David Fewer, Director

(613) 562-5800 (x2558) dfewer@uottawa.ca

Université d’Ottawa University of Ottawa Faculté de droit Faculty of Law

57 Louis-Pasteur, Ottawa (Ontario) K1N 6N5 Canada (613) 562-5800 (2553) (613) 562-5417 (Téléc/Fax)

www.cippic.ca cippic@uottawa.ca

Canadian Internet Policy and Public Interest Clinic Clinique d’intérêt public et de politique d’internet du Canada

November 23, 2010 VIA EMAIL Mr. Gilles McDougall Acting Secretary General Copyright Board of Canada 56 Sparks Street Suite 800 Ottawa, ON K1A 0C9 Dear Mr. McDougall, RE: Access Copyright Post-Secondary Educational Institutions Tariff (2011-2013) We have reviewed Access Copyright’s letter to the Board, dated 22 September, 2010, regarding Access Copyright’s response to the filing of over 100 objections to its proposed tariff, 1 and the Board’s response, dated November 15, 2010. We have also become aware, circuitously, of Access Copyright’s application to the Board for an interim tariff.2 In this correspondence, we respond to both on behalf of our clients, the Canadian Federation of Students (“CFS”) and the Canadian Association of University Teachers (“CAUT”) (collectively, the “Objectors”). CAUT and CFT are pleased to participate in this proceeding under the terms proposed by the Board – interveners with all of the rights of objectors. Although now moot with respect to our clients’ status, we offer the Board the benefit of our view on the merits of Access Copyright’s claims with respect to the proper interpretation of s. 68(1) of the Copyright Act3 in the hopes that it may prove useful to the Board in addressing the positions of other participants in this proceeding.

1. Access Copyright’s Response to the Objectors Access Copyright’s response to the Objectors raises numerous issues, two of which we shall address: a. the question of the standing of the objectors, and

b. the right of Access Copyright to demand interrogatories of objectors and interveners.

1 Barry Sookman, Letter on behalf of Access Copyright to Copyright Board (22 September, 2010) [“Access Copyright Letter”]. 2 See Access Copyright, “Post-Secondary Tariff Interim Application”, online: Access Copyright, <http://www.accesscopyright.ca/default.aspx?id=339> [“Interim Application”]. 3 Copyright Act, R.S.C. 1985, c. C-42 (as amended) [“Copyright Act”].

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a. Standing

Access Copyright takes the position that the Objectors are not “users” and so cannot qualify as “objectors” with standing to participate in this proceeding as parties. Access Copyright argues that only an entity that pays royalties under the proposed tariff is a “user” of the tariff and could enjoy standing as what it terms a “bona fide s. 68(1) objector”4 before the Board. Access Copyright concludes that all other parties’ filings may be treated as “comments”, and that such parties may apply to intervene in the matter before the Board. Access Copyright’s position is without merit, and should be rejected out of hand. CAUT and CFS represent professors (in the first case) and students (in the second), both classes of “users” who will be affected by the certification of the proposed tariff. CAUT and CFS are properly before the Board as objectors. This position is supported by a range of considerations:

(a) statutory interpretation; (b) consideration of the role and purpose of the Board; (c) fairness; and (d) practical considerations. (a) Statutory Interpretation

In publishing the proposed tariff in the Gazette, the Board invited “prospective users or their representatives” to file objections to the proposed tariff.5 This language follows that of the Copyright Act6 itself, which defines the Board’s jurisdiction to address tariffs. Determination of CAUT' and CFS’ standing as objectors is affirmed through a statutory interpretation of the Act. The Supreme Court of Canada has adopted Dreidger’s modern rule of statutory interpretation.7 This rule instructs that statutes are to be interpreted according to their context and by the plain meaning of the words:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.8

Thus, where sub-section 67.1(5) of the Act sets out the Board’s jurisdiction to accept objections from “prospective users”, the understanding of who these users are should be read in light of Dreidger’s principle. This provision of the Act provides as follows:

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.9

The Act does not specifically define “prospective user”, nor does it define “user”, no “use”, the

4 A term with no foundation in the Copyright Act. 5 Supplement to the Canada Gazette, Part I, June 12, 2010, p. 3, online: Copyright Board of Canada <http://www.cb-cda.gc.ca/tariffs-tarifs/proposed-proposes/2010/2009-06-11-1.pdf>. 6 Copyright Act, supra note 3. 7 Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 21. 8 Elmer Driedger, Construction of Statutes (2nd ed. 1983) at 87. 9 Subsection 1 provides that “(1) Each collective society referred to in section 67 shall, on or before the March 31 immediately before the date when its last tariff approved pursuant to subsection 68(3) expires, file with the Board a proposed tariff, in both official languages, of all royalties to be collected by the collective society.”.

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root of each term. Dictionaries provide some guidance on the grammatical and ordinary sense of “user”. The Merriam-Webster simply states that “user” means “One that uses.”10 The obvious question is: uses what? The Oxford defines “user” in law to mean “Continued use, exercise, or enjoyment of a right, etc.; presumptive right arising from use.”11 The use refers to the use of a right. In the context of copyright law, this right is use of a work subject to copyright. This analysis directs one to conclude that the grammatical and ordinary meaning of “user” is one who uses a work subject to copyright. This conclusion is confirmed by a contextual analysis of the Copyright Act.

In the context of the Copyright Act, the term “user” is employed in this same manner throughout – to mean the user of a work subject to copyright. This is derived from the root of the term, the verb “use”. A clear example of this is provided in section 77(1) under the Part of the Act addressing “Owners Who Cannot be Located”:

Where, on application to the Board by a person who wishes to obtain a licence to use (a) a published work, (b) a fixation of a performer’s performance, (c) a published sound recording, or (d) a fixation of a communication signal in which copyright subsists, the Board is satisfied that the applicant has made reasonable efforts to locate the owner of the copyright and that the owner cannot be located, the Board may issue to the applicant a licence to do an act mentioned in section 3, 15, 18 or 21, as the case may be.12

Thus a “person” may obtain a license to “use” a work, performance, sound recording, or communication signal in which copyright subsists. Similarly, in section 45(1), addressing “Importation”, “use” consistently refers to use of a work under copyright, whether it be by a person, the Government of Canada, or library, archive, museum or educational institution:

Notwithstanding anything in this Act, it is lawful for a person (a) to import for their own use not more than two copies of a work or other subject-matter made with the consent of the owner of the copyright in the country where it was made; (b) to import for use by a department of the Government of Canada or a province copies of a work or other subject-matter made with the consent of the owner of the copyright in the country where it was made; (c) at any time before copies of a work or other subject-matter are made in Canada, to import any copies, except copies of a book, made with the consent of the owner of the copyright in the country where the copies were made, that are required for the use of a library, archive, museum or educational institution; (d) to import, for the use of a library, archive, museum or educational institution, not more than one copy of a book that is made with the consent of the owner of the copyright in the country where the book was made; and (e) to import copies, made with the consent of the owner of the copyright in the country where they were made, of any used books, except textbooks of a scientific, technical or scholarly nature for use within an educational institution in a course of instruction.13

10 Merriam-Webster, s.v. “user”, online: Merriam-Webster, <http://www.merriam-webster.com/dictionary/user>. 11 Oxford English Dictionary, s.v. “user”, online: Oxford English Dictionary <http://dictionary.oed.com/cgi/entry/50273894?query_type=word&queryword=user&first=1&max_to_show=10&sort_type=alpha&result_place=2&search_id=IQj5-i4qW6G-16021&hilite=50273894>. 12 Copyright Act, supra note 3. 13 Ibid (emphasis added).

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And section 14.1(4) on the part on Moral Rights provides that “use” is of “the work”:

Where a waiver of any moral right is made in favour of an owner or a licensee of copyright, it may be invoked by any person authorized by the owner or licensee to use the work, unless there is an indication to the contrary in the waiver.14

Thus, in the context of the statute, “use” refers to the use of a work under copyright. The corollary to this is that “user” refers to the person making such “use” of the work. The Supreme Court of Canada also employs the term “user” in this manner. In CCH Canadian Ltd. v. Law Society of Upper Canada the Court discusses “use” and “users” in the context of fair dealing and users’ rights; users throughout are clearly the users of the works under copyright:

The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right. In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively. As Professor Vaver, supra, has explained, at p. 171: “User rights are not just loopholes. Both owner rights and user rights should therefore be given the fair and balanced reading that befits remedial legislation;15

and

As discussed, these [fair dealing] purposes should not be given a restrictive interpretation or this could result in the undue restriction of users’ rights. This said, courts should attempt to make an objective assessment of the user/defendant’s real purpose or motive in using the copyrighted work;16

and

If a copyright owner were allowed to license people to use its work and then point to a person’s decision not to obtain a licence as proof that his or her dealings were not fair, this would extend the scope of the owner’s monopoly over the use of his or her work in a manner that would not be consistent with the Copyright Act’s balance between owner’s rights and user’s interests.17

Similarly, academics recognize this same understanding of user in the specific context of the Copyright Board’s collective society regime. For example, Daniel Gervais notes that one of the functions of collective management of copyright in Canada is to ensure “that users will have easy access to the rights needed to use the material protected by copyright”.18 Again, “users” are meant here as users of the works that are protected by copyright. Even in the context of the proposed tariff a “user” includes users of works licensed under the tariff, as well as such users the tariff burdens with duties and obligations. The definition of “course collection” under section 2 of the tariff provides that “authorized persons” can make “use” of “course collections”. Under the tariff:

“authorized persons” means: (a) a student; and

14 Ibid (emphasis added). 15 CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339 at para. 48 (emphasis added). 16 Ibid. at 54 (emphasis added). 17 Ibid. at 70 (emphasis added). 18 Daniel J. Gervais, “Collective Management of Copyright and Neighbouring Rights in Canada: An International Perspective” (2002) 1(2) Canadian Journal of Law and Technology 21 at 22.

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(b) a staff member”19 of the educational institution. Nowhere does the tariff propose that the educational institutions themselves are the users of the works under copyright covered by the tariff. By its own language, the proposed tariff contemplates benefiting and burdening a range of stakeholders beyond royalty payers. These stakeholders are users, and as such are proper objectors to the tariff. This is consistent with how Access Copyright accounts for itself to the world. On its website, Access Copyright explains its role as meeting the needs of “users” to legally copy copyright protected materials:

Since 1988, Access Copyright has been meeting the needs of businesses, educators, governments and other organizations across Canada with our innovative copyright licensing solutions. Our licences give content users immediate, legal access to the copyright protected materials they need to get their jobs done…20

Access Copyright relies on the one ambiguous employment of the term “use” in the Copyright Act. Under section 70.12 “user” can and should be understood to mean “user” consistent with the context of the Act as set out above. However, it can also be understood to mean the parties with whom a collective society negotiates a license agreement. Section 70.12 states:

A collective society may, for the purpose of setting out by licence the royalties and terms and conditions relating to classes of uses, (a) file a proposed tariff with the Board; or (b) enter into agreements with users.21

The ambiguity of this provision is unlike any other area of the Act. Where “use” is employed to mean something other than the use of a work under copyright then the legislator has set this out clearly under the Act. For example, subsection 30.3(1) specifies use vis-à-vis a machine:

An educational institution or a library, archive or museum does not infringe copyright where… (b) the machine is installed by or with the approval of the educational institution, library, archive or museum on its premises for use by students, instructors or staff at the educational institution or by persons using the library, archive or museum. 22

Similarly, subparagraph 32.2(1)(c) identifies the use of a building:

32.2 (1) It is not an infringement of copyright… (c) for any person to make or publish, for the purposes of news reporting or news summary, a report of a lecture given in public, unless the report is prohibited by conspicuous written or printed notice affixed before and maintained during the lecture at or about the main entrance of the building in which the lecture is given, and, except while the building is being used for public worship, in a position near the lecturer; 23

And subsection 38(1) specifies the use of plates in making infringing copies:

…the owner of the copyright in a work or other subject-matter may: (a) recover possession of all infringing copies of that work or other subject-matter, and of all plates used or intended to be used for the production of infringing copies…24

19 Access Copyright Post-Secondary Educational Institution Tariff, 2011-2013, s. 2. 20 “About Access Copyright”, online: Access Copyright, http://www.accesscopyright.ca/Default.aspx?id=35 (emphasis added). 21 Copyright Act, supra note 3. 22 Ibid (emphasis added). 23 Ibid (emphasis added). 24 Ibid (emphasis added).

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The above instances of “use” under the act are sufficiently descriptive to indicate that the meaning of “use” is not that which is otherwise present throughout the Act – to mean the use by a person of a work under copyright. The position of CFS and CAUT is that the meaning of “user” under section 70.12, when read harmoniously with and in the context of the Act, cannot exclude the users of the copyright works in question. CAUT and CFS grants that Parliament intended to confer on the Board the ability to take a broad interpretation of “users”. Thus, “user” under section 70.12 may include the institutions that are negotiating licenses and tariffs with collective societies, and that same may be true for “prospective users” in section 67.1(5). The role of the Baord, as empowered by the legislature, is to “fix rates and the terms, in the public interest, for royalties to be assessed by performing rights societies to users of rights under the management of the society”.25 The board may take a broad or narrow interpretation of “users” in a manner consistent with its administrative role which requires due regard for the public interest. Even standing committee discussions for the statute recognized that both individuals and institutions were the users in play: “We wanted to achieve legislation that would help the people and organizations it affects, authors and users”.26

However, the Act does not provide for the “bona fide s. 68(1) objector” which Access Copyright is proposing that the Board adopt. Parliament has entrusted the Board with the flexibility to determine who may shape the proceedings on a case by case basis if necessary. The Board itself has said that “Only formal objections under the Act, from user/objectors, or from the Board itself, together with the societies' statement, can frame the issues to be resolved in fixing the royalties that may be charged to licensees”27 without defining who constitutes a “formal objector”. The views of students and teachers are integral to understanding the issues that the tariff may create for users of the copyright material covered by the tariff because they are the users of that material. It is in the public interest to bring their views fully into the process as they are the groups the most impacted by the tariff. The teachers and students that will potentially fall under this tariff are not simply subject to the “downstream effects” of the tariff. Students and teachers are the reason the tariff is in place; without them there would be no tariff. Their interest in the tariff is anything but “indirect” – they have a direct interest as primary users of the works under copyright that are the subject of the tariff.

(b) Consideration of the Role and Purpose of the Board The meaning of the phrase “prospective users” should be understood in the context of the Act in which those words are used. This context implicates the Board, its role, and its purpose. The participation of CAUT and CFS as objectors to these proceedings for the tariff is necessary to ensure that the views of users are fairly accounted for in the process of setting the tariff. The Board must weigh the interest of users alongside the interest of creators in setting tariffs. Michael Hétu, then Vice-Chairman of the Copyright Board, succinctly recounted to the Committee on Bill C-32, An Act to Amend the Copyright Act, that the jurisprudence provides that the aim of the Board with respect to a tariff is to “adopt and set rates that are fair and equitable. In doing so, it must give consideration to the respective of weight of the creators and the users in the markets subject to a tariff proposal”.28 For this tariff the target

25 Society of Composers, Authors and Music Publishers of Canada v. Canada (Copyright Board), [1993] F.C.J. No. 137 [SOCAN v. Canada]. 26 Mr. Leroux (Richmond-Wolfe), Evidence, Standing Committee On Canadian Heritage, Order of the Day - Bill C-32, an Act to amend the Copyright Act. Chairman: Clifford Lincoln, Meeting No. 42, Wednesday, December 11, 1996 (online: http://www.parl.gc.ca/35/Archives/committees352/heri/evidence/42_96-12-11/heri-42-cover-e.html) at .1730 [emphasis added]. 27 SOCAN v. Canada, supra note 25. 28 Michel Hétu, Evidence, Standing Committee On Canadian Heritage, Order of the Day - Bill C-32, an Act to amend the Copyright Act. Chairman: Clifford Lincoln, Meeting No. 36, Wednesday, November 6, 1996 (online:

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users of the copyright material in question are student and teachers. The full participation of CFS and CAUT will allow the Board comprehensive access to the views of students and teachers as copyright users with respect to this tariff. Such comprehensive access is necessary for the Board to appropriately weigh the views of users in the tariff setting process. Indeed, given that the primary authors of academic works are academic authors – students and professors – it would seem that CFS and CAUT offer the Board perspectives that weigh on both sides of this equation. Nevertheless, in the context of copyright law a user is plainly understood to be the user of the work subject to copyright; it would be absurd to exclude students and teachers from the meaning of “users” of the copyright material under the tariff. Similarly, copyright law’s raison d’être is to balance the interests of those who make use of material under copyright and those who create or own that material. Under this tariff it is principally students and teachers that would be making use of the materials in question. Limiting the meaning of “user” to mean a “payer of royalties” pursuant to a tariff would frustrate the Board’s ability to fulfil its role to “fix rates and the terms, in the public interest, for royalties to be assessed by performing rights societies to users of rights under the management of the society”.29 The Copyright Act and its collective administration regime does not distinguish intermediary groups that manage tariffs on behalf of users, such as universities, from the users themselves. This ambiguity in the bill also existed in the standing committee discussions for the statute: “We wanted to achieve legislation that would help the people and organizations it affects, authors and users”.30 Parliament’s broad approach to “users” under the Act serves some important purposes.

First it is consistent with the administrative role of the Board which requires due regard for the public interest. The Act does not provide for the “bona fide s. 68(1) objector” which Access Copyright is proposing that the Board adopt because it would inhibit the Board’s mandate over its procedures. Parliament has entrusted the Board with the flexibility to determine who may shape the proceedings. The Board itself has said that “Only formal objections under the Act, from user/objectors, or from the Board itself, together with the societies' statement, can frame the issues to be resolved in fixing the royalties that may be charged to licensees”31 without defining who constitutes a “formal objector”. The views of students and teachers are integral to understanding the issues that the tariff may create for users of the copyright material covered by the tariff. It is in the public interest to bring their views fully into the process as they are the groups the most impacted by the tariff. Indeed, the tariff would not exist without them.

(c) Fairness Considerations

Interpretation of the meaning of “users” should also account for the administrative proceedings framed by the statute. Considerations of procedural fairness suggest that the term should be interpreted to encompass those users who will be affected by tariffs, and who, under principles of administrative fairness, should enjoy a right to participate in decisions that will affect them. Participation includes the right to make argument, the right to test and offer evidence, and the right to shape the questions the Board will attend. These interests demand objector status, not mere intervener status. The scope of the questions before the Board on this tariff should include those that CFS and CAUT would

http://www.parl.gc.ca/35/Archives/committees352/heri/evidence/36_96-11-06/heri36_blk101.html) at .1925 (emphasis added). 29 SOCAN v. Canada, supra note 25. The present proposed tariff originates with a reprographic collective rather than a “performing rights society’, but the principle stands. 30 Mr. Leroux (Richmond-Wolfe), Evidence, Standing Committee On Canadian Heritage, Order of the Day - Bill C-32, an Act to amend the Copyright Act. Chairman: Clifford Lincoln, Meeting No. 42, Wednesday, December 11, 1996 (online: http://www.parl.gc.ca/35/Archives/committees352/heri/evidence/42_96-12-11/heri-42-cover-e.html) at .1730. 31 SOCAN v. Canada, supra note 25.

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put forward. Like the Copyright Act, the Copyright Board’s Model Directive on Procedure also does not distinguish a “bona fide objector”. CFS and CAUT grant that the Model Directive does permit interveners insofar as their interventions would be “useful” to the Board32 and that teachers and students would offer “useful” information for determining a tariff between Access Copyright and universities. However, it would not be fair to exclude teachers and students from determining the ground that should be covered in establishing the tariff – they should accordingly be provided full status as objectors. A two party proceeding may be more expeditious but it would not be in the interests of fairness, and it is common ground that the principle if fairness is one of the few “limitations on the authority of the Board”.33 Additionally, while university administrations may be the counterpart to collective societies in tariff negotiations, those administrations do not have the same statutory authority to act on behalf of students and teachers that collective societies have under authorization from rights holders. In contrast, CFS and CAUT do have the authority to represent the teachers and students that are the targeted users of the copyright under the tariff. As such they should accordingly be viewed as objectors to the tariff with the ability to shape the questions in the proceeding.

(d) Practical Considerations

Practical considerations also demand that “users” be interpreted to include agents such as CAUT and CFS. Copyright notoriously affects multiple stakeholders. Restricting the class of affected stakeholders who may object to a proposed tariff to those who write the cheques deprives other stakeholders of the ability to participate meaningfully in decisions that will affect them and raises issues of denial of fundamental justice and procedural fairness. Narrowing the class of objectors entitled to appear before the board would also deprive the Board of the benefit of the views of uniquely affected stakeholders. It is common practice for payers of royalties under tariffs to pass the costs of such royalties on to other stakeholders. The practice raises the spectre of a one-sided hearing before the Board. Royalty payers that merely act as royalty collectors lack the incentive to wholly invest in the adversarial process before the Board. Royalty collectors bear merely administrative costs – the burden of royalty payment falls elsewhere. In such cases, the royalty collector’s incentives are to reduce administrative costs – participation before the Board being merely one such cost. Just this scenario threatens to mar the present proceeding. We attach for your review Appendix II of the Report of the Property and Finance Committee to the University of Western Ontario’s Board of Governors, dated June 24, 2010. In that Report, the Committee addressed the problem of future liability to the University to Access Copyright arising from the proposed tariff’s significant royalty increase. Several points are noteworthy. First, the University passed the entire cost of the expected liability on to the student body. Second, the University included in its calculations no amount to cover the University’s own activities under Access Copyright permissions. Thus, the University’s strategy is to pass a speculative liability on to the student body, and have the student body subsidize the University’s own reprographic liabilities. In the case of Western, at least, we conclude that Western students may have a stronger claim to objector status than the University itself. The inclusion of CAUT and CFS as objectors would provide the Board with a second practical benefit. CAUT and CFS represent individual stakeholders who are both users of copyright protected content and also creators. Indeed, a significant volume of content copied in the post-secondary academic context is 32 Copyright Board, Model Directive on Procedure, online: Copyright Board, <http://www.cb-cda.gc.ca/about-apropos/directive-e.html> at 3 [Model Directive on Procedure]. 33 SOCAN v. Canada, supra note 25.

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authored – not surprisingly – by academics. Accordingly, CAUT and CFS are well placed to offer the Board a unique perspective as stakeholders benefiting from the proposed tariff and also bearing the burden of compliance.

b. Process In its letter objecting to the standing of all but two of the objectors to the proposed tariff, Access Copyright makes passing reference to expectations that it would be entitled to impose an interrogatory process upon interveners.34 We offer a number of observations.

First, it is extraordinarily unusual for interveners to a legal proceeding to be subject to the direct evidentiary rules of that proceeding. To do so would burden interveners with the costs and inconveniences of participation without corresponding rights of parties.

Second, Access Copyright’s position misinterprets the role of interveners: interveners serve to aid the Board in its decision-making process. Interveners are not granted participatory rights by the Board to aid tariff applicants in building their case.

Finally, Access Copyright’s presumption of a right to impose interrogatories usurps the role of the Board, who controls the issuance of interrogatories in proceedings before it.35 CAUT and CFS trust the Board to oversee a controlled interrogatory process that is genuinely directed towards assisting the Board in its tasks, and not towards strategically burdening objectors.

2. Application for Interim Order Access Copyright seeks the extraordinary remedy of an interim order of the Board “maintaining the status quo”.36 As a preliminary note, CAUT and CFS observe that, inexplicably, Access Copyright did not see fit to serve, deliver, or otherwise provide notice of its application to a large number of objectors, including CAUT and CFS. CAUT and CFS ask the Board to decline to proceed with the application until such time as Access Copyright satisfies the Board that it has provided notice to all objectors. This is a simple matter of procedural fairness. With respect to the substance of the Application itself, CAUT and CFS will have substantive comments once it and all objectors have been provided a copy of the application and had the opportunity to review the application. In the interim, CAUT and CFS urge the Board to summarily reject Access Copyright’s extraordinary request on the basis of obvious considerations. First, the usual practice upon final approval of a proposed tariff is to make payments back-dated to the filing of the tariff. Access Copyright can offer no compelling argument to distinguish this proceeding from others before the Board that would justify such an unusual and extraordinary remedy. Regardless of usual practice, Access Copyright can offer no compelling reason in this proceeding to justify such a remedy in this particular proceeding.

Second, CAUT and CFS take exception to Access Copyright’s characterization of its proposed interim arrangement as the “status quo”.37 As Access Copyright well knows, educational dealings with content

34 Access Copyright Objection, supra note 1. 35 See Model Directive on Procedure, supra note 32. 36 Interim Application, supra note 2. 37 Ibid.

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are shifting along with the evolution of the legal environment and evolving digital marketplace upon which those dealings stand. Bill C-32, the Copyright Modernization Act,38 includes a number of provisions which will have an impact on the proposed tariff and which could similarly affect the assumptions inherent to Access Copyright’s proposed interim arrangement. These matters are contentious, in flux, and neither easily nor quickly resolved. An interim proceeding would be subject to interlocutory positioning, evidentiary processes, judicial review and further appeals, unavoidably further delaying the ultimate resolution of the tariff application.

Third, CAUT and CFS share Access Copyright’s concern over the period of time likely to elapse between the filing of this proposed tariff and its final adjudication. That concern will not be alleviated in any way by the flurry of procedural motions filed by Access Copyright, including this application. CAUT and CFS are of the view that Canadian professors, teachers, students, authors and educational institutions will be best served by the Board directing participants in this proceeding to simply “get on with it”.

Finally, CAUT and CFS observe that Access Copyright has placed itself in this position. It has been open to Access Copyright to negotiate good faith agreements with post-secondary institutions. It has chosen not to do so, but to instead file the proposed tariff. The substance of the proposed tariff is not straightforward. Access Copyright’s proposed tariff is controversial and contentious, raising privacy issues, challenging long-accepted rulings originating with the highest courts of the land, ignoring the reality of academic freedom and departing from accepted norms of – and rulings on – compensability, liberty and academic freedom in dealings with content. It also ignores shifts in the educational publishing marketplace that will have an significant effect on the quantum of the tariff when finally adjudicated. By filing an application for an interim award, Access Copyright seeks to sidestep these important and fundamental legal and factual issues, perhaps in doing so establishing baseline payments far in excess of what it could hope to obtain on an analysis of evidence and potentially influencing any final monetary elements of the final tariff. Access Copyright should not be allowed to do so. In the alternative, should the Board allow Access Copyright’s application to go forward, CAUT and CFS urge the Board to undertake an effective procedure that respects the potential impact of any interim order. Such a proceeding should allow for the tendering of useful, tested evidence and submission of argument.

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We trust the foregoing is helpful. Yours truly,

David Fewer Director, CIPPIC Encl. cc: Access Copyright Objectors, interveners, and participants

38 Bill C-32, the Copyright Modernization Act, first reading 2 June 2010, online: Parliament of Canada, <www2.parl.gc.ca/HousePublicatons/Publicationc.aspx?Docid=4580265&file=4>.

Board of Governors APPENDIX II June 24, 2010 -- REPORT OF THE PROPERTY AND FINANCE COMMITTEE * * * 2. Access Copyright Fee Increase Recommended: That the Access Copyright Fee be raised from $2.90 to $16.45 effective for the 2010-11 academic year. This would be applicable to all students at the undergraduate and graduate levels. Background: This fee is included as one of the general supplemental fees and collected with tuition. When the fee schedule for 2010-11 came forward for approval in April of 2010 it was noted that this fee was “to be determined”. Access Copyright is a copyright co-operative that represents a large number of Canadian publishers and authors, and, through agreements with similar co-operatives in other countries, a large number of foreign authors and publishers. Institutions such as universities that use a large amount of copyrighted materials typically enter into an agreement with Access that allows such copying to take place, without the necessity of getting approvals from each individual publisher or author each time a copy is made. In 2005 AUCC negotiated a standard form agreement with Access, and most Canadian universities then signed individual contracts with Access based on that standard form agreement. The 2005 agreement provides for compensation to be paid to Access in two ways. First, in preparing printed course packs for distribution to students, the university keeps track of the number of copies made of material that is covered by the Access agreement, and remits to Access an amount per page together with a report detailing the data upon which the payment was calculated. Second, the university pays a set fee per FTE to cover all other incidental copying. For the 2009/2010 academic year the fee was $3.38 per FTE. There is no requirement to track and report, although Access has the right to a sampling audit to confirm volumes. Western currently collects all of the course pack fees from students (incorporated into the cost of the course packs) and 86% of the FTE fee (based on an estimate done years ago that approximately 14% of the miscellaneous copying was not related to student needs) as part of an ancillary fee added to tuition bills. For this academic year the total amount collected from students and remitted to Access will be approximately $260,000 from course fees and $100,000 from the FTE fee for a total of $360,000. The current five year agreement with Access expires on August 31, 2010, and Access has now given notice that, rather than negotiating a new agreement, it wishes to apply to the Copyright Board of Canada to set a tariff (i.e., set the terms under which universities can use copyrighted works) as it is entitled to do under the provisions of the Copyright Act. One of the terms of the proposed tariff is that all copying (including digital copying which was not covered under the previous license) would be covered by a single fee per FTE. They have asked the Copyright Board to set that fee at $45.00 per FTE. If approved, it would result in our payment to Access increasing from approximately $360,000 to almost $1,500,000. Based on the model in place up to this time, the university would have to make up all of that increase. Access has agreed to extend the current agreement through to December 31, 2010, so that we are protected for half of this academic year. However, from January 1, 2011, we will be subject to the new tariff. The problem is that at this point it is not known what that tariff will be. AUCC is currently considering challenging the proposed tariff before the Copyright Board, and if that happens a final decision may not be known for another year to eighteen months, and even then may be subject to appeals. Once the new tariff is determined, the University will be required to pay retroactively to January 1, 2011. A worst case scenario, that the tariff of $45 per FTE is approved, would have the following effect: Fee payable to Access for 2011 calendar year: $1,500,000 Collected from students through course pack sales $ 260,000 Collected from 2010/2011 students through Ancillary fee (1/2 of fee set by the Board in prior years) $ 50,000 Collected from 2011/2012 students through Ancillary fee to be set next year ?

As can be seen, this would result in a substantial loss to the university unless the fees charged to students increased dramatically. And in order to ensure that, as much as possible, the students to whom the fee relates are the ones who pay, any increase in student fees would have to be applied partially to the 2010/2011 academic year. Therefore, to avoid having the university foot the entire bill for a large retroactive assessment, and to ensure that current students contribute some proportionate share of a retroactive assessment, it is recommended that the ancillary fee charged to students for the 2010/2011 academic year be increased. There is no way of knowing what the applicable fee commencing in the 2011 winter term will be. While in theory the annual tariff could be as high as $45, the thinking is that this is unlikely. It would not be unreasonable to expect that it could end up somewhere in the range of $25-$30. It is therefore recommended that the ancillary fee for 2010/2011 be reset based on a $30 per FTE annual tariff. This would result in a fee to be charged to the students calculated as follows: Total amount attributable to 2010/2011 students: 1/2 year at $2.90 per FTE (86% of the previous FTE fee) $1.45 (fall term) 1/2 year at $30.00 per FTE $15.00 (winter term) Total fall/winter term blended rate $ $16.45 Note: In setting this fee, the university (and the affiliates in proportion to their share of FTEs) must be prepared to make up any difference in the event the new tariff is higher than the estimate. If the new tariff is lower than anticipated, any surplus funds collected would serve to reduce the ancillary fees in future years. In making those calculations, an appropriate adjustment for non-student related copying would also be taken into account. The current figure of $0.48 per student FTE would be reviewed to determine whether it is an accurate estimate. This process will be repeated again next year in setting the fees, based on any additional information available at that time about the status of the tariff application.