SCC Issues Rulings on Copyright Pentalogy

While lawyers and academics will surely be allocating a significant amount of short term resources to analyzing the SCC’s pentology of copyright decisions issued this morning, a quick look demonstrates a vindication of fair dealing, online innovation, technical neutrality and general common sense.

In brief and lacking any nuance, the Court’s decision in Entertainment Software Association v. SOCAN, 2012 SCC 34 seems to imply some interesting developments in copyright law:

Online distribution of video games should not be impeded with additional tariffs for musical works embedded in the games simply because the games are sold ‘by means of telecommunications’. The Court held that the communications right in section 3(1)(f) of the Copyright Act is a performance right, not a reproduction right, and should not be used to expand what is essentially a [n already compensated for] reproduction. The two are distinct. The definitional limiter on ‘reproduction’ is whether the reproduction amounts to a complete copy of the work or a “substantial’ part thereof. The limiter on ‘performance’ is whether the performance was ‘to the public’.

A ‘download’ is simply a reproduction and cannot amount to a ‘communication to the public via telecommunications’, although an online stream is more akin to a broadcast and might amount to one. In another of the pentology outcomes, Rogers v. SOCAN, 2012 SCC 35, Justice Rothstein clarifies that online point to point communications are indeed ‘to the public’, suggesting that at least some live streaming will be considered a ‘broadcast’ or ‘communication to the public via telecommunications’, even if point-to-point:

Focusing on each individual transmission loses sight of the true character of the communication activity in question and makes copyright protection dependant on technicalities of the alleged infringer’s chosen method of operation. Such an approach does not allow for principled copyright protection. Instead, it is necessary to consider the broader context to determine whether a given point-to-point transmission engages the exclusive right to communicate to the public. This is the only way to ensure that form does not prevail over substance. […]

…focusing the analysis on the recipient of a transmission rather than on the overall context of the communication produces results inconsistent with the true character of the communication. The facts of this case underscore the point. The Board found that “[d]ownloads are ‘targeted at an aggregation of individuals’” and are “offered to anyone with the appropriate device who is willing to comply with the terms” (para. 97). It is hardly possible to maintain that “there is no intention that the same work ever be transmitted again”.

In addition, the appellants’ proposed rule that each transmission be analyzed in isolation because each is initiated at the request of individual members of the public would have the effect of excluding all interactive communications from the scope of the copyright holder’s exclusive rights to communicate to the public and to authorize such communications. A stream is often effectuated at the request of the recipient. On-demand television allows viewers to request and view the desired program at the time of their choosing. By definition, on-demand communications — relating to the so-called “pull” technologies — are initiated at the request of the user, independently of any other user, and each individual transmission happens in a point-to-point manner. […]

CCH (SCC) determined that a “series of repeated … transmissions of the same work to numerous different recipients” may constitute a communication “to the public” within the meaning of s. 3(1)(f) of the Act (CCH (SCC), at para. 78). Where such a series of point-to-point communications of the same work to an aggregation of individuals is found to exist, it matters little for the purposes of copyright protection whether the members of the public receive the communication in the same or in different places, at the same or at different times or at their own or the sender’s initiative.

This would seem to capture your basic ‘YouTube’ scenario, where videos are posted with the understanding (or, at least, the aspiration) that they will be viewed by many, even if the actual viewing is on an individual by individual basis. It could lead to future confusion for Netflix-type models (is it a television? is it a video rental?). However, it would seem to exclude cloud streaming solutions (where content is stored in the cloud and accessed remotely by the individual who put it there — but not by the general public). It also, incidentally, is similar to the legislative approach adopted in S.C. 2010, c.-23, CASL.

The majority decision in ESA v. SOCAN (penned by Justice Abella and Moldaver) is also a strong vindication of the principle of technical neutrality. The Court drew on this principle, which is reflected in the legislative history of the Copyright Act, as well as in sub-section 3(1) of the Act:

In our view, the Board’s conclusion that a separate, “communication” tariff applied to downloads of musical works violates the principle of technological neutrality, which requires that the Copyright Act apply equally between traditional and more technologically advanced forms of the same media: Robertson v. Thomson Corp., [2006] 2 S.C.R. 363, at para. 49. The principle of technological neutrality is reflected in s. 3(1) of the Act, which describes a right to produce or reproduce a work “in any material form whatever”. In our view, 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. The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.

The fact that a technologically more efficient (but otherwise identical) distribution channel is used to distribute a work does not have any material impact on the activity being analyzed.

Perhaps most significant will be the Court’s treatment of the multiple, often overlapping, rights found under section 3(1) of the Act. The Court found that the individual rights enumerated under section 3(1) are not, in fact, separate rights. They are merely indicative instances of copyright infringements, while the scope of copyright law is defined in section 3(1)’s introductory paragraph:

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.

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.

One activity is one activity. It seems that unless there is both a reproduction and a performance, there is but one act that is salient under copyright law.

This may have serious repercussions for Canada’s copyright collectives, which tend to have independent oversight over specific rights under section 3(1)(f). Such repercussions should be viewed as positive, however, as it will prevent copyright collectives from imposing serious practical impediments on dealings with copyrighted works. As Justices Abella and Moldaver note:

Justice Rothstein argues (at para. 126) that the Board can avoid such “double-dipping” by copyright owners by adjusting the two fees in a way that “divides the pie” between the collective societies administering reproduction rights, on the one hand, and communication rights, on the other. However, this seems to us to undermine Parliament’s purpose in creating the collective societies in the first place, namely to efficiently manage and administer different copyrights under the Act. This inefficiency harms both end users and copyright owners:

When a single economic activity implicates more than one type of right and each type is administered by a separate collective, the multiplicity of licences required can lead to inefficiency. . . . The result is that the total price the user has to pay for all complements is too high . . . .

[T]he fragmentation of licences required for single activities among several monopolist-collectives generates inefficiencies, from which copyright owners as a whole also suffer. . . . 

 (Ariel Katz, “Commentary: Is Collective Administration of Copyrights Justified by the Economic Literature?”, in Marcel Boyer, Michael Trebilcock and David Vaver, eds., Competition Policy and Intellectual Property (2009), 449, at pp. 461-63)

Copyright collectives are there to increase the efficiency of copyright clearances, not to burden transactions with multiple clearance procedures and bargaining agents.

The Court’s definitional approach to ‘Copyright’ infringement (as well as its analysis of point-to-point communications in Rogers v. SOCAN) is also likely to have interesting repercussions for other, soon to be recognized rights such as the making available right.


  1. A couple of questions:

    i) Are the provisions interpreted by the SCC on fair dealing still in the Act after the amendments just passed? Is there anything in the amendments that will allow the content owners or collectives to reopen the case?

    ii) Is this decision legal grounds for those who have signed the recent (heavily criticized) licence agreement with Access Copyright to get out of it?