Shifting technological neutrality into reverse: UNPACK SODRAC

Should all copies be treated the same way for the purposes of Copyright? If the CBC’s internal content management system creates incidental copies of audio works during the creation or broadcast of a television program or movie, does it enage the owner’s Copyright under s 3(1)(d) of the Copyright Act [the “Act”]? What incentives do Canada’s Copyright regime create for new technologies?

These questions were posed on February 25th when Osgoode Hall Law School in collaboration with the University of Toronto, Faculty of Law, held Unpack SODRAC, a symposium aimed at unpacking the myriad of issues covered in the 2015 Supreme Court case CBC v SODRAC 2003 Inc., [SODRAC].

Unpack SODRAC was organized by Osgoode Associate Dean Carys Craig and University of Toronto Professor Ariel Katz. The symposium covered three main topics from the case: Technological Neutrality, Reproduction Rights, and Mandatory Tariffs.

The parties in this case include the appellant CBC, and respondent SODRAC. CBC, Canada’s national broadcaster, is responsible for the creation of many television programs and movies. SODRAC is a french-language collective society in Quebec within the statutory definition found in s 2 of the Act. The facts revolve around incidental copies made by CBC during the video editing and broadcast preparation process. These are referred to as ‘broadcast-incidental’ copies.

Interveners on the case included Howard P. Knopf and David Lametti from the Centre for Intellectual Property Policy and Ariel Katz, David Fewer and Jeremy de Beer from the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Casey M. Chisick, Peter J. Henein and Eric Mayzel from the Canadian Musical Reproduction Rights Agency Ltd., the Canadian Music Publishers Association and the International Confederation of Music Publishers, and Barry B. Sookman and Daniel G. C. Glover from Music Canada, the International Federation of the Phonographic Industry, the Canadian Council of Music Industry Associations, the Canadian Independent Music Association and Association québécoise de l’industrie du disque, du spectacle et de la vidéo.

Licensing for musical works often uses a ‘through to the viewer’ model, where synchronization (copies created during editing of the work), broadcast-incidental (copies created during broadcasting of the work) and distribution-incidental (copies created during the distribution of the work) licenses are bundled together. This was not the case with the licensing scheme used by SODRAC.

CBC argues that broadcast incidental copies are the result of technological efficiency and it would contravene the Principle of Tech Neutrality to compensate SODRAC for ephemeral copies of their repertoire whose use has nothing to do with copyright holders’ legitimate interests.  SODRAC argues they are entitled by the Act (and by the decision in the 1990 case Bishop v Stevens [Bishop]) to remuneration for the ephemeral copies.

The first panel of the day discussed the emerging principle of technological neutrality in Copyright. The panel was chaired by Professor Giuseppina D’Agostino, and included Craig, Dean Gregory Hagen (University of Calgary), Professor Cameron Hutchinson (University of Alberta), and Richard Pfohl (General Counsel, Music Canada).

Craig surveyed the spectrum of case law that includes three different types of neutrality: Media neutrality at one end and a purposive approach to neutrality at the other.  This spectrum reflects the fact that prior to SODRAC there was not a clear consensus on the spirit and the content of the principle of technological neutrality. Jurisprudence on this principle stems from two main cases: 1990’s Bishop and 2012’s ESA v SOCAN [ESA v SOCAN]. Justice McLachlin (as she was), writing for the court in Bishop, held that s 3(1) of the Act did not include the right to make “ephemeral” recordings for the purpose of facilitating broadcasting. This meant that licensing was required for both synchronization copies of works and incidental copies.

At the conservative end of the spectrum, the interpretation of media neutrality was introduced in 2006 in Robertson v Thomson Corp [Robertson]. In that case, neutrality meant that the Act continued to apply in different types of media, and that actions undertaken when using a new technology should be reviewed rather than the technologies net effect. This position is echoed in Justice Rothstein’s dissent in ESA.

In the middle of the spectrum is the functional equivalence approach found in SOCAN v Bell Canada. In this case, Justice Abella explains that technological neutrality “seeks to have the Copyright Act applied in a way that operates consistently, regardless of the form of media involved, or its technological sophistication.”

The purposive approach to neutrality was introduced by Justices Abella and Moldaver writing for the majority in ESA. This case represented a major evolution in the interpretation of the Act, and Technological Neutrality, demonstrated by the following quote:

“[5] … The principle of technological neutrality is reflected in s 3(1) of the Act, which describes a right to produce or reproduce a work “in any material form whatever”. In our view, there is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user. “

The underlying technological neutrality issue in SODRAC is the statutory interpretation of the Act, and the Court’s refusal to displace the ordinary meaning of the text. The modern Canadian approach to statutory interpretation is Driedger’s Modern Principle, as identified in Re Rizzo & Rizzo Shoes [Rizzo].

Specifically, the question is when principles of interpretation (such as the principle of technological neutrality) can displace the ordinary meaning of a statute. This is argued in SODRAC at paras [49]-[51]. Exceptions exist in the Act for ephemeral/incidental copying under s 30.8 and s 30.9. However, CBC’s incidental copying did not fall under them. Based on the legislative history, including failed lobbying by broadcasters to broaden the definition, the majority concluded that it was not possible to displace the ordinary meaning of the Act. Panelist Greg Hagan argued that the majority’s interpretation missed the point made in Rizzo at para [27], which held that the ordinary meaning could be displaced if it led to an unreasonable and/or absurd outcome.

The principle of technological neutrality in statutory interpretation makes it clear that functionally equivalent technologies (in this case the delivery of television and movie programming using a digital content management system versus an analog one) should be treated equally by the Act.  As broadcasters increasingly deliver their content digitally, SODRAC is problematic because it offers a potential disincentive for the use of these innovative technologies.  As it stands, there is a good case to make for parliament to expand the incidental copying exceptions under s 30.8 and s 30.9 to avoid this absurd outcome and continue to encourage innovation in media delivery.

Paul Blizzard is a JD Candidate at Osgoode Hall Law School. Twitter: @paulblizzard.

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