Jeremy De Beer Strathmore Lecture

Last month, Strathmore University hosted Prof. Jeremy de Beer from University of Ottawa who found time to deliver a public lecture. His lecture traced the evolution of Canadian copyright law in the internet era. His lecture was anchored on an analysis of three cases which viewed collectively highlight what he termed as a “20 year saga” pitting copyright owners and users of copyright works. These three cases were: (1) Society of Composers, Authors and Music Publishers of Canada v Canadian Association of Internet Providers, 2004 SCC 45 (SOCAN v. CAIP), (2) Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34 (ESAC v. SOCAN) and (3) Canadian Broadcasting Corporation v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada Inc. (CBC v. SODRAC).

The start of the 20 year saga is way back in 1996 when the same companies that provided internet connections to consumers also provided them with content. According to De Beer, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) realised that the internet would revolutionise the ways in which their repertoire is used in particular certain exclusive rights in the repertoire that they license out to users. As a result, SOCAN decided that the best way to collect license fees from the internet was to go through the intermediaries, including internet service providers (ISPs). In this connection, SOCAN first proposed Tariff 22 in 1996, applying to the Copyright Board of Canada for certification of this tariff targeting ISPs, which SOCAN alleged were involved in communicating works to the public in Canada and/or authorizing their subscribers’ communications. This move by SOCAN led to the first case in the 20 year saga namely the case filed by the Canadian Association of Internet Providers (CAIP). SOCAN v. CAIP was first heard before the Copyright Board of Canada which found that CAIP was not liable for acts of copyright infringement by its subscribers.

Aggrieved by the Board’s decision, SOCAN took the case went to the Federal Court of Appeal where a young Jeremy De Beer was a Law Clerk. The Federal Court of Appeal held that an ISP could rely on the “intermediary exception” found in section 2.4(1)(b) that absolved carriers who only pass information through their system from liability. However, this exception did not apply for caching of information as doing so was considered more than just relaying information. Thus an ISP who refuses to remove copyrighted material from its servers after given reasonable opportunity to do so could be held liable.

The matter went to the Supreme Court of Canada which overturned the Court of Appeal decision. In a 8-1 split, the Supreme Court agreed with the Copyright Board’s original ruling that ISPs are not liable to pay a tariff when they act as neutral intermediaries.

Following the Supreme Court’s 2004 decision, SOCAN asked the Board to certify a revised Tariff 22. SOCAN’s restructured tariff proposal tracked commercial and technological developments. Proceedings before the Copyright Board were bifurcated to deal separately with Tariff 22.A and 22.B-G. Tariff 22.A proposed to target online music services that stream or sell copies of music and Tariff 22.B-G proposed to target websites that use music in other ways, including Internet simulcasting and video gaming. With advances in video game technology it has become common for video games to include soundtracks with copyright-protected musical works. Ordinarily, video game producers privately contract with rights holders for a licence, setting out compensation. This compensation was paid pursuant to the copyright owner’s sole right to reproduce the musical work (the “reproduction right”).

In 2007, SOCAN brought a broad application to the Copyright Board seeking new tariffs pursuant to s. 3(1)(f), which provides copyright owners with the exclusive right to communicate works to the public through telecommunication (the “communication right”).
The Entertainment Software Association of Canada (ESAC) vigourously opposed the imposition of the new SOCAN tariffs to both the Board and the Federal Court of Appeal, arguing that the “communication right” license amounted to double-dipping as ESAC were already taking out the “reproduction right” license to synchronise musical works in their games. As a result, ESAC argued that a distinction should not be made between video games which are downloaded and those that are purchased in physical stores. Both the Board and the Court of Appeal rejected ESAC’s submissions and upheld the new SOCAN tariffs. The matter went to the Supreme Court with the central issue being the interpretation of the word “communicate” in s. 3(1)(f) of the Canadian Copyright Act which reads: “In the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication”. More specifically, the Supreme Court had to determine whether this “telecommunication right” intended to apply to the downloading of video games solely by virtue of it having been “communicated” over the Internet, or is it solely a reproduction subject to the “reproduction right”?

The majority decision of the Supreme Court found the “telecommunication right” inapplicable to permanent downloads of any sort. The majority decision was grounded in policy arguments in support of the concept of technological neutrality namely, that the imposition of a separate tariff for the “telecommunication right” would create an additional cost on the distribution of products by way of downloading over the Internet, when compared to distribution in physical stores, and thus violate technological neutrality.

The final case in the so-called “20 year saga” is the CBC v SODRAC case which is still pending before in the Supreme Court of Canada with a judgment expected very soon.  The central issue in this case is whether broadcasters must pay royalties on ephemeral or incidental copies of an audiovisual work created during the preparation of that work for broadcast. This case arose out of a decision by the Copyright Board that SODRAC can license and collect royalties from broadcasters for ephemeral copies made in the course of broadcasting. The Board’s rationale was that because they add value to the final broadcast, incidental acts of reproduction should attract royalties of their own in addition to those payable for the broadcast of the work. The Canadian Broadcasting Corporation (CBC) disagrees with both the Board and the Court of Appeal and relied on the technological neutrality principle stated in the ESAC v SOCAN case, which CBC argues changed the law as it relates to incidental copies. According to CBC, the principle as articulated by the Court provides that the public should not be subject to additional taxes or tariffs for a copyrighted work depending merely on its method of delivery – more advanced technological methods of delivering a work to a customer should not attract additional levies.

CBC and several interveners including Prof. J de Beer on behalf of CIPPIC argued before the Supreme Court that the particular version of technological neutrality espoused in the ESAC v. SOCAN case seems to be that of functional equivalence: if two technologies have the same effect, such as mailing a video game to a customer and downloading the same game via the internet, one method of delivery should not be favoured over the other by copyright law.

This much-awaited CBC v. SODAC decision will bring to an end the so-called “20 year saga” that has put Canada at the forefront of developments in this area of copyright law. Prof de Beer concludes that the role of the judiciary in interpreting copyright law is to facilitate digital entrepreneurship which creates a thriving digital marketplace for owners and users. In this regard, de Beer submits that copyright owners, particularly those in the music industry such as collective societies should exercise restraint.