Some of the key particular themes of the Supreme Court of Canada’s landmark set of five simultaneous copyright rulings are:
- Collectives cannot assume that they will be entitled to an additional "layer" of remunerated rights every time there is a new method of delivery. Technological neutrality matters.
- The Court said what it meant and meant what is said in CCH v. LSUC in 2004 and will move forward from there - not be pushed backwards. Users have rights that must be given a "large and liberal interpretation". Copyright doesn't exist solely for collectives.
- Educators are in a "symbiotic" relationship with students and the Copyright Act serves the goal of education, which includes access to essential material. "Instruction and research/private study are, in the school context, tautological."
- Copyright law is both about "protection" and "access"
- Copyright law is about "dissemination"
- "Research" is not restricted to "creative purposes". Consumer research counts too. Research can even be for "personal interest". There is no absolute requirement for "transformative" use in Canada
- The user's purpose is the one that counts in fair dealing
- Practices that increase the sale of work cannot be said to have a negative impact on the work
- The concept "public" must be considered in light of new technology, technological neutrality and the purpose of the legislation. The fact that communication may be interactive on an individual basis does not mean that it cannot be considered to be to the "public"
- When the statute uses a word such as "excludes", it means it. The word is not superfluous.
- Parliament did not intend to "recognize a superior expertise of the Board relative to the courts with respect to legal questions arising under the Copyright Act". On copyright questions of "first instance", the Board will get no more deference that any court would get. In other words, the Board must be "correct". It will not be sufficient that it merely be "reasonable"
- The 1916 University of London case has firmly and finally been laid to rest on the issue of "private" study in Canada. It had a long and seriously misunderstood life in this country. Frankly, far too long. This is a key conclusion and I am pleased to note that Ariel Katz and I made this a key submission on what turned out to be a key issue in paras. 10ff our intervener factum.
- On the "standard of review" in fair dealing cases, Justice Abella for the majority stated that "Because the Board’s finding of unfairness was based on what was, in my respectful view, a misapplication of the CCH factors, its outcome was rendered unreasonable." As lawyers will know, that is a strong and significant statement that could have profound ramifications. It is a rare event when a reviewing court will find that the decision of a tribunal under review is "unreasonable". The message is clear. CCH is the law of the land in Canada. All concerned take notice.
- The Court seems to be rejecting attempts by collectives to overreach by seeking payment for activities
- simply because a technical reading of the act suggests that they can
- where such payment would add an unnecessary "layer" that offends technological neutrality
- where strained interpretation is urged upon old words based upon new technology
- It will be hard for collectives to refute a finding of fair dealing in the absence of any evidence of economic harm and especially where the dealing may actually help the sales of the work, and encourage "access" and "dissemination"
- The purpose of "users" is most important in determining fair dealing - whether it be in deciding what song to buy on iTunes or learning at all stages of education
- The Copyright Board will be held to the same standard of review as any court when it comes to legal questions of first instance. The Board will be under more rather than less judicial scrutiny in the future.
- Collectives will need to think more carefully about seeking controversial new "inaugural" tariffs
- Canada's Supreme Court will continue to look at foreign copyright jurisprudence - but will not hesitate to disregard it when warranted.
- A great day for education, innovation, user's rights, access, dissemination and that most over-used and frequently misused word in copyright conversation, namely "balance"
- The Supreme Court of Canada continues its "Magna Carta" achievement in CCH v. LSUC and to be at the centre of the world's stage as the leading forum for an enlightened and evolutionary yet cautious and reasoned common law approach to copyright.
- We have two new major decisions on fair dealing, penned by Justice Abella. These will be very important both in Canada and abroad for years to come.
- There were some thoughtful and important dissents, for example penned by Justice Rothstein in the K-12 decision and the ESA decision. (though he agreed with many of the important majority conclusions in K-12). These are constructive and useful. Some of the most important copyright decisions in history had strong dissents - for example the 1984 Sony Betamax decision in the US Supreme Court. These are not black and white issues. Nobody expected today to be the end of these debates.
- Today's decisions come at the perfect time to help us to deal with Bill C-11, once it is proclaimed.
- While Bill C-11, when proclaimed, may render the ruling on "communication" somewhat moot in a technical sense at least on a going forward basis, the overall message about layering and technological neutrality will survive and will need to be taken into consideration by the Board in the next inevitable attempt to add to the revenues of the collectives based upon the new "making available" right
- Today's K-12 decision will doubtless be the most controversial and important in the short, medium and long terms. In the short term, it completely undercuts any possible rationale for the AUCC model license deal and clearly raises the question of why AUCC couldn't have waited a few more weeks, when things could have realistically only gotten better than the results from below and both today's decision and the passage of Bill C-11 were about to unfold. Those institutions that have signed the AUCC model license are presumably locked in until the end of 2015. The UofT/UWO licenses at least had the virtue of a much shorter minimum term - namely until the end of 2013.
- A proud day for Canadian law and, indeed, for Canada
Here are the specific results from the SCC’s unique five at once set of rulings on Canadian copyright law:
Per McLachlin C.J. and Deschamps, Abella, Moldaver and Karakatsanis JJ.: The Copyright 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) of the Copyright Act should be set aside.
The Board’s conclusion that a separate, “communication” tariff applies to downloads of musical works violates the principle of technological neutrality. This principle requires that the Act apply equally between traditional and more technologically advanced media forms. There is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. ESA has already paid reproduction royalties to the copyright owners for the video games. Absent evidence of Parliamentary intent to the contrary, we interpret the Act in a way that avoids imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user. To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies. The Internet should be seen as a technological taxi that delivers a durable copy of the same work to the end user. The traditional balance in copyright between promoting the public interest in the encouragement and dissemination of works and obtaining a just reward for the creators of those works should be preserved in the digital environment.
The term “communicate” in s. 3(1)(f) is not defined in the Act, but the legislative history of the Act demonstrates that the right to “communicate” is historically connected to the right to perform a work and not the right to reproduce permanent copies of the work. The 1988 amendment in the Act from “communicate . . . by radio communication” to “communicate . . . by telecommunication” does not demonstrate Parliament’s intent to remove all reference in s. 3(1)(f) to conventional performance or broadcasting activities, or to expand the communication right to technologies such as downloading that involve transmitting data in a way that gives end users a permanent copy of the work. Instead, the replacement of the words “radio communication” with “telecommunication” should be understood as merely expanding the means of communicating a work — that is, from radio waves to cable and other future technologies. By substituting the word “telecommunication” in 1988, Parliament did not intend to change the fundamental nature of the communication right, which has been concerned with performance-based activities for over 50 years.
Applying the dictionary definition of the word “communicate” has the effect of ignoring a solid line of legislative history connecting the term “communicate” to performance-based activities. The term “communicate” in s. 3(1)(f) should not be transformed by the use of the word “telecommunication” in a way that would capture activities that resemble reproduction. Such transformation would result in abandoning the traditional distinction in the Act between performance‑based rights and rights of reproduction.
“Research” need not be for creative purposes only. Permitting only creative purposes to qualify as “research” would ignore the fact that one of the objectives of the Copyright Act is the dissemination of the works themselves. Limiting “research” to creative purposes would also run counter to the ordinary meaning of “research”, which includes many activities that do not require the
establishment of new facts or conclusions. The fair dealing exception must not be interpreted restrictively and “research” must be given a large and liberal interpretation.
The inquiry then moves to the second step set out in CCH, namely, determining whether the use of previews was “fair”. The factors to be considered in determining whether a dealing is fair are the purpose, character, and amount of the dealing; the existence of any alternatives to the dealing; the nature of the work; and the effect of the dealing on the work.
The Board properly concluded that previews constituted fair dealing. The guiding perspective is that of the ultimate user or consumer. The service providers facilitate the research purposes of the consumers. There are reasonable safeguards in place to ensure that the previews are being used for this purpose.
With respect to the character of the dealing, users do not keep a permanent copy of the preview, since the file is streamed and automatically deleted from the user’s computer once the preview is heard. As a result, copies cannot be duplicated or further disseminated.
The “amount of the dealing” factor should not be assessed on the basis of the aggregate number of previews that are streamed by consumers. This factor should be assessed by looking at the proportion of the preview in relation to the whole work,
not the aggregate amount of music heard through previews. Streaming a preview of several seconds is a modest amount when compared to the whole work.
Under the remaining factors, there are no alternatives to the dealing that as effectively demonstrate to a consumer what a musical work sounds like. Previews are therefore reasonably necessary to help consumers research what to purchase. Unless a potential customer can locate and identify the work he or she wants to buy, the work will not be disseminated. Short, low-quality previews do not compete with, or adversely affect, the downloading of the works themselves. Instead, their effect is to increase the sale and dissemination of copyrighted musical works.
The previews therefore constitute fair dealing under the Copyright Act.
The Copyright Board’s approach to the “amount of the dealing” factor was also flawed. Having found that teachers only copied short excerpts of each textbook, the Board was required to determine whether the proportion of each of the short excerpts in relation to the whole work was fair. This factor is not a quantitative assessment based on aggregate use, but an examination of the proportion between the excerpted copy and the entire work.
With respect to the “alternatives to the dealing” factor, contrary to the Copyright Board’s conclusion, buying books for every student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks. Purchasing a greater number of original textbooks to distribute to students is unreasonable in light of the Board’s finding that teachers only photocopy short excerpts to complement existing textbooks.
As for the “effect of the dealing on the work” factor, there was no evidence of a link between photocopying short excerpts and a decline in textbook
sales. There were several factors, in fact, other than photocopying, that were more likely to have contributed to any such decline. Moreover, the Board’s finding that the teachers’ copying was limited to short excerpts of complementary texts, makes it difficult to see how the teachers’ copying competes with the market for textbooks.
The Copyright Board’s decision as to whether the photocopies amount to fair dealing is to be reviewed on a reasonableness standard. Because its finding of unfairness was based on a misapplication of the CCH factors, its outcome was unreasonable.
The provisions in question must be read in their entire context, in their grammatical and ordinary sense, and harmoniously with the scheme and object of the Act, and consistently with the words chosen by Parliament. According to s. 2 of the Act, a “sound recording” is a recording consisting of sounds “but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work.” Therefore, a “soundtrack” is a “sound recording” except when it accompanies the motion picture. Otherwise, the exclusion would be superfluous. For a pre‑existing sound recording to be excluded from the interpretation of “soundtrack”, Parliament would have had to make that intention explicit in the Act. This could have been achieved by excluding, for example, only “the aggregate of sounds in a soundtrack”. Legislative history confirms this interpretation, notably comments made at the Standing Committee on Canadian Heritage hearing with respect to the provisions at issue.
The Copyright Act is not incompatible with the Rome Convention. Although the Rome Convention states that producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms, Article 3 defines “phonogram” as “any exclusively aural fixation of sounds of a performance or of other sounds”. A soundtrack that accompanies a cinematographic work is not for “exclusively aural fixations”. Furthermore, if a pre‑existing sound recording is extracted from a soundtrack accompanying a cinematographic work, it once again attracts the protection offered to sound recordings. The Board’s interpretation is consonant with Canada’s obligations under the Rome Convention.