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Canada: Providing Permanent Copies Of Works To Consumers By Online Downloading Services Is Not "Communicating" Works To The Public By Telecommunication: Entertainment Software Association v. SOCAN (2012 SCC 34)
Consumers can purchase video games by downloading them online.
The games downloaded often contain copyright protected
musical works.
SOCAN sought to obtain compensation, on behalf of music owners,
for their right under the Copyright Act to "communicate"
musical works "to the public." SOCAN's position is
that when a game containing music is downloaded by consumers, this
is a communication of the music to the public that requires
payment.
SOCAN applied to the Copyright Board for a tariff of
remuneration to be paid by service providers offering music
downloads over the Internet. The Copyright Board concluded that
when service providers offer a video game containing music by
download, a fee is required to be paid. This was upheld by the
Federal Court of Appeal. These decisions were consistent with a
number of previous decisions of the Board and the courts, including
the Supreme Court's 2004 decision in SOCAN v. CAIP.
Writing for the majority in a divided Supreme Court of Canada
(the decision was 5-4), Justices Abella and Moldaver agreed with
ESA that the exclusive right enjoyed by music owners is to
"communicate" their works to the public, and that the
word "communicate" in the context of the Copyright Act
has historically connoted an act akin to a public performance or
broadcast. In contrast, a download transmits a permanent copy of a
work to a consumer akin to physical delivery of a physical
product.
The Court expressed the view that there was no practical
difference between buying a durable copy of the work in a store or
downloading an identical copy using the Internet. The majority was
troubled by the fact that an added communication royalty would not
have to be paid when games are sold through traditional channels.
In the Court's view, the principle of technological neutrality
required an interpretation of the Copyright Act that avoids
imposing additional layers of protections and fees based solely on
the method of delivery of the work to users.
Dissenting reasons were given by Justice Rothstein for four
members of the Court, who would have upheld the Board's
decision that an additional fee is required to be paid for online
delivery. In Justice Rothstein's words: "[T]he Internet
may well be described as a technological taxi; but taxis need not
give free rides." Justice Rothstein also noted that the
Copyright Board is authorized to set appropriate royalty rates,
including by taking into account any concerns as to overlapping
rights and alleged "double-dipping" by
rights-holders.
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