{"id":39884,"date":"2022-08-02T12:00:34","date_gmt":"2022-08-02T16:00:34","guid":{"rendered":"https:\/\/www.iposgoode.ca\/?p=39884"},"modified":"2022-08-02T12:00:34","modified_gmt":"2022-08-02T16:00:34","slug":"socan-v-esa-royalties-in-the-age-of-streaming","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2022\/08\/02\/socan-v-esa-royalties-in-the-age-of-streaming\/","title":{"rendered":"SOCAN v ESA: Royalties in the Age of Streaming"},"content":{"rendered":"\n<hr \/>\n<p><em><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-38274\" src=\"https:\/\/www.iposgoode.ca\/wp-content\/uploads\/2021\/09\/Emily-Chow-2.jpg\" alt=\"Headshot\" width=\"75\" height=\"75\" \/>Emily Chow is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.<\/em><\/p>\n<hr \/>\n<p>On July 15, 2022, the Supreme Court of Canada (\u201cSCC\u201d) released its <a href=\"https:\/\/www.canlii.org\/en\/ca\/scc\/doc\/2022\/2022scc30\/2022scc30.html\">decision<\/a> for the case <em>Society of Composers, Authors and Music Publishers of Canada <\/em>(\u201c<em>SOCAN<\/em>\u201d)<em> v. Entertainment Software Association <\/em>(\u201c<em>ESA<\/em>\u201d). The unanimous decision written by Justice Rowe clarified provisions of the <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/C-42\/page-2.html#docCont\"><em>Copyright Act <\/em><\/a><em>\u00a0<\/em>(the <em>\u201cAct<\/em>\u201d)<em>, <\/em>ruling that the <em>Act <\/em>only requires users to pay one royalty fee to stream works online as opposed to the two fees proposed by <a href=\"https:\/\/www.socan.com\/\">SOCAN<\/a>.<\/p>\n<p><strong>Judicial History<\/strong><\/p>\n<p>In 2012, Parliament amended the <em>Copyright Act <\/em>to align copyright legislation with the <a href=\"https:\/\/www.wipo.int\/treaties\/en\/ip\/wct\/\">World Intellectual Property Organization\u2019s (\u201cWIPO\u201d) Copyright Treaty<\/a>, which Canada signed in 1997. Among the changes was the addition of section <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/C-42\/page-2.html#docCont:~:text=public%20by%20telecommunication-,(1.1),-For%20the%20purposes\">2.4(1.1),<\/a> which was meant to clarify subsection <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/C-42\/page-2.html#docCont:~:text=a%20cinematographic%20work%2C-,(f),-in%20the%20case\">3(1)(f)<\/a> \u00a0defining \u201ccommunication of a work or other subject\u2011matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.\u201d<\/p>\n<p>As the central authority for the approval of tariffs, the <a href=\"https:\/\/cb-cda.gc.ca\/en\">Copyright Board of Canada<\/a> held proceedings to determine the amount of royalties to be paid, receiving submissions from various groups on how to interpret the new sections of the <em>Copyright Act. <\/em><a href=\"https:\/\/www.socan.com\/\">SOCAN<\/a>, a music licensing organization representing over 175,000 music creators, publishers and visual artists, argued that s. 2.4(1.1) required royalties to be paid whenever a copyrighted work was posted on the Internet for public access. The Copyright Board concurred, deeming that the act of making works available was in itself a separately protected and compensable activity. In effect, there would be two payable royalties: one for when the provider makes the work available online, and another for when a user actually streams or downloads a work.<\/p>\n<p>The Federal Court of Appeal <a href=\"https:\/\/www.canlii.org\/en\/ca\/fca\/doc\/2020\/2020fca100\/2020fca100.html\">overturned<\/a> the Copyright Board\u2019s decision, concluding that Parliament did not intend to introduce the two-royalties system for users accessing works online.<\/p>\n<p><strong>Key Takeaways<\/strong><\/p>\n<p>Although differing in the exact standard of review for the Copyright Board\u2019s decision, the SCC unanimously dismissed SOCAN and Music Canada\u2019s appeal. The SCC found that the Copyright Board and SOCAN\u2019s interpretation of the <em>Copyright Act<\/em>\u2019s new sections undermined the purpose of the <em>Act <\/em>itself. As per the principle of <a href=\"https:\/\/canliiconnects.org\/en\/commentaries\/46245\">technological neutrality<\/a>, \u201cdistributing functionally equivalent works through old or new technology should engage the same copyright interests [\u2026] what matters is what the user receives, not how the user receives it\u201d absent parliamentary intent to the contrary. Section 2.4(1.1) merely clarifies that a work is \u201ccommunicated\u201d when it is made available or uploaded \u2013 as <a href=\"https:\/\/www.scc-csc.ca\/case-dossier\/cb\/2022\/39418-eng.aspx\">\u201cone continuous act\u201d<\/a>, streaming begins when the work was made available online and continues throughout to the end user\u2019s accessing of the work. Thus, section 2.4(1.1) does not entitle authors to an additional \u201cmaking available\u201d royalty for making the work available online. It is merely part of the public performance right enshrined in section 3(1)(f).<\/p>\n<p>The SCC also addressed two non-copyright specific issues relevant to the larger practice of law in Canada. Firstly, the SCC recognized a <a href=\"https:\/\/www.blg.com\/en\/insights\/2022\/07\/making-copyrighted-works-available-online-is-not-a-stand-alone-interest#:~:text=on%20this%20point.-,Correctness%20is%20the%20appropriate%20standard%20of%20review,-The%20SCC%20first\">new category of correctness review<\/a> under <a href=\"https:\/\/www.canlii.org\/en\/ca\/scc\/doc\/2019\/2019scc65\/2019scc65.html\"><em>Vavilov<\/em><\/a> to apply for instances of concurrent first instance jurisdiction, which allows both administrative bodies and courts to have this first instance jurisdiction over a legal issue in a statute (<a href=\"https:\/\/canlii.ca\/t\/jqgw0#par26\">paras 26-28<\/a>). Secondly, the Court reiterated the role international treaties play in statutory interpretation. Although WIPO\u2019s Copyright Treaty is relevant to the statutory interpretation of the <em>Act<\/em>, it cannot \u201coverwhelm clear legislative intent\u201d (<a href=\"https:\/\/canlii.ca\/t\/jqgw0#par48\">para 48<\/a>). The SCC found that the Copyright Board erred by privileging the Copyright Treaty and Canada\u2019s signatory obligations over the domestic <em>Copyright Act <\/em>in its interpretation.<\/p>\n<p>The Copyright Society of the USA will host a <a href=\"https:\/\/www.csusa.org\/events\/EventDetails.aspx?id=1659360&amp;group=\">discussion about <em>SOCAN v ESA<\/em><\/a><em>, <\/em>breaking down the decision and exploring its broader implications for all stakeholders in the arenas of licensing, collective administration, and enforcement. The event features IP Osgoode\u2019s own Professor David Vaver alongside Professor Ysolde Gendreau from the University of Montreal. It will be taking place virtually on Wednesday, August 3, 2022, at 12pm EST. Details and registration information can be found <a href=\"https:\/\/www.csusa.org\/events\/EventDetails.aspx?id=1659360&amp;group=\">here.<\/a><\/p>\n<p><strong>Further reading:<\/strong><\/p>\n<p>Breakdown of <em>SOCAN v ESA<\/em>\u2019s administrative law related holdings: <a href=\"https:\/\/www.thelawyersdaily.ca\/articles\/37983\/scc-s-first-copyright-ruling-on-making-available-online-creates-new-category-of-correctness-review\">https:\/\/www.thelawyersdaily.ca\/articles\/37983\/scc-s-first-copyright-ruling-on-making-available-online-creates-new-category-of-correctness-review<\/a><\/p>\n<p>US Government\u2019s <em>Making Available Study: <\/em><a href=\"https:\/\/www.copyright.gov\/docs\/making_available\/\">https:\/\/www.copyright.gov\/docs\/making_available\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":2140,"featured_media":0,"comment_status":"open","ping_status":"closed","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":[3,1106,65,60,112,291,1043],"tags":[27,93,459,463,1374,4609,1243],"class_list":["post-39884","post","type-post","status-publish","format-standard","hentry","category-blogs","category-canada","category-copyright","category-ip","category-music-industry","category-music","category-supreme-court-of-canada","tag-copyright","tag-emily-chow","tag-internet-sharing","tag-music-industry","tag-scc","tag-streaming-services","tag-supreme-court-of-canada"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin 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