Five Supreme Court Copyright Decisions: Consumers 4.5 — Artists and Creators 0.5
CCA Bulletin 11/12
Last Thursday, the Supreme Court delivered five judgments which have a considerable impact on the interpretation of copyright law in Canada. The Court’s decisions were based on the previous version of the Copyright Act, Bill C-11 not yet having been adopted at the time of the hearing, last December. The Court has reaffirmed the existence of “user’s rights” and the importance of taking a liberal interpretation of what constitutes fair dealing. Both these aspects of the Supreme Court’s decision, initially stated in a 2004 decision, have raised concerns domestically and abroad from an economic perspective and have created controversy amongst legal experts and academics.
The notion of user’s rights mirrors the government’s approach to C-11 and this second judgment, reinforcing the Court’s previous decision, will make life more difficult for artists and creators collectives and for all owners of intellectual property. For them, the summer of 2012 means worse things than hot temperatures: on June 30, C-11 became law without any amendments; two weeks later, the Industry Minister by-passed the Copyright Commission and regulated that memory sticks are not to be subject to a levy like CDs and tapes, and now, these five judgments by the top legal authority in the land.
One of the eagerly expected decisions concerned photocopying parts of text book material by a teacher. This case pitted the provincial ministers of education (Quebec excepted) against Access Copyright, representing authors and publishers. In a split decision (5–4), the Court referred the case back to the Copyright Board for re-determination in light of the Court’s decision. The Copyright Board will decide whether the ruling changes its impression that the dealing was unfair.
Not surprisingly, the education community, notably the Copyright Consortium of the Council of Ministers of Education, Canada (CME) and the Canadian Federation of Students are happy. The Nova Scotia Education Minister, Ramona Jennex, Chair of the Education Ministers Consortium, stated: “Countries with copyright laws permitting a teacher to copy short excerpts all have healthy educational publishing industries. Making copies of short excerpts is not a substitute for purchasing copyright-protected educational resources.” Access Copyright has reacted prudently to the Court’s decision, noting that this particular type of copying represents less than 7% of copies made in schools and colleges. Executive Director Maureen Cavan said, “The decision absolutely does not mean a free-for-all on copyright-protected materials used in the classroom”.
The Court also dealt with issues concerning music, notably on-line listening and the purchasing of music: should previewing music on-line prior to purchasing trigger a right? Should there be a new tariff in the case of downloading music or for streaming?
In the case of downloading and previewing, the Court sided with the giant distribution companies who had opposed SOCAN’s application. According to the Court, “There is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet.” In the case of streaming however, the Supreme Court confirmed that listening on line without downloading does require the payment of a right since this is a “communication to the public”.
In another case, the Court rejected a request that video games which are downloaded rather than bought on a physical support be the object of a specific tariff. The Court also stated that musicians and producers are not entitled to compensation when their recordings are broadcast on television or in a film.
According to Ian McKay, President of the music collective Re:Sound “Unfortunately, Canada’s copyright law has today been found to put Canadian recording artists and record companies at a disadvantage in the international marketplace.”
Ironically, in Beijing on June 26, the 185 member countries of the World Intellectual Property Organization (WIPO) concluded a treaty strengthening the economic rights of performers in audiovisual media distribution. Canada is a member of WIPO but was conspicuously absent from the meeting. If and when the Canadian government signs the new treaty, the Copyright Act will have to be amended and this decision revisited.
It is worth noting that in all decisions related to music, the Court stated that appropriate payments had been made in other phases of the creative process and that based on the principle of technological neutrality, there was no reason to impose a new tariff.
Tell me more
The following is an overview of each case:
1. Is a point‑to‑point transmission from the website of an online music service to an individual customer a private communication? Does streaming of files from the Internet triggered by individual users constitute communication to the public of the musical works by online music services which make the files available for streaming?
Those two questions were raised in the case of Rogers, Shaw, Bell and Telus versus the Society of Composers, Authors and Music Publishers of Canada (SOCAN). The Court has stated that no new payment should be required when the piece of music is downloaded but that artists must be paid in cases of streaming. According to our information, SOCAN may go back to the Court for further clarifications.
2. Can elementary and secondary schools claim the benefit of “fair dealing” exception for copies of works made at the teachers’ initiative with instructions to students that they read the material?
This case was deemed very important for Access Copyright, opposed here by the government of Alberta’s Education Minister, who had the support of all other provinces except Québec. The Court has asked the Copyright Board to review in light of the present decision.
In the pre-C-11 version of the Copyright Act, photocopying without compensation was only allowed if done for research or private study. In its judgment, the Court relies on its 2004 decision: since the teacher making photocopies for his students is not doing it for commercial purposes, the activity should be considered fair dealing, particularly since “there was no evidence of a link between photocopying short excerpts and a decline in textbook sales. There were several factors, in fact, other than photocopying, that were more likely to have contributed to any such decline.”
This decision shows an important division within the Court with Justices Deschamps, Fish, Rothstein and Cromwell dissenting from the majority.
3. Is the transmission of musical works contained in a video game through an Internet download a communication to the public?
This case pitted SOCAN against the Entertainment Software Association of Canada. The decision again shows the division within the Court, with the same four Justices dissenting. Contrary to the Copyright Board, the Court considers that applying a distinct tariff for the “communication” of musical works contained in a video game through an Internet download would be contrary to the principle of technological neutrality, “There is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. ESA has already paid reproduction royalties to the copyright owners for the video games.”
Accordingly, the Supreme Court asks the Copyright Board to rescind its previous decision to the effect that downloading a permanent copy of a video game containing music is tantamount to “communicating” the music and triggers the application of Art. 3 (1)f of the Copyright Act.
The four dissenting Justices (LeBel, Fish, Rothstein and Cromwell) prefer to nuance the concept of technological neutrality, “The right of reproduction continues to apply to copies made through downloads notwithstanding that they are digital copies and the communication right continues to apply to digital communications notwithstanding that they may differ from traditional broadcasting technologies.”
4. Does listening to music excerpts on commercial sites fall under the fair dealing exception for research?
This case pitted music collectives against service providers like Bell, Apple and Rogers Communications which allow potential customers the ability line to preview the music on-line before buying it. The collectives were initially turned down by the Copyright Board for their application requesting a payment for the use of short samples of music on sites that sell music, the collectives appealed the decision at the Federal Court which upheld the Commission’s decision that no compensation should be paid for previews of 30 to 90 seconds. Referring to its 2004 CCA decision regarding fair dealing, the Court sided with the service providers that this was fair dealing.
5. Do pre‑existing recordings incorporated into soundtracks of cinematographic work constitute a sound recording subject to payment of tariff?
This fifth cause pitted Re:Sound against the Motion Picture Theatre Associations of Canada, Rogers Communications Inc., Shaw Communications Inc., Bell ExpressVu LLP, Cogeco Cable Inc., Eastlink, Quebecor Media, TELUS Communications Company, the Canadian Association of Broadcasters and Canadian Broadcasting Corporation.
The Supreme Court stated that performers and music recording companies are not entitled to a separate payment when their music is part of the soundtrack of a film or a television program.
Under s. 19 of the Act, Re:Sound “is entitled to collect equitable remuneration on behalf of performers and makers of sound recordings when their recordings are performed in public or communicated to the public by telecommunication.”
During the drafting of the revision of the Copyright Act in 1997, the definition of “sound recording” was amended at the Committee stage so as to ensure that while a soundtrack would not be a sound recording and therefore would not attract equitable remuneration when accompanying a movie or television program, the soundtrack would be a sound recording and would attract equitable remuneration when it was played separate from the movie or program.”
*We have made revisions to this Bulletin. Please use this version for reference.