Form Does Not Prevail Over Substance – SCC Finds Repeated Individual Online Musical Streaming a “Communication to the Public” under the Copyright Act

Published July 24th, 2012

Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35 (“Rogers”)

Summary – The Supreme Court of Canada (“SCC”) has found that online “streaming” of music is a “communication to the public” and therefore a protected right under the Copyright Act (the “Act”) that is subject to the tariffs of the Copyright Board the “Board”).  The Board was correct in its tariff allocation regarding streaming.  The substance of online streaming, although sent to individual users on demand (identified as “pull” technologies (para. 34)) was practically “targeted at an aggregation of individuals” (para. 25).  However, the Board was incorrect regarding musical “downloads” – the SCC held the download issue moot because it had already decided that downloads were not actionable “communications” in a concurrently released decision (para. 2)[1].  The majority in Rogers found the standard of review was correctness, notwithstanding the “deferential trend” advocated by the SCC in Dunsmuir v. New Brunswick, 2008 SCC 9 (“Dunsmuir”) (para. 11).  Madam Justice Abella gave a strong dissent that deference was owed to the Board such that a reasonable standard was applicable; she cautioned that courts should be careful to avoid “excessive and wrong-headed intervention” (para. 85).

Analysis – The SCC (per Rothstein J) found that the applicable section 3(1)(f) of the Act regarding a creator’s right to communicate to the public by telecommunication was “technology-neutral” (para. 37).  Rogers was wrong to focus on the technicalities of a musical stream as merely moving from one entity to another and therefore not “public”.  Repetitive streaming could easily be differentiated from an earlier SCC decision characterizing the single fax of reported cases from the law society library as outside the realm of section 3(1)(f) of the Act.[2]  It was clear that Rogers was unlikely to win on the streaming issue – its only argument was a clearly awkward interpretation of a problematic follow up finding in CCH that “… a series of repeated fax transmissions of the same work to numerous different recipients might constitute communication to the public” (para. 26).  Rogers argued that such repeated transmissions must be sent out all at once by a single act.  The SCC instead preferred the “common sense” approach it had already taken in 2008 when it held that individual ringtone downloads were communications to the public.  It was “illogical” to differentiate between individual downloads and one mass transmission – which was precisely what Rogers was attempting to do (paras. 27, 31).  Musical streaming was clearly “targeted at an aggregation of individuals” (paras. 25, 33) – in fact the “very raison d’être of online music services” is that an aggregate of consumers are expected to hear the work (para. 54).  The SCC referred to international developments (the Berne Convention and the 1996 WIPO Copyright Treaty which Canada has not yet adopted) as further support for its “broad interpretation” of section 3(1)(f) of the Act (para. 49).  The difference in wording of the US statute meant that US decisions were “of no assistance” (para. 51).

The majority decision spent a great deal of time reviewing the applicable standard of review, and found that a “correctness standard” applied to the Board because there was a “statutory scheme under which both a tribunal and a court may decide the same legal question at first instance” (para. 19).  The SCC refers to this as an “unusual statutory scheme” (para. 15), but later accepts that such concurrent jurisdiction in fact occurs in other intellectual property statutes, which the SCC leaves until such a case arises (para. 19).  The majority also found they had an extricable question of law to determine which again required a correctness standard (para. 20).  In dissent (only on the standard of review), Abella J was clearly concerned that the SCC was returning to its “pre-Dunsmuir” days of an “unduly interventionist approach” (para. 87).  “Applying a correctness standard of review on the sole basis that a court could potentially interpret the same statute effectively drains expert tribunals of the institutional deference they are owed.” (para. 60).  Arguably, the dissent approach is more practical as it recognizes the expertise that the Board has obtained from its “day to day” familiarity of its “home statute” as a “permanent resident” (paras. 64, 66, 68).  The court is merely an occasional occupant.  The dissent also criticized the majority’s artificial parsing out of the Board’s decision – instead the decision should properly be reviewed as a whole which is the standard practice of the SCC (paras. 78, 81, 84).

Practice Point –This is one of five decisions on copyright released by the SCC contemporaneously.  This decision highlights the SCC’s intention that the Act be interpreted broadly as technology develops to ensure authorship rights are protected.

The detailed standard of review analysis suggests that there may be strong arguments that deference is not owed to any administrative tribunals who have an intellectual property statute as their “home statute”.  The dissent discussed the fact that the Trade-mark Opposition Board has been granted deference despite concurrent jurisdiction over many issues like trade-mark confusion (paras. 70, 71).  One may expect that parties will challenge this traditional approach, using the Rogers decision.

 


[1] In Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34 (see our summary here), the SCC refused to permit tariffs based merely on the delivery method:  “ESA has already paid reproduction royalties to the copyright owners for the video games. … 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.”

[2] CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 (“CCH”)