The decision is being viewed as a victory for Access Copyright, which launched the lawsuit in 2013, and speaks harshly of fair dealing guidelines used by Canadian universities.

Editor’s note, Aug. 1, 2017: York University has announced it will appeal the Federal Court’s recent decision in the lawsuit brought by Access Copyright.

In a strongly worded decision, the Federal Court has ruled that York University owes royalty fees to Access Copyright for a period between 2011 and 2013, and that York’s fair dealing guidelines are unfair. The ruling on July 12 could have wide implications for postsecondary institutions and students, and universities are carefully reviewing the decision. York has until Oct. 2 to file an appeal.

Access Copyright launched the lawsuit in 2013, after York and some other universities decided not to sign onto a new licensing agreement with the organization, which collects royalties on behalf of its affiliate Canadian authors and publishers. The new license raised fees to a flat $26 per full-time equivalent (FTE) student, from $3.38 per FTE student and 10 cents per page for course-pack copying under the previous license.

This case was the first test of the postsecondary sector’s interpretation of fair dealing since copyright law reforms in 2012. Those reforms will also undergo a review for the first time later this year.

Interim tariff

Access Copyright took York University to court to enforce an interim tariff for works in its repertoire between September 2011 and December 2013. York had opted out of the tariff, choosing to navigate copyright on its own through various licensing and subscription agreements, open-access content and fair dealing. In the trial, York argued that the interim tariff set by the Copyright Board of Canada was not binding, but the trial judge, Michael Phelan, ruled that it is mandatory and “there is no opting out.”

Fair dealing

York submitted a counterclaim in this case, seeking a declaration that copying for educational purposes constituted “fair dealing” under the Copyright Act. (In 2012, the Supreme Court released five rulings discussing how fair dealing, which allows a portion of work to be copied for specific purposes, should be interpreted. Also in 2012, education was added as a fair dealing purpose in the law.)

Judge Phelan ruled that York’s guidelines – similar to those used at other Canadian universities – satisfy the purpose of education but “are not fair in either their terms or their application.” The amount of copying was a “core area of focus in this case,” Mr. Phelan wrote. He zeroed in on the “10 percent” of a work that could be copied for course material under the guidelines: “There is no explanation why 10% or a single article or any other limitation is fair.”

After hearing witnesses and reviewing sampling data, the judge deemed that the guidelines had a negative impact on publishers’ bottom line. He also questioned the level of review and enforcement of York’s policies around printed course packs and materials accessed through the web portal Moodle.

Responses to the ruling

Shortly after the decision was released, Access Copyright issued a statement saying it is pleased with the decision and welcomes “the opportunity for all interested stakeholders to entertain a meaningful dialogue with a view to resolving any outstanding issues between them.” York University is reviewing the decision to determine next steps and has expressed its disappointment in the outcome, stating, “We believed York’s Fair Dealing Guidelines reflected a balance between the interests of creators and of users and functioned within a system that includes spending millions of dollars per year on licenses and acquisitions.”

For those in the publishing industry, the decision comes as good news. “My initial reaction was relief, because we’ve been badly beaten up on this file for quite a number of years,” said Glenn Rollans, who is president of both the Association of Canadian Publishers and an independent publishing company, Brush Education Inc. “I think it is an important reset moment for everyone and it’s time to look at the decision with a sense of practicality, to look at it with values and the law in mind rather than what turned into a fractious argument.”

To many observers, the judge’s reasoning was a surprising departure from what the Supreme Court has said about fair dealing over the past 10 years. “If I were to go through the six factors of fair dealing, I think it’s open to challenge on all of these,” said Michael Geist, who holds the Canada Research Chair in internet and e-commerce law at the University of Ottawa. “The question that will be asked is, does this signify a change in the law that is going be upheld, assuming there is an appeal, or is this an outlier that doesn’t reflect the law as articulated by the high courts?”

The judgment leaves room for uncertainty for institutions and that is deeply concerning to students, according to Michael McDonald, executive director of the Canadian Alliance of Student Associations. “Our concern with this decision is it seems to walk back many of the decisions the Supreme Court had made,” he said, adding that the affordability and accessibility of quality course materials for students could be impacted. “The decision seems to draw into question how the actual functioning of [fair dealing for education] would ever work. … We are hoping this will be challenged and greater clarification can be brought to the question.”

Universities are taking time to review and consult on the decision. At least one institution, the University of Alberta, has provided a public update on the matter. “The University of Alberta fair dealing guidelines were already under review, and this decision will help inform that review,” wrote Adrian Sheppard, director of U of A’s copyright office, in a recent blog post. Nevertheless, the decision “was disappointing for universities,” he added.

Canadian universities “manage their copyright responsibilities conscientiously through the purchase and licensing of resources and through a considered application of statutory exceptions and fair dealing, respecting the balance between the interests of copyright holders and the interests of users. This balance has previously been recognized and endorsed by Supreme Court of Canada jurisprudence.”

As for course materials for this coming fall term, he said they are already being processed at the U of A copyright office “and the remainder of those course materials will continue to be processed under the current fair dealing guidelines.”