SCC Active in IP: Leave to Appeal Granted in Major Internet Cases

Mark Kohras is a JD candidate at Osgoode Hall Law School.

Digital media has been prominent in Canadian minds lately. From the recent copyright consultations to the outcry over the usage based billing decision, digital content and the way we receive it is becoming increasingly important to Canadians. As our society navigates the digital age, issues around intellectual property become more relevant as we begin to understand its implications, so it’s no small wonder that the Supreme Court of Canada has started to take an interest as well.

Recently, the Supreme Court of Canada granted leave to appeal in two major copyright cases. The first case, Entertainment Software Association (ESAC) et al. v. Society of Composers and Authors and Music Publishers of Canada (SOCAN) is an interesting case regarding the use of music in video games. SOCAN, the copyright collective responsible for collecting and applying for royalties, claims that video games which incorporate copyrighted music are engaging in telecommunication to the public of that music when transmitted over the internet and therefore are entitled to a royalty for that telecommunication. Since online sales of video games are becoming increasingly more popular with major video game producers, this could represent a substantial amount of money.

Another case, Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada (SOCAN), is again an issue stemming from a SOCAN applcation for royalties. The question, similar to the above case, is whether online music sales are a telecommunication to the public. Traditionally, online music sales are private transactions between the purchaser and music seller. However, the first instance Federal Court ruling suggested that, as long as the seller intended to sell “to the public” and the song is received by at least one member of the public, a telecommunication to the public occurred and the royalty applies. The ISPs are disputing this test.

The two cases will be heard alongside a previous case granted leave to appeal, Society of Composers, Authors and Music Publishers of Canada (SOCAN) v. Bell Canada et al., a landmark decision regarding fair use of music. The case involves a ruling of the Copyright Board of Canada, stating that the free 30-second previews provided to consumers on most music download stores are considered “fair use” for the purposes of consumers’ research. Therefore, no tariff for royalties will be granted to SOCAN for their use. This case will allow the Supreme Court of Canada to clarify fair dealing once again, in the aftermath of CCH Canada Ltd. v. Law Society of Upper Canada.

The final case to be heard is Alliance of Canada Cinema, Television & Radio Artists (ACTRA) et al. v. Bell Aliant Regional Communications et al. ACTRA is requesting that Internet Service Providers be classified as “broadcasters” under the broadcasting act, given the amount of content transmitted over the internet nowadays. This would require the ISP’s to contribute to a fund to help with the development of Canadian content.

As can be seen from the cases demonstrated above, technology is changing so fast that the law is understandably struggling to catch up. New issues are being brought before the courts that policy makers in Ottawa might not have ever anticipated when these laws were drafted. As intellectual property issues are becoming increasingly important to the average Canadian, it becomes more important than ever that we clarify our copyright laws as they apply to today’s technological realities. Since copyright reform is starting to look like a far off dream, with the third attempt at reform dissolving along with the current government, we are left to look to the Supreme Court of Canada for clarification of the current laws in the context of today’s realities, and it looks like it has taken up the challenge.

  1. I can’t say I’m a fan of SOCAN’s suggestion that online music sales should be considered a telecommunication to the public, and therefore net them a royalty.

    The content industries are consistently being told to get with the times and make their content available online through legitimate channels. If they now have to pay an additional royalty for trying to do so, it will make the medium less attractive to publishers and make Canada a less attractive market to foreign publishers.

  2. I also can’t imagine that this is the situation the framers of the copyright act intended for when they included the phrase “communicate the work to the public by telecommunication.”

    I believe the court misinterpreted CCH when the SCC referred to the possibility that a series of fax transmissions may be “to the public”. I think they may have been referring to a situation where a work is sent to the public in a series of repeated transmissions. In this way, it would be more akin to a broadcast of the work, and simply lacking the element of simultaneous transmissions. The Great Library in CCH makes their book collection available to any member of the public who wishes a book to be faxed, and most likely sent the same book to more than one person. iTunes, similarly makes their music collection open to anyone in the public who wishes it. For the federal court to say that iTunes communicates to “the public” and the Great Library only communicates “one-on-one” does not make sense. Is it the commercial nature of the transaction that indicates a transmission “to the public?” Is the reasoning that iTunes is more popular, and therefore a single work may be requested multiple times? If so, how many times does a work have to be transmitted to lose its one-to one character?

    To say an additional right should be granted simply because something is delivered electronically instead of physically does not fit with today’s digital world. If iTunes were to mail me the song I purchased on a disk, they would pay a reproduction royalty. But if they e-mail me the song, they pay both a reproduction and telecommunication royalty? The only thing that changes is the method of delivery. In either case, I am paying for a reproduction of the song. The character of the transaction stays the same. Copyright law should reflect this.

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