Copyright Board, SOCAN expected to weigh in on Tariff 22 leave to appeal

No one’s betting on the likelihood of the Supreme Court of Canada hearing an appeal of a lower court’s decision on the controversial Tariff 22 online music decision, but a cross-appeal by the Society of Composers, Authors and Music Publishers of Canada (SOCAN), as well as an anticipated leave to intervene by the Copyright Board of Canada, improves the odds. On August 1, the Canadian Cable Television Association (CCTA), the Canadian Association of Internet Providers (CAIP) and Bell Canada filed a leave to appeal application with the court to overturn certain aspects of the Federal Court of Appeal’s decision in favour of applying a tariff to caching activities and others (CNM Special Update, Aug. 1/02). In response, SOCAN has confirmed its intention to cross-appeal, and though still unconfirmed, it’s expected the Copyright Board will weigh in with its opposing perspective on the standard of review applied to board cases. Several aspects of the court’s decision are being questioned by the CCTA and its allies, which argue that the case is too important not to be heard by the Supreme Court. In its statement of facts filed with the court earlier this month, the applicants write: "If permitted to stand, the Court of Appeal’s decision will impose an indeterminate level of copyright liability on ISPs – effectively penalizing their efforts to enhance the speed, efficiency and affordability of Internet communications. Such copyright liability will ultimately impair the rapid transfer of data over the Internet and will have a chilling effect on technological innovation with respect to the Internet in Canada. The result is both unwarranted and unacceptable given the increasing importance of this medium of communication in Canada and throughout the world." In particular, the applicants say the decision will "expand inappropriately the territorial reach of the (Copyright) Act to Internet content providers situated beyond Canada’s borders…" The Federal Court of Appeal ruling stated that communications of copyright material originating from outside Canada were subject to tariff. More importantly, say observers, the Federal Court was also wrong to rule that caching activities are subject to a tariff, since, as the justices ruled, caching falls within the scope of ISPs’ control, eliminating those activities from the exemption provided to other telecommunications services. But, say several Internet experts in affidavits filed with the leave to appeal application, the appeal court’s decision ignores fundamental elements of how the Internet works. Affidavit’s to this effect were filed by CAIP president Jay Thomson, author Jim Carroll, and Eric Carroll (no relation), managing partner of Tekton Internet Associates Inc. In his submission, Eric Caroll, a longtime expert on network design and a founder of iSTAR internet Inc., writes: "If, as a result of the Federal Court of Appeal’s decision, ISPs must face an undefined (but likely very large) copyright liability if they continue to use caching servers, many will no doubt have no choice but to stop using those servers. "This could cause very significant harm, not only to ISPs, but also to Internet users throughout Canada and to the Canadian economy at large. Canada has to date been a leader on the Internet, thanks in no small part to the wide availability of high-speed access to the Internet. As the scope of the Internet and the content available on it continues to expand, it is essential to constantly improve the infrastructure of the Internet so that it does not grind to a halt. Caching has been one very important improvement to the Internet’s infrastructure since it was first developed over twenty years ago." An affidavit filed with the leave to appeal by Michael Geist, law professor at the University of Ottawa and an Internet regulatory expert, focuses the issue of territoriality. In his submission, Geist says competing decisions on the issue of territory and the Internet have made it paramount that the highest court renders its opinion. "The policy rationale for increased certainty in determining the location of transborder copyright communications is to permit all Internet participants to make informed and rational choices about potential liability that may stem from Internet-based conduct," Geist writes. "The differing approaches taken by this Court or by other courts in Canada and in other jurisdictions creates confusion that requires swift clarification and guidance from this Court." In one other major area of argument, the applicants also assert that the court needs to settle the question of standard of review for Copyright Board decisions. The Federal Court’s decision that the Copyright Board had to be "correct" in its decisions – legalese for the determination that the higher court can overturn board decisions on the basis of whether or not it agrees with them – has proven contentious. When determining a standard of review, the Federal Court of Appeal has the option of deferring to the Board on the basis of its greater expertise – something it didn’t do in the Tariff 22 decision. The result, say the applicants, is that the appeal court has introduced a new element of uncertainty into future proceedings. According to their statement of fact, the move upends precedent established in cases such as AVS Technologies Inc. v. Canadian Mechanical Reproduction Rights Agency. The applicants note: "This unresolved issue is of critical importance having regard to the fact that the Court of Appeal is called upon, on a frequent basis, to review decisions of the Board…The Board is a primary and important source for interpretation of the scope of rights granted under the Act. It is therefore important for this Court to settle the conflicting standards of review that have been applied by the Court of Appeal in recent cases." In fact, the Federal Court of Appeal’s decision may prove controversial enough to convince the Copyright Board itself to weigh in with its own opinion. CCTA senior counsel Jay Kerr-Wilson tells Canadian NEW MEDIA he believes the board will submit its own request to be heard on the matter by the deadline for doing so at the end of the month. If that comes about, it would be a highly unusual move for the tribunal to seek to overturn a higher body’s decision on standard of review. Board counsel Mario Bouchard won’t comment on its intentions, saying only that observers will have to wait until the end of the month to know whether it will join the fray or not. For its part, SOCAN is also staying mum on the leave to appeal, except to confirm that it will launch a cross-appeal by the deadline. Says Paul Spurgeon, the collective’s in-house legal counsel: "SOCAN is studying their application, their leave to appeal, and it’s really premature at this time to speak to it. We are going to be filing a cross-appeal, which is in response to what they are saying. We obviously believe that this is an important issue, and we’re not disputing that this whole issue of the Internet is important. But, obviously, we are going to cross-appeal and I can’t say anything much more than that for the simple fact that we have several days – 30 days, in fact, from the day of the filing – to respond."

Copyright Board, SOCAN expected to weigh in on Tariff 22 leave to appeal

Broadcast | August 21, 2002

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