A-

Q3 -16

FEDERAL COURT OF APPEAL

he Canadian Copyright Licensing Agency, operating as Access Copyright

Applicant
-andBritish Columbia Ministry of Education and all entities named in Schedule "A" hereto
Respondents

NOTICE OF APPLICATION
TO THE RESPONDENTS:
A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicant. The relief
claimed by the Applicant appears on the following pages.
THIS APPLICATION will be heard by the Court at a time and place to be fixed by the
Judicial Administrator. Unless the Court directs otherwise, the place of hearing will be as
requested by the Applicant. The Applicant requests that this application be heard at Toronto,
Ontario.
IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in
the application or to be served with any documents in the application, you or a solicitor acting for
you must prepare a notice of appearance in Form 305 prescribed by the Federal Courts Rules
and serve it on the Applicant's solicitors WITHIN 10 DAYS of being served with this notice of
application.
Copies of the Federal Courts Rules, information concerning the local offices of the Court
and other necessary information may be obtained on request to the Administrator of this Court at
Ottawa (telephone 613-996-6795) or at any local office.

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IF YOU FAIL TO OPPOSE THIS APPLICATION, JUDGMENT MAY BE GIVEN IN
YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU.

March 21, 2016

Issued by:
(Registry Off
Address of local office:

TO:

180 Queen St. West

Suite 200
Toronto, ON M5V 3L6

British Columbia Ministry of Education and all entities named in Schedule "A"
hereto

AND TO: The Copyright Board of Canada

56 Sparks Street, Suite 800
Ottawa, ON, KIA 0C9

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APPLICATION
A. Overview
1.

This is an application for judicial review of a decision of the Copyright Board of Canada
dated February 19, 2016 which was communicated to the Applicant that day. The decision
was made in respect to two proposed tariffs filed by the Applicant under section 70.13(1) of
the Copyright Act.

2.

The Applicant, Access Copyright, is a not-for-profit collective society under section 2 of

the Act. It carries on the business of the collective administration of copyright for the
benefit of publishers and creators of copyright-protected works ("works") who authorize
Access Copyright to act on their behalf.

3. That authorization arises from three discrete sources: express written authority granted by
publishers and creators ("affiliates"); express written authority granted by reproduction
rights organizations in Quebec and other countries ("RROs"); and the ratification, under the
principles of agency, of Access Copyright's acts by publishers on whose behalf it acted
without an antecedent grant of authority ("non-affiliated rightsholders").
4. Access Copyright operates a licensing scheme in relation to works in respect of which it has
the authority to act (the "repertoire"). Under that scheme, Access Copyright sets out the
classes of uses that it agrees to authorize under the Act and the royalties and terms and
conditions on which it agrees to authorize those classes of use.
5. The genres of works that fall within Access Copyright's repertoire include books,
periodicals, newspapers, sheet music and "consumables" (workbooks published by
educational book publishers that are intended for one-time use by students).
6. Access Copyright collects royalties from licensees who copy works in its repertoire. Access
Copyright distributes those royalties to its affiliates, RROs and non-affiliated rightsholders,
net of its administration fees.

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7. When it is unable to negotiate consensual licence agreements with users, Access Copyright
files statements of proposed tariffs with the Copyright Board under subsection 70.13(1) of
the Act.
a. The Proposed Tariffs
8. On March 31, 2009 and March 30, 2012, the Applicant filed statements proposing the
royalties to be collected by the Applicant for the reproduction in Canada (excluding
Quebec) of works in the Applicant's repertoire by elementary and secondary educational
institutions and persons acting under their authority ("K-12 Schools") for the years 2010 to
2012 (the "2010 Proposed Tariff") and the years 2013 to 2015 (the "2013 Proposed
Tariff").
9. The royalties proposed to be collected for the 2010 Proposed Tariff were $15.00 per fulltime equivalent student ("FTE"). The royalties proposed to be collected for the 2013
Proposed Tariff totaled $9.50 per FTE. Objections to these proposed rates were filed with
the Board by a number of Objectors, now the Respondents in this application.
10. After completing all interlocutory steps in accordance with the Board's Model Directive on
Procedure, the parties filed their respective cases and presented their evidence at a nine day
oral hearing held in April/May 2014.
b. The Decision
11 Following the exchange of further evidence and submissions after the hearing to address
matters raised by the Board, the Board issued its decision on February 19, 2016 (the
"Decision") that certified a royalty rate of $2.46 per FTE for the years 2010-2012 and a
royalty rate of $2.41 per FTE, for the years 2013 to 2015.

c. Overview of Applicant's Position

12. The Board accepted the parties' joint submission that, in arriving at the FTE royalty rates,
the Board ought to apply the "volume times value" methodology. The Board applied that

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methodology in a previous tariff proceeding between the parties. That methodology
requires the Board to carry out two main steps.

13. First, the Board must arrive at estimates of the volume of copying (or exposures) of each of
the genres of works in Access Copyright's repertoire; and make an evidence-based
determination of the proportion of that volume that is compensable (i.e. triggers a royalty
payment).

14. Second, the Board must determine, based on the evidence, the value per copied page for
each genre of work.

15. Once the volume and value variables are determined, the product of those variables is
divided by the number of FTEs to arrive at a final certified FTE royalty rate (see Tables 34
and 35 to the Decision).

16. The Board also accepted the parties' joint submission that a sample survey ("Volume
Study") conducted in a representative sample of K-12 Schools in the period 2005-2006
should be used to calculate the volume of copying of each genre of work in K-12 Schools in
each of the years 2010 to 2015.
17. The Applicant does not take issue with the Board's adoption of the "volume times value"
methodology; its reliance on the Volume Study as a reasonable approximation of the
volume of exposures of the various genres of work for each of the years 2010 to 2015; or
the values it determined per copied page for each genre of work.
18. The Applicant also does not take issue, in these proceedings, with the Board's exclusion,
from the category of compensable volume, the works of non-affiliated rightsholders which
the Applicant claimed were in its repertoire.
19. However, the Applicant submits that the Board made a number of reviewable errors in
arriving at certain of the volumes used by it in the application of the "volume times value"
methodology.

20. First, in determining the volume of copying of books, periodicals and newspapers that were
within Access Copyright's repertoire, the Board erroneously misidentified a larger
proportion of works (approximately 26% for books, 22% for newspapers and 33% for
magazines) as having been published by non-affiliated rightsholders than was actually the
case. On a reasonable assessment of the evidence, a maximum of 7% of those works were
published by non-affiliated rightsholders. On the evidence, approximately 93% of all works
were within the Applicant's repertoire by reason of its affiliation agreements and
agreements with RROs.
21. Second, in arriving at the compensable volumes of books and consumables, the Board
incorrectly or unreasonably found that the copying of one or two pages from these genres of
works did not constitute the reproduction of a substantial part of the work under section 3 of
the Act. This finding that copyright did not subsist in the content of these pages was made
without any consideration of the qualitative nature of what had been copied. The Board's
error resulted (or would have resulted) in its exclusion, from the category of compensable
copying volume, 22.25% of the copying from books and 9.71% of the copying from
consumables.
22. Third, in arriving at the compensable volumes of books, periodicals and newspapers, the
Board incorrectly or unreasonably found that the volume associated with the vast majority
of copying (over 80% of books, newspapers and periodicals) in each of the years 2010 to
2015 constituted fair dealing and thus fell outside the category of compensable volume.

THE APPLICANT MAKES AN APPLICATION FOR:

23. An Order setting aside the Decision and referring the matter back to the Board for redetermination of the compensable volume to be used in the "volume times value"
methodology in accordance with the following directions:

1 A portion of the volume of compensable copying affected by this error was already deducted by the Board on
account of its findings on fair dealing and Section 29.4 of the Act (see Table 32 of the Decision)

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a. The Board shall re-determine the repertoire status of the works that were copied
in the Volume Study and include, in the category of compensable volume, the
volume associated with the copying of all works that are in the Applicant's
repertoire by reason of its agreement with an affiliate or its agreement with an
RRO;

b. The Board shall include, in the category of compensable volume, the volume of
books and consumables associated with those copying events that were excluded
by the Board on the grounds that the portions copied were not a substantial part of
the work;

c. The Board shall include, in the category of compensable volume, that volume of
books, newspapers and periodicals associated with the copying events that the
Board excluded on the grounds of fair dealing; and

d. In the alternative to the relief requested in paragraph 23(c), the Board shall
reassess the fairness of the copying events in accordance with the reasons of the
Court.

24. The Applicant requests costs of the Application.

25. The Applicant requests such other order, direction or other relief as this Court may find is
appropriate.

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THE GROUNDS FOR THE APPLICATION ARE:

A. The Board based the Decision on an erroneous finding of fact that it made without
regard to the evidence before it, resulting in an unreasonable deduction from
compensable volume

26. In paragraphs 136-158 of the Decision, the Board determined that all works of nonaffiliated rightsholders that: a) were copied in the Volume Study; and b) claimed by Access
Copyright to be in its repertoire, ought not be further considered to arrive at the volume of
compensable exposures.

27. At Tables 1-5 of the Decision, the Board excluded the volume associated with 25.73% of
books, 21.67% of newspapers and 33.09% of all periodicals on account of this finding.
28. These determinations were made by the Board despite evidence before it that the data upon
which the Board made its determination greatly underestimated the proportion of works
copied in the Volume Study that were, in fact, in the Applicant's repertoire by reason of its
agreements with an affiliate or an RRO.
29. In paragraph 405 of the Decision, the Board erroneously stated that "Access has provided
no evidence of the degree of underestimation". In fact, such evidence was before the Board
and its failure to consider that evidence whatsoever was unreasonable.

B. The Board erred in law in its interpretation of "substantial part" in section 3 of the Act
30. The Board determined that every copying event captured in the Volume Study that involved
the copying of one or two pages of a book or consumable was to be automatically excluded
from the compensable category of copying volume on the grounds that such copying, in
each and every case, did not constitute the reproduction of a "substantial part" of the work
under section 3 of the Act.

31. The arbitrary and solely quantitative rule adopted by the Board to inform its assessment of

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substantiality was wrong in law. An assessment of "substantial part" under section 3 of the
Act requires a qualitative assessment of what has been copied, not simply "how much" has
been copied.

32. The Board thus erred in law in prescribing a solely quantitative and arbitrary page threshold
under which the content copied was deemed not to be a substantial part of the work and
therefore not subject to copyright protection.

33. There was considerable evidence before the Board relating to the qualitative nature of the
books and consumables from which the pages were copied upon which the Board ought to
have made a qualitative assessment. Had the Board not disregarded such evidence, the only
reasonable finding available to it was that the one or two pages copied were a substantial
part of the works.

34. The Board also unreasonably failed to consider the evidence before it that teachers in K-12
Schools return to the same work to copy additional content. It was unreasonable for the
Board to apply its arbitrary quantitative rule in the face of this undisputed evidence of
"compound copying."

35. The Board also unreasonably failed to consider the evidence that teachers in a large number
of K-12 Schools provide "class sets" of textbooks, rather than a textbook for each student.
The use of "class sets" also requires teachers to return to the same work time and time again
to copy content for, among other reasons, homework assignments.

C. The Board's errors in respect to fair dealing

36. In assessing the fairness of the dealing, the Board erred in law or acted unreasonably in
finding that the majority of copying of books, periodicals and newspapers in K-12 Schools
constituted fair dealing:

a. despite its finding, in paragraph 350 of the Decision, that "the parties did not

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adequately address fair dealing", a finding that ought to have resulted in the Board
concluding that the Respondents had not met their evidential and legal burdens to
establish that the copying in K-12 Schools in any of the years 2010 to 2015 was
fair;

b. by failing to take into consideration the admissions of the Respondents that, as

and from January 2013, teachers copied entire works, entire book chapters and
entire periodical articles;

c. by failing to take into consideration the absence of any evidence from the
Respondents that teacher copying behaviour in any of the years 2010 to 2015 was
restricted to complementing the main teaching resource or restricted to the
situational needs of students;

d. by finding "irrelevant" and affording no weight to most of the Applicant's

evidence directed to the actual and likely negative impacts of the copying
behaviours in K-12 schools as and from January 2013 on the publishers' markets
for their works, the incentives on publishers and creators to create new works and
the quality, diversity and indigeneity of those works;

e. by designing and implementing a methodology to assess the fairness of the

copying in K-12 Schools without affording the Applicant any opportunity to make
submissions on the methodology, and thus without regard to the duty of
procedural fairness owed to the Applicant;

f. by designing a methodology to assess the fairness of the copying in K-12 Schools

that was unintelligible and non-transparent, the implementation of which resulted:
(i) in the Board unreasonably assigning no weight whatsoever to copying
behaviours that the Board itself determined were not fair; and (ii) in the Board
unreasonably weighting each fairness factor equally and in isolation from one
another, thus unreasonably distorting the Board's analysis of the fairness of each

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copying event in favour of a finding of fairness;

g. by considering each fairness factor in isolation from the others, without regard to
the purpose of copyright, thereby unreasonably skewing the fairness analysis in
favour of users at the expense of copyright holders;

h. by failing to consider, under the "alternatives to the dealing" factor or the "impact
on the market" factor, the uncontradicted evidence of the availability for purchase
by K-12 Schools of entire stand-alone magazine and newspaper articles, entire
stand-alone works published in compilations or anthologies, and textbook
chapters;
i. by failing to consider, under the "character of the dealing" fairness factor, or any
other fairness factor, the aggregate volume of copying behaviour in K-12 Schools
disclosed in the evidence; and

J by prescribing solely quantitative thresholds for the assessment of the "amount of

dealing" factor and by assessing the evidence of record relating to that factor
solely upon the quantitative amount copied and without consideration of the
qualitative nature of what had been copied.

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THE APPLICATION WILL BE SUPPORTED BY THE FOLLOWING MATERIAL:

37. The Decision;

38. An affidavit under Rule 306 introducing relevant excerpts from the evidence and
proceedings before the Board;

39. The Applicant's Record prepared in accordance with Rule 309; and

40. Such other material as this Honourable Court permits.

THE APPLICANT REQUESTS, UNDER RULE 317, THAT:

41. The Board:

a)

transmit certified copies of Exhibits AC-70, AC-71, AC-72, AC-73,AC-74 and AC-85 to
the Registry; and

b)

transmit, to the Registry and the Applicant, certified copies of any documents not
marked as an Exhibit by the Board that were relied upon by the Board to make its
determination, and which were not furnished to the Applicant.

42. Without limiting the generality of the request made under paragraph 41(b), the Applicant
requests any documents underlying the adoption and implementation of the methodology
referred to in paragraph 350 and Appendix B to the Decision that have not been furnished
to the Applicant.

Date: March 21, 2016

The Canadian Copyright Licensing
Agency operating as Access Copyright
320-56 Wellesley Street West
Toronto, ON M5S 2S3
Tel.:1-800-893-5777

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Fax: 416-868-1621
vArthur B Renaud (Ext. 294)
Erin Finlay (Ext. 234)
Jessica Zagar (Ext. 255)
arenaud@accesscopyright.ca
efinlay@accesseopyrightea
jzagar@accesscopyriRht.ca
Counsel for the Applicant

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Schedule "A"
Alberta Education
Manitoba Education and Advanced Learning
New Brunswick Department of Education and Early Childhood Development
Newfoundland and Labrador Department of Education and Early Childhood Development
Nova Scotia Department of Education and Early Childhood Development
Northwest Territories Department of Education, Culture and Employment
Nunavut Department of Education
Ontario Ministry of Education
Prince Edward Island Department of Education, Early Learning and Culture
Saskatchewan Ministry of Education
Yukon Department of Education
Algoma District School Board
Algonquin and Lakeshore Catholic District School Board
Avon Maitland District School Board
Bloorview School Authority
Bluewater District School Board
Brant Haldimand Norfolk Catholic District School Board
Bruce-Grey Catholic District School Board
Campbell Children's School Authority
Catholic District School Board of Eastern Ontario
Conseil des ecoles publiques de l'Est de l'Ontario
Conseil scolaire de district catholique Centre-Sud
Conseil scolaire de district catholique de l'Est ontarien
Conseil scolaire de district catholique des Aurores boreales
Conseil scolaire de district catholique des Grandes Rivieres
Conseil scolaire de district catholique du Centre-Est de l'Ontario
Conseil scolaire de district catholique du Nouvel-Ontario
Conseil scolaire de district catholique Franco-Nord
Conseil scolaire de district des &cotes catholiques du Sud-Ouest
Conseil scolaire Viamonde
Conseil scolaire de district du Grand Nord de l'Ontario
Conseil scolaire de district du Nord-Est de l'Ontario
District School Board of Niagara
District School Board Ontario North East
Dufferin-Peel Catholic District School Board
Durham Catholic District School Board
Durham District School Board
Grand Erie District School Board
Greater Essex County District School Board
Halton Catholic District School Board
Halton District School Board
Hamilton-Wentworth Catholic District School Board
Hamilton-Wentworth District School Board
Hastings and Prince Edward District School Board

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Huron Perth Catholic District School Board
Huron-Superior Catholic District School Board
James Bay Lowlands Secondary School Board
John McGivney Children's Centre School Authority
Kawartha Pine Ridge District School Board
Keewatin-Patricia District School Board
Kenora Catholic District School Board
KidsAbility School Authority
Lakehead District School Board
Lambton Kent District School Board
Limestone District School Board
London District Catholic School Board
Moose Factory Island District School Area Board
Moosonee District School Area Board
Near North District School Board
Niagara Catholic District School Board
Niagara Peninsula Children's Centre School Authority
Nipissing-Parry Sound Catholic District School Board
Northeastern Catholic District School Board
Northwest Catholic District School Board
Ottawa Catholic District School Board
Ottawa Children's Treatment Centre School Authority
Ottawa-Carleton District School Board
Peel District School Board
Protestant Separate School Board of the Town of Penetanguishene
Peterborough Victoria Northumberland and Clarington Catholic District School Board
Rainbow District School Board
Rainy River District School Board
Renfrew County Catholic District School Board
Renfrew County District School Board
Simcoe County District School Board
Simcoe Muskoka Catholic District School Board
St. Clair Catholic District School Board
Sudbury Catholic District School Board
Superior North Catholic District School Board
Superior-Greenstone District 3 School Board
Thames Valley District School Board
Thunder Bay Catholic District School Board
Toronto Catholic District School Board
Toronto District School Board
Trillium Lakelands District School Board
Upper Canada District School Board
Upper Grand District School Board
Waterloo Catholic District School Board
Waterloo Region District School Board
Wellington Catholic District School Board

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Windsor-Essex Catholic District School Board
York Catholic District School Board
York Region District School Board