On January 28, 2013, to a room full of intellectual property lawyers at an ALAI Canada luncheon meeting, IP Osgoode Advisory Board Member Mario Bouchard, general counsel to the Copyright Board of Canada, presented his analysis of the initial impact of the Supreme Court’ of Canada’s copyright pentalogy and the portion of the Copyright Modernization Act that came into force November 7th, 2012.
For an in depth discussion of the copyright pentalogy, see here.
Mr. Bouchard set the tone for his presentation by a tongue in cheek reference to the copyright pentalogy as the “copyright quintet” – a prelude to his discussion on the impact the pentalogy cases has had on recent decisions of the Board concerning musical works. Discussions on the impact of Bill C-11 and the Copyright Modernization Act were also on Mr. Bouchard’s playlist for the noon hour. (A list of the files that are still undergoing review, notices and interim decisions of the Board can be found here.)
Online Music and the “Making Available” Right
One of the most discussed issues during Mr. Bouchard’s presentation was that the communication right in the Copyright Act would not apply to permanent downloads as a result of the ESA v SOCAN released on July 7th, 2012.
There was some discussion by Mr. Bouchard of the concept of joint product pricing in economics. In the context of music downloads and streaming, he theorized that if the market for music downloads were eliminated by removing the public communication tariff, the price for streaming would typically increase as a “joint product” (all other things being held equal). Whether this is the direction that should be taken is an important decision that the Board will have to make in the near future.
There is also uncertainty in the digital medium because of the addition of section 18 (1.1) to the Copyright Act as part of the implementation of the Copyright Modernization Act. This section has been referred to as the “making available” right and in these proceedings, the parties involved were curious as to what protections the right granted and how it would interact with the ESA v SOCAN decision. While the Board chose not to consider this issue separately from its analysis of tariffs on online music, it sent an invitation to the parties it had dealt with in the last several years to make submissions in regard to this issue.
The hearing for this file is scheduled to begin November 19th, 2013 – as such, it seems that we will have to wait a while before we will be able to fully grasp the impact of the recent court decisions and legislative changes on online music tariffs.
On August 1st, 2012, in relying on the ESA v SOCAN decision, a ringtone supplier applied to the Board to repeal the 2003-2005 and 2006-2013 tariffs for these files. The 2006-2013 tariff was of particular interest for two reasons: (1) it was a result of an agreement between suppliers and SOCAN, and (2) it was certified only two weeks before the ESA decision. The issues raised in the application were of “fascinating complexity,” according to Mr. Bouchard, for 3 main reasons:
(1) It questioned the finality of regulatory decisions.
(2) It raised issues regarding payments made under mistake of law
(3) It brought to the forefront the impact of changes on determination of law
When proceeding on the matter, the Board decided that the application to vary/repeal the 2003-2005 tariff and the 2006-2013 tariff up until the date of November 6th, 2012 (the day before part of the Copyright Modernization Act came into force) would be denied. However, the Board concluded that it would examine the 2006-2013 tariff applying after the date of November 7th, 2012 on the basis of the following three reasons (good things always do come in threes):
(1) The question concerning the ambit of powers of the tribunal exceeds the normal context of tariff proceedings.
(2) The power to vary does not include the power to rescind/repeal unless it is clearly stated (as is the case for some other tribunals).
(3) Even if the Board had the power to grant the application, it would not as it should be left to the ordinary courts of law and that this application was an attempt to bypass federal courts for review.
Mr. Bouchard pointed out that paragraph 41 of the decision references the fact that while ESA v SOCAN and Rogers v SOCAN represent “the proposition that internet delivery of a permanent copy does not involve the communication right…. [that] neither decision provides directives that would allow us to determine what is a permanent copy and what is not.” This raises some interesting issues that Mr. Bouchard highlighted by asking the audience, “If I deliver a permanent copy that becomes unusable, is it a permanent copy?” It will be interesting to see how the Board and the judicial system will approach this question, as it is not an easy one to answer. New technologies and methods of content delivery in the future may also alter the perception of this question.
The SCC in Alberta v Access Copyright case remitted the case back to the Board for reconsideration. After the parties made their initial representations, the Board issued an order on September 19, 2012 stating that the SCC’s decision “left no room for interpretations” and that as a result, the rate must be reduced accordingly by removing Category 4 copies from the calculation. Highlighted by Mr. Bouchard (and by Justice Rothstein when he visited Osgoode Hall last November) was the curious way in which the Board described how the SCC came to its decision, stating that it was “based on the record before the Board and the finding of fact of the Supreme Court” (emphasis my own). Was this accidental slip of prose, or a purposeful jab at the SCC’s approach to judicial review? We may never know, and whether this will affect proceedings in any way remains to be seen.
On January 18, 2013 the Board concluded that if a tariff authorizes an institution to copy a work, then the fair dealing exception would only apply to uses in a medium other than what the licence provided for. For example, if the licence was for photocopying, a teacher could not claim fair dealing if a test using the materials was administered by photocopy, but the exception could be claimed if the test was administered over the internet.
According to Mr. Bouchard’s knowledge, there are rumblings that many school boards plan to claim “fair dealing” for all, if not most, copies that they make. As a result, going forward, the developments in cases related to educational institutions and copying will be interesting. Depending on the extent to which the exception is claimed, Mr. Bouchard indicated that he would not be surprised if the Board hears from Access Copyright again soon.
On July 13th, 2012, the Canadian Association of Broadcasters (CAB) requested that the Board issue an interim decision reducing the reproduction royalties paid by commercial radio by 90%, to declare that there is no longer a legal basis for any reproduction tariff in this area, and to rescind the CSI tariff as of that date. In order to support their claim that there should be no reproduction tariff, CAB argued that the interaction of provisions dealing with back-up copies and tech processes, the new treatment of ephemeral copies under the amended act (ss. 30.8 and 30.9), and that evaluation copies provided to directors of programming should be considered fair dealing for the purpose of research. The Board rejected the interim applications, stating that those that claim exceptions must show that they are entitled to do so. As the Board was aware that many radio stations operated differently, it refused the request, stating that this proposition was “illogical”. However, the Board recognized that the issue needed to be dealt with quickly and has set hearings to take place in the near future.
Musical Works on Television
The last case Mr. Bouchard discussed dealt with licensing by the Canadian Broadcasting Corporation (CBC) to use Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) repertoire. The January 16th, 2013 decision of the Board relied on some of its reasoning in the Commercial Radio case, but due to its multiple broadcasts in various time zones across the country, CBC would likely be less able to rely on ephemeral recording legislation in the Copyright Act.
The Board granted an interim licence that is, in many ways, the same as the old licence that existed. However, the Board decided on a lump-sum tariff and extended the lump-sum synchronization licence with a discount of 20%, effectively encouraging transactional licensing in this area.
Though it has already been six months since the copyright pentalogy decisions were released, and two months since part of the Copyright Modernization Act came into effect, there is still a lot of uncertainty as to what the consequences of these changes will be to the operation of the Copyright Board of Canada and the Federal Court of Canada with respect to copyright law in Canada. Many lawyers will have to grapple with the reinvigorated (and sometimes new) concepts of permanency, technology neutrality, fair dealing, and “double-dipping”. As a result, copyright advocacy in the foreseeable future will remain extremely divisive and adversarial. It may be that in the next few years we will see another set of important cases reaching the Supreme Court of Canada for judicial review of Copyright Board decisions. Until that time, it will be interesting to see the path that our lawyers, administrative tribunal adjudicators, and judiciary will pave in the days ahead.
Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School