On the heels of oral arguments heard before the Supreme Court of Canada (SCC) in CBC v SODRAC, the Toronto Intellectual Property Group hosted a fascinating event centered on the principle of technological neutrality from ESA v SOCAN, and how it might be interpreted by the SCC when the case is decided.
The event, held at the Rosewater Supper Club, brought together academics, intellectual property lawyers, and industry professionals for dinner and discourse. IP Osgoode’s own Professor Giuseppina D’Agostino moderated two speakers: Christine Pallotta (partner of Borden Ladner Gervais LLP) and Richard Pfohl (General Counsel, Music Canada, CONNECT Music Licensing). The frank discussion comprehensively explored the major themes and driving factors of the background cases, along with the merits of the arguments of every party and intervenor in CBC. Tackling the vagueness of the principle of technological neutrality — as it was described several times throughout the evening, a “ghost” of the SCC’s own making — was a recurring motif.
Professor D’Agostino’s opening remarks laid out the background of technological neutrality (humourously confessing it has become a favoured subject for her law school exam questions). She identified the definition of the principle as set out by the SCC in ESA: “different forms of media should be treated the same for copyright purposes, regardless of their level of technological sophistication.” She succinctly outlined the major critical theme about the principle which would punctuate the rest of the evening: there is significant disagreement about what the principle means and how it should apply.
Professor D’Agostino emphasized to the room that the principle was not new, having existed in other jurisdictions since 2001, including the US in New York Times Co v Tasini. There, it was known as the principle of media neutrality. (Tasini was referred to and followed by the SCC in Robertson v Thomson Corp.)
The introduction concluded by accentuating the principle’s ambiguity perceived by the Federal Court of Appeal in their decision: “…ESA, while restating the principle of technological neutrality in copyright law, provides no guidance as to how a court should apply that principle when faced with a copyright problem in which technological change is a material fact.” Professor D’Agostino highlighted this flaw by citing Justice Rothstein’s dissent in ESA, where he suggested that “a principle should not override statutory rights in the Copyright Act.”
With the principle described and defined, Pallotta launched into a detailed overview of the background cases that led to its inception. She began with Bishop v Stevens (a 1990 SCC decision case about incidental copies for a prerecording in a televised broadcast of a song) which affirmed a crucial distinction between performances and recordings. Bishop was quoted in ESA and faced a similar quandary as CBC: what is to be done when “the introduction of new technology present[s] a situation not contemplated by the drafters of the original Canadian Copyright Act“? The Court in Bishop distinguished between recording and performing, but they also underlined the importance of balancing needs of technology with creators’ rights.
Pallotta then outlined the driving factors behind the majority and dissenting opinions in ESA. She noted that the majority sought to balance the public interest and creator rights (as in Bishop, and with more backing from Théberge v Galerie d’Art du Petit Champlain inc) using predominantly economic reasoning to tip the scales. She reinforced this methodology by referencing the majority’s statement that “[t]he Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.”
Pallotta characterized the dissent as taking a divergent approach to the issue, with Parliamentary intent superseding economic reasoning. She first highlighted Rothstein J’s dismissal of the majority’s cab metaphor: “taxis need not give free rides.” Rothstein J acknowledged the appeal of technologically neutral copyright law. However, Pallotta neatly summarized how his reluctance to employ technological neutrality follows a simple three-step argument:  copyright is a creature of statute;  it is comprised of a bundle of independent statutory rights; and  courts must respect the language chosen by Parliament – not override it. Pallotta’s unbiased juxtaposition of majority and dissent in ESA made a strong case in favour of applying Rothstein J’s opinion.
From there, Pfohl took over by leading the room through a history of CBC v SODRAC. He started by outlining the Board’s decision, and followed with a concise retelling of the FCA decision under appeal (where they admitted they did not know what to do with the principle in the first place due to the lack of guidance in ESA – Pfohl called this a big “red flag”). He finished by dissecting every major argument of the appellant, respondent, and nearly every intervenor in CBC (CMRRA, Music Canada, CIPPIC; omitted were arguments from the Centre for Intellectual Property Policy).
After an exhaustive list of CBC’s objections to SODRAC’s incidental copy licencing (including: “double-dipping”, “royalty stacking”, “triple-paying”, “gratuitous cost” and “chilling effect”), Pfohl explained how CBC wanted the principle to be applied, synthesizing from their factum: “broadcast-incidental copies do not engage the reproduction right”, the principle “creates implied license in SODRAC’s synch license”, and “a technologically-neutral licence would attribute only nominal value to broadcast-incidental copies.”
SODRAC’s response to CBC’s arguments resembled Rothstein J’s dissent in ESA. Pfohl noted how SODRAC posited that there is in fact no layering or double-dipping (the acts in question in this case are not simultaneous, unlike in ESA, where a video game was either downloaded or bought in person, but not both) and the court should not upset Parliament’s balance: “neither the Board nor the Courts can ‘balance’ away a right that is provided by statute.”
As Pfohl moved through the intervenors, it was clear they provided the Court with unique and compelling arguments. CMRRA focused on the importance of the fundamental divisibility of copyright (owners are entitled to divide and subdivide their exclusive rights) and a consistent application of the Copyright Act, which has always protected broadcast-incidental copies. Music Canada (a non-profit organization promoting this interests of numerous companies engaged in all aspects of the recording industry, and which Pfohl represents ) sought to reject Functional Equivalence as being inconsistent with the language, structure, and history of the Act.
CIPPIC’s arguments addressed a peripheral yet pressing contemporary issue at stake in CBC: what do we do with the practical reality that ephemeral copies are ubiquitous in digital technology (you likely just made an ephemeral copy of my blog post in your web cache – I’ll take cash or cheque)? CIPPIC suggests that “fleeting, transient, impermanent” copies should not be protected, and those copies that are protected must be “durable”.
Regardless of how the SCC applies statutory language to the facts and context of CBC’s ephemeral copies, the threshold issue raised by CIPPIC appears more than merely trivial. The Court would be wise to address this concern irrespective of the ultimate holding of the case.
A brief round of comments followed, enthusiastically kicked off by counsel for CMRRA, Casey Chisick, who provided an astute summation of the principle of technological neutrality. Chisick analogized the criticism of the SCC majority’s ESA principle as “wrestling with a ghost/monster of their own making, which creates an unpredictable situation.” Professor D’Agostino expanded on this comment in her closing remarks, saying that this case has the opportunity to “play ghostbuster” as dissents can often become majorities.
Perhaps Rothstein J’s dissent in ESA will provide a more consistent methodology for the Court to apply the Copyright Act, and a catalyst for Parliament to recognize the need to “future-proof” their legislation so technology does not impede on creators’ rights.
(The slides for the event may be accessed here.)
Jordan Fine is the IPilogue Content/Publication Editor and a JD Candidate at Osgoode Hall Law School.