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Fair Dealing Among YouTubers

A recent decision of the US District Court for the Southern District of New York regarding a dispute between “YouTubers” is getting a fair amount of comment, as it is one of the first cases of its kind regarding the use of YouTube video clips.  Ethan and Hila Klein who operate the YouTube channel H3H3 posted a video that criticized a video posted by fellow YouTuber Matt Hosseinzadeh.  The H3H3 video featured clips from the Hosseinzadeh video and Hosseinzadeh took exception to both the use of the clips and the comments that were made.   Hosseinzadeh sued the Kleins for copyright infringement and defamation.

U.S. copyright law contains “fair use” provisions. Criticism is one of the exceptions to copyright infringement that is considered to be “fair use”.  There was no question that the use constituted “criticism”, and the District Court Judge focused upon whether  the use was “fair”, so as to  fall within the “fair use” exception.  Large portions of the Hosseinzadeh video were used by H3H3.  However, the Judge was satisfied that this was necessary in order for H3H3 to comment and critique the Hosseinzadeh video.  The effect of the H3H3 use on the potential market for the Hosseinzadeh video was examined.  The Judge was satisfied that the H3H3 video was not a substitute or replacement of the Hosseinzadeh video.    In the end result, the Judge decided that the use by H3H3 was “fair use” and that, although critical, the comments H3H3 video contained were not defamatory, but merely “non-actionable opinions”.   It is to be noted that the fact the Hosseinzadeh video was a scripted and fictional creative work played a role in the Judge’s characterization of the critical comments as “non-actionable opinions”. The critical comments focused upon the fictional creative work and could not be construed as a personal attack upon Hosseinzadeh.

The question then becomes what is the comparable situation in Canada.  In Canada “fair dealing” is analogous to the U.S. concept of “fair use”.  Section 29.1 of the Canadian Copyright Act contains a provision expressly contemplating “fair dealing for the purpose of criticism or review” as an exception to copyright infringement.

29.1 Fair dealing for the purpose of criticism or review does not infringe copyright if the following are mentioned:
(a) the source; and
(b) if given in the source, the name of the
(i) author, in the case of a work,
(ii) performer, in the case of a performer’s performance,
(iii) maker, in the case of a sound recording, or
(iv) broadcaster, in the case of a communication signal.
It would appear to the writer that, as long as section 29.1 is complied with, the Canadian Courts would view these issues much as the U.S. Courts have done. In this context, it is no different than a television movie reviewer reviewing a move about to open in the theatres.   However, the Court will look at the quantity of video material taken to determine whether the resulting work is intended as or could be used as a “substitute” for the original work.  The Court will also look at whether the critical comments are “non-actionable opinions” on a creative work or constitute a defamatory personal attack.

In the writer’s opinion, even greater care must be taken if the video clips are not of a “creative” work, but rather of a serious video post expressing an opinion.  In such cases, taking too much of the serious video, could be viewed as a substitute for viewing the serious video.  Conversely, taking too little of the serious video could leave the opinion without support and out of context, thereby subjecting the person who posted the serious video to ridicule.  Also care must be taken to criticize the opinions presented and not include extraneous comments that could be construed as a personal attack. With the number of bloggers on the internet, one can expect more of these kind of conflicts to arise in future.  One way to gain followers will be to post commentary on video material posted by persons who may have more followers than you.  For example, many persons are presently becoming known on the internet by posting criticism of Donald Trump.

“Fair Dealing” under Copyright Law

“Fair Dealing” allows persons who qualify under one of the relevant sections of the Copyright Act to copy portions of literary works without a licence from the authors.  The leading case on “fair dealing” is the Supreme Court of Canada decision in CCH Canadian Ltd v Law Society of Upper Canada in which a law library was making copies of legal cases for lawyers doing legal research.   On July 12, 2017 the Federal Court rendered a decision in Access Copyright v York University relating to “fair dealing” by educational institutions.

The Canadian Copyright Act provides for collective societies, being organizations that manage licensing schemes for multiple creators/authors.  Access Copyright is such a collective society.  Access Copyright represents tens of thousands of writers, visual artists and publishers, and licenses the copying of their works to educational institutions, businesses, governments and others.

Between 2005 and 2011, York University had a license to copy literary works with Access Copyright.  During that period, York University copied 122 million print exposures for use in course packs – an average of 17.5 million exposures per year. Each student at York University would receive 387 exposures per year in course packs, 80% of which came from books.

In 2011, York University decided to “opt out” of their license with Access Copyright, instead electing to  copy under its own “fair dealing” Guidelines. Between 2011 and 2013, York University outsourced the majority of its course pack production to three external copy shops which copied between 4.4 million and 7.6 million exposures per year – 90% of which were from books.
The Supreme Court of Canada decision in CCH Canadian Ltd v Law Society of Upper Canada case provided the following guidance to lower courts considering fair dealing:
•                     The analysis is a two-step process: first, the authorized purpose (in this case education) must be established and second, the dealing must be fair;
•                     “Fair” is not defined and is a question of fact depending on the circumstances of each case; and,
•                     The fairness analysis engages six non-exhaustive factors:
a)                  purpose of the dealing,
b)                  the character of the dealing,
c)                  the amount of the dealing (amount of copying),
d)                 alternatives to the dealing,
e)                  the nature of the work, and
f)                   the effect of the dealing on the work.

In the Access Copyright v York University decision, the Federal Court noted that, other than the legal principles annunciated in CCH, that decision is more of a burden than a benefit to York University. One important distinction is that the copying done at the Law Library was for others, not for the Library itself. In York University’s situation, the copying and the Guidelines serve York University’s interests and those of its faculty and students. There is an objectivity in CCH which is absent in York University’s case.
Of even greater significance is that in CCH, the copying at issue was that of a single copy of a reported decision, case summary, statute, regulation, or limited selection of text from a treatise. It was not the mass copying of portions of books, texts, articles, entire artistic work, or portions of collections, nor was it the multiple copying of those materials into course packs or digital formats.   There were a number of other differences which included:
•                     Copying at a single location under the supervision and control of research librarians in the Library contrasted with no effective supervision, control, or other method of “gatekeeping” at York University;
•                     A policy strictly applied and enforced by librarians versus virtually no enforcement of the Guidelines by anyone in authority at York University;
•                     Single copies made versus multiple copies;
•                     A large amount of ad hoc or situational copying for users at the Library contrasted with the mass systemic and systematic copying at York University; and,
•                     An absence of negative impacts on publishers in CCH as contrasted with the negative impacts on creators and publishers caused or at least significantly contributed to by York University.

The Guidelines permitted copying of up to 10% or one chapter of a book. The Federal Court noted that these copying thresholds of York University were arbitrary and expressed the view that a failure to justify the choice of thresholds seriously undermined the overall fairness of the York Guidelines.   The Federal Court noted that under the terms of the Guidelines, in some situations the permitted copying could encompass 100% or such a large part of a work as to appropriate the whole (e.g. for a journal article in a periodical, a short story in an anthology, or a chapter in an edited book). The Federal Court noted that York University had no means of meaningful control or monitoring of compliance with the Guidelines.

The Federal Court accepted evidence from experts that the Guidelines have had a significant negative impact, summarized as follows:
•                     They contributed to a drop in sales and accelerated the drop in unit sales – up to 6.9% per year and 3.4% in revenues between 2012 and 2015. Precise allocation of the amounts attributable to the Guidelines is not possible, but it was a material contribution.
•                     They caused a loss of revenue to creators and publishers as evidenced by the loss of licensing income. The range of loss to Access Copyright alone is between $800,000 and $1.2 million per year.
•                     Actual and expected loss of licensing income resulting from the Guidelines has a negative impact on publishers. Licensing revenues represented about 20% of publishers’ revenues.
•                     Actual and expected loss of licensing income has a negative impact on creators. A survey confirmed the importance of licensing revenue to writers and the materiality of a loss of revenue.
•                     On a balance of probabilities and recognizing the inherent unreliability of predicting the future, there are likely to be adverse long-term impacts of the Guidelines on investment, content, and quality.

The Federal Court concluded that the Guidelines established by York University were not “fair” and, as such, copying under the terms of the Guidelines constituted copyright infringement.  There will now be a determination of the amount of compensation that York University will be required to pay to Access Copyright for the infringement.  Numerous Universities established Guidelines similar to those of York University.  This decision will, without question, impact educations institutions across Canada.