York University v. Canadian Copyright Licensing Agency (Access Copyright), 2020 FCA 772021 SCC 32 (39222)

“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.”

The SCC (9:0) dismissed the appeals.

Justice Abella wrote as follows (at paras. 17-19, 96-106):

” 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).

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).

… 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.

The resulting judicial framework for fair dealing was set out in CCH, where McLachlin C.J. set out a two-step test for assessing fair dealing under s. 29 of the Act, which states:

29 Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright.

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 (which concerns the number of copies made or distributed and whether the copies are retained or destroyed after use); the amount of the dealing (which concerns the proportion of the work dealt with and the importance of that part); alternatives to the dealing; the nature of the work; and the effect of the dealing on the work (para. 53; see also SOCAN, at para. 13; Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), [2012] 2 S.C.R. 345, at para. 12, per Abella J.).

It was common ground in this case that York’s teachers make copies for their students for the allowable purpose of education at the first step of the analysis.

But at the second step, where fairness is assessed, 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. Both perspectives should be taken into account.

In the educational context, instructors are facilitating the education of each of their individual students who have fair dealing rights (Alberta (Education), at paras. 22-23). However, courts are not required to completely ignore the institutional nature of a university’s copying practices and adopt the fiction that copies are only made for individual isolated users. When an institution is defending its copying practices, its aggregate copying is necessarily relevant, for example, to the character of the dealing and the effect of the dealing on the work (see, e.g., CCH, at paras. 55 and 72; SOCAN, at para. 42; Alberta (Education), at paras. 30 and 33).

In this case, as in Alberta (Education), “the key problem is in the way the [trial judge] approached the ‘purpose of the dealing’ factor” in the fairness analysis (para. 15). In fact, both the Federal Court and the Federal Court of Appeal erred in an almost identical fashion to the Copyright Board in Alberta (Education). There, the issue was whether copies of short excerpts of textbooks and other literary works made by secondary school teachers and provided to students as assigned reading constituted fair dealing for the purpose of “research or private study”. The case arose prior to the enactment of the Copyright Modernization Act, S.C. 2012, c. 20, which added “education” as a permissible purpose. The Board found that the copies were for the permissible purpose of research or private study at the first stage of the analysis, but the predominant purpose at the second stage was “instruction”, which fell outside of research or private study.

This Court rejected the Board’s approach in a passage that is directly apposite to the present appeal:

. . . fair dealing is a “user’s right”, and the relevant perspective when considering whether the dealing is for an allowable purpose under the first stage of CCH is that of the user . . . . This does not mean, however, that the copier’s purpose is irrelevant at the fairness stage. If . . . the copier hides behind the shield of the user’s allowable purpose in order to engage in a separate purpose that tends to make the dealing unfair, that separate purpose will also be relevant to the fairness analysis.

In the case before us, however, there is no such separate purpose on the part of the teacher. Teachers have no ulterior motive when providing copies to students. . . . [T]hey are there to facilitate the students’ research and private study. It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers. They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying. [paras. 22-23]

And in SOCAN, the Court similarly explained that the “predominant perspective” when assessing the purpose of the dealing was “that of the ultimate users of the previews” (para. 34).

In other words, contrary to the Federal Court of Appeal’s view, in the educational context it is not only the institutional perspective that matters. When teaching staff at a university make copies for their students’ education, they are not “hid[ing] behind the shield of the user’s allowable purpose in order to engage in a separate purpose that tends to make the dealing unfair”.

It was therefore an error for the Court of Appeal, in addressing the purpose of the dealing, to hold that it is only the “institution’s perspective that matters” and that York’s financial purpose was a “clear indication of unfairness” (paras. 238 and 241). Funds “saved” by proper exercise of the fair dealing right go to the University’s core objective of education, not to some ulterior commercial purpose (see Lisa Macklem and Samuel Trosow, “Fair Dealing, Online Teaching and Technological Neutrality: Lessons From the COVID-19 Crisis” (2020), 32 I.P.J. 215, at p. 238). The purpose of copying conducted by university teachers for student use is for the student’s education. But in every case, all relevant facts must be taken into account in order to determine the fairness of the dealing.

And the trial judge’s criticism of York’s Guidelines on the basis that different portions of a single work could be distributed to different students, such that an author’s entire work could end up being distributed in the aggregate, is also contradicted by SOCAN, which held that “[s]ince fair dealing is a ‘user’s’ right, the ‘amount of the dealing’ factor should be assessed based on the individual use, not the amount of the dealing in the aggregate” (para. 41; see also Alberta (Education), at para. 29).

And while it is true that “aggregate dissemination” is “considered under the ‘character of the dealing’ factor” (SOCAN, at para. 42; see also CCH, at para. 55; Alberta (Education), at para. 29), as this Court cautioned in SOCAN, “large-scale organized dealings” are not “inherently unfair” (para. 43). In SOCAN, where copies could easily be distributed across the internet in large numbers, this Court warned that focussing on the “aggregate” amount of dealing could “lead to disproportionate findings of unfairness when compared with non-digital works” (para. 43). By extension, the character of the dealing factor must be carefully applied in the university context, where dealings conducted by larger universities on behalf of their students could lead to findings of unfairness when compared to smaller universities. This would be discordant with the nature of fair dealing as a user’s right.

At the end of the day, 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 Act. Since we are not deciding the merits of the fair dealing appeal brought by York, there is no reason to answer the question in this case.”