The Federal Court’s recent decision on rampant copyright infringement at York University helps restore some lost balance in Canada’s intellectual property rights regime, writes Richard Owens.
By Richard Owens, July 18, 2017
When a skilled and experienced judge is bound by inconvenient legal precedent, justice may nevertheless prevail. A superb example is the judgment released last Wednesday in the case of Access Copyright v. York University, written by the Honourable Michael L. Phelan of the Federal Court of Canada. It was a case that involved massive and flagrant copying of published materials by York University in accordance with its new copying guidelines. Previous court rulings had led to severely watered down copyright protections, and opened the door for rampant copying at schools. This ruling will finally help to fix that.
York had developed its new copying policy when, in light of recent Supreme Court of Canada cases, the education industry decided to create new fair-dealing guidelines. These were prepared and endorsed by what is now Universities Canada. York (and others), relying on those guidelines, stopped paying Access Copyright royalties for use of the materials. Access Copyright, which exists to collect royalties on behalf of creators and publishers under the authority of a certified copyright tariff, suffered a catastrophic decline in revenues and sued York.
Previous court rulings had led to severely watered down copyright protections, and opened the door for rampant copying at schools. This ruling will finally help to fix that.
Fair dealing is a part of the Copyright Act. It allows the reproduction of copyrighted material, protecting it from copyright infringement lawsuits, if it’s done for certain specified purposes, such as research or private study, and if it is also fair.
In 2004, the Supreme Court strengthened fair dealing as a “user’s right” and opened it up for expansive interpretation. In a later ruling, the court — in a very divided ruling — astonishingly decided that for an educator to make copies for all the students in a class was “fair dealing” for private study by the students. These were dangerous precedents, for these and other reasons. Then along came the Copyright Modernization Act in 2012, which added “education” itself to the list of permitted purposes. “Fair dealing” had ceased to be fair or reasonable, it seemed. Justice Phelan demonstrated otherwise.
The fairness part of a fair dealing case is assessed on six factors: purpose of the dealing (somewhat confusingly, different than the statutory purpose assessment); the character of the dealing; the amount of the dealing (amount of copying); the available alternatives to the dealing; the nature of the work; and the effect of the dealing on the work.
Clearly York’s copying was for a statutorily permitted purpose: education. But Justice Phelan found that York’s dealing was unfair, or grossly unfair, on several of the six factors. He also found York’s guidelines to be unfair, poorly conceived and arbitrary, not to mention that York made no effort to see that they were followed. Many details of this analytic, measured decision merit specific praise that space here doesn’t allow for.
It was not open to the Federal Court to overturn the binding Supreme Court precedents. But there was no need to, for the reasoning of the decision is consistent with them. Justice Phelan did an assiduous and scrupulous job interpreting the Supreme Court’s rulings and conducted his exhaustive fairness analysis as the rulings had directed. The precedents were carefully distinguished on their facts where appropriate.
Further protecting the decision from appeal is that fairness is a factual enquiry, highly dependent on the facts and evidence of each case. Trial judges are much more able to undertake such review than appellate courts and, absent obvious legal error, their decisions will be granted deference. The great care taken with this decision, its extensive reliance on facts and a vast body of evidence, and its soundness from a copyright policy perspective, will make all but impossible to appeal.
Let’s hope we are in a new era in which Canadian courts will prove friendlier to IP and issue judgments more in keeping with principle and precedent.
The court ordered York to pay damages as well as costs. If it doesn’t have the financial reserves, this ruling will come as a heavy blow. But York, and the rest of the education industry, will be better off for having to pay these royalties. Not only do its employees — academics — create most of the materials at issue, but the education industry absolutely relies on the existence of educational publications, which wouldn’t exist if fair dealing unduly diminished remuneration of creators and publishers. Some publishers have closed up shop and left Canada because of the wide application of the fair dealing exception. This decision will result in new hope for publishers and creators.
Michael Geist, a law professor at the University of Ottawa, suggests the decision must surely be appealed, and that there are many arguable errors in its fair dealing analysis. A lawyer can always make an argument, but it is most unlikely that Geist has raised so far will prevail against this sound decision. York would be well-advised not to throw good money after bad.
This is the latest in a string of recent rulings that have strengthened intellectual property rights in Canada, including the Supreme Court abolishing the invidious “promise doctrine” in Canadian patent law in AstraZeneca v. Apotex, and ruling against Google to protect Canadian intellectual property in Google v. Equustek. Let’s hope we are in a new era in which Canadian courts will prove friendlier to IP and issue judgments more in keeping with principle and precedent. Our information economy demands it.
Richard C. Owens is a Toronto lawyer, a Senior Munk Fellow at the Macdonald-Laurier Institute and an adjunct professor at the University of Toronto Faculty of Law.
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