Hugh L. Stephens
It seems as if it was only a few weeks ago that I was writing a similar summary for 2020, the “annus horribilis” when COVID first hit us, but in fact it was 51 weeks ago yet many of the same pandemic and copyright-related issues that I wrote about last year are still with us, albeit in somewhat modified form. This time last year, creative industries were just starting to come out of a series of lockdowns that decimated many genres, especially those involving live performances. Others were making the transition to “virtual” performances and delivering content online. The early rollout of vaccinations gave hope that 2021 would be a better year, one where we turned the corner on the pandemic. That seemed to be generally the case until the Omicron variant reared its head in late November and now, at the time of writing, we seem to be going backwards again.
There is no doubt that 2021 was a challenging year for creators, although there were some bright spots. At the end of December 2020, in the United States the CASE Act became law. This legislation finally provides a simple means for individual rights-holders to enforce their rights in the US without necessarily resorting to litigation. A three person tribunal, the Copyright Claims Board (CCB), will be established within the US Copyright Office to deal with small copyright claims, potentially avoiding costly and lengthy litigation, assuming both parties agree. That’s the good news. The not-so-good news is that establishment of the CCB has been delayed beyond the expected date of implementation, December of this year, to 2022, in order to ensure that all runs smoothly. Still, a few months delay for this alternative dispute resolution forum for small copyright claims will be worth the wait.
One of the big stories in 2021, echoing developments a year earlier, was the issue of payment to news providers for use of their content (snippets, headlines and small excerpts) by online news aggregators and social media platforms. While the issue is still unfolding in several countries, there were significant developments on this file in 2021 in both France and Australia, despite both Google and Facebook fighting long and hard against any obligation to license content from news providers. In Australia in particular, this pushback took the form of attempts to mobilize Australian public support against the Australian government, forcing it to back away from legislation that would give the competition regulator, the Australian Competition and Consumer Commission (ACCC), power to enforce new regulations under the News Media Bargaining Code. This code requires Google and Facebook (and only them because of their market dominance) to license Australian news content that they use in their search or social media offerings. While the threat of legislation finally got Google to start negotiations with some Australian media providers, its dominant position made it difficult for news providers to negotiate reasonable terms. The Australian legislation, therefore, threatened to impose “final offer” arbitration.
Google went ballistic, but its pressure campaign failed spectacularly. Likewise, its attempt to enlist the support of the US government flopped when Microsoft stepped in and stated it would be happy to comply with Australia’s terms. In the end, determined government action resulted in an outcome that both the Australian government, Australian media and apparently Google can live with. Facebook tried its own pressure tactics, blocking all Australian news on its newsfeed in Australia. The result, which I detailed in my blog posting (“Facebook in Australia: READY, FIRE, AIM”), was a classic climb-down. Facebook retreated, restored newsfeeds, and entered into talks with the Australian government. Miraculously, they were also suddenly able to strike content deals with Australian media.
Likewise in France, strong government action to enforce the new neighbouring right for press publishers established by Article 15 of the EU Copyright Directive, has achieved what earlier proved impossible in both Spain and Germany. In those countries, Google either shut down or threatened to shut down Google News and kick off the platform any news providers who objected to Google’s unlicensed use of their content. In France, the Competition Bureau stepped in, fining Google €500 million for failing to bargain with news providers “in good faith”. With this “encouragement”, Google has managed to reach content deals with many French publishers, the most recent being with press agency Agence France Press (AFP) just last month.
These content deals provide an important demonstration effect for other countries in their dealings with the dominant platforms. Canada has announced that it intends to bring in legislation to deal with the issue. The mandate letter for the new Minister of Canadian Heritage, dated December 16, instructs him to,
“Swiftly introduce legislation to require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets to level the playing field between global platforms and Canadian outlets. This legislation should be modelled on the Australian approach and introduced in early 2022.”
This promise of action is at least partly in response to an active campaign launched by Canada’s news media advocacy organization, News Media Canada (NMC) this past June. NMC published an “Open Letter” to Prime Minister Justin Trudeau in many newspapers across the country urging action against the “predatory monopoly practices” of Google and Facebook.
In the US, the Copyright Office has launched a study to determine whether additional copyright protections (or other measures) are needed to protect news publishers in dealing with the news aggregation issue. Earlier this month, it held a public roundtable to further air the issues. There is also legislation currently before Congress, the Journalism Competition and Preservation Act, that would provide a limited anti-trust exemption to allow US media companies to bargain collectively with the platforms. Some action seems inevitable, but whether it will occur in 2022 remains to be seen.
Access Copyright vs York University
One copyright issue that came to a head in in Canada in 2021 was the ongoing and seemingly never-ending legal dispute between the author/publisher copyright collective, Access Copyright, and York University (Toronto), with York standing in as a proxy for post-secondary institutions outside Quebec. This started out a number of years ago when York declined to renew its licence with Access Copyright for reproducing (copying into course-packs) educational materials, arguing that its use constituted fair dealing. The main legal issue was whether the “interim tariff” established by the Copyright Board of Canada for use of materials in Access Copyright’s repertoire applied to York, in cases where York’s use was not a fair dealing. In 2017, the Federal Court ruled ruled that York was required to pay the interim tariff (i.e. regulated license fee), and dismissed York’s claim of fair dealing. York appealed and last year, the 2017 decision was overturned by the Federal Court of Appeal (FCA). The FCA found that the tariff certified by the Copyright Board was not mandatory insofar as content users like York were concerned. Having found that the tariff was not mandatory, it did not rule on the fair dealing question since York’s fair dealing defence against payment of the tariff was no longer relevant.
Both parties appealed to the Supreme Court. The bombshell dropped on July 30, 2021. The Supreme Court of Canada (SCC) upheld the Appeal Court’s decision that the “mandatory” tariffs set by the Copyright Board of Canada are optional with respect to users of content covered by the tariffs. While not ruling on whether York’s unlicensed use was fair (since with the dismissal of the mandatory tariff question, there was no longer a legal dispute between Access Copyright and York), Justice Abella nonetheless launched into an extensive discourse as to whether the Federal Court in its initial finding of unfairness had taken into account the user’s rights of individual students. Despite the unequivocal finding against York in 2017 that their Guidelines had materially harmed the Canadian publishing market, the interpretive musings by the SCC add significant uncertainty to the issue of what is a fair dealing when post-secondary institutions engage in widespread unlicensed copying of educational materials for instructional purposes.
More damaging that this, however, is the dismissal of Access Copyright’s appeal on mandatory tariffs. The SCC decision upends the basis for collective licensing in the publishing field in Canada, something that had existed for almost 30 years on the premise that the licence fees established by the Copyright Board applied to all users of a repertoire covered by the tariff. Canadian publishers are already facing dire financial challenges owing to the proliferation of uncompensated copying enabled by the addition of “education” as a fair dealing exception in the Copyright Act revisions of 2012. Now the fundamentals of the collective licensing system have been kicked out from under them. The only solution would appear to be an amendment to the Copyright Act, given that Parliament clearly intended to create a collective licensing scheme when it amended and updated copyright legislation in the late 1980s. The fact that it did so in such a way that was open to legal challenge (the FCA and the SCC reached their decision on the non-binding nature of “mandatory” tariffs by examining their origins in the 1930s) suggests that clarity of intent is needed. Review of the Copyright Act is overdue so perhaps this loophole will be closed in future amendments
Copyright Term Extension in Canada
Other amendments to the Act will be required to give effect to Canada’s commitment to extend its term of copyright protection by an additional twenty years, as per Article 20.62 of the USMCA/CUSMA. In February of this year the government launched a public consultation over how the obligation is to be implemented, which must be in effect by December 31, 2022. The consultation focused primarily on how to handle orphan and out-of-commerce works, although copyright opponents have been trying to institute a copyright registration process (an unnecessary bureaucratic obstacle and one that potentially conflicts with Canada’s Berne Convention obligations) as a condition of accessing the extra twenty years of protection. I discussed the consultation process here.
Very recently a new wrinkle has appeared regarding term extension in Canada. You would not think that copyright and electric vehicles have much in common, but when it comes to international trade, everything is linked. The Canadian government is very concerned about a proposal by the Biden Administration to offer subsidies of up to $12,500 per unit to American consumers to purchase electric vehicles. Canada is not against electric vehicles. The problem is that, as currently written in Biden’s gigantic “Build Back Better” bill, the subsidies apply only if the vehicle is manufactured in the US. Canada’s position is that this violates the provisions of the USMCA that established a North American market for automobiles, is an illegal subsidy that will impose a de facto 30 percent tariff on Canadian-made vehicles and will destroy decades of automotive industry integration between the two countries. In a worst-case scenario, if these large subsidies go into effect and apply only to US made vehicles, it could ultimately mean the end of automotive manufacturing in Canada. In an attempt to get the attention of US lawmakers before the Build Back Better bill is passed, Canada has threatened retaliation in areas that could impact US jobs, including suspending some commitments made under the USMCA. One of these is copyright term extension.
This, along with other areas of retaliation, might be sufficient to get the attention of enough US legislators to amend the legislation in this one area, especially if Canada agrees to provide a similar subsidy to Canadians for the purchase of North American manufactured electric vehicles. At the moment it is unclear what will happen. The Biden Administration looks as if it will not be able to pass the bill because of the opposition of Democratic Senator Joe Manchin from West Virginia. Manchin is an unlikely ally for Canada, but his opposition may buy enough time to be able to resolve the electric vehicle subsidy issue, thus allowing the important reform of bringing Canadian and US terms of copyright protection into alignment to proceed.
Canadian Election Brings Delays
There were other issues on the copyright front in Canada that did not get dealt with owing to the pointless election called by Justin Trudeau’s Liberals in August. When the final results were tabulated on September 20, the Liberal minority government was in almost exactly the same place as it had been in the previous Parliament. The impact on copyright and other legislation was the cancellation of all legislation in the pipeline at the time of the election call. It all needs to be reintroduced in the new Parliament, bringing in new ministers, new priorities, and inevitable delays. I will take a closer look at what is in store in 2022 in a subsequent blog posting.
There were many other copyright issues that I wrote about this year, and I can’t possibly summarize them all. Here are a couple. The Philippines joined the broad international consensus that blocking of offshore pirate websites is an effective way to combat piracy, and the appeal against Canada’s first site-blocking order was dismissed. Singapore updated its copyright legislation, bringing in some improvements. The changes took effect in November.
This article was first published on Hugh Stephens Blog