{"id":26755,"date":"2015-03-30T14:14:24","date_gmt":"2015-03-30T18:14:24","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=26755"},"modified":"2015-03-30T14:14:24","modified_gmt":"2015-03-30T18:14:24","slug":"cbc-v-sodrac-episode-iii-oral-arguments-heard-at-the-scc","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2015\/03\/30\/cbc-v-sodrac-episode-iii-oral-arguments-heard-at-the-scc\/","title":{"rendered":"CBC v SODRAC Episode III: Oral Arguments Heard at the SCC"},"content":{"rendered":"

On March 16th<\/sup>, the Supreme Court of Canada (SCC) heard oral arguments in CBC v SODRAC <\/em><\/a>. The SCC granted leave to appeal from the Federal Court of Appeal (FCA) decision<\/a>\u00a0back in September, which originally stemmed from a 2012 Copyright Board (the \u201cBoard\u201d) decision<\/a>. The issue centers on whether broadcasters should be required to pay royalties on ephemeral or incidental copies of audiovisual works that are created during the process of making a final copy for broadcast. However, what really is at stake here are the principles and scope of technological neutrality \u2013 and with a number of interveners<\/a> and parties interested in the outcome, the IP world has its eyes turned to how this case unfolds.<\/p>\n

<\/p>\n

IPilogue<\/em><\/a>\u00a0editor Adam Chan<\/a>\u00a0originally reported on this case back in a September post<\/a>\u00a0on the SCC\u2019s decision to grant leave to appeal. The case arose out of the Board\u2019s decision<\/a>\u00a0to collect royalties on these aforementioned ephemeral copies. The CBC<\/a>\u00a0disagreed on tech neutrality grounds, arguing that under those principles royalties should not be charged for incidental copies since payments are already made for the use of the original content in final broadcasts. The Board, finding for SODRAC<\/a>, relied on the SCC\u2019s decision in Bishop v Stevens<\/em><\/a>, which determined that because incidental copies add value to a final broadcast they should attract separate royalties. Furthermore, the SCC in Bishop <\/em>narrowly interpreted the Copyright Act<\/em><\/a>\u00a0(the \u201cAct<\/em>\u201d) to conclude that incidental copies made in the process of creating a broadcast were not part of the broadcast right itself.<\/p>\n

 <\/p>\n

At the FCA, CBC argued that Bishop <\/em>was no longer good law. As discussed<\/a>\u00a0by some commentators on the case,\u00a0CBC argued that the SCC in\u00a0ESA v SOCAN <\/em><\/a>fundamentally changed the law through its statements about tech neutrality. The Court however decided that neutrality did not override the language of the Act <\/em>that gives owners of music works the exclusive right of reproduction. The FCA said in paragraph 48<\/a>\u00a0that nothing in ESA <\/em>\u201cwould authorize the Board to create a category of reproduction or copies which, by their association with broadcasting, would cease to be protected by the Act<\/em>. ESA <\/em>did not explicitly, or by necessary implication, overrule Bishop v Stevens<\/em>.\u201d The Court further stated that since the majority\u2019s reasoning in ESA <\/em>did not rely on or refer to technological neutrality the case did not provide guidance on applying the principle to the situation at hand.<\/p>\n

 <\/p>\n

The importance of this appeal has been discussed by many members of the IP world. One commentator\u00a0noted<\/a> that the greatest danger in this case is that the SCC could potentially \u201croll back its finding that technological neutrality is a foundational principle within the law.\u201d Additionally, if the SCC rules that all copies, incidental or not, are copies under the Act<\/em>\u00a0there is \u201cthe very real possibility of payment demands for the myriad of copies that occur through modern technologies.\u201d In this world of digital copies and Internet file sharing, accessing digital goods could potentially become an expensive task.<\/p>\n

 <\/p>\n

Although a webcast of the oral arguments was not available at the time of the writing this post, the parties\u2019 factums<\/a>\u00a0are \u2013 and prove to be interesting reads. CBC submits<\/a>\u00a0that SODRAC is the first copyright holder to \u201cattempt to monetize broadcast-incidental copies\u2026[which is] a subversion of the purpose of the Copyright Act<\/em> in an attempt to generate economic rents through a layer licensing scheme.\u201d CBC contends that the layered licensing scheme at question was upheld by the Court through a fundamental error of law, \u201cnamely the rejection of technological neutrality as a guiding principle in the interpretation and application of the Copyright Act<\/em>.\u201d CBC asserts in its factum that this layered approach to licensing is \u201cimpermissible double-dipping that violates technological neutrality.\u201d It is also interesting to note one of CBC\u2019s requests that if the SCC decides that a licence is indeed required for incidental copies then the royalty should be reduced to a nominal amount \u201cto reflect the fact that broadcast-incidental copies do not have independent economic value.\u201d This request seems to reflect the reality that incidental copies tend to be a part of the production process in creating content, and are not necessarily \u201cvaluable\u201d items on their own.<\/p>\n

 <\/p>\n

The SODRAC factum<\/a>\u00a0on the other hand contends that CBC is attempting \u201cto reverse decades of settled law\u201d and does not mince words in its opening paragraphs:<\/p>\n

This appeal amounts to an attempt by CBC to persuade this Court, through a misuse of the principle of technological neutrality, to upset the existing statutory balance in relation to broadcast-incidental copies and to substitute its own policy preferences for those of Parliament, enabling CBC to escape liability for copies it is making and deriving benefits from, and that it has been making and paying for, for decades.<\/em><\/p>\n

It is also fascinating (and sort of juicy!) to scan through the SODRAC factum and see a couple portions crossed out, specifically the paragraph describing how CBC has made tape and digital broadcast-incidental copies over the years for its programs.<\/p>\n

 <\/p>\n

An attendee of the hearing\u00a0commented<\/a>\u00a0on the opening stages of the appeal, saying that it did not start well for the CBC with the SCC being \u201cclearly skeptical\u201d of its arguments. In discussing technological neutrality however, one of the intervenors (CIPPIC<\/a>) suggested that a test should be established for when a copy should be treated as a copy under the Act<\/em>. CIPPIC\u2019s fear is that in this digital world that constantly uses ephemeral copying to function, literally interpreting the right to reproduction would give copyright owners control over everybody else\u2019s access to digital content \u2013 which is not realistic.<\/p>\n

 <\/p>\n

It has been said<\/a>\u00a0that this case\u00a0may \u201cserve to reinforce the importance of the technological neutrality principle and confirm that in the digital world, not ever copy is a copy for the purposes of the Copyright Act<\/em>.\u201d\u00a0I agree with this position. Although SODRAC relies on the established law, the law must keep up with our ever-changing (and technologically advanced) world. It is simply impractical to suggest every copy is a copy under the Act <\/em>when the way we access and store digital information heavily relies on ephemeral copying. To charge royalties on the digital content used in the production process before the final (valuable) broadcast is made seems to be an inappropriate cash-grab and abuse of copyright owners\u2019 powers. However, the conclusion that the law may lend itself to could be completely different, and unfortunately we can never predict with certainty how the bench will sway. I guess we will just have to sit on the couch and find something else to watch until the final result is ready for the air.<\/p>\n

 <\/p>\n

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

On March 16th, the Supreme Court of Canada (SCC) heard oral arguments in CBC v SODRAC . The SCC granted leave to appeal from the Federal Court of Appeal (FCA) decision\u00a0back in September, which originally stemmed from a 2012 Copyright Board (the \u201cBoard\u201d) decision. The issue centers on whether broadcasters should be required to pay […]<\/p>\n","protected":false},"author":2140,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[1106,65,121,60,1043,124],"tags":[1496,2152,27,2468,1243,2513],"class_list":["post-26755","post","type-post","status-publish","format-standard","hentry","category-canada","category-copyright","category-internet","category-ip","category-supreme-court-of-canada","category-technology","tag-appeal","tag-cbc","tag-copyright","tag-jaimie-franks","tag-supreme-court-of-canada","tag-technological-neutrality"],"yoast_head":"\nCBC v SODRAC Episode III: Oral Arguments Heard at the SCC - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2015\/03\/30\/cbc-v-sodrac-episode-iii-oral-arguments-heard-at-the-scc\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CBC v SODRAC Episode III: Oral Arguments Heard at the SCC - IPOsgoode\" \/>\n<meta property=\"og:description\" content=\"On March 16th, the Supreme Court of Canada (SCC) heard oral arguments in CBC v SODRAC . 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