Re Breakthrough Films & Television (Copyright Board)

1

53 C.P.R. (4th) 240

Copyright Board

Breakthrough Films & Television, Re

Licence Application by Breakthrough Films & Television for the Reproduction Through Off-Camera Narration of Book Extracts in a Television Program

Bertrand-Venne Member, Callary Member, Charron Member, Doucet Member, Vancise J.

Heard: May 10, 2005

Judgment: March 6, 2006

Docket: 2004-UO/TI-33

2

Headnote

3

Intellectual property --- Copyright — Licences — Where original copyright owner not found

4

Television production company produced documentary on World War II — Narrator included excerpts from book of unlocatable copyright owner — Company applied pursuant to s. 77 of Copyright Act for licence permitting it to reproduce, through off-camera narration, eight excerpts from book in context of producing documentary — Application granted — Applicant satisfied tests for licence under s. 77 in that: (a) work has been published; (b) copyright subsisted in work; (c) contemplated act was mentioned in s. 3 of Act; (d) copyright owner was unlocatable; and (e) applicant had made reasonable efforts to locate copyright owner — Quantitatively, excerpts were small and constituted 325 words of 342-page book — Narration of excerpts lasted slightly more than five minutes in one 45-minute episode — However, qualitatively, excerpts were author’s individual perspective and gave verisimilitude to battle described in documentary — Use constituted appropriation of author’s knowledge, time and talent and, therefore, substantial part of his book — Retroactive licence was justified — Applicant applied for licence after completion of narrative but before exploitation of documentary — Applicant made sufficiently substantial efforts to locate copyright owners — Board had no reason to believe that author would not have granted licence — Use made of the excerpts did not detract from author’s reputation or from his book.

5

The production company BF&T produced a multi-part documentary on World War II which allowed viewers to visit the battlefields where Canadian soldiers had fought during the war. A narrator recounted the battles from the perspective of the soldiers who fought them. The narrative in the fourth episode of the documentary contained excerpts from the autobiography of an American citizen who had enlisted in the Canadian army during World War II. The book had been published in New York in 1954. BF&T had been unable to locate the copyright owner, notwithstanding attempts between August and October 2004. BF&T applied in October 2004 to the Copyright Board pursuant to s. 77 of the Copyright Act for a licence permitting it to reproduce, through off-camera narration, eight excerpts from the book in the context of producing the documentary. The documentary was broadcast on a television network in November 2004.

6

Held: The application was granted.

7

Per Bertrand-Venne, Charron, and Doucet, Members: The conditions for issuing a licence under s. 77 of the Act are: (a) the work has been published; (b) copyright subsists in the work; (c) the contemplated act is an act mentioned in s. 3 of the Act; (d) the copyright owner is unlocatable; and (e) the applicant has made reasonable efforts to locate the copyright owner. For (c), the acts proposed by BF&T were required to be acts mentioned in s. 3 of the Act. It was also to be determined whether the excerpts from the book used in the documentary constituted a substantial part of the book.

8

BF&T reproduced a number of excerpts of the book in the documentary. It proposed to communicate the documentary to the public by telecommunication, to perform it in public and to reproduce it. These were all acts within s. 3 of the Act.

9

Although “substantial part” is not defined in the Act, two factors for determining whether a substantial part of a work has been used are quantity and quality. Quantitatively, the eight excerpts were small. They constituted 325 words of a 342-page book. The narration of the excerpts lasted slightly more than five minutes in one 45-minute episode. However, qualitatively, the excerpts were the author’s individual perspective giving verisimilitude to the battle described in the documentary. The use was an appropriation of the author’s knowledge, time and talent and, therefore, a substantial part of his work. The five conditions under s. 77(1) of the Act were satisfied, justifying the issuance of a licence.

10

The licence was granted retroactively. Although the applicant applied for the licence after completion of the narrative, the application was made before the exploitation of the documentary. The applicant had made sufficiently substantial efforts to locate the copyright owners. All other copyright owners located granted licences to the applicant. The board had no reason to believe that the author would have acted otherwise. The use made of the excerpts did not detract from the author’s reputation or from the book itself. The use made honoured the book and disseminated it to a broad public for educational purposes. A substantial part of the book which was in literary form was incorporated into a cinematographic work which would help to perpetuate it and disseminate it more broadly.

11

Per Vancise J. and Callary, Member (dissenting): A licence was not required because the applicant’s use was not protected by copyright. The use of less than a substantial part of a work is not protected by copyright. Quantitatively, the amount used was trivial comprising less than one-third of one per cent of the whole work. Qualitatively, an ordinary reasonable buyer or user on seeing the two products involved together would conclude that the eight excerpts did not contemplate a coherent whole. The proposed use was different from that contemplated by the author. The program was not a substitute for the original and could only enhance its economic exploitation. The excerpts did not display the required level of ingenuity or inventiveness so as to be inherently substantial. Even if a licence were required, it should be refused because the application was made after the use of the book and the rights being sought were not trivial.

12

Table of Authorities

13

Cases considered:

14

Breen v. Hancock House Publishers Ltd. (1985), 6 C.I.P.R. 129, 6 C.P.R. (3d) 433, 1985 CarswellNat 570 (Fed. T.D.) — referred to

15

CCH Canadian Ltd. v. Law Society of Upper Canada (2004), 247 F.T.R. 318 (note), 236 D.L.R. (4th) 395, 317 N.R. 107, 30 C.P.R. (4th) 1, [2004] 1 S.C.R. 339, 2004 SCC 13, 2004 CarswellNat 446, 2004 CarswellNat 447 (S.C.C.) — referred to

16

Cie générale des établissements Michelin - Michelin & Cie v. CAW-Canada (1996), (sub nom. Cie Générale des Établissements Michelin-Michelin & Cie v. C.A.W.-Canada) 71 C.P.R. (3d) 348, [1997] 2 F.C. 306, (sub nom. Cie Générale des Établissements Michelin-Michelin & Cie v. C.A.W.-Canada) 124 F.T.R. 192, 1996 CarswellNat 2297, 1996 CarswellNat 2711 (Fed. T.D.) — referred to

17

Édutile Inc. v. Automobile Protection Assn. (APA) (2000), 2000 CarswellNat 744, 2000 CarswellNat 1258, 188 D.L.R. (4th) 132, 255 N.R. 147, [2000] 4 F.C. 195, 6 C.P.R. (4th) 211, (sub nom. Edutile Inc. v. Automobile Protection Association) 181 F.T.R. 160 (Fed. C.A.) — referred to

18

Cases considered by Vancise J. (dissenting):

19

CCH Canadian Ltd. v. Law Society of Upper Canada (2004), 247 F.T.R. 318 (note), 236 D.L.R. (4th) 395, 317 N.R. 107, 30 C.P.R. (4th) 1, [2004] 1 S.C.R. 339, 2004 SCC 13, 2004 CarswellNat 446, 2004 CarswellNat 447 (S.C.C.) — referred to

20

Hager v. ECW Press Ltd. (1998), 1998 CarswellNat 2568, 158 F.T.R. 44, [1999] 2 F.C. 287, 85 C.P.R. (3d) 289, 1998 CarswellNat 3031 (Fed. T.D.) — referred to

21

Pointe-À-Callière, Re (2004), 2004 CarswellNat 4978, 2004 CarswellNat 4979 (Copyright Bd.) — referred to

22

U & R Tax Services Ltd. v. H & R Block Canada Inc. (1995), 62 C.P.R. (3d) 257, 97 F.T.R. 259, 1995 CarswellNat 1343 (Fed. T.D.) — referred to

23

Statutes considered:

24

Copyright Act, R.S.C. 1985, c. C-42

25

Generally — referred to

26

s. 3(1) “copyright” — considered

27

s. 3(1) “copyright” (d) — considered

28

s. 3(1) “copyright” (f) — considered

29

s. 6 — referred to

30

s. 77 — pursuant to

31

s. 77(1) — considered

32

s. 77(2) — considered

33

Statutes considered by Vancise J. (dissenting):

34

Copyright Act, R.S.C. 1985, c. C-42

35

Generally — referred to

36

s. 3(1) “copyright” — considered

37

s. 77 — pursuant to

38

Words and phrases considered

39

SUBSTANTIAL PART

40

[Per Bertrand-Venne, Charron, and Doucet, Members:]The Act [Copyright Act, R.S.C. 1985. c. C-42] does not define the concept of “a substantial part,” but the case law has analysed that concept. Two criteria must be considered to determine, in accordance with the facts in each case, what constitutes “a substantial part” of the work: quantity and quality.

41

APPLICATION for copyright licence pursuant to s. 77 of Copyright Act, R.S.C. 1985, c. C-42.

42

The Board:

43

Introduction

44

1      On May 10, 2005, the Board issued a licence to Breakthrough Films & Television (”Breakthrough”) pursuant to section 77 of the Copyright Act (the “Act”). The licence allows Breakthrough to reproduce, through off-camera narration (hereinafter “narration”), eight excerpts of the book by Sergeant Charles Monroe Johnson in the context of producing a documentary. It also allows Breakthrough, in exploiting the documentary, to represent in public and communicate to the public through telecommunication the excerpts of the book incorporated in the documentary, and to make copies of the documentary itself (hereinafter “exploitation”).

45

Facts

46

2      Breakthrough is a Toronto-based production company. It produced, with great success, a documentary on the First World War entitled “For Empire and Country”. It repeated that success in producing a six-episode television documentary on the Second World War entitled “For King and Country”. The documentary allows viewers to visit the battlefields where Canadian soldiers fought during the war. The narrator recounts the battles from the perspective of the soldiers who fought them. The documentary was broadcast starting on November 10, 2004 on the History Television Network.

47

3      In the fourth episode, Breakthrough incorporated, through narration, excerpts of the autobiography of Sergeant Charles Monroe Johnson. Sergeant Johnson was an American citizen who enlisted in the Canadian army during the Second World War. His book, “Action with the Seaforths”, was published in 1954 by Vantage Press Inc., New York. All of the excerpts were taken from the same chapter, in which Sergeant Johnson recounted the May 1944 battle in the Liri Valley, Italy against the Hitler line.

48

4      Breakthrough was able to locate the copyright owners on all the other works used in the documentary; all of them agreed to issue it a licence. It was not able, however, to locate Sergeant Johnson or his successors, in spite of efforts undertaken in August, September and October 2004. On October 26, 2004, the Board received Breakthrough’s application, pursuant to section 77 of the Act, to obtain a licence allowing for the narration and the exploitation of the excerpts.

49

Applicable Legal Principles

50

5      Subsection 77(1) of the Act gives the Board the power to issue licences when the owner of the copyright cannot be located. Subsection 77(2) allows the Board to set terms and conditions for these licences as it sees fit. Section 77 of the Act reads as follows:

51

Circumstances in which licence may be issued by Board

77. (1) Where, on application to the Board by a person who wishes to obtain a licence to use

(a) a published work,

(b) a fixation of a performer’s performance,

(c) a published sound recording, or

(d) a fixation of a communication signal

in which copyright subsists, the Board is satisfied that the applicant has made reasonable efforts to locate the owner of the copyright and that the owner cannot be located, the Board may issue to the applicant a licence to do an act mentioned in section 3, 15, 18 or 21, as the case may be.

Conditions of licence

(2) A licence issued under subsection (1) is non-exclusive and is subject to such terms and conditions as the Board may establish.

52

6      The present application pertains to a published work, and therefore, to a use mentioned in section 3 of the Act. The relevant portions of that provision, for our purposes, read as follows:

53

3. Copyright in works

(1) For the purposes of this Act, “copyright”, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right

[...]

(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,

[...]

(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,

[...]

and to authorize any such acts.

[Our emphasis]

54

7      When a licence application pertains to a work, five conditions must be met before the Board can issue a licence:

55

1) the work is published;

2) copyright subsists in the work;

3) the contemplated act is an act mentioned in section 3;

4) the copyright owner cannot be located; and

5) the applicant has made reasonable efforts to locate the copyright owner.

56

8      This case raises few issues in relation to those conditions. The work was published in 1954. Copyright certainly subsists: for it to have joined the public domain, Sergeant Johnson would have to have died no later than 1954, the year during which the work was published.2 Nothing in the file suggests that that is the case. In light of the documentation submitted by Breakthrough, the Board is also satisfied that the copyright owner cannot be located and that Breakthrough made reasonable efforts to locate him.

57

9      Only the third condition requires more in-depth examination. For that condition to be met, two components must be examined: are the acts that Breakthrough wishes to effect acts mentioned in section 3, and if so, do the excerpts of the book used by Breakthrough constitute a substantial part of Sergeant Johnson’s work? Breakthrough reproduced a number of excerpts of Sergeant Johnson’s book in the documentary. It also proposes to communicate the documentary to the public by telecommunication, to perform it in public and to reproduce it. Those are all acts mentioned in section 3.

58

Issues at hand

59

10      The present application thus raises two issues:

60

1) Did Breakthrough use a substantial part of Sergeant Johnson’s work, within the meaning of subsection 3(1) of the Act?

2) Under the circumstances, should a retroactive licence be issued to the applicant?

61

Analysis

62

1) Did Breakthrough use a substantial part of Sergeant Johnson’s work, within the meaning of subsection 3(1) of the Act?

63

11      The Act does not define the concept of “a substantial part,” but the case law has analysed that concept.3 Two criteria must be considered to determine, in accordance with the facts in each case, what constitutes “a substantial part” of the work: quantity and quality.

64

12      With respect to quantity, eight excerpts of Sergeant Johnson’s book were reproduced in the documentary. Those excerpts constitute 325 words out of a 342-page book. The narration of those excerpts lasts just over five minutes in one 45-minute episode. Solely on the basis of the quantitative aspect of the analysis, it is difficult in this case to draw a definitive conclusion as to the issue of “a substantial part” of the work.

65

13      It is also important to consider the qualitative aspect of the excerpts of Sergeant Johnson’s work that were used in the documentary. The Federal Court of Appeal ruled on the quality issue in Édutile4 :

66

[22] To determine whether a “substantial part” of a protected work has been reproduced, it is not the quantity which was reproduced that matters as much as the quality and nature of what was reproduced.

[...]

[...]

To enter upon a simple calculation of percentages or proportions in order to determine whether there was an infringement would be to unduly minimize the protection given to copyright. In a copyright matter a part may be as important as the whole [...]

67

14      ”Action with the Seaforths” is an autobiographical work recounting Sergeant Johnson’s participation in the Second World War. The facts pertaining to the conduct of the war are not protected by copyright, but the author’s individual perspective is, and that is what Breakthrough used. The narration of the excerpts of Sergeant Johnson’s book, which are all taken from the same chapter, lends verisimilitude to the battle described in the documentary. The narrator depicts himself as Sergeant Johnson recounting his experience. After viewing the fourth episode of the documentary series, the Board finds that the part of Sergeant Johnson’s book used by Breakthrough constitutes a substantial part of the work from a qualitative standpoint. Although the excerpts of Sergeant Johnson’s work are quantitatively small in relation to the book as a whole, the Board finds that the use of those excerpts constitutes, from a qualitative standpoint, an appropriation by Breakthrough of Sergeant Johnson’s “knowledge, time and talent”5 and therefore, of a substantial part of his work. Breakthrough did in fact appropriate a substantial part of Sergeant’s Johnson’s work by repeating excerpts of his book word for word.

68

15      The five conditions under subsection 77(1) of the Act are therefore met, justifying the issuance of a licence to Breakthrough.

69

2) Under the circumstances, should a retroactive licence be issued to the applicant?

70

16      Pursuant to subsection 77(2) of the Act, licences are issued subject to such terms and conditions as the Board may establish. Those conditions may include time stipulations. The Board can therefore exercise its discretion to issue a retroactive licence.

71

17      The section 77 regime requires the Board to exercise its discretion based on, among other things, the presumed interests of the unlocatable copyright owner, which implies to some extent that the Board is required to act on the owner’s behalf. The regime must also be interpreted so as to mitigate the exclusive nature of copyright in favour of the public interest in cases where the owner cannot be located, in order to allow the dissemination of works that might otherwise not be. In effect, if the owner cannot be located, copyright cannot be released, thus preventing the dissemination of numerous works, to the detriment of “the public domain [works] to flourish”.6

72

18      The Board cannot systematically refuse to issue licences simply because the applicant has already used the work in question, without considering the merits of each application. Such a refusal by the Board would constitute a limitation on its discretion and would not give account for the complex and multidimensional nature of copyright.

73

19      Although Breakthrough asked the Board to issue a licence once the narration was completed, the application was made before the exploitation of the documentary. Moreover, Breakthrough made sufficiently substantial efforts to locate all copyright owners, including Sergeant Johnson, whom it was nevertheless unable to locate. In addition, all the owners located granted a licence to Breakthrough. The Board has no reason to believe that Sergeant Johnson would have acted otherwise. The Board was also able to view the episode in which excerpts from Sergeant Johnson’s work were incorporated, and is satisfied that the use made therein in no way detracts from Sergeant Johnson’s reputation nor from the work itself. Indeed, the Board believes that the use made by Breakthrough honours Sergeant Johnson’s work and helps to disseminate it to a broad public for educational purposes. Moreover, a substantial part of Sergeant Johnson’s work, which was in literary form, has now been incorporated into a cinematographic work, which will help to perpetuate it and disseminate it on a broader scale. Accordingly, as it has previously indicated on a few occasions, the Board finds that the issuance of a retroactive licence is justified.

74

Vancise J.:

75

Introduction

76

20      Breakthrough Films & Television (”Breakthrough”) applied for a licence pursuant to section 77 of the Copyright Act (the “Act”) to use certain extracts from a book written by Charles Monroe Johnson and published in 1954 entitled “Action With the Seaforths” which describes his experiences with the Canadian Army during the Second World War.

77

21      Attempts to locate Mr. Johnson or his assigns throughout August, September and October 2004 proved unsuccessful. On October 26, 2004, Breakthrough filed with the Board a licence application that would entitle it to use the excerpts from Mr. Johnson’s book as the owner of the copyright could not be located. The series aired on the History TV Network starting on November 10, 2004. It is being distributed for educational purposes. Copies of the series can be purchased through the producer’s website, which also states that the series is “available for the world”.

78

22      Our colleagues have decided to issue the licence. With respect, we disagree. We decided to state our reasons for so doing at length in the hope that readers will be better able to understand the general principles which, in our view, ought to inform decisions made pursuant to section 77 of the Act.

79

Legal and Policy Considerations

80

23      It is not necessary to reproduce the relevant provisions of the Act because they have been reproduced in full in the decision of the majority.

81

24      Section 77 is a remedial provision. It seeks to attenuate some of the less palatable effects of the exclusive nature of copyright. Its object is to foster the circulation of works and other subject-matters protected by copyright while at the same time protecting the moral and economic interests of those who own them. Section 77 also is an exceptional provision. Very few jurisdictions throughout the world have adopted similar provisions.7

82

25      Deciding whether to issue a licence authorizing the use of a work or other subject-matter protected by copyright when the owner of the copyright cannot be located involves a number of considerations. Some are legal. Others relate to the public policy objectives of the Act in general, and of section 77 in particular.

83

26      From a legal perspective, the Act sets out a number of clear conditions that must be met before the Board can decide whether to exercise its power to issue a licence. In the case of a work, for example, the Board must find that the work is protected by copyright, that it was published and that the intended use is an act mentioned in section 3 of the Act; the Board also must be satisfied that the applicant has made reasonable efforts to locate the owner of the copyright and that the owner cannot be located.

84

27      If the conditions set out in the Act are met, the Board “may” issue a licence. If it does, it must set the terms and conditions of the licence, including the amount that the copyright owner may claim within five years after the expiry of the licence. Both decisions involve the exercise of discretion, influenced by a number of considerations.

85

28      In dealing with section 77 applications, the Board has always viewed its role as that of stepping into the shoes of the copyright owner. The owner’s wishes ought to play a very important role. So, the Board should not issue a licence for the use of a work in association with a cause or product if it is known that the copyright owner systematically refused in the past to be associated with such a cause or product. That said, since the issue arises only when the owner cannot be located, taking into account the owner’s probable conduct is difficult. The Board will almost inevitably look at substitute tests to assess what that conduct might have been. Market practices often will play an important role, based on the assumption that these practices reflect the owner’s most probable course of action.

86

29      We agree with this approach, as long as certain public policy objectives are also taken into account. For example, general principles that underpin copyright law should be kept in mind. While the interests of copyright owners should be protected, so should those of users, given the recent insistence of the Supreme Court of Canada in balancing the rights of the former and those of the latter.8 The public interest in the dissemination of works and subject-matters also should be given some attention.

87

30      The importance of fostering compliance with copyright rules also should be emphasized. By this, we do not mean that licences should be issued simply so as to convert an infringer into a licensee. Users should be encouraged to evolve towards practices where licences are sought before a work is used. The Board should not condone industry practices that view licensing copyright as an afterthought, thereby showing a lack of disregard for the rights of copyright owners.

88

31      Finally, general public policy should be taken into account, if only because a public agency cannot be asked to exercise its discretion in a manner that runs against clear public policy. For example, the Board should not issue a licence for a purpose that is repugnant to modern Canadian society, even if the author was known to support such a purpose; this would disregard public interest objectives that the Board always should keep in mind.

89

32      Coming to decisions according to the principles outlined above will involve weighing many factors including the nature of the original work, the anticipated use of the work, the difficulties encountered in locating the copyright owner, the benefits that are derived by the applicant in the use of the work and the royalty fees normally paid in the industry for the use of such works.

90

33      Basing ourselves on the principles set out above, we find two reasons for which the application should be denied. First, Breakthrough does not need a licence because what it did is not protected by copyright. Second, even if it did, Breakthrough’s application should be denied as a matter of discretion because it was made after Breakthrough used Mr. Johnson’s book.

91

Is the Contemplated Act Protected by Copyright?

92

34      Breakthrough’s application should fail because the envisaged use does not require the consent of the copyright owner. Simply put, Breakthrough did not violate copyright by acting as it did.

93

35      The Board can issue a section 77 licence for the use of a work only for the doing of “an act mentioned in section 3”. Section 3 of the Act defines “copyright” as “the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever”. The use of less than a substantial part of a work is not protected by copyright. When deciding whether a part of a work is substantial, quality is as important as quantity.

94

36      A copyright owner “cannot control every particle of her work, any little piece the taking of which cannot affect the value of her work as a whole.”9 From a quantitative perspective, what Breakthrough took from Mr. Johnson’s book is trivial. It used seven excerpts and one paraphrase, totalling some 325 words, found on five pages of a 354-page book, or less than one-third of one per cent of the whole work. An earlier decision of the Board concluded that a larger taking from a shorter set of works (12 quotes, totalling some 400 words, out of two books containing 170 pages) did not involve a substantial part of those works.10

95

37      Assessing quality is another matter. Based on recent decisions of the Federal and Ontario courts dealing with the issue of substantiality,11 Vaver has outlined a list of factors that he considers relevant in making such a determination:

96

Is the part taken distinctive — something on which the first author spent much skill, effort, or ingenuity?

Does the author merit the degree of protection sought, to her and others, to produce works of that sort? Would takings of this kind significantly impair the incentive to create for other similarly placed authors?

Has the claimant’s present or future ability to exploit her work been substantially affected? Is the user unfairly enriching himself at the author’s expense? Has he saved himself much time, trouble, or expense by taking the features that make the claimant’s work what it is?

Do the two works compete for much of the same market? Is the market for the user’s work one that ought fairly to belong to the author?12

97

38      We agree with this list of factors. We also agree with Vaver that these matters generally are to be judged by how the ordinary reasonable buyer or user would react on seeing the two products involved together.13

98

39      We conclude that in this instance, the taking involved is not qualitatively substantial. The eight excerpts do not constitute a coherent whole. The proposed use is different from that contemplated by the author. The passages quoted are spoken by an actor using the first person as if the author himself were reading from his work. Their combination with superimposed photo or movie images of the battlefield create something that is more graphically real and significantly different than the original written version. The program is not a substitute for the original and can only enhance (and therefore cannot hinder) its economic exploitation.

99

40      We agree that a short excerpt of a work sometimes can be so distinctive as to be inherently substantial. This is not the case here. The selected quotes do not display the required level of ingenuity or inventiveness. They state simply tragic facts and events, as can be seen from these examples:

100

Here in the valley there was just wheat fields hiding men. There were no ditches or rocks to give us cover.

Directly ahead, a Jerry held his machine gun in his arms. A long burst tore into 8th Platoon to my right. I fired two rounds from the hip. The Jerry folded up and fell. I stepped on his bloody head as I passed over the position a few seconds later.

Points of German resistance were overrun. The Germans must have been surprised by the fact that not one of us stopped for any reason, even to help the wounded.

In hospital I learned that Needham was dead. Scholarly Ross and the rebel Harris were killed. Cowboy Dykes and Halhead too were dead. Fein was also killed. And George Collins, the wheat farmer, would never again weather the Canadian winters or look for crocuses in early spring. His sowing and reaping were finished. The harvest was in.

101

41      In using these excerpts, Breakthrough is not expropriating an essential characteristic of the work. These are not the immortal words of the Bard’s introduction to Hamlet’s soliloquy or the literary equivalent to the opening bars of Beethoven’s Fifth Symphony.

102

42      We will now deal with certain misconceptions often associated with taking a substantial part of a work.

103

43      The first is the proposition that the chosen excerpts must be important precisely because they are being used. That proposition is not sustainable. It is contrary to the very essence of section 3 of the Act:

104

According to a well-known aphorism in the area of copyright, what is worth copying is prima facie worth protecting. Still, it cannot be argued as a result that a quotation is qualitatively substantial for the sole reason that someone wishes to make that quote. Under this approach, the principle according to which a non-substantial part of a work can be quoted without the author’s blessing would lose all meaning. If all quotations were intrinsically substantial, any quotation made without the authorization of the rights holder would prima facie constitute a violation of copyright.14

105

44      The second is that there is no harm in issuing a licence where none is needed. We cannot agree with this proposition. To do so would undermine the Board’s credibility. The Board can only authorize protected acts. An insubstantial taking is not a protected act. Therefore, issuing a licence for an insubstantial taking is ultra vires the powers of the Board, as would be issuing a licence for a private performance, for using something that is in the public domain or for an act that constitutes fair dealing.

106

45      Issuing a licence where none is needed also undermines the underlying principles of the Act. These principles include maintaining a balance between the interests of copyright owners and those of users. Licensing insubstantial takings does not help in maintaining this balance. It gives the impression that trivial takings are protected by copyright. Copyright owners may use the fact that the Board licences insubstantial takings as argument to convince users that an otherwise trivial taking is somehow substantial. Users will apply for unnecessary licences. The tendency to seek a licence for what is ostensibly already authorized will be reinforced. “Just in case” licensing already is common: “people regularly seek permission to carry on arguably non-infringing activities because the cost of permission is usually less than the cost and inconvenience of going to court.”15 The Board should not serve as an insurance agency.

107

46      The third is a preoccupation with the possibility that if the Board wrongly decides not to issue the licence, Breakthrough will stay exposed to prosecutions before the ordinary courts of law. This conundrum is not new to this Board; it is common to all decision-making agencies. The Board’s decisions have no legal authority before a court of law. This can have unintended consequences. Those consequences are the unavoidable result of the way in which our legal regime allocates decision-making power. The answer to this conundrum is not to issue a licence where the Board has no power to do so.

108

47      Taking all of these criteria into account together, we conclude that the excerpts that Breakthrough used are not a substantial part of Mr. Johnson’s book. The use made of the excerpts is not protected by copyright and Breakthrough does not need a licence.

109

Retroactive Licensing

110

48      Had we concluded that the use of the chosen excerpts was protected by copyright, we still would have declined to issue the licence for the following reasons.

111

49      The application under review was received on October 26, 2004, fifteen days before the intended date of broadcast of the first episode of the series. Before the episode could be broadcast, scenes had to be recorded and put together and editing had to take place, leading to the creation in some useable form of a master of the relevant episode. The episode then had to be delivered to History TV so that it could prepare for the broadcast. Consequently, it is almost certain that a number of protected uses, such as the synchronization of the excerpts onto the master tape of the relevant episode, occurred before Breakthrough applied for a licence.

112

50      Nothing in the Act prevents the Board from issuing a licence after a use has occurred, in effect legitimizing the infringing action. By categorically refusing to issue licences for such acts, the Board would probably fetter its discretion.

113

51      Deciding whether to issue a licence after an infringement has taken place raises a variety of issues. Most can be identified and addressed using the principles outlined above. Would the copyright owner have issued the licence in similar circumstances? Will issuing the licence foster the public policy objectives of copyright law?

114

52      Owners often issue licences after the fact. In some areas, this is common practice. The application under review may be an example. From a legal perspective, Breakthrough should have sought permission to reproduce every work it copied, including those that ended on the cutting room floor. In practice, it is more probable that it sought licences only for those works that remained after the final editing process.

115

53      As far as copyright owners are concerned, then, it would seem that Breakthrough’s conduct was acceptable. From a public policy perspective, however, the matter is not as simple.

116

54      Issuing retroactive licences promotes certain valid objectives. It fosters certainty. If done properly and reasonably, it can encourage a culture in which copyright is acknowledged and respected: to an extent, the person who applies for a retroactive licence recognizes the importance of copyright and that should be encouraged. Also, issuing any licence promotes the dissemination of published works. Users who might simply have proceeded without provisions for royalties in the past are now provided with an incentive to make royalties available.

117

55      Other public policy reasons militate against issuing retroactive licences. Issuing a licence deprives the copyright owner of the right to choose between agreeing to a price and seeking compensation for the violation of copyright that has already occurred.16 Once the licence is issued, the time within which the owner is entitled to collect royalties is set: it ends five years after the licence expires. Absent a licence, the owner can challenge a violation of copyright at any time, as long as it is within three years from the time he learns of the violation.

118

56      Most importantly, a licence should not be issued simply so as to absolve an infringement of copyright, whether deliberate or unwitting. A section 77 licence is not an insurance policy, a cheap way for users to manage the risk of a costly legal defence and statutory damages for infringement, or an easy way to deal with an afterthought resulting from incorrect assumptions about how easy or difficult finding a copyright owner will prove. It is not a dog licence. Asking for permission after the fact should be seen as prima facie suspect. Sloppiness should not be encouraged. Industry practices, however ingrained, should be discouraged if they do not show respect for copyright, even denounced if they treat the rights of copyright owners casually.

119

57      Finally, copyright owners should not lightly be deprived of the leverage they are given once their rights have been violated.

120

58      It is possible to enumerate some of the criteria that could be used in assessing whether or not to issue a retroactive licence. A first is the nature of the contemplated use. The commercial or noncommercial nature of the use as well as its impact on the author’s moral rights would be important. A second is the fides of the applicant. The Board should hesitate before granting a licence for Canada if the applicant intends to act without a licence elsewhere. It should be more demanding of sophisticated applicants. Applicants with a history of late filings should be sanctioned. On the other hand, honest mistakes should not be an obstacle to issuing a licence. A third is the time constraints inherent in deciding of the use of a work in the creative process.

121

59      Retroactive applications, when granted, probably should command higher royalties than would otherwise be the case. Where infringement has already occurred, a copyright owner has a strong argument for holding the user’s feet to the flame. He can drag the user through the courts and ask for sums that are considerably larger than if the price of a licence had been agreed beforehand. It would not be unreasonable for the Board to take that sort of power into account and then set a premium royalty price.

122

60      Should a licence be issued in the case at hand? We do not think so. The factors that lead us to so conclude are the following.

123

61      First, the rights being asked for are not trivial. The application seeks the right to include the work into the program, to communicate, publicly perform, reproduce, sell or rent the program, to use the work to advertise the program, and to use the work in “behind the scenes” and “making of” books and productions connected with the program. This ought to attract a higher level of scrutiny.

124

62      Second, this is a sophisticated applicant who should have initiated the process earlier. Breakthrough is a well-established television producer. Production of television programs usually extends over long time periods. Choices about which works might be used in the program no doubt were made some time ago. Yet, the applicant started looking for the copyright owner only three months ahead of time.

125

63      Third, the applicant has not acted beyond reproach. The search for the copyright owner probably did not start until after protected uses had occurred. Believing that it needed the rights, Breakthrough nevertheless allowed History TV to broadcast the programs without having obtained the required permission; this in turn put History TV in an arguably delicate situation.

126

64      Breakthrough apparently intended to market the series without due regard for the infringements that inevitably would occur if Breakthrough did need a licence. In this respect, though it made significant efforts to accommodate the Board’s numerous requests for information, it did not supply all the relevant information. Its application states that the series will air on Canadian television and be distributed for educational purposes. It makes no mention of Breakthrough’s intention to make the series available for broadcast elsewhere or to sell copies to individuals. Yet on its website, Breakthrough states that the series “is available to the world” and offers the series for sale to anyone who wishes to purchase it. Breakthrough should have known that licensing the series for broadcast outside Canada would inevitably have resulted in the violation of Mr. Johnson’s copyright if a licence was required.

127

65      Breakthrough’s conduct may simply reflect current industry practices. If so, then we are of the view that absent clear indications that issuing the licence would be in the best interest of the copyright owner, such practices ought to be condemned. They involve the systematic use of works protected by copyright before the proper authorization is secured. Copyright owners who were located may feel that they must systematically endure such violations of their rights. The Board can afford to be less forgiving.

128

66      The matter does not end with this. The only reason we can imagine for the tardiness of the application is that the applicant never intended to seek licences for works that were reproduced but did not make the final cut, possibly so as to avoid the time and expense involved in seeking authorizations that arguably have little if any commercial value. In our view, the Board should not sanction practices that necessarily involve unauthorized uses for which no licence will ever be sought. The Board must encourage copyright users to develop business models that respect copyright, not give the impression that practices that inevitably lead to copyright violations will be tolerated or forgiven.

129

67      In our view, granting a licence in this instance would have encouraged a perception that the Board is sanctioning the casual violation of copyright, or ingrained practices that inevitably lead to such violation. It certainly would not encourage respect for copyright.

130

68      We are conscious that if the application is dismissed, some users will opt not to file for a licence and to “manage the risk”. It goes without saying that if the Board has a policy not to issue licences under certain circumstances, people will stop filing for such licences. From our point of view, however, applying after infringement tends to show a willingness to manage the risk. A person who is prepared to take the risk of using a work without permission should be prepared to live with the whole risk of infringement. More importantly, it seems to us that by declining to issue a licence, the Board can only help to increase the amount of damages that may be granted in the event of a prosecution, since the user will not be able to claim honest mistake as a defence to help mitigate the statutory damages provided by the Act. Finally, those who are willing to manage the risk outside of Canada ought to be required to do the same inside.

131

Application granted.