York University ordered to pay up after losing copyright battle

One of Canada's largest universities will have to payfor copyrighted materials distributed to students after a federal
court ruling that some intellectual property experts say will affectschools throughout the country.

The Federal Court of Canada has ruled against Toronto's YorkUniversity in its legal dispute with Access Copyright, a collectivethat has provided institutions access to a pool of protectedintellectual work for more than two decades while distributingroyalties to the writers, artists and publishers it represents.

The university cut ties with Access Copyright in 2011 over risingtariffs, saying it was opting out and would navigate the world ofintellectual property rights on its own.

The school also implemented guidelines meant to ensure materialscopied for course packs and online class supports included a portionof any protected work small enough to be considered "fair dealing"and thus exempt from copyright fees.

The clash led Access Copyright to sue the school, alleging it hadbeen improperly reproducing and authorizing the copying of protectedworks. York then filed a countersuit, seeking to have its actionsdeclared fair dealing.

York's guidelines 'not soundly based in principle,' judge rules

In a decision released Wednesday, the court found York didn'thave the right to opt out of the tariff and that its guidelines which permitted copying up to 10 per cent of a protected work forcourse materials were anything but fair.

"The fact that the guidelines could allow for copying of up to100 per cent of the work of a particular author, so long as the copying was divided up between courses, indicates that theguidelines are arbitrary and are not soundly based in principle," Justice Michael L. Phelan wrote.

"York has not satisfied the fairness aspect of the quantitativeamount of the dealing. There is no explanation why 10 per cent or asingle article or any other limitation is fair," he wrote.

"It is evident that York created the guidelines and operatedunder them primarily to obtain for free that which they had
previously paid for."

Several other universities use guidelines similar to thoseestablished by York, the judge noted in his decision.

The ruling will have wide-reaching consequences throughout thepost-secondary system, said Michael Geist, a University of Ottawalaw professor who is an expert on intellectual property. "The issue of fair dealing and copyright within education has anenormous impact on the rights of students and teachers," he said inan email.

"The Supreme Court has emphasized that all students are entitledto exercise their fair dealing but this ruling seriously underminesthose rights, potentially leading to huge new costs for students andlost flexibility for teachers," he said.
"I think the judge's interpretation of fair dealing run counterto multiple Supreme Court of Canada decisions on the issue and thecase is certain to be appealed."

Trent Horne, a copyright lawyer in Toronto, said the ruling islikely to affect universities' bottom line."I think there's a lot of money at stake," he said.

The legal battle began as part of a broader dispute over tariffsbetween Access Copyright and a group of universities represented bythe Association of Universities and Colleges Canada.

In 2010, Access Copyright asked the Copyright Board of Canada toimpose on universities a tariff of $45 per full-time studentannually, rather than a lower tariff combined with a per-page royalty for copying protected works.

At the time, York whose licence with the collective was set toend that year was paying an annual rate of $3.38 per full-timeequivalent student plus a 10 cents per page royalty, according tothe federal court, which noted the per-page fee was typically passedon to students.

'Tariff is mandatory'

While the debate over the proposed tariff continued, the boardagreed to an interim tariff for schools and universities that didn'thave a deal with the collective but used works the agency handledthe rights for.

Eight months later, York declared it was opting out of theinterim tariff.

"York took the position that the interim tariff was a voluntarymatter as was the payment of copyright fees," Phelan said. "I findthat the interim tariff is mandatory, not voluntary."

The following year, Access Copyright and the Association ofUniversities and Colleges Canada reached a deal requiring
institutions to pay the collective $26 per full-time equivalentstudent annually, but York did not sign on.

Neither the university nor the collective immediately respondedto requests for comment.