Before & After: The Emperor still has no clothes but the cost of tribute has gone way up!

Harry Hillman Chartrand ©
Compiler Press Review #1, May 1998


0. Introduction
            In this review I will assess the Canadian Copyright Act with respect to provisions directly affecting educational institutions - before and after the April 25th,1997 amendment of the Act (Statutes of Canada 1997, c. 24).    Comparative analysis is based on the 1996 and 1997 editions of The Compleat Canadian Copyright Act - Current, Past and Proposed Provisions of the Act (Compiler Press, Saskatoon, April 1st and October 31st 1997, respectively).    Use of two editions published only seven months apart reflects a fundamental change.  Between 1921 and 1996 the basic structure of the Act remained the same.  With the 1997 amendment, however, it changed dramatically.

           The magnitude of change is apparent with respect to education.  Before April 1997 three subsections directly referred to education [old sub-sections 27(2)(d), 27(3) and 45(3)(c)].  Other than these three, educational institutions were subject only to the general provisions of the Act.  After the April 1997 amendments, the Act now contains thirty-four subsections directly affecting educational institutions.  For purposes of this review  these thirty-four provisions are clustered under 10 headings.

           This review does not consider general provisions of the Act as they affect the policies, practices and procedures of educational institutions.  It does not consider amendments affecting other sectors such as individual creators, corporations and collectives, governments, libraries, motion pictures, museums, sound recordings, visual arts galleries, etc.  It does not consider copyright relative to industrial designs,  patents or trade marks which collectively constitute the economic constitution of the 'knowledge-based' economy.   It must be stressed that this review does not constitute a legal opinion or advice.  As with any legal issue, one should consult a lawyer for a more definitive opinion about a specific situation or set of circumstances.   

1. Definitions (Section 2)
           The amended Act defines an “educational institution” as a non-profit institution providing pre-school, elementary, secondary or post-secondary education or training if it is licenced, recognized or regulated by federal or provincial governments or operated by a department or agency of any level of government including municipalities.
            Prior to April 1997, there was no formal definition of an educational institution and, by default, included for-profit institutions of learning.  The new Act also defines “premises” of an educational institution as a place where education or training is provided, controlled or supervised by an educational institution, i.e.  the physical space need not be owned by an educational institution.

2. Parallel Importation of books (Section 27.1)
           Under this new provision of the Act it is an infringement of copyright to import a book without the consent of the owner of the copyright in Canada.  This provision applies, however, only if there is an exclusive distributor for the book. 
     In a transitional clause [s. 63(2)] covering the period between June 30, 1996 and the amendments receiving Royal Assent (April 25, 1997), exclusive distributors were denied remedy for infringement by educational institutions.  After the transitional period, however, exclusive distributors can seek remedy through the courts.

3. Acts Undertaken Without Motive of Gain (Section 29.3)
            Subsections 29.3 is a new section specifying that certain actions of educational institutions (subsequently described in sections 29.4 to 30) may not be carried out for a profit. Educational institutions may, however, charge to recover costs including overhead costs.  Definition of what constitutes overhead costs is, however, not provided in the Act, e.g. whether they include amortization of buildings and facilities, depreciation of equipment or salaries associated with such actions.
4. Educational Institutions (Sections 29.4,.5, .6, .7, .8, .9 & 30)
            (a) Section 29.4 is a new provision permitting reproduction of copyright works or other subject-matter by an educational institution for instructional and examination purposes.  Subsection (1) permits handwritten presentation of material and making overheads for instructional purposes.  Subsection (2) permits performance, reproduction, telecommunication or translation of copyrighted materials for examination purposes.  Subsection (3), however, makes it an infringement to do anything permitted under (1) and (2) except manual reproduction if appropriate material is commercially available, e.g. overheads.
            (b) Section 29.5 is a new provision permitting educational institutions to perform a work in public (if primarily done by students), to play a sound recording or receive a communication signal (at the time of its communication) on the premises of an educational institution if the audience consists primarily of students, instructors or persons directly responsible for setting curriculum and if it is done not for profit.
            (c) Section 29.6 is a new provision permitting educational institutions to make a single copy of a news program or commentary, but not a documentary, and to play back that copy for educational or training purposes as many times as desired within one year if the audience consists primarily of students and takes place on its premises.  After one year, however, the copy must be destroyed or the institutions must pay royalties and comply with terms and conditions fixed under section 29.7, 29.8 and 29.9 of the Act.
            (d) Section 29.7 is a new provision permitting an educational institution to make a single copy of any other type of broadcast and keep it for up to thirty days to decide if it wishes to perform it for educational or training purposes.  After thirty days the institution must either destroy the copy or pay royalties and comply with terms and conditions fixed under the Act.   If the institution pays royalties and complies with required terms and conditions it may perform the copy for educational or training purposes to an audience consisting primarily of students
            (e) Section 29.8 is a new provision declaring exceptions to infringement granted under sections 29.5 to 29.7 do not apply if a communication signal was received by unlawful means.
            (f) Section 29.9 is a new provision requiring an educational institution to make a record regarding: the making of a copy of any broadcast pursuant to sections 29.6 and 29.7;  performance of the copy for which royalties are payable; and, destruction of the copy.
            (g) Section 30 replaces old section 27(2)(d) which was an exemption from infringement granted to educational institutions under the original 1921 Act.  Until 1970 its marginal title was: Short passages for schools.  In the Revised Statutes of Canada 1970, the marginal title was dropped but the exemption remained.  It allowed publishers of a textbook intended for use in schools (and so described in its title and any advertisement) to include not more than two passages from works by the same author published by the same publisher within five years.  The source of such passages had to be acknowledged.  This exception remains in force as section 30 of the amended Act as of April 1997.  There is, however, an additional requirement that the name of the author, if given in the source, must also be acknowledged.
5. Machines Installed in Educational Institutions, Libraries, Archives and Museums &  Libraries & Archives and Museums in Educational Institutions (Section 30.3 & Section 30.4)
            Section 30.3 is a new provision permitting educational institutions to photocopy printed works if certain conditions are met.   Machines must be installed with the approval of the educational institution and be for the use of students, instructors and staff or persons using a library, archive or museum located in the educational institution (section 30.4).  A notice must be fixed to the machine, in a prescribed manner and location, warning of copyright infringement. 
            To gain this exemption, however, an educational institution must enter into an agreement with a copyright society.  The institution may also enter into agreements with copyright owners other than collectives but such agreements apply only to works of those owners.
            These sections effectively create a specific right of reprographic reproduction, at least with respect to educational institutions, which was explicitly rejected by the unanimous 1985 all-Party House of Common’s Sub-Committee Report - A Charter of Rights for Creators  (recommendation 24, page 21) and by the government in its 1986 Government Response to the Sub-Committee’s Report on Revision of Copyright (recommendation 24, page 5).
6. Further permitted acts (Section 32.2 (3))
            Section 32.2 (3) replaces old section 27(3) introduced in the Statutes of Canada 1938, c. 27, s. 5 entitled: Further exceptions.  In summary, it exempted charitable, educational and fraternal institutions from paying royalties for the live public performance of any musical work in furtherance of charitable, educational or religious purposes. This exception remains in force as sub-section 32.2(3) of the amended 1997 Act.  It is now, however, extended to the performance in public of sound recordings and communication signals including a performer’s performance embodied in a recording or communication signal.
7. No award (Section 38.1(6))
            Section 38.1 is new and concerns statutory damages available for copyright infringement.  Subsection (6) specifies that no statutory damages are available against an educational institution for acts permitted under sections 29.6, 29.7 or 38.2.
8 Maximum amount that may be recovered (Section 38.2(1))
            Section 38.2 is a new provision specifying that the maximum amount that a copyright owner can recover for infringement by an educational institution is the amount of royalties payable if the institution had signed an agreement with the owner or collective society.  In cases where more than one agreement with a collective society are signed, the maximum amount that can be recovered is the largest amount of royalties provided in any of those agreements.
9.  Exceptions (Section 45)
            Section 45 replaces old section 45(3)(c) which was an exception to copyright infringement granted by the original 1921 Act.   In summary, the original provision allowed institutions of learning to import copies of any work before it was printed or made in Canada.   The exception continues as new sub-section 45(1)(c), (d) and (e) but with some significant changes.  While the previous provision permitted unlimited importing of books and other types of works for use by educational institutions, the new provision permits not more than one copy of a book to be imported by an educational institution while retaining the exception for other works and subject-matter, e.g. records, tapes and computer programs.   This means educational institutions will have to obtain any quantity of books from those who now have the legal right to import, i.e. ‘exclusive distributors’, a category of copyright proprietor defined for the first time in section 2 of the amended 1997 Act.
            Furthermore, while under the new provision most used books can be freely imported by anyone, used textbooks of a scientific, technical or scholarly nature intended for use in a course of instruction by an educational institution can not be imported.  There is no exception to this prohibition.  Importation remains subject to presenting satisfactory evidence of the right to import to an officer of customs, at the officer’s discretion [old 45(4) & new  45(2)].
10. Publication of proposed tariffs &  Certification (Section 72 & Section 73)
             Sections 72 and 73 replace old sections 70.62, 70.63 and 70.67 which were introduced in 1988.  At that time, they made no direct reference to educational institutions.  New section 72 requires the Copyright Board to publish proposed tariffs for collective societies in the Canada Gazette. The provision allows educational institutions sixty days to file written objections with the Board.  The Board must then notify the collective societies of such objections.  New section 73 requires the Board, after considering the proposed tariffs and objections, to determine appropriate tariffs, certify them as approved, notify educational institutions objecting to the collectives’ initial proposals of its reasoning and publish the tariffs in the Canada Gazette.
            The first conclusion is: educational institutions have become a clearly defined target of copyright reform in Canada, e.g. the increase from three to thirty-four provisions directly referring to educational institutions 
            The second conclusion is: the freedom of educational institutions in using copyrighted works has been reduced.  Formal record keeping is now required with respect to electronic media; importation of books has been constrained; and, creation and use of instructional aids such as overheads is limited with the onus falling on the institution to determine commercially availability. 
            The third conclusion is collectivization continues: educational institutions are now required by the Act, not regulation, to make agreements with collective societies to enjoy any statutory exemption from infringement in the use of works in any medium.  Educational institutions are now formally subject to the Copyright Board concerning tariffs as well as terms and conditions of agreements with collective societies.  Educational institutions are also now liable to infringement of the rights of a new class of copyright proprietor - exclusive book distributors.
            Successful collectivization ultimately depends, however, on accurate monitoring.  At present, there are no technologies capable of measuring actual usage of a specific copyrighted work - in any medium.  Without such technology - and its implications for other forms of information law, e.g. privacy, censorship, et al - copyright collectives essentially impose a blanket licence on institutional and corporate users.  They then distribute funds from licence fees - in theory to creators but in practice more usually to corporate copyright owners - based on the results of sometimes questionable 'sampling' techniques. 
           This was true before and after the 1997 amendment of the Act.  What has changed is the increased administrative burden and direct cost to Canadian educational institutions (already wavering under the blow of recent public sector cutbacks) that must be paid to corporate copyright owners through government sanctioned 'collectives' in order to claim a 'fair dealing' exemption from copyright infringement.  In other words, the Emperor still has no clothes but the cost of tribute has gone way up!.