Alberta v. Canadian Copyright Licensing Agency (Access Copyright)

Alberta v. Canadian Copyright Licensing Agency (Access Copyright)
Court (s) Database
Federal Court Decisions
Date
2024-02-22
Neutral citation
2024 FC 292
File numbers
T-326-18
Decision Content
Date: 20240222
Docket: T-326-18
Citation: 2024 FC 292
Ottawa, Ontario, February 22, 2024
PRESENT: The Honourable Madam Justice Aylen
BETWEEN:
THE PROVINCEOF ALBERTA and all entities named in Schedule “A” to the Statement of Claim
Plaintiffs
and
THE CANADIAN COPYRIGHT LICENSING AGENCY (c.o.b. ACCESS COPYRIGHT)
Defendant
ORDER AND REASONS
[1] The Plaintiffs are the Ministries of Education of 10 Canadian provinces and territories (excluding British Columbia, Ontario and Québec) and each of the school boards in Ontario. During the years 2010, 2011 and 2012, the Plaintiffs paid royalties in the amount of $4.81 per full time equivalent [FTE] student to Access Copyright (a collective society under the Copyright Act, RSC 1985, c C-42 [Copyright Act])[1] under an interim tariff. When the Copyright Board certified the final tariff for 2010 to 2015 at $2.46 per FTE, the Plaintiffs brought this action seeking a refund for the amount they claim they overpaid from 2010 to 2012. The Plaintiffs maintain that they opted out of purchasing licences effective January 1, 2013 and as such, did not pay for a licence from 2013 to 2015.
[2] Access Copyright does not dispute the amount of the overpayment, but instead counterclaims that it should be permitted to keep the Plaintiffs’ refund because the Plaintiffs continued to hold a statutory licence from 2013 to 2015 for which no licence fees were paid. As a result, Access Copyright claims it is entitled to recover default licence fees from the Plaintiffs under section 68.2(1) of the Copyright Act because the Plaintiffs paid or offered to pay royalties under the tariff for those years. In the alternative, if it is not entitled to recover default licence fees from the Plaintiffs for 2013 to 2015, Access Copyright argues that it is entitled to various equitable and common law remedies that would extinguish any amount owing to the Plaintiffs, including unjust enrichment, estoppel by representation, common law and equitable election, issue estoppel, abuse of process and collateral attack. In the further alternative, Access Copyright argues it is entitled to equitable set-off against any refund of the overpayment otherwise owing to the Plaintiffs.
[3] The parties have brought a motion for summary trial in which they have jointly asked the Court to answer the following three questions:
Have the Plaintiffs been licensees from 2013 onward?
If the Plaintiffs have not been licensees from 2013 onward, are the Plaintiffs nevertheless liable in equity to pay Access Copyright?
If the Plaintiffs are not liable in equity to pay Access Copyright, is Access Copyright entitled to retain the 2010-2012 overpayment in any event?
[4] When the motion was originally brought and the aforementioned questions were framed by the parties, Access Copyright was seeking compensation from 2013 onward. However, in their closing submissions, Access Copyright advised that it was limiting its case to compensation owed for the period 2013 to 2015 only and as such, I have not considered any of Access Copyright’s claims and arguments related to 2016 onward. The issues as framed by the parties have been modified accordingly (as set out below).
[5] For the reasons that follow, I find that: (a) the Plaintiffs were not statutory licensees from 2013 to 2015; (b) the Plaintiffs are not liable in equity, or otherwise, to pay Access Copyright an amount equivalent to the royalties under the Approved 2010-2015 Tariff (as defined below) for the years 2013 through 2015; and (c) Access Copyright is not entitled to retain the 2010 to 2012 royalty overpayment.
I. Background
A. The parties
[6] The Plaintiffs are the Ministries of Education of ten Canadian provinces and territories (excluding British Columbia, Ontario and Québec) and each of the school boards in Ontario, as listed in Schedule “A” to the Statement of Claim.
[7] The Council of Ministers of Education, Canada [CMEC] is an intergovernmental body that is comprised of the Ministers of Education in all 13 provinces and territories in Canada, including Québec. The CMEC’s Copyright Consortium is composed of the Ministers of Education of all provinces and territories of Canada, with the exception of Québec. The CMEC Copyright Consortium works to advance the views of its members on national copyright issues related to education. The CMEC Copyright Consortium also represents the interests of students and teachers before the Copyright Board of Canada [Board] and was an objector in the Board proceedings to certify Access Copyright’s proposed tariffs for elementary and secondary schools for the years 2005-2009, 2010-2012 and 2013-2015. Further, the CMEC’s Copyright Consortium has a mandate to provide information on the use of copyright-protected materials and educate teachers, school staff and school board administrators about their rights and obligations under the Copyright Act (including publishing and distributing Copyright Matters!). While CMEC is not a party to this proceeding, CMEC played an active role before the Board, on behalf of many of the Plaintiffs, in relation to the tariffs at issue in this proceeding.
[8] Access Copyright is a not-for-profit corporation operating as a collective society within the meaning of section 70.1(a) of the Copyright Act. Access Copyright acts as an agent and collects royalties for hundreds of thousands of domestic and international publishers, authors and artists [collectively, Affiliates] for the reproduction of published literary, dramatic and artistic works in Canada (except Québec). The Affiliates enter into representation agreements with Access Copyright in respect of their copyright works.
[9] Access Copyright is not an assignee or an exclusive licensee. As such, it does not have the right to sue for copyright infringement of its Affiliates’ work, and the Affiliates are free to licence their rights to users directly or through intermediaries besides Access Copyright [see York University v Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32 at para 2 [York University]].
[10] The Affiliates are not, and have never been, parties to this proceeding.
B. Collective societies and the tariff regime
[11] Access Copyright is a collective society within the meaning of section 2 of the Copyright Act. As a collective society that administers a licensing scheme in respect of reproduction rights applicable to its repertoire of published works, Access Copyright operates within the Copyright Act’s regime for “Collective Administration in Relation to Rights under Sections 3, 15, 18 and 21”, known as the “general regime” (sections 70.1 to 70.6) [see York University, supra at para 21].
[12] Pursuant to section 70.12, a collective society operating in the general regime may, “for the purpose of setting out by licence the royalties and terms and conditions relating to classes of uses”, either (a) file a proposed tariff with the Board; or (b) enter into agreements with users. A collective society that chooses to file a proposed tariff does so under section 70.13, which permits it to “file with the Board a proposed tariff … of royalties to be collected by the collective society for issuing licences” [see York University, supra at para 22].
[13] When a collective society files a proposed tariff with the Board, subsection 70.15(1) requires the Board to “certify the tariffs as approved, with such alterations to the royalties and to the terms and conditions related thereto as the Board considers necessary, having regard to any objections to the tariffs” [see York University, supra at para 23].
[14] After a collective society files a proposed tariff under section 70.13, section 70.14 stipulates that subsections 67.1(3) and (5) and subsection 68(1) apply, “with such modifications as the circumstances require.” These provisions state as follows:
67.1 (3) A proposed tariff must provide that the royalties are to be effective for periods of one or more calendar years.
[…]
(5) As soon as practicable after the receipt of a proposed tariff filed pursuant to subsection (1), the Board shall publish it in the Canada Gazette and shall give notice that, within sixty days after the publication of the tariff, prospective users or their representatives may file written objections to the tariff with the Board.
[…]
68 (1) The Board shall, as soon as practicable, consider a proposed tariff and any objections thereto referred to in subsection 67.1(5) or raised by the Board, and
(a) send to the collective society concerned a copy of the objections so as to permit it to reply; and
(b) send to the persons who filed the objections a copy of any reply thereto.
[15] Accordingly, prospective users are entitled, pursuant to subsection 67.1(5), to object to any tariff proposed by Access Copyright and to participate in the proceedings before the Board.
[16] The Board’s power to modify and approve a collective society’s proposed tariff is one of three sources of the Board’s supervisory and price-setting authority over a collective society’s royalties in the general regime. The Board may also fix royalties when a collective society and individual user are unable to agree on terms and one party applies to the Board (sections 70.2 to 70.4), or alter royalties if the parties make an agreement without Board intervention that is then filed with the Board (sections 70.5 to 70.6) [see York University, supra at para 24].
[17] Once a tariff is approved under subsection 70.15(1), the resulting legal consequences are established by subsection 70.15(2) and section 70.17 [see York University, supra at para 25].
[18] Subsection 70.15(2) states that subsection 68.2(1) applies “with such modifications as the circumstances require.” Subsection 68.2(1), which is found in the Copyright Act’s separate regime for the collective administration of performing rights and communication rights, provides:
68.2 (1) Without prejudice to any other remedies available to it, a collective society may, for the period specified in its approved tariff, collect the royalties specified in the tariff and, in default of their payment, recover them in a court of competent jurisdiction.
[19] Section 70.17 provides:
70.17 Subject to section 70.19, no proceedings may be brought for the infringement of a right referred to in section 3, 15, 18 or 21 against a person who has paid or offered to pay the royalties specified in an approved tariff.
[20] Section 70.18 gives collective societies the right to continue collecting royalties under the terms of the previous tariff where it has filed a proposed tariff in accordance with section 70.13, but that proposed tariff has not yet been approved (referred to as an “interim tariff” or a “continuation tariff”):
70.18 Subject to section 70.19, where a collective society files a proposed tariff in accordance with section 70.13,
(a) any person authorized by the collective society to do an act referred to in section 3, 15, 18 or 21, as the case may be, pursuant to the previous tariff may do so, even though the royalties set out therein have ceased to be in effect, and
(b) the collective society may collect the royalties in accordance with the previous tariff,
until the proposed tariff is approved.
[21] Under section 66.52, the Board also has the power to vary the tariff terms and conditions if, in its opinion, there has been a material change in circumstances since the decision was made:
66.52 A decision of the Board respecting royalties or their related terms and conditions that is made under subsection 68(3), sections 68.1 or 70.15 or [sic] subsections 70.2(2), 70.6(1), 73(1) or 83(8) may, on application, be varied by the Board if, in its opinion, there has been a material change in circumstances since the decision was made.
C. Supreme Court of Canada’s decision in York University
[22] When this proceeding was commenced in 2018, the Supreme Court of Canada had not yet rendered its decision in York University. The Supreme Court’s decision in York University, ultimately rendered on July 30, 2021, impacted the framing of Access Copyright’s claims in this proceeding (discussed more fully below). It also impacted the dealings between the Plaintiffs and Access Copyright, as, most notably, the Supreme Court concluded that interim and final tariffs certified by the Board (which would include the tariffs at issue in this proceeding) are not mandatory.
[23] By way of context, from 1994 to 2010, a licence agreement permitted professors at York University to make copies of published works in Access Copyright’s repertoire and set the applicable royalties. The relationship between Access Copyright and York University deteriorated in the course of negotiations to renew the licence and Access Copyright eventually filed a proposed tariff with the Board for post‑secondary educational institutions. Access Copyright’s position was that a tariff certified by the Board would create a mandatory legal relationship between Access Copyright and universities (including York University) and that the full amount of the approved royalties under the tariff would be payable by a university as soon as it made a single infringing use of a work within Access Copyright’s repertoire, regardless of whether the university agreed to be bound by a licence on the approved terms of the tariff.
[24] Access Copyright applied to the Board for certification of a tariff on an interim basis because it was unsure that it would be able to reach an agreement with York University before the licence expired. The terms generally matched the pre‑existing licence agreement and would operate until the Board certified the final tariff. The Board granted Access Copyright’s request for an interim tariff and it took effect on January 1, 2011. York University initially paid the approved royalties, but in July 2011, York University informed Access Copyright that it would not continue as a licensee. York University took the position that its copying activities involving works within Access Copyright’s repertoire constituted fair dealing and, in any event, the interim tariff was not enforceable against it.
[25] The Board ultimately certified the final tariff for the period 2011 to 2017, but made no comment as to whether the tariff created a mandatory legal relationship between Access Copyright and universities who did not sign a licensing agreement.
[26] Access Copyright sought to enforce the interim tariff in this Court, asserting that professors at York University had made copies that went beyond fair dealing and for which no licence was obtained. Access Copyright asserted that York University was liable to pay, in full, the royalties set out in the interim tariff. York University counterclaimed for a declaration that any copying conducted within its fair dealing guidelines was protected by fair dealing rights under the Copyright Act and asserted that the interim tariff was not enforceable against it as it had not agreed to be bound by its terms.
[27] This Court found that the interim tariff was enforceable against York University and that neither its fair dealing guidelines nor its actual practices constituted fair dealing. The Federal Court of Appeal allowed the appeal on the tariff enforcement action, holding that Board-approved tariffs are voluntary for users, but dismissed its appeal on the fair dealing counterclaim. Access Copyright appealed the tariff enforcement issue to the Supreme Court, and York University appealed from the dismissal of its fair dealing counterclaim.
[28] The issue, as framed by the Supreme Court, was whether subsection 68.2(1) of the Copyright Act empowers Access Copyright to enforce royalty payments set out in a Board-approved tariff against a user who chooses not to be bound by a licence on the approved terms.
[29] The Supreme Court held that the tariff was not enforceable against York University as the tariff was not mandatory. The Supreme Court found that subsection 68.2(1) of the Copyright Act does not empower Access Copyright to enforce the royalty payments set out in tariffs certified by the Board pursuant to section 70.15 against a user who chooses not to be bound by a licence on the approved terms. Moreover, subsection 68.2(1) also does not provide a collective infringement remedy. Although a collective society is required to provide licences pursuant to the terms of a certified tariff, the licence cannot be forced on a user. Users are entitled to obtain their rights by other means, if they choose to, and if the user makes an unauthorized use of works in the collective society’s repertoire, the appropriate remedy is an action for infringement.
[30] The Supreme Court began its analysis by considering the text of subsection 68.2(1), noting that the provision is silent on who the collective society may collect royalties from and on what conditions. The Supreme Court stated at paragraph 32 that “where Parliament sees fit to create a mandatory duty to pay, it does so with ‘clear and distinct legal authority showing that this was Parliament’s intent’” and noted that there is no such language creating a duty to pay approved royalties to a collective society that operates a licencing scheme anywhere in the Copyright Act.
[31] With respect to the legislative context, the Supreme Court held that the combined effect of subsection 68.2(1) and section 70.17 creates a dichotomy between users who choose to be licensed pursuant to the terms of a Board-approved tariff, and those who choose not to acquire a licence but may be liable for infringement. The Supreme Court went on to state:
[34] Copyright infringement constitutes an unauthorized exercise of the owner’s exclusive right (s. 27), and a licence constitutes an authorization to make a particular use that would otherwise be infringing (Elizabeth F. Judge and Daniel J. Gervais, Intellectual Property: The Law in Canada (2nd ed. 2011), at p. 146; Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129, at para. 49, per Iacobucci J.). It is therefore “elementary” that a person cannot simultaneously be an infringer and a licensee (Composers, Authors and Publishers Association of Canada, Ltd. v. Sandholm Holdings Ltd., 1955 CanLII 799 (CA EXC), [1955] Ex. C.R. 244, at p. 254). In the context of the provisions at issue in this case, a person who has paid or offered to pay the royalties under s. 70.17 has become a licensee and may be liable for defaulted payments under s. 68.2(1). A person who has not paid or offered to pay is not licensed and may be liable for infringement.
[35] Section 68.2(1) ensures that a collective society has a remedy for defaulted payments from voluntary licensees and that actions for recovery can be brought in Federal Court (see Sandholm Holdings Ltd., at pp. 249-50).
[Emphasis added.]
[32] The Supreme Court cited its decision in Canadian Broadcasting Corp v SODRAC 2003 Inc, [2015] 3 SCR 615 [SODRAC], noting that the SODRAC decision was consistent with its interpretation of subsection 68.2(1). In SODRAC, Rothstein J. held that royalties fixed by the Board pursuant to section 70.2 (a provision permitting a tariff application when a collective society and a specific user are unable to agree on licencing royalties) are not binding on the user and the Board did not have the “power to force these terms on a user who, having reviewed the terms, decided that engaging in licensed copying is not the way to proceed.” In SODRAC, the Supreme Court stated that a user who does not accept a licence but engages in a protected use “will remain liable for infringement” [see SODRAC, supra at para 108].
[33] The Supreme Court in York University went on to state:
[38] In reaching this conclusion, Rothstein J. observed that the text of s. 70.4 is permissive, showing that “a user whose copying activities were the subject of a s. 70.2 proceeding may avail itself of the terms and conditions established by the Board as a way to gain authorization to engage in the activity contemplated in the Board proceeding” (para. 106 (emphasis in original)). Section 68.2(1) does not itself specify that a user “may” avail itself of the tariff terms. But read alongside s. 70.17, the combined effect creates the same voluntary trigger for acquiring a licence. Under s. 70.17 a user can acquire a licence and immunize themselves from infringement proceedings if they have “paid or offered to pay the royalties”. This is identical to s. 70.4, where a user “may … subject to the related terms and conditions fixed by the Board and to the terms and conditions set out in the scheme and on paying or offering to pay the royalties, do the act”. Paying or offering to pay is a permissive act triggering licence acquisition in both cases.
[Underlining added.]
[34] The Supreme Court also considered the legislative purpose and held that the object of the statutory scheme governing collective administration is the protection of users, and this purpose has persisted through various amendments to the Copyright Act. The first regime regulating collective societies in Canada was created in response to the emergence of early performing rights societies who had acquired control of the vast majority of popular musical compositions and were therefore able to exercise monopolistic power. Regulating collective societies was deemed necessary by Parliament and was done by vesting the Board with price‑setting powers to protect users from the potentially unfair exertion of the new societies’ market power. Though an approved statement of royalties put a cap on what the societies could charge for a licence, it did not bind an unwilling user to the terms of a licence. Empowering a society to foist a licence on an unwilling user would be discordant with the protective purpose of the regime.
[35] Before concluding, the Supreme Court noted:
[74] The source of Access Copyright’s grievance, it seems to me, stems not so much from the voluntary nature of an approved tariff, but from the fact that Access Copyright cannot initiate infringement actions on behalf of its members. To the extent that this is a problem, it has nothing to do with s. 68.2(1) and is largely outside the scope of this appeal. But it is important to recall that Access Copyright chooses to operate on the terms of a non-exclusive licence that does not give it the right to sue for infringement in respect of the rights it administers. Nothing compels Access Copyright and its members to operate this way.
D. The underlying action/counterclaim and history of the proceeding
[36] On February 16, 2018, prior to the Supreme Court’s decision in York University, the Plaintiffs commenced this action against Access Copyright seeking, among other relief: (a) a declaration that Access Copyright’s tariffs as certified by the Board are not mandatory; (b) a declaration that the Plaintiffs overpaid Access Copyright for the years 2010, 2011 and 2012 by an amount equal to $2.35 per FTE student; and (c) payment by Access Copyright of a refund or monetary damages to the Plaintiffs in the amount of the overpayment, namely $25,493,109.36, together with pre-judgment and post-judgment interest.
[37] On July 11, 2018, Access Copyright served and filed its Statement of Defence and Counterclaim. As explained below, Access Copyright’s counterclaim and defences changed significantly over the course of the proceeding. As originally pleaded, Access Copyright alleged that the Board’s tariffs were mandatory and based their defences and counterclaim on both the 2013-2015 Interim Tariff (as defined below) and the Approved 2010-2015 Tariff (as defined below), as well as tariffs post-2015, which are no longer at issue. Access Copyright asserted that the Plaintiffs’ claims must be set-off from the amounts owing to Access Copyright for non-payment of royalties under the Approved 2010-2015 Tariff. In the alternative, Access Copyright pleaded that, by their conduct (including participating in Board and judicial review proceedings), the Plaintiffs are estopped or otherwise precluded from claiming that the Approved 2010-2015 Tariff is not binding or otherwise attacking the Board’s decisions certifying the 2013-2015 Interim Tariff and the Approved 2010-2015 Tariff. Access Copyright asserted that such claims are also an impermissible collateral attack and an abuse of process, and that the Plaintiffs are bound by findings of fact and law in the 2013-2015 Interim Tariff and the Approved 2010-2015 Tariff decisions by the doctrines of res judicata, issue estoppel and collateral attack.
[38] By way of its counterclaim, Access Copyright sought, among other relief: (a) a declaration that the Plaintiffs, from January 1, 2013 to December 31, 2015, reproduced works in Access Copyright’s repertoire, which obliges them to pay royalties under the Approved 2010-2015 Tariff; (b) a declaration that the Approved 2010-2015 Tariff and the 2013-2015 Interim Tariff are mandatory for the Plaintiffs as a result of their reproduction of works in Access Copyright’s repertoire; and (c) payment by the Plaintiffs of the royalties owing under the relevant tariffs.
[39] Amendments were made by Access Copyright to its pleading on January 10, 2020 and September 13, 2021, the latter amendments being made post-York University. The September 13, 2021 version of its pleading is the one presently before the Court on this motion. Access Copyright now pleads, in addition to the allegations detailed above, that the Plaintiffs had no right to opt out of the tariffs because they voluntarily engaged in the tariff process beginning in 2010, including after January 1, 2013, and made use of works in Access Copyright’s repertoire. Having made their election to engage in the tariff process, and having paid royalties from 2010 to 2012, Access Copyright asserts that the Plaintiffs were voluntary licensees.
[40] Access Copyright further pleads, in the alternative and under the heading of set-off that:
[55]…by engaging in the reproduction, making available and authorization of making available and reproduction of copyright works in the Repertoire without authorization, the Plaintiffs are engaging in mass infringement of works in the Repertoire and have generated damages in a quantum far in excess of the amounts claimed by the Plaintiffs in their Statement of Claim.
[…]
[57] The payments still owing to Access Copyright pursuant to the Tariffs since and including 2013 are so clearly connected with the Plaintiffs’ claims that it would be manifestly unjust to allow the Plaintiffs to enforce payment without taking into consideration those amounts still owing to Access Copyright by the Plaintiffs or, alternatively, recoverable as damages for infringement.
[Underlining in original.]
[41] In early 2022, the Plaintiffs brought a motion to strike Access Copyright’s pleading pursuant to Rule 221(1)(a) of the Federal Courts Rules, SOR/98-106 [Rules], in which they asserted that the Supreme Court’s decision in York University provides a complete answer to Access Copyright’s position in this litigation, such that Access Copyright has no defence to the action and no claim to assert by way of counterclaim. It was in the context of this motion that the full extent of Access Copyright’s assertions became known, including Access Copyright’s assertion that the Plaintiffs “offered to pay” for a licence under the Approved 2010-2015 Tariff by virtue of their various forms of asserted conduct (as particularized below), as well as the various forms of equitable relief sought by Access Copyright and the basis therefor.
[42] By Order dated March 16, 2022, I dismissed the Plaintiffs’ motion to strike, finding that the Plaintiffs had not demonstrated that it was plain and obvious that Access Copyright’s pleading disclosed no reasonable cause of action.
[43] The parties have engaged in an extensive documentary discovery process. Given the number of Plaintiffs and the time period involved, the documentary production process quickly became unwieldy and the parties required the extensive assistance of the Case Management Judge (a position which I held at the relevant time). By Order dated January 2, 2019, I determined that documentary production would proceed by way of a representative set of productions from an agreed upon number of Plaintiff schools, school boards and Ministries of Education, without prejudice to the right of any party to seek leave of the Court to obtain further documentary productions. The parties were required to meet and confer to agree on the specific representative group, as well as the nature of documents to be produced.
[44] However, the parties encountered issues in determining the representative group and the nature of documents to be produced, with both the Plaintiffs and Access Copyright engaging experts to assist them with documentary discovery. I ultimately ordered the parties and their experts to confer regarding: (a) the nature and scope of document production expected from Access Copyright and the representative Ministries, school boards and schools (as ultimately selected); (b) the manner by which the specific representative Ministries, school boards and schools would be selected; and (c) the methodologies used by the experts in opining on the appropriate representative Ministries, school boards and schools and the areas of agreement and disagreement between the experts. The parties were unable to reach an agreement and ultimately, the Plaintiffs brought a motion before the Court to determine the issues.
[45] By Order dated May 29, 2019, I ordered that, for the purpose of the representative documentary discovery of the Plaintiffs (as ordered on January 2, 2019):
Affidavits of documents were required from: (a) each Ministry of Education from all provinces and territories, excluding Québec and British Columbia, and in relation to Ontario, the school boards shall make inquiries of the Ministry for relevant documents; (b) 65 school boards (excluding Québec and British Columbia), randomly selected with sufficient representation of smaller and larger school boards (in proportions equivalent to their share of FTEs) and to be distributed across Canada in a manner proportional to FTE counts while ensuring a minimum of three school boards per province and three for the three territories in aggregate; and (c) eight schools randomly selected from each of the 65 school boards, with sufficient representation of smaller and larger schools as well as elementary and secondary schools. The selection of school boards and schools was to be a joint exercise undertaken by the parties and their experts.
The affidavits of documents to be delivered from the representative Plaintiffs had to contain the following records, for the period 2013 onward, in the power, possession or control of the representative Plaintiffs that were relevant to the implementation, administration and enforcement of fair dealing, to the extent such records exist: (a) each fair dealing guideline implemented by each province, district, school board and school, including implementation memoranda, correspondence, training materials and logs, teacher and administrator certifications, guidelines for agents or external providers, documents relating to the monitoring of compliance with fair dealing guidelines, including by the CMEC, feedback from users within the school system, incident reports or disciplinary records relating to non-compliance or failure to train, including any records of any violation or suspected or claimed violations of any fair dealing guidelines, and excluding any student incident reports or student disciplinary records; and (b) such other relevant documentation relating to the implementation, administration and enforcement of fair dealing guidelines, including of Ministry or Department of Education Copyright Officers.
The affidavits of documents to be delivered from the representative Plaintiffs had to contain the following records, for the period 2013 onward, in the power, possession or control of the representative Plaintiffs that were relevant to the copying activities of the representative Plaintiffs, to the extent such records exist: (a) physical copies of works, including both “master copies” of works intended to be used for teaching as well as resulting copies of works disseminated to students; (b) lesson plans, course syllabi, course outlines, source materials, curriculums and similar records associated with the teaching of subjects in the Plaintiffs’ schools (i.e. teachers’ course binders); (c) all internal and external records pertaining to choice of educational materials, maintenance of class sets, and use of workbooks; all internal and external records pertaining to Access Copyright or its tariffs; (d) all internal and external records pertaining to the schools, school boards and provinces electing to “no longer operate” under Access Copyright’s K-12 tariff; (e) archives from electronic learning management systems; (f) budgets for each school for the 2013 to 2018 years (in the form that they currently exist), including for purchasing all products and services including materials used for educational instruction, copying expenses (i.e. paper, ink, copying equipment, etc.) and acquiring new physical works (i.e. for textbooks, novels, etc.); and (h) amounts spent by each school on purchasing or licensing materials for educational instruction, broken down by type, including on each textbook and consumable, as they relate to the works at issue in the counterclaim including publisher licence agreements, amounts spent on licences of materials used for educational instruction by work licensed, records from copying shops or internal copying services relating to any copying of the works at issue in the counterclaim, records of any savings of each school board resulting from copying of the works at issue in the counterclaim, and all FTE numbers on a per class basis, for all schools and school boards between 2013 and 2018.
A limited affidavit of documents was also to be delivered by 300 school boards (excluding Québec and British Columbia) containing the following records, for the period 2013 onward, in the power, possession or control of each school board, to the extent such records exist: (a) copyright management and enforcement guidelines, including all guidelines, instructions and training materials issued by the school board to teachers and principals; (b) any copying audits, audit committee reports or studies with regard to compliance; (c) all copying budget numbers; and (d) all FTE numbers.
Access Copyright was also entitled to identify a maximum of 10 additional school boards for targeted discovery, which school boards were to produce an affidavit of documents containing the same categories of documents as set out above.
[46] Further disputes arose regarding the production of certain file types and whether the Plaintiffs had complied with my production order, which also required the ongoing assistance of the Court throughout 2020 and 2021.
[47] Following my Order dismissing the Plaintiffs’ motion to strike, the parties participated in a Court-assisted mediation. When it was unsuccessful, the parties then agreed to bring the within motion for summary trial.
E. Evidence before the Court on this motion
[48] Notwithstanding that the parties were unable to reach an agreement on an agreed statement of facts for use on this motion, I find that most of the facts that are relevant to the issues raised on this motion are not in dispute. Rather, it is the parties’ respective interpretation of events that is disputed.
(1) Licences prior to 2005
[49] In 1991, the province of Ontario became the first jurisdiction in Canada to enter into a licence agreement with Access Copyright for elementary and secondary publicly funded schools. The royalty rate was $1.00 for each FTE. By 1997, all other provinces and territories (excluding Québec) had entered into similar licence agreements with Access Copyright.
[50] In 1998, CMEC concluded a licence agreement with Access Copyright for all Ministries of Education in all jurisdictions (excluding Ontario and Québec) and for school boards in Ontario. This licensing agreement, referred to by the parties as the Pan-Canadian Licence Agreement, took effect on September 1, 1999. The royalty rate was $2.10 per FTE, with an annual increase of the lesser of the rate of change of the Consumer Price Index or 3 per cent.
(2) 2005-2009 tariff
[51] In March 2004, following the expiry of the Pan-Canadian Licence Agreement and unsuccessful negotiations with CMEC to enter into a new licensing agreement, Access Copyright filed a proposed tariff for the reproduction in Canada (excluding Québec) of works in Access Copyright’s repertoire by kindergarten to grade twelve [K-12] schools for the period of 2005 to 2009.
[52] In April 2005, during the Board proceedings for the certification of Access Copyright’s proposed tariff, Access Copyright and the objectors agreed on the methodology that would be used in conducting a study to measure a sample of the volume and nature of photocopying that occurred in elementary and secondary educational institutions, school boards, and Ministries of Education throughout Canada, save Québec [Volume Study]. The Volume Study was carried out during the 2005 to 2006 school year in 894 schools, 31 school boards, and 17 offices of Ministries of Education.
[53] On June 26, 2009, the Board issued its decision in relation to Access Copyright’s proposed tariff for 2005 to 2009 [Initial 2005-2009 Tariff]. Relying on the data from the Volume Study, the Board concluded that approximately 270 million pages of published works that would be covered by the tariff were copied per year by K-12 schools, Ministries of Education and school boards. The Board identified 18.5 million pages as having been made for a purpose permitted by the fair-dealing provisions in sections 29 or 29.1 of the Copyright Act. Of these, the Board found 1.6 million pages to have been made by fair dealing. The Board concluded that the royalty rate for the tariff would be $5.16 per FTE. On June 27, 2009, the Initial 2005-2009 Tariff, as certified by the Board, was published in the Canada Gazette.
[54] The Plaintiffs sought judicial review of the Board’s finding of non-fair dealing with respect to approximately 16.9 million pages [the “category 4” copies]. On July 23, 2010, the Federal Court of Appeal found that the Board’s conclusion that the “category 4” copies were not fair dealing was reasonable [see Alberta (Education) v Access Copyright, 2010 FCA 198]. The Plaintiffs were granted leave to appeal the fair dealing issue to the Supreme Court.
[55] On July 12, 2012, the Supreme Court rendered its decision in Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 and found that the Board’s decision certifying the Initial 2005-2009 Tariff was unreasonable. The Supreme Court held that the Board’s finding misapplied the factors enunciated in CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13. The Supreme Court restricted their decision to the 16.9 million “category 4” copies in dispute and remitted the matter to the Board for redetermination.
[56] On January 18, 2013, the Board issued its redetermination decision and the following day published the final certified tariff for 2005 to 2009 [Approved 2005-2009 Tariff] at $4.81 per FTE student [see Access Copyright - Tariff for Educational Institutions, 2005-2009 [Redetermination], 2013 CanLII 148720 (CA CB)]. This tariff replaced the Initial 2005-2009 Tariff (set at $5.16 per FTE).
[57] For the years 2005 to 2009, the Plaintiffs chose to license the reproduction of published literary works in elementary and secondary schools by paying t