Ringtone tariff ruled invalid, but SOCAN can keep money

A tariff on downloaded ringtones for cellphones has been declared invalid, but the wireless carriers who challenged it were denied the $12 million in paid royalties they were seeking back from the Society of Composers, Authors and Music Publishers of Canada (SOCAN). A Federal Court decision issued Friday said carriers, including BCE Inc., Telus Corp., Rogers Communications Inc. and Quebecor Inc., were right when they argued that the downloading of music "does not constitute a communication of a musical work to the public," according to a summary on the court's website. As a result, Matthew Estabrooks, a lawyer who represented SOCAN in the case, said Tariff 24 on ringtones does not apply to time periods following Supreme Court decisions issued in July 2012 that ruled in favour of both Rogers and the Entertainment Software Association, in separate cases, in which SOCAN's right to other tariffs on downloaded music was overruled. The court, however, disagreed with the carriers’ that SOCAN was "unjustly enriched" as a result of Tariff 24, and denied their request for $12 million in returned payments. "Essentially, the court is saying that, putting aside the issues of the tariff and whether it's valid and whether ringtones count as communications to the public, the money paid to SOCAN pursuant to the tariff while it was valid should stay with SOCAN," Estabrooks said in a phone interview. "It wasn't unjust for SOCAN to collect that money and retain it." He added: "Ultimately, SOCAN was successful on this motion in the sense that the main relief the plaintiffs were seeking was denied to them." The court also said the Copyright Board of Canada was within its jurisdiction to certify Tariff 24 and that the carriers were not entitled to a tracing order to track where royalty payments in question have ended up. The court also said a 2010 agreement between SOCAN and the carriers on Tariff 24 did not prevent them from seeking relief in this case, and that a 2008 decision by the Supreme Court against the Canadian Wireless Telecommunications Association (CWTA) seeking leave to appeal Tariff 24 did not prevent future arguments against the royalty. Estabrooks added that the decision "leaves some areas of the law unsettled," and said it was too early to say whether an appeal from SOCAN on any aspect of Friday's ruling would be forthcoming. Jay Kerr-Wilson, one of the lawyers representing the carriers in this case, declined to comment, saying in an email he had not yet reviewed the decision with his clients. The case was heard in court last September, following its launch in November 2012. — With reporting by Derek Abma at dabma@thewirereport.caand editing by Anja Karadeglija at akarad@thewirereport.ca

Ringtone tariff ruled invalid, but SOCAN can keep money

Broadcast | March 9, 2015

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Ringtone tariff ruled invalid, but SOCAN can keep money

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