Consider This: Collective Licences and Mandatory Tariffs

As part of the statutory review of the Copyright Act by the Standing Committee on Industry, Science and Technology (INDU), public hearingsā€¦

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As part of the statutory review of the Copyright ActCopyright Act by the Standing Committee on Industry, Science and Technology (INDU), public hearings commenced in April of this year. At those hearings, some authors' and publishers' groups have expressed concerns about the impact of the use of fair dealing by educational institutions. These groups have routinely suggested that a return by educational institutions to collective licences through Access Copyright would be a good approach to resolving many of their concerns.

The University of Alberta has always respected copyright and remains committed to taking reasonable steps to ensure that rights-holders are fairly and appropriately compensated for the use by the University of their copyright-protected works. However, the University believes it can more reasonably achieve this end without an institutional licence with Access Copyright.

The Access Copyright institutional licence provides limited reproduction rights for the works in its repertoire. In exchange for this grant of rights, and in addition to the extensive reporting requirements, under the proposed Access Copyright Post-Secondary Educational Institution Tariff (2018-20) a university would be required to pay an annual licence fee of $26 per FTE student. For the University of Alberta, with approximately 35,000 FTE students, that annual fee would be $910,000.

Tariffs are essentially the licence fees that are approved by the Copyright Board where the parties have been unable or unwilling to negotiate such fees. In the current proposal, as in the most recent institutional licences, this annual license fee, or tariff, is based solely on the number of FTE students at the university and is not connected in any other way to the quantity of copyright-protected material reproduced under the licence.

Despite the extensive reporting requirements for course materials, the fee is the same whether the average number of print or digital pages the student receives as course materials is 100 pages per year or 10,000 pages per year. The fee is the same whether 9% of the reproduced pages are already covered by separate licences directly with publishers or whether 99% of the pages are reproduced under such separate licences. Similarly, the amount of the fee makes no allowance for reproducing works that are in the public domain nor for reproducing works, or excerpts, under fair dealing, no matter how the fairness of that dealing is determined. The only response that seems to be available to Access Copyright in defense of this model is that these considerations are either not relevant to the determination of the proposed fee or that they are already properly accounted for in the fee.

When writers' and publishers' groups indicate their revenues have dropped in recent years, universities usually respond by pointing out that the amounts they spend on content each year have been increasing, and these amounts are paid directly to publishers. It has been argued, however, that the amounts paid by the universities to publishers are for "access rights" and must be distinguished from the amounts to be paid under the Access Copyright licence for "reproduction rights."

This argument might make a certain amount of sense in a print world. A library that spends an enormous amount every year to ensure it has a copy of every book and periodical on its shelves is contributing to the publishing industry through its purchases. However, through those purchases it has simply acquired access to those works; it is not acquiring any reproduction rights in those physical books and periodicals. Therefore, the argument goes, regardless of how much the university spends on such acquisitions, it is reasonable also to pay Access Copyright a licence fee for the reproduction rights so that the library's users can enjoy additional benefits from those works beyond the scope of the uses permitted under fair dealing.

The model becomes quite different when a university is licensing digital assets rather than buying print copies of works. Licences of digital assets, particularly for periodicals, often include specific limited reproduction rights. Therefore, there will be cases when course materials are reproducing excerpts from such works, but the reproduction right that permits this use has already been paid for through the licence directly with the publisher. As well, university libraries are increasingly licensing ebooks rather than buying print books, and in many cases these licences will allow unlimited concurrent access to the work for authorized users. While this may still be primarily an access right rather than a reproduction right, if copies of the work can be available to every student concurrently under the licence, then the need to reproduce any part of that work is significantly reduced.

In both these ways, an investment by a library in licences of digital resources reduces the need for acquiring separate reproduction rights through Access Copyright. And yet, the extent to which a given university is making such an investment is given no weight in determining the applicable Access Copyright licence fee.

A second argument offered in support of the Access Copyright model is the "two buckets" argument. Roanie Levy, President & CEO of Access Copyright, offered a version of this argument when she appeared before the INDU committee on 22 May 2018 (at page 12). The two buckets argument centres on the type of content that universities license directly from publishers. The argument suggests that these direct licences tend to be for scholarly journals, which is one bucket of content, but the copying for which the Access Copyright licence is needed is for a second bucket of content that includes books and all the other works universities use and for which reproduction rights have not already been obtained directly.

While it is likely that the initial digital resources that were licensed by universities were scholarly journals, the number and type of resources that are now being made available for license by publishers is constantly expanding. Therefore, although it might be trivially true that there will always be a bucket of works that are not included under a university licence with a publisher, the amount of content in this bucket is generally shrinking.

It could be argued that the focus of the second bucket is really the non-scholarly works that are used by the university, assuming that these are the works less likely to be included among the resources licensed by the university library. Although it is certainly true that universities will always use some non-scholarly works, the percentage of such works in relation to the full scope of the works used is relatively small. Ensuring fair compensation for the authors of those works is certainly important, but surely there are better approaches to achieving this than through requiring an institutional licence such as the one described.

Much has been said about the impact of the addition of "education" as a purpose under fair dealing through the Copyright Modernization Act in 2012. It has been regularly asserted that this change to the s.29 of the Copyright Act is why so many educational institutions ended their institutional licences with Access Copyright. However, as copyright lawyer Wanda Noel pointed out in her testimony before the INDU committee on 22 May 2018 (at page 7), the shift in the approach to fair dealing by post-secondary institutions arose primarily from the Supreme Court of Canada decision in Alberta (Education) v. Access CopyrightAlberta (Education) v. Access Copyright.

While the guidelines that govern how many universities have been applying fair dealing for the distribution of course materials to students is currently before the Federal Court of Appeal in the appeal of Access Copyright v. York UniversityAccess Copyright v. York University, the Supreme Court decision in Alberta (Education) makes it clear that fair dealing is available to educational institutions in their reproducing excerpts from copyright-protected works for distribution to classes as course materials. What is not clear is how the licence fee in the Access Copyright post-secondary tariff is intended to account for the availability of fair dealing, no matter how the fairness of that dealing is ultimately to be determined. Clearly the reproduction of materials under fair dealing must be accounted for in any tariff that would be reasonably applied to all post-secondary institutions.

For some post-secondary institutions, an Access Copyright institutional licence may remain a reasonable choice. Depending on the number of FTE students and the resources devoted to licensing content and to personnel focused on copyright issues, the value proposition across institutions might be very different. There are a variety of models that different universities might adopt to remain compliant with the Copyright Act and to ensure that the rights-holders are fairly compensated in accordance with the law. An institutional licence through Access Copyright no longer seems to be the choice of many post-secondary institutions.

Not all tariffs for copyright collectives are similarly troublesome. The University of Alberta pays royalties to SOCAN and Re:Sound for its use of recorded music, and the amounts paid are computed on the basis of a number of tariffs covering different types of use. This system works quite well, with the amounts paid tied to actual use. Furthermore, there is currently no practical alternative outside of dealing with SOCAN and Re:Sound to ensure that the rights-holders are appropriately compensated for the use of the works.

In light of the difficulty in negotiating institutional licences with post-secondary institutions, Access Copyright has applied to the Copyright Board for the approval of a new post-secondary educational institution tariff. This proposed tariff is a one-size-fits-all "solution" with all the shortcomings outlined above, and it is intended to apply equally to all universities despite their differences. This would not be a concern if the tariff were voluntary, such that universities could opt in or out based on whether the institutional licence offered by Access Copyright were a reasonable value proposition for that particular institution. However, the Federal Court decision of Access Copyright v. York UniversityAccess Copyright v. York University, currently under appeal, has ruled that such tariffs are mandatory.

Suppose the current proposed Access Copyright Post-Secondary Educational Institution Tariff (2018-20) were approved and deemed mandatory. A university, no matter how much content it licensed directly or how little in-copyright repertoire material was reproduced and distributed to students, would have to pay the annual licence fee of $26 per FTE student. If it chose to operate outside the mandatory tariff, then even the smallest transgression, such as the good faith reproduction of a short excerpt from a repertoire work that was ultimately determined to be beyond the scope of fair dealing, could give rise to damages equivalent to the full amount of the annual licence fee under the tariff, or, potentially, to statutory damages of several times the amount of that licence fee (for more details on statutory damages, see this blog post by Michael Geist).

Under such a model, universities would likely feel compelled to pay the annual licence fee as a hedge against the risk of onerous penalties for the smallest non-compliance. Even if an institution were to adopt a policy of purchasing transactional licences for all reproductions of copyright-protected works, essentially treating their fair dealing rights as non-existent, the size of the penalty for a small oversight may make even this ultra-conservative approach seem too risky. Such a tariff regime so disconnected from actual use seems less like a reasonable approach to fairly compensating rights-holders and more like a tax on post-secondary institutions.

The proposed post-secondary tariff is a blunt instrument that does not account for how different institutions are approaching the direct licensing of content - including reproduction rights in content - and how those institutions are managing copyright internally. Those differences should make a difference. Universities can reasonably structure their affairs differently from one another while pursuing the common objective of remaining compliant with copyright. More and more options are available for licensing content - both access rights and reproduction rights - directly from publishers, so any regime that does not account for these seems outdated and inadequate. Fair dealing rights are statutory rights that universities should be free to use as the legislature has intended, in good faith and in accordance with Supreme Court decisions, without fear of onerous penalties for minor miscalculations.

I am not aware of any evidence to suggest that post-secondary institutions are anything but sincere in their commitments to remain compliant with copyright law, which includes taking appropriate advantage of all exceptions and user rights under the Act. Given the number of institutions who have chosen to opt out of institutional collective licences, it seems reasonable to infer that the tariff is not perceived as a practical and fair approach for all institutions. Even if there were a few rogue universities that didn't take copyright compliance seriously, a regime that subjects ALL universities to such a mandatory tariff would not be a justifiable solution to that problem.

To participate in the review of the Copyright Act, the details on how to make a submission to the INDU committee are available here.

For additional information about copyright at the University of Alberta, or to arrange an information session for your department or faculty, check out the Copyright Office website, or email our help desk at

Adrian Sheppard - Director, Copyright Office

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Adrian has been the Director of the University of Alberta's Copyright Office since April 2015. One role of the Copyright Office is to educate and inform U of A students, faculty and staff on issues related to copyright. Adrian has an LL.B. from the University of Victoria.

Note: This post is intended to provide information and perspective about copyright issues, but should not be considered as legal advice.