More Multiplicity of Multiple Copyright Tariffs?

Last year, the Neighbouring Rights Coalition of Canada (“NRCC”) filed a proposed tariff that raised more than a few eyebrows. It seeks money from broadcasters for the communication to the public by telecommunication of sound recordings embodied in cinematographic works and from motion picture theatre operators for the performance in public of such recordings . SOCAN gets paid by these same folks for these same activities, So why would anyone object to the basis of the tariff for the NRCC? After all, NRCC has been playing catchup with SOCAN for years, and the Copyright Board has basically accepted that it can do so, subject to such inconvenient little details as the eligible repertoire requirement, which in theory keeps much of the neighbouring rights payments in Canada. Moreover, multiple tariffs for the same activity are nothing new in Canada.

The reason several major parties did a double take is that the definition of “sound recording” in the Copyright Act explicitly excludes a “soundtrack.”

The definition of “sound recording” is this:

"sound recording" means a recording, fixed in any material form, consisting of sounds, whether or not of a performance of a work, but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work;
(Emphasis added)

The definition of “cinematographic work” is this:

"cinematographic work" includes any work expressed by any process analogous to cinematography, whether or not accompanied by a soundtrack.

One might well ask “What part of the these definitions is not clear”?

The NRCC filed for a tariff, notwithstanding the above apparently clear wording. Despite the apparently clear wording, the Board published the proposed tariff, which forces parties to engage in a costly objection process. Some major parties have objected at the outset on the obvious jurisdictional basis that the definition of sound recording explicitly and clearly excludes the soundtrack in a cinematographic work.

In a procedure remarkably reminiscent of the “iPod tax” tariff case from 2007, the Board has required the parties to make submissions on this jurisdictional issue and to potentially hold an oral hearing to determine whether the tariff can proceed. The NRCC has filed a 30 page memo with references to law from the USA, UK and mostly Australia - and relatively little about Canada. Perhaps this is because the Canadian statute clearly speaks for itself in this instance. Interestingly, the Supreme Court of Canada has twice recently refused to follow Australian copyright precedents that were essential to the arguments being advanced by ultimately unsuccessful plaintiffs, notably in the CCH and Kraft cases. The Australian copyright statute is very different than Canada's. Although they descend from statutes that once were first cousins or maybe even siblings, the family resemblance between the recent generations of these two statutes is no longer easy to discern, following many legislated and judicial mutations.

Whatever the Board decides will likely end up in the Federal Court of Appeal (“FCA”), as it did in the “iPod Tax” decision, in which I was involved. Without specifically commenting on the merits of the NRCC position and the points in its memorandum, I will say that it is entirely possible that the FCA might be comparably "brusque" in this instance, if the Board decides that the hearing should go forward based on the NRCC arguments. Moreover, if NRCC is right in this case that its position is based on a “plain reading” of the Canadian statute, one wonders why it took eleven years to figure this out. The law that NRCC relies on came into force in 1997.

HK