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COPYRIGHT - Federal statutes - International treaties and conventions

Thursday, July 09, 2020 @ 8:32 AM  

Application by Entertainment Software Association and Apple for judicial review of a Copyright Board decision setting tariffs. SOCAN filed proposed tariffs with the Copyright Board for certain years in respect of works made available to the public through online music services. Subsequently, the Copyright Act was amended to introduce s. 2.4(1.1), the “making available” provision, addressing making works available to the public by telecommunication for subsequent streaming or downloading. Days later, the Supreme Court of Canada released a decision holding that online transmission resulting in download was not a communication by telecommunication giving rise to a tariff. As a result, royalties were not available to SOCAN for such downloads. Before the Board, SOCAN argued that s. 2.4(1.1) rendered the Supreme Court’s decision irrelevant, submitting that the provision required online music service providers to pay royalties upon posting musical works on their Internet servers, regardless of whether such works were transmitted to end-users by way of downloads or streaming. The Copyright Board accepted SOCAN’s interpretation of s. 2.4(1.1) as deeming the act of making a work available constituted a “communication to the public” triggering a tariff entitlement. The applicants sought judicial review. 

HELD: Application allowed. The Board’s interpretation of s. 2.4(1.1) of the Copyright Act was unreasonable. The Board skewed its analysis in favour of one result consistent with an unsupported view of the WIPO Copyright Treaty’s requirements. The Board engaged in unacceptable legislative interpretation that improperly preferred international law over domestic law, left out contextual elements, including the recent Supreme Court of Canada decision and involved unjustifiable leaps in reasoning. The Board provided no meaningful reasons to support its finding that the act of making a work available and the subsequent transmission over the Internet each gave rise to application of a tariff. It would be contrary to the Act’s policy to establish a tariff on a preparatory step, disaggregating rights for the purpose of adding an additional layer of royalties. In the absence of a new exclusive right, there was no basis for the Board’s conclusion that a stream did not merge with the making-available which preceded it to justify payment of two separate fees. The Board’s decision was quashed with no further relief.

Entertainment Software Assn. v. Society of Composers, Authors and Music Publishers of Canada, [2020] F.C.J. No. 671, Federal Court of Appeal, J.D.D. Pelletier, D.W. Stratas and D.G. Near JJ.A., June 5, 2020. Digest No. TLD-July62020007