Federal court dismisses telecom carriers attempt to get SOCAN royalties back

Rogers Communications Inc., BCE Inc., and Quebecor Inc.’s collective bid to get back millions in royalties they say they paid to the Society of Composers, Authors and Music Publishers of Canada (SOCAN) for ringtones downloaded onto customers’ phones over 10 years has been dismissed by a federal court. The March 5 decision is part of a fight that goes back to 2012, when the companies, along with Telus Corp. at the time, filed the suit. In 2015, a federal court issued a decision saying the carriers were right when they argued that the downloading of music "does not constitute a communication of a musical work to the public,” ruling a tariff collected by SOCAN invalid. However, the court also disagreed with the carriers’ argument that SOCAN was "unjustly enriched" and denied their request for $12 million in returned payments. A federal court of appeal later dismissed both an appeal by the companies on that decision and as well as a related cross-appeal in early 2016. In the new decision this month focussed on the carriers’ demand that they be reimbursed, federal court judge Roger Lafrenière wrote that the issue appears to arise from the companies having paid royalties to SOCAN from November 2006 onward under the belief that if they objected to the royalties and the related tariff was ever deemed invalid, that SOCAN would return the payments. However, Lafrenière said he saw no evidence that SOCAN was aware or agreed to return the royalties under any circumstances. “It would be inequitable in the particular circumstance of this case to require SOCAN to return the ringtones royalties,” Lafrenière wrote in the decision. SOCAN had also filed a counterclaim seeking payment for ringtone royalties it claims Rogers, Bell, and Quebecor have refused to pay, which Lafrenière granted in part. The decision says SOCAN conceded that it isn’t entitled to collect royalties for any period after March 6, 2015, the date of the earlier federal court decision. Lafrenière therefore granted SOCAN’s counterclaim, awarding it royalties owed dating back before the tariff “expired,” Rogers, Bell, and Quebecor will therefore have to pay all outstanding royalties from July 12, 2012, to December 31, 2013, plus interest -- and granted SOCAN costs of $157,866.10. The decision does not break down how much royalties would amount to for that period. The royalty rate was 6 per cent from January 1, 2006, to June 30, 2009, and then reduced to 5 per cent for the period from July 1, 2009 to the end of the tariff's term on December 31, 2013. From November 2006 to July 2012, Rogers paid SOCAN over $4.2 million, Bell paid over $2.5 million, and Quebecor paid $14,786 in ringtone royalties. — Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Federal court dismisses telecom carriers attempt to get SOCAN royalties back

Broadcast | March 22, 2021

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Federal court dismisses telecom carriers attempt to get SOCAN royalties back

Broadcast | March 22, 2021

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