Copyright Act Amendments and Recent Supreme Court of Canada Copyright Cases

Introduction
 
After fifteen years and numerous attempts, the Copyright Act (the “Act”) was amended in June 2012. Then in July 2012 the Supreme Court of Canada (the “SCC”) handed down five significant Copyright Act decisions also known as the Pentalogy series of decisions.  Subsequent to July 2012, several other significant SCC cases were decided.  In addition, in April 2015 the Copyright Act was yet again amended.

I outline key amendments to the Act and briefly summarize the SCC copyright case decisions below.

I Copyright Act Amendments

1. One can now copy legally acquired copyright protected content from one format to another. For example, from a CD to your computer, or an iPod, but not if the content is protected by a digital lock. A digital lock means a technological measure such as encryption, or a digital signature used to restrict access to copying materials such as CDs, DVDs, e-books, digital files.

2. Provided the purpose is not to build up an archive or library, or for commercial use, one can record television, radio and Internet broadcasts, the purpose of which is to view them later on whatever device the consumer chooses; but not if the content is offered "on demand", or is protected by a digital lock.

3. One can make a backup copy of legally acquired copyright protected content, the purpose of which is to protect against loss or damage, but not if the content is protected by a digital lock.

4. Circumventing digital locks is prohibited. This applies even in the case where the circumvention would be for legal purposes, such as research or private study. The manufacture, importation of services and devices, the purpose of which is primarily to break digital locks, is also prohibited.

5. Three new fair dealing exemptions were added to the Act. Fair dealing exemptions allow the use of copyright protected works without the necessity of obtaining copyright licenses or paying licensing fees. Now in addition to the right to use copyright protected works for the purposes of criticism, review, research, private study and news reporting, fair dealing exemptions also include the use of copyright protected works for education, satire and parody purposes.

6. Radio broadcasters are no longer required to pay for making temporary reproductions of sound recordings for purposes of digital conversion.

7. Provided it is not done for commercial gain, one can now integrate legally acquired copyright content into one's user generated work. However, such practice cannot impact negatively the commercial market for the original copyright material, or negatively impact the artist's reputation.

8. The Act now distinguishes between commercial copyright infringement and copyright infringement by an individual. Individuals can be subject to monetary penalties of between $100 and $5000 for copyright infringement. The amount of $20,000 in potential monetary liability now applies in cases of commercial infringement of copyright.

9. An ISP must give notice to a customer/user of a violation of copyright if the copyright holder gives notice to the ISP that there is potential copyright infringement. The ISP must retain information about the customer / user, including their identity, which could be released pursuant to a court order. However, ISPs and search engines are exempt from liability resulting from the copyright infringement of their customers / users if they act only as intermediaries caching, communicating or hosting copyright materials.

10. Moral rights, which include integrity and paternity rights, accrue to creators of works. Such works now include performers’ performances. For more information on moral rights see: http://www.songwriters.ca/copyright101.aspx, for example.

11. Photographers now will be the first owner of the copyright in their photographs. This was not the case when photographs were commissioned prior to these most recent amendments.  Previously, in the absence of an agreement to the contrary, the commissioner of a photograph would have owned the copyright to it.

12.  A review of the Act is required every five years by a committee of the Senate, the House of Commons, or both.

13.  Effective June 2015, the duration of copyright in sound recordings was extended from 50 years from the date of making to 70 years from the date of publication.

II Supreme Court of Canada Copyright Act Decisions

The SCC is the highest court in Canada.  SCC decisions are significant because it takes many years to have a case get to the SCC and there is no appeal from the SCC.  Four of the Pentalogy decisions mentioned above are highly relevant to the music industry.

1.  SOCAN was seeking public performing rights royalties on music used in downloadable video games. The SCC decided that no public performing rights royalties are payable for the downloading of music and that video game downloads are "one-time purchases",  not broadcast communications, which would be subject to the payment of public performance rights royalties. However mechanical royalties, which are payable for the reproduction of music, will continue to be payable on downloads of music. For more information on SOCAN, see:   http://www.socan.ca/, for example. For more information on mechanical royalties, see: www.cmrra.ca, for example.

2. SOCAN was seeking public performing rights royalty payments for song previews such as the 60 second previews that potential buyers use to decide whether to buy music from services such as i-Tunes. The SCC held that such previews were fair dealing for the purpose of research and therefore no public performing rights royalties should be payable.

3. Access Copyright is a copyright collective that collects royalties for authors and publishers of literary works. At issue in this case involving Access Copyright was whether the copying for educational purpose of print materials, including books, magazines and newspapers for private study and research by students in elementary and secondary schools was fair dealing. The SCC clarified the legal test of what is “fair” for fair dealing purposes, stating it was a question of "fact" and a “matter of impression”.

4. Re: Sound, the copyright collective that collects neighbouring rights royalties, was unsuccessful in pursuading the SCC that soundtracks in movies and television programs should be subject to the payment of neighbouring rights royalties. Neighbouring rights royalties include the maker’s share, which are payable to owners of master sound recordings and the performer’s share, which are payable to performers' for their performances embodied in master sound recordings. For more information regarding Re: Sound see:  www.resound.ca/en/index.htm, for example.

5. The SCC decided that music streaming services are liable to pay public performing rights royalties.

6.  In a recent case involving the film production company Cinar, the SCC specifically decided, among things, that there is copyright in treatments, proposals, and formats and copyright infringement can occur when elements of such works are used, even if there is not an actual literal reproduction of such works.

7.  In a case involving the CBC and SODRAC, an author’s society established in 1985 which has a mandate from its members to administer reproduction rights for music, including both synchronization and mechanical rights and copyrights for visual artists and crafts, the SCC decided, among other things, that the CBC was liable to pay synchronization fees for “broadcast incidental copies” of music for television and Internet uses and that such uses amount to reproductions that are protected under the Copyright Act.

Conclusions

The above amendments to the Act and SCC decisions summarized above have significant implications for the Canadian music industry.

Many legal issues remain to be clarified by the courts including, but not limited to:

a.)  defining the legal parameters of what constitutes fair dealing for purposes of "education", "satire" or "parody"; and

b.)  what constitutes “negative impact on the commercial market" and "negatively impacting the artist's reputation" when integrating copyright content into one's user generated work.

The full impact of these amendments and SCC decisions will take years to fully assess.

The above summary in nature only and in any specific situation, skilled legal advice should be sought.

Paul Sanderson, Barrister and Solicitor is a lawyer in private practice in the firm Sanderson Entertainment Law (www.sandersonlaw.ca) and author of Musicians and Law in Canada (Carswell).

© Paul Sanderson 2015.  All rights reserved.