A- Q3 -16

FEDERAL COURT OF APPEAL

he Canadian Copyright Licensing Agency, operating as Access Copyright

Applicant

-and-

British Columbia Ministry of Education and all entities named in Schedule "A" hereto

Respondents

NOTICE OF APPLICATION

TO THE RESPONDENTS:

A LEGAL PROCEEDING HAS BEEN COMMENCED by the Applicant. The relief claimed by the Applicant appears on the following pages.

THIS APPLICATION will be heard by the Court at a time and place to be fixed by the Judicial Administrator. Unless the Court directs otherwise, the place of hearing will be as requested by the Applicant. The Applicant requests that this application be heard at Toronto, Ontario.

IF YOU WISH TO OPPOSE THIS APPLICATION, to receive notice of any step in the application or to be served with any documents in the application, you or a solicitor acting for you must prepare a notice of appearance in Form 305 prescribed by the Federal Courts Rules and serve it on the Applicant's solicitors WITHIN 10 DAYS of being served with this notice of application.

Copies of the Federal Courts Rules, information concerning the local offices of the Court and other necessary information may be obtained on request to the Administrator of this Court at Ottawa (telephone 613-996-6795) or at any local office.

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IF YOU FAIL TO OPPOSE THIS APPLICATION, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU.

March 21, 2016 Issued by: (Registry Off

Address of local office: 180 Queen St. West Suite 200 Toronto, ON M5V 3L6

TO: British Columbia Ministry of Education and all entities named in Schedule "A" hereto

AND TO: The Copyright Board of Canada 56 Sparks Street, Suite 800 Ottawa, ON, KIA 0C9

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APPLICATION

A. Overview

1. This is an application for judicial review of a decision of the Copyright Board of Canada

dated February 19, 2016 which was communicated to the Applicant that day. The decision

was made in respect to two proposed tariffs filed by the Applicant under section 70.13(1) of

the Copyright Act.

2. The Applicant, Access Copyright, is a not-for-profit collective society under section 2 of

the Act. It carries on the business of the collective administration of copyright for the

benefit of publishers and creators of copyright-protected works ("works") who authorize

Access Copyright to act on their behalf.

3. That authorization arises from three discrete sources: express written authority granted by

publishers and creators ("affiliates"); express written authority granted by reproduction

rights organizations in Quebec and other countries ("RROs"); and the ratification, under the

principles of agency, of Access Copyright's acts by publishers on whose behalf it acted

without an antecedent grant of authority ("non-affiliated rightsholders").

4. Access Copyright operates a licensing scheme in relation to works in respect of which it has

the authority to act (the "repertoire"). Under that scheme, Access Copyright sets out the

classes of uses that it agrees to authorize under the Act and the royalties and terms and

conditions on which it agrees to authorize those classes of use.

5. The genres of works that fall within Access Copyright's repertoire include books,

periodicals, newspapers, sheet music and "consumables" (workbooks published by

educational book publishers that are intended for one-time use by students).

6. Access Copyright collects royalties from licensees who copy works in its repertoire. Access

Copyright distributes those royalties to its affiliates, RROs and non-affiliated rightsholders,

net of its administration fees.

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7. When it is unable to negotiate consensual licence agreements with users, Access Copyright

files statements of proposed tariffs with the Copyright Board under subsection 70.13(1) of

the Act.

a. The Proposed Tariffs

8. On March 31, 2009 and March 30, 2012, the Applicant filed statements proposing the

royalties to be collected by the Applicant for the reproduction in Canada (excluding

Quebec) of works in the Applicant's repertoire by elementary and secondary educational

institutions and persons acting under their authority ("K-12 Schools") for the years 2010 to

2012 (the "2010 Proposed Tariff") and the years 2013 to 2015 (the "2013 Proposed

Tariff").

9. The royalties proposed to be collected for the 2010 Proposed Tariff were $15.00 per full-

time equivalent student ("FTE"). The royalties proposed to be collected for the 2013

Proposed Tariff totaled $9.50 per FTE. Objections to these proposed rates were filed with

the Board by a number of Objectors, now the Respondents in this application.

10. After completing all interlocutory steps in accordance with the Board's Model Directive on

Procedure, the parties filed their respective cases and presented their evidence at a nine day

oral hearing held in April/May 2014.

b. The Decision

11 Following the exchange of further evidence and submissions after the hearing to address

matters raised by the Board, the Board issued its decision on February 19, 2016 (the

"Decision") that certified a royalty rate of $2.46 per FTE for the years 2010-2012 and a

royalty rate of $2.41 per FTE, for the years 2013 to 2015.

c. Overview of Applicant's Position

12. The Board accepted the parties' joint submission that, in arriving at the FTE royalty rates,

the Board ought to apply the "volume times value" methodology. The Board applied that

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methodology in a previous tariff proceeding between the parties. That methodology

requires the Board to carry out two main steps.

13. First, the Board must arrive at estimates of the volume of copying (or exposures) of each of

the genres of works in Access Copyright's repertoire; and make an evidence-based

determination of the proportion of that volume that is compensable (i.e. triggers a royalty

payment).

14. Second, the Board must determine, based on the evidence, the value per copied page for

each genre of work.

15. Once the volume and value variables are determined, the product of those variables is

divided by the number of FTEs to arrive at a final certified FTE royalty rate (see Tables 34

and 35 to the Decision).

16. The Board also accepted the parties' joint submission that a sample survey ("Volume

Study") conducted in a representative sample of K-12 Schools in the period 2005-2006

should be used to calculate the volume of copying of each genre of work in K-12 Schools in

each of the years 2010 to 2015.

17. The Applicant does not take issue with the Board's adoption of the "volume times value"

methodology; its reliance on the Volume Study as a reasonable approximation of the

volume of exposures of the various genres of work for each of the years 2010 to 2015; or

the values it determined per copied page for each genre of work.

18. The Applicant also does not take issue, in these proceedings, with the Board's exclusion,

from the category of compensable volume, the works of non-affiliated rightsholders which

the Applicant claimed were in its repertoire.

19. However, the Applicant submits that the Board made a number of reviewable errors in

arriving at certain of the volumes used by it in the application of the "volume times value"

methodology.

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20. First, in determining the volume of copying of books, periodicals and newspapers that were

within Access Copyright's repertoire, the Board erroneously misidentified a larger

proportion of works (approximately 26% for books, 22% for newspapers and 33% for

magazines) as having been published by non-affiliated rightsholders than was actually the

case. On a reasonable assessment of the evidence, a maximum of 7% of those works were

published by non-affiliated rightsholders. On the evidence, approximately 93% of all works

were within the Applicant's repertoire by reason of its affiliation agreements and

agreements with RROs.

21. Second, in arriving at the compensable volumes of books and consumables, the Board

incorrectly or unreasonably found that the copying of one or two pages from these genres of

works did not constitute the reproduction of a substantial part of the work under section 3 of

the Act. This finding that copyright did not subsist in the content of these pages was made

without any consideration of the qualitative nature of what had been copied. The Board's

error resulted (or would have resulted) in its exclusion, from the category of compensable

copying volume, 22.25% of the copying from books and 9.71% of the copying from

consumables.

22. Third, in arriving at the compensable volumes of books, periodicals and newspapers, the

Board incorrectly or unreasonably found that the volume associated with the vast majority

of copying (over 80% of books, newspapers and periodicals) in each of the years 2010 to

2015 constituted fair dealing and thus fell outside the category of compensable volume.

THE APPLICANT MAKES AN APPLICATION FOR:

23. An Order setting aside the Decision and referring the matter back to the Board for re-

determination of the compensable volume to be used in the "volume times value"

methodology in accordance with the following directions:

1 A portion of the volume of compensable copying affected by this error was already deducted by the Board on account of its findings on fair dealing and Section 29.4 of the Act (see Table 32 of the Decision)

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a. The Board shall re-determine the repertoire status of the works that were copied

in the Volume Study and include, in the category of compensable volume, the

volume associated with the copying of all works that are in the Applicant's

repertoire by reason of its agreement with an affiliate or its agreement with an

RRO;

b. The Board shall include, in the category of compensable volume, the volume of

books and consumables associated with those copying events that were excluded

by the Board on the grounds that the portions copied were not a substantial part of

the work;

c. The Board shall include, in the category of compensable volume, that volume of

books, newspapers and periodicals associated with the copying events that the

Board excluded on the grounds of fair dealing; and

d. In the alternative to the relief requested in paragraph 23(c), the Board shall

reassess the fairness of the copying events in accordance with the reasons of the

Court.

24. The Applicant requests costs of the Application.

25. The Applicant requests such other order, direction or other relief as this Court may find is

appropriate.

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THE GROUNDS FOR THE APPLICATION ARE:

A. The Board based the Decision on an erroneous finding of fact that it made without

regard to the evidence before it, resulting in an unreasonable deduction from

compensable volume

26. In paragraphs 136-158 of the Decision, the Board determined that all works of non-

affiliated rightsholders that: a) were copied in the Volume Study; and b) claimed by Access

Copyright to be in its repertoire, ought not be further considered to arrive at the volume of

compensable exposures.

27. At Tables 1-5 of the Decision, the Board excluded the volume associated with 25.73% of

books, 21.67% of newspapers and 33.09% of all periodicals on account of this finding.

28. These determinations were made by the Board despite evidence before it that the data upon

which the Board made its determination greatly underestimated the proportion of works

copied in the Volume Study that were, in fact, in the Applicant's repertoire by reason of its

agreements with an affiliate or an RRO.

29. In paragraph 405 of the Decision, the Board erroneously stated that "Access has provided

no evidence of the degree of underestimation". In fact, such evidence was before the Board

and its failure to consider that evidence whatsoever was unreasonable.

B. The Board erred in law in its interpretation of "substantial part" in section 3 of the Act

30. The Board determined that every copying event captured in the Volume Study that involved

the copying of one or two pages of a book or consumable was to be automatically excluded

from the compensable category of copying volume on the grounds that such copying, in

each and every case, did not constitute the reproduction of a "substantial part" of the work

under section 3 of the Act.

31. The arbitrary and solely quantitative rule adopted by the Board to inform its assessment of

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substantiality was wrong in law. An assessment of "substantial part" under section 3 of the

Act requires a qualitative assessment of what has been copied, not simply "how much" has

been copied.

32. The Board thus erred in law in prescribing a solely quantitative and arbitrary page threshold

under which the content copied was deemed not to be a substantial part of the work and

therefore not subject to copyright protection.

33. There was considerable evidence before the Board relating to the qualitative nature of the

books and consumables from which the pages were copied upon which the Board ought to

have made a qualitative assessment. Had the Board not disregarded such evidence, the only

reasonable finding available to it was that the one or two pages copied were a substantial

part of the works.

34. The Board also unreasonably failed to consider the evidence before it that teachers in K-12

Schools return to the same work to copy additional content. It was unreasonable for the

Board to apply its arbitrary quantitative rule in the face of this undisputed evidence of

"compound copying."

35. The Board also unreasonably failed to consider the evidence that teachers in a large number

of K-12 Schools provide "class sets" of textbooks, rather than a textbook for each student.

The use of "class sets" also requires teachers to return to the same work time and time again

to copy content for, among other reasons, homework assignments.

C. The Board's errors in respect to fair dealing

36. In assessing the fairness of the dealing, the Board erred in law or acted unreasonably in

finding that the majority of copying of books, periodicals and newspapers in K-12 Schools

constituted fair dealing:

a. despite its finding, in paragraph 350 of the Decision, that "the parties did not

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adequately address fair dealing", a finding that ought to have resulted in the Board

concluding that the Respondents had not met their evidential and legal burdens to

establish that the copying in K-12 Schools in any of the years 2010 to 2015 was

fair;

b. by failing to take into consideration the admissions of the Respondents that, as

and from January 2013, teachers copied entire works, entire book chapters and

entire periodical articles;

c. by failing to take into consideration the absence of any evidence from the

Respondents that teacher copying behaviour in any of the years 2010 to 2015 was

restricted to complementing the main teaching resource or restricted to the

situational needs of students;

d. by finding "irrelevant" and affording no weight to most of the Applicant's

evidence directed to the actual and likely negative impacts of the copying

behaviours in K-12 schools as and from January 2013 on the publishers' markets

for their works, the incentives on publishers and creators to create new works and

the quality, diversity and indigeneity of those works;

e. by designing and implementing a methodology to assess the fairness of the

copying in K-12 Schools without affording the Applicant any opportunity to make

submissions on the methodology, and thus without regard to the duty of

procedural fairness owed to the Applicant;

f. by designing a methodology to assess the fairness of the copying in K-12 Schools

that was unintelligible and non-transparent, the implementation of which resulted:

(i) in the Board unreasonably assigning no weight whatsoever to copying

behaviours that the Board itself determined were not fair; and (ii) in the Board

unreasonably weighting each fairness factor equally and in isolation from one

another, thus unreasonably distorting the Board's analysis of the fairness of each

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copying event in favour of a finding of fairness;

g. by considering each fairness factor in isolation from the others, without regard to

the purpose of copyright, thereby unreasonably skewing the fairness analysis in

favour of users at the expense of copyright holders;

h. by failing to consider, under the "alternatives to the dealing" factor or the "impact

on the market" factor, the uncontradicted evidence of the availability for purchase

by K-12 Schools of entire stand-alone magazine and newspaper articles, entire

stand-alone works published in compilations or anthologies, and textbook

chapters;

i. by failing to consider, under the "character of the dealing" fairness factor, or any

other fairness factor, the aggregate volume of copying behaviour in K-12 Schools

disclosed in the evidence; and

J• by prescribing solely quantitative thresholds for the assessment of the "amount of

dealing" factor and by assessing the evidence of record relating to that factor

solely upon the quantitative amount copied and without consideration of the

qualitative nature of what had been copied.

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THE APPLICATION WILL BE SUPPORTED BY THE FOLLOWING MATERIAL:

37. The Decision;

38. An affidavit under Rule 306 introducing relevant excerpts from the evidence and

proceedings before the Board;

39. The Applicant's Record prepared in accordance with Rule 309; and

40. Such other material as this Honourable Court permits.

THE APPLICANT REQUESTS, UNDER RULE 317, THAT:

41. The Board:

a) transmit certified copies of Exhibits AC-70, AC-71, AC-72, AC-73,AC-74 and AC-85 to

the Registry; and

b) transmit, to the Registry and the Applicant, certified copies of any documents not

marked as an Exhibit by the Board that were relied upon by the Board to make its

determination, and which were not furnished to the Applicant.

42. Without limiting the generality of the request made under paragraph 41(b), the Applicant

requests any documents underlying the adoption and implementation of the methodology

referred to in paragraph 350 and Appendix B to the Decision that have not been furnished

to the Applicant.

Date: March 21, 2016 The Canadian Copyright Licensing Agency operating as Access Copyright 320-56 Wellesley Street West Toronto, ON M5S 2S3

Tel.:1-800-893-5777

Fax: 416-868-1621

vArthur B Renaud (Ext. 294) Erin Finlay (Ext. 234) Jessica Zagar (Ext. 255)

arenaud@accesscopyright.ca efinlay@accesseopyrightea jzagar@accesscopyriRht.ca

Counsel for the Applicant

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Schedule "A"

Alberta Education Manitoba Education and Advanced Learning New Brunswick Department of Education and Early Childhood Development Newfoundland and Labrador Department of Education and Early Childhood Development Nova Scotia Department of Education and Early Childhood Development Northwest Territories Department of Education, Culture and Employment Nunavut Department of Education Ontario Ministry of Education Prince Edward Island Department of Education, Early Learning and Culture Saskatchewan Ministry of Education Yukon Department of Education Algoma District School Board Algonquin and Lakeshore Catholic District School Board Avon Maitland District School Board Bloorview School Authority Bluewater District School Board Brant Haldimand Norfolk Catholic District School Board Bruce-Grey Catholic District School Board Campbell Children's School Authority Catholic District School Board of Eastern Ontario Conseil des ecoles publiques de l'Est de l'Ontario Conseil scolaire de district catholique Centre-Sud Conseil scolaire de district catholique de l'Est ontarien Conseil scolaire de district catholique des Aurores boreales Conseil scolaire de district catholique des Grandes Rivieres Conseil scolaire de district catholique du Centre-Est de l'Ontario Conseil scolaire de district catholique du Nouvel-Ontario Conseil scolaire de district catholique Franco-Nord Conseil scolaire de district des &cotes catholiques du Sud-Ouest Conseil scolaire Viamonde Conseil scolaire de district du Grand Nord de l'Ontario Conseil scolaire de district du Nord-Est de l'Ontario District School Board of Niagara District School Board Ontario North East Dufferin-Peel Catholic District School Board Durham Catholic District School Board Durham District School Board Grand Erie District School Board Greater Essex County District School Board Halton Catholic District School Board Halton District School Board Hamilton-Wentworth Catholic District School Board Hamilton-Wentworth District School Board Hastings and Prince Edward District School Board

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Huron Perth Catholic District School Board Huron-Superior Catholic District School Board James Bay Lowlands Secondary School Board John McGivney Children's Centre School Authority Kawartha Pine Ridge District School Board Keewatin-Patricia District School Board Kenora Catholic District School Board KidsAbility School Authority Lakehead District School Board Lambton Kent District School Board Limestone District School Board London District Catholic School Board Moose Factory Island District School Area Board Moosonee District School Area Board Near North District School Board Niagara Catholic District School Board Niagara Peninsula Children's Centre School Authority Nipissing-Parry Sound Catholic District School Board Northeastern Catholic District School Board Northwest Catholic District School Board Ottawa Catholic District School Board Ottawa Children's Treatment Centre School Authority Ottawa-Carleton District School Board Peel District School Board Protestant Separate School Board of the Town of Penetanguishene Peterborough Victoria Northumberland and Clarington Catholic District School Board Rainbow District School Board Rainy River District School Board Renfrew County Catholic District School Board Renfrew County District School Board Simcoe County District School Board Simcoe Muskoka Catholic District School Board St. Clair Catholic District School Board Sudbury Catholic District School Board Superior North Catholic District School Board Superior-Greenstone District 3 School Board Thames Valley District School Board Thunder Bay Catholic District School Board Toronto Catholic District School Board Toronto District School Board Trillium Lakelands District School Board Upper Canada District School Board Upper Grand District School Board Waterloo Catholic District School Board Waterloo Region District School Board Wellington Catholic District School Board

Windsor-Essex Catholic District School Board York Catholic District School Board York Region District School Board

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