The Federal Court of Appeal recently released its highly anticipated decision in York University v. The Canadian Copyright Licensing Agency (Access Copyright) in which it found that the payment of tariffs set by the Copyright Board is not mandatory.
The dispute between York University and Access Copyright is representative of a broader discussion about copyright in the educational context and specifically “fair dealing” rights that has been ongoing within the education community for many years. Although this decision is confined to its specific facts, the questions at issue, including the Fair Dealing Guidelines implemented by York University, are relevant to the education community in Canada as a whole.
The decision has two components: (1) the Court’s finding that tariffs set by the Copyright Board are not mandatory, and (2) its consideration of York University’s Fair Dealing Guidelines.
Tariffs Are Not Mandatory
In the dominant part of the decision, the Federal Court of Appeal found that tariffs set by the Copyright Board are not mandatory, thus overruling the lower court’s decision in the Federal Court. In the underlying decision, Access Copyright had sued York University for non-payment of royalties pursuant to its tariff for copying in post-secondary institutions.
York University, along with many other educational institutions across Canada, chose to opt out of paying the tariff following the Supreme Court of Canada’s decision in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright) in 2012 and, instead, relied on alternative arrangements to meet its copying needs.
Access Copyright argued that institutions such as York University are not able to opt out of paying royalties pursuant to such tariffs because these tariffs are mandatory. Access Copyright sued York University to recover these alleged unpaid royalties.
In its reasons, the Federal Court of Appeal thoroughly canvassed the legislative history of the relevant sections of the Copyright Act and found that tariffs were not intended to be mandatory. As the Federal Court of Appeal explained, “[a]cts of infringement do not turn infringers into licensees so as to make them liable for the payment of royalties.”
In this way, the Court endorsed the ongoing actions of educational institutions that have opted out of paying tariffs for several years.
As the Court noted, only a copyright owner, or its assignee or exclusive licensee, which Access Copyright is not, can bring an action for copyright infringement.
York University’s Fair Dealing Guidelines
The second part of the decision deals with York’s counterclaim seeking a declaration that its “Fair Dealing Guidelines”, which rely on the institution’s and its students’ fair dealing rights as an alternative to paying the Access Copyright tariff, are compliant with the fair dealing regime set out in the Copyright Act.
Although the Federal Court of Appeal did not make a conclusive finding on this point, it reviewed the Federal Court’s fair dealing analysis and found that the Federal Court did not make any palpable and overriding errors in conducting its analysis.
It is important to remember that the standard of review of palpable and overriding error is a very high hurdle. A reviewing court will not intervene in the result simply because it may have decided the matter differently—it will only overturn a decision if the lower court made a clear error that goes to the heart of the matter such that it merits intervention by the appellate court.
In its reasons, the Federal Court of Appeal considered the Federal Court’s analysis of each of the six steps of the fair dealing analysis established by the Supreme Court of Canada in its 2004 CCH Canadian Ltd. v. Law Society of Upper Canada decision: (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). While the Court did note that the lower court had erred in its analysis of the amount of the dealing, it found that this error was not “palpable”.
The implications of the Court’s finding that tariffs are not mandatory is significant for the education sector as this is a confirmation of how many educational institutions have conducted themselves for several years now.
Regarding the Court’s fair dealing analysis, it is important to remember that this is an appellate court’s review of questions of fact and law. Although the standard of review to apply to a lower court’s decision is often thought of as the domain of lawyers and administrative law devotees in particular, it is an extremely important issue. Given that the Fair Dealing Guidelines reviewed in this decision have been adopted by many other universities, colleges, and primary and secondary educational institutions across Canada, this decision, although specific to York University, will almost certainly be cited in similar matters going forward.
Each fair dealing analysis, however, is confined to its specific facts. Although this decision will doubtless be highly persuasive in future matters regarding the Fair Dealing Guidelines, it will not be binding in another matter involving different facts.
Both Access Copyright and York University now have 60 days from the date of the decision (April 22, 2020) to seek leave to appeal to the Supreme Court, should they choose to do so. Consequently, the Federal Court of Appeal’s decision may still not be the final word in this matter. Both the questions of the mandatory nature of tariffs and the scope of fair dealing in the educational context have been hot topics of debate in the copyright community for some time, and it may therefore well be time for the Supreme Court to consider these issues.
The timing of the Federal Court of Appeal decision, which was released in the midst of the COVID-19 pandemic, is also interesting. Although the pandemic does not impact the facts at issue in this matter, it has put the spotlight on copyright issues in the educational context as teachers and students have largely moved online and are using materials in new and innovative ways.