Copyright Board, Federal Court, reviewing C-11 ‘making available right’

Legal fights are under way in Ottawa over whether the Conservative government's new copyright bill creates a new right for the collection of online music royalties. In separate legal proceedings involving the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the copyright collective that would collect the royalty, the Copyright Board and the Federal Court are looking at the Copyright Act's new making available right and whether it extends SOCAN's communication right to cover streaming or download music services. “It's most likely that the Copyright Board will rule first,” a legal source familiar with the issue said on on a background basis. They said decisions on the issue from the board or the Federal Court are likely to be challenged, possibly to the Supreme Court, to settle the legal question raised by the bill. “I fully expect that no matter which way the board rules, somebody will seek to review that decision at the Federal Court of Appeal,” the person said. “There's a lot of money involved.” SOCAN collects royalties on the performance or “communication” of music, such as that in concerts, movies, radio and television broadcasts, and distributes them to copyright owners. For online music services, those tariffs would be collected in addition to a reproduction tariff for making copies, which is collected by other copyright societies. The Supreme Court's decision in Entertainment Software Association v. SOCAN, issued last July, said music rightsholders cannot charge communications royalties from online download services like Apple Inc.'s iTunes. SOCAN is now arguing in separate proceedings at the Copyright Board and the Federal Court that Bill C-11, which passed last year and introduced a new making available right in the Copyright Act, extends the group's communication right to cover online music and restores the royalty that the Supreme Court struck down. “The recognizes that a download now involves two separate acts protected by two separate rights: the act of making a work available, which is an act of communication; and the act of transmitting a permanent copy, which is an act of reproduction,” the copyright collective said in a submission to the Copyright Board this month. “Internet music services are liable to SOCAN when they post musical works on their Internet servers in a way that allows customers to have access to them from a place and at a time chosen by each customer, irrespective of whether the musical works are subsequently transmitted to end-users by way of downloads, streams or at all,” SOCAN said. At the Federal Court, SOCAN is fighting a case launched by Canadian mobile carriers for the return of $15 million in ringtone royalties following last year's Supreme Court decision that struck down the tariff. In that case, the copyright collective has said the making available right “restores SOCAN's right to collect royalties on downloads of ringtones." In a filing with the court this month by Rogers Communications Inc., Telus Corp., BCE Inc., and Quebecor Media Inc., the carriers said “no 'making available right was created by the virtue of the new subsection” added to the Copyright Act. “That subsection clarifies the scope of the existing public performance right. It does not alter or override the decision of the Supreme Court,” the carriers said. The Copyright Board is holding a proceeding on how to interpret the making available right in advance of a public hearing in November that will look at tariffs for online music services. In a notice issued Jan. 31, the board said companies and organizations permitted to participate in the proceeding include Apple, BCE, Rogers, Quebecor, Telus, YouTube LLC (owned by Google Inc.), and the Canadian Association of Broadcasters. Initial responses to SOCAN's submission are due May 3. In a post on his blog on March 8, Howard Knopf, a copyright lawyer in Ottawa with Macera & Jarzyna LLP, wrote that the Supreme Court decision last summer expressed concern about technological neutrality, and “'double dipping' and ensuring that collectives and tariffs serve to enhance economic efficiency rather than impede it.” Knopf said the Supreme Court decision should have “a profound effect on the increasingly complex layering and multiplicity of tariffs and collectives that had been occurring in Canada.” The Department of Heritage, in an email response to questions from The Wire Report, did not comment on whether the minister of heritage is concerned about the so-called "layering of rights" or whether the making available right should extend SOCAN's communication right to online music. Tim Warmington, a spokesman for the department, said in an email statement that Bill C-11 helps artists and creators protect their works and ensure fair compensation. “All copyright owners will now have a 'making available right,' which is an exclusive right to control the release of copyrighted material on the Internet,” Warmington said. “The copyright implications of making content available online is currently at issue in proceedings before the Copyright Board of Canada and thus I am not in a position to comment further.” According to a SOCAN projection of distributions for the first quarter of 2013, the collective will provide $46.1 million to its members for the quarter. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and copy editing by Nicholas Kyonka at nkyonka@thewirereport.ca

Copyright Board, Federal Court, reviewing C-11 ‘making available right’

Broadcast | March 22, 2013

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