COPYRIGHT BOARD OF CANADA
Access Copyright Elementary and Secondary School Tariff (2010-2012 and 2013-2015)
STATEMENT OF CASE of the OBJECTORS
J. Aidan O’Neill Ariel Thomas Fasken Martineau DuMoulin LLP 55 Metcalfe St., Suite 1300 Ottawa, ON K1P 6L5 Tel: 613-236-3882 Fax: 613-230-6423 firstname.lastname@example.org email@example.com and Wanda Noel Jordan Snel 5496 Whitewood Ave. Ottawa, ON K4M 1C7 Tel: 613-692-9232 Fax: 613-692-1735 firstname.lastname@example.org email@example.com
Counsel to the Objectors March 19, 2014
STATEMENT OF CASE of the OBJECTORS Introduction ─ Access Copyright’s Proposed Tariffs 1. This Statement of Case provides a summary of the Objectors’ arguments and evidence in opposition to the two statements of proposed royalties submitted by Access Copyright designated as the Access Copyright Elementary and Secondary School Tariff, 2010-2012 and 2013-2015 (the “Proposed Tariffs”). This Statement of Case also provides a list of the Objectors’ witnesses, together with an estimate of the time required to present their evidence in chief at the April 29, 2014 hearing before the Copyright Board. The Objectors in this proceeding strongly oppose several aspects of the methodology used by Access Copyright to derive its proposed FTE rates of $13.69 and $9.50. At the upcoming hearing, the Objectors will present evidence that several significant corrections must be made to both the volume and the value evidence of Access Copyright. These corrections result in a substantial reduction to its proposed FTE rates for the two tariff periods under review. The Objectors’ survey experts' analysis produces lower FTE rates for the following reasons. First, the Objectors’ volume analysis is methodologically superior to Access Copyright’s in several respects. Second, the Objectors’ compensability analysis applies the new users' rights enacted by Parliament in the 2012 Copyright Modernization Act, while Access Copyright’s does not. Third, the Objectors’ volume analysis applies the Supreme Court of Canada's interpretation of fair dealing in the K to 12 education context in Alberta v. Access Copyright  2 SCR 345 ("Alberta"), while Access Copyright’s does not. Finally, the Objectors estimate page values for books, periodicals, newspapers, sheet music, and consumables differently from Access Copyright and in accordance with the Copyright Board’s previous K to 12 tariff decision of June 26, 2009. When these corrections are made to Access Copyright's evidence, the Objectors submit that appropriate FTE rates for the uses being considered by the Board in this proceeding should be $0.49 for the 2010-2012 tariff period and $0.46 for the 2013-2015 tariff period. The most significant difference in the Objectors’ analysis leading to these significantly lower proposed FTE rates is the application of the users’ right of fair dealing. These proposed FTE rates will be supp orted by the Objectors’ evidence at the upcoming hearing.
-2Canada’s Copyright Law Has Changed 5. In responding to the evidence and arguments set out in Access Copyright’s Statement of Case, the Objectors believe that it is very important for the Board to note that Canadian copyright law has changed in a very fundamental way since the Board certified the Access Copyright Elementary and Secondary School Tariff 2005-2009. An important aspect of the Board’s previous K to 12 tariff decision relating to “short excerpts” made its way to the Supreme Court of Canada in the Alberta case. The Supreme Court held that it is fair for teachers to copy short excerpts from copyright-protected works for students in their classes. On June 29, 2012, royal assent was given to the Copyright Modernization Act. These amendments to the Copyright Act came into force on November 7, 2012 and significantly expanded users' rights in an education context. New educational users' rights were enacted and "education" was added as an enumerated fair dealing purpose in section 29. Taken together, these changes profoundly altered the legal basis upon which the Board’s decision with respect to the 2005-2009 tariff period was reached. As a matter of law, much of the copying of works in Access Copyright's repertoire that required payment when the previous K to 12 tariff was certified no longer triggers copyright royalty payments. The Objectors submit that Access Copyright's theory of this proceeding, as described in its Statement of Case, is almost entirely predicated on an interpretation of Canadian copyright law that ignores the changes that occurred in 2012. Access Copyright appears to be frozen in time in terms of its legal analysis. It fails to recognize or acknowledge the implications upon it of the Supreme Court’s Alberta decision or the effect of the Copyright Modernization Act. The Objectors, however, believe that their case is clearly based on current law as it applies to copying behaviour in K to 12 schools. Moreover, the Objectors strongly disagree with the position of Access Copyright expressed at paragraph 10 of its Statement of Case that “[t]he Objectors have the legal burden of establishing that every act of copying in K to 12 schools… was for an allowable purpose and was fair.” This is a clear misstatement of the law for two reasons. First, this is not a copyright infringement lawsuit. This is a tariff proceeding, and the final certified tariff rate must reflect the fact that there is a great deal of fair dealing activity in K to 12 schools. The tariff rate certified by the Board would therefore appropriately need to account for fair dealing whether or not there were any objections to the proposed tariff. Second, Access Copyright’s theory of the Objectors’ supposed burden of proof in this proceeding clearly contradicts the Supreme Court of Canada’s findings in CCH Canadian Ltd. v. Law Society of Upper Canada  1 S.C.R. 339 (“CCH”), Alberta, as well as in the Board’s own previous tariff decisions. Fair
-3dealing is not a users’ right that must be analyzed on an individual, transact ional basis. Rather, fair dealing can also be assessed as a practice or system of dealing. 12. Finally, although a great deal of copying in K to 12 schools is permitted under users' rights in the Copyright Act, some copying may require authorization direct from individual copyright owners and the payment of copyright royalties. As such, special authorization may be required in those limited cases in which a teacher intends to copy more than a short excerpt. The Objectors consequently request that the Copyright Board certify a transactional tariff to cover any copying in K to 12 schools of published works in Access Copyright's repertoire that is not permitted by users' rights in the Copyright Act.
Access Copyright and Declining Book Sales 13. In its Statement of Case, Access Copyright asserts that the sales of its publisher affiliates are declining for a number of reasons. Only one of these reasons, however, could possibly be relevant to the Board's statutory mandate of establishing a fair and equitable tariff. Access Copyright asserts that teachers are using photocopies as a substitute for, not a supplement to, purchased textbooks. While the Objectors recognize that textbook sales have significantly declined since 2008, their evidence will show that this decline is not at all likely the result of classroom copying but, instead, is attributable to other unrelated factors. The Board’s mandate under the Copyright Act is to set fair and equitable tariffs to compensate Access Copyright’s members for the use of their works. The Board’s role is not to establish tariffs with the purpose of subsidizing the entire Canadian K to 12 educational publishing industry, with funds drawn from the Objectors in order to compensate authors and book publishers for declining textbook sales. Nonetheless, such an outcome appears to be the underlying thesis to the arguments set out in Access Copyright’s Statement of Case. Any losses the K to 12 publishing industry in Canada may be suffering for reasons that cannot be directly attributed to classroom copying by teachers are entirely irrelevant to this proceeding. The Board’s mandate does not include setting FTE rates that are designed to protect Access Copyright's affiliates from these financial losses, or even to preserve a profitable K to 12 textbook publishing industry. Simply stated, Canadian K to 12 schools cannot be the financial guarantors of the Canadian K to 12 educational publishing industry. The Objectors will demonstrate at the hearing that the financial troubles of the Canadian educational publishing industry cannot be attributed to the copying of textbooks by teachers. Instead, sales of K to 12 textbooks have been in decline generally over the past 25 years, and particularly since 2008, due to reasons that are completely unrelated to teacher copying. During the course of the Board’s previous K to 12 hearing in 2007, the Objectors presented evidence of the following reasons for declining sales:
-4 17. an increase in semestered schools where one set of books serves two classes of students; the use of class sets of books; declining enrollment; sturdier textbooks that last longer; and increased use of digital resources instead of textbooks.
In Alberta, the Supreme Court of Canada agreed that the decline in textbook sales was likely attributable to such factors. Nonetheless, in this proceeding, Access Copyright continues its attempt to link declining textbook sales to copying activities in K to 12 schools for which it claims it should be compensated by the Objectors. The Objectors will show at the hearing, however, that there is very little relationship, if any at all, between declining K to 12 textbook sales and classroom copying by teachers. Since 2009, additional factors have arisen that contribute to declining textbook sales, none of which are related to copying by teachers. These include: an increased use of open educational resources (“OERs”); material on the Internet that is available for educational use without permission or payment of royalties; teachers sharing their lessons with each other; teachers creating their own resources; and portals and repositories of educational materials made available to teachers by ministries of education and school boards.
The 2012 changes to Canada’s copyright law have drastically reduced Access Copyright’s legal entitlement to collect copyright royalties from educational users. The cumulative effect of these changes is that the Board should certify lower tariff rates than it did in its 2009 K to 12 decision. This is the case even taking into consideration that the Proposed Tariffs authorize the copying of published works in two additional genres—consumables and sheet music.
Access Copyright’s Repertoire 20. When seeking certification of a tariff proposal, a collective must prove that it has the legal right to collect the royalties that it seeks. Only collectives are in a position to prove that the copyright-protected works for which they seek royalty payments fall within their respective repertoires. As such, Access Copyright must prove to the Board in this proceeding that the works for which it claims compensation are in its repertoire. Access Copyright has not filed adequate evidence to demonstrate this. Access Copyright may only collect royalties for the copying of works that are in its repertoire as a result of valid affiliation agreements. Access Copyright may
-5not, however, claim that a work is part of its repertoire simply because an unaffiliated rights holder has cashed a cheque from it for the copying of that work. As the Board found in its previous K to 12 decision, where an unaffiliated rights holder accepts a royalty payment from Access Copyright, that rights holder has created an agency relationship only for the particular copying event for which payment was made. For example, a rights holder’s cashing of a royalty cheque in 2006 does not place his or her work in Access Copyright’s repertoire in 2014. Instead, for the work to be in Access Copyright’s permanent repertoire, there must be an affiliation agreement between the rights holder and Access Copyright. 22. Access Copyright may not claim royalties for the copying of sheet music unless it demonstrates that it has been authorized to do so by the rights holder. In its Statement of Case at paragraphs 16 and 17, and in the witness statements of Roanie Levy and Caroline Rioux identified as Exhibits AC-2 and 9 respectively, Access Copyright asserts that CMRRA has granted it an exclusive mandate to collect all royalties for the reproduction of stand-alone print musical works. As part of this authorization chain, CMRRA claims that it has an agreement (Schedule G) with music publishers. Access Copyright's evidence, however, indicates that the signing of these Schedule G agreements only began in October, 2012, and that only 16 of them have been executed. Further, Access Copyright has not shown that CMRRA has the right to license the copying of sheet music, or the right to sub-contract licensing rights to Access Copyright. The Objectors will argue that Access Copyright cannot collect any royalties for the copying of sheet music relating to these specific agreements to the extent that they were executed before October, 2012. Finally, the Objectors will show the Board that the sheet music repertoire claimed by Access Copyright is so small that, as a practical matter, it is valueless to K to 12 teachers—and consequently to the Objectors. At this point in time, the Proposed Tariffs would only authorize to copy the musical works that are represented in the 36 transactions for which Access Copyright claims payment. A blanket licence covering such a small number of works is not a comprehensive tariff, and would pose significant administrative problems to the Objectors. Without information on which musical works are covered by the Proposed Tariffs, or the inclusion of an indemnity provision by Access Copyright, K to 12 teachers would be unable to rely on the tariff to ensure that their copying of sheet music would be permitted.
Measuring the Estimated Volume of Compensable Copying 25. The Objectors agree with Access Copyright that the volume data generated by the 2005-2006 study that was considered by the Board in its 2009 K to 12 tariff decision should be used again to calculate the volume of compensable copying in this proceeding. The Objectors also agree with some, but not all, of the analysis of the 2005-2006 study data conducted by Mr. Benoît Gauthier of Circum Network Inc. in his report identified as Exhibit AC-11.
-626. Unlike the calculations made by Mr. Gauthier, the Objectors’ survey experts, Drs. Piotr Wilk and Paul Whitehead, exclude works that are not in the Access Copyright repertoire according to the best available data, adjust the volume for an estimated number of discarded copies, and adjust the multiplier used to extrapolate the survey data to an annual volume. The Objectors’ survey experts, in accordance with the instructions of legal counsel, also exclude copies made under the fair dealing provision and other users' rights in the Copyright Act. These different methodological approaches and legal instructions result in notably different estimates of the volume of compensable copying as between Access Copyright and the Objectors. The results obtained by the Objectors’ survey experts, and the report that they have prepared, are set out in Exhibit Objectors-10. It should be noted at this point that Access Copyright's two expert witnesses take somewhat inconsistent approaches to the use of the bibliographic data used to measure copying volume for the 2010-2012 and 2013-2015 tariff periods. Mr. Gauthier suggests at paragraph 27 in Exhibit AC-11 that, in 2012, there was a 17% increase in copying volume relative to the 2005-2006 period. This being said, at paragraph 26, he lists a number of methodological “weaknesses” that would affect the reliability of any reliance on these bibliographic surveys. However, at paragraphs 113 and 173 of the PricewaterhouseCoopers (“PwC”) report identified as Exhibit AC-13, Mr. Michael Dobner relies on Mr. Gauthier’s evidence to claim that, not only has the volume of copying increased by 17% in the period of 2006 to 2012, but that, year-to-year from 2011 to 2012, there was a 27% increase. The Objectors agree with Mr. Gauthier that the bibliographic data described in Exhibit AC-11 cannot be reliably used to measure copying volume in either of the two tariff periods under review. These data are simply unreliable as evidenced by the 2% reduction in volume in 2010 compared to 2005-2006, the 8% reduction in 2011 compared to 2005-2006, and the 17% increase in 2012 compared to 2005-2006. (See Exhibit AC-11 at paragraph 27.) In this regard, Mr. Dobner’s reliance on these figures in an attempt to show an increase in copying activity in K to 12 schools, and the way in which these data are presented in his report, are inconsistent with Mr. Gauthier's own evidence. In other words, Mr. Dobner is cherry-picking short-term fluctuations from a methodologically unreliable and unrepresentative source and claiming that they show long-term trends.
Burden of Proof and Compensability 31. The mandate of the Copyright Board is to set fair and equitable tariff rates for the reproduction of works in Access Copyright's repertoire. This proceeding is not a copyright infringement action in which the Objectors, like defendants in a copyright infringement case, must prove that their copying is not infringing.
-732. The Board established in its K to 12 decision of June 26, 2009 how an appropriate FTE rate for Access Copyright should be derived. This includes the application of the “volume times value” methodology that begins with an assessment of the estimated volume of compensable copying. The per-page value of each genre of published work copied is then determined. Then the volume for each genre is multiplied by the estimated per-page value for that genre. Finally, the total of these different sums is divided by the number of FTEs to arrive at an overall FTE rate. The Objectors' evidence, to be presented by their survey experts, assesses each transaction in the 2005-2006 survey data to determine whether the material copied should be assumed, for the purposes of this hearing, to be in Access Copyright's repertoire. If it is assumed to be in Access Copyright’s repertoire, the transaction is further analyzed to determine whether the copying in that transaction is compensable by applying criteria provided by legal counsel. Transactions may be non-compensable for a variety of reasons: the work in question is not in Access Copyright’s repertoire, the reproduction is fair dealing, other users' rights in the Copyright Act apply, or because a substantial part of a work was not copied.
Fair Dealing and the Contemporary K to 12 Classroom 34. Notwithstanding the Objectors’ agreement with Access Copyright that the volume data generated by the previous 2005-2006 study should be used again by the Board in this proceeding, reliance on these data is, of course, not ideal. This is because the copying behavior in K to 12 classrooms is unlikely to be the same in 2014 as it was in 2006. Through their various curriculum witnesses, the Objectors will therefore provide the Board with a picture of typical Canadian classrooms as they exist in 2014. Interrogatory responses show, and the Objectors’ various witnesses will testify, that elementary and secondary school students in 2014 are typically provided with core textbooks. Those core textbooks are supplemented by the copying of “short excerpts,” sometimes from textbooks, but also from other sources. OERs, websites, social media, blogs, creative commons, the publicly available Internet, resources shared among teachers, teacher-created resources, portals and repositories provided by ministries of education and school boards supplement the core textbooks that are provided to students. These K to 12 classroom practices are consistent with the Board's own description of teacher copying practices in its 2009 decision. The Board noted at paragraph 73 of its decision that "[p]hotocopies are, for the most part, limited to short excerpts from a great variety of books, complementing the use of textbooks." In 2014, however, the source material for the short excerpts that teachers copy to supplement core textbooks includes multiple other sources in addition to textbooks.
-837. K to 12 classrooms are no longer simply desks in a row, with students working through a textbook from the first to the last page. Pedagogical practices adapt to individual students, rather than take a Procrustean “one size fits all” approach. Witnesses for the Objectors will describe differentiated learning, which is how teachers make learning relevant to a student's local environment by supplementing core textbooks with current information that is both interactive and directly relevant to their students' specific learning needs. Interrogatory responses to Access Copyright’s Question 90, found at Exhibit Objectors-11, show that teachers rely on textbooks as core resources. 94 out of 108 respondent schools indicated that core textbooks are generally used, or that they are used in some cases or for certain courses (particularly for mathematics). This makes sense because a textbook may not be appropriate for every course, such as gym or English literature. Only 11 respondent schools indicated that core textbooks were not generally used. (3 responses could not be readily categorized.) Responses to Access Copyright’s different Interrogatories further show that: (a) (b) Q91: Where a textbook was issued, students were typically each issued their own copy for the duration of the course (Exhibit Objectors-12); Q93: Most schools do not copy pages from textbooks for students when there are insufficient copies; the few schools that do make such copies have indicated that they do so rarely (Exhibit Objectors-13); Q95: 59 respondent schools answered outright that they do not make multiple copies at all from the core or main textbook. Several responses specified that this is because there are enough textbooks for each student. Of the remaining schools, almost all indicated that copying from a core or main textbook was a rare event (Exhibit Objectors-14); and Q97: Only 15 respondent schools indicated that entire chapters of a core or main textbook may have been copied. Most schools that did indicate copying entire chapters may have taken place specified that it was rare (Exhibit Objectors-16)—even though the copying of entire chapters was permitted under the Access Copyright 2005-2009 tariff that those schools had been directed to adhere to until 2012, and under the CMEC Fair Dealing Guidelines (the “Fair Dealing Guidelines”) after that.
The interrogatory responses above also each show that copying and textbook practices have not changed at K to 12 schools in 2013 as a result of the implementation of the Fair Dealing Guidelines. 40. The Objectors agree with Access Copyright’s witness, Nancy Gerrish of McGillHill Ryerson Limited, when she states in paragraph 15 of her witness statement identified as Exhibit AC-5 that, in Ontario, core resources (textbooks) must cover at least 85% of the curriculum. What is not in the core textbooks, however,
-9comes from supplemental resources, which are usually provided by teachers from a wide variety of sources. Teachers often supplement textbooks with current and local material they either create or find for themselves to keep learning current, interesting and relevant for their students. The Objectors’ witnesses will explain that core textbooks, by themselves, are not sufficient in a modern classroom setting. They have limitations: they are static, they become out of date very quickly, and one textbook does not meet the learning needs of every student in every class every day. 41. Having at least 85% of the curriculum covered in a core textbook and the remaining 15% coming from a variety of teacher-provided resources accurately reflects how fair dealing was interpreted by the Supreme Court of Canada in Alberta. Teachers do not copy core textbooks, but copy short excerpts from other sources in order to supplement these core textbooks. This copying of short excerpts is permitted by fair dealing. One reason for this is that it would be unreasonable to require schools to buy additional books for every student when only a short excerpt is required. Establishing whether a dealing is fair is a two-step process. First, the dealing must be for an allowable purpose enumerated in the Copyright Act. In Alberta, the Supreme Court established that copying, by a teacher, of short excerpts for students in his or her class, met the first test because such a dealing was for the purposes of private study. The teacher's purpose was tautological with the student's purpose. This finding was also legislatively recognized when, in 2012, as a result of revisions to the Copyright Act, "education" was added as an enumerated fair dealing purpose under section 29. The second step in a fair dealing analysis is to assess whether the dealing is fair. The Supreme Court’s 2004 decision in CCH established a non-exhaustive list of factors for this analysis. The Objectors’ survey experts have conducted an analysis of the 7,579 transactions in the 2005-2006 survey data that involve works assumed to be in Access Copyright’s repertoire in order to assess whether each transaction is fair. If the transaction is fair, it is classified by the Objectors as non-compensable. The criteria applied by the Objectors’ su rvey experts to assess whether a particular transaction is fair were provided by legal counsel.
The Effect of the Dealing Factor 44. One factor used to assess whether a dealing is fair is the "effect of the dealing" on the market for the work. In its evidence, particularly Mr. Dobner’s report identified as Exhibit AC-13, Access Copyright has interpreted how to apply the "effect of the dealing" factor incorrectly. Access Copyright interprets the "effect of the dealing" factor as the effect of the dealing on the entire Canadian K to 12 educational publishing industry. The fact that the K to 12 educational publishing industry in Canada has fallen on hard economic times, due to a variety of reasons that have nothing to do with copying of textbooks by teachers, is not relevant to assessing the effect of copying by teachers on the sale of textbooks.
- 10 45. The Supreme Court of Canada in its Alberta decision at paragraph 34 was very clear about how to assess the fairness of a dealing under the “effect of the dealing” factor: the market for the work itself must decrease as a result of copies made by teachers. Moreover, at paragraph 26 of its decision, the Supreme Court noted that "it is difficult to see how the teachers’ copying competes with the market for textbooks, given the Board’s finding that the teachers’ copying was limited to short excerpts of complementary texts." The analysis conducted by the Objectors’ survey experts confirms the Board's finding in its 2009 K to 12 decision that teachers’ copying is limited to short excerpts. Of the transactions conducted for a fair dealing purpose, 93% were of less than 10% of the work, and 85% of the transactions were of less than 5% of the work. The evidence also shows that teachers do not need to copy core textbooks because each student is provided with his or her own copy.
Users' Rights in the Copyright Act 47. Copying by teachers of published works for students is permitted by a variety of users' rights in the Copyright Act in addition to fair dealing including, but not limited to: 48. educational use of the Internet; display right; user-generated content; the right to make backup copies; and copying for tests and examinations.
The Objectors’ survey experts conducted an analysis of the 7,579 transactions in the 2005-2006 survey data that involve works assumed to be in Access Copyright’s repertoire in order to assess whether each transaction is non compensable based on a users' right in the Copyright Act. If the transaction was authorized by a users' right, it was classified as non-compensable. Unfortunately, since the survey was conducted before some users’ rights were enacted, the survey data are not always sufficient to determine whether a user's right applies. The criteria applied by the Objectors’ survey experts to assess whether a transaction is authorized by a users' right were provided to them by legal counsel.
The Objectors’ Economic Analysis 49. The Objectors have engaged Dustin Chodorowicz from the Nordicity Group Ltd. to respond to Exhibits AC-12 and 13, the two reports prepared by Mr. Dobner of PwC. Mr. Chodorowicz has filed two reports that are designated Exhibits Objectors-8 and 9. The first of these two reports responds to Access Copyright’s valuation evidence and the second to Access Copyright’s “effect of the dealing” evidence.
- 11 50. In his report responding to Access Copyright’s valuation evidence, Exhibit Objectors-8, Mr. Chodorowicz explains why the multi-step methodology utilized by the Board in its 2009 K to 12 tariff decision was, in fact, correct in terms of the sequence of the steps, the calculation of creative contribution, and the application of the selection premium. In particular, he explains why the Board was correct with respect to its approach for the portion of the average selling price that should be assigned to creative contribution and, subsequently, the page values for books, periodicals, and newspapers, as well as the new genres, consumables and sheet music. Exhibit AC-13 provides Access Copyright’s “effect of the dealing” evidence as it purports, among other considerations, to assess the market impact of the Objectors’ interpretation of fair dealing. This evidence consists largely of Mr. Dobner’s various speculations as to the likely financial impact of the implementation of the Fair Dealing Guidelines on the Canadian K to 12 educational publishing industry. Mr. Chodorowicz responds to this evidence in his report identified as Exhibit Objectors-9. To the extent that any of Mr. Dobner's speculations are relevant to the Board’s consideration of the Proposed Tariffs—and the Objectors will argue that they are not—applicable economic theory views copyright as inherently striking a balance between copyright owners and users. From an economics perspective, the optimal outcome is one that benefits social welfare as a whole. As a result, by relevant economic benchmarks, copying by K to 12 teachers will not necessarily reduce social welfare unless there is a clear substitution of copies for the purchase of original works. Mr. Chodorowicz will also testify that the Fair Dealing Guidelines that are currently being applied in K to 12 schools (outside of Quebec) have not, and will not, lead to lower sales of published K to 12 textbooks. While Exhibit AC-13 points to evidence of falling K to 12 textbook sales, this phenomenon has not been caused by any increase in copying resulting from the implementation of the Fair Dealing Guidelines, which only went into effect on January 1, 2013. Any historic decline in textbook sales, which according to Access Copyright’s own evidence represents a longer-term, year-over-year trend, is consequently due to factors completely unrelated to the Fair Dealing Guidelines. Moreover, Access Copyright has led no clear evidence that the Fair Dealing Guidelines, or copying by teachers in any capacity, are responsible for the decline in textbook sales over the past few years. Instead, there is a wealth of simpler, more reasonable explanations for this long-term decline in K to 12 textbook sales. Mr. Chodorowicz will further point out how photocopying is not “free” as Mr. Dobner contends in his report, and that, in any case, the textbook procurement process operates completely independently of the decisions of individual teachers to photocopy published works. That is, the decision as to whether or not to purchase a textbook is completely distinct from the decision to photocopy, as these decisions are made by different people at different times. Finally, there
- 12 is no persuasive reason to believe that photocopies are “substitutes”, economically speaking, for the purchase of textbooks. The Objectors’ Evidence in Chief 55. The following witnesses are expected to testify as part of the Objectors’ case in chief. The Objectors expect that these witnesses will appear in the order set out below. In addition to these witnesses, the Objectors would also like to reserve the right to call any other witnesses or evidence that may be needed to answer any evidence presented by Access Copyright at the hearing that has not been clearly disclosed in its Statement of Case.
Introducing the Objectors Shannon Delbridge – Executive Director, Corporate Policy, Department of Education and Early Childhood Development, Government of Nova Scotia
The Objectors will provide the Board with a broad overview of the composition of their membership and their organizational structure, and set the context for the introduction of their evidence. The Objectors will do this by calling Ms. Shannon Delbridge as a witness. Ms. Delbridge is the Executive Director of Corporate Policy of the Nova Scotia Department of Education and Early Childhood Development, and is the Chairperson of the Steering Committee of the Council of Ministers of Education, Canada (“CMEC”) that oversees the Objectors’ Copyright Consortium (the “CMEC Consortium”). In her testimony, Ms. Delbridge will describe the activities of the CMEC Consortium and its involvement, since 1999, in a wide variety of copyright initiatives of national significance relating to K to 12 education on behalf of the various provincial and territorial ministers of education (with the exception of Quebec) to whom it reports through the Steering Committee. These initiatives have included participating in the legislative process of amending the Copyright Act─which resulted in the enactment of the Copyright Modernization Act in 2012─and representing the interests of K to 12 educators before the Copyright Board. Ms. Delbridge’s testimony will also describe the CMEC Consortium’s mandate to educate teachers, school staff and school board administrators about their copyright rights and obligations. She will therefore explain to the Board how the CMEC Consortium decided to launch a comprehensive education initiative, that began in 2012, to inform its K to 12 stakeholders about the two recent major developments in Canada’s copyright law—the enactment by Parliament of the Copyright Modernization Act and the Supreme Court of Canada’s decision in Alberta. The cornerstone of this initiative was the publication and distribution to more than 300,000 K to 12 teachers across Canada of the third edition of Copyright Matters!, which explains these developments in Canada’s copyright
- 13 law. A witness statement relating to Ms. Delbridge’s evidence is set out in Exhibit Objectors-2. Estimated Time in Chief — 30 minutes Implementation of the Fair Dealing Guidelines 59. Chris George – President, CG&A Communications
The Objectors will provide the Board with an overview of the efforts they have made, through a variety of venues, to communicate to ministries of education, teachers, schools, and school boards the changes that occurred in 2012 to Canada’s copyright law. They will do this by calling Mr. Chris George, President of CG&A Communications, as a witness. Mr. George is an Ottawa-based government relations specialist who, since 2001, has provided strategic communications advice to CMEC. In this capacity, Mr. George was instrumental in devising an extensive and farreaching communications strategy to inform ministries of education, teachers, schools and school boards about the scope of fair dealing following the Supreme Court of Canada’s decision in Alberta and the new educational users’ rights enacted in 2012 pursuant to the Copyright Modernization Act. Mr. George will describe the communications strategy that was used, and continues to be used, to advise ministries of education, teachers, schools and school boards about the scope, as well as the limits, placed on classroom copying. This included the production and distribution of the third edition of Copyright Matters!, that included the Fair Dealing Guidelines, as well as the production and distribution of a variety of copyright informational materials. A witness statement relating to Mr. George’s evidence is set out in Exhibit Objectors-3. Estimated Time in Chief — 1 hour
Teacher Adherence to the Fair Dealing Guidelines 62. Jim Giles – Executive Assistant, Professional Services, Elementary Teachers’ Federation of Ontario
The Objectors will next call evidence to demonstrate the degree to which the implementation of the Fair Dealing Guidelines has been supported by Canadian K to 12 teacher unions. This will be done through the testimony of Mr. Jim Giles, Executive Assistant, Professional Services, from the Elementary Teachers’ Federation of Ontario (“ETFO”). He will describe the extent to which the Objectors’ communications campaign with respect to both fair dealing and users’ rights has succeeded in reaching the rank and file of K to 12 teachers in Ontario
- 14 and explain the seriousness with which these teachers treat copyright issues and the respect they have for copyright owners. 63. Mr. Giles will testify that Canadian K to 12 teachers are aware of the limits on their copying behavior set out in the Fair Dealing Guidelines, and that they know that copyright permission may be necessary if they exceed these limits. A witness statement relating to Mr. Giles’s evidence is set out as Exhibit Objectors4. Estimated Time in Chief — 45 minutes
The Selection and Purchase of Educational Resources 64. Lori Lisi – Coordinator of Programs, Secondary, York Catholic District School Board Karen Gill – Director, Curriculum and Assessment Policy Branch, Ontario Ministry of Education Brenda McKinny – Chief Operating Officer, Manitoba Textbook Bureau Carole Bilyk – Coordinator, Development Unit, Instruction, Curriculum and Assessment Branch, Manitoba Education and Advanced Learning Cathy Viva – Coordinator of Secondary Programs, Cape Breton-Victoria Regional School Board, Nova Scotia
The Objectors will then call three separate panels of witnesses composed of Curriculum Delivery Specialists from a number of different provincial jurisdictions ─ Ontario, Manitoba and Nova Scotia. These witnesses will describe the varied processes used by the Objectors to select, purchase and distribute educational resources within elementary and secondary schools. The panels will describe how these educational resources, including published print material, are currently chosen for use in K to 12 classrooms. The panels will provide an overview of the curriculum development criteria required by the provincial governments in which they work of the K to 12 publishing companies and the selection processes by which educational resources are purchased. Finally, these panels will describe the changes that have occurred in Canadian K to 12 classrooms over the last number of years in terms of their reliance on “core” textbooks in support of a varied, and jurisdiction specific, curriculum that responds to the needs of individual students. The three separate panels that the Objectors will call will be as follows: Ms. Lisi and Ms. Gill for Ontario, Ms. McKinny and Ms. Bilyk for Manitoba, and Ms. Viva for Nova Scotia. Witness statements relating to each of these three panels of witnesses are set out in Exhibits Objectors-5, 6 and 7.
- 15 Estimated Time in Chief — 3 hours The Value of Access Copyright’s Repertoire 66. Dustin Chodorowicz, Partner, Nordicity Group Ltd.
The Objectors will next call Mr. Dustin Chodorowicz from Nordicity Group Ltd. to respond to Access Copyright’s valuation and “effect of the dealing” evidence prepared by Mr. Michael Dobner as Exhibits AC-12 and 13 respectively. Mr. Chodorowicz will first refute Mr. Dobner’s assertion, set out in Exhibit AC-12, that the Board made various errors in developing and applying its K to 12 tariff methodology in its 2009 decision. This includes Access Copyright’s attempt to redefine the K to 12 publishing industry’s creative contribution as being all publisher costs other than incremental costs. By deducting only the costs of paper, printing and binding to arrive at a value for a copied page, Mr. Dobner inevitably, and improperly, inflates the per-page value of creative contribution. Mr. Chodorowicz will also challenge Access Copyright’s suggestion that the sequence of the steps in the valuation methodology used by the Board in its 2009 decision was flawed. Mr. Chodorowicz will testify that whether the selection premium is applied before, or after, the estimation of creative contribution is made, it does not change the calculation. Mr. Chodorowicz’s report responding to Mr. Dobner’s valuation report is designated as Exhibit Objectors-8. Mr. Chodorowicz will then respond to Access Copyright’s “effect of the dealing” evidence set out in Mr. Dobner’s second report, identified as Exhibit AC-13. It is the Objectors’ position that much of Access Copyright’s evidence with respect to this issue is not relevant to the tariff before the Board in this proceeding. This being said, Mr. Chodorowicz will testify that Access Copyright’s evidence fails to consider that, unless copying is a substitute for the purchase of original works, overall social welfare, in economic terms, is not negatively affected. Mr. Chodorowicz will also demonstrate, relying in part on Access Copyright’s own evidence, that the implementation of the Fair Dealing Guidelines effective as of January 1, 2013, cannot be used to explain any decline in K to 12 textbook sales since 2008. While the Objectors do not contest the fact that textbook sales have fallen, this decline cannot be attributed to either copying by teachers or the application of the Fair Dealing Guidelines in K to 12 schools. Mr. Chodorowicz will testify that, in his view, the conclusions reached by Mr. Dobner in his report are overly dramatic and entirely speculative. Mr. Chodorowicz’s report responding to Mr. Dobner’s “effect of the dealing” report is designated as Exhibit Objectors-9. Estimated Time in Chief — 3 hours
- 16 Estimated Volume of Photocopying in K to 12 Schools Dr. Piotr Wilk – Department of Paediatrics, Epidemiology and Biostatistics, University of Western Ontario Dr. Paul Whitehead – Professor Emeritus, Department of Sociology, University of Western Ontario
The Objectors retained the services of Drs. Piotr Wilk and Paul Whitehead to review the evidence submitted by Access Copyright in this proceeding as Exhibit AC-11 relating to the estimated volume of compensable copying in K to 12 schools in the tariff periods under review. This evidence was derived from the 2005-2006 survey data relied upon in the Board’s 2009 tariff decision. The Objectors agree with Access Copyright that these historic data should be used, for lack of an alternative, to calculate the estimated volume of compensable copying in K to 12 schools in this proceeding. This being said, the Objectors do not agree with Access Copyright’s estimated volume of compensable copying. The Objectors’ survey experts’ analysis can be broken down into five tasks: (i) (ii) identifying which copying events reported in the 2005-2006 survey data involve published works; identifying which copying events reported in the 2005-2006 survey data involve books, newspapers, periodicals, sheet music and consumables; determining whether the work copied in each copying event should be assumed to be in Access Copyright’s repertoire; confirming bibliographic information on published works that are assumed to be in Access Copyright’s repertoire; and determining whether or not each copying event involving a work assumed to be in Access Copyright’s repertoire is compensable, or whether it is not compensable because a users’ right applies.
(iii) (iv) (v)
Drs. Wilk and Whitehead use as the starting point of their analysis the conclusions of Mr. Gauthier’s Circum report identified as Exhibit AC-11. However, they make several adjustments to the volume calculations made by Mr. Gauthier, as well as several other adjustments to the 2005-2006 survey data that are not made by him. Their analysis is quite different from that of Mr. Gauthier in four major respects. First, they analyze copying events individually, while Mr. Gauthier analyzes the number of exposures at a global level. Second, they adopt a different interpretation of the results of Access Copyright’s repertoire analyses. Third, in
- 17 determining whether users’ rights apply, they apply significantly different compensability criteria than Mr. Gauthier does. Fourth, they determine how much underreporting of copying occurred in the 2005-2006 survey in a different way than Mr. Gauthier. 75. Drs. Wilk and Whitehead conclude that, in total, for the first tariff period, there are 10,551,457 compensable exposures involving books; 145,463 involving newspapers; 1,775,470 involving periodicals; 205,513 involving sheet music; and 16,890,136 involving consumables. For the second tariff period, they conclude that there are 10,091,660 compensable exposures involving books; 123,341 involving newspapers; 1,060,841 involving periodicals; 202,165 involving sheet music; and 14,003,652 involving consumables. The report prepared by Drs. Wilk and Whitehead, in response to Exhibit AC-11, is designated as Exhibit Objectors-10. Estimated Time in Chief — 4 hours
ALL OF WHICH is respectfully submitted this 19th day of March, 2014. J. Aidan O’Neill Ariel Thomas Fasken Martineau DuMoulin LLP 55 Metcalfe St., Suite 1300 Ottawa, ON K1P 6L5 Tel: 613-236-3882 Fax: 613-230-6423 firstname.lastname@example.org email@example.com and Wanda Noel Jordan Snel 5496 Whitewood Ave. Ottawa, ON K4M 1C7 Tel: 613-692-9232 Fax: 613-692-1735 firstname.lastname@example.org email@example.com Counsel to the Objectors