Supreme Court decisions to affect future Copyright Board cases

July 23rd, 2012 by Barry Sookman Leave a reply »

The five copyright decisions released by the Supreme Court of Canada just over a week ago are bound to influence copyright cases for a long time. Nowhere is this more likely than in future proceedings before the Copyright Board which was the source of all of the appeals in the first instance.

The Supreme Court decisions will clearly be relevant in follow on tariffs to those that were the subject of the appeals such as SOCAN Tariff 22.A (online music services) and Tariff 22G (game sites) and the Access Copyright Educational Institutions tariff.

The Entertainment Software Association v SOCAN, 2012 SCC 34 (ESA v SOCAN) decision will have a direct impact on proposed SOCAN Tariff 24 (Download of Music Ringtones) as the Court reversed the decision of the Federal Court of Appeal in Canadian Wireless Telecommunications Assn. v. Society of Composers, Authors and Music Publishers of Canada, 2008 FCA 6, leave to appeal refused, [2008] 2 S.C.R. vi which had found this tariff had a statutory basis in the communication to the public right. The fair dealing decision in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 will also be potentially relevant in the Access Copyright Post-Secondary Educational Institutions proposed tariff, even though its relevance has been greatly exaggerated by some who frequently attack and regularly publicly counsel opposition to Access Copyright tariffs.

In its factum in the ESA v SOCAN case, SOCAN admitted that if the Court ruled, as it did, that the communication to the public right does not cover the download of musical works that “there would be no legal basis for retaining or continuing to collect royalties for the Internet transmission of musical works by popular downloading services such as iTunes, Puretracks, Napster and ArchambaultZiq under Tariff 22.A, ringtones under Tariff 24, and other audio and audio-visual downloads presently covered by Tariffs 22.B-G”.

SOCAN also warned that if the Court ruled as it did that other “current uses of music in traditional media for which commercial entities have been paying communication royalties to SOCAN for years would suddenly find themselves without any legal obligation to continue to pay those fees and would undoubtedly seek refunds for past periods”.

On July 20, 2012, the Copyright Board made three orders directly resulting from the decisions of the Supreme Court. In recognition of the implications of the decisions, in the CSI Online Music Services Tariff (2008-2010) / SOCAN Tariff 22.A (2007-2010) proceedings, the Board made the following order:

The decisions the Supreme Court of Canada issued on July 12, 2012 (the “Decisions”) require that the Board modify, sometimes significantly, the tariff and reasons it was soon to release in the above-referenced matter. In particular, the Board is of the preliminary view that SOCAN is no longer entitled to a tariff for permanent downloads or limited downloads and that listening to previews constitutes fair dealing for the purpose of research in 2007-2010 just as it did in 1996-2006. Some other adjustments might also be necessary.

The Board is considering three ways to deal with the consequences of the Decisions on the above-referenced matter.

1) The Board can proceed to adjust the reasons and tariffs without further input from the parties. The resulting decision may account somewhat imprecisely for the longer-term impact of the Decisions, but it could be issued fairly rapidly. The Board would then proceed without delay with the examination of the tariffs for the years 2011 and following, at which time the full impact of the Decisions would be accounted for.

2) The Board can seek further input from the parties. This may take the form of arguments only, or may require some additional evidence. The Board would then render its decision based on the existing record and on the additional input of the parties. This would allow the Board to better account for the impact of the Decisions. It would also postpone the final decision by several months.

3) The Board can fully re-open the matter and join it with the examination of the tariffs for the years 2011 and following. The full impact of the Decisions would be accounted for. This approach would require a new evidence-gathering process (including interrogatories). A decision would not likely be issued until the end of 2013.

Approach number 3 presents a procedural hurdle. The member of the panel currently seized of the above-referenced matter who is no longer a member of the Board cannot deal with the tariffs for the years 2011 and following. However, with the unanimous consent of the parties, it should be possible to remit the matter for 2007-2010 to a panel of current members, to join that matter with the tariffs for the years 2011 and following and to treat the record for 2007-2010 as part of the record of the joint proceedings.

The Board favors option 1.

The Board made another order in the Satellite Radio Services tariff proceedings (Re:Sound Tariff 4 (Use of Music by Satellite Radio Services (2011-2012)); SOCAN Tariff 25 (Satellite Radio Services (2010-2012)); and CSI – Satellite Radio Services (2010-2013)). The hearings in these proceedings are scheduled to start February 12, 2013. However, the Copyright Board instructed the parties involved in these proceedings to address how the decisions of the Court will impact these proceedings in the following order:

The decisions the Supreme Court of Canada issued on July 12, 2012 set out a number of principles that may affect the outcome of the above-referenced matter. To date, the Board has identified the following two.

First, the Board will need to determine which transactions between a satellite radio service and its subscribers involve a communication to the public by telecommunication and which do not. Potentially relevant factors include who decides to make a copy (user-triggered copying vs system-triggered copying) and how long a copy is kept (short buffer, extended buffer, short-term replay, (semi)-permanent copies in temporary internet folder, storing of individual songs, block programming storage).

Second, given the reasons of the majority in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, the Board’s analysis of fair dealing in the satellite radio services market may need to be reviewed.

Parties are asked to address these and any other relevant issue raised by the July, 12, 2012 decisions of the Supreme Court of Canada in their evidence and arguments.

The decision of the Copyright Board in the prior tariff proceedings was released in April, 2009. The Federal Court of Appeal dismissed two judicial reviews from the decision in Sirius Canada Inc. v. CMRRA/SODRAC Inc., 2010 FCA 348.  The Supreme Court later denied CSI’s motion for leave to appeal in the CSI v Canadian Satellite Radio Inc. case.

In the Access Copyright Elementary and Secondary School Tariff, 2005-2009 the Board made another order:

On July 23, 2010, the Federal Court of Appeal remitted the above-referenced decision of June 26, 2009 to the Board “(a) to determine the meaning of the words «in a medium appropriate for the purpose», as found in subsection 29.4(3) [of the Copyright Act]; and (b) to assess whether category 4 copies come within the meaning of these words.”

On July 12, 2012, the Supreme Court of Canada remitted that same decision to the Board to reconsider the result having regard to the reasons of the majority in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37.

The parties are asked to provide the Board, no later than Friday, August 17, 2012, their opinions on the following questions:

a) What issues must be addressed by the Board to comply with the decisions of the Federal Court of Appeal and of the Supreme Court of Canada?

b) Can these issues be determined on the basis of the existing record? Will it be necessary for the parties to file additional argument or additional evidence?

c) If the parties require an opportunity to file additional argument or evidence, how can this be achieved most efficiently? A proposed timetable would be welcome.

d) Are the instructions of the Federal Court of Appeal sufficiently precise or should the parties ask the Court for further directions?

A joint filing would be welcome.

From all appearances, it won’t be long before some of the first implications of the decisions of the Supreme Court start to be felt.

*Updated July 24, 2012

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