Fair is foul and foul is fair: Lifting the fog around fair dealing in Canadian copyright law 


October 2012

Intellectual Property Bulletin

Canada's copyright regime has recently been subject to a great deal of transformation as a result of the amendments introduced by the Copyright Modernization Act as well as the five copyright decisions released by the Supreme Court of Canada on July 12, 2012.

Two companion appeals, Alberta (Education) v Access Copyright1 and SOCAN v Bell Canada,2 considered the fair dealing provisions in Canada's Copyright Act. The decisions reinforce the Supreme Court of Canada's previous pronouncement in CCH Canadian v Law Society of Upper Canada ("CCH") that fair dealing is a user's right, as opposed to being merely an exception or defence to owners' rights, and plays an integral role in the scheme of copyright law.

The Supreme Court in SOCAN v Bell Canada, in a unanimous judgment, decided that the use of previews by online music service providers constituted fair dealing for the purpose of "research" under s. 29 of the Copyright Act, and, consequently, no royalties were required to be paid for such previews. The previews consisted of 30- to 90- second excerpts of digital musical works that could be listened to by consumers (through an online "stream") to assist them in deciding whether to purchase a permanent download of the musical work. Some music service providers allowed consumers to listen to previews as many times as they wanted, whether or not they made a purchase or registered with the online service provider.

The Supreme Court reaffirmed that copyright plays an important role in "promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator," and therefore copyright protection and access ought to be appropriately balanced. One mechanism the Copyright Act employs to achieve this balance is the concept of fair dealing, which allows users to engage in some activities that might otherwise amount to copyright infringement.

The Supreme Court in CCH articulated a two-pronged test for determining whether a dealing constitutes "fair dealing" within the meaning of the Canadian Copyright Act: the first step is to determine whether the dealing is for one of the allowable purposes listed in the Act, and the second step is to assess whether the dealing is "fair". The allowable purposes enumerated in the Act are exhaustive, namely "research" or "private study" listed in s. 29 of the Act, "criticism or review" listed in s. 29.1, and "news reporting" listed in s. 29.2.3 To assist in determining whether the dealing is "fair", the Court set out six fairness factors for guidance: the purpose, character, and amount of the dealing; the existence of any alternatives to the dealing; the nature of the work; and the effect of the dealing on the work. The factors are not exhaustive and the weight given to each factor will depend on the particular facts of each case.

In SOCAN v Bell Canada, the Court concluded that the use of previews was for the allowable purpose of "research" and rejected SOCAN's more restrictive interpretation of the term "research" as "the systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions." The Supreme Court held that giving "research" such a narrow interpretation would run counter to its earlier ruling in CCH that allowable purposes should be given a generous interpretation.

The Court had a harder time agreeing on the correct application of the fair dealing analysis in Alberta (Education) v Access Copyright, with the Court dividing 5:4 on the issue. The case concerned photocopies made by teachers in primary and secondary schools across Canada (except Québec) of short excerpts of textbooks to complement existing curriculum. The question was whether such copying was fair dealing for the purposes of "research" or "private studying," or whether it amounted to infringement of copyright in such textbooks. There was generally no dispute that the first step in CCH was met and that the dealing was for an allowable purpose. The inquiry mainly centered on the second step, namely, whether the photocopying was "fair."

Justice Abella, writing for the majority, found that the Copyright Board had not properly approached the first CCH factor, namely the purpose of the dealing. She echoed the Court's earlier words in CCH that the "research" should be given a large and liberal interpretation so as not to unduly restrict users' rights. The main concern was from whose perspective should the purpose of the dealing be considered – that of the user/student or that of the copier/teacher. The Copyright Board had found that the dealing should be viewed from the copier's, or teacher's perspective, and that the predominant purpose of the teacher was that of "instruction", which was different than that of the student's, which could be characterized as research or private study. Abella J. disagreed with the Board's approach, being of the view that the relevant perspective was that of the student/user. However, she acknowledged that an ulterior purpose on the part of the copier would be relevant to the fairness analysis if the copier were simply trying to obscure its own purpose (which could potentially be unfair) and conflate it with the research or private study purposes of the ultimate user. This approach, according to Abella J. accorded with the test set out in CCH where the Court did not focus its inquiry on the library's perspective, but on that of the ultimate user, the lawyers, whose purpose was legal research. In this case, Abella J. found that teachers did not have an ulterior purpose when providing copies to students, and that the distinction between instruction and research/private study was artificial.

Abella J. also rejected the Copyright Board's finding that the photocopies made by teachers were made for the purpose of "non-private study," an unfair purpose. In her view, the term "private" should not limited to viewing copyrighted works in "splendid isolation." In her view, "[s]tudying and learning are essentially personal endeavours, whether they are engaged in with others or in solitude." Justice Abella therefore concluded that the Board's finding was unreasonable on this issue.

Rothstein J., writing for the minority, was not convinced that the distinction between the teacher's purpose and that of the student's was unwarranted on the facts of this case. He expressed the view that even if providing photocopies to students were an essential element in the research and private study undertaken by those students, the teachers also had a purpose, namely educating or instructing the students. Therefore, it was not unreasonable for the Board to conclude that, on the facts of this case, the teacher's purpose predominated, and it was that purpose which was relevant to the analysis and which tended to make the dealing unfair.

Rothstein J. also disagreed with Abella J.'s interpretation of the term "private study." Although he agreed with Justice Abella that studying and learning are personal endeavours and one could collaborate with others, he was of the view that, in the circumstances of this case, where thousands of copies were made in schools as part of an organized program of instruction, this could not be properly characterized as "private study". If copies were made for a small group of students engaged in studying a particular subject, that could potentially qualify as private studying. Rothstein J. thus concluded that the Board was not unreasonable in finding that the real or predominant purpose of the dealing was "instruction" or "non-private study," and would therefore not have interfered with the Board's decision.

It will be interesting to see how the fair dealing exception will evolve when the new amendments introduced by the Copyright Modernization Act, which include a new allowable purpose of "education," come into effect.

1 2012 SCC 37.

2 2012 SCC 34.

3 The Copyright Modernization Act, which has received Royal Assent but has not yet been proclaimed into law, will introduce three more allowable purposes, namely "education," "parody" and "satire."

by Joanna Vatavu

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2012