Canada: Copyright Year In Review — 2015

This article summarizes noteworthy Canadian copyright law decisions and developments from 2015.

1. Voltage Pictures LLC v. John Doe, 2015 FC 1364

In 2014, the Federal Court ordered TekSavvy (a non-party Internet Service Provider) to produce names of approximately 2,000 customers alleged to have infringed copyright through illegal file sharing of the film The Hurt Locker. The Plaintiff (Voltage Pictures) was ordered to pay TekSavvy's reasonable costs of compliance. On its own accord, TekSavvy notified more than 200,000 subscribers of the litigation, which generated a much higher volume of inquiries and significant additional compliance costs that TekSavvy sought to recover.

The Federal Court (on appeal from a Prothonotary) agreed that reasonable costs of compliance should be recovered and ultimately allowed a slightly higher costs award to TekSavvy. However, it ultimately concluded that costs arising from TekSavvy's decision to notify 200,000 subscribers would not be reasonable costs of compliance that could be recovered.

2. Red Label Vacations Inc v. 411 Travel Buys Limited (2015 FC 19; 2015 FCA 290)

Metatags are words or phrases embedded invisibly in a website's source code that act as targets for search engine algorithms. In Red Label Vacations, the Plaintiff claimed that a Defendant who had used the same or similar metatags (to increase its business being listed in certain search engine results) was violating the Plaintiff's copyright or trademark rights. In January 2015, the Federal Court concluded that while it was possible that copyright could subsist in other metatags, copyright did not subsist in the particular tags at issue in the case. They were found to lack sufficient skill and judgment. Regarding the Plaintiff's trademark rights, the Court found that metatags did not give rise to source confusion and that "initial interest confusion" was also not applicable.

Recently (in December 2015) the Court of Appeal upheld the trial judge's decision while stressing that it should be read as being fact specific. It does not preclude claims for copyright or trademark infringement being advanced in future metatag disputes. In particular, the Court of Appeal stated that its affirmation should not be read as an endorsement of the trial judge's reluctance to consider "initial interest confusion" as applicable to future metatag disputes.

3. Canadian Broadcasting Corp v. SODRAC 2003 Inc, 2015 SCC 57 

In this 2015 decision the Supreme Court of Canada affirmed that while "technological neutrality" should be used to interpret the Copyright Act, it cannot displace Parliament's clear expression to the contrary.

This case considered whether the reproduction right was implicated when broadcasters make copies of programs featuring music for internal use (for example, for screening, editing and storage, or to ensure file format compatibility). Where such copies are made to facilitate broadcasting, they are described as "broadcast-incidental copies." SODRAC was asking the CBC to pay additional royalties for these copies beyond those paid to incorporate the works into its television programs and broadcasts.

A majority of the Supreme Court of Canada ruled that the reproduction right was clearly engaged by these acts under the Copyright Act. The concept of technological neutrality could not be used to deny a requirement to pay royalties, even if this resulted in a royalty requirement scheme that was not technologically neutral.

However, the majority also remitted the setting of fees back to the Copyright Board with guidance suggesting that the quantum of appropriate royalties payable must take into consideration several factors, including the ultimate value that users derive from the reproductions.

4. Netflix v. SOCAN, 2015 FCA 289

The Copyright Board had been considering a proposed tariff regarding audiovisual works transmitted online. The originally published tariff did not propose that users (such as Netflix) be required to charge their own subscribers minimum fees for trial subscription services. Netflix was also not a party objector to the proposed tariff. The Board ultimately approved a tariff negotiated by the parties, which included a requirement for subscribers to be charged minimum fees for trial subscriptions.

Netflix applied to the Federal Court of Appeal, arguing that procedural fairness had been denied. The Court of Appeal agreed and set aside the tariff in so far as it pertains to royalties on free trials. It returned the matter back to the Board, along with the interesting requirement that a different panel of the Board be constituted to hear the matter.

5. Rogers Communications Partnership v. SOCAN, 2015 FC 286

Between 2003 and 2012, SOCAN had collected $15,000,000  in tariff royalties from mobile service providers for communications of musical works (ring tones) to the public. As a result of two decisions of the Supreme Court of Canada in 2012, these mobile service providers now claimed that the past royalties paid should not have been paid and sought their return.

The Federal Court ruled that they not be repaid. The tariff in question had been validly certified by the Copyright Board at the time, and thus SOCAN had not been unjustly enriched by past royalty collection and payment. This decision remains under appeal.

6. Customs Recordal to Combat Counterfeit Goods

In 2015, portions of Canada's Combating Counterfeit Products Act came into force enabling IP rights holders to record their copyright (and trademark rights) with the Canada Border Services Agency. Rights-holders can file a Request for Assistance with the CBSA to detain suspected counterfeit goods at the border.

7. Copyright Act Term Extensions

In June 2015, changes to the Copyright Act altered and extended the term of protection for certain sound recordings (depending on when they were first recorded or published) to potentially 70 years from first publication or 100 years from first fixation. Similar extensions were introduced for certain performers' performances. However, the changes do not revive the term of protection for subject matter that had previously passed into the public domain.

In November 2015, Canada also became a signatory to the Trans-Pacific Partnership (TPP) which contemplates more general extension of copyright protection for all works, from the current term of 50 years plus life of author to a new term of 70 years plus the life of the author.  These more general term extensions do not take effect unless and until Parliament amends the Copyright Act to accord with the TPP.

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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