Re:Sound v. MPTAC: SCC Upholds Copyright Board's Decision

Re:Sound v. MPTAC: SCC Upholds Copyright Board's Decision

On July 12, 2012, in a unanimous 9-0 decision, the Supreme Court of Canada dismissed the appeal launched by Re:Sound, rejecting an application for Tariffs on soundtracks accompanying cinematographic works. The SCC held that a sound recording accompanied by a video is precluded from collecting the s.19 remuneration right.

The decision stems from an application made to the Canadian Copyright Board by Re:Sound on March 28, 2008 proposing two Tariffs (Tariffs 7 & 9), which the Board rejected. Re:Sound collects royalties when a sound recording is performed in public or communicated to the public by telecommunication based on s.19 of the Copyright Act. The proposed Tariffs would have allowed for royalties to be claimed for the 'use of sound recordings embodied in a movie by motion picture theatres and other establishments' (Tariff 7) and 'for the use of sound recordings in programs broadcast by commercial over the air pay, specialty and other television services' (Tariff 9). In other words, the tariff would have required movie theatres and TV stations to pay a royalty to Re:Sound for the recorded music included in movies or TV shows. To read a previous IPilogue analysis of the Board and FCA decisions click here.

The Motion Picture Theatre Association of Canada (MPTAC) objected to Tariff 7, while a series of telecommunications companies including Rogers Communications, Shaw Communications, Bell Express Vu and Quebecor Media objected to Tariff 9 (collectively referred to as the ‘Objectors’).

The main issue considered by the Board was “...[w]hen is a pre-existing sound recording that is subsequently incorporated into a soundtrack no longer a sound recording?” The basis of the analysis stemmed from the interpretation of s.2 of the Copyright Act pertaining to the defined term “sound recording” and the undefined term “soundtrack”. (Board, 27)

Section 2
"Sound Recording"

‘means a recording, fixed in any material form, consisting of sounds, whether or not a performance of a work, but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work’

Re:Sound argued that pre-existing sound recordings in a "soundtrack" accompanied by a cinematographic work are included in the definition of "sound recording", and should therefore not be excluded from s.19 remuneration.

The objecting parties submitted that the definition of sound recording and the soundtrack exclusion therein applies to exclude protection from the use of pre-existing sound recordings when they are part of a soundtrack that accompanies a cinematographic work. The same sound recording on its own (not accompanied by a cinematographic work) would remain a sound recording as defined by the Act, and subject to the remuneration right. Otherwise, the objectors contended that the copyright holders of the sound recordings could effectively wield a veto power over any soundtrack which accompanied a cinematographic work.

After reviewing the relevant legislation, namely sections 2, 15, 17, 18 and 19 of the Canadian Copyright Act, the Board addressed the submissions made by the Re:Sound:

  • First, the definition of ‘sound recording’ was amended at the Committee stage to ensure that a soundtrack accompanied by the cinematographic work would not be entitled to equitable remuneration while the soundtrack absent the cinematographic work would receive equitable remuneration. (Board, 36)
  • Second, cinema and television were not a part of the dialogue concerning the enactment of s.19 of the Act. (Board, 37)
  • Third, that Parliament, having aligned its legislation with the Rome Convention does not require protection where the sound recording is incorporated into a soundtrack. (Board, 38)
  • Finally, (and what they found to be the most important) the Board observed that the Committee clearly never intended to include television broadcasts within s.19 of the Act. (Board, 39)

Re:Sound relied heavily on Australian, American and UK authorities - all which were rejected by the Board due to legislative differences. The Board concluded that the proposed Tariff had no legal foundation and could therefore not be certified. (Board, 44)

Re:Sound applied for a judicial review of the Board’s decision to the Federal Court of Appeal on February 22, 2011. The Federal Court upheld the findings of the Copyright Board and held that the Re:Sound’s concerns that the sound recording could be published and disseminated on the internet, or be extracted from the DVD without recourse or remedy were ill founded. They also found that reference to the Australian jurisprudence and UK law was irrelevant because the jurisdictions are based on fundamentally different laws. Finally, the applicant also raised arguments based on the Rome Convention in which the Court held that phonograms are exclusively aural fixation of sounds (Article 3, paragraph (b)), “...[a]nd that consequently a “fixation of images (e.g., cinema) or of images and sounds (e.g., television) are therefore excluded” (WIPO Guide to the Rome Convention section 3.7).”

The main issue considered by the Supreme Court of Canada in this appeal was the statutory interpretation of the relevant provisions:

"Do pre-existing sound recordings incorporated into a soundtrack fall within the meaning of the undefined term “soundtrack” used in the definition of “sound recording” in s. 2 of the Act? In other words, in view of the fact that only a “sound recording” can be the subject of a tariff under s. 19, can the reproduction of a pre-existing sound recording that is part of a soundtrack of a cinematographic work be the subject of a tariff when the soundtrack accompanies the cinematographic work?" (SCC, 25)

The Court held that a reading of the provisions in a manner other than the one proposed by the Board would be 'superfluous'. As a result, the Court opined that a sound recording in a soundtrack would not trigger the remuneration scheme under s.19 of the Act when accompanied by a cinematographic work or television program.

After reviewing the excerpts made by the Standing Committee on Canadian Heritage concerning the s.19 provision of the Act, the Court confirmed that that a soundtrack CD would normally qualify under the s.19 remuneration scheme, as it is not accompanied by a movie or television program. However, once the soundtrack accompanied either a movie or television program, it would be excluded from the remuneration scheme.

The SCC also addressed the international jurisprudence used by the appellants to support their position, holding that "...[t]he foreign jurisprudence makes it clear that significant differences exist between Canadian copyright legislation and the foreign legislation on which those decisions are based".

Finally, concerning the appellants arguments based on the Rome Convention, the Court held that the appellants overlooked article 3 "...[w]hich defines a “phonogram” as “any exclusively aural fixation of sounds of a performance or of other sounds”. Thus, excluding a soundtrack from the definition of “sound recording” where the soundtrack accompanies the cinematographic work is consistent with the Rome Convention, since this exclusion is not for “exclusively aural fixations”." (SCC, 49) The Court held that Canada is aligned with the Rome Convention because once the sound recordings are extracted from the soundtrack (in which case it is not accompanying the cinematographic work or television program), the remuneration scheme would apply.

After considering both the Copyright Board and FCA’s decisions, the Supreme Court of Canada rejected the appellant's interpretation of 'sound recording' holding that:

“When it accompanies the motion picture, therefore, the recording of sounds that constitutes a soundtrack does not fall within the definition of “sound recording” and does not trigger the application of s. 19. A pre-existing sound recording is made up of recorded sounds. The Act does not specify that a pre-existing recording of “sounds” that accompanies a motion picture cannot be a “soundtrack” within the meaning of s. 2. In my view, a pre-existing sound recording cannot be excluded from the meaning of “soundtrack” unless Parliament expressed an intention to do so in the Act. It could have done this by, for example, excluding only “the aggregate of sounds in a soundtrack”.” (SCC, 36)

The SCC concluded that the Board was correct in its interpretation of ‘sound recording’, ‘soundtrack’ and that its decision was “...[c]onsistent with the scheme of the Act, the intention of Parliament and Canada’s international obligations. Contrary to the appellant’s suggestion, it does not lead to absurd results.”

In a statement released by Re:Sound following the decision, Re:Sound President Ian MacKay was quoted as saying that "...[i]t is the Supreme Court's role to interpret the law as it exists, not as it should be. Unfortunately, Canada's copyright law has today been found to put Canadian recording artists and record companies at a disadvantage in the international marketplace." Publishers and songwriters will continue to receive protection for these works under the Copyright Act, whereas performers and musicians will not. However, as the Supreme Court noted, if Parliament intended to exclude pre-existing sound recordings from the definition of a soundtrack - it would have done so. Further, as mentioned throughout the decision, a soundtrack on its own would receive remuneration rights based on s.19, just not when accompanied in a movie or television show.

As the Board mentioned, granting such rights could inevitably "...[p]ermit these contributors to a movie, but not the copyright owner of the movie, to control the rental of the movie." (Board, 29) although this was not addressed by the SCC.

The new Copyright Bill C-11 does little to back Re:Sound's plight for adding Tariffs, although interestingly enough, the decision follows a recent international conference held to formalize a new treaty for audiovisual performers. The Beijing Treaty on Audiovisual Performances, which concluded in June, is meant to grant rights to audiovisual performers akin to copyright. Perhaps future copyright reforms meant to ratify this treaty will grant Re:Sound the rights they are looking for.


Courtney Doagoo is a doctoral student at the University of Ottawa, Faculty of Law.