University of Toronto Law School Faculty Blog

The GSU Copyright Case: Some Canadian Perspectives

2012-05-15T17:09:49-04:00

This post was originally published on Prof. Katz's blog.

In April 2008, three publishers, Cambridge University Press, SAGE Publications, and Oxford University Press, filed a copyright infringement lawsuit against Georgia State University, alleging that GSU infringed their copyrights by allowing professors to upload excerpts from books onto the university’s electronic reserve system (ERes). The complaint alleged “systematic, widespread, and unauthorized copying and distribution of a vast amount of copyrighted works”, and argued that GSU “has facilitated, enabled, encouraged, and induced Georgia State professors to upload and post to these systems - and Georgia State students simultaneously to download, view, print, copy, and distribute - many, if not all, of the assigned readings for a particular course without limitation.” Unless GSU’s “infringing digital distribution practices are enjoined", the complaint asserted, "Plaintiffs, authors, and the publishing community at large will continue to face a certain, substantial, and continuing threat of loss of revenue, which will in turn threaten Plaintiffs' incentive to continue supporting and publishing the cutting-edge scholarship upon which the academic enterprise depends.”

On Friday, the US District Court issued a 350 pages decision, dismissing 94 out of the 99 claims of copyright infringement.

Of the initial 99 claims, only 75 reached the final stages of the trial. Some of the claims were dismissed on the grounds of de minimis copying, others on the ground that plaintiffs could not demonstrate that they were the owners, while the rest were found to be fair use. Infringement was found in only 5 cases. The court found that making small free excerpts from these books available to students would further the spread of knowledge, that copying caused no harm to the sale of any of the plaintiff’s books, and that here was no reason to believe that allowing unpaid, nonprofit academic use of small excerpts in controlled circumstances would diminish creation of academic works, or would appreciably diminish the Plaintiffs' ability to publish high quality scholarly books. The court dismissed the plaintiffs’ argument that they might be forced to reduce publication of high quality scholarly works, describing it as “glib” that was unsupported by any evidence.

Despite some differences between American and Canadian copyright laws, Canadian universities should pay very close attention to this decision, not only because actual lawsuits, and judicial decisions, involving allegations of copyright infringement by educational institutions are extremely rare, but also because the reasons for the plaintiffs’ failure are highly relevant to Canada. In fact, possibly, had a similar case been brought in Canada, the result could be 99-0 for the defendants, not only 94-5.

The case should also provide food for thought for the universities that have to decide whether to capitulate to Access Copyright. It casts further doubts about the claims of the AUCC that the deal that it brokered with Access Copyright is the best possible outcome for Canadian universities.

I have had some discussions with different people in the university community, including in universities that are leaning towards signing the Model License, and it seems to me that it’s not the conviction that Model License provides any real benefits for universities that motivates them to sign it, but the fear of what would happen to them if they do not sign. This is an understandable approach. For almost two decades, most universities obtained licenses from Access Copyright, which provided some real, but mostly imaginary, comfort to university administrators that they don’t have to worry about copyright. As a result, very few universities developed any internal expertise on copyright or any internal mechanisms that would allow them to feel confident about operating without Access Copyright.

Things began to change about a year ago, when more than 30 universities decided to opt out of the interim tariff, get over their Access Copyright addiction and prepare for a new life of rehabilitation. Their plan comprised of four elements: obtaining direct licenses from publishers and other market intermediaries when necessary, relying on open-access materials when available, taking fair dealing and other users’ rights seriously, and lastly, more sophisticated risk management than the one they were used to before. In other words, many universities decided to regain ownership of their copyright lives and slowly develop confidence in their ability to do that. Even when UofT and Western decided to settle with Access Copyright, many of the opt-out universities remained resolved not to go back and confident that the AUCC would not cave in. But it did, and left many of its members confused, bewildered, under pressure to make quick decisions. Panic reaction ensued, and the option of signing the agreement—what they vowed not to do again—suddenly began looking like a comforting alternative.

From my conversations, the fear of being liable for copyright infringement plays an important role for the university administrators who lean toward signing the Model License. The fear is that despite their best efforts to secure licenses, encourage use of open access materials, and provide guidance about the scope of fair dealing and other exceptions, they may not be able to guarantee that all students and all faculty and staff will comply and some infringing copies will be made. They fear that Access Copyright might sniff around, look for evidence of infringement, and sue them. However, the GSU decision demonstrate why the fear of being sued and held liable might be overblown, and universities should conduct a much closer risk-assessment.

First, without getting into much detail, it is doubtful whether Access Copyright, who acts on behalf of copyright owners but is not the owner of copyrights, has any standing to sue for copyright infringement. Even if it has such standing, the copyright owner must normally be made a party. But the interests of Access Copyright and its members do not always align. For example, the owner may be an author, or an academic author, who has no objection for her works being used for teaching, or it may be a publisher for whom universities are important customers and suing them may or may not be perceived as good business.

Second, if contested, the plaintiff’s ownership cannot be taken for granted, and showing chain of title can be more complicated than ordinarily thought. For example, a publisher claiming to be an assignee of the copyright may not be able to produce the signed document on which the assignment depends, or it may turn out that the owner has transferred only some rights, but retained others (e.g., digital rights), etc. GSU is a case on point. 18 claims were dismissed because the plaintiffs couldn't prove ownership.

Third, the copying itself might not be infringing at all. Even the copying was not covered by a license, many if not most, of the unauthorized copies made on campus may be permissible under fair dealing or other exceptions even before Bill C-11 becomes law. Save for blatant cases of infringement, copyright owners might be reluctant to risk another CCH-like outcome in borderline cases. The GSU case confirms such prediction. It was a carefully planned case, and presumably, it would not have launched unless the plaintiffs believed that they had the best possible evidence. The fact that they lost 94 of 99 complaints is telling.

Let me now offer additional (and initial) observations on the GSU case from a Canadian perspective, which, I promise, will be interesting for my American readers as well.

Access Copyright and the Copyright Clearance Center

The plaintiffs in this case were Cambridge, Sage, and Oxford as plaintiffs, but the real entity behind the case was the Copyright Clearance Centre (CCC). When it comes to licensing educational institutions, the CCC is Access Copyright’s American little cousin. While most of Access Copyright’s income comes from the educational sector (more than 75%, according to the Friedland Report), educational licenses contributed only 12% to the CCC’s revenue. American universities, for the most part, were never convinced that the CCC could offer them anything valuable, except for being an occasional source of transactional licenses. The GSU case was brought as a test case. According to the court, CCC and the Association of American Publishers (AAP) organized the litigation, and they pay the plaintiffs’ expenses and attorneys’ fees. CCC and its counsel did the initial fact gathering concerning unlicensed copying of excerpts in the higher education community and then convinced the three publishers to join. The purpose of the lawsuit was not to recover any damages, but rather to force GSU, and convince all other universities, to obtain licenses from CCC. The availability of such licenses, what actually they would cover, was a central issue during trial. What has been revealed should be of particular interest to Canadian universities: those who already decided to sign an agreement with Access Copyright and those who contemplate doing so.

So here are some interesting facts. Like most American universities, GSU declined to obtain licenses from CCC. Occasionally it obtained some ad-hoc transactional licenses from the CCC, but the scale was rather low. In an earlier decision in this case, the court found that over a decade, GSU paid CCC less than $19,000 on license fees (i.e., less than $1,900 per year). Since GSU has approximately 32,000 students, these payments are the equivalent of less than ¢6 per student per year. Canadian universities paid Access Copyright $19 per student per year during the same period.

During trial, the CCC estimated that it would cost GSU $114,000 per year to participate in its annual licensing program (p. 29), which means that the fee per-student would be $3.56. Presumably, there is no significant difference between the repertoires of AC and CCC, because the two organizations cross-license their repertoires, but Canadian universities who sign the Model License would pay $26 per student. So when Canadian universities consider whether to sign the Model License that the AUCC claims is the “best possible outcome for Canadian universities”, they should look south of the border and think what could be the price if they weren’t so eager to be dependent on Access Copyright. This chart might help them.

Access Copyright’s Repertoire

Access Copyright’s repertoire is shrouded in mystery. This has been very convenient for Access Copyright, as well as for its licensees. Access Copyright has pretended that it can license almost every work that universities might use, and universities really wanted to believe that this was true. However, this “don’t ask, don’t tell” unwritten rule has become less stable as universities began obtaining permissions covering digital and print directly from publishers, and as many of Access Copyright’s members declined to let it authorize digital rights. As I have noted before, Access Copyright’s digital repertoire is significantly smaller than its (limited) paper repertoire. The GSU decision provides some interesting insights into the limited digital repertoire available to CCC. These insights may shed light on similar issues with respect to AC’s repertoire too.

For example, the court learned that CCC is able to license excerpts only from 60% of Cambridge's works. Oxford estimated that CCC currently (in 2011) licenses the copying of excerpts from over 90% of its titles, but there was no evidence that all of Oxford’s works in question were available for licensing through the CCC, only that some of them were. CCC offers an Academic Repertory License Service, which affords subscribers access to excerpts from about nine million titles. In 2009 digital licenses for excerpts from a million and a half (seventeen percent) of these works were available (the veracity of these general nubers was not an issue in this case). The court attributed the lesser availability of digital excerpts to the following reasons: (1) some publishers are concerned that they may not have the right to authorize distribution in digital as opposed to print format; (2) some publishers are reluctant to place digital copies of their works in the stream of commerce; and (3) sometimes publishers, for whatever reason, simply prefer limiting sales to the whole book. Cambridge did not and does not participate in this program; Oxford participated in 2009 only with its journals, not with its books. Oxford currently participates in this program. Sage participates in this program currently and did so in 2009.” (pp. 28-29) In the end, of the 46 excerpts from Cambridge's and Oxford's works, licenses to make digital copies were shown to be available for only 13 excerpts.

Canadian universities that consider singing the Model License believing it provides them wide permissions to use works in digital form should think twice, and should demand to find out what exactly will they get in return for the hundreds of thousands of dollars that they would pay AC. They should recognize that the Model License that they are encouraged to sign treats digital copying quite differently from photocopies. While AC authorizes the making of digital copies for works within its repertoire, the size and scope of this repertoire is unknown. Moreover, while AC undertakes to indemnify universities who make digital copies of works not within its repertoire, the indemnity with respect to works in “born digital format” only if the work appears on the Inclusions List (if you're surprised, read s. 13 of the Model License and the definition of the term "Repertoire Work"). To the best of my knowledge, this Inclusions List is not available.

GSU vs. CCH

The litigation strategy behind the GSU case is highly similar to that employed in other cases, notably, CCH v. LSUC. Like the CCC in the GSU case, the real entity behind the CCH case was AC, who hoped to gain a quick victory over the Law Society that would open for it new markets: law firms first, and then the broader corporate world. Like the CCC in the GSU case, AC bore the cost of the litigation. To its dismay, the CCH case ended with the worst possible outcome for AC.

An earlier case that was crucial for these two cases is the 2^nd Circuit decision in American Geophysical Union v. Texaco. In that case, publishers of scientific and medical journals brought copyright infringement action against Texaco, who made unauthorized copies of copyrighted articles for use of its researchers. The 2nd Circuit rejected Texaco’s fair use defense and found in favour of the publishers. Even though, when analyzing the “effect on the market”, the court found that there was no persuasive evidence with respect to harm to the sales of subscriptions to journals, the court found that a finding of fair use would impair the ability of the publishers to license copying through the CCC, and held that the defense of fair use failed.

In the GSU case, the court accepted the Texaco approach and held that the availability of a license is relevant to the fair use analysis and would weigh in favour of the plaintiff. While the court noted the notorious circularity of the Texaco approach, it concluded that there is no ideal solution to this problem. The court’s solution seems to be treating the availability of a license as a necessary condition for defeating a fair use claim, but not a sufficient one.

In Canada, the Supreme Court avoided that circularity by rejecting the Texaco approach. Although that case is not mentioned in the decision itself, Texaco played an important role in AC’s strategy in the CCH case. AC, who was behind the litigation and granted intervener status at the Supreme Court, devoted a quarter of its intervener factum in CCH to the argument that “obtaining of licenses from collective societies constitutes a valid alternative to infringement and should be considered in the determination of the fairness of a particular dealing.” It submitted that the Court should follow Texaco and hold that “Where collective societies have created a workable market for institutional users to obtain licences for the right to reproduce works protected by copyright, courts should acknowledge that the reproduction of such works, absent a licence, will generally affect the potential market for those works, and take this factor into account in any analysis of whether a dealing is ‘”fair”.” The Court in CCH listened to argument. The Court considered the argument. The Court rejected the argument. The Supreme Court held that

“The availability of a licence is not relevant to deciding whether a dealing has been fair. As discussed, fair dealing is an integral part of the scheme of copyright law in Canada. If a copyright owner were allowed to license people to use its work and then point to a person’s decision not to obtain a licence as proof that his or her dealings were not fair, this would extend the scope of the owner’s monopoly over the use of his or her work in a manner that would not be consistent with the Copyright Act’s balance between owner’s rights and user’s interests.”

Since the Supreme Court of Canada foreclosed a Texaco-style finding of infringement, the 5 successful claims in the GSU case might have failed in Canada like the rest of the 94.

Fair Use, Fair Dealing, and the Effect on the Market

I have recently blogged about the false claim that the “effect on the market” is the preeminent factor in fair use analysis in the US. The GSU case confirms this point: “It is hornbook law that there is no across the board rule for what weight should be given to each factor or how the factors should be applied.” (p. 19)

In that post I also discussed the fact that publishers have consistently failed to demonstrate any harm to their markets in virtually every reported case. The GSU case has now become just the latest chapter in a series of cases in which publishers make passionate claims about the harms of unauthorized copying for research or teaching but fail to support them with any credible evidence. As Judge Evans put it, these arguments are glib.

GSU, CCH, and the university’s liability

The named defendants in the GSU case were university officials. In an earlier decision the court held that they could not be liable for direct infringement or under vicarious liability but left open the possibility of contributory liability. At the close of Plaintiffs' case, the court granted Defendants' motion for judgment on Count II (contributory infringement), leaving only the claim under Count I that the 2009 Copyright Policy caused copyright infringement.

The court concluded the university was liable for the five cases of infringement, because GSU’s Copyright Policy “did not limit copying in those instances to decidedly small excerpts as required by this Order. Nor did it proscribe the use of multiple chapters from the same book. Also, the fair use policy did not provide sufficient guidance in determining the “actual or potential effect on the market or the value of the copyrighted work,” a task which would likely be futile for prospective determinations (in advance of litigation). The only practical way to deal with factor four in advance likely is to assume that it strongly favors the plaintiff-publisher (if licensed digital excerpts are available)." Still, the court believed that “Defendants, in adopting the 2009 policy, tried to comply with the Copyright Act. The truth is that fair use principles are notoriously difficult to apply. Nonetheless, in the final analysis Defendants' intent is not relevant to a determination whether infringements occurred.” This is potentially another point which could turn out differently in Canada.

Normally in a similar factual setting in Canada, the university’s liability would depend on whether it would “authorized” the infringement. In CCH the Court adopted an approach that is likely to make it more difficult to hold the university liable. The Supreme Court emphatically emphasized that

While authorization can be inferred from acts that are less than direct and positive, a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law. This presumption may be rebutted if it is shown that a certain relationship or degree of control existed between the alleged authorizer and the persons who committed the copyright infringement.

Even though the Court relied on the lack of master-servant or employer-employee relationship between the Law Society and the patrons to support its conclusion that the Law Society lacked the necessary control over the library’s patrons, concluding that the existence of such relationships is sufficient to rebut the presumption that the activity was authorized only so far as it is in accordance with the law is would not only be a logical fallacy but it would also ignore the policy rationale behind the Court’s holding. In CCH the court declined the follow the Australian High Court decision in Moorehouse (which held that a university was liable for authorizing copying by library patrons becuase it failed to had taken reasonable steps to prevent an infringing copy from being made) stating that Moorhouse approach was “inconsistent with previous Canadian and British approaches to this issue,” but more importantly, it “shifts the balance in copyright too far in favour of the owner’s rights and unnecessarily interferes with the proper use of copyrighted works for the good of society as a whole.”

Moreover, despite being an employer of professors, the university is an inherently non-hierarchical organization. This is not a bug, but a feature. The very limited control that university administration has over professors choices of materials used for research or teaching is, in part, necessary to enable academic freedom, which is, as the Alberta Court of Appeal just confirmed, “an important value in Canadian society” and a value that is inextricably linked to freedom of expression protected by the Charter. Academic freedom, of course, is not a free pass to professors to infringe copyright, but a university that would be liable for the infringement of its faculty—except in some extreme situations—would have to exert much greater level of control over its professors than it currently does. An interpretation of the Copyright Act that requires a high level of control runs the risk of being constitutionally invalid.

In addition, in CCH, the Court rejected the notion that the Law Society had to prove that all the copies made by the library’s patrons would constitute fair dealing. The Court held that it was not incumbent on the Law Society to adduce evidence that every patron uses the material provided for in a fair dealing manner, but that instead, it was sufficient for the Law Society to rely on its general practice to establish fair dealing. “Persons or institutions relying on the s. 29 fair dealing exception need only prove that their own dealings with copyrighted works were for the purpose of research or private study and were fair. They may do this either by showing that their own practices and policies were research-based and fair, or by showing that all individual dealings with the materials were in fact research-based and fair.” (para. 63). The policy of the Great Library which the Court upheld as fair is much more general than the GSU policy, and does not seem to have the degree of specificity that Judge Evans requires in GSU.

The Canadian Paradox

As I write this post, Bill C-11 is under third readings at the House of Commons. Barring some unexpected development, "education" will be explicitly added to the fair dealing provision, removing any doubt that the Copyright Act allows fair dealing for this purpose. Bill C-11 will also reduce the risk of excessive statutory damages for non-commercial activities. The cumulative effect of this amendment the the Supreme Court's holdings in CCH, will be an expanded ability of Canadian universities to pursue their mandate without being subject to Access Copyright's de facto Education Tax, and without being liable for copyright infringement. To Supreme Court's clear repudiation of Texaco gives Canadian universities a wider zone than that available to their American counterparts. Nevertheless, American universities are much more willing to assert and defend their rights, while many Canadian ones, short-sighted, extremely risk-averse, and ill-advised, still cling to their habit of being dependent on Access Copyright.

Still, the opposition to the AUCC-AC Model License continues to mount. The times they are a-changin'.

Prof. Ed Morgan - "The difference between lunchtime prayer and a Jesus T-shirt"

2012-05-09T15:35:03-04:00

This commentary was first published by Prof. Ed Morgan in The Globe and Mail on May 9, 2012.

A public school in Toronto thinks a clergyman can be invited to conduct Islamic prayers at lunchtime on school grounds. As a school trustee explains it, “What we’re doing is what we should be doing as a school board and that is accommodating students’ needs no matter what their religion is.”

A public school in Chester Basin, N.S., thinks a student can be prohibited from wearing a T-shirt with a Christian message on school grounds. As school trustees explain it, “It is expected that students will not wear clothing with messages that may offend others’ beliefs, race, religion, culture or lifestyle.”

Does Canadian law really get such a failing grade?

Whether religious expression is permitted in schools turns on the meaning given to “freedom of religion” and “freedom of expression.” The confusion over this question calls for a review class on the Canadian Charter of Rights and Freedoms.

Beginning in the mid-1980s, the courts determined that public schools cannot teach religion in a doctrinal way. While they can, and often do, offer history and social-studies classes that survey world religions, the mandatory separation of church and state prohibits them from teaching religion as it is taught to adherents of that religion – i.e., as a matter of belief rather than general knowledge.

In another 1980s case, the courts ruled that public schools cannot conduct religious exercises that favour one denomination. While they can, and often do, have inspirational or spiritual readings at the beginning of the day, the constitutional protection of religious freedom prohibits them from holding prayer sessions in the same way as adherents of a particular religion.

In a key part of these rulings, it was found that even voluntary religious sessions violate the Charter. The fact that a student could typically opt out or seek an exemption from the prayers or classes was not enough. As the Ontario Court of Appeal put it, having to seek an exemption from religious exercises itself “compels students and parents to make a religious statement.”

While the courts have not had an opportunity to examine the current Toronto controversy over communal prayers held at lunch hour in the school cafeteria, it seems clear that the practice is constitutionally offside. The same logic that denied school boards the power to hold opt-out religious sessions should deny them the power to hold opt-in sessions.

A state agency simply cannot tacitly endorse denominational prayer, especially in a school environment. As the court put it, what appears voluntary to adults may in effect be mandatory for schoolchildren: “The peer pressure and the classroom norms to which children are acutely sensitive, are real and pervasive and operate to compel … religious practices.”

Much as it should be clear that a public school’s power to endorse religion is constitutionally limited, it should be equally clear that a student’s right to endorse religion is constitutionally protected.

The combination of freedom of religion and freedom of speech gives wide latitude for Canadians to express their faith. As the Supreme Court of Canada said in a 2002 ruling, religion is too integral an aspect of people’s lives to expect them to stay silent on the subject. And this is true no matter how harsh the expression appears to the majority of listeners. As the Supreme Court again noted in the case of right-wing New Brunswick teacher Malcolm Ross, “It is not the role of the court to decide what any particular religion believes.”

What’s true for teachers is true for everyone else. The courts have repeatedly held that although schools can take reasonable measures for maintaining discipline, pupils do not leave their Charter rights at the schoolhouse door. This includes freedom of speech.

Religious expression, like other speech, is protected unless it collides with Canada’s hate laws and human rights codes. Properly understood, however, these laws apply only in the most egregious circumstances. In the notorious case of hatemongering Alberta teacher James Keegstra, it was made clear that to be illegal, the speech must be a form of “extreme emotion that belies reason.” It must, in human rights terms, utterly poison the educational atmosphere for an identifiable group. Mere disagreement, even impassioned disagreement, doesn’t count.

Needless to say, religious faiths differ with each other. While it is common to think that the world’s religions share the same basic beliefs, the fact is they do not all agree. To use the example of the Nova Scotia T-shirt, a Christian may feel that life is wasted without Jesus; a Hindu will likely not feel the same. If all faiths agreed, the Pope would have to eat kosher.

Professing one’s faith – whether by saying “Jesus saves,” “There is no God but Allah,” “Hare Krishna,” etc. – is not to denigrate another faith in any legal sense. Like all Canadians, pupils in school are allowed to say these things with as much fervour as they like.

In short, Canadian law generally restricts school authorities from promoting religion, even passively by holding voluntary classes and prayers. It generally does not restrict students from promoting religion, even actively by wearing it on their sleeve or chest. That’s a lesson school boards and principals need to study.

Prof. Anita Anand: "Telus funds ignore governance"

2012-04-30T10:31:48-04:00

This commentary was first published in the Financial Post on April 28, 2012.

The collapse of Magna’s dual-class share structure in 2011 via an insider bid for Frank Stronach’s holdings raised eyebrows because of the unprecedented pay out of an 1,800% premium that Mr. Stronach (through a private holding company) received in the transaction. Dual-class structures are once again in the spotlight with the recent proposal by Telus to eliminate its dual class structure. It was clear that Magna concerned securities regulators at least from a disclosure standpoint. By contrast, regulators have been conspicuously silent on the Telus transaction.

Under the terms of the Telus proposal, which goes to a shareholder vote on May 9, each non-voting share would be converted to a common share on a one-for-one basis. The two classes of shareholders will vote separately on the transaction. Two-thirds approval from each class is required in order for the votes to pass. Thus, a concern about shareholder participation that existed in previous dual class transactions, such as Canadian Tire, falls away since shareholders in each class have a vote.

Yet the Telus proposal, and in particular the actions of certain investors, raise investor protection issues. Let’s start with hedge fund Mason Capital, which is vigorously opposing the plan. Mason has acquired almost 20% of Telus’s common shares. While in and of itself, its acquisition of Telus shares seems benign, one must consider that while Mason holds a significant percentage of common shares, it owns less than 0.25% net economic interest in the underlying company. Mason is playing an arbitrageur’s game: trying to leverage profit from the existence of the dual-class structure without a concern for what is best from a corporate-governance standpoint.

The first and perhaps most fundamental issue is whether such a bifurcation between value and vote should be permitted. From a corporate law standpoint, shareholders who purchase and sell shares for profit only without concern for the underlying governance of the corporation undermine the principle of shareholder democracy on which corporate law is founded.
Advertisement

The second crucial issue concerns the lack of prompt disclosure relating to how Mason acquired its Telus shares. As a policy matter, non-transparent borrowing and lending of stock over the course of the record date undermine shareholder democracy and raises investor protection concerns. If such activities are permitted, proper disclosure about such trades must be made; the current system based in part on the “alternative monthly report” (AMR) is inadequate. In particular, the rules provide broad latitude for hedge funds to use the AMR system when they are not passive investors. More regulatory focus is needed with regard to the disclosure obligations of active versus passive investors.

Do securities regulators have public interest concerns about these issues? The Ontario Securities Commission has in the past; it intervened in Sears when a mandatory vote was being determined by empty voters receiving collateral benefits. Telus is a British Columbia company; presumably the lead regulator is the B.C. Securities Commission. The Telus transaction, and the apparent absence of a regulatory response to it, may be one consequence of having no national securities regulator. While one commission may be concerned about particular transactions and market players, others may not share similar investor-protection concerns.

Ultimately, the issue must be one about the regulation of hedge funds and similar investors who by their actions attempt to circumvent the spirit of both corporate and securities law. Numerous issues come to mind: bifurcation of vote and value, the lack of transparency and disclosure, regulation of market players such as hedge funds. The Telus transaction to abolish its dual-class share structure, a positive move for investors generally, has brought these concerns to the fore: Who is going to do something about them now that the transaction is at risk of failure? Securities regulators need not wait for an application from an issuer to act in the public interest.

Prof. Ed Morgan - "Foreign affairs: a delicate balancing act"

2012-04-18T15:29:24-04:00

This article by Prof. Ed Morgan was originally published in The Lawyers Weekly, April 13, 2012.

When it comes to conducting foreign affairs, it is well established that the constitution puts the weight of responsibility on the federal government. But in recent years, the courts have deviated from that rule as often as they have invoked it.

In the Afghan prisoners case, the Federal Court of Canada explained that the government owes no constitutional duty when, after questioning, the military turns detainees over to a foreign government. The judgment presumed that Canadian forces require flexibility, and enjoy the discretion to deviate from domestic rules when they deal with an allied state and prisoners of war.

That ruling came within a year of the Supreme Court's first judgment on Omar Khadr's treatment in Guantanamo, where it held that the government owes a constitutional duty to a detainee held by a foreign state and turned over to CSIS for questioning. The court presumed that intelligence officers can adhere to the same domestic standards as the Charter requires of ordinary police when they deal with an allied state and national security prisoners.

The courts have been equally perplexing on whether Canadian authorities should interfere with a foreign country's legal system. In the case of convicted murderer Ronald Smith, the Federal Court determined that our diplomats are constitutionally obliged to run interference with a foreign system that falls short of Canadian rules on cruel and unusual punishment. The ruling effectively ignored international standards on consular assistance, which make it a policy choice by state governments as to whether to espouse the cause of its citizen facing another state's criminal justice.

At the same time, in the case of convicted money launderer Lawrence Hape, the Supreme Court acquiesced in the RCMP's policy of complying with criminal investigations that fall short of our rules on search and seizure. The ruling effectively ignored international standards on police procedure, which make it a mandatory obligation of state governments to adhere to universal human rights norms in law enforcement matters.

In the most recent version of this constitutional tangle, the Supreme Court has managed to both restrict government in the name of the Charter and to defer to government in the name of Crown prerogative over foreign affairs. It wasn't easy, but the court addressed the second appeal brought to it by Omar Khadr in a way that put both strands of the contradictory jurisprudence into one ruling.

Khadr brought his claim directly against the Prime Minister for failing to use his position as head of government to advocate for a citizen held abroad. The case pitted the rights of an incarcerated citizen directly against the power of the federal government in international relations. It is a dilemma to which the constitution provides no easy answer: the federal executive, not the courts, is authorized to conduct foreign policy, while the courts, not the federal executive, are authorized to adjudicate individual rights and freedoms.

In the result, the Supreme Court split the difference. It opined that Khadr's rights were violated by the Prime Minister's choice of attending to foreign relations rather than to a citizen's plight. Simultaneously, it reasoned that any remedial order would interfere with the Crown's inherent discretion in foreign affairs. Accordingly, the court declared that Khadr's rights were violated by the Prime Minister's failure to do anything on his behalf, and then proceeded to deny him a remedy or to do anything on his behalf.

Where will the courts take the constitution in the foreseeable future?

The direction of the courts can be gleaned from recent cases dealing with prisoner transfers. Canada has treaty relationships with roughly a dozen countries that permit citizens convicted by the courts of a treaty partner to serve their time in Canada. Given the sensitive nature of foreign relations and cross-border crime, however, it takes a cabinet level decision to implement any transfer.

The Federal Court has decided a number of transfer cases both before and since the latest Khadr ruling. In doing so it has stayed "true" -- if that word can be used in this difficult context -- to the conflicting principles that have plagued the law. That is, the court has seen transfer agreements and their implementing legislation as conferring rights on convicts and conferring powers on government, and has done little to reconcile the two.

The recent decision in the case of Alexie Randhawa, a Canadian convicted of drug trafficking in California, is a case in point. The court made it clear that the Minister of Public Safety has discretion whether to authorize a prisoner's transfer from abroad. At the same time, it made it clear that the Minister has little discretion in overriding the right of a citizen to repatriate through the transfer system.

The Charter confirms that we value universal rights, while the traditional Crown prerogative over foreign affairs confirms that we have distinct national interests. The courts show every sign of continuing to follow both lines, finding new ways for us to have our constitutional cake and eat it too.

The Best Possible Outcome for Universities, Really?

2012-04-17T18:23:05-04:00

This post was posted originally on Prof. Katz's blog.

Access Copyright and the Association of Universities and Colleges of Canada (AUCC) announced yesterday that they had negotiated a Model Licence that would allow universities to reproduce copyright protected materials in both print and digital formats. In a joint media release issued by Access Copyright and the AUCC, Paul Davidson, president of the AUCC, was quoted as saying "We believe that this negotiated agreement provides the best possible outcome for universities, their students and faculty." Really, Mr. Davidson, Really?

The Model License is quite similar to the unfortunate agreement that UofT and UWO signed a couple of months ago. Like the other agreement, this one suffers from the same conceptual flaws that I described in an earlier post. The two agreements also contain similar provisions that create unacceptable intrusion and limitation on academics' ability to conduct research and teach. For example, s. 4(a) provides that "Except as specifically authorized under section 3(b), no Copies of Repertoire Works shall be made available, distributed, or transmitted to a person who is not an Authorized Person." This appears to mean that even though the Agreement allows me to copy a journal article, I can't share it with a colleague from outside my institution, even if that colleague is a co-author. Is this the best possible outcome? Really?

Or consider s. 4(c): "Copies of Repertoire Works shall not be stored or indexed with the intention of creating a library of Published Works, except as permitted by this agreement as part of a Course Collection." I don't know when was the last time the people who negotiated these license agreements conducted academic research, but I'm happy to break the news that since the photocopier appeared on campus (and perhaps earlier than that) copying works (such as journal articles), and storing them "with the intention of creating a library" has been integral to the researcher's life. Some of us annotate these copies, occasionally at least, and those who are better organized employ various methods for cataloging and indexing their collections. Believe it or not, some academics keep not only collections of photocopies but also collections of materials in electronic format called "pdf". Yes, we sometimes do weird things up there in the ivory tower. Moreover--and I hope you're ready for the shocking news--it has even been brought to my attention that some Canadian researchers use programs like Zotero, RefWorks, EndNotes, among others, in order to index those files for easy search, retrieval, and other seditious purposes. The agreements seem to prohibit that. Is this the best possible outcome? Really?

Or what would you say about the following gems, such as s. 5(a): "Digital Copies of Repertoire Works shall not be transmitted to, posted or uploaded to, or stored on any computer network other than a Secure Network", and 5(b:) "Digital Copies of Repertoire Works stored on Secure Networks shall be made available and accessible only to Authorized Persons segregated by individual Course of Study"? These prohibition seem benign enough until your read the definitions. A Secure Network is defined as: "a network that is operated by the Licensee [i.e., the licensed university, not the Authorized Person, AK], or for and subject to the control of the Licensee (such as a network hosted by a third party and/or accessible through a web interface) and which is only accessible by an Authorized Person who is approved by the Licensee by means of a process of authentication which, at the time of login, identifies the user as an Authorized Person, whether by user name and password or by some other equally secure method." This definition inspired me to write the following short poem.

Bye bye CDs, au revoir USB drive,

Goodbye local hard-

disk and memory card.

No more Dropbox, no more Gmail,

Adieu, dear Cloud. Take care. Farewell.

Is this the best possible outcome, Really? And who the heck should be "segregated by Individual Course of Study"? Should the Digital Copies be segregated or the Authorized Persons?

And if that's not bad enough, how about the "poison pill" in s. 5(d): "(d) Where the Licensee is no longer covered by this agreement, the Licensee shall immediately use reasonable efforts to (i) prevent access to Digital Copies of Repertoire Works made under this agreement and stored on a Secure Network under its control ..." Get it? If the Access Copyright decides to terminate the Agreement, or if the university decides not to renew it, the university will have to block access to all the copies that you made. Immediately. Who wants to be the university administrator that will decide to divorce Access Copyright under such conditions? “Educational institutions and the publishing industry depend on one another,” said Greg Nordal, President, Nelson Canada and Access Copyright Board Member. They depend on each other so much, that care must be taken to avoid withdrawal symptoms. Thank you.

What else does the Agreement has to offer? Probably in response to the outcry over the surveillance provisions of the UofT-UWO agreements, the equivalent provisions under the AUCC Model License are more detailed and guarantee that "The Survey shall respect the principles of academic freedom, for example, by not providing access to the Licensee’s, its Students’ and academic staff’s chat rooms and e-mails" (s. 11(d)(iii)). What a relief. Your emails and chats won't be put under surveillance, but everything else might. The best possible outcome, Really? And now to the last nugget, which I saved to my faithful readers, my fellow Access Copyright geeks. Here's one of the most interesting and worrisome aspects of the agreement, s. 18.

18. Application of the Tariff Consistent with section 70.191 of the Copyright Act, Access Copyright will not seek to enforce the Tariff, and any renewals, extensions or replacements of the Tariff, against the Licensee during the Term.

Why is it interesting? Because it indicates that the Agreement with the AUCC is not even part of a settlement of the Tariff proceedings before the Copyright Board. That is, Access Copyright does not intend to withdraw the Proposed Tariff but plans to use the Proposed Tariff as a threat against the Opt-Out institutions, those rebellious universities that decided to get over the Access Copyright addiction. As you may recall, the Proposed Tariff requested a fee of $45 per student, and included surveillance, monitoring, and auditing requirement that make the equivalent requirements under the Model License look like The Charter of Rights and Freedoms. Moreover, the Copyright Board has expressed the view that the option of opting out is merely theoretical, because the Final Tariff would apply to any institutions that made even a single copy of a single Repertoire Work, and will be levied retroactively.

One of the things that I learned over the last several weeks is that one of UofT's motivations to settle the case was the realization that the AUCC was handling the Copyright Board challenge quite badly. Apparently, UofT concluded that it would rather settle than participate in funding a legal challenge that was handled in a way that guaranteed defeat. I suspect that additional universities have reached the same conclusion, and the result is a classic prisoners' dilemma for the universities. If all of them could coordinate and mount a serious challenge they could win the case, but if they cannot coordinate to mount such challenge, then those who continue to fight would lose and be subject to a retroactive draconian Tariff, whereas those who settle will get a bad deal, but one that is not as bad as a retroactive Tariff.

To accelerate this outcome, Access Copyright and the AUCC even negotiated a Limited Time Offer of Discounted Pricing on Retroactive Payments, that provides relief from retroactive payments for the institutions that sign the agreement early. The message to university administrators is clear: "Yes, you can opt out and try to challenge the tariff; but you will lose anyway. Instead, here's an offer that you can't refuse."

So no, Mr. Davidson. This deal is not the best possible outcome for universities. The AUCC may believe that under the current circumstances "this negotiated agreement provides the best possible outcome for universities". But if such a dismal outcome is the best that Canadian universities believe they could get, then Mr. Davidson and other senior university administrators still owe faculty, staff, students, and taxpayers some serious explanations. They should explain how instead of coordinating and leading the academic community to set itself free from the tyranny of Access Copyright, they ended up colluding and brokering a deal with their bully. If they were advised, or came to the conclusion on their own, that this agreement is the best they could get, they should explain why they have used and have continued knowingly to seek legal advice from counsel who regularly advise and act for copyright collective and other big content owner interests. The AUCC and other senior university administrators should explain why retaining counsel who have lobbied on behalf of publishers and copyright collectives, and argued in the Supreme Court of Canada last December against a "large and liberal" interpretation of fair dealing that would be beneficial to academia was a wise decision to make. We deserve to know why these flawed agreements are the best possible outcome for universities. We really do. Really.

Prof. Audrey Macklin with Lorne Waldman: Ottawa’s bogus refugee bill

2012-02-24T12:20:03-05:00

This commentary by Prof. Audrey Macklin and Lorne Waldman was first published on the Toronto Star website on Feb. 22, 2012.

Jason Kenney, the minister of Citizenship and Immigration, knows who the real refugees are. Or at least he knows which ones are “bogus”: refugee claimants from Mexico or Sri Lanka or Hungary are bogus. Bogus refugees include those who use smugglers to overcome the barriers to lawfully reaching countries like Canada which, by signing the refugee convention, have promised not to send back persons fleeing persecution.

Kenney’s system-abusing bogus refugees include those fleeing discrimination, oppression and hardship not quite horrific enough to satisfy the standards required by the jurisprudence defining and applying the refugee definition. Kenney does not mention that close to 40 per cent of the claimants were recognized as genuine refugees last year. Like falling crime statistics, that is an inconvenient truth for this government. Kenney manages to convert the fact that the system does not confer refugee protection on all who seek it into evidence of system failure.

Kenney made his views clear to voters by highlighting the issue of “bogus claims” in the last election. And he made them known to the members of the Immigration and Refugee Board — the decision-makers who are tasked with determining individual cases based on the evidence, and whose reappointments depend on Kenney’s opinion of them. And just to be sure that his views were respected, he took the unprecedented step last year of telling the justices of the Federal Court to stop thwarting his efforts to reform refugee policy by holding government officials legally accountable for their actions.

Now, with a majority government in hand, the minister proposes to change the law to make reality bend to his vision. There is no longer a need to treat refugee claimants with basic dignity, or to provide them with a fair opportunity to tell their story. Why bother, since the minister has already determined for all of us that they are bogus?

All refugee claimants will have 15 days from the moment they arrive to submit a written application (in English or French) setting out the elements of their refugee claim. If they cannot find an interpreter, a lawyer or a trustworthy person who can assist them, they will miss the deadline and be deemed to have “abandoned” their refugee claim. No need to worry that a refugee might be sent back to persecution because she missed an impossible-to-meet deadline, because the minister knows she is a fraud anyway.

The legislation also lets the minister deem non-citizens as “irregular arrivals.” These designated “irregular arrivals” will be automatically detained for one year without warrant and without review. Children under 16 won’t automatically be detained — the minister will get to choose whether to detain them with their parents or wrench them away from their parents for a full year. If one of these detained refugee claimants manages to persuade a decision-maker that she is a refugee, the law will deny her the ability to reunite with family members for a minimum of five years.

Yes, these might seem like brutal, arbitrary and cruel measures to impose on human beings who have committed no crime, especially those who have been recognized as refugees. But since the minister knows that even a recognized refugee is really bogus, punishing refugees by denying them family reunification should not bother us.

But that is not enough for the minister: Bill C-31 authorizes the government to strip refugees of their status and deport them years after they have been resettled or recognized as refugees, if the government figures that the refugee no longer faces a risk of persecution. The only protection against this perpetual threat of expulsion is citizenship, but the government is also restricting access to citizenship for refugees by elevating language requirements to a level that will make citizenship less attainable for them.

Bill C-31’s retrospective refugee stripping provision will put at risk the security of tens of thousands of refugees already in Canada, depriving them of the ability to rebuild their lives, live with their families, work and flourish, and contribute fully and fearlessly to their new country.

The legislation also gives the minister the power to decree certain countries as “safe.” This formalizes in law the presumption that a refugee claimant from one of these countries is a fraud. Many countries are safe for most people most of the time. Refugees are usually people who are marginalized and vulnerable, so designating a country as safe tells us nothing about the risks faced by the people likely to seek refugee protection.

The power that the legislation confers on the Minister of Citizenship and Immigration is broad, unfettered and virtually immunized from judicial oversight. He can throw people in jail, deny them a fair opportunity to present their refugee claim, inflict five years of forced family separation on recognized refugees, and hang the threat of deportation over their heads for many more years. All of this should be unimaginable in a country that respects the rule of law.

Remember, neither the minister nor we know with any certainty if a person is a refugee until that person has had a fair opportunity to present his or her case before an independent and impartial decision maker. The minister has done an excellent job of relentlessly vilifying refugees, and of encouraging us to believe that he “knows” that they are all bogus by the fact of their arrival. Don’t believe it.

Prof. Audrey Macklin: Minister Kenney’s Ban on Face Coverings is Ultra Vires

2012-02-17T12:24:49-05:00

Not only is Minister Kenney’s ban on face coverings a gratuitous insult to Muslim women, it’s ultra vires.

In the wake of all the publicity about the Minister of Immigration’s decree that no one shall be allowed to go through the citizenship ceremony with her face covered, I thought I'd find out how the ban on face coverings was authorized in law. It appears that the ban is buried in the Operations Manual on citizenship ceremonies. The Operations Manual provides guidance to citizenship bureaucrats (including Citizenship Judges) about how to interpret and apply the law -- the Citizenship Act and the Citizenship Regulations. Since they are only guidelines, they do not have the force of law, and are invalid to the extent that they contradict the statute or the regulations.

You can find the citizenship manual here (PDF) (see s. 6.5). The manual contains an elaborate set of instructions about how citizenship officials shall respond if a woman is both uppity and oppressed enough to show up with her face covered.

The more interesting discovery, though, is the citizenship regulations that govern citizenship ceremonies. These seem to provide an entitlement to religious accommodation, and therefore cut against the legality of the Minister’s instructions. Section 17(1)(b) speaks directly to religiosity, and 17(1)(d) to 'intergroup understanding' as a component of good citizenship.

Citizenship Regulations

17. (1) The ceremonial procedures to be followed by citizenship judges shall be appropriate to impress on new citizens the responsibilities and privileges of citizenship and, without limiting the generality of the foregoing, a citizenship judge shall, during a ceremony held for the presentation of certificates of citizenship,

(a) emphasize the significance of the ceremony as a milestone in the lives of the new citizens;

(b) subject to subsection 22(1), administer the oath of citizenship with dignity and solemnity, allowing the greatest possible freedom in the religious solemnization or the solemn affirmation thereof;

(d) promote good citizenship, including respect for the law, the exercise of the right to vote, participation in community affairs and intergroup understanding.

(2) Unless the Minister otherwise directs, a certificate of citizenship issued to a person who has been granted citizenship under subsection 5(l) of the Act shall be presented at a ceremony described in subsection (l).

Second, s. 22 seems to distinguish between the grant of citizenship and the oath -- leaving open the question of the citizenship status of one who has been granted citizenship but does not take the oath.

22. (1) The Minister or a person authorized by the Minister in writing to act on the Minister's behalf may administer the oath of citizenship to any person who has been granted citizenship and, in such case, the Registrar shall make all necessary arrangements for the purpose of administering the oath.

(2) Where the Minister or a person authorized by the Minister in writing to act on the Minister's behalf administers the oath of citizenship, a citizenship officer who is authorized to do so by the Registrar shall countersign the certificate and forward it to the Registrar

Bottom line is that the citizenship manual's mandatory instructions about face covering strike me as ultra vires the regulation and without legal authority, quite apart from any Charter challenge.

Audrey Macklin

Don’t throw in the towel: Systemic Risk in Securities Markets Must be Federally Regulated

2012-02-17T11:25:33-05:00

Anita Anand and Grant Bishop

In its recent decision, the Supreme Court nixed the federal proposal for a national securities regulator, finding that its proposed scheme was unconstitutional. Admittedly, the federal government’s proposal largely (and intentionally) uploaded the current provincial regime to a federal statute. The Court held that, while aspects of the proposed legislation were within the federal wheelhouse, these could not justify a “wholesale takeover” of securities regulation in Canada.

Nonetheless, the Court’s decision should not be read as foreclosing on a federal role in securities regulation. The judgment specifically observes that provinces would be incapable of enacting legislation to effectively address systemic risk and comprehensive data collection. Indeed, the Court expressly stated that “[t]he need to prevent and respond to systemic risk may support federal legislation pertaining to the national problem raised by this phenomenon”.

While the Court has barred one proposal, we note Minister Flaherty’s recent statements that the federal government remains committed to a presence in securities regulation to address a glaring regulatory gap with respect systemic risk. But we seem to have moved in Canada from the specific notion that “systemic risk” is the interconnected financial breakdown where a triggering event causing default by one market participant in turn impacts others’ ability to fulfill their legal obligations causing a chain of negative economic consequences. As Governor Carney has suggested, “systemic risk” can be used more broadly to refer to the financial system’s inability to support economic activity.

The recent (and arguably ongoing) financial crisis underscores how financial contagion can spread from securities markets to financial institutions and back again, threatening the integrity of the entire economy. In Canada, our regulatory framework has not kept pace with the increasing integration of financial institutions and securities markets. In particular, banks are frequent counterparties in over-the-counter derivatives – products for which provincial securities regulators have yet to enact a coherent regime.

Many commentators rightly point to the efficacy of Canada’s regulation of financial institutions in safeguarding against financial contagion. Certain commentators urge that what we have is good enough, arguing that the U.S. had a federal regulator (i.e. the Securities and Exchange Commission) but little good did this do. Such an inference is dangerously simplistic and conveniently forgetful.

Canada’s own Asset-Backed Commercial Paper (ABCP) crisis highlights the gaps in our present regulatory structure. The solution hinged an arrangement fashioned under the thoughtful guidance of Purdy Crawford using a federal insolvency statute. Contagion from ABCP was forestalled but, had the $32 billion market collapsed, the default would have propagated throughout our financial system.

This weakness in our regulatory armour was underscored by former Superintendent of Financial Institutions, Nick Le Pan: “If anyone should have been on top of this, it was securities regulators. They expressed ‘surprise’ ex post at aspects of the issue, such as the extent of ABCP sales to individuals. … In Canada, we don’t have one national securities regulator that could be a partner for federal authorities in financial stability monitoring and crisis management.”

The Office of the Superintendent of Financial Institutions (OSFI) is ill-placed to regulate such systemic risk emanating from securities markets (so-called “macro-prudential regulation”). Lumping prudential supervision of securities markets into OSFI’s mandate would confuse its specialization and pose a worrisome conflict of interest: would concern about keeping banks healthy lead to over-cautious and ham-fisted interventions in securities markets? Good regulation requires well-coordinated but specialized regulators that each have a clear mandate.

With its more ambitious scheme deemed unconstitutional, the federal government should now move to enact a federal regime in areas that are clearly within federal jurisdiction. Taking the lead from the Supreme Court, the federal government should create a Financial Markets Regulatory Agency (FMRA) and mandate such a national regulator specifically with the oversight of systemic risks in securities markets, investing it with powers to intervene where particular products or activities threaten financial stability.

So what specifically would the FMRA do? Notably, the Supreme Court’s judgment sketches a statutory scheme which would form the backbone of such a body. This would involve the regulation of over-the-counter derivatives, credit rating agencies, record-keeping, short-selling and urgent regulation relating to “substantial risk of material harm to investors or to the integrity or stability of capital markets.” As the Supreme Court recognized, comprehensive data collection on potential risks in securities markets is similarly a function that only the federal government can accomplish.

Provincial securities regulation, even under the opt-in umbrella of the Canadian Securities Administrators, cannot achieve a comprehensive and standardized regime for these systemically critical areas of law. There is provincial jurisdiction to protect investors and ensure companies can access capital markets, but with their admitted focus on local markets, provinces lack uniform incentives not to mention constitutional ability to safeguard Canada’s financial system as a whole. The Supreme Court was clear on this point.

The Canadian Securities Transition Office has already done a good deal of groundwork towards establishing such a national-level securities regulator. In addition, the Bank of Canada has been primarily responsible for the systemic risk oversight of clearing and settlement systems, is involved in international fora (such as the BIS and the FSB) and is playing a leading role in the reform of derivatives markets. Revised federal legislation constituting the FMRA could leverage that foundation while conforming to the constitutional constraints articulated by the Supreme Court.

There is clear direction from the Supreme Court and a pressing rationale for the federal government to enact a national regime to address systemic risk in securities markets. The peace and order of Canada’s economy demand no less.

Anita Anand, Associate Professor, Faculty of Law, University of Toronto and Grant Bishop, JD Candidate, Faculty of Law, University of Toronto. An edited version of this editorial appeared in the Financial Post on February 10, 2012.

Governance Issues: The UofT-Access Copyright Agreement

2012-02-15T05:44:02-05:00

First posted on Prof. Katz's blog.

In addition to serious copyright, privacy, and academic freedom problems arising from the Agreement signed last week between UofT and Access Copyright, the way it has been handled so far raises some questions about whether it is consistent with UofT’s governance procedures.

No serious consultation or discussion has taken place before the Agreement was signed, although, interestingly, s. 22 of the Agreement does contemplate it being conditional upon “applicable Governance approval”. It seems only natural that an agreement with wide, deep, and long-term implication such as this one would be subject to governance approval, yet it is less clear that UofT's Administration is going to seek the appropriate approval. The Administration has not done it yet, and in fact, there are worrying signs that the Agreement will not get the scrutiny that it deserves. I hope I'm misinterpreting these signs.

Two hours before the Agreement was announced on Jan. 30 at 7 pm, the Business Board of the Governing Council held a meeting. Item #9 on the agenda was titled "Access Copyright Fee". It was presented for information only, not for approval. The Agreement itself had not been presented. The Report briefly describes the Tariff hearing at the Copyright Board, notes that agreement between UofT and Access Copyright had been reached, and notifies the Administration's intent to cover the cost of the license by increasing the ancillary fees that students pay.

The Report portrays the Agreement as one pertaining solely to teaching materials, and justifies the increase in ancillary fees as a permissible step to recover the cost of "materials, services, or licenses where the University acts as a broker with a vendor for the students" pursuant to the Policy on Ancillary Fees. It concludes that the only remaining issue is how to distribute the fees among different students.

Portraying the Agreement in this manner is highly inaccurate. The Agreement deals with all aspects of reproduction of copyright-protected works by the University for "all purposes within or in support of [its] mandate," which obviously include not only teaching, but also research and various other purposes. Describing the University's role under the Agreement as that of "a broker with a vendor for the students" is plainly wrong. The University isn't a "broker", but a "Licensee", and has taken upon itself not only to pay license fees, but also to comply with a host of restrictions and obligations that concern the way most of its members conduct their day-to-day activities as researchers, students, librarians, administrators, and IT staff. These obligations are not only unnecessary and burdensome, but may also threaten their privacy and academic freedom.

This portrayal of the Agreement is troubling on several levels. First, while characterizing the Agreement as an issue of teaching materials may allow the University to shift the cost of the license fees onto the students in the form of ancillary fees, it is unclear whether it can actually do that. Since the Agreement is not limited to teaching materials, such a move seems to be inconsistent with the University’s own Policy on Ancillary fees (and possibly with applicable Ontario regulations). If the University cannot pass the cost onto the students, it may end up paying approx. $2 millions a year in license fees out of its own budget.

Second, the narrow portrayal obscures the fact that some of the obligations under the Agreement may cause the University to incur significant additional costs. For example, complying with s. 11, dealing with "Survey of Bibliographic and Volume Data" in a way that is consistent with all privacy laws and preserves academic freedom (if possible at all) may turn out to be extremely costly.

Third, the Agreement will significantly affect the teaching, learning, and research functions of the University, and the decision to sign it may have long-term implications for UofT’s ability to access scholarly materials on competitive terms. It may also affect its ability to compete globally because there is no equivalent to the tyranny of Access Copyright in the US or elsewhere. Moreover, contrary to the belief that the indemnity provision in the Agreement protects the University from liability, under some scenarios it may actually increase it. Therefore, this agreement is exactly the type of agreement that deserves full scrutiny by the Advisory Committee on the University of Toronto Library System and the Academic Board. It may not even be an exaggeration to say that as an issue having a major impact it requires the approval of the Governing Council.

To date, the Library Advisory Committee (of which I’m a member) has not been asked to review the Agreement, although we have discussed the relationships with Access Copyright in two separate meetings. To the best of my knowledge, the Academic Board has not been asked to review it either. The Governing Council's next meeting is scheduled to Feb. 16, 2012. The issue does not appear on the agenda although the Agreement may be reported on, or perhaps raised under “Other Business”. At the moment, no discussion is scheduled. Indeed, it would be inappropriate to bring the issue before the Governing Council on such short notice, and before the Library Advisory Committee and the Academic Board had an opportunity to review it.

I truly hope that the fact that no steps towards "appropriate Governance approval" have been taken yet simply reflects the slow pace that characterizes a complex organization such as UofT, and that the Agreement will be thoroughly reviewed in the appropriate fora. Maybe the conclusion will be that signing the agreement has been the best decision under the circumstances, and it may turn out that all the alternatives were thoroughly considered, but given the many problems in the Agreement, this conclusion is not self evident.

Prof. Angela Fernandez: Aggression v. Atrocity in the History of International Law

2012-02-07T14:33:09-05:00

Columbia University history professor Samuel Moyn (visiting at Yale Law School in the spring term of 2012) has recently posted his paper From Antiwar Politics to Antitorture Politics on SSRN, a paper I heard him present at a November session of the Critical Analysis of Law workshop at my law school, the Faculty of Law, University of Toronto. I have written about it on JOTWELL because it is an excellent paper, which law professors might not otherwise hear about, offering an extremely thoughtful intervention on the recent history of international law.

Read the full post on JOTWELL.