Music Canada calls on top court to review interpretations of 2004 fair dealing precedent

Music Canada is challenging the legal interpretations of a seminal 2004 Supreme Court decision on copyright, leading critics to say it could impact research and innovation across the country. The controversy surrounds a factum submitted to the Supreme Court as commentary for a case that is reviewing whether online song previews should be exempt from copyright. In the factum, the Canadian Recording Industry Association (which has now rebranded as Music Canada) argues that the 30-second song previews available via online music services such as Apple Inc.’s iTunes should not be classified as “research”—which allows for an exception under the Copyright Act. The Supreme Court case involves a review of previous decisions of the Copyright Board and the Federal Court of Appeal. In 2007, the Copyright Board decided that the 30-second song previews of musical works online—offered as a way for shoppers to sample the music—count as research, and are excepted from copyright. That decision aligned with the Supreme Court’s 2004 decision CCH Canadian Ltd. v. Law Society of Upper Canada, in which the court said research qualifies as a “fair dealing,” so that activities related to research, study, criticism, review or news reporting are excepted from copyright. Experts and user advocates of copyright contend that the CCH decision set an important precedent and gave organizations involved in research the right to use copyrighted materials more freely. After the Copyright Board reached its decision on song previews in 2007, copyright collective the Society of Composers, Authors and Music Publishers of Canada (SOCAN) requested a judicial review. The Federal Court of Appeal dismissed SOCAN’s application in May 2010, but earlier this year, the Supreme Court granted SOCAN leave to appeal the decision. The case is scheduled for a hearing Dec. 6. Music Canada said in its factum that the Copyright Board made a mistake when it classified previews as research. “Even if it is accepted that Services are entitled to rely on the 'research' purpose of consumers, the Services’ only purpose in dealing with Previews is not to facilitate that research,” Music Canada wrote. “The Services also use Previews for their own economic benefit in marketing the sale of downloads of sound recordings and that is their predominate purpose for using Previews.” “It’s a commercial application,” Amy Terrill, Music Canada’s vice-president of public affairs, added in an interview. “It’s more like an advertisement for a song.” Music Canada argues that the Copyright Board also “committed a breach of natural justice” by not affording parties a chance to present arguments about fair dealing during the board's proceeding. The organization adds that the Supreme Court should look at the Federal Court of Appeal’s decision to see whether it correctly interpreted the definition of “research.” “CRIA submits that both the Federal Court of Appeal and the Board were incorrect in their construction of research and erred in law in the selection of the purpose of consumers who use Previews, and in ignoring an important element of the test for fair dealing. In addition, the Court below and the Board erred in finding the Services' dealing with Previews was fair,” Music Canada wrote. “Both the Federal Court of Appeal and the Board failed to adopt a principled approach in construing fair dealing.” The benchmarks set out in the CCH decision were misinterpreted by the Copyright Board, Music Canada adds. The CCH precedent doesn’t apply in the previews case, the group says, because the relationship between the Law Society and its patrons, which the case dealt with, is different from the relationship between music shoppers and the preview providers. Music Canada argues for a different approach to deciding what should be exempt from copyright. It says the “Three-Step Test” set out in the Trade-Related Aspects of Intellectual Property Rights (TRIPS), an agreement of the World Trade Organization, should apply. The test establishes where copyright exemptions are limited for special cases. Experts and advocates of more user access to copyrighted works say Music Canada's arguments amount to a challenge of the scope of the Supreme Court's CCH precedent. “CRIA is asking the court to significantly scale back the scope of fair dealing,” Sam Trosow, associate professor at the University of Western Ontario’s Faculty of Law and Faculty of Information and Media Studies, wrote on his blog late last month. “What they propose is a general framework for exceptions,” Ariel Katz, a law professor at the University of Toronto, added in an interview. “It’s broader than research. It applies to private study, review and all the other exceptions.” Copyright scholar Meera Nair, author of the copyright blog Fair Duty, said a narrower interpretation of fair dealing could have impacts beyond the music industry, making it more difficult to use copyrighted material for research and development. “It’s the nature of human creativity to tinker and play with things. That is often where the next great innovation comes from. I qualify that under research ... You have to allow for the fact that research will often involve using other people’s work.” Music Canada argues that extending research exemptions to shoppers goes too far. If previews are classified as research, other activities now considered copyright infringement could also become exempt. “A consumer could copy a large extract of a literary works to enable the consumer to read the extract for the purpose of deciding whether or not to purchase the work. A consumer could make a full scale photograph of an artistic work to hang in the consumer's home for the purpose of deciding whether or not to purchase the work,” Music Canada wrote. “Where do you stop?” Terrill added. “If you interpret a preview as research, couldn’t someone say a copy of a song on a pirate site that is not legally obtained is research?” Complicating matters is the relationship between Music Canada and the Association of Universities and Colleges (AUCC), which is an objector to a tariff application at the Copyright Board from the copyright collective Access Copyright. Critics and legal adversaries of the collective point out that Music Canada and the AUCC are both represented by the same lawyer, Glen Bloom, of Osler, Hoskin & Harcourt LLP. They say that a narrowed fair dealing provision could bolster Access Copyright’s position for licensing before the Copyright Board and potentially lead to higher licensing fees for the AUCC. “There could be much higher costs in the educational system—potentially tens of millions per year—and much less access to essential information in Canadian schools, colleges and universities than other competitive countries such as the U.S.A. enjoy,” said Howard Knopf, counsel with Moffat & Co. and Macera & Jarzyna LLP. “It would be a self-inflicted serious wound for Canada—nothing less.” Critics add that the situation seems to be a strange one for Bloom to be in. “To the extent that he’s wildly successful at the Supreme Court, it’s going to come back on the university community in a negative way, making it harder for universities to successfully mount as potent a fair dealing offset to whatever the tariff might be,” Trosow said in an interview. Terrill said Music Canada sees no conflict. Steve Wills, the AUCC’s manager of legal affairs, was not available for an interview, and Bloom did not respond to a request for comment. news@thewirereport.ca

Music Canada calls on top court to review interpretations of 2004 fair dealing precedent

Broadcast | July 28, 2011

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