The Copyright Modernization Act

COPYRIGHT MODERNIZATION ACT

Holy Copyright!

[The Copyright Modernization Act has changed copyright law in Canada]. On July 12th, 2012 the Supreme Court of Canada released its reasoning on five copyright cases that were argued in December 2011. The recent passing of the Copyright Modernization Act, along with what has been dubbed the “Copyright Pentalogy” (I think “Copyright Quintet” just sounds catchier) has simultaneously reshaped Canadian copyright law. What follows is a brief overview of the rules coming out of these cases and their implications.

Downloading is not a communication to the public”_ but streaming is

In Entertainment Software v SOCAN, the collective representing copyright holders of musical works sought to collect a licensing fee for downloaded purchases of video games that contained musical works.[i] This additional tariff for “communication to the public” was argued to be separate from the tariff already received for allowing the “reproduction” of music used in the game. The SCC took a technologically neutral stance by classifying the Internet as a “technological taxi.”[ii] It simply provides another way of distributing a single durable copy of a work to a user, much like at a retail store or through mail delivery. Copyright holders of music and other forms of creative work will not be able to collect two different revenue streams from the same activity.

Online streaming, of movies or music for instance, has been distinguished from downloading by the SCC as a series of repeated transmissions of the same work to different customers.[iii] This is the whole business model of streaming and is therefore quite different from purchasing downloadable files. As a result of Rogers Communication v SOCAN, SOCAN is entitled to a licensing fee for online streams.[iv] This decision taken together with Entertainment Software provides some predictability in revenue forecasts for entities offering creative works online.

Fair dealing will continue to have a “large and liberal interpretation”

The SCC upheld its broad interpretation of “fair dealing” from CCH v Law Society of Upper Canada in two of the five cases. Fair dealing, by the way, is an exception to copyright infringement for purposes of research, private study, criticism, review and news reporting. In assessing a fair dealing claim, the purpose of the infringement must fall within one of the enumerated categories. The “analytical heavy hitting”[v] comes in to determine whether the dealing is fair by looking at its purpose, character, amount, alternatives, nature and effect.[vi] In both cases, the court acknowledged that fair dealing is a user right and accordingly, a user’s perspective is to be considered in examining the purpose of the dealing. Also, it was clarified that the amount of the work is based on the proportion of the excerpted amount, with the aggregate amount of content considered under the character of the dealing.

SOCAN v Bell Canada has lowered the threshold for research to the point where it need not be for creative purposes.[vii] Here, free online music previews were held to be fair dealing for the purpose of research because consumers could use them as a means of researching whether they would purchase a particular song or album. The court’s conclusion was also supported by the streamed nature of previews, their much shorter length, reduced quality and the unlikelihood of them replacing the original work.

Similarly, the court in Alberta v Access Copyright considered the student’s perspective in assessing whether photocopies of literary works made by teachers for students was fair dealing.[viii] Access Copyright’s argument for “instruction” rather than “private study” was rejected. The court held that the teacher’s purpose, as a copier, is only relevant to the fairness analysis if the copier “hides behind the shield of the allowable purpose in order to engage in a separate one”[ix] “ñ such as commercial gain. The matter has been remitted back to the Copyright Board to reapply the CCH fairness factors.

Soundtracks are not “sound recordings” when presented as part a film or television program

Nothing groundbreaking here. The SCC simply stuck to the definition of “sound recording” in the Copyright Act.[x] The definition excludes soundtracks from being eligible to earn royalties when the music recording was performed while embedded in a cinematographic work.

 

CONCLUSION

And the winner by a score of 4 to 1 is”_

Users without a doubt. These decisions clearly reflect a shift in the copyright tightrope in favour of users at the expense of creators. Although the rights and revenue potential of copyright holders and collectives have been diminished, the new rules provide a bit more certainty for financial planning purposes. The full implication of these decisions and their interaction with the amended Copyright Act will probably take years to be felt, but one thing is certain, copyright law in Canada will never look quite the same.

*DISCLAIMER: While the information in this article reflects changes in the law, it is not to be relied upon as legal advice. This article is intended solely for informational purposes. Should any legal dispute arise, you should seek legal counsel.

by Marco Figliomeni


[i] Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] SCJ No 34.

[ii] Ibid at para 5.

[iii] Rogers Communications Inc v Society of Composers, Authors and Music Publishers, 2012 SCC 35, [2012] SCJ 35.

[iv] Ibid.

[v] Society of Composers, Authors and Music Publishers of Canada v Bell Canada, 2012 SCC 36 at para 27, [2012] SCJ No 36 [SOCAN v Bell].

[vi] CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13, [2004] SCJ No 12.

[vii] SOCAN v Bell, supra note 5 at para 22.

[viii] Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37, [2012] SCJ No 37.

[ix] Ibid.

[x] Copyright Act, RSC 1985, c C-42, s 2.

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