Among the unanswered questions arising in the wake of the massive changes to the Canadian copyright landscape in 2012 is the issue of precisely how the two seismic forces at work (i.e., The Copyright Modernization Act and the Supreme Court’s “Copyright Pentalogy” cases) would interface with each other. While we’re not really any closer to having an answer to that question, in light of the recent filing of a statement of claim regarding “ringtone” tariffs, we might have just caught a glimpse of the battlefield on which the struggle over applying the conflicting elements of the CMA and the Pentalogy will be fought.
To put some meat on those bones: in the ESA/C v SOCAN (2012 SCC 34) decision, the Supreme Court of Canada held that a download of a musical work engaged the “reproduction right” in the musical work, but did not engage the “telecommunication to the public” right, which meant that SOCAN can not collect license fees pursuant to Tariff 22 in respect of downloads. The obvious implication of that decision is that it called into question SOCAN’s ability to collect license fees pursuant to other tariffs which had previously been certified and which were predicated on SOCAN being entitled to license fees on the basis that a “download” involved a “communication to the public”. But, as important as the impact on SOCAN’s tariffs might be, nestled in the heart of the ESA/C v SOCAN decision was something potentially even more profound. The Court asserted that “copyright” consists of three rights: (1) to produce or reproduce a work in any material form, (2) to perform a work in public, and (3) to publish an unpublished work. All the other “examples” set out in Section 3(1) of the Copyright Act (Canada) (which include translations, communication to the public, etc.) are merely illustrations of those three “core” copyrights. This appeared to work a rather drastic change to the traditional metaphor of copyright consisting of a “bundle of sticks” – instead of a multiplicity of “sticks”, there are evidently only three. Metaphors aren’t law, but they provide a mechanism for understanding and interpreting law, and previous understandings of how copyright functioned (or at least the understandings which underpinned the various tariffs which had been certified in respect of online activities) were premised on the notion that each of the multiplicity of sticks was a separate compensable right. If that has changed, and if there are really only three compensable copyrights, then that has much broader implications than simply knocking down some SOCAN tariffs.
In any event, we’ve seen this past week one outcome of the ESA/C v SOCAN decision: a group of mobile phone service providers are seeking to have SOCAN’s Tariff 24, which applies to the downloading of ringtones, eliminated because, they argue, the Supreme Court has said that SOCAN should not be collecting license fees in respect of downloads of musical works, whether they are contained in ringtones or otherwise. Because nothing about Canadian copyright law is ever straightforward, this fight is unfolding in two different venues: at the Copyright Board and in the Federal Court. (For background, see Barry Sookman and Howard Knopf.) The statement of claim filed in Federal Court is available online, as are various of the documents filed at the Copyright Board, including the phone provider application, the Board’s resulting order and SOCAN’s response to the application.
Fine – so far that’s (comparatively) straightforward: people subject to a SOCAN tariff are trying to use a Supreme Court decision about another tariff to knock down the one they don’t want to pay. But so far we’ve only talked about the Copyright Pentalogy – how does The Copyright Modernization Act (Bill C-11) come into play? Well, recall that the CMA introduced a new provision into the Copyright Act, colloquially referred to as the “making available” provision – new Section 2.4(1.1) of the Act states that:
“For purposes of this Act, communication of a work or other subject-matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.”
In the pre-ESA/C v SOCAN world, this seemed to look like an entirely new right – another “stick” in the bundle of sticks, so to speak. And in the pre-ESA/C v SOCAN world, that meant that rightsholders would be entitled to seek compensation for activities which engaged this new right. However, in the post-ESA/C v SOCAN world, it’s no longer clear that that conclusion holds: remember, the Supreme Court seems to have indicated that “communication to the public by telecommunication” is really just an example of the “perform in public” right, and so shouldn’t be viewed as a separate right giving rise to a separate revenue stream. If that interpretation of the Supreme Court’s reasoning in accurate, then that means that the “making available” right is… well, it’s not a new “right”, it’s just, at most, a further illustration of the “perform in public” right (i.e., the “making available” right is an illustration of the “telecommunicate to the public” right which is an illustration of the “perform in public” right).
But (and apologies for how long it took us to get here), it looks like SOCAN is willing to push back on that post-ESA/C v SOCAN interpretation. In SOCAN’s response to the mobile providers’ Copyright Board application (see page 10ff here), SOCAN is advancing the argument that the introduction of the “making available” right effectively pre-empts the result of the Supreme Court’s decision:
It is SOCAN’s position that with the coming into force of Bill C-11, the introduction of the [making available right ] re-establishes SOCAN’s right to require licenses – and the Board’s jurisdiction to certify tariffs – in respect of the downloading of musical works made available to the public in such a way that members of the public may access the musical works from a place and at a time individually chosen by them. This would cover ringtones and ringbacks, as well [as] videogames and full-length musical tracks. [emphasis added; from page 14 of the SOCAN response]
And there’s the heart of the matter: how do ESA/C v SOCAN and the CMA interact? Has the CMA effectively overruled the holding in ESA/C v SOCAN such that it has re-vivified SOCAN’s right to collect tariffs for downloads, just in the guise of the “making available” right rather than the “telecommunicate to the public” right? Or does the causality work in the other direction, meaning that ESA/C v SOCAN vitiates the impact of the introduction of the “making available” right, since it is simply a subordinate illustration of one of the three “sticks” of copyright law, and not itself a separate right which gives rise to a right of compensation?
We of course don’t have answers to those questions at this point – this dispute between Rogers et al and SOCAN simply provides the opportunity to see the opening salvo of what will likely be a long-running battle. But I think we’ve just caught a glimpse of what will be one of the enduring sources of friction in the world of Canadian copyright law over the next few years.