What is Fair Dealing?

In Canadian copyright law, fair dealing permits certain uses of copyrighted material without requiring permission, provided it is for an allowable purpose, such as research or private study. Fair dealing in Canada is a statutory defense against copyright infringement, set out in the Copyright Act under sections 29, 29.1, and 29.2.These purposes are outlined in sections 29, 29.1, and 29.2 of the Copyright Act:

• Section 29: Fair dealing for purposes of research, private study, criticism, or review does not infringe copyright.

• Section 29.1: Fair dealing for the purpose of news reporting does not infringe copyright, provided the source and author (if known) are cited.

• Section 29.2: Fair dealing for the purposes of parody or satire does not infringe copyright.

This defense allows limited use of copyrighted material without permission for certain purposes and requires that the use be "fair." The relevant sections provide as follows:

For a use to qualify as fair dealing, it must meet a two-part test:

• Purpose: The dealing must fall under one of the purposes specified in the Act, such as research, private study, criticism, review, news reporting, parody, or satire.  Fair dealing for the purpose of criticism, review or news reporting must contain a credit to the source and the author.  

  As we know, fair dealing for the purpose of private study and research does not include multiple copying of works by educational institutions to distribute to students in classrooms or cover the selling of course packs.  However, this stance has changed with recent case law allowing multiple copies for educational purposes in the case law. 

  In order for fair dealing to be used as a defence, the copying must be for one of the specified purposes (research, private study, criticism, review or news reporting) and the defence only generally only applies to the individual doing the research or private study (i.e. the purpose for which the copying is undertaken is the purpose of the person making the copies and not the purpose of the person for whom the copies are made). *subject to the new exception

• Fairness: The dealing itself must be fair, which courts assess by applying a multi-factor test developed in case law.

Key Case Law on Fair Dealing and Fairness

However, fair dealing is not an easy defence to prove. It depends on the facts and is analyzed on a case by case basis. It depends on various factors such as the nature of the work copied, the amount and significance of the work copied, the use made of the copy, and the degree to which the copy competes in the market for the original, the availability of a licence from a collective society.

The Supreme Court of Canada in CCH Canadian Ltd. v. Law Society of Upper Canada (2004) established the foundational test for determining whether a dealing is fair, setting a precedent for evaluating fair dealing on a case-by-case basis and outlining six fairness factors. Subsequent cases, such as Access Copyright v. York University (2021), have reinforced and clarified this test, particularly in educational contexts.

CCH Canadian Ltd. v. Law Society of Upper Canada (2004)

In this landmark case, the Supreme Court of Canada ruled that providing photocopies of legal texts for research purposes by the Law Society’s Great Library constituted fair dealing. The Court emphasized that fair dealing is a user’s right, integral to achieving balance in copyright law. Chief Justice Beverley McLachlin explained the importance of interpreting "research" broadly to support users' rights:

“Research must be given a large and liberal interpretation in order to ensure that users' rights are not unduly constrained. The fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defense.”

The Six Factors for Fairness in CCH

The Supreme Court outlined six factors to assess fairness:

• Purpose of the Dealing: The purpose of the dealing must align with the purposes specified in the Act. The Court recognized that purposes like research should be interpreted liberally to foster access to knowledge.

• Character of the Dealing: This factor examines whether the dealing involves single or multiple copies and the extent of distribution. Justice McLachlin noted:

  “If multiple copies of works are widely distributed, this may suggest that the dealing is not fair. However, if a single copy is used for a permitted purpose, this is more likely to be fair.”

• Amount of the Dealing: The Court assesses both the quantity and significance of the material copied, with limited copying favoring a finding of fairness.

• Alternatives to the Dealing: If alternative, non-copyrighted options exist, they may weigh against fairness. Chief Justice McLachlin observed:

  “If there is a non-copyrighted equivalent of the work or another way to achieve the user’s purpose without copying the copyrighted work, the dealing may not be fair.”

• Nature of the Work: Works that are publicly accessible are more likely to qualify for fair dealing. If the work is confidential or unpublished, it may be less likely to meet the fairness standard.

• Effect of the Dealing on the Work: If the dealing competes with the market for the original, it is less likely to be fair. The Court clarified:

  “If the reproduced work competes in the same market as the original work, it is less likely to be considered fair.”

The CCH test provides a flexible but structured approach to fairness, with no single factor being determinative. Each factor must be balanced based on the facts of the case.

Fair Dealing for Educational Purposes - Access Copyright v. York University (2021)

In Access Copyright v. York University, the Supreme Court further clarified the limits of fair dealing in educational contexts. York University claimed fair dealing for copying portions of copyrighted works in course packs for students, arguing that it fit under "research" or "private study."

However, the Supreme Court disagreed, emphasizing that York's guidelines exceeded what could be considered fair and that the institution had an obligation to seek licensing for widespread use.

“While fair dealing supports access to works, it does not extend to a level that displaces copyright licensing when an institution profits from using copyrighted materials in a widespread way.”

Historically, this defense did not cover multiple copying of works by educational institutions to distribute to students in classrooms or to create course packs for sale. This approach emphasized that institutional or commercial copying was outside the scope of fair dealing, aligning with a more conservative interpretation of fair dealing in education.

Key Case Law: Early Restriction on Institutional Copying

In CCH Canadian Ltd. v. Law Society of Upper Canada (2004), the Supreme Court of Canada set out the foundational test for fair dealing and emphasized that copying must be fair in nature and purpose. Although CCH established a broad precedent for research and private study, it left unresolved questions about extensive copying in institutional settings, especially for classroom or course pack use.

Expanding Fair Dealing: Educational Copying and Collective Licensing

In Access Copyright v. York University (2021), the Supreme Court of Canada revisited fair dealing in an educational context. York University had developed its own copying guidelines for distributing materials to students, claiming that the use qualified as fair dealing for the purpose of private study and research. Access Copyright, a collective rights society, argued that York’s copying practices amounted to infringement, as the guidelines facilitated widespread copying without paying licensing fees.

The Supreme Court ultimately ruled that York's guidelines did not meet the fair dealing standard, emphasizing that fair dealing in education should not displace the role of licensing where substantial copying occurs. The Court reinforced the importance of the character and amount of the dealing in educational contexts, noting:

“The fair dealing analysis must be applied rigorously, particularly where an institution engages in systematic and substantial reproduction. Even if the purpose is research or private study, institutional practices involving significant copying may require a license.”

Despite ruling against York University, the decision clarified that fair dealing may still apply in educational settings, but each instance must meet the fairness criteria on a case-by-case basis. Thus, while multiple copies for educational purposes may be permissible under fair dealing, institutions must demonstrate fairness based on the six factors established in CCH.

Practical Implications of Access Copyright v. York University

The ruling in Access Copyright v. York University established that educational fair dealing claims are possible but limited by strict scrutiny. Courts will examine the following aspects closely:

• Character of the Dealing: Multiple, extensive copies distributed across classrooms or departments are more likely to be deemed unfair.

• Amount of the Dealing: Significant portions of copyrighted works, such as entire chapters or articles, may indicate that the dealing is not fair.

• Effect on the Market: Where copying practices displace potential licensing revenue, they are less likely to qualify as fair dealing.

The Court's emphasis on licensing options underscores that collective licensing remains critical for large-scale copying by educational institutions. Fair dealing can cover certain educational uses, but not at the expense of a viable licensing market.

Comparative Perspective: U.S. Influence on Canadian Educational Fair Dealing

The Canadian concept of fair dealing is different than the US concept of fair use. Fair use is broader. However, even with the US concept being broader, the court in Texaco still found that the copying was not fair dealing.

Canadian courts sometimes refer to U.S. case law for guidance on fair dealing, especially where institutional use and market effect are in question. In American Geophysical Union v. Texaco, a U.S. court ruled that Texaco’s unauthorized copying of scientific journal articles for internal research was not fair use due to its commercial nature and market impact. This ruling aligns with Canadian courts’ caution in granting fair dealing rights for extensive educational copying without authorization.

In the Texaco case (American Geophysical Union et. al. v. Texaco) which went to the Court of Appeal and settled before U.S. Supreme Court by Texaco agreeing to pay a seven figure amount to the CCC for photocopying licensing. The Court held that it was not fair use under the U.S. Copyright Act for a profit-seeking company to make unauthorized photocopies of copyrighted articles published in scientific and technical journals for use by the company's scientists employed in scientific research. It is very likely that should Canadian courts be faced with a fair dealing question in the context of photocopying for research for commercial purposes, it would be concluded in much the same manner as the Texaco decision.

Summary

Canadian fair dealing now cautiously permits multiple copies for educational purposes, but only under rigorous analysis. Access Copyright v. York University clarified that institutions must evaluate the fairness of each instance of copying, applying the six factors from CCH and considering the availability of collective licensing. While educational fair dealing may cover limited classroom use, it cannot serve as a substitute for licensing in cases of widespread copying.

Influence of U.S. Case Law: Warhol and Texaco Decisions

Although Canadian courts are not bound by U.S. case law, Canadian courts often refer to U.S. fair use decisions for guidance, particularly in cases involving commercial or transformative use.

• Andy Warhol Foundation v. Lynn Goldsmith (2023): This recent U.S. Supreme Court decision limited the scope of fair use for transformative works, concluding that Warhol’s adaptation of Goldsmith’s photograph into a stylized image of Prince was not fair use. The Court emphasized that a transformative purpose does not necessarily justify fair use if it affects the market for the original.

• American Geophysical Union et al. v. Texaco: This case involved Texaco's unauthorized photocopying of scientific journal articles for internal research purposes. The U.S. Court ruled against Texaco, reasoning that such copying in a commercial context impacted the market for scientific journals, a view aligning with Canadian interpretations of fair dealing in commercial contexts.

Entcounsel. 2000 - 2024.