Vancouver, British Columbia
May 15-17, 1996

Leading the Agile Organization

Amending Canada’s Copyright Law While Renegotiating the CANCOPY License

Graham R. Hill, University Librarian
McMaster University

As I talk about Canadian copyright law and the situation we face here, I would encourage you to reflect upon the different approaches of our two countries. I think that there are both subtle and fundamental differences in approach between the two countries with respect to copyright law.

In the United States, as you know, there are fair use guidelines–Sections 107 and 108, classroom guidelines, and so on. We have a very different system here in Canada, which I will explain.

I also want to very briefly outline for you some new legislation tabled in Parliament–the so-called Phase II of our copyright law. It is almost impossible to talk about the status of the Canadian Copyright Licensing Agency (CANCOPY) without telling you about Phase II as well. I am going to use overheads as a framework as I address you.

The recent history of Canadian copyright law dates back to 1988: some of you may recall me saying to this group on previous occasions that this was the first alteration of our copyright law in over 60 years. This change finally brought Canadian copyright law from the Middle Ages to the 20th century, and it dealt primarily with the five areas you see marked at the top of the screen [see Figure 1].

Parliament finally recognized the fact that we had moved from mechanical contrivances for the reproduction of sound into a computer age. But it did more than provide protection for computer programs. It established a Copyright Board. The Copyright Board is an independent body under the Copyright Act. Its primary responsibility is setting tariffs for the use of copyright, principally in the entertainment arena: music, film, radio, and television, but it also has the authority to set tariffs under any part of the Act.

In the same overhead you will see a little hand pointing towards CANCOPY. CANCOPY dates from 1988 because Bill C-60 provided for the establishment of societies for the collective management of copyright. When I have used this slide in other presentations, people have asked me if it was a coincidence that I used a finger and not an arrow on the slide. I have to admit that after having negotiated with CANCOPY, I think the use of a finger is particularly appropriate. More on that later.

The government, having passed this phase of legislation (commonly called the "Creators’ Legislation"), established two consultative committees: one for the educational uses of copyright and the other for library uses of copyright. The objective of these committees was to advise the government on exceptions. Remember, up to this point, even with the passage of C-60, we had no exceptions in our copyright laws. In fact, the only thing approaching an exception we had is indicated in at the bottom of the screen [Figure 1].

This was the part of the Copyright Act that dealt with actions not constituting infringement of copyright, which was considered fair dealing. There was a considerable amount of uncertainty about all this, and librarians have expressed for many years their desire for some certainty. In the press for certainty came questions: Why can’t the committees define fair dealing? Why can’t we have criteria like they do in the United States?

The government had, in fact, passed a half-law. I say a half-law because C-60 gave considerable rights to copyright owners, but contained no exceptions for user communities in the public good. Of course, Phase II was supposed to contain those exceptions.

So what is Phase II? Bill C-32, An Act to Amend the Copyright Act, was tabled in Parliament 2,878 days after Phase I became law. That’s longer than the Second World War. Whenever I talk about copyright I tend to be very cynical about this. We consulted with everyone having anything to do with this and then some–and it still took us seven years to get user legislation [see Figure 2].

Obviously, after C-60–the bill that set up CANCOPY–was enacted, we began to negotiate a license. There was a great fear that we would end up licensing away rights to which we should be legally entitled. People thought if we started negotiating licenses, well, you could kiss Phase II good-bye. There would never be any exceptions because the government would simply turn around and say, "Well, you’ve managed to do it all by licensing. What do you need exceptions for?"

I don’t believe that has proven to be the case. Those fears were largely unfounded. But licensing has given us a lot of aggravation. The delay has also allowed the whole area of intellectual property and copyright use a chance to solidify. Besides, legislation is too often enacted prematurely. So I think there is a case for sort of letting things settle to a degree before you rush into them–even though obviously seven years is a long time to wait–because it is a large and complex area, where every decision has many ramifications.

Now let ‘s talk about Bill C-32 a bit. This legislation was introduced April 25, 1996 by our Minister of Heritage, Sheila Copps, who is also our Deputy Prime Minister; she represents the Hamilton East constituency, and as my university is in Hamilton, I had a real vested interest in this.

In fact, when she tabled the bill in Parliament it brought to mind the day the late and unlamented Robert Maxwell met his demise. At the time they said, "Well, that just shows what happens when you mess with librarians." Sure enough, six days after Sheila Copps tabled this legislation, she resigned. Now, I don’t think there is a connection between the two. She actually resigned for very different reasons, and I’m sure my Canadian colleagues will be only too delighted to fill you in on those. Let’s just say it definitely wasn’t over bill C-32.

Bill C-32 encompasses five broad areas of copyright law [see Figure 3]. Three of them are mostly about neighboring rights and the private copying of sound recordings, and the fourth one deals with protection from parallel importation of books, which seems to be more in the way of what might be called cultural protectionism. I know there is some sense of a cultural war developing between our two countries on parallel importation, but these are not areas on which I need to dwell at this point. I think our focus should be on the exceptions. Exceptions have been added to this bill which favor non-profit educational institutions, libraries, museums, archives, and–unlike U.S. law–individuals with perceptual disabilities.

The exceptions are contained in Sections 29 through 32 of the drafted bill [see Figure 4]. The bill is silent on fair dealing, which is the term we use in Canada for fair use. It is not defined, nor is it clarified. The bill does not address the issue of finding a definition for fair dealing. In the slide I have quoted the ten or so words from the bill addressing the issue of fair dealing. In Section 29, as you see, it states that fair dealing, for the purpose of research or private study, does not infringe copyright. I think it is important that we consider the meaning of every one of these words and then reflect upon the specific wording of U.S. legislation. There are some subtle differences. There are opportunities and constraints in Canadian wording that those of us, as a community representing users, can explore.

The educational institutional exceptions to copyright law are relatively limited when compared to U.S. law. But at least our teachers will now be able to write on a blackboard without violating copyright, and they will be able to use copyrighted material for exams, which is real progress, believe it or not.

Note that there is no teaching exception in the bill. This is another way in which our law differs quite noticeably from U.S. law. But most important to our constituency, of course, are the exceptions for libraries, archives, and museums.

The bill provides three exceptions to current copyright law. The first exception, which deals with copying published or unpublished works in order to maintain or manage permanent collections, is pretty broadly written. It addresses the need to copy rare, deteriorating works in order to preserve them.

The second exception, which I call the interlibrary loan exception, makes an exception for interlibrary loan purposes. It deals specifically with copying a single article from a scientific, technical, or scholarly journal for private study or research purposes. My understanding, and the understanding of those in Ottawa close to the drafters of this bill, is that they specifically intended to create a distinction between scholarly journals as opposed to magazines and newspapers.

This could lead to a parting of the ways on this bill within the various library communities in Canada because it will, obviously, operate differentially. Research libraries tend not to send newspapers and magazines out on interlibrary loan. There is also an attempt to balance the interests of magazine publishers, who lobbied strongly against such exceptions because, as they claimed, exemptions would destroy their market. But, in fact, the bill does recognize that providing free access and free circulation of scholarly materials through the inter-loan network is in the public good.

The third exception, in Section 32, allows a single copy of a work to be made in an alternate format for persons with perceptual disabilities. This particular proposal has received a lot of public support. Of the few technical difficulties in this bill, one deals specifically with this provision: the bill would require the destruction of any intermediate copy that is made in order to produce that alternate format copy. This could create quite an obstacle to the production of Braille text or recorded word. (However, the third exception would not apply to large print books, which, of course, are quite successful commercially.)

I would like to turn now to the CANCOPY license [see Figure 5]. The Association of Colleges and Universities of Canada (AUCC) negotiated the first model license, which has now been signed by all Canadian universities–55 altogether. It is a two-year agreement which expires the end of this August. It is essentially a two-part license. I direct your attention to the box in the middle of the screen, which gives the license in a nutshell.

Part A of the license is a blanket license: it covers all compensable copying. The definition of compensable copying is important. The license covers classroom distribution of multiple copies by instructors, personal use, library reserve, interlibrary loan, and so forth, at $2.50 (Canadian dollars) per student per year.

The second part of the license covers photocopying of material that is then sold to students–that is to say "coursepacks"–at a royalty level of 3.5 cents per page.

This license was signed by all Canadian universities in the summer of 1994. We are now in the course of renegotiating this license. The fact that the Bill C-32 was tabled right when we had begun renegotiations only served to complicate matters further.

On the next overhead I have outlined the key issues of the renegotiations [see Figure 6]. These were CANCOPY ‘s positions at the end of last year.

CANCOPY wanted to restructure the license totally and remove interlibrary loan from beneath the blanket of the license and put it into a separate schedule that they would call document supply. They proposed a rate of 16 cents per page for interlibrary loan users, and 40 cents per page charged to corporate and other professional users.

They also wanted to survey what was being copied, which was one of the things we had absolutely refused to let them do. The whole idea of a blanket license is that universities pay on per student basis. Frankly, what the students copied and how much they copied was none of CANCOPY’s business. We were only responsible for paying them a lump sum.

They wanted to increase the Part A tariff. They said they were being magnanimous, and that they were not raising the tariff, but the fact is that removing certain provisions from the license would have had the effect of raising it. And they very much wanted to increase coursepack charges–from 3.5 cents to 5 cents, an increase of over 40 percent.

So here you have a realization of the fears of licensing. Once you have a license, all the licensor tries to do is ratchet up the costs and take things away from you, and so on and so forth.

Interestingly, now that Bill C-32 has been tabled, the whole kaleidoscope has shifted because interlibrary loan is an exception in that bill. So number one, we won’t pay for interlibrary loan in terms of traffic between our institutions.

There are other exceptions in the bill from which we can benefit. We can test, in court, what exactly the term fair dealing means, since there is relatively little case law for us to refer to.

But of course the coursepack increase is an issue they are absolutely intransigent on, at least as of January this year. We have tried negotiating with them. It’s hard. CANCOPY negotiates in a very in-your-face style. Let me give you a flavor of the way it always goes: they come in and say, "We will not sign a license unless...," and we sit there and say, "We will not sign a license unless...." And then we both sort of pound the table.

It is going to be very interesting from this point on, because, as I said earlier, C-32 is still just a bill. It has to work its way through committee, back through the House, then into passage at third reading, and assent into law. It is going to be very interesting to watch its course. We plan to be closely involved in the process. Ideally, it will become law by late summer, and certainly by the end of 1996. It is unlikely to become law before we finish a renegotiation of this license.

CANCOPY’s position, a few days after the bill had been tabled in Parliament, was essentially, "Well, the library community got so little out of the new bill compared to what they wanted that nothing has changed," which is a total misrepresentation of the facts. I don’t know whether they meant that as a signal that they intend to negotiate as if C-32 didn’t exist.

Our position is, in essence, "Let’s be sensible and put all posturing aside. Let’s get a license that works for all of us." We have taken the route of trying to mold the copyright law for the benefit of users. It is clearly for the public good, as we have shown on many occasions. It makes sense to license only that which will never be exempted or excepted from copyright law.

So when our first license expires we will be vulnerable. Every university will be vulnerable. We will be completely unprotected until a new license agreement is reached. And Bill C-32 is still waiting to be passed into law. It promises to be a very interesting summer.

The constraint upon CANCOPY and the owners of copyrights, of course, is that going to the Copyright Board is a public process and involves considerable expense. I will watch with great interest the way in which your battles on the other side of the border proceed with respect to the Michigan Document Services case. I wish you good luck.

Thank you.

Copyright © 1998 by Graham R. Hill

Question and Answer Session: Mr. Hill

MS. PATRICK (University of British Columbia): Graham, are there any implications in the Canadian copyright bill for copying electronic material?

MR. HILL: Well, yes, in a very general sense. Fundamentally, however, C-32 is print-based. There is nothing specific in it that relates to technology. One of the things that always strikes me when people talk about U.S. and Canadian law is that Canada seems to be about five, seven, even ten years behind the U.S. Or, to say it another way, the U.S. is that many years ahead of Canada. I still don’t know who has it better.

It can be said that, although we got rid of mechanical contrivances, C-32 is still littered with the word "reprography." They are still dealing with print on paper. However, the passage of time does give some chance for users of copyright and information to understand how things are shaking down, to mount the lobbying campaigns, and so on.

So there is nothing in C-32 that specifically points to copyright in an electronic environment. I am sure that we will deal with electronic reserves the same way we do with reserves in a print environment. The IHAC (Information Highway Advisory Council) has put forth their latest recommendation, which says that the Copyright Act should be technology neutral. However, the current thinking is that displaying electronic information constitutes publication, and therefore there is a liability for copyright offence the moment the material crystallizes on-screen. They are obviously concerned about that.

But in terms of exceptions for libraries and educational institutions in C-32, I can only say that they will become clearer as we renegotiate the CANCOPY license. It goes right back to the very different foundations of U.S. and Canadian laws. U.S. laws are constitutionally based; ours are not. Canadian law tends to hold the property right of the creator as supreme. It is the creators’ right to decide, almost unhindered, whether or when their creation shall be published. But, hopefully we can resolve some of these issues as we work on Phase III, which will address copyright in the digital environment.

MR. WIENS (Queen’s University): Graham, it seems to me that there might be some salutary effects of not having a license or of letting one lapse. I wonder if you could comment on two things. One, how much copying under Part A might be covered under fair dealing? And, two, how do you see universities dealing with the copying that now takes place under Part B in the absence of a license?

MR. HILL: It is very difficult to anticipate what would be covered under fair dealing. It is easier to list the exceptions. If it is an exception to copyright, it does not infringe copyright. This is what we wanted in the first place. Obviously, interlibrary loan is largely removed from the license.

But let me make something clear: multiple copying for classroom use is still not an exception. We still have to work through the fine points of the legislation (which, as I said, was tabled only three weeks ago).

Under Part B, if we have no license at the end of August, there are a couple of possibilities. One, CANCOPY’s principal affiliates, the large publishers and the Canadian publisher groups, could take one of our universities to court. It won’t take the AUCC to court because the AUCC, the association of universities negotiating the model license, is not itself a license holder.

So CANCOPY will have to pick on one of us–take us to court and sue us for copyright infringement. Or CANCOPY could try and take its case to the Copyright Board. Both these strategies are risky and expensive. Certainly, other strategies are available to us: we could charge 3.5 cents per page and put it into escrow, and then face them in front of the Copyright Board.

I try to disabuse people of the notion that, because we have licenses, we have somehow knuckled under to the publishers. We haven’t done that. We still assert rights that we believe to be in the public interest with respect to copyright. Ultimately, I’m sure that our strategy will be guided by that kind of thinking.

MR. NEAL: In conclusion, I think we can all agree that, if we are ever sued or if we ever need to negotiate a good license agreement for our libraries, we know where to go. Thank you to both our speakers.