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Misleading on Fair Dealing, Part 9: The Remarkable Growth of Free and Open Materials

Michael Geist Law RSS Feed - Fri, 2018/11/30 - 10:06

“Free” materials for educational purposes are sometimes derided as sub-standard works based on the premise that you get what you pay for. Inherent in the argument is that value is associated with cost and that turning to materials without cost means relying on materials without value. Yet the reality is that free materials are free as in “freely available” with the costs of production or business models that support those works rivalling conventional publication approaches. Free or openly available materials are not outliers. For example, the University of Guelph told the Industry committee that 24 per cent of materials in their course management systems consisted of open or free online content.

The series on misleading on fair dealing continues with an examination of freely available materials, including four sources: public domain works, open educational resources, open access publishing, and hyperlinking to third party content (prior posts in the series include the legal effect of the 2012 reforms, the wildly exaggerated suggestion of 600 million uncompensated copies each year, the decline of books in coursepacks, the gradual abandonment of print coursepacks, the huge growth of e-book licensing, why site licences offer better value than the Access Copyright licence, my opening remarks to the Standing Committee on Canadian Heritage, and transactional licensing).

Public domain

Despite efforts by some to dismiss its value, the widespread use of public domain works within Canadian classrooms underscores its continued relevance. The Ontario Book Publishers Organization published a study last year funded by Ontario Creates on the use of Canadian books in English classes in Ontario Public and Catholic schools from Grades 7 to 12. The study surveyed teachers and school boards on which books (including novels, short story collections, creative non-fiction, poetry and plays but not textbooks) are taught in English classes. The goal was to see whether Canadian books were included in class lists. The survey generated hundreds of responses (27 from school board participants and 280 from the Ontario Teachers Federation) resulting references to 695 books by 539 authors.

Working with Sydney Elliott, one of my research assistants, we reviewed the OBPO data to identify the presence of public domain works in Ontario classrooms (ie. the use of works for which the term of copyright has expired). The results were striking as the data confirms that public domain books are an essential part of the English curriculum. Of the top 20 titles, half are in the public domain today or will enter the public domain within the next few years. William Shakespeare is unsurprisingly responsible for many of these titles, but he is not alone. Other very popular public domain works include books by F. Scott Fitzgerald and George Orwell along with books by John Wyndham and John Steinbeck that will enter the public domain in Canada by the end of the decade.

The importance of the public domain within the classroom extends far beyond the most popular works, however. The survey identified 99 books that received at least four separate mentions from respondents. Of those 99 books, 20 are in the public domain and two more will enter the public domain shortly. This covers a wide range of additional authors including Huxley, Conrad, Shelley, Bronte, and McNamee. These books are widely used as they represent 35% of the total mentions. Expanding even further to the entire list of 695 books, 96 are in the public domain or about to enter it.

It should be noted that there was another large category of works currently used in Canadian classrooms beyond the nearly 100 public domain titles. Our review identified another 27 titles that are scheduled to enter the public domain within the next 20-25 years including works from authors and poets such as Agatha Christie, J.R.R. Tolkein, and W.H. Auden. These works – which appear regularly on class lists – would be directly affected by copyright term extension agreement in the new NAFTA that will lock down works from the public domain for decades. The copyright term extension represents a significant shift in Canadian copyright that requires a re-balancing as part of the current reform process.

Open Educational Resources

The BC government became the first Canadian province to launch an open textbook initiative in 2012, committing to 40 new online, open textbooks for 40 popular post-secondary courses. The initiative has since grown and been emulated in other provinces. For example, the Ontario government launched a new Open Textbook Library for Ontario in 2016 that will feature hundreds of openly licensed, professionally created textbooks providing students with access to free digital texts in dozens of university and college courses.

As governments increasingly recognize the importance of investing in open education to support learners at all stages of their lives, publishers have taken note of the changing market dynamics. A 2017 report prepared for the Association of Canadian Publishers acknowledged:

The OER movement continues to grow and is becoming a cornerstone of the Canadian K–12 educational system. The proliferation of OER content is evident across the country and there are numerous initiatives that support the development, access, and distribution of content.

Described in the Access Copyright commissioned report from PWC as a “threat”, the open textbook model provides a cost-effective alternative to expensive textbooks and licences. Indeed, internationally, SPARC estimates there has been more than $1 billion saved through open educational resources. The works are paid for, but once created, can be freely used and modified without the need for further licences, payments or permissions. This also provides a strong rebuttal to those who suggest that open textbooks may be inferior to the pricey, publisher versions. The open textbooks are written by teaching professionals, peer reviewed, and professionally developed in the same manner as commercial textbooks. The difference is that once created, they can be freely used, reused, and modified.

The impact of open educational resources is being felt at universities across the country.  For example, UBC reports:

Since 2011, at least 155 UBC courses have been identified as using open textbooks, OERs, or freely accessible resources instead of traditional textbooks. And if we look across those past six years, 47,423 UBC students were enrolled in those courses using open resources. The estimated cost savings for students has also increased over the past few years. The replacement of traditional textbooks with open resources has potentially saved UBC students between $4.7 to $6.7 million since 2011.

The province-wide estimates from the BC Campus are even higher, with student savings of nearly $10 million, almost 100,000 B.C. students using open textbooks, and nearly 500 faculty adopting the open textbooks.  Other studies provide similar numbers. The University of Saskatchewan says it use of open textbooks has saved 2,750 students a total of $275,00 in the 2016-2017 academic year, and more than $400,000 since it first launched in 2014. A study by David Annand and Tilly Jensen projected cost savings of $217,500 per year for the University of Athabasca, based on using an open textbook for an introductory financial accounting class (of 1,500 student enrollment) alone.

The shift toward open educational resources represents a win-win-win-win scenario: free textbooks for students, reduced long-term costs for education and government, financial support and compensation for creators of the texts, and high quality, Canadian materials freely available for use by teachers across the province.

Open Access

As open access publishing grows in popularity – the European Union has announced plans to ensure that all publicly-funded scientific papers will be freely available by 2020 and Canada now has a similar open access policy in place for government-funded research – the majority of new research publications will soon be freely online and accessible to all. This should be celebrated as it creates equality of access and better ensures that the work of researchers is made available to everyone, including teachers and students.

The role of open access licensing is particularly important, since the public has effectively already paid for many of the publications by funding research and researchers. Further, the continued growth of open access reflects a desire of the authors/researchers to ensure their work is widely disseminated. In many disciplines – the sciences, health, engineering, and law to name several – open access is increasingly the standard, meaning that Access Copyright’s demands for licence payments would require hundreds of thousands of students to pay for copying that does not require a licence.

The emergence of open access publishing has enabled free access (as desired by the author) to millions of articles. According to a report by Montreal-based Science-Metrix, more than half of all research publications in some countries and fields of study are now freely available online. The shift toward open access becoming the default form of disseminating research in many fields is a remarkable change given that conventional publishing in expensive subscription-based journals was the standard in many areas of research as recently as ten years ago. The move toward open access means that global research is far more accessible to everyone—scientists, researchers, and the general public. It also means that courses that rely on the latest research found in journal articles will increasingly be able to access and distribute those articles to students at no cost.

Hyperlinking to Third Party Materials

Another notable source of materials on digital CMS are hyperlinks to third party websites that may feature content that a teacher or professor wishes to incorporate into the curriculum. The works are not copied by the educational institution, but rather merely referenced by way of a hyperlink. The government explicitly supported educational use of Internet-based materials in the 2012 reforms with the following provision at 30.04(1):

it is not an infringement of copyright for an educational institution, or a person acting under the authority of one, to do any of the following acts for educational or training purposes in respect of a work or other subject-matter that is available through the Internet:
(a) reproduce it;

(b) communicate it to the public by telecommunication, if that public primarily consists of students of the educational institution or other persons acting under its authority;

(c) perform it in public, if that public primarily consists of students of the educational institution or other persons acting under its authority; or

(d) do any other act that is necessary for the purpose of the acts referred to in paragraphs (a) to (c).

The Act does contain several conditions, but it permits widespread use of Internet-based materials by education.

Moreover, the Supreme Court of Canada considered the legal status of a hyperlink in the 2011 decision of Crookes v. Newton. The court concluded:

Hyperlinks thus share the same relationship with the content to which they refer as do references.  Both communicate that something exists, but do not, by themselves, communicate its content.  And they both require some act on the part of a third party before he or she gains access to the content.  The fact that access to that content is far easier with hyperlinks than with footnotes does not change the reality that a hyperlink, by itself, is content neutral – it expresses no opinion, nor does it have any control over, the content to which it refers.

Given the state of the law, some may find it odd to even include hyperlinks within a discussion on freely available materials since it does not appear to trigger a copy or copyright issue. Yet Access Copyright proposed including hyperlinks within its educational tariff.  When the Copyright Board called them on it by asking for a legal justification in light of the Supreme Court jurisprudence, the copyright collective admitted (Document AC-21):

Access Copyright has not introduced any evidence about the prevalence of the use of links and the extent to which they point to unauthorized uses. Given the lack of evidence, Access Copyright is not claiming any specific or additional value in the tariff for the right to post a link or a hyperlink in this proceeding.

It then folded on the issue altogether: “Access Copyright has no objection to the Board removing this permitted use from the certified tariff.”

The initial inclusion of compensation for linking is part of a broader trend of overreach, however, with Access Copyright seeking compensation for uses that are already covered by other sources, including site licences, fair dealing, or transactional licences. There are many other materials that are freely available for use, including works for which the term of copyright has expired, open educational resources, open access for journals, and third party content posted online that may be incorporated through a hyperlink.

The post Misleading on Fair Dealing, Part 9: The Remarkable Growth of Free and Open Materials appeared first on Michael Geist.

Misleading on Fair Dealing, Part 8: The Access Copyright Fight Against Transactional Licensing

Michael Geist Law RSS Feed - Thu, 2018/11/29 - 10:57

The series on misleading on fair dealing continues with a post on transactional licensing and Access Copyright’s inexplicable opposition to a licensing system that currently generates millions of dollars in revenue for publishers and authors. Transactional licensing, which involves pay-per-use licences for specific uses not otherwise covered by institutional site licences, collective licences, or fair dealing, is widely used to ensure universities and colleges are compliant with copyright law (prior posts in the series include the legal effect of the 2012 reforms, the wildly exaggerated suggestion of 600 million uncompensated copies each year, the decline of books in coursepacks, the gradual abandonment of print coursepacks, the huge growth of e-book licensing, why site licences offer better value than the Access Copyright licence, my opening remarks to the Standing Committee on Canadian Heritage).

The Industry committee has heard convincing evidence that expenditures by Canadian education on transactional licences collectively runs into the millions of dollars each year. For example:

  • the University of Toronto said it paid more than $285,000 on transactional licences in the last academic year
  • Ryerson University said it spends more than $150,000 on transactional licences annually
  • the University of Guelph spent $100,000 on transactional licences in 2017-18. Transactional licences are responsible for 6 per cent of course materials at the university. Site licensing covers 54 per cent of the content, free and open Internet content constitutes 24 per cent, and fair dealing 16 per cent.
  • Concordia University, which pays the Copibec collective licence, still spends an additional $120,000 in transactional licensing costs
  • the University of Calgary spent $96,149 on transactional licences, of which $45,123 went toward materials in printed coursepacks and $51,026 for materials posted to a CMS.
  • UBC spent $113,409 on transactional licences for access and use of 780 items

The significant expenditures on transactional licences is notable for several reasons. First, they provide compelling evidence that claims educational institutions treat fair dealing as free dealing is simply false. Universities spend millions of dollars on these licences each year precisely because there are reasonable limits to fair dealing. Contrary to the claims, universities regularly turn to licences for materials where fair dealing does not apply.

Second, additional transactional licences may be needed even where a collective licence is operational. While Access Copyright and Copibec leave the impression that their licences provide a one-stop solution for educational copying, their licences do not permit unlimited copying. Given their commitment to abiding by the law, universities subject to collective licences still find themselves investing in transactional licences to cover their copying needs.

Third, transactional licences are more effective than collective licences in directly compensating creators and publishers for the use of their work. Unlike the Access Copyright licence, which involve considerable guesswork on usage and a Payback system that excludes digital materials as well as works older than 20 years, transactional licences are paid for use of a specific work regardless of the format or age. The costs currently reflect market rates and feature a link between copyright compensation and creativity not found in a collective licence.

Fourth, Access Copyright has astonishingly opposed transactional licences for years, arguing that only its licence is an effective means of compensation. In 2016, the Copyright Board raised several questions about the possibility of establishing a tariff for transactional licensing, effectively creating a standard per page fee for transactional usage. Despite widespread usage by educational institutions and adoption by publishers, Access Copyright responded (Document AC-18):

Transactional licences for secondary uses of works fail to deal with the realities presented by digital copying in the educational sector and do not ensure that rightsholders are compensated when required.

Oddly, Access Copyright told the Copyright Board that transactional licences simply can’t be used for CMS:

Whereas students buy paper coursepacks from their institutions, bookstores, and copyshops, which can charge and recoup the per-page royalty fee at the point of sale, there is no point of sale when a digital copy is made by a professor and placed on a CMS or accessed by a student. There is nowhere for the royalty to be charged and collected.

In fact, Canadian universities are already using transactional licences for these purposes, supported by publishers and others granting licences in the market. For example, the U.S.-based Copyright Clearance Center (CCC), Access Copyright’s U.S. counterpart, offers transactional licences and has been used by Canadian universities. The CCC has then remitted the royalties it collects to Access Copyright. Yet despite its success in the market and the millions being spent annually, Access Copyright remains opposed, suggesting that its primary interest is preserving its licence approach, not adapting to emerging opportunities in support of all stakeholders.

The post Misleading on Fair Dealing, Part 8: The Access Copyright Fight Against Transactional Licensing appeared first on Michael Geist.

Misleading on Fair Dealing, Part 7: My Appearance Before the Standing Committee on Canadian Heritage

Michael Geist Law RSS Feed - Wed, 2018/11/28 - 10:05

I appeared yesterday before the Standing Committee on Canadian Heritage via videoconference as part of its study on remuneration models for artists and the creative industry. The Heritage study is designed to provide additional context and information for the Industry committee’s copyright review. My opening statement is posted below. It focused on recent allegations regarding educational copying practices, reconciled the increased spending on licensing with claims of reduced revenues, and concluded by providing the committee with some recommendations for action. An audio version of the opening statement is posted here and embedded below.

Appearance before the House of Commons Standing Committee on Canadian Heritage, November 27, 2018

Good afternoon. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law, and I am a member of the Centre for Law, Technology, and Society. I appear in a personal capacity as an independent academic representing only my own views.

I am sorry that I am unable to appear in person but I am grateful for the opportunity to participate in your study on remuneration models via videoconference.

I have been closely following the committee’s work on this issue, which will undoubtedly provide valuable input to the INDU committee’s copyright review.  Last week I was dismayed to hear witnesses claim that Canada’s teachers, students and educational institutions are engaged in illegal activity. This claim is wrong and should be called out as such.

I’d like to address several of the allegations regarding educational copying practices, reconcile the increased spending on licensing with claims of reduced revenues, and conclude by providing the committee with some recommendations for action.

First, notwithstanding the oft-heard claim that the 2012 reforms are to “blame” for current educational practices, the reality is the current situation has little to do with the inclusion of “education” as a fair dealing purpose. You need not take my word for it. Access Copyright was asked in 2016 by the Copyright Board to describe the impact of the legal change. It told the Board that the legal reform did not change the effect of the law. Rather, it said, it merely codified existing law as interpreted by the Supreme Court. While I think that the addition of education must have meant something more than what was already found in the law, its inclusion as a fair dealing purpose was better viewed evolutionary rather than revolutionary.

Second, the claim of 600 million uncompensated copies – which lies at the heart of the allegations of unfair copying – is the result of outdated guesswork using decades-old data and deeply suspect assumptions.

The majority of the 600 million – 380 million – involve K-12 copying data that dates back to 2005. The Copyright Board warned years ago that the survey data is so old that it may not be representative. Indeed, it is so old there are cabinet ministers who could have been the actual students in the K-12 schools at the time they were last surveyed on copying practices.

Of the outdated 380 million, 150 million involves copies that were over-compensated by tens of millions of dollars as determined by the Copyright Board and upheld by the Federal Court of Appeal. Education has had to file a lawsuit to get a refund of those public dollars. I can only imagine the public response if the federal government was found to have overpaid for services by tens of millions of dollars and it failed to take action to recoup that money.

The remaining 220 million comes from a York University study, much of which as old as the K-12 study. Regardless of its age, however, extrapolating some dated copying data from a single university to the entire country is not credible. It would be akin to sampling a few streets in Ms. Dabrusin or Mr. Blaney’s ridings and concluding that they are representative of the entire country.

Third, the committee has heard suggestions that the shift from print coursepacks to electronic course material systems (CMS) is irrelevant from a copying perspective. This is wrong. The data is unequivocal: printed coursepacks have largely disappeared in favour of digital access. For example, the University of Calgary reports that only 53 courses used printed coursepacks last year for a student population of 30,000.

Why does this matter? Three reasons:

First, as universities and colleges shift to CMS, the content used changes too. For example, an Access Copyright study at Canadian colleges found that books comprised only 35% of materials. The majority was journals and newspapers, much of which is available under open access licenses or licensed by other means.

Second, the amount of copying with CMS is far lower than with print. While Access Copyright argues there should be a one-to-one ratio – for every registered student the assumption should be that every page is accessed even for optional readings – the data (and common sense) tells us this is unlikely.

Third, CMS allows for the incorporation of licensed e-books. At the University of Ottawa, there are now 1.4 million licensed e-books, many of which involve perpetual licences that require no further payment and can be used for course instruction. Tens of thousands of the e-books are from Canadian publishers and in many instances universities have licensed virtually everything offered by those Canadian publishers.

What this means is that the shift from an Access Copyright licence is not grounded in fair dealing. Rather, it reflects the adoption of licenses that provide both access and reproduction. These licences get universities access to the content and the ability to use it in their courses. The Access Copyright licence offers far less, granting only copying rights for materials you already have.

With the increased spending, why do some report reduced revenues? There may be several reasons.

First, licensing is often perpetual, meaning that payment comes once, not as an annual royalty.

Second, many works aren’t being used or copied. UBC reports that 69% of their physical items have not been used since 2004.

Third, despite the shift to digital, Access Copyright’s Payback system excludes all digital works. In terms of eligibility, its rules exclude “blogs, websites, e‐books, online articles and other similar publications. Only print editions can be claimed.” Moreover, the Payback system also excludes all works that are more than 20 years old on the grounds that they are rarely copied.

Fourth, Access Copyright has refused to adopt transactional licences, thereby sending licensing money elsewhere. Education is spending millions each year on transactional licensing which permits copying for a specific course, yet Access Copyright has not entered that market.

Fifth, consistent with what this committee heard from Bryan Adams, it may be that part of the problem lies with the relationship between authors and publishers, with authors under-compensated for the digital revenues.

Let me conclude with a few thoughts on solutions on remuneration.

First, efforts to force the Access Copyright licence on educational institutions through statutory damages reforms should be rejected. Education should be free to pursue the best licences the market offers, an approach that is in the best interests of both education and authors. At the moment, that comes directly from publishers and other aggregators, not Access Copyright.

Second, the government should work with Canadian publishers to ensure their works are available for digital licensing either in bundles or through transactional licenses. Given that digital licenses are sometimes the only source of revenue – Access Copyright’s Payback doesn’t compensate for older works and print sales of old books is typically non-existent – embracing the digital opportunities with a forward looking approach may be the only revenue source for some authors.

Third, governments should continue to pursue alternative publishing approaches that improve both access and compensation. For example, last week’s Economic Update announcement of funding for creative commons licensed local news should be emulated with funding for open educational resources that pays creators up front and gives education flexibility in usage.

Fourth, non-copyright policies must be examined. For example, how is that Canadian content rules for film and television production still treat Canadian book authors as irrelevant for Cancon qualification?

Despite the criticism, the 2012 reforms were about establishing rules to foster a digital market for the benefit of all stakeholders. It is still early in the process, but we have already seen a huge shift to digital for both education and the publishing industry, with hundreds of millions spent on digital licensing. That’s a win for everyone except for an outdated licence that now offers little value when compared to other market and legal options.

I look forward to your questions.

The post Misleading on Fair Dealing, Part 7: My Appearance Before the Standing Committee on Canadian Heritage appeared first on Michael Geist.

an open letter to MP Randy Boissonnault

Fair Duty by Meera Nair - Tue, 2018/11/27 - 22:35

Dear Mr. Boissonnault:

I write in connection to remarks you made on November 22, during a meeting of the Standing Committee on Canadian Heritage (beginning at 11:49 here). There appears to be a misunderstanding on matters relating to legitimate, unauthorized copying of copyright-protected materials. As this misunderstanding could be widespread, a few words publicly offered may alleviate such anxiety.

You expressed concern that Canadian literature is in peril, and you attributed this to unauthorized use of such literature in universities. That some publishers and writers are encountering difficulties is not in question, but the details are much more complex than was discussed. Today’s challenges stem from an accumulation of events preceding the 2012 amendment of the Copyright Act.

Nevertheless, CanLit is here to stay. On this topic, the work of Nick Mount (Professor, Department of English, University of Toronto) is invaluable, as he is respected on both sides of this debate. In Arrival: The Story of CanLit (2017), Mount details CanLit’s birth, midwifed as it was by profuse government spending during the booming post-WWII economy. As to CanLit’s trajectory: “Canada is producing many more writers and many more books than ever before … there has never been a better time to be a Canadian reader.”

History informs us that reading brings forth writing.

Returning to your remarks, you spoke highly of your studies at Oxford. You might be interested to know that Oxford is mentioned by name in the very first copyright statute: the Statute of Anne (1710). A condition for receiving copyright was that the libraries of Oxford, Cambridge, and other similar institutions, should receive a complimentary copy of the protected book, printed “upon the best paper,” apparently to survive the handling by many grubby hands. Since then, copyright law has undergone numerous changes, but the principle remains: certain measures of unauthorized use are legitimate as they serve larger social goals.

Despite this, universities are increasingly paying for all uses, through licenses with publishers. A multitude of briefs have been submitted to the Standing Committee on Industry, Science and Technology; expenditures are given in detail and speak to the rising trend of relying more on institution-wide licenses for journals and books. Also, Michael Geist (Canada Research Chair in Internet and E-commerce Law, University of Ottawa) has just published a series on his blog which addresses this topic; for instance, see here.

If I may, there is one aspect of your remarks that I find troubling; you suggested sitting down with student leaders to ensure Canadian writers have sufficient funding. The implication is that students are responsible for the challenges endured by some Canadian writers. Nothing could be further from the truth. When students independently engage in unauthorized copying towards completion of their homework, projects, presentations etc.—that is, when they incorporate bits and pieces of text, imagery, multi-media—such copying falls within fair dealing (the principal exception within the Copyright Act, which supports learning). When guided by their teachers, content circulated likely fell within fair dealing, or, as Geist illustrates, was already paid for through an institutional license.

Moreover, a blanket fee, charged to all students, ignores the reality that many disciplines do not engage with Canadian literature, or literature of any kind. To levy such a fee on all students is, at best, inappropriate. At worst, it is unconscionable.

We are leaving our next generations with some intractable problems including climate change, ballooning healthcare costs, the need to develop new industries, and the desperate need to diversify our markets. Fortunately, there are many bright, hardworking, dedicated students, overcoming their ever present hardships, rising to meet these challenges. But even so, the political solution to a shortfall in income among writers should not be a transfer of funds from the group that is even more impoverished.

Meera Nair, Ph.D.
Constituent and Parent

Misleading on Fair Dealing, Part 6: Why Site Licences Offer Education More than the Access Copyright Licence

Michael Geist Law RSS Feed - Tue, 2018/11/27 - 10:05

The series on misleading on fair dealing continues with a post on how to reconcile the data about which everyone agrees: education has spent more on licensing since 2012, but some copyright collectives (Access Copyright and Copibec) have generated less revenue (prior posts in the series include the legal effect of the 2012 reforms, the wildly exaggerated suggestion of 600 million uncompensated copies each year, the decline of books in coursepacks, the gradual abandonment of print coursepacks, and the huge growth of e-book licensing).

The issue was the focal point in the following exchange between MP Maxime Bernier and Copibec’s Frédérique Couette last May:

Hon. Maxime Bernier: So you also agree that, when universities claim they are paying more and more for copyright, that is true on the one hand. On the other hand, you say your revenues are dropping, for the reasons you just explained. Is that correct?

Ms. Frédérique Couette: What the universities are telling you is really that they are paying more for acquisitions, while what they pay us for is reproduction.

In other words, the explanation offered by Access Copyright, Copibec, and author/publisher groups for why spending is up but their revenues are down is simply that the two licenses are different. They say education may be spending more on licensing, but those licences are to acquire access to content, not make copies of the works for students and teachers. The licence offered by the collectives covers the copying activity, which, they argue, is separate from acquisition or access.

The copyright collectives are wrong. The evidence on the shift to digital demonstrates that physical copying for coursepacks is largely disappearing. Previous posts highlighted how coursepacks are being dropped in favour of digital course management systems, how the content on CMS is shifting away from books to other content, and how the amount of “copying” is declining as postings on course sites replace actual copies. Moreover, with some universities now licensing over a million e-books, the content is readily available in digital, licensed form to be incorporated into CMS.

Yet beyond the evidence on educational practices, are the licences themselves. Access Copyright and Copibec may infer that only their licence covers reproduction, but that is not the case. As demonstrated below, many of the content licences include reproduction rights that meet or exceed what is offered by Access Copyright. Access Copyright’s latest proposed tariff offers the following copying permissions:

(a) make a Copy, including for use in a Course Collection, of up to twenty per cent (20%) of a Repertoire Work; or

(b) make a Copy of a Repertoire Work that is
(i) an entire newspaper or periodical article or page,
(ii) a single short story, play, poem, essay or article,
(iii) an entire entry from an encyclopaedia, annotated bibliography, dictionary or similar reference work,
(iv) an entire reproduction of an artistic work (including a drawing, painting, print, photograph and reproduction of a work of sculpture, an architectural work of art and a work of artistic craftsmanship), and
(v) one chapter, provided it is no more than twenty five per cent (25%) of a book.

Those copying rights are very similar to what is provided in many standard e-book licences. For example, the Canadian Research Knowledge Network’s 2015 Ebooks License Agreement, which involves every major Canadian university press, features the following rights:

Participating Member Institutions and Authorized Users may incorporate no more than 20% of an an individual work or a chapter of the Licensed Materials in printed and electronic Course Packs and Electronic Reserve collections for the use of Authorized Users in the course of instruction at a Participating Member Institution…

The licence also covers:

Authorized Users may incorporate a durable link to the Licensed materials and no more than 20% or a chapter of an individual work contained in the Licensed Material to be used in virtual and managed environments per course (including but not limited to virtual learning environments, managed learning environments, virtual research environments, library environments, and courseware technology) hosted on a Secure Network..

Moreover, there are the following additional rights found in the licence:

  • the right to email up to 20% or one chapter to third party colleagues for personal use or scholarly, educational, or scientific or professional use
  • inter-library loans to non-participating member institutions
  • text and data mining of the Licensed Materials
  • the right to allow walk-In users to access the materials at designated terminals
  • the right to create indices to the Licensed Materials

A model version of the CRKN licence can be found here.

By contrast, the Access Copyright tariff restricts any transfer of the materials to an unauthorized person, no index can be made, and there are no specified rights on text data mining. This is just one of hundreds of e-book licences signed by Canadian universities that provide both access and reproduction rights. In fact, UBC posts information on the licence terms for each licence, clearly indicating what can be done with the materials.


UBC ACUP eBOUND Ebooks, https://licenses.library.ubc.ca/ACUP_EboundEbooks


Contrary to the assertions of Access Copyright and Copibec, a review of the licences makes it clear that universities are buying far more than just access. The licence terms for hundreds of thousands of e-books offers access, reproduction in course materials, and far broader range of rights and uses than those found with the Access Copyright licence. If revenues are dropping for one licence, it is because it offers far less value than competing licences covering the same materials.

The post Misleading on Fair Dealing, Part 6: Why Site Licences Offer Education More than the Access Copyright Licence appeared first on Michael Geist.

Canadian Government Commits $50 Million to Creative Commons Licensed Open News Content

Michael Geist Law RSS Feed - Mon, 2018/11/26 - 10:01

The Canadian government announced plans last spring in Budget 2018 to support local journalism with a $50 million commitment over five years. It indicated that the money would be allocated by independent, non-governmental organizations to provide support in under-served communities. Last week, the federal economic update included several additional measures to support the media sector, including the prospect of charitable donations to non-profit journalism organizations, a refundable tax credit to support labour costs for news organizations, and a non-refundable tax credit for Canadians that subscribe to Canadian digital news media. While the new funding has attracted considerable commentary (my take here on why there are problems but the proposal is better than Internet taxes or other cross-subsidization models), somewhat overshadowed was an update on the initial $50 million commitment.

The update indicates that the money will be invested in “open source” news content that will be available under a Creative Commons licence:

Budget 2018 announced $50 million over five years to support local journalism in under-served communities, helping to ensure that Canadians continue to have access to informed and reliable civic journalism. Starting in 2019-20, independent, not-for-profit organizations will have additional government support to create open source news content under a creative commons licence. This will allow local news organizations to access the content produced for free, helping to bolster local news coverage as organizations struggle with reduced capacity.

The plan to fund Creative Commons licensed open news content is big news as it represents a different model for ensuring that local communities are served by local news reporting. I have been arguing since 2005 that Canada should embrace open licensing of news content, emphasizing the role that the CBC could play in that regard. Early pieces cited examples from Norway and the UK for how public broadcasters were actively using open licensing to enable new creativity that builds upon their work. More recently, I argued for open licensing of CBC content:

What the public often needs are the “raw materials” to enhance their content and better platforms to help distribute and market it. What if the CBC saw its public role primarily through that prism?  It could continue to produce news programming, but openly licence its content so that Canadians could freely use it for their own creativity and storytelling.

The Public Policy Forum’s Shattered Mirror report picked up on the potential for the CBC to adopt Creative Commons licences for news content. I argued that it could have gone further by supporting more flexible licensing (it recommended an attribution, no derivatives licence that would restrict the ability to re-use the news content), but the general principle remains the same: public support for the creation of local news content based on the quid pro quo that the resulting content is then openly and freely available for others to use and disseminate. Creators are fully compensated upfront for their work and the public can then use or reuse the result.  The same approach is now widely accepted within the education and research communities where open access to scholarly research and the development of open educational resources are based on much the same premise of public investment in return for public access alongside full compensation to creators for their work.

Having embraced the Creative Commons licence as part of the solution to increasing the creation and distribution of local news content, the government should pursue additional steps in support of openly licensed news content, including incorporating the CBC into the initiative. Given the public tax dollars used to support the public broadcaster, the CBC should be exploring ways to make its local news content openly available. Moreover, the government itself should unlock its content, by eliminating crown copyright and adopting open licensing when it posts content on sharing services such as Flickr.

The post Canadian Government Commits $50 Million to Creative Commons Licensed Open News Content appeared first on Michael Geist.

Misleading on Fair Dealing, Part 5: The Multi-Million Dollar Educational Investment in E-Book Licensing

Michael Geist Law RSS Feed - Fri, 2018/11/23 - 11:09

This series on misleading on fair dealing has placed the spotlight on the changing state of educational copying including the significant decline in book copying as part of coursepack materials and the gradual abandonment of print coursepacks in favour of digital course management systems (CMS). Other posts in the series examined the legal effect of the 2012 reforms and the wildly exaggerated suggestion of 600 million uncompensated copies each year.

This post highlights the massive education investment in e-book licensing. The shift to e-book licensing has significant implications for the fair dealing debate since it confirms that the decline of the Access Copyright licence is not the result of institutions seeking free access, but rather the gravitation toward alternative licences that offer better value for teachers, students, and the taxpayer.

Given Access Copyright’s reliance on conventional print coursepacks and book copying, it is unsurprising that CEO Roanie Levy tried to convince the copyright review that there are “two buckets” of content: journals and books. Levy argued that educational institutions license journals, but not books:

We don’t dispute that the university sectors may in fact be paying more and more for content. What’s important to keep in mind is that the content that they are licensing and paying through their library licences is different from the content that they are copying under their copying policies. We’re talking about two different buckets of content. There is some overlap, but very little overlap.

The content that they are licensing is, through their own testimonies before you, mainly journal articles. As an example, CRKN testified that out of $125 million, $122 million is spent with foreign publishers. That content is created often by academics, people who rely on a salary in order to be compensated for their contributions. The content that is copied historically under the Access Copyright licence, today under their fair dealing guidelines, is mostly books, not journals.

During the same appearance, Levy characterized the difference as research materials as opposed to instructional materials:

The material that tends to get copied and used in class for instruction is different from the material that is used for research. That’s where you get the science, technical, and medical journal publishers. The five big multinational publishers are in that category. The licences that they have through CRKN are for the STM, science, technical, and medical journals. What gets copied and no longer paid for is the educational content, the trade content, the stuff that is used for instructional purposes.

The goal of this argument is clear: to convince the committee that the increased spending on licensing by educational institutions does not address the content covered by the Access Copyright licence. Yet aside from the fact that the data indicates there is far less copying of books and that print coursepacks (which are more likely to include book excerpts) are rapidly being replaced by digital course management systems (CMS), the data also leaves no doubt that Levy is wrong about book licensing. Canadian educational institutions are investing heavily in e-book licenses. Indeed, in recent years many institutions have adopted “digital first” policies in which they purchase digital copies of books rather than the physical ones. In doing so, educational institutions typically purchase both access to the work and a licence for multiple uses and/or inclusion in a CMS. This means that the e-book licence replaces the Access Copyright licence, compensating publishers and authors while providing students and teachers with greater flexibility and value. Moreover, many of the licences are perpetual, meaning that rights holders are paid a higher upfront fee in return for no subsequent royalties or payments.

The copyright review has repeatedly been provided with evidence of the shift to digital licensing and the significant investment in e-books. Universities Canada demonstrated the shift with this chart on one university’s experience:

Universities Canada, The Changing Landscape of Canadian Copyright and Universities, https://www.univcan.ca/wp-content/uploads/2018/06/copyright-parliamentary-review-submission-june-2018.pdf

Universities big and small have pointed to increased spending on electronic books. Trent University submitted to the committee:

The trend at Trent away from print on paper to digital is clearly evident from the spending on acquisitions between 2014/15 and 2016/17. During that period spending on print monographs went from $30,102 to $5722, a decline of 80%, whereas spending on ebooks went from $43,901 to $97,985, an increase of 46%, over the same period.

MacEwan University provided the committee with data showing a similar trend:

MacEwan library expended $2.6 million on acquisitions in 2017-2018 – a 98% increase since the 2009-2010 academic year. Digital content such as journals, eBooks, and streaming audio and video currently represents around 80% of the library collections budget.

The University of Calgary reported to the committee:

A growing proportion of library spending at UCalgary is on digital resources. The library has a buy-digital acquisition policy, unless a print resource is explicitly requested or electronic version is unavailable. In 2017/18, the university spent $9.8 million on digital resources, or 90.8 per cent of its acquisition spending.

It also highlighted the value of e-book licensing, explaining why the licence provides better value than transactional licensing or print copying:

eBook licenses for use in a course are often a more cost-effective approach for the university. A license for a multi-user eBook can cost less than a transactional license, and access is not limited only to students enrolled in one course. For example:

  • A transactional license for two chapters of Oil: a Beginner’s Guide (2008) by Vaclav Smil for a class of 410 students would cost the library $2,463 USD. An unlimited license for the eBook version is $29.90 USD, and the book would be available to all library users.
  • A transactional license for two chapters from the print book version of Negotiating a Vacant Lot: Studying the Visual in Canada (2014) by Lynda Jessop et al. for a class of 60 students is $414 CAD, while an unlimited license for the eBook version is $150 USD.

The University of Alberta’s open data project provides remarkable detail on all subscriptions and purchases by the university library. The data sets show year-by-year, work-by-work pricing, demonstrating that even a single university can spend hundreds of thousands of dollars annually to acquire access to works, many in perpetuity (thanks to University of Alberta’s Trish Chatterley for the assistance). The dataset shows massive investments in e-books from publishers around the world. For example, last year, it spent over $500,000 for the Springer e-book archive, which provides perpetual access to 110,000 books with the ability to use full chapters for course materials.

With regard to the Canadian publisher e-book licensing, the data discussed below suggests that the expenditures and range of Canadian materials is significant. For example, one of the largest Canadian e-book databases comes from the Canadian Electronic Library with a database known as DesLibris. It features thousands of Canadian e-books from Canadian publishers. Last year, the University of Alberta alone spent $24,000 on a licence to access to the database.

While it is challenging to identify precisely what is covered under the licence at each institution, the University of Ottawa also has a licence to the database. At the University of Ottawa, there are now nearly 1.4 million e-books under licence. Working with University of Ottawa student Tamara Mascisch-Cohen, we tried to identify the scope of the university’s e-book licences for Canadian publishers within DesLibris (which is just one of several Canadian e-book databases licensed at the university). The University of Ottawa is particularly interesting in this regard since it licences both English and French books from dozens of Canadian publishers (thanks to librarians Tony Horava and Sarah Hill for the assistance).

We looked specifically for four metrics by publisher: number of licensed e-books, number of licensed e-books published since 1997, total number of e-books available, and total number of e-books published since 1997 available. The metrics were designed to provide a sense of licensed e-books from a single database along with a better understanding of how many e-books fell within the last 20 years (Access Copyright says books older than 20 years are rarely copied and are ineligible for its Payback system) and whether the university was purchasing access to the majority of e-books available for subscription. Data on the top 60 Canadian presses is posted below:

University of Ottawa DesLibris data

The data shows a huge investment in Canadian e-books with universities licensing access to thousands of them across dozens of Canadian publishers. In fact, the University of Ottawa approach suggests that universities will typically licence the majority of e-books that are made available by Canadian publishers. In other words, the only thing stopping more e-book licensing are publishers who fail to include them within their databases. Further, there are a sizable number of e-books that are licensed that were published before 1997. These e-books are typically not copied (according to data from Access Copyright) and would not return royalties from the Payback system for the authors or publishers, meaning that site licensing is a crucial way to obtain an ongoing economic return from these older titles.

Moreover, this is only one database. The University of Ottawa library advises that it has purchased perpetual access to more than 15,000 books from Canadian publishers, including thousands of books from the largest publishers such as University of Toronto Press, McGill-Queen’s University Press, and UBC Press as well as dozens of smaller presses that have also sold perpetual access.

For example, the University of Ottawa has licensed access to over 98 per cent of the Dundurn Press e-books that are available through DesLibris: 1,933 Dundurn Press e-books of a total of 1,965 available e-books through the database. Dundurn has also sold 459 e-books under perpetual licences to the university. There is similar data for other Canadian publishers. ECW Press, whose site says it has published “close to 1,000 books” told the industry committee earlier this year that it has lost significant educational adoption revenues. Yet the University of Ottawa has licensed over 99 per cent of the available ECW e-books from DesLibris: 685 out of a total 690. ECW has also sold 339 e-books – about a third of its entire catalogue – under perpetual licences to the university.

Fernwood Publishing, a Canadian publisher that started in Halifax and expanded to Winnipeg, was also discussed at the copyright review. It says it has published over 450 titles over the past 20 years. The University of Ottawa has licensed 86 per cent of the available Fernwood e-book on DesLibris: 254 out of a total of 295. Fernwood has also sold 186 e-books under perpetual licences to the university. The data is replicated at many Canadian publishers, who criticize fair dealing yet remain silent on the new revenues from site licensing their e-books and on the fact that those licences typically mean that potential copying of their works is paid copying, not copying based on fair dealing.

The data is unequivocal. Claims that universities do not licence books is simply false. Rather, there has been a dramatic shift toward e-book licensing, with those licences (many of which are perpetual) effectively replacing the Access Copyright licence, compensating publishers and authors, and providing students and teachers with greater flexibility and value.

The post Misleading on Fair Dealing, Part 5: The Multi-Million Dollar Educational Investment in E-Book Licensing appeared first on Michael Geist.

The Best of a Bad Situation?: Why Tax Incentives Are Better Than Regulation and Cross-Subsidization to Support Canadian Journalism

Michael Geist Law RSS Feed - Thu, 2018/11/22 - 11:53

The challenges faced by the Canadian media sector represent an incredibly challenging policy issue for the government. The struggles to adapt to heightened competition in the digital environment – the local paper now competes with a myriad of alternative choices – has led to layoffs, closures, and intense lobbying for a bailout. For the past few years, the government has largely resisted the lobbying efforts, recognizing the risks to the independence and trust in media that can come from government funding for the media itself. While concerns about government influence over the media and journalists are nothing new (I appeared before two Senate committees yesterday which both featured prominent former journalists), there is a difference between the prospect of future appointments and the perception of cash for favourable coverage.

Notwithstanding the misgivings, the Canadian government yesterday announced plans to supplement its support for the struggling media industry with a trio of tax policy reforms: the prospect of charitable donations to non-profit journalism organizations, a refundable tax credit to support labour costs for news organizations, and a non-refundable tax credit for Canadians that subscribe to Canadian digital news media.

The plan quickly attracted applause from groups that had been lobbying the government for months for support and criticism from those concerned with undue government influence over the media. While the charitable donation approach is common in the U.S. and the tax credit for subscriptions might entice some to subscribe to digital media, the plan to convene an “independent panel” to determine who qualifies for the tax credit for labour costs looks to be a problematic implementation of the proposal. Critics will rightly point out that it could lead to greater media mistrust with fears that organizations try to garner support with the government in order to obtain the necessary tax accreditation. Moreover, the proposed solutions, which are estimated to cost $595 million over five years, won’t change the structural challenges faced by the industry and might delay much-needed innovation.

Yet despite the significant concerns about tax credit implementation, the approach is better than many of the alternatives that have been raised in recent months. Groups have lobbying for a link tax, restrictions on fair dealing, taxes on Internet services, regulation of Internet platforms, or income tax reform that would have raised advertising costs for Canadian businesses. Many of these alternate proposals were based largely on visions of either cross-subsidization (Internet users subsidizing the news industry through higher access costs) or increased regulation designed to make Canadian news services more competitive by making the competition less so.

Instead, the government is focused on using its most effective tool in the toolkit – tax policy – to create incentives to invest in the sector and continue the shift to digital. Setting aside the implementation concerns, that is good news from a policy perspective since the approach may foreshadow the outcomes of similar battles over telecom, broadcast, and copyright policy where the same cries for government intervention are often heard.

For example, the Broadcast and Telecom Review Panel was asked to consider whether changes were needed to support the continued viability of local news. That question has been answered by the new government policy, which should serve as a model when demands to levy new taxes or restrict fair dealing are made to “save” broadcasting, publishing or the music industry. There may be a reasonable debate over the benefits and risks of government support for these sectors. But if the media, broadcasting, or publishing needs public support and the government believes it is in the public interest to do so, funding should come from general revenues as part of broader government policy, not through cross-subsidization and a myriad of levies that run counter to other policy goals such as affordable Internet access and marketplace innovation.

The post The Best of a Bad Situation?: Why Tax Incentives Are Better Than Regulation and Cross-Subsidization to Support Canadian Journalism appeared first on Michael Geist.

Misleading on Fair Dealing, Part 4: The Shift from Coursepacks to Digital Course Management Systems

Michael Geist Law RSS Feed - Thu, 2018/11/22 - 10:44

The changing state of course materials in education involves more than just increased reliance on alternative materials such as journal and newspaper articles. Yesterday’s post highlighted the significant decline in book copying as part of coursepack materials, but the data also consistently demonstrates that coursepacks are being abandoned in favour of digital course management systems (CMS) (previous posts in the misleading on fair dealing series on the impact of the 2012 reforms, the wildly exaggerated suggestion of 600 million uncompensated copies each year, and the decline of books in coursepacks).

The emergence of CMS as the dominant form of materials distribution has a profound impact on the Access Copyright licence. While the copyright collective is quick to argue that its licence covers both print and digital uses, the shift to CMS means that educational institutions can more easily  rely on alternative site licenses, open access materials, and links to third party content as major sources of course content. This increases the relative value of alternative licences (such as site licensing of e-books, journals, and newspapers), which, unlike the Access Copyright licence that is limited to reproduction, can be used to provide both access to the materials and their reproduction. It also means there is a reduction in overall copying as students no longer receive copies of all works, instead accessing the materials posted online.

The increasing shift away from coursepacks to digital CMS is easily demonstrated by the data before the Copyright Board and copyright review committee. For example, Access Copyright admitted it believes that is happening in response to a question from the Copyright Board in 2016 (Document AC-18):

Q. Please comment on the following hypothesis: The data show that paper coursepacks are being progressively replaced by digital CMS.

A. Access Copyright agrees with the hypothesis. Overall coursepack reporting peaked in 2006 and has gradually declined over time (see Exhibit AC-5, Table 3.3 at p. 11), but the question of whether paper coursepacks are being progressively replaced by digital CMS is unclear. Access Copyright believes it to be so and has been insistent that any new licence with post-secondary educational institutions must include digital uses; however, it is not possible to demonstrate a displacement of copying from coursepack to CMS use because Access Copyright has no time-series data documenting the evolution of digital CMS use.

While Access Copyright says it does not have definitive data to demonstrate the CMS use, there is plenty of data that confirms the shift. In fact, Access Copyright commissioned a study on copying practices at Canadian colleges as part of its ongoing case at the Copyright Board of Canada on post-secondary copying practices (Document AC-4) which found that 55.1 per cent of the volume of copying was done for posting on a CMS, 10.2 per cent for coursepacks, 26.6 per cent for handouts in class, and 7.9 per cent through hyperlinking. Similarly, the report Access Copyright commissioned for the York University litigation concluded:

a comparison of the volume of print copying versus digital copying for the period for which there are comparative data (2011-2013), the copying behaviour at York appears to be shifting from the inclusion of published works in print coursepacks to the posting and copying of those works on an LMS system.

Data submitted to the copyright review affirms that the shift is replicated at universities across the country. The University of Calgary reported to the committee:

To keep course materials affordable, instructors are using material licensed and paid for by the library (e.g. e-journal articles and eBooks) rather than custom course packs or expensive textbooks. Indeed, the use of course packs has decreased as the availability of licensed digital resources has increased. While 118 courses used course packs in the 2013-14 school year, in 2016/17 only 85 courses used them. In 2017/18, approximately 53 courses used course packs.

For a university of 30,000 students to use only 53 coursepacks demonstrates how printed materials are largely disappearing from many university campuses. In fact, at the University of Calgary there are 27 courses using freely available open access as the primary text, pointing to a near future where freely available materials surpass printed coursepacks.

There is similar data at other universities. The University of Winnipeg submitted to the committee that this year over 1,600 courses have been created in its CMS, a 50 per cent increase since 2013-14. Meanwhile, Allan Bell, Associate University Librarian at UBC noted to the committee:

Our students are demanding more digital content, and more digital experiences. Selling photocopies to 19 year olds is something that does not work today, and certainly won’t work tomorrow.

UBC provided the committee with a chart on coursepack sales that demonstrate the steep decline in recent years.

UBC Submission to INDU Committee, http://www.ourcommons.ca/Content/Commit ee/421/INDU/Brief/BR10020447/br external/UniversityOfBritishColumbia-e.pdf, pg. 3

Access Copyright has suggested that the digital shift is immaterial for collective licensing, but the reality is that it has an enormous impact on the value and necessity of its licence. First, as discussed yesterday, with course materials becoming predominantly digital, there is also a change in the materials used that involves a shift from books to journal articles. Since journal articles are often licensed by universities or available under open access, there is no need for either fair dealing or the Access Copyright licence for those materials. Second, there is far less copying in a digital CMS as the data unsurprisingly points to many instances where fewer students access content than are enrolled in a course. The reduced access lessens the amount of copying and the value of the Access Copyright licence, which now effectively competes with alternative site licences that offer better value and access for students and teachers.

The post Misleading on Fair Dealing, Part 4: The Shift from Coursepacks to Digital Course Management Systems appeared first on Michael Geist.

Misleading on Fair Dealing, Part 3: Data Shows Books Are Rapidly Declining as Part of Coursepack Materials

Michael Geist Law RSS Feed - Wed, 2018/11/21 - 11:02

The misleading claims on fair dealing extend beyond the impact of the 2012 reforms and the wildly exaggerated claim of 600 million uncompensated copies each year. Given that educational institutions have increased their licensing spending since 2012, Access Copyright has sought to downplay the investment at the copyright review by arguing that site licensing is primarily focused on access to journals while copying for coursepacks predominantly involves excerpts from books. The implication of the Access Copyright argument is that book copying remains as relevant as ever and that site licensing does not cover that form of copying. These arguments are misleading, however, since the data suggests that book copying is rapidly declining as part of coursepacks, coursepacks themselves represent a small percentage of course materials, and books are in any event an increasingly large part of university site licensing. Posts over the next three days will address each of these issues.

Given the reality that a shift away from book copying decreases the relevance and value of the Access Copyright licence, the copyright collective has tried to convince MPs on the copyright review that books remain the primary source of materials for coursepacks. For example, Roanie Levy, Access Copyright’s President and CEO, told the committee:

The content that is copied historically under the Access Copyright licence, today under their fair dealing guidelines, is mostly books, not journals. This is content that is created by professional authors who rely on royalties for compensation. It is not content that is licensed, by and large, through the library licences.

Later in the same hearing, Levy reiterated the same point in an answer to a question from NDP MP Brian Masse:

Like what Frédérique mentioned about the experience in Quebec, and in the rest of Canada as well, what we saw historically was that, of the copies that they used to make and report to us, only about 15% was from STM, science, technical, and medical journals. The rest was books, and that doesn’t tend to be licensed through university libraries.

The key word in both responses is “historically.” While it may have been true that books once comprised 80 per cent or more of copying in print coursepacks, the data today indicates that books are a far smaller part of overall copying (as will be discussed later this week, the data also indicates that books are a significant part of site licensing).

For example, Access Copyright commissioned a study on copying practices at Canadian colleges as part of its ongoing case at the Copyright Board of Canada on post-secondary copying practices (Document AC-4). The 2012 study included colleges and polytechnic universities from across the country, arriving at the following breakdown by genre:

The study data, weighted to the population of 62 colleges and to a year of activity, indicate that 287 million exposures were compensable. Of those, roughly one third were from books (34.6%), one third from journal articles (32.8%), and one third from newspaper articles (29.8%).

Books only comprise a little over one-third of the copies, far below the Access Copyright claims. In fact, the roughly even split among books, journal articles, and newspaper articles in 2012 likely  overstates the role of books today.  The study also considered whether the copies were digital or electronic. Digital uses comprised 53.4 per cent in 2012 with print uses only 18.7 per cent. This is relevant since journal articles were 60.2 per cent of postings on learning management systems (LMS) compared with 36.3 per cent for books. In other words, as course materials become predominantly digital, there is also a change in the materials used that involves a shift from books to journals and links to third party content. As Access Copyright acknowledges, journal articles are often licensed by universities. The chart from Circum, which conducted the study for Access Copyright, tells the story (Document AC-43):

Analysis of the Responses Provided to Interrogatories 71, 105, 106, 107, and 108 in the Context of the Post-Secondary Educational Institution Tariff (2011-2013) Proceedings, Final Report, September 11, 2013, Doc AC-4

The declining importance of books for course materials was also found in a study at York University as part of the fair dealing litigation at the university. Much like the colleges study, the majority of materials in printed coursepacks were copies from books. However, a study of materials on learning management systems from 2011 to 2013 once again found the diminishing use of books and corresponding increasing use of journals. The study found that 58 per cent of the copies in the sample were books and 37 per cent were journal articles. While a higher book percentage than colleges, the trend is similar with a growing shift away from books as course materials as the delivery of course materials moves online.

The York study is consistent with data provided by several Canadian universities during the copyright review. For example, UBC advised the committee that books are increasingly being placed in storage and not copied at all:

The other thing is the circulation. Our books are being used less. Indeed, many of our books are being put into a storage facility, where they are safely not being copied.

Meanwhile, the University of Lethbridge conducted a study of materials contained in its learning management systems. It found that only 98.3 per cent of the materials did not involve collective licensing. Ryerson University provided similar figures to the committee, noting

More than 80% to 90% of the content we make over to our students in e-reserve is covered through licences for digital materials, links to legally posted publicly available materials and open access content.

The wider range of materials in learning management systems was a point of emphasis by the University of Guelph, which told the committee:

Students at the university access course readings in a variety of ways: they purchase textbooks from the university bookstore; they access materials placed on reserve in the learning management system, including 54% through direct 
links from licenced materials, 24% open and free Internet content, 6% via transactional licences, with the remaining 16% under fair dealing.

The change in source of materials also has enormous implications for the payments to authors by Access Copyright. Access Copyright’s Payback system, which provides royalties to all writer affiliates, excludes all digital works. In terms of eligibility, its rules exclude “blogs, websites, e‐books, online articles and other similar publications. Only print editions can be claimed.” Moreover, the Payback system also excludes all works that are more than 20 years old on the grounds that they are rarely copied.

The data – taken directly from Access Copyright commissioned studies – is unequivocal. It isn’t fair dealing that has driven changing copyright practices since 2012. Rather, the shift to digital is fundamentally changing how students access materials as well as the source of those materials. The Access Copyright licence derived much of its value from copying portions of books into coursepacks, a practice that has dramatically declined with the broader move toward digital delivery of educational materials.

The post Misleading on Fair Dealing, Part 3: Data Shows Books Are Rapidly Declining as Part of Coursepack Materials appeared first on Michael Geist.

Misleading on Fair Dealing, Part 2: Why Access Copyright’s Claim of 600 Million Uncompensated Copies Doesn’t Add Up

Michael Geist Law RSS Feed - Tue, 2018/11/20 - 10:36

My series on how the copyright review has been misled on fair dealing continues with one of Access Copyright’s most attention-getting claims: that each year “600 million pages of copyright-protected content is being copied for free each year by the education sector” (Part 1 on inconsistent claims on effect of 2012 reforms). The 600 million page figure has attracted widespread coverage, regularly cited by Access Copyright supporters (Association of Canadian Publishers, Writers’ Union of Canada) and noted by Members of Parliament. However, a closer examination reveals that the number is the result of outdated guesswork using decades-old data and deeply suspect assumptions.

Where does the 600 million figure come from?

Questions about the source of the 600 million figure have arisen a couple of times during the copyright review hearings. For example, MP Julie Dabrusin joined the Industry Committee for a hearing featuring the publishers and writers union, leading to the following exchange:

Ms. Julie Dabrusin:  I’ve also heard a reference to 600 million pages every year being copied. I’m not sure, first of all, if you could tell us what the source is for that information, because that might help.

Mr. John Degen: My understanding is that most of that number, or at least over half of that number, comes from the York trial, so we’re talking about evidence. We’re talking about actual testing of copying that happened on a university campus in Canada. The rest would be what’s historical from the licence.

Ms. Kate Edwards: They’re from submissions to the Copyright Board and assessments of the tariff. Again, these are evidence-based, real copies made in Canadian institutions, and that has not changed in the last five years.

In fact, both Degen and Edwards are wrong. As discussed below, over half of the number does not come from the York University trial and the data says very little about copying practices over the past five years.

The same question was posed directly to Access Copyright during its appearance by NDP MP Brian Masse. Access Copyright’s Roanie Levy was somewhat evasive during the exchange:

Mr. Brian Masse: I want to get clarification with regard to the illegal copying that’s taking place. I’ve heard different numbers. What exactly are they and where do the numbers come from? Those have also been used by several witnesses prior to today’s testimony. I think they’re all using these numbers, the 600 million, as well as some other ones. Where do they come from?

Ms. Roanie Levy: There is a document, which I distributed earlier, that has some of the key numbers in it and explains where they come from. You’ll see where the “600 million pages of published works copied every year” comes from.

Mr. Brian Masse: For the record where exactly does that come from?

Ms. Roanie Levy: It comes from a couple of places. The first place is the Copyright Board decision in the elementary/secondary school sector. There were 380 million pages copied there per year.

Mr. Brian Masse: How did they come to that conclusion?

Ms. Roanie Levy: A study was done.

Mr. Brian Masse: I want to make sure because we’re hearing that number quite a bit.

Ms. Roanie Levy: Yes, absolutely.

Mr. Brian Masse: If people are following perhaps they want to know.

Ms. Roanie Levy: A study was done and that’s where the 380 million came from. Of that 380 million, the Copyright Board concluded that 60% of that is fair dealing, and therefore not compensable.

Mr. Brian Masse: Okay.

Ms. Roanie Levy: The remaining 40% is compensable. So, in fact, there were 150 million pages that still need to be compensated, but the ministers of education are still refusing to pay that. They’re claiming the whole thing under fair dealing, even the amount that the Copyright Board said had to be paid for.

Mr. Brian Masse: There’s about 150 million pages in outstanding invoices?

Ms. Roanie Levy: Outstanding payments that they’re claiming fair dealing on, 380 million pages in total for elementary/secondary. In the post-sec sector, we did a study on York University. In that case, as a result of the study that looked at the copies loaded on learning management systems and course packs, we see, on average, 360 pages per student per year being copied.

Mr. Brian Masse: Okay. So, it’s—

Ms. Roanie Levy: When you use all of that data, on a conservative end, you end up with 600 million pages that have been copied and not paid for. These are copies that are not licensed, nor have transactional licences been obtained for them that are not available under open access licences.

Why the 600 million page figure is misleading: K-12 data

A closer look at the sources cited by Access Copyright reveals that the 600 million page figure is highly misleading, overstating the impact of fair dealing while relying on data that almost entirely pre-dates the 2012 reforms. In fact, some of the data is so old that there are cabinet ministers who could have been the actual students in the K-12 schools at the time they were surveyed on copying practices.

Access Copyright says the 600 million figure combines data from a Copyright Board decision involving copying practices at K-12 schools with a several data points from York University. In the case of the Copyright Board data, it reflects 13-year old copying survey information from 2005-6. The Copyright Board noted that the data is now quite old, warning both Access Copyright and school boards in 2016 that it may no longer be representative:

Both of the parties rely on the 2005- 2006 Volume Study in their calculation of a royalty rate for the Proposed Tariffs. While we believe it is still possible to use this study for the purposes of establishing a royalty rate for this Tariff, it may not be so in the future. The study may then be sufficiently dated as to call into question its representativeness.

To suggest that 2005 copying data – which obviously pre-dates the 2012 reforms and Supreme Court of Canada decisions by many years – can be used as the basis to make claims about copying in 2018 is simply not credible.

Since the data is so old, it should not be used to make assertions about copying practices more than a decade later. Yet even if the data were reliable, Access Copyright’s inference that it represents 380 million unpaid copies due to fair dealing is misleading. The Copyright Board concluded that there were 382.2 million copies made by schools and school boards at issue, of which about half were books and the other half were newspapers, periodicals, and consumables (which can be any number of different works). After conducting a fair dealing analysis, the board concluded that 154.3 million copies – just over 40 per cent – were not covered by fair dealing. The majority of those copies were consumables.

Access Copyright has rounded the 382.2 million copies to 380 million and now argues that all are uncompensated. In fact, during the relevant period, Canadian schools paid millions of dollars to Access Copyright from 2010 to 2012 for copying in advance of an actual tariff being set by the Copyright Board of Canada. Having been found to have overpaid by tens of millions of dollars (based on Copyright Board analysis that was upheld by Federal Court of Appeal), the education groups asked for a refund of the overpayment. When Access Copyright refused – it said it was holding the money to cover later copying under a licence for which schools had opted-out – the schools were forced to file a lawsuit for a return of the overpayment. In other words, there was overpayment for 150 million copies from 2010-2012 and disputes/litigation over the withheld funds since that time.

Why the 600 million page figure is misleading: York data

The remaining 220 million copies that Access Copyright claims are uncompensated each year is derived from a study conducted as part of the York University litigation that is currently before the Federal Court of Appeal. The precise source of this estimate is difficult to discern since the Access Copyright expert in the case cited several York-related data sets including internal coursepack copying from 2005 -2011, licensed copyshops from 2011 – 2015, York printing services from 2011-2013, and learning management system posting of works from 2011-2013. Access Copyright’s Roanie Levy seemed to suggest to the committee it comes primarily from the 2005-2011 internal coursepack copying data since she pointed to 360 pages per year and that report estimated an average of 387.5 exposures per full time student (the estimate for LMS copying was far lower at 92 copies in 2012 and 186 in 2013 per full time student).

If so, some of the York data is as old as the K-12 data, dating back as much as 13 years for printed coursepacks that have dramatically declined in usage. Not only is the data old, but the 220 million figure represents a remarkable extrapolation by Access Copyright from a single university to estimate copying for all universities and colleges across Canada many years later.

Indeed, even if the York study was not outdated and somehow representative of all Canadian universities and colleges, the numbers significantly overstate the amount of potential non-fair dealing copying. First, the numbers do not account for copying covered by alternative site licenses. York has spent millions of dollars on site licences to pay for access to content, yet the study does not account for that licensed copying. In fact, even the trial judge in the York case acknowledged the potential risk of overstating the copying:

While Gauthier [Access Copyright’s expert] did not adjust his estimate of print and digital exposures to account for York’s claim that some of the items captured in the sampling were copied or posted with permission, this does not significantly undermine the conclusions which can be drawn. The report may overstate some of the copying, but since York had the data it was incumbent on them to establish quantum and materiality.

While the trial judge was nevertheless satisfied with that approach, a second study on the same data concluded that 96.6 per cent of the copying in course packs was covered by alternative permissions that York had obtained to include the materials. For the course management system study, the percentage of documents subject to an alternate permission was 26.2 percent. The precise amount of copying subject to alternate licences is subject to debate, but there is no doubt that a sizable percentage of the copying was covered by a non-Access Copyright permission.

Second, although none of the data is current to the last few years, the most recent data comes from access to materials on online learning management systems (LMS). As will be discussed in an upcoming post, the days of paper-based coursepacks have largely disappeared with universities shifting to an LMS approach. That digital shift has significant licensing implications since it allows universities to licence both access and reproduction in the same licence directly from publishers and database providers, unlike the Access Copyright licence that covers only reproduction.

The digital shift also has implications for determining how many copies – or instances of access – have occurred. According to Access Copyright, there should be a one-to-one ratio, meaning that every registered student should be deemed to have accessed every page posted to an LMS. If the 220 million figure includes LMS, then the “copying” is based on this assumption with a multiplier of every posted page per course for every registered student. Yet as any professor or student will tell you, it is incredibly unlikely that every student accessed every single page posted to an LMS.

In fact, the York study had evidence to suggest that registered students often outnumbered the frequency of LMS access. The data indicated that enrolled students outnumbered unique accesses of the LMS 34 per cent of the time, equal access occurred just 5 per cent of the time, and 14 per cent involved more unique accesses than enrolled students (46 per cent of the time the unique access data was missing). While not conclusive, the data unsurprisingly points to many instances where fewer students access content than are enrolled in a course. Indeed, the Copyright Board asked Access Copyright in the post-secondary case to provide data on alternate assumptions that 75%, 50%, and 25% of student accessed materials posted to an LMS.

The net effect is the York data is an unrepresentative, small sample of copying practices, much of which pre-dates the 2012 reforms. Moreover, much of the content may have been covered by alternate site licences and the amount of copies or usage is undoubtedly overstated. Access Copyright and its allies have repeatedly cited the 600 million copy figure but on closer inspection it overstates the situation by hundreds of millions copies and is based on unreliable, old data.

The post Misleading on Fair Dealing, Part 2: Why Access Copyright’s Claim of 600 Million Uncompensated Copies Doesn’t Add Up appeared first on Michael Geist.

Misleading on Fair Dealing, Part 1: Access Copyright’s Inconsistent Claims on the Legal Effect of the 2012 Fair Dealing Reforms

Michael Geist Law RSS Feed - Mon, 2018/11/19 - 10:41

Fair dealing has unsurprisingly emerged as one of the dominant topics of the ongoing Canadian copyright review. While educational institutions maintain that spending on content has increased since the 2012 reforms that added education to the list of fair dealing purposes, Access Copyright and the publishing community argue that licensing revenues have declined. Starting today, I’ll be posting a series on fair dealing that unpack many of the issues and demonstrate why House of Commons committees studying the issue may have been misled by exaggerated and inaccurate claims.

The series starts with the foundational argument from Access Copyright and its supporters, namely that current educational practices are the result of the 2012 copyright reforms that led to a significant expansion of fair dealing. The implication is that the government broke their compensation system in 2012 and should “fix it” by curtailing educational use of fair dealing. Future posts will explain why licensing has actually increased since 2012, but this post is limited to the oft-heard claim that the 2012 reforms are to “blame” for current educational practices.

The attempt to link licensing approaches to the 2012 reforms – particularly the expansion of the fair dealing purposes to include education – has become a standard line for proponents of limiting fair dealing. Access Copyright’s submission to the copyright review argues that education and the collective had a mutually beneficial relationship that “deteriorated following the Copyright Modernization Act (the “CMA”) coming into force in 2012, due largely to the education sector’s interpretation of the addition of ‘education’ as an enumerated purpose to fair dealing (the “Education Exception”).”

Access Copyright supporters tell a similar story: the Association of Canadian Publishers told the committee “we’ve been damaged by the Copyright Modernization Act”, the Writers’ Union of Canada said to the committee “we now know that the 2012 imposition of education as a category of fair dealing has delivered none of its intended benefits and has caused exactly the kind of economic damage many of us predicted,” and Copibec noted to the committee that “about six years ago, we appeared before the committee studying Bill C-32. At that time, we warned MPs about the risks and potential abuse associated with introducing the word ‘education’ into the fair dealing exception.”

While linking the 2012 reforms to copyright practices today may have emerged as a standard lobbying line, the reality is that Access Copyright told the Copyright Board of Canada in 2016 that the legislative changes merely reflected the law at the time and did not expand fair dealing. The copyright collective was asked during the interrogatory process of a case involving a post-secondary institutions the following question by the board:

Describe the impact on fair dealing in educational institutions of the addition of “education” in s. 29 of the Copyright Act and of the Alberta and Bell Supreme Court of Canada decisions. To what extent do these developments expand fair dealing in educational institutions?

Unlike the claims to MPs conducting the copyright review, Access Copyright responded (Document AC-21 in the Access Copyright – Post-Secondary Educational Institutions case) that the legislation did not expand fair dealing, but rather merely codified what the Supreme Court of Canada had already ruled:

The majority of the Supreme Court of Canada in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright) found in its July 2012 decision that teachers who copy copyright-protected works for their students on the teachers’ own initiative share a symbiotic purpose with the students who are engaged in their own research and private study. The majority concluded that “[i]nstruction and research/private study are, in the school context, tautological.” In effect, the majority of the Supreme Court of Canada jurisprudentially expanded the meaning to be afforded “research “and “private study” to include instruction. This decision expanded what was once understood to be limited allowable purposes of private study and research to include copying performed for the purpose of instruction or education.

This expansion of the allowable fair dealing purposes was later codified in the amendments to section 29 of the Act. The coming into force of the statutory amendment in November 2012 did not serve to further expand fair dealing because the Supreme Court of Canada had already interpreted the exception as including that purpose. Simply put, and contrary to the apparent position taken by a number of educational users that the legislative amendments further expanded fair dealing in education, the legislative inclusion of education as an express allowable fair dealing purpose simply now accords with the jurisprudence [bold added].

Access Copyright’s response to the Copyright Board that the legislative change merely codifies the Supreme Court’s jurisprudence is surely wrong given that the legislation received royal assent on June 29, 2012, two weeks before the Supreme Court of Canada’s Alberta v. Access Copyright ruling. Moreover, since those decisions were based on the research and private study purposes, the addition of education must have meant something more than what was already found in the law. The inclusion of education as a fair dealing purpose was better viewed evolutionary rather than revolutionary, representing a compromise between those calling for a full fair use provision and those seeking to further restrain fair dealing.

Regardless, given Access Copyright’s position before the Copyright Board, the claims that current fair dealing practices are the result of the 2012 reforms are misleading. Canadian fair dealing practices over the past five years have involved increased licensing and copying practices that are largely the result of technological change, new digital licensing alternatives, and court rulings, not the 2012 reforms as Access Copyright and its supporters now claim in an effort to convince the committee to backtrack on the earlier amendments.

The post Misleading on Fair Dealing, Part 1: Access Copyright’s Inconsistent Claims on the Legal Effect of the 2012 Fair Dealing Reforms appeared first on Michael Geist.

“You’re Misleading Us”: Canadian Anti-Counterfeiting Network Calls for Elimination of Court Oversight For Border Seizures

Michael Geist Law RSS Feed - Mon, 2018/11/12 - 10:10

Bell’s promotion of a site blocking system in Canada – rejected by the CRTC on jurisdictional grounds – was grounded in the view that it could establish a mandated blocking approach without court orders. That placed the Canadian proposal off-side the vast majority of site blocking systems around the world, but it also pointed to mounting efforts to exclude the courts from the realm of copyright enforcement. For example, the Canadian Anti-Counterfeiting Network recently appeared before the Industry committee to argue for legislative reforms that would eliminate court oversight for seizures at the border. In its place, the group argued that customs authorities should be empowered to seize and destroy goods without court review.

According to Lorne Lipkus, who represented the group at the copyright review before the Standing Committee on Industry, Science and Technology:

We would like the introduction of a simplified procedure, under section 44, which relates to CBSA’s request for assistance program, so that it is clear that border officers are authorized and mandated to not only detain these products coming into Canada but to seize them. Right now, they detain them. We’re asking that they be allowed to seize them, as is the case around the world, and destroy them, without the need for a judicial proceeding which is the hallmark of the existing program [emphasis added].

Lipkus explained the group’s proposed process under questioning with NDP MP Brian Masse:

I don’t know if it’s a regulatory change or not, but in the existing legislation, there’s a 10-day period of notice given to both the importer and to the rights owner. It says, “These goods are on their way into the country. You, Mr. Rights Holder, have 10 days to bring an action or else we’re going to be releasing the goods in some way.” The importer is given 10 days’ notice to say that these goods are suspected of being counterfeit.  In the cases that we’re finding right now, the importer either doesn’t respond, or says, “I didn’t order those goods.” If part of the process were an abandonment situation, which is done with other goods in Canada in similar situations—after 10 days the importer does not respond, or responds and says they didn’t order these goods—then why can’t we destroy them right away? Why is the government paying to continue to store these goods? They could be destroyed immediately.

Yet under subsequent questioning from Liberal MP David Lametti, it became readily apparent that the proposal has little to do with copyright. In fact, Lametti hinted that the group was misleading the committee with a policy bait-and-switch by arguing for copyright reforms that were fundamentally about patents and trademark.

Mr. David Lametti:    Thank you. Mr. Lipkus, one of the fundamental principles of copyright law is that copyright on the book doesn’t mean ownership of the book. It’s a physical object versus copyright. Most of the examples you gave were a patent or a trademark – I think you would definitely agree with that – with copyright coming in at the end. Now, if there’s a copyright violation on the label, why should it give you the right to seize or even destroy the physical object?

Mr. Lorne Lipkus: That’s an excellent question. In fact, what happens in practice right now is that they seize the package, because it is illegal to be using the packaging to advertise that. If the product is authentic, for example, it doesn’t show—

Mr. David Lametti: But then you’re back to trademark and a patent again for authenticity.

Mr. Lorne Lipkus: No, no. If that package—

Mr. David Lametti: The copyright only applies to the design on the label.

Mr. Lorne Lipkus: Exactly.

Mr. David Lametti: It doesn’t apply to the authenticity of what’s inside.

Mr. Lorne Lipkus: Exactly. You’re 100% right, and so the product itself can flow through. No one is taking a position on the product. Unfortunately, when the packaging is an infringement, very often the product is counterfeit as well, but—

Mr. David Lametti: You seem to be pushing for ability to seize or destroy the product based on copyright. If that’s the case, you’re misleading us.

Mr. Lorne Lipkus: No. If I said that, that’s only predicated on the product being counterfeit. We’ve seen toys, for example—

Mr. David Lametti: We’ve seen toys under patent or trademark.

Mr. Lorne Lipkus: Correct.

Given the lack of connection to copyright, the committee should have little trouble dismissing the proposal. But the broader trend should raise alarm bells as rights holders increasingly look to exclude the courts from the copyright enforcement process.

The post “You’re Misleading Us”: Canadian Anti-Counterfeiting Network Calls for Elimination of Court Oversight For Border Seizures appeared first on Michael Geist.

Tinkering With Copyright in Bill C-68: My Appearance Before the Standing Committee on Finance

Michael Geist Law RSS Feed - Fri, 2018/11/09 - 10:50

I appeared earlier this week before the House of Commons Standing Committee on Finance as part of its review of Bill C-86, the Budget Implementation Act. The bill features extensive intellectual property provisions arising out of the IP strategy referenced in Budget 2018. My comments were consistent with previous posts on the changes to notice-and-notice, patents, and the Copyright Board.  My opening remarks are posted below.

Appearance before the House of Commons Standing Committee on Finance, November 7, 2018

Good evening. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law, and I am a member of the Centre for Law, Technology, and Society. I appear in a personal capacity representing only my own views.

I am pleased to have the opportunity to discuss the intellectual property provisions found in Bill C-86. As you know, Budget 2018 prioritized a national IP strategy. While aspects of that strategy involve investment in issues such as IP education, there were several legal and policy commitments that required legislative reform.

Many aspects of Bill C-86’s IP provisions are both long overdue and welcome. Since abuse of intellectual property rights may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market, crafting rules that address misuse can be as important as providing effective IP protection. There are several examples of how Bill C-86 addresses IP misuse.

For example, the misuse of Canada’s copyright notice-and-notice system, which was formalized in 2012 to allow rights holders to forward allegations of online copyright infringement to Internet users through their Internet service provider, has been an ongoing source of concern. Bill C-86 amends the Copyright Act to ensure settlement demands are excluded from the notice-and-notice process, thereby restoring the original intent of the system.

Patent changes to address patent trolling provide another important reform. Bill C-86 seeks to combat patent trolls by creating new minimum requirements for patent demand letters, which should discourage the sending of deceptive letters. The rules also include the right for a recipient to pursue damages or injunctions at the federal court.

The bill also includes provisions that expand prior use rights, address standard essential patents, and create safeguards for research with a rule stating that “an act committed for the purpose of experimentation relating to the subject-matter of a patent is not an infringement of the patent.” In doing so, the bill restores a better balance to support innovation within the patent system.

Bill C-86 also includes notable reforms to the Copyright Board, including an important reference to considering the public interest in the decision making process. It rightly does not include an expansion of statutory damages among the extensive reforms to the Copyright Board. Arguments in favour of expansion were unconvincing and would have usurped the role of the Industry committee that is currently engaged in a copyright review. The issue will still be hotly debated as part of the review, but the committee is the appropriate place for discussion of statutory damages, not within a package of administrative and governance reforms to the board.

While these represent some of the positive in the bill, there is still room for improvement. I’d like to offer three recommendations.

First, the implementation of some of the reforms – such as the patent reforms I’ve just described – are likely delayed for years since they are structured to require regulations to define issues such as the requirements in patent demand letters. Officials have indicated they know what they want included. Long delays undermine the likely success of the government’s IP policy. Bill C-86 should include the requirements and the issue should not be left to the regulation-making process.

Second, the notice-and-notice copyright fix is good, but we can still do better. There should be penalties for sending abusive notices and common standards established to make it easier for Internet providers to identify compliant notices.

Third, Budget 2018 includes several references to artificial intelligence, one of the Canada’s most important innovative sectors. Yet despite the prioritization of both AI and the IP strategy, it leaves a major AI copyright barrier untouched. Several of the world’s leading AI companies – including Canada’s Element AI, Microsoft, and members of the Business Software Alliance – have pointed to the need for fair dealing exception for text and data mining or informational analysis. Without such an exception, Canada will trail badly behind competitor jurisdictions such as the U.S., Europe, and Japan, which have addressed this issue by allowing for data mining without the risk of copyright liability. Canada cannot wait many years to address this commercialization barrier. Given the budget’s inclusion of both AI and IP, Bill C-86 would be an obvious place to fix the problem.

I look forward to your questions.

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No Need for New Internet Injunctions: Why Canadian Copyright Law Already Provides Rights Holders with the Legal Tools They Need

Michael Geist Law RSS Feed - Wed, 2018/11/07 - 09:55

As the Industry Committee’s copyright review continues to hear from stakeholders from across the spectrum, a recurring theme has been demands that the government create a new, explicit Internet intermediary injunction that would allow for everything from site blocking to search engine result de-indexing to a ban on payment providers offering services to some sites. For example, earlier this week, the Canadian Chamber of Commerce argued before the Industry Committee:

CIPC encourages the government to enact provisions that expressly allow rights holders to obtain injunctive relief from competent authorities, such as site blocking and de-indexing orders, against intermediaries whose services are used to infringe copyright.

That recommendation was echoed by the Business Coalition for Balanced Copyright, which is comprised of many leading telecom companies. It stated:

The Coalition strongly supports amendments that will make it easier for copyright owners to effectively enforce their rights. The act should allow for injunctive relief against all of the intermediaries that form part of the online infrastructure distributing infringing content. For example, it should be explicit that courts can issue a blocking order requiring an ISP to disable access to infringing content available on preloaded set top boxes or an order prohibiting credit card companies from processing payments for infringing services.

Yet despite the increasingly heated rhetoric for new court injunctions related to Internet intermediaries, the reality is that Canadian law already provides rights holders with the legal tools they need. In fact, injunctions or orders have been obtained against websites, search engines, and many other intermediaries. The power to obtain injunctions for infringement is clear. Section 34(1) of the Copyright Act provides:

Where copyright has been infringed, the owner of the copyright is, subject to this Act, entitled to all remedies by way of injunction, damages, accounts, delivery up and otherwise that are or may be conferred by law for the infringement of a right.

In addition, Section 41.27(1) for information location tool providers, better known as search engines, speaks specifically to injunctions in certain circumstances:

In any proceedings for infringement of copyright, the owner of the copyright in a work or other subject-matter is not entitled to any remedy other than an injunction against a provider of an information location tool that is found to have infringed copyright by making a reproduction of the work or other subject-matter or by communicating that reproduction to the public by telecommunication.

The Copyright Act also contains a provision that targets sites that “enable” infringement, thereby bringing those sites into the scope of injunctive relief found in Section 34(1):

It is an infringement of copyright for a person, by means of the Internet or another digital network, to provide a service primarily for the purpose of enabling acts of copyright infringement if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of the use of that service.

These provisions have been used to do exactly what rights holders say is needed. In fact,  Innovation, Science and Economic Development Minister Navdeep Bains has noted that “Canada’s copyright system has numerous legal provisions and tools to help copyright owners protect their intellectual property, both online and in the physical realm.” These tools have been used to launch lawsuits against set-top box distributors, mod-chip sellers, and websites such as TVAddons. Some of these lawsuits have resulted in injunctions and massive damage awards running into the millions of dollars. In fact, even the Supreme Court of Canada has upheld orders against intermediaries that apply on a global basis as last year’s Equustek decision required Google to remove search results in support of intellectual property rights.

The demand for a duplicate injunction provision is particularly odd given that rights holders have been reluctant to use the powers they already have. As noted, there are several key cases that demonstrate their effectiveness, yet when asked about using the law, rights holders such as Bell have been somewhat evasive in their answers. For example, when asked whether Bell or Rogers had ever even tried to use the existing law to obtain a site blocking order, the companies had to admit they had not:

Mr. David de Burgh Graham: Have Bell or Rogers attempted to get any of these orders to block sites?

Mr. Robert Malcolmson: We have certainly been to court trying to get injunctions against those that sell the set top boxes that disseminate this content. My colleague may want to speak to how long and torturous that process is, but even when you can actually find a defendant in Canada and get proof that that person is engaging in illegal conduct it has taken us, I think, two years to shut down one particular defendant in Montreal. Imagine how difficult it is to tackle an offshore defendant.

Notwithstanding demands for more enforcement powers, Minister Bains was right when he noted that there are already numerous legal provisions and tools to allow rights holders to enforce their rights. The Industry committee should demand evidence that the current set of tools are inadequate based on real-world usage before entertaining the possibility of expanding the already-extensive enforcement toolkit.

The post No Need for New Internet Injunctions: Why Canadian Copyright Law Already Provides Rights Holders with the Legal Tools They Need appeared first on Michael Geist.

CRTC Chair Opens the Door to Weakening Canadian Net Neutrality Rules

Michael Geist Law RSS Feed - Mon, 2018/11/05 - 12:26

The Canadian government’s strong pro-net neutrality position has served as its telecom policy foundation with Prime Minister Justin Trudeau and other government ministers frequently citing Canada’s commitment to the policy. In fact, the current review of broadcast and telecommunications legislation described net neutrality as “a key Government priority given its importance for freedom of expression and the ‘innovation without permission’ ethos that underpins the success of the Internet.”

Yet despite the emphasis on strong net neutrality rules, CRTC Chair Ian Scott used a keynote speech last week to open the door to watering down Canadian net neutrality rules, noting his desire for “flexibility” with the legislation.

Scott told the International Institute of Communications:

The Telecommunications Act provides the CRTC with the tools and flexibility to establish and enforce a net neutrality framework. The framework we have built over the past 10 years will likely be tested as needs and technology continue to evolve. There may indeed be situations relating to public safety or security, telemedicine or self-driving cars where a certain flexibility will be required and should therefore be maintained in the legislation.

Flexibility in this context is clearly a reference to weakening net neutrality rules to allow for non-neutral applications. Pointing to issues such as telemedicine or autonomous vehicles comes directly out of the Internet provider playbook as U.S. providers used it to support gutting net neutrality rules in 2017 and Canadian providers promoted the issue before a House of Commons committee in 2018. For example, Rogers told the committee that net neutrality rules should not be strictly applied for faster 5G wireless services:

Rogers believes that by virtue of section 27(2) of the Telecommunications Act, the CRTC has all the necessary tools it needs to protect net neutrality in a fast-changing environment, while maintaining the flexibility to adapt to future changes occasioned by new technologies. As an example, the next evolution of wireless service, known as 5G, may require a flexible approach to ensure continued innovation. With 5G, certain services will require different levels of connectivity. For example, connected cars and remote medical services will require higher reliability and lower latency levels than networked parking meters.

The call for greater net neutrality flexibility was not adopted by the committee, as it recommended that net neutrality be enshrined in the law to “prevent any further erosion.” However, it does appear that the CRTC chair has bought into the position that would erode the policy despite considerable reason for skepticism. The latest calls to weaken net neutrality bear a striking resemblance to older campaigns from many of the same companies opposed to a policy that would restrict their ability to establish a two-tier Internet. In fact, researchers have noted that abandoning net neutrality could harm telemedicine, raising the prospect of two-tier tele-health care with faster networks for deeper pocketed providers or patients. Similar doubts have been raised with respect to autonomous cars, with experts noting that such vehicles are likely to use unlicensed spectrum known as the Dedicated Short Range Communications band to communicate.

As these technologies develop, the pressure from large incumbents to water down net neutrality rules is sure to increase. With the CRTC chair citing with approval incumbent talking points without the benefit of a hearing or evidentiary record, it would appear that maintaining Canada’s leadership on net neutrality could face a policy fight at the commission in the years ahead.

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Making Sense of the Canadian Digital Tax Debate, Part 6: Ensuring Internet Companies Pay Their Fair Share of Income Tax

Michael Geist Law RSS Feed - Fri, 2018/11/02 - 11:34

The series on digital tax issues concludes with the most conventional tax issue: how to ensure that large corporations pay their fair share of income tax for profits generated in Canada (series posts on digital sales tax, Netflix tax, Internet access taxes, digital device taxes, and tax in support of newspapers). The income tax issue was raised by the NDP earlier this year, who called on the government to ensure that Internet companies pay taxes on profits made in Canada.

While the income tax issue is an important one, it is not a digital tax issue per se. Rather, it reflects ongoing corporate tax challenges that implicates all multinational companies that strategically structure themselves in the most tax advantageous manner. The debate on the issue is not limited to Canada with countries around the world struggling with the same question. Indeed, the issue was raised at the Senate committee, with a CRA official commenting:

It is also important to understand the current corporate tax system, which is essentially based on the notion of permanent establishment, which is a traditional concept. For example, when a company does business in another country and has employees and plants in that country, it clearly has a permanent establishment. The general concept of taxation is based on these notions.

A company that does business in another country and sells digital products does not necessarily have a physical presence. Consequently, some important questions arise with respect to income taxation. The key question is whether these permanent establishment concepts on which tax treaties are based still represent the best way to tax those businesses and to determine whether value is being created in the source country by those electronic transactions. If that is the case, one must determine the approach that should be used to tax properly, but also to ensure that the ultimate result is not double taxation of the business in question.

This therefore requires discussions at the international level, such as those currently being held at the OECD, for example. I think the OECD communiqués attest to the fact that the various OECD members have agreed to take time to analyze this question. The ideal solution is to come up with joint and coordinated options or new standards to prevent double taxation.

In other words, the income tax question is not limited to Canada nor to technology companies. There is a general consensus on the need to address income tax standards to ensure fair taxation without double payment in multiple jurisdictions.

The post Making Sense of the Canadian Digital Tax Debate, Part 6: Ensuring Internet Companies Pay Their Fair Share of Income Tax appeared first on Michael Geist.

Making Sense of the Canadian Digital Tax Debate, Part 5: Income Tax Reform to Support the News Media

Michael Geist Law RSS Feed - Thu, 2018/11/01 - 09:53

The series on digital tax policy issues has touched on various tax measures that target consumers: digital sales tax, Netflix tax, Internet access taxes, and digital device taxes. The series returns with a post examining a business-focused tax proposal, namely lobbying efforts to amend the Income Tax Act to change the rules on advertising deductions in the hope of shifting ad spending to Canadian media organizations.

The challenges faced by local media companies is well-known as the industry faces significant declines in revenues and layoffs. Several groups have focused on tax reform as a potential solution, lobbying for a change to the Income Tax Act that would render advertising purchased on foreign Internet-based media no longer tax deductible. Section 19 of the Income Tax Act limits tax deductions for advertising with provisions designed to favour Canadian media organizations. However, since there are no restrictions on deductions for advertising on foreign websites, proponents of reform argue that that this favours foreign sites and ad networks such as those run by Google and Facebook. They maintain that reforms to treat advertising on foreign sites as non-deductible would shift advertising back to Canadian organizations by making online advertising more expensive.

For example, according to a Friends of Canadian Broadcasting report such a change would dramatically change the Canadian media landscape:

For Canadian media, it could be the single greatest factor in reversing revenue declines and ensuring viability for Canadian local print, TV and radio operations – and their contributions to Canadian culture, news and democracy. Hundreds of millions of dollars could move back from foreign to Canadian owned-and-controlled media companies – stabilizing and growing their revenues, and allowing these companies to reverse job cuts and re-invest in Canadian content, including journalism. 

Specifically, the suggested re-interpretation of the advertising tax deductibility provisions of the ITA would, we estimate, result in on the order of 50% – 80% of current internet advertising expenditures being deemed nondeductible. Conservatively estimating that 10% of these now non-deductible foreign internet advertising expenditures shift back to Canadian media, this would represent an influx of $250 to $450 million annually in incremental advertising revenue.

The Friends of Canadian Broadcasting report was the impetus for a Senate study on the issue earlier this year. Despite being a hearing seemingly designed to arrive at a recommendation for reform and general support from industry witnesses, the committee stopped short of recommending reform, instead opting for further study:

The Committee recommends that the Government of Canada study the tax deductibility of foreign Internet advertising and publish a report providing its position on the matter. The report should indicate if the government intends to take actions to extend section 19 of the Income Tax Act to Internet advertising; if it does, the government should indicate the best way to do so.

Why back away from recommending reform?  The short answer is that the proposal will harm Canadian businesses but do little to help Canadian media organizations.

First, the hope that advertisers will move away from digital advertising by making it more expensive by eliminating tax deductions misunderstands the very nature of digital advertising. Simply put, digital advertising is a function of audience. Given that more and more people are shifting their viewing and media consumption habits from offline to digital, advertisers are unsurprisingly following their audience (this is true for both the private sector and government, who occasionally get criticized for social media based advertising, as if advertising were merely a subsidy program as opposed to expenditures designed to communicate to the public).

That is a challenging marketplace shift for traditional media since there is far more competition for digital ad dollars. The combination of increased supply of potential ad space and real-time bidding that ensures market demand based pricing unsurprisingly leads to lower revenues for digital ads. Moreover, digital advertising offers metrics – click-through rates and actual views – that are more efficient in identifying advertising effectiveness. Lower prices and more effective advertising means that a change in the tax code is unlikely to result in a meaningful shift in advertising venues. Rather, it will simply make the digital advertising more expensive and leave Canadian business less competitive in the digital marketplace.

Second, the proposal misunderstands the complexity associated with digital advertising. A considerable portion of digital advertising with companies such as Google involves a revenue share between Google and the site where the advertising appears. In other words, the advertising often appears on the same Canadian sites that would purportedly benefit from the reform. That revenue initially goes to Google, which then sends the majority back to the site or media organization. For that form of advertising, Google is simply matching advertisers and websites, while collecting a commission for providing the service. If advertising through the Google or Facebook network alone were enough to disqualify the advertising from tax deductibility, Canadian sites would be harmed in the process.

In cases where the advertising is on a foreign site – think YouTube – there may also be important Canadian connections. For example, the Globe and Mail posts videos on Youtube and generates a revenue share for the advertising that appears alongside the video. That is part of how Canadian media is trying to monetize its content, yet the policy would discourage such advertising by making it more expensive. The problem with Canadian content on foreign sites also crops up for Canadian artists and smaller media organizations, who may similarly use foreign sites as important sources of distribution and advertising revenue.

The harm extends to Canadian businesses seeking to reach larger audiences through digital advertising. When asked about the issue during the Senate hearing, an official with Canada Revenue Agency warned that the policy would have limited impact on advertising practices but would harm Canadian businesses:

Estimates provided by the Friends of Canadian Broadcasting indicate that roughly 10 per cent of foreign Internet advertising expenditures would shift back to Canada and that their proposal would increase the tax burden on Canadian businesses by more than $1 billion. This suggests the measure would likely not change firms’ behaviour to a significant degree. As such, it seems it would mainly result in a tax increase on Canadian businesses. In this context, it is not clear that in itself the measure would represent a complete solution to the problem facing Canadian media.

There is a reasonable debate to be had over the dominance of Google and Facebook in the digital advertising sector and over how to fund important investigative journalism. However, cutting the flow of dollars to large Internet companies through income tax reform – particularly where that money often boomerangs back to Canada – will do little to actually help Canadian media organizations seeking to attract digital ad dollars, Canadian artists searching for new revenues online, or Canadians businesses trying to grow through digital advertising.

The post Making Sense of the Canadian Digital Tax Debate, Part 5: Income Tax Reform to Support the News Media appeared first on Michael Geist.

Taking on the Trolls: Canadian Government To Regulate Patent Demand Letters

Michael Geist Law RSS Feed - Wed, 2018/10/31 - 07:44

The Canadian government’s Bill C-86, its Budget Implementation Act, features several notable provisions designed to curb intellectual property misuse. I posted yesterday on the rejection of “harmonized” statutory damages with the copyright collective system and new limits on the content of notices under the copyright notice-and-notice rules, with the government banning the inclusion of settlement demands or other requests for payment. Internet providers that receive notices that do not comply with the requirements will not be required to forward them to their subscribers. The bill also takes on patent misuse, including rolling out a framework for regulating patent demand letters in an effort to stop patent trolling.

Patent trolling refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. Studies indicate that patent trolling has a negative affect on innovation and is a particularly big problem in the United States, which tends to be more litigious than Canada.

The new framework includes the prospect of regulations that will specify what must be included in a demand letter and liability for a company’s officers, directors, and agents for failing to comply with the law after being notified of a non-compliant letter. The scope of the provision is very broad, applying to demands arising from any patent, not just those issued in Canada.  The new section 76.2((1) states:

Any written demand received by a person in Canada, that relates to an invention that is patented in Canada or elsewhere or that is protected by a certificate of supplementary protection in Canada or by analogous rights granted elsewhere, must comply with the prescribed requirements.

The “prescribed requirements” will be found in regulations that will detail what constitutes a written demand and the requirements with which a written demand must comply. The regulations should discourage the sending of deceptive letters and include minimum standards of information to better allow recipients to assess the merits of the claim.

The framework grants recipients of demand letters new rights, allowing for application to the federal court:

Any person who receives a written demand that does not comply with the prescribed requirements, and any person who is aggrieved as a result of the receipt by another person of such a written demand, may bring a proceeding in the Federal Court.

Once at the federal court:

If the Federal Court is satisfied that the written demand does not comply with the prescribed requirements, it may grant any relief that it considers appropriate, including by way of recovery of damages, punitive damages, an injunction, a declaration or an award of costs.

Moreover, those that violate the rules cannot hide behind a corporate entity:

If a corporation sends a written demand that does not comply with the prescribed requirements, is notified of those requirements and of the demand’s defects in respect of those requirements and does not, within a reasonable time after receiving the notice of those defects, remedy them, the corporation’s officers, directors, agents or mandataries are jointly and severally, or solidarily, liable with the corporation if they directed, authorized, assented to, acquiesced in or participated in the sending of the demand.

The regulation of patent demand letters are not the only patent changes, with provisions that expand prior use rights, address standard essential patents, and create safeguards for research with a rule stating that “an act committed for the purpose of experimentation relating to the subject-matter of a patent is not an infringement of the patent.” Determining what constitutes experimentation will also be the subject of future regulations. In other words, Innovation, Science and Economic Development Minister Navdeep Bains is working to restore better balance to support innovation within the patent system, though the specifics are “pending”.

The post Taking on the Trolls: Canadian Government To Regulate Patent Demand Letters appeared first on Michael Geist.

Canadian Government Rejects Access Copyright’s Demand for Statutory Damages

Michael Geist Law RSS Feed - Tue, 2018/10/30 - 09:10

Earlier this year, I wrote about lobbying pressure to “harmonize” statutory damages for copyright collectives. Access Copyright, which supported the measure, argued that the massive escalation in potential damage awards were needed for three reasons: deterrence, promotion of settlement negotiations, and efficient use of court resources. Yet as I argued in this post, none of the arguments rang true.

After months of internal wrangling, the government unveiled its proposed reforms to the Copyright Board yesterday as part of Bill C-86, its Budget Implementation Act. The bill contains many changes requested by copyright stakeholders. With respect to the statutory damages provisions, however, it has rightly left the statutory damages distinction between certain collectives in place, meaning that Access Copyright will not be able to rely on statutory damages for non-payment of tariffs, relying instead on actual damages (if any).

The issue will still be hotly debated as part of the copyright review, but the government was right to reject the collective’s demand, effectively acknowledging that the copyright review is the appropriate place for discussion of statutory damages, not within a package of administrative and governance reforms to the board. In fact, the government similarly left the limit of $100 in royalties for the first $1.25 million in advertising revenue for radio stations in place, despite ongoing lobbying from the music industry for it to be eliminated.

The proposed changes to the Copyright Board are extensive and will require considerable study. In the meantime, it is worth noting that they include a much-overdue policy provision establishing objectives for the royalty rates set by the board. Those objectives include a requirement to consider the public interest, which critics have argued has often been missing from board analysis. The government’s identification of the public interest is instructive as it should also be a guiding principle for the copyright review and subsequent proposed reforms.

The post Canadian Government Rejects Access Copyright’s Demand for Statutory Damages appeared first on Michael Geist.

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