"Making Available" Is Not an Independent Copyright in Canada
July 20, 2022
By Tamara Céline Winegust and Prudence Etkin
The Supreme Court of Canada, in a decision of Justice Rowe, has affirmed that there is no separate compensable right for “making available” a work on the internet under the Canadian Copyright Act. In Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 (SOCAN v ESA 2022), the Court overturned a decision of the Copyright Board that would have permitted additional royalties to be charged by collective societies when works in their repertoire were made available on the internet—regardless of how (or whether) the works were ultimately accessed. In doing so, the Court confirmed that section 3(1) of the Act creates only three compensable rights—reproduction, performance, or publication—and that a single activity can only engage one of those three interests. It also animated Canada’s treaty obligations to protect on-demand streams and authors’ rights to control the making available of their works via new technologies in concordance with the Court’s general interpretative approach to domestic copyright law.
The Court’s decision in SOCAN v ESA 2022 turned on the interpretation of ss. 2.4(1.1). That subsection was introduced to the Canadian Copyright Act in 2012:
For the purposes of this Act, communication of a work or other subject-matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.
For the majority of the Supreme Court, ss. 2.4(1.1) is simply a definition. It clarifies when a work is considered “made available” for the purposes of interpreting the performance right of “communicat[ing] the work … by telecommunication” under section 3(1)(f)—in this case, that s. 3(1)(f) applies to on-demand streams. Section 2.4(1.1) thus deems the work to be performed as soon as it is made available for streaming—rather than when (or if) it is actually enjoyed by the user. Consequently, the act of “making available” does not create a new revenue stream for owners outside the ultimate right engaged; a work made available for download engages the “reproduction” right; a work made available for streaming engages the “performance” right. Such interpretation was found by the Court to comply with Canada’s obligations under Article 8 of the 1996 WIPO Copyright Treaty (Can T.S. 2014 No. 20) which requires member countries to give authors the exclusive right to control the act of making works available.
SOCAN v ESA 2022 comes nearly 10 years to the day of the Court’s release of its Copyright Pentalogy. It is consistent with the interpretative approaches to Canadian copyright law outlined in those five decisions and those that followed (including last year’s York University v Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32). Together, they affirm that the balance between creators and users sits at the core of Canadian copyright law and that the principle of “technological neutrality” is a key interpretive tool to maintain that balance. When a work is made available via the internet, “what matters is what the user received, not how the user receives it”.
The underlying decision on appeal in SOCAN v ESA 2022 arose from a 2020 decision of the Copyright Board (“Board”) in a tariff proceeding. In that proceeding, the Society of Composers, Authors and Music Publishers of Canada (SOCAN)—a collective society administering owners’ reproduction rights—asked the Board to find that the implementation of ss. 2.4(1.1) of the Copyright Act created a new copyright that permitted SOCAN to collect an additional set of royalties when works were made available for download over the internet, in addition to the royalties SOCAN would already collect for that download.
Of importance to SOCAN (and the Board), ss. 2.4(1.1) was implemented mere days after the Copyright Pentalogy was released. Two of the Pentalogy decisions—Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34 (ESA 2012) and Rogers Communications Inc. v Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35 (Rogers 2012)—directly engaged with whether works transmitted over the internet triggered the communication right under s. 3(1)(f). Those cases determined that downloads did not engage the s. 3(1)(f) right, while streams did, such that owners could only charge one royalty when users accessed works as downloads or streams. The Court did not consider ss. 2.4(1.1).
Before the Board, SOCAN argued that ss. 2.4(1.1) rendered ESA 2012 (which concerned downloads) irrelevant. The new provision thus obligated persons, such as online music services, to pay royalties to SOCAN when they post musical works on their Internet servers in a way that allows access to them by their end-user customers, regardless of whether the works are later transmitted to end-users by way of downloads, streams, or not at all. The Board agreed, finding ss. 2.4(1.1) makes a work available to the public via a communication to the public pursuant to ss. 3(1)(f), triggering a right to collect a tariff for that use. As a result, SOCAN was entitled to collect royalties both for: (1) the making the work available; and (2) any subsequent transmission or download of the musical work.
On appeal, the Federal Court of Appeal quashed the Board’s decision (Entertainment Software Assoc. v. Society Composers, 2020 FCA 100). The Court highlighted two general reasons why the Board’s decision could not stand: (1) an unacceptable legislative interpretation that failed to consider the Supreme Court’s reasoning in ESA 2012 and other earlier decisions that warned against supplicative layers of regulation and fees that would cause inefficiency and needless costs; and (2) a misapprehension of the interrelationship between international law and domestic law that essentially looked at the section of the 1996 WIPO Copyright Treaty involving the “making available” right, asserted its view of that article’s meaning without any supporting reasoning, and then made ss. 2.4(1.1) conform to its view. While the Court declined to offer its own interpretation of ss. 2.4(1.1)—since the parties did not make arguments on this point—it suggested that ss. 2.4(1.1) does not create a new exclusive right, and thus, there was only one right at play (i.e., the communication to the public) that triggered royalties.
SOCAN (and another affected collective society, Music Canada) sought and were granted leave to appeal to the Supreme Court.
The Supreme Court’s Decision
The Court unanimously agreed to overturn the Board’s decision; but split 7-2 in their reasons.
Writing for the majority, Justice Rowe applied a standard of review of correctness. He found that the Board’s interpretation of ss. 2.4(1.1) was inconsistent with the text, structure, and purpose of the Copyright Act. Further, it ran contrary to the Supreme Court’s decisions in ESA 2012 and Rogers 2012 which remained good law. While acknowledging that the 1996 WIPO Copyright Treaty provides important context to the interpretation of ss. 2.4(1.1), Parliament reigns supreme and domestic law governs: “The Court’s task is to interpret what the legislature (federally and provincially) has enacted and not subordinate this to what the federal executive has agreed to internationally”.
While the Board’s interpretation of ss. 2.4(1.1) could allow Canada to fulfil its Treaty obligations, it was not the required interpretation, and did not adhere to the domestic approach to copyright law. To be correct, the approach must examine the text and structure of the Act—which the Court confirmed creates only three compensable copyright interests—as well as the purpose of the Act—which includes the principle of technological neutrality. An approach to ss. 2.4(1.1) that resulted in a work made available by stream being compensable as a “performance” while a work made available for download being compensable as a “reproduction”, with no additional royalties attached to the means of distribution, would both adhere to Canada’s Treaty obligations and respect these interpretive principles.
With respect to the text and structure of the Copyright Act, Justice Rowe confirmed that there are only three compensable copyright interests, all of which are found in the preamble to section 3(1)—produce or reproduce a work in any material form (i.e., reproduction), perform a work in public (i.e., performance), or publish an unpublished work (i.e., publication). The remaining subsections, including the communication right in ss. 3(1)(f), are simply illustrative. A single activity engages only one of these interests. Consequently, the key to assessing what interest is engaged (and thus what royalties flow) is to examine what the activity in question does to the copyrighted work—does the user get limited access (a “performance”) or a durable copy (a “reproduction”)?:
While I accept that the act of “making a work available” is a separate physical activity from the act of a user downloading or streaming a work, it does not follow that it is a separately compensable activity. Had Parliament intended to treat the act of making available as a new separately compensable activity, the way to do so would have been to add “making available” as a fourth copyright interest in the opening paragraph of s. 3(1), rather than as a modification to the scope of s. 3(1)(f).
This approach also fulfills the principle of technological neutrality underlying the purpose of the Copyright Act. The Court identified two aspects to this principle: (1) that absent parliamentary intent to the contrary, the Act should not be interpreted in a way that either favours or discriminated against any form of technology; and (2) that distributing functionally equivalent works through old or new technology should engage the same copyright interests.
In Justice Rowe’s eyes, the Board violated this principle by interpreting ss. 2.4(1.1) as triggering an additional royalty—and one that would not arise if the work were accessed via traditional means: “Requiring that users pay additional royalties based solely on the mode of a work’s distribution violates the principle of technological neutrality”. Technological neutrality helps achieve balance by ensuring owners retain the same rights over works regardless of the technological means used to distribute the works, while protecting consumers from being penalized when they access a work through a new technology.
The principle of technological neutrality is designed to operate precisely in situations like the present case, where a novel technology emerges that has no clear traditional equivalent. In those circumstances, courts must look at what that new technology does to the substance of the work by examining which, if any, of the copyright interests in s.3(1) are engaged by this new method of distributing a work. If that new technology gives users durable copies of a work, the author’s reproduction right is engaged. If the new technology gives users impermanent access to the work, the author’s performance right is engaged. What matters is what the user receives, not how the user receives it.
With these principles in mind, the Court looked to Article 8 of the 1996 WIPO Copyright Treaty, and how it might animate the interpretation and application of ss. 2.4(1.1) and the Copyright Act. Justice Rowe acknowledged that the Board correctly concluded Article 8 requires member states give authors the right to control the act of making works available, in addition to any download/stream that may later occur; however, it did not require such control result in a right to additional compensation. Justice Rowe concluded that, at best, Article 8 simply functioned to protect on-demand transmissions and give authors a right to control over when and how their works are offered through such new technologies. It did not dictate how to give effect to such obligations.
Consequently, Justice Rowe found the correct interpretation of ss. 2.4(1.1) (i.e., one that was consistent with its text, structure, purpose, and context) to be one that clarifies the communication right in section s.3(1)(f) applies to on-demand streams, and that a work is deemed “performed” as soon as it is made available for on-demand streaming:
This interpretation gives effect to Canada’s obligations under art. 8 through a combination of the performance, reproduction, and authorization rights in s. 3(1). In so doing, it also respects the principle of technological neutrality as it ensures that authors retain the same rights and royalties over their works regardless of whether the works are distributed online or offline.
However, it did not require that making the work available and the user’s accessing the work be treated as separate compensable performances. Section 2.4(1.1) clarified that these acts were a single continuous activity:
The work is performed as soon as it is made available for on-demand streaming. At this point, a royalty is payable. If a user later experiences this performance by streaming the work, they are experiencing an already ongoing performance, not starting a new one. No separate royalty is payable at that point. … [T]he making available of a stream and a stream by a user are both protected as a single performance — a single communication to the public.
Justice Rowe also found this overall approach respected Canada’s Treaty obligations: “If a work is streamed or made available for on-demand streaming, the author’s performance right is engaged. If a work is downloaded, the author’s reproduction right is engaged. If a work is made available for downloading, the author’s right to authorize reproductions is engaged. There are no gaps in protection”.
In their concurring minority reasons, Justice Karakatsanis (joined by Justice Martin) differed on the standard of review, and instead applied “reasonableness”. Nevertheless, their reasons for overturning the Board were essentially the same as those of Justice Rowe—that ESA 2012 remained good and binding law that required the Board to treat “making available” as not a separate copy-right, and that the Board’s approach failed to consider key interpretive tools to ensure the Copyright Act balanced the interests of users and creators and was applied in a technologically neutral manner.
SOCAN v ESA 2022 clarifies that, at least for consumer-facing distribution of works, the ultimate product or experience obtained by the consumer is what dictates which copyright interest (and thus what royalty) is engaged—the technological method of distribution is irrelevant. More broadly, it further entrenches the Court’s approach to copyright law that has been developing over the last nearly 20 years as one that reflects technological neutrality and balances owners’ and users’ competing interests.
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