Canada: $5 Cab Ride - SCC Copyright Decisions Don't Take Us Very Far

Last Updated: August 20 2012
Article by Thomas O'Reilly

Given the near-hysterical tenor of much of the media commentary on the July 2012 release of five copyright decisions by the Supreme Court of Canada, you would think the SCC had ruled that dogs could vote and that beer was now free in Canada. While the decisions are positive in regard to user rights for copyright, commentary to the effect that these decisions have "left the rights of authors, publishers and songwriters by the side of the road" is hyper-hyperbole.

Using the "technological taxi" analogy made by the SCC in the ESA v. SOCAN decision, these rulings take us a short ways down the road toward broader fair dealing rights, but there is still a long walk ahead to no-cost copying.

Only two of the five decisions, Alberta v. Access Copyright, and Socan v. Bell, address the "fair dealing" right. Fair dealing is a provision under the Copyright Act, which allows for some limited reproduction of copyright works, for specified purposes, without such use being copyright infringement. The SCC did drive us all the way to the airport in their 2004 ruling in LSUC v. CCH, which broadened "fair dealing" from a narrow exception to a much more robust "user right". However, in these two 2012 rulings, the SCC has applied the CCH test in a straightforward way to two new situations, and so has essentially just said "the law of fair dealing is the same as it has been for the last eight years".

To the extent some commentators think the Alberta v. Access Copyright ruling was controversial, here is some perspective: The new "education" fair dealing right added to the Copyright Act by Bill C-11 would have produced the same result anyway; the broader fair dealing right for teacher-copying will only reduce the Access Copyright tariff by 7%; the amount that teachers are allowed to copy from textbooks and other works as fair dealing remains only "short excerpts".

The Socan v. Bell ruling can be said to enhance fair dealing, because it provides that the "research" category of fair dealing can apply to everyday consumer activities. However, it seemed somewhat obvious from the outset that streamed 30 second samples of music made available for the purpose of selling the tracks (and therefore generating royalties for the artists and music companies) should be fair dealing. It is a reasonable way for consumers to shop for music, and it benefits the copyright owners by selling more tracks.

The next two decisions dealt with the same Copyright Act provision, being the exclusive right of copyright owners to communicate their works to the public by telecommunication. The cases arose from the activities of SOCAN, a collective society that exists to collect royalties on behalf of copyright owners, through tariffs for the public performance/communication of copyright works.

In the Entertainment Software Association (ESA) v. SOCAN case, SOCAN had successfully applied to the Copyright Board for a tariff that would require sellers of downloadable games to pay a royalty to SOCAN for copyright musical tracks within the games. The ESA of course objected to this, because the game sellers had already paid the music owners for the right to reproduce the music tracks in the games – this SOCAN tariff would be a second payment by the same game seller, for the same musical track. Further, no second payment would arise for the same games sold as DVDs – because this tariff only applied to copyright works sold via "telecommunication". The Copyright Board had approved the tariff nonetheless, on the basis that there are technically two separate rights (reproduction and telecommunication), so there can be a requirement for two separate royalty payments.

The SCC majority in ESA said nuh-uh – there could not be two different compensation rules for the same product, based solely on one being downloaded, and the other sold as a physical copy. This would violate the theory that the Copyright Act rules are "technology neutral" – that is, that the fundamentals of copyright don't change whether you are givin'er on a Gutenberg, or swiping a screen in cyberspace. As a result, the SCC majority held that the telecommunication right is limited to "performance-like" communications (like streaming) but does not include sending a permanent copy of a work in the form of a downloaded file.

In the second case dealing with the telecommunication right, Rogers v. SOCAN, Rogers and other telecommunication companies argued that now that we don't have to pay a telecommunication royalty for music downloads (thank you, ESA!) we will go for the whole enchilada, and say we don't have to pay a royalty for streaming music either. Roger's argument was based on the strict wording of the Copyright Act provision "telecommunication to the public", and that internet streaming is point to point to individuals, so not "to the public". Nice try, but all nine SCC thumbs pointed earthward, once again as a result of a bias toward neutrality of technological means. The SCC said that public availability of content on the internet is effectively the technological equivalent of broadcasting TV or radio content, and so sending an aggregation of individual streams is still "to the public".

Keep in mind that even in light of the ESA and Rogers decisions, music owners still have to give permission, and still have to be paid for their music to be downloaded, streamed and included in games or movies – these SCC decisions just rearrange some of the channels through which that compensation will be negotiated and collected in Canada.

The fifth decision in Sound v. Motion Picture Theatre Association of Canada, barely warrants reporting. Another collective society, Re:Sound, also sought a double-dip royalty for musical tracks in movie soundtracks, on a very technical interpretation of Copyright Act language. The soundtrack to this decision sounded like "SMACK!", as the SCC knocked Re:Sound's soft pitch out of the park, unanimously dismissing the appeal.

So, applying the theory of transportation analogy neutrality, copyright owners are still driving the bus, and the fare is about the same – but the seats look a little more comfortable.

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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Thomas O'Reilly
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