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December 10, 2010 SENT BY EMAIL Mr. Gilles McDougall Acting Secretary General Copyright Board of Canada 56 Sparks Street Suite 800 Ottawa, Ontario K1A oC9 Dear Mr. McDougall: Re: Objection to an Interim Tariff Decision on the Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)(the “Proposed Tariff”) I am writing to you on behalf of the Government of Alberta (“Alberta”), pursuant to the Notice of the Board dated November 26, 2010 and the Ruling of the Board dated December 8, 2010. It is the position of Alberta that the Board should not should not grant Access Copyrightʼs application for an interim decision for the following reasons. (a) The interim decision should not be granted because doing so would be contrary to the procedural requirements of the Copyright Act (Canada). Subsection 70.13(2) of the Copyright Act states that where no previous tariff has been approved pursuant to subsection 70.15(1), a collective society shall ﬁle with the Board its proposed tariff, in both ofﬁcial languages, all royalties to be collected by it for issuing licenses, on or before the March 31 immediately before its proposed effective date. The application for a proposed interim tariff was ﬁled with the Board on October 13, 2010. While the Board, under section 66.51, may render interim decisions, those decisions should be consistent with the overall ambit and scheme of the Copyright Act. Subsection 70.13(2) does not distinguish between interim or other types of tariffs. Similarly, under section 70.14 of the Copyright Act, where a proposed tariff is ﬁled under section 70.13, subsection 67.1(5) requires the Board to publish the proposed tariff in the Canada Gazette and give notice to prospective users (or
their representatives) within sixty days after the publication of the tariff, that they may ﬁle written objections to the tariff with the Board. If Access Copyright is granted the Proposed Tariff, the Board will have effectively overridden express procedural requirements for the imposition of tariffs, interim or otherwise. These requirements are there in order to allow prospective users reasonable time to consider and respond to proposed tariffs. (b) The interim decision should not be granted because the parties have not been given reasonable and sufﬁcient time to address the application. Although AC ﬁled the application for the interim tariff on October 13th, it only provided precise ﬁgures with respect to the Proposed Tariff on November 30th and December 1st, 2010. Moreover, additional documents, namely the model license and a table correlating the model license with provisions of the proposed interim tariff were only received by the participants to these proceedings on December 8th, 2010. The participants should be provided reasonable time to review and consider all materials ﬁled pursuant to these proceedings. Whether or not the Board considers them merely supplemental in nature is immaterial; the parties should be provided adequate time to review them if they are relevant to the proceedings. The participants were only provided with the most recent submission of AC at 5 p.m. on December 8th and were expected to respond to them on December 10th. Thus, the participants will have effectively only been provided one day to review highly detailed documents relevant to the Proposed Tariff. That the parties have not been provided sufﬁcient time to review the documents ﬁled by AC is particularly egregious given the fact that Proposed Tariff may last several years. (c) The interim decision should not be granted because AC has not provided sufﬁcient information in support of its application for the Proposed Tariff. Only recently, on December 1st, did AC provide precise ﬁgures with respect to the Proposed Tariff. However, AC did not provide any further information in support of those ﬁgures. AC should be required to provide further information explaining the process at which those ﬁgures were arrived. AC provided information in the letter dated October 7, 2010 as to the ﬁnancial effects that would be felt by AC if an interim tariff was not imposed.1 None of the information provided by AC in support of its application for a Proposed Tariff have been supported by afﬁdavit evidence, nor have the participants been afforded an opportunity to test the veracity of those representations. In addition, the ﬁnancial estimates provided by AC were purely one-sided estimates of how AC might be adversely affected if it was not granted the Proposed Tariff. AC did not provide any estimations as to (a) how the amounts proposed relate to the copying being done by post secondary institutions, (b) how those amounts might decrease over time due to the advent of digital collectives and
Bloom, G., “AUCC response to Access Copyright Application for Interim Decision” (December 10, 2010), at page 11, para. 2. According to Mr. Bloom, the effects that would be felt by AC are suspect.
creative commons licenses, and (c) how much of the amounts to be paid would be distributed to creators and publisher afﬁliates. Provision of that information, even very rough estimates, would provide greater context into whether an interim tariff is necessary or fair, and assist the Board with its decision making. A proper hearing on the evidence in support of this interim decision would be necessary. As the submission of Athabasca University succinctly states, “...AC has offered literally no ʻevidenceʼ to sustain its position.” 2 It should be further noted that, given the (a) movement towards towards digital use of materials, (b) movement towards licensing materials directly from authors or from digital collectives, (c) movement away from the use of course packs and (d) the increased role of fair dealing in Canadian law, reliance upon the previous amounts paid under prior license agreements would be likely to result in inaccurate overestimations of the fair and proper amounts that should be paid to AC. (d)
The interim decision should not be granted until AC has provided further information as to the extent of its repertoire. Under section 70.11, a collective society must answer within a reasonable time, all reasonable requests from the public for information about its repertoire of works, performerʼs performances, sound records or communications signals. It would be reasonable to require AC to present further information as its repertoire for the purposes of this application for a Proposed Tariff for several reasons. First, it would be impossible for the parties affected by Proposed Tariff to consider the reasonableness and fairness of the Proposed Tariff without a sense of the extent to which they continue to use the works being covered by the Proposed Tariff. Second, the parties that would be affected by the Proposed Tariff may already be entitled to digital reproduction of a large portion of the materials within the repertoire through other license agreements (i.e. directly with the authors themselves or through digital collectives). Post secondary institutions should not be required to pay more than once for the digital reproduction of the same works. There is also question, as raised in the submission of Athabasca University, that ACʼs actual repertoire may be in insufﬁcient to justify the Proposed Tariff. AC has not submitted any information as to the extent of its repertoire. (e)
The interim decision should not be granted because AC has not met the necessary criteria In the case of Bell Canada v. Canada, J. Gonthier set out the test for making interim decisions as follows:
Traditionally, such interim rate orders dealing in an interlocutory manner with issues which remain to be decided in a ﬁnal decision are granted for the purpose of relieving the applicant from the deleterious effects caused by the length of the proceedings. Such decisions are made in an expeditious
Infra note 12, at page 3. Athabasca University goes on to note that the Federal Court of Appeal recently ruled that the Board cannot approve a tariff where there is “a lack of or insufﬁcient evidence”. Socan v. Bell Canada et al, 2010 FCA 139 at para. 28.
manner on the basis of evidence which would often be insufﬁcient for the purposes of the ﬁnal decision. The fact that an order does not make any decision on the merits of an issue to be settled in a ﬁnal decision and the fact that its purpose is to provide temporary relief against the deleterious effects of the duration of the proceedings are essential characteristics of an interim rate order. 3
AC has failed to meet the stated test for the following reasons. First, AC has, in support of its application, only provided very unsubstantiated claims that it will suffer lost revenues as a result of awaiting the outcome of the proceedings. None of the claims were subject to scrutiny or testing for veracity. Second, while AC notes that in determining the deleterious effects, the Board considers the balance of convenience of the parties4, this balance weighs heavily in favour of the post secondary institutions affected by the Proposed Tariff. It is possible that AC would temporarily suffer reduced revenue. However, if reduced royalty rates are eventually certiﬁed, the post secondary institutions could be placed in the difﬁcult situation of having to refund royalties to students potentially years after they have left their studies. In considering the balance of convenience of the parties the Board should also consider the negative effects that the Proposed Tariff would have upon the competitiveness and ability of post secondary institutions to adapt to changing circumstances. As noted previously, there appear to be several signiﬁcant changes taking place with respect to the use of educational materials by post-secondary institutions. These include the increasing use of digital materials, deceasing use of course packs, increasing role of creative commons licenses, and the increasing role of fair dealing, and changes in Canadian copyright law. The submission of the AUCC 5 sets out an evolution of copyright practices amongst its members and changes in the way post secondary institutions use educational materials. The fact that so few of the post secondary institutions that were previously party to license agreements with AC signed the interim offer is indicative of the paradigm shift that appears to be occurring in the way educational materials are being delivered for the beneﬁt of post secondary students. Extending a royalty regime that does not take into consideration any of the above noted changes would hamper the ability of post-secondary institutions to adapt and remain competitive. The negative effects of imposing such a tariff would be widespread and systemic.
 1. S.C.R. 1722 at p. 1754. This test has been applied with respect to the section 66.51 of the Copyright Act (Canada) previously in “Interim Statement of Royalties to be Collected by SOCAN and NRCC in respect of Commercial Radio for the Years 2003 - 2007” (November 24, 2006).
Sookman, B. “Application for an Interim Decision on the Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)(the “Proposed Tariff”).” (October 7 2010) at page 7. Sookman cites several sources. Retransmission 2001-03, Decision of December 21, 2001, at p. 4; SODRAC v. ADISQ, Decision of August 31, 1999, File 70.2-1999-1, at p. 2.
Supra note 1, at page 5.
It is also important to re-emphasize the fact that the existing tariff amounts do not adequately address the role of fair dealing as set out in the landmark Supreme Court of Canada case of CCH Canadian Limited v. Law Society of Upper Canada6 , in which Justice McLachlin emphasized the importance of balancing “the public interest in promoting the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator”. Fair dealing does not merely provide a defence, it deﬁnes the outer boundaries of copyright and grants a right to the user. A signiﬁcant portion of the revenues that AC currently enjoys likely falls under the fair dealing exception and should be excluded from the scope of any tariff or license fees. Post-secondary institutions would be placed in the position of being charged for works they were already entitled to copy under the CCH case. The submissions of the AUCC and the ACCC both make further comment on the previous interim decisions of the Board. Alberta makes no further comment on those interim decisions other than to agree with the conclusions of both the AUCC and ACCC that, on the whole, the precedents suggest that the interim decision should be rejected.7 Lastly, it is submitted that AC had numerous other options prior to this application, including ﬁling the proposed tariff earlier, in order to properly have the Proposed Tariff heard by the Board. Caution should be taken when using interim processes to abbreviate a process that warrants careful consideration. (f) The interim decision on the Proposed Tariff should not be granted because it does not promote the status quo. AC argues in its application that part of the intent of the interim decision would be to maintain the status quo8 and that the interim decisionʼs effect would be to extend a pre-existing regime, which would not necessitate new payments or reporting on the part of the respondents.9 However, clearly the Proposed Tariff goes signiﬁcantly farther than the status quo. For example, the AUCC Model License provided AUCC members with an indemnity holding the university harmless from claims arising from its exercise of its rights under that license.10 There is no such indemnity in the Proposed Tariff. There are also serious changes to the tariff royalty structure which would greatly beneﬁt AC.11 As the submission of Athabasca University notes, “an interim tariff would, if enforceable in the way AC clearly intends, would, in effect, be poten6 7
 1 S.C.R. 339.
Supra note 1, at page 13; Noel, W. “Application for an Interim Decision on the Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013)(the “Proposed Tariff”).” (December 10, 2010) at page 8.
Supra note 4, at page 4. Ibid, at page 5. Supra note 1, at page 2. Ibid, at page 3.
tially a mandatory injunction requiring the payment of at least $11 million a year by universities to AC for several years to come...”.12 Conclusion Alberta urges the Board to reject the interim decision for a Proposed Tariff on the aforementioned grounds. The critical issues pertaining to these proceedings should be addressed with a full hearing, where the evidence and arguments can be properly considered. Alberta is concerned with both ensuring that its post secondary institutions remain competitive and preserving an environment that promotes fostering learning and innovation. This interim order does not adequately recognize the changing ways in which post secondary institutions use education materials or the important role that fair dealing plays in balancing the rights of users and creators. For all of the above reasons, Alberta requests that the interim tariff application be dismissed. Yours truly, Jason Fung Barrister & Solicitor c.c.: Lisa Fox
Athabasca University, “Submissions re Access Copyright (“AC”) DRAFT INTERIM TARIFF” (December 10, 2010), at page 2.
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