CMA Ontario September Newsletter legal article

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CMA Ontario September Newsletter legal article

What the Recent Supreme Court Copyright Decisions Mean for You

In December 2011, the Supreme Court of Canada heard an unprecedented FIVE appeals involving copyright collectives.  In July of this year, the Court handed down its decisions.

To avoid being overly academic, I will not cite the specific cases but rather focus just on the direct impact that the decisions have on CMA Ontario members.

1.         Any income you receive from iTunes downloads and similar services could be lower.  On any given track, there is a song and a sound recording.  Each song and each sound recording has its own copyright; and each copyright comprises a performing right (technically a communication right) and a reproduction right.

–           The Supreme Court made it clear that SOCAN can no longer collect royalties for the incidental performance involved when a song is downloaded.  The Court ruled that a download only involves a reproduction right.  The reproduction right is generally licensed by your music publisher (you, if you are self-published).  In turn, the licensing function is often delegated to CMRRA.

–           Although the sound recording copyright was not at issue in the case, the decision also means that, for similar reasons, Re:Sound – SOCAN’s counterpart for sound recordings – cannot collect royalties for the incidental performance of the sound recording when it is downloaded. Your only source of revenue from iTunes type downloads will be your record label (you, if you are self-distributed).  Because Re:Sound will receive no revenue from downloads, its member performer rights organizations (MROC and RACS) will in turn receive nothing to distribute to you.

2.         The Court also agreed with the Copyright Board that “previewing” a track before purchasing it constitutes “fair dealing” because it is research.  SOCAN had contended that this kind of streaming should be subject to a royalty payment, as it is in the US.  Fair dealing is a concept under the Copyright Act that permits certain activities (research, news reporting, parody, among others) without royalty obligation.  The decision shuts the door to either SOCAN or Re:Sound monetizing the activity.

3.         Similar to its iTunes ruling, the Court held that downloading games that incorporate music does not entail performances.  Accordingly, SOCAN is not entitled to collect royalties for the activity.  Again, Re:Sound will be affected by this decision without having participated in the proceedings.  Copyright owners of the songs and sound recordings can still get paid for the reproductions, but not the performances.

4.         On the “plus side”, the Court held that SOCAN can continue to collect royalties for on-demand streaming, even though it was argued that such point-to-point communications were not “to the public”.

5.         Finally, the Court ruled against Re:Sound’s contention that TV stations should pay Re:Sound for the performances of sound recordings embedded in TV programs and movies.  This was a tariff proposal that, if successful, would have generated a lot of royalties for record labels and performers, putting them on the same footing as music publishers and composers of the same music for which SOCAN has always been paid.  Unfortunately, the law that recognizes performing rights in sound recordings and performers’ performances is limited to audio-only sound recordings.  Unfortunately, Re:Sound was unsuccessful in convincing the court otherwise.

The above summary of the Supreme Court decisions is a general overview and should not be taken as legal advice.  If you have a specific issue that arises from this summary, you should consult a lawyer.

Craig Parks is a director on the CMA Ontario Board and sits on the Governance Committee. He is also legal counsel to MROC – Musicians’ Rights Organization Canada.