Canada: IP Monitor - Are We Communicating? In Public?: Two Supreme Court Decisions

In two recent Supreme Court cases, the court carefully examined the right given in section 3(1)(f) to "communicate" a work "to the public by telecommunication". In the first case, Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (hereafter ESA or ESA v. SOCAN)1, the court examined the word "communicate" and in the second case, Rogers Communications Inc. et al. v. SOCAN et al.2, the court examined the meaning of the words "to the public".

In the first case, ESA v. SOCAN, the Supreme Court by a 5 to 4 decision applied policy arguments to overturn the Federal Court of Appeal. In so doing, the court decided that downloading of a work for viewing later was not a "communication". As all parties accepted that "streaming" was a communication, this did not become an issue in either the ESA or Rogers cases.

The facts of the ESA case are relatively simple. SOCAN, a collective given the right to administer the performance and communication rights granted to copyright owners, applied for and was granted a tariff by the Copyright Board to charge a royalty for music that was downloaded as part of a computer game. The Entertainment Software Association (ESA) objected to this tariff on the basis that a download of a computer game in which the game cannot be played or perceived in the process of downloading was not a "communication". The majority accepted ESA's argument that the communication right given to copyright owners in section 3(1)(f) was a subset of the "performance" right and that there could not, in effect, be a communication if there was no "performance".3 The majority equated a performance with the ability to perceive the game and its music during the download. In so doing, the Supreme Court also overturned (on this point) not just the lower court Federal Court of Appeal decision but the prior Federal Court of Appeal decision in the "ringtones" case.4

The Supreme Court majority seemed motivated by the policy goal that copyright owners should not receive more in royalties when a game is downloaded from the internet than when purchased in a store. In the view of the majority, the internet is simply a technological taxi which delivers games to consumers who should not pay more than if the same game was purchased and physically brought home by taxi or otherwise.5

Both the majority and the minority accepted that the communication right and the reproduction right were distinct rights. Rothstein, speaking for the minority, pointed out that royalties could be apportioned to provide for a payment for both the communication right and the reproduction right.6 However, the majority interpreted the word "communication" narrowly so that, as previously mentioned, the Court did not consider that the communication right applied when there was no ability to immediately perceive and listen while downloading was taking place.7

The majority's decision may be sound policy for the ESA situation, but it remains to be seen what difficulties the Court's interpretation of the Copyright Act may engender in other circumstances.

Firstly, the Court considered the enumerated rights in section 3(1)(f) as simply illustrative of the rights given in the introductory paragraph of section 3.8

This introductory paragraph has defined copyright to mean the "sole right to produce or reproduce a work in any material form, to perform a work in public or to publish an unpublished work." According to the majority, the definition of copyright is "exhaustive" as the term "means" in the preamble defines its scope. According to the majority, then, all copyright rights must fall under reproduction, performance or publishing. Rothstein speaking for the minority pointed out that section 3(1)(i) included rental rights and that this right did not seem to fall under any of the enumerated reproduction, performance or publishing rights referred to in the preamble. However, the majority concluded that rental rights could "fit comfortably" into the general category of reproduction rights.9

What will the Court do with the "making available" right when it is added to the Copyright Act by Bill C-11?10 Bill C-11 adds section 2.4(1.1) which reads as follows: "For the purposes of this Act, communication of a work or other subject matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and time individually chosen by that member of the public." Does this alter the view that a communication must include a performance? Does access to a work necessarily require a performance? In addition, "making available" implies only that the work is available in that it "allows" a member of the public to have access to it. It seems that the words of subsection 1.1 do not require that a member of the public have actually accessed a work, if they are allowed to do so. However, does this means that a work is only made available if what is available to the person is a "performance"? It is understandable why the Supreme Court did not tackle these problems with respect to a statutory amendment that has not yet been proclaimed in force, but it is unfortunate that the question answered in the ESA case may not definitively resolve the issue. After the Bill C-11 amendments come into force, there will now be an additional right of "making available" that falls under the communication right and therefore must presumably be interpreted in association with section 3(1). Is it possible that if a work is made available on the internet for download, but that is not performed or perceptible during the download that such a work is not therefore "made available"? This is a possible interpretation if all communications require a performance and performance requires the ability to simultaneously play or perceive the work during the process of downloading. This could make assertions of infringement against persons who post materials on the internet for download more difficult.

While the Supreme Court's policy rational of not distinguishing between electronic delivery by the internet and purchase in a store sounds reasonable, the ramifications of this decision are not immediately apparent and could have unintended consequences.

In the second decision, Rogers v. SOCAN,11 the court considered the meaning of "to the public". Here the court was unanimous in its view that a point to point transmission of a musical work on demand was a communication "to the public" where the same work was made available to an aggregation of individuals. The court noted that section 3(1)(f) was not limited to broadcasting to the public (the traditional "push" technology) but also covered the newer "pull" or on demand model. The court distinguished its own previous case of CCH Canadian Ltd. V. Law Society of Upper Canada12, on the basis that in CCH a single work was delivered on request to a single researcher, while in the present case, it was the intent of the appellants to deliver a single work multiple times on request "indiscriminately" to anyone with internet access to the online music service's website. According to the court, the customers requesting such streams were not members of a narrow group but were quite simply, "the public".13

The court rejected the view that communications to individual members of the public through downloads or streams requested by them at different times are not communications "to the public". The court considered it necessary to consider the broader context to determine whether a given point-to-point transmission engages the exclusive right to communicate to the public.14 The court considered that the appellant's proposal that each transmission had to be analyzed in isolation because each is initiated at the request of individual members would have the effect of excluding all interactive communications from the scope of the copyright holder's exclusive rights to communicate "to the public".15 Since all parties had accepted that streaming was a communication, once the court ruled that the Rogers interactive on-demand streaming service was "to the public", the Rogers appeal failed on this point and the SOCAN tariff for streaming was upheld.16 However as the court had just held in ESA that downloading was not a communication, the Rogers appeal succeeded for downloading and the SOCAN tariff was denied.

While the court did not examine the "making available" right in the context of analyzing the word "communicate" in ESA, it did do so in Rogers in the context of examining the words 'to the public". The court cited Article 8 of the WIPO Copyright Treaty for the proposition that "on demand" or "pull" technologies are specifically covered by the making available right in that treaty.17

The court also considered the proper standard of review of a decision of the Copyright Board. Space does not permit a full discussion of this issue, but suffice it to say that the court (Abella dissenting on the standard of review only) held that the standard of review was correctness, rather than the more differential standard of reasonableness. The court concluded this because of the unusual statutory scheme under which the Board and the court may each have to consider the same legal question at first instance.18

Footnotes

1 2012 SCC 34, hereinafter ESA

2 2012 SCC 35, hereinafter Rogers

3 ESA decision at paragraphs 19, 25, 27,31, 39

4 Canadian Wireless Telecommunications Association v. SOCAN, 2008 FCA 6

5 ESA decision paragraphs 1, 3, 9

6 ESA decision at paragraph 126

7 However, while there was a dispute over whether downloading was a "communication", all parties accepted that streaming was a communication and that a tariff would apply if the streaming was "to the public", an issue to be decided in the subsequent Rogers case, see Rogers paragraph 2, footnote 16 below.

8 Copyright Act, R.S.C. 1985, c. C-42, s. 3(1)(f), ESA decision at paragraph 42

9 ESA decision at paragraph 42., but see Rothstein's dissent at paragraph 91

10 Copyright Modernization Act, SC 2012, Chapter 20

11 op. cit. footnote 2.

12 2004 SCC 13, [2004] 1 SCR 339

13 Rogers at paragraph 56

14 Rogers at paragraph 30

15 Rogers at paragraph 34

16 Rogers at paragraphs 2 and 56

17 Rogers at paragraphs 44-46

18 Rogers at paragraph 15

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