CANADAS COPYRIGHT BOARD:

PROUD LEGACY, PROBLEMS, POTENTIAL &

POSSIBILITIES

University of Toronto
October 2, 2015
COPYRIGHT IN CANADA CONFERENCE 2015
HOWARD KNOPF
Counsel
MACERA & JARZYNA, LLP
OTTAWA, CANADA
(views are personal and not necessarily those of my firm or
clients)

What I will cover?

This is NOT a year in review. I will deal with in my ~ 17
minutes with:
A brief history of the Board
How the Board works (and doesnt work)
Copyright Board at the Cross Roads Is the System
Sustainable?
The De Beer Report
Actual, even if anecdotal as opposed to statistical, facts
about the Board
Whether Copyright Board tariffs are mandatory?
The York University litigation
Where do we go from here?

Copyright Board

Opening thoughts about baseball, statistics, Yogi Berra and predictions

When You Come to a Fork in the Road, Take It!
The Parker Report of 1935 re sound pictures and broadcasting
In 1936, Copyright Appeal Board created
Plus a change
Canada once a world leader in collective oversight
Ill-fated International Association ofCopyright Administrative Institutions
(IACAI) initiative from ~2005
Today, we have a highly professional, courteous and committed Board with
considerable continuity and corporate memory
However, today, it routinely takes 4 years to get to a hearing and 2+ years to
a decision, which may be too often prone to error
Decisions are almost always significantly retroactive, despite warning of
Supreme Court of Canada in 1954 Maple Leaf decision
Canada has largest tribunal of its kind by far anywhere in world
Cases often cost > $1 million to launch and even defend and last for
6+ years
Cost to taxpayers is ~ $1 million per significant decision
Why is this so and are parties getting their moneys worth?
Problems overall are:
Delay
Expense
Retroactivity

Even the Collectives are

Complaining

Recent tariffs that wont pay for themselves:

Access Copyright Provincial Government Tariff
(worth about $370,000 over ten years)
Re:Sound Pandora Tariff ($500,000 per annum
revenue, but if and only if Pandora launches in
Canada which it has not done)
Canadians still cant get there from here re
Pandora:
We are deeply, deeply sorry to say that due to licensing
constraints, we can no longer allow access to Pandora for
listeners located outside of the U.S., Australia and New
Zealand. www.Pandora.com

Reaction? Judicial review and why not?

But certain collectives are going straight to the
Court of Public Opinion or worse

Collective Response

Access Copyright spending its dwindling

funds on an unconvincing PwC report?
Very inappropriate lobbying/astroturf
campaign by MusicCanada.com:
Send an email to the Chair of the Copyrigh
t Board of Canada re: Tariff 8
???

From: MusicCanada.com
Send an email to newly-appointed Copyright Board chair Justice Robert A. Blair, urging him to
facilitate the prosperity of Canadian cultural businesses rather than impede it by recognizing the
value of the Canadian music industry for all Canadians.
To Justice Robert A. Blair, Chair of the Copyright Board of Canada
Congratulations on your recent appointment as the chair of the Copyright Board of Canada.
Under the previous leadership of the Copyright Board one year ago the Tariff 8
decision to provide creators with rates 90% lower than those they had negotiated
commercially. [sic]
This decision discards years of agreements freely negotiated between digital music service
providers and the music industry and sends a message to the world that it does not value music
as a profession. This is inconsistent with Canadian values.
These rates were unprecedented globally they are one [sic] of the worlds worst royalty rates
for non-interactive and semi-interactive music streaming.
One year later [sic] Tariff 8 decision remains a serious setback for the music community in
Canada, for artists and the music companies who invest in their careers. This decision has
created a regulatory precedent that ignores the reality of the marketplace and will continue to
harm the business climate in this country and create a [sic] market uncertainty.
Today Canadian recorded music digital revenues and physical revenues combined only represent
half of revenues fifteen years ago. I urge you in your new position to make decisions that
recognize the value of the Canadian music industry for all Canadians, and to create tariffs that
pay creators fairly. Canadian creators should not be paid less than their contemporaries around
the world.
As you begin your mandate please consider how the Copyright Board can facilitate the
prosperity of Canadian cultural businesses rather than impede it. (emphasis added)

Whassup on current high profile JRs?

(i.e. Appeals)
The Access Copyright Judicial Review
re Provincial Tariff
The Re:Sound Judicial Review re Tariff
8 (the Pandora tariff

Tribunal/ Applicable
Regulations or Rules re
Procedure
Copyright Board/No
procedural regulations in
place other than Boards
informal and very
general
Directive on Procedure

Mandate/# of Significant # of Members

# of
& Substantive Decisions
Staff
per year
FTE
Setting Copyright Tariffs and Up to 5 full time.
16
Levies pursuant to Copyright Currently 1 full time
Act/ app. 3 per year. (S. 77 + 1 part time. Chair
Unlocatable decisions
(currently
cannot be considered as
vacant)who must
significant and have never be a sitting or
involved an actual hearing)
retired judge.
Competition Tribunal/
Dealing with wide range of
Up to six judicial
9
Competition Tribunal Rul applications arising from
members from
es (SOR/2008-141)
Competition Act/
Federal Court and
app. 10 per year since 20 not more than eight
00
lay members
.Wide range of licensing and Chair, two ViceCRTC/
437
Canadian Radio-television
regulatory oversight in
Chairs and up to 10
and Telecommunications Combroadcasting and
national and
mission Rules of Practice
telecommunication, internet, Regional
and Procedure (SOR/2010-27 ant-spam, etc./ app. 600-700 Commissioners
7)
decisions a year many
minor but many very
important, e.g. 2014
Canadian International
international trade cases,
Up to seven full
62
Trade Tribunal/ See Act
procurement cases, customs time members
and Regulations here.
and excise tax appeals and
including a
government-mandated
chairperson
inquiries within the Tribunals
jurisdiction/
129 decisions in 2013-201
4
Canadian Industrial
Handles
more than 600
Chair, two Vice97
Relations Tribunal/
labour related matters under Chairs, up to six full
Canada Industrial Relations Federal jurisdiction, including time members, and
Board Regulations, 2012 (S Status of the Artist Act.
additional part time
OR/2001-520)
Processing times are publ members
Trademarks Opposition
ishedon
Rules
here.
oppositions to
App. 10 members a12
Board/ See
registration and s. 45
nd 12 staff
Practice in Trademark Oppos expungement. Many of these These are all public
service positions.
ition Proceedings
rulings involve hearings./
741 decisions rendered in
2011-2-12
Supreme Court of
Highest
Court of Canada.
Nine full time
215
Canada/
Process more than 500 lea justices.
Rules of the Supreme Court ve applications and issue
of Canada (SOR/2002-156) s approximately 80 decisi

Budget (i.e. net cost of operations)

3,514,185
(2013-2014)

3,184,043
(2014-2015)

17,586,000
(2013-2014)
(Expenses of 65,030 offset by revenues
of 47,444)

13,581.000

17,567,000

N/A

42,011,659
(net cost of operations est. for 20132014)

Prof. De Beer: Distribution of certified tariffs applicable for the years 1999-2013
(www.JeremyDeBeer.ca)

Prof. De Beer:
According to my data,852 different tariffs were certified by
the Copyright Board in respect of the 15-year period
between and including 1999-2013. There are 209 pending
tariffs that were proposed for that period but have not yet
been certified. The certified tariffs took an average of 3.5
years to certify after filing. The average pending tariff
has been outstanding for 5.3 years since filing as of
March 31, 2015. On average, tariffs are certified 2.2
years after the beginning of the year in which they
become applicable, which is in effect a period of
retroactivity. The standard deviation in the time from
proposal filing to tariff certification is 2 years. A hearing was
held in 28% of tariff proceedings. The average time from
proposal filing to a hearing in those proceedings was
just over 3 years. The average time from a hearing to
tariff certification was almost 1.3 years.
(emphasis added)

Prof. De Beer: Statistics Regarding

Tariffs Certified With and Without
Hearings
(www.JeremyDeBeer.ca)

Just in case you were wondering:

Inprobability theoryandstatistics,skewnessis a measure of the
asymmetry of theprobability distributionof areal-valuedrandom variable
about its mean. The skewness value can be positive or negative, or even
undefined.
(Excerpt from Wikipedia entry for skewness)
Inprobability theoryandstatistics,kurtosis(fromGreek
:,kyrtosorkurtos, meaning "curved, arching") is any measure of
the "peakedness" of theprobability distributionof areal-valued
random variable.[1]In a similar way to the concept ofskewness,kurtosisis
a descriptor of the shape of a probability distribution and, just as for
skewness, there are different ways of quantifying it for a theoretical
distribution and corresponding ways of estimating it from a sample from a
population. There are variousinterpretationsof kurtosis, and of how
particular measures should be interpreted; these are primarily peakedness
(width of peak), tail weight, and lack of shoulders (distribution primarily
peak and tails, not in between).
(Excerpt from Wikipedia entry for kurtosis)

TYPES OF TARIFFS CERTIFIED

BY COPYRIGHT BOARD
BETWEEN 1999 - 2013

NUMBER CERTFIFIED
TARIFFS FROM 1999
2013 (including
redeterminations)

COMMENTS and LINKS TO ACTUAL DECISIONS

Educational Rights

Media Monitoring

Private Copying

Opposition to this tariff has essentially evaporated, since it now

only applies to the obsolete medium of blank CDs. The Board
lists each year from 2012 to 2016 as separate tariffs,
but there were only two proceedings for that period.

Public Performance of Music

39

Reproduction of Musical Work

s

11

Reproduction of Sound Record

ings and Performers Perform
ances
Reproduction of Literary Work
s
Retransmission of Distant Rad
io & TV Signals
Arbitration

This is by far the major sector covered by the Board. There are
47 tariffs listed, but 8 of them involved both SOCAN and
Re:Sound (formerly NRCC), so they should not be counted
separately. There are 41 decisions between 1999 and 2013,
some of which concern relatively minor matters.
Two of these are suspended by the Federal Court of Appe
al and one became interim as of November 7, 2012

The tariff, to the extent it concerns CSI, becomes interim

as of November 7, 2012.

TOTAL NUMBER OF TARIFFS

CERTIFIED

Number of tariffs per year on

average

2
4

This tariff is now extinct, since the collective was never able to
recover its costs
This is a minor tariff that has occupied little Board time.

There are 4 decisions, only one of which has resulted in an a

ctual tariff.
22 decisions, many or most of which are procedural or interim

N/A

The Board has rendered 14 decisions between 1999 and 2014

all but one of which (now pending in the SCC in CBC v
SODRAC) were interim. These are not part of Prof. de Beer's
analysis but are included in this chart for the sake of
completeness to show the Boards level of activity. These are not
tariffs and even the term arbitration is a misnomer.

74

Even this is an inflated number, and reflects a number of minor

redeterminations and other less than significant events. But is still the
Boards own number, as calculated from the Boards own posted
information. Still, this is less than 10% of Prof. de Beers number of 852.

4.9

This the total of 74 certified tariffs divided by the number of years being
studied (15). This is greater than the number of decisions per year,
since many of these tariffs are unopposed because they are unimportant or
the objectors cannot afford to participate in the Boards process, or for
other reasons such as the oppressive and intrusive interrogatory
process.

Anecdotal Actual Facts of Life

I have repeatedly suggested on an anecdotal basis that:
It often takes the Board four years or more for a tariff to reach the hearing
stage
It often takes the Board two years or more after the hearing to render a
decision
The decision is invariably retroactive
Few, if any, who are familiar with the recent history of the Board would
disagree with my anecdotal observations, which are easy to confirm as
seen below. Even the recently retired Chairman stated almost 10 years ago
that the delay in decision rendering was excessive. This was at a time when
parties were grumbling about mere 18 month delays. In a
published speech from 2006, the now retired Chairman of the Copyr
ight Board (William Vancise) stated
shortly after his appointment:
I am not at all happy with the time it takes to render a final decision. I
have tried to address the issue and I can assure you it will be resolved.If
the Supreme Court of Canada can render a decision within six
months of a hearing, there is no reason why this Board cannot do
the same.My goal is to see that this occurs.(emphasis added)

More Facts of Life

Quite apart from the rather inapposite conflation of the Copyright Board and
the Supreme Court of Canada, the bottom line is that the trend clearly seems
to be getting worse rather than better. Hence, Prof. de Beers overall
conclusions are instantly questionable, for example when he suggests at page
37 that It took on average a further 1.29 years for the Board to issue a
decision and certify the tariff following a hearing. That obfuscates the fact
that, many if not most of the recent important decisions have taken much
longer, for example:

The K-12 hearing

had about a two year delay in rendering the decision, which was
then reversed by the Supreme Court of Canada.
It has been
2.5 years since the Boards hearing in the Access Copyright - Prov
incial and Territorial Governments Tariffs (2005-2009 and 2010-201
4)
. Finally, on May 22, 2015, we had a decision,
which I have discussed in detail, that is subject to judicial review.
The fitness tariff discussed below took more than two years to decide
initially, and more than a year to re-determine after submission of a
settlement agreement. It took about 8 years overall to resolve inconclusively.
TheRe:Sound Tariff 8 Pandora decisiontook about 18 months
from the hearing to render a decision

e.g. Recent Re:Sound Fitness Tariff

(2008-2012)

Tariff was filed June 2, 2007

Board Hearing April 27 to May 11, 2010
Board Decision July 6, 2012
Judicial Review Application Filed August 7, 2012
Hearing by Federal Court of Appeal (FCA)
November 19, 2013
Decision by Federal Court of Appeal February 24,
2014
Parties File Settlement March 21, 2014
More than a year later, Board approves settlement
agreement with minor adjustment March 27, 2015

Some Questions that Need to be

Asked

The Mandatory Tariff Spectre

The Federal Court of Appeal (FCA) held that a collective management
organization (CMO) can ask the Board to approve a licensing scheme and then
impose it on users. If correct, such users then have no choice other than to
deal with the CMO, and must, as a matter of law, pay the entire specified
royalties if they make even a single unauthorized use of a single work
from the CMOs repertoire. By so ruling, the FCA has upended the legislative
scheme.
The Interveners submit that this holding (hereinafter referred to as the
mandatory tariff theory) lacks any basis in law: standard principles of
statutory interpretation contradict it; the case law debunks it; and the
legislative history discredits it. In addition to absurd results that
contradict fundamental tenets of the rule of law, the mandatory tariff
theory threatens to upset the balance in Canadian copyright law. It would
overly compensate owners, contrary to this Courts holding in Thberge, and it
could gut fair dealing and other users rights, contrary to what this Court cautioned
against in CCH.
(emphasis added)
From CIPP & Katz intervener brief dated March 2, 2015 to the SCC in
CBC v. SODRAC (notes omitted)

The York University

Litigation
Relationship to Copyright Board Post-Secondary
Tariff (which is proceeding effectively by default,
which poses an enormous problem for the Board
and everyone else)
Current Status: Deep in discovery, confidentiality
& protective order, bifurcation, etc.
The Mother of Canadian Copyright Litigation
cases?
Whats at stake and what could happen if York
loses?
Timing: Board Post-secondary case begins
January 19, 2016 and York case begins May 16,
2016 for 15 days.

How is this affecting Copyright Board practice?

Proposed inaugural tariffs maybe no longer bankable
assets
Costs of objection may deter objectors ab initio and
may contribute to withdrawals and default proceedings
Large law firm representation of collectives being
replaced by in-house counsel
Will clients expect law firms to take sides in tariff
cases either for collectives or for users, as in labour or
drug patent practice?
New tariffs resulting from legislation unlikely in antitax environment
Some collectives may cease to be viable
Is the party over for the multi-million dollar files that
take for four to six years or more just to get a Board
decision?

What is the Solution?

Current Working Group suggestions may only make things worse
why?
Very short term:
The new Chair, Hon. Robert Blair, has important experience in
reforming the Ontario courts (and indirectly the Federal Courts) in
the 1990s
Hopefully, he can do a lot from within the Board and without
needing to wait for new regulations
Medium term:
Regulations pursuant to already enacted authority to deal with
steps of a proceeding, timelines, discovery/interrogatories,
experts, rendering of decisions, etc.
Possibly even costs of objectors and interveners, though this may
require legislation
Long term:
Another Parker Commission to look at roles, responsibilities,
governance and oversight of collectives?
Possibly even looking at machinery issues involving Patented
Medicine Prices Review Board, Notice of Compliance litigation
regime, Competition Tribunal, and the possibility of a new
Intellectual Property Tribunal or other innovative and visionary

Dj vu all over again?

Bill C-93, an omnibus budget bill, was defeated in the Senate
on June 10, 1993. Among other measures, this Bill provided for
the merger of the Copyright Board and the Trade Marks
Opposition Board. Thus, the jurisdiction of the Board remains
unchanged.
(CB Annual Report 1993-1994)
As of 2001:
Only four bills -- Bill C-43 on abortion, Bill C-93 on the
reorganization of certain boards, agencies, commissions and
tribunals, Bill C-28 on the L.B. Pearson International Airport,
and C-220 on profiting from authorship respecting a crime
have actually been defeated in the past several decades, with
all of these defeats occurring in the 1990s.
THE CANADIAN SENATE IN FOCUS 1867-2001
Committees And Private Legislation Directorate May 2001

The Future?
What will the effect be of
cord cutting
Streaming
DRM & TPM
Internet everywhere
And new things we cant imagine?

How much longer will collectives be useful or

sustainable?
How much longer will we even need a Copyright
Board?
Until then, we all need to help the Board work well to
serve Canadians and live up to its important legacy
from Judge Parker.
And remember Yogi Berra (RIP):

Conclusion