The application of Canada’s Copyright Act to the reality of the Internet will be the subject of hearings at the Supreme Court of Canada by early next year. As many copyright stakeholders are aware, Canada’s most recent attempt to bring its copyright law in line with the explosion of new digital based media (including the steep rise in online content available via streaming or download), known as Bill C-32, died on the order paper when our recent federal election was called. However, despite the fact that the “Old” Copyright Act has seen no major revisions since the 1990s, in its current form, the Copyright Act has proven to be sufficiently flexible to deal with the issue of new forms of media and new forms of electronic communications. Given the relative novelty of the Internet vis à vis the aging Copyright Act, it is therefore not surprising that a series of recent Copyright Board decisions, which looked at the issue of whether or not an Internet transmission or download fell within the definition of what constitutes “copyright”, has been appealed to the highest court in the land.
By way of background information, under the Copyright Act, the Society of Composers, Authors and Music Publishers of Canada (known as SOCAN for short), which is a copyright collective, administers in Canada, on behalf of its members, the world repertoire of performing rights associated with music. SOCAN’s main purpose is to collect revenues for its members in the form of royalties paid under licenses granted by SOCAN to persons who wish to either perform music in public, or communicate (i.e. broadcast) music to the public. These royalties are set under a system of tariffs, which are established with SOCAN’s input, and put in place by the Copyright Board of Canada. Users of copyright protected music that are required to pay a tariff but do not do so in violation of the rights of the copyright owner, and can be sued by SOCAN for copyright infringement.
One of the cases now under appeal involves Internet service providers seeking judicial review of a decision of the Copyright Board of Canada, which decided that Tariff 22.A (a tariff proposed by SOCAN for the collection of royalties associated with Internet online music services), applied to the transmission of a download of online music over the Internet. In other words, those providing online music for download are required, under Tariff 22.A, to collect and remit the appropriate royalties to SOCAN. The position taken by the service providers was that Tariff 22.A should not apply to music that is downloaded on the Internet, as this was not the subject of a copyright under the Copyright Act. The legal argument advanced by the service providers was that, under the Copyright Act, although the definition of “copyright” includes “the sole right to communicate any literary, musical or artistic work to the public by telecommunication”, that this definition did not cover the current scenario of downloading music found online, as this was not a “communication to the public”: i.e. that this type of communication was private in nature, and therefore downloading copyright protected material to your computer for personal use was not a violation of the copyright holder’s right to receive remuneration under Tariff 22.A.
In advancing its claim, the service providers relied heavily on the findings of the Supreme Court of Canada in the case of CCH Canadian Ltd. v. Law Society of Upper Canada, which was the last copyright case dealt with by the Supreme Court in 2004. In the CCH case, the Supreme Court found that the transmission by fax of a single copyright protected work was not a “communication to the public”, and thus did not constitute copyright infringement. The service providers argued by analogy that, a communication from a single point (the provider of online music downloads) that was intended to be received from a single point (the end user who downloaded the music in question) was not a “communication to the public”.
In a unanimous decision of a three judge panel, the Federal Court of Appeal (whose decision is now under appeal to the Supreme Court of Canada) decided that providing online music for downloading was a right that the owners of copyright protected music could protect, and which in turn required providers of such services to pay royalties to SOCAN under Tariff 22.A. The court held that in order to establish that a communication was a “communication to the public” such that the Copyright Act was engaged, two factors had to be established: 1) the intention of the communicator, and 2) the fact of the reception of the communication (in this case downloaded music) by at least one member of the public.
Based on the facts presented to the Court in this case, the Court found that by making available music for downloading on the Internet, providers of such services were in fact targeting such communications to an aggregation of individuals, which is more than a single person, but not necessarily the public at large. This was sufficient to find that the intention of the provider of the online music was the communication of that music to the public (i.e. not a private communication to as series of individuals). The Court went on to state that the exact number of persons who actually receive the communication (i.e. who downloaded the music) is not relevant: it only takes one member of the public to download the song in question for the Court to find that a “communication to the public” had occurred. The Court stated further that even if one could characterize downloading music from the Internet as a series of private communications, that such communications could also constitute “communications to the public”. It is therefore possible that one could in fact be “communicating to the public” by a series of simultaneous individual communications to numerous people in different locations. This, it would seem, is what downloading online music is all about, and in fact, this is the business model that many wireless carriers use in trying to sell as many copies of music ringtones as possible. In other words, a series of repeated transactions of the same work to numerous recipients is, quite simply, a communication to the public.
Although it remains to be seen what the Supreme Court of Canada’s decision will be in this case, the implications of this case are far reaching for anybody that makes available for download either literary, dramatic, musical or artistic works on the Internet. By simply offering such a service to the public on the Internet (even for free), such service providers are in many cases infringing someone’s copyright, and can be compelled to pay significant damages and royalties to any injured parties. In the case of music downloads, the appropriate license should be obtained by the service provider from SOCAN, and the required royalties remitted. In the case of copyright protected subject matter that is not administered by a collective, the owner of the copyright should be contacted in order to seek permission (possibly in exchange for remuneration, either on a royalty or other basis). In any case, a proactive approach by anyone considering providing visitors to their website with downloadable (or even streaming) content is a must, especially as communications via the Internet are now the rule, rather than the exception.
James Katz is an Associate with the law firm of BrazeauSeller.LLP. He practices in the areas of litigation and intellectual property. James can be reached at 613-237-4000 ext. 267 or at jkatz@brazeauseller.com. For more information about James, please visit www.brazeauseller.com.
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