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

Harry Hillman Chartrand ©
Compiler Press Review #2, August 1998


0. Introduction                                                     
In this review I will assess the Canadian Copyright Act with respect to provisions directly affecting libraries before and after the April 25th,1997 amendment of the Act (Statutes of Canada 1997, c. 24).  Comparative analysis is based on The Compleat Canadian Copyright Act - Current, Past and Proposed Provisions of the Act (Compiler Press, Saskatoon, October 31st 1997).

Between 1921 and 1997 the basic structure of the Act remained the same.  With the 1997 amendment, its structure and substance changed dramatically.  In addition to my conclusions, for purposes of this review, provisions of the Act are clustered under 4 headings:

1. Definition

2. Fair Dealing Exceptions to Infringement

3. Importation of Books

4. Remedies for Infringement

I will not consider general provisions of the Act as they affect the policies, practices and procedures of libraries. I will not consider specific provisions regarding archives and museums which will be the subject of a separate review.  I will not consider amendments affecting other players such as individual creators, corporations and collectives, governments, libraries, motion pictures, museums, sound recordings, visual arts galleries, etc.  I will not consider copyright relative to industrial designs, patents or trade marks which collectively constitute the economic constitution of the ‘knowledge-based' economy.  I must stress 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. Definition

Section 2 of the amended Act defines a “library, archive or museum” as a non-profit institution - incorporated or not incorporated that is not administered or controlled by a for-profit institution, directly or indirectly - which holds and maintains a collection of documents or other materials that is opened to the public or researchers.  The definition also includes any other non-profit institution prescribed as a library, archive or museum by regulations.  Prior to April 1997, there was no definition of a library.  By default, it therefore included for-profit libraries or libraries directly or indirectly controlled by for-profit institutions.

2. Fair Dealing Library Exceptions

In Canada, the operative concept governing exemption from copyright infringement is 'fair dealing'.  Under this concept virtually every reproduction of a work or other subject-matter constitutes infringement of copyright except for very specific and clearly stated exceptions.  This contrasts with the operative concept under American copyright known as 'fair use' which, in simple terms, means 'nonprofit use is fair use'.  For libraries there are four ‘fair dealing’ exceptions to copyright infringement.  These are, what I will call, the:

a) Collection Management & Maintenance ;

b) Research & Private Study;

c) Photocopier; and,

d) Library in the School Exception.

These exceptions are however, limited by new Section 29.3 (Acts Undertaken Without Motive of Gain) which specifies that certain actions of libraries (subsequently described in sections 30.1 to 30.4) may not be carried out for profit. Libraries may, however, charge to recover costs including overhead costs.  Definition of what constitutes overhead is, however, not defined in the Act, e.g. whether it includes amortization of buildings and facilities, depreciation of equipment or salaries associated with such actions.

a) Collection Management & Maintenance 

Section 30.1 (Libraries, Archives and Museums) is a new provision permitting reproduction of copyright works or other subject-matter (published or unpublished) by a library for purposes of managing or maintaining its permanent collection, or the permanent collection of another library.

Subsection (1) permits reproduction:

i - if the original is rare or unpublished and is deteriorating, damaged or lost, or is at risk of deterioration, damage or becoming lost;

ii - for purposes of on-site consultation if the original cannot be viewed, handled or listened to because of its condition or threat of damage;

iii - if the original is currently in an obsolete format or the technology required to use the original is unavailable;

iv - for purposes of internal record-keeping or cataloging;

v - for insurance purposes or police investigations; or,

vi - if necessary for restoration.

Subsection (2) grants this collection management and maintenance exemption only if a copy of sufficient quality is not commercially available

Subsection (3) requires that any ‘intermediate’ copy made under subsection (1)  must be destroyed when and if it is no longer needed, e.g. for purposes of internal record-keeping or cataloging.

b) Research & Private Study 

Section 30.2 is a new section providing an exception from infringement for purposes of research and private study conducted in or with the assistance of library personnel.

Subsection (1) exempts libraries from infringement when doing, for itself or on behalf of someone else, any copying or reproduction that would be an exception to infringement done by an individual for purposes of research or private study as specified in section 29 of the amended Act.

Subsection (2) allows libraries - for purposes of research or private study - to make photocopies of a work contained in any scholarly, scientific or technical periodical or in a newspaper or other periodical if it was published more than a year before the copy is made.

Subsection (3) restricts the exemption granted under subsections (1) and (2) excluding copying a work of fiction or poetry or a dramatic or musical work  - no matter when it was published so long as copyright still subsists, i.e. it is not in the public domain.

Subsection (4) requires libraries to assure themselves that any person for whom a copy is made will not use it for a purpose other than research or private study and that only a single copy is provided.

Subsection (5) grants the exemption to patrons of other libraries, archives or museums, i.e. one library may make a copy for a bona fide patron of another library.  This exemption, however, does not include making a copy in a ‘digital’ format.

Subsection (5.1) requires a library to destroy any intermediate copy made in order to provide a patron with a final copy.

Subsection (6) specifies that the Governor-in-Council may make regulations defining a newspaper, periodical, etc.  Such regulations may also prescribe what information is to be recorded by a library, and the form it should take, for any action taken under subsections (1) or (5).  Furthermore, regulations may also prescribe the manner and form in which the conditions set out in subsection (4) are to be met, i.e. how will a library assure itself that a patron will use a copy only for purposes of research and private study.

c) Photocopier 

Section 30.3 (Machines Installed in Educational Institutions, Libraries, Archives and Museums) is a new provision permitting libraries to photocopy printed works if certain conditions are met.

Subsection (1) limits the exception to copies of works in printed form.  Machines must be installed with the approval of the library and be for the use of staff or patrons of the library and a notice must be fixed to the machine, in a prescribed manner and location, warning of copyright infringement.

Subsection (2) requires that a library, to receive this exception, must enter into an agreement with a copyright society.  Royalties and related terms and conditions are to be established by the Copyright Board which must approve proposed tariff by all collective societies.

Subsection (3) permits the Board at the request of a library or collective society to issue an order that the library be treated as an institution to which subsection (1) applies if a collective offers to negotiate or has begun negotiations with the library.

Subsection (4) allows a library to enter into agreements with copyright owners other than collectives but such agreements apply only to works of those owners.

Subsection (5) allows the Governor-in-Council to prescribe the manner of affixing, location and nature of notices required by Section 30.3(1)(c).

The photocopying exceptions effectively represents a de facto right of reprographic reproduction.  This right 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).

d) Library in the School 

Section 30.4 (Libraries, Archives and Museums in Educational Institutions) is a new section which specifies that ‘fair dealing’ exceptions to copyright infringement granted to libraries under sections 30.1, 30.2 and 30.3 apply to libraries located in educational institutions.

3.  Importation of Books

Section 27.1 (Parallel Importation of Books) of the amended Act makes it an infringement of copyright for anyone, including libraries, 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 Royal Assent (April 25, 1997), exclusive distributors were denied remedy for infringement by libraries.  After the transitional period, however, exclusive distributors can seek remedy against infringing libraries through the courts.

Section 45 (Exceptions) replaces old Section 45, a set of exceptions to copyright infringement  by importing books granted in the original 1921 Act.

New subsection 45(1)(c) replaces the old 45(3) which allowed libraries to import copies of any work including a book before it is printed or made in Canada.   The new provision permits libraries to import any number of copies of a work or other subject-matter before they are made in Canada - except copies of a book.  New subsection 45(1)(d) restricts a library to importing only one copy of a book.  The new provision thus permits only one copy of a book to be imported by a library while permitting importation of an unlimited number of copies of other works and subject-matter, e.g. records, tapes and computer programs.  This means libraries will have to obtain multiple copies of books from those who 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.

New subsection 45(2) retains the requirement of presenting satisfactory evidence of the right to import to an officer of customs, at the officer’s discretion [old 45(4)].

4. Remedies for Infringement

If a library infringes copyright the owner or proprietor of the copyright or a collective society representing the owner can seek remedies in the courts. There are two types of remedies - civil and criminal.  Libraries are expressly mentioned with respect to civil remedies.

New section 38.1 (No award) concerns statutory damages available to copyright proprietors for infringement.  Subsection (6) specifies that no statutory damages are available against a library for acts described in Section 38.2.

Section 38.2(1) (Maximum amount that may be recovered) is a new provision specifying the maximum amount that a copyright owner who has not authorized a collective society to manage reprographic rights can recover from a library for infringement.  The maximum is the amount of royalties payable if the owner had signed an agreement with a collective society

Subsection (2) specifies that where a library has more than one agreement with a collective society, the maximum amount that can be recovered with respect to subsection (1) is the largest royalty provided in any of the collective agreements.

Subsection (3) specifies that subsections (1) and (2) apply only where a collective society is entitled to authorize reprographic reproduction of that specific category of work and copying is covered by the agreement.

5. Conclusions

The first conclusion is: libraries have become a clearly defined target of copyright reform in Canada.

The second conclusion is: the freedom of libraries in using copyrighted works will be reduced by regulations proposed under section 30.2(6).  Formal record keeping will be required; importation of books is constrained; and, reproduction of works deteriorating or threatened with damage is limited with the onus falling on the library to determine commercially available

The third conclusion is: collectivization continues. Libraries 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 written and electronic media. Libraries are also now liable to infringement of the statutory rights of a new class of copyright proprietor - exclusive distributors.

Successful collectivization is ultimately dependent, however, on accurate monitoring by collective societies. 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 license on libraries.  They then distribute funds from license fees - in theory to creators but in practice 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 libraries 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!.