Date: 20080109
Docket: A-391-06
Citation: 2008 FCA 6
CORAM: SEXTON
J.A.
SHARLOW
J.A.
RYER
J.A.
BETWEEN:
CANADIAN WIRELESS TELECOMMUNICATIONS
ASSOCIATION,
BELL MOBILITY INC. AND
TELUS COMMUNICATIONS COMPANY
Applicants
and
SOCIETY OF COMPOSERS, AUTHORS
AND MUSIC PUBLISHERS OF CANADA
Respondent
REASONS FOR JUDGMENT
SHARLOW J.A.
[1]
On August
18, 2006, the Copyright Board of Canada certified a Statement of Royalties
entitled “SOCAN Tariff No. 24 – Ringtones (2003-2005)”, [2006] C.B.D. No. 5
(QL). Tariff 24 authorizes the Society of Composers, Authors and Music
Publishers of Canada (“SOCAN”) to collect royalties on the wireless
transmission of ringtones from wireless carriers to cellphones at the request
of cellphone owners. Canadian Wireless Telecommunications Association and two
of its members, Bell Mobility Inc. and Telus Communications Company, seek
judicial review of that decision on the basis that Tariff 24 is not authorized
by the Copyright Act, R.S.C. 1985, c. C-42.
Decision of the Copyright
Board
[2]
In
certifying Tariff 24, the Copyright Board relied on paragraph 3(1)(f) of
the Copyright Act, which reads in relevant part as follows (my
emphasis):
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thereof in public or, if the work is unpublished, to publish the work or any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
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3.
(1) Le droit d’auteur sur l’œuvre comporte le droit exclusif de produire ou
reproduire la totalité ou une partie importante de l’œuvre, sous une forme
matérielle quelconque, d’en exécuter ou d’en représenter la totalité ou une
partie importante en public et, si l’œuvre n’est pas publiée, d’en publier la
totalité ou une partie importante; ce droit comporte, en outre, le droit
exclusif :
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[…]
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[…]
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(f) in the case of any literary, dramatic, musical or
artistic work, to communicate the work to the public by telecommunication,
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f) de
communiquer au public, par télécommunication, une œuvre littéraire,
dramatique, musicale ou artistique;
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[…]
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[…]
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and to authorize any
such acts.
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Est inclus dans la
présente définition le droit exclusif d’autoriser ces actes.
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[3]
The terms
“musical work” and “telecommunication” are defined as follows:
"musical work"
means any work of music or musical composition, with or without words, and
includes any compilation thereof.
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«œuvre
musicale » Toute œuvre ou toute composition musicale — avec ou sans paroles —
et toute compilation de celles-ci.
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"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.
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«télécommunication »
Vise toute transmission de signes, signaux, écrits, images, sons ou
renseignements de toute nature par fil, radio, procédé visuel ou optique, ou
autre système électromagnétique.
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[4]
The
Copyright Board held that the transmission of a musical ringtone to a cellphone
in the circumstances stated in Tariff 24 is a communication falling within
paragraph 3(1)(f) of the Copyright Act.
Standard of Review
[5]
The
issue in this application is the interpretation of paragraph 3(1)(f) of
the Copyright Act. The parties agree that the standard of review is
correctness. I agree as well; see Society of Composers, Authors and Music
Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] 2 S.C.R.
427, 2004 SCC 45, at paragraphs 48 to 50.
Facts
[6]
The facts
are undisputed. They are well and fully stated in the Board’s decision. For the
purposes of this application, only a summary is necessary.
[7]
A ringtone
is a digital audio file that may be stored in the memory of a cellphone and
programmed to signal an incoming call. A ringtone may be any kind of sound,
including music. A musical ringtone may be synthesized music, either monophonic
(one note at a time) or polyphonic (up to sixteen notes at a time). A ringtone
may also be an excerpt or clip taken from an original sound recording of a musical
work.
[8]
A
cellphone is normally sold with one or more ringtones loaded in the cellphone
memory. The customer may purchase additional ringtones and add them to the
cellphone memory. By means of various promotional devices, wireless carriers
invite their customers to purchase ringtones by ordering them from the wireless
carrier’s website.
[9]
There are
two methods by which ringtones are sold and distributed to customers from the
website of a wireless carrier. One is by means of a “wireless application protocol”
or “WAP”. The customer uses the cellphone to access and browse a digital
catalogue maintained by the wireless carrier containing descriptions of
ringtones. The customer sends a message to the wireless carrier identifying the
chosen ringtone. For a fee, the wireless carrier transmits the chosen ringtone
to the customer’s cellphone, where it is immediately stored in the cellphone
memory. Approximately 80% of ringtones are purchased this way.
[10]
The other
method uses a “short messaging service” or “SMS”. A customer uses a computer to
access and browse the ringtone catalogue on the website of the wireless
carrier. The customer either reads a description of the ringtone or has the
ringtone played. The subscriber then sends a message to the wireless carrier identifying
the chosen ringtone. For a fee, the wireless carrier transmits a message to the
customer’s cellphone with the copy of the chosen ringtone file as an
attachment, which is then saved in the cellphone memory.
[11]
Either
method of acquiring a ringtone for a cellphone involves a transmission of the
digital audio file from the wireless carrier to the customer’s cellphone, upon
payment of a fee. Once the file is stored in the cellphone memory, the customer
can access the file to play the ringtone or to use the ringtone as a signal for
incoming calls. Neither of the transmission methods described permits the
ringtone to be played or heard simultaneously with the transmission.
[12]
Wireless
carriers could use other ways of delivering ringtones to customers. For example,
more ringtones could be loaded at the point of purchase, or ringtones could be
sold as compact disc recordings which would then be copied to the cellphone
memory. Neither method would be caught by Tariff 24. However, neither of those
alternatives would be as efficient from the point of view of the wireless
carriers.
The suggestion of double compensation
[13]
Through
contracts with reproduction rights societies (Canadian Musical Reproduction
Rights Agency Limited (CMRRA) and Society for Reproduction Rights of Authors,
Composers and Publishers in Canada (SODRAC)), the authors, composers and music
publishers of musical ringtones are being compensated for the reproduction of
musical works associated with ringtones.
[14]
The
applicants say that the authors, composers and music publishers of musical
works should not be allowed to “split” the enforcement of their rights between
different collectives and collect a second time for the same use of the musical
works for which they are already being compensated. However, the applicants do
not argue that the transmission of musical works by the methods described above
is expressly or implicitly authorized by the contracts referred to above. Nor
do the applicants argue that the existence of the agreements is sufficient, as a
matter of law, to support the conclusion that Tariff 24 is invalid.
[15]
It has
long been established that under the Copyright Act, the right to
reproduce a musical work and the right to communicate it to the public by
telecommunication are separate statutory rights (Bishop v. Stevens,
[1990] 2 S.C.R. 467). If the Copyright Board was correct to conclude that the transmission
of a musical ringtone is the final step in a communication to the public by
telecommunication, then Tariff 24 stipulates compensation for a right that is
not covered by the reproduction rights agreements. If the Copyright Board was
wrong on that point, then Tariff 24 is not authorized by the Copyright Act
and the decision of the Copyright Board to certify Tariff 24 cannot stand.
Royalty
structures in other countries
[16]
The
parties have referred for various reasons to the royalty arrangements in other
countries involving ringtone transmissions. Those arrangements illustrate that
there are many statutory schemes and administrative techniques by which
authors, composers and music publishers might be compensated for the various
rights associated with the copyright in musical works. None of the foreign
arrangements involve legislation that is sufficiently like the Copyright Act
to assist in resolving the legal issues in this application.
Discussion
[17]
The
applicants’ challenge to the legality of Tariff 24 is based on two alternative arguments.
The first argument is that the transmission of a ringtone to a cellphone by one
of the methods described above is not a “communication”. The alternative argument
is that it is not a “communication to the public”.
(1)
First
argument: “Communication”
[18]
The
applicants argue, based on a contextual analysis of the Copyright Act, that
a transmission is not the same thing as a communication, and therefore the use
of the word “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.
[19]
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.
[20]
This
conclusion accords with the SOCAN 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). It is not clear whether that point was in issue in that case, or
the subject of argument. It may be obiter dicta. Even so, it is undoubtedly
a true statement. In relation to the meaning of the word “communication”, I see
no relevant distinction between the transmissions in issue in the SOCAN case
and the transmissions in issue in this case. I conclude that the transmissions
are communications.
[21]
In support
of its argument on the meaning of “communication”, the applicants rely heavily
on the decision of the Exchequer Court in Composers, Authors and Publishers
Association of Canada Ltd. v. CTV Television Network Ltd., [1968] S.C.R.
676, affirming [1966] Ex. C.R. 872 (the “1968 CAPAC” case) and two later cases
(discussed below) that follow the same reasoning.
[22]
The 1968
CAPAC case involved CAPAC (a predecessor of SOCAN), which owned the copyright
in certain musical works and authorized the broadcast of the musical works by
television stations affiliated with CTV. To facilitate the broadcast, the
musical works were videotaped. Rather than send copies of the videotape to the
stations, CTV transmitted the contents of the videotape to its affiliates using
the microwave facilities of Bell Telephone Co. CAPAC claimed that this was a
breach of the previous version of paragraph 3(1)(f) of the Copyright
Act, which read as follows:
(f)
in case of any literary, dramatic, musical or artistic work, to communicate
such work by radiocommunication; ...
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f) s'il
s'agit d'une œuvre littéraire, dramatique, musicale ou artistique, de
transmettre cette œuvre au moyen de la radiophonie…
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[23]
At that
time, the term “musical work” was defined as “any combination of melody and
harmony, or either of them, printed, reduced to writing, or otherwise
graphically produced or reproduced”. Justice Pigeon, writing for the Supreme
Court of Canada, concluded that paragraph 3(1)(f), as it then read, did
not apply.
[24]
In
reaching that conclusion, Justice Pigeon did not say that there had been no
communication. Rather, he found that what had been communicated was not a
“musical work” (a graphic representation of the melody and harmony), but a
“performance” of the work, which was not an act within the scope of paragraph
3(1)(f). At that time, the word “performance” was defined as “any
acoustic representation of a work or any visual representation of any dramatic
action in a work, including a representation made by means of any mechanical
instrument or by radio communication.”
[25]
Justice
Pigeon did not stop at his literal interpretation of paragraph 3(1)(f),
but went on to consider its legislative and historical context. He found
nothing in that context to derogate from the literal interpretation. Paragraph
3(1)(f), as originally enacted in 1931, was intended to give effect to
section 1 of Article 11bis of the Berne Convention (Rome
Copyright Convention, 1928), which read as follows:
(1) Authors of
literary and artistic works shall enjoy the exclusive right of authorizing
the communication of their works to the public by radiocommunication.
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(1) Les auteurs d'œuvres
littéraires et artistiques jouissent du droit exclusif d'autoriser la
communication de leurs œuvres au public par la radiodiffusion.
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[26]
Justice
Pigeon concluded that this provision of the Berne Convention
contemplates public performances by radio broadcasting. That is consistent with
the general definition of "copyright" in section 3 of the Copyright
Act, which includes all rights of reproduction, and also includes all rights
to perform the work, but only if the performance is “in public”. The microwave
transmissions facilitated broadcasts to the public by the CTV affiliate
stations, as authorized by CAPAC, but they were not themselves communications
to the public.
[27]
In 1988, the
Copyright Act was amended, primarily to give effect to the Free Trade
Agreement (Canada-United States Free Trade Implementation Act, S.C.
1988, c. 65). At that time, the definition of “telecommunication” (quoted
above) was added to the Copyright Act, and other provisions were added
to deal with broadcasting issues that are not relevant to this application. At
the same time paragraph 3(1)(f) was amended to become the version that
is applicable to this case. The 1988 version of paragraph 3(1)(f) is
quoted above but is repeated here for ease of reference (my emphasis):
(f)
in the case of any literary, dramatic, musical or artistic work, to
communicate the work to the public by telecommunication.
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f) de
communiquer au public, par télécommunication, une œuvre littéraire, dramatique,
musicale ou artistique.
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[28]
The 1988 version
of paragraph 3(1)(f) was considered by this Court in two cases heard at
the same time in 1993. The first case, CTV Television Network Ltd. v. Canada
(Copyright Board) (F.C.A.), [1993] 2 F.C. 115, involved facts that were
similar to the facts in the 1968 CAPAC case, except that the transmission of musical
works from CTV to its affiliate stations was by satellite rather than microwave.
The Court followed the reasoning in the 1968 CAPAC case to reach the same
result, namely that the transmissions were not within the scope of paragraph
3(1)(f). The Court also concluded that the transmissions did not
constitute performances of the musical works in public.
[29]
In the
second case, Canadian Cable Television Assn. v. Canada (Copyright Board)
(F.C.A.), [1993] 2 F.C. 138, the Court again followed the reasoning in the
1968 CAPAC case to conclude that the transmission of a musical work to cable
subscribers is not a communication of the work to the public within the meaning
of paragraph 3(1)(f). However, the transmission was held to be a performance
of the musical work in public, because the result of the transmission was a
visual and acoustic representation of the musical work to a broad segment of
the public.
[30]
In my
view, the 1968 CAPAC case and the two subsequent cases from this Court in 1993
cast no doubt on the conclusion that the transmissions in issue in this case
are communications.
(2) Alternative argument:
Communication “to the public”
[31]
The only
remaining question is whether the transmission of ringtones from a wireless
carrier’s website to a customer’s cellphone is, as the Copyright Board found,
the last step in the communication of the ringtone “to the public”.
[32]
The group
consisting of all of the customers of a wireless carrier is a group that is
sufficiently large and diverse that it may fairly be characterized as “the
public”. The applicants do not argue the contrary. The essence of their
argument is that when a wireless carrier offers to all of its customers an opportunity
to purchase ringtones, the fact that the customers respond to the offer one by
one, and receive copies of the ringtones by wireless transmission one by one,
necessarily means that each transmission is a private communication, and
therefore there is no communication of to the public. Put another way, the
applicants’ proposition is that a series of identical communications, no matter
how numerous, cannot be a communication to the public if each communication is
initiated by the recipient’s request.
[33]
The only
case of any assistance on this point is the decision of the Supreme Court of
Canada in CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1
S.C.R. 339 (the “CCH case”). That case involved a request-based photocopy
service operated by the Law Society of Upper Canada to members, judges and
other legal researchers. The photocopied material consisted of excerpts from
works held in the Great Library in Toronto.
One of the means by which the requested material was delivered was by fax,
which is a method of telecommunication.
[34]
Among the
many issues in the CCH case was whether the transmission of copies by fax on
request in accordance with the Great Library’s photocopy service was a
communication to the public by telecommunication within the meaning of
paragraph 3(1)(f) of the Copyright Act. The Court held that it
was not. As the reason for that conclusion is very short, I reproduce it in its
entirety (paragraphs 77 to 79, per Chief Justice McLachlin, writing for the
Court):
[77] At trial, the publishers argued
that the Law Society's fax transmissions of copies of their works to lawyers
in Ontario were communications "to
the public by telecommunication" and hence infringed s. 3(1)(f) of the Copyright Act. The
trial judge found that the fax transmissions were not telecommunications to
the public because they "emanated from a single point and were each
intended to be received at a single point" (para. 167). The Court of
Appeal agreed, although it allowed that a series of sequential transmissions
might constitute an infringement of an owner's right to communicate to the
public.
[78] I agree with these conclusions.
The fax transmission of a single copy to a single individual is not a
communication to the public. This said, a series of repeated fax transmissions
of the same work to numerous different recipients might constitute
communication to the public in infringement of copyright. However, there was
no evidence of this type of transmission having occurred in this case.
[79] On the
evidence in this case, the fax transmissions were not communications to the
public. I would dismiss this ground of cross-appeal.
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[35]
Based on
this reasoning, it seems to me that in determining whether paragraph 3(1)(f)
applies to the transmission of a musical work in the form of a digital audio
file, it is not enough to ask whether there is a one-to-one communication, or a
one-to-one communication requested by the recipient. The answer to either of
those questions would not necessarily be determinative because a series of
transmissions of the same musical work to numerous different recipients may be
a communication to the public if the recipients comprise the public, or a
significant segment of the public.
[36]
The
Copyright Board concluded that the present case involves a series of transmissions
of the same works to different recipients, and thus to the public. That
conclusion is explained as follows at paragraph 68 of its reasons:
Wireless
carriers are trying to sell as many copies of every single musical ringtone
as possible to maximize sales and profit. They intend, indeed they wish for,
a series of repeated transactions of the same work to numerous recipients.
This, in our opinion, amounts to a communication to the public.
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[37]
The
Copyright Board’s description of the relevant facts is an apt one, and it is well
supported by evidence in the record.
[38]
The
applicants argue that the Copyright Board erred in its appreciation of the reference
to a series of transmissions. They rely on the decision of this Court in the
CCH case ([2002] 4 F.C. 213), and in particular the following comments of
Justice Linden at paragraph 100:
[100] The Trial Judge held (at paragraph 167) that a
single telecommunication emanating from a single point and intended to be
received at a single point is typically not a communication to the public. I
agree. In my view, the ordinary meaning of the phrase "to the
public" indicates that a communication must be aimed or targeted toward
"people in general" or "the community" (see the New
Oxford Dictionary of English, s.v. "public" (Oxford: Clarendon
Press, 1998). Article 1721(2) of NAFTA, supra, which is not binding on
this Court but is nevertheless helpful since "public" is not
otherwise defined, states that the public includes "any aggregation of
individuals intended to be the object of, and capable of perceiving
communications". A communication that is targeted only at a segment of
the public, may however, also be a communication to the public. Paragraph
2.4(1)(a) (as enacted by S.C. 1997, c. 24, s. 2) […] clarifies that a communication
may be to the public if it is "intended to be received by" a
"part of the public", specifically persons who occupy apartments,
hotel rooms, or dwelling units in the same building. Thus, to be "to the
public" a communication must be targeted at an aggregation of
individuals, which is more than a single person but not necessarily the whole
public at large.
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[39]
In my
view, these comments are not intended to be a comprehensive description of the
meaning of “communication to the public”. There is no reason to believe that in
making these comments, Justice Linden was contemplating a series of one-to-one
transmissions to individuals who together comprise a group that may fairly be
described as the public, as in this case.
[40]
The
applicants also point out that the transmissions in this case are not made
“openly and without concealment” and therefore lack an essential characteristic
of being “public”. This is a reference to Canadian Cable Television Assn. v.
Canada (Copyright Board) (F.C.A.), cited above, in which this Court held
that the transmission of a musical work by cable television was a performance
of the work “in public”. Justice Létourneau, writing for the Court, explained
that conclusion as follows:
The
appellant also contends that, should this Court find that its transmission
amounts to a performance, such performance is not a public performance as 97%
of all cable television subscribers in Canada
are residential subscribers and the transmission is to the private homes of
the various subscribers.
I would
have thought on a mere common sense basis that when the Prime Minister of
Canada addresses the nation, either from his home or his private office, and
reaches the citizens in their homes by means of radio and television, he
appears in public and performs in public. I would have been content to leave
it at that had it not been for early conflicting decisions on this issue.
In the
case of Canadian Admiral Corporation Ltd. v. Rediffusion, Inc. [(1954) Ex.C.R. 382], the Court held that radio or
television broadcasts do not amount to performances in public when received
in private homes. […]
With
respect, I prefer and adopt the contrary views expressed by English, Indian
and Australian authorities. They are consistent with our Act. They take a
realistic view of the impact and effect of technological developments and
they are consistent with the plain and usual meaning of the words "in
public", that is to say openly, without concealment and to the knowledge of all.
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[41]
The
question in that case was whether a performance was in public, not whether a
communication had been made to the public. The words “openly and without
concealment” were used to describe the nature of the intended and potential
audience for a performance transmitted by television, as distinguished from a
private performance in a home.
[42]
In the
present case, no one except the wireless carrier and the recipient normally
would be aware of a particular transmission of a ringtone to a cellphone, and
in that sense the transmission is not made “openly”. However, it does not necessarily
follow that paragraph 3(1)(f) does not apply. The transmission of a
television program is a performance in public, even if no one is watching it or
everyone who is watching it is doing so in private, because it is made available
to a sufficiently large and diverse group of people. Similarly, in this case all
of the customers of a wireless carrier (that is, all members of the relevant
segment of the public) have access to all of the ringtones offered by that
wireless carrier. The fact that the ringtones are offered to the public, or to
a significant segment of the public, supplies the requisite degree of
“openness”.
[43]
In my
view, the conclusion of the Copyright Board that the transmissions in issue in
this case are within the scope of paragraph 3(1)(f) of the Copyright
Act is consistent with the language of that provision and its context. It
also accords with common sense. If a wireless carrier were to transmit a
particular ringtone simultaneously to all customers who have requested it, that
transmission would be a communication to the public. It would be illogical to
reach a different result simply because the transmissions are done one by one,
and thus at different times.
Conclusion
[44]
In my
view, the Copyright Board was correct in law to conclude that the transmission
of ringtones by wireless carriers to their customers on request is a
communication to the public by telecommunication within the meaning of
paragraph 3(1)(f) of the Copyright Act. I would dismiss this
application with costs.
“K.
Sharlow”
“I
agree.
J. Edgar Sexton J.A.”
“I
agree.
C. Michael Ryer J.A.”