Statutory Review of the Copyright Act: My Testimony Before the House of Commons INDU Committee

On Dec 3, I appeared before the House of Common’s Standing Committee on Industry, Science and Technology, as part of the statutory review of the Copyright Act. Here is my written testimony:

Good afternoon. My name is Ariel Katz. I am a law professor at the University of Toronto, where I hold the Innovation Chair Electronic Commerce. I am grateful for the opportunity to appear before you today.

In my comments today, I would like to focus on dispelling some of the misinformation about the application of copyright law and fair dealing in the educational sector.

Since 2012, Access Copyright and some publishers and authors organization have embarked on an intensive and unfortunately somewhat effective campaign, portraying Canada as a disastrous place for writers and publishers. This campaign, which I call the “Copyright Libel Against Canada” was built on misinformation, invented facts, and sometimes outright lies. Regrettably, it has slandered Canada and its educational institutions not only at home but also abroad.

I have debunked many of the claims in a series of blog posts four years ago, when the campaign started and I encourage you to read them.[1] I also invite you to read what Michael Geist and Meera Nair have written on this point. You may also find it useful to know that the Australian hard-headed Productivity Commission looked at the “evidence” on the supposed devastation of Canadian publishers and authors, submitted to it by publishers and copyright collectives, faulty and unpersuasive.[2]

Nevertheless, the Copyright Libel persists. It persists because it presents three simple correct facts, wraps them in enticing rhetoric and half-truths, and then tells a powerful yet wholly fictitious story.

Here are the three uncontroversial facts:

• Over the last few years, and especially since 2012, most educational institutions stopped obtaining licences from Access Copyright, and Access Copyright’s revenue has declined dramatically.
• As a result, the amounts that Access Copyright has distributed to its members and affiliates has also declined significantly.
• Most freelance Canadian authors, namely, novelists, poets, and some non-fiction writers, earn very little from their writing.

All of that is correct.

What is incorrect is the claim that changes in Canada’s copyright law and universities’ decisions not to obtain licences from Access Copyright are responsible for the decline in Canadian authors earning.

First, correlation does not imply causation, and as you’ve already heard from some witnesses, even though universities have stopped paying Access Copyright, they haven’t stopped paying for content. In fact, they have been paying more, not less, and most publishers are doing quite well.

But if educational institutions aren’t paying less for content, but more, then why do the earnings of Canadian authors decrease rather than increase? This seems to be the question that puzzles you.

To answer this question we would need to get into the details of Access Copyright’s business model and consider:

• Which works are in Access Copyright’s repertoire;
• Which authors are members of Access Copyright and which aren’t;
• What type of content generally used in education;
• How Access Copyright distributes the money it collects.

I’ll answer these questions.

The logic behind Access Copyright’s business model has been deceptively simple and attractive. Access Copyright would offer educational institutions a licence allowing them basically to copy every work they wanted without worrying about copyright liability. It would charge reasonable fees for the licence, distribute the fees among copyright owners, and everyone would live happily ever after.

This sounds great, except that this business model can only work if you believe in two fictions. First, that Access Copyright actually has the repertoire it purports to licence, and second, that a cartel of publishers would provide an attractive service and charge reasonable fees.

But good fiction doesn’t make good or lawful business models. Access Copyright has never had the extensive repertoire it purported to license. As a matter of copyright law, Access Copyright can only give a licence to reproduce a work if the owner of the copyright in that work has authorized it to act on her behalf. And it would have been a copyright miracle if it managed to get the owners of the copyrights in all of the works it purports to licence to let it act their behalf.[3]

Access Copyright has always known that it didn’t really have the legal power to license everything that it did, but that knowledge never stopped it from pretending to have virtually every published work in its repertoire. Practically, Access Copyright has been selling universities the copyright equivalent of the Brooklyn Bridge. But as a matter of copyright, not only Access Copyright cannot licence stuff that doesn’t belong to it or to its members, its attempt to do that is in itself an act of copyright infringement.[4]

You may find it surprising, but Access Copyright has committed what is in my opinion one of the massive acts of copyright infringement that Canada has ever seen.

For many years, educational institutions, on their part, were quite content to play along and overlook the limited scope of Access Copyright’s repertoire giving them because the licence agreements contained an “indemnity clause”. It basically told universities, “don’t worry whether we can lawfully give you permission to copy those works. Because as long as you continue paying us we will protect you, and we will indemnify you should the copyright owner ever sues you.”

This “don’t ask don’t tell” arrangement persisted for some two decades, but eventually the it began unraveling.

Now, you would expect that if Access Copyright collected money for the use of works that aren’t in its repertoire it would refund the money to the institution that paid it. But this is not how Access Copyright works.

Instead, it keeps the money and distributes it among its members. This has principally been the money that now has all but disappeared.

At this point, it is important to consider which authors are members of Access Copyright and which aren’t, and what type of works are typically being used in universities.

In general, except in a handful of courses in English departments, Canadian universities don’t teach Canadian Literature (and when they do, students buy those books). As UofT historian and English professor Nick Mount recently wrote in his book Arrival: The Story of CanLit: “At eleven of Canada’s largest twenty universities, English and French, you can complete a major in literature without any of it being Canadian. (At all twenty you can earn a B.A. without ever reading a Canadian poem or novel.)”[5]

This may sound surprising, but it’s not. The works typically used in Canadian universities, for research and teaching, are academic works, written by academics, some from Canada but in many cases from elsewhere. Canadian universities are not parochial schools, but serious academic institutions—members in good standing in the global enterprise of science. The study of contemporary CanLit is only a tiny fraction of that enterprise.

Moreover, most academic authors, the ones why write the works that are mainly used in universities, aren’t even members of Access Copyright.

According to Stats Canada, there are 46,029 full-time teaching staff at Canadian universities.[6] Most of those are active authors who write and publish, otherwise they’ll perish. Some faculty members are members of Access Copyright, but the vast majority of them aren’t. Indeed, the number of creator affiliates that Access Copyright has is 12,674,[7] which is even less than the number of full-time faculty, all of which are authors, that my own university, UofT, employs.[8] Yes, UofT alone employs more authors than Access Copyright has as members.

In other words, the vast majority of works used in universities isn’t written by authors who are members of Access Copyright. Therefore, whatever estimate Access Copyright or the Writers Union give you of the number of copies made by universities, this has very little to do with the copying of works written by their members.

But now you may wonder: if Canadian universities don’t really copy the works of Canadian novelists and poets, why did those authors receive money through Access Copyright in the past, and why did the payments stopped when universities stopped paying Access Copyright?

To answer this question, you need to delve into how Access Copyright distributes the money it collects. I won’t bore you with the full details, but crucially, at least a third of the money that Access Copyright distributes to its affiliates is money that Access Copyright has collected for the use of works that aren’t theirs.

When Access Copyright or the Writers Union tell you that the amount money that authors receive from Access Copyright has declined, they principally refer to this money, money that they can have no legal or moral entitlement to receive.

Sadly, Access Copyright has been playing a very cynical game with Canadian authors. Access Copyright didn’t need these authors because they own the copyright in the works used in universities. Access Copyright needed those creators in order to mobilize them politically, which it has done quite successfully. After all, you probably won’t give the same attention to claims made by CEOs of highly profitable multinational publishers that you give to Canadian authors.

This model has now collapsed. It didn’t collapse because the recklessness of Parliament or the lawlessness of universities. It collapsed because the deception and fiction it was based on could no longer support it.

But if you really are interested in assisting Canadian authors, then you must sift the facts from the fiction and acknowledge that the low earning of many writers doesn’t have much to do with copyright, and has nothing to do with fair dealing.

I look forward to your questions.

[1] “The Loss of Access Copyright Royalties and the Effect on Publishers: Sifting Fact from Fiction (Part 1)”, (4 June 2014), online: Ariel Katz <https://arielkatz.org/loss-access-copyright-royalties-effect-publishers-sifting-facts-fiction/>; “The Loss of Access Copyright Royalties and the Effect on Publishers: Sifting Fact from Fiction (Part 2)”, (6 June 2014), online: Ariel Katz <https://arielkatz.org/loss-access-copyright-royalties-effect-publishers-sifting-fact-fiction-part-2/>; “The Loss of Access Copyright Royalties and the Effect on Publishers: Sifting Fact from Fiction (Part 3)”, (16 June 2014), online: Ariel Katz <https://arielkatz.org/loss-access-copyright-royalties-effect-publishers-sifting-fact-fiction-part-3/>.

[2] “Productivity Commission: Tales of the Widespread Demise of Canadian Publishers are Just That”, (20 December 2016), online: Ariel Katz <https://arielkatz.org/productivity-commission-tales-widespread-demise-canadian-publishers-just/>.

[3] “Rocky start for post-Access Copyright era? Not quite”, (21 January 2014), online: Ariel Katz <https://arielkatz.org/rocky-start/>. If you want to read more about Access Copyright’s evasiveness and misleading claims about its repertoire, you can read the Appendix of my letter to the Copyright Board from Dec. 20, 2013. Access Copyright even claims that the list of its affiliates is confidential information and should not be publicly disclosed; it purports to speak in the name of authors and publishers, but would not disclose who those authors and publishers are. If you don’t believe that Access Copyright’s actually claims that, see Exhibit AC-2H, which it has filed in a fully redacted form to the Copyright Board, the letter from its counsel objecting to my request to place the non-redacted version on the public record, and my reply to that letter.

[4] Access Copyright Provincial and Territorial Governments Tariff, 2005-2014 [Reproduction of Literary Works, Re, 2015 CarswellNat 1793 (Copyright Bd.)] (May 22, 2015), para 138.

[5] Nicholas J Mount, Arrival: The Story of CanLit (Toronto: House of Anansi Press, 2017) at 292.

[6] Statistics Canada Government of Canada, “Number of full-time teaching staff at Canadian universities, by rank, sex”, (15 November 2018), online: <https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3710007601>.

[7] According to its 2017 Annual Report, Access Copyright has 12,674 creator affiliates, which includes not only writers, but also visual artists. See Access Copyright Annual Report 2017.

[8] “Quick Facts | University of Toronto”, online: <https://www.utoronto.ca/about-u-of-t/quick-facts>.