The much anticipated Supreme Court of Canada ruling in Rogers Communications Inc v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35 (Rogers v SOCAN), culminated with a unanimous Court holding that on-demand transmissions of music streams made available by online music services constitute communications “to the public”.  Consequently, the on-demand streaming of musical works provided by online services such as Rdio or CBC’s online radio site represents a form of communication to the public, and therefore attracts royalty fees.

The Evolution of the Proceedings

The appellants, (Rogers et al), provide online music services that allow on-demand downloads and streams of files holding musical works.  In  1995, SOCAN proposed tariffs for the use of musical works over the Internet via downloads and streams, between the years of 1996 and 2006.  Subsequently, the Copyright Board established a tariff for the communication of musical works over the Internet, holding that the streaming of copyrighted music falls within the copyright owners’ right to “communicate to the public by telecommunication” afforded by section 3(1)(f) of the Copyright Act (“Act”).

On appeal to the Federal Court, the appellant’s application for judicial review of the Board’s decision was dismissed.   The issue was whether the on-demand communication of a musical work to an individual by online music services, was within the meaning of section 3(1)(f) of the Act.  The Court’s ruling was in agreement with the Copyright Board’s contention that “one or more transmissions of the same work, over the Internet, by fax or otherwise, to one or more members of a public each constitute a communication to the public.” Thus, royalties applied for such transmissions and the tariff, proposed by SOCAN, was upheld.

The question raised on appeal to the Supreme Court of Canada was in reference to the proper interpretation of section 3(1)(f) of the Act.  More specifically, the Court was to determine whether the streaming of files provided by online music services at the request of individual users (i.e. on-demand)   constituted communications “to the public” of the musical works contained therein.  In light of the majority decision in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, the issue regarding whether online music services engage the exclusive right to communicate by telecommunication by enabling downloads to the public became moot.   That is, musical works are not communicated when they are downloaded because they are merely reproductions of the works.

In regards to an online stream, Justice Rothstein clarified that point-to-point communications via the Internet (i.e. on-demand communications sent directly to a single user at their request) are to the public, thus disposing of the appellant’s argument that point-to-point transmissions are necessarily private transactions between the user and the music service, beyond the scope of the exclusive right to communicate to the public (at para 55). The Court cited Professor David Vaver to further its interpretation, stating that “[I]f the content is intentionally made available to anyone who wants to access it, it is treated as communicated to the public even if users access the work at different times and places”.  Therefore, even if a work is streamed in a point-to-point manner, the fact that the same point-to-point stream is offered to anyone makes it “to the public.”

Rogers v SOCAN and the Digital and International Sphere

The ramifications of the “fivefecta” rulings have yet to manifest; however, the holding in Rogers v SOCAN reaffirms an already existing practice, that is, the collection of royalties for streamed on-demand musical works. Although SOCAN can no longer collect royalties for downloaded musical works, the decision in Rogers v SOCAN reflects changes occurring in music consumption. In the rapidly evolving digital sphere, streaming music through on-demand services such as Spotify or Rdio is an increasingly popular way to listen to music and fees collected from streaming services can provide a great source of revenue for artists.  Justice Abella believes the Act should, and does, afford for media neutrality by continuing “to apply in different media, including more technologically advanced ones” since it “exists to protect the rights of authors and others as technology evolves” (at para 39). On-demand streaming is an example of the evolution of communications and, as Justice Abella shows, the copyright act is flexible enough to adapt to this model.

In addition to acknowledging the evolution of music consumption, the decision in Rogers v SOCAN aligns Canada with developments at the international level.  Article 11bis of the Berne Convention, of which Canada is a party, stipulates various communication rights in literary and artistic works, which include: works broadcasted or communicated to the public by any other means of wireless diffusion of signs, sounds or images. Other Berne Convention countries, such as Denmark, have provisions that extend protection to “communication to the public of works, by wire or wireless means, including broadcasting by radio or television and the making available to the public of works in such a way that members of the public may access them from a place and at a time individually chosen by them”.  The Court’s interpretation of s. 3(1)(f) of the Act, which recognizes on-demand communication to the public as subject to copyright, parallels international thinking on the matter.

Although the other rulings released last Thursday represent a massive let down for artists, Eric Baptiste, CEO of SOCAN, believes that the Supreme Court “reconfirmed the online rights of music creators and publishers” and trusts that “the right final decision has been made in the case of Internet streaming”. While less ambiguity is left in regards to the allowance of royalties for streamed works, it remains to be seen whether providers will be required to alter business practices in light of the rulings. However, artists can breathe a partial sigh of relief that their ability to be remunerated for works streamed through on-demand music services remains alive and well.

Tracy Ayodele is a JD Candidate at Osgoode Hall Law School.

Posted in Canada, Copyright, copyright reform, Feature Post, Internet, Internet Sharing, IP Reform, Music Industry, Music Industry, Ownership, Supreme Court of Canada, Technology, Telecommunications, Uncategorized, WIPO