‘Ringtone’ Tariff Appeal Refused by SCC

‘Ringtone’ Tariff Appeal Refused by SCC

Last month, the SCC refused leave to appeal from the FCA’s decision in Canadian Wireless Telecommunications Association v. SOCAN.  The FCA had undertaken the judicial review of a tariff decision by the Copyright Board. The tariff covered the communication of musical works, in the form of cell phone ringtones, from suppliers to subscribers.

At issue was whether this process of downloading a ringtone triggered the distinct right under section 3(1)(f) of the Copyright Act to communicate the work to the public by telecommunication in addition to the right of reproduction (which had already been contracted for). The wireless carriers suggested that this amounted to double dipping as they were already paying compensation once for this transaction. In characterizing each individual subscriber’s download as a one-on-one transmission, the wireless carriers argued that this was not a communication nor was it “to the public”.

However, the FCA upheld the Board’s decision in concluding “that the transmission of ringtones by wireless carriers to their customers on request is a communication to the public by telecommunication.” The FCA relied in part on the SCC’s previous decisions in 1) SOCAN v. CAIP, to support that this transmission is a communication; and 2) in CCH Canadian Ltd. v. Law Society of Upper Canada, to support that a series of transmissions of the same work to different individuals can be “to the public”.

The importance of this decision goes beyond ringtones and cell phones to the growing number of Copyright protected works that are distributed over the Internet and other networks. This decision implies broadly that when a work is made available online in a way that results in a reproduction, for example as a download, both rights will need to be cleared and compensated. This extends beyond music to all protected literary, artistic and dramatic works. In the online context, it also arguably establishes these two rights as an unavoidable ‘dual right’ since it’s not clear that any online activity, including ordinary web browsing, does not necessarily entail both a reproduction and a transmission.

By dismissing the application for leave to appeal, the SCC has opted not to weigh in any further on this topic. This may signal that the Court feels its comments in SOCAN v. CAIP and CCH, referred to in the above FCA decision, are sufficient for the time being.

One immediate impact of the SCC’s decision not to hear an appeal will likely be on any judicial review on this issue from the Copyright Board’s more recent Tariff 22.A. Tariff 22.A broadly covers the communication of musical works over the Internet. Some objectors again argued that the transmission of a download is not a communication to the public by telecommunication.