Copyright decision spells out 'fair dealing' for Canadian universities


Head Shot Bill Northcote

A Federal Court decision that backs a copyright collective in its battle to collect royalties from an Ontario university cannot be ignored by Canadian post-secondary institutions, says Toronto intellectual property lawyer Bill Northcote.

“It demonstrates that copyright holders of, presumably, mostly academic works are getting more aggressive in terms of enforcing their rights and getting proper compensation,” says Northcote, a partner with Shibley Righton LLP.

Justice Michael Phelan ruled in favour of a collective that administers reproduction rights for Canadian literary works and ordered the university to pay damages for the millions of pages of materials that the university's staff copied for coursework.

The university argued that its copying of book excerpts, articles, videos and other materials fell within the “fair dealing” exceptions allowed for educational users under s. 29 of the Copyright Act, and that it had developed its own “Fair Dealing Guidelines.”

But Phelan found that the university’s use of the material did not fall under the law’s fair dealing exceptions. Its own “Fair Dealing Guidelines” are “not fair in either their terms or their application,” he wrote. The university made “no real effort” to review or enforce its guidelines, he added.

Northcote says the judgment is noteworthy for its detailed analysis of the law’s fair dealing exceptions.

The court went to considerable lengths to distinguish between single-use copying and the more widespread dissemination of materials typical of university coursework, Northcote tells

The judge wrote that the university’s wide-ranging, large-volume copying tended toward unfairness. For instance, the university’s “fair dealing” guidelines allowed the copying of 100 per cent of a single work, he said.

Professors and staff typically bound together photocopies of the material in student course packs, while digital reproductions were made available on in-house, password-protected software platforms.

“There’s a substantial amount of money involved here, particularly for what is ultimately distributed to writers,” Northcote says.

An expert called by the copyright collective testified that if all Canadian post-secondary institutions outside Quebec adopted the defendant’s guidelines, it would result in the annual loss of licensing royalties of between $10 million and $14.7 million, with the university’s share being $800,000 to $1.3 million.

The judge accepted evidence about the numerous challenges facing the Canadian post-secondary educational publishing industry as it struggles to adapt to the digital age.

Northcote says the judge went through the case law exhaustively and his decision is carefully written — likely in anticipation of an appeal.

The university has announced it will appeal, calling Phelan’s ruling “the first phase” of the litigation, according to a release from the university’s media relations director.

The court’s decision will likely have an impact on the next round of tariff hearings at the Copyright Board when discussions turn to questions of what is fair dealing and what usage should attract a licensing fee, Northcote says.

This case illustrates how rapid technological change is challenging copyright protections, he adds. “It’s a demonstration of the fact that intellectual property law, particularly copyright law, tends to lag behind technological development in the real world. It’s an ongoing problem.”

The decision puts at risk any university not adhering to the tariff set by the Copyright Board, he says. “It may well have been a bit of a test case for [the copyright collective].”

Northcote predicts more court battles of this nature, particularly as digital and online uses develop.

“It’s a very interesting, developing area of the law. Thirty years ago, intellectual property was not a big area of the law. It was kind of its own special area that the rest of the legal community didn’t pay much attention to,” he says.

“Now that’s completely reversed. Everything a lawyer does in the business field now has some sort of intellectual property aspect to it.”

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