York University v. Canadian Copyright Licensing Agency (Access Copyright)

York University v. Canadian Copyright Licensing Agency (Access Copyright)
Collection
Supreme Court Judgments
Date
2021-07-30
Neutral citation
2021 SCC 32
Report
[2021] 2 SCR 734
Case number
39222
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas
On appeal from
Federal Court of Appeal
Subjects
Intellectual property
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32, [2021] 2 S.C.R. 734
Appeals Heard: May 21, 2021 Judgment Rendered: July 30, 2021 Docket: 39222
Between: York University Appellant
and
Canadian Copyright Licensing Agency (“Access Copyright”) Respondent
- and -
Société québécoise de gestion collective du droit de reproduction (COPIBEC), Authors Alliance, Ariel Katz, Canadian Association of Law Libraries, Canadian Association of University Teachers, Canadian Federation of Students, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Centre de droit des affaires et du commerce international, Chaire L. R. Wilson sur le droit des technologies de l’information et du commerce électronique, Copyright Collective of Canada, Canadian Musical Reproduction Rights Agency Ltd., Canadian Retransmission Collective, CONNECT Music Licensing Service Inc., Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec, Canadian Media Producers Association, Association québécoise de la production médiatique, International Authors Forum, International Federation of Reproduction Rights Organisations, International Publishers Association, Association of Canadian Publishers, Canadian Publishers’ Council, Writers’ Union of Canada, Canadian Association of Research Libraries, Copyright Consortium of the Council of Ministers of Education, Canada, Music Canada, Canadian Music Publishers Association, Association québécoise de l’industrie du disque, du spectacle et de la vidéo, Professional Music Publishers Association, Canadian Independent Music Association, Colleges and Institutes Canada and Universities Canada Interveners
And Between: Canadian Copyright Licensing Agency (“Access Copyright”) Appellant
and
York University Respondent
- and -
Société québécoise de gestion collective du droit de reproduction (COPIBEC), Authors Alliance, Ariel Katz, Canadian Association of Law Libraries, Canadian Association of University Teachers, Canadian Federation of Students, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Centre de droit des affaires et du commerce international, Chaire L. R. Wilson sur le droit des technologies de l’information et du commerce électronique, Society of Composers, Authors and Music Publishers of Canada, Copyright Collective of Canada, Canadian Musical Reproduction Rights Agency Ltd., Canadian Retransmission Collective, CONNECT Music Licensing Service Inc., Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec, Association of Canadian Publishers, Canadian Publishers’ Council, Writers’ Union of Canada, Canadian Association of Research Libraries, Music Canada, Canadian Music Publishers Association, Association québécoise de l’industrie du disque, du spectacle et de la vidéo, Professional Music Publishers Association, Canadian Independent Music Association and Universities Canada Interveners
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
Reasons for Judgment: (paras. 1 to 108)
Abella J. (Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ. concurring)
York University Appellant
v.
Canadian Copyright Licensing Agency (“Access Copyright”) Respondent
and
Société québécoise de gestion collective du droit de reproduction (COPIBEC),
Authors Alliance,
Ariel Katz,
Canadian Association of Law Libraries,
Canadian Association of University Teachers,
Canadian Federation of Students,
Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic,
Centre de droit des affaires et du commerce international,
Chaire L. R. Wilson sur le droit des technologies de l’information et du commerce électronique,
Copyright Collective of Canada,
Canadian Musical Reproduction Rights Agency Ltd.,
Canadian Retransmission Collective,
CONNECT Music Licensing Service Inc.,
Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec,
Canadian Media Producers Association,
Association québécoise de la production médiatique,
International Authors Forum,
International Federation of Reproduction Rights Organisations,
International Publishers Association,
Association of Canadian Publishers,
Canadian Publishers’ Council,
Writers’ Union of Canada,
Canadian Association of Research Libraries,
Copyright Consortium of the Council of Ministers of Education, Canada,
Music Canada,
Canadian Music Publishers Association,
Association québécoise de l’industrie du disque, du spectacle et de la vidéo,
Professional Music Publishers Association,
Canadian Independent Music Association,
Colleges and Institutes Canada and
Universities Canada Interveners
‑ and ‑
Canadian Copyright Licensing Agency (“Access Copyright”) Appellant
v.
York University Respondent
and
Société québécoise de gestion collective du droit de reproduction (COPIBEC),
Authors Alliance,
Ariel Katz,
Canadian Association of Law Libraries,
Canadian Association of University Teachers,
Canadian Federation of Students,
Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic,
Centre de droit des affaires et du commerce international,
Chaire L. R. Wilson sur le droit des technologies de l’information et du commerce électronique,
Society of Composers, Authors and Music Publishers of Canada,
Copyright Collective of Canada,
Canadian Musical Reproduction Rights Agency Ltd.,
Canadian Retransmission Collective,
CONNECT Music Licensing Service Inc.,
Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec,
Association of Canadian Publishers,
Canadian Publishers’ Council,
Writers’ Union of Canada,
Canadian Association of Research Libraries,
Music Canada,
Canadian Music Publishers Association,
Association québécoise de l’industrie du disque, du spectacle et de la vidéo,
Professional Music Publishers Association,
Canadian Independent Music Association and
Universities Canada Interveners
Indexed as: York University v. Canadian Copyright Licensing Agency (Access Copyright)
2021 SCC 32
File No.: 39222.
2021: May 21; 2021: July 30.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin and Kasirer JJ.
on appeal from the federal court of appeal
Intellectual property — Copyright — Tariffs — Enforcement — Fair dealing — Declaratory relief — Collective society obtaining certification of interim tariff for post‑secondary educational institutions — University refusing to pay royalties under interim tariff for its copying activities — Collective society bringing enforcement action — University bringing counterclaim seeking declaration that copying conducted within its fair dealing guidelines protected by fair dealing rights — Whether collective society can enforce royalty payments set out in tariff against user who chooses not to be bound by licence on the approved terms — Whether declaratory relief sought by university should be granted — Copyright Act, R.S.C. 1985, c. C‑42, ss. 29, 68.2(1).
Access Copyright (“Access”) is a collective society who licences and administers reproduction rights in published literary works on behalf of creators and publishers. From 1994 to 2010, a licence agreement permitted professors at York University (“York”) to make copies of published works in Access’s repertoire and set the applicable royalties. As licence renewal negotiations were underway, the relationship between Access and York deteriorated, resulting in Access filing a proposed tariff with the Copyright Board for post‑secondary educational institutions. Unsure that it would be able to reach an agreement with York before the expiry of its licence, Access applied to the Board for certification of a tariff on an interim basis, generally matching the pre‑existing licence agreement, to operate until the Board approved a final tariff. The Board granted Access’s request for an interim tariff. York initially paid the approved royalties, but eventually informed Access that it would not continue as a licensee.
Access sought enforcement of the interim tariff in the Federal Court, and York counterclaimed for a declaration that any copying conducted within its fair dealing guidelines was protected by fair dealing rights under the Copyright Act. The trial judge found that the interim tariff was enforceable against York and that neither its guidelines nor its actual practices constituted fair dealing. The Federal Court of Appeal allowed York’s 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 appeals to the Court on the tariff issue, and York appeals from the dismissal of its fair dealing counterclaim.
Held: The appeals should be dismissed.
The tariff is not enforceable against York. Section 68.2(1) of the Copyright Act does not empower Access to enforce royalty payments set out in a Board approved tariff pursuant to s. 70.15 against a user who chooses not to be bound by a licence on the approved terms. Section 68.2(1) does not provide a collective infringement remedy. A collective society is required to provide licences pursuant to the terms of an approved tariff, but the licence cannot be forced on a user. A user is entitled to obtain its rights through other means and, if the user makes an unauthorized use, the appropriate remedy is an action for infringement. While Access’s inability to initiate infringement actions as a non‑exclusive licensee may cause it difficulties, this is the consequence of its freely chosen contractual arrangements with its members.
The text, legislative context, purpose and supporting jurisprudence confirm this interpretation. As a collective society that administers a licensing scheme in respect of reproduction rights applicable to its repertoire of published works, Access operates within the Copyright Act’s general regime for collective administration (ss. 70.1 to 70.6). Once a tariff is approved under s. 70.15(1), the resulting legal consequences are established by ss. 70.15(2) and 70.17. Section 70.15(2) says that s. 68.2(1), which is found in the Copyright Act’s separate regime for the collective administration of performing rights and communication rights, applies “with such modifications as the circumstances require”. Section 68.2 provides that 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. Section 70.17 states that “no proceedings may be brought for the infringement of a right . . . against a person who has paid or offered to pay the royalties specified in an approved tariff”.
The text of s. 68.2(1) is silent on who the collective society may collect royalties from and on what conditions. Where Parliament sees fit to create a mandatory duty to pay, it generally does so with clear and distinct legal authority showing that this was its intent. There is no such language creating a duty to pay approved royalties to a collective society that operates a licensing scheme anywhere in the Copyright Act. Concluding otherwise would read words into the provision that are not found anywhere in the text of the Copyright Act.
With respect to the legislative context, the combined effect of ss. 68.2(1) and 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. Copyright infringement constitutes an unauthorized exercise of the owner’s exclusive right and a licence constitutes an authorization to make a particular use that would otherwise be infringing. It is therefore elementary that a person cannot simultaneously be an infringer and a licensee. A person who has paid or offered to pay the royalties under s. 70.17 has become a licensee and may accordingly be liable for defaulted payments under s. 68.2(1). But a person who has not paid or offered to pay is not licensed and may only be liable for infringement. Section 68.2(1) thus 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.
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 any form of collective society 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. 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. Users are therefore entitled to choose whether or not to accept a licence on Board‑approved terms.
It would be inappropriate to entertain York’s request for declaratory relief in these proceedings. In light of the conclusion that the interim tariff is not mandatory and is therefore unenforceable against York, there is no live dispute between the parties. This is not an action for infringement, since Access has no standing to bring such an action. Furthermore, the copyright owners who do have standing are not parties to these proceedings and have not had the opportunity to advance arguments about the impact of York’s activities on their copyrighted works. Assessing fair dealing guidelines in the absence of a genuine dispute between proper parties would anchor the analysis in aggregate findings and general assumptions without a connection to specific instances of works being copied.
However, the reasoning of the Federal Court and Federal Court of Appeal on the fair dealing issue is not endorsed. It is well‑established that the party invoking fair dealing must prove first that the dealing was for an allowable purpose and, second, that it was fair. Six non‑exhaustive factors provide a framework for assessing fairness, which is ultimately a question of fact: the purpose of the dealing; the character of the dealing; the amount of the dealing; alternatives to the dealing; the nature of the work; and the effect of the dealing on the work. At the second step, the Federal Court and Federal Court of Appeal approached the analysis from an institutional perspective only, leaving out the perspective of the students who use the materials. This error tainted the analysis of several fairness factors. The purpose of copying conducted by university teachers for student use is for the student’s education. Funds saved by proper exercise of the fair dealing right go to this core objective, and not to some ulterior commercial purpose. Ultimately, the question in a case involving a university’s fair dealing practices is whether those practices actualize the students’ right to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Copyright Act. In the present case, by focusing on the institutional nature of the copying, the nature of fair dealing as a user’s right was overlooked and the fairness assessment was over before it began.
Cases Cited
Applied: Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, [2016] 1 S.C.R. 99; considered: Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615; CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339; Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326; Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, [2012] 2 S.C.R. 345; referred to: Reprographic Reproduction 2011‑2013, Interim Statement of Royalties to be Collected by Access Copyright (Post‑Secondary Educational Institutions) (Re) (2011), 92 C.P.R. (4th) 434; Statements of Royalties to be Collected by Access Copyright for the Reprographic Reproduction, in Canada, of Works in its Repertoire, CB‑CDA 2019‑082 (online: https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/453965/1/document.do); Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129; Composers, Authors and Publishers Association of Canada, Ltd. v. Sandholm Holdings Ltd., [1955] Ex. C.R. 244; Vigneux v. Canadian Performing Right Society, Ltd., [1943] S.C.R. 348; Vigneux v. Canadian Performing Right Society, Ltd., [1945] A.C. 108; Maple Leaf Broadcasting Co. v. Composers, Authors and Publishers Assn. of Canada Ltd., [1954] S.C.R. 624; Performing Rights Organization of Canada Ltd. v. Lion D’Or (1981) Ltée (1987), 16 F.T.R. 104; Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231; Euro‑Excellence Inc. v. Kraft Canada Inc., 2007 SCC 37, [2007] 3 S.C.R. 20; Solosky v. The Queen, [1980] 1 S.C.R. 821; Newfoundland and Labrador (Attorney General) v. Uashaunnuat (Innu of Uashat and of Mani‑Utenam), 2020 SCC 4, [2020] 1 S.C.R. 15; Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336.
Statutes and Regulations Cited
An Act to amend the Copyright Act, S.C. 1997, c. 24.
An Act to amend The Copyright Amendment Act, 1931, S.C. 1935, c. 18.
An Act to amend The Copyright Amendment Act, 1931, S.C. 1936, c. 28.
An Act to amend the Copyright Act and to amend other Acts in consequence thereof, R.S.C. 1985, c. 10 (4th Supp.) [formerly S.C. 1988, c. 15].
Budget Implementation Act, 2018, No. 2, S.C. 2018, c. 27.
Competition Act, R.S.C. 1985, c. C‑34.
Copyright Act, R.S.C. 1927, c. 32, s. 10B(8) [ad. 1936, c. 28, s. 2], (9) [idem].
Copyright Act, R.S.C. 1985, c. C‑42, ss. 2 “collective society” (a), 19, 27, 29, 29.1, 29.2, 30.02, 30.3, 38.1 [ad. 1997, c. 24, s. 20], 38.2, 41.23, 68.2(1), 70.1 to 70.6, 81, 82(1).
Copyright Act, 1911 (U.K.), 1 & 2 Geo. 5, c. 46.
Copyright Act, 1921, S.C. 1921, c. 24.
Copyright Amendment Act, 1931, S.C. 1931, c. 8.
Copyright Modernization Act, S.C. 2012, c. 20.
York University Act, 1959, S.O. 1959, c. 145.
York University Act, 1965, S.O. 1965, c. 143, s. 4.
Authors Cited
Canada. Report of the Royal Commission Appointed to Investigate the Activities of the Canadian Performing Rights Society, Limited, and Similar Societies, by James Parker. Ottawa, 1935.
Canada. Consumer and Corporate Affairs. From Gutenberg to Telidon: A White Paper on Copyright: Proposals for the Revision of the Canadian Copyright Act, by Judy Erola and Francis Fox. Ottawa, 1984.
Canada. Department of Canadian Heritage. Collective Management of Copyright and Neighbouring Rights in Canada: An International Perspective, by Daniel J. Gervais. Ottawa, 2001.
Canada. House of Commons. House of Commons Debates, vol. VI, 2nd Sess., 33rd Parl., June 15, 1987, p. 7109.
Canada. House of Commons. House of Commons Debates, vol. VI, 2nd Sess., 33rd Parl., June 26, 1987, p. 7667.
Canada. House of Commons. Sub-committee of the Standing Committee on Communications and Culture on the Revision of Copyright. A Charter of Rights for Creators. Ottawa, 1985.
Craig, Carys. “Locking Out Lawful Users: Fair Dealing and Anti-Circumvention in Bill C‑32”, in Michael Geist, ed., From “Radical Extremism” to “Balanced Copyright”: Canadian Copyright and the Digital Agenda. Toronto: Irwin Law, 2010, 177.
Craig, Carys J. “Locke, Labour and Limiting the Author’s Right: A Warning against a Lockean Approach to Copyright Law” (2002), 28 Queen’s L.J. 1.
Geist, Michael. “Fairness Found: How Canada Quietly Shifted from Fair Dealing to Fair Use”, in Michael Geist, ed., The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law. Ottawa: University of Ottawa Press, 2013, 157.
Gervais, Daniel J. “Collective Management of Copyright and Neighbouring Rights in Canada: An International Perspective” (2002), 1 C.J.L.T. 21.
Judge, Elizabeth F., and Daniel J. Gervais. Intellectual Property: The Law in Canada, 2nd ed. Toronto: Carswell, 2011.
Katz, Ariel. “Spectre: Canadian Copyright and the Mandatory Tariff — Part I” (2015), 27 I.P.J. 151.
Katz, Ariel. “Spectre: Canadian Copyright and the Mandatory Tariff — Part II” (2015), 28 I.P.J. 39.
Knopf, Howard P. “Copyright Collectivity in the Canadian Academic Community: An Alternative to the Status Quo?” (1999), 14 I.P.J. 109.
Macklem, Lisa, and Samuel Trosow. “Fair Dealing, Online Teaching and Technological Neutrality: Lessons From the COVID‑19 Crisis” (2020), 32 I.P.J. 215.
Tawfik, Myra. “History in the Balance: Copyright and Access to Knowledge”, in Michael Geist, ed., From “Radical Extremism” to “Balanced Copyright”: Canadian Copyright and the Digital Agenda. Toronto: Irwin Law, 2010, 69.
Tawfik, Myra J. “The Supreme Court of Canada and the ‘Fair Dealing Trilogy’: Elaborating a Doctrine of User Rights under Canadian Copyright Law” (2013), 51 Alta. L. Rev. 191.
Trosow, Samuel E. “Bill C-32 and the Educational Sector: Overcoming Impediments to Fair Dealing”, in Michael Geist, ed., From “Radical Extremism” to “Balanced Copyright”: Canadian Copyright and the Digital Agenda. Toronto: Irwin Law, 2010, 541.
APPEALS from a judgment of the Federal Court of Appeal (Pelletier, de Montigny and Woods JJ.A.), 2020 FCA 77, 174 C.P.R. (4th) 1, 448 D.L.R. (4th) 456, [2020] F.C.J. No. 509 (QL), 2020 CarswellNat 1294 (WL Can.), setting aside in part a decision of Phelan J., 2017 FC 669, [2018] 2 F.C.R. 43, 149 C.P.R. (4th) 375, [2017] F.C.J. No. 701 (QL), 2017 CarswellNat 3226 (WL Can.). Appeals dismissed.
Guy Pratte and John C. Cotter, for the appellant/respondent York University.
Sheila R. Block and Asma Faizi, for the respondent/appellant the Canadian Copyright Licensing Agency (“Access Copyright”).
Daniel Payette, for the intervener Société québécoise de gestion collective du droit de reproduction (COPIBEC).
Sana Halwani, for the interveners the Authors Alliance and Ariel Katz.
Kim P. Nayyer, for the intervener the Canadian Association of Law Libraries.
Jeremy de Beer, for the interveners the Canadian Association of University Teachers and the Canadian Federation of Students.
David Fewer, for the intervener the Samuelson‑Glushko Canadian Internet Policy and Public Interest Clinic.
Ysolde Gendreau, for the interveners Centre de droit des affaires et du commerce international et Chaire L. R. Wilson sur le droit des technologies de l’information et du commerce électronique.
Matthew Estabrooks, for the intervener the Society of Composers, Authors and Music Publishers of Canada.
John E. Callaghan, for the intervener the Copyright Collective of Canada.
Erin Finlay, for the interveners the Canadian Musical Reproduction Rights Agency Ltd., the Canadian Retransmission Collective, CONNECT Music Licensing Service Inc. and Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec.
Erin Finlay, for the interveners the Canadian Media Producers Association and Association québécoise de la production médiatique.
Stéphane Caron, for the interveners the International Authors Forum, the International Federation of Reproduction Rights Organisations and the International Publishers Association.
Brendan van Niejenhuis, for the interveners the Association of Canadian Publishers, the Canadian Publishers’ Council and the Writers’ Union of Canada.
Howard P. Knopf, for the intervener the Canadian Association of Research Libraries.
Wanda Noel, for the intervener the Copyright Consortium of the Council of Ministers of Education, Canada.
Casey M. Chisick, for the interveners Music Canada, the Canadian Music Publishers Association, Association québécoise de l’industrie du disque, du spectacle et de la vidéo, the Professional Music Publishers Association and the Canadian Independent Music Association.
J. Aidan O’Neill, for the intervener Colleges and Institutes Canada.
David Kent, for the intervener Universities Canada.
The judgment of the Court was delivered by
[1] Abella J. — These appeals raise issues of fundamental importance to the rights and liabilities of Canadian universities and their students under the Copyright Act.[1]
Background
[2] Access Copyright is a collective society under the Copyright Act. It licences and administers reproduction rights in published literary works throughout Canada, with the exception of Quebec, on behalf of creators and publishers who own the copyright in those works. Access Copyright is not an assignee or an exclusive licensee of the copyright held by its members, which means that Access Copyright does not have the right to sue for infringement of its members’ copyright and that Access Copyright’s members are free to licence their rights to users directly or through intermediaries other than Access Copyright.
[3] York University is the third largest university in Canada. It consists of 11 faculties providing undergraduate, graduate, and professional programs and courses taught primarily at 2 campuses in Toronto. At the time of the trial, York had over 3,000 full and part-time faculty and over 45,000 full-time equivalent students. York was established by the government of Ontario through the York University Act, 1959, S.O. 1959, c. 145, and continued under the York University Act, 1965, S.O. 1965, c. 143. Its statutory objectives are “the advancement of learning and the dissemination of knowledge” and “the intellectual, spiritual, social, moral and physical development of its members and the betterment of society” (s. 4 of the York University Act, 1965).
[4] Those who teach at York University select and make available copies of published works, including works falling within Access Copyright’s repertoire, to students enrolled in courses for educational purposes. Learning materials are distributed through two main methods: course packs and the learning management system. A course pack is a compilation of printed materials, printed internally at York or through external printshops. The learning management system is an online platform through which instructors can make course materials available to their students electronically.
[5] From 1994 to 2010, Access Copyright and York maintained a steady legal relationship pursuant to the terms of a licence agreement which permitted professors at York to make copies of published works in Access Copyright’s repertoire and set the applicable royalties. By 2010, the royalties payable to Access Copyright under the licence consisted of an annual blanket fee of $3.38 per full-time equivalent student in addition to $0.10 per page copied into a course pack for sale or distribution to students. Access Copyright would collect these royalties and distribute payments to its members, and conduct any usage monitoring incidental to the licence. The agreement between Access Copyright and York reflected a “model licence” negotiated by the Association of Universities and Colleges of Canada, and all members of the AUCC were likewise licensed by Access Copyright.
[6] The relationship between Access Copyright and York deteriorated as licence renewal negotiations were underway in 2010, with the acrimony eventually culminating in the appeals before this Court. Access Copyright says that York started freely using materials it was obliged to pay for and that it failed to negotiate in good faith. York responded that the precipitating factors were based on legitimate decisions to obtain usage rights from sources other than Access Copyright and to make more complete use of its legal entitlement to fair dealing.
[7] Unsure that it would be able to reach an agreement with York before the expiry of its licence in January 2011, Access Copyright filed a proposed tariff with the Copyright Board of Canada in March 2010 for post-secondary educational institutions covering the years 2011-2013. The proposed tariff contemplated an increase in the annual blanket fee to $45 per full-time equivalent student for use of the works within Access Copyright’s repertoire, without a per page rate. This would have amounted to a flat annual fee of over two million dollars payable by York.
[8] Access Copyright’s view was that Board approval of a tariff would create a mandatory legal relationship between Access Copyright and York (and other universities), effectively supplanting the voluntary licensing agreement that had set out the parties’ rights and liabilities for the preceding 16 years. In Access Copyright’s view, the full amount of the approved royalties would be payable by York as soon as York made a single infringing use of a work within Access Copyright’s repertoire, regardless of whether or not York agreed to be bound by a licence on the approved terms.
[9] Access Copyright’s proposed tariff was published in the Canada Gazette. Just over 100 individuals and institutions filed objections.
[10] In light of the rapidly approaching licence expiry date, Access Copyright applied to the Copyright Board in October 2010 asking it to certify a tariff on an interim basis, generally matching the pre-existing licence agreement, to operate from January 1, 2011 until the Board approved a final tariff. On December 23, 2010, the Board granted Access Copyright’s request for an interim tariff, based on the previous licence agreement royalty rate of $0.10 per page for course packs and $3.38 per full-time equivalent student (Reprographic Reproduction 2011-2013, Interim Statement of Royalties to be Collected by Access Copyright (Post-Secondary Educational Institutions) (Re) (2011), 92 C.P.R. (4th) 434).
[11] After the interim tariff took effect on January 1, 2011, York initially paid the approved royalties. But in July 2011, prior to the start of the academic year, York informed Access Copyright that it would not continue as a licensee. York claimed that its copying activities involving Access Copyright’s repertoire constituted fair dealing and, in any event, the interim tariff was not enforceable against it.
[12] A hearing was held by the Board in January 2016. York and some other universities had withdrawn from the proceedings in April 2012 and were not represented at the hearing. On December 6, 2019, the Board approved final tariffs for the years 2011-2017 (Statements of Royalties to be Collected by Access Copyright for the Reprographic Reproduction, in Canada, of Works in its Repertoire, CB-CDA 2019-082 (online)). The royalties for universities were fixed at a blanket rate of $24.80 per full-time equivalent student from 2011-2014 and $14.31 per full-time equivalent student from 2015-2017.
[13] In its decision, the Board did not comment on whether the tariffs created a mandatory legal relationship between Access Copyright and universities who do not sign a licensing agreement.
[14] Access Copyright went to the Federal Court to enforce the interim tariff for copying activities engaged in by York and its employees from September 1, 2011 to December 31, 2013. Access Copyright identified cases of copying conducted by 5 professors involving 87 works within Access Copyright’s repertoire. It claimed that this copying was not licensed or exempted by the concept of fair dealing. Accordingly, it said, York was liable to pay, in full, the royalties set out in the interim tariff. York said that the tariff was not enforceable against it because, among other reasons, York had not agreed to be bound by its terms.
[15] York counterclaimed for a Declaration that any copying conducted within its “Fair Dealing Guidelines for York Faculty and Staff”, issued November 13, 2012, was protected by the fair dealing rights in ss. 29, 29.1 and 29.2 of the Act.
[16] At the Federal Court, the Case Management Judge bifurcated the trial into two Phases. Phase I included all issues relating to whether the interim tariff was enforceable against York; whether York was responsible for the copying activities of the five professors; and York’s counterclaim that it was entitled to a Declaration that “any reproductions made that fall within the guidelines set out in York’s ‘Fair Dealing Guidelines for York Faculty and Staff (11/13/12)’ . . . constitute fair dealing”. The amount of unauthorized copying and York’s quantum of liability under the tariff was to be determined at Phase II, if necessary. These appeals arise solely from Phase I of the trial.
[17] The trial judge found that the interim tariff was enforceable against York and that neither its Fair Dealing Guidelines nor its actual practices constituted fair dealing (2017 FC 669, [2018] 2 F.C.R. 43).
[18] The Federal Court of Appeal allowed York’s appeal on the tariff enforcement action but dismissed its appeal on the fair dealing counterclaim. The court held that Board approved tariffs are voluntary for users. If a user who chooses not to be licensed under a tariff makes an unauthorized use of a work, the remedy is an infringement action which Access Copyright does not have standing to assert because it does not own the copyright in any of the works and is not an exclusive licensee or an assignee. While this disposed of the dispute between the parties, the court went on to evaluate York’s appeal on the fair dealing counterclaim. It concluded that York could not establish that all copying within its Guidelines is fair and refused to issue the Declaration (2020 FCA 77, 174 C.P.R. (4th) 1).
[19] For the following reasons, I agree with the Federal Court of Appeal that the tariff is not enforceable against York University. But I would not grant York’s requested Declaration, nor endorse the fair dealing analysis conducted by the Federal Court and the Federal Court of Appeal.
Analysis
[20] The question on Access Copyright’s appeal is whether s. 68.2(1) of the Copyright Act empowers Access Copyright to enforce royalty payments set out in a Copyright Board approved tariff against a user who chooses not to be bound by a licence on the approved terms. More specifically, the issue is whether Access Copyright can extract from York the royalties set out in the interim tariff despite the fact that York chose not to be bound by a licence. While this appeal only concerns the interim tariff, it is common ground that the effect of an interim tariff and a final tariff is the same.
[21] 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 Act’s regime for “Collective Administration in Relation to Rights under Sections 3, 15, 18 and 21”, known as the “general regime” (ss. 70.1 to 70.6).
[22] Pursuant to s. 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 s. 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”. In this case, Access Copyright filed a proposed tariff with the Board setting out the royalties it proposed to collect for issuing reproduction licences to post-secondary educational institutions.
[23] When a collective society files a proposed tariff with the Board, s. 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”. Here, the Board approved an interim tariff in response to Access Copyright’s proposal.
[24] 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 (ss. 70.2 to 70.4), or alter royalties if the parties make an agreement without Board intervention that is then filed with the Board (ss. 70.5 to 70.6).
[25] Once a tariff is approved under s. 70.15(1), the resulting legal consequences are established by ss. 70.15(2) and 70.17.
[26] Section 70.15(2) says that s. 68.2(1), which is found in the Act’s separate regime for the collective administration of performing rights and communication rights, applies “with such modifications as the circumstances require”:
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.
[27] Of related relevance is s. 70.17, which states:
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.
[28] The issue in this case is one of statutory interpretation, which, as this Court has repeatedly said, is an exercise in discerning legislative intent by looking at the grammatical and ordinary meaning of the text in the context of the statute’s scheme and objectives.
[29] Access Copyright argues that s. 68.2(1), incorporated by reference in s. 70.15(2), means that any person who makes an otherwise unauthorized use of a work captured by an approved tariff is liable to be sued for royalties, regardless of whether the user agrees to be bound by a licence on the approved terms. This is known as the “mandatory tariff” theory. In this case, that means that any use of a work in Access Copyright’s repertoire that was not separately licensed or authorized by fair dealing would trigger York’s liability to pay the full annual blanket rate of $3.38 per full-time equivalent student (and by extension the substantially higher rates approved under the final tariffs), in addition to the per-page rate applicable to course pack copies. A single unauthorized use would result in liability to pay six figure annual fees under the interim tariff, and over one million dollars per year under the 2011-2014 final tariff.
[30] York rejects the mandatory tariff theory. In its view, s. 68.2(1) only grants a collective society the right to collect defaulted payments from a user who has agreed to be bound by a licence on the approved terms. A collective society is required to provide licences pursuant to the terms of an approved tariff, since s. 70.17 immunizes a person who pays or offers to pay the royalties from an infringement action. But the licence cannot be forced on a user. A user is entitled to obtain its rights through other means and, if the user makes an unauthorized use, the appropriate remedy is an action for infringement (see generally Ariel Katz, “Spectre: Canadian Copyright and the Mandatory Tariff — Part