1. Anti-Competition Rules. The Canadian Copyright Act encourages collective administration. Canadian legislators were very much aware of the potential conflict with anticompetition rules, such as those that exist in the United States. Antitrust accusations have marked the history of collective administration in the United States, and Canadian legislators sought to address this issue so that collective administration in Canada would not share a similar experience. By increasing the overseeing powers of the Copyright Board to set and review tariffs and other conditions associated with the allocation and collection of royalties, legislators sought to remove any potential conflict with Canada’s Competition Act,13 particularly Section 45 of the Act, which makes it is a criminal offense to conspire or agree to lessen competition by effectively enhancing the price of a good or service.14

Canadian performing rights societies are protected from certain accusations of anticompetitive behavior because they are subject to the Copyright Board’s jurisdiction in setting tariffs for royalties.15 For all other issues, performing rights societies and other collective societies are subject to anticompetition laws.

2. Exceptions to Copyright. Amendments to Canada’s Copyright Act16 in 1997 introduced specific exceptions to copyright for educational institutions and museums, archives, and libraries, which are excepted from copyright violation if they make a copy of a work in order to manage or maintain their respective collections (specific conditions are provided in the text of the legislation), or to carry out limited interlibrary loans. Exceptions to copyright are also provided to educational institutions for use of works inside a classroom or as part of an examination.17 Museums, libraries, and archives that are part of educational institutions may avail themselves of all of the exceptions. Certain exceptions for all these groups apply only when a copy of the work in question is not "commercially available," i.e., not available for licensing from a collective society.18

Some of the amendments of the 1997 legislation are not yet in force, so the impact of the exceptions on a collective’s potential market is not known. However, one can assume that since educational institutions are one of the primary users of intellectual property from cultural heritage organizations, their direct use of this intellectual property for educational purposes may be exempt from copyright. In other words, educational institutions can use this intellectual property for the specific reasons defined by the Copyright Act (such as for use on a classroom overhead projector) without paying for such use or requesting prior authorization, as long as museums, libraries, and archives do not make their intellectual property commercially available through a collective society. If these organizations do make their intellectual property available through collective societies, then educational institutions are required by law to use these collectives to obtain the works. Thus, under Canadian law, it is in the interests of cultural institutions to join collectives if they wish to receive financial payments from the educational markets using their intellectual property.

Continued . . .