Simon Chester is a partner in the Toronto law firm of McMillan Binch LLP and a member of the firm’s KNOWlaw Group. This article was prepared with the assistance of Lisa Parliament.

What started as a dispute over photocopying in a law library has resulted in what may be the most significant copyright case in decades.

The Supreme Court of Canada’s decision that the Law Society of Upper Canada’s Great Library did not infringe legal publishers’ copyright may well change the legal landscape for both creators and users of copyright works.

The publishers claimed that the Law Society was breaching copyright law when its Great Library copied extracts from books and faxed them to lawyers.

They also claimed that the Law Society encouraged members to break the law by providing self-service photocopiers that could make unlimited copies.

The Law Society responded that its service was in the public interest and that any copying came within the ‘fair dealing’ exception to the Copyright Act.

In its landmark decision, Canada’s top court emphasized that copyright law must protect the rights of users as well as creators.

For example, when deciding whether the works in question were original and therefore protected by copyright, the court confirmed that some sort of intellectual effort is required. While ‘originality’ doesn’t necessarily mean something has to be novel or unique, it must show the exercise of skill and judgement.

Perhaps the most significant issue was the court’s assessment of the Law Society’s claim that its copying was ‘fair dealing,’ and again the court emphasized the importance of users’ rights.

The fair-dealing exceptions to copyright law set out ways in which people can legally copy the works of others. They include fair dealing for the purposes of research, private study, criticism or review, and news reporting.

The court emphasized that these exceptions were an integral part of copyright law and should be viewed as actual rights, not just defences or loopholes.

And in considering ‘fair’ an open-ended concept that depends on the circumstances of each case, the court moved ‘fair dealing’ closer to the much broader notion of ‘fair use’ under U.S. copyright law. In fact, the framework used by the court is based on tests used by American courts in cases where fair use is claimed.

According to the court, the factors to be considered are:

* The purpose of the use

* The character of the use

* How much of the original work was used

* Whether there were alternatives to using the original work

* The nature of the original work

* The effect on the market for the original work

In this case, the court noted that the purposes set out in the Act should be interpreted liberally so users’ rights aren’t restricted more than necessary.

And, similar to the American approach, the court said that the final factor – the effect on the market – is an important factor, but not the only one or even the most important one. So, if the reproduced work is likely to compete with the original work, it may suggest that the dealing is not fair, but that won’t necessarily be the case.

The court’s comments on this shouldn’t be taken as a licence to copy at will, however. For example, a U.S. appeal court – using the more liberal American concept – didn’t agree with the producers of the documentary The Definitive Elvis that their use of photos, music and clips from television programs without permission was fair use.

Its decision was based in part on the fact that the use was commercial – not a ‘scholarly critique or historical analysis’ – and an attempt to profit from the inherent entertainment value of Elvis’ television appearances.

Widespread implications

The court’s decision may also have implications in a number of other areas.

For example, the publishers claimed that sending copies of their works by fax was a communication to the public and therefore a secondary infringement of copyright by the library.

The court disagreed, saying that sending a single fax to a single person is not a communication to the public, although it might be if someone repeatedly faxed the same work to a number of different people.

This ruling may influence a court’s assessment of how file-sharing activities should be viewed in the context of a similar claim.

In addition, the court disagreed with the publishers’ argument that the Law Society was authorizing infringement by providing photocopiers to its users. The court stated that people could presume that they were authorizing use only in accordance with the law, unless the other party could prove otherwise.

This could present a new hurdle for anyone suing a manufacturer of devices that allow users to record music and/or audiovisual works on the basis that giving someone the means to infringe copyright is itself breaking the law.

The fact that the decision comes from Canada’s highest court means that other Canadian courts are required to follow the rulings in similar situations. What hasn’t yet been determined is exactly what can be appropriately characterized as a similar situation.

File sharing liberated?

One court has already applied part of the Supreme Court’s ruling to the context of file-sharing activities. Recently, Judge Konrad von Finckenstein of the Federal Court of Canada refused to order the disclosure of the identity of individuals who are accused of illegally trading in downloaded music. He found that the alleged infringers had not distributed or authorized the copying of music files by merely placing personal copies in their shared computer directories.

In part, Judge von Finckenstein based this conclusion on the Supreme Court’s decision in the Law Society case. He said that he could not see a ‘real difference between a library that places a photocopy machine in a room full of copyrighted material and a computer user that places a personal copy on a shared directory linked to a P2P service’.

Whether other courts will identify differences between these two situations remains to be seen. Given what’s at stake, it was inevitable that the recording industry would appeal.

File sharers may have won the initial battle before Judge von Finckenstein, but Canadian Heritage Minister Helene Scherrer has vowed that the recording industry will win the war. In an interview with the Globe and Mail she said that ‘[w]e are going to make sure that downloading stays illegal. We will make it a priority so it is done as quickly as possible.’

The battle lines having been drawn, it is clear that the Law Society case will affect all creators. Far from being what might have seemed at first glance to be a minor and innocuous case about photocopying, the case contains key rulings that have set the ground rules for copyright litigation for years to come.

Meaning – perhaps fittingly – that it will likely be the subject of numerous photocopy requests.

(This article contains general comments only. It is not intended to be exhaustive and should not be considered as advice in any particular situation.)

-www.mcmillanbinch.com