SOCAN's Quest for a new "Making Available Right" Tariff at the Copyright Board in the Post ESA v. SOCAN and Post Bill C-11 World

As anyone who is interested in Canadian copyright knows, the Supreme Court of Canada ruled on July 12, 2012  in the decision in ESA v SOCAN  at the able behest of Barry Sookman that the “communication” right did not give rise to a separate right upon which the Copyright Board could certify a tariff with respect to the delivery of digital files of music for permanent download over the internet, i.e. the there could not be a valid tariff for the delivery of copies of works which were substitutes for the distribution of physical hardcopies on which performance royalties were not payable. As the Court stated:

[43]  In our view, therefore, the Board’s conclusion that the Internet delivery of a permanent copy of a video game containing musical works amounted to a “communication” under s. 3(1)(f) should be set aside.

The SCC was explicitly concerned with technological neutrality, avoidance of “double dipping” and ensuring that collectives and tariffs serve to enhance economic efficiency rather than impede it. The decision was based upon the statute in effect before Bill C-11 became law. The decision can be expected to have a profound effect on the increasingly complex layering and multiplicity of tariffs and collectives that had been occurring in Canada.

SOCAN is now taking the position that the new “making available right” (“MAR”), as SOCAN calls it, found in Section 2.4(1.1) of the Copyright Act now in force in the form of amendments resulting from the Copyright Modernization Act that came into force on November 7, 2012 creates a new right and warrants a new tariff.

The Copyright Board has called for submissions on this issue and SOCAN has now filed its memorandum of submissions and the expert opinion of Mihaly Ficsor. These are being posted now because of the important public interest aspect of this case.

To quote from SOCAN’s submission filed today with the Copyright Board:

SOCAN’s position is that, as a result of new section 2.4(1.1), Internet music services are liable to SOCAN when they post musical works on their Internet servers in a way that allows customers to have access to them from a place and at a time chosen by each customer, irrespective of whether the musical works are subsequently transmitted to end-users by way of downloads, streams or at all.

There are many interesting issues here. However, SOCAN will have to deal with the majority ruling in the ESA decision that:

[41] In our view, the Court in Bishop merely used this quote to emphasize that the rights enumerated in s. 3(1) are distinct.  Bishop does not stand for the proposition that a single activity (i.e., a download) can violate two separate rights at the same time.  This is clear from the quote in Ash v. Hutchinson, which refers to “two acts”.  In Bishop, for example, there were two activities: 1) the making of an ephemeral copy of the musical work in order to effect a broadcast, and 2) the actual broadcast of the work itself.  In this case, however, there is only one activity at issue: downloading a copy of a video game containing musical works.

[42]  Nor is the communication right in s. 3(1)(f) a sui generis right in addition to the general rights described in s. 3(1).  The introductory paragraph defines what constitutes “copyright”.  It states that copyright “means” the sole right to produce or reproduce a work in any material form, to perform a work in public, or to publish an unpublished work.  This definition of “copyright” is exhaustive, as the term “means” confines its scope.  The paragraph concludes by stating that copyright “includes” several other rights, set out in subsections (a) through (i).  As a result, the rights in the introductory paragraph provide the basic structure of copyright.  The enumerated rights listed in the subsequent subparagraphs are simply illustrative: Sunny Handa, Copyright Law in Canada(2002), at p. 195; see also Apple Computer Inc. v. Mackintosh Computers Ltd., [1987] 1 F.C. 173 (T.D.), at p. 197.  The rental rights in s. 3(1)(i) referred to by Justice Rothstein, for example, can fit comfortably into the general category of reproduction rights.(emphasis added)

I won’t comment further for the moment, since I (along with most other active copyright counsel in Canada) am involved in this case. The first round of responses to SOCAN’s submissions is due April 5, 2013.

HPK