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Randall Hofley Partner Dir: 416-863-2387 firstname.lastname@example.org Reference: 71273/7
Copyright Board of Canada 56 Sparks, Suite 800 Ottawa ON K1A 0C9 Attention: Gilles McDougall Secretary General
Re: Access Copyright – Post-Secondary Educational Institutions Tariff, 2011-2013 Response to the AUCC’s application to amend the Interim Tariff Dear Mr. McDougall: We write on behalf of Access Copyright further to the Board’s Notice dated June 16, 2011, concerning the AUCC’s application to amend the Interim Tariff. In accordance with the Notice, this letter contains Access Copyright’s submissions in response to the AUCC’s application and the submissions of the ACCC, Professor Katz and Sean Maguire. I. INTRODUCTION
In its application, the AUCC is asking the Board to graft onto the Interim Tariff a right for Institutions – including those who have not taken up the tariff and who are therefore not paying the FTE rate – to demand a transactional licence from Access Copyright for paper copies and/or digital copies. The AUCC argues that the amendment sought is needed to preserve the status quo in existence prior to issuance of the Interim Tariff (the status quo ante). The ACCC supports the AUCC in its application. The AUCC’s contention that the amendment is required to preserve the status quo ante is not supported by the facts. With respect to paper copying, since at least 2004, Access Copyright has never issued transactional licences to post-secondary educational institutions for paper copies that fall within the limits of the licence (i.e., one chapter, 10% of a work etc.). Accordingly, what the AUCC is seeking in its application would entirely change the status quo ante for paper. Similarly, with respect to digital copying, Access Copyright has never issued a transactional licence for uses within the limits of the licence to a postsecondary educational institution that had not signed the comprehensive “AUCC Model Licence”. Also, the Board signalled a change for digital licensing in the Interim Tariff, albeit at this stage digital is optional and
on a no fee basis. Access Copyright is entitled to rely on the regime for digital implemented through the Interim Tariff without being subject to a charge that it is not maintaining the status quo. Moreover, the status quo ante did not involve any requirement or obligation that Access Copyright issue transactional licences on demand. Prior to issuance of the Interim Tariff, Access Copyright had attempted to negotiate a blanket licence for digital with the AUCC. The AUCC refused and, as a result, the comprehensive licences with the Institutions did not cover digital uses. The only feasible means for Access Copyright to obtain some compensation for its rightsholders for digital copying was through a transactional licence. That changed with the filing of the Proposed Tariff and the issuance of the Interim Tariff. Access Copyright is not attempting to change the status quo. Instead, it is the AUCC that is attempting to change the status quo ante by: (i) asking the Board to impose a compulsory licensing scheme on Access Copyright; and (ii) demanding that transactional licences for paper and/or digital be made available to Institutions, including those that have not paid the FTE rate. It is important to note that, prior to issuance of the Interim Tariff, Access Copyright never issued a transactional licence for digital to an Institution that had not entered into the comprehensive licence for paper copying, and was thus paying the FTE rate called for under the comprehensive licence. In essence, what the AUCC is seeking to accomplish is inclusion under the Interim Tariff of compulsory licences governing one time use licences outside the Interim Tariff (or the Proposed Tariff). Access Copyright submits that the amendment sought by the AUCC would completely change the regime in place prior to issuance of the Interim Tariff. Further, what the AUCC is seeking is inconsistent with the Proposed Tariff and is outside the Board’s jurisdiction. For these reasons, Access Copyright respectfully submits that the AUCC’s application should be dismissed. The AUCC also accuses Access Copyright of misconduct. As the Board noted in its March 16, 2011 reasons, “[t]he transparent exercise of a clear right is not a sign of bad faith”.1 It cannot constitute misconduct for Access Copyright to rely on the Interim Tariff and choose to conduct its business in compliance with the Interim Tariff. If an institution does not have a licence with the rightsholder, Access Copyright is entitled to rely on and operate under the comprehensive, blanket licence for paper and digital copies established by the Interim Tariff and to require any Institution that wishes to make copies of works in Access Copyright’s repertoire to take up the tariff or seek a transactional licence from the relevant individual rightsholder. Access Copyright has been consistent and transparent throughout these proceedings. In its application for an Interim Tariff, Access Copyright never asked for the status quo ante for digital. Rather, it asked that digital copying be included under the Interim Tariff for no additional cost (Access Copyright, Letter to the Board, December 15, 2010, p. 17). Since it filed the Proposed Tariff on March 31, 2010, Access Copyright has made it clear that it is asking the Board for a comprehensive tariff covering paper and digital uses. If the Board were inclined to make any change with respect to digital in response to the AUCC’s application, it is submitted that the Board should take a principled approach and simply remove the digital option altogether from the Interim Tariff. The Proposed Tariff includes digital, and Institutions can govern themselves accordingly.
Board’s reasons, March 16, 2011, para. 92.
Access Copyright does not provide exclusive access to works in its repertoire and has never told its affiliates, including publishers, not to issue transactional licences. It is open to any Institution to negotiate a licence with any rightsholder. Access Copyright categorically rejects any suggestion that it has engaged in misconduct, including, but not limited to, anti-competitive conduct, as alleged by the AUCC, ACCC and Professor Katz. Regarding the submissions of Professor Katz, throughout his submissions he inveighs against the collective tariff regime established by Parliament under the Copyright Act (the Act”) and submits that “when copyright owners are allowed to administer their rights collectively, a duty to licence their works independently is a reasonable quid pro quo” (Katz, p. 12). He asks the Board to amend the Interim Tariff to “enjoin Access Copyright from granting any transactional licence, and require that Access Copyright members and affiliates would licence their own works on reasonable terms” (Katz, p. 12). Professor Katz is in effect lobbying for legislative changes to the general collective regime under the Act and his submissions are not relevant in the context of this proceeding. The Board has no jurisdiction – through an interim or final tariff – to mandate that (or how) individual rightsholders licence their works. Access Copyright urges the Board to reject the AUCC’s (and Professor Katz’s) application to amend the Interim Tariff. II. OUTLINE OF ARGUMENT
Access Copyright’s submissions will be presented pursuant to the following outline: Jurisdiction: The Board does not have jurisdiction to grant the relief sought by the AUCC (or Professor Katz)
Substantive Issues: The AUCC is attempting to change the status quo ante Rightsholders (and, by extension, Access Copyright) should be free to decide if, and how, to licence their works The challenges presented by digital cannot be adequately addressed through transactional licences The Objector’s allegations of anti-competitive conduct have no merit Professor Katz’s suggested remedy should be rejected Access has acted in good faith throughout
JURISDICTION OF THE BOARD The Board cannot [alternatively should not] amend the Interim Tariff so as to alter, fundamentally, the Proposed Tariff
The AUCC is asking the Board to graft onto the Interim Tariff a mandatory licence scheme that would be available on demand by all Institutions, including those who have not taken up the Interim Tariff and are not paying the FTE rate. This is evident from its application which states: “[t]he need for AUCC to seek Board intervention at this time has arisen in light of the recent refusal of Access Copyright to grant transactional licenses to post-secondary educational institutions in a blatant effort to force those institutions to operate under the Interim Tariff” (AUCC, page 1). The proposed amendment to the Interim Tariff makes it clear that the AUCC is seeking a right for Institutions who have not taken up the Tariff to demand a transactional licence from Access Copyright. Sections 2.4 and 2.5 of the proposed amendments provide that upon request of an Institution, Access Copyright must grant a transactional licence to the Institution to make a Copy or Digital Copy, respectively. Section 2.6 of the proposed amendment states that, except as specifically provided for in the proposed transactional licence provisions, no other provisions of the Interim Tariff apply. If the AUCC were successful, this would mean Institutions could avoid paying the FTE rate through the requirement that Access Copyright enter into a pay per use transactional licence for paper or digital copies. For his part, Professor Katz is asking the Board to reach beyond the ambit of its authority over collectives and mandate that rightsholders themselves licence their works. Both are, in effect, trying to do an “end run” around the operation of the Interim Tariff and the regime established by the Act for the collective administration of copyright. The Proposed Tariff filed by Access Copyright is for a comprehensive blanket licence, covering both paper and digital copies. Although the Board has the authority pursuant to section 66.52 of the Act to amend a tariff with respect to terms and conditions, Access Copyright respectfully submits that the Board has no jurisdiction to change the fundamental nature of the Proposed Tariff, as is sought by the AUCC (and Professor Katz), particularly on an interim basis with no evidence before it. Imposing an obligation on Access Copyright to enter into a transactional licence with Institutions that have not taken up the Tariff – and which will not be paying an FTE rate – is outside the ambit of the tariff Access Copyright is seeking from the Board. It is noteworthy that prior to the Interim Tariff, transactional licences for digital were only provided to Institutions that had a comprehensive licence with Access Copyright and were paying the FTE rate under that licence. Transactional licences for paper were never provided to Institutions. It is submitted that in view of the Proposed Tariff filed by Access Copyright, the Board does not have jurisdiction is amend the Interim Tariff to establish the scheme the AUCC is pressing on the Board. A number of SOCAN tariffs do provide to copyright users a choice of two types of licences, however, this alternative licence system is distinguishable from the compulsory licence proposed by AUCC. Tariff No. 2 Television and Tariff No. 17 Transmission of Pay, Specialty and Other Television Services by Distribution Undertakings allow stations and programming undertakings to choose between a “standard blanket licence” and a “modified blanket licence” (or “MBL”).
In 1999, SOCAN sought judicial review of the Board’s decision to include the MBL in Tariff No. 2.2 SOCAN argued that by introducing the MBL, the Board had exceeded its jurisdiction. The Court denied SOCAN’s application. The court’s analysis turned on its interpretation of s. 67.2(1) of the Act: On the conclusion of the Board’s consideration of a statement, any objections to it and any reply to the objections, the Board shall (a) certify the statement as approved, with or without such alterations to the royalties and related terms and conditions specified therein as the Board may make. The language of s. 67.2(1) is similar, though not identical to, the language used in s. 70.15(1). The Court described the MBL as follows: “[e]ssentially, the MBL enables stations to reduce their royalty obligations to SOCAN by allowing them to deduct from their gross advertising revenues those revenues attributable to programs which do not contain music from SOCAN’s repertoire, that is, music which is “cleared at the source”.” 3 The Court concluded that the Board’s powers to set tariff rates and append terms and conditions under s. 67 of the Act were sufficiently broad to encompass its decision to include the MBL. The Court held that to decide otherwise would restrict the Board’s jurisdiction to deciding the numerical basis of the tariff: In my view, the Board has the jurisdiction and obligation to fix not only the tariff rate, but also determine the manner of calculating the revenue base to which the rates will apply. For example, it seems both reasonable and necessary that the Board retain flexibility to determine whether revenues derived from certain sources are to be excluded from the revenue base, including music commissioned directly from a composer.4 The question before the Court, then, was NOT whether the Board had jurisdiction to issue compulsory licence orders. Rather, the Court simply considered whether, on approving of a percentage-of-revenue based tariff, the Board was entitled to allow for the deduction of revenues not associated with any works in the society’s repertoire. Here, the AUCC is proposing an amendment that in essence permits an Institution to avoid the scheme of the general collective regime by forcing Access Copyright to enter into a transactional licence altogether, notwithstanding that it has applied for a blanket, comprehensive tariff that will cover both paper and digital copying. The Board does not have jurisdiction to do what the AUCC requests. (ii) The Board does not have statutory authority to compel Access Copyright to enter into a transactional licence
Access Copyright also submits that the Board has no jurisdiction to force it to enter into a licence with any Institution, whether that Institution has taken up the tariff or not. Where Parliament has seen fit to impose the extraordinary remedy of forcing parties to contract, it has done so through express statutory provisions. For
Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Broadcasters and Societé du Droit de Réproduction des Auteurs, Compositeurs et Editeurs au Canada, (1999) 1 CPR (4th) 80 (FCA). 3 Ibid, at para. 7. 4 Ibid, at. para. 11.
example, section 65 of the Patent Act provides that the "Attorney General of Canada or any person interested may, at any time after the expiration of three years from the date of the grant of a patent, apply to the Commissioner alleging in the case of that patent that there has been an abuse of the exclusive rights thereunder and asking for relief under this Act.” Pursuant to section 66 of that Act, if the Commissioner is satisfied that an abuse of excusive patent rights has been committed, he or she may order, inter alia, the grant of a licence. Under the Act, the Board is empowered to issue licences under three circumstances only: to set the terms of licences pursuant to subsection 70.2(2); to change the terms of licensing agreements at the request of the Commissioner of Competition pursuant to subsection 70.6(1); and, to issue a licence for the use of a work whose copyright owner cannot be located pursuant to subsection 77(1). As the Board noted in its reasons of March 16, 2011 (the “March 16 Reasons”), “[t]he licences the Board issues pursuant to subsection 70.2(2) of the Act are final licences. [...] The Board can only be asked to set the terms of an interim licence if arbitration for a final licence has been applied for.” These are the only circumstances under which express statutory authority is granted to the Board to issue compulsory licences. Here, the AUCC is asking the Board to issue a compulsory licence under the guise of the Interim Tariff. None of the above-described provisions is applicable in the present circumstances. Absent express statutory authority under the Act, the Board has no jurisdiction to compel Access Copyright to enter into a transactional licence with any Institution that demands one. The general tariff regime, which applies in this case, is premised on a collective society’s right to establish, with the Board’s oversight, the conditions under which users may make copies of published works. Users can access a collective society’s repertoire in three ways: through the negotiation of a licence(s) with the rightsholder; through the negotiation of a licence(s) with the collective society; or, the collective society may file a proposed tariff with the Board that will set out the royalties and terms and conditions relating to classes of uses: section 70.12(a). Under the general tariff regime, section 70.191 provides that licences trump tariffs. Therefore, even after a tariff has been set, it is always open to the user and a collective society, or the user and the individual rightsholder, to reach an agreement on the terms of a licence, in which case the tariff will not apply. The clear implication of this, however, is that licences are to be arrived at through negotiation, not through the imposition of compulsory terms. In summary, the Act contemplates two options under the general tariff regime – regulation under a tariff and voluntary negotiation of licence agreements. It is respectfully submitted that the Board has no jurisdiction to encroach upon Access Copyright’s prerogative to enter into, or not, voluntary agreements by mandating such agreements as a term under the Interim Tariff. (iii) The issues relating to digital copying should be dealt with at the hearing on the Proposed Tariff
If the AUCC and its members wish to challenge the Interim Tariff on the basis of use of digital copies and it believes Schedule G is unfair, the proper time to make these arguments is at the final hearing. There, with a full evidentiary basis, it is open to the AUCC to argue the tariff pertaining to digital ought to be usage based. It is to be noted that the AUCC, in its submissions responding to Access Copyright’s application for an Interim Tariff, opposed inclusion of digital copying, and opposed reporting of digital copies because Institutions are not set up to deal with digital copying because of the decentralized nature of digital copying,
exacerbated because there is no point of sale where volume can be measured (AUCC Letter to the Board of January 21, 2011, p. 4-5). The AUCC also argued it is premature to set pricing for digital copying at the present time (AUCC Letter to the Board of January 21, 2011, p. 4). Access Copyright did not dispute this, and in fact, submitted that the Interim Tariff should allow for digital copying at no additional charge, precisely because of the challenges of measuring digital copying. It opposed the imposition of a $.10 per page charge for a Digital Copy for this reason, among others. Now, the AUCC would have the Board believe Institutions are able – suddenly – to track the volume of Digital Copies and pay on a per page basis. This is not credible. Access Copyright sets out the challenges raised by Digital Copying below. Access Copyright submits the issues raised by digital copying can only be dealt with at the hearing, on the basis of a full evidentiary record. iv. Conclusion – Jurisdiction
In Access Copyright’s submission, the Board has no authority to amend the Interim Tariff as requested because (i) the Board has no jurisdiction to amend the Interim Tariff in a manner fundamentally different from the model utilized in the Proposed Tariff; (ii) the Board has no statutory authority to compel Access Copyright to enter into a transactional licence; and (iii) the issues raised in the application to amend are properly dealt with at the hearing on the Proposed Tariff. For these reasons, Access Copyright respectfully requests that the Board dismiss the AUCC’s application to amend. III. SUBSTANTIVE ISSUES
For the reasons outlined above, Access Copyright believes the Board has no jurisdiction to grant the relief sought by the AUCC (or Professor Katz). In the event the Board disagrees with this position, Access Copyright makes the following substantive submissions opposing the application. A. The AUCC is attempting to change the status quo ante
The AUCC’s contention that the amendment is required to preserve the status quo ante is not supported by the facts. Access Copyright has never issued transactional licences to post-secondary educational institutions for paper copies. Nor has Access Copyright ever entered into a transactional licence for digital with any post-secondary educational institution that had not already entered into a comprehensive licence for paper copying, and was therefore paying the FTE rate under the comprehensive licence. In its application, the AUCC is seeking an amendment to the Interim Tariff that would give a right to Institutions – including those who have not taken up the tariff and who are therefore not paying the FTE rate – to demand a transactional licence for paper copies and/ or digital copies. What the AUCC is seeking would entirely change the status quo ante for paper and digital. The Board in its decision issued on December 23, 2010 stated the purpose of the Interim Tariff was, inter alia, “to maintain the status quo to the extent possible”. The AUCC does not address the fact that the Interim Tariff as amended on April 7, 2011 maintained the status quo for everything except digital. The Board made express provision in the Interim Tariff for a comprehensive licence for digital copying. This was done at the request of Access Copyright, the AUCC and the ACCC. In the Interim Tariff, the Board signalled a change for digital licensing, albeit at this stage it is optional and on a no fee basis. Presumably, the Board
recognized that the issues surrounding digital copying in post-secondary educational institutions have not yet been settled, and as such, was loathe to implement a system that had not yet been tested by the evidence. Access Copyright is entitled to rely on the regime for digital implemented through the Interim Tariff without being subject to a charge that it is not maintaining the status quo. It is noteworthy that Access Copyright has been trying to negotiate a blanket licence for digital uses in postsecondary educational institutions with the AUCC and ACCC since 1997. Attached as Appendix A are two memoranda from Access Copyright (CanCopy) to the ACCC in which the issue is broached and proposes an add-on to the existing licence for multimedia.5 To date, the AUCC and the ACCC – on behalf of collectivities of the largest users of Access Copyright’s repertoire for the educational sector – have exercised their buying power to thwart every attempt at implementing a blanket digital licence for the postsecondary sector. In fact, apparently when Access Copyright attempted to roll-out pilot scanning licences in early 2008, Steve Wills, the Manager of Legal Affairs of AUCC issued an advisory to its members recommending that they not participate in Access Copyright’s pilot. Attached as Appendix B is an excerpt from The Bulletin of the Atlantic Provinces Library Association of February 2008 in which this is reported (at page 27). It is to be noted that the AUCC has not distinguished, in its arguments, between transactional licences for paper copies, and transactional licences for digital copies. Yet, it has applied for an amendment to the Interim Tariff that would compel Access Copyright to issue a transactional licence for paper or digital, on demand by an Institution, whether or not that Institution has taken up the tariff and is paying the FTE rate. All requests for transactional licences referred to in its application (and included in its application as Appendices F through J), were for transactional licences for digital copying. As the Board is aware, since 1994, Access Copyright and every member of the AUCC have had comprehensive licence agreements in place which cover the reprographic (i.e., photocopying) uses covered by the Proposed Tariff. Similar licences have been in place with ACCC member colleges and proprietary colleges since roughly the same time. The licences contained limits on the amount of a work that could be copied. To the best of Access Copyright’s recollection, since at least 2004, Access Copyright has never granted a transactional licence for the photocopying of a work that was within the limits of that licence to a post-secondary educational institution in Canada. The reason for this is that the uses were covered under the comprehensive licence between the Institution and Access Copyright. Requiring Access Copyright to grant a transactional licence for paper copying is not maintaining the status quo ante. Because of the AUCC’s long-standing refusal to negotiate a blanket licence for digital copying, prior to issuance of the Interim Tariff, Access Copyright had no choice at that time but to offer the post-secondary institution “transactional” licences for the digital copying of copyright-protected works. It is noteworthy that Access Copyright has never issued a transactional licence for digital copying within the limits of the blanket licence to a post-secondary educational institution that did not sign on to the (blanket) general licence (i.e., pay the FTE rate). There is a difference between a transactional licence, which operates outside of a comprehensive licence and is truly a “one-off” licence; and a pay-per-use model within a comprehensive licence or tariff, which fluctuates with usage, but also provides blanket coverage in a sector where the use and copying of copyright-protected works is extensive and widespread. Access Copyright made this offer
Note that both memoranda are addressed to the ACCC, however, the memorandum dated January 27, 1998 (the “January 28 Memorandum”) refers to the same proposal being made to the AUCC. Access Copyright has not been able to locate the memorandum sent to the AUCC corresponding to the January 28 Memorandum.
because there was no comprehensive licence agreement in place to cover this copying. In order for rightsholders to receive any compensation for digital works, the only way this could be accomplished was through “the honour system” of transactional licences. As demonstrated by its historical practice, Access Copyright does not offer transactional licences for matters covered by a functioning comprehensive licence (proposed or certified tariff). As noted earlier, Access Copyright has never granted a transactional licence to a post-secondary institution for reprographic reproduction – i.e., paper copying – within the limits of the comprehensive licence. Nor does Access Copyright grant transactional licences to K-12 schools as of January 1, 2010 because a proposed comprehensive tariff covering digital use in that sector is in place. This can be distinguished from the corporate sector where Access Copyright does offer both a comprehensive licence and transactional licences because the penetration of the comprehensive licence has been minimal. Thus, just as it chose to grant transactional licences for digital copying to post-secondary institutions when it was unable to negotiate a comprehensive licence for digital uses, Access Copyright continues to grant transactional licences to corporate entities that seek them. This is the only model that makes sense given the absence of a proposed or certified tariff. However, in the post-secondary educational sector, as of January 1, 2011, a comprehensive certified (interim) tariff (covering both paper and digital) is now available and there is no need for a transactional model in the post-secondary educational sector. This approach was contemplated, and indeed made very clear, when Access Copyright filed its Proposed Tariff in March 2010. Access Copyright’s current policies and practices respecting transactional licences are set out in Appendix C. In essence, the AUCC is asking that the Board establish an interim tariff that provides an à-la-carte menu for post-secondary institutions: an institution can choose to pay: (i) the FTE rate; (ii) a transactional (i.e., oneoff) licence for paper coursepack copying; (iii) a transactional licence for digital copying; and (iv) a blanket licence for digital copying under Schedule “G”, or any combination of the above. This is not reflective of the status quo, is a completely unworkable model, would be a compliance and revenue-tracking nightmare (particularly in the digital environment) and should not be implemented by the Board without cogent and convincing evidence that it is the appropriate way to reflect value and fairly compensate rightsholders. Access Copyright submits that it is the AUCC that is attempting to change the status quo ante by asking the Board to impose what amounts to a compulsory licensing scheme for paper copies and digital copies. B. Rightsholders (and, by extension, Access Copyright) should be – and are –free to decide
Even if the Board had jurisdiction to amend the Interim Tariff to provide for a compulsory transactional licences, and did so, in Access Copyright’s submission such a tariff should not be certified by the Board. Contrary to the submissions of the AUCC and ACCC, Access Copyright has never told its affiliates, including publishers, not to issue transactional licences to Institutions. Soon after the Interim Tariff was issued, Access Copyright wrote to its publisher affiliates to explain the implications of the Interim Tariff. A copy of Access Copyright’s letter dated January 10, 2011 is attached as Appendix D. In its letter, Access Copyright recommended to publishers that if they were contacted by post-secondary institutions that were seeking direct permission from publishers for both digital copies and photocopying, they can let the Institution know they could contact Access Copyright. Access Copyright expressly informed the publishers, “As always, publishers also have the option to clear the rights themselves directly with the educational
institutions in accordance with their individual business interests.” Access Copyright has also, as part of regular updates to interested affiliates, explained the facts surrounding the tariff, including a potential correlation between an affiliate granting permission and the value of the tariff (i.e., the possible removal of previously authorized content from a volume study) and the impact that granting permission would have on an affiliate’s distribution from Access Copyright. Access Copyright has also continued to market itself as its affiliates’ chosen business model for clearing permissions for secondary-uses. There is nothing improper, anti-competitive or illegal about any of these initiatives. Access Copyright has not asked its publishers whether they are granting transactional licences, but understands that several publishers have granted transactional licences in the Interim Tariff period. In Appendix D to the ACCC’s submissions, the University of Guelph representative is quoted as saying it deals with 50 publishers and only one has refused to deal with it directly. The insinuation by the AUCC, ACCC and Professor Katz that publishers have colluded with Access Copyright to refuse to enter into transactional licences is not only manifestly false but reflects, at best, an attempt to cast aspersions on Access Copyright and/or rightsholders in hopes that it will lead them, or the Board, to acquiesce to the Objectors’ desired outcome, the undervaluation (or obliteration) of the Proposed Tariff. The general collective copyright regime was not implemented to undermine rightsholders’ rights or to dictate how they are to exercise those rights. The Interim Tariff cannot mandate rightsholders to licence their works. The copyright holder has the exclusive right to determine how its property is to be used and under what conditions. The rightsholder can grant a licence to Access Copyright, in whole or in part, and with no exclusivity. Rightsholders can withhold from Access Copyright the right to enter into transactional licences (or indeed any licences) in respect of their works. Thus, even if the Board were persuaded to include a mandatory licensing order in the Interim Tariff, from a practical standpoint, such an order could be meaningless because Access Copyright cannot grant a right it has been advised by the rightsholders that it does not have the authority to grant. It is worth noting that the existing subscription licences upon which the AUCC and its member Institutions purport to so heavily rely, are not even transactional licences. They are subscriptions for access to collections of works in publisher and consortium databases that are purchased for their entire academic community. This is the business model employed by both rightsholders and Institutions for the digital uses of copyright-protected works in the post-secondary educational sector. Despite their reliance on these databases, the AUCC through its application, is demanding that the collective society and the publishers licence in some different way. Transactional licences are entirely dependent on the self-determination by an Institution as to whether it believes it needs a licence to make a copy of a work. For this reason (and others), Access Copyright believes the levels of compliance with respect to digital copying are extremely low. In 2010, for example, Institutions paid $136,326 to Access Copyright pursuant to the transactional licences granted by Access Copyright. In the entire year, permission was sought for a mere 1160 titles. Only six post-secondary educational institutions were semi-regular purchasers of digital transactional licences, and only 30 institutions requested a digital transactional licence in 2010. The AUCC would have the Board believe that the reason for this is that the Institutions have numerous licences agreements in place that cover the digital copying taking place. While Access Copyright appreciates that the Institutions have subscription agreements in place for access to digital works, in reality, none of these licences covers the scanning and
uploading of printed books, magazines and newspapers. Yet, any review of university course management sites shows that they contain numerous scans of printed materials. It is clear to Access Copyright that an enormous amount of activity in post-secondary educational institutions was (and continues to be) not licensed, even during the pre-Interim Tariff period when transactional licensing was available. The transactional system therefore creates an environment where a significant amount of piracy and copyright infringement can flourish, undetected. This is an unacceptable model for rightsholders. In an environment such as a university or college setting, where the use of copyright protected works is widespread, dispersed and de-centralized, the compliance problems associated with a transactional business model are insurmountable for collectives and rightsholders. These compliance concerns are amplified in the digital world. The move away from granting transactional licences is simply a reflection that it is not practical or possible for an educational institution to ensure that all uses by its professors and students are licensed or otherwise compliant with the Act. In Access Copyright's view, the only way to capture the greatest number of uses that would otherwise be infringing is to licence the uses in a blanket fashion under the tariff. In addition, transactional licences have very high transaction costs. Put simply, the transactional business model does not protect rightsholders for secondary digital uses of works by the postsecondary sector. Rightsholders – and by extension – Access Copyright, should be free to decide. The general tariff regime is based on a collective society’s right to establish the conditions under which users may make copies of published works. C. The challenges presented by digital cannot be adequately addressed through transactional licences
In their submissions opposing the Interim Tariff, the AUCC and most other objectors, claimed that the right to make digital copies was of marginal value to Institutions. The AUCC, for example (December 10, 2010 letter, page 3), acknowledged that the Proposed Tariff expands the scope of the copying rights to include the making of digital copies of certain works, by making a digital copy, or by scanning a paper copy into electronic form, subject to various safeguards. However, to the AUCC, this was of marginal value. The AUCC stated: Given today’s technology, scanning is a costly and time consuming process for securing digital copies. AUCC member universities have elected models [...] which enable them to source digital copies directly from publishers or aggregators thereby reducing the cost and delay of scanning, and provides to faculty, researchers and students a far more timely and valuable research and study resource. As a result, the value of the right to make digital copies under the Proposed Tariff is only of marginal value to universities. The Board minimized these arguments in the March 16 Reasons, stating:  Access Copyright applied to licence digital copies. It offers to include them in the Interim Tariff without increasing the FTE rate. Most Objectors claim that the right to make digital copies is of marginal value to Institutions. Be that as it may, since these rights are being granted at no extra fixed cost for the time being, the Institutions would not be prejudiced by being so authorized.
Given its earlier statement about the marginal value of digital copying, it is ironic that the examples where the AUCC complains Access Copyright has refused to enter into a transactional licence with an Institution involve the Institution making a scanned copy of a work in Access Copyright’s repertoire. Clearly, the utility of digital copying is not as marginal as the AUCC would have had the Board believe in its earlier submissions. Digital copying imposes unique challenges on copyright holders. Digital technologies have placed powerful tools for secondary uses of copyright-protected works in the hands of anyone with a laptop. A digital copy can be made as a result of scanning a paper copy, transmission by email or facsimile, storage of a digital copy on a server, posting a digital copy on a secure network and posting a hyperlink to a digital copy. Secondary uses are not centralized. In a university or college setting, monitoring digital uses is virtually impossible: secondary uses can occur anywhere: in a professor’s office, the student’s dorm, or any oncampus coffee house with a WiFi hotspot. For digital works, infringement – whether purposeful or inadvertent – becomes more frequent because of the decentralized nature of copying and the ease by which digital copies can be made without detection. In the digital copying world, it is almost impossible to monitor compliance so as to ensure usage at 10 cents (or any cents) per page is captured, reported and paid for. As noted by the Copyright Board in the March 16 Reasons, “[o]ne of the objects of the Act is to ensure that rightsholders get paid for protected uses of their works” (para. 36). Based on its years of experience, Access Copyright has concluded that a transactional business model for the use of digital works does not ensure that rightsholders get paid for the uses of their works. For this reason, Access Copyright included digital copying in the Proposed Tariff as a comprehensive licence. In its submissions in the Interim Tariff proceedings, Access Copyright maintained that the Interim Tariff should cover digital uses, but with no fee or reporting obligation attached because the transactional business model was not practical. Access Copyright’s application for an Interim Tariff did not request payment or reporting for Digital Copies for two reasons. First, requiring payment on a per page basis is simply not practical. Establishing such a payment and reporting mechanism under the Interim Tariff will force into place a structure that is difficult (if not impossible) to administer. Students buy paper coursepacks from their institutions, bookstores and copyshops, which can charge and recoup the per page royalty fee at the point of sale. In comparison, there is no point of sale when a Digital Copy is made by a professor and placed on a course management system. Moreover, neither Access Copyright nor the Institutions have mechanisms in place to administer the Interim Tariff in this way. This makes the requirement of payment for every page of a Digital Copy impossible to administer. The AUCC in its January 21, 2011 submissions in response to the application for an Interim Tariff went to great pains (at pages 3 to 5) to explain the challenges that tracking usage of digital copies would create for universities, why reporting digital usage is impossible, and why a per page rate was inappropriate. In its current application, the AUCC maintains Institutions should not be required to report digital usage. Yet the Board is now asked to believe that Institutions are capable of tracking usage across their decentralized operations, can determine how many pages should be paid for, and a per page rate is suddenly no longer problematic. Second, the Proposed Tariff proposes a flat FTE rate for all copying. To establish a practice now that may not likely reflect the final certified tariff structure raises a host of future issues in reconciling the Interim Tariff
with the final certified tariff. Because of the potential compliance and reporting problems, it is not appropriate at this time to tie payment to reporting. Reporting for Digital Copies will be better addressed through negotiation with the Institutions during the tariff process. Payment for Digital Copies will be more appropriately and sufficiently addressed during the tariff process, during which all parties will have an opportunity to introduce evidence of the volume and value of the copying activity taking place. Payment for Digital Copies will be required by the Board if it is persuaded that it is just and appropriate to do so, upon certification of the Proposed Tariff. Under the Interim Tariff, no payment is required for the making of digital copies. This is because the AUCC, the ACCC and Access Copyright all believed that the reporting and payment obligations as originally suggested by the Board (being $0.10 per page with full reporting) were premature. Moreover, even leaving aside the question of fair dealing for the moment, there remain significant disagreements between what is required to be reported and paid for, and what is not. The AUCC stated in its January 21, 2011 submission that payment for digital copies ought to be made only “where the Digital Copy is made for sale” and that since digital copies on course management systems are not “sold” to students, they are not analogous to paper coursepacks (AUCC, January 21, 2011, p. 4-5 and see ACCC, January 21, 2011, p. 6). The AUCC has also complained about the “onerous” reporting requirements attached to the making of Digital Copies (AUCC, Submission to Copyright Board on Interim Tariff, January 21, 2011). In its present application, the AUCC would have the Board believe that reporting and paying for Digital Copies is a viable alternative to the Interim Tariff. Requiring Access Copyright to offer transactional licences within the tariff will only result in (further) underreporting and undervaluation of the copyright. This will be a fundamental issue before the Board at the hearing in this matter. If the AUCC claims that a pay-per-use mechanism for digital uses more accurately reflects the value of the reproduction rights, it is perfectly entitled to raise this in the final tariff proceedings. The Board can then (and will) hear evidence and make a decision on the basis of the evidence filed. With the filing of the Proposed Tariff on March 31, 2010, users were put on notice that digital uses would be covered comprehensively by the tariff, and not on a transactional basis. Comprehensive or “blanket” licences, such as that under the Interim Tariff, ensure that Institutions are protected from liability. From the Institutions’ perspective, since they are in an impossible position with respect to monitoring uses of digital materials, inclusion of digital uses on a comprehensive basis in the Interim Tariff provides them with a high degree of comfort. If the final tariff as certified by the Board includes a component for digital copies, provided an Institution takes up the Interim Tariff, all digital copying of works in Access Copyright’s repertoire, up to the date the final tariff is certified, will have been legal. In Statement of Royalties to be Collected by SOCAN; Re Sound, CSI, AVLA/SOPROQ and ArtistI in Respect of Commercial Radio Stations (the "CSI Tariff”) issued on July 10, 2010, the Board set a comprehensive tariff applicable to both over-the-air broadcasts and streaming via the Internet or similar computer network. In this sense, the CSI Tariff is analogous to the Interim Tariff, in that both apply to analog and digital uses. Under the CSI Tariff, the royalty rate payable varies with usage or gross income. Nothing in the CSI Tariff requires it to offer transactional one-time permissions to online service providers. In its application, the AUCC has proposed the transactional licence be subject to a royalty of $0.10 per page. Access Copyright notes that the default charge for transactional licences for digital copying was not
always $0.10 per page. Attached as Confidential Appendix 1 is a chart setting out the transactional licensing fees for each sector, for print use and digital use. As is apparent from the chart, transactional licences started at $0.11 pp for magazines, $0.15 pp for books, $0.30 for journals and $0.70 for newspapers. In addition, Access Copyright has publisher-set pricing as well – which varied from the rates for genre quoted in the previous sentence. Therefore, even if one were to accept that the Board should be compelling Access Copyright to grant transactional licences on demand in order to preserve the status quo – which Access Copyright does not concede – $0.10 pp for digital uses would not maintain the status quo ante. 6 Transactional licences for secondary uses of works fail to deal with the realities presented by digital copying. In most cases, they are not suited to the demands of the digital universe. Moreover, transactional licences are cost-intensive. Access Copyright and its rightsholders should not have to bear the cost of entering into a large volume of transactional licences. Any transactional licence would have to reflect the true cost of such licence, otherwise it would be unfair to Access. That true cost can only be determined on a full evidentiary basis. Moreover, Access Copyright requested that the interim tariff not “deal with digital rights” (with no royalties flowing and no need to report uses in relation to digital rights) (Access Copyright Letter to the Board, December 15, 2010) because Access: (i) recognized the number of unsettled issues relating to digital uses in the post-secondary sector; and (ii) hoped to promote certainty in the marketplace by providing comfort to the institutions as to what they could and could not do post-January 1, 2011 (Access Copyright Letter to the Board, October 7, 2010, p. 5). It appears that the certainty sought by Access Copyright has not been the result. If the Board were inclined to make any change to the Interim Tariff with respect to digital in response to the AUCC’s application, it is submitted that, given the uncertainty and number of unsettled issues surrounding digital copying, the Board should take a principled approach and simply remove the digital option altogether from the Interim Tariff. That leaves all parties to address the issues fully at the hearing of the tariff, and will give the Board the benefit of a complete evidentiary record. To grant AUCC’s request now, without any evidence as to the appropriateness of such a model, would turn Access Copyright’s business model and future upside-down and, as noted in our submissions of January 21, 2011, force Access Copyright into an untenable, unworkable model. It is noteworthy that the AUCC’s proposed amendments to the Interim Tariff do not require anything of the Institution. The amendments suggest that only Access Copyright has the obligation to license the use of works in its Repertoire in a particular ways. This is completely inequitable and, moreover, turns copyright law on its head. Access Copyright asks the Board to reject what appears to be an opportunistic application, the sole aim of which, in Access Copyright’s view, is to devalue the Proposed Tariff in advance of any objective exploration of that value. Access Copyright submits that if the Interim Tariff were amended as requested, this would give rise to the type of “gaming” adverted to by the Board in its Ruling of June 28, 2011. Finally, if the AUCC, and the Institutions it represents, believe that the most appropriate tariff to be set is one that fluctuates with usage for Digital Copies, they are entitled to make such arguments at the hearing of the Proposed Tariff. If the Copyright Board determines on the evidence that type of structure sets a fair and reasonable royalty rate, the Board is able to certify the final tariff at that time.
Note that the prices shown in the chart have been in effect for years, although the chart was updated to refer to the Interim Tariff after January 1, 2011.
The Objectors’ allegations of anti-competitive conduct have no merit
In its application, the AUCC alleges that Access Copyright’s “tactic” of refusing to grant Institutions transactional licences “is a gross abuse of the collective administration of copyright and an improper use of collective monopoly power” (AUCC, p. 1). The ACCC argues that the Interim Tariff “has allowed Access Copyright to unfairly exploit its monopoly power over its repertoire in such a way as to essentially compel educational institutions to take up the interim Tariff” in circumstances where these institutions are seeking “one off” transactional licences from Access Copyright or its affiliated publishing houses (ACCC, p. 2). Professor Katz goes even further and alleges that Access Copyright is engaged in anti-competitive behaviour and abuse of monopoly power; these are very serious – unfounded, indeed spurious – allegations. As explained in detail below, there is no merit to the argument that Access Copyright is abusing the collective administration of copyright. In fact, the AUCC’s conduct leading up to the Proposed Tariff, as further reflected in its application to amend, reflects a strategy whereby a collective exertion of monopsony power is intended to force Access Copyright to enter into licences with Institutions. There is no evidence (because none exists) that Access Copyright has ever told its affiliates, including publishers, not to issue transactional licences to Institutions, nor is there any evidence that its affiliates have discussed, let alone agreed upon, whether each affiliate will issue transactional licences. It remains open to any Institution to choose not to use works from Access Copyright’s repertoire and/or not to use the works of any individual copyright holder. If any Institution chooses to use such works, it is open to it to negotiate a licence with any rightsholder or Access Copyright or to engage the Interim Tariff. (i) There is no refusal to deal
Without expressly referring to it as a refusal to deal, the AUCC and ACCC argue that, because Access Copyright has refused to issue transactional licences on demand, the AUCC has no choice but to seek Board intervention at this time (AUCC, p. 1). The AUCC also alleges that rightsholders / publishers have either refused to grant a transactional licence or have referred the Institution to Access Copyright (AUCC, p. 10). Professor Katz goes further and alleges that Access Copyright and publishers have engaged in a “concerted collective refusal to deal” (Katz, para. 23). The latter allegation is – if intended to reference Access Copyright’s individual affiliates (as between themselves) or Access Copyright and its individual affiliates – entirely unfounded and spurious. Section 75 (refusal to deal) of the Competition Act is not, at all, engaged by any decision by Access Copyright, or its individual affiliates, not to grant transactional licences in the face of the Interim Tariff. Not only are the required elements of s. 75 not present (notably sub-paras. 75(1) a), b), d) and e)) but the Competition Tribunal has expressly found, in Canada (Director of Investigation & Research) v. Warner Music Canada Ltd.7, that intellectual property, specifically copyright, is not a “product” subject to the refusal to deal provision of the Competition Act and that copyright holders have the right to refuse to license their copyright to a prospective licensee.
(1997), 78 C.P.R. (3d) 321.
There is no abuse of dominance or tied selling
Professor Katz states that the conduct complained of may constitute an “abuse of dominant position” and “tied selling” (Katz, para. 16). Professor Katz’s allegation, in this respect, is also unfounded. As is clear from ss. 77-79 of the Competition Act and governing caselaw,8 to engage these provisions not only would there need to be evidence that Access Copyright had market power (of which there is none, as the Board recognized in its March 16 Reasons) but there would need to be evidence that the impugned conduct was intended to impede entry or expansion of competing rightsholders or copyright works (tied selling) or exclude, predate or discipline a competitor(s) of Access Copyright or its affiliates (tied selling or abuse of dominance), in order for Competition Bureau (or the Competition Tribunal) to even consider whether the impugned conduct has an anti-competitive effect. No evidence or even allegation of this nature has been proferred. Indeed, it would be illogical for any such allegation to be made in the context of the Proposed Tariff. This, like the other anti-competitive conduct allegations made by Professor Katz (and the AUCC) have no foundation in fact or law, and are simply intended to obfuscate what the Objectors seek here: to rewrite the Act’s collective administration provisions. (iii) Sections 45 and 90.1 of the Competition Act are not engaged
Professor Katz states that, “to the extent that Access Copyright and its member/affiliate copyright owners or some of them have agreed or otherwise arranged that they would refrain from licensing their works independently, such conduct may amount to an offence under section 45 of the Competition Act, to which the immunity under section 70.5(3) of the Copyright Act will not apply. Alternatively, such conduct could at least be subject to an order under section 90.1 of the Competition Act” (Katz, para. 16). While using deliberately cautious language (“to the extent that”) to soften a very serious allegation, Professor Katz’s references to ss. 45 and 90.1 represent a further attempt to cloud the real issues before the Board. Neither section 45 nor section 90.1 of the Competition Act apply to the circumstances before the Board, whether in law or based on the facts. As for the law, if section 45 or 90.1 were to apply as Professor Katz implies, logic dictates that any collective (or rightsholder) that acts pursuant to the collective administration provisions of the Copyright Act would be engaged in a hard core (criminal) cartel conduct prohibited by s. 45 or reviewable conduct prohibitable under s. 90.1, and the Board (by fulfilling its mandate) would be facilitating such conduct. This manifestly cannot be the case. As for the facts, there is no evidence of (nor is there) any agreement between publisher affiliates of Access Copyright not to licence on a transactional basis (or to license in any manner). Access Copyright’s decision, itself, not to license on a transactional basis in the face of the Proposed Tariff providing for a blanket licence is a unilateral decision made by an incorporated entity, not an agreement amongst competitors or potential competitors. Again, these allegations – while carefully couched as contingent – are irresponsible and intended to remove the Board’s focus from what is at stake.
Notably the Canada Pipe decision of the Federal Court of Appeal in which the undersigned was counsel for the Commissioner of Competition: Commissioner of Competition v. Canada Pipe Company Ltd./Tuyauteries Canada Ltée., 2006 FCA 236.
We trust that the Board will view the allegations of anti-competitive conduct for what they are: unfounded allegations of no relevance to the AUCC’s (or Professor Katz’s) application. We are, of course, prepared, should the Board believe it of assistance, to address these allegations in greater detail. In the end, as the Board knows, the scheme in the collective administration of copyright established by the Copyright Act requires that the Board balance, in this case, the interests of several ‘collectives’, collective of copyright holders, expressly authorized by the Copyright Act, and collectives of users, not expressly authorized by the Copyright Act. E. Professor Katz’s suggested remedy
In his submissions, Professor Katz repeats the arguments he made in response to Access Copyright’s application for an Interim Tariff, i.e., that the Board had no authority to issue the Interim Tariff. Indeed, much of his argument focuses on the theme that the Interim Tariff should never have been granted. Professor Katz also inveighs against the collective copyright regime established by Parliament, and proposes how he would like to see it changed. To counteract the authority Parliament has granted to collective societies, he asks the Board to implement a “quid pro quo” that would require rightsholders – actually mandate them – to enter into transactional licences with Institutions at the Board’s behest (Katz, para. 33 and footnote 9). Professor Katz’s submissions may be the sort of submissions one would make to a legislative committee, however, they should be rejected in the context of these proceedings. Professor Katz protests that the Interim Tariff interferes with the Institutions’ ability to secure licences on competitive terms if they wish (at para. 4). As he did in response to the application for Interim Tariff, he asserts that the Interim Tariff is mandatory (paras. 1-8). Notwithstanding clear direction from the Board in its March 16 Reasons regarding the nature of a collective society’s repertoire (see paras. 67-71 of the Board’s March 16 Reasons), he continues to make unsubstantiated allegations that “Access Copyright has so far systematically avoided providing any meaningful information about its [repertoire’s] scope, and it keeps making false and misleading representations that its repertoire is indeed vast and comprehensive” (para. 12). There is no factual basis for these allegations. In paragraph 13 of his submission, Professor Katz makes outrageous allegations that Access Copyright “in effect misappropriates others’ copyright to set up a monopolistic stronghold on the emerging market for digital licensing”. He continues these unfounded allegations in paragraph 14. Professor Katz studiously ignores the fact that the Board has recognized implied agency, and has outright rejected arguments of this nature in Access Copyright Elementary and Secondary School Tariff, 2005-2009 (the “K-12 Tariff”).9 As the Board noted in its March 16 Reasons, any Institution can find out what is in Access Copyright’s repertoire. It is the user’s responsibility to inquire, not any owner’s duty to inform. The type of allegations being made by Professor Katz should not be countenanced in these proceedings. Professor Katz evidently has difficulty accepting Parliament’s decision granting collective societies the right to apply for a tariff under the general tariff regime. Parliament has already established a legislative regime designed to secure the balance between rightsholders operating through collective societies on the one hand and users on the other hand. It is always open to an Institution to approach a rightsholder and try to negotiate a licence, but if the rightsholder decides not to enter into a licence, there is nothing in the Act giving the Board authority to force the rightsholder to enter into a licence. Therefore, it is respectfully
Collective Administration in relation to rights under sections 3, 15, 18 and 21, K-12 Tariff, para. 131.
submitted that the Board has no authority to do what Professor Katz asks. Indeed, even in the presence of a determined anti-competitive effect (which is not the case here), the Competition Bureau has expressly said that neither it nor the Competition Tribunal or courts would be justified in requiring an intellectual property holder to license its intellectual property (see Intellectual Property Enforcement Guidelines, para. 4.2 ff). F. Access has acted in good faith and consistently throughout
In its application for an Interim Tariff, Access Copyright did not in any way suggest transactional licences would be available if the Board granted its application to include digital uses under the Interim Tariff. In the Proposed Tariff filed on March 31, 2010, it is clear that Access Copyright’s application is to have digital uses covered on a comprehensive basis under the final tariff: there is no mention of transactional licences. Access Copyright has been consistent in its actions in the Proposed Tariff as filed in March 2010 and also throughout the proceedings for an Interim Tariff. In Access Copyright’s application for an Interim Tariff, the Board refused Athabasca University’s request to compel Access Copyright to issue transactional licences and arguably the issue is now res judicata. Where Access Copyright said in its reply submissions that parties could enter into negotiated licences, this was in reference to a voluntarily negotiated licence. It is noteworthy that the AUCC, ACCC and their members have not approached Access to negotiate a licence for digital use. Instead a small number of Institutions have sent a demand for a transactional licence. Rather than approaching Access Copyright directly to negotiate a licence for digital copying, the AUCC has filed this application to amend the Interim Tariff. This action was taken by the AUCC in the face of offers from Access Copyright to discuss and negotiate the licence in the spring and summer of 2010, in the period leading up to Access Copyright’s application for an Interim Tariff. In the circumstances, this action may be viewed as leverage for any future negotiation with Access Copyright. The Board rejected the argument that Access Copyright exercises a monopoly power in its March 16 Reasons, where it stated at para. 96: That this argument is even raised is surprising, for three reasons. First, if the Access repertoire is as unimportant to the Institutions as some claim, then Access clearly is not in a position to exert monopoly power. Second, Access is not a monopoly in at least two respects. It does not represent the world repertoire and what it does is represented on a non-exclusive basis. The users remain free to deal directly with its affiliates. Third, it is now settled that the Board’s mandate is not to protect users against potential abuse of monopoly power by collectives, but to maintain a balance in the relevant markets. This principle is very relevant here since, as Access pointed out, the Board may be confronted with a collective exertion of market power similar to that which once led the Board to protect copyright owners from the exertion of such power. As indicated above, Access Copyright has not engaged in any conduct that is subject to the Competition Act. Regardless, Access Copyright’s adherence to the Competition Act is not a matter within the Board’s jurisdiction and should not be used, even indirectly, as justification for amendments to the Interim Tariff.
In its submissions of December 22, 2010, Access Copyright addressed the argument made by a number of participants that imposition of an Interim Tariff would “amount to an intervention in the marketplace” (Access Reply December 22, 2010, p. 7). Ironically here, the AUCC has applied for just such an intervention. The universities (supported by the colleges) are, in reliance on their collective buying power, trying to dictate the terms of supply, a further signal to Access Copyright that users will exercise their collective will to thwart Access Copyright’s licensing and/or tariff efforts. It is precisely to address such a situation that Parliament has expressly provided rightsholders with the ability to file a proposed tariff, and be adjudicated by an independent expert tribunal. An Interim Tariff is not the stage at which these fundamental issues should be considered. ****** We would be pleased to answer any questions the Board may have in respect of the above submissions.
Yours very truly,
c: Objectors and Intervenors
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