To: Presidents of Student Governments, Presidents of College & FacultyStudent Societies, Student Members of the Governing Council.From: Jill Matus, Vice-Provost, StudentsDate: January 30, 2012

RE: University of Toronto and Western Sign Agreement with AccessCopyright

I am writing to inform you that the Provost has this evening advised the Business Boardof the Governing Council on the following matter.The University of Toronto and Western have reached an agreement with AccessCopyright for a new royalty License. It allows for cost-effective copying; includespreviously excluded digital copying; minimizes risk; and simplifies the way royalties arecollected. As will become clear below, these are major gains.'Copyright' is a complex legal concept, but the word itself coveys its essence. Just aspatents can be held by inventors, so also can copyrights be held by those who createcontent of various kinds, and who can claim compensation for the use of that content byothers.The kind of creative content used most frequently by students in universities is that foundin books, journal articles, etc. In our digital age, it has become very easy to copy anddistribute creative content. Content creators, such as authors and artists, have raisedmany concerns about fair compensation for the copying of what they have produced.These claims have often been upheld by courts.It is, of course, relatively straightforward for someone to buy a book in a store, or to payfor digital access to an e-book. In those instances, each transaction leads to a royaltypayable to the author. Matters become more complex, however, in an institutional settingsuch as a university, where access to information is the lifeblood of teaching andlearning.Direct textbook sales obviously continue, and the library pays subscription fees for a vastnumber of journals and digital resources. However, many instructors also use course-packs, with collections of printed material that has been copyrighted by multiple authors.The sale of course-packs in itself involves challenges in tracking and where possiblepaying authors for their work. And matters become more difficult from there, given allthe different channels through which written material is photocopied or digitallydistributed in a university setting.Different nations have taken different approaches to this situation. In Canada, theadministration of copyright is overseen by the Copyright Board, which has which has

wide-ranging powers. One of the features of copyright law is the ability of authors toband together to be represented by "collectives" authorized by the Copyright Board. Thecollective that affects us most directly is Access Copyright. It represents authors andadministers copyright entitlements on their behalf. The Copyright Act provides for suchcollectives to apply to the Copyright Board for a "Tariff" - a comprehensive set of ruleswhich among other things establishes a standardized royalty rate that applies across anentire sector, such as the university and college sector.The idea behind these arrangements is that a collective approach offers advantages forboth creators and users of content. Individual authors cannot afford to track and chasedown every royalty payment and every infringement of their copyrights. Nor canindividual users negotiate copyright permissions on an individualized basis for each itemthat they might use in an information-intensive environment such as a university.For many years Access Copyright had full-time Canadian university students paying aroyalty of $3.38 for fall/winter terms, in addition to a 10 cents per page course-pack charge through Licenses with the universities. The $3.38 royalty covered the day-to-daycopying of copyright material, while the per-page royalty covered specific publishedworks for course-packs. Use of course-packs varies across programs. However, theaverage cost of the Access Copyright portion of a course-pack is estimated at $19.26. If astudent's program requires him or her to purchase several course-packs, the AccessCopyright royalties could be in excess of $60.00 in a given session.When the previous License expired in 2010, Access Copyright declined to enter into newLicenses with any university. They instead brought an application to the CopyrightBoard for a new Tariff - including a schedule of royalties - covering the entire universityand college sector. The Tariff sought included a royalty rate of $45 per full-timeequivalent (FTE) student. Part of the rationale for the severe rate hike was thatsignificant amounts of copying now occur on a digital basis. The new tariff wouldinclude digital rights.This application by Access Copyright sparked opposition and debate on the University of Toronto campus as well as many others. Indeed, the University of Toronto has beenparticipating in a sector-wide challenge to Access Copyright's application for a sharpincrease to the Tariff. That challenge has been conducted under the auspices of theAssociation of Universities and Colleges of Canada.As that legal challenge has continued, the University has been examining itsoptions. We looked for, and found, a comparator to assess the likelihoodthat Access Copyright might make major headway in its claims. Quebec operates its owncopyright arrangements. The royalty charged by Copibec, the Quebec collective, variesin the range of $24.90 to $27.50 per FTE student. This includes only limited digitalrights. A per-page course-pack charge may also be levied on top of the per FTE studentcharge, depending on the proportion of course-pack copying in relation to the entire work being copied.

These charges constituted a striking and pertinent Canadian precedent, and were clearlypart of Access Copyright's case for a much higher tariff.The legal challenge itself has been complex. Legal costs, while not trivial, were beingshared across all universities. The delay in reaching a resolution was superficiallyappealing, as it deferred any increased payments. However, Access Copyright had madeit clear that it would be seeking payment retroactive to the expiry of the original Licenseat the end of 2010, and there was concern that the Copyright Board would uphold thatclaim.The larger problem with the legal challenge was that the interests of the variousinstitutions were far from aligned. Some institutions preferred to work with an overallTariff but disputed the proposed terms, while others were convinced that anindividualized approach was preferable and wanted to break away altogether from theAccess Copyright regime and Tariff. Putting these groups together in a single legalsettlement is far from straightforward.The University of Toronto is also not convinced that the 'opt-out' approach is cost-effective in the present circumstances. Even should the actual level of payments tocopyright holders appear at first to be lower with this approach, we believe that it carriessubstantial hidden costs. These include the additional administrative burdens on theinstitution and its members, only some of which can be readily measured. Among theongoing risks was that the opted-out institution, in an audit or a legal claim, would befound to have failed to fully and fairly track and pay for the use of all copyrightedmaterials in Access Copyright's repertoire.In the province of Ontario, Western took a similar view to the University of Toronto.Western has already been collecting from its students a royalty of $30 per FTE, on aprovisional basis, given the uncertainty of the Tariff outcome and the Quebec precedent.Two months ago, the University of Toronto and Western decided to enter into directnegotiations with Access Copyright for a new License. This License would apply to ourcommunity instead of the yet-to-be-defined Tariff.The upshot of these negotiations is that, for the period ending December 31, 2013 theFTE royalty will be $27.50, covering both print and digital Published Works. Theroyalty also eliminates a separate per page course-pack charge. And there will be noretroactive increases, which potentially could have gone back to the expiry of theprevious License at the end of December 2010. The University community avoidsdealing with and paying separately for digital rights - an area of growing traffic andsubstantial potential costs. The arrangement we have made with Access Copyrightcompares very favourably with the regime in Quebec, which does not include somecourse-pack royalties and includes only limited digital rights.