SCC decisions provide clear guidance on fair dealing policies

One of the important results from the recent SCC copyright decisions is the additional guidance and clarity provided on the application of fair dealing. Two of the five decisions directly treated different aspects of fair dealing. Overall, the court has reaffirmed the strong policy language from its unanimous 2004 decision in CCH v Law Society of Upper Canada. In addition, the new decisions in Alberta (Education) v Access Copyright and SOCAN v Bell Canada provide further guidelines in applying the different levels of fair dealing analysis.

In holding that fair dealing was an important users’ right, and not just a technical defense to copyright infringement, the CCH court set out a two part analysis for determining whether fair dealing would apply in any particular situation.

In the first stage, the fair dealing claimant must come within one of the categories specified in the Copyright Act (which had been research, private study, criticism, review or news reporting to which education, parody and satire have been added in Bill C-11). If the first step is satisfied, then the six fair dealing criteria are applied in order to determine whether the infringement should be excused.

One of the recurring criticisms of fair dealing has been the lack of clarity in terms of how these criteria might be applied in particular instances. This subjective nature of determining fair dealing has been cited not only by its strong opponents, but also by many potential institutional fair dealing claimants like schools, colleges, universities and libraries.  Many institutions have not always fully embraced the full potential of the CCH decision because of continuing worries about potential liability. Indeed, the uncertain nature of potential infringement litigation has often been cited as a reason for opting for the perceived safety and certainty of various licensing arrangements, even where the arrangement otherwise imposed undue costs and burdens, such as licenses with Access Copyright.

The new endorsement of fair dealing from the Supreme Court not only reaffirms the importance of fair dealing at the overall policy and conceptual levels, but the decisions contain several concrete instances which should help clarify and guide future fair dealing determinations. This additional authoritative guidance comes at an excellent time, as  many institutions are now grappling with their copyright policies and how they should be updated.

Here is a summary of relevant parts of the decisions along with some key “take-aways” that will help apply fair dealing on the ground.

Threshold First Step

At the threshold step of whether the use qualifies as one of the enumerated fair dealing categories, it is very clear now that the categories are to be very broadly construed. In CCH, the court said that the category of research should be given a liberal interpretation. This was reiterated in SOCAN v Bell Canada, where the unanimous court rejected on several grounds the attempt by SOCAN to narrow the scope of research at this first level of analysis, stating:

Limiting research to creative purposes would also run counter to the ordinary meaning of “research”, which can include many activities that do not demand the establishment of new facts or conclusions. It can be piecemeal, informal, exploratory, or confirmatory. It can in fact be undertaken for no purpose except personal interest. It is true that research can be for the purpose of reaching new conclusions, but this should be seen as only one, not the primary component of the definitional framework. [SOCAN, paragraph 22]

In mandating a generous interpretation of the fair dealing purposes, including “research”, the Court in CCH created a relatively low threshold for the first step so that the analytical heavy-hitting is done in determining whether the dealing was fair. SOCAN’s submission that “research” be restricted to the creation of new works would conflate the allowable purpose with the fairness analysis and unduly raise the bar for entering that analysis. Moreover, its restricted definitional scope of “research” contradicts not only the Court’s admonition in CCH that “in order to maintain the proper balance between the rights of a copyright owner and users’ interests, [the fair dealing exception] must not be interpreted restrictively” (para. 48), but also its direction that the term “research” be given a “large and liberal interpretation” so that in maintaining that balance, users’ rights are not unduly constrained (paras. 48, 51). [SOCAN, para 27]

In addition to rejecting SOCAN’s attempt to narrow the definition of research, the court also rejected their attempt to shift the focus of the inquiry away from the perspective of the end-user:

SOCAN’s proposed definition of “research” as requiring “systematic investigation” and “new conclusions” is also at odds with its second submission about “research”, namely, that “research” be analysed from the perspective of the purpose of the online service providers, and not that of the users. But its own proposed definition shows that it sees research as a user-focused undertaking, since the investigation and creation of new conclusions are clearly done by a user, not a provider. The provider’s purpose in making the works available is therefore not the relevant perspective at the first stage of the fair dealing analysis. [SOCAN, para 28]

. . . in considering whether previews are for the purpose of “research” under the first step of CCH, the Board properly considered them from the perspective of the user or consumer’s purpose. . . [SOCAN, para 30]

In Alberta (Education) v Access Copyright, there was no controversy over whether the first step of CCH had been satisfied as it was agreed that the photocopying was for the allowable purpose of research or private study. [Alberta, para 14]

Second Step: Applying the Fair Dealing Criteria

Turning to the second prong of the fair dealing analysis, these two decisions also provide additional guidance on how to apply the six fair dealing criteria adopted in CCH.

On the first factor, the purpose of the dealing, the court rejected SOCAN’s claim that the purpose of the dealing was commercial. This follows from their earlier discussion about adopting the perspective of the end-user as the frame of reference. And since the previews were streamed and of lesser quality than the original, the court felt there were reasonable safeguards in place so the first factor weighed in favour of fair dealing. [SOCAN, para 36]

In the photocopying context, the court rejected the position of Access Copyright that private study did not include more general instructional purposes. This was a major factor in the Board ruling that the Category 4 copies were not under fair dealing. It then became a very significant worry on the part of many institutions, resulting in some very problematic policies even in the post-secondary sector. But the court was very clear that private study is neither inconsistent with broader instructional purposes nor limited to situations where the studying in isolation.

Justice Abella’s reasoning in the Access Copyright decision here deserves a very close reading as it has significant implications for the development of educational fair dealing policies going forward.The passage also demonstrates the majority’s incredible insights into the educational processes of teaching and learning and their relationships with instructional materials:

. . . Teachers have no ulterior motive when providing copies to students. Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study. It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers. They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying. The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study. Instruction and research/private study are, in the school context, tautological. [Alberta, para 23]

The Board’s approach, on the other hand, drives an artificial wedge into these unified purposes by drawing a distinction between copies made by the teacher at the request of a student (Categories 1-3), and copies made by the teacher without a prior request from a student (Category 4). [Alberta, para 24]

…photocopies made by a teacher and provided to primary and secondary school students are an essential element in the research and private study undertaken by those students. The fact that some copies were provided on request and others were not, did not change the significance of those copies for students engaged in research and private study. [Alberta, para 25]

It is also significant that the court put to rest the misguided reliance on some dated case law that was being used to limit the scope of private study as an allowable purpose:

Nor, with respect, do I accept the statement made by the Board and endorsed by the Federal Court of Appeal, relying on University of London Press, that the photocopies made by teachers were made for an unfair purpose — “non-private study” — since they were used by students as a group in class, and not “privately”. As discussed above, the holding was simply that the publisher could not hide behind the students’ research or private study purposes to disguise a separate unfair purpose — in that case, a commercial one. The court did not hold that students in a classroom setting could never be said to be engaged in “private study”. [Alberta, para 26]

The court concluded its analysis on the first factor in an unequivocal and clear manner – private study does not require isolation or solitude:

. . . the word “private” in “private study” should not be understood as requiring users to view copyrighted works in splendid isolation. Studying and learning are essentially personal endeavours, whether they are engaged in with others or in solitude. By focusing on the geography of classroom instruction rather than on the concept of studying, the Board again artificially separated the teachers’ instruction from the students’ studying. [Alberta, para 27]

On the second factor, the character of the dealing, SOCAN had argued that since the consumer accessed on average, 10 times the number of previews as full-length musical works, this factor weighed against fair dealing. The court rejected this position insofar as the streamed previews were transient. [SOCAN, para 38].

SOCAN’s argument that the third factor, amount of the dealing, should weigh in its favour was also rejected. They argued the baseline for comparison should be the aggregate amount of the previews, not the length of each individual preview compared to the length of the work. SOCAN pointed to the large amount of previewing in the aggregate as reason to find the dealings unfair. In rejecting SOCAN’s aggregation argument, the court put the focus right back on the individual end-user, stating:

Since fair dealing is a “user’s” right, the “amount of the dealing” factor should be assessed based on the individual use, not the amount of the dealing in the aggregate.  The appropriate measure under this factor is therefore, as the Board noted, the proportion of the excerpt used in relation to the whole work.  That, it seems to me, is consistent with the Court’s approach in CCH, where it considered the Great Library’s dealings by looking at its practices as they related to specific works requested by individual patrons, not at the total number of patrons or pages requested. The “amount of the dealing” factor should therefore be assessed by looking at how each dealing occurs on an individual level, not on the aggregate use. [SOCAN, para 41]

This fourth factor had also been misapplied by the Board in the Access Copyright case:

. . . as discussed in the companion case SOCAN v. Bell, the “amount” factor is not a quantitative assessment based on aggregate use, it is an examination of the proportion between the excerpted copy and the entire work, not the overall quantity of what is disseminated. [Alberta, para 29]

By putting to rest the aggregate approach to the amount of the usage, individual users and their institutions will retain more control and have more certainty over this factor.

On the fourth factor, whether there are any alternatives to the dealing, the court rejected arguments from both SOCAN and Access Copyright. In rejecting SOCAN’s arguments that there were various alternatives to previews such as album artwork, textual descriptions, user-generated album reviews and return policies, the court agreed with the Board’s position that

listening to a preview is probably the most practical, economical and safest way for users to ensure that they purchase what they wish and that the previews were reasonably necessary to help consumers research what to purchase. [SOCAN, paragraph 46]

The Board had misapplied this fourth factor in the Access Copyright case where it found that the schools had an alternative to photocopying textbooks – they could buy more copies of the texts to distribute to each student or to put in the library. The court rejected this reasoning:

. . . buying books for each student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks. First, the schools have already purchased originals that are kept in the class or library, from which the teachers make copies. The teacher merely facilitates wider access to this limited number of texts by making copies available to all students who need them. In addition, purchasing a greater number of original textbooks to distribute to students is unreasonable in light of the Board’s finding that teachers only photocopy short excerpts to complement existing textbooks. Under the Board’s approach, schools would be required to buy sufficient copies for every student of every text, magazine and newspaper in Access Copyright’s repertoire that is relied on by a teacher. This is a demonstrably unrealistic outcome. Copying short excerpts, as a result, is reasonably necessary to achieve the ultimate purpose of the students’ research and private study. [Alberta, para 32]

On the fifth factor, the nature of the work, the court also rejected SOCAN’s argument that since these works are easily purchased and disseminated without the use of previews, the previews are of no additional benefit to promoting further dissemination. [SOCAN, para 47]

On the sixth factor, the effect of the dealing on the work with respect to the music previews, the court said:

Because of their short duration and degraded quality, it can hardly be said that previews are in competition with downloads of the work itself. And since the effect of previews is to increase the sale and therefore the dissemination of copyrighted musical works thereby generating remuneration to their creators, it cannot be said that they have a negative impact on the work. [SOCAN, para 48]

On the effect of the dealing on the work in the Access Copyright case, the court found the Board had adopted a flawed approach. Despite finding no evidence of a link between a decline in text book sales, the Copyright Board nonetheless held this factor weighed against fair dealing and in favour of Access Copyright. The court rejected this approach, noting that “other than the bald fact of a decline in sales over 20 years, there is no evidence from Access Copyright demonstrating any link between photocopying short excerpts and the decline in textbook sales.” [Alberta, para 35] To this, the court added:

. . . it is difficult to see how the teachers’ copying competes with the market for textbooks, given the Board’s finding that the teachers’ copying was limited to short excerpts of complementary texts. If such photocopying did not take place, it is more likely that students would simply go without the supplementary information, or be forced to consult the single copy already owned by the school. [Alberta, para 36]

Some clear take-aways for institutional policymakers

Taken together, these two cases add quite a bit to our understanding of how to apply the fair dealing factors in particular cases. In both of these controversies, the claims of SOCAN and Access Copyright, who were trying to limit the application of fair dealing, were soundly rejected. Emerging out of these cases are some very clear general principles which will be readily applicable to other situations:

• There is a low threshold for the first step in terms of coming within one of the enumerated statutory categories. This ease will be even greater with the addition of education, parody and satire as fair dealing categories.
• The “analytical heavy-hitting” will be done as part of the factual analysis looking at the six individual fair dealing factors in the second step.
• On the first factor, which takes a deeper look at the purpose of the dealing, the point of view of the end-user should be adopted. In schools this means looking at the use by the students, and in libraries it means looking at the use by the patrons.
• On the first factor, it is also clear that the research prong continues to have a broad meaning. It is not limited to formal and systematic inquiry but equally applies to consumer research, lifelong learning, and everyday information seeking activities.
• Also on the first factor, the word “private” in private study should not be taken so literally as to require isolation or solitude. Private study can occur in the classroom setting and there is an inter-relationship between the instructional activities of a teacher and the research and private study of the students. Instructors and librarians have always well understood this relationship, and it needs to be better reflected in institutional copyright policies.
• Lastly on the first factor, artificial distinctions like whether an instructor has required a reading are not determinative, assigning a reading does not preclude private study.
• The third factor regarding the amount of the dealing should be assessed by looking at how each dealing occurs on an individual level, not on the aggregate use. The issue of whether to adopt the aggregate versus individual point of view has been a highly disputed point, with the collectives pushing for the user-disabling aggregate approach. The individual approach, which was endorsed in both cases, keeps the control localized in the hands of the end-user who is best able to make reasonable assessments under this factor.
• As to the fourth factor, the possibility of simply purchasing the text for everyone (or having everyone purchase a text) was not considered a reasonable alternative. Policies can be justified where they are reasonably necessary to achieve the ultimate purpose of the students’ research and private study. This prong of the holding should provide some additional comfort for robust library reserve policies.
• On the last factor, the effect of the dealing on the work, these two cases clarify that demonstrable harm needs to be shown in order to turn this factor against the fair dealing claimant. Making generalizations about lost-sales due to copying will not suffice.

These are some very concrete and helpful take-aways from the two cases. Hopefully the additional clarity will give some comfort to institutions who have been previously uneasy about adopting and encouraging robust fair dealing practices.