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COPYRIGHT - Royalties - Copyright Board - Tariff hearings

Thursday, August 17, 2017 @ 8:35 AM  

Lexis Advance® Quicklaw®
Application by Re:Sound Musical Licensing Company (Re:Sound), a collective society that administered the right to receive equitable remuneration, for judicial review of a decision of the Copyright Board setting royalties for the use of published sound recordings in webcasting for the years 2009-2012. When a published sound recording of a performance of a musical work was publicly performed, royalties were payable to The Society of Composers, Authors and Music Publishers of Canada (SOCAN) on behalf of the composer and publisher and to Re:Sound on behalf of the performer and the sound recording maker. Under the Copyright Act, Re:Sound was required to file with the Board proposed tariffs to receive royalties for the use of their repertoire. It urged the Board to set the equitable remuneration at market rates, and to support its argument it submitted several agreements that it alleged represented market rates for webcasting sound recordings. Previously, the Board had set Re:Sound’s tariffs in relation to the pre-existing SOCAN tariffs for the same uses. The Board chose not to deviate from its previous cases and set the rates in accordance with the one-to-one ratio without regard to the market conditions. It chose not to rely on the agreements because the webcasting market was in its infancy and the agreements were too new to yield any data to show they were working in practice.

HELD: Application dismissed. The decision of the Board was reasonable. The Board had been consistent on the issue. It followed the same approach it had followed in its cases since 1999. The Board was not required to apply market rates in setting royalties, but rather was tasked with setting “equitable remuneration” based on “any factor that it considered appropriate.” The Board’s failure to consider input costs was not unreasonable. The Board’s analysis focusing on the value of the sound recording rather than input costs, was consistent with the balance between promoting the public interest in the works and just reward for the creator. The value of the work was derived from the ideas embodied within it, not the economic costs of inputs.

Re:Sound v. Canadian Association of Broadcasters, [2017] F.C.J. No. 646, Federal Court of Appeal, D.W. Stratas, W.W. Webb and A.F.J. Scott JJ.A, June 28, 2017. Digest No. TLD-August142017008