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Narrowing the Sole Rights of Copyright Owners

The summer of 2012 was significant for developments in Canadian copyright law.

First, the much debated amendments to the Copyright Act were finally passed and received Royal Assent on June 29, 2012. They will come into force on a day to be fixed by cabinet. Given that these amendments have not yet come into force, we will leave them for discussion in a future issue.

Next, on July 12, 2012, the Supreme Court released decisions in five related copyright cases argued before it at the same time. These decisions have become known as the "copyright pentalogy". Although they represent incremental rather than radical change, the pentalogy does decidedly narrow the rights of copyright owners and correspondingly reduce the obligations of users.

Fair Dealing

In Canada, limited dealing with copyright protected works is permitted for specified purposes without infringing copyright. The identified purposes under the current Act include: (a) research and private study; (b) criticism and review; and (c) news reporting. The following factors are considered to determine whether the dealing will be considered "fair":

  • whether the number of copies is reasonable;
  • whether a proportional part of the work is copied;
  • whether the part of the work that is copied represents the substance of the entire work;
  • whether there are realistic alternatives to access the work; and
  • whether the copies will compete with sales of the original work.

In SOCAN v. Bell, it was held that making available to consumers short streamed previews of musical works constitutes fair dealing for which no royalties are due from Internet retailers. In Alberta v. Access Copyright, it was held that the reproduction of brief extracts from texts by teachers for distribution to students constitutes fair dealing for which no royalties are due from educational institutions.

In other words, the court recognized that everyday consumer research will qualify as "research" under the Act and that it is the purpose of the end user which determines whether a particular use qualifies as fair dealing and not the purpose of intermediaries such as retailer or teachers. This expanded recognition of fair dealing will most directly benefit the many educators and businesses which deliver services via the Internet by implicitly authorizing the fragmentary use of works such as thumbnails of photos, sampling of music and snippets of film when used by the end consumer for an authorized purpose.

Technological Neutrality

The principal of technological neutrality was critical to the outcome of two other cases. This principle requires that the Copyright Act apply equally notwithstanding the technological diversity of different forms of media.

In ESA/C v. SOCAN, the court held that there is no practical difference between buying a durable copy of a video game in traditional retail channels and downloading a permanent digital copy of the same game via the Internet. As a result, it refused to require the payment of an additional royalty for the transmission of permanent downloads via the Internet. In its opinion, a so-called "communication" royalty is due only for transmissions akin to a live performance or television broadcast. Since downloads are not viewed during transmission, they do not infringe upon the copyright owners' exclusive right to communicate the work to the public and, consequently, do not attract a "communication royalty".

In Rogers v. SOCAN, the court held that there is no practical difference between a cable television broadcast to the public and making content available to the public by streaming temporary files for viewing via the Internet. It rejected arguments that such streaming services are not communications "to the public" since they are private transmissions initiated by the consumer. Instead, it found that streaming temporary files is akin to a live performance or television broadcast and that, in making the work available via the Internet, the work was effectively communicated to the public. As a result, the copyright owners' exclusive right to communicate the work to the public was infringed and a "communication royalty" is due for each streamed transmission.

Soundtrack v. Sound Recording

In Re: Sound v. MPTAC, a copyright collective sought payment of performance royalties for any pre-existing sound recordings that are incorporated into the soundtrack for a film whenever the film is performed in public. However, the Copyright Act, specifically defines a "sound recording" to exclude "any soundtrack of a cinematographic work when it accompanies the cinematographic work". The court rejected arguments that a "soundtrack" refers only to the aggregate of sounds that accompanies a film and not to its constituent elements.

Conclusion

The pentalogy is consistent with the Supreme Court's earlier decision in CCH v. LSUC which stated that user rights are to be given a "large and liberal interpretation". The natural outcome of that seminal case is a significant narrowing of the rights previously enjoyed by copyright owners.

The pending amendments of the Copyright Act will, in some respects, continue that trend by expanding the eligible purposes for fair dealing to include education, parody and satire. In other respects, the amendments grant powerful new rights to copyright owners – most notably for the enforcement of so-called "digital locks". We will review these amendments in detail in a future issue.

 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.