Canada: Supreme Court To Hear Five Appeals Concerning Copyright Tariffs

In an unprecedented cluster of cases focusing on copyright, the Supreme Court of Canada has recently granted leave to appeal in five separate cases involving tariffs approved by the Copyright Board. 

The cases, at least four of which will be heard on December 6 and 7, 2011, will consider tariffs dealing with online music, photocopying by teachers for instructional purposes and music in movie soundtracks.

Copies of educational material by schools

The first case concerns a revised tariff, with significantly increased fees for the reproduction of literary, dramatic and artistic works – including books, newspapers and magazines - by primary and secondary educational institutions outside Québec. 

At issue in Alberta (Minister of Education) v. Canadian Copyright Licensing Agency (Access Copyright) is the application of the "fair dealing" exception to copyright infringement, found in section 29 of the Copyright Act, which allows copies to be made for research, private study, criticism and review.  The Copyright Board found that copies made by instructors for student use were made for the purposes of instruction or non-private study, and therefore did not qualify as fair dealing.  The Federal Court of Appeal upheld the Board's decision.

Leave to appeal was sought by the Ministries of Education for each of the affected provinces, together will all of the Ontario school boards, which contend that a majority of the reproductions purported to be covered by the tariff qualify for the fair dealing exception.

The Court will likely build upon the fair dealing test it developed in a 2004 case dealing with the photocopy service provided to lawyers by the Great Library at Osgoode Hall: CCH Canadian Ltd. v. Law Society of Upper Canada.  In that decision, the Court pronounced that the fair dealing exception was a user's right, and should therefore be given a large and liberal interpretation.

The Court is also likely to consider the application of the educational exemptions found in sections 29.4 to 30 of the Act, which were raised by the Applicants at the Board and at the Federal Court of Appeal -- particularly the exception allowing works to be reproduced for the purpose of a test or examination.

A similar Access Copyright tariff, which proposes significant increases to fees charged to post-secondary educational institutions for photocopied material, has resulted in apparent turmoil in the education community.  A number of colleges and universities have reportedly pulled out of the tariff arrangement, resulting in confusion among professors as to copyright liability, and the elimination of some course material.

Communication to the public

Three of these cases to be heard by the Court relate to the Board's approval of Tariff 22A, a tariff for the communication of musical works over the Internet.  The tariff, originally filed in 1996, has already been the subject of several preliminary proceedings relating to jurisdiction, including judicial review by the Federal Court of Appeal and an earlier appeal to the Supreme Court of Canada.

In two of the Tariff 22A appeals, the Court will examine whether the streaming or downloading of copyrighted content, through distinct point to point transmissions of individual files to consumers, constitute communication "to the public" and thus fall within the scope of copyright protection afforded by section 3(1)(f) of the Act, such that a tariffed royalty is payable.

The first case, Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada, dealt with the approval of a tariff that imposed copyright liability for transmission of musical works by a range of "telecommunications services", including websites providing music downloads and streaming and the Internet Service Providers who provide access to the Internet.  The second case, Entertainment Software Assn. v. Society of Composers, Authors and Music Publishers of Canada concerned liability for similar transmission of video games which contain background music.

The Federal Court of Appeal dismissed these applications, finding that a communication is "to the public" when the communicator intends the communication to be received by the public.  The number of persons who actually receive the communication was not considered to be relevant.

In the Entertainment Software case, the court below also rejected the Applicant's argument that a de minimis rule exists preventing the imposition of a tariff in a situation where a musical work constitutes only a marginal component of a particular video game, finding that the download of a video game which includes music is a communication to the public within the meaning of section 3(1)(f) of the Act and is thus subject to a tariff.


Another of the cases stemming from the Tariff 22A decision concerns whether the tariff that would require the payment of royalties with respect to online music previews, which consist of short extracts of musical works provided to assist consumers in deciding to purchase the works in question.

In Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, copyright collective SOCAN sought judicial review of the Board's refusal to certify a tariff for previews.  The Board had concluded that users listening to previews were entitled to avail themselves of the fair dealing exception, as are those that make such previews available to users, as listening to the previews constituted research of a purchasing decision.  In doing so, the Board applied another aspect of the earlier ruling in CCH, where the Supreme Court noted that research was not limited to non-commercial or private contexts.  The Federal Court of Appeal upheld the Board's decision, and SOCAN sought leave to appeal to the Supreme Court.

Sound recordings in soundtracks

Finally, and most recently, the Supreme Court granted leave to hear the appeal of Re: Sound v. Motion Picture Theatre Associations of Canada, which concerns whether a tariff can be imposed for the communication to the public through telecommunication of a sound recording, where the recording is part of a soundtrack that accompanies a motion picture or a television program being communicated to the public by telecommunication. 

The Copyright Board refused to approve such a tariff, noting that the Act defines "sound recording" so as to exclude "any soundtrack of a cinematographic work where it accompanies the cinematographic work."  Section 17 provides that where a performer authorizes the inclusion of a musical performance in a cinematographic work, they may no longer exercise their rights with respect to communication to the public by telecommunication, although they may contract separately to obtain royalties for such telecommunication from the studio with the rights to the cinematographic work.

On appeal to the Federal Court of Appeal, the applicant performance right copyright collective,  Re: Sound, sought to draw a distinction between a "soundtrack" and its component parts, however the Court rejected the argument, finding that there was no legal basis for the tariffs proposed by Re: Sound since its interpretation of soundtrack would require adding words to the definition of "sound recording" found in the Act.


The Supreme Court's review of these key provisions in the existing Copyright Act will be timely given the federal government's recent announcement that it would be reintroducing Bill C-32, An Act to Amend the Copyright Act.  The Bill, which died upon Parliament's dissolution in March of this year, contains important new prohibitions on the circumvention of "digital locks" as well as reforms of the fair dealing provisions found in the Copyright Act.  The proposed fair dealing reforms, which would include new explicit exceptions for "education, parody or satire," were explicitly referenced by the Federal Court of Appeal in the Access Copyright case.

Copyright owners, users and commentators will be watching both Parliament and the Supreme Court in the coming months, as the potential for  significant reform of Canada's copyright framework looms on the immediate horizon.

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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