Tariff 22 heats up as international groups seek leave to weigh in with court

Parties both for and against a blanket fee on Internet caches to compensate the music industry for downloaded tunes have asked the Supreme Court of Canada for leave to intervene in the Tariff 22 case. Tariff 22, a proposed tariff on Internet music, faces an uncertain future as the Supreme Court will decide whether to reverse a Federal Court of Appeal decision that the Society of Composers, Artists and Music Publishers of Canada (SOCAN) is entitled to collect a tariff on music downloaded from outside the country, and for music stored temporarily in the caches ISPs employ to speed Internet surfing (CNM, April 3/03). The case has been brought to the highest court by a coalition of ISPs including cable operators, represented by the Canadian Cable Television Association (CCTA), Bell Canada and the Canadian Association of Internet Providers, who oppose the lower court's decision (CNM, Aug. 21/02). Now, both an international coalition of ISPs allied with the Canadian ISPs, and the Canadian Recording Industry Association (CRIA) and international recording industry lined up with SOCAN's position, have asked the Supreme Court to weigh in with their own arguments for and against. In its filing, a coalition of ISPs whose members include most of the global heavyweights has told the court that it will bring an international perspective to the question of whether caching should trigger a royalty payment. The group, with members from Europe, the U.S., Japan and Australia, writes: "The Applicants share a distinct interest and a unique perspective as foreign parties significantly affected by the decision of the Court, and seek to make a single set of submissions which would be useful to this Honourable Court and different from those of the other parties concerning the framework of laws concerning copyright protection in the international community, foreign law, the adverse effect of the decision of the Federal Court of Appeal on foreign internet service providers, and the conflicts that this decision of the Federal Court of Appeal create with foreign laws in foreign countries and the problems that flow therefrom." It's not certain that the Supreme Court will hear those arguments, however. While it came as no surprise that it would take a look at the lower court's ruling, applications for leave to intervene are never a sure bet. Both the international ISPs and CRIA will have to convince the court that their points won't overlap with those already being made by the Canadian ISPs or SOCAN. For their part, the international ISPs say: "By providing examination of the framework of laws concerning copyright protection in the international community specifically on the issue of 'caching', the Applicants offer assistance to this court in harmonizing the construction of the Canadian Copyright Act with other like-minded jurisdictions." They later continue: "The Federal Court of Appeal's decision that network caching triggers liability to pay royalties to SOCAN and its suggestion that this liability applies extra-territorially to foreign ISPs who cache material that is subsequently transmitted to Canadian users gives rise to a significant conflict of laws problem for ISPs who engage in network caching in other countries where such caching does not violate copyright." The group of ISPs expresses concern about the uncertainty that might create over liability, and goes on to note that even more broadly, collecting royalties for music downloads from outside Canada's borders could result in duplicate royalty payments by ISPs and others. For its part, CRIA and co-applicant the International Federation of Phonogram Industry (IFPI) hope to argue that the Federal Court of Appeal was right to say that the Copyright Act "applies to Internet communications, irrespective of place of origin, that are transmitted through Canada to users located within Canada." IFPI is a not-for-profit trade association of sound recording producers. The duo write in their case to be heard by the Supreme Court that: "CRIA and IFPI intend to submit the proper determination of the territorial application of the communication right would find that a cross-border transmission constitutes a communication in Canada if the transmission proceeds through Canada to a recipient located in Canada. Such a determination would comport both with Canadian law and the practical reality of what takes place in an Internet transmission. Such a determination would also deter the development of piracy havens and facilitate the continued development of global licensing of copyright and neighbouring rights in a way in which Canadian rightsholders would participate in compensation for the exploitation of their works. It would minimize the potential for a conflict between copyright regimes around the world, create a degree of certainty for content providers for their potential liability for royalties and establish economic efficiencies in the regulatory regimes." Their argument goes on to state that the general trend in international copyright law is that acts of communication - one crux of the Tariff 22 proposal - take place in the country of origin and in all countries into which signals are transmitted. CRIA and IFPI say their members could be affected by the Tariff 22 decision, grounds enough, they say, to be granted leave to intervene in the case. For example, they write that CRIA and its Audio-Visual Licensing Agency subsidiary are at work globally to determine royalty mechanisms for music downloaded internationally, an initiative that could be derailed should the Supreme Court decide the Copyright Board of Canada was originally incorrect to rule that transmissions from outside the country weren't subject to royalty payments. The two groups write: "In addition, the decision will impact the liability of CRIA's members and their affiliates for making sound recordings and music videos available on web sites stored on servers located outside Canada and which are accessed by a person located in Canada. It will also determine whether offshore 'piracy havens' are likely to develop." Like the global coalition of ISPs, both CRIA and IFPI stress their usefulness to the Supreme Court in matters of international copyright in the hope of convincing the court to hear their argument. The parties also stress that they bring a content creator's perspective to the table. "CRIA and IFPI can provide the perspective of content creators and content providers both with respect to the protection of rights in content and the potential liability for making the content available for transmission over the Internet. No content creators or content providers are parties to this appeal." CCTA senior counsel Jay Kerr-Wilson says the entry by would-be interveners shows the national importance of the case. "The fact that these international associations are seeking leave to intervene clearly demonstrates the significance of the Federal Court of Appeal's decision, not just in Canada, but around the world. These associations represent ISPs from Canada's major trading partners. They can assist the court in explaining how caching has been dealt with in other countries and the uncertainty caused by the Federal Court of Appeal's approach to communications that originate outside Canada." The respective applications for leave to intervene bring Canadian copyright matters to the fore again after a summer hiatus on the most important fronts. The s.92 review of the Copyright Act is set to begin this fall (CNM, Oct. 16/02) . Bill C-36 is also set to be heard sometime this fall by the House of Commons, and speculation holds that the Canadian Alliance will attempt to stymie the legislation after being blindsided by the committee's surprise acceptance of copyright term extensions (CNM, June 25/03).

Tariff 22 heats up as international groups seek leave to weigh in with court

News | 09/12/2003 4:00 am EDT

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