Access Copyright -FINAL Letter to McDougall Requesting Amendment to Interim Tariff Re Transactional (1)

8/6/2019 Access Copyright -FINAL Letter to McDougall Requesting Amendment to Interim Tariff Re Transactional (1)

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Osler, Hoskin & Harcourt LLP

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OTTAWA:1593144.4

June 8, 2011 Glen A. BloomDirect Dial: [email protected] Matter Number: 105956

SENT BY ELECTRONIC MAIL

Mr. Gilles McDougallSecretary GeneralCopyright Board of CanadaSuite 800 56 Sparks StreetOttawa, Ontario K1A 0C9

Dear Mr. McDougall:

Re: Access Copyright Interim Post-Secondary Educational Institutions Tariff,

2011-2013 (the Interim Tariff):

Application to Amend the Interim Tariff

We are writing to you on behalf of the Association of Universities and Colleges of

Canada (AUCC) to apply to amend the Interim Tariff granted by the Copyright Board

(the Board) as an interim decision in these proceedings on December 23, 2010 (the

Boards Decision) and amended by the Board on April 7, 2011.

AUCC requests that the Interim Tariff be amended to require Access Copyright to grant

transactional licences to post-secondary educational institutions on a per copy basis

consistent with the practice of Access Copyright prior to the grant of the Interim Tariff

and consistent with Access Copyrights practice and procedures for other industry sectors

including, but for royalty rate, for-profit corporations.

The need for AUCC to seek Board intervention at this time has arisen in light of the

recent refusal of Access Copyright to grant transactional licenses to post-secondary

educational institutions in a blatant effort to force those institutions to operate under the

Interim Tariff. AUCC submits that this tactic is a gross abuse of the collective

administration of copyright and an improper use of collective monopoly power.


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Background

In their various submissions to the Board in response to Access Copyrights application

for an interim decision, many of the Objectors raised concerns about the potential serious

adverse consequences of the mandatory nature of an interim tariff. The submissions

spoke of the requirement of post-secondary institutions to pursue their right to either

operate under a tariff regime or otherwise secure copyright permissions as required

through individual transactional licences. AUCC was very troubled by the prospect that

the tariff proceedings and the monopoly power wielded by Access Copyright over an

unknown, yet potentially vast, repertoire would inhibit a law abiding non-profit post-

secondary educational institution from pursuing a usage based alternative of paying for

uses that require payment. AUCC was concerned that Access Copyright could exert its

collective monopoly power to force its members to paying exorbitant rates to be able to

supply a limited number of copies of works within Access Copyrights repertoire for the

education of students.

AUCC does not advocate that users should have free access to published works. AUCCs

members and their faculty are among the most prolific creators of published works which

benefit Canadians and others globally. AUCC only advocates that post-secondary

educational institutions be required to pay for only what the law would require them to

pay for.

AUCCs submissions to the Board dated December 10, 2010 described the evolution of

copyright practices at post-secondary educational institutions and that there now exists a

real, practical and more efficient alternative to Access Copyright securing copyright

permissions for the copying activities of AUCC member universities. (AUCC,

December 10, 2010, page 7)

Today, Access Copyright competes with its affiliates, and in view of the Boards decision

in the K-12 proceedings, those publishers or authors who happen to cash cheques


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forwarded to them by Access Copyright, in granting licenses to post-secondary

educational institutions.

The Board has stated that the post-secondary educational institutions have a choice. They

do not have to accept the product that Access Copyright has on offer. They can pursue

the lawful reproduction of published works in reliance on license agreements with

publishers, many of which may, or may not, be affiliates of Access Copyright, and

exceptions under the Copyright Actwhich the Supreme Court of Canada has enshrined as

users rights in the CCHcase.

Importantly, technology has revolutionized society, including those who rely on

reprographic reproduction. Post-secondary educational institutions want digital access

and associated rights to ensure that Canadians are able to take advantage of the reality of

today. Virtual libraries and global electronic instruction and research are the reality today.

Many affiliates of Access Copyright understand this reality. They provide the access to

their publications electronically and enable activities for which Access Copyright seeks a

double payment under its proposed tariff. They do not do this out of an altruistic attitude.

These publishers enter into agreements with post-secondary institutions, to their financial

benefit, but not to that of Access Copyright, to facilitate what publishers and post-

secondary educational institutions need today. The record in these proceedings already

show the limited relevance of the Access Copyright proposed tariff. AUCC has stated

that:

[A] number of AUCC member universities have concluded that they no

longer require a licence from Access Copyright. They are able to conducttheir copying practices in accordance with the terms of the DigitalLicences, and in reliance on fair dealing for the purpose of research,private studying, criticism, review or news summary, and other exceptionsin the Copyright Actsupplemented by individual transactional licences.

AUCC, December 10, 2010, page 7


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On this point, the submissions of the Association of Canadian Community Colleges

(ACCC) to the Board dated December 10, 2010 echoed those of AUCCs, describing a

similar evolution of copyright practices at ACCC member colleges. Accordingly, both

AUCC and ACCC, in response to the second question in the Ruling of the Board dated

December 8, 2010, proposed that, should the Board decide to issue an interim decision,

that decision should take the form of an interim tariff.

AUCC submitted that an interim tariff would provide AUCC member universities the

flexibility to elect either to conduct their copying practices under the tariff and thereby

with Access Copyrights permission, or outside the provisions of the tariff with

permissions, where required, obtained from sources other than from Access Copyright.

(AUCC, December 16, 2010, page 6)

In ACCCs submissions, it stated that an interim tariff that reflects the content of

existing licences would provide ACCCs member institutions with the option of

continuing their current arrangements with Access Copyright. It would also provide

ACCCs member institutions with the second option of copying with permission (where

it is required) obtained directly from the copyright owner as some may wish to do.

(ACCC, December 17, 2010, page 3)

Similar submissions were advanced by other Objectors in these proceedings. Ariel Katz,

in his submissions to the Board dated December 10, 2010, argued strongly against the

establishment of an interim tariff and described how:

[M]ore competitive and vibrant models for lawfully accessing works arethriving and growing, to the benefit of authors, publishers, readers,students, scholars and Canadians as a whole. [...] The status quo consistsof a series of voluntary contractual arrangements. Imposing an interimtariff on users against their will would be a radical departure from thisstatus quo, whose voluntariness is its salient feature.


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Katz, December 10, 2010, page 11

In their submissions to the Board dated December 17, 2010, the Canadian Association of

University Teachers (CAUT) and the Canadian Federation of Students (CFS)

cautioned the Board that [t]he imposition of an interim tariff amounts to an intervention

in the marketplace. This again counsels the Board to employ a light hand. It always

remains open to Access Copyright to enter into direct license agreements with willing

institutions. Access Copyright already employs some such licenses. That speaks to a

functional marketplace. (CAUT/CFS, December 17, 2010, page 2)

Athabasca University (an AUCC member university) expressly sought the inclusion of a

transactional licence provision should the Board decide to issue an interim decision. In its

submissions to the Board dated December 10, 2010, Athabasca University argued that

Access Copyrights application for an interim decision raises serious anti-competitive

concerns and would prevent the development and operation of an efficient clearance

market, in which universities can deal directly with rights owners, develop new e-reserve

and other copyright compliant models, use open access material, and otherwise explore

more innovative models of education. (Athabasca University, December 10, 2010,

paragraph 12)

In Athabasca Universitys response to the third question in the Ruling of the Board dated

December 8, 2010, it proposed the following:

Additionally, the Board may wish to require that [Access Copyright] beobliged to issue transactional licenses for any specific work in its

repertoire at a reasonable cost, on reasonable terms, and in a reasonablelength of time to any post-secondary institution that does not require anoverall license with [Access Copyright]. This may be useful to allconcerned when copyright owners, within the [Access Copyright]repertoire, are difficult to contact or when they would prefer that [AccessCopyright] handle such requests.

Athabasca University, December 17, 2010, page 3


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This point was raised again in Athabasca Universitys submissions to the Board dated

January 21, 2011 responding to the Boards request for input into amendments to the

Interim Tariff. Athabasca University emphasized, among others, the following point:

3. Access Copyright should allow for transactional licenses for pieces ofits repertoire, so that post-secondary institutions do not have to pay fora full license when thry [sic] may use only a very small percentage ofthe repertoire.

Athabasca University, January 21, 2011, page 1

Finally, it is important to note that even Access Copyrights own submissions to the

Board have addressed this issue and the concerns raised by the Objectors. Access

Copyright repeatedly stressed the voluntary nature of any interim tariff that the Board

may decide to issue. We provide, by way of example, the following excerpts from Access

Copyrights submissions to the Board:

...any post-secondary institution can ensure that it is not subject to thedraft Interim Tariff in one of two ways: it can decide not to use any works

in Access Copyrights repertoire or it can enter into a negotiated licenceagreement with Access Copyright.[emphasis added]

Access Copyright, December 15, 2010, page 22

...a concern is expressed that an interim tariff will be mandatory. Anyinstitution can avoid application of the tariff by: (1) purchasing the work;(2) negotiating a licence with the rightsholder to copy the work; (3) notusing any work in Access Copyrights repertoire; (4) by engaging inconduct exempt from liability, e.g. fair dealing; or (5) negotiating a licencewith Access Copyright. At any time an institution can contact Access

Copyright to determine whether a particular work is in its repertoire: if itis, the institution can take steps to enter into an agreement with therightsholder or can decide not to use that work. The interim tariff (indeedany tariff) is not mandatory in this sense. [footnotes omitted, emphasisadded]


Access Copyright notes that any institution is free to purchase the work,enter into a voluntary licence with Access Copyright, negotiate a licence


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agreement for any work in the Access Copyright repertoire with therightsholder of that work, not use the works in Access Copyrightsrepertoire, and/or rely on exemptions to liability in the Act, e.g., fairdealing. The tariff is not mandatory, i.e., it is not the only option open toinstitutions, and is for the duration to be determined by the Board.[emphasis added]


Ultimately, on December 23, 2010 the Board granted Access Copyrights application for

an interim decision and established the Interim Tariff. The Boards Reasons for the

Decision of the Board establishing the Interim Tariff were issued on March 16, 2011 (the

Boards Reasons). The Boards Reasons made it clear that the Board had considered

the Objectors arguments and concerns over the potentially mandatory nature of any

interim tariff. The Board addressed those concerns by stating the following:

An interim tariff does not force Institutions to pay royalties absent anyevidence that they require a licence. A tariff applies only to those whoneed the licence; those who do not, need not pay. Under the generalregime, which applies in this instance, users whose consumption patternsjustify different rates remain free to secure, from Access or from others,transactional or other licences that will trump the tariff. The fact that theinterim tariff can be modified at any time ensures that Access will displaygood faith in such negotiations. Any misconduct on its part wouldnecessarily be reported to the Board, which would take it into account inany further consideration of this matter. [footnotes omitted, emphasisadded]

Boards Reasons, March 16, 2011, paragraph 45

AUCC submits that, for the reasons that follow, Access Copyright has not approached

negotiations of transactional licenses with AUCC and ACCC members in good faith and

instead has engaged in misconduct. Therefore, AUCC hereby applies to the Board to

amend the Interim Tariff to require Access Copyright to grant transactional licences to

post-secondary educational institutions.


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Access Copyrights Refusal to Grant Transactional Licences to Post-Secondary

Educational Institutions

Since the Interim Tariff was established by the Board on December 23, 2011, Access

Copyright began the practice of systematically denying transactional licence requests

made by AUCC member universities and other post-secondary educational institutions.

This is not the "status quo" that the Board sought to maintain when it granted Access

Copyright's application for an interim decision.

Shortly after the Boards Decision was issued and the Interim Tariff was established,

Access Copyright posted a notice on its website informing post-secondary educational

institutions that it was no longer offering transactional licences for digital copying and

that institutions were to operate under the terms of the Interim Tariff. This is an obvious

attempt by Access Copyright to force post-secondary educational institutions to operate

under a tariff regime that the Board clearly held was not to be mandatory.

Attached as Appendix A is a document entitled Frequently Asked Questions for theDigital Copies Option Under the Interim Tariff (Schedule G) issued by Access

Copyright. The Frequently Asked Questions document is available on its website at

(the Access Copyright

FAQ). In the Access Copyright FAQ, Access Copyright poses the following question

and answer:

If my institution does not elect the Digital Copies option, will we be

able to obtain permission for digital uses using the Access Copyrighttransactional licence service?

No. As digital copying is covered by Schedule G in the Interim Tariff,Access Copyright is no longer offering transactional licences to makedigital copies of published works when the amount copied falls under theterms of the Interim Tariff.

Access Copyright FAQ, page 2


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Attached as Appendix B are printouts of archived web pages from Access Copyrights

website relating to Access Copyrights licences with universities and community colleges

that were accessible prior to the Boards Decision (the Archived Web Pages). These

printouts have been obtained from the database of the Internet Archive

() and show how these web pages appeared on June 7, 2008 and

September 2, 2007, the last available archive dates for these particular web pages

captured by the Internet Archive. The Archived Web Pages clearly provide links and

instructions to post-secondary educational institutions on the process by which the

institution may obtain a Digital Pay-Per-Use (Transactional) Licence. Prior to the

Boards Decision, Access Copyright provided the following instructions to post-

secondary educational institutions:

To determine whether the work you want to use is available for thesedigital uses, go to our Rights Management System (RMS), where you maypurchase a digital pay-per-use licence using our Licence Wizard.

You may also email us for more information. If you are from a post-

secondary school and would like to purchase a digital pay-per-use licence,you might find our RMS Users Guide useful.

Archived Web Pages, Digital Pay-Per-Use Licences: Using Digital

Content, page 1

Attached as Appendix C are printouts of current web pages from Access Copyrights

website relating to post-secondary educational institutions and the Interim Tariff (the

Current Web Pages). On the Current Web Pages, Access Copyright has removed all

references to transactional licences (except for the reference provided in Appendix A

above). In addition, AUCC member universities have reported that Access Copyrights

Rights Management System and Licence Wizard service are currently unavailable to

post-secondary educational institutions. In contrast, digital transactional licences are still

being made available to K-12 schools (see Access Copyrights website at

).


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While AUCC member institutions have had some success in negotiating transactional

licences directly with the rightsholders, some Canadian publishers have now begun to

direct transactional license requests to Access Copyright. Access Copyright, in turn, has

denied such requests and has directed the requesting institution to use the Interim Tariff.

AUCC member universities have advised AUCC that at least one major publisher,

Cengage Learning/Nelson Education Ltd. (Cengage), has begun to direct all permission

requests from Canadian post-secondary educational institutions to Access Copyright. The

following notice was recently posted to the Cengage website:

To all Canadian Post-Secondary Institutions

All photocopy and electronic permission requests for use by Canadian Post-Secondary Schools (excluding Quebec) should be forwarded to AccessCopyright for processing. These request types include photocopying forcoursepacks, handouts for classroom distribution, electronic coursepacks,and library reserve requests. When making such requests, please contactAccess Copyright via email [email protected].

A printout of the current Rights & Permissions web page from the Cengage website is

attached as Appendix D. A printout of the archived Rights & Permissions web page

from the Cengage website, obtained from the database of the Internet Archive captured

on February 20, 2009, is attached as Appendix E. The archived Cengage Rights &

Permissions web page does not direct Canadian institutions to Access Copyright for

transactional licence requests.

In addition, AUCC member universities have reported to AUCC numerous instances

where either: (i) Access Copyright has denied a request for a transactional licence and

directed institutions to the Interim Tariff, or (ii) a rightsholder/publisher has refused to

grant permissions directly and/or has directed a transactional licence request to Access

Copyright. We enclose, by way of example, extracts of correspondence received from the

following AUCC member universities:

University of Manitoba (attached as Appendix F)


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University of Calgary (attached as Appendix G)

Memorial University of Newfoundland (attached as Appendix H)

University of Waterloo (attached as Appendix I)

University of Regina (attached as Appendix J)

Conclusion

It has come to our attention that Access Copyright may have recently redesigned its

Internet home page. The home page has a button labelled Get Permission to Copy. If a

user clicks on this button the user is directed to a webpage entitled Serving Your

Copyright Permission Needs. The page then describes a procedure for securing

transactional (pay-per-use) permissions to make paper or digital copies. The transactional

permissions include an online permission service that Access Copyright describes as its

Rights Management System. Copies of the home page and Serving Your Copyright

Permission Needs pages are attached as Appendix K. These copies were printed out

from the website on May 27, 2011.

On May 27, 2011, Alex McCulloch of the University of Waterloo received a voice mail

message from Jennifer Lamantia of Access Copyright. In the message, Ms. Lamantia

informed Mr. McCulloch that Access Copyright would not issue a transactional license

for a work if the use of the work would fall under the Interim Tariff. Attached as

Appendix L is a transcript of the voice mail message.

AUCC submits that Access Copyright is engaging in a pattern of conduct of denying

transactional licenses. This pattern of conduct is intended to force AUCC and ACCC

members to opt into the Interim Tariff or to elect the optional digital license under

Schedule G to the Interim Tariff. Access Copyrights conduct displays bad faith in

refusing to negotiate transactional licenses. This bad faith amounts to misconduct. As the


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Board anticipated in the Boards Reasons, AUCC is reporting this misconduct to the

Board. AUCC requests that the Interim Tariff be modified to add the following sections

to the Tariff.

2.4 Upon request of an Institution Access Copyrightshall grant to the Institution a transactional license to makea Copy of a specific Published Work in its Repertoireprovided that:

(a) the copy requested complies with the terms

and conditions set forth in Schedule C to this Tariff;

(b) the use of the Copy would comply with theuse of a Copy made under the provisions of anyother Section or Schedule to this Tariff; and

(c) the institution offers to pay a royalty rate of$0.10 per page.

2.5 Upon request of an Institution, Access Copyrightshall grant to the Institution a transactional license to make

a Digital Copy of a specific Published Work in itsRepertoire provided that:

(a) the Copy requested complies with the termsand conditions set out in Schedule C to this Tariff,with such modifications as necessary for DigitalCopies:

(b) the use of the Digital Copy would complywith the use of a Digital Copy made pursuant toSchedule G of this Tariff; and

(c) the Institution offers to pay a royalty rate of$0.10 per page.

2.6 Except as specifically provided in sections 2.4 and2.5 of this Tariff, none of the provisions of the Tariff applyto any Copy or Digital Copy made pursuant to eithersections 2.4 or 2.5 of this Tariff.

Yours very truly,


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Glen A. BloomGAB:BF:cmsEnclosure

c: [email protected] and [email protected]@[email protected]@uottawa.ca

[email protected]@[email protected]@blakes.ca and [email protected]@yorku.ca

Documents

Access Copyright -FINAL Letter to McDougall Requesting Amendment to Interim Tariff Re Transactional (1)