Canada: Copyright Year In Review, 2010

This past year saw several developments in copyright law, but the tabling of Bill C-32 has the potential to change the face of copyright in Canada. This article discusses highlights of Bill C-32, the Copyright Modernization Act, as well as other key developments in Canadian copyright law in 2010. Aside from Bill C-32, 2010 saw a number of judicial review decisions that upheld Copyright Board rulings, potential changes to the interpretation of the fair dealing provisions and an affirmation of the territoriality of copyright law.

Bill C-32

The title of Bill C-32, the Copyright Modernization Act, describes the stated intent behind the Bill, which received first reading in June and second reading in November. The objectives of Bill C-32 include:

  • update the rights and protections of copyright owners to better address the challenges and opportunities of the Internet, so as to be in line with international standards;
  • clarify Internet service providers' (ISPs') liability and make the enabling of online copyright infringement itself an infringement of copyright;
  • permit businesses, educators and libraries to make greater use of copyright material in digital form;
  • allow educators and students to make greater use of copyright material;
  • permit certain uses of copyright material by consumers;
  • give photographers the same rights as other creators;
  • ensure that the Copyright Act remains technologically neutral; and
  • require a review of the Copyright Act by Parliament every five years.

The Bill seeks to achieve these goals through four major changes: (i) implementing a notice-and-notice scheme to immunize ISPs from liability; (ii) expanding the scope of the fair dealing exception; (iii) creating new exceptions aimed at consumers; and (iv) making it an offence to circumvent technological protection measures. The parliamentary committee overseeing this Bill is currently hearing from witnesses about these and other key provisions.

Judicial Review of Copyright Board Decisions

The past year saw a number of applications for judicial review of Copyright Board decisions heard by the Federal Court of Appeal (FCA). All but one of these applications were dismissed (leave to appeal to the Supreme Court of Canada was sought on four of these decisions, which will be discussed in detail below). The FCA upheld the decisions of the Copyright Board on issues of fair dealing, evidence, certification of tariffs, whether Internet communications are "to the public," the territorial application of the Copyright Act (Act) and whether satellite radio providers authorize the copying done by their customers.

Only one application was allowed in part. In Alberta (Minister of Education) v. Canadian Copyright Licensing Agency (c.o.b. Access Copyright), the FCA remitted to the Board a question regarding the interpretation of the educational institution exemptions in section 29.4 of the Act.

Supreme Court to Hear Fair Dealing Appeal

One of the judicial review applications mentioned above involved the question of whether previews offered for free by an online music service ought to be considered "research" for the purposes of the fair dealing exception in section 29 of the Copyright Act.

The Copyright Board, in certifying a tariff for the Society of Composers, Authors and Music Publishers of Canada (SOCAN) on Internet uses of music, refused to certify a tariff on 30-second previews streamed to consumers. The Board held that listening to these previews fell under the definition of "research" as contemplated by section 29 of the Act. The Board held that when users of a service such as Apple's iTunes listen to 30-second previews of music offered by the service, they are conducting "research," and therefore the online music service does not require a licence to stream those previews.

The FCA dismissed SOCAN's application for judicial review on this point. Relying on dictionary definitions of the term "research," the FCA concluded that the term was broad enough to encompass the process of searching through an online catalogue for a song to purchase.

SOCAN was granted leave to appeal the decision of the FCA to the Supreme Court of Canada. The appeal, the outcome of which has the potential to further develop the law of fair dealing, is scheduled to be heard in December.

The coalition of educators who were the applicants in the Access Copyright case mentioned above have also applied for leave to appeal on an issue involving fair dealing in the educational context. A decision on this application for leave is pending. One of the key issues in this judicial review was the meaning of the term "private study," also found in section 29 of the Copyright Act. The FCA held that making copies of passages from textbooks for classroom use could not be considered fair dealing for the purposes of "private study."

Territorial Application of the Copyright Act

In the course of an application for judicial review of a decision of the Copyright Board regarding satellite radio, the FCA came to two important conclusions on the territorial application of Canada's copyright laws.

First, the FCA concluded that authorization in Canada of copyright infringement that occurs outside of Canada is not an offence under the Copyright Act. Second, the FCA held that the "real and substantial connection" test did not apply to acts that take place wholly within another country.

The distribution of satellite radio is, by its nature, territorially ambiguous. The main broadcasting activities are conducted by satellites in orbit. Even on Earth, the broadcasting operation involves an international element. For Canadian satellite radio providers, all of the content programming happens in Canada. Both major providers, XM and Sirius, assemble their Canadian content in Canada. However, both providers also transmit the final program data to a server in the U.S., where it is then beamed to the satellite for broadcast.

At the FCA, the applicants — a coalition of rights-holders in the musical works broadcast over satellite radio — argued that this transmission between Canada and the U.S. amounted to either a copy that occurred in Canada or that was made in the U.S. but authorized in Canada. The FCA concluded that the copy was made in the U.S. and that it is not an offence under the Act to authorize an act that does not amount to an infringement in Canada.

The other major issue in this application was raised by Sirius and dealt with the test for authorization. Several of the satellite receivers sold by Sirius offer the user the option to store a copy of up to 100 hours of the satellite radio stream. The Copyright Board had certified a higher tariff rate for these receivers on the basis that the copies made by the users required a licence, and Sirius required a licence to authorize the creation of those copies.

Sirius argued that it simply provided the equipment to its customers and it was up to the customer to decide whether to make legitimate or infringing copies. The FCA focused on the fact that the receivers copied all of the signal content without discriminating between infringing and non-infringing content. The FCA concluded the level of control built into the receivers amounted to an authorization by Sirius of the infringing copies made by its customers. It expressed this conclusion at paragraph 29 of its decision as follows:

In practical terms, the use of a satellite radio receiver as it is intended to be used will always result in the making of infringing copies because of the technological choices made by satellite radio service providers.

Other Notable Cases

Construction Denis Desjardins inc. c. Jeanson, 2010 QCCA 1287

In this case, the Québec Court of Appeal overturned a decision of the Québec Superior Court where the trial judge had determined that the architectural plans in question lacked sufficient originality to be protected under the Copyright Act. The Court of Appeal held that the trial judge had applied the wrong test for originality and affirmed that a design is original when it is the product of the judgment of the author.

Target Event Production Ltd. v. Cheung, 2010 FCA 255

This was an appeal from a decision of the Federal Court regarding competing night markets in Vancouver's Chinatown. At trial, the plaintiff claimed that the defendant's night market was substantially similar to his own and the defendant was liable in both copyright and passing off. The trial judge held that the defendant had substantially copied the defendant's market site plan in its permit application to the city. The trial judge also found the defendant liable for passing off. The trial judge awarded damages totalling $15,000 and issued an injunction enjoining the defendant from further infringement of the plaintiff's copyright in his market site plan.

On the copyright issue, the FCA upheld the trial judge's decision on infringement, but clarified the content of the injunction. The FCA held that the injunction did not prevent the defendant from continuing to operate his current market because the Copyright Act did not contemplate prohibitions on "use" or "operation." Rather, the injunction simply prevented the defendant from further infringing the plaintiff's copyright in the market site plan by reproducing it in any material form.

Philip Morris Products S.A. v. Marlboro Canada Ltd., 2010 FC 1099

This case concerned a dispute between two tobacco manufacturers over the use of the Marlboro cigarette brand. Along with several trade-mark related claims, the plaintiff claimed that the defendant had infringed its copyright in the Red Roof design on its packaging.

The trial judge held that while copyright can subsist in product packaging, a comparison of the plaintiff's and defendant's packages in question revealed no substantial similarity. The designs used different colours and fonts and the only likeness was the use of a crest, but the two crests were not substantially similar.


The introduction of Bill C-32 has raised the possibility of significant changes to Canadian copyright law. Also, the grant of SOCAN's application for leave to appeal in a case involving fair dealing has the potential to bring changes to how that doctrine is applied. The coming year will tell whether those changes come to pass and what impact they will have on creators and users of copyright content.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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