, like NImmer and myself are not authorities in this sense. What we say is not law in any sense of that word. We may accurately describe law as made by Congress or the courts, or we may inaccurately describe law as made by Congress and the courts. In the case of the quotation from the Nimmer treatise made by you, it was a completely, thoroughly, totally inaccurate statement of law when Mel Nimmer first made it in 1984, and it is equally inaccurate today. The handful of cases cited by Nimmer in 1984 do not bear out his assertion and even Nimmer hedged his assertion by declaring that one had to look beyond the opinions’ “stated rationale”. Nimmer may have thought himself God by being able to divine what the courts really meant when they in fact said something different, but we mere mortals have to go by what courts actually say (their “stated rationale”), and they said nothing close to what Nimmer believed in 1984, and since Campbell have decisively rejected it. I go through every case cited by the 1984 Nimmer treatise in detail for those who want to examine this. You can find the analysis in Section 6.5 of my fair use treatise (Patry on Copyright Law) or Section10:149 of my general treatise (Patry on Copyright) both available on Westlaw.

    Harper & Row merely cited Nimmer and did no analysis of its own; it was dictum, Court did not, in fact, base its decision only on the fourth factor. But it is true that until Campbell rejected Harper & Row’s treatment of the fourth factor, lower courts did cite the “single most important factor language.” Judge Leval and I both that Harper & Row and the lower courts following it were wrong on this point and we said so. Our advocacy was adopted by the Campbell court; it is, therefore, is entirely inaccurate of you to pretend that our views remain mere criticisms of Sony and Harper & Row. Campbell accepted them and they are now the law in the U.S., like it or not.

    Put as clearly as possible, it is an inaccurate statement of U.S. law to say that the fourth factor is the single most important, determinative, primus inter partes, or anything of the sort. It is one of four and the four are inter-related and therefore considered together. Campbell did note that non-transformative, duplicative uses uses that supplant the market will not be fair use, and I agree and hopefully everyone agrees with that. Fair uses cases that get litigated though in the U.S. are rarely of this kind. It costs money to litigate and silly defenses are expensive. For example, the Supreme Court did not make a ruling on fair use in Campbell, because of a factual dispute about whether too much was taken, something that had nothing to do with the market effect: clearly, the copyright owner would never have licensed the use in Campbell, nor did it harm any non-existent market for parodies.

    The fourth factor remains a difficult one, but we need not compound the difficulty by misstating its importance.

  2. Ariel Katz says:

    I’ve added the following comment in reply to your comment on my blog and I’m posting it here too because it responds directly to this post.

    I’ve now had the chance to read your follow-up blog, and I wish to add four comments:

    1) In your response to Mr. Knopf’s blog you write that Mr. Knopf “also doesn’t disclose that the Sony case at the U.S. Supreme Court set a test stating that “every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright”. The quoted words from Sony are accurate, but it’s inaccurate to say that it “set a test” because the statement was an obiter dictum: the use in Sony (home time-shifting) was clearly non-commercial, there was no real evidence of harm, and the decision held that the use had been fair.
    The dictum from Sony later became the ratio for the 6th Circuit decision in Campbell, which was reversed by the Supreme Court. Here’s what the Court said in Campbell about the presumption that commercial use is unfair:

    The court then inflated the significance of this fact [commercial nature of the parody] by applying a presumption ostensibly culled from Sony, that “every commercial use of copyrighted material is presumptively . . . unfair . . . .” Sony, 464 U. S., at 451. In giving virtually dispositive weight to the commercial nature of the parody, the Court of Appeals erred. …

    If, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrativeuses listed in the preamble paragraph of § 107, including news reporting, comment, criticism, teaching, scholarship, and research, since these activities “are generally conducted for profit in this country.” … . Congress could not have intended such a rule … .

    Sony itself called for no hard evidentiary presumption. There, we emphasized the need for a “sensitive balancing of interests,” 464 U. S., at 455, n. 40, noted that Congress had “eschewed a rigid, bright line approach to fair use,” id., at 449, n. 31, and stated that the commercial or nonprofit educational character of a work is “not conclusive,” id., at 448-449, but rather a fact to be “weighed along with other[s] in fair use decisions.” Id., at 449, n. 32 (quoting House Report, p. 66). The Court of Appeals’s elevation of one sentence from Sony to a per se rule thus runs as much counter to Sony itself as to the long common law tradition of fair use adjudication.

    The above discussion was in the context of the first factor. When discussion the fourth factor, the Court was just as unequivocal:

    The court [below] reasoned that because “the use of the copyrighted work is wholly commercial, . . . we presume a likelihood offuture harm to Acuff Rose exists.” .. . In so doing, the court resolved the fourth factor against 2 Live Crew, just as it had the first, by applying a presumption about the effect of commercial use, a presumption which as applied here we hold to be error.

    No “presumption” or inference of market harm that might find support in Sony is applicable to a case involving something beyond mere duplication for commercial purposes.

    Not only the Supreme Court rejected any presumption that commercial use is unfair in cases involving something beyond mere duplication for commercial purposes, it was even careful not to hold that in those limited cases a presumption does exist, noting that such a presumption only “might” find support in Sony.

    2) I am encouraged by your statement that “Where there is little or no proof that the effect of a dealing is damaging to the market or the potential market for a work, as in Campbell or in Canada’s CCH decision, the proper result is that the fair use or fair dealing defence is made out. I wonder if you would agree with me that this is the case in the K-12 case. You would probably say that this is not the case because, as you wrote in your previous post, “small and repeated acts of copying could deal publishers a death by a thousand cuts.” And I suppose that you would also quote Nimmer’s statement that “widespread conduct of the sort engaged in by the defendant (whether in fact engaged in by the defendant or by others) would result in a substantially adverse impact on the potential market for, or value of, the plaintiff’s present work.” But Nimmer talks about “adverse impact on … the plaintiff’s present work”, and let’s face it, there is no evidence that this was the case in the K-12 context. I would agree that if there’s a work whose main market is schools, and there’s evidence that the schools who copy it would otherwise buy it, and the amount and extent of copying is so widespread so that the copying displaces the market, fair dealing would be difficult to make out. But there’s no evidence of this kind in the K-12 case. Yes, there is widespread copying, but there is no evidence about any single work that is affected by it.

    3) I have nothing to add to Mr. Patry’s reply about Harper & Row and Nimmer. I would only add that Nimmer itself is not as unequivocal as he might appear from your quotations. Immediately after the quoted language he adds:

    Two caveats, however, must be borne in mind. First, as has been emphasized with
    respect to each of the fair use factors, the analysis must proceed case-by-case.
    Therefore, even if viewed as central, this factor cannot substitute for an evaluation
    of each of the four statutory factors.

    (The second caveat is the one that you did cite, dealing with the effect of “unrestricted or widespread conduct”). Omitting a relevant caveat from a cited reference is not only and act that disrespects your readers, it is also disrespectful towards the author that you cite. In this case, omitting the first caveat makes Nimmer appear less balanced than he actually is.

    4) You mention Mr. Patry’s current position as senior copyright counsel at Google. If the point is to suggest that Mr. Patry’s opinions on fair use in the US has been shaped by the interests of his current employer, then this is a chronological impossibility. But there is, indeed, a deeper connection. As Patry himself notes in his comment, the Court’s decision in Campbell was influenced by his writings. When Campbell was handed down, Larry Page and Sergey Brin hadn’t began working on their project that would later become Google. But it is difficult to overestimate the importance of Campbell on creating a legal environment that facilitated the emergence of innovative companies such as Google. We should not lose sight of this when we consider fair dealing in Canada.

  3. Dan Glover says:

    For those of you who are curious about my views on Mr. Patry’s post, I have drafted a lengthy reply. It may be found at: https://www.barrysookman.com/2012/03/19/a-reply-to-william-patry/

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