Copyright Review in Canada: Will Fair Dealing Be Widened Further, Tightened or Left As Is?

There are many issues under consideration as the mandated five year review of the Copyright Act in Canada continues to grind away, but one area to be carefully watched is that of fair dealing. Will fair dealing be widened further as it was during the last revision in 2012, or will at least some of the new and expanded exceptions introduced in the 2012 Copyright Modernization Act be tightened? Or, perhaps, will the government duck the issue and decide to leave things more or less as they are until the next review in five years’ time? There is a lot riding on the outcome of the review, particularly for some copyright industries like publishers of educational books.

In many countries over the years the boundaries of fair dealing or fair use have continued to widen with the result that exceptions to copyright have steadily expanded. Anti-copyright advocates would say that this is a good thing; as far as these people are concerned, the less copyright the better. Supporters of copyright, those who believe in the basic right of an author to decide whether their work is to be reproduced and distributed, and on what terms, see things differently—but even strong supporters of copyright recognize that the world changes and copyright (and its exceptions) must adapt to the times. The digital age is of course the best current example of enormous, rapid change, and the corresponding need to adapt copyright rules to these changes. However, just because rapidly changing technology has brought new ways of communicating and reproducing content, this doesn’t mean that the principles that have underpinned the concept of copyright for over 300 years no longer apply in the digital environment. But still, adaptation is necessary to keep pace with technology. As a result, in most fair dealing countries, there is a periodic review of the statutory exceptions that are provided for allowable purposes or uses (dealing), as well as specified exceptions.

In the US under its fair use system there is not the same need for a periodic review since the limits of fair use are regularly tested in the courts and, as we have seen with some recent “transformative use” rulings, the interpretation of fair use is growing ever wider.

With respect to fair dealing in Canada, recall that in 2012 three new fair dealing exceptions were added to the Act, parody, satire and education. Education was by far the most controversial of these added exceptions. Let us also recall the steps (in Canada) that a user must take to determine if a use of copyrighted material not authorized by the author is legal. It’s a three-step process; (1) Is there a substantial use of the material? (with “substantial” not being defined in the Act); (2) If so, does the use (dealing) fall within one of the allowed purposes? (research, private study, education, parody, satire, criticism, review, news reporting—with citations required for the last three categories). None of these terms are defined in the Act; (3) If the dealing falls within an allowed purpose, is it “fair”? To determine fairness, the Supreme Court of Canada has outlined six principal factors to be taken into consideration;

• The purpose of the dealing
• The character of the dealing
• The amount of the dealing
• Alternatives to the dealing
• The nature of the work
• The effect of the dealing on the work

US readers will recognize that these six factors are not dissimilar to the four fair use factors applied in the United States and, like in the US, there is no one single definition of acceptable use under these categories.

The addition of “education” as a fair dealing category in 2012 has led to legal confrontation between the publishing and authors’ collective society in English Canada, Access Copyright, and the university sector (represented by York University), and to a countersuit from provincial ministries of education against Access Copyright claiming overpayment of licensing fees in an interim period prior to 2012. After “education” was added to fair dealing exceptions in 2012, Universities Canada (the self-styled “voice of Canadian universities”) produced new fair dealing guidelines for copying educational materials without a licence. These guidelines basically replicated the uses that previously were authorized by a licence from Access Copyright. Most universities immediately applied the new guidelines and dropped their licences with the copyright collective. The result was a lawsuit (and countersuit) between Access Copyright and York University in 2013, York becoming in effect the proxy for universities across the country. That case was finally decided four years later when the Federal Court decided in favour of Access Copyright. The issue was not whether the dealing by York fell within the education fair dealing exception but whether or not the use was fair. The Court decided that it was not. York has prolonged the confrontation by appealing.

The issue is more about how the education exception is interpreted rather than the exception itself, although some authors have called for the full repeal of the exception. That is unlikely to happen and even Access Copyright, the organization most materially affected with a 90% decline in royalties from the education sector between 2012 and 2017, has not called for this. Instead, Access Copyright, in its brief to the Parliamentary Standing Committee reviewing the Copyright Act called for amendments to the Act; “to restore a functioning marketplace that encourages the continued creation of content for Canadian classrooms…”

The brief continues;

“A guiding principle should be to establish a system that distinguishes between personal and institutional copying…Students should remain free to make individual copies of reasonable portions of works for their personal educational use, but widespread institutional copying should be paid for when the market offers licences for such use…Access Copyright submits that the Copyright Act be amended such that the fair dealing exception for the purposes of research, private study and education not apply to educational institutions in respect of works that are commercially available.”

Others have called for the definition of an allowed “short excerpt” to be clarified and for other factors to be considered other than just the raw amount of the dealing. While Universities Canada may unilaterally determine that taking ten percent of a work without a licence is acceptable, this does not consider the effect of that unlicensed copying on the market for the work, especially if it is ten percent now for Course A, another ten percent later for Course B and perhaps a further ten percent for some other purpose. Moreover, there is nothing sacrosanct about the ten percent rule, which can easily be abused and which in many cases is excessive, although some educators have actually argued that even the ten percent limit on free copying is too restrictive, as I noted in a previous blog. The focus of teaching in universities today has shifted away from conventional textbooks to customized course packs. These course packs are in many cases compiled under the self-declared fair dealing guidelines, avoiding licensing and royalty costs that used to be paid to Access Copyright for use of the repertoire. The educational sector argues that it is still spending significant amounts on licensing content, which is true. However most of this spending is dedicated to licences for academic journals and other online materials, primarily for research purposes rather than providing teaching materials to students.

The impact on Canadian publishers has not gone unnoticed in other countries. As Access Copyright noted in its Parliamentary submission, “Internationally, the treatment of educational fair dealing in Canadian legislation is considered an outlier and a model to be avoided.” It has even become a bilateral issue with the USTR noting in its 2018 Special 301 Report that “the United States…remains deeply troubled by the ambiguous education-related exception to copyright that has significantly damaged the market for educational publishers and authors”.

While many authors and publishers would like to see some aspects of fair dealing, especially the education exception, restricted or at least better defined, others such as anti-copyright advocate Michael Geist would like to see fair dealing widened considerably (some would say gutted) by adding the words “such as” before the list of specified fair dealing exceptions. By making the list of exceptions illustrative only, this would have the effect of turning the Canadian fair dealing system into a US-style fair use regime, (where the courts rather than legislators set the parameters of what is an acceptable use).

There is an ongoing debate in several countries as to whether jurisdictions that have based their copyright legislation on a fair dealing framework (e.g. UK, Australia, New Zealand) should consider adopting US-style fair use. In 2011, the UK reviewed this issue, and rejected adopting fair use (see Hargreaves Report). The issue has come up several times in Australia and is currently one of the issues under review in that country. New Zealand is also undergoing review of its copyright legislation and the fair use issue is on the table. As noted in my blog “Fair Use or Fair Dealing: The Debate Continues “Down Under”, the tech industry likes to claim that fair use will promote greater innovation although there is little or no evidence to support this claim. Copyright industries generally oppose the uncertainty that court-litigated fair use will bring. To date, neither Australia nor New Zealand appear to be inclined to throw out their current fair dealing regimes, but instead prefer to focus on updating them.

What will happen in Canada is an open question. In my own view, I think it most unlikely that the government will upset a legal framework (fair dealing) that Canadians have become familiar with over many years by proposing adoption of fair use. At the same time, I also think it unlikely that the current list of fair dealing exceptions will be cut back. While it may be seen by many as an unfortunate precedent, the education fair dealing exception is probably here to stay. The “educational industry” is huge and has important federal-provincial dimensions. That does not mean, however, that there couldn’t be some greater clarity provided on what constitutes a fair dealing under this exception. The fact that Access Copyright has prevailed in Federal Court against York University, and its Quebec equivalent Copibec has reached an out-of-court settlement with Laval University (after bringing a class action suit against Laval because Laval refused to renew its licence with Copibec, which it has now agreed to do) suggests that it would be appropriate and helpful to have a clearer interpretation of how education fair dealing should be applied.

In the meantime we will have to await the recommendations of the Parliamentary Committee to see in which direction they go on fair dealing. Should it be further widened, or restricted, or clarified? Perhaps they might even propose no changes, and just kick the can down the road a further five years. A reasonable outcome, in my view, would be to limit the damage caused to content creators by the educational community’s unilateral interpretation of what constitutes educational fair dealing by restricting institutional use of the exception so that fair dealing for education becomes, in fact, fair for everyone.

© Hugh Stephens 2019. All Rights Reserved.

Author: hughstephensblog

I am a former Canadian foreign service officer and a retired executive with Time Warner. In both capacities I worked for many years in Asia. I have been writing this copyright blog since 2016, and recently published a book "In Defence of Copyright" to raise awareness of the importance of good copyright protection in Canada and globally. It is written from and for the layman's perspective (not a legal text or scholarly work), illustrated with some of the unusual copyright stories drawn from the blog. Available on Amazon and local book stores. View all posts by hughstephensblog