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Canada: Supreme Court Of Canada Confirms A Two-Part Approach To Fair Dealing Analysis And Finds That Providing Online Previews Of Musical Works Constitutes Fair Dealing Research: SOCAN v. Bell Canada (2012 SCC 36)
The issue before the Court was whether music previews available
to consumers through commercial music stores on the Internet were
covered by the fair dealing exception such that no royalties should
be paid to copyright owners.
The Copyright Board had concluded that such music previews
constitute fair dealing for the purpose of
"research" by consumers under s. 29 of the Copyright
Act, and as such were not remunerable. This decision was upheld by
the Federal Court of Appeal.
In a unanimous decision written by Justice Abella, the Supreme
Court of Canada reiterated its prior comments in CCH Canadian that
at the purpose inquiry stage of the fair dealing analysis the term
"research" should be given a generous interpretation. The
argument that "research" should be restricted only to
acts that create new works was rejected. The Court also rejected
argument that the purpose inquiry should focus on the purpose of
the copier and not the end user. In this case, because consumers
use the previews to engage in a form of research this was found to
pass the low hurdle of proper research purpose. The inquiry then
moved onto the issue of "fairness," where Justice Abella
indicated the analytical "heavy hitting" is
performed.
In assessing whether music previews are "fair," the
Court considered the six fairness factors originally set out in CCH
Canadian. Recognizing that this stage of the analysis is a
highly fact-specific exercise, the Court concluded that the Board
had properly found that the dealings in question were fair. In
particular, the Court agreed that the fact previews are streamed (a
temporary copy) rather than downloaded (a permanent copy) favoured
a finding of fairness. The Court also accepted that there was no
reasonable alternative to listening previews for consumer research
purposes. Finally, the Court found that previews did not affect
sales of music negatively or compete with the sale of musical works
given their temporary nature and short duration, and the fact that
they are generally provided in lower quality formats. The Court
also noted that the effect of previews is to increase the sale of
musical works, thereby generating remuneration to their
creators.
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