January 28, 2008 by Cory Schneider
In October 2007, the Copyright Board of Canada rendered a decision regarding tariffs payable to SOCAN by online music services. As part of the Board’s decision it concluded that music previews do not infringe copyright as they constitute fair dealing for the purpose of research. While I agree in principle that a prospective purchaser of online music should have a right to preview the music before purchasing it, I find the rationale for the Board’s decision to be questionable, and contend that the issue of whether or not previews constitute fair dealing need not have been addressed in the Board’s ruling to begin with.
Under Canadian copyright law, fair dealing for the purpose of research or private study does not infringe copyright. While the Copyright Act does not define “research”, the Supreme Court of Canada states that “’research’ must be given a large and liberal interpretation [… ] and is not limited to non-commercial or private contexts.” In CCH, the Court held that lawyers carrying on the business of law for-profit are conducting research within the meaning of s. 29. However, the Court states that photocopying court decisions does not constitute research in and of itself, but that such copying is a necessary condition of legal research and thus part of the “research process”.  In my opinion, it is at this stage that the analogy between facilitating the photocopying of court decisions and the posting of online music previews becomes somewhat disingenuous, as previewing music is not necessarily an integral part of a research process.
While the Supreme Court establishes a clear and substantial connection between photocopying court decisions and conducting legal research (whether for profit or not), the Copyright Board seems rather quick to come to its conclusion that “If copying a court decision with a view to advising a client or principal is a dealing ‘for the purpose of research’[ …], so is streaming a preview with a view to deciding whether or not to purchase a download or CD.” While the Board qualifies this analogy, it does so by saying the differences between the two types of research are differences in degree, rather than differences in nature.  When one delves further into the CCH analysis, it is clear that the Court places considerable weight on the specific Access Policy that LSUC had in place in relation to its photocopying service. The Court expresses at the start of its analysis that in order to rely on the fair dealing exception, a person or institution must either show that its own practices and policies are research-based and fair, or that all individual dealings with the materials are in fact research-based and fair. This implies that fair dealing exceptions should be dealt with on a case-by-case basis: if a claim of infringement is made against an individual user, it is open to this individual to claim their particular use falls under the fair dealing exception; and if a claim of facilitating infringement is made against a content provider, it is open to the provider to claim their policies and procedures place them within the fair dealing exception. However, to make a broad proclamation that music previews can be classified as fair dealing seems to go beyond the scope of the Court’s decision.
Finally, it is unclear why the Board felt it must decide this broad legal issue in the first place, since it was not raised by any of the parties to the hearing. The proposal before the Board on SOCAN’s behalf was to charge higher tariffs to content providers offering previews. The issue of whether previews constitute “fair dealing” for the purpose of research is extraneous to whether or not a higher tariff should be charged when a music file is sold with an option to preview. If previews are meant as “marketing tools” (as defined by the Board itself), it makes little sense from an economic perspective to charge a content provider a higher rate to allow potential customers to preview the music. This would surely discourage sites from offering previews which would not benefit the copyright owner, the content provider, or the prospective purchaser. However, regardless of economic sense, that decision should be up to the copyright owner. By classifying previews as “fair dealing”, the possibility is left open for content providers to profit from them with no benefit to the copyright owner.
 Re Statement of Royalties to be Collected By SOCAN for the Communication to the Public By Telecommunication, in Canada, of Musical or Dramatico-Musical Works (Tariff 22.A) (2007), 61 C.P.R. (4th) 353 (Copyright Board). Available online at http://cb-cda.gc.ca/decisions/m20071018-b.pdf.
 Copyright Act, R.S.C. 1985, c. C-42, s. 29. Available online at http://www.canlii.org/ca/sta/c-42/
 CCH Canadian Ltd. v. Law Society of Upper Canada,  1 S.C.R. 339, 2004 SCC 13, at para. 51. [CCH]. Available online at http://scc.lexum.umontreal.ca/en/2004/2004scc13/2004scc13.html
 Supra note 3, at para. 64.
 Supra note 1, at para. 109.
 Supra note 5. (emphasis mine)
 Supra note 1, at para. 103.
 Supra note 1, at para. 24.