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ACCESS COPYRIGHT – POST-SECONDARY INSTITUTIONS TARIFF (2011-2013)

EXHIBIT AC-21

ACCESS COPYRIGHT SUBMISSIONS IN ANSWER TO BOARD’S FEBRUARY 18, 2014 QUESTIONS

March 28, 2014 BLAKE, CASSELS & GRAYDON LLP Barristers and Solicitors 340 Albert Street, Suite 1750 Constitution Square, Tower 3 Ottawa, Ontario K1R 7Y6 Randall Hofley Nancy Brooks Tel: (613) 788-2200 Fax: (613) 788-2247 ACCESS COPYRIGHT Erin Finlay Tel: (416) 868-1620 ext. 234 Fax: (416) 868-1621 Lawyers for Access Copyright

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TO: Gilles McDougall, Secretary General Copyright Board of Canada 56 Sparks Street, Suite 800 Ottawa, ON K1A 0C9 AND TO: Sean Maguire 27 Carola Street

Nepean, ON K2G 0X9 Objector

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ACCESS COPYRIGHT SUBMISSIONS

IN ANSWER TO BOARD’S FEBRUARY 18, 2014 QUESTIONS

1. Access Copyright submits the following in response to the questions issued by the Copyright Board in its Notice of February 18, 2014.

Question 1. (a) Please provide legal justification for targeting the posting of a link or hyperlink to a digital copy in the Proposed Tariff. In particular, explain how the posting of a link or hyperlink triggers the right to reproduce. Please address the Crookes v. Newton decision of the Supreme Court of Canada (2011 SCC 47) in your response.

2. The Proposed Tariff seeks royalties for the copying by Educational Institutions of works in Access Copyright’s repertoire. Section 2 of the Proposed Tariff defines “copy” to mean “any reproduction, in any material form whatever, including a Digital Copy, that is made by or as a consequence of any of the following activities: … (k) posting a link or hyperlink to a Digital Copy.”

3. The inclusion of the right to post a link or hyperlink to a Digital Copy was intended to capture the unauthorized reproduction and/or the communication/making available of works in Access Copyright’s repertoire.

4. Access Copyright represents and administers both the reproduction rights as well as the communication to the public by telecommunication rights of its affiliates. Access Copyright obtains these rights through its affiliation agreements (which authorize, as an example, Access Copyright to licence the posting of works on a secure network) and by virtue of the application of section 30.02 of the Copyright Act (the “Act”).

5. Section 30.02 of the Act states that it is not an infringement of copyright for an educational institution that has a reprographic reproduction licence under which the institution is authorized to make copies of works in a collective society’s repertoire for an educational purpose to (a) make a digital reproduction; (b) to communicate the digital reproduction by telecommunication; or (c) to do any other act necessary for the purpose of reproduction or communication provided that the educational institution pays the applicable royalties set out in subsection (3)(a). Subsection 30.02(6) deems a copyright owner that has authorized a collective society to enter into a reprographic reproduction agreement with an educational institution to have authorized the society to enter into a digital reproduction agreement. The section thus extends the collective’s reprographic reproduction licence for educational institutions (in the form of an exception with compensation) to digital copying and communication by telecommunication, provided that certain conditions are met.

6. The posting of a link or hyperlink to a work in Access Copyright’s repertoire triggers three rights: the right to communicate / make available the work to the public by telecommunication per sections 3(1)(f) and 2.4(1.1) of the Act; the right to reproduce per section 3(1) and the right to authorize any owner’s right (here, reproduction and communication/making available) per section 3(1). The Proposed Tariff, by licensing the act of linking by the professor, covers the professor and the institution for any liability that might result from the unauthorized making available, unauthorized reproduction,

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and/or authorization of infringement of the unlicensed work. Each of these implicated rights is addressed below.

7. Reproduction and making available are two separate rights, each of which are to be valued separately. However, since Access Copyright represents both the reproduction and communication rights and licences them as a bundle, it is not necessary for the Board in this tariff proceeding to ascribe separate or distinct values for each of those rights. In Access Copyright’s case, the bundle of rights licensed under the Proposed Tariff can be valued as a bundle of rights. (Since the Board has not asked for Access Copyright’s position on the appropriate value for these separate and distinct rights in this submission, we respectfully reserve our submissions on that point until the appropriate time, if necessary).

8. In this proceeding, Access Copyright does not claim any additional compensation for the right to link to a published work provided that the reproduction and making available of that Published Work has already been permitted, either by the copyright owner directly, by the licence granted under the Proposed Tariff or by an exception under the Act. In other words, if the uses to which the hyperlink points are already authorized, Access Copyright does not seek additional compensation for the act of hyperlinking.

9. Access Copyright has not introduced any evidence about the prevalence of the use of links and the extent to which they point to unauthorized uses. Given the lack of evidence, Access Copyright is not claiming any specific or additional value in the tariff for the right to post a link or a hyperlink in this proceeding.

10. Moreover, the specific value of the right to link or hyperlink to a Published Work (to the extent there is value) is included in the bundle of rights licensed under the Benchmark Licences. It is therefore not necessary for the Board to decide the legal issues above, or ascribe any specific value to the right to link or hyperlink in this proceeding.

11. Finally, in view of the lack of evidence, Access Copyright has no objection to the Board removing this permitted use from the certified tariff. That being said, the legal justification for the inclusion of links and hyperlinks in the Proposed Tariff is set out below.

A. Right to Communicate / Make Available by Telecommunication

12. The right to communicate / make available the work to the public by telecommunication per sections 3(1)(f) and 2.4(1.1) of the Act is a technologically neutral right attaching to the act of enabling or encouraging online access arising from an initial act of reproduction to create a tangible reproduction, combined with the user’s intent to more broadly disseminate the copyright-protected content. The right is triggered irrespective of whether there is any subsequent reproduction of the work by another person, or a performance of the work to such person. The act of making works available, thereby enabling or encouraging a subsequent user’s access to tangible or intangible copies of work for immediate or later perception is a discrete, additional tariffable act comprising part of an author/owner’s communication right.

13. The trend in Canada and abroad is to recognize that the communication/making available rights are implicated by use of hyperlinks.

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14. Section 3(1)(f) of the Act provides the rightsholder the sole right “to communicate the work to the public by telecommunication”. Section 2.4(1.1) of the Act clarifies that communicating a work includes making it available to the public:

For the purposes of this Act, communication of a work or other subject-matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.

15. Thus, section 2.4(1.1) of the Act has two components: that the work is (1) made available (2) to the public.

(i) Made available

16. Section 2.4(1.1) was added to the Act in 2012. Section 2.4(1.1) was intended to, inter alia, fully implement the WIPO Treaties, which include a making available right.1 The amendment to control making content available via the s. 2.4(1.1) deeming clause shows a clear intent to expand the meaning of the term “communicate” to encompass all present and future means of making available.

17. In assessing the impact of the deeming clause, it is crucial to understand that it expands the term “communicate” beyond its ordinary meaning. As the Supreme Court held in an analysis of the dictionary definition of “communication” in the 2004 Tariff 22 case, the term “presupposes a sender and a receiver of what is transmitted”.2 By contrast, the “making available” of content requires only its offering, not its completed transmission. A hyperlink, whether clicked or not, meets this definition.

(ii) To the public

18. In addition to being subject to section 2.4(1.1) because they make works available, hyperlinks also meet the second element of section 2.4(.1) as they communicate works “to the public”. In Canadian Wireless Telecommunications Assn. v. Society of Composers, Authors and Music Publishers of Canada,3 the Federal Court of Appeal interpreted “to the public” as follows:

Article 1721(2) of NAFTA, supra, which is not binding on this Court but is nevertheless helpful since “public” is not otherwise defined, states that the public includes “any aggregation of individuals intended to be the object of, and capable of perceiving communications”. A communication that is

1 “The WIPO Copyright Treaty and the Performances and Phonograms Treaty, collectively known as the WIPO Internet treaties, establish new rights and protections for authors, performers and producers. Canada signed the treaties in 1997. The proposed Bill will implement the associated rights and protections to pave the way for a future decision on ratification. All copyright owners will now have a “making available right”, which is an exclusive right to control the release of copyrighted material on the Internet. This will further clarify that the unauthorized sharing of copyrighted material over peer-to-peer networks constitutes an infringement of copyright.” Government of Canada, “What the Copyright Modernization Act Means for Copyright Owners, Artists and Creators”. 2 SOCAN v. CAIP, 2004 SCC 45 at para. 46. 3 Canadian Wireless Telecommunications Assn. v. Society of Composers, Authors and Music Publishers of Canada 2008 FCA 6.

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targeted only at a segment of the public, may however, also be a communication to the public. Paragraph 2.4(1)(a) (as enacted by S.C. 1997, c. 24, s. 2) . . . clarifies that a communication may be to the public if it is “intended to be received by” a “part of the public”, specifically persons who occupy apartments, hotel rooms, or dwelling units in the same building. Thus, to be “to the public” a communication must be targeted at an aggregation of individuals, which is more than a single person but not necessarily the whole public at large.4

19. More recently, in Rogers Communications Inc. v. Society of Composers, Authors and

Music Publishers of Canada,5 the Supreme Court of Canada considered whether streams of musical works from the Internet constituted communications to the public rather than private communications. The Court held that a “series of repeated . . . transmissions of the same work to numerous different recipients” may constitute a communication “to the public” within the meaning of s. 3(1)(f) of the Act.6 In the context of online music services providers, the Court found that their services were available to “large segments of the public” and that “the works in question have the potential of being put in the possession of an aggregation of customers”.7 “The necessary implication of this business model is that there will be a ‘series of repeated . . . transmissions of the same work to numerous different recipients’”.8 The Court distinguished this scenario from that involving communication to a smaller group, writing: “the customers requesting the streams are not members of a narrow group, such as a family or a circle of friends”.

20. While hyperlinks in a course management system (“CMS”) do not make works available to an unlimited number of individuals, they do make works available to a “large segment of the public”, i.e., any post-secondary student who wishes to take a course involving the works. This could be a class of 10, a class of 200 or the entire institution. Indeed, a number of educational institutions are currently offering Massive Open Online Courses (“MOOCs”) which make works available to a potentially indeterminate number of students. Hyperlinks also involve “a series of repeated . . . transmissions of the same work to numerous different recipients”. The Copyright Act itself recognizes that “public” need not be interpreted narrowly to require solicitation of an undifferentiated mass of individuals – for example, section 29.4(2)(b) grants an exemption from infringement for educational institutions communicating “to the public situated on the premises of the educational institution a work or other subject-matter as required for a test or examination” [emphasis added]. Likewise, the Supreme Court (implicitly) recognized that the subset of the public comprising lawyers attending the Law Society’s Great Library could constitute a public in CCH Canadian Ltd. v. Law Society of Upper Canada if the communications involved a “series of repeated fax transmissions of the same work to numerous different recipients”.9 Thus, the Act contemplates that a “public” could include students on a campus (otherwise no exemption would be needed).

4 Ibid., at para. 38. 5 Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35. 6 Ibid., at para. 52. 7 Ibid. at para. 54. 8 Ibid. at para. 54. 9 CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 at para. 78 [“CCH”]. The Court applied this concept to the facts of the case as well, by finding that “there was no evidence of this type of transmission having occurred in this case”. Ibid.

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B. A Hyperlink may infringe the making available right

21. The purpose of the making available right is to broaden the copyright to provide rightsholders with sufficient protection to ensure that an initial unauthorized act, such as the posting of a link or hyperlink of its work, does not thereby rob it of the ability to derive a fair economic return in exchange for publishing the work. A hyperlink can, depending on the circumstances, make a work available to a public different than that which is contemplated by the rightsholder, as illustrated in the cases discussed below.

22. In Warman v. Fournier, the Federal Court held that an inline link of a photograph could constitute a communication under the Act if the rightsholder had not already authorized its communication by publishing it himself openly without restriction.10

23. In Case C-466/12 Svensson v. Retriever Sverige AB11, the Court of Justice of the European Union (“CJEU”) considered Article 3(1) of Directive 2001/29, which provides:

Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.

24. The applicants in Svensson were journalists who wrote articles published in the Göteborgs-Posten newspaper and on the Göteborgs-Posten website. Retriever Sverige operates a website that provides its clients, according to their needs, with lists of clickable Internet links to articles published by other websites. The journalists sought compensation on the ground that Retriever had made use, without their authorization, of certain articles by them, by making them available to its clients.

25. The CJEU found that “the concept of communication to the public includes two cumulative criteria, namely, an ‘act of communication’ of a work and the communication of that work to a ‘public’” [para. 16]. “[T]he provision, on a website, of clickable links to protected works published without any access restrictions on another site, affords users of the first site direct access to those works” [para. 20]. “[T]he term ‘public’ … refers to an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons…. An act of communication such as that made by the manager of a website by means of clickable links is aimed at all potential users of the site managed by that person, that is to say, an indeterminate and fairly large number of recipients” [paras. 21-22]. Thus, the provision of ordinary user-activated hyperlinks can make a work available to the public.

26. However, “in order to be covered by the concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29, a communication … must also be directed at a new public, that is to say, at a public that was not taken into account by the copyright holders when they authorised the initial communication to the public” [para. 24] [emphasis added].

10 Warman v. Fournier, 2012 FC 803 at para. 36-38. 11 Case C-466/12 Svensson v. Retriever Sverige AB (CJEU) (Feb. 13, 2014), available at: http://curia.europa.eu/juris/document/document.jsf?text=&docid=147847&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=395 [“Svensson”].

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27. The CJEU held that in the facts before it, the links did not make the works available to a new public because “[t]he public targeted by the initial communication consisted of all potential visitors to the site concerned, since, given that access to the works on that site was not subject to any restrictive measures, all Internet users could therefore have free access to them” [para. 26].

28. The CJEU distinguished this from a case where:

a clickable link makes it possible for users of the site on which that link appears to circumvent restrictions put in place by the site on which the protected work appears in order to restrict public access to that work to the latter site’s subscribers only, and the link accordingly constitutes an intervention without which those users would not be able to access the works transmitted, all those users must be deemed to be a new public, which was not taken into account by the copyright holders when they authorised the initial communication, and accordingly the holders’ authorisation is required for such a communication to the public. This is the case, in particular, where the work is no longer available to the public on the site on which it was initially communicated or where it is henceforth available on that site only to a restricted public, while being accessible on another Internet site without the copyright holders’ authorisation. [Ibid. at para. 31] [emphasis added]

29. Thus, a hyperlink can, if it circumvents restrictions put in place by the rightsholder, links to an infringing copy, or otherwise subverts the rightsholder’s prerogative to control the distribution of their work, result in infringement.

C. The Crookes v. Newton Decision

30. In Crookes v. Newton,12 the Supreme Court of Canada considered whether a shallow or deep hyperlink to allegedly defamatory material could be said to “publish” that material for purposes of defamation law. A six-justice majority decision written by Abella J. held that a shallow or deep hyperlink will only constitute publication where the hyperlink “in itself conveys defamatory meaning”.13 “Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be ‘published’ by the hyperlinker”.14

31. Abella J.’s reasons in Crookes can and should be distinguished as the case dealt with the realm of defamation law, not copyright law. Crookes involved publication under defamation law, not owners’ rights under copyright law. “Publication” under defamation law is a distinct concept from “making available” or “communicating by telecommunication” or authorizing those uses. “Making available” is a right broader than mere “publication”, which Abella J. limited to actual reproduction in the context of defamation. Further, there is no analogue to the concept of “authorization” of infringing use in defamation.15

12 Crookes v. Newton, 2011 SCC 47. 13 Ibid., at para. 40. 14 Ibid., at para. 42. 15 For these reasons, it is also unnecessary for a user to actually click a hyperlink and access the works. The making available and authorization rights can be triggered without such action – a factor

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32. If the Board does not agree that Crookes is entirely distinguishable, the test more capable of capturing the concepts of making available and authorization in the copyright law context may be that proposed by Deschamps J. in dissent. She proposes that a link is a publication if it constitutes “a deliberate act that made defamatory information readily available to a third party in a comprehensible form”.16 Deschamps J. proposes that information is readily available if “it can be immediately accessed” (para. 94). This approach recognizes the differences between types of hyperlinks and the context in which they are posted. Deschamps J. explains:

[I]t is inaccurate to equate a hyperlink with, for example, a footnote in a book. A footnote that does not actually reproduce the information to which the reader is being referred does not make that information readily available. The reader has to locate and obtain the document the footnote refers to and then find the information within the document. In contrast, an automatic hyperlink requires no action whatsoever, while an embedded deep hyperlink requires only the tap of a finger to gain access to the information. The effort involved is even less than that of turning a page in a book. Although it is of course true that hyperlinks are a form of reference, the extent to which they facilitate access and their ubiquity on the Internet cannot be overlooked.17

33. Deschamps J. alludes to the Court’s decision in Dell Computer Corp. v. Union des consommateurs,18 in which the Court found that a hyperlinked arbitration clause should not be considered physically separate from the main contract document. She writes: “The arbitration clause in Dell was found to be reasonably accessible, since clicking on one hyperlink took the consumer directly to a page containing the terms and conditions of the sale, including the arbitration clause. Thus, there was no material distinction between having access to the clause by hyperlink and actually having a paper copy of it”.19

34. Deschamps J. identifies several factors relevant to determining if a hyperlink makes information readily available:

In determining whether hyperlinked information was readily available, a court should consider a number of factors, including whether the hyperlink was user-activated or automatic, whether it was a shallow or a deep link, and whether the linked information was available to the general public (as opposed to being restricted). This list of factors is by no means exhaustive.20

35. Access Copyright submits that the same factors are relevant to a determination of whether a hyperlink constitutes a communication by telecommunication by making a work available under the Act or authorizes an infringing use.

distinguishing it from the defamation analysis in Crookes where the trial judge concluded that the mere posting of a hyperlink “does not lead to a presumption that someone actually used the hyperlink to access the impugned words”. Ibid., at para. 11. 16 Ibid., at para. 93. 17 Ibid., at para. 96. 18 2007 SCC 34. 19 Crooks v. Newton, at para.96. 20 Ibid., at para. 99.

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D. Right to Reproduce

36. Links and hyperlinks can result in duplicate, perceptible reproductions that exist for as long as the link exists. Works in Access Copyright’s repertoire may be reproduced even if only a hyperlink is used and no new tangible copy of a work is created. As such, hyperlinking and linking in the Proposed Tariff properly capture reproductions for which a licence may be required

E. Right to Authorize

37. In Public Performance of Musical Works (Tariff 22),21 the Board explained the concept of authorization in the Internet context:

[A work’s] communication is authorized as soon as the work is made available.

“Authorization” constitutes a separate protected use under the Act. To authorize is to sanction, approve and countenance. [emphasis added]

38. In accordance with the above discussion, Access Copyright submits that to the extent a hyperlink makes a work available, it authorizes a copyright-protected use of the work. Access Copyright submits that this is likely to be the case for hyperlinks used in a post-secondary institution’s CMS where the institution has provided the student a list of required or recommended readings, directed them to use the CMS, then provided hyperlinks to the relevant works.

39. Indeed, the Board has already held that some hyperlinks authorize communication of a work. In Tariff 22, the Board held that embedded (automatic) hyperlinks authorize the communication of a work, writing:

In itself, the creation of hyperlinks does not involve a communication to the public of any works contained at the linked sites. In their simplest form, hyperlinks represent an electronic directory of addresses.

However, the content provider who includes into a Web page an automatic link which effects the transmission of a musical work to the recipient without the need for further action by the end user holds itself out as responsible for the material at the linked sites and therefore, authorizes its communication. This will be true even in the absence of a business relationship with the owner of the linked sites. By creating such automatic hyperlinks, the site owner makes itself “a party in interest to the [communication] by warranting the right to [communicate].”22

40. Providing a link or a hyperlink to an unauthorized reproduction or making available increases the extent of the initial infringement by directing traffic to the infringing work to more users who would likely not have otherwise known about it. The act of hyperlinking amplifies the extent of the infringement of those rights and increases the damages to the rightsholder commensurately. A post-secondary educational institution may be liable for

21 (1999) 1 C.P.R. (4th) 417 (October 27, 1999) [Tariff 22] at p.44. 22 Tariff 22 at p. 48.

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its professors’ authorization of infringement (both the reproduction and communication rights) by hyperlinking to unauthorized content. The Proposed Tariff seeks to permit these acts of professors so that the institution is not liable for that authorization.

41. As noted above, since Access Copyright makes no claim for additional compensation for the right to link or hyperlink to a Published Work in its repertoire in this proceeding because of the lack of volume evidence, it is not necessary for the Board to decide this legal issue. Access Copyright has no objection to the removal of these permissions under the final certified tariff.

Question 1.(b) Please explain: (i) the difference between a link and a hyperlink;

42. For the purpose of the proposed tariff, there is no difference between a link and a hyperlink. Access Copyright has included both terms in the Proposed Tariff because the terms are often used interchangeably.

Question 1.(b) Please explain: (ii) the meaning of para. 71 of AC-2 (Written Statement of Levy et al.), in particular, the difference between the act of linking or hyperlinking to an internal secure network and that of linking or hyperlinking to an external non-secured network.

43. Paragraph 71 of Exhibit AC-2 reads:

The Proposed Tariff (s. 2(f)) is also intended to capture the act of linking or hyperlinking to published works within certain systems, such as the inclusion of, and linking to, published content within the CMS itself, a network that is within the institution's internal secure network (such as an institutional repository), or another secure intranet.

44. We note that the referenced paragraph to the Proposed Tariff in Exhibit AC-2 should be section 2, definition of “Copy”, subparagraph (k) (rather than s. 2(f)). Subparagraph (k) reads:

“Copy” means any reproduction, in any material form whatever, including a Digital Copy, that is made by or as a consequence of any of the following activities: … (k) posting a link or hyperlink to a Digital Copy.

45. “Secure Network” is defined in the Proposed Tariff as:

a network that is operated by the Educational Institution, or for the Educational Institution with Access Copyright’s consent, and which is only accessible by an Authorized Person who is approved by the Educational Institution by means of a process of authentication which, at the time of login, identifies the user as an Authorized Person, whether by user name and password or by some other equally secure method.

46. The Proposed Tariff seeks to permit or licence acts of a professor that might trigger liability for the institution. There are two types of linking licensed by the Proposed Tariff: the linking to Published Works posted on a Secure Network; and the linking within a Secure Network to a Digital Copy posted elsewhere (e.g., an external non-secure intranet or the Internet.

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47. The first (i.e., linking to Published Works on a Secure Network) permits, for example, a professor to post a link to a Published Work in a secure database of Published Works maintained by the institution. Section 4(3) of the Proposed Tariff prohibits storing or indexing Copies with the result of creating a library of published works. Obviously, if the posting of those Published Works and creation of the library have already been licensed by the copyright owner, Access Copyright is not seeking to further licence the use. Nor does Access Copyright seek any additional compensation for that already licensed use. However, where the Copies of the Published Works in the library have been made without authority, a licence may be necessary. Since creating a library is prohibited, if a professor links to that database, the institution could be liable for, among other things (and as discussed above), infringement of the making available right or authorizing infringement. To be clear, and as noted above, Access Copyright does not claim any additional compensation for the right to link provided that the use of the Published Work has already been permitted, either by the copyright owner directly, by the licence granted under the Proposed Tariff or by an exception under the Copyright Act. The Proposed Tariff is simply intended to provide comfort to the institution that the professor’s act of linking is permitted, if necessary.

48. The second licensed act of linking (i.e., linking to a Published Work that is posted external to a Secure Network) allows, for example, a professor to post a link within the institution’s course management system to a Published Work that has been posted outside of the institution’s course management or library system, such as on the open Internet. It should be noted that the Proposed Tariff does not authorize the posting of a Published Work on the open Internet; it does however permit linking to a work that has been posted on the open Internet.23 Without the licence to post a hyperlink to the work covered under section 2, definition of “Copy”, subparagraph (k), that use would not be covered by the Proposed Tariff. If the work to which the professor has linked is posted on the Internet without the copyright owner’s authorization, the posting of the link by the professor may attract liability to the institution (for example, and as discussed above, by infringing the making available right and/or by authorizing infringement).

49. In conclusion, linking to a published work triggers the right to reproduce, the right to communicate or make available and the right to authorize any owner’s right. A post-secondary educational institution may be liable for copyright infringement if a professor posts on a CMS a link to a published work that has been posted outside of the institution’s CMS, or within the institution’s CMS, if that work was posted without authorization. The Proposed Tariff simply seeks to licence that use where a licence is required. Since Access Copyright has no evidence in this proceeding regarding the extent to which linking points to unauthorized reproductions, Access Copyright seeks no additional value for this use under the Proposed Tariff. Access Copyright therefore does not object to its removal from the tariff to be finally certified by the Board.

Question 2. Please provide legal justification for targeting reproductions that are made by or as a consequence of the “displaying [of] a Digital Copy on a computer or other device” in the Proposed Tariff. In so doing, please address s. 30.71 of the Copyright Act, as well as any effect the distinction between streams and

23 We note that section 30.04 of the Copyright Act provides an exception for an educational institution to use material that is publicly available on the Internet in some cases, but only when the copyright-protected material was made with the consent of the copyright owner (s. 30.04(5)).

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permanent downloads made by the Supreme Court of Canada in ESA v. SOCAN (2012 SCC 34) has on this analysis.

50. The definition of “copy” in section 1 includes: “any reproduction, in any material form whatever, including a Digital Copy, that is made by or as a consequence of any of the following activities: … (j) displaying a Digital Copy on a computer or other device”.

51. Section 30.71 was added to the Copyright Act in the recent amendments, which took effect in November 2012. As such, it was not in force at the time the Proposed Tariff was filed, nor was it in force for the first 22 months of the Proposed Tariff period.

52. Section 30.71 of the Act provides:

30.71 It is not an infringement of copyright to make a reproduction of a work or other subject-matter if

(a) the reproduction forms an essential part of a technological process;

(b) the reproduction’s only purpose is to facilitate a use that is not an infringement of copyright; and

(c) the reproduction exists only for the duration of the technological process.

53. Access Copyright submits that elements (b) and (c), above, are not met in the context of post-secondary copying.

54. With regard to element (b), reproductions made by or as a consequence of displaying a Digital Copy on a computer or device do not facilitate a non-infringing use. While Digital Copies can of course be printed, viewing a Digital Copy electronically (through a monitor, laptop, tablet, smartphone, e-reader, or other device) is the quintessence of digital copying. True technological neutrality requires recognition that viewing a Digital Copy digitally is akin to viewing it in tangible or physical form – the former is not an ephemeral or incidental copy made only to facilitate a technological process. Rather, it is a manner of reproduction or communication that disseminates copyright-protected content to another user.

55. With regard to element (c), in Professor Murphy’s report (Exhibit AC-3) he discusses the number and type of copies created when a Digital Copy is posted on a CMS and viewed by a student. As a result of displaying a Digital Copy on a computer or other device, copies will be made which persist beyond the duration of the technological process. These include, to use the terminology and chart at page 34 of Professor Murphy’s report, potentially five other permanent copies:

(i) Copy B (local back-up copy of originating copy uploaded to a CMS);

(ii) Copy C (initial upload of the file to a CMS);

(iii) Copy D (CMS back-up of Copy C);

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(iv) Copy F (recipient’s download of file directly from CMS or by saving/printing); and

(v) Copy G (other user copies).

56. Access Copyright submits that the “ephemerality” requirement of element (c) and the “essential part of a technological process” requirement of element (a) is met only by Copy E (the ephemeral copy existing in the computer cache only while the copy is being viewed).

57. In ESA v. SOCAN,24 the Supreme Court of Canada affirmed the principle of technological neutrality, holding that the Board erred in concluding that a separate, “communication” tariff applies to downloads of musical works contained in games sold online (when no such tariff would apply if the games were purchased in a brick-and-mortar store and when ESA had already paid reproduction royalties to the copyright owners for the video games).

58. Access Copyright submits that the distinction the Court made between streams and permanent downloads in obiter in ESA is not relevant to the Proposed Tariff’s application to reproductions that are made by or as consequence of displaying a digital copy on a computer. Unlike the fact scenario in ESA, Access Copyright is not seeking duplicate payments (i.e., ‘double-dipping’) for the copying of Published Works simply because the works are delivered over the Internet. To the contrary, Access Copyright seeks compensation for the reproduction and/or making available of Published Works when the method of delivery obviates the need to make a tangible reproduction; in other words, where the display of a Published Work substitutes for the making of the tangible paper reproduction. Here, there is no additional layer of fees: Access Copyright simply seeks compensation when the making of a paper coursepack or the printing of a work is no longer necessary because the student can access and read the work online.

59. The principle of technological neutrality in this case requires that the value of the display to an entire class of a Published Work be akin to the value of the reproduction of that Published Work for the entire class (i.e., the value of a page multiplied by the number of students in the class). If a hard copy of the Published Work is never made by the students, such as in a coursepack or via further download, but each student accesses and reads the work, whether it be on a CMS, via a student’s smartphone or otherwise, the display of the Published Work must be a compensable act. To find otherwise, would inequitably reward the user (to the detriment of the copyright owner) based solely on the means of delivery. That result would violate the principle of technological neutrality.

60. Section 30.02 of the Act affirms this principle with specific reference to educational institutions and the collective licence. Section 30.02(3) extends the collective reprography licence for educational institutions to digital copying and communications provided that an educational institution: (a) pays “with respect to all the persons to whom the digital reproduction is communicated by the institutions…the royalties that would be payable if one reprographic reproduction were distributed by the institution to each of those persons…”. The legislation thus supports the assertion that the posting of a work or the making available of a work to a class has the equivalent value as a copy made for every student in the class.

24 2012 SCC 34.

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61. At paragraph 28 of the ESA decision, the SCC found that, “although a download and a stream are both “transmissions” in technical terms…they are not both “communications” for purposes of the Copyright Act…Unlike a download, the experience of a stream is much more akin to a broadcast or performance”. This conclusion has no effect on Access Copyright’s analysis regarding section 30.71 of the Act: as discussed above, Access Copyright administers both the reproduction rights and communication rights of its affiliates. Whether display falls under the communication right, or the reproduction right, or both, the act is covered by and compensable under the Proposed Tariff.

62. If the Board disagrees with the above analysis, the exception under section 30.71 of the Copyright Act cannot in any event apply to the Proposed Tariff for the period between January 2011 and November 2012.

Question 3. (a) Describe the impact on fair dealing in educational institutions of the addition of “education” in s. 29 of the Copyright Act and of the Alberta and Bell Supreme Court of Canada decisions. To what extent do these developments expand fair dealing in educational institutions?

63. In CCH, the Supreme Court of Canada held that, “In order to show that a dealing was fair under s. 29 of the Copyright Act, a defendant must prove (1) that the dealing was for the purpose of either research or private study and (2) that it was fair.”25 As such, fair dealing necessitates a two-part analysis: first, it must be determined whether the dealing was for one of the authorized purposes under the Copyright Act; and second, it must be determined whether the dealing was fair.

64. The majority of the Supreme Court of Canada in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright)26 found in its July 2012 decision that teachers who copy copyright-protected works for their students on the teachers’ own initiative share a symbiotic purpose with the students who are engaged in their own research and private study. The majority concluded that “[i]nstruction and research/private study are, in the school context, tautological.”27 In effect, the majority of the Supreme Court of Canada jurisprudentially expanded the meaning to be afforded “research “and “private study” to include instruction. This decision expanded what was once understood to be limited allowable purposes of private study and research to include copying performed for the purpose of instruction or education.

65. This expansion of the allowable fair dealing purposes was later codified in the amendments to section 29 of the Act. The coming into force of the statutory amendment in November 2012 did not serve to further expand fair dealing because the Supreme Court of Canada had already interpreted the exception as including that purpose. Simply put, and contrary to the apparent position taken by a number of educational users that the legislative amendments further expanded fair dealing in education, the legislative inclusion of education as an express allowable fair dealing purpose simply now accords with the jurisprudence.

25 CCH, supra, at para. 50. 26 Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 [“Alberta (Education)”] 27 Ibid., at para. 23.

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66. Therefore, the purposes under step one of the fair dealing analysis was expanded by Alberta (Education) and similarly (but not additionally) by the amendments to the legislation.

67. Following the Alberta (Education) case and the addition of “education” to section 29 of the Copyright Act, “education” is now an allowable fair dealing purpose. But, while the Supreme Court of Canada may have expanded the allowable purposes under fair dealing, that case did not expand the notion of fairness. Nor did the legislation.

68. The Alberta (Education) case found that some of the copying performed in elementary and secondary schools was fair, but that finding did not “expand” part two of the fair dealing analysis. Rather, the Court assessed the facts of the case as it understood them and concluded that the copying of 16.9 million pages of copyright-protected works, when the copying of the other 229 million pages of copyright-protected works were being paid for under a collective licence, was fair.28

69. Similarly, the legislative amendment did not make the copying behaviour in question more or less fair. It simply recognized “education” as an enumerated fair dealing purpose (part two of the fair dealing analysis). The Federal Court of Appeal in the Alberta (Education) case agreed that the (then-proposed) legislation would not change the fairness analysis, stating, “This amendment serves only to create additional allowable purposes; it does not affect the fairness analysis. As the parties agree that the dealing in this case was for an allowable purpose, the proposed amendments to the Act do not affect the outcome of this case….”29

70. The notion of fairness (the second step in the fair dealing assessment) remains a case-by-case analysis. Once the copying behaviour in question is found to fall within one or more allowable purposes, the Board or any reviewing Court must still engage in the second stage fairness analysis. That analysis requires an assessment of the evidence and arguments in respect to the six recognized fair dealing principles first delineated by the Supreme Court of Canada in the CCH decision.

28 K-12 (2005-2009) Decision, Copyright Board (July 17, 2009) [“K-12 Decision”], at Tables 1 and 2. 29Alberta (Education) v. Access Copyright, 2010 FCA 198 at para. 21. The Federal Court of Appeal decision was overturned by the Supreme Court of Canada, but the Court did not reference or disturb the FCA’s analysis of the amendments. Alberta (Education), supra, at para. 14. In December 2010, when the legislative amendment to fair dealing was first tabled, Professor Michael Geist commented in his blog on the (then-proposed) amendments to the fair dealing exception. In response to the question, “Won’t the fair dealing reforms allow education to make unlimited copies without compensation?”, he stated, “The extension of fair dealing to education only affects the first part of the test. In other words, while Bill C-32 will extent the categories of what qualifies as fair dealing, it does not change the need for the use itself to be fair…judges would be required to assess the fairness of any use – including education – before it was treated as fair dealing”. Michael Geist, “Clearing Up the Copyright Confusion: Fair Dealing and Bill C-32”, December 15, 2010, available at: www.michaelgeist.ca. Professor Geist also previously noted that “while the bill will extend the categories of what qualifies as fair dealing, it does not change the need for the use itself to be fair…the bill will open the door to other potential uses being treated as fair dealing, but the requirements for fairness remain unchanged”. Michael Geist, “Federal Court Ruling Shows Fair Dealing Fears Greatly Exaggerated”, July 28, 2010, available at: www.michaelgeist.ca. In other words, the legislative amendment did not expand the second part of the test: the assessment of whether or not a dealing is fair.

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71. In every case in which the Supreme Court of Canada has considered section 29 of the Copyright Act, it has confirmed that whether the dealing is fair “is a question of fact and depends on the facts of each case”.30

72. The Alberta (Education) decision turned on the facts of that case, that is, the evidence tendered before the Board and the Board’s weighing of the evidence. Based upon that record, the majority of the Supreme Court of Canada determined that the copying behaviour there at issue (being 16.9 million copies of copyright-protected works) qualified as fair dealing. The decision is certainly not determinative where the evidentiary record of a subsequent case is sufficiently distinct or distinguishable from the record before the Court in Alberta (Education).

73. Moreover, a consideration of the implications of that decision (indeed, of any court decision) must consider the arguments advanced by a party or its counsel in that particular case, particularly when a party subsequently attempts to expand the ratio of that decision to different and distinguishable facts.

74. In Alberta (Education), the appellants represented to the Supreme Court of Canada that the disputed copying activities at issue in that case involved the copying of “short excerpts copied to supplement the main textbook”31; “…tak[ing] a few pages from another resource, a different book, to assist the students”32; and “…taking short excerpts from a different resource, and it is a very short excerpt…”33. The nature of the copying, as framed by the appellants in that case, involved a teacher’s unplanned and unexpected need to copy pages from a non-core educational book to help a student overcome his learning difficulties in comprehending the material in the core textbook.

75. The issue before the Supreme Court of Canada was not whether the making of short excerpts from books used, for example, in coursepacks or on course management systems, would qualify as fair dealing. The copying behaviour at issue in that case, as framed by the appellants, involved spontaneous copying by the teacher, not pre-planned systematic copying of copyright-protected works. To the extent the facts in a subsequent case involve the non-spontaneous, pre-planned, systematic copying of works in the absence of a demonstrated need to supplement a core textbook, the Alberta (Education) decision is of little assistance.

76. In addition, the appellants conceded in the Alberta (Education) case that the copying behaviour that would not qualify as fair dealing would be, “…things like chapters from a book; not short excerpts but long excerpts, if you want to continue the analogy that I began with that fair dealing deals with little bits.”34 To the extent a party in a subsequent case wishes to argue that copying an entire chapter from a textbook or a poem from an anthology is a “short excerpt” and thus qualifies as fair dealing, the Alberta (Education) decision does not support the conclusion of fair dealing.

77. Also, the appellants submitted in the Alberta (Education) case that “the Court should [not] set a mathematical formula”35 when pronouncing on the issue of fair dealing in that

30 See e.g., CCH, supra, at para. 25. 31 Alberta (Education), supra, Transcript of Oral Hearing, p.6, lines 3-4. 32 Ibid., at p. 11, lines 15-16. 33 Ibid., at p. 12, lines 23-24. 34 Ibid., at p. 17, lines 7-9. 35 Ibid., at p. 18, lines 17-18.

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case. Indeed, the Court set no such formula. To the extent a party in a subsequent case takes the position that a mathematical formula ought to be applied in delineating what is, and what is not, fair dealing, the Alberta (Education) decision is of little assistance.

78. Lastly, the Supreme Court of Canada in Alberta (Education) made its determinations concerning fair dealing in the context of a small percentage (7%) of the overall copying by educational institutions, on the understanding (from the submissions made by the appellants) that they were not disputing the obligation upon them to pay for the remaining (93%) copying; and also on the understanding that publishers and creators of educational content would continue to receive millions of dollars from K-12 institutions through a collective licence for the copying of their copyright-protected works.

79. Some users attempt to use the Supreme Court’s finding in Alberta (Education) to support the assertion (one that has never been scrutinized or considered by any court) that all copying by educational institutions of up to 10% or a chapter of a book and an entire poem or article is fair dealing. This dramatically expanded level of copying was not what the Supreme Court of Canada held to constitute fair dealing. Nor was this expanded interpretation the intention of the legislation.36 Nor did this expanded notion of fair dealing constitute the type of copying that the appellants represented to the Supreme Court was the type of copying at issue.

80. The Alberta (Education) decision does not “expand” the fairness of the dealings in educational institutions: it only expanded the purposes for which fair dealing may be used. To suggest it does more than that would ignore the factual case-by-case analysis required to assess the fairness of a dealing. The majority of the Court simply found, based upon the context of that case, the evidentiary record before it and the submissions and concessions of the parties, that the disputed copying behaviour there at issue was fair.

81. In this case where the now-absent Objectors have put the issue of “fair dealing” in play through their adoption of the Policies, the Board is obligated to weigh the admissible evidence and determine whether or not their copying behaviour is fair in the context of the evidentiary record before it and the arguments advanced in these proceedings.

82. Obviously, the Board must be guided by the relevant legal principles articulated in the binding Supreme Court of Canada jurisprudence. Access Copyright agrees that the Alberta (Education) case (as codified by the legislative amendments) expanded the allowable fair dealing purposes to include instructional or educational purposes. However, for the reasons expressed above, the findings in Alberta (Education) do not expand the notion of fairness (the second part of the fair dealing test) and are not determinative in these subsequent tariff proceedings.

36 If it were the intention of the legislation to cancel the need for a licence from the collective, it would not have included the amendments to section 30.02. Section 30.02(1) extends the reproduction collective licence to digital reproductions and communications provided that, among other things, an educational institution pays to the collective society, the royalties equivalent to one reprographic reproduction for each student and complies with the terms of the licence (s. 30.02(3)). The legislators could not have intended to simultaneously extend the collective licence to digital copying under section 30.02 and take the collective licence away under section 29.

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83. Similarly, the Supreme Court of Canada’s decision in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada,37 does not expand the fairness of the dealings in educational institutions. Indeed, this case had nothing to do with educational institutional copying at all. The issue before the Board and the reviewing Courts was whether the communication to the public of low quality, impermanent, non-reproducible and non-communicable short “previews” of musical works by Internet Service Providers triggered an obligation to pay a fee to the applicable copyright collective.

84. Again, that decision was rendered based upon the evidentiary record and arguments advanced by the parties. The two-fold ratio of that case is that the word “research” as used in section 29 of the Copyright Act is not to be restricted to creative endeavours, but includes activities that do not require the establishment of new facts or conclusions; and that it is the ultimate user or consumer’s perspective to whom the musical previews were communicated that is to be considered when determining whether their dealing with the previews was research-based and otherwise fair.38

85. As with the Alberta (Education) case, the court’s findings in SOCAN v. Bell suggest that a reviewing court must consider the student’s (as the end-user) purpose when assessing fair dealing. But that assessment falls under the first part of the fair dealing test and does not impact or expand the notion of fairness.

86. In addition, the evidence established that the end user’s research-based streaming of short previews did not compete with or adversely affect the purchase of downloads of the works previewed. Indeed, the effect of the ISP’s dissemination of low-quality and impermanent previews to end users increased the ultimate sale and permanent downloading of the entire works by end users. In other words, there was no negative impact on the market for the musical works previewed: in fact, the converse was true.

87. The evidence filed by Access Copyright in the present proceedings establishes, among other things, a negative impact on the market for the educational literary works in question. Beyond this fundamental distinction, the research-based or education-based copying behaviour in question in the present proceedings is disseminated to end users not for the purposes of assisting them in deciding whether or not to purchase the entire work from which the copies have been made. Rather, they are disseminated as replacements or substitutions for the purpose of the original work. Moreover, the copies made by educational institutions for use by students are not impermanent or of a lesser quality than the original work from which the copies were made. To the contrary, they were made so as to provide a learning resource of equal readability to the original and thus substitute for the need to purchase the original work.

88. Thus, the SOCAN v. Bell decision cannot be relied upon to argue that it expands the scope of fairness in the context of copying behaviour in educational institutions.

3(b) Taking into consideration the jurisprudential and legislative developments referred to above, analyze the ACCC and AUCC fair dealing policies (exhibits AC-2KK and AC-2JJ) adopted by many educational institutions in light of the fair dealing factors identified in CCH.

37 Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36 [“SOCAN v. Bell”]. 38 Ibid., at paras. 19, 22, 30.

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89. As discussed above, it is the party who asserts that its copying behaviour qualifies as fair dealing who bears the legal burden to establish this assertion on a balance of probabilities. That party also bears certain evidentiary burdens to which the responding party usually responds with evidence of its own. In addition, in the usual adversarial process, the responding party has the opportunity to challenge its adversary’s evidence and assertions through cross-examination.

90. In these proceedings, however, both the AUCC and ACCC have, of their own volition and for their own reasons, discontinued their participation in these proceedings. They have filed no Case and no evidence to which Access Copyright can respond. No witness will be made available at the hearing who can be questioned under oath concerning the assertions of fair dealing, including the monitoring, enforcement and compliance with the AUCC and ACCC fair dealing policies (the “Policies”)39 or the actual underlying copying behaviour of the faculty and staff at their members’ institutions.

91. In these proceedings, in order to satisfy their legal and evidentiary burdens, it was incumbent upon the AUCC and the ACCC to file evidence or point to evidence in the record that supports their assertion that the Policies are fair and to permit Access Copyright and the Board to test these assertions fairly. They have not done so.

92. The Policies are not, in substance or in fact, “fair”.40 In attempting to delineate what is fair dealing and what is not fair dealing, the Policies advocate a bright-line rule that purports to define fairness in arithmetic terms of the amount of the dealing only. Apart from the wording of the Policies themselves, which address only the “amount of the dealing” factor and only on a prima facie basis, the Board has no other evidence to decide that the dealing permitted under the Policies is fair. Given the burden incumbent on users of the Proposed Tariff, and the fact that they have not met that burden in any way, Access Copyright submits that fair dealing of any copying of works in its repertoire has not been established in this case. However, despite the fact that neither the AUCC nor the ACCC have met their evidentiary or legal burdens, Access Copyright will address the Board’s question and the merits of the Policies, below.

A. The publication of a “fair dealing” policy or guidelines without evidence that the policy is strictly enforced and monitored is not fair and does not establish a policy and practice that is fair

93. In CCH, the decision at the Supreme Court of Canada turned on the evidence before that Court, including the nature of the works (judicial decisions and other works essential to legal research) and the implementation by the Great Library of an “Access to the Law Policy”. That policy provided, on its face, a strict procedure that controlled the nature and extent of the copying behaviour. The policy was supported by testimony at trial that the Great Library’s practices were to strictly enforce and monitor the policy. Such enforcement was only possible because of the single locus of the copying activities permitted such monitoring to occur.41

39 Exhibits AC-2KK and AC-2JJ. 40 CCH, supra, at paras. 72 (establishing burden lies with user to prove fair dealing defence), 56 (“the quantity of the work taken will not be determinative of fairness”). 41 Ibid., at paras. 61, 64.

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94. The Court declined the Great Library’s express request for a declaration that “the making of a single copy of a limited selection of text (not more than 10% of the work) in a legal treatise, digest or other review or summary of the law does not constitute infringement…”. Insofar as such works were concerned, the declaration of non-infringement was limited to single copies of a limited selection of text when made by the Great Library in accordance with the Access to the Law Policy.42

95. The Court rejected a bright-line arbitrary rule by declining to specify a particular percentage of a work that delineated non-infringing fair dealing and infringement. The decision was reached on the particular evidentiary record before the Court, including evidence from library personnel that the Access to Law Policy was strictly enforced and compliance with it was monitored.

96. The Court addressed the evidentiary burden on the Great Library.43 Was it incumbent upon it to adduce evidence that every patron used the material in a fair dealing manner or was it sufficient for the Great Library to rely on the general practice set out in the Access to the Law Policy? The Court concluded, on the evidence before it – including testimony confirming the strict enforcement of the policy – that it was sufficient for the Great Library to show that their own practices and policies were for an allowable purpose and fair. Alternatively, the Great Library could show that all individual dealings with the works were in fact for an allowable purpose and fair.44

97. The evidence before the Board in respect to the Policies is the text of the Policies themselves, nothing more. Unlike the “Access to the Law Policy” in CCH, there is no oversight of copying behaviour built into the terms of the Policies themselves. There is no evidence that the practice of the institutions is to ensure that compliance with the Policies is monitored or enforced “strictly”, as was the case in CCH, or at all. Moreover, there is no evidence from the ACCC or the AUCC to satisfy the Board that, despite the multiple loci of copying behaviour (Exhibit AC-3, paras. 57 and 63), the Policies are even capable of being effectively monitored and enforced. To the contrary, the answers to interrogatories establish that 86% of AUCC and 87.3% of ACCC institutions do not monitor or review the content on the CMS systems. Furthermore, 96.2% of AUCC institutions and 98.6% of ACCC institutions do not monitor or track the transmission of published works over email.45

98. Further, the evidence before the Board establishes that post-secondary educational institutions copy beyond the limits set out in the Policies (Exhibit AC-15, paras 20-25). This is further evidence that the Policies are not enforced or monitored.

99. In the absence of evidence that the copying is controlled and monitored, and that the Policies are enforced, the Board is in no position equivalent to the three levels of Court in CCH to determine that the publication of the fair dealing Policies on their own establish that the copying behaviour at issue is fair. To the contrary, given that the evidence establishes that the copying is not controlled or monitored and that the Policies are not enforced, the Board must find that the Policies are unfair.

42 Ibid., at paras. 67, 76. 43 Ibid., at para. 63. 44 Ibid., at para. 63. 45 AC-3, Michael Murphy Report on Course Management Systems and Copying Activities in Higher Education, p. 20-22.

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100. For the purpose of this submission, we have assumed, arguendo, that the users of the Proposed Tariff have met the first part of the fair dealing test: that the copying at issue falls within one of the enumerated fair dealing purposes under section 29 of the Copyright Act. Once the first part of the test has been met, the analysis turns to whether the dealings are fair and a review of the six factors set out in CCH. We address each of those fairness factors below.

B. Purpose of the dealing

101. The Policies state that teachers, instructors, professors and staff members may communicate and reproduce short excerpts of copyright-protected works copy for the purposes of research, private study, criticism, review, news reporting, education, satire or parody: the eight enumerated purposes in the Copyright Act. There is no evidence before the Board that any purpose of the copying would render the copying fair, that the Policies prohibit certain purposes or that all users of the Proposed Tariff actually copy, in all circumstances, for fair purposes (enumerated or otherwise). Without additional evidence supporting a finding of fairness, the Board cannot conclude the Policies (or the copying) are fair. Those who would advance a defence of fair dealing have not met their legal or evidentiary burden.

102. If the proponents of the Policies appeared before the Board, presumably they would take the position that the copying at issue in the Proposed Tariff is for “educational” purposes and, therefore, that the purpose factor weighs in favour of fairness. Access Copyright submits that a complete consideration of this factor requires the tribunal to go beyond merely confirming that one or more of the purposes of the copying are for an allowable purpose. That determination is made at the first stage of the analysis and need not be repeated at the second stage of the analysis. To simply mirror the first step would be a nonsensical application of this fairness factor, and in effect, render the factor moot under step-two of the test. The fairness of the purpose factor must have some meaning.

103. In assessing the fairness of the purpose, Canadian courts have considered “the user/defendant’s real purpose or motive in using the copyrighted work” (CCH, para. 54 and SOCAN v. Bell, para. 33); assessed the “predominant perspective” and that perspective’s purpose in using the copyrighted works (SOCAN v. Bell, para. 34); considered whether the dealing for a particular purpose is more or less fair than another (for example, research for a commercial purpose is less fair than research for a charitable purpose) (CCH, para. 54); and considered whether there “were reasonable safeguards in place to ensure that the users’ dealing…was in fact being used for this purpose” and if those safeguards prevent the copy from replacing the work while still fulfilling the fair dealing purpose (SOCAN v. Bell, para. 35). In addition, the SCC has held that the copier’s purpose is relevant at the fairness stage if 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” (Alberta (Education), para. 22).

104. Courts in Canada have not determined that a transformative purpose is irrelevant to an assessment of the fairness of the copying. In SOCAN v. Bell, the Supreme Court declined to narrow the definition of “research” because the purpose was not transformative in its assessment of the first part of the test. The Court did not find that whether or not a use is transformative is an irrelevant consideration in a fair dealing assessment. To the contrary, it said that a suggestion that “research” be restricted to the creation of new works “would conflate the allowable purpose with the fairness analysis

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and unduly raise the bar for entering that analysis” (SOCAN v. Bell, para. 27). The court held that the question of whether the purpose of the copying is transformative belongs in the second stage fairness analysis.

105. Therefore, assessing the fairness of the purpose requires that one look at all of the purposes of the copying and weighing the facts to determine whether the copier’s purposes are, on balance, fair. In other words, the trier of fact must ask, “Is there something about these other purposes that renders the copying more or less fair?” Whether or not the purposes are, on balance, fair requires an assessment of whether those purposes further copyright policy: does the purpose of the copying further the “public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator”? (Théberge v. Galerie d'Art du Petit Champlain Inc., 2002 SCC 34, at paras. 30-31) (emphasis added).

106. The purpose of copyright is thus to further the public interest in three ways: by encouraging works of the arts and intellect; by disseminating works of the arts and intellect; and by obtaining a just reward for the creator. The balance sought in copyright must seek to balance all three of those public policy objectives.

107. Looking at copyright policy, one must ask, ‘Is the copying transformative, such that a new audience will experience the expression of the idea or an audience will experience the expression in a new way?’ If yes, the copying tends toward fairness because it furthers both the encouragement and dissemination of works of the arts and intellect without (arguably) infringing on the original author’s right to obtain a just reward for his work.

108. Is the copying for a purpose other than the purpose for which the original work was created? If yes, the copying tends towards fairness if it encourages the creation of works and the dissemination of works without interfering with the creator’s just reward. For example, the purpose of sampling an original musical work may be to create a new transformative or derivative work. The sample may encourage new works of the arts in terms of the new expression that is created. Audiences experience the original work in a new way, a new work is created and disseminated and both the original and new work may be disseminated further than they might otherwise have been. These facts may weigh towards fairness.

109. However, when the purpose of the copying is identical to the purpose underlying the creation of the original work, that dealing tends towards unfairness. If the purpose of the original work that has been copied was educational in nature and to be used for instruction, and the portions copied from the work are used solely for the identical purpose, in particular without any transformative or derivative benefits to the copying, none of the policy objectives of copyright law are met. As such, the copying will tend to be less fair.

110. Here, the institutions have copied resources intended for educational purposes and used the copied portion for the identical purpose. There is no transformative or derivative purpose in that copying that would advance copyright policy. Not only do the copies have no transformative purpose, but they are not transformative in any way. The copies at issue in this proceeding are merely slavish, identical duplications of the original copyright-protected works.

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111. In addition, the users copy instead of purchasing the original works in order to save money. Barring an access issue (which has not been proven or alleged in this case), copying to save money does not further copyright policy in the dissemination of works of art and intellect. To the contrary, it discourages works of art and intellect and deprives the creator of his just reward.

112. Finally, in this case there are no safeguards in place to prevent the copy from replacing the original work (SOCAN v. Bell, para. 35). To the contrary, the copies at issue in this case are made in order to replace the original work.

113. Based upon all of these facts, an assessment of the purpose of the dealing factor tends towards unfairness.

C. Character of the dealing

114. This factor encompasses a consideration of the extent of the copying, in the aggregate, and the circumstances underlying the reasons the copies were made. Under this factor, the trier of fact “must examine how the works were dealt with” (CCH, para. 55). “A particular dealing might be unfair if multiple copies of works are being widely distributed....if a single copy of a work is used for a specific legitimate purpose, or if the copy no longer existed after it was used, this would favour a finding of fairness” (SOCAN v. Bell, para. 37 and CCH, para. 55).

115. In Alberta (Education), the appellants did not appeal the character of the dealing factor to the Supreme Court of Canada. Because it was not before it, the Court’s reasons are silent on this factor, except to say that the Board had already considered the aggregate copying and the “quantification of the dissemination” (multiple copies distributed to entire classes) when it assessed the character of the dealing and the (Alberta (Education), paras. 29 and 30). As such, the Board’s finding that the character of the dealing tends towards unfairness was undisturbed (to the extent it is relevant to the assessment of the fairness of the copying in post-secondary educational institutions).

116. Here, the evidence is that an average of 124.8 million pages from works in Access Copyright’s repertoire have been copied in each academic year by post-secondary educational institutions for use in paper coursepacks. In addition, the evidence shows that post-secondary educational institutions engage in non-coursepack copying at a much higher volume than coursepack copying; the ratio of non-coursepack copying is between six to nine times that of coursepack copying.46 This magnitude of aggregate copying tends to make the dealing unfair.47

117. Post-secondary educational institutions make and authorize the making of multiple copies of works in Access Copyright’s repertoire. Copies of published works are made for the entire class and are widely distributed to the entire class. Unlike the SOCAN previews case, where no copy existed after the preview was heard, where users did not receive a permanent copy and where the file was automatically deleted from the user’s computer (SOCAN v. Bell, para. 38), students (and professors) keep copies for at least the entire duration of their courses, and often beyond; copies stored on institutions’ course management systems are kept indefinitely and accessed repeatedly and the

46 AC-18, Access Copyright Answers to Copyright Board Questions Dated January 17, 2014, p. 3-4. 47 AC-5, Circum Coursepack Data Volumes Report, p. 10.

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copies can be further reproduced and disseminated by users. For all of these reasons, the character of the dealing factor weighs towards unfairness.

D. Amount of the dealing

118. The Policies at issue in the present proceedings presumptively fix as “fair” the copying of all or a portion of a work provided the amount copied does not exceed an arbitrary percentage or other quantitative segment of the work as published, without consideration of any other fairness factors. The Policies ignore completely the qualitative assessment of the importance of the part copied, the fact that courts have consistently declined to set an arbitrary bright-line proportion of the amount that can be copied, and the other five recognized fairness factors and are thus, unfair.

119. As discussed above, the Supreme Court of Canada has steadfastly declined to fix an arbitrary quantitative ceiling under which the amount of copying is presumptively fair; or over which the amount of copying is presumptively unfair.

120. The amount of the dealing factor requires an assessment of both the amount of the dealing and the importance of the part copied (CCH, para. 56). “The “amount” factor…is an examination of the proportion between the excerpted copy and the entire work” (Alberta (Education), para. 29) or “the proportion of the excerpt used in relation to the whole work” (SOCAN v. Bell, para. 41).

121. The Policies do not instruct those who would make copies to assess any qualitative aspects of the portions copied. The Policies permit faculty to copy summaries, abstracts and conclusions or other key aspects of an educational work. They allow the copying of entire chapters, which may contain an entire analysis of a given topic. They allow the copying of entire poems, articles and short stories. Such copying very clearly copies the ‘heart of the work’. As such, the Policies, and the amount of the dealing purportedly allowed by them, are unfair.

122. In addition, an assessment of the amount of the copying has always been conducted in tandem with an assessment as to the whether the amount of copying can be effectively controlled. In the absence of a meaningful ability to control the amount of copying, the fixing of quantitative thresholds is merely illusory. The Policies, by focusing solely on the amount of the work taken, by ignoring the assessment of the importance of the part copied and by failing to provide for control over the copying, are unfair.

123. Moreover, the arbitrary bright-line percentages in the Policies (i.e., 10% or a chapter of a book, an entire poem, article etc.) do not accord with the case law. The fair dealing guidelines purport to allow the copying of a “single article from a periodical”, “an entire artistic work (including a painting, print, photograph, diagram, drawing, map, chart and plan)”, “an entire newspaper article”, and “an entire single poem or musical score”. Each of these so-called limitations are entire works for the purposes of section 3 of the Copyright Act. Hence, when these works are copied the amount of the dealing is 100%.

124. As noted in CCH, it may be possible to deal fairly with an entire work. For example, there may be no other way to criticize or review a photograph.48 But, the Policies make no distinction between the types of works copied and do not require users to assess any

48 CCH, supra, at para. 56.

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connection between the purpose of the copying and the amount taken. They simply deem the copying of 100% of certain works as fair.

125. The Policies appear to make a distinction between these works when they are published as part of a larger compilation as compared to when they are published as stand-alone works: the copying of entire works are only allowed when the works are published as part of a broader publication. But, this is a nonsensical distinction that would cause absurd results. If applied, it would mean that an author would lose copyright protection of his work if he chose to market and monetize it other than as a stand-alone work. In another context, a song released as a single would be protected by copyright, but if the song was released as part of an album, the artist and composer would lose that protection. That conclusion does not advance copyright policy in any way.

126. The Federal Court of Appeal in CCH confirmed that in considering what constitutes a “work” for the purposes of section 3 of the Copyright Act, it is necessary to ask whether the literary content in question is capable of existing outside of the context in which it was originally published by the publisher. If that content is original and is reasonably able to stand alone, then it may be deemed a ‘work’ in itself rather than as part of another work. The Court recognized that certain works, such as a poem or individual judicial decisions, are usually published as part of a compilation and rarely published as independent stand-alone works. The Court noted that the fact that these works are often published with other similar works in a compilation ought not to prejudice their protection under copyright law.49

127. Many of the works copied and included within a coursepack, for example, journal articles, newspaper articles, poems and short stories, that are rarely if ever published as independent stand-alone works, are on a par with poems and judicial decisions discussed by the Federal Court of Appeal. Whenever an institution makes an entire copy of a poem, a short story, an article or other work that retains its identity as a stand-alone work despite its disaggregation from the entire journal or other source material, that copying constitutes 100% of the work and ought to be considered presumptively unfair. Barring some other factors weighing towards fairness, there is nothing fair about expropriating the whole of an author’s expression.

128. Copying 10% or a chapter of a book is no more fair than copying the entire works noted above. (Nor is the copying of any other arbitrary percentage fair.) First, allowing the copying of 10% of a book could capture not just one, but numerous entire works.50

129. Copying 10% or a chapter of a book under fair dealing is not supported by the case law. The Supreme Court of Canada did not decide that “short excerpts” in the K-12 setting included chapters of book. To the contrary, and as noted above, the appellants conceded in the Alberta (Education) case that “…things like chapters from a book; not short excerpts but long excerpts” would not constitute fair dealing (emphasis added).51

130. Finally, permitting the copying of 10% or a chapter of a book, in every situation, without a review of the other fairness factors is unfair..

49 CCH Canadian Limited v. The Law Society of Upper Canada, [2002] F.C.A. 187, paras. 66-67. 50 AC-9, Witness Statement of Don LePan, para. 23. 51 Alberta (Education), supra, Transcript of Oral Hearing, p. 17, lines 7-9.

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131. For all of these reasons, the amount of the dealing factor tends towards unfairness.

E. Alternatives to the dealing

132. There is nothing in the Policies that require faculty members who make or authorized the making of the copies of pages from published works in Access Copyright’s repertoire to consider any alternatives to the dealing. As such, the Policies are unfair.

133. In CCH, the Supreme Court of Canada concluded, based upon the evidentiary record before it, that it was not apparent that there were available alternatives to the copying activities carried out by the Great Library at the request of remotely located patrons of the Law Society who were engaged in research-based activities. Moreover, the Supreme Court of Canada concluded that it would be burdensome to expect such patrons to travel to Toronto each time they wanted to track down a legal source and would be unreasonable to expect them to conduct all their research from the original works physically located in the Great Library. With all reasonable alternatives to copying ruled out, the copying activities carried out tended to be fair (CCH, para. 57).

134. Post-secondary educational institutions and their advocates consistently claim that there are numerous alternatives to dealing with works covered by the Access Copyright licence, including open access content and direct licences with publishers. According to the users of the tariff, there are numerous alternatives to the dealing with the works covered by the Proposed Tariff.

135. In the digital age, the availability of a licence – whether from the rightsholder directly or from the collective that represents the rightsholder – has to be a consideration as to whether there is an alternative to the dealing. (The commercialization of works in a digital environment is done through the issuance of licences as opposed to the sale of physical copies of works.) In this case, a licence is clearly available from Access Copyright: the works in issue are all in Access Copyright’s repertoire. Further, the evidence filed by Access Copyright establishes that licences for the exact excerpt of the works that have been copied are available for purchase from the publishers.52 Given these alternatives, the copying purportedly permitted by the Policies is unfair.

136. In Alberta (Education), the Supreme Court of Canada understood that what was at issue was the copying of a total of four and a half pages per student from multiple resources. In that factual matrix, the Court found that “buying books for each student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks” (Alberta (Education), para. 32). Here, there is no evidence that professors and students are copying to supplement core textbooks. To the contrary, the copying of works into coursepacks and on to course management systems replaces the need for a core textbook. That is a markedly different fact scenario than the fact scenario advanced by the appellants and understood by the Court.

137. As with the purpose of the dealing (as well as the other fairness factors), the question of whether there are alternatives to the dealing ought to be about furthering copyright policy. If there are no alternatives to copying a work, and copying must occur in order to disseminate the work or to encourage works of the arts, then the dealing will tend towards fairness. If however, there are alternatives to copying and copying is not

52 AC-7, Witness Statement of Greg Nordal, paras. 26-28.

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reasonably necessary to disseminate the work or to achieve the ultimate purpose of the copier, the dealing will tend to be unfair. Here, there is no evidence that the copying activities in question were reasonably necessary in order to meet the students’ educational objectives. To the contrary, the purchase of the original works (including excerpts thereof) or a licence to copy the original works would meet the same objective.53 In the absence of such evidence that the copying was necessary to achieve the ultimate purpose because there were no alternatives available, the Board’s assessment of this issue must tend toward unfairness.

F. Nature of the works

138. The Policies make no suggestion that the nature of the works copied must be factored into an assessment of whether the dealings are fair. In CCH, the court found that, if a work has not been published, “the dealing may be more fair in that its reproduction could lead to a wider public dissemination of the work – one of the goals of copyright law” (CCH, para. 58). All of the works at issue in this proceeding are published works. This tends to make the dealing unfair.

139. Also in CCH, the works in question that had been copied in strict accordance with the Access to the Law Policy were judicial decisions and other legal resources essential to legal research. The Supreme Court of Canada agreed with the Federal Court of Appeal that it was generally in the public interest that access to judicial decisions and other legal resources not be unjustifiably restrained. Importantly, the authors of the works in question in CCH were judges and lawyers, not professional authors.

140. The nature of the works at issue in the present proceedings - educational works created and published for profit - triggers no access to law considerations or other public interest. The copying of the works in question does not engage the broader public interest to ensure the public have unfettered access to the law. Indeed, in finding that the nature of the works factor in the K-12 context weighed towards unfairness (a conclusion that was not appealed), the Board held that access to classroom materials do not raise the same public interest concerns as access to legal resources.54 Instead, the works copied are educational works, tailor-made for and marketed to the very users that purport to copy them under the fair dealing Policies. Moreover, as also noted by the Board, there is rarely an alternative to a judgment; but a textbook can always be replaced with other resources.

141. The works at issue are published original works, created with skill and judgment. They require a great deal of research, pedagogical expertise and editorial judgment55; and present a high degree of originality, express new ideas, reflect original analysis, exercise independent judgment and contain complex intellectual analyses.56 The works are creative, as opposed to derivative and present new ideas, independent judgments and opinions.57 Thus, the Board’s assessment of this factor must tend toward unfairness.

53 Ibid., at paras. 26-28. 54 K-12 Decision, supra, para. 108. 55 AC-7, Witness Statement of Greg Nordal, para. 4. 56 AC-10, Witness Statement of John Degen, para. 5. 57 AC-6, Circum Creator Survey Report, s. 3.2.

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G. Effect of the dealing on the work

142. In both CCH and Alberta (Education) there was no evidence in the record that showed that the market for the publishers’ works had decreased as a result of the copies in question having been made. In neither case was there convincing evidence that the publishers’ or authors’ markets had been negatively affected by the copying behaviour. The “evidentiary vacuum” in both cases was a factor in the Supreme Court of Canada’s ultimate determination of fair dealing.

143. The Supreme Court also found that the Board had erred by referring to the totality of the copying under this factor (roughly 250 million copies per year), when what was relevant was the impact of the copies claimed to be fair dealing (16.9 million copies).

144. In the present proceedings, the users of the Proposed Tariff have put the entire volume of copying (and associated revenues) in issue through their “fair dealing” Policies. Moreover, there is a substantial body of evidence, collected from publishers and creators and subjected to expert analysis, that the implementation of the ACCC and AUCC “fair dealing” Policies has had and will likely have a substantial negative impact on the market for the publishers’ works.58 In addition, Access Copyright has introduced evidence that the Policies would have substantial negative impacts for creators.59 Access Copyright repeats and relies on its submissions at paragraphs 57-76 in Access Copyright’s answers to the Board’s questions of January 17, 2014. No response to this evidence has been put in the record nor has this evidence been contested by any person. It stands uncontroverted.

145. In this case, there is strong evidence that the copying purportedly allowed under the Policies is likely to impact the market for the works.

146. In addition, Access Copyright’s evidence demonstrates a negative effect of the dealing on the market for the specific works copied. The unlicensed copying by post-secondary educational institutions competes with the market for publishers’ specific works, products and services.60

147. This factor recognizes that it is in the public interest that the educational materials upon which colleges and universities rely continue to be published and that the authors of those materials obtain a just reward. Given the effect of the dealing on the market for the works in this proceeding, the Policies and the copying are unfair under this factor.

H. Overall Assessment of Fair Dealing Factors

148. For all the above reasons, the “fair dealing” Policies advocated by the AUCC and ACCC do not set out a legally or factually defensible policy of fairness. Regardless, the Policies constitute only a small portion of the evidentiary record. The Board’s consideration of the evidence of record must begin by assigning the appropriate evidentiary and legal burdens applicable to establishing ‘fair dealing’ as a question of fact. If, after a review of the evidence, the Board is not satisfied, on the balance of probabilities, that the Policies

58 AC-11, PricewaterhouseCoopers’ Market Impact of Post-Secondary Fair Dealing Policy Report, paras. 16-18. 59 AC-6, Circum Creator Survey Report, s. 3.5. 60 AC-7, Witness Statement of Greg Nordal, paras. 24-25.

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and the copying behaviour at issue are “fair”, then it has no basis to conclude that the issue of fair dealing ought to negate or lower the tariff rate.

149. Such a determination is entirely appropriate given that the persons affected by the ultimate certified tariff were given, in accordance with the provisions of the Copyright Act, the unfettered opportunity to fully participate in these proceedings in any manner they saw fit. Indeed, many interested persons actively opposed the certification of the tariff as Objectors and Interveners but, for their own undisclosed reasons, withdrew their participation at various stages of the proceedings.

150. While the Board’s mandate must take into account the public interest, the simple fact is that those who would be directly affected by the certification of this tariff and against whom it would be enforceable – post secondary educational institutions – have been given every opportunity to assist the Board in carrying out that mandate but have declined to provide assistance.

151. Indeed, the Board ought to draw an unfavourable inference from the users’ withdrawal from the proceedings. The Board is entitled to consider the fact that the users claiming “user’s rights” have, through their actions, avoided any challenge (e.g., through cross-examination) to the factual underpinnings of their position on “fair dealing” and have withheld those facts from the Board’s and Access Copyright’s scrutiny. The Board is thus entitled to draw the inference that had such participation not been withheld, the evidence elicited would not have been favourable to the users’ position on fair dealing

152. In any event, neither the Policies promulgated by the AUCC and ACCC, nor the copying permitted by those Policies, are fair.

3(c) Referring to para. 3 of Access’ Statement of Case (AC-1), please explain the basis for asserting that all copying carried out under the educational institutions’ policies is compensable and subject to the tariff to be certified by the Board. Is it Access’ position that there is no fair dealing at all in educational institutions?

153. Access Copyright does not maintain that all the copying behaviour engaged in by faculty and instructors at post-secondary institutions triggers an obligation to pay a fee for the copying. Clearly, there is fair dealing in educational institutions. Nowhere in its case does Access Copyright claim that it is entitled to be paid for each and every copying transaction.

154. Just as whether or not a copied published work does, or does not, fall within Access Copyright’s repertoire is a question of fact, to be determined on the evidence put before the Board in the proceedings, so too is the factual issue of whether or not copying behaviour, or a portion of the copying behaviour, is fee-exempt because it constitutes fair dealing.

155. The Board’s task is to determine the impact of fair dealing for education on the volume of compensable copying.

156. In Alberta (Education), the Supreme Court of Canada found that 7% of the volume of copying by K-12 schools of works in Access Copyright’s repertoire was fair dealing when the other 93% of the volume was being paid for under a collective licence. However, no

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court in Canada has yet ruled on what constitutes fair dealing in post-secondary educational institutions.

157. The fact situation presented to the Supreme Court of Canada by the appellants was that copies of short excerpts (“not long excerpts such as chapters”) of works were made to meet the teacher’s unplanned need to supplement the core educational resources with these excerpts because one or more students were having unexpected difficulty in learning the educational objective of a particular concept using the core educational materials alone. In other words, the teacher was unable to accomplish the educational purpose without resorting to these additional short excerpts. Given the unexpected need to resort to these supplemental materials, such a need would arise suddenly and without sufficient time to secure permission for the copying.

158. The hallmarks of fairness in respect to the character of the dealing in Alberta (Education) were necessity, spontaneity and expediency and the fact that the bulk of the copying would continue to be compensated.

159. There is no evidence before the Board that the dealings at issue – being primarily coursepack copying and works posted on course management systems – by the institutions in the present proceedings possesses any of these hallmarks. Here, Access Copyright submits that when a member of faculty made or authorized the making of copies of works, in whole or substantial part, for inclusion in course packs or on course management systems before the commencement of the academic year or semester as part of the required or supplemental readings, the dealing was deliberately pre-planned, without any unexpected spontaneous need to expediently make copies of works to accomplish the students’ educational objective. That is unfair.

160. That being said, Access Copyright has proposed to the Board a tariff rate that incorporates a discount for fair dealing for educational purposes, as well as other exceptions under the Copyright Act. The Benchmark Licences are the result of arms’ length negotiated licences for the bundle of rights licensed by the Proposed Tariff, including all exceptions available to the users of the tariff.

161. As noted in Access Copyright’s response to the Questions from the Board dated January 17, 2014, the available evidence regarding the volume of copying indicates that copying is much higher than the volume implied by the rates of $26.00 and $10.00. (See Exhibit AC-18, paras 40, 155, 156 and 159). Some of the difference between the volume and the rates agreed to in the Benchmark Licences can be attributed to fair dealing and other exceptions that can be relied upon by educational institutions.

162. Therefore, Access Copyright’s position on fair dealing is reflected in the rates it agreed to in the Benchmark Licences. It is further exemplified by a number of alternative guidelines that have recently been published.

163. First, Access Copyright supports the Statement of Principles on Fair Dealing in Education released by the Association of Canadian Publishers’ Higher Education Committee in December 2013, available at http://publishers.ca/images/downloads/ACP-HigherEd-Statement-FairDealing-December-2013.pdf. These principles are:

(i) Quantitative limits on fair dealing are not at the heart of defining what is fair. In the absence of a permission negotiated with copyright owners or their

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representatives, an arbitrary amount becomes a guideline for unfair copying: regardless of the purpose or impact of copying, the analysis starts and ends with calculating a quantity. That is not fair.

(ii) “Textbook-like collections” are created by instructors during their course planning and are most often presented as course outlines. For any resource that appears as required material on an instructor’s course outline, copyright owners should be paid. Although the copying of short excerpts to complement core resources may be fair, fair dealing is not intended to enable the assembly of textbook-like collections, whether digitally or on paper. That is not fair.

(iii) Fair dealing is intended to facilitate transformative uses of copied material, such as new research, criticism, and satire. When copying is simply duplication for distribution, it is not fair dealing.

(iv) Fair dealing is intended to enable situational uses of copyright-protected material, in support of free expression, expanded discourse, and creativity. Fair dealing is spontaneous—not planned, organized, coordinated for maximum value gained, or designed specifically to avoid payment. If copying is not spontaneous, it is not fair dealing.

(v) Fair dealing depends on copying from a legal source. Copying from an illegally acquired original is not fair dealing.

(vi) Fair dealing is not intended to exclude paying for the work of authors and all those involved in the original publishing of the material when those doing the copying are being paid for their work, or when students are being charged for the materials. That is not fair.

(vii) Fair dealing is not intended to cause damage to the markets for works, along with the livelihoods of authors and publishers, and their ability to create new works. Depending on the work, such damage can occur at any level of copying, but damage is very likely when large amounts of a work are copied, or when multiple copies are made. If copying damages the market for a work, it is not fair dealing.

164. In addition, Access Copyright’s position on fair dealing is illustrated by the Canadian Copyright Institute’s Fall 2013 publication entitled, “A Fair and Better Way Forward” available at http://www.writersunion.ca/sites/all/files/A%20FAIR%20AND%20BETTER%20WAY%20FORWARD%20F%2006-12.pdf#overlay-context=news/canadian-copyright-institute-releases-fair-and-better-way-forward.

165. Finally, Access Copyright’s position on fair dealing in elementary and secondary schools is reflected in the Canadian Educational Resources Council’s Fair Dealing Guidelines for K-12 Setting which is filed as Exhibit AC-21A. 61 While the structure of the CERC Guidelines provides a much more balanced approach to an assessment of whether a

61 As noted in the cover letter to the exhibit, the CERC Guidelines were forwarded to every Minister of Education in the country (excluding Quebec) in March 2013.

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particular dealing is fair, it should be noted that the CERC Guidelines advocate a principled approach to fair dealing in the K-12 setting only: they do not translate directly to fair dealing in post-secondary educational institutions.

166. Each of these policies, guidelines and set of principles advocate for a principled approach to fair dealing that further the policy objectives of copyright law. This principled and fair approach is absent from consideration in the AUCC and ACCC Policies.

Question 4. Are there similarities or differences between the context of the copying in Alberta and the context of the copying in these proceedings? Namely, in Alberta, the Supreme Court found that the copying of short excerpts by the teacher and subsequent distribution to all the students in the class with instructions to read the excerpts was fair dealing for the purpose of research and private study. Please distinguish this fact situation from the creation of a coursepack, where the professor arranges to have one coursepack prepared for each student in the class and instructs them to read the content.

167. As submitted above, there are significant differences in the two factual contexts presented in the Alberta (Education) case and the present proceedings.

168. First, as noted above, when it determined that the copying at issue was fair, the Supreme Court of Canada was assessing only 7% of the copying in elementary and secondary schools, when the Ministries of Education were paying royalties to Access Copyright on the remaining 93% of the copying. In fact, in response to a question from the bench, counsel to the appellants stated that the appellants would continue to pay for the remaining 93% of the pages copied:

MR. JUSTICE ROTHSTEIN: I see. Okay; and if you are successful here, then you would pay zero?

MS. NOEL: No; absolutely not. This case is not about copying whole textbooks; it is about copying short excerpts from those textbooks, and it doesn’t replace purchased textbooks; schools will continue to spend millions and millions of dollars buying that, but

--

MR. JUSTICE ROTHSTEIN: But in terms of category 4 –

MS. NOEL: Yes?

MR. JUSTICE ROTHSTEIN: You would pay zero?

MS. NOEL: In terms of category 4, 17 million out of the quarter billion copies that are compensated. If I could frame the issue mathematically in this way, it might be helpful.

MR. JUSTICE ROTHSTEIN: But just before you do; it is right to understand that category 4 would be uncompensated?

MS. NOEL: Yes.

MR. JUSTICE ROTHSTEIN: Okay. Go ahead; yes.62

62 Alberta (Education), supra, Transcript Oral Hearing, p. 5, lines 1-11. See also p. 15, lines 7-18.

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169. Clearly, in Alberta (Education), only part of the volume of the copying was in issue. Here, the entire volume of the copying has been put in issue.

170. Second, in this context, the Supreme Court found that copying of short excerpts by the teacher and subsequent distribution to the class with instructions to read in order to supplement student textbooks or complement existing textbooks was fair (para. 32). Unlike the copying in issue in Alberta (Education) (as the court understood it), coursepacks usually serve as the primary resource for the class. The creation and copying of a coursepack replaces the need to purchase a textbook or core resource. Similarly, copying and posting works on to a CMS usually replace the need to purchase a core resource, and may even replace the need to purchase a coursepack. The copying into coursepacks and on to course management systems in post-secondary educational institutions is not done to supplement student textbooks. Rather, the copying replaces the core resource and supplants the need to purchase it.

171. In addition, in their submissions to the Court in Alberta (Education), the appellants represented that the “short excerpts” at issue comprised “little bits… and not long excerpts such as a chapter…”. In the present proceedings, the copying behaviour purported to be covered under the “fair dealing” Policies includes the making of complete chapters from textbooks and trade publications and the making of complete (100%) copies of journal and magazine articles, poems and short stories. This interpretation is a marked departure from the Court’s finding and is different from the evidence and argument that was before the Supreme Court.

172. Also, in Alberta (Education) the Supreme Court of Canada was told by the appellants that the short excerpts at issue were spontaneously copied from works other than the core teaching materials in order to address a student’s unexpected difficulty is achieving an educational objective. In the present proceedings, there is no evidence from the makers and users of the copies that the copies were made out of necessity, spontaneity or expediency. The copies at issue in this proceeding were systematically (non-spontaneously) made by faculty and instructors who planned to reproduce the works as part of the required or recommended readings for their students, well in advance of the commencement of the academic term and not in response to unexpected need to copy works to expediently address a shortcoming in the prepared course pack content to achieve the educational objective of the course.

173. Also, as noted above and in Access Copyright’s submissions provided in response to the Board’s January 17, 2014 questions, the Supreme Court found that there was no evidence before it about the likely impact of the copying on the market for the works. Here, Access Copyright has provided the Board with substantial and cogent expert evidence about the likely impact on the market.

174. Beyond these fundamental distinctions in the context of the copying, the nature of the “short excerpts”, the underlying reasons for their making and the evidence about the likely impact on the market, the Supreme Court of Canada’s determination of fair dealing in Alberta (Education) in respect to the copying behaviour there at issue was arrived at after a consideration of all relevant evidence, or the absence of relevant evidence, before it. Because the issue of fair dealing is a question of fact to be decided on the evidence tendered before the fact-finder in any subsequent proceeding, a fact-based finding of fair dealing in one case is of little or no precedential value in a subsequent case involving an entirely different factual record.

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Question 5. Do the characteristics of the dealings in post-secondary institutions tend to generally make the dealings fairer than, less fair than, or as fair as those targeted by the Provincial and Territorial Governments Proposed Tariff?

175. It can reasonably be expected that more dealings might fall under the enumerated “educational purpose” for educational institutions than for provincial and territorial governments. But, that possibility does not speak to the fairness of the copying: it speaks only to whether the first part of the fair dealing test is met. Fairness can only be established on a case-by-case basis.

176. With all due respect to the Board, this question mischaracterizes the law, and the Board’s role, as it applies to determining whether and the extent to which fair dealing applies in post-secondary educational institutions. Fairness is not a relative concept. Fair dealing requires a case-by-case analysis to determine whether the dealing at issue is fair. It does not require a side-by-side comparison of different cases, with different facts, different users, different works and different volumes to determine whether one type of copying is “fairer” than the other.

Question 6. The Board’s preliminary view is that the copying of a few pages or a small percentage from a book that is not a collection of short works, such as poems, is not substantial. Assuming that two pages or less of such a book is not a substantial part thereof, the Board would be of the preliminary view that, based on the coursepack copying dataset supplied to the Board, less than 3 per cent of the copying would not be compensable.

6(a) Please comment on the Board’s preliminary view;

177. Access Copyright submits that a purely quantitative method of determining substantiality is inappropriate. An exclusively quantitative methodology ignores the other factors the Federal Court in U & R Tax Services Ltd. v. H & R Block Canada Inc.63 has held should be considered when determining whether a substantial part of a work is reproduced:

(a) the quality and quantity of the material taken;

(b) the extent to which the defendant's use adversely affects the plaintiff's activities and diminishes the value of the plaintiff's copyright;

(c) whether the material taken is the proper subject-matter of a copyright;

(d) whether the defendant intentionally appropriated the plaintiff's work to save time and effort; and

(e) whether the material taken is used in the same or a similar fashion as the plaintiff's.

178. This approach was recently emphasized by the Supreme Court of Canada in Cinar Corporation v. Robinson, 2013 SCC 73, where the Court considered an appeal of a trial judge’s finding that a Robinson Crusoe-themed children’s television show called “Robinson Sucroë” (“Sucroë”) copied a substantial part of another (earlier conceived)

63 U & R Tax Services Ltd. v. H & R Block Canada Inc. (1995), 62 C.P.R. (3d) 257 (F.C.T.D.) at para. 35.

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Robinson Crusoe-themed children’s television show called “The Adventures of Robinson Curiosity” (“Curiosity”), in which some of the infringing defendants were involved. Because both shows drew from public domain materials, the defendants argued that the trial judge should not have compared the works side-by-side but rather used a three-step approach to:

(1) determine what elements of Curiosity were original, within the meaning of the Copyright Act; (2) exclude non-protectable features of Robinson’s work (such as ideas, elements drawn from the public domain, and generic elements commonplace in children’s television shows); and (3) compare what remains of Curiosity after this “weeding-out” process to Sucroë, and determine whether a substantial part of Curiosity was reproduced.64

179. The Court rejected this argument because it failed to take a “qualitative and holistic approach”, writing:

Canadian courts have generally adopted a qualitative and holistic approach to assessing substantiality. “The character of the works will be looked at, and the court will in all cases look, not at isolated passages, but at the two works as a whole to see whether the use by the defendant has unduly interfered with the plaintiff’s right”: J.S. McKeown, Fox on Canadian Law of Copyright and Industrial Designs (loose-leaf), at p. 21-16.4 (emphasis added).65

180. The Court also warned against conducting a “piecemeal” substantiality analysis:

[I]t is important to not conduct the substantiality analysis by dealing with the copied features piecemeal. The approach proposed by the Cinar appellants would risk dissecting Robinson’s work into its component parts. The “abstraction” of Robinson’s work to the essence of what makes it original and the exclusion of non-protectable elements at the outset of the analysis would prevent a truly holistic assessment. This approach focuses unduly on whether each of the parts of Robinson’s work is individually original and protected by copyright law. Rather, the cumulative effect of the features copied from the work must be considered, to determine whether those features amount to a substantial part of Robinson’s skill and judgment expressed in his work as a whole.66 [internal citations omitted]

181. In addition, Access Copyright disagrees with the Board’s apparent preliminary view that the words ‘substantial part’ used in section 3(1) of the Copyright Act expressed Parliament’s intention to permit the unauthorized copying of an insubstantial part of a copyright-protected work. Section 3 grants rights to owners of copyright exclusively: it does not provide for exceptions. The words “substantial part” as used in this section cannot be legitimately construed or appropriated by users as a grant of rights or

64 Cinar Corporation v. Robinson, 2013 SCC 73 at para. 34. 65 Ibid., at para. 35. 66 Ibid., at para. 36.

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permission to them to copy any part of the work, whether the part copied is considered arithmetically to be “insubstantial” or not.

182. The inclusion of the words "substantial part” was to broaden the protection afforded to creators and owners of original works to which copyright attaches. Affording the copyright owner the sole copyright in respect to substantial parts of their works ensures that one who copies the work less than 100% slavishly cannot escape a finding of infringement. The courts have always considered the issue of “substantiality” in the context of ensuring that the copyright owner’s rights are not made illusory by copying behaviour that does not amount to slavish copying but nonetheless constitutes a copying of a substantial portion of the creator’s skill and judgment expressed in the work.

183. As recently confirmed by the Supreme Court of Canada in Cinar Corporation v. Robinson,67 the Copyright Act protects creators against both literal and non-literal copying so long as the copied material forms a substantial part of the infringed work. Whether a part copied is substantial must be decided by its quality rather than its quantity.

184. Thus, musicians who consciously or subconsciously copy a small quantitative part of another musician’s work have been found to infringe the copyright in the work copied because the part copied represents a substantial portion of the creator’s skill and judgment expressed in the work. In other words, despite the small quantitative copying, the work may be found to have been copied in substantial part when properly assessed on a qualitative basis.

185. By way of further example, a screenwriter who consciously or subconsciously copies the original elements in the plot of a play or a novel may be found to have copied a substantial part, so that copyright may be infringed by a work which does not reproduce even a single sentence of the original.

186. As the Supreme Court of Canada in Cinar observed, a substantial part of a work is a flexible notion, a matter of fact and degree. If the copying of any part, even a small quantitative part, represents a substantial portion of the author’s skill and judgment expressed in the work, the copyright in the work is infringed.

187. In the present proceedings, the makers and users of the copies of works have slavishly copied either the entirety of the works or have selected for copying those parts of the works that represent a substantial portion of the author’s skill and judgment in the work. Why else would those parts be selected for copying?

188. It is highly unlikely that professors copy insubstantial parts of copyright-protected works for any educational or instructional objective. If a professor wants to convey an author’s expression to her class (for example, to elucidate a point) the professor must copy a substantial part, qualitatively, of the author’s expression. To copy an insubstantial part would not convey the author’s expression and would thus be a pointless exercise. It may be that there is some qualitatively insubstantial copying in the post-secondary sector, but if there is, it is de minimus.

67 2013 SCC 73, at paras. 25-28.

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189. The amount of the copying, measured quantitatively, is irrelevant. Therefore, to assess “substantiality” in a purely arithmetic way, as the Board’s preliminary view suggests, is wrong in law. It may be that there is some qualitatively and quantitatively insubstantial copying in the post-secondary educational sector, but if there is, it is de minimus. Again, as with the fair dealing exception, the Benchmark Licences already incorporate a discount for insubstantial copying.

190. For the above reasons, Access Copyright submits that the Board would be wrong in law to apply any arithmetic “deduction” in its assessment of whether a substantial part of works in Access Copyright’s repertoire have been copied. A quantitative threshold alone cannot be used to determine substantiality.

191. Access Copyright urges the Board to refrain from making any conclusions declaring the proportion of a work that is not substantial. This type of conclusion has the very real potential for unintended impact and application across a wide variety of content-industries, far beyond what is contemplated in this tariff process. It is expected that some users would interpret this type of conclusion as the starting point for their free copying. From there, they will say, fair dealing will allow an additional 10% or a chapter of free copying. This would be an absurd interpretation of copyright law, including “users’ rights”.

192. As an example of the potentially misleading interpretation and unintended consequences, Professor Geist has already broadcast that the Board has “staked out a notable position on de minimus copying” stating, “Copyright Board of Canada on Copying a Few Pages: It’s Insubstantial and Not Compensable”. Professor Geist states that “since a few pages or a small percentage is insubstantial, fair dealing…must involve a significantly larger percentage of the work. This suggests that the Canadian education approach of a single chapter or ten percent of a work is consistent with the law and might be too low.” 68

193. Relying on the Board’s “preliminary view” some users are already advocating a purely mathematical formula to exempt copying from payment; first by applying an ‘insubstantial part’ deduction (which ignores the qualitative test to establish insubstantial copying); and second, by applying an additional discount for fair dealing (also, based exclusively on a quantitative measurement of the amount of the work taken). This misinterpretation of copyright law disregards entirely the context of the copying, the qualitative assessment of the part taken, the purpose of the copying, the amount of the dealing, the nature of the work, alternatives to the dealing, the character of the dealing and the effect of the dealing of the work. Under this misguided approach, the balancing of the three public interest objectives sought by copyright law is completely ignored. Balance in copyright is not achieved by applying a mere mechanical quantitative exercise.

6(b) Please comment on the Board’s estimate.

194. With regard to the Board’s estimate that less than 3 percent of the copying is not compensable using a two-pages-or-less threshold for substantiality, Access Copyright’s expert Benoit Gauthier could not replicate the Board’s results. Identifying coursepack

68 Michael Geist, website: “Copyright Board of Canada on Copying a Few Pages: It’s Insubstantial and Not Compensable”, http://www.michaelgeist.ca/content/blogsection/0/125/10/10/.

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copying events involving two pages or fewer of a book (before excluding collections of short works), his calculations result in an annual volume percentage of “insubstantial” copying (under the Board’s preliminary definition) varying from 0.5% to 0.8% rather than around 3%. Below is a Table representing his results.

TABLE 1: Coursepack copying volume from events where two pages or less were copied from a book

ACCC Number of cases 4,419 4,601 4,658 6,676 7,604 7,378 8,832 11,238

AUCC 12,549 10,923 12,487 20,325 19,402 20,847 24,940 30,167

Non-ACCC/AUCC 311 491 746 905 1,186 1,338 1,530 1,634

Total 17,279 16,015 17,891 27,906 28,192 29,563 35,302 43,039

ACCC Million exposures 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

AUCC 0.6 0.6 0.5 0.6 0.6 0.6 0.6 0.4

Non-ACCC/AUCC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total 0.9 0.9 0.7 0.8 0.9 0.9 0.8 0.5

ACCC % of exposures 2.0% 1.6% 2.5% 1.8% 2.2% 1.7% 1.8% 2.0%

AUCC 0.5% 0.4% 0.5% 0.7% 0.7% 0.7% 0.8% 0.6%

Non-ACCC/AUCC 0.6% 0.7% 0.7% 1.2% 1.2% 1.3% 1.2% 1.2%

Total 0.6% 0.5% 0.6% 0.8% 0.9% 0.8% 0.9% 0.8% 195. Mr. Gauthier’s calculation parameters are described by footnote herein.69

196. Since the volumes in Table 1 do not exclude “collections of short works” – copying of which the Board appears to be of the preliminary view does not qualify as insubstantial copying – Access Copyright conducted an additional analysis of a sample of titles to determine the proportion of the volume that is copied from collections of short works (“Sample Analysis”). Mr. Gauthier provided Access Copyright with a randomly selected sample of 200 events drawn from the list of events involving the copy of two pages or less from a book. Access Copyright’s Bibliographic & Information Services staff conducted an analysis of all 200 events to determine if any of the works from which the copies were made were collections of short works.70 The results are attached as Exhibit AC-21B. The Sample Analysis demonstrates that only 91 out of 200 cases (46%) involved copies that were not made from collections of short works.

197. Access Copyright’s Sample Analysis was provided to Mr. Gauthier so that he could quantify the impact on the volume of the Board’s preliminary view of “insubstantial” copying. He calculated that the 91 events that were not copied from collections of short works (i.e., the only events that would meet the Board’s preliminary view of insubstantial

69 In SPSS, using the large event-level file, Mr. Gauthier ran the following statements: COMPUTE insubstantial = 0. IF (number_of_copies LE 2 AND rms_genreREC EQ 1) insubstantial = 1. VARIABLE LABEL insubstantial "Two pages or less of a book". VALUE LABEL insubstantial 0 "NOT insubstantial" 1 "insubstantial". SELECT IF (in_repertoire EQ 1). SELECT IF (insubstantial EQ 1). 70 Access Copyright defined a “collection of short works” as any anthology of works, including collections of poems, essays and short stories.

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copying) comprise 26% of the volume of copying among the 200 events studied. This means that only 26% of the volume of copying from these 200 "insubstantial" events were from works that the Board identified in its question 6 as subject to the "insubstantial" argument. Mr. Gautier applied the proportion of 26% to reduce the "insubstantial" volume he identified initially. This led to a proportion of "insubstantial" copying varying from 0.1% to 0.2% between 2005 and 2012. The results of Mr. Gauthier’s analysis are presented in Table 2 below.

TABLE 2 - Coursepack copying volume from events where two pages or less were copied from a book excluding collections of short works (i.e., excluding 74% of the volume) 2005 2006 2007 2008 2009 2010 2011 2012 ACCC Million exposures 0.1 0.1 0.1 0.0 0.1 0.0 0.0 0.0 AUCC 0.2 0.2 0.1 0.2 0.2 0.2 0.2 0.1 Non-ACCC/AUCC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 ACCC % of exposures 0.5% 0.4% 0.6% 0.5% 0.6% 0.4% 0.5% 0.5% AUCC 0.1% 0.1% 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% Non-ACCC/AUCC 0.2% 0.2% 0.2% 0.3% 0.3% 0.3% 0.3% 0.3% Total 0.2% 0.1% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

198. Therefore, applying the Board’s preliminary view that two-pages-or-less is the threshold for substantiality, the maximum deduction for insubstantial copying would be 0.1 to 0.2% of the volume of copying.

Question 7. S. 4(3) of the Proposed Tariff provides that:

Copies of Repertoire Works shall not be stored or indexed with the intention or result of creating a library of published works;

S. 5(4) of the Proposed Tariff provides that:

Where the Educational Institution is no longer covered by this tariff, the Educational Institution and all Authorized Persons shall immediately cease to use all Digital Copies of Repertoire Works, delete from their hard drives, servers and networks, and make reasonable efforts to delete from any other device or medium capable of storing Digital Copies, those Digital Copies and upon written request from Access Copyright shall certify that it has done so.

Please explain the meaning and purpose of ss. 4(3) and 5(4) of the Proposed Tariff. There are no such requirements with respect to paper copies. Please explain the reason for this difference. In your response, please also substantiate para. 3-4 of Access Reply Statement of Case (AC-13) [Now Exhibit AC-1671].

199. The purpose of section 4(3) (which applies by its terms to any “copies”, i.e., print or digital) of the Proposed Tariff is to prevent an Educational Institution from cataloguing Copies of Repertoire Works with the intent or result of creating a proprietary library of

71 The exhibit number of the Access Copyright Reply Statement of Case has been changed to Exhibit AC-16 as per direction of the Board on March 7, 2014.

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copied Published Works that would compete with the market for the original work and obviate the need to purchase original content for such a library. Consistent with paragraph 4 of Access Copyright’s Reply Statement of Case (Exhibit AC-16), to the extent a Student or Staff Member compiles and indexes a group of Published Works for a non-infringing use, such as their own research or private study, the tariff would not operate to prohibit that use. A user is always entitled to rely on his or her rights under the Copyright Act, no matter what the tariff allows or prohibits. Section 4(3) is simply a term of the licence offered by Access Copyright. Copies made under the tariff cannot be used to create a library.

200. Requiring the destruction of digital copies is a standard licensing term for digital uses. Digital licences are often temporal: a user is entitled to use a work for the term set out in the licence and/or as long as the user pays a licensing fee for such use (in the case of a subscription). Unlike paper copies, which are difficult to share with multiple users and have a limited life-span, digital copies of works can be shared widely and kept indefinitely. For this reason, the Proposed Tariff requires the destruction of digital Copies if an institution ceases payment of the licence granted under the tariff.

201. Consistent with the industry paradigm, section 5(4) protects Access Copyright’s right to permit digital copying only via revocable time-limited licences, rather than (as for a print copy) outright sale. Access Copyright has the right to issue licences that, once terminated, require the deletion of the Digital Copies, just as digital publishers or distributors can sell licences for e-books that expire after a given time period or are revocable on certain conditions. This right is further consistent with the Act itself, which requires deletion of Digital Copies in various provisions, such as section 29.24 (backup copies).

202. As a practical matter, section 5(4) does not apply to print copies because print copies do not pose as serious a threat of continuing unabated use. For example, section 3 of the Proposed Tariff allows “Authorized Persons for Authorized Purposes” to “make a Copy” of Repertoire Works subject to certain limitations72 regarding the percentage of the work copied. The Proposed Tariff defines “Copy” to include all conceivable methods of copying under current technology:

“Copy” means any reproduction, in any material form whatever, including a Digital Copy, that is made by or as a consequence of any of the following activities:

(a) reproducing by a reprographic process, including reproduction by photocopying and xerography; (b) scanning a paper copy to make a Digital Copy; (c) printing a Digital Copy; (d) transmission by electronic mail; (e) transmission by facsimile; (f) storage of a Digital Copy on a local storage device or medium; (g) posting or uploading a Digital Copy to a Secure Network or storing a Digital Copy on a Secure Network;

72 i.e., 10% of a work generally but 20% if part of a Course Collection, an entire article, a single short story, play, poem, or essay, an entire artistic work, and one chapter comprising no more than 20% of a book.

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(h) transmitting a Digital Copy from a Secure Network and storing it on a local storage device or medium; (i) projecting an image using a computer or other device; (j) displaying a Digital Copy on a computer or other device; and (k) posting a link or hyperlink to a Digital Copy.

203. Notably, only two of those means of copying (reprography and printing) can cause multiplication of print copies. Nine of the methods are digital, which result in potentially unlimited numbers of copies and distribution via email, hyperlinks, or other methods. Given the extensive digital copying by Educational Institutions,73 once an Educational Institution is no longer covered by the tariff, it is no longer permitted to engage in any unauthorized uses, including reproduction, communication by telecommunication and making available, or authorization. In order to ensure the above uses are not deliberately or inadvertently infringed, it is necessary for Educational Institutions and Authorized Persons to certify that they have ceased to use and deleted all Digital Copies.

204. Finally, Access Copyright is not authorized to licence any digital copying of its affiliates’ works without the corresponding requirement to delete such digital files upon termination of the licence. Access Copyright’s affiliation agreement requires that its licences for digital conversion (print to digital) and digital importation (digital to digital) “provide for deletion of all digital files no later than the termination of our licence”.74

205. Regarding paragraph 3 of Access Copyright’s Reply Statement of Case (Exhibit AC-16), this paragraph simply submits that limits on continued digital use of copyright-protected works are important conditions of the Proposed Tariff, which authorizes certain uses under certain conditions which otherwise infringe copyright. This proposition is supported by the analysis above of sections 5(4) and 5(3) and the definition of “copy” under the Proposed Tariff.

73 As documented in Circum’s Analysis of the Responses Provided to Interrogatories 71, 105, 106, 107, and 108 (Exhibit AC-4) at Tables 3.3 and 3.4 and Circum’s Analysis of the Volume and Nature of the Copying of Published Works at the University of Toronto, 2005-2012 (Exhibit AC-164) at Table 3.1. 74 Exhibit AC-2F, Standard Affiliation Agreements and Forms, Appendix A, s.3A(i)(ii) and s.3B(i)(ii).