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    Respondents Memorandum of Fact and Law Revised 7 November 2016 PDF

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    Court File No. A-93-16 FEDERAL COURT OF APPEAL BETWEEN: ‘The Canadian Copyright Licensing Agency, operating as Access Copyright Applicant and British Columbia Ministry of Education et al. Respondents RESPONDENTS’ RECORD Date: November 7, 2016 (Revised) VOLUME IV OF VII Wanda Noel Barrister and Solicitor 5496 Whitewood Avenue Ottawa, ON K4M 1C7 Tel: (613) 794.1171 Fax: (613) 692.1735 -and- J. Aidan O'Neill Ariel Thomas FASKEN MARTINEAU DuMOULIN LLP Barristers and Solicitors 55 Metcalfe Street, Suite 1300 Ottawa, ON KIP 6L5 Tel: (613) 236.3882 Fax: (613) 230.6423 Solicitors to the Respondents ~auseun 10 n 12 13 TABLE OF CONTENTS Youmel Statement of Royalties to be Collected By Access Copyright for the Reprographic Reproduction, in Canada, of Works in its Repertoire (Elementary and Secondary Schools - 2010-2015), Decision of the Board, Copyright Board of Canada, February 19, 2016 Affidavit of Yael Wexler, dated May 19, 2016 which includes a series of documents that were filed with the Board on March 19, 2014 (unless otherwise indicated): Exhibit 1: Objectors’ Statement of Case Bxhibit 2: Witness 8 tatement of Shannon Delbridge Exhibit 3: Witness Statement of Chris George Exhibit 4; Copyright Matters!, 3 edition Exhibit 5: Fair Dealings Guideline Posters Exhibit 6: Outreach Campaign - Powerpoint Presentation Exhibit 7: Notice to Principals and Teachers, Compliance Copyright Checklists Exhibit 8: Ad and infographic- “Copyright law has changed for teachers and schools” Exhibit 9: Capsle article - “Significant changes to Copyright Rules for Educators” Exhibit 10: Witness Statement of Jim Giles Exhibit 11: Flow Chart - implementation of Fair Dealing guidelines Exhibit 12: Witness Statement of Lori Lisi and Karen Gill Exhibit 13: Guidelines for Approval of Textbooks 2004, Ministry of Education: Ontario 13 241 270 273 283, 287 289 4 15 16 7 18 19 21 23 25 Description Exhibit 14: Witness Statement of Carole Bilyk and Brenda McKinny Exhibit 15: Witness Statement of Cathy Viva Youume Affidavit of Yael Wexler (cont'd) Exhibit 16: Report (Public Version) - Nordicity Group Ltd. Economic Analysis of the Impact of Fair Dealing in Elementary and Secondary Schools (with Appendices A and B) Exhibit 17: Expert Report - Wilk & Whitehead -Volume of Compensable copying in K to 12 Schools (with Appendices A to H) Exhibit 18: Schools -Interrogatory Responses - Q90 Youume UI Affidavit of Yael Wexler (cont’d) Exhibit 19: Schools - Interrogatory Responses - Q91 Exhibit 20: Schools - Interrogatory Responses - Q93 Exhibit 21: Schools - Interrogatory Responses - Q95 Exhibit 22: Schools - Interrogatory Responses - Q96 Exhibit 23: Schools - Interrogatory Responses - Q97 Exhibit 24: Schools - Interrogatory Responses - Q98 Exhibit 25: Slide Deck - Estimates of the Volume of Compensable Copying in K-12 Schools (2010-2012 & 2013-2015) by Dr, Piotr Wilk and Dr, Paul C. Whitehead, May 5, 2014 Exhibit 26: Slide Deck - Chris George - Communications Advisor to Copyright Consortium of the Council of Ministers of Education, Canada, May 6, 2014 314 321 307 an 82823388 28 29 31 2 33 34 35 36 Description Exhibit 27: Slide Deck - Copyright Hearings - Copyright Board, Ottawa - Presentation of Jim Giles, May 6, 2014 Exhibit 28: Slide Deck - Economic Analysis of the Impact of Fair Dealing Guidelines in Flementary and Secondary Schools (2010-2015) - Summary and Presentation of Evidence from Exhibit Objectors-9 prepared by Dustin Chodorowicz, Nordicity Group L1d., May 8, 2014 Exhibit 29: Notice of the Board dated June 6, 2014 - Access Copyright - Elementary and Secondary School Tariffs (2010-2012, 2013-2015) Exhibit 30; Objectors’ Reply to the Board's September 12, 2014 Questions filed with the Board on October 10, 2014 Exhibit 31: Public Version of the Objectors' Answers to the Board's Sune 6, 2014 Technical questions (1,3,4,5) filed with the Board on October 10, 2014 Exhibit 32: Objectors' Reply to the Board's June 6, 2014 Technical Questions (1, 3,4, 5) filed with the Board on December 5, 2014 Exhibit 33: Wilk and Whitehead Reply to Circum Technical Questions (1, 3,4, 5) filed with the Board on December $, 2014 Exhibit 34: Appendix A - Detailed calculations revised, fled with the Board on December 5, 2014 Exhibit 35: Appendix B - Examples of shared ISBSN numbers, filed with the Board on December 5, 2014 Exhibit 36: Appendix C - Analysis of shared ISBSN numbers, filed with the Board on December 5, 2014 Excerpt from the Transcript from the Access Copyright - Elementary and Secondary Schoo! Tariff, 2010-2012, 2013-2015, April 29, 2014, Volume 1 (Public), pages 1-28 Youume IV ‘Memorandum of Fact and Law al oun 10 n 2 13 4 ‘YouuME Vv Book of Authorities Copyright Act, RCS, 1985 6 C-42, 8 3,29 Federal Courts Act, RSC, 1985, c F-7, ss 18, 28, $2(c) Alberta (Education) ¥. Canadian Copyrigh Licensing Agency Access Copyright), [2012] 2 SCR 345 Alberta (Workers' Compensation Board) v. Appeals Commission, 2005 ABCA 276 Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 ScR 817 Board Decision, Commercial Radio, April 21, 2016 ‘Board Decision, Provincial and Territorial Government (2005-2014), May 22, 2015 ‘Yolume YI Book of Authorities (cont'd) Board Decision, SOCAN - Tariff 2.A.1 (1990-1993), December 6, 1993 Board Decision, SOCAN - Tariff 3.B (1995), September 20, 1996 ‘Board Decision, SOCAN - Tariff 9 (1998-2001), ‘September 15, 2000 Canadian Broadcasting Corp. v. SODRAC 2003 Inc., [2015] SCR 61S Canadian Recording Industry Association v. Society of Composers, Authors and Music Publishers of Canada, 2010 FCA 322 CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 SCR 339 Cinar Corporation v. Robinson, [2013] 3 SCR 1168 Court File No. A-93-16 FEDERAL COURT OF APPEAL BETWEEN: ‘The Canadian Copyright Licensing Agency, Operating as Access Copyright Applicant and - British Columbia Ministry of Education et al. Respondents MEMORANDUM OF FACT AND LAW OF THE RESPONDENTS Date: November 7, 2016 (Revised) ‘Wanda Noel Barrister & Solicitor ‘5496 Whitewood Ave. (Ottawa, ON K4M 107 Tel: (613) 794.1171 Fax: (613) 692.1735 -and- J. Aidan O'Neill Arie! Thomas Fasken Martineau DuMoulin LLP Barristers & Solicitors 55 Metcalfe Street, Suite 1300 Ottawa, ON KIP 6L5 Tel: (613) 236.3882 Fax: (613) 230.6423 Solicitors to the Respondents TABLE OF CONTENTS PARTI-FACTS. ‘The Copyright Board's Decision. ‘The Board's Tariff Methodology.. PART II - ISSUES. PART III - LEGAL SUBMISSIONS... (@) Whats the appropriate standard of review when assessing the Applicant's judicial review application? . 4) The Dunsmuir, Alberta and CCH Decisions. ii) The Recent Re:Sound and CBC Decisions, (©) Did the Board make its decision without regard to the evidence before it, resulting in an unreasonable deduction from the volume of compensable copying?. i) The Board Must Assess and Weigh the Evidence. iil) The Applicant's Submissions Ignore the Evidence in its Totality. (©) Did the Copyright Board properly ‘evaluate non-substantial copying?. i) The Board’s Decision on Non-Substantial Copying. ii) The Respondents’ Answer to the Applicant — Cinar. iii) The Respondents’ Answer to the Applicant — An Arbitrary Threshold.. 12 (@ Did the Board fail to apply an appropriate evidentiary burden of proof on the ‘Respondents in respect of fair dealing? 13 i) The Copyright Board is an Administrative Tribunal, Not a Court. 13 Rewekh {i) Burden of Proof and the Supreme Court Decisions Cited by the Applicant iii) Burden of Proof and the Fair Dealing Guidelines. (©) Did the Board err in choosing to disregard the Fair Dealing Guidelines? 4) The Board’s Decision to Rely on the Volume Study... fi) The Applicant's Criticism of the Guidelines. iii) The Representativeness of the Volume Study (®) Was the Board’s application of the fair dealing factors reasonable and in accordance with the case law?.. 990 iv) Effect of the Dealing, (g)_ Was the Applicant denied procedural faimess by the Board's decision to design its own tariff methodology and not submit it to the parties for comment? (h) Was the Board's Tariff Methodology Fundamentally Flawed? i) The Board’s Methodology Was Not Flawed ‘in Any Way .. ii) The Applicant's Request That the Court Revise the Boards Decision PART IV ~ ORDER SOUGHT. PART V - AUTHORITIE: 26 28 28 9 0 1 so <3 NS PART I-FACTS ‘opyri Decis 1 On February 19, 2016, following a lengthy proceeding, the Copyright Board (the “Board”) issued its tariff decision establishing the royalty rates to be paid to Access Copyright (the “Applicant” in respect of the copying of published works in the Applicant's repertoire by elementary and secondary (“K-12”) educational institutions during the 2010-2012 (the “First Tariff") and 2013-2015 (the “Second Tariff’) tariff periods.’ 2. The parties to this proceeding were the Applicant and the Respondents, a consortium of twelve provincial and territorial Ministries of Education outside of ‘Quebec, and each of the various Ontario school boards (the “Consortium”). This Memorandum of Fact and Law is submitted to this Honourable Court on behalf of the members of the Consortium, the Respondents in this proceeding. 3. A single public hearing was held for the certification of both the First and ‘Second Tariffs. The hearing occurred over nine days in April, May and September, 2014. Following the hearing and final oral argument, the Board required the parties ‘o provide further information in response to its additional questions. The Board's record of this proceeding was consequently not completed until December 19, 2014? 4. The Board's decision of February 19, 2016, certified annual royalty rates payable to the Applicant of $2.46 per full-time equivalent student (“PTE”) for the First Tariff and $2.41 per FTE for the Second Tariff. ‘The Board’s Tariff Methodology 5. In reaching its decision, the Board applied the ‘same tariff methodology that it had adopted in a previous K-12 decision ‘involving the Applicant and the Respondents dated June 26, 2009, This is referred to as the “volume times value” tariff ' Board Decision, Respondents’ Record, Vol. !, Tab A, page 1. * Board Decision at para. 4, Respondents’ Record, Vol. 1, Tab A, page 5. 2 ‘methodology, pursuant to which the volume of compensable copying is multiplied by the estimated value of each page of a copied work from one of four specific “genres” ~ a book, periodical, newspaper, or “consumable” to derive the final certified FTE rate. 6. With respect to the volume and genre of copying, the Applicant and the Respondents agreed to rely on the results of the volume study previously undertaken bby them in 2005-2006 (the “Volume Study”) as a reasonable proxy for the copying taking place during the tariff periods. 7 In its decision of February 19, 2016, the Board performed a further analysis to determine what copying was compensable, excluding from the total number of ‘compensable copies those that: a) fell outside the scope of the Applicant's proposed tariffs, b) did not constitute a “substantial part” of the entire work within the meaning of section 3 of the Copyright Act (the “Act”), and c) were “fair dealing” copies ‘Pursuant to section 29 of the Act. 8. _Inperforming its analysis, the Board used its own methodology for ‘approximating fair dealing. This methodology was, as described by the Board in Paragraph 350 of its decision, “inspired ... by submissions ofthe parties, particularly ‘those of the Objectors”. The Board’s methodology led to a significantly higher estimate of compensable copying than that submitted by the Respondents, 9. ‘The Board did not submit its methodology to the parties for comment. In choosing not to do so, the Board provided four reasons: (i) the methodology was based om the legal framework in CCH Canadian Ltd. v. Law Society of Upper Canada (“CCH”), which is a well-known framework, and one on which the parties had “already commented extensively”; (i) allowing the parties to comment “would {introduce several months of needless delay”; (ii) “the record is complete enough as it is"; and the methodology “uses data found in the evidence” that had been “extensively examined and cross-examined by the parties”. 2 CCH Canadian Lid, v. Law Society of Upper Canada, [2004] | SCR 339, “Board Decision at para. 351, Respondents’ Record, Vol. 1, Tab A, Page 102. 994 ‘The Applicant’s Notice of Application 10. The Applicant asks this Honourable Court to substitute Access Copyright’s calculations for the Board's, or to set aside the decision and refer the matter back to the Board for redetermination.> 11, ‘The Applicant argues that the Board made a number of errors of law in its decision. In response, the Respondents submit that that Board did not make any errors of law in reaching its decision and, as such, the Applicant's judicial review application should be dismissed with costs. PART II - ISSUES 12. The principal legal issues raised by the Applicant's judicial review application are the following: 8) What is the appropriate standard of review when assessing the Applicant's Judicial review application? ») Did the Board make its decision without regard to the evidence before it, resulting in an unreasonable deduction from the volume of compensable copying? ©) Did the Board properly evaluate non-substantial copying? 4) Did the Board fail to apply an appropriate evidentiary burden of proof on the Respondents in respect of fair dealing? ©) _ Did the Board err in choosing to disregard the Fair Dealing Guidelines? 1) Was the Board’s application of the fair dealing factors reasonable and in accordance with the case law? 8) _ Was the Applicant denied procedural faimess by the Board's decision to design its own tariff methodology and not to submit it to the parties for comment prior to the issuance ofits decision? and * Notice of Application at para. 23, Applicant’s Record, Vol 1, Tab 1, page 6. 995 4 b) Was the tariff methodology developed by the Board fundamentally flawed? PART III - LEGAL SUBMISSIONS (@) What is the appropriate standard of review when assessing the Applicant's Judicial review application? 13, The Applicant submits that this Honourable Court should apply the standard of review of correctness to the following three issues: a) the Boards decision to conclude that “two pages or fewer” of a work constitutes non-substantial copying, b) the Board's “failure” to impose an evidentiary burden of proof on the Respondents with respect to fair dealing and the Board’s assessment of the fair dealing factors in accordance with the principles of stare decisis, and ¢) the Board’s decision not to consult the Applicant in relation to its tariff methodology. The Applicant submits that the standard of review of reasonableness should apply to the other issues it has ‘identified at paragraph 40 {misidentified as paragraph 49] ofits Memorandum of Fact and Law.® 14, The Respondents submit that all of the Board’s conclusions in its decision were, on any objective basis, reached on the basis of mixed considerations of fact and law. Such being the case, the Board's decision should be reviewed by this Honourable Court on the standard of review of reasonableness. 1) The Dunsmuir, Alberta and CCH Decisions 15. In its 2008 decision in Dunsmuir v. New Brunswick (“Dunsmuir”)’, the ‘Supreme Court of Canada was clear that precedents have presumptive value. Where an adequate standard of review analysis has been conducted, courts do not have to reassess the appropriate standard of review by repeating the analysis.* 16, In Dunsmuir, the Supreme Court set out a two-step process for determining, * Memorandum of Fact and Law at paras. 41-42, Applicant’s Record, Vol 7, Tab 11, age 2142 [Access MFL"], 7 Dunsmuir v. New Brunswick, [2008] 1 SCR 190. * Dunsmuir at para. 57. so an the appropriate standard of review: (i) determine whether the courts have already set the standard of review for the category of question; (i) if not, analyze the factors that will identify the proper standard of review. 17. The Supreme Court, in its CCH decision, found that in assessing fair dealing claims, the question of whether something is “fair” is a question of fact and “a matter of impression.” 18, The decision of the majority of the Supreme Court in Alberta (Education) v, Access Copyright (“Alberta”)"' determined that Board decisions involving a ‘consideration of facts, including the issue of “fair dealing” under section 29 of the Copyright Act, should be reviewed on the standard of reasonableness, rather than correctness." 19. Similarly, the dissenting opinion in Alberta also held that the appropriate standard of review of the Copyright Board’s decision was that of reasonableness and warned that “[a] principled deferential review requires that courts be cautious not to inadvertently slip into a more intrusive, correctness review”."? ent Ress 20. Dunsmuir states that courts must review allegations of procedural unfairness by administrative decision-makers on a standard of correctness. Dunsmuir does not, however, address the standard of review applicable to tribunals’ procedural choices ‘when they are challenged for breach of the duty of faimess. 21, This Honourable Court in its 2014 decision in Re:Sound v. Fitness Industry Council of Canada and Goodlife Fitness Centre Inc. (“Re:Sound")", clarified that ° Dunsmuir at para. 62. '° CCH at para. 52 citing Hubbard v. Vosper, [1972] 1 All ER 1023 (CA) at 1027. "" Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), [2012] 2 SCR 345 Alberta at para. 37. ® Alberta at para. 40. "* Re:Sound v, Fitness Industry Council of Canada, 2014 FCA 48, 5 957 the applicable standard of review with Tespect to the content of the duty in a ‘articular context, and in the exercise of the Board’s discretion in setting tariffs, is “normally reviewable on a standard of reasonableness.”"* Thus, “ijt is therefore not for a reviewing court to second-guess an administrative agency's every procedural choice, whether embodied in its general ules of procedure or in an individual determination.”"* 22. Finally, the recent Supreme Court of Canada decision in Canadian Broadcasting Corp. v. SODRAC 2003 Inc. (“CBC")"” held that, “[w]hile itis Possible to frame any interpretation of a tribunal’s home statute as a question of ‘Whether the tribunal has the jurisdiction to take a particular action ... this definition of jurisdiction in the context of standard of review” should be rejected." According to the Supreme Cour, “the category of “true questions of jurisdiction”, if it exists at all, is narrow”.'? 23. On the basis of the Supreme Court's decisions in Dunsmudr, Alberta, and CBC, as well as the Federal Court ‘of Appeal’s decision in Re:Sound, the Respondents submit that the Board’s decision should be assessed, in its entirety, on the standard of reasonableness. Moreover, the Board’s decision is, in all aspects, ‘intelligible, transparent and justifiable, and falls “within a range of possible, acceptable outcomes which are defensible in respect of the facts and law”. (@) Did the Board make its decision without regard to the evidence before it, resulting in an unreasonable deduction from the volume of compensable copying? 24. The Applicant claims thatthe Board, in calculating the number of potentially compensable copying events derived from the Volume. Study, disregarded various evidence that had been provided by the Applicant with respect to works included 5 Re:Sound at paras. 34 and 38. Re:Sound at para. 38. "” Canadian Broadcasting Corp. v. SODRAC 2003 Inc., [2015] SCR 615 "§ CBC at para. 39. CBC at para 39 citing Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, (201 1] SCR 654 at para 34. ?° Dunsmuir at para. 47. 7 ‘within its repertoire.”" According to the Applicant, the reasoning the Board gave for its treatment of this evidence was “unjustified and unreasonable”? 25. — The Applicant further submits that the Board’s decision to disregard its evidence significantly understated the volume of compensable copies.”? i) The Board Must Assess and Welgh the Evidence 26. The Board’s hearing lasted some nine days, heard from some 23 witnesses, including expert witnesses, and dealt with highly complex evidence submitted by both the Applicant and the Respondents. In reaching its decision, the Board had to assess and weigh all of this evidence, including the Applicant's evidence in relation to the works in its repertoire, 27. The Applicant is clearly dissatisfied with the Board’s decision in relation to the volume of compensable copies, and the Board’s treatment of the evidence that the Applicant submitted on this issue. However, as the sole trier of fact under the Copyright Act, itis the Board’s statutory role to hear, consider, and rule on this evidence, 28. In this judicial review application, the Applicant is asking this Honourable ‘Court to re-hear and re-assess its evidence on this issue and to make the decision that the Applicant believes the Board should have made.” This would obviously require the Court to accept, as proven, the very evidence tendered by the Applicant that the Board, for reasons explained in its decision, chose to reject. 29. The Applicant characterizes the Board’s supposed error as being one of law ‘that resulted in a decision that is “unjustified and unreasonable”, In actuality, the Applicant is asking this Court to usurp the Board’s statutory role and to vacate the Board's fully reasoned decision with respect to a highly complex question of fact 7" Access MFL at paras 51-53, Applicant's Record, Vol 7, Tab 11, Pages 2144-45. ® Access MFL at para. 54, Applicant's Record, Vol 7, Tab 11, page 2145, ® Access MFL at paras. 55-56, Applicant's Record, Vol 7, Tab 1 1, pages 2145-46. % Acoess MFL at paras. 55-56 and 126-28, Applicant's Record, Vol. 7, Tab 11, pages 2145-46 and 2160-61. ‘upon which the Applicant made detailed submissions, In the Respondents’ respectful submission, only the Board has the specialized expertise, and legal authority Pursuant to the Copyright Act, to make factual determinations relating to the evidence it heard. As recognized by the Supreme Court of Canada in its 2002 decision in Housen v. Nikolaisen (“Housen")**: “The tial judge is better situated to ‘make factual findings owing to his or her extensive exposure to the evidence, the ‘advantage of hearing testimony viva voce, and the judge’s familiarity with the case ‘as a whole. Because the primary role of the trial judge is to weigh and assess. ‘voluminous quantities of evidence, the expertise and insight of the trial judge in this area should be respected.”"* icant’s Submissi re lence in its To! 30. Notwithstanding the above, the Respondents also submit that the Applicant's suggestion that the Board somehow disregarded its evidence fails to account for the totality of the evidence that the Board had to weigh on this point. In this regard, the Applicant's submissions summarizing the Board’s supposed “unjustified and ‘unreasonable” reasoning”” do not reflect all ofthe evidence that the Board heard, or the stage of the Board’s proceeding at which certain evidence was submitted by the Applicant. In short, the Applicant’s summary of the evidence on this issue is entirely self-serving, incomplete, and omits certain vital information which could have played an important role in the Board’s decision-making process. 31. For example, the Applicant states in paragraphs 48 and 51 of its Memorandum of Fact and Law that, in response to questions from the Board, it ‘made further submissions as to the purported underestimation of the volume of ‘compensable copies. The Applicant's submissions to the Board, however, only pertained to consumables and to the Applicant's distribution to non-affilistes, Such evidence was simply irrelevant to the question of the underestimation of books, Periodicals, and newspapers being considered by the Board. * Housen v. Nikolaisen, [2002] 2 SCR 235. 6 Housen at para. 18, 77 Access MFL at paras 48-54, Applicant's Record, Vol 7, Tab 11, pages 2144-45, 1060 9 32. Moreover, the very first time that the Applicant provided any information to ‘the Board in relation to its claims with ‘Tespect to the underestimation issue was in its reply to the Respondents’ own responses to the Board's questions, In view of the Procedural stage at which the Applicant provided this information, this new evidence Could not be reviewed and assessed by the Respondents. This evidence was therefore sheltered from scrutiny and comment by the Respondents, (©) Did the Copyright Board properly evaluate non-substantial copying? 33. ‘The Applicant claims that the Board’s quantitative analysis of non- substantial copying failed to follow the case law, particularly the Supreme Court of ‘Canada’s 2013 decision in Cinar Corporation v. Robinson (“Cinar”)*, It also claims that the Board ignored important evidence on this issue? 34, _ Inits arguments before the Board on this question, the Applicant argued that any portions of a work copied by K-12 teachers were “qualitatively instrumental to ‘meet the educational needs of students”.”” In other words, because teachers choose to copy some portions of a work and not others, such copying behaviour can never be characterized as being non-substantial. The Board rejected this argument.2" 1) The Board’s Decision on Non-Substantial Copving 35. _Inits decision, the Board noted that the data from the Volume Study upon which the parties chose to rely did not provide the necessary evidence that would ‘enable the Board to “make a qualitative analysis of whether the portion copied ‘tepresents a substantial part of the whole”.”* This was similarly the case with respect to certain of the Applicant's viva voce evidence, which the Board described as being merely “anecdotal”.* In addition, this evidence did not describe the qualitative 2 Cinar Corporation v, Robinson, [2013] 3 SCR 1168, ® Access MFL at paras, 61-62, Applicant's Record, Vol. 7, Teb 11, page 2147, » Board Decision at para. 215, Respondents’ Record, Vol. 1, Tab A, Page 65, *" Board Decision at paras. 216-217, Respondents’ Record, Vol. 1, Tab A, pages 65- 66. ” Board Decision at para. 221, Respondents’ Record, Vol, 1, Tab. ‘A, pages 66-67. * Board Decision at para. 220, Respondents’ Record, Vol. 1, Tab A, Page 66. 10 characteristics of the portions of the works captured in the Volume Study. 36. The Board also stressed that an extensive qualitative ‘analysis, such as that used in Cinar, which related to a single protected work, “may be unworkable in ‘Some situations, such as tariff proceedings.” In a Copyright Board proceeding to ‘set a tariff, there is typically a large volume of copied works to be reviewed with respect to the question of whether the copying was substantial or non-substantil. For the Board to conduct a purely Cinar-style qualitative analysis on a large number ‘of works in a tariff proceeding may actually be impossible. 37. _ In the absence of any qualitative evidence, and for the sole purpose of setting royalty rates in this proceeding, the Board chose to approximate the amount of non- substantial copying by considering the copying of one to two pages from a book or consumable 2s being non-substantil. As for articles from periodicals and ‘newspapers that may be copied by K-12 teachers, because of their typicel shorter length, the Board held there could not be any instances of non-substantial copying. il) The Respondents’ Answer to the Applicant — Cinar 38. Cinar is simply not instructive in this proceeding for the following reasons. First, Cinar related to a civil lawsuit for copyright infringement. This proceeding concerns # Board hearing to establish a royalty rate applicable to uses of the ‘Applicant's repertoire. The Respondents submit that these types of proceedings are very different in character and, consequently, demand different approaches from decision-makers. 39. The Supreme Court's decision in Cinar arose from a copyright infringement Iawsuit. In that case, however, the source material was not directly and literally duplicated. It was modified and transformed into a new work which was both similar to, and different from, the original work. As a result, the Quebec Superior Court had to, with help from expert evidence, carefully compare the works to determine which parts of the new work were substantially similar to the original, and whether those similar portions of the original work qualified for copyright protection, ™ Board Decision at para. 222, Respondents’ Record, Vol. 1, Tab A, page 67. h 1052 40. By contrast, in this proceeding, the Board was required to determine how ‘much copying, on average, was made of published works in the Applicant's repertoire by elementary and secondary schools in a typical year. It did this by examining the results of the Volume Study that the Applicant and Respondents had agreed to use. The Board extrapolated the results of the Volume Study to obtain estimates for each year covered by the proposed tariffs. In doing so, the Board did not, and was never asked to, make any legal findings with respect to possible instances of copyright infringement. 41. Inthe context of a lawsuit before the courts regarding a specific work, assessing whether the copying is substantial involves an examination of several circumstantial factors that are particular to the specific work and the rights holder. In contrast, the Board's general tariff-setting function is a completely different exercise. ‘The Board's general tarff-setting function involves making legal decisions as to what is usually done in the entire industry that is targeted by a tariff. 42, In the proceeding under review, the Board had to examine the evidence before it in order to estimate how many copies of a substantial part of a work are typically made each year by elementary and secondary schools in Canada. In doing 80, it did not make any findings of law with respect to any specific works or the question of copyright infringement, 43. Second, in the Cinar decision, the Superior Court had to perform @ ‘qualitative analysis in order to ascertain which elements were protected by copyright and which portions of the original author's skill and judgment were copied. 44, Inthis proceeding, however, the Board could take as its starting point that the original underlying works — the excerpts from the books, periodicals, newspapers, and consumables ~ had been copied. There was therefore no need for the Board to ‘conduct the kind of analysis undertaken in the Cinar decision. Instead, the Board found that, in the circumstances and for the sole purpose of this particular tariff, the ‘appropriate method of determining substantiality was by reference to the quantitative ‘amount of the work copied. 12 45. Third, the Applicant suggests that, “in the absence of any contradictory evidence from the Respondents, the Board could not have come to the conclusion. that it did. This implies, of course, that the Respondents bear the burden of ‘demonstrating that the copying was non-substantial. However, as is clear from (Cinar, in litigation proceedings, the burden to demonstrate substantial copying lies with the person claiming the infringement. As such, in the event this Court were to disagree with the Respondents’ submissions in paragraphs 50 to 69 below that such burdens are not appropriate in tariff proceedings, the result would be that itis the Applicant that has not met its burden to demonstrate substantial copying, This, in ‘tum, would result in all the copies made of a part of « work being excluded from the determination of the Applicant's tariff rate, ) dents’ Answer. t— Am Ard id 46. The Applicant further argues that the Board erred in law by fixing an “arbitrary” threshold of one to two pages from a book as an approximation of non- ‘Substantial copying for the purposes of setting fair and equitable royalty rates.® The Respondents submit that this was not an error of law. 47. As noted in paragraphs 221 and 227 of its decision, the Board had no qualitative evidence about each of the copied works captured in the Volume Study or about whether the portion copied represented a substantial part of these works.2” ‘These questions were not addressed in the Volume Study, and it isnot clear how they could ever have been. 48. The Applicant claims that the Board “disregarded the evidence that the Content of two pages from a book can often be the most qualitatively important” and “declined to make any other qualitative assessment” of other evidence." On the Contrary, the Board was simply not persuaded by the Applicant's evidence on these °° Access MPL at para. 63, Vol. 7, Tab 11, page 2147. % Access MFL at para. 64, Applicant's Record, Vol 7, Tab 11, page 2148 *” Board Decision at paras. 221 and 227, Respondents’ Record, Vol, 1, Tab A, pages 66, 68. * Access MFL at para. 64, Applicant's Record, Vol 7, Tab 11, page 2148, B 1004 Points, which the Board dismissed as being “anecdotal.” Notwithstanding the Applicant's claims, the Board’s weighing of the evidence in this manner was entirely justified and defensible in respect of both the evidence and the law and fell fully within its specialized expertise as the trier of fact. 49. In summary, due to the nature ofthe evidence presented by the parties, the Board was simply not able to perform the qualitative analysis that the Applicant claims the Board was required to perform. Even assuming for the sake of argument that such a highly “granular” level of evidence had been available, it would have been extremely difficult, if not impossible, for the Board to perform a Cinar-style analysis of every one of the copying events identified in the Volume Study. The ‘Respondents submit that the Board's analysis was correct, as well as reasonable. (d) Did the Board fail to apply an appropriate evidentiary burden of proof on the Respondents in respect of fair dealing? 50. The Applicant claims that the Respondents bear the “persuasive burden of establishing” that much of their K-12 copying behaviour is fair, The Applicant further argues that this principle has been “determined” by the Supreme Court of ‘Canada in CCH and Alberta, Consequently, ifthe Board is uncertain whether a Particular copying event is fair, “it must find that the copying was not fair”.*! In the view of the Applicant, the Board “ought not to have excused™ the Respondents” failure to discharge their evidentiary burden. 1) The Copvright Board is an Administrative Tribunal, Not a Court 51. ‘The Board is an administrative tribunal, and not a court of law. The Board is therefore not bound to comply with the normal rules of evidence, including those relating to the imposition of a strict burden of proof. This is consistent with the mandates of most administrative tribunals that serve the public interest, rather than adjudicate disputes between adversarial parties. According to the common law, the » Board Decision at para. 220, Respondents’ Record, Vol. 1, Tab A, page 66. ‘© Access MFL at para. 67, Applicant’s Record, Vol. 7, Tab 11, pages 2148-49, “" Access MFL at para. 67, Applicant's Record, Vol. 7, Tab 11, pages 2148-49, “ Access MFL at para. 68, Applicant’s Record, Vol. 7, Tab 11, page 2149, 14 normal rules of evidence do not apply to administrative tribunels unless explicitly stated in the mandating legislation, As there is no such explicit statement in the Copyright Act, the normal rules of evidence do not apply to proceedings before the Copyright Board. 52, In Alberta Workers’ Compensation Board) v. Appeals Commission, (Alberta (WCB)")®, the Alberta Court of Appeal noted that: ‘This general rule [that the rules of evidence do not apply to ‘administrative tribunals] applies even in the absence of a specific legislative direction to that effect. While many statutes stipulate that a articular tribunal is not constrained by the rules of evidence applicable to courts of civil and criminal jurisdiction, “these various Provisions do not however alter the common law; rather they reflect the common law position: in general, the normal rules of evidence do ‘not apply to administrative tribunals and agencies”. 53. This principle was subsequently confirmed by this Honourable Court in ‘Canadian Recording Industry Association v, Society of Composers, Authors and Music Publishers of Canada (“CRIA")*, in which the Court held that the Copyright ‘Board was an administrative tribunal to which the ordinary rules of evidence did not apply: Jn any event, the Board is not a court; itis an administrative tribunal. ‘While many tribunals have specific exemptions from the obligation to ‘comply with the rules of evidence, there is authority that even in the absence of such a provision, they are not bound, for example, to comply with the rule against hearsay evidence. * © Alberta (WCB), 2005 ABCA 276. “Alberta (WCB) at para. 64, citing David J Mullan in Administrative Law (2001) at ages 279-80. * Canadian Recording Industry Association v. Society of Composers, Authors and Music Publishers of Canada, 2010 FCA 322 at paras. 13-31. “© CRIA at para. 20. 1056 is ‘54. The Board's statutory mandate under the Copyright Act is an economic tariff: setting function relating to multiple copyright uses. It is not a legal inquiry into whether a specific act of copyright infringement has occurred in relation to an identifiable copyright-protected work. Thus, the Board hes confirmed, in several of its decisions and over many years, that the burden of proof that may apply in civil Proceedings before the courts does not apply before it. *” 55. Asaresult, the Respondents do not, as is claimed by the Applicant, bear an evidentiary burden of proof that must be met in order to establish that their copying behaviour constitutes fair dealing. 4H) Burden of Proof and the Supreme Court Decisions Cited by the Applicant 56. As noted in paragraph 50 above, the Applicant asserts that the Supreme Court of Canada has “determined” in its CCH and Alberta decisions that the party asserting its copying behaviour is fair bears the evidentiary burden of establishing this fact. In fact, neither of these Supreme Court decisions address the question of burden of proof in any length or detail. 57. The paragraph the Applicant cites from CCH simply reads: Procedurally, a defendant is required to prove that his or her dealing. with a work has been fair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing ‘exception will not be an infringement of copyright. ” 58. With respect, the Applicant appears to have read between the lines quite liberally inorder to conclude from this short passage in the Supreme Court's CCH “" See, e.g., Board Decision, SOCAN -Tariff'2.A.1 (1990-1993), December 6, 1993, age 17; Board Decision, SOCAN - Tariff 3.B (1995), September 20, 1996, page 7; Board Decision, SOCAN - Tariff 9 (1998-2001), September 15, 2000, page 9; Board Decision, Commercial Radio, April 21, 2016 at para. 133; and Board Decision, Governments at para, 215. “* Access MFL at para. 67, Applicant's Record, Vol. 7, Tab 11, pages 2148-49, ° CCH at para. 48. 16 decision that the Court has “determined” in the context ofa tariff proceeding before the Board that there exists any specific burden of proof on the parties. In light of the fact that the burdens of proof in civil copyright infringement proceedings are neither applicable nor appropriate to the Board’s tariff hearings, this partial sentence taken from CCH cannot possibly be interpreted as the Applicant suggests ‘59. Similarly, in paragraph 70 of its Memorandum of Fact and Law, the Applicant has overstated the significance of the Supreme Court's Alberta decision on the question of burden of proof by suggesting that the “principal reason for the Court overturning the Board’s assessment of the sixth fair dealing factor (market impact) was its finding that Access Copyright failed to meet its evidential burden”. (60. What the paragraph cited by the Applicant from the Alberta decision actually says is that when there is no evidence tendered at all, the sixth fair dealing factor cannot be demonstrated: “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 saies”.** 61. Rather than a discussion of the question of the burden of proof'in the Board's tariff proceedings, this citation from the Alberta decision addresses the issue of the ‘consequences arising from a complete absence of evidence in support of one of the CCH fair dealing factors. This is similar to the situation in this Honourable Court’s decision in CRIA in which the Court distinguished between the Board's ability, as an administrative tribunal, to deviate from the strict rules of evidence and its ability to reach its decisions on the basis of no evidence whatsoever. As noted by the Court in CRIA, “{e]ven if the Board was not bound to follow the rules of evidence, it was nonetheless required to act on the basis of some evidence”. 62. There have been three separate Supreme Court decisions since 2004 assessing fair dealing in different contexts: in a law library (CCH), in a classroom. ® Access MEL at para. 70, Applicant's Record, Vol. 7, Tab 11, page 2149. * Alberta at para. 35. * CRIA at para. 22. 17 (Alberta), and in respect of the online sale of music (SOCAN v. Bell Canada ("Bell)*), None of these decisions conducted a fair dealing assessment using the ‘burden of proof approsch that the Applicant asserts to be an error of law on the part of the Board. As such, these decisions cannot support the Applicant's argument, 63. ‘The Applicant’s proposition is also inconsistent with the Supreme Court of Canada’s decisions in CCH and Alberta that fait deating is a “matter of impression.” In the decision under review, the Board’s impression was formed after reviewing a large number of copying transactions in considerable detail. Fettering the Board’s ability to form its own impression would not be reasonable. 64. The Respondents consequently submit that, when faimess and unfaimess are ‘equally balanced, or when there is any uncertainty between them, the Copyright Board should not be required to find the dealing unfsir by having to apply an inflexible rule relating to burden of proof. Instead, the Board’s assessment should be ‘made based on its overall impression of the dealings involved. This is precisely what the Board did in this case. 65. Evenif the Court were to conclude that there is some manner of burden. imposed on the Respondents with respect to the question of fairness, the ‘Respondents submit that this burden does not translate into a separate burden — evidentiary or otherwise — with respect to any of the fair dealing factors considered by the Board. The fair dealing factors are merely different lenses through which a decision-maker evaluates the totality of the evidence, and each trier of fact may select different factors to examine in any particular case. 66. The Respondents accordingly submit that attempting to impose an evidentiary burden with respect to the fair dealing factors would alter their nature from mere guiding factors to required elements and tum a “useful analytical framework” in forming an impression into a strict six-part test. This result would be entirely contrary to the Supreme Court’s guidance as to how fair dealing is to be * SOCAN v. Bell Canada, [2012] SCR 326. CCH at para. 53. 18 1059 determined, lil) Burden of Proof and the Fair Dealing Guidelines 67. In relation to the burden of proof supposedly imposed on the Respondents, the Applicant claims that the Board “unjustifiably altered the case that Access ‘Copyright was expected to meet” by choosing to disregard evidence that was presented by the Respondents pertaining to the fair dealing practices described in their Fair Dealing Guidelines.” The Board held that the Respondents’ arguments with respect to these Guidelines were “irrelevant to the evaluation of faimess of the copies made” in the Volume Study and consequently chose not to consider them further in its decision-making process.** In the Applicant’s view, this decision by the Board was procedurally unfair and excused the Respondents from their failure to discharge their burden of proof with respect to fair dealing, 68. The Applicant's argument is entirely premised on its mistaken assumption ‘that there are specific evidentiary burdens that the Applicant and the Respondents each bear in Board proceedings. As noted above, this is not the case, ‘There is no particular burden that either the Applicant or the Respondents are, in the words of the Applicant, “expected to meet”. Moreover, the Board’s decision to disregard the Respondents’ evidence was well within the Board’s statutory power in considering the evidence before it. To disregard the Respondents’ arguments relating to the Guidelines can hardly be said to be procedurally unfair to either party. 69. In summary, the Respondents submit that, as an administrative tribunal, the Copyright Board is not required to impose evidentiary burdens of proof on the parties before it. Furthermore, the two Supreme Court decisions referred to by the Applicant in support of its claim do not address this issue or “determine” what the Applicant suggests. (©) Did the Board err in choosing to disregard the Fair Dealing Guidelines? 70. The Applicant claims that the Board’s decision is unreasonable because it % Access MFL at para. 89, Applicant’s Record, Vol. 7, Tab 11, page 2153. * Board Decision at para. 235, Respondents’ Record, Vol. 1, Tab A, page 70. 19 relied on the Volume Study, and not the Fair Dealing Guidelines, to assess whether ‘copying by teachers in K-12 schools is fair.'” The Respondents submit that the Board properly applied the law established by the Supreme Court of Canada in CCH that fair dealing can be established in either one of two ways: (1) “by showing that ‘their own practices and policies fare] research-based and fair”, or (2) “by showing that all individual dealings with the materials were in fact research-based and fair” * 1) The Board’s Decision to Rely on the Volume Study ‘71. The Applicants and the Respondents presented evidence to the Board with ‘espect to the two ways of establishing “faimess”. Both parties Jed evidence on the Fair Dealing Guidelines as a policy and practice in elementary and secondary schools in Canada, as well as on the data derived from the Volume Study. 72. The Board chose to rely on the Volume Study, and not on the Fair Dealing Guidelines, for three reasons. 73. First, the Volume Study served as much better evidence of copying behavior in K-12 schools.” Second, the Board found it difficult to reconcile any assessment ‘of “faimess” based on both the Fair Dealing Guidelines and the Volume Study, because “if the Guidelines have modified the copying behavior of the Objectors, then the Volume Study is no longer representative. Ifthe Volume Study is representative, then the introduction of the Guidelines has not had a. Pronounced effect on the copying behavior of the Objectors." 74. Third, the Board found that much of the evidence presented by the Respondents on the Fair Dealing Guidelines was too limited to be relied on to assess fairness. Even though the Guidelines may have been distributed within K-12 schools and school boards, there was not enough evidence relating to the actual level of ‘compliance with them. The Board consequently held that it was unable to conclude *” Access MPL at paras, 88-89, Applicant's Record, Vol. 7, Tab 11, page 2153, ** CCH at para. 63. * Board Decision at para, 235, Respondents’ Record, Vol. 1, Tab A, page 70. “ Board Decision at para, 233, Respondents’ Record, Vol. 1, Tab. ‘A, page 70. 20 that there was a generally uniform practice within K-12 schools and school boards that could “be evaluated for fairness in the manner contemplated in CCH”.*! 75. For these three reasons, the Board found that the Volume Study served as ‘much better evidence of the copying behavior of K-12 schools than did the Fair Dealing Guidelines. The Respondents submit that the Board, in coming to this conclusion, carefully considered the large volume of evidence presented by both parties with respect to the two ways in which copying behavior in K-12 schools ‘could be considered “fair.” In its decision, the Board carefully and fully explained the reasons why it chose to rely on the Votume Study rather than the Guidelines for the purposes of conducting its fair dealing analysis. As such, the Applicant is quite incorrect to assert that the Board “disregarded” the evidence relating to copying behaviour in K-12 schools that was permitted under the Guidelines. 6. At the Board’s hearing, the Applicant argued that the Board should not rely ‘on the Fair Dealing Guidelines to show that teacher copying was “fait” because there was no evidence of monitoring or enforcement of the Guidelines." The Board. agreed with the Applicant, finding that there was insufficient evidence of the extent of the compliance with the Guidelines to rely on them to assess fairness. 77. The Applicant cannot have it both ways. It cannot have argued before the ‘Board that the Guidelines should not be relied on to establish faimess because there was no evidence that the Guidelines were complied with, and now argue before this Honourable Court that the Board improperly chose to rely on the Volume Study, and not the Guidelines, to assess whether copying by K-12 teachers is fair, il) The Applicant’s Criticism of the Guidelines 78, In its Memorandum of Fact and Law, the Applicant challenges the Fair “' Board Decision at para. 234, Respondents’ Record, Vol. 1, Tab A, page 70. © Access MFL at para, 88, Applicant's Record, Vol. 7, Tab 11, page 2153. © Transcript, Access Copyright - Elementary and Secondary School Tariff, 2010- 2012, 2013-2015, April 29, 2014, Volume I (Public), pages 15-17, “Board Decision at para. 234, Respondents’ Record, Vol. 1, Tab A, page 70. 1i2 2 Dealing Guidelines on several fronts. The Applicant then goes on to claim that the Board’s decision disregarded its “substantial” and “incontrovertible evidence” on these matters, and that the Board “declined to assess” whether the copying ‘behaviour permitted by the Guidelines constituted fair dealing further to the Copyright Act. The Board’s decision is clear, in fact, that the Board did not disregard ‘the Applicant's evidence. It decided, however, to rely instead on the Volume Study to assess the question of fairness. It was therefore not necessary for the Board to make any findings with respect to the Fair Dealing Guidelines themselves. iii) The Representativeness of the Volume Study 79. Early in the Copyright Board’s proceeding to certify the First and Second ‘Tariffs, both the Applicant and the Respondents agreed not to conduct a second copying study. Instead, they would submit to the Board estimates based on the data from the Volume Study.” 80. The estimates of the Applicant, the Respondents, and the Board, although based on the same data, differ for two reasons. First, the parties did not agree to ‘conduct their analyses the same way. Second, the law on fair dealing changed in 2012 as a result of the Supreme Court of Canada’s Alberta decision. 81. Alberta established that the copying of short excerpts by teachers for a class of students was fair dealing and was therefore not compensable. The Board ‘consequently relied on the Alberta decision to find that the vast majority of copying by teachers in K-12 schools constituted fair dealing. What was not considered fair dealing in the Board's previous K-12 tariff decision in 2009 did constitute fair dealing in its 2016 decision because the law had changed in 2012 as « consequence ‘of the Supreme Court's decision in Alberta, and amendments to the Copyright Act that added, inter alia, “education” as a fair dealing purpose. © Access MFL at paras. 84-87, Applicant’s Record, Vol. 7, Tab 11, pages 2152-53, Access MEL at paras, 87-88, Applicant's Record, Vol. 7, Tab 11, pages 2152-53. © Transcript, Access Copyright - Elementary and Secondary School Tariff, 2010- 2012, 2013-2015, April 29, 2014, Volume 1 (Public), Pages 23-24. 1013 22 @ Was the Board’s application of the fair dealing factors reasonable and in accordance with the case law? 82. The Applicant claims that the Board’s reasoning was “ncither justified nor intelligible" regarding its assessment of four of the six fair dealing factors set out in the Supreme Court’s CCH decision: amount of the dealing; alternatives to the dealing; character of the dealing; and effect ofthe dealing. i) Amount of the Dealing 83, The Respondents agree that CCH states that an assessment of whether the ‘amount of the dealing is fair also includes considering the “importance of the work.” The Respondents do not agree with the Applicant that these words impose ‘an obligation on the Board to consider the qualitative importance of the amount copied in circumstances in which there was no qualitative evidence to consider. 84. Indeed, the Supreme Court did not itself consider the qualitative importance of the work in its assessment of the amount of the dealing in any of CCH, Alberta and Bell, instead conducting quantitative analyses. 85. The Board correctly noted in its 2015 Governments decision that it was “not readily apparent ... to what extent the qualitative aspect of the amount of the dealing is even to be considered” as part of any fair dealing assessment, It attributed the ‘Supreme Court’s entirely quantitative analysis to the possibility that, in both A/berta and Bell, “those cases considered numerous dealings with a multitude of works and there was no evidence of the qualitative aspects of the portions that were dealt with in those matters.” In other words, in the absence of any qualitative evidence relating to the “importance” of a particular work, the Supreme Court had no alternative but to assess the amount of the dealing on a strictly quantitative basis, ‘The Board cannot have erred in law by doing the same thing. “ Access MFL at para. 93, Applicant's Record, Vol. 7, Tab 11, page 2154 Access MFL at para. 94, quoting CCH at para. 56, Applicant's Record, Vol. 7, Tab 11, page 2154. ™ Board Decision, Governments at para, 320. "' Board Decision, Governments at para, 321. 23 86. Finally, the Applicant states that the Board “ignored” evidence presented by ‘the Applicant relating to the issue of “compound copying”.”” 87. This is simply not the case.” Following the oral phase of the hearing, and before issuing its final decision, the Board posed a series of questions on compound copying to the parties. These questions were designed to measure the theoretical ‘maximum of compound copying.” In response, the Applicant itself submitted that “since the Volume Study was neither designed nor is it capable of measuring or ‘quantifying the extent of compound copying, itis not possible to empirically assess the incidence or volume of such compound copying.” 88. Such being the case, the Board did not, as is claimed by the Applicant, ignore the Applicant’s evidence on compound copying, Instead, the Board clearly ‘considered this evidence, consulted the parties following the hearing in relation to this evidence, discussed this evidence in its decision, and fully explained the reasons why it could not account for compound copying. After doing all of this, the Board ‘actually agreed with the Applicant that there were “problems with measuring compound copying in the context of the Volume Study””* and went on to describe the nature of these problems in its decision.” 1) Alternatives to the Dealing 89. The Applicant claims that the Board “summarily disregarded””* all of its ‘evidence on the alteratives to the dealing factor. As the Board’s decision indicates, the Board did consider this evidence and came to its own concusions as to its persuasive value. The Board's reasoning with respect to the alternatives to the ” Access MFL at para, 98, Applicant’s Record, Vol. 7, Tab 11, page 2155. ” Board Decision at paras, 188-202, Respondents’ Record, Vol. 1, Tab A, pages 55- 60. ™ Board Decision at para. 193, Respondents’ Record, Vol. 1, Tab A, page 57. ® Board Decision at para. 195, Respondents’ Record, Vol. 1, Tab A, page 58. ” Board Decision at para. 197, Respondents’ Record, Vol. 1, Tab A, page 58. Board Decision at paras. 198-200, Respondents’ Record, Vol. 1, Tab A, page 58- 59. ™ Access MFL at para. 101, Applicant’s Record, Vol. 7, Tab 11, page 2155. 24 dealing factor was both justified and intelligible. The Board held, as a conclusion of foct, that the Applicant's evidence had not established reasonable altemstives to K- 12 teachers making copies of protected works. In so holding, the Board wrote: ‘The evidence in this matter does not show any realistic alternatives being available at the time the copies were made (as this is what is being evaluated). The little evidence that was adduced shows only that ‘some alternatives, for some resources, have become available more recently.” iif) Character of the Dealing 90. The Applicant objects to the Board's treatment of its evidence on the ‘character of the dealing factor, claiming that the Board disregarded evidence of the aggregate volume of copying," 91. In this case, the Board found that the appropriate way to assess the character of the dealing was to consider the size of a particular copying transaction, or set of copying transactions, involving the same copyright-protected work, as opposed to the aggregate volume of all copies made by all teachers aoross Canada, 92. The Board examined the evidence and made a number of factual findings in ‘elation to the character of the dealing factor including that a) “copies made for distribution within [a K-12] school ... [do] not tend to make the dealing fair or unfair” and b) “the ‘character of the dealing” factor looks at the size of a particular ‘transaction or a set of transactions involving the same work.”*? The Board did not Aisregard the Applicant's evidence; it simply did not agree with the Applicant. Board Decision at para. 305, Respondents’ Record, Vol. 1, Tab A, page 90. © Access MFL at paras. 105-106, Applicant's Record, Vol. 7, Tab 11, page 2156, * Board Decision at para. 272, Respondents’ Record, Vol. 1, Tab A, page 81. * Board Decision at paras. 269-270, Respondents’ Record, Vol. 1, Tab A, page 80. oS 25 4) Effect of the Dealing 93, ‘The Applicant claims with respect to the effect of the dealing factor that the ‘Supreme Court of Canada, in its CCH decision, “did not restrict its ... analysis to the particular works copied but included ... whether the markets for those works had been ... negatively affected”."? The Respondents strongly disagree with the Applicant’s interpretation of the Supreme Court’s findings in CCH. This interpretation of CCH being advanced by the Applicant was, in fact, later expressly ‘ejected by the Supreme Court in its Alberta decision." 94, The Respondents submit that the Board was correct to consider whether the effect of the teachers’ copying adversely affects the original work. As the Board noted in its decision, “[iJn considering the effect of the dealing, we consider the cffect that a dealing has on the work that has been dealt with. A dealing does not ‘become less fair simply because it may have a negative effect on another work”. 95. Furthermore, the Board did not disregard the Applicant's evidence on market impacts as the Applicant claims."* The Board did not reference all of the Applicant's evidence on market impacts in its decision, as it could not possibly have done so. ‘Nonetheless, the Board devoted eight pages of its decision to the Applicant’s market impacts evidence, and addressed the effect ofthe dealing factor on sales, licence royalties, and the quality of future works."” 96. The Board's detailed consideration of the evidence on the effect of the dealing factor was more than sufficient given that the Supreme Court's decision in Alberta clearly established that the Applicant was required to adduce some evidence that any decline in book sales was as a result of the making of copies in K-12 ‘schools. As no such evidence was tendered, the Board correctly concluded that, © Access MFL at para. 108, Applicant's Record, Vol. 7, Tab 11, page 2156. Alberta at para. 33. * Board Decision at para. 317, Respondents’ Record, Vol, 1, Tab A, page 93. * Access MFL at paras. 109-113, Applicant’s Record, Vol. 7, Tab U1, page 2157. ” Board Decision at paras. 315-337, Respondents’ Record, Vol. 1, Tab A, pages 92- 98, 1916 1017 26 “{wlith respect to [the] effect of the dealing, ... 80 per cent of the exposures have a neutral effect and 20 per cent of the exposures tend to unfaimess."** (@) Was the Applicant denied procedural fairness by the Board’s decision to design its own tariff methodology and not submit it to the parties for comment? 97. The Applicant claims that the Board “breached its obligation of procedural fairness owed to Access Copyright” by devising its own methodology in order to ‘approximate the amount of fair dealing and for not soliciting comments from the Applicant on this methodology."” The Applicant submits that the Board was “required” by the rules of procedural faimess to give it a full opportunity to address this issue through the participation of its expert witness and the fling of comments in relation to the Board’s methodology. 98, In support ofits arguments, the Applicant refers the Court to the Supreme ‘Court of Canada decision in Baker v. Canada (Minister: ‘of Citizenship and Immigration (“Baker”) and the Federal Court of Appeal decision in Re:Sound. In the Respondents’ respectful submission, neither of these two decisions required the Board, as a matter of procedural faimess, to submit its tariff methodology to the parties for comment prior to the issuance of its decision. 99. The Baker and Re: Sound decisions referred to by the Applicant are clearly

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