Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association

Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association
Collection
Supreme Court Judgments
Date
2022-07-15
Neutral citation
2022 SCC 30
Case number
39418
Judges
Wagner, Richard; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud
On appeal from
Federal Court of Appeal
Subjects
Administrative law
Intellectual property
Notes
Case in Brief
SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30
Appeal Heard: January 18, 2022 Judgment Rendered: July 15, 2022 Docket: 39418
Between:
Society of Composers, Authors and Music Publishers of Canada Appellant
and
Entertainment Software Association, Entertainment Software Association of Canada, Apple Inc., Apple Canada Inc., Bell Canada, Quebecor Media Inc., Rogers Communications Inc., Shaw Communications and Pandora Media Inc. Respondents
And Between:
Music Canada Appellant
and
Entertainment Software Association, Entertainment Software Association of Canada, Apple Inc., Apple Canada Inc., Bell Canada, Quebecor Media Inc., Rogers Communications Inc., Shaw Communications and Pandora Media Inc. Respondents
- and -
Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Canadian Music Publishers Association carrying on business as “Music Publishers Canada”, Professional Music Publishers Association, Canadian Association of Law Libraries, Library Futures Institute and Ariel Katz Interveners
Coram: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
Reasons for Judgment: (paras. 1 to 114)
Rowe J. (Wagner C.J. and Moldaver, Côté, Brown, Kasirer and Jamal JJ. concurring)
Concurring Reasons: (paras. 115 to 161)
Karakatsanis J. (Martin J. concurring)
Note: This document is subject to editorial revision before its reproduction in final form in the Canada Supreme Court Reports.
Society of Composers, Authors and Music Publishers of Canada Appellant
v.
Entertainment Software Association,
Entertainment Software Association of Canada,
Apple Inc.,
Apple Canada Inc.,
Bell Canada,
Quebecor Media Inc.,
Rogers Communications Inc.,
Shaw Communications and
Pandora Media Inc. Respondents
‑ and ‑
Music Canada Appellant
v.
Entertainment Software Association,
Entertainment Software Association of Canada,
Apple Inc.,
Apple Canada Inc.,
Bell Canada,
Quebecor Media Inc.,
Rogers Communications Inc.,
Shaw Communications and
Pandora Media Inc. Respondents
and
Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic,
Canadian Music Publishers Association carrying on business as “Music Publishers Canada”,
Professional Music Publishers Association,
Canadian Association of Law Libraries,
Library Futures Institute and
Ariel Katz Interveners
Indexed as: Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association
2022 SCC 30
File No.: 39418.
2022: January 18; 2022: July 15.
Present: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
on appeal from the federal court of appeal
Intellectual property — Copyright — Communication to public by telecommunication — Making available online — On‑demand transmissions — Amendment to Copyright Act clarifying that communication of work to public by telecommunication includes making it available to public in way that allows members of public to have access to it from place and at time they have individually chosen — Copyright Board concluding that amendment requires users to pay one royalty when work made available to public online and another royalty when work downloaded or streamed by member of public — Whether amendment creates new compensable making‑available right — Copyright Act, R.S.C . 1985, c . C‑42, ss. 2.4(1.1) , 3(1) (f).
Administrative law — Judicial review — Standard of review — Standard of review applicable where administrative body and courts share concurrent first instance jurisdiction over questions of law.
In 1997, Canada signed the WIPO Copyright Treaty, one of two treaties negotiated for the purpose of adapting international copyright rules to new and emerging technologies. The Treaty sets out a number of protections that member countries are to provide to authors. Article 8 provides that authors of literary and artistic works shall enjoy the exclusive right to make their works available to the public in such a way that members of the public may access these works from a place and at a time individually chosen by them. In 2012, Parliament added s. 2.4(1.1) to the Copyright Act by way of the Copyright Modernization Act (“CMA”) to implement the rights and protections of the Treaty. Section 2.4(1.1) amends s. 3(1) (f) of the Copyright Act by clarifying that “communication of a work or other subject‑matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public”.
In the context of proceedings to set a tariff for online music services, the Copyright Board of Canada, which shares concurrent first instance jurisdiction over some aspects of the Copyright Act with the courts, concluded that s. 2.4(1.1) deems the act of making works available to be a separately protected and compensable activity. This meant that two royalties would be payable when a work is distributed online: (1) when it is made available online and (2) when the work is actually streamed or downloaded. The Federal Court of Appeal overturned the Board’s decision. It concluded that Parliament did not intend to create a new compensable making available right, and that, properly interpreted, s. 2.4(1.1) did not subject downloads and streams to two royalties.
Held: The appeal should be dismissed.
Per Wagner C.J. and Moldaver, Côté, Brown, Rowe, Kasirer and Jamal JJ.: The Copyright Act does not require that users pay two royalties to access works online. The reading of s. 2.4(1.1) of the Copyright Act that is most consistent with its text, structure, purpose, and context is that s. 2.4(1.1) clarifies that (1) s. 3(1) (f) applies to on‑demand streams, and (2) a work is performed as soon as it is made available for on‑demand streaming. This interpretation is technologically neutral and allows Canada to fulfill its obligations under art. 8 of the Treaty through a combination of the performance, reproduction, and authorization rights in s. 3(1) . If a work is streamed or made available for on˗demand streaming, the author’s performance right is engaged. If a work is downloaded, the author’s reproduction right is engaged. If a work is made available for downloading, the author’s right to authorize reproductions is engaged. There are no gaps in protection. If a work is downloaded or made available for downloading, s. 3(1) (f) is not engaged. If a work is made available for streaming and later streamed, s. 3(1) (f) is only engaged once.
The Board’s decision should be reviewed under the standard of correctness. In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, the Court recognized five categories for correctness review. None of these categories justifies applying a correctness standard of review to situations of concurrent administrative and court first instance jurisdiction. Nevertheless, in rare and exceptional circumstances, new correctness categories can be recognized when applying reasonableness would undermine legislative intent or the rule of law in a manner analogous to the five correctness categories discussed in Vavilov. When courts and administrative bodies have concurrent first instance jurisdiction over a legal issue in a statute is one of those rare and exceptional circumstances where it is appropriate to recognize a new category of correctness review. Applying correctness accords with legislative intent — by conferring concurrent first instance jurisdiction to courts and administrative bodies, it should be inferred that the legislature wanted to subject those decisions to appellate standards of review. Applying correctness also promotes the rule of law. First, when there is concurrent first instance jurisdiction, the legislature has expressly involved the courts in the interpretation of a statute, which necessarily carries with it the implication that, absent legislative direction to the contrary, courts will operate by their settled standards. Second, it avoids conflicting statutory interpretations, and it provides a way to manage differing decisions between courts and tribunals. Third, this correctness category can be defined with precision, as it will apply only when courts and administrative bodies have concurrent first instance jurisdiction over a legal issue in a statute.
A treaty should be considered when interpreting statutes that purport to implement the treaty. The treaty is relevant at the context stage of the statutory interpretation exercise. There is no need to find textual ambiguity in a statute before considering the treaty. Where the text permits, legislation should be interpreted so as to comply with Canada’s treaty obligations, in accordance with the presumption of conformity. However, a treaty cannot overwhelm clear legislative intent. The court’s task is to interpret what the legislature has enacted and not subordinate this to what the federal executive has agreed to internationally.
Article 8 of the Treaty forms a relevant part of the context of s. 2.4(1.1) because Parliament intended to fulfill Canada’s obligations under art. 8 through s. 2.4(1.1) : the CMA’s preamble states that it was enacted in part to implement the “norms” of the Treaty, and the wording of art. 8 and s. 2.4(1.1) is similar. The Treaty was also ratified shortly after the CMA was passed, and an explanatory memorandum placed before the House of Commons stated that the CMA was developed with a view to implementing the rights and protections of the Treaty.
The Board’s interpretation of s. 2.4(1.1) is inconsistent with its text and structure, it undermines the purpose of the Copyright Act , and it is not required by art. 8 . To understand the text of s. 2.4(1.1) , one must understand the basic scheme of the Copyright Act . The opening paragraph of s. 3(1) exhaustively sets out three copyright interests that authors have in their works: the right to (1) produce or reproduce a work in any material form, (2) perform a work in public, or (3) publish an unpublished work. A single activity can only engage one of the three copyright interests. When a work is downloaded, giving a user a durable copy of a work, only the author’s reproduction right is engaged. When a work is streamed, allowing a user to experience a work for a limited period of time, only the author’s performance right is engaged. Authors are entitled to royalties for use of their works when an activity engages one of the copyright interests in s. 3(1) . Nothing in the text of s. 2.4(1.1) indicates that Parliament intended to allow authors to charge two royalties for a single protected activity. The Board’s interpretation is also entirely inconsistent with the Court’s holdings in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231, and Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283, which explained that downloads and streams are a single activity. Had Parliament intended to treat the act of making available as a new separately compensable activity, the way to do so would have been to add “making available” as a fourth copyright interest in the opening paragraph of s. 3(1) , rather than as a modification to the scope of s. 3(1) (f).
The Board’s interpretation also undermines the purpose of the Copyright Act because it violates the principle of technological neutrality by requiring that users pay additional royalties to access works online. Distributing functionally equivalent works through old or new technology should engage the same copyright interests. What matters is what the user receives, not how the user receives it. If that new technology gives users durable copies of a work, the author’s reproduction interest is engaged. If the new technology gives users impermanent access to the work, the author’s performance right is engaged. Clear legislative intent would be needed to derogate from the principle of technological neutrality given its central importance to the scheme of the Copyright Act . Since there is no persuasive basis for concluding that Parliament intended to derogate from the principle of technological neutrality, s. 2.4(1.1) should be interpreted in a way that is technologically neutral.
Finally, while the Board correctly concluded that art. 8 of the Treaty requires that member countries give authors the right to control the act of making works available, in addition to any download or stream that might later occur, this obligation does not require the imposition of additional royalties on downloaded or streamed content. Each state can fulfill its art. 8 obligations through an explicit making available right or through a combination of pre‑existing rights. Provided that the Copyright Act gives effect to art. 8 ’s goals through any combination of rights, Canada will be in compliance with its obligations under art. 8 .
Per Karakatsanis and Martin JJ.: The standard of review of the Board’s decision should be reasonableness. Creating a new correctness category only three years after a majority of the Court in Vavilov set out a comprehensive judicial review framework undermines Vavilov’s promise of certainty and predictability. Vavilov explicitly established a presumption of reasonableness that could only be displaced in five situations. Concurrent jurisdiction at first instance was not among them. The creation of a sixth category is simply contrary to the majority reasons in Vavilov.
Although the Court did not definitively foreclose the possibility that another category could be recognized, the establishment of new categories was explicitly reserved for possible circumstances which could not be realistically foreseen. The reasons in Vavilov were based on a thorough review of the relevant jurisprudence, including correctness cases of recent vintage, such as Rogers. It is therefore unrealistic to suggest that the Court’s own precedent represents a possible set of circumstances that it could not have contemplated. And neither legislative intent nor the rule of law can make this case rare and exceptional — to conclude otherwise sweeps aside the Court’s recently established framework governing the standard of review.
When applying the standard of reasonableness, context does not modify the standard or degree of scrutiny by the reviewing court, but it is obviously important in determining whether the decision itself is reasonable. And where the reasonableness standard applies to questions of statutory interpretation, the reviewing court must examine the administrative decision as a whole, including the reasons provided by the decision maker and the outcome that was reached. The court does so in reference to the modern principle of statutory interpretation, under which words, policy objectives and consequences all matter. It is not a purely textual exercise.
Even on a reasonableness standard, the failure of the Board to consider the Court’s material and binding precedents or the animating themes of the Copyright Act was unreasonable. It was unreasonable for the Board to disregard the Court’s decision in Entertainment Software Association — the leading domestic authority on s. 3(1) (f). While the Board correctly pointed out that Entertainment Software Association was decided against a different legislative backdrop, three critical aspects remained the same: (i) the language of s. 3(1) (f); (ii) the Copyright Act ’s fundamental distinction between performance and reproduction rights, and (iii) Parliament’s commitment to preserve technological neutrality. Had the Board meaningfully engaged with Entertainment Software Association, it would not have rendered a decision that captured downloads — a reproductive activity — within an act of communication, nor would it have effectively created two separate rights for a single activity.
The Board’s decision was also unreasonable in the context of the broader statutory scheme. First, the Board’s reasons fail to meaningfully address the duplicate royalties that would arise when a work is subsequently downloaded or streamed. This was unreasonable in light of the Court’s caution against this precise kind of layering of rights. Second, the interpretation advanced by the Board is not technologically neutral because it opens the door to duplicate royalties simply because the transaction takes place online. Without displacing Parliament’s intent, the Board could not endorse an interpretation that applied differently to diverse forms of media.
As this is not a case where the omission is a minor aspect of the interpretive context, the Board’s interpretation of s. 2.4(1.1) cannot be accepted. If correctness was the applicable standard, there would be agreement with the majority that s. 2.4(1.1) could not be read as creating a new independent right that is triggered when works are made available for downloading or on-demand streaming, nor as creating a separate tariff. Nothing in the text, context, or purpose of s. 2.4(1.1) suggests otherwise, particularly when viewed in light of the legal landscape in which it operates.
Cases Cited
By Rowe J.
Applied: Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231; Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283; considered: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653; Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615; referred to: Re:Sound v. Canadian Association of Broadcasters, 2017 FCA 138, 20 Admin. L.R. (6th) 179; Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; B010 v. Canada (Citizenship and Immigration), 2015 SCC 58, [2015] 3 S.C.R. 704; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Crown Forest Industries Ltd. v. Canada, [1995] 2 S.C.R. 802; Office of the Children’s Lawyer v. Balev, 2018 SCC 16, [2018] 1 S.C.R. 398; Rahaman v. Canada (Minister of Citizenship and Immigration), 2002 FCA 89, [2002] 3 F.C. 537; R. v. Hape, 2007 SCC 26, [2007] 2 S.C.R. 292; Németh v. Canada (Justice), 2010 SCC 56, [2010] 3 S.C.R. 281; Kazemi Estate v. Islamic Republic of Iran, 2014 SCC 62, [2014] 3 S.C.R. 176; Bishop v. Stevens, [1990] 2 S.C.R. 467; Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336; Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36, [2012] 2 S.C.R. 326; York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32; CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339; Keatley Surveying Ltd. v. Teranet Inc., 2019 SCC 43, [2019] 3 S.C.R. 418; Muzak Corp. v. Composers, Authors and Publishers Association of Canada, Ltd., [1953] 2 S.C.R. 182; CCH Canadian Ltd. v. Law Society of Upper Canada, 2002 FCA 187, [2002] 4 F.C. 213; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427; Apple Computer, Inc. v. Mackintosh Computers Ltd., [1988] 1 F.C. 673, aff’d [1990] 2 S.C.R. 209; SOCAN Statement of Royalties, Public Performance of Musical Works 1996, 1997, 1998 (Tariff 22, Internet) (Re) (1999), 1 C.P.R. (4th) 417; Warman v. Fournier, 2012 FC 803, 104 C.P.R. (4th) 21.
By Karakatsanis J.
Applied: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653; considered: Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283; Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231; referred to: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427; Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615; Domtar Inc. v. Quebec (Commission d’appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756; Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Uber Technologies Inc. v. Heller, 2020 SCC 16; TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144; Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247; Construction Labour Relations v. Driver Iron Inc., 2012 SCC 65, [2012] 3 S.C.R. 405; National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324; Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336.
Statutes and Regulations Cited
Copyright Act , R.S.C. 1985, c. C‑42, ss. 2.4(1.1) , 3(1) , 14.1 , Part II, 15(1.1)(d), 18(1.1)(a), 27(1), 28.1, Part VII.1.
Copyright Act, 1921, S.C. 1921, c. 24.
Copyright Modernization Act, S.C. 2012, c. 20, summary, preamble.
Treaties and Other International Instruments
Berne Convention for the Protection of Literary and Artistic Works, 828 U.N.T.S. 221.
WIPO Copyright Treaty, Can. T.S. 2014 No. 20, art. 8.
WIPO Performances and Phonograms Treaty, Can. T.S. 2014 No. 21.
Authors Cited
Bently, L., and B. Sherman. Intellectual Property Law, 4th ed. New York: Oxford University Press, 2014.
Craig, Carys J. “Technological Neutrality: (Pre)Serving the Purposes of Copyright Law”, in Michael Geist, ed., The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law. Ottawa: University of Ottawa Press, 2013, 271.
de Beer, Jeremy. “Copyright Royalty Stacking”, in Michael Geist, ed., The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law. Ottawa: University of Ottawa Press, 2013, 335.
Drassinower, Abraham. “Copyright Is Not About Copying” (2012), 125 Harv. L. Rev. F. 108.
Ficsor, Mihály. The Law of Copyright and the Internet: The 1996 WIPO Treaties, their Interpretation and Implementation. New York: Oxford University Press, 2002.
Foong, Cheryl. The Making Available Right: Realizing the Potential of Copyright’s Dissemination Function in the Digital Age. Northampton, Mass.: Edward Elgar, 2019.
Ginsburg, Jane C. “The (New?) Right of Making Available to the Public”, in Columbia Law School Public Law & Legal Theory Working Paper Group, Working Paper No. 04‑78, 2004.
Harris, Lesley Ellen. Canadian Copyright Law, 4th ed. Hoboken, N.J.: Wiley, 2014.
Keller, Ryan. “Moving Toward a Balanced ‘Making Available Right’ in Canada” (2014), 27 I.P.J. 213.
Makeen, Makeen Fouad. “Video streaming and the communication to the public right in the United States and European Union”, in Tanya Aplin, ed., Research Handbook on Intellectual Property and Digital Technologies. Northampton, Mass.: Edward Elgar, 2020, 246.
McKeown, John S. Fox on Canadian Law of Copyright and Industrial Designs, 4th ed. Toronto: Thomson Reuters, 2022 (loose‑leaf updated June 2022, release 3).
Reinbothe, Jörg, and Silke von Lewinski. The WIPO Treaties 1996: The WIPO Copyright Treaty and The WIPO Performances and Phonograms Treaty — Commentary and Legal Analysis. London: Butterworths LexisNexis, 2002.
Ricketson, Sam, and Jane C. Ginsburg. International Copyright and Neighbouring Rights: The Berne Convention and Beyond, vol. I, 2nd ed. New York: Oxford University Press, 2005 (2010 reprint).
Rowe, Malcolm, and Leanna Katz. “A Practical Guide to Stare Decisis” (2020), 41 Windsor Rev. Legal Soc. Issues 1.
Sookman, Barry B. Sookman: Computer, Internet and Electronic Commerce Law. Toronto: Thomson Reuters, 2022 (loose‑leaf updated June 2022, release 2).
Sookman, Barry, Steven Mason and Carys Craig. Copyright: Cases and Commentary on the Canadian and International Law, 2nd ed. Toronto: Carswell, 2013.
Sullivan, Ruth. Sullivan on the Construction of Statutes, 6th ed. Markham, Ont.: LexisNexis, 2014.
United States. United States Copyright Office. The Making Available Right in the United States: A Report of the Register of Copyrights. Washington, D.C., February 2016.
Vaver, David. Intellectual Property Law: Copyright, Patents, Trade‑marks, 2nd ed. Toronto: Irwin Law, 2011.
World Intellectual Property Organization. Diplomatic Conference on Certain Copyright and Neighboring Rights Questions. Basic Proposal for the Substantive Provisions of the Treaty on Certain Questions Concerning the Protection of Literary and Artistic Works to be Considered by the Diplomatic Conference, Doc. CRNR/DC/4, August 30, 1996.
APPEAL from a judgment of the Federal Court of Appeal (Pelletier, Stratas and Near JJ.A.), 2020 FCA 100, [2021] 1 F.C.R. 374, [2020] F.C.J. No. 671 (QL), 2020 CarswellNat 1745 (WL), setting aside a decision of the Copyright Board of Canada, No. CB‑CDA 2017‑085, [2017] C.B.D. No. 11 (QL), 2017 CarswellNat 4235 (WL). Appeal dismissed.
Casey M. Chisick, D. Lynne Watt, Matthew S. Estabrooks and Eric Mayzel, for the appellant the Society of Composers, Authors and Music Publishers of Canada.
Barry B. Sookman, Daniel G. C. Glover and Connor Bildfell, for the appellant Music Canada.
Gerald (Jay) Kerr-Wilson, Michael Shortt and Stacey Smydo, for the respondents the Entertainment Software Association, the Entertainment Software Association of Canada, Bell Canada, Quebecor Media Inc., Rogers Communications Inc. and Shaw Communications.
Julie Rosenthal and Michael Koch, for the respondents Apple Inc. and Apple Canada Inc.
David W. Kent and Jonathan O’Hara, for the respondent Pandora Media Inc.
David Fewer, for the intervener the Samuelson‑Glushko Canadian Internet Policy and Public Interest Clinic.
Jessica Zagar, for the interveners the Canadian Music Publishers Association carrying on business as “Music Publishers Canada” and the Professional Music Publishers Association.
Kim Paula Nayyer and Robert Janes, Q.C., for the interveners the Canadian Association of Law Libraries and the Library Futures Institute.
Sana Halwani and Andrew Moeser, for the intervener Ariel Katz.
The judgment of Wagner C.J. and Moldaver, Côté, Brown, Rowe, Kasirer and Jamal JJ. was delivered by
Rowe J. —
I. Overview
[1] Does the Copyright Act , R.S.C. 1985, c. C-42 , require that users pay two royalties to access works online, even though accessing the same work offline requires paying only one royalty?
[2] The answer to this question depends on the correct interpretation of s. 2.4(1.1) of the Copyright Act . Section 2.4 (1.1) modifies the definition of s. 3(1) (f) by holding a work is communicated to the public as soon as it is made available in a way “that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public”. The Copyright Board of Canada concluded that s. 2.4(1.1) deems the act of making works available to be a separately protected and compensable activity. In practical terms, this meant that users needed to pay two royalties to access works online — a royalty for “making works available” and an additional royalty when the work was actually downloaded or streamed. The Board reasoned that this was the only interpretation that would fulfill Canada’s obligations under art. 8 of the 1996 WIPO Copyright Treaty, Can. T.S. 2014 No. 20, which requires that member countries give authors the exclusive right to control the act of making works available.
[3] The Federal Court of Appeal overturned the Board’s decision. It concluded that the Board focused too much on art. 8’s meaning, rather than s. 2.4(1.1) ’s meaning. Had it properly interpreted s. 2.4(1.1) , the Board would have seen that Parliament did not intend to subject downloads and streams to two royalties.
[4] The appellants, the Society of Composers, Authors and Music Publishers of Canada (“SOCAN”) and Music Canada, ask that this Court overturn the Court of Appeal’s decision and adopt the Board’s interpretation of s. 2.4(1.1) .
[5] I cannot agree with the Board’s interpretation of s. 2.4(1.1) . The Copyright Act does not exist solely for the benefit of authors. Its overarching purpose is to balance authors’ and users’ rights by securing just rewards for authors while facilitating public access to works. When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users gain access to works which they can use to inspire their own original artistic and intellectual creations.
[6] The principle of technological neutrality helps the Copyright Act balance the rights of authors and users. This principle holds that, absent parliamentary intent to the contrary, the Copyright Act should not be interpreted so as to favour or discriminate against any form of technology. It protects authors and users by ensuring that works attract the same rights and give rise to the same royalties regardless of the technological means used to distribute the works.
[7] The Board’s interpretation departs from the principle of technological neutrality. It requires that users pay additional royalties to access works online. Requiring that users pay additional royalties based on the mode of the work’s distribution violates the principle of technological neutrality and shifts the balance between users’ and authors’ rights that has underpinned the Copyright Act for decades decisively in favour of authors.
[8] The Board’s interpretation is not required by art. 8 of the WIPO Copyright Treaty. The Board’s interpretation of s. 2.4(1.1) would fulfill Canada’s obligations under art. 8. But other interpretations of s. 2.4(1.1) that are more consistent with its text, context, and purpose also conform to art. 8. In my view, s. 2.4(1.1) clarifies two things: (1) s. 3(1) (f) applies to on-demand technologies, and (2) a work is performed as soon as it is made available for online streaming. This interpretation of s. 2.4(1.1) is technologically neutral and allows Canada to fulfill its obligations under art. 8 through a combination of the performance, reproduction, and authorization rights in s. 3(1) . If a work is streamed or made available for on-demand streaming, the author’s performance right is engaged. If a work is downloaded, the author’s reproduction right is engaged. If a work is made available for downloading, the author’s right to authorize reproductions is engaged. There are no gaps in protection.
[9] As this interpretation of s. 2.4(1.1) is more consistent with its text, context, and purpose, I would adopt it over the Board’s. If a work is downloaded or made available for downloading, s. 3(1) (f) is not engaged. If a work is made available for streaming and later streamed, s. 3(1) (f) is only engaged once. It follows that I would dismiss the appeal.
II. Facts
[10] In 1997, Canada signed the WIPO Copyright Treaty. The WIPO Copyright Treaty is one of two treaties negotiated in 1996 for the purpose of adapting international copyright rules to new and emerging technologies.
[11] The WIPO Copyright Treaty sets out a number of protections that member countries are to provide to authors. Of relevance to this appeal is art. 8, which provides that,
[w]ithout prejudice to the provisions of Articles 11(1)(ii), 11bis(1)(i) and (ii), 11ter(1)(ii), 14(1)(ii) and 14bis(1) of the Berne Convention, authors of literary and artistic works shall enjoy the exclusive right of authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.
[12] In 2012, the Copyright Modernization Act, S.C. 2012, c. 20 (“CMA”), amended the Copyright Act . Among other changes, the CMA introduced three “making available” provisions: ss. 2.4(1.1) , 15(1.1)(d), and 18(1.1)(a). Sections 15(1.1)(d) and 18(1.1)(a) apply to performances and sound recordings and are not at issue in this appeal.[1] Section 2.4(1.1) applies to original works. It amends s. 3(1) (f) — which gives authors the right to “communicate the work to the public by telecommunication” — by clarifying that,
[f]or the purposes of [the Copyright Act ], communication of a work or other subject˗matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.
[13] Shortly after the CMA received royal assent, but before it came into force, this Court released two important decisions on the scope of s. 3(1) (f): Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231 (“ESA”), and Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283. ESA held that the transmission of a musical work over the Internet that results in a download is not a communication by telecommunication under s. 3(1) (f). Rogers concluded that on-demand streams were captured by s. 3(1) (f).
[14] After ESA and Rogers were released and after the CMA came into force, the Board received submissions on the meaning of s. 2.4(1.1) . SOCAN, which administers the s. 3(1) (f) right to “communicate” musical works on behalf of copyright owners, submitted that s. 2.4(1.1) requires that users pay tariffs[2] (i.e., royalties) when they post works on the Internet in a way that allows the public to access the work. These royalties would be payable irrespective of whether the works are subsequently transmitted to a member of the public by way of download, stream, or not at all.
III. Decisions Below
A. Copyright Board of Canada, 2017 CanLII 152886
[15] The Board accepted SOCAN’s position. It reasoned that s. 2.4(1.1) deems making a work available to be a “communication” to the public regardless of whether any subsequent transmission occurs and regardless of whether a subsequent transmission is a download or a stream. This meant that two royalties would be payable when a work is distributed online: (1) when it is made available online and (2) when the work is actually streamed or downloaded. The Board’s reasoning relied heavily on art. 8 of the WIPO Copyright Treaty, which it read as requiring that member countries provide a separate and compensable protection for the act of “making a work available”.
B. Federal Court of Appeal, 2020 FCA 100, [2021] 1 F.C.R. 374 (Pelletier, Stratas and Near JJ.A.)
[16] The Federal Court of Appeal held that the Board’s decision was unreasonable. Regarding the standard of review, the Court of Appeal noted that the jurisprudence prior to Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, required reviewing the Board’s interpretation of s. 2.4(1.1) on a standard of correctness. However, after Vavilov, this jurisprudence was uncertain. While the Court of Appeal identified strong reasons for reviewing the Board’s decision on a standard of correctness, it applied the standard of reasonableness because it had not received submissions on the issue.
[17] The Court of Appeal concluded that the Board placed too much weight on art. 8 when interpreting s. 2.4(1.1) . Rather than focusing on what art. 8 means, the Board should have focused on what s. 2.4(1.1) means. Had it done so, the Board would have seen that Parliament did not intend to create a new compensable making available right.
[18] While the Court of Appeal rejected the Board’s interpretation of s. 2.4(1.1) , it did not explain what s. 2.4(1.1) means — it simply rejected the Board’s interpretation of s. 2.4(1.1) and quashed the Board’s decision.
IV. Parties’ Positions
A. Appellants
[19] The appellants ask this Court to affirm the Board’s interpretation of s. 2.4(1.1) . They argue that the Board correctly concluded that s. 2.4(1.1) deems the act of making works available to be a “communication” under s. 3(1) (f). A royalty is therefore payable whenever a work is made available for downloading or streaming. If the work is later downloaded, another reproduction royalty is payable. If the work is later streamed, another performance royalty is payable.
B. Respondents
[20] The respondents ask this Court to reject the Board’s interpretation of s. 2.4(1.1) . They argue that s. 2.4(1.1) does not require that users pay two royalties to download or stream works. If a work is downloaded, only a single reproduction royalty is payable. If a work is streamed, only a single performance royalty is payable. Correctly interpreted, s. 2.4(1.1) simply clarifies that a work is “performed” as soon as it is “made available” for on-demand streaming. At that point, a royalty is payable. If the work is later streamed by a user, no additional royalty is payable because the stream is part of one continuous act of performance that began when the work was “made available” for streaming.
V. Issues
[21] This appeal raises three issues:
(a) What is the appropriate standard of review?
(b) What role does the WIPO Copyright Treaty play in interpreting s. 2.4(1.1) ?
(c) Does s. 2.4(1.1) entitle authors to an additional “making available” royalty?
VI. Analysis
A. Issue 1: What Is the Appropriate Standard of Review?
(1) Prior Jurisprudence Needs to Be Reconsidered in Light of Vavilov
[22] Prior to Vavilov, the Board’s decisions on the scope of rights in the Copyright Act were reviewed on the standard of correctness: see, for example, Rogers, at paras. 10-20; Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615 (“CBC”), at para. 35.
[23] These pre-Vavilov cases held that correctness was appropriate because the Board and courts have concurrent first instance jurisdiction over some aspects of the Copyright Act . In infringement actions, the scope of rights under the Act is routinely brought before courts for interpretation. Similarly, the Board may need to decide the scope of rights in the Act in order to set tariffs, as occurred in this case: Rogers, at paras. 12-13. Given this shared jurisdiction, the pre-Vavilov cases concluded that correctness was appropriate because it minimized the risk of conflicting statutory interpretations and gave effect to legislative intent: Rogers, at paras. 12-15; CBC, at para. 35.
[24] In Vavilov, this Court reconsidered its standard of review jurisprudence. It simplified the law by holding that courts should review administrative decisions on a standard of reasonableness except when doing so would undermine legislative intent or the rule of law: paras. 17 and 69.
[25] Vavilov overtook the prior jurisprudence: para. 143. Cases from this Court applying a correctness standard to the Board’s decisions therefore need to be reconsidered in light of Vavilov.
(2) Concurrent First Instance Jurisdiction Should Be Recognized as a Sixth Category of Correctness
[26] Vavilov recognized five categories for correctness review: legislated standards of review, statutory appeal m