Society of Composers, Authors and Music Publishers of Canada v Bell Canada

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Society of Composers, Authors and Music Publishers of Canada v. Bell Canada
Supreme court of Canada in summer.jpg
Hearing: December 6, 2011
Judgment: July 12, 2012
Citations 2012 SCC 36
Prior historyAppeal from the Federal Court of Appeal, 2010 FCA 123
RulingAppeal dismissed.
Court membership
Chief Justice: Beverley McLachlin
Puisne Justices: Louis LeBel, Marie Deschamps, Morris Fish, Rosalie Abella, Marshall Rothstein, Thomas Cromwell, Michael Moldaver, Andromache Karakatsanis
Reasons given
Unanimous reasons byAbella J

Society of Composers, Authors and Music Publishers of Canada (SOCAN) v. Bell Canada, 2012 SCC 36, is a leading Canadian case on the application of fair dealing under s. 29 of the Copyright Act. It pertained to the use of previews of musical works on online music services that sell digital files of musical works.

Contents

Background and facts

SOCAN is the collective society in Canada representing the administration and collection of royalties for the performance and communication rights of composers, authors and music publishers. [1] Bell Canada, Apple Canada, Rogers Communications, Rogers Wireless Partnership, Shaw Cablesystems G.P., and TELUS Communications Inc. operate online music services that sell downloads of digital files of musical works. [2] These service providers allow consumers to listen to free 30–90 second previews for those musical works before making a purchase. [3] These previews constitute an online stream (i.e. a temporary transmission of an excerpt of the musical work). The consumer's computer does not store a permanent copy of the preview, but consumers can listen to the previews as many times as they want, regardless of whether they make a purchase or have registered with the online service provider. [4] SOCAN filed proposed tariffs with the Copyright Board of Canada for the determination of royalties to be paid by users when musical works are communicated to the public over the Internet. [5]

In its decision released on October 18, 2007, the Copyright Board agreed that SOCAN is entitled to royalties for the downloading of musical works, but not for previews, since previews constitute fair dealing for the purpose of research under s.29 of the Copyright Act and thus do not amount to copyright infringement. [6] The Federal Court of Appeal upheld the Copyright Board's decision. [7] SOCAN appealed to the Supreme Court of Canada.

Issue

The issue addressed was whether allowing consumers to preview musical works before making a purchase on commercial websites that sell music constitutes “fair dealing” under s.29 of the Copyright Act. [8]

Holding

The Supreme Court of Canada unanimously upheld the Copyright Board's decision that the use of previews of musical works on commercial music websites amounts to fair dealing under s.29 of the Copyright Act. Therefore, these previews do not entitle SOCAN to royalties.

Reasons of the Court

The Court applied the test for fair dealing set out in CCH Canadian Ltd. v. Law Society of Upper Canada , [2004] 1 SCR 339. [9] It reaffirmed that fair dealing must not be interpreted restrictively, because allowing users to engage in some activities that would otherwise constitute copyright infringement supports the achievement of the proper balance, set out in Théberge v. Galerie d'Art du Petit Champlain Inc. , 2002 SCC 34, between promoting the public interest in the encouragement and dissemination of works (access) and obtaining a just reward for the creator (protection). [10]

The first stage of the fair dealing analysis requires that the previews be for the purpose of research, private study, criticism, review or news reporting. [11] The Court clarified that it is the perspective of the user of the preview, not that of the online service provider, that is relevant at this stage of the inquiry, as fair dealing is a user's right. [12] It also confirmed that the first stage of the analysis constitutes a relatively low threshold, so that the in-depth analysis takes place at the second stage when determining whether the dealing is fair. [13]

The Court concluded that the consumers' use of previews of musical works constitutes research, with respect to authenticity and quality, for the purpose of identifying which songs to purchase and therefore satisfies the first step of the fair dealing inquiry. [14] It specified that "research" should be given a "large and liberal interpretation to ensure that users' rights are not unduly constrained" [15] such that "research" is not limited to research for creative purposes, but can include many activities that do not require establishment of new facts or conclusions. Research can be piecemeal, informal, explanatory, confirmatory and simply for personal interest. [16]

The second stage of the fair dealing analysis requires a determination, with the guidance of six factors from CCH, of whether the use of the previews was fair. As these six factors demonstrated that the use of online previews of musical works was fair, the Court found that the second stage of the test for fair dealing was also satisfied. [17]

(i) objective assessment of the purpose behind the use of the copyrighted work

The Court concluded that the purpose behind the use of the previews is to facilitate consumer research. As there are reasonable safeguards to ensure that previews are actually used for this purpose, rather than to replace song itself (e.g. previews are shorter, of lower quality and constitute temporary not permanent copies), it held that this factor still favored fairness even though the research was for a commercial purpose.

(ii) the character of the dealing

The Court found that this factor favored fairness, even though users could listen to the previews as many times as they liked, because no copy of the preview existed for the user after it was heard and multiple copies of the work were not widely distributed.

(iii) the amount of the work taken

The Court assessed the length of the preview in relation to the length of the song and determined that a thirty-second excerpt of a four-minute song constituted a modest dealing and thus favored fairness. The Court rejected SOCAN's argument that this factor should be assessed based on the aggregate amount of previews, rather than the amount of each preview in relation to the whole work. Given the ease and magnitude with which digital works are disseminated over the Internet, focusing on the aggregate amount of the dealing in cases involving digital works would lead to disproportionate findings of unfairness when compared with non-digital works. Such an interpretation would undermine the goal of technological neutrality in copyright law.

(iv) existence of alternatives to the dealing

The Court decided that, since there are no other alternatives for allowing consumers to actually hear what a musical work sounds like and since allowing returns of songs is an expensive, complicated and market-inhibiting alternative to helping users identify the right music, previews of songs are "reasonably necessary" to achieve the ultimate consumer research purpose.

(v) nature of the work:should it be widely disseminated

The parties did not dispute the desirability of the sale and dissemination of musical works. The Court concluded that previews support the purchase and dissemination of songs by facilitating potential consumers' identification of musical works they want to buy, so this factor also supported the fairness of the dealing.

(vi) effect of the dealing on the work : does it compete with or adversely affect the original work?

The Court held that previews do not adversely affect the musical works. If anything, they have a positive effect because they encourage the purchase of songs. The Court also determined that previews do not compete with the musical work because they are shorter, of lower quality and are only temporary streamed copies rather than permanent downloaded copies.

Reception and Aftermath

Also released on July 12, 2012, Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright) [18] cited SOCAN v. Bell Canada with approval for the propositions that: 1) fair dealing enables user to engage in activities that might otherwise amount to copyright infringement, [19] 2) that fair dealing is a user's right and the relevant perspective at the first stage of the test is that of the user, [20] and 3) that the "amount" factor is not a quantitative assessment based on aggregate use, but rather an examination of the proportion between the excerpted copy and the entire work. [21]

On January 16, 2013, the Copyright Board in Society for Reproduction Rights of Authors, Composers and Publishers in Canada v. Canadian Broadcasting Corp. considered SOCAN v. Bell Canada as having "clarified the Canadian concept of fair dealing, with material consequences in this instance". [22]

SOCAN v. Bell Canada has been interpreted as having "reassess[ed] old shibboleths" and "reorient[ed]" legal understandings" with respect to copyright. [23] Furthermore, its emphasis that fair dealing is a user's right that must interpreted liberally, rather than as a narrow exception "to be grudgingly conceded", has been cited as a basis for why either the American open-ended fair use doctrine or an expanded list of enumerated user rights under s.29 should be adopted in Canada. [24]

Other scholars have deemed the "lasting significance" of SOCAN v. Bell Canada to be its adoption of an expansive definition of "research" under s.29 and its rejection of SOCAN's argument that the music previews simply constitute a search, not research. [25]

Related Research Articles

Fair use is a doctrine in the law of the United States that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to balance the interests of copyright holders with the public interest in the wider distribution and use of creative works by allowing as a defense to copyright infringement claims certain limited uses that might otherwise be considered infringement. Unlike "fair dealing" rights that exist in most countries with a British legal history, the fair use right is a general exception that applies to all different kinds of uses with all types of works and turns on a flexible proportionality test that examines the purpose of the use, the amount used, and the impact on the market of the original work.

The copyright law of Canada governs the legally enforceable rights to creative and artistic works under the laws of Canada. Canada passed its first colonial copyright statute in 1832 but was subject to imperial copyright law established by Britain until 1921. Current copyright law was established by the Copyright Act of Canada which was first passed in 1921 and substantially amended in 1988, 1997, and 2012. All powers to legislate copyright law are in the jurisdiction of the Parliament of Canada by virtue of section 91(23) of the Constitution Act, 1867.

<i>Théberge v Galerie dArt du Petit Champlain Inc</i>

Théberge v Galerie d'Art du Petit Champlain Inc[2002] 2 S.C.R. 336, 2002 SCC 34 is one of the Supreme Court of Canada's leading cases on copyright law. This case interprets the meaning of "reproduction" within the Copyright Act of Canada, and touches on the moral rights to copyrighted material and how much control an author has over his work once it is in the hands of a third party.

<i>CCH Canadian Ltd v Law Society of Upper Canada</i>

CCH Canadian Ltd v Law Society of Upper Canada, [2004] 1 SCR 339, 2004 SCC 13 is a landmark Supreme Court of Canada case that established the threshold of originality and the bounds of fair dealing in Canadian copyright law. A group of publishers sued the Law Society of Upper Canada for copyright infringement for providing photocopy services to researchers. The Court unanimously held that the Law Society's practice fell within the bounds of fair dealing.

In United States copyright law, transformation is a possible justification that use of a copyrighted work may qualify as fair use, i.e., that a certain use of a work does not infringe its holder's copyright due to the public interest in the usage. Transformation is an important issue in deciding whether a use meets the first factor of the fair-use test, and is generally critical for determining whether a use is in fact fair, although no one factor is dispositive. Transformativeness is a characteristic of such derivative works that makes them transcend, or place in a new light, the underlying works on which they are based. In computer- and Internet-related works, the transformative characteristic of the later work is often that it provides the public with a benefit not previously available to it, which would otherwise remain unavailable. Such transformativeness weighs heavily in a fair use analysis and may excuse what seems a clear copyright infringement from liability.

Derivative work Expressive work created from a major part of a different, original artwork

In copyright law, a derivative work is an expressive creation that includes major copyrightable elements of an original, previously created first work. The derivative work becomes a second, separate work independent in form from the first. The transformation, modification or adaptation of the work must be substantial and bear its author's personality sufficiently to be original and thus protected by copyright. Translations, cinematic adaptations and musical arrangements are common types of derivative works.

Fair dealing is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. Fair dealing is found in many of the common law jurisdictions of the Commonwealth of Nations.

The copyright law of South Africa governs copyright, the right to control the use and distribution of artistic and creative works, in the Republic of South Africa. It is embodied in the Copyright Act, 1978 and its various amendment acts, and administered by the Companies and Intellectual Property Commission in the Department of Trade and Industry. As of March 2019 a major amendment to the law in the Copyright Amendment Bill has been approved by the South African Parliament and is awaiting signature by the President.

Fair dealing in United Kingdom law is a doctrine which provides an exception to United Kingdom copyright law, in cases where the copyright infringement is for the purposes of non-commercial research or study, criticism or review, or for the reporting of current events. More limited than the United States doctrine of fair use, fair dealing originates in Sections 29 and 30 of the Copyright, Designs and Patents Act 1988, and requires the infringer to show not only that their copying falls into one of the three fair dealing categories, but also that it is "fair" and, in some cases, that it contains sufficient acknowledgement for the original author. Factors when deciding the "fairness" of the copying can include the quantity of the work taken, whether it was previously published, the motives of the infringer and what the consequences of the infringement on the original author's returns for the copyrighted work will be.

In Canada, the Copyright Act provides a monopoly right to owners of copyrighted works. This implies no person can use the work without authorization or consent from the copyright owner. However, certain exceptions in the Act govern circumstances where a work will not be held to have been infringed.

Fixation in Canadian copyright law is a threshold consideration that must be used in copyright infringement cases by courts to determine if copyright actually exists.

Fair dealing is a statutory exception to copyright infringement, and is also referred to as a user's right. According to the Supreme Court of Canada, it is more than a simple defence; it is an integral part of the Copyright Act of Canada, providing balance between the rights of owners and users. To qualify under the fair dealing exception, the dealing must be for a purpose enumerated in sections 29, 29.1 or 29.2 of the Copyright Act of Canada, and the dealing must be considered fair as per the criteria established by the Supreme Court of Canada.

<i>Capitol Records, LLC v. ReDigi Inc.</i>

Capitol Records, LLC v. ReDigi Inc., 934 F. Supp. 2d 640 , is a case from the United States District Court for the Southern District of New York concerning copyright infringement of digital music. In ReDigi, record label Capitol Records claimed copyright infringement against ReDigi, a service that allows resale of digital music tracks originally purchased from the iTunes Store. Capitol Records' motion for a preliminary injunction against ReDigi was denied, and oral arguments were given on October 5, 2012.

<i>Euro-Excellence Inc v Kraft Canada Inc</i>

Euro-Excellence Inc v Kraft Canada Inc, 2007 SCC 37, [2007] 3 S.C.R. 20, is a Supreme Court of Canada judgment on Canadian copyright law, specifically on the issue of indirect infringement and its application to parallel importation. Kraft Canada sued Euro-Excellence Inc. for copyright infringement due to their importation of Côte d’Or and Toblerone chocolate bars from Europe into Canada. A majority of the court found that the copyright claim could not succeed, although they split on whether the claim failed due to the rights of an exclusive licensee or due to the scope of copyright law.

<i>Hubbard v Vosper</i>

Hubbard v Vosper, [1972] 2 Q.B. 84, is a leading English copyright law case on the defence of fair dealing. The Church of Scientology sued a former member, Cyril Vosper, for copyright infringement due to the publication of a book, The Mind Benders, criticizing Scientology. The Church of Scientology alleged that the books contained material copied from books and documents written by L. Ron Hubbard, as well as containing confidential information pertaining to Scientology courses. Vosper successfully defended the claim under the fair dealing doctrine, with the Court of Appeal deciding unanimously in his favour. The judgment given by Lord Denning clarified the scope and content of the fair dealing defence.

<i>Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright)</i>

Alberta (Education) v Canadian Copyright Licensing Agency , 2012 SCC 37, is a Supreme Court of Canada case that considered whether the photocopying of textbook excerpts by teachers, on their own initiative, to distribute to students as part of course materials is fair dealing pursuant to the provisions of the Copyright Act. The Supreme Court, in a 5/4 split, concluded that the Copyright Board made several errors in its analysis of the "fairness factors". Thus, it allowed the appeal and remitted the matter back to the Copyright Board for reconsideration.

<i>Re:Sound v Motion Picture Theatre Assns of Canada</i>

Re:Sound v Motion Picture Theatre Assns of Canada, 2012 SCC 38, is a Supreme Court of Canada case that confirmed that pre-existing sound recordings accompanying a cinematographic work are part of a soundtrack and are therefore excluded from equitable remuneration under the Copyright Act of Canada. The decision was unanimous decided by the court on July 12, 2012.

<i>Entertainment Software Assn v. Society of Composers, Authors and Music Publishers of Canada</i>

Entertainment Software Ass'n v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, is a landmark Supreme Court of Canada judgement that clarified the nature of and relationship between, the bundle of rights created for copyright owners under section 3(1) of the Copyright Act of Canada. In particular, the Supreme Court considered the relationship between the reproduction and communication rights under the Copyright Act, and applied the principle of technological neutrality to hold that downloading a work engaged only the reproduction right, and not the communication right.

<i>Civic Chandran v. Ammini Amma</i>

Civic Chandran v. Ammini Amma is a landmark case in Indian copyright law decided by Kerala High Court in which the judgment held that even substantial copying of copyrighted work is permissible under the fair dealing exception, if the copying is in public interest.

References

  1. ↑ Society of Composers, Authors and Music Publishers of Canada (SOCAN) v. Bell Canada, 2012 SCC 36 at para 2
  2. ↑ SOCAN v. Bell at para 3
  3. ↑ SOCAN v. Bell at para 3
  4. ↑ SOCAN v. Bell at para 4
  5. ↑ SOCAN v. Bell at para 5
  6. ↑ SOCAN v. Bell at para 6
  7. ↑ SOCAN v. Bell at para 7
  8. ↑ SOCAN v. Bell at para 1
  9. ↑ SOCAN v. Bell at paras 13-50
  10. ↑ SOCAN v. Bell at paras 8-11
  11. ↑ SOCAN v. Bell at paras 12-13
  12. ↑ SOCAN v. Bell at paras 28-29
  13. ↑ SOCAN v. Bell at paras 27
  14. ↑ SOCAN v. Bell at paras 15-31
  15. ↑ SOCAN v. Bell at para 15
  16. ↑ SOCAN v. Bell at paras 21-22
  17. ↑ SOCAN v. Bell at paras 31-50
  18. ↑ Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37
  19. ↑ SOCAN v. Bell Canada at para 12
  20. ↑ SOCAN v. Bell Canada at para 30
  21. ↑ SOCAN v. Bell Canada at para 29
  22. ↑ Society for Reproduction Rights of Authors, Composers and Publishers in Canada v. Canadian Broadcasting Corp., 2013 CarswellNat 43 at para 7
  23. ↑ David Vaver, "Harmless Copying" (December 2012) 25 IPJ 19 at 21
  24. ↑ SOCAN v. Bell Canada at 22
  25. ↑ Bita Amani, "Access Copyright and the Proposed Model Licence Agreement: A Shakespearean Tragedy" (November 2012) 24 IPJ 221 at 236

Full text of Supreme Court of Canada decision available at LexUM and CanLII

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