New development in Google Books saga: Google will get its chance to argue fair use

The latest salvo in the Google Books saga promises to be a big one. On July 1, the United States 2^nd Circuit Court of Appeals issued an order decertifying the plaintiff class, the Authors Guild et al. The Court found that District Judge Denny Chin’s June 11, 2012 order certifying the plaintiff class was made in error.

As discussed in more depth in an earlier post, in 2004, Google undertook its massive “Library Project”. Google, in cooperation with a number of libraries began scanning, digitizing and indexing millions of books. At the time my last post on this case was published, the total number of books digitized was estimated at 15 million. The 2^nd Circuit’s decision puts that number at 20 million today. A group of plaintiffs- eventually settled into a class headed up by the Authors Guild- instituted a copyright infringement action.

The 2^nd Circuit found Judge Chin’s class certification to be premature in light of Google’s fair use argument on the merits. The Court wrote that allowing the statutory fair use defense to be affirmatively argued may render some or all of the issues moot, thereby eliminating the need for the costly, complex class action to go forward.

Notable authority on the Google Books saga Professor James Grimmelmann has opined that the wording of the 2^nd Circuit’s ruling, though not directly dealing with the fair use argument, suggested that the argument would be compelling. Grimmelmann explains that the normal procedure when the certification of the plaintiff class is itself, in whole or in part, contingent on the merits, the court will usually consider the merits only insofar as they aid in determining if the plaintiff class is appropriate. In this decision however, the 2^nd Circuit gave express instructions in its remand to the district court to consider the fair use issue specifically and to its end.

Professor Grimmelmann wrote that this unorthodox, if not pragmatic order may not only be a signal that the 2^nd Circuit finds Google’s fair use argument to be meritorious; they may believe it to have a fair chance of success.

I've read a couple interesting breakdowns of Google’s fair use argument and while not all the case law is neatly on their side, the argument is tenable and persuasive; but that’s another post. 

Author Resale rights in Canadian Copyright Law

On May 29^th, Liberal MP Scott Simms (Bonavista—Gander—Grand Falls—Windsor) introduced a private members bill, bill c-516, that proposes to modify the Copyright Act to create an “artist resale right” for authors of copyright protected works. 

The resale rights (also known as a “droit de suite”) would allow an author to be remunerated not only for the first purchase of a copy of their work, but for every subsequent resale of that work. The droit du suite came about at the end of the 19^th century in France as a response to a case in which the owner of a painting sold it for a hefty sum while the artist who painted it lived in poverty. 

Photo by Ranjith Krishnan

The droit de suite is a theory that runs directly counter to the “first sale doctrine”. This Common Law doctrine dictates that a copyright owner’s right to remuneration is extinguished after the first sale of a copy of a protected work. The first sale doctrine comes from the Common Law principle that restraint on the alienation of tangible property is to be avoided. The doctrine was first cited by the US Supreme Court in Bobbs-Merrill Co. v. Straus (1908) and was later codified in the American Copyright Act of 1909.

Today, the European Union, Australia and the Philippines have resale rights legislation. The State of California also had a resale right law on the books until it was struck down by the U.S. District Court (Central District of California) on May 17, 2012. Judge Jacqueline H. Nguyen found the law to be unconstitutional because it encroached on the Federal power over interstate commerce. This decision is currently being appealed to the 9^th Circuit Court of Appeal.

The bill is presently in its first reading before Parliament. It proposes to grant authors the right to capture a 5% royalty in any subsequent sales of a work where the value of the transaction is $500 or more. This resale right is not limited to the first subsequent sale, but to all subsequent sales of the work while the work remains in copyright. The resale right may not be waived by the author and is not transferable. The onus is on the seller of the work to report and pay out the royalty. The bill mandates that royalty collection be carried out by a collective licensing society. 

One interesting feature of the bill is that its provisions only apply to:

- Authors who were Canadian citizens or residents at the time of the sale; and

- Authors in other countries that offer similar resale rights to Canadian authors in their home jurisdictions (namely the EU as mentioned above). 

Though the resale right is not transferable inter vivos, the right is transmissible upon the death of the author. The right passes to the person to whom it was expressly bequeathed; or, failing that, the person to whom the copyright in the work has been bequeathed. 

While the chances of this legislation passing are slim, this initiative represents a potential shift in Canadian copyright policy towards the EU. This proposed change to the Copyright Act is more than likely related to the ongoing negotiations taking place between Canada and the EU on the “Canada-EU Trade Agreement” (CETA) in which the EU is putting pressure on Canada to once again amend its intellectual property laws to come into line with their own. 

Though this iteration of the resale right may not pass, interested parties should keep watch as the negotiations over CETA progress. It is quite possible that a similar amendment may be introduced in the near future; though next time, it may come from the government’s side of the aisle.

SCC Copyright Pentalogy 4 of 5: Alberta (Education) v. Access Copyright

In December 2011, The Supreme Court of Canada heard five major copyright cases. All five cases are appeals from decisions of the Canadian Copyright Board. The Court released its decisions in these five cases on July 12^th, 2012. This series will analyse each of the five decisions in turn. 

           In Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), the Supreme Court of Canada decided 5-4 that photocopies of educational materials made at the initiative of teachers for students constitute a fair dealing and therefore not compensable under Access Copyright’s proposed tariff. 

Image by Renjith Krishnan

            In 2004, Access Copyright- the copyright collective that represents authors and publishers of literary and artistic works- proposed a tariff covering the copying of published texts in elementary and high schools across Canada (except for Quebec). The photocopies made by the schools were classified into five categories. There was no dispute that the first three categories qualified as fair dealing. Category 5 copies were not even discussed in the decision. Category 4, however, proved to be a point of contention. This category dealt with those photocopies made by teachers on their own initiative for students.

           The Copyright Board decided that though the copies made by teachers for their students fall under the allowable purposes of “research” or “private study”, they did not constitute fair dealing under the CCH fairness analysis. On judicial review, while the Federal Court of Appeal ordered the Copyright Board to reconsider another ground of opposition, they found the Board’s decision on fair dealing to be reasonable. 

            As I wrote in my analysis of the companion decision SOCAN v. Bell, fair dealing is a doctrine of copyright law that protects certain uses (or dealings) of copyright protected works that, but for the fair dealing doctrine, would constitute copyright infringement. Fair dealing is considered to be a limitation on the scope of the copyright in favour of the public interest. 

The Majority Opinion

Writing for the majority, Justice Abella concluded that the Copyright Board erred in its assessment of the fairness factors laid out in CCH. Strangely, the majority did not specifically address the “character of the dealing” although it is tacitly addressed in the assessment of the “amount of the dealing”. The “nature of the work” was also not assessed as the majority likely didn’t find it relevant in the case at bar.

•    Purpose of the dealing

The Copyright Board analysed the purpose of the dealing from the perspective of the copier (the teacher) rather than that of the user (the student). The majority wrote that while the perspective of the copier may be a valid consideration to keep in mind during the fairness analysis, the predominant point of reference should be that of the student. From that perspective, the purpose (or motive) of the dealing should be considered to be fair. 

Access Copyright also advanced an argument that the purpose of “private study” necessarily precludes the classroom setting. Justice Abella found this argument unconvincing. While university level students are expected to conduct research on their own, elementary and high school students are not. At these levels, part of a teacher’s job is to guide the student in their research. In Justice Abella’s words: “By Focusing on the geography of the classroom instruction rather than the concept of studying, The Board again artificially separated the teachers’ instruction from the students’ studying” (Emphasis in the original).

•    Amount of the dealing

The Board assessed the amount of the dealing based on the aggregate number of copies made by the teachers. As the Court opined in SOCAN v. Bell, this is the wrong approach. In considering the amount of the dealing, the decider must look at the quality rather than the quantity of the work taken. In this case, the Board itself found that the excerpts taken by the teachers were relatively short. The Board based itself on a passage from CCH written in obiter saying that had the same person submitted several requests for documents from the same series or collection in a short timeframe, the dealing may be unfair. 

The Court points out that the teacher is not making multiple copies for himself, but a single copy for each student. Again, if analysed from the perspective of the user, this factor militates in favour of a finding of fairness.  

•   Alternatives to the dealing

This factor assess whether or not it is truly necessary for the copies to be made or if there are other viable alternatives. The Board found that there were viable alternatives such as the purchasing of additional text books for each student. 

The majority makes clear that while an alternative, buying several different textbooks for each student is hardly viable. The cost of doing so would be astronomical and the schools would be forced to make do without those texts. As a result, the students would suffer by being forced to rely on only the textbook provided for and whatever materials may be found in the public domain. 

• Effect of the dealing on the work

At the Copyright Board, Access Copyright was unable to show a negative effect on the published works in its catalogue that was due to the category 4 photocopying. Instead, they relied on figures showing a decline in textbook sales of 30% over 20 years without showing a causal link between those figures and the category 4 copies. The Board nevertheless found the effect of the dealing on the work to weigh in favour of Access Copyright.

The majority exposed this finding as unjustified by the evidence. Furthermore, Justice Abella found it hard to believe that the copying of these short excerpts would compete with the sale of the entire textbook. As mentioned above, she found it more likely that if the copies aren’t made, the students will simply go without.

The Dissenting Opinion

            Writing for the dissenting Judges, Justice Rothstein disagreed with the majority stressing that more deference for the Copyright Board’s decision was warranted. He found that the Board’s analysis of the fair dealing factors was not unreasonable and therefore not a reviewable error.

            Justice Rothstein goes on to write that he does not view the Board’s assessing the purpose of the dealing from the teacher’s perspective to be unreasonable. He found that as much as the dealing was focused on the learning of the student, so too was it focused on the act of teaching. More specifically, the careful selection and copying of excerpts was done for the purpose of “instruction” as much as it was for study.

            The dissenting opinion also sided with access copyright on the distinction between “private” and “non-private” study.  Agreeing with the Federal Court of Appeal, Rothstein felt that even with a large and liberal interpretation, private study excludes study in a classroom setting.

            Justice Rothstein also disagreed with the majority regarding the Board’s assessment of the remaining factors, namely: the character of the dealing, the nature of the dealing, the amount of the dealing, alternatives to the dealing and the effect of the dealing on the work.

Conclusion

            As far as judging the case de novo is concerned, I find myself agreeing with the majority’s reasons. In spite of that, I believe Justice Rothstein was correct in showing deference to the Copyright Board’s decision. As a matter of administrative law, the Supreme Court’s decision in Dunsmuir v. New Brunswick requires that administrative tribunal decisions contain: “justification, transparency and intelligibility within the decision making process”.

On the question of standard of review, the majority in Rogers v. SOCAN decided that the correctness standard applies where a court and administrative tribunal have concurrent jurisdiction in first instance. Unfortunately, this isn’t helpful to the majority in this case because the fair dealing analysis is entirely fact based. While I think the Copyright Board came to the wrong conclusion, I don’t know that the majority made out a case for unreasonableness.

In sum, while I’m happy with the outcome of the Court’s decision, I feel that the dissenting Judges were more faithful to the prescriptions of Dunsmuir. And after all, don’t we all prize administrative law above all else? Sigh...