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AC response re transactional licenses OTTAWA-#40281178-V1-8 July 2011 Letter to Board (PUBLIC Search Able)

AC response re transactional licenses OTTAWA-#40281178-V1-8 July 2011 Letter to Board (PUBLIC Search Able)

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Randall Hofley
Dir: 416-863-2387randall.hofley@blakes.comReference: 71273/7
July 8, 2011
Copyright Board of Canada56 Sparks, Suite 800Ottawa ON K1A 0C9
Attention:Gilles McDougallSecretary GeneralRe:Access Copyright – Post-Secondary Educational Institutions Tariff, 2011-2013Response to the AUCC’s application to amend the Interim Tariff 
Dear Mr. McDougall:We write on behalf of Access Copyright further to the Board’s Notice dated June 16, 2011, concerning theAUCC’s application to amend the Interim Tariff. In accordance with the Notice, this letter contains AccessCopyright’s submissions in response to the AUCC’s application and the submissions of the ACCC,Professor Katz and Sean Maguire.
In its application, the AUCC is asking the Board to graft onto the Interim Tariff a right for Institutions –including those who have not taken up the tariff and who are therefore not paying the FTE rate – to demanda transactional licence from Access Copyright for paper copies and/or digital copies. The AUCC argues thatthe amendment sought is needed to preserve the status quo in existence prior to issuance of the InterimTariff (the status quo
). The ACCC supports the AUCC in its application.The AUCC’s contention that the amendment is required to preserve the status quo
is not supported bythe facts. With respect to paper copying, since at least 2004, Access Copyright has never issuedtransactional licences to post-secondary educational institutions for paper copies that fall within the limits of the licence (i.e., one chapter, 10% of a work etc.). Accordingly, what the AUCC is seeking in its applicationwould entirely change the status quo
for paper. Similarly, with respect to digital copying, AccessCopyright has never issued a transactional licence for uses within the limits of the licence to a post-secondary educational institution that had not signed the comprehensive “AUCC Model Licence”. Also, theBoard signalled a change for digital licensing in the Interim Tariff, albeit at this stage digital is optional and
Page 2on a no fee basis. Access Copyright is entitled to rely on the regime for digital implemented through theInterim Tariff without being subject to a charge that it is not maintaining the status quo.Moreover, the status quo
did not involve any requirement or obligation that Access Copyright issuetransactional licences on demand. Prior to issuance of the Interim Tariff, Access Copyright had attempted tonegotiate a blanket licence for digital with the AUCC. The AUCC refused and, as a result, thecomprehensive licences with the Institutions did not cover digital uses. The only feasible means for AccessCopyright to obtain some compensation for its rightsholders for digital copying was through a transactionallicence. That changed with the filing of the Proposed Tariff and the issuance of the Interim Tariff. AccessCopyright is not attempting to change the status quo. Instead, it is the AUCC that is attempting to changethe status quo
by: (i) asking the Board to impose a compulsory licensing scheme on Access Copyright;and (ii) demanding that transactional licences for paper and/or digital be made available to Institutions,including those that have not paid the FTE rate. It is important to note that, prior to issuance of the InterimTariff, Access Copyright never issued a transactional licence for digital to an Institution that had not enteredinto the comprehensive licence for paper copying, and was thus paying the FTE rate called for under thecomprehensive licence.In essence, what the AUCC is seeking to accomplish is inclusion under the Interim Tariff of compulsorylicences governing one time use licences outside the Interim Tariff (or the Proposed Tariff). AccessCopyright submits that the amendment sought by the AUCC would completely change the regime in placeprior to issuance of the Interim Tariff. Further, what the AUCC is seeking is inconsistent with the ProposedTariff and is outside the Board’s jurisdiction. For these reasons, Access Copyright respectfully submits thatthe AUCC’s application should be dismissed.The AUCC also accuses Access Copyright of misconduct. As the Board noted in its March 16, 2011reasons, “[t]he transparent exercise of a clear right is not a sign of bad faith”.
It cannot constitutemisconduct for Access Copyright to rely on the Interim Tariff and choose to conduct its business incompliance with the Interim Tariff. If an institution does not have a licence with the rightsholder, AccessCopyright is entitled to rely on and operate under the comprehensive, blanket licence for paper and digitalcopies established by the Interim Tariff and to require any Institution that wishes to make copies of works inAccess Copyright’s repertoire to take up the tariff or seek a transactional licence from the relevant individualrightsholder.Access Copyright has been consistent and transparent throughout these proceedings.In its application for an Interim Tariff, Access Copyright never asked for the status quo
for digital. Rather, it asked thatdigital copying be included under the Interim Tariff for no additional cost (Access Copyright, Letter to theBoard, December 15, 2010, p. 17). Since it filed the Proposed Tariff on March 31, 2010, Access Copyrighthas made it clear that it is asking the Board for a comprehensive tariff covering paper and digital uses. If theBoard were inclined to make any change with respect to digital in response to the AUCC’s application, it issubmitted that the Board should take a principled approach and simply remove the digital option altogether from the Interim Tariff. The Proposed Tariff includes digital, and Institutions can govern themselvesaccordingly. 
Board’s reasons, March 16, 2011, para. 92.
Page 3Access Copyright does not provide exclusive access to works in its repertoire and has never told itsaffiliates, including publishers, not to issue transactional licences. It is open to any Institution to negotiate alicence with any rightsholder. Access Copyright categorically rejects any suggestion that it has engaged inmisconduct, including, but not limited to, anti-competitive conduct, as alleged by the AUCC, ACCC andProfessor Katz.Regarding the submissions of Professor Katz, throughout his submissions he inveighs against the collectivetariff regime established by Parliament under the
Copyright Act 
(the Act”) and submits that “when copyrightowners are allowed to administer their rights collectively, a duty to licence their works independently is areasonable
quid pro quo
” (Katz, p. 12). He asks the Board to amend the Interim Tariff to “enjoin AccessCopyright from granting any transactional licence, and require that Access Copyright members and affiliateswould licence their own works on reasonable terms” (Katz, p. 12). Professor Katz is in effect lobbying for legislative changes to the general collective regime under the Act and his submissions are not relevant inthe context of this proceeding. The Board has no jurisdiction – through an interim or final tariff – to mandatethat (or how) individual rightsholders licence their works.Access Copyright urges the Board to reject the AUCC’s (and Professor Katz’s) application to amend theInterim Tariff.
Access Copyright’s submissions will be presented pursuant to the following outline:
The Board does not have jurisdiction to grant the relief sought by the AUCC (or Professor Katz)
Substantive Issues:
The AUCC is attempting to change the status quo
Rightsholders (and, by extension, Access Copyright) should be free to decide if, and how, to licencetheir works
The challenges presented by digital cannot be adequately addressed through transactional licences
The Objector’s allegations of anti-competitive conduct have no merit
Professor Katz’s suggested remedy should be rejected
Access has acted in good faith throughout

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