SCC Provides Further Guidance on “Fair Dealing” Exception to Copyright Infringement
Aug 2021 Charity & NFP Law Update
Published on August 26, 2021

By Sepal Bonni

   
 

The Supreme Court of Canada (“SCC”) released its decision in York University v Canadian Copyright Licensing Agency (Access Copyright) on July 30, 2021. Access Copyright (“Access”) is a non-profit organization and collective society under section 2 of the Copyright Act (the “Act”) that represents a collection of copyright owners, including writers, artists, and publishers. Access licenses and administers reproduction rights throughout Canada on behalf of copyright owners. Litigation commenced between Access and York University (“York”) when York opted out of an interim tariff that it had initially paid to Access. Instead, York continued to operate without a license from Access and implemented its own “fair dealing” guidelines to help the university comply with section 29 of the Act, which states that “fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright.”

Access sued York in Federal Court seeking to compel York to pay the tariff, and York counterclaimed seeking a Declaration that any copies made constitute a “fair dealing”. At the Federal Court, the court held that the interim tariff was enforceable against York and dismissed York’s counterclaim for a fair-dealing Declaration. On appeal, the FCA set aside the lower court’s decision on the interim tariff enforcement and held that the Copyright Board’s approved tariffs were not mandatory for users who do not opt for a license. The FCA also dismissed York’s appeal of the dismissal of York’s counterclaim for a fair-dealing Declaration. 

Access appealed the FCA’s decision regarding the interim tariff to the SCC and York appealed the dismissal of the fair-dealing Declaration. Therefore, the SCC considered two main issues: (1) if York is compelled to be a licensee of Access and therefore pay the tariff that was set; and (2) whether to grant a Declaration that copies made by York constitute “fair dealing” in accordance with the Act.

The SCC dismissed Access’ claim against York and found that the interim tariff was not enforceable against York. Access cannot force York to pay fees in accordance with a license that York did not agree to. The SCC also dismissed York’s counterclaim for a fair-dealing Declaration. The SCC held that a Declaration was not warranted, but this was because the case did not meet the threshold requirements for when declaratory relief may be granted.

Given that this dispute was not between the copyright owners and York, the SCC did not see any reason to make any finding regarding whether York’s dealings constitute “fair dealings” under the Act. However, the SCC did provide some guidance regarding the two-step framework to assess fair dealing which requires a party prove that (1) the dealing was for an allowable purpose enumerated in the Act, and (2) that it was fair. The second step of the test, fairness, is a question of fact, with six non-exhaustive factors which provide a framework for assessment. The SCC held that the dealings under York’s fair use guidelines were allowable for the purpose of education. However, to determine if the dealing was fair, the Federal Court and FCA had approached the analysis by considering the six factors only from the perspective of York. The SCC concluded this was an error and that these courts focused on the wrong end-user.

In determining if a university’s use of copyright material is fair, the question is whether the university’s actions “actualize students’ rights to receive course material for educational purposes in a fair manner, consistent with the underlying balance between users’ rights and creators’ rights in the Act”. It is important to note that this same analysis is equally applicable when considering whether any particular dealing is “fair”. That is, the perspective of the end-user that actually uses the copied materials as well as any intermediaries facilitating that ultimate use must be taken into account. 

While this decision provides some guidance for charities and not-for-profits that rely on the fair dealing exception to copyright infringement, given that the decision does not provide a definitive assertion on what constitutes a fair dealing, charities and not-for-profits must remain prudent when using copyright-protected content.

   
 

Read the August 2021 Charity & NFP Law Update