SUPREME
COURT OF CANADA
Citation: Entertainment Software Association v. Society of
Composers, Authors and Music Publishers of Canada,
2012 SCC 34, [2012] 2 S.C.R. 231
|
Date: 20120712
Docket: 33921
|
Between:
Entertainment
Software Association and Entertainment Software Association of Canada
Appellants
and
Society
of Composers, Authors and Music Publishers of Canada
Respondent
-
and -
CMRRA-SODRAC
Inc., Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic and
Cineplex Entertainment LP
Interveners
Coram: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein,
Cromwell, Moldaver and Karakatsanis JJ.
Joint
Reasons for Judgment:
(paras. 1 to 44)
Dissenting
Reasons:
(paras. 45 to 128)
|
Abella and Moldaver JJ. (McLachlin C.J.
and Deschamps and Karakatsanis JJ. concurring)
Rothstein J. (LeBel, Fish and Cromwell
JJ. concurring)
|
Entertainment Software Association v. Society of Composers,
Authors and Music Publishers of Canada, 2012 SCC 34, [2012] 2 S.C.R. 231
Entertainment Software Association and
Entertainment
Software Association of Canada Appellants
v.
Society of
Composers, Authors and Music Publishers of Canada Respondent
and
CMRRA‑SODRAC Inc., Samuelson‑Glushko Canadian
Internet Policy and Public Interest
Clinic and Cineplex
Entertainment
LP Interveners
Indexed as: Entertainment Software Association v. Society of
Composers, Authors and Music Publishers of Canada
2012 SCC 34
File No.: 33921.
2011: December 6; 2012: July 12.
Present: McLachlin C.J. and LeBel, Deschamps, Fish, Abella,
Rothstein, Cromwell, Moldaver and Karakatsanis JJ.
on appeal from the federal court of appeal
Intellectual
property — Copyright — Right to communicate a work to the public by
telecommunication — Copyright Board certifying tariff for communication rights
in copyrighted music contained in video games sold for download on Internet —
Whether transmission of musical works contained in a
video game through an Internet download is a communication to the public — Copyright Act,
R.S.C. 1985, c. C-42, s. 3(1) (f).
The appellants ESA represent a coalition of
video game publishers and distributors who enable customers to download copies
of video games from the Internet. These copies are identical to copies
purchased in stores or shipped to customers by mail. The video games contain copyrighted
musical works. The royalties for the reproduction of
those musical works are negotiated before the games are sold to the public.
The respondent SOCAN, which administers the right to “communicate” musical
works on behalf of copyright owners, applied to the Copyright Board for a tariff covering downloads of musical
works over the Internet. The Copyright Board concluded
that the download of a file containing a musical work is a communication to the
public by telecommunication within the meaning of s. 3(1) (f) of the
Copyright Act , entitling SOCAN’s members to compensation in accordance
with an approved tariff. On
judicial review, the Federal Court of Appeal upheld the
Copyright Board’s decision.
Held
(LeBel, Fish, Rothstein and Cromwell JJ. dissenting): The appeal
should be allowed.
Per
McLachlin C.J. and Deschamps, Abella, Moldaver and Karakatsanis JJ.:
The Copyright Board’s conclusion that the Internet delivery of a permanent copy
of a video game containing musical works amounted to a “communication” under
s. 3(1) (f) of the Copyright Act should be set aside.
The
Board’s conclusion that a separate, “communication” tariff applies to downloads
of musical works violates the principle of technological neutrality. This
principle requires that the Act apply equally between traditional and
more technologically advanced media forms. 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. ESA has already
paid reproduction royalties to the copyright owners for the video games. Absent
evidence of Parliamentary intent to the contrary, 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. To do otherwise
would effectively impose a gratuitous cost for the use of more efficient,
Internet-based technologies. The Internet should be seen as a technological
taxi that delivers a durable copy of the same work to the end user. The
traditional balance in copyright between promoting the public interest in the
encouragement and dissemination of works and obtaining a just reward for the
creators of those works should be preserved in the digital environment.
The
term “communicate” in s. 3(1) (f) is not defined in the Act,
but the legislative history of the Act demonstrates that the right to
“communicate” is historically connected to the right to perform a work and not
the right to reproduce permanent copies of the work. The 1988 amendment in the
Act from “communicate . . . by radio communication” to
“communicate . . . by telecommunication” does not demonstrate
Parliament’s intent to remove all reference in s. 3(1) (f) to
conventional performance or broadcasting activities, or to expand the
communication right to technologies such as downloading that involve
transmitting data in a way that gives end users a permanent copy of the work.
Instead, the replacement of the words “radio communication” with
“telecommunication” should be understood as merely expanding the means
of communicating a work — that is, from radio waves to cable and other future
technologies. By substituting the word “telecommunication” in 1988, Parliament
did not intend to change the fundamental nature of the communication right,
which has been concerned with performance-based activities for over 50 years.
Applying
the dictionary definition of the word “communicate” has the effect of ignoring
a solid line of legislative history connecting the term “communicate” to
performance-based activities. The term “communicate” in s. 3(1) (f)
should not be transformed by the use of the word “telecommunication” in a way
that would capture activities that resemble reproduction. Such transformation
would result in abandoning the traditional distinction in the Act
between performance‑based rights and rights of reproduction.
Per LeBel, Fish, Rothstein
and Cromwell JJ. (dissenting): The creators of works downloaded from the
Internet are entitled to both communication and reproduction rights. Copyright
is a creature of statute comprised of a bundle of independent statutory
rights. Although a technologically neutral copyright law is desirable, the Act
cannot be interpreted in a manner that divests these rights of their
independent content. The right of reproduction continues to apply to copies
made through downloads notwithstanding that they are digital copies and the
communication right continues to apply to digital communications
notwithstanding that they may differ from traditional broadcasting
technologies.
The
general rules of statutory interpretation require that the words of the Act
are to be read in their entire context and in their grammatical and ordinary
sense harmoniously with the scheme of the Act, the object of the Act,
and the intention of Parliament. The word “communicate” is not defined in the Act. Parliament is
presumed to use words in their ordinary meaning and dictionary definitions give “communicate” and
“transmit” overlapping meanings. Nothing in the context in
which the words are used in the Act indicates that “communicate” is
distinct in meaning from “transmit” or is limited to transmissions of
information in a humanly perceptible form for immediate perceiving and
listening.
The
communication right set out in s. 3(1)(f) of the Act is a
self‑standing right that is independent of the performance right set out
in the introductory portion of s. 3(1) . The rights listed in paragraphs 3(1) (a)
to 3(1) (i) are in addition to the rights to produce or reproduce,
perform or publish. Nor does the legislative history of s. 3(1) (f)
confine the communication right to being only a variation of the performance
right. Although there is an historic relationship between the right of public
performance and the right to communicate to the public, the legislation has
evolved. By adopting the word “telecommunication”, Parliament removed the
historic reference to conventional broadcasting and encompassed evolving
technologies. The current language of the Act does not support a
conclusion that s. 3(1) (f) only applies to traditional broadcasting
technologies.
The
application of the communication right does not depend on the purpose of the communication.
The fact that the Internet transmission delivers a copy of a video game, which
contains a musical work, does not change the fact that there is an Internet
communication requiring authorization of the copyright holder.
No policy concern arises because the reproduction right and
the communication right are distinct and separate rights. The fact that there are two protected rights does not restrict the
protection afforded by each right. To characterize an Internet transmission as a mere “method of delivery”
of a work and limit the copyright to reproduction rights would pre-empt the
application of the communication right. Inferring limits into the
communication right for policy reasons is beyond the function of the courts.
Cases Cited
By Abella and Moldaver JJ.
Referred to: Robertson
v. Thomson Corp., 2006 SCC 43, [2006] 2 S.C.R. 363; Théberge v. Galerie d’Art du Petit Champlain inc.,
2002 SCC 34, [2002] 2 S.C.R. 336; Bishop v. Stevens,
[1990] 2 S.C.R. 467; Composers, Authors and Publishers Assoc. of Canada Ltd.
v. CTV Television Network Ltd., [1968] S.C.R. 676; Canadian Wireless Telecommunications Assn. v. Society of Composers,
Authors and Music Publishers of Canada, 2008 FCA 6, [2008] 3 F.C.R. 539; Canadian Admiral Corp. v. Rediffusion, Inc., [1954] Ex. C.R. 382; Society of Composers, Authors and Music Publishers of Canada v. Canadian
Assn. of Internet Providers,
2004 SCC 45, [2004] 2 S.C.R. 427; Ontario v. Canadian Pacific Ltd.,
[1995] 2 S.C.R. 1031; Ash v. Hutchinson & Co. (Publishers),
Ltd., [1936] 2 All E.R. 1496; Apple
Computer Inc. v. Mackintosh Computers Ltd., [1987] 1 F.C. 173.
By Rothstein J. (dissenting)
Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336; Compo Co. v. Blue
Crest Music Inc., [1980] 1 S.C.R. 357; Bishop v. Stevens, [1990] 2
S.C.R. 467; SOCAN Statement of Royalties, Public Performance of Musical Works
1996, 1997, 1998 (Tariff 22, Internet) (Re) (1999),
1 C.P.R. (4th) 417; Society
of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of
Internet Providers, 2004
SCC 45, [2004] 2 S.C.R. 427; SOCAN Statement of
Royalties, Internet ― Other Uses of Music 1996‑2006 (Tariffs 22.B‑22.G)
(2008), 70 C.P.R. (4th) 81; Bell
Canada v. Society of Composers, Authors and Music Publishers of Canada, 2010 FCA 220, 409
N.R. 102; Rogers Communications Inc. v. Society of Composers, Authors and
Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283; CCH
Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R.
339; Canadian
Wireless Telecommunications Assn. v. Society of Composers, Authors and Music Publishers
of Canada, 2008 FCA 6, [2008] 3 F.C.R. 539, leave to appeal refused, [2008] 2
S.C.R. vi; Composers, Authors and Publishers Assoc. of Canada Ltd. v. CTV
Television Network Ltd., [1968] S.C.R. 676; Canadian Admiral Corp. v. Rediffusion, Inc., [1954] Ex. C.R. 382; United States v.
American Society of Composers, Authors and Publishers, 627 F.3d 64 (2010), cert. denied (U.S.S.C., October 3, 2011, No.
10-1337); Robertson v.
Thomson Corp., 2006 SCC 43, [2006] 2 S.C.R. 363.
Statutes and Regulations Cited
17 U.S.C. §§ 101, 106(4) (2000).
Act to amend the Copyright Act, S.C.
1993, c. 23, s. 3.
Act to amend the Copyright Act , S.C. 1997, c. 24, ss. 18, 45.
Canada‑United States Free Trade Agreement Implementation Act, S.C. 1988, c. 65, ss. 61 to 65 .
Copyright Act, R.S.C. 1985, c. C‑42,
ss. 2 “telecommunication”, 2.2(1) “publication”, 2.4(1)(c), 3(1)(f),
15(1), 27(2), 29.4(2), 30.8(1), 67 to 68.2.
Copyright
Act, 1921, S.C. 1921, c. 24, ss. 2(q) “performance”, 3(1).
Copyright Amendment Act, 1931, S.C. 1931,
c. 8, ss. 2(3) “performance”, 3.
Statement of Proposed Royalties to Be Collected by SOCAN for the
Public Performance or the Communication to the Public by Telecommunication, in
Canada, of Musical or Dramatico‑Musical Works,
(2005) 139 Can. Gaz. I (Supp.).
Treaties and Other International Instruments
Berne Convention for the Protection of Literary and Artistic Works, 828 U.N.T.S. 221, September 9, 1886; rev. in
Berlin November 13, 1908, art. 11, 13, 14; rev. in Rome June 2,
1928, art. 11bis.
Canada‑U.S. Free Trade Agreement,
1987, arts. 2005, 2006.
North American Free Trade Agreement Between the Government of
Canada, the Government of the United Mexican States and the Government of the
United States of America, Can. T.S. 1994 No. 2.
Authors Cited
Canada.
Canada‑U.S. Free Trade Agreement. Ottawa: External Affairs,
1987.
Canada.
House of Commons. House of Commons Debates, vol. 1, 2nd Sess.,
17th Parl., April 23, 1931, pp. 899-900.
Canada.
House of Commons. House of Commons Debates, vol. 3, 2nd Sess.,
17th Parl., June 8, 1931, p. 2399.
Craig,
Carys. “Locking Out Lawful Users: Fair Dealing and Anti‑Circumvention
in Bill C‑32”, in Michael Geist, ed., From “Radical Extremism” to
“Balanced Copyright”: Canadian Copyright and the Digital Agenda. Toronto:
Irwin Law, 2010, 177.
Driedger, Elmer A. Construction of Statutes, 2nd ed.
Toronto: Butterworths, 1983.
Goldstein, Paul, and P. Bernt Hugenholtz. International
Copyright: Principles, Law, and Practice, 2nd ed. New York: Oxford
University Press, 2010.
Handa, Sunny. Copyright Law in Canada. Markham, Ont.:
Butterworths, 2002.
Judge, Elizabeth F., and Daniel J. Gervais. Intellectual
Property: The Law in Canada, 2nd ed. Toronto: Carswell, 2011.
Katz, Ariel. “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. Toronto: Irwin Law, 2009, 449.
McKeown, John S. Fox on Canadian
Law of Copyright and Industrial Designs, 4th ed. Toronto:
Thomson/Carswell, 2009 (loose-leaf updated 2012, release 1).
Merriam-Webster’s Collegiate Dictionary,
11th ed. Springfield, Mass.: Merriam-Webster, 2003, “communicate”, “transmit”.
Moyse, Pierre‑Emmanuel. Le droit
de distribution: analyse historique et comparative en droit d’auteur. Cowansville,
Qué.: Yvon Blais, 2007.
Oxford
English Dictionary (online: www.oed.com),
“communicate”, “transmit”.
Shorter Oxford English Dictionary on Historical Principles, 6th ed., vol. 1. Oxford: Oxford University Press, 2007, “communicate”.
Sullivan, Ruth. Statutory Interpretation, 2nd ed. Toronto:
Irwin Law, 2007.
Sullivan, Ruth. Sullivan and Driedger on the Construction of
Statutes, 4th ed. Markham, Ont.: Butterworths, 2002.
Vaver, David. Intellectual Property Law: Copyright, Patents,
Trade‑marks, 2nd ed. Toronto: Irwin Law, 2011.
APPEAL
from a judgment of the Federal Court of Appeal (Létourneau, Nadon and
Pelletier JJ.A.), 2010 FCA 221, 406 N.R. 288, 323 D.L.R. (4th) 62, 86
C.P.R. (4th) 258, 14 Admin. L.R. (5th) 151, [2010] F.C.J. No. 1088 (QL),
2010 CarswellNat 3113, affirming a decision of the Copyright Board, www.cb-cda.gc.ca/decisions/2007/20071018-m-e.pdf,
(2007), 61 C.P.R. (4th) 353, [2007] C.B.D. No. 7 (QL), 2007 CarswellNat 3466. Appeal allowed,
LeBel, Fish, Rothstein and Cromwell JJ. dissenting.
Barry B. Sookman and Daniel G. C. Glover, for the appellants.
Gilles Daigle, D. Lynne
Watt, Paul Spurgeon and Henry Brown, Q.C., for the
respondent.
Written submissions
only by Casey M. Chisick, Timothy Pinos and Jason
Beitchman, for the intervener CMRRA‑SODRAC Inc.
Written submissions
only by Jeremy de Beer and David Fewer, for the intervener the Samuelson‑Glushko
Canadian Internet Policy and Public Interest Clinic.
Written submissions
only by Tim Gilbert, Sana Halwani and Sundeep Chauhan, for
the intervener Cineplex Entertainment LP.
The
judgment of McLachlin C.J. and Deschamps, Abella, Moldaver and Karakatsanis JJ.
was delivered by
[1]
Abella and
Moldaver JJ. — In the video game publishing industry, the royalties for the
reproduction of any musical works which are incorporated into the games are
currently negotiated before the games are packaged for public sale. Once these
rights have been negotiated, the owner of the copyright in the musical work has
no further rights when the game is sold. The question in this appeal is
whether the rights are nonetheless revived when the work is sold over the Internet
instead of in a store. In our view, it makes little sense to distinguish
between the two methods of selling the same work.
[2]
The Copyright Board concluded that video games
containing a musical work, the royalties to which have already been negotiated
with the copyright owner, were nonetheless subject to a new fee when sold over
the Internet ((2007), 61 C.P.R. (4th) 353). Its decision was upheld by the
Federal Court of Appeal (2010 FCA 221, 406 N.R. 288). In our respectful view,
the Board’s decision misconstrues the provisions at issue in the Copyright
Act, R.S.C. 1985, c. C-42 , ignoring decades of legislative history, and
violates the principle of technological neutrality, which requires that the Act
apply equally notwithstanding the technological diversity of different forms of
media.
Analysis
[3]
The provision at issue in this appeal is s.
3(1) (f) of the Copyright Act , which states that copyright owners
have the sole right
in
the case of any literary, dramatic, musical or artistic work, to communicate
the work to the public by telecommunication . . . .
[4]
The focus of this appeal is on the meaning of
the word “communicate” in s. 3(1) (f), a term which is not defined in the
Act. The Society of Composers, Authors and Music Publishers of Canada
(SOCAN), which administers the right to “communicate” musical works on behalf
of copyright owners, applied to the Board for a tariff under this provision to
cover downloads of musical works over the Internet. The Entertainment Software
Association and the Entertainment Software Association of Canada (collectively,
ESA), which represent a broad coalition of video game publishers and
distributors, objected to the tariff, arguing that “downloading” a video game
containing musical works did not amount to “communicating” that game to the
public by telecommunication under s. 3(1) (f). Instead, a “download” is
merely an additional, more efficient way to deliver copies of the games to
customers. The downloaded copy is identical to copies purchased in stores or
shipped to customers by mail, and the game publishers already pay copyright
owners reproduction royalties for all of these copying activities.
[5]
We agree with ESA. 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.
[6]
This argument is echoed by David Vaver in his
book, Intellectual Property Law: Copyright, Patents, Trade-marks (2nd
ed. 2011), where he appears to criticize the Board’s decision in this
particular case:
In principle, substitute delivery systems should
compete on their merits: either both or neither should pay. Copyright law
should strive for technological neutrality.
. . .
In
the past, whether a customer bought a sound recording or video game physically
at a store or ordered it by mail made no difference to the copyright holder: it
got nothing extra for the clerk’s or courier’s handover of the record to the
customer. Now, because of the telecommunication right, copyright holders can
and do charge extra for electronic delivery of identical content acquired off
websites. [Emphasis added; pp. 172-73.]
[7]
ESA’s argument is also consistent with this
Court’s caution in Théberge v. Galerie d’Art du Petit Champlain inc.,
[2002] 2 S.C.R. 336, that the balance in copyright between promoting the public
interest in the encouragement and dissemination of works and obtaining a just
reward for the creator requires recognizing the “limited nature” of creators’
rights:
The proper balance among these and
other public policy objectives lies not only in recognizing the creator’s
rights but in giving due weight to their limited nature. In crassly economic
terms it would be as inefficient to overcompensate artists and authors for
the right of reproduction as it would be self-defeating to undercompensate them.
Once an authorized copy of a work is sold to a member of the public, it is
generally for the purchaser, not the author, to determine what happens to it.
[Emphasis added; para. 31.]
[8]
The traditional balance between authors and
users should be preserved in the digital environment: Carys Craig, “Locking Out
Lawful Users: Fair Dealing and Anti-Circumvention in Bill C-32”, in Michael
Geist, ed., From “Radical Extremism” to “Balanced Copyright”: Canadian
Copyright and the Digital Agenda (2010), 177, at p. 192.
[9]
SOCAN has never been able to charge royalties
for copies of video games stored on cartridges or discs, and bought in a store
or shipped by mail. Yet it argues that identical copies of the games sold and
delivered over the Internet are subject to both a fee for reproducing
the work and a fee for communicating the work. The principle of
technological neutrality requires that, absent evidence of Parliamentary intent
to the contrary, we interpret the Copyright 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. To do otherwise would effectively
impose a gratuitous cost for the use of more efficient, Internet-based
technologies.
[10]
The Board’s misstep is clear from its definition
of “download” as “a file containing data . . . the user is meant to keep as his
own” (para. 13). The Board recognized that downloading is a copying
exercise that creates an exact, durable copy of the digital file on the user’s
computer, identical to copies purchased in stores or through the mail.
Nevertheless, it concluded that delivering a copy through the Internet was
subject to two fees — one for
reproduction and one for communication — while delivering a copy through stores or mail was subject only to
reproduction fees. In coming to this conclusion, the Board ignored the
principle of technological neutrality.
[11]
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 . . . .
. . .
. . . the 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)
[12]
In our view, the Board improperly concluded that
the Internet delivery of copies of video games containing musical works amounts
to “communicating” the works to the public. This view is evidenced by the
legislative history of the Copyright Act , which demonstrates that the
right to “communicate” is historically connected to the right to perform a work
and not the right to reproduce permanent copies of the work.
[13]
As this Court held in Bishop v. Stevens,
[1990] 2 S.C.R. 467, at pp. 473-74, the 1921 Canadian Copyright Act was
based on, and designed to implement, the following provisions of the 1886 Berne
Convention for the Protection of Literary and Artistic Works, as revised in
the 1908 Berlin Revision:
Article 11
The stipulations of the present
Convention shall apply to the public representation of dramatic or
dramatico-musical works and to the public performance of musical works,
whether such works be published or not.
. . .
Article 13
The authors of musical works shall have
the exclusive right of authorizing (1) the adaptation of those works to
instruments which can reproduce them mechanically; (2) the public
performance of the said works by means of these instruments.
. . .
Article 14
Authors
of literary, scientific or artistic works shall have the exclusive right of
authorizing the reproduction and public representation of their works by
cinematography.
[14]
These articles were reflected in the
introductory paragraph to s. 3(1) of the Copyright Act, 1921,
S.C. 1921, c. 24, which granted
the sole right to produce or reproduce the
work or any substantial part thereof in any material form whatsoever, to
perform, or in the case of a lecture to deliver, the work or any
substantial part thereof in public; if the work is unpublished, to publish the
work or any substantial part thereof; . . .
[15]
In the 1921 Act, “performance” was
defined in s. 2 (q) as
any
acoustic representation of a work and any visual representation of any dramatic
action in a work, including such a representation made by means of any
mechanical instrument;
[16]
The right to perform historically presupposed a
live audience that would be present at the site where the performance took
place. With the advent of radio broadcasting, however, a debate emerged about
how this new technology should be treated under copyright law, reminiscent of
the current debate over Internet technologies. The international consensus was
that radio broadcasting should be treated as an extension of the existing
performance right, in order to cover distant audiences: Paul Goldstein and P.
Bernt Hugenholtz, International Copyright: Principles, Law, and Practice
(2nd ed. 2010), at §9.1.4.3; Pierre-Emmanuel Moyse, Le droit de
distribution: analyse historique et comparative en droit d’auteur (2007),
at pp. 309-10. The Rome Revision (1928) of the Berne Convention therefore
extended the Article 11 performance right. The new Article 11bis
conferred on authors the “exclusive right of authorizing the communication
of their works to the public by radiocommunication”.
[17]
Canada acceded to the amended Berne
Convention in 1928, and enacted s. 3(1) (f) of the Copyright Act
in 1931 to incorporate the new Article 11bis :
(f) In case of any literary,
dramatic, musical or artistic work, to communicate such work by radio
communication.
(Copyright Amendment Act, 1931, S.C.
1931, c. 8, s. 3)
[18]
At the same time, the 1931 Copyright
Amendment Act amended the definition of “performance” to accommodate this
new concept of performances at a distance:
“performance” means any acoustic representation
of a work . . . including a representation made by means of any mechanical
instrument or by radio communication. [s. 2(3)]
[19]
Like a performance, communicating a work by
radio communication (i.e., a radio broadcast) under s. 3(1) (f) involved
an “acoustic representation” of a work. Also like a performance, communication
under s. 3(1) (f) did not contemplate the delivery of permanent
copies of the work, since such a delivery was not possible through the means of
Hertzian radio waves.
[20]
This interpretation of the original s. 3(1) (f)
is supported by the legislative debates. In explaining the purpose of this
provision to Parliament, the Minister responsible for the amendments, C. H.
Cahan, stated that s. 3(1) (f) was intended to bring the Copyright Act
into conformity with the Rome Revision of the Berne Convention (House
of Commons Debates, vol. 1, 2nd Sess., 17th Parl., April 23, 1931, at pp.
899-900), and that “radio communication” was a form of performance:
In England, the courts have decided that
radio communication comes within the meaning of the word performance; but
in order to make it clear that the author’s rights include not only the right
of performance by acoustic representation and so forth, but also by radio
communication, we have added those words “or by radio communication” to the
present definition of performances as contained in the act. . . . I am simply
adding the words “or by radio communication” to make it clear that in
respect of radio communication the author has exactly the same rights as he has
in relation to other performances of his work. [Emphasis added.]
(vol.
3, June 8, 1931, at p. 2399)
[21]
This was also the interpretation of the original
s. 3(1) (f) by this Court in Composers, Authors and Publishers Assoc.
of Canada Ltd. v. CTV Television Network Ltd., [1968] S.C.R. 676. The
Court held that signals transmitted from CTV to its affiliates did not
communicate “musical works” —
at the time defined as “reduced to writing” — but instead communicated a “performance” of the works. In obiter,
the Court went on to hold that Article 11bis of the Rome Convention,
on which s. 3(1) (f) was based, was intended to cover public performances
by radio broadcasting (pp. 680-82). Moreover, it held that “communication” is
“apt to include performances in its meaning” (p. 681). As a result, the Court
concluded that s. 3(1) (f) must include the exclusive right of public
performance by radio broadcasting.
[22]
After 1931, there were no changes to s. 3(1) (f)
until 1988. In 1988, s. 3(1)(f) was amended to read as follows:
(f) in the case of any literary,
dramatic, musical or artistic work, to communicate the work to the public
by telecommunication. . . .
(Canada-United
States Free Trade Agreement Implementation Act, S.C. 1988, c. 65, s. 62 )
[23]
SOCAN argues that the 1988 amendment from “radio
communication” to “telecommunication” demonstrates Parliament’s intent to
remove all reference in s. 3(1) (f) to conventional performance or
broadcasting activities, and to expand the communication right to technologies
that involve transmitting data in a way that gives end users a permanent copy
of the work.
[24]
With respect, we disagree. The 1988 amendments
to the Copyright Act found at ss. 61 to 65 of the Canada-United
States Free Trade Agreement Implementation Act , were enacted in order to
give effect to Articles 2005 and 2006 of the 1987 Canada-U.S. Free Trade
Agreement (CUFTA): see Canadian Wireless Telecommunications Assn.
v. Society of Composers, Authors and Music Publishers of Canada, 2008 FCA
6, [2008] 3 F.C.R. 539 (CWTA v. SOCAN), at para. 27. Before CUFTA,
Canadian courts had held that “radio communication” under the former s. 3(1) (f)
was limited to Hertzian radio waves and did not extend to communication
by co-axial cables: Canadian Admiral Corp. v. Rediffusion, Inc., [1954]
Ex. C.R. 382, at p. 410. CUFTA, however, required Canada to compensate copyright owners for the
retransmission of television signals that were sent over cable lines. The amendments were therefore designed to ensure that cable
companies, and not just radio broadcasters, would also be captured under s.
3(1) (f): John S. McKeown, Fox on Canadian Law of Copyright and
Industrial Designs (4th ed. (loose-leaf)), at pp. 21-86, 21-87 and 29-1.
[25]
In this context, the replacement of the words
“radio communication” with “telecommunication” should be understood as merely
expanding the means of communicating a work — that is, from radio
waves (“by radio communication”) to cable and other future technologies (“to
the public by telecommunication”). In our view, by substituting
the word “telecommunication” in 1988, Parliament did not intend to change the
fundamental nature of the communication right, which had for over 50 years been
concerned with performance-based activities. Instead, Parliament only changed
the means of transmitting a communication. The word “communicate”
itself was never altered.
[26]
Parliament’s addition of the phrase “to the
public” to s. 3(1) (f) also supports this interpretation of the 1988
amendments. Before 1988, there was no doubt that all communications were “to
the public”, as the nature of a broadcast through radio waves was necessarily
public. The term “telecommunication”, however, risked introducing ambiguity
into the Act, as telecommunication could also include private
communications. By adding the phrase “to the public” with the term
“telecommunication” in 1988, Parliament clarified its intent to maintain the
communication right as a category of performance right.
[27]
Therefore, we agree with Rothstein J. (at para.
98) that there is a “historic relationship” between the performance right and
the communication right in the Copyright Act , but we disagree
with his conclusion that Parliament intended to sever this relationship based
on the 1988 amendments. In our view, this historical connection between
communication and performance still exists today. With respect, the Board ignored this connection when it concluded that
transmitting a download of a musical work over the Internet could amount to a
“communication”.
[28]
The Board’s conclusion was based in part on its
erroneous view that a “download” is indistinguishable from a “stream”.
Although a download and a stream are both “transmissions” in technical terms
(they both use “data packet technology”), they are not both “communications”
for purposes of the Copyright Act . This is clear from the Board’s
definition of a stream as “a transmission of data that allows the user to
listen or view the content at the time of transmission and that is not
meant to be reproduced” (para. 15). Unlike a download, the experience of a
stream is much more akin to a broadcast or performance.
[29]
The Board also appears to have relied on Binnie
J.’s observation in Society of Composers, Authors and Music Publishers of
Canada v. Canadian Assn. of Internet Providers, [2004] 2 S.C.R. 427 (SOCAN
v. CAIP), that a work has necessarily been “communicated” when, “[a]t the
end of the transmission, the end user has a musical work in his or her
possession that was not there before” (at para. 45), and on CWTA v. SOCAN,
where Sharlow J.A. evoked SOCAN v. CAIP to hold that “[t]he word
‘communication’ connotes the passing of information from one person to another”
(paras. 19-20).
[30]
As noted by Justice Rothstein, however, the
comments in SOCAN v. CAIP were obiter, as the meaning of “communicate”
in s. 3(1) (f) was not directly in issue in that case. Neither SOCAN
v. CAIP nor CWTA v. SOCAN examined the legislative history behind
the term “communicate” or the connection between communication and performance.
[31]
For the same reason, we cannot agree with
Justice Rothstein’s dependence on the dictionary definition of the word
“communicate” to mean any transmission of data, including a download
which provides the user with a durable copy of the work. Dictionaries, while
often offering a useful range of definitional options, are of little assistance
in identifying what a word means when it is orphaned from its context: Ruth
Sullivan, Sullivan and Driedger on the Construction of Statutes (4th ed.
2002), at p. 27; see also Ontario v. Canadian Pacific Ltd., [1995] 2
S.C.R. 1031, at para. 67 (per Gonthier J.). In our view, using
dictionary definitions in this case has the effect of ignoring a solid line of
legislative history connecting the term “communicate” to performance-based
activities.
[32]
The Board’s interpretation of s. 3(1) (f)
also ignores the historic distinction between performance-based rights and
reproduction-based rights, improperly extending the term “communicate” to
capture the Internet delivery of permanent copies of a work. In our view, this
interpretation goes far beyond what the term “communicate” was ever intended to
capture.
[33]
In enacting s. 3(1) , Parliament distinguished
between rights of reproduction and performance:
3.
(1) For the purposes of this Act, “copyright” means the sole right to produce
or reproduce the work or any substantial part thereof in any material form
whatsoever, to perform, or in the case of a lecture to deliver, the work
or any substantial part thereof in public . . . .
(Copyright
Act, 1921)
[34]
This distinction between reproduction and performance
in s. 3(1) has been maintained all the way through to the current version of
the Act.
[35]
Performing a work is fundamentally different
than reproducing it. As this Court concluded in Bishop v. Stevens, a
performance is impermanent in nature, and does not leave the viewer or listener
with a durable copy of the work:
The right to perform (including radio
broadcast), and the right to make a recording, are separately enumerated in s.
3(1) . They are distinct rights in theory and in practice . . . . [T]he rights
to perform and to record a work are considered sufficiently distinct that they
are generally assigned separately, and administered by different entities.
. . .
.
. . A performance is by its very nature fleeting, transient, impermanent.
When it is over, only the memory remains. . . . Furthermore, no
imitation of a performance can be a precise copy. A recording, on the
other hand, is permanent. It may be copied easily, privately, and
precisely. Once a work has been recorded, the recording takes on a life
of its own. . . . Once the composer has made or authorized a recording of
his work, he has irrevocably given up much of his control over its presentation
to the public. These are the reasons why the rights to perform and to record
are recognized as distinct in the Act, and why in practice a composer may wish
to authorize performances but not recordings of his work. [Emphasis added;
pp. 477-79.]
[36]
In Bishop, the alleged infringer argued
that the “right to broadcast” a musical work under s. 3(1) (f) included
the incidental right to make an ephemeral copy for the sole purpose of
facilitating the broadcast. This Court ultimately concluded that the right to
perform — including the right
to communicate — could not be
understood to include the right to reproduce, since performing and
communicating are different in nature from making a recording.
[37]
Even though Bishop interpreted the
pre-1988 version of the Copyright Act (before the “telecommunication”
amendment), the distinction between performance-based and reproduction-based
rights established in s. 3(1) is evidenced in the provisions of the current Act.
For example, in s. 2.2(1) , the term “publication” includes “making
copies”, but expressly excludes “the performance in public, or the
communication to the public by telecommunication” of a work. Similarly, the
educational institutions exception in s. 29.4(2) refers to the right to
“reproduce” and the right to “communicate by telecommunication to the public”
as distinct rights. The same is true of s. 15(1) , which categorizes
neighbouring rights under the Act into two categories: the right to
“communicate” and “perform” a performance, and the right to “reproduce” a
fixation of the performance.
[38]
The distinction between performance and
communication rights on the one hand and reproduction rights on the other is
also evident in the collective administration of copyright tariffs under the Copyright
Act . In 1993, SOCAN — a
performing rights society — was
put in charge of administering the communication right
in s. 3(1) (f) in relation to musical works: S.C. 1993, c. 23, s. 3: see McKeown, at pp. 3-12, 27-2 and 27-3. These provisions are
contained in a section of the Act entitled “Collective
Administration of Performing Rights and of Communication Rights”: ss. 67
to 68.2 (S.C. 1997, c. 24, s. 45): see McKeown, at p.
26-3. Even the Copyright Board itself categorizes its decisions relating to musical works into two
categories: “Public Performance of Music” and “Reproduction of Musical Works”:
http://www.cb-cda.gc.ca/decisions/index-e.html.
[39]
Therefore, the term “communicate” in s. 3(1) (f),
which has historically been linked to the right to perform, should not be
transformed by the use of the word “telecommunication” in a way that would
capture activities akin to reproduction. Such transformation would result in
abandoning the traditional distinction in the Act between
performance-based rights and rights of reproduction. There is no evidence
either in 1988 or in subsequent amendments to the Act that Parliament
intended such abandonment.
[40]
SOCAN submits that the distinction between
reproduction and performance rights in Bishop actually supports its view
that downloading a musical work over the Internet can attract two tariffs.
Since reproduction and performance-based rights are two separate, independent
rights, copyright owners should be entitled to a separate fee under each
right. This is based on the Court’s reliance in Bishop, at p. 477, on a
quote from Ash v. Hutchinson & Co. (Publishers), Ltd., [1936] 2 All
E.R. 1496 (C.A.), at p. 1507, per Greene L.J.:
Under the Copyright Act , 1911 [on which the
Canadian Act was based], . . . the rights of the owner of copyright
are set out. A number of acts are specified, the sole right to do which is
conferred on the owner of the copyright. The right to do each of these acts is,
in my judgment, a separate statutory right, and anyone who without the
consent of the owner of the copyright does any of these acts commits a tort; if
he does two of them, he commits two torts, and so on. [Emphasis added.]
[41]
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.
[42]
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.
[43]
In our view, therefore, the Board’s conclusion
that the Internet delivery of a permanent copy of a video game containing
musical works amounted to a “communication” under s. 3(1) (f) should be set
aside.
[44]
We would therefore allow the appeal with costs.
The reasons of LeBel, Fish,
Rothstein and Cromwell JJ. were delivered by
[45]
Rothstein J. (dissenting) — Under the Copyright Act, R.S.C. 1985, c. C-42
(the “Act ”), s. 3(1) (f), a copyright holder has the sole right to
“communicate [his or her] work to the public by telecommunication” and to
authorize any such communication. The question in this case is whether a
musical work is “communicate[d] . . . by telecommunication” when a file
containing the musical work is downloaded from the Internet.
[46]
When files containing copyright protected works
are downloaded, copyright holders are entitled to compensation for the
reproduction of their works. This appeal concerns musical works contained in
video games which may be downloaded from the Internet. The appellants, the
Entertainment Software Association and the Entertainment Software Association
of Canada (collectively, the “ESA”), argue that works transmitted over the
Internet by downloading should not give rise to further compensation under s.
3(1) (f). The respondent, Society of Composers, Authors and Music
Publishers of Canada (“SOCAN”), says that reproduction and communication are
different and independent rights under the Act and that copyright holders are entitled
to remuneration for the communication of their works through Internet
downloading.
[47]
My colleagues Abella and Moldaver JJ. part
company with me on some fundamental principles of copyright law. In my view,
precedents of this Court have established the principles that must govern the
analysis in this appeal. Copyright is a creature of statute (Théberge v.
Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336, at
para. 5; Compo Co. v. Blue Crest Music Inc., [1980] 1 S.C.R. 357, at p.
373; Bishop v. Stevens, [1990] 2 S.C.R. 467, at p. 477). Copyright is
comprised of a bundle of independent statutory rights (Bishop v. Stevens,
at p. 477; Compo Co. v. Blue Crest Music Inc., at p. 373). Courts must
give effect to these independent rights as provided by Parliament. While
courts must bear in mind that the Copyright Act “is . . . a balance
between promoting the public interest in the encouragement and dissemination of
works of the arts and intellect and obtaining a just reward for the creator”,
which balance requires “not only . . . recognizing the creator’s rights but in
giving due weight to their limited nature” (Théberge, at paras. 30-31),
courts must still respect the language chosen by Parliament — not override it.
[48]
In my respectful opinion, my colleagues’
approach sweeps away these well-established principles. They start from the
proposition that once the reproduction rights in the musical work contained in
a video game are negotiated, “the owner of the copyright in the musical work has
no further rights when the game is sold” (Abella and Moldaver JJ., at para.
1). They support their argument by reference to the principle of technological
neutrality: because the production and sale of a hard copy of the video
game would only engage the right to reproduce the musical works it contains,
the sale of a digital copy of the game, by transmission over the
Internet, must also not trigger protected rights other than the right to
reproduce. For my colleagues, the “Internet is simply a technological taxi
that delivers a durable copy of the same work to the end user” (para. 5). They
say that the question in this appeal is “whether the rights are nonetheless
revived when the work is sold over the Internet instead of in a store” (para.
1).
[49]
Generally, a technologically neutral copyright
law is desirable. However, technological neutrality is not a statutory
requirement capable of overriding the language of the Act and barring the
application of the different protected rights provided by Parliament. My
colleagues’ basic propositions pre-empt the application of other rights of the
copyright holder to this set of facts and divest these rights of their
independent content. There is no need to revive rights that have never been
exhausted.
[50]
In many respects, the Internet may well be
described as a technological taxi; but taxis need not give free rides.
I.
Facts and Procedural History
[51]
On judicial review, the Federal Court of Appeal
(“FCA”) upheld the determination by the Copyright Board that the download of a
file containing a musical work is a “communicat[ion] . . . to the public by
telecommunication” within the meaning of s. 3(1) (f) of the Act ,
entitling SOCAN members to compensation in accordance with an approved tariff.
The ESA appeals to this Court from the decision of the FCA.
[52]
The ESA is a coalition of video game publishers
and distributors. Video games are entertainment software consisting of
millions of lines of software code. When installed and run on a computer, the
software generates audiovisual effects in response to commands by the user.
The audio component may include musical works as part of the game’s
soundtrack.
[53]
Video games can be sold over the Internet.
Customers navigate to the website of an online game provider where the video
game program is offered for sale, pay the purchase price and download the
program. The site transmits a permanent copy of the software to the customer’s
hard drive. This mode of delivery of the purchased program competes with the
traditional model, where the video game is stored on a CD or in a cartridge,
requiring the customer to buy it at a store.
[54]
The customer must then install the program,
either downloaded from the Internet or contained on the CD, on his or her
computer. Only after the installation is complete may the customer run the
game, at which point, the audio and the visual effects of the software become
perceptible. The game and its audio and visual effects are not perceptible
during the transmission of the file from the vendor to the video game user, a
fact that is said to be of crucial significance in this case.
[55]
It is standard practice within the video game
publishing industry to negotiate clearance of copyright for the reproduction
of the musical works incorporated in the games prior to their publication.
There is no dispute that once reproduction rights are cleared, the owner of
copyright in the musical work would have no further rights when the video game
is sold to a customer at a bricks-and-mortar store or if a CD containing the
game is shipped through regular mail.
[56]
SOCAN is a collective society of composers,
authors and publishers of music. It administers the right to perform in public
and the right to communicate to the public by telecommunication the works
covered by its members’ copyrights. It files proposed tariffs with the Board
and collects royalties, as set by the Board, on behalf of its members.
[57]
These proceedings involve proposed tariffs first
filed by SOCAN in 1995 for various uses of musical works constituting, in
SOCAN’s view, copyright protected communication of musical works to the public
over the Internet. There were objections to the filed proposals. In 1996, the
Board decided to deal with legal issues separately from the determination of
the actual tariffs. The first step was to “determine which activities on the
Internet, if any, constitute a protected use [of SOCAN’s repertoire of music]
targeted in the tariff” (SOCAN Statement of Royalties, Public Performance of
Musical Works 1996, 1997, 1998 (Tariff 22, Internet) (Re) (1999), 1 C.P.R.
(4th) 417 (“Tariff 22 decision”), at p. 424).
[58]
On October 27, 1999 (the Tariff 22 decision),
the Board issued what it termed its Phase I decision, dealing with legal and
jurisdictional issues. The Tariff 22 decision was ultimately appealed to this
Court, but not on the issue of communication to the public by telecommunication
now before this Court. However, in Society of Composers, Authors and Music
Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45,
[2004] 2 S.C.R. 427 (“SOCAN v. CAIP”), at para. 30, Binnie J. noted the Board’s
conclusion that “an Internet communication occurs at the time the work is
transmitted from the host server to the computer of the end user, regardless of
whether it is played or viewed at that time, or later, or never” (see Tariff 22
decision, at p. 450). He found that this particular issue was “no longer
contested”.
[59]
In 2005, SOCAN modified its proposed Tariff to
divide it into seven categories, each dealing with a different Internet-based
activity. The sixth category applies to “Game Sites” and covers
“communications of musical works as part of games, including gambling, from
Sites or Services that consist predominantly of games . . .” (Statement of
Proposed Royalties to Be Collected by SOCAN for the Public Performance or the
Communication to the Public by Telecommunication, in Canada, of Musical or
Dramatico-Musical Works (2005), 139 Can. Gaz. I (Supp.), at p. 18). When
the Board proceeded to Phase II of the process to establish a tariff for the
communication of musical works over the Internet for the years 1996 to 2006,
the ESA argued that since the users can neither see, nor hear game software
while it is being downloaded, “[t]he transmission solely involves a
distribution of a copy of a work that is identical to copies available
on discs in stores. The transmission [is] thus not a ‘communication to the
public’” (A.F., at para. 20 (emphasis in original)).
[60]
The Board’s Phase II determination was rendered
in two decisions. In the first, issued on October 18, 2007 (61 C.P.R. (4th)
353) (the “Tariff 22.A decision”), the Board rejected the ESA’s argument and
confirmed its prior conclusion that a download is a “communication”. While the
Tariff 22.A decision dealt with the details of the tariffs applicable to uses
of music by online music services that offer catalogues of songs for
downloading upon payment of the purchase price, the Board held that the legal
principles established in that decision would also apply to other uses of music
on the Internet. The Board’s second Phase II decision, issued on October 24,
2008, SOCAN Statement of Royalties, Internet ― Other Uses of Music, 1996-2006 (Tariffs 22.B-22.G) (2008), 70 C.P.R. (4th) 81 (the “Tariff 22.B-G decision”),
established the details of the tariffs applicable to other uses of music on the
Internet, including use by game sites at issue in this appeal (Tariff 22.G).
[61]
A number of objectors applied to the FCA for
judicial review on different issues, which the FCA dealt with in separate
decisions. Bell Canada v. Society of Composers, Authors and Music
Publishers of Canada, 2010 FCA 220, 409 N.R. 102 (“Bell Canada”),
was an appeal by online music services contesting the Board’s determination in
the Tariff 22.A decision that a download of a music file from the online music
service’s website by the end consumer is a “communication to the public”. The
FCA held that the Board’s determination was a reasonable interpretation of s.
3(1) (f) of the Act . The FCA considered that SOCAN v. CAIP had
fully answered the question of what constitutes a “communication” and
accordingly confirmed that a download is a communication (para. 5).
[62]
As stated above, the ESA’s application for
judicial review of the Tariff 22.B-G decision was dismissed by the FCA. On
the issue of whether downloads of video games are communications to the public
of the musical works they contain, the FCA referred to its reasons in Bell
Canada, that is, that a download of a file containing a musical work is a
communication to the public by telecommunication (2010 FCA 221, 406 N.R.
288, at para. 13).
II.
Issue
[63]
The issue in this appeal is whether the
transmission of a video game through an Internet download is a “communication”
to the public within the meaning of s. 3(1) (f) of the Act . If it is,
SOCAN is entitled to royalties for the communication of the included musical
works.
III.
Analysis
A. Overview
[64]
The ESA submits that on reading s. 3(1) (f)
in its entirety, considering it in the context of the entire Act and in light
of its legislative history, the provision “creates an exclusive right of public
performance (or representation for works that are not publicly performed)
delivered by means of telecommunication”. They say that to “communicate” must
mean “to cause information in humanly perceivable form to be imparted to
another person for immediate listening or viewing” (A.F., at para. 33
(emphasis added)). The communication right was never meant to cover situations
where durable copies of the copyrighted works are made available, which are
already covered by the reproduction right and for which copyright
holders are already compensated. Since the users can neither see nor hear
game software while it is being downloaded, the transmission from the online
game provider to the user does not constitute a communication to the public.
The ESA further argues that the Act uses both the terms “communicate” and
“transmit” and that the two cannot have the same meaning. In their submission,
the act of a game being downloaded by a user constitutes a transmission and not
a communication. The ESA also relies on American jurisprudence and raises some
“unintended consequences” of the decisions below.
[65]
In this appeal, the ESA does not advance
arguments on whether, should the transmissions be found to be “communications”
within the meaning of s. 3(1) (f), such transmissions would be
communications “to the public”; this issue is dealt with in the
companion case Rogers Communications Inc. v. Society of Composers, Authors
and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283.
[66]
SOCAN says that the decisions of the Board and
of the FCA were correctly decided. In SOCAN’s view, to communicate means
simply “to transmit, impart, make known or convey information” (R.F., at para.
32 (emphasis deleted)) and the ESA’s submissions would artificially restrict
the ordinary meaning of the word. Further, SOCAN says that the ESA’s argument
ignores the basic principle of copyright law that the copyrights granted in s.
3(1) for reproduction, performance and communication of a work are separate and
distinct rights (R.F., at para. 9).
B. Standard of Review
[67]
For the reasons explained in Rogers, at
paras. 10-16, the applicable standard of review is correctness.
C. Whether Transmitting Musical Works Through Downloads Over
the Internet Is “Communicating”
(1) Section 3(1) (f) and Section 2
[68]
This appeal requires defining the right to
“communicate . . . by telecommunication” in the Copyright Act . The ESA
urges a definition of “communicate . . . by telecommunication” as “to cause
information in humanly perceivable form to be imparted to another person for
immediate listening or viewing” (A.F., at para. 33 (emphasis added)).
[69]
The exclusive right of the copyright holder to
“communicate . . . to the public by telecommunication” is provided in s. 3(1) (f)
of the Act :
3. (1)
For the purposes of this Act , “copyright”, in relation to a work, means the
sole right to produce or reproduce the work or any substantial part thereof
in any material form whatever, to perform the work or any substantial part
thereof in public or, if the work is unpublished, to publish the work or any
substantial part thereof, and includes the sole right
. . .
(f) in
the case of any literary, dramatic, musical or artistic work, to communicate
the work to the public by telecommunication,
. . .
and
to authorize any such acts.
[70]
Section 2 of the Act
defines “telecommunication”:
“telecommunication” means any transmission of
signs, signals, writing, images or sounds or intelligence of any nature by
wire, radio, visual, optical or other electromagnetic system;
It is not disputed that
transmissions in the digital environment are “telecommunications”.
(2) The Approach to Statutory Interpretation
[71]
The Copyright Act must be interpreted in
accordance with the general rules of statutory interpretation: “the words of an
Act are to be read in their entire context and in their grammatical and
ordinary sense harmoniously with the scheme of the Act , the object of the Act ,
and the intention of Parliament” (CCH Canadian Ltd. v. Law Society of Upper
Canada, 2004 SCC 13, [2004] 1 S.C.R. 339, at para. 9, citing E. A.
Driedger, Construction of Statutes (2nd ed. 1983), at p. 87).
(3) The Precedents
[72]
The word
“communicate” is not defined in the Act . I therefore start with the dictionary
meaning of the word. The Oxford English Dictionary (online) defines the
verb “communicate” as “[t]o impart (information, knowledge, or the like) . . .;
to impart the knowledge or idea of (something), to inform a person of; to
convey, express; to give an impression of, put across”. The Shorter Oxford
English Dictionary on Historical Principles (6th ed. 2007), vol. 1, at p.
466, includes the following definition: to “[i]mpart, transmit”. The Merriam-Webster’s
Collegiate Dictionary entry is defined as “to convey
knowledge of or information about: make known” ((11th ed. 2003), at p. 251). There is no suggestion
in these definitions that “to communicate” cannot mean “to transmit”, and
indeed, the Shorter Oxford English Dictionary expressly includes in the
definition of “communicate”, “transmit”.
[73]
Although the question was not directly in issue in that case (see para.
30), Binnie J. in SOCAN v. CAIP endorsed the ordinary definition of
“communicate” as the appropriate interpretation of the word in s. 3(1) (f)
of the Copyright Act :
The Board ruled that a telecommunication occurs
when the music is transmitted from the host server to the end user. I agree
with this.
. . .
The word “communicate”
is an ordinary English word that means to “impart” or “transmit” (Shorter
Oxford English Dictionary on Historical Principles (5th ed. 2002), vol. 1,
at p. 463). [paras. 42 and 46]
[74]
Since
SOCAN v. CAIP, the FCA has had the occasion to deal directly with the
meaning of the right to “communicate” under s. 3(1) (f) in Canadian
Wireless Telecommunications Assn. v. Society of Composers, Authors and Music
Publishers of Canada, 2008 FCA 6, [2008] 3 F.C.R. 539, leave to appeal refused, [2008] 2 S.C.R. vi (“CWTA”). The
question in that case, answered in the affirmative, was whether a person
communicates to the public the musical works contained in ringtones when
members of the public download the ringtones for their mobile phones. Sharlow
J.A. rejected the argument that a transmission is not the same thing as a
communication because “‘communication’ must be understood to include only a
transmission that is intended to be heard or perceived by the recipient
simultaneously with or immediately upon the transmission” (para. 18). She
wrote:
In
my view, the applicants are proposing a meaning of the word “communication”
that is too narrow. The word “communication” connotes the passing of
information from one person to another. A musical ringtone is information in
the form of a digital audio file that is capable of being communicated. The
normal mode of communicating a digital audio file is to transmit it. The
wireless transmission of a musical ringtone to a cellphone is a communication, whether
the owner of the cellphone accesses it immediately in order to hear the music,
or at some later time. The fact that the technology used for the
transmission does not permit the cellphone owner to listen to the music during
the transmission does not mean that there is no communication. In my view, in
the context of a wireless transmission, it is the receipt of the transmission
that completes the communication.
This conclusion accords with the [SOCAN
v. CAIP] case (cited above). In that case Justice Binnie, writing for the
majority, said that the transmission of information over the Internet is a
communication once the information is received (see paragraph 45). . . . [I]t
is undoubtedly a true statement. [Emphasis added; paras. 19-20.]
(4) The ESA’s Arguments for Not Following SOCAN
v. CAIP and CWTA
[75]
The ESA argues that SOCAN v. CAIP (to the
extent that it addressed the issue) and CWTA should not be followed.
(a) “Communicate” and “Transmit”
[76]
The ESA first argues that there must be some
difference between the words “communicate” and “transmit”. The two words are
not used interchangeably in the Act and if Parliament used both words, it
intended them to have different meanings. On this basis, the ESA submits that
to “communicate to the public” means “more than the [mere] transmission of a
file from one point to another point without that file being seen or heard”
(A.F., at para. 73). Therefore, a download is not a communication within the
meaning of s. 3(1) (f), but a mere transmission.
[77]
I do not find this argument compelling. Parliament
is presumed to use words in
their ordinary meaning: R. Sullivan, Statutory Interpretation (2nd ed.
2007), at p. 49. As noted above, to “communicate” means to “impart” or
“transmit”. The Oxford English Dictionary (online) defines “transmit”
as: “[t]o cause (a thing) to pass, go, or be conveyed
to another person, place, or thing; to send across an intervening space; to
convey, transfer; . . . [t]o convey or communicate (usually something
immaterial) to another or others” (emphasis added); and, in a more
technical sense: “[t]o send out electric signals or electromagnetic waves
corresponding to (an image, a programme, etc.).” The definitions of “transmit”
in the Merriam-Webster’s
Collegiate Dictionary are:
to send or convey from one person or place to
another . . .
to send out (a signal) either
by radio waves or over a wire.
I see no
reason why, having regard to context, the meaning of both words cannot
overlap.
[78]
As set out above, s. 2 of the Act defines “telecommunication” as “any transmission of signs, signals, writing, images or sounds or
intelligence of any nature by wire, radio, visual, optical or other
electromagnetic system”. This definition equates the term “telecommunication”
with the transmission of certain subject matter by electromagnetic system. The
prefix “tele” simply means “to a distance”. So, “telecommunication” means
communicating to a distance by the means specified in the Act . It would seem
odd that “telecommunication” and transmission by electromagnetic system are
interchangeable in the Act but that “to communicate” and “to transmit” would
not be. The more obvious interpretation would be that for the purposes of s.
3(1) (f) of the Act , the exclusive right of the copyright holder to
communicate works to the public by telecommunication is simply to transmit
those works to the public by electromagnetic system, including the Internet.
[79]
The above definitions of “communicate” and “transmit” and the context in
which the words are used in the Act do not support the ESA’s conclusion that to
“communicate” in s. 3(1) (f) must necessarily mean to transmit
information in a humanly perceptible form for immediate perceiving and
listening. Even accepting that to communicate means to impart an idea, there
is no requirement that the idea be perceived and heard immediately.
[80]
The ESA supports its argument that the words “transmit” and “communicate”
must have different meanings primarily by reference to s. 2.4(1)(c).
Section 2.4(1)(c) provides:
2.4 (1) For
the purposes of communication to the public by telecommunication,
. .
.
(c) where
a person, as part of
(i) a
network, within the meaning of the Broadcasting Act , whose
operations result in the communication of works or other subject-matter to the
public, or
(ii) any
programming undertaking whose operations result in the communication of works
or other subject-matter to the public,
transmits by telecommunication a work
or other subject-matter that is communicated to the public by another person
who is not a retransmitter of a signal within the meaning of subsection 31(1),
the transmission and communication of that work or other subject-matter by
those persons constitute a single communication to the public for which those
persons are jointly and severally liable.
[81]
The ESA argues that the words “transmit” and “transmission” appear twice
and the word “communicate” five times, and that this means that they must have
different meanings. It says that transmitting is merely delivery or receipt of
information or data being conveyed; that the term “communicate” pertains to
what happens after transmission; and that this implies that the difference is
that a transmission is not the conveyance of information in a humanly
perceivable form. As a result, a transmission does not implicate s. 3(1) (f),
because s. 3(1) (f) uses the term communicate which, by contrast, does
imply conveyance in humanly perceivable form. Therefore, since the
communication only occurs after the transmission, a download does not give rise
to any entitlement under s. 3(1) (f).
[82]
This argument ignores the context and purpose of s. 2.4(1)(c).
This section was introduced in 1988 in order to reverse the holding in Composers,
Authors and Publishers Assoc. of Canada Ltd. v. CTV Television Network Ltd.,
[1968] S.C.R. 676 (“CAPAC”), that CTV’s transmissions of programs to its
affiliated stations, for further broadcasting to the public by the affiliated
stations, did not engage the right to communicate to the public in s. 3(1) (f),
because such transmissions remained within the private realm (see J. S. McKeown,
Fox on Canadian Law of Copyright and Industrial Designs (4th ed.
(loose-leaf)), at p. 21-90). In the context of s. 2.4(1)(c), a
“transmission” describes conveying works within a network or programming
undertaking before the work is conveyed to the public, while a “communication”
is the conveyance of the work “to the public” by another actor within the
network or programming undertaking. Without s. 2.4(1)(c), only the
latter act — the communication to the public — would engage s. 3(1) (f);
but a private transmission between affiliates would remain outside of copyright
protection. The effect of s. 2.4(1)(c), where it applies, is to make
the transmission and the communication a single act of communication to the
public, so that both the person who transmits the work and the person who
communicates the work to the public are jointly and severally liable for the
act of communication to the public.
[83]
All that can be teased out of s. 2.4(1)(c)
is that “communication to the public” is the phrase used to designate instances
where copyright protection is engaged, and not that “communication” means a
conveyance of information in a humanly perceivable form. On the other
hand, “transmit” or “transmission” are terms designating situations that do not
engage copyright protection under s. 3(1) (f). I agree with the ESA
that s. 2.4(1)(c) suggests that under the Act , the words “communicate”
and “transmit” are not used interchangeably. But the provision does not
suggest that the words refer to different types of conveyances. Rather, the
distinction is that the words are used in conjunction with different types of
recipient and different legal significance. Unless the transmission is
combined with a communication to the public, s. 3(1) (f) would not attach
to the transmission. When the transmission is ultimately a communication to
the public, s. 2.4(1) (c) provides that the transmission and the
communication to the public are a single communication to the public which does
attract copyright under s. 3(1) (f). Indeed, the word “communicate” is
consistently used in conjunction with the words “to the public” throughout the
Act . The ESA’s separating the word “communicate” from the words “to the public”
to give it an independent meaning different from that of “transmit” is not
supported by Parliament’s intention in enacting s. 2.4(1) (c). The words of s. 2.4(1) (c),
when read in context, do not support the distinction argued by the ESA.
(b) The CAPAC Decision
[84]
The ESA relies
on this Court’s decision in CAPAC for the proposition that to
communicate means disseminating performances to the public for immediate
listening and not merely sending signals that may be perceived later. However,
this jurisprudence is of little avail to the ESA.
[85]
As noted above, in CAPAC, this Court was asked to determine
whether the transmission of television programs containing musical works by CTV
to its affiliated stations, for broadcasting to the public by the affiliates,
constituted “communicating the same by radio communication” (at p. 679), an act
protected under s. 3(1) (f) as it read at that time.
[86]
It should first be noted that CAPAC interpreted provisions of the
Act that have since been amended in a way relevant to the scope of s. 3(1) (f),
as will be discussed later. In any event, in CAPAC, the ratio of
the Court’s decision was that CTV’s transmissions of recorded TV programs
containing music to its affiliates were not communications of musical works
by radio-communication. Rather, as CTV was transmitting performances of
musical works (e.g., in an ordinary TV program) and not the musical works
themselves (e.g., the sheet of music), s. 3(1) (f), which did not apply
to performances of musical works, was not engaged. It is important to note
that this distinction arose from the definition of “musical work” in the Act as
it read at the time and is no longer applicable.
[87]
Nonetheless, the ESA relies on some comments of Pigeon J., at pp. 681-82
of CAPAC, involving an analysis of Article 11bis of the Berne
Convention for the Protection of Literacy and Artistic Works, 828 U.N.T.S.
221, on which s. 3(1) (f) was based. The ESA says that this analysis
demonstrates that a communication is more than sending signals, which is all
that occurs when works are downloaded as in the case now before the Court.
Rather, the ESA says that Article 11bis contemplates public performances
by broadcasting, in other words, communications in humanly perceptible form.
Therefore, a “communicat[ion]” within the meaning of s. 3(1) (f) must
also be a conveyance of information in humanly perceptible form.
[88]
However, the passages
of Pigeon J.’s judgment note that “‘communication’ does not usually mean ‘a
performance’ [but that] it is apt to include performances” (p. 681 (emphasis
added)). The necessary implication of these words is that “communication” is a
broader term than “performance”. Therefore, Pigeon J.’s analysis does not
support the ESA’s contention that a communication is necessarily a
performance or necessarily more than sending signals.
(5) Whether “Communicating” is
“Performing” a Work at a Distance
[89]
The ESA further argues, based on the legislative
history of s. 3(1) (f), that the communication right is only a variation
of the performance right, being the right to perform a work to a distant
audience. Because a performance, in the ESA’s submission, is, by nature, a
transient event that cannot result in the transmission of a durable copy of the
work to the audience, downloads cannot be performances and, therefore, cannot
be communications.
[90]
I digress briefly to point out that the
structure of s. 3(1) implies that the communication right in paragraph (f)
is a self-standing right independent of the performance right in the
introduction of the section. The first lines of the English version of s. 3(1)
provide that
“copyright”
. . . means the sole right to produce or reproduce the work . . .,
to perform the work . . . in public or . . . to
publish the work . . . and includes the sole right .
. .
There then follow specific rights
listed as paragraphs (a) to (i). Paragraph (f) provides
for the sole right to “communicate the work to the public by
telecommunication”.
[91]
While the use of the word “includes” could
indicate that the rights listed in paragraphs (a) to (i) are
instances of one of the rights in the opening words of s. 3(1) , the
context indicates otherwise. Several of the listed rights are clearly outside
of the right to produce or reproduce, perform or publish. For example,
paragraph (i) provides for the right to rent out a sound recording
embodying a musical work. It is difficult to see how this right fits within
the right to produce or reproduce, perform or publish the work. Indeed, it
would be contrary to Théberge, in particular at paras. 42 and 45, where
the majority of this Court held that a “reproduction” within the meaning of the
Act requires a multiplication of copies. All the prerogatives of the
copyright holder in s. 3(1) are better considered as separate and distinct
rights (Bishop v. Stevens, at p. 477, per McLachlin J.; Compo
Co. v. Blue Crest Music Inc., at p. 373, per Estey J.).
[92]
This interpretation of the English version of s.
3(1) is consistent with the French version of the text, which states that “[l]e
droit d’auteur sur l’œuvre comporte le droit exclusif de produire ou reproduire . . . l’œuvre,
[de la représenter ou de la publier]; ce droit comporte, en outre, [les droits
énumérés aux al. a)
à i)].” The use of the
phrase “en outre” — in addition — indicates paras. (a) to (i)
are in addition to those in the opening words.
[93]
Nonetheless, the ESA relies on legislative
history in order to confine the scope of the right to communicate to the public
to performing a work to a public in a distant place, in a humanly perceptible
form, as distinct from a download.
[94]
The Canadian Act was based on the Berne
Convention of 1886, as revised in Berlin in 1908 (see Bishop v. Stevens,
at p. 473). The revised Berne Convention comprised certain public
performance rights in certain types of works. However, the advent of the radio
warranted another revision of the Convention. In 1928, Article 11bis
was added to the text, which guaranteed that:
Article 11bis
(1) Authors of literary and artistic
works shall enjoy the exclusive right of authorizing the communication of their
works to the public by radiocommunication.
[95]
In 1931, Canada implemented the revision through
the then s. 3(1) (f), which provided for a right, “[i]n case of any
literary, dramatic, musical or artistic work, to communicate such work by radio
communication” (Copyright Amendment Act, 1931, S.C. 1931,
c. 8) (see CAPAC, at pp. 680-81).
[96]
Section 3(1) (f) was again amended in
1988. According to Canadian Admiral Corp. v. Rediffusion, Inc., [1954]
Ex. C.R. 382, the radiocommunication right extended to radio and traditional
over-the-air television broadcasting, leaving transmissions by cable
outside of copyright protection. This technology-specific communication right
was amended to the technologically neutral right to “communicate . . .
to the public by telecommunication” to reflect the obligations entered into by
Canada under the North American Free Trade Agreement, Can. T.S. 1994 No.
2 (Canada-United States Free Trade Agreement Implementation Act, S.C.
1988, c. 65, ss. 61 and 62 ). The change from radiocommunication to
telecommunication and further amendments in 1993 meant that Canadian cable
companies which previously avoided any payment of royalties under the
“radiocommunication” right, and other users, were now caught by the Act : S.
Handa, Copyright Law in Canada (2002), at p. 320; D. Vaver, Intellectual
Property Law: Copyright, Patents, Trade-marks (2nd ed. 2011), at p. 90.
[97]
The ESA argues that from the outset, s. 3(1) (f),
as well as its Berne progenitor Article 11bis, were meant to provide broadcasting
rights the nature of which is “to deliver content [i.e. performances of works]
to a public audience for immediate listening or viewing” (A.F., at para. 40).
In the ESA’s submission, the 1988 amendment from “radiocommunication” to “telecommunication”
did not change the fundamental nature of the communication right, that is, that
it was concerned with broadcasting. The word “communicate” in the
English version was not amended, although the means by which the communication
may be made were expanded (A.F., at para. 52). The verb “transmettre”,
used in the French version of s. 3(1) (f) prior to the 1988 amendments,
was replaced by “communiquer”.
[98]
There is little doubt that a historic
relationship between the right of public performance and the right to
communicate to the public did exist:
.
. . as performance before a live audience was one of the first forms of
exploitation to be covered by copyright, it made sense to create a right to
provide protection when the performance took place at a distance through the
use of Hertzian (radio) waves and the other types of communication technologies
invented since then (television, cable, satellite and the internet).
(E. F. Judge and D. J. Gervais, Intellectual
Property: The Law in Canada (2nd. ed. 2011), at pp. 166-67)
[99]
The legislation has evolved to recognize the
evolution of technologies. In 1988, the relevance of including transmissions
by cable within the communication right had become obvious due to the
prevalence of that mode of telecommunication.
[100]
Even though the advent of cable may have been
the catalyzing force for the 1988 amendment, the amendment did not only cover
cable communications, in addition to radiocommunications, but adopted neutral
language to encompass evolving but then unknown technological advances. In
adopting the neutral language of “telecommunication”, Parliament removed all
reference to conventional broadcasting. The fact that in 1988 Parliament did
not foresee, or could not have foreseen, the way in which modern technologies
would evolve should not serve to limit the scope of the communication right
when it is applied to one such new technology.
[101]
On this basis, the historic relationship of s.
3(1) (f) with broadcasting-type industries does not support reading into
the Act restrictions which are not apparent from and are even inconsistent with
the current language of the Act . In particular, the historic relationship does
not support adopting the ESA’s proposition to read into the language of the Act
the significant restriction that the transmission must be in a “humanly perceivable
form for immediate viewing or listening” (A.F., at para. 74). While the
rationale for the 1988 change from radio to “telecommunication” was concerned
with the technical means by which the communication to the public was
made, nothing supports concluding that s. 3(1) (f) could not also apply
to new technologies which operate in a manner different from traditional
broadcasting. This includes a communication occurring in a manner which also
provides durable copies of the works that the users may view at a later time.
When transmitted over the Internet, whether works are perceptible immediately
or at a later moment or whether or not the technology used involves producing
temporary copies, as in the case of streams, or permanent copies of the work is
irrelevant to whether a communication has occurred and the work will, or has
the potential to be, viewed or listened to by the receiver. As stated at para.
45 of SOCAN v. CAIP:
At the end of the transmission, the end
user has a musical work in his or her possession that was not there before.
The work has necessarily been communicated . . . . To hold otherwise would . .
. fly in the face of the ordinary use of language . . . .
(6) American Jurisprudence
[102]
The ESA relies on the decision of the United
States Court of Appeals for the Second Circuit in United States v. American
Society of Composers, Authors and Publishers, 627 F.3d 64 (2010) (“U.S.
v. ASCAP”), certiorari denied (U.S.S.C., Octobre 3, 2011, No.
10-1337), where the Court of Appeals for the Second Circuit decided that the
download of a copy of a work did not come within the scope of the right to
perform in public, as defined in the U.S. Copyright Act, 17 U.S.C. §§ 101 and 106(4).
[103]
This decision is of no avail to the ESA. The
United States copyright law does not include an exclusive right in the
copyright holder to communicate to the public. Rather, it recognizes a right
of public performance (17 U.S.C. § 106(4)), which has been understood to include situations such as
radio or television broadcasting where performances are made available to a
distant public. This is a fundamental difference with the right to communicate
a work by telecommunication in s. 3(1)(f) of the Canadian Act, as
explained above. The two cannot be equated.
[104]
This Court has recognized in the past important
differences both in wording and in policy between Canadian and American
copyright legislation. It has cautioned that “United States court decisions,
even where the factual situations are similar, must be scrutinized very carefully”
(see Compo Co. v. Blue Crest Music Inc., at p. 367). The difference in
statutory wording between the provisions of the American legislation and of the
Canadian Copyright Act is sufficient to render the U.S. decisions of no
assistance in the interpretive exercise engaged here. Indeed, following the
American jurisprudence in interpreting Canada’s copyright legislation would, in
this case, amount to rewriting the Canadian Act.
(7) The Application of Section 3(1) (f) Does
not Depend on the Purpose of the Communication
[105]
The ESA’s argument that the sole purpose of the
transmissions in the case of downloads is just to deliver copies
to the customers is not an answer to the fact that a transmission by
telecommunication to the public, and therefore, a communication within the
meaning of s. 3(1) (f), effectively occurs.
[106]
A similar argument was made in Bishop v.
Stevens. That case dealt with whether a TV station that had paid
the appropriate royalties for the right to broadcast a performance of a musical
work had also acquired the right to make an “ephemeral” recording of the
performance for the sole purpose of facilitating the broadcast. It was
held that the right to perform did not include the right to make a recording,
albeit an “ephemeral” one made only for technical reasons. McLachlin J. held
that “s. 3(1) (d) contains no mention of purpose” (p. 479):
Interpretation of a statute must always begin
with the ordinary meaning of the words used, and nothing in this section
restricts its application to recordings made for the purpose of reproduction
and sale. A recording may be made for any purpose, even one not prejudicial to
the copyright holder, but if it is not authorized by the copyright holder then
it is an infringement of his rights. [p. 480]
[107]
Similarly, the fact that the work is transmitted
over the Internet, and therefore, “communicate[d] . . . by telecommunication”
within the ordinary meaning of the words, for the purpose of delivering a copy
of the video game containing the musical work to the user, does not change the
fact that there is an Internet communication requiring authorization of
the copyright holder.
(8) Unintended Consequences
[108]
The ESA raises a number of “unintended
consequences” that would flow from accepting that downloads are communications
within s. 3(1) (f) of the Act .
[109]
The ESA first refers to s. 2.2(1) of the Act ,
which defines the concept of “publication” for the purposes of the Act .
Section 2.2(1) provides:
2.2 (1) For
the purposes of this Act , “publication”
means
(a) in
relation to works,
(i) making
copies of a work available to the public,
. . .
but
does not include
(c) the performance in
public, or the communication to the public by telecommunication, of a literary,
dramatic, musical or artistic work or a sound recording, or . . .
[110]
The ESA argues that adopting the “broad
interpretation of ‘communicate to the public’ to include distribution of
durable copies over networks” would mean that where copies of works are
“distributed” over the Internet, these works would not be considered as
“published”, because publication, as defined by s. 2.2(1) of the Act , excludes
works communicated to the public by telecommunication (A.F., at paras. 102-10).
[111]
In my opinion, no conclusion concerning the
scope of the right to communicate to the public by telecommunication in s.
3(1) (f) can be drawn on the basis of s. 2.2(1) . Section 2.2(1) is only
relevant in understanding the scope of publication, in those sections
where it appears in the Act . Where that word is used, the definition in s.
2.2(1) provides that it means “making copies of a work available to the
public”, but does not include the communication of a work to the public by
telecommunication. On the other hand, s. 2.2(1) does not provide a
comprehensive definition for all purposes of the Act whereby “making copies of
a work available to the public” can never occur in connection with
communication to the public by telecommunication. It cannot be inferred that
the independent right of communication to the public by telecommunication in s.
3(1) (f) cannot be engaged where, at the same time, copies of a work are
made available.
[112]
As for the ESA’s argument that this may render
publication technologically non-neutral, as works distributed only by
making them available for download on the Internet would not be considered as
published, whether this is the inescapable conclusion about the meaning of s.
2.2(1) remains to be seen in a case where the issue arises. Indeed, there is
some authority suggesting that “[w]ork available online or sitting in a public database
may therefore be considered ‘published’”, and this notwithstanding the fact
that a work conveyed over the Internet constitutes a communication to the
public by telecommunication (Vaver, at pp. 157 and 172-73).
[113]
ESA also argues that extending the s. 3(1) (f)
right to include “digital delivery of copies of a work” would make the secondary
infringement provisions in s. 27(2) “largely redundant” in the electronic
environment (A.F., at para. 117). It says there would be little need for the
secondary infringement provisions related to the electronic distribution of
copies of works. I would note that this argument assumes that communication is
equivalent to distribution under the Act without any supporting justification
on the point. While it appears that such a redundancy point is a policy
argument that should be addressed by Parliament if there is a view that any
alleged overlap in the provisions is considered undesirable, I will deal with
it briefly.
[114]
The basic difference between primary and
secondary infringement is that primary infringement under s. 3(1) may occur
without the infringer knowing that infringement is occurring while secondary
infringement only applies where the person has actual or constructive knowledge
that what is being distributed constitutes an infringing copy of a work.
Section 27(2) provides in relevant part for purposes of this case:
It
is an infringement of copyright for any person to
. . .
(b) distribute
to such an extent as to affect prejudicially the owner of the copyright,
. . .
a copy of a work . . . that the person knows or
should have known infringes copyright . . . .
[115]
A secondary infringer may be the same person as
the primary infringer, but need not be. The purpose of s. 27(2) is to widen
the net for copyright infringement beyond those who engage in primary
infringement to those who, with knowledge or constructive knowledge, distribute
to such an extent as to prejudicially affect the owner of the copyright, a copy
of a work that already infringes copyright. A distributor who knows or should
know that he is distributing an infringing copy of a work, for example because
it was reproduced without authority of the copyright holder, may be liable for
infringement even though he did not engage in the primary infringement. However,
a distributor who distributes an authorized copy of the work will not be found
liable under s. 27(2)(b).
[116]
According to the evidence in this case, it is
standard practice in the video game publishing industry to negotiate clearance
of copyright for the reproduction of the musical works incorporated in the
games prior to their publication. In the possession of the video game vendor
and before the vendor takes any action with respect to communicating the game,
there is no infringement of copyright because reproduction rights have been
cleared. Unless authorized by the holder of the rights under s. 3(1) (f),
however, the communication of the game will violate s. 3(1) (f) of the
Act . But s. 27(2) will not be engaged.
[117]
ESA has structured its examples in support of
its redundancy argument carefully. However, they do not cover the facts of
this case. Here the communication or distribution is of prior authorized
copies, not infringing copies. Only s. 3(1)(f) is engaged, not s. 27(2).
(9) Policy Considerations
[118]
The policy concern raised by the ESA is that a
copyright holder should not be entitled to both a reproduction and a
communication right in the context of Internet downloads.
[119]
The answer to this concern is straightforward:
the rights of copyright holders under s. 3(1) are distinct and separate
rights. Bishop v. Stevens re-affirmed (at p. 477) the holding in Compo
Co. v. Blue Crest Music Inc., at p. 373, per Estey J., that the
rights listed in s. 3(1) are distinct and separate rights:
It
is clear from an examination of s. 3(1) that it lists a number of distinct
rights belonging to the copyright holder. As stated in Ash v.
Hutchinson & Co. (Publishers), Ltd., [1936] 2 All E.R. 1496 (C.A.), at
p. 1507, per Greene L.J.:
Under the Copyright Act , 1911 [on which the
Canadian Act was based], s. 1(2) , the rights of the owner of copyright are set
out. A number of acts are specified, the sole right to do which is conferred on
the owner of the copyright. The right to do each of these acts is, in my
judgment, a separate statutory right, and anyone who without the consent of
the owner of the copyright does any of these acts commits a tort; if he does
two of them, he commits two torts, and so on. [Emphasis added.]
[120]
The occurrence of one infringement therefore
does not preclude the finding of another. As “[i]nfringement is the single act
of doing something which ‘only the owner of the copyright has the right to do’”
(Compo Co. v. Blue Crest Music Inc., at p. 375), if two protected acts
occur without authorization of the copyright holder, there are two
infringements. The fact that there are two protected rights does not restrict
the protection afforded by each right.
[121]
I cannot agree with my colleagues that the
“principle of technological neutrality requires that … we interpret the Copyright
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”
(para. 9 (emphasis in original)). Characterizing the Internet transmission as
a mere “method of delivery” of the work pre-empts the application of the right
to communicate by telecommunication in s. 3(1) (f). Further, the
proposition is inconsistent with the approach to media neutrality as described
by the majority of this Court in Robertson v. Thomson Corp., 2006 SCC
43, [2006] 2 S.C.R. 363, at para. 49, per LeBel and Fish JJ.:
Media neutrality means that the Copyright Act
should continue to apply in different media, including more technologically
advanced ones. But it does not mean that once a work is converted into
electronic data anything can then be done with it. . . . Media neutrality is
not a licence to override the rights of authors — it exists to protect the
rights of authors and others as technology evolves.
[122]
A media neutral application of the Act to the
facts of this case would mean that the right of reproduction continues to apply
to copies made through downloads, notwithstanding the fact that they are digital
copies. It would also support the proposition that the communication right
must continue to apply to digital communications, notwithstanding that they may
differ from traditional broadcasting technologies. A media neutral application
of the Act, however, does not imply that a court can depart from the ordinary
meaning of the words of the Act in order to achieve the level of protection for
copyright holders that the court considers is adequate.
[123]
Any concerns arising from the independent
protected rights in the digital context are concerns of policy, which are
properly within the domain of Parliament in defining the scope of copyright.
“The Copyright Act is usually presented as a balance between promoting
the public interest in the encouragement and dissemination of works of the arts
and intellect and obtaining a just reward for the creator” (Théberge, at
para. 30). While the “courts should strive to maintain an appropriate balance
between these two goals” (CCH Canadian Ltd., at para. 10), inferring
limits into the communication right in the present case would be beyond the
function of the courts. “In Canada, copyright [remains] a creature of statute
. . .” (SOCAN v. CAIP, at para. 82). See also CCH, at para.
9; Théberge, at para. 5; Bishop v. Stevens, at p. 477; Compo
Co. v. Blue Crest Music Inc., at p. 373.
[124]
Indeed, it would be hazardous for the courts to
delimit the scope of broadly defined rights in the digital environment without
the benefit of a global picture of the implications for all the parties
involved. Binnie J. wrote in SOCAN v. CAIP, at para. 40:
The capacity of the Internet to disseminate
“works of the arts and intellect” is one of the great innovations of the
information age. Its use should be facilitated rather than discouraged, but
this should not be done unfairly at the expense of those who created the works
of arts and intellect in the first place.
[125]
In light of these considerations, providing
exceptions to the right to communicate by telecommunication is properly left to
Parliament. History has shown that Parliament will indeed legislate when it
considers copyright protection to be improperly balanced (for example, it
introduced the ephemeral recordings exception in s. 30.8(1), following the
ruling in Bishop (S.C. 1997, c. 24, s. 18); McKeown, at pp. 21-82 to
21-83).
[126]
In addition, it should be borne in mind that
SOCAN merely proposes tariffs, which must then be authorized by the Board. In
doing so, it is within the power of the Board to adjust proposed royalty rates
in a manner that it considers appropriate for a particular use. Specifically,
when the same activity engages two protected rights, the Board is in a position
to consider each of these rights in light of the type of use that causes users
to engage in the activity. This is consistent with the core of the Board’s
mandate as an economic regulatory agency, which consists of “working out . . .
the details of an appropriate royalty tariff” (SOCAN v. CAIP, at para.
49) based on the economic value of the different ways in which copyrighted
works may be used. The Board’s authority to determine royalty rates in factual
circumstances addresses concerns about the relative value of services as
between online game providers and bricks and mortar stores, and the overlapping
of rights and alleged “double-dipping” by copyright holders.
IV. Conclusion — Meaning of “Communicate” in Section 3(1)(f)
[127]
Communicating works to the public by
telecommunication is an independent and distinct right from other rights in s.
3(1) that are included within copyright. It is complete when the communication
is received, in this case, when the file is downloaded to the user’s computer,
even though it can be perceived only after the transmission, or whether or not
it is ever perceived. As put by Professor Vaver, “[s]ending works by radio,
television, cable, fax, modem, satellite, or microwave involves
telecommunication”; if, in addition, the communication is “to the public”, it
will attract liability (p. 172).
[128]
I would dismiss the appeal with costs.
Appeal
allowed with costs, LeBel, Fish, Rothstein and Cromwell JJ.
dissenting.
Solicitors
for the appellants: McCarthy Tétrault, Toronto.
Solicitors
for the respondent: Gowling Lafleur Henderson, Ottawa.
Solicitors
for the intervener CMRRA‑SODRAC Inc.: Cassels Brock &
Blackwell, Toronto.
Solicitor
for the intervener the Samuelson‑Glushko Canadian Internet Policy and
Public Interest Clinic: University of Ottawa, Ottawa.
Solicitors for the
intervener Cineplex Entertainment LP: Gilbert’s, Toronto.