Do Private Interests Override the Public Interest in Top Court?

When the Supreme Court of Canada decides a case, it can be hard to know who has won. All sides have declared victory since October’s Robertson v Thompson Corp, 2006 SCC 43, a ruling handed down by Canada’s top court. By a 5-4 split, the Court favoured freelance author Heather Robertson who sued The Globe and Mail in a class action lawsuit to stop newspapers and magazines from reproducing freelance articles in online databases without permission (and compensation).

Authors’ groups like the Professional Writers Association of Canada (PWAC) triumphantly stated that the decision “has upheld freelance writers’ ownership and control of the work they produce (a fundamental tenet of copyright law).” But The Globe also said in its statement that it was pleased overall. This is because the decision, for the first time, carved out the right for newspapers to republish articles on CD-ROM; articles reproduced in CD-ROM were seen as “faithful” to the essence of the original print edition and therefore allowable reproductions by the newspaper without the authors’ permission.

But saying that authors own online rights and newspapers own CD-ROM rights is practically meaningless. This is because for both the majority and the dissenting opinions, freedom to contract trumps the law. Each and every time. As the Supreme Court stated, “this decision, will of course, be of less practical significance. Parties are, have been, and will continue to be free, to alter by contract the rights established by the Copyright Act.” Each party theoretically has contractual freedom, but publishers, as the party with the greater bargaining power, dictate terms to freelancers who have little power to demand better treatment. This decision—sanctioning freedom of contract—will therefore have little, if any, impact in practice.

Publishers have already standardized “all rights” contracts where they own all digital rights. And so, this decision is only relevant for the period of pre-electronic publication when there were no written contracts and no mention of digital rights. But even for this pre-electronic period, it may be that due to verbal contracts, publishers may also own freelancers’ online rights. Freelancers may therefore end up with no rights.

Indeed, the majority opinion, seemingly more sympathetic to freelancers, acknowledges that it had not even begun to scratch the surface of the real issue: had freelancers impliedly given away their digital rights in the first place? The issue of who owns the digital rights for that pre-electronic time period remains a live issue.

But freedom of contract does not always have the last word. The Court is only partly accurate here. At least in the UK, which provided the model for Canada’s copyright statute, publishers’ freedom to contract has been restricted when dealing with parties with weaker bargaining power, such as freelancers. And where the law failed, courts would often step in and level the playing field by giving publishers fewer rights in the contracts. If such precedents had been considered in Robertson, the contract issues would have been resolved in the authors’ favour. Publishers, aware of these constraints, may now have had more incentive to contract precise terms for each of their digital rights.

In Canada, freedom of contract is subject to an ancient body of doctrine called “equity” by which courts check contracts for unfair conduct and terms. English decisions in the music industry invalidating one-sided contracts unfairly reached by producers with inexperienced musicians will likely be followed, and likely expanded on, in Canada. Further, the Court’s decision does not stop Parliament—the final adjudicator on copyright policy—from enacting laws to address copyright contract issues (e.g. more specific provisions on licensing). Such issues were flagged in the federal government’s Section 92 Report on Supporting Culture and Innovation (October 2002) but ultimately have not made governments’ priority lists. It’s still not too late. This problem will not go away any time soon.

Freelancers are a growing category of cultural workers. More and more work is being outsourced to freelancers. New technologies continue to be invented, opening up new markets of exploitation and new challenges to today’s standardized contracts and publishing practices. Allowing full freedom of contract will mean that publishers, with their greater bargaining power, will take the greater share of the fruits of these new technology markets, at the expense of authors.

For the Robertson dissent, this last result would seem just fine. The dissenters seem to go even further than the majority in allowing publishers free rein. They considered a similar American case where the publishers lost and then in retaliation purged authors’ works from their online databases. To avoid a similar purging in Canada that would go against the “public interest,” the dissenters ruled for the publishers. But publishers may not always prioritize what is in the public interest over what is in their shareholders’ interests. Also, at least in the American decision, its dissent deferred to the U.S. government and said that these issues merit further study.

There is no reason why licensing schemes parallel to those in the music industry could not evolve to compensate authors and ensure users greater access and diversity of works. Such a creative solution may accommodate all parties in the public interest. What the Court gives us is a copyright test that is a “matter of degree” and will lead to much future guesswork. Even publishers need more than this for certainty’s sake. Resolving the live contract issue in Robertson may still leave the door open for new uncertainties in future copyright contracts. Bright-line rules will be necessary to guide both parties and courts.

As in the past, Quebec currently stands out as the one province in Canada that has attempted to clarify and protect authors’ rights through legislation. Similarly, across Europe, various laws manage copyright contracts so that contracts may be arrived at equitably and so that freedom to contract does not undermine public policy.

The government and Parliament would do well to learn from the past and the present as signaled by Robertson. They should produce legislation that avoids having courts do their job for them in the future.

A version of this article is to be published in Masthead Jan/Feb 2007 issue and a longer version in the upcoming European Intellectual Property Review (EIPR) 2007, Issue 2.