Good afternoon.
My name is Ariel Katz. I'm a law professor at the University of Toronto, where I hold the innovation chair in electronic commerce. I am very grateful for the opportunity to appear before you this afternoon.
In my comments today, I would like to focus on dispelling some of the misinformation about the application of copyright law and fair dealing in the educational sector.
Since 2012, Access Copyright and some publishers and authors organizations have embarked on an intensive and, unfortunately, somewhat effective campaign, portraying Canada as a disastrous place for writers and publishers. This campaign, which I call the “copyright libel against Canada”, was built on misinformation, invented facts and sometimes outright lies. Regrettably, it has slandered Canada and its educational institutions, not only at home but also abroad.
I debunked many of the claims in a series of blog posts four years ago, when the campaign started. I encourage you to read them. I also invite you to read the submissions and posts by Michael Geist, Meera Nair and others. I'm happy to provide the links to those.
Nevertheless, the copyright libel persists. It persists because it presents three simple, correct facts, wraps them in enticing rhetoric and half-truths, and then tells a powerful yet wholly fictitious story.
Here are the three uncontroversial facts.
Fact number one is that over the last few years, and especially since 2012, most educational institutions stopped obtaining licences from Access Copyright, and Access Copyright's revenue has declined dramatically. This is true.
Fact number two is that, as a result, the amount that Access Copyright has distributed to its members and affiliates has also declined significantly. This is also true.
Fact number three is that most freelance Canadian authors, namely novelists, poets and some non-fiction writers, earn very little from their writing. This is true.
All of that is correct, but what is incorrect is the claim that the changes in Canada's copyright law and the decisions by universities not to obtain licences from Access Copyright are responsible for the decline in Canadian authors' earnings.
First of all, as you've already heard from some witnesses, even though universities stopped paying Access Copyright, they did not stop paying for content. Indeed, they have been paying more for content than they paid before. Most publishers are actually doing quite well, and some are doing extremely well.
Now you may wonder, if educational institutions aren't paying less for content, but more, then why do the earnings of Canadian authors decrease rather than increase? That seems to be the question that puzzles this committee. I'll try to help you with that.
To answer this question, we need to get into the details of Access Copyright's business model and consider things like these: Which works are actually in its repertoire? Which authors are members of Access Copyright, and which aren't? What type of content is generally being used in universities? How does Access Copyright actually distribute the money it collects?
I'll try to answer these questions. The logic behind Access Copyright's business model has been deceptively simple and attractive. Access Copyright would offer educational institutions a licence that allowed them to basically copy every work they needed without worrying about copyright liability. It would charge reasonable fees for the licence, distribute the fees among copyright owners, and everyone would live happily ever after.
This sounds great, except that this model can work only if you believe in two fictions. First, you have to believe that Access Copyright actually has the repertoire it purports to license. Second, you have believe that a cartel of publishers would provide an attractive service and charge reasonable fees. However, good fictions do not make good business models.
Access Copyright has never had the extensive repertoire it purported to license. As a matter of copyright law, Access Copyright can only give a licence to reproduce a work if the owner of the copyright in that work has authorized Access Copyright to license on her behalf. It would have been a copyright miracle if Access Copyright actually managed to get all the copyright owners to appoint it to act on their behalf. They never have been able to do that.
Access Copyright has always known that it didn't really have the legal power to license everything that it did, but that knowledge has not stopped it from pretending to have virtually every published work in its repertoire. Practically, Access Copyright has been selling universities the copyright equivalent of the Brooklyn Bridge. However, as a matter of copyright, not only can Access Copyright not license stuff that doesn't belong to it or to its members, but its attempt to do that constitutes, in itself, an act of copyright infringement.
Yes, you may find it surprising that Access Copyright has, in my opinion, committed one of the most massive acts of copyright infringement that Canada has ever seen, by authorizing works that don't belong to it or to its members.
For many years, educational institutions were quite content to play along and overlook the limited scope of Access Copyright's repertoire. They did that because the licence agreement contained an indemnity clause. It basically told universities, “Don't worry about whether we can lawfully give you permission to copy those works, because as long as you continue paying us, we will protect you. We'll indemnify you should the copyright owner come and actually sue you. We'll take on the risk.” As long as universities paid the sufficiently low prices, they were happy with this “don't ask, don't tell” policy. They just continued paying and thought that they were protected.
You would expect that if Access Copyright collected money for the use of works that aren't in its repertoire, it would then refund the money to the institution that paid—that overpaid—but that's not how Access Copyright works. Instead, it keeps the money that it collects for works that aren't its own and distributes this money among its own members. This is principally the money that has now all but disappeared and that you hear a lot of complaints about.
At this point, it is important to consider which authors are actually members of Access Copyright, which aren't, and what type of works are actually being used in universities.
In general, except for a handful of courses in the English departments, Canadian universities don't teach Canadian literature. When they do, students actually buy those books. As U of T historian and English professor Nick Mount recently wrote in his book Arrival: The Story of CanLit, “At eleven of Canada's largest twenty universities, English and French, you can complete a major in literature without any of it being Canadian.”
This may surprise you, but it shouldn't. Most Canadian universities are serious academic institutions. The works they typically use for research and teaching are academic works written by academics, some from Canada, but in many cases from elsewhere. Canadian universities are not parochial schools but serious academic institutions. They are members in good standing in the global enterprise of science. The study of contemporary Canadian literature is only a tiny fraction of that enterprise. Moreover, most academic authors, the ones who actually write most of the works that are being used in universities, aren't even members of Access Copyright.
According to Stats Canada, there are 46,000 full-time teaching staff at Canadian universities. Most of those are active authors who write and publish—otherwise they'll perish. Some faculty members are members of Access Copyright, but most are not—