The introduction of long-awaited copyright reform legislation has generated considerable discussion among Canadians about whether the latest bill strikes the right balance. While concern over Bill C-32's digital lock rules has garnered the lion share of attention with expressions of concern from all opposition parties and a wide range of stakeholders, the other major issue in the bill is the extension of fair dealing -- Canada's version of fair use -- to cover education, parody, and satire.

The government endeavoured to find a compromise by rejecting both pleas for no changes to the fair dealing provision as well as arguments for a flexible fair dealing that would have opened the door to courts adding exceptions to the current fair dealing categories of research, private study, news reporting, criticism, and review. Instead, it identified some specific new exceptions that assist creators (parody and satire), educators (education exception, education Internet exception), and consumers (time shifting, format shifting, backup copies).

Some writers groups have reacted angrily to the education exception, claiming it will cost them millions in revenue and arguing that it amounts to an "expropriation of property." Yet a new decision from the Federal Court of Appeal provides powerful evidence that these fears are exaggerated with the new expanded fair dealing rules still striking a reasonable balance between creators and users.

A big win for Access Copyright

The decision marked the culmination of a six-year battle over the fees to be paid by schools across the country for copying to Access Copyright, a leading copyright collective. At the heart of the case was the question of how far fair dealing currently extends to the education environment. The ruling was a major win for Access Copyright, as the court dismissed objections from education groups on an earlier Copyright Board of Canada ruling that awarded the collective millions in additional compensation.

The case is notable since it demonstrates how critics of greater fair dealing flexibility have greatly exaggerated claims of potential harm. For example, former Professional Writers Association of Canada executive director John Degen warned that "the introduction of an overly broad exception to copyright for educational use would all but eliminate fair compensation for this established use." Access Copyright reacted to the court victory by stating it was "bittersweet" given the C-32 changes.

While there is no doubt that extending fair dealing to education will bring more copying within the scope of fair dealing, this case reinforces the fact that fair dealing is a fair for all -- not a free for all -- and that fears that extending fair dealing by introducing a broad education category will wipe out all revenues bear little relation to reality.

The case highlights that Canadian fair dealing analysis involves a two-part test. First, does the use (or dealing) qualify for one of the fair dealing exceptions. Second, if it does qualify, is the use itself fair. In this particular case, the court affirmed that the copying in question qualified under the first part of the test (i.e. for research or private study), but that it did not meet the six-part test for fairness and thus was not fair dealing.

It is critical to note that extension of fair dealing to education in Bill C-32 only affect the first part of the test. In other words, while the bill will extend the categories of what qualifies as fair dealing, it does not change the need for the use itself to be fair. The Supreme Court of Canada has identified six non-exhaustive factors to assist a court's fairness inquiry: (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work.

In fact, the court even addressed the potential impact of C-32, noting that the bill's fair dealing reform "serves only to create additional allowable purposes; it does not affect the fairness analysis. As the parties agree that the dealing in this case was for an allowable purpose, the proposed amendments to the act do not affect the outcome of this case."

The decision represents a big win for the copyright collectives, but it also demonstrates that their concerns about C-32's fair dealing reforms are overstated. The bill will open the door to other potential uses being treated as fair dealing, but the requirements for fairness remain unchanged.