Royalties Have Crashed Since the 2012 Expansion of the Fair Dealing Law

On March 7, 2018, the Authors Guild signed onto a letter with the International Authors Forum, a coalition of authors’ groups around the world to which the Authors Guild belongs, addressed to the Canadian Parliament expressing concern about the overexpansion of Canada’s fair dealing (i.e., fair use) exceptions for educational uses. Canada enacted amendments to their copyright law in 2012 that included an exception for educational use, with no guidance or pre-existing law on its scope or application. Most Canadian educational institutions adopted a broad interpretation of the new exception and stopped paying royalties they had been paying for decades for uses like course packs or other copying. Despite a court ruling last year that royalties are in fact still due, the universities refuse to reinstate the payments.

The letter, signed by 63 authors’ organizations from around the world, calls attention to the fact that the royalty distributions to Canadian authors have plummeted since the 2012 amendment. In its 2016 Annual Report, Canada’s collective licensing agency Access Copyright reported an approximate drop in royalty distributions of 80%, having distributed approximately CAD $30.6 million in royalties in 2012 as compared to an estimated CAD $5 million in 2017. Textbook publishers have experienced a particularly significant loss, with Oxford University Press Canada closing its K–12 division in 2014, Emond Publishing ceasing to publish for the high school market, and Nelson Education filing for bankruptcy protection in 2015.

In 2017, Access Copyright sued one of the major universities for non-payment of royalties, and the Canadian Federal Court found that the uses were not covered by the outright exemption and mandated that the royalties be paid. (The Authors Guild wrote about this in the fall 2017/winter 2018 Bulletin: “Lessons Abroad: How Access Copyright v. York University Helped End Canada’s Educational Pirating Regime.”) York University appealed and the Canadian universities have refused to start paying again pending the appeal. And, even if the Federal Court of Appeal upholds the lower court’s decision, it is possible that the case could be appealed to the Canadian Supreme Court, meaning that a definitive decision may not be reached for a couple years.

The IAF’s letter calls for the Canadian Government to adopt lessons from other countries in regulating fair dealing in education, and to make sure that authors are compensated fairly for their work. This issue is especially relevant today because the Canadian Parliament is currently undertaking its first five-year review of the Copyright Act.