All Things Newz
Law \ Legal

“Making Available” Is Not An Independent Copyright In Canada – Copyright

[ad_1]

The Supreme Court of Canada, in a decision of Justice Rowe, has
affirmed that there is no separate compensable right for
“making available” a work on the internet under the
Canadian Copyright Act. In Society of Composers, Authors and Music
Publishers of Canada v. Entertainment Software Association
,
2022 SCC 30
(SOCAN v ESA 2022), the Court overturned a
decision of the Copyright Board that would have permitted
additional royalties to be charged by collective societies when
works in their repertoire were made available on the
internet—regardless of how (or whether) the works were
ultimately accessed. In doing so, the Court confirmed that section
3(1) of the Act creates only three compensable
rights—reproduction, performance, or publication—and
that a single activity can only engage one of those three
interests. It also animated Canada’s treaty obligations to
protect on-demand streams and authors’ rights to control the
making available of their works via new technologies in concordance
with the Court’s general interpretative approach to domestic
copyright law.

The Court’s decision in SOCAN v ESA 2022 turned on
the interpretation of ss. 2.4(1.1). That subsection was introduced
to the Canadian Copyright Act in 2012:

For the 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.

For the majority of the Supreme Court, ss. 2.4(1.1) is simply a
definition. It clarifies when a work is considered “made
available” for the purposes of interpreting the performance
right of “communicat[ing] the work … by
telecommunication” under section 3(1)(f)—in this case,
that s. 3(1)(f) applies to on-demand streams. Section 2.4(1.1) thus
deems the work to be performed as soon as it is made available for
streaming—rather than when (or if) it is actually enjoyed by
the user. Consequently, the act of “making available”
does not create a new revenue stream for owners outside the
ultimate right engaged; a work made available for download engages
the “reproduction” right; a work made available for
streaming engages the “performance” right. Such
interpretation was found by the Court to comply with Canada’s
obligations under Article 8 of the 1996 WIPO Copyright
Treaty
(Can T.S. 2014 No. 20) which requires member countries
to give authors the exclusive right to control the act of making
works available.

SOCAN v ESA 2022 comes nearly 10 years to the
day of the Court’s release of its Copyright Pentalogy.
It is consistent with the interpretative approaches to Canadian
copyright law outlined in those five decisions and those that
followed (including last year’s York University v Canadian
Copyright Licensing Agency (Access Copyright)
, 2021 SCC 32).
Together, they affirm that the balance between creators and users
sits at the core of Canadian copyright law and that the principle
of “technological neutrality” is a key interpretive tool
to maintain that balance. When a work is made available via the
internet, “what matters is what the user received,
not how the user receives it”.

Background

The underlying decision on appeal in SOCAN v ESA 2022
arose from a 2020 decision of the Copyright Board
(“Board”) in a tariff proceeding. In that proceeding, the
Society of Composers, Authors and Music Publishers of Canada
(SOCAN)—a collective society administering owners’
reproduction rights—asked the Board to find that the
implementation of ss. 2.4(1.1) of the Copyright Act
created a new copyright that permitted SOCAN to collect an
additional set of royalties when works were made available for
download over the internet, in addition to the royalties SOCAN
would already collect for that download.

Of importance to SOCAN (and the Board), ss. 2.4(1.1) was
implemented mere days after the Copyright Pentalogy was
released. Two of the Pentalogy
decisions—Entertainment Software Association v Society of
Composers, Authors and Music Publishers of Canada
, 2012 SCC 34
(ESA 2012) and Rogers Communications Inc. v Society of
Composers, Authors and Music Publishers of Canada
, 2012 SCC 35
(Rogers 2012)—directly engaged with whether works
transmitted over the internet triggered the communication right
under s. 3(1)(f). Those cases determined that downloads did not
engage the s. 3(1)(f) right, while streams did, such that owners
could only charge one royalty when users accessed works as
downloads or streams. The Court did not consider ss. 2.4(1.1).

Before the Board, SOCAN argued that ss. 2.4(1.1) rendered
ESA 2012 (which concerned downloads) irrelevant. The new
provision thus obligated persons, such as online music services, to
pay royalties to SOCAN when they post musical works on their
Internet servers in a way that allows access to them by their
end-user customers, regardless of whether the works are later
transmitted to end-users by way of downloads, streams, or not at
all. The Board agreed, finding ss. 2.4(1.1) makes a work available
to the public via a communication to the public pursuant to ss.
3(1)(f), triggering a right to collect a tariff for that use. As a
result, SOCAN was entitled to collect royalties both for: (1) the
making the work available; and (2) any subsequent transmission or
download of the musical work.

On appeal, the Federal Court of Appeal quashed the Board’s
decision (Entertainment Software Assoc. v. Society
Composers
, 2020 FCA 100
). The Court
highlighted two general reasons why the Board’s decision could
not stand: (1) an unacceptable legislative interpretation that
failed to consider the Supreme Court’s reasoning in ESA
2012
and other earlier decisions that warned against
supplicative layers of regulation and fees that would cause
inefficiency and needless costs; and (2) a misapprehension of the
interrelationship between international law and domestic law that
essentially looked at the section of the 1996 WIPO Copyright
Treaty
involving the “making available” right,
asserted its view of that article’s meaning without any
supporting reasoning, and then made ss. 2.4(1.1) conform to its
view. While the Court declined to offer its own interpretation of
ss. 2.4(1.1)—since the parties did not make arguments on this
point—it suggested that ss. 2.4(1.1) does not create a new
exclusive right, and thus, there was only one right at play
(i.e., the communication to the public) that triggered
royalties.

SOCAN (and another affected collective society, Music Canada)
sought and were granted leave to appeal to the Supreme Court.

The Supreme Court’s Decision

The Court unanimously agreed to overturn the Board’s
decision; but split 7-2 in their reasons.

Writing for the majority, Justice Rowe applied a standard of
review of correctness. He found that the Board’s interpretation
of ss. 2.4(1.1) was inconsistent with the text, structure, and
purpose of the Copyright Act. Further, it ran contrary to
the Supreme Court’s decisions in ESA 2012 and
Rogers 2012 which remained good law. While acknowledging
that the 1996 WIPO Copyright Treaty provides important
context to the interpretation of ss. 2.4(1.1), Parliament reigns
supreme and domestic law governs: “The Court’s task is to
interpret what the legislature (federally and provincially) has
enacted and not subordinate this to what the federal executive has
agreed to internationally”.

While the Board’s interpretation of ss. 2.4(1.1) could allow
Canada to fulfil its Treaty obligations, it was not the required
interpretation, and did not adhere to the domestic approach to
copyright law. To be correct, the approach must examine the text
and structure of the Act—which the Court confirmed
creates only three compensable copyright interests—as well as
the purpose of the Act—which includes the principle
of technological neutrality. An approach to ss. 2.4(1.1) that
resulted in a work made available by stream being compensable as a
“performance” while a work made available for download
being compensable as a “reproduction”, with no additional
royalties attached to the means of distribution, would both adhere
to Canada’s Treaty obligations and respect these interpretive
principles.

With respect to the text and structure of the Copyright
Act
, Justice Rowe confirmed that there are only three
compensable copyright interests, all of which are found in the
preamble to section 3(1)—produce or reproduce a work in any
material form (i.e., reproduction), perform a work in public (i.e.,
performance), or publish an unpublished work (i.e., publication).
The remaining subsections, including the communication right in ss.
3(1)(f), are simply illustrative. A single activity engages only
one of these interests. Consequently, the key to assessing what
interest is engaged (and thus what royalties flow) is to examine
what the activity in question does to the copyrighted
work—does the user get limited access (a
“performance”) or a durable copy (a
“reproduction”)?:

While I accept that the act of “making a work
available” is a separate physical activity from the
act of a user downloading or streaming a work, it does not follow
that it is a separately compensable activity. Had
Parliament intended to treat the act of making available as a new
separately compensable activity, the way to do so would have been
to add “making available” as a fourth copyright interest
in the opening paragraph of s. 3(1), rather than as a modification
to the scope of s. 3(1)(f).

This approach also fulfills the principle of technological
neutrality underlying the purpose of the Copyright Act.
The Court identified two aspects to this principle: (1) that absent
parliamentary intent to the contrary, the Act should not
be interpreted in a way that either favours or discriminated
against any form of technology; and (2) that distributing
functionally equivalent works through old or new technology should
engage the same copyright interests.

In Justice Rowe’s eyes, the Board violated this principle by
interpreting ss. 2.4(1.1) as triggering an additional
royalty—and one that would not arise if the work were
accessed via traditional means: “Requiring that users pay
additional royalties based solely on the mode of a work’s
distribution violates the principle of technological
neutrality”. Technological neutrality helps achieve balance by
ensuring owners retain the same rights over works regardless of the
technological means used to distribute the works, while protecting
consumers from being penalized when they access a work through a
new technology.

The principle of technological neutrality is designed to operate
precisely in situations like the present case, where a novel
technology emerges that has no clear traditional equivalent. In
those circumstances, courts must look at what that new technology
does to the substance of the work by examining which, if any, of
the copyright interests in s.3(1) are engaged by this new method of
distributing a work. If that new technology gives users durable
copies of a work, the author’s reproduction right is engaged.
If the new technology gives users impermanent access to the work,
the author’s performance right is engaged. What matters is
what the user receives, not how the user receives
it.

With these principles in mind, the Court looked to Article 8 of
the 1996 WIPO Copyright Treaty, and how it might animate
the interpretation and application of ss. 2.4(1.1) and the
Copyright Act. Justice Rowe acknowledged that the Board
correctly concluded Article 8 requires member states give authors
the right to control the act of making works available, in addition
to any download/stream that may later occur; however, it did not
require such control result in a right to additional compensation.
Justice Rowe concluded that, at best, Article 8 simply functioned
to protect on-demand transmissions and give authors a right to
control over when and how their works are offered through such new
technologies. It did not dictate how to give effect to
such obligations.

Consequently, Justice Rowe found the correct interpretation of
ss. 2.4(1.1) (i.e., one that was consistent with its text,
structure, purpose, and context) to be one that clarifies the
communication right in section s.3(1)(f) applies to on-demand
streams, and that a work is deemed “performed” as soon as
it is made available for on-demand streaming:

This interpretation gives effect to Canada’s obligations
under art. 8 through a combination of the performance,
reproduction, and authorization rights in s. 3(1). In so doing, it
also respects the principle of technological neutrality as it
ensures that authors retain the same rights and royalties over
their works regardless of whether the works are distributed online
or offline.

However, it did not require that making the work available and
the user’s accessing the work be treated as separate
compensable performances. Section 2.4(1.1) clarified that these
acts were a single continuous activity:

The work is performed as soon as it is made available for
on-demand streaming. At this point, a royalty is payable. If a user
later experiences this performance by streaming the work, they are
experiencing an already ongoing performance, not starting a new
one. No separate royalty is payable at that point. … [T]he making
available of a stream and a stream by a user are both protected as
a single performance — a single communication to the
public.

Justice Rowe also found this overall approach respected
Canada’s Treaty obligations: “If a work is streamed or
made available for on-demand streaming, the author’s
performance right is engaged. If a work is downloaded, the
author’s reproduction right is engaged. If a work is made
available for downloading, the author’s right to authorize
reproductions is engaged. There are no gaps in
protection”.

In their concurring minority reasons, Justice Karakatsanis
(joined by Justice Martin) differed on the standard of review, and
instead applied “reasonableness”. Nevertheless, their
reasons for overturning the Board were essentially the same as
those of Justice Rowe—that ESA 2012 remained good
and binding law that required the Board to treat “making
available” as not a separate copy-right, and that the
Board’s approach failed to consider key interpretive tools to
ensure the Copyright Act balanced the interests of users
and creators and was applied in a technologically neutral
manner.

Takeaways

SOCAN v ESA 2022 clarifies that, at least for
consumer-facing distribution of works, the ultimate product or
experience obtained by the consumer is what dictates which
copyright interest (and thus what royalty) is engaged—the
technological method of distribution is irrelevant. More broadly,
it further entrenches the Court’s approach to copyright law
that has been developing over the last nearly 20 years as one that
reflects technological neutrality and balances owners’ and
users’ competing interests.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

[ad_2]

Source link

Related posts

European Commission Has Published The Revised Market Definition Notice – Economic Analysis

Equal Parts Science, Technology, And Intellectual Property Law – Patent

Electronic conveyancing in Queensland – Conveyancing