FEDERAL COURT OF APPEAL

BETWEEN:
File Nos. A- 339 -11
A- 395 -11
ASSOCIATION OF UNIVERSITIES AND COLLEGES OF CANADA
and THE UNIVERSITY OF MANITOBA
Applicants
- and-
THE CANADIAN COPYRIGHT LICENSING AGENCY
Operating as "ACCESS COPYRIGHT"
MEMORANDUM OF FACT AND LAW
OF THE APPLICANTS
Respondent
Date: January 30, 2012
LEGAL_l:226S1950.1
Osler, Hoskin & Harcourt LLP
1900 - 340 Albert Street
Ottawa, Ontario KlR 7Y6
Tel: (613) 235-7234
Fax: (613) 235-2867
Glen A. Bloom
Patricia Wilson
Solicitors for the Applicants,
Association of Universities and
Colleges of Canada and The
University of Manitoba
1455
1456
TABLE OF CONTENTS
I OVERVIEW & STATEMENT OF FACTS .............................................. 1
OVERVIEW .............................................................................................. 1
Introduction and Backgronnd of Proceedings ................................ I
Opt-Out Interrogatories Decision .................................................. 4
Transactional Licences Decision ................................................... 6
STATEMENT OF FACTS ........................................................................ 8
The Applicants ............................................................................... 8
The Respondent ............................................................................. 9
Prior Licensing Arrangements - Between Access Copyright
and AUCC Members ........................................................ 10
Alternative Copying Permissions Options Available to
Institutions ........................................................................ 12
Access Copyright Interrogatory Proceedings .............................. 15
Transactional Licence Decision Proceedings .............................. 19
II STATEMENT OF ISSUES ..................................................................... 21
III ARGUMENT ........................................................................................... 23
STANDARD OF REVIEW ..................................................................... 23
DECISIONS ARE FINAL DETERMINATIONS MERITING
REVIEW ...................................................................................... 23
OPT-OUT INTERROGATORIES DECISION ....................................... 25
The Board Does Not Have the Authority under Sections
66.7(1) and 70.15 of the Act to Order the Opt-Out
Institutions to Provide Responses to Interrogatories ....... 25
Board Failed to Consider Whether the Opt-Out
Interrogatories Order was Necessary or Proper ............... 29
The Board Failed to Consider Whether the Requirements
for Non-Party Discovery were Met.. ................................ 30
Extensive Nature and Lack of Proportion of the
Interrogatories .................................................................. 32
Improper Enforcement Threats and Prospective Evidentiary
Rulings ............................................................................. 33
Opt-Out Interrogatories Decision is Unreasonable ...................... 35
Transactional Licences Decision ............................................................. 36
Inconsistent with Statutory Context and Purpose of
Copying Licensing Provisions ......................................... 36
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Monitoring and Volume Detennination of the Board were
Misplaced ......................................................................... 39
The Board Misapprehended the Purposes ofInterim Orders
under Section 66.51 of the Act ......................................... 40
Inconsistency with Earlier Decisions ........................................... 41
Transactional Licences Decision is Unreasonable ....................... 42
Conclusion ............................................................................................... 43
IV ORDERS SOUGHT ................................................................................. 43
V AUTHORITIES REFERRED TO ........................................................... 46
LEGAL_l:22681950, I
1
I OVERVIEW & STATEMENT OF FACTS
OVERVIEW
Introduction and Bacl,ground of Proceedings
1. This is an application by the Association of Universities and Colleges of
Canada ("AUCC") and The University of Manitoba ("U of M"), the Applicants,
to quash two decisions of the Copyright Board ("Board"), issued August 18,2011
and September 23, 2011 respectively, in the course of proceedings to consider
certification of a statement of royalties proposed by the Respondent ("Access
Copyright") for the copying of published works by post-secondary educational
institutions located outside the Province of Quebec for 2011 to 2013 ("Proposed
Tariff').
Application Record (liAR "), Volume 1, Tabs 1A and 2A, p. 1-
A1 to 1-A3, and p. 2-Al to 2-A15
2. On December 23, 2010, the Board issued an interim tariff, which set the
Access Copyright fees for copying published works onto paper and created an
optional digital copying licence on an interim basis, until the fmal certification of
the Proposed Tariff ("Interim Tariff'). Prior to the Interim Tariff, AUCC
members had since 1993 entered into blanket licence agreements with Access
Copyright to authorize the copying of published works based upon a model
blanket licence agreement negotiated by AUCC and Access Copyright. The
blanket licence agreements expired on December 31, 2010.
3. The royalties sought in the Proposed Tariff and issued in the Interim Tariff
talce the form of a blanket licence covering all copying by a post-secondary
educational institution ("Institution"). The Interim Tariff is based on a fee per
full-time equivalent student ("FTE"), with per page rates for copies of published
works made for the purpose of course collections sold to students. While the
Interim Tariff reflects the rates and terms of the prior licences between Access
Copyright and institutions, the Proposed Tariff, which will have retroactive effect
as of January 1,2011 and replace the Interim Tariff when certified in final form,
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makes significant changes to the prior licence agreements. The Proposed Tariff
increases the FTE rate from $3.38 to $45.00, eliminates the $0.10 per page rate
for course collection copying, adds an optional blanket digital or electronic
copying licence and removes an indemnity provided to institutions in the prior
licences against infringement claims for copying published works that are not on
an "Exclusions List" maintained by Access Copyright. Institutions with licences
under the Interim Tariff will be liable for the royalties set, and subject to the terms
of, the Proposed Tariff when it is certified by the Board.
4. The decisions of the Board for which judicial review is sought raise issues
about the rights and obligations of universities and colleges that do not have, and
do not want, licences under the Interim Tariff to authorize their copying of
published works ("Opt-Out Institutions"). Opt-Out Institutions obtain copyright
permissions outside the tariff from publishers, licence aggregators, and licensing
consortia like the Canadian Research Knowledge Network ("CRKN"), and
otherwise rely upon statutory exceptions or the fair dealing provisions of the
Copyright Act (the "Act").
5. It is a fundamental underpiuning of the copyright licensing regime enacted
in the Act that copyright users are not required to obtain a licence under a tariff
issued by the Board, but can secure copyright permissions either directly from the
publisher or author of the published work, or even by agreement with a collective
society holding the work in its repertoire, apart and separate from a tariff issued
by the Board. The Board itself recognized this when it issued the Interim Tariff:
... [An interim decision] will provide certainty until the Board
certifies a final tariff. It will not impose a single licensing solution;
instead, it will add a tool Institutions can use to comply with their
copyright obligations. Since Access secures rights on a non-
exclusive basis, Institutions remain free to seek licences from
others, even for their uses of the Access repertoire.
[45] An interim tariff does not force Institutions to pay royalties
absent any evidence that they require a licence. A tariff applies
LEGAL_l :22681950.1
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only to those who need the licence; those who do not, need not
pay. Under the general regime, which applies in this instance, users
whose consumption patterns justifY different rates remain free to
secure, from Access or from others, transactional or other licences
that will trump the tariff.
Interim Statement of Royalties (Post-Secondary Educational
Institutions (2011-2013) Reasons ("Interim Tariff Decision"),
March 16,2011; Affidavit of Steve Wills sworn October 6, 2011
("Wills Affidavit (A-339-11)"), Exhibit E, paras 30 and 45, AR,
Volume 2, Tab 5E, p 145, 149
3
6. As a result of changes to the Proposed Tariff compared with the prior
licensing arrangements between Access Copyright and the universities, along with
the very significant growth in availability of electronic licensing alternatives for
access to and copying of published works, 37 of the 77 universities that are
AUCC members outside Quebec decided, effective either January 1,2011, when
the Interim Tariff came into effect, or September 1,2011, at the beginning of the
current academic year, not to obtain a blanket licence under the Interim Tariff but
instead to secure their copying permissions outside the blanket licence under the
Interim Tariff.
7. In the two decisions for which judicial review is sought, the Board:
(a) ordered that full responses to the very extensive written
interrogatories about paper and digital copying activities, finances,
copyright compliance, library reserve, electronic course
management and e-mail systems at institutions to be covered by
the Proposed Tariff that were issued by Access Copyright to
AUCC, in its capacity as an objector to the Proposed Tariff, be
obtained from a representative sample of Opt-Out Institutions
("Opt-Out Interrogatories Decision"); and
(b) dismissed an application by AUCC to amend the Interim Tariff so
as to provide for transactional licences to authorize the copying of
extracts of specific published works in the repertoire of Access
Copyright, at a reasonable rate to be set by the Board, by Opt-Out
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Institutions without a blanket licence under the Interim Tariff or by
institutions seeking to make a digital copy that are licensed under
the blanket licence under the Interim Tariff but not under the
optional digital licence under the Interim Tariff ("Transactional
Licences Decision").
Opt-Out Interrogatories Decision
8. Opt-Out Institutions have not participated in the proceedings to consider
the Proposed Tariff, because they are not licensed under the Interim Tariff will
not require the blanket licence under the Proposed Tariff. Opt-Out Institutions are
not objectors to the Proposed Tariff under section 67.1(5) of the Act; they operate
outside the Proposed Tariff to obtain their copying permissions. The effect of the
Opt-Out Interrogatories Decision, however, is to require the Opt-Out Institutions
selected to answer the interrogatories to participate fully in the very heaviest part,
in terms of person hours and required resources, of the Proposed Tariff
proceeding, that of the discovery phase represented by the interrogatories process.
9. The Applicants submit that the Board's Opt-Out Interrogatories Decision
is not reasonable. The Board does not have the authority to require parties that
are not objectors to the Proposed Tariff and who will not be subject to the
Proposed Tariff to provide discovery. The Board exceeded its general powers
under sections 66.7(1) and 70.15 of the Act by requiring non-parties like the Opt-
Out Institutions to provide discovery to Access Copyright. The Board's extension
of its procedural powers to require non-users of a tariff to answer extensive
interrogatories directed at tariff users is unsupported by a reasoned contextual and
interpretative analysis of these provisions of the Act. The Opt-Out Interrogatories
Decision is therefore unreasonable.
10. If the Board was authorized to order non-users such as the Opt-Out
Institutions to provide discovery, the Applicants submit that the Board made no
examination of whether its order to require Opt-Out Institutions operating outside
the Interim Tariff to provide discovery was necessary or proper under sections
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66.7(1), having regard to the Board's role nuder section 70.15 of the Act, and
made no consideration of whether the requirements for ordering non-party
discovery had been met. A reasoned consideration of these requirements would
have shown that the order was not necessary or proper and that the criteria for
allowing non-parties discovery had not been met. In failing to consider these
requirements the Board therefore lacked jurisdiction to issue the Opt-Out
Interrogatories Decision. The Opt-Out Interrogatories Decision is also
unreasonable for this reason.
11. Further, the Access Copyright Interrogatories are very extensive in scope
and burdensome to answer and involve an enormous imposition of time and
resources on institutions. In July 2010, AUCC provided responses from 55
institutions, including universities that became Opt-Out Institutions on September
1, 2011, to the interrogatories. The applicants submit that the Board's
requirement that more Opt-Out Institutions provide full answers to the
interrogatories in these circumstances is umeasonable given the disproportionate
burden that answering these interrogatories will impose on the selected Opt-Out
Institutions, when those institutions do not use the Interim Tariff and are not
participants in the Proposed Tariff proceeding.
12. In addition, the Board made improper references at paragraphs (6) to (8)
of the Opt-Out Interrogatories Decision to Opt-Out Institutions being potentially
liable under the final tariff and being required to provide the same information as
is requested in the interrogatories nuder the final tariff, that a lack of full
responses from Opt-Out Institutions would tend to raise the royalty rate in the
final tariff, and that the Board would prospectively grant applications by Access
Copyright to bar evidence from or about Opt-Out Institutions that do not provide
full responses to the interrogatories.
13. The Applicants submit that these factors are completely irrelevant to a
reasonable determination of whether Opt-Out Institutions, operating in a
legitimate manner nuder the Act outside the Proposed Tariff before the Board,
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should be brought into the proceeding through non-party discovery. The
statements about liability under the tariff improperly conflate enforcement, not a
matter for the Board, with the Board's rate-setting function; the statements about
the tariff rate infer an improper pre-determination of the very question before the
Board, and the prospective granting of future evidentiary applications, without
hearing from the parties, amount to a prospective breach of fairness and an
improper pre-disposition by the Board of matters that may come before it. The
Applicants submit that the errors at paragraphs (6) to (8) of the Opt-Out
Interrogatories Decision exceed the margin of appreciation afforded tribunals in
their exercise of statutory authority and decision-making and put the decision
outside the range of acceptable and reasonable solutions.
Transactional Licences Decision
14. The purpose for seeking the addition of a transactional licence to the
Interim Tariff was to provide an efficient means for securing occasional copying
permissions from Access Copyright apart from its blanket licence under the
Interim Tariff, in those situations where Opt-Out Institutions, and Institutions
licensed under the Interim Tariff that have not exercised the option for a digital
licence, could not obtain permissions to copy directly from the publisher or
author, or where the publisher or author directs the institution to obtain the
requested licence from Access Copyright.
15. The evidence before the Board was that Access Copyright had made
transactional licences available to institutions for copying that was not covered by
its prior blanket licences with institutions, such as digital copying and copying
beyond the limits of the licence. Access Copyright ceased making transactional
licences available effective January 1, 2011. If an Institution did not also agree to
obtain a blanket licence under the Interim Tariff or if an Institution with a blanket
licence did not exercise the optional digital copying licence under the Interim
Tariff.
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16. The effect of the refusal by Access Copyright to provide transactional
licences is to force Opt-Out Institutions to either forego copying the work or to
obtain a full, blanket licence under the Interim Tariff in order to copy the single
works for which the transactional licences were requested. Similarly, the refusal
to provide transactional licences requires Institutions licensed under the Interim
Tariff but not under the optional digital licence, to either take up the blanket
digital licensing option or forego making the digital copies.
17. In relation to the Transactional Licences Decision, the Applicants argue
that the Board failed to consider the statutory scheme of the Act as a whole, which
contemplates a user obtaining an individual licence in respect of a work in the
repertoire of a collective society such as Access Copyright, and does not require a
user to obtain a licence under a tariff which provides a blanket licence for all of
the works in the collective society's repertoire.
18. The Applicants submit that a purposive interpretation of the copyright
licensing provisions of the Act confirms that the purpose of the licensing regime
in the Act is to facilitate access to the copyright permissions required to copy
published works, not force distorted licensing results or block access to copyright
licensing. The Board's refusal to provide a transactional licensing option is
contrary to the purpose and object of section 70.2 of the Act, which specifically
empowers the Board to fix royalties where no agreement is reached between a
collective society and a user.
19. The Board's failure to adhere to the Act's purpose of providing, not
blocking, users' access to copying permissions in the Act created an unacceptable
result contrary to the intent and objects of the Act. The Transactional Licences
Decision cannot therefore be reasonable.
20. The Board misapprehended the purpose of its authority under section
66.51 to make interim tariff orders, which are to protect parties affected by the
length and uncertainty of the tariff proceeding before it, and misdirected itself by
regarding preservation of the blanket license in the Interim Tariff as the exclusive
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licensing mechanism as necessary to preserve the status quo. The Transactional
Licences Decision instead exacerbated the nncertainty of the Proposed Tariff
proceeding for the Opt-Out Institutions and licensed Institutions that did not
exercise the digital copying option. The Board's reliance on the prior licensing
agreements as the status quo is not justifiable when a very substantial portion of
Access Copyright's prior licensees no longer had licenses and the circumstances
had so fundamentally changed.
21. The Applicants further submit that the Board's refusal to provide a
transactional licensing option in the Interim Tariff is inconsistent with its decision
to issue the Interim Tariff, in which the Board stressed the voluntary nature of the
licence provided nnder the Interim Tariff and its role as one of a number of
mechanisms by which institutions can secure the copying permissions they need.
STATEMENT OF FACTS
The Applicants
22. AUCC is an association of 95 public and private not-for-profit universities
and university-degree level colleges in Canada. On behalf of its members located
outside Quebec, AUCC negotiated model licence agreements with Access
Copyright that licensed institutions to reproduce published works onto paper,
which licences expired on December 31, 2010. AUCC has objected to the
Proposed Tariff for which Access Copyright seeks certification by the Board.
Wills Affidavit (A-339-11), paras 2, 6 and Exhibit B, AR,
Volume 2, Tab 5, p. 41-42 and 66-68
23. The U of M held a licence for its copying of published works onto paper
from Access Copyright until December 31, 2010, when the licence expired.
Effective January 1,2011, the U ofM elected not to obtain a licence from Access
Copyright nnder the Interim Tariff and operates outside the Interim Tariff to
obtain, where required, its licences and copying permissions. Access Copyright
has refused to grant transactional licences to the U of M to authorize its copying
of specific works in the repertoire of Access Copyright for which copying
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9
permissions cannot be obtained directly from publishers or authors or when
publishers direct licensing requests to Access Copyright. The U of M is an Opt-
Out Institution directly affected by the Board's Transactional Licence Decision.
Wills Affidavit (A-339-11), paras 8 and 15, AR, Volume 2, Tab
5, p. 43, and 46-47
24. Brandon University is making an application to be added as an applicant
in the within applications. Brandon University held a licence for its copying of
published works onto paper from Access Copyright until December 31, 2010,
when the licence expired, and, effective January 1, 2011, also elected not to
obtain a licence to authorize its copying of published works under the Interim
Tariff. Brandon University instead operates outside the Interim Tariff to obtain
the licences and copying permissions it needs. Brandon University was selected
as part of a representative sample of Opt-Out Institutions that would be required
to answer the Access Copyright Interrogatories pursuant to directions from the
Board following the Opt-Out Interrogatories Decision. Brandon University is
directly affected by the Board's Opt-Out Interrogatories Decision.
Wills Affidavit (A-339-11), paras 8, 15 and 30, AR, Volume 2,
Tab 5, p. 43, 46-47 and 53,
Affidavit of Christopher Hurst sworn October 7, 2011 (If Hurst
Affidavit (A-339-11)If), paras 3, 5 and 7, AR, Volume 3, Tab 6,
p.385-386
The Respondent
25. Access Copyright is a collective society representing authors and
publishers that agree to affiliate with it with respect to the copying of their
published works. Access Copyright entered into licence agreements with AUCC
member institutions to authorize the copying of published works onto paper from
1994 until December 31, 2010.
Wills Affidavit (A-339-11), para 8, AR, Volume 2, Tab 5, p. 42
26. On March 31, 2010, Access Copyright filed the Proposed Tariff, for which
it seeks certification by the Board pursuant to section 70.13(2) of the Act.
LEGAL_I :22681950.1
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Prior Licensing Arrangements - Between Access Copyright and AVCC
Members
10
27. Since 1994, AUCC members obtained licences from Access Copyright for
the copying of published works onto paper, based upon the model licences
negotiated by AUCC and Access Copyright. Under the most recent licence
between Access Copyright and AUCC member Institutions, AUCC members paid
Access Copyright an annual royalty rate of $3.38 per FTE enrolled in the
Institution, plus $0.10 a page for paper copies of published works sold to students,
generally in the form of course packs. The prior licences permitted the copying
onto paper of all published works except those placed on an Exclusions List
maintained by Access Copyright and provided an indemnity to institutions against
copyright infringement claims for copying any work not on the Exclusions List.
Wills Affidavit (A-339-ll), para 9, Exhibit G, AR, Volume 2,
Tab 5, p. 43 and 190-214
28. When the Proposed Tariff was filed by Access Copyright in March 2010,
negotiations by AUCC and Access Copyright to renew the existing licences
between institutions and Access Copyright were abandoned. The term of existing
licences with institutions expired on August 31, 2010, but was extended until
December 31, 2010 by agreement, at which point the prior licences between
Access Copyright and AUCC member institutions terminated.
29. Until December 31, 2010, Access Copyright also provided transactional
licences to AUCC members to licence the reproduction of specific published
works in the Access Copyright repertoire not covered by the prior blanket
licences, for example when the amonnt of copying exceeded the copying limits in
the prior licences, or where the institution sought to make an electronic copy of a
work in the Access Copyright repertoire.
Affidavit of Steve Wills sworn November 22, 2011 (It Wills
Affidavit A-395-ll It), paras 5 and 6, Exhibit C, p. 8,
Appendixes A and B, AR, Volume 5, Tab 8, p. 846-847, 889,
and 895-904
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30. Access Copyright applied to the Board for an interim tariff, to have effect
January 1, 2011, pending certification of the Proposed Tariff ("Interim Tariff").
The Interim Tariff was issued by the Board on December 23, 2010. When the
Proposed Tariff is certified by the Board, it will replace the Interim Tariff and
apply retroactively, as of January 1,2011.
Interim Tariff Decision, supra, AR, Volume 2, Tab 5E, Wills
Affidavit (A-339-11), para 5, AR, Volume 2, Tab 5, p. 42
31. The Interim Tariff reflects the terms of the prior licences by maintaining
the FTE rate of $3.38 plus $0.10 per page for copies made for sale (e.g. course
packs), but adds an optional digital copyright licence applicable to the Access
Copyright repertoire. The paper copying part of the Interim Tariff applies to all
published works that are not on the Access Copyright Exclusions List and
maintains the indemnity for paper copying that was in the prior licence
agreements.
Interim Tariff Decision, supra, AR, Volume 2, Tab 5E, Wills
Affidavit (A-339-11), para 11, AR, Volume 2, Tab 5, p. 44
32. The Proposed Tariff filed by Access Copyright in March 2010, differs,
however, from the prior licence agreements and Interim Tariff in four principal
ways:
(i) The Proposed Tariff would extend Access Copyright licensing
from permitting the making of print or paper copies to the making
of digital copies, including in optical or electronic form;
(ii) The Proposed Tariff limits permitted copying to works in the
Access Copyright repertoire and eliminates the indemnity provided
to institutions against copyright infringement claims;
(iii) The Proposed Tariff sets significantly elevated FTE rates, from
$3.38 CAD per FTE, to $45.00 CAD per FTE and eliminates the
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$0.1 0 per page copying rate under the model licence agreements;
and
(iv) The Proposed Tariff would provide Access Copyright the right to
conduct a bibliographic and volume survey of the uses of the
works in its repertoire and imposes reporting requirements in
relation to print and digital copying at the Institutions, obligations
that were not included in the prior licence agreements except in
respect of the reporting of copies made for sale to students.
Wills Affidavit (A-339-11), para 10, AR, Volume 2, Tab 5, p. 44
33. An institution holding a licence issued under the Interim Tariff faces
potentially very large liability to Access Copyright upon certification of the
Proposed Tariff, based on the difference between the amount the institution paid
under the Interim Tariff and the amount payable under the proposed Tariff, from
January 1, 2011 to the date of certification. This liability could be very large
given the very large increase to $45.00 from $3.38 in the FTE rate in the Proposed
Tariff.
Alternative Copying Permissions Options Available to Institutions
34. The copyright licence rights held by Access Copyright in respect of
published works in its repertoire are non-exclusive. AUCC member institutions
can and do enter into licence agreements directly with publishers or other
licensing consortia to secure rights to copy published works. This has become a
widespread practice in relation to digital copying, which was not covered by the
prior licences with Access Copyright. Institutions have obtained licence
agreements from publishers directly, or negotiated by CRKN, the Council of
Prairie and Pacific University Libraries ("CPPUL"), the Ontario Council of
University Libraries ("OCUL") or the Council of Atlantic University Libraries
("CAUL "), as well as from other collective societies, such as the Copyright
Clearance Center in the United States. The vastly expanded availability of
electronic works, and the licences providing access to and use of electronic works,
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have made electronic works a very significant component of Institution libraries
and course materials.
Wills Affidavit (A-339-ll), para 13, AR, Volume 2, Tab 5, p. 42
Wills Affidavit (A-395-ll), Exhibit C, p. 3, AR, Volume 5, Tab 8, p.
884
Affidavit of ShaUyn MacDonald sworn November 4, 2011
("MacDonald Affidavit"), Exhibit 7G, p. 5-7, Appendixes B-F, AR,
Volume 4, p. 585-587, and 605-674
35. In addition to electronic licensing alternatives, Institutions can use
statutory exceptions, including the fair dealing exceptions in section 29 of the Act
to copy for purposes including research and private study. In addition, until the
Interim Tariff took effect on January 1, 2011, institutions could secure
transactional licences from Access Copyright, if needed, to permit copying
beyond the limits permitted in the prior licences, or digital copying, which was
not covered by the prior licences.
Wills Affidavit (A-339-ll), para 14, AR, Volume 2, Tab 5, p. 46
36. In view of the significant increase in royalty rates in the Proposed Tariff
over the royalty rates in the prior blanket licence agreements, the increased use of
digital technologies and the availability of licence agreements for the access and
use of a vast repertoire of published works in electronic form, 16 of AVCC's
members elected not to operate under either the Proposed Tariff or the Interim
Tariff effective January 1, 2011. An additional 21 AVCC members opted out of
the Interim Tariff effective September 1, 2011.
Wills Affidavit (A-339-ll), paras 15 and 16, AR, Volume 2,
Tab 5, p. 46-48
Cross-examination of Steve Wills, January 17,2012, p.100-
104, AR, Volume 6, Tab 10, p.1346-150
Hurst Affidavit (A-339-ll), para 10, Exhibit B, AR, Volume 3,
Tab 6, p. 387 and 430
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37. Those Opt-Out Institutions that became Opt-Out Institutions as of January
1, 2011 have not participated in the proceedings to certify the Proposed Tariff,
other than having provided evidence in support of the application to add a
transactional licences option to the Interim Tariff, which arose directly from their
requirements to obtain occasional copying permissions from Access Copyright
apart and separate from the blanket licence. The remaining Opt-Out Institutions
have not participated in the proceedings since they became Opt-Out Institutions as
of September 1, 2011.
38. The Board explicitly recognized the voluntary nature of the Interim Tariff
and the range of copyright licensing alternatives mandated under the Act in its
decision to issue the Interim Tariff.
- to allow targeted institutions to make digital copies pursuant to
the interim tariff, but only ifthey so elect;
- to confirm that institutions that do not require a licence from
Access Copyright are not required to deal with it, whether pursuant
to the interim tariff or otherwise.
[30] An interim decision will allow Institutions to continue to avail
themselves of the existing licensing scheme if they so wish. It will
provide certainty until the Board certifies a final tariff. It will not
impose a single licensing solution; instead, it will add a tool
Institutions can use to comply with their copyright obligations.
Since Access secures rights on a non-exclusive basis, Institutions
remain free to seek licences from others, even for their uses of the
Access repertoire. As always, Institutions that do not make
protected uses of that repertoire are not targeted by the decision in
any event.
[45] An interim tariff does not force Institutions to pay royalties
absent any evidence that they require a licence. A tariff applies
only to those who need the licence; those who do not, need not
pay. Under the general regime, which applies in this instance, users
whose consumption patterns justify different rates remain free to
LEOAL_I :22681950.1
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secure, from Access or from others, transactional or other licences
that will trump the tariff. The fact that the interim tariff can be
modified at any time ensures that Access will display good faith in
such negotiations. Any misconduct on its part would necessarily be
reported to the Board, which would take it into account in any
further consideration of this matter.
Interim Tariff Decision, snpra, AR, Volume 2, Tab 5E, p. 134-
184
Access Copyright Interrogatory Proceedings
15
39. Access Copyright served its interrogatories on AUCC on March 21, 2011
pursuant to the Board's procedural directive and schedule for the proceeding to
certify the Proposed Tariff. The interrogatories required extensive information
and responses from AUCC and, notwithstanding that there were 16 Opt-Out
Institutions as of January 1,2011, required AUCC to obtain extensive responses
and information from all AUCC member institutions located outside Quebec.
Wills Affidavit (A-339-11), paras 18 and 20, Exhibit H, AR,
Volnme 2, Tabs 5, 5H and 51, p. 49,215-239 and 240-331
40. The Access Copyright interrogatories are extensive, consisting of over 120
questions covering the activities of Institutions over the time period from 2008 to
2011, most consisting of multiple parts. The interrogatories require voluminous
information about an Institution's licences, budgets and expenses for acquisitions
and licences, fees charged stndents, detailed questions on paper and electronic
copying practices, including equipment and volumes, library operations and
budgets, course management systems, uploading and downloading on course
management systems, e-reserve systems and functionality, email accounts, use of
email to transmit, store, upload and archive documents and works used in the
Institution's courses of study, amongst other matters.
Wills Affidavit (A-339-11), para 21, Exhibit H, AR, Volnme 2,
Tab 5, p. 49-50, and 215-239
41. AUCC filed its objection to the interrogatories with the Board on April 4,
2011, in which AUCC objected to providing answers to the interrogatories from
LEGAL_l:226819S0,1
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16
its member institutions that operated outside the Interim Tariff to obtain copying
permissions (the "Opt-Out Institutions"), on grounds that the proposed Tariff does
not apply to these members.
Wills Affidavit (A-339-11), Exhibit I, Response to
interrogatory 3, page 202, AR, Volume 2, Tab 5, p. 2 4 3 ~ 2 4 4
42. On June 13,2011 and July 11, 2011 AUCC served on Access Copyright
extensive documentation containing complete answers to the Access
Interrogatories from 55 AUCC members, incomplete answers from two AUCC
members that had elected to obtain licences under the Interim Tariff as well as
answers to certain interrogatories provided by nine consortia of AUCC members
(such as CRKN) on behalf of the Institutions that have an Interim Licence.
AUCC provided 16,236 separate documents comprising 11.92 gigabits of
information. If printed onto paper, the answers AUCC provided to the Access
Interrogatories would weigh over eight tons.
Wills Affidavit (A-339-11), para 23, AR, Volume 2, Tab 5, p. 51
43. AUCC did not secure or provide Access Copyright with any answers to
the Access Copyright Interrogatories from the 16 Opt-Out Institutions that ceased
their licence arrangements with Access Copyright as of January 1,2011 ("January
1,2011 Opt-Out Institutions").
Wills Affidavit (A-339-11), para 24, AR, Volume 2, Tab 5, p. 51
44. On July 20,2011 Access Copyright applied to the Board for, inter alia, an
order requiring AUCC to secure answers to the interrogatories, from a
representative sample of the Opt-Out Institutions.
Wills Affidavit (A-339-11), para 25, AR, Volume 2, Tab 5, p. 51
45. AUCC opposed the Access Copyright motion on August 2, 2011.
Wills Affidavit (A-339-11), para 26, AR, Volume 2, Tab 5, p. 52
LEGAL_I :22681950.1
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17
46. The Board allowed the Access Motion in part on August 18,2011. In the
Opt-Out Interrogatories Decision the Board ordered AUCC to provide complete
answers to the Access Interrogatories, from a representative sample of the Opt-
Out Institutions, issued directions requiring Access Copyright and AUCC to agree
on a list of Opt-Out Institutions required to answer the Access Interrogatories, a
joint letter to the Opt-Out Institutions and a time table for dealing with the
responses from those institutions by September 15, 2011, and directed AUCC to
send the letters requiring answers to the Access Interrogatories to Opt-Out
Institutions by September 26, 2011.
Wills Affidavit (A-339-11), para 27, AR, Volume 2, Tab 5, p. 52
47. At paragraphs (6) to (8) of the Interrogatories Opt-Out Decision, the Board
also:
(6) [directed that] "Access may file with the Board an
application prohibiting any objector from adducing evidence about
an [Opt-Out Institution] that does not provide responses by the date
provided to do so, or that does not remedy a deficient response by
the date provided to do so. Once such an order has been issued,
Access will be allowed to adduce evidence about the [Opt-Out
Institution], but objectors will not be allowed to refute such
evidence except with leave of the Board";
(7) "remind[ed] the objectors that an [Opt-Out Institution's]
decision not to avail itself of the interim tariff [in respect of which
the Opt-Out Institutions have elected not to require a license for
their copying activities] in no way guarantees that [the Opt-Out
Institution] will bear no liability under the final tariff, that its
liability will not be retroactive or that it will not be compelled,
pursuant to the final tariff, to provide information about its copying
habits during the period between January 1, 2011 and the date on
which the final tariff is certified ... "; and
(8) Stated that "A lack of information concerning copying
habits at Opt-Out Institutions might tend to increase any FTE
royalty the Board may decide to certify. This would happen if the
average volume of copying of works from Access Copyright's
repertoire by Opt-Out Institutions was less than by other
institutions. This will not prevent the Board from certifying such a
royalty based on an imperfect record."
LEGAL_I:22681950.1
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Wills Affidavit (A-339-11), para 28, AR, Volume 2, Tab 5, p.
52-53
18
48. Two universities, Brandon University and Campion College were chosen
as part of the representative sample from amongst the January 1, 2011 Opt-Out
Institutions. Ten universities were chosen as part of the representative sample
required to answer the interrogatories from amongst the 21 universities that opted
out of the Access Copyright licence under the Interim Tariff effective September
1,2011 ("September 1, 2011 Opt-Out Institutions). The September 1, 2011 Opt-
Out Institutions, which held licences from Access Copyright at the time the
interrogatories were answered, provided answers to the Access Interrogatories
that were included in AUCC's response to the interrogatories in July, 2011. At
issue before the Board in the Opt-Out Interrogatories Decision relating to the
September 1, 2011 Opt-Out Institutions is whether they must address deficiencies
in the interrogatory responses they provided. AUCC does not object to having a
representative sample of September 1, 2011 Opt-Out Institutions address
deficiencies in the responses to interrogatories they have provided.
Wills Affidavit (A-339-11), para 30, AR, Volume 2, Tab 5, p.
53-54
49. The selected January 1, 2011 Opt-Out Institutions are small universities
and colleges. They will be required to divert significant resources and staff to
provide full responses to the Access Copyright interrogatories. For example, the
preparation and generating of the information necessary to provide answers to the
Access Interrogatories will reqnire a very significant investment of staff resources
and time, a diversion from other pressing needs at Brandon University
("Brandon"), all when Brandon is no longer operating under the permissions
provided in an Access Copyright license and is not a participant in the Proposed
Tariff proceeding.
Hurst Affidavit (A-339-11), para 22, AR, Volume 3, Tab 6, p.
390
LEGALJ22681950.1
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19
50. Brandon is a small institution with limited information technology,
administrative library and operational staff. The Interrogatories would require
diversion of existing staff resources from Financial Services, Student Services, the
Registrar's Office, the Library, Information Technology Services, Ancillary
Services, the office of the Vice-President Academic & Research, the office of the
Vice-President Administration and Finance, and the offices of Academic Deans.
Because of the tight financial commitments Brandon currently faces, many of
these departments are understaffed. Answering the Interrogatories would have a
noticeable impact on ongoing university projects and even impinge basic
university operations such as library, network systems and finance and
administration operations.
Hurst Affidavit (A-339-11), para 24, AR, Volume 3, Tab 6, p.
390-391
51. The Opt-Out Interrogatories Decision was stayed by order of this Court
dated September 28, 2011.
AR, Volume 1, Tab lB, p. I-Bl to I-B2
Transactional Licence Decision Proceedings
52. Although Opt-Out Institutions obtain most of their copying permissions
through the alternative licensing arrangements described above, in certain
circumstances, Opt-Out Institutions are unable to locate the author or publisher of
a published work to obtain permission to copy an extract from the published
works where the copying of the work would not fall under an exception in the Act.
In other instances, based on Access Copyright's recommendation, publisher
affiliates of Access Copyright have directed Opt-Out Institutions to contact
Access Copyright to obtain a licence to copy their published works. Similarly,
Institutions with licences under the Interim Tariff, but that have not elected to take
up the optional digital licence under the tariff, occasionally require permission to
make digital copies of specific works in the Access Copyright repertoire that
cannot be licensed elsewhere for the same reasons.
LEGAL_l:22681950.1
1476
Wills Affidavit (A-395-11), Exhibit e, AR, Volume 5, Tab 8e,
p. 881 to 950
20
53. Since the issuance of the Interim Tariff, Access Copyright has refused to
grant AUCC members transactional licences for uses covered by the Interim
Tariff blanket licence and optional digital licence. The only alternatives available
to those institutions are either to opt into the Interim Tariff or its optional digital
licence and copy the published work, or to refrain from copying and using the
published work.
54. The evidence before the Board was that Access Copyright began refusing
licences of digital copying, having granted these licences while the prior blanket
licences were in force, as of January 1, 2011 if the Institution requesting the
licence was an Opt-Out Institution or an Institution that had not elected to obtain
the optional blanket digital licence under the Interim Tariff. The evidence before
the Board also established that publishers affiliated with Access Copyright began
to refer requests for transactional licences that had previously been handled
directly by them to Access Copyright after the Interim Tariff was in effect.
Wills Affidavit (A-395-11), Exhibit e, and Appendixes A-K, p.
889-950,957-979, Exhibit E, and Appendixes A-E, AR, Volume
5, Tab 8e and 8E, p. 881-950 and p. 954-979
55. Operating under the Interim Tariff would be prohibitively expensive for
Opt-Out Institutions which require permission to copy only a few published
works in any year. Access Copyright has taken the position that by copying even
one extract from a published work in its repertoire during an academic year, an
Institution would be liable for the full Interim Tariff blanket licence royalties for
that entire academic year. In addition, for that academic year the Institution
would also have the potential liability, upon certification of the Proposed Tariff,
to pay Access Copyright the difference between the royalty rates in the Interim
Tariff and the royalty rates in the Proposed Tariff as certified.
56. The refusal of Access Copyright to provide transactional licences to
institutions on the occasions when they were requested left the institutions
LEGAL_' :22681950.1
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21
without an effective means to secure permissions to copy the works in question.
To address this, AUCC applied to the Board on June 8, 2011 to amend the Interim
Tariffby adding a transactional licence option to permit copying, onto paper or in
electronic form, of published works in the Access Copyright repertoire at a
reasonable per page royalty rate. The amendment requested by AUCC would
enable an Opt-Out Institution to make a copy and use a work, or extract of a work,
in the Access Copyright repertoire without triggering the blanket tariff royalty
rate for the academic year in which the copy was made, in those situations where
an Opt-Out Institution was not able to obtain a permission to copy the work from
the publisher or other licensing organizations and an exception under the Act was
not available.
Wills Affidavit (A-395-11), Exhibit C, AR, Volume 5, Tab 8e,
p.881-950
57. The Board denied the application for a transactional licence option on
September 23, 2011. In the Transactional Licences Decision the Board
determined that the Interim Tariff reflects the status quo of the blanket licence or
"take it or leave it" approach of the prior licences between Access Copyright and
institutions and should not be disturbed, that Access Copyright should not be
required to depart from the blanket licence conferred under the Interim Tariff, that
transactional licences raised monitoring issues and that the degree of usage by
institutions indicated institutions could do without transactional licences.
AR, Volume 1, Tab 2A, p. 2-A1 to 2-A15
II STATEMENT OF ISSUES
58. The issues raised by this application are:
(i) Whether the Opt-Out Interrogatories Decision and Transactional
Licences Decision of the Board were reasonable decisions having
regard to the circumstances and relevant law;
LEGAL_l:22681950.1
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22
(ii) Whether the Board exceeded its authority under the Act by
requiring Opt-Out Institutions to answer the Access Copyright
interrogatories;
(iii) If the Board was authorized to require Opt-Out Institutions to
answer the Access Copyright Interrogatories, whether the Board's
decision was umeasonable:
(a) As a result of the Board's failure to consider whether the
order was necessary or proper under sections 66.7(1) and
70.15 of the Act;
(b) As a result of the Board's failure to consider the
requirements for third party discovery;
( c) Given the inappropriate and heavy imposition of burden,
time and expense in answering the interrogatories would
require when the Opt-Out Institutions are not licensed
under the Interim Proposed Tariff;
(iv) Whether the Board's statements at paragraphs (6) to (8) of the Opt-
Out Interrogatories Decision were improper.
59. In relation to the Transactional Licence Decision, the issues are:
(i) Whether the decision is inconsistent with and fails to take account
of the statutory context and purpose of the copyright licensing
provisions of the Act;
(ii) Whether the Board misapprehended the purposes for providing
interim relief or orders in section 66.51 of the Act; and
(iii) Whether the decision is inconsistent with earlier decisions of the
Board that the Interim Tariff is voluntary and will not impair
alternative licensing mechanisms.
LEGAL _1 :22681950.1
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23
III ARGUMENT
STANDARD OF REVIEW
60. The Applicants submit that the standard of review of the Opt-Out
Interrogatories Decision and Transactional Licensing Decision is reasonableness,
and that both decisions fail to reach the reasonableness standard.
Dunsmuir v. New Brunswick, [2008] 1 SCR 190, 2008 SCC 9
("Dunsmuir"), Applicants' Book of Authorities ("ABA"), Tab
1
Alberta (Information and Privacy Commissioner) v. Alberta
Teachers' Associations, 2011 SCC 61, ABA, Tab 2
61. The Board exceeded its powers under sections 66.7 and 70.15 of the Act in
extending discovery obligations to non-parties, and populated its reasons with
improper statements amounting to breaches of fairness in the Opt-Out
Interrogatories Decision. In the Transactional Licences Decision, the Board failed
to have regard to the statutory context in which the transactional licences request
was made and misinterpreted the purpose of its interim order authority by blindly
applying a misplaced perception of the status quo. In both decisions, the Board
imposed unreasonable, disproportionate obligations on Institutions given the
extremely burdensome nature of the interrogatories for Institutions not licensed
under the tariff, and the cavalier disregard for the lack of access to published
works that the refusal of transactional licence option would entail.
62. The Applicants submit that the errors in the Decisions put them beyond
the range of acceptable outcomes that are defensible and do not meet the standard
of reasonableness required of the Board's decisions.
Dunsmuir, para 47, ABA, Tab 1
DECISIONS ARE FINAL DETERMINATIONS MERITING REVIEW
63. The Opt-Out Interrogatories Decision is different than a case about
whether parties to a proceeding must answer interrogatory questions due to their
content. In the Opt-Out Interrogatories Decision, the Board extended the

1480
24
requirement to answer interrogatories beyond the institutions affected by and
using the Proposed Tariff, which institutions answered the interrogatories and
about which there is no issue before the Court, to those not licensed by Access
Copyright. This case raises issues that are jurisdictional in nature about the
Board's authority to reach beyond the parties to a tariff to impose discovery
requirements that merit the consideration of this Court and is a final determination
of the obligations of Opt-Out Institutions to provide answers to the
comprehensive interrogatories issued by Access Copyright in the Proposed Tariff
proceedings before the Board. If judicial review of the Opt-Out Interrogatories
Decision is not available at this stage of the Board's Proposed Tariff proceeding,
the damage, by virtue of the very broad and expansive nature of the
interrogatories, and the time and burden involved in responding to them, will have
been done to the Opt-Out Institutions selected to answer them.
The Canadian Copyright Licensing Agency operating as Access
Copyright v. The Province of Alberta as represented by the
Minister of Education et al., 2006 FCA 108, paras. 3 and 5,
ABA, Tab 3
64. The application to review the Opt-Out Interrogatories Decision has not
impaired the decision-making process of the Board. The Interrogatories Opt-Out
Decision was stayed by this Court on the basis of irreparable harm to the affected
Opt-Out Institutions should they be required to answer the interrogatories. The
proceedings to consider the Proposed Tariff are continuing, and are at the stage
where the parties are negotiating a survey of copying at Institutions. The parties
have, on consent, requested and been granted an early hearing date by this Court.
Order dated September 28, 2011 staying August 18, 2011
Decision of Copyright Board, AR, Tab lB, p. l-Bl to l-B2
Order dated January 23, 2012, AR, Tab 3, p. 23-27
65. The Transactional Licence Decision is a final disposition of the rights of
Institutions without a blanket licence issued under the Interim Tariff to obtain a
transactional licence. The term of the Proposed Tariff is from 2011-2013. It is
unlikely the Board will conclude its consideration of the Proposed Tariff and issue
LEGAL_I :22681950.1
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25
a final tariff over this period. The Board's Transactional Licences decision finally
determines whether Institutions without blanket licences from Access Copyright
can obtain transactional licences for the period of the Proposed Tariff, and the
remedies of a non-licensed Institution before the Board are exhausted on this
issue. The Transactional Licences Decision also raises the very issue of whether
the Board misinterpreted and applied the wrong test under its interim order
authority. The opportunity to review the Transactional Licences Decision will be
lost if judicial review of the decision is not available now and must await the final
tariff certification of the Board. Judicial review of the Board's Transactional
Licences Decision does not interfere with the progress of the proceeding to
consider the Proposed Tariff.
Canada v. Schnurer Estate (C.A.) [1997] 2 F.C. 545, para 13,
ABA, Tab 4
Canada (Minister of Public Safety and Emergency Preparedness)
v. Kahlon, [2006] 3 FCR 493, paras 12, 14 and 16, ABA, Tab 5
Ocean Services Limited v. Marcel Guenette, 2010 FC 185, paras.
12 and 13, ABA, Tab 6
Canada (Attorney General) v. Vincent Estate, 2004 FC 1016,257
FTR 107, ABA, Tab 7
OPT-OUT INTERROGATORIES DECISION
The Board Does Not Have the Authority under Sections 66.7(1) and 70.15 of
the Actto Order the Opt-Out Institutions to Provide Responses to
Interrogatories
66. The Applicants submit that the authority of the Board to manage the
interrogatories phase of its proceedings derives from, and is limited, by the
Board's authority in section 70.15 of the Act to certify the Proposed Tariff. The
general powers of the Board in section 66.7(1) of the Act may only be exercised
within the limits of the Board's authority in section 70.15 to consider and certify a
tariff.
67. The Board's authority to consider and certify the Proposed Tariff is in
section 70.15 of the Act, which directs the Board to set rates and the terms and
LEGAL_l:22681950.1
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26
conditions of tariffs proposed for certification as the Board considers necessary,
"having regard to the objections to the tariff'. The Act further specifies, at section
67.1(5) that, following publication of a proposed tariff in the Canada Gazette,
"prospective users or their representatives" may file written objections to the tariff
with the Board.
S.70.14 Where a proposed tariff is filed under
section 70.13, subsections 67.1(3) and (5) and subsection
68(1) apply, with such modifications as the circumstances
require.
S. 70.15 The Board shall certifY the tariffs as
approved, with such alterations to the royalties and to the
terms and conditions related thereto as the Board considers
necessary, having regard to any objections to the tariffs.
S.67.1(5) As soon as practicable after the receipt of a
proposed tariff filed pursuant to subsection (1), the Board
shall publish it in the Canada Gazette and shall give notice
that, within sixty days after the publication of the tariff,
prospective users or their representatives may file written
objections to the tariff with the Board.
68. The January 1, 2011 Opt-Out Institutions cannot be regarded as
prospective users of the Proposed Tariff under section 67.1(5) of the Act. These
institutions have clearly indicated, by their actions, that they are conducting their
copying activities outside the Proposed Tariff. In addition, the Interim Tariff will
remain in place over most, and likely all, the 2011-2013 term of the Proposed
Tariff. By not taking up a licence under the Interim Tariff, the January 1, 2011
Opt-Out Institutions clearly are not prospective users of the Proposed Tariff.
Society of Composers, Authors and Music Publishers of Canada
v. Canada (Copyright Board), 47, CPR (3d) 297, ABA, Tab 8
69. On an application to reconsider its Opt-Out Interrogatories Decision by the
Association of Community Colleges of Canada ("ACCC"), another objector in the
Proposed Tariff proceeding, the Board has reasoned that the term "prospective
LEGAL_l:2268\950.1
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27
user" cannot be interpreted by reference to the intent of an institution not to take
up a licence under the final tariff, once the Proposed Tariff is certified. The only
evidence before the Board, however, regarding the January 1, 2011 Opt-Out
Institutions was that these institutions were and are not licensed, for all intents and
purposes, under the Proposed Tariff. There was no objective basis upon which
the Board could conclude that the January 1, 2011 Opt-Out Institutions were
prospective users of the tariff when they were, and remain, unlicensed under an
Interim Tariff that will run the term of the Proposed Tariff.
Board Decision dated September 13, 2011, (Reconsideration of
August 18, 2011 Decision), ABA, Tab 9
70. The Board's Model Directive on Procedure recognizes the limits to which
the interrogatories issued in a tariff proceeding are subject. Paragraph B.l of the
Model Directive states that interrogatories can be addressed to "participants" by
parties or the Board:
1. Interrogatories
Interrogatories are NOT filed with the Board. They are
served on the participant to whom they are addressed, by
the date set for that purpose, and presented in the form set
out in Appendix II. Interrogatories can be addressed to any
participant who is allowed to file evidence or to cross-
examine a witness.
The Board may, at any time, direct interrogatories to a
participant.( emphasis added)
Copyright Board of Canada, Model Directive in Procedure,
dated March 16,2011, ABA, Tab 10
71. The January 1, 2011 Opt-Out Institutions are not "participants" in the
proceeding to consider the royalty rates and terms and conditions of the Proposed
Tariff. These institutions operate outside the Proposed Tariff to secure their
copying permissions.
LEGAL_l:226819S0.l
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28
72. Further, the Board cannot sweep in to the interrogatories process Opt-Out
Institutions operating outside the Proposed Tariff on the basis of their
membership in AUCC.
73. AUCC's members have divergent interests in relation to the proceedings
to certify the Proposed Tariff, because some of its members have licences from
Access Copyright under the Interim Tariff, and to that extent have also elected to
be subject to the final tariff when it is certified, while other members (the Opt-Out
Institutions) have elected not to obtain a licence under the Interim, or the
Proposed Tariff when it is certified.
74. AUCC members that have elected to obtain a licence from Access
Copyright under the Interim Tariff are, by nature, the users and prospective users
of the Proposed Tariff, are the AUCC members that are concerned with the
content of the Proposed Tariff, and are the members on whose behalf AUCC
appears as an Objector to the Proposed Tariff. By definition, though, AUCC
members that have elected not to obtain a licence under the Interim Tariff, and to
that extent, the final version of the Proposed Tariff, are not concerned with the
content and terms of the Proposed Tariff, because they operate outside the tariff.
As an Objector to the Proposed Tariff, AUCC does not object to the royalties and
terms and conditions of the Proposed Tariff on behalf of the Opt-Out Institutions
which are not prospective users of the Proposed Tariff, but does object on behalf
of its members that are licensed under the Interim Tariff, and will be licensed
under the Proposed Tariff. I
AUCC filed its objection to the Proposed Tariff on July 15, 2010, six months before the
Interim Tariff was issued and before the expiry of the prior copying licences. At that time,
AUCC indicated that it objected to the Proposed Tariff on behalf of its members outside
Quebec. Immediately upon the prior licences expiring, however, the Januaty I, 20 II Opt-Out
Institutions elected not to take up licences with Access Copyright under the Interim Tariff.
Interrogatories are the first stage of the proceeding to consider the Proposed Tariff. Access
Copyright served its interrogatories on AUCC on March 21, 2011. AUCC objected to the
interrogatories on April 4, 2011 and in that objection, stated, in response to the interrogatory
asking AUCC to identify all parties that it represents in the Tariff, that it represents "its
members located in Canada outside Quebec who are operating pursuant to the licence
conveyed by the Interim Tariff", and that it objected to securing answers to the interrogatories
LEGAL_l:226819S0.1
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29
75. The Board cannot exercise the powers as a superior court of record
afforded it under section 66.7(1) of the Act independently of or beyond its
statutory authority. The Board itself has recognized that it cannot, for example,
use its powers to enforce the terms and conditions of a tariff, because the Act does
not allocate enforcement authority to the Board. Similarly here, as the Board has
no authority under section 70.15 to require non-objectors like the Opt-Out
Institutions to participate or provide discovery in the tariff proceeding, the
Board's powers under subjection 66.7(1) of the Act do not extend its authority to
do so.
Private Copying Tariff, Enforcement, Re (2004), 32 CPR (4th)
271 (Copyright Board, ABA, Tab 11
Public Performance of Musical Works 2003-2007, November 30,
2006, para 14, ABA, Tab 12
Board Failed to Consider Whether the Opt-Out Interrogatories Order was
Necessary or Proper
76. If the Board is authorized to require non-parties to answer interrogatories,
it is submitted that the Board failed to consider whether the order was necessary
or proper, the criteria for non-party discovery, and whether the order is
proportionate given the expanse and breadth ofthe interrogatories.
77. The Board's powers under section 66.7(1) to compel the production and
inspection of documents are not akin to ordering an Institution or person to
provide expansive discovery. First, discovery is provided to a party to a
proceeding, not to the Board. Second, discovery requires parties to provide
information, and although interrogatories also ask for document production, their
primary purpose is to gather information in the manner of a discovery. It is
submitted that the Board's authority to order that answers to interrogatories be
obtained from Opt-Out Institutions cannot be not based on the words "the
production and inspection of documents" in section 66.7(1) of the Act as a free
from the January 1,2011 Opt-Out Institutions. Affidavit of Steve Wills, Paragraphs 6, 17;
Exhibits B, I.
LEGAL_l :22681950.1
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30
standing source of authority, independent of the Board's authority under section
70.15. Rather, the Board must exercise caution when faced with a request to
impose a broad-ranging and burdensome discovery obligation on non-participants
to a section 70.15 proceeding. In addition, the Board must consider whether the
order is necessary or proper for the exercise of its jurisdiction under section 70.15.
Society of Composers, Authors and Music Publishers of Canada
v. Canada (Copyright Board), supra, ABA, Tab 8
78. The Board exercised no restraint or caution when faced with the request
by Access Copyright to impose discovery obligations beyond the Institutions
using the Interim Proposed Tariff and made no examination of whether the Order
was necessary or proper under section 70.15. It made a bald statement, without
any elaboration, that the information from Opt-Out Institutions is "relevant". The
Board made no consideration of whether the voluminous information from 55
other institutions made more information from the January 1, 2011 Opt-Out
Institutions "necessary", gave no indication how or why the information from
Opt-Out Institutions would or could be relevant, did not consider whether the
operational burden imposed by the Access Interrogatories was necessary for non-
parties to undertake and had no regard as to whether or how the information
would be probative or useful. As such, the Board's decision cannot be a
reasonable or proper exercise of its jurisdiction under sections 70.15 and 66.7(1)
of the Act.
The Board Failed to Consider Whether the Requirements for Non-Party
Discovery were Met
79. If the Board was authorized to require that Opt-Out Institutions provide
responses to the Access Interrogatories, the Board had no regard to the
requirements superior courts of record must require be met before ordering, in
effect, third party discovery. A party requesting third party discovery must show
that the material is relevant, the party sought to be examined is engaged in activity
that is the subject of the claim, that the party seeking discovery cannot get the
information needed in other formal or informal ways, that the request is
LEGAL_I :22681950.1
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31
proportional in nature given the ability of the third party to produce the requested
documents and information, there is no unjustified interference and prejudice to
the third party caused by the discovery request, that the request will not interfere
with progress of the action, and that the time and expense involved in fulfilling
the request is not onerous. None of these criteria are addressed in the Board's
decision.
BMG Canada v. Roe, 4 FCR 81, 2005 FCA 193, ABA, Tab 13
GEA Group AG v. Flex-N-Gate Corporation, 2009 ONCA 619,
paras 50-53, citing with approval Alberta, ABA, Tab 14
80. The January 1,2011 Opt-Out Institutions, by definition, are not engaged in
the matters at issue before the Board, which relate to the approval of a tariff and
royalty rates of the Proposed Tariff. The information about their copying activity
cannot, by definition, be relevant. By contrast, the scope and extensive nature of
the interrogatories will cause significant and material disruption to the operations
of the January 1,2011 Opt-Out Institutions selected to answer the interrogatories,
as well as significant and material expense, for which no compensation is
provided.
Wills Affidavit (A-339-11), paras 21, 23, Exhibit H, and I, AR,
Volume 2, Tabs 5, 5H, and 51, p. 49-51,215-239, and 240-331
Hurst Affidavit, paras 22-25, AR, Volume 3, Tab 6, p. 390-391
81. The prejudice to January 1,2011 Opt-Out Institutions from answering the
Access Interrogatories far outweighs the probative value and usefulness of the
information, given the extensive information already provided by AVCC from 55
Institutions. Finally, the scope and breadth of the Access Interrogatories, directed
at a January 1, 2011 Opt-Out Institution not licensed under the Interim Tariff
lacks any proportionality and is excessive in relation to the marginal benefit to be
gained from requiring answers from the January 1, 2011 Opt-Out Institutions in
question.
LEGAL_l:226819S0.1
1488
32
82. Third party discovery is an intrusive and extraordinary remedy that must
be granted by courts and tribunals alike with caution. In addition to meeting the
criteria above, an applicant for third party discovery must show why the order is
necessary and demonstrate that it is proportional in nature and will not impose an
unreasonable burden on the non-party. It is submitted that the requirements for
non-party discovery caunot be said to have been met in this case.
(Treasury Branches) v. Leahy (2001, 270 ARI, affd 303 AR 63
(CA)
Tetesky v. General Motors Corp, 2010 ONSC 1675, para 47,
ABA, Tab 15
83. The Board made no inquiry to address these requirements and there is no
. basis on the facts or circumstances here to infer such reasoning into the Board's
Opt-Out Interrogatories Decision. As such the Board's decision does not meet the
regarding requirements for justification and intelligibility and carmot be
reasonable.
Alberta Information and Privacy Commissioner v. Alberta
Teachers Association, supra, ABA, Tab 2
Dunsmuir, supra, para 47, ABA, Tab 1
Extensive Nature and Lack of Proportion of the Interrogatories
84. The Access Copyright interrogatories are enormous. They are grossly
disproportionate to the value of information regarding an Opt-Out Institution
operating outside the Interim Tariff under the Board's consideration. The Board
made no consideration of whether the interrogatories were proportionate in
relation to an Opt-Out Institution, but simply assigned to Opt-Out Institutions the
same obligation to provide interrogatory responses as to Institutions licensed
under the Interim Tariff.
Rule 29.2.03, Sedona Canada Principles, Principle 2, Ontario
Rules of Civil Procedure, ABA, Tab 16
LEGAL_I :221581950.1
1489
33
85. It is not justifiable, and is therefore unreasonable, for the Board to have
ordered that responses to all interrogatories be secured without any consideration
of the fundamentally different position of the Opt-Out Institutions. Further, it was
unreasonable of the Board to impose the very significant demands that providing
answers to these expansive interrogatories would entail given the marginal
connection of the January 1, 2011 Opt-Out Institutions to the Proposed Tariff
proceeding and the wealth of information on the same questions having already
been provided by 55 other institutions, 21 of which became Opt-Out Institutions
as of September 1, 2011.
Improper Enforcement Threats and Prospective Evidentiary Rulings
86. In the Opt-Out Interrogatories Decision, the Board also:
(6) directed that "Access may file with the Board an
application prohibiting any objector from adducing evidence about
an [Opt-Out Institution] that does not provide responses by the date
provided to do so, or that does not remedy a deficient response by
the date provided to do so. Once such an order has been issued,
Access will be allowed to adduce evidence about the [Opt-Out
Institution], but objectors will not be allowed to refute such
evidence except with leave of the Board";
(8) "remind[ed] the objectors that an [Opt-Out Institution's]
decision not to avail itself of the interim tariff [in respect of which
the Opt-Out Institutions have elected not to require a license for
their copying activities 1 in no way guarantees that [the Opt-Out
Institution] will bear no liability under the final tariff, that its
liability will not be retroactive or that it will not be compelled,
pursuant to the final tariff, to provide information about its copying
habits during the period between January 1, 2011 and the date on
which the final tariff is certified ... "; and
(8) stated that "A lack of information concerning copying
habits at Opt-Out Institutions might tend to increase any FTE
royalty the Board may decide to certify. This would happen if the
average volume of copying of works from Access Copyright's
repertoire by Opt-Out Institutions was less than by other
institutions. This will not prevent the Board from certifying such a
royalty based on an imperfect record."
LBGAL_l:22681950.1
1490
34
87. The Board's statements are improper and well beyond what can be
justified as an incident of the Board's authority to order responses to
interrogatories.
88. The statements in paragraph (6) above constitute a putative but obvious
breach of fairness insofar as the Board has decided, in advance, to preclude
AVCC from bringing any evidence about an Opt-Out Institution that does not
provide responses to the interrogatories, without any assessment of the relevance
of that evidence, or even whether it is evidence that was requested in the
interrogatories. The Board cannot provide fair procedure by making prospective
decisions to reject the admission of evidence before making a reasoned
assessment of its relevance or weight.
89. In addition, pre-emptively barring AVCC from bring evidence in response
to evidence brought against an Opt-Out Institution by Access Copyright, without
limit, except if the Board grants leave will unreasonably constrain AUCC from
putting forward its case in the event that evidence from Opt-Out Institutions
becomes relevant at the hearing. The Board's pre-emptive ruling has no expressed
limit, and raises the presumption that leave will only be granted in exceptional
cases. A pre-emptive bar of this kind offends the fundamental audi alteram
partem principal that parties to a proceeding must be given an opportunity to be
heard.
Dunsmuir, supra, paras 85-90, ABA, Tab 1
Cardinal v. Director of Kent Institution, [1985] 2 SCR 643, paras
14 and 15, ABA, Tab 17
90. The references in paragraph (8) of the Opt-Out Interrogatories Decision to
matters such as liability under the certified tariff, are completely irrelevant to the
matter of responses to interrogatories, and improperly conflate liability under, and
enforcement of, the certified tariff, over which the Board has no jurisdiction, with
the powers of the Board to order discovery in a tariff proceeding. It was entirely
improper for the Board to threaten Opt-Out Institutions not licensed under the
LEGAL_l :22681950.1
1491
35
Interim Tariff with repercussions regarding liability under the certified tariff or by
suggesting the Board could embed adverse terms in the certified tariff.
Private Copying Tariff, Enforcement Re, supra, ABA, Tab 11
91. The Board's statement in paragraph (7) of the Opt-Out Interrogatories
Decision that a lack of full response from Opt-Out Institutions would tend to raise
the royalty rate in the final tariff improperly pre-judges a live issue before the
Board. It is improper for the Board to signal its direction on the merits of the
Proposed Tariff and the royalty rates it will set in an interlocutory decision
regarding answers to interrogatories, before the Board has received any evidence
whatsoever on the merits, or lack thereof, of the royalty rates in the Proposed
Tariff or heard any argument on this issue.
Opt-Out Interrogatories Decision is Unreasonable
92. It is submitted that the Opt-Out Interrogatories Decision is an
unreasonable exercise of the Board's authority to require responses to
interrogatories in a tariff proceeding. The Board's extension of its authority to
order responses to interrogatories be provided by non-parties is based on a
misinterpretation of its authority to consider the tariff in section 70.15 and its
general powers under section 67.1 (5) of the Act and robs its decision of a
reasonable interpretative foundation under the Act.
93. The use of the Board's authority under sections 70.15 and 66.7(1) to
authorise the order to provide interrogatory responses from non-parties is also
inconsistent with the prior decisions of the Board, which have recognized that the
general process in section 66.7(1) powers cannot be exercised independently of
the Board's statutory authority. The extension of the interrogatories obligation to
the Opt-Out Institutions as non-parties is inconsistent with the Board's procedural
directive, which requires interrogatories to participants in a tariff certification
proceeding. This also signals that the decision and its outcome are unreasonable.
Alberta Information and Privacy Commission v. Alberta
Teachers' Association, supra, para 56, ABA, Tab 2
LEGAL_I :22681950.1
1492
36
94. The Board's failure to engage in any consideration of whether the order
was necessary or improper or whether it meets the requirement for non-party
discovery takes the decision beyond the range of acceptable outcomes defensible
in law, and deprives the Opt-Out Interrogatories Decision of any legal
justification. In addition, the disproportionate nature of the obligation imposed by
the Board, in the form of the expansive and burdensome nature of the
interrogatories, set against the great volume of information from Institutions,
including a number of Institutions that became Opt-Out Institutions, and the lack
of attachment to the proceedings of the Opt-Out Institutions creates a highly
disproportionate result that is of itself umeasonable.
Dunsmuir, supra, para 47, ABA, Tab 1
95. Finally, improper nature of the Board's statements at paragraphs (6) to (8)
of the Board's reasons, which result in substantive defects in the Board's execution
of its obligation to provide procedural fairness, render the statements
umeasonable.
Dunsmuir, supra, para 47, ABA, Tab 1
TRANSACTIONAL LICENCES DECISION
Inconsistent with Statutory Context and Purpose of Copying Licensing
Provisions
96. The Applicants submit that the Transactional Licences Decision is
inconsistent with the statutory context and purpose of the copyright licensing
provisions of the Act. A purposive interpretation of these provisions must take
into account the purposes of the Act as a whole. In Theberge v. Galerie d'Art du
Petit Champlain Inc. ("Theberge"), the Supreme Court of Canada described the
balance struck in the Act between the public interest in dissemination of works
and obtaining ajust reward for the creator, as follows:
Excessive contrdl by holders of copyrights and other forms of
intellectual property may unduly limit the ability of the public
domain to incorporate and embellish creative iunovation in the
long-term interests of society as a whole, or create practical
LEGAL_l:226S1950.1
1493
obstacles to proper utilization. This is reflected in the exceptions to
copyright infringement enumerated in ss. 29 to 32.2, which seek to
protect the public domain in traditional ways such as fair dealing
for the purpose of criticism or review and to add new protections to
reflect new technology, such as limited computer program
reproduction and "ephemeral recordings" in connection with live
performances.[30-32] (Emphasis added)
Theberge v. Galerie d'Art du Petit Champlain Inc., [2002) 2 SCR
336; 202 SCC 34, para 32, ABA, Tab 18
Euro-Excellence Inc. v. Kraft Canada Inc. [2007) 3 SCR 20,
2007 SCC 37, paras 3 and 9, ABA, Tab 19
CCH Canadian Ltd. V. Law Society of Upper Canada, [2004) 1
SCR 339, 2004 SCC 13, para 9, ABA, Tab 20
37
97. The description in Theberge of the need to balance the interests in
dissemination of a work with just reward to the creator and to avoid practical
obstacles to proper utilization created by excessive control of copyright holders
also informs the purposes of the licensing provisions of the Act. The purpose of
the licensing provisions, which set the mechanisms in the Act by which copyright
permissions to copy and use works are secured, must also incorporate and reflect
the public interest articulated in Theberge of avoiding practical obstacles to
proper utilization of works.
98. The array of options for securing copyright permissions in the Act is a
reflection of Parliament's intent to provide flexibility for and promote access to
copyright licensing alternatives. Users of works can secure permissions to copy
with authors, assignees of the authors, such as publishers, or with collective
societies with which an author or is assignee has authorized to act for it.
Collective societies' licences or authorization from copyright owners are non-
exclusive, so that the owners and their assignees retain the right to confer copying
permissions. Licences with collective societies, in turn, can be by agreement or by
operation of the licences created under a tariff certified by the Board. And, under
section 70.2 of the Act, a collective society or a user can apply to the Board to fix
royalties and related terms and conditions when they cannot agree on terms and
rates to permit the copying of a work in the repertoire of the collective society.
LEGAL_l:22681950.1
1494
38
99. It is submitted that the purpose ofthe copyright licensing regime in the Act
described above is to facilitate and provide access to copying permissions for
users of works, so as to secure proper reward for their creators. The purpose of
these provisions is not to block access, force particular or distorted licensing
arrangements on users or to require one form of licensing over another.
100. The. practical effect of the Transactional Licenses Decision is to deny
access to copyright permissions to Opt-Out Institutions and licensed Institutions
without the optional digital copying licence. Obtaining a blanket licence under the
Interim Tariff and exercising the digital licensing option would create a severe
distortion in the licensing result and is not a realistic alternative given the high
entry costs of a blanket licence, which is meant to cover all copying, when Opt-
Out Institutions or Institutions without the optional digital licence only seek
licences to copy a limited number of specific works.
101. The Board ignored the purposes and object of the licensing regime in the
Act by refusing to provide a transactional licence option in the Interim Tariff. The
evidence before the Board was that transactional licences were requested in the
absence of licensing alternatives available from authors, publishers or other
sources, or where publishers directed Institutions to obtain copying permissions
from Access Copyright. It is directly contrary to the purposes of facilitating
access to copying permissions in the Act for the Board to deny the provision of a
transactional licence option when no other licensing option was available and the
result would necessarily be that the Institution must forego copying the work.
Instead, the Board determined that it must preserve the blanket licence
requirement of the Interim Tariff, notwithstanding the practical blocking of
licensing access that this would present. It is submitted that the Board's
Transactional Licences Decision resulted in exactly the kind of practical
impediment to dissemination that the Supreme Couct indicated in Theberge
should be avoided.
LEGAL_! :22681950. I
1495
39
102. Further, the Board's refusal to provide a transactional licences option is
inconsistent with the purpose of section 70.2 of the Act. Section 70.2 mandates the
Board to facilitate licence agreements where agreements set between collective
societies and "any person" has not been reached.
103. The purpose of section 70.2 is to ensure that "any person" may have
access to the copying permission needed to copy a work in the repertoire of a
collective society, in the terms and conditions and rates sect by the Board. Section
70.2 contemplates that access to copying permissions from a collective society, is
available from the Board apart fTOm the licence conferred by a tariff.
Society for Reproduction Rights of Authors, Composers and
Publishers in Canada v. Musique Plus Inc. (2000) 10 CPR (4th)
242, ABA, Tab 21
104. The Board's determination in this case to force the "take it or leave it"
blanket licence requirement of Access Copyright in the Interim Tariff runs
directly counter to the purpose of section 70.2 of the Act. The Board's departure in
this manner from the common purpose of the licensing provisions of the Act
makes the Transactional Licences Decision inconsistent with the statutory context
giving rise to the decision, and places the decision outside the range of acceptable
alternatives, consistent with statutory context, available to the Board as a solution
to the matter before it.
Monitoring and Volume Determination of the Board were Misplaced
105. The Board determined that the low volume of requests for transactional
licences under the prior licences and the need for heavy monitoring that a
transactional licence would entail were reasons not to provide a transactional
licence option in the Interim Tariff.
106. It is submitted that the Board's concern with the monitoring that a digital
transactional licence would entail is misplaced when Access Copyright had
provided transactional licences for digital copying without such monitoring for
years under the prior licensing arrangements.
LEGAL_' :22681950.1
1496
40
107. Further, the low volume of transactional licence requests is not a
justifiable reason to block access to a transactional licensing mechanism when no
other licensing alternatives were available, and confirms that requests for
transactional licences would not be so voluminous as to impose licensing or
monitoring burdens on Access Copyright. It was entirely open to the Board to
impose terms and conditions on a transactional licences option, such as the same
reporting of transactional licenses for digital copying required under the prior
licensing arrangements, instead of fastening onto these concerns as a reason to
eliminate the transactional license option. If the Board had proceeded from a
proper, purposive interpretation of the licensing regime provisions of the Act, that
of facilitating access to licensing alternatives, the issues identified by the Board as
concerns about transactional licensing could easily have been addressed.
The Board Misapprehended the Purposes ofInterim Orders under Section
66.51 of the Act
108. The purpose of the Board's interim order is making authority under section
66.51 of the Act is to protect parties affected by the length and uncertainty of the
tariff proceeding before it. The Board misdirected itself by instead fastening onto
the perceived need to preserve the blanket licence structure under the prior
licensing agreements between Access Copyright and institutions, as outlined in
the Interim Tariff, as the sole licensing option, in order to reflect the status quo.
The Board should have directed itself to inquire whether a transactional licences
option in the Interim Tariff was necessary to protect those requesting it, the Opt-
Out Institutions and the institutions without a digital licence under the Interim
Tariff, from the uncertainties of the tariff proceeding or the Interim Tariff itself.
Bell Canada v. Canada (Canadian Radio-Television and
Telecommunications Commission), [1989] 1 SCR 1722, p. 29,
ABA, Tab 22
109. In this regard, Opt-Out Institutions face uncertainty without a licensing
alternative in the Interim Tariff for the copying of specific works in the Access
Copyright repertoire, and Institutions that do not have the optional digital licence
LEGAL_l :22681950.1
1497
41
face uncertainty as a result of the lack of a licensing alternative for digital copying
of specific works. In both cases, Institutions had validly elected not to use the
Interim Tariff blanket licence, as they are permitted to do under the Act and under
the terms of the Interim Tariff itself, which make the digital licence optional.
110. The Board's appreciation of the status quo as based solely on the prior
blanket licensing agreements flies in the face of and ignores the fundamentally
changed circumstances after the prior licences expired and, by the time the Board
issued the Transactional Licences Decision up to 37 Institutions had opted out of
the Interim Tariff. The Board's decision instead exacerbated the uncertainty of the
Proposed Tariff proceeding for Opt-Out Institutions and licensed Institutions
without the digital copying option. The Board's reliance on the prior licensing
agreements as the status quo is not justifiable or intelligible when such a
substantial portion of Access Copyright's prior licensees no longer had licences
from Access Copyright. The exclusive blanket licence structure of the prior
licences could not, in fact, represent the "status quo" when the licensing
arrangements between Access Copyright and Opt-Out Institutions had terminated
and the surrounding circumstances had changed in such a significant manner.
111. In relation to the licensed Institutions that did not take up the optional
digital copying licence, the status quo under the prior licensing arrangements was
in fact that digital copies were licensed by Access Copyright on a transactional
basis. It was not justifiable for the Board to fix the "status quo" under the blanket
licence structure of the prior licensing agreements, which applied to paper
copying only, and then refuse to recognize the transactional licensing structure for
digital copying in place under the prior licensing arrangements as the status quo.
Inconsistency with Earlier Decisions
112. The Board's refusal to provide a transactional licensing option in the
Interim Tariff is inconsistent with its decision in the Interim Tariff. In the Interim
Tariff Decision, the Board stressed the non-mandatory nature of the licence
provided under the Interim Tariff, and the role of the blanket licence in the
LEGAL_l :22681950.1
1498
42
Interim Tariff as one of a number of mechanisms by which institutions could
secure the copying permissions they need, including permissions to copy from
Access Copyright apart from the blanket licence in the Interim Tariff. In the
Interim Tariff Decision, the Board also specified that: ... "the users remain free to
secure, from Access or from others, transactional or other licences that will trump
the tariff. The fact that the interim tariff can be modified at any time ensures that
Access will display good faith in such negotiations".
113. In the Transactional Licences Decision, however, the Board decided that
Institutions without other licensing alternatives must take up the blanket licence in
the Interim Tariff, to the exclusion of other licensing options or forego copying
the work. This result forces, rather than makes non-mandatory, institutions to take
up the Interim Tariff blanket licence to make copies of certain works, and is a
direct contradiction of the Board's earlier determination that the Interim Tariff
blanket licence would not be a barrier or impair access to other licensing
mechanisms, including from Access Copyright itself. As a result the Transactional
Licences Decision unreasonably alters the ability of Institutions to obtain copying
permissions outside of the blanket licence in the Interim Tariff, in a marmer that is
inconsistent with the statutory context and intent of the licensing regime in the Act
and the Board's own reasons in the Interim Tariff decision.
Transactional Licences Decision is Unreasonable
114. It is submitted that the Transactional Licenses Decision does not meet a
standard of reasonableness. The decision is based on a misinterpretation of the
purpose and object of the copyright licensing regime and of the Board's interim
order authority under the Act. If the Board's decision carmot be reconciled with a
purposive interpretation of the statutory context in which the decision was made,
or of the statutory authority under which the decision was considered, it cmIDot be
considered reasonable.
Canada (Canadian Human Rights Commission) v. Canada
(Attorney General), 2011 SCC 53, paras 29 and 33-34, ABA,
Tab 23
1499
43
115. Further, the Board's Transactional Licences Decision is inconsistent with
its prior decision to issue the Interim Tariff itself on the same subject matter. In
addition, the Board's decision leaves a gap in the licensing structure and forces a
distorted licensing result, rather than applying available solutions to the matter
before it. These factors are strong indications of, and lead to a conclusion that, the
Transactional Licences Decision is umeasonable.
CONCLUSION
116. Underlying both the Opt-Out Interrogatories and Transactional Licences
Decision is a heavy inference that the Board does not recognize the legitimacy of
the decision of Opt-Out Institutions not to obtain a licence under the Interim
Tariff. In the Opt-Out Interrogatories Decision, the Board treats the Opt-Out
Institutions as no different from Institutions that have licences under the Interim
Tariff, and threatens compliance action against Opt-Out Institutions that do not
agree to provide full responses, so as to force Opt-Out Institutions into the
Proposed Tariff proceeding. In the Transactional Licences Decision, the Board's
main preoccupation was to preserve the ability of Access Copyright to enforce its
blanket licence requirement for post-secondary educational institutions through
the Interim Tariff, without any acknowledgement of the legitimate needs of Opt-
Out Institutions or licensed institutions that did not wish to obtain the optional
digital licence for occasional transaction licences. The inference behind the
Board's decisions is entirely unreasonable given the non-mandatory nature of
adherence to a licence under a Board-issued tariff in the Act and the purpose of
the copyright licensing regime in the Act of facilitating access to copyright
licensing and avoiding practical obstacles to the dissemination of works.
117. For the reasons above, the Applicants submit that the application for
judicial review of the Opt-Out Interrogatories and Transactional Licences
Decision of the Board should be granted.
IV ORDERS SOUGHT
118. The Applicants respectfully seek:
LEGAL_l :22681950.1
1500
44
(i) An order setting aside the August 18, 2011 decision of the Board
(Opt-Out Interrogatories Decision) as it relates to institutions that
did not have licences under the Post-Secondary Educational
Institutions Tariff (2011-2013) as of January 1, 2011 (January 1,
2011 Opt-Out Institutions);
(ii) An order quashing paragraphs (6) to (8) of the August 18, 2011
decision of the Board with a direction that the Board shall have no
further regard to the statements therein in the course of its
consideration of the Proposed Tariff; and
(iii) An order setting aside the September 23, 2011 decision of the
Board (Transactional Licences Decision) and remitting the matter
back to the Board with a direction to amend the Interim Tariff to
provide a transactional licence option permitting the copying of
specific works or extracts of works in the repertoire of Access
Copyright under such terms and conditions and at reasonable
royalty rates to be fixed by the Board in a manner consistent with
this Court's reasons.
LEGAL_I :22681950.1
1501
ALL OF WHICH IS RESPECTFULLY SUBMITTED.
D"'" '" Oturnm, Ontrio, (hi, 30" day OfJM""'Y'12:.. _
& LLP
1900 - 340 Albert Street
TO:
AND TO:
AND TO:
LEGAL_l :22681950, 1
The Administrator
Federal Court of Appeal
Ottawa, Ontario
Ottawa, Ontario KIR 7Y6
Tel: (613) 235-7234
Fax: (613) 235-2867
Glen A. Bloom
Patricia Wilson
Solicitors for the Applicants,
Association of Universities and
Colleges of Canada and The
University of Manitoba
Blake, Cassels & Graydon LLP
45 O'Connor Street, Suite 2000
World Exchange Plaza
Ottawa, ON KIP lA4
Randall Hofley
Nancy Brooks
Tel: 613-788-2200
Fax: 613-788-2247
Solicitors for the Respondent, Access Copyright
Copyright Board of Canada
56 Sparks Street, Suite 800
Ottawa, ON KIA OC9
1502
45
v
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
AUTHORITIES REFERRED TO
Dunsmuir v. New Brunswick, [2008] 1 SCR 190, 2008 SCC 9
Alberta (Information and Privacy Commissioner) v. Alberta
Teachers' Associations, 2011 SCC 61
46
The Canadian Copyright Licensing Agency operating as Access
Copyright v. The Province of Alberta as represented by the Minister of
Education et al., 2006 FCA 108
Canada v. Schnurer Estate (CA) [1997] 2 F.C. 545
Canada (Minister of Public Safety and Emergency
Preparedness) v. Kahlon, [2006] 3 FCR 493
Ocean Services Limited v. Marcel Guenette, 2010 FC 185,
Canada (Attorney General) v. Vincent Estate, 2004 FC 1016,
257 FTR 107
Society of Composers, Authors and Music Publishers of
Canada v. Canada (Copyright Board), 47, CPR (3d) 297
Board Decision dated September 13,2011, (Reconsideration of
August 18,2011 Decision)
Copyright Board of Canada, Model Directive in Procedure,
dated March 16,2011
Private Copying Tariff, Enforcement, Re (2004), 32 CPR (4th)
271 (Copyright Board)
Public Performance of Musical Works 2003-2007, November
30,2006
BMG Canada v. Roe, 4 FCR 81, 2005 FCA 193
GEA Group AG v. Flex-N-Gate Corporation, 2009 ONCA 619,
paras 50-53, citing with approval Alberta
Tetesky v. General Motors Corp, 2010 ONSC 1675
LEGAL_I:2268\950.1
1503
16.
17.
18.
19.
20.
21.
22.
23.
Rule 29.2.03, Sedona Canada Principles, Principle 2, Ontario
Rules of Civil Procedure
Cardinal v. Director of Kent Institution, [1985] 2 SCR 643
Theberge v. Galerie d'Art du Petit Champlain Inc. [2002] 2
SCR 336; 202 SCC 34
Euro-Excellence Inc. v. Kraft Canada Inc. [2007] 3 SCR 20,
2007 SCC 37
CCH Canadian Ltd v: Law Society of Upper Canada, [2004] 1
SCR 339, 2004 SCC 13
Society for Reproduction Rights of Authors, Composers and
Publishers in Canada v. Musique Plus Inc. (2000) 10 CPR (4th)
242
Bell Canada v. Canada (Canadian Radio-Television and
Telecommunications Commission), [1989]1 SCR 1722
Canada (Canadian Human Rights Commission) v. Canada
(Attorney General), 2011 SCC 53
LEGAL_I :22681950.1
1504
47

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