ARIEL KATZ ASSOCIATE PROFESSOR INNOVATION CHAIR, ELECTRONIC COMMERCE

November 12, 2013 Mr. Gilles McDougall Secretary General The Copyright Board of Canada 56 Sparks Street, Suite 800 Ottawa, Ontario K1A 0C9 Dear Mr. McDougall,

- BY EMAIL -

Re: Access Copyright Post-Secondary Tariff 2011-2013: Request for Reference to the Federal Court of Appeal In her letter from yesterday on behalf of Access Copyright (AC), ACs counsel took issue with my statement reserving the right to make further submissions regarding a need for an adjournment if the Board accepts ACs suggested timelines. I would like to emphasize that ACs suggested timelines, as set forth in its Counsels suggestions by letter of November 7, 2013, clearly contemplated further submissions on the issue of adjournment by me. Even though I thought that there would be no need for further submissions as suggested by AC, my comment simply meant to clarify that I have not waived my right to make those submissions if the Board decides to accept that timeline. I also wish to add that even though ACs submission from yesterday should have been limited to a reply to my and the other parties responses to its suggested timelines, it has actually raised new issues in its submission, to which a quick response would seem appropriate. First, AC has raised a fundamental new point about jurisdiction that is simply wrong. AC asserts that the Board must certify a tariff if a collective society files a proposed tariff (Copyright Act, s. 70.15). The current issue before the Board is not whether it must certify the proposed tariff, but in any event, ACs assertion is clearly ill founded. As the Federal Court of Appeal held in SOCAN v. Bell Canada,1 the Boards mandate is to approve and certify a fair and reasonable tariff while balancing the competing interests of copyright holders, service providers and the public. The Court recognized that even under the s. 67 regime, there may exist circumstances under which it would be unreasonable for the Board to certify a tariff. This may happen, for

2010 FCA 139 (CanLII), http://canlii.ca/t/29z9n

Faculty of Law, 78 Queens Park, Toronto, ON, Canada M5S 2C5 Tel: 416-978-8892 Fax: 416-978-2648 ariel.katz@utoronto.ca www.law.utoronto.ca/faculty/katz

2 example, in the absence of the necessary probative evidence, on mere guesses, speculations and approximations and especially if the tariff were to have a retroactive effect. It should go without saying that the Board should not and cannot certify a tariff when it lacks jurisdiction to so. This was made clear twice by the Federal Court of Appeal with respect to private copying in 20042 and 2008.3 The Board itself made this point with respect to a proposed tariff for a performance or communication right for sound recordings incorporated into the soundtrack of cinematographic works, and was upheld in this instance by the Supreme Court of Canada.4 Therefore, it is clear that whether or not the Board must certify a tariff, it cannot, and indeed must not, certify a tariff that exceeds its jurisdiction, or when certifying it would be unreasonable for a wide range of reasons. Second, since Access Copyright has raised the point, I suggest that it would be unfair and absurd to go ahead with a hearing by the Board while the suggested reference is underway. If it should transpire that the tariff is indeed not mandatory, those who participate in such a hearing would have wasted much effort. Moreover, even if (although it is unclear) AC is suggesting that the hearing proceed while the reference is underway by focusing on other issues, such as rates, the linking right, etc., this is also unrealistic. Those issues and the efforts required to deal with them are inextricably linked to the ultimate issue of whether the tariff can be mandatory. In any event, with respect to my suggestion for at least a three-week adjournment while the reference issue is being considered, another point should be mentioned. A key point in ACs Statement of Case is that its proposed royalties are justified because they are the same rates that were successfully negotiated by UofT, Western, AUCC, and ACCC. It is a matter of public knowledge, however, that UofT has notified AC that it would not be renewing the license under those terms,5 and it is also a matter of public knowledge that negotiations are currently underway and that the parties may or may not reach an agreement to take effect when the current agreement expires at the end of 2013.6 While UofT is aiming for a date by the first week of December, at the latest, for conclusion of negotiations one way or the other, one can foresee, at least in principle, the possibility of a delay. Therefore, in the event that the Board decides not to make the reference to the Federal Court of Appeal and decides to proceed with the hearing, this may still require some further time for the remaining parties to assimilate the results of those negotiations (whether the result in a new agreement or lack thereof), and to incorporate any possibly resulting relevant evidence and any appropriate analysis into their submissions. Finally, it is absurd to suggest that anything turns on the timing of my request for a reference almost two weeks after ACCCs withdrawal. It should be obvious that much thought and research went into my submission of November 6, 2013, and in any event, AC itself says that the
2

Canadian Private Copying Collective v. Canadian Storage Media Alliance, 2004 FCA 424 (CanLII), http://canlii.ca/t/1jgv9 3 Apple Canada Inc. v. Canadian Private Copying Collective, 2008 FCA 9 (CanLII), <http://canlii.ca/t/1vcx1> 4 Re:Sound v. Motion Picture Theatre Associations of Canada, 2012 SCC 38 (CanLII), [2012] 2 SCR 376, http://canlii.ca/t/fs0vc 5 http://www.provost.utoronto.ca/Assets/Provost+Digital+Assets/AccessCopyright.pdf 6 http://www.provost.utoronto.ca/public/pdadc/2013_to_2014/23.htm

3 presence or absence of ACCC and AUCC in this discussion is irrelevant. Moreover, as I explain in my letter from Nov. 6, significant issues of the public interest are at stake, and those should hardly depend on how quickly I wrote my letter.

Respectfully submitted,
Digitally signed by com.apple.idms.appleid.prd.2f4a3 3663435624a4d4547656e484c492 b7836766e413d3d DN: cn=com.apple.idms.appleid.prd.2f 4a33663435624a4d4547656e484c 492b7836766e413d3d Date: 2013.11.12 15:00:34 -05'00'

Ariel Katz

CC:

Randall Hofley Nancy Brooks David Fewer Sean Maguire