SOCAN fights ringtones case, launches counterclaim for unpaid royalties

Copyright collective the Society of Composers, Authors and Music Publishers of Canada (SOCAN) is fighting a Canadian mobile carriers' lawsuit for the return of $15 million in ringtone royalties. Rogers Communications Inc., Telus Corp., Quebecor Media Inc., and BCE Inc. subsidiary Bell Mobility filed the lawsuit with the Federal Court last November, arguing that Supreme Court decisions on copyright issued in July meant the carriers should never have paid communications royalties for ringtone downloads, which were applied as far back as 2003. In a statement of defence filed with the Federal Court this month, SOCAN argues the Supreme Court decisions did not apply to the download of ringtones and that, even if they did, the federal Conservative government's amendments to the Copyright Act last fall affirmed the collective's right to collect communications royalties on ringtone downloads. The group at the same time launched a counterclaim seeking between three and 10 times the unpaid royalties it says the carriers have failed to pay since last year. SOCAN is a copyright society that collects and distributes communication royalties from “performance” tariffs. On downloads, those tariffs are collected in addition to a reproduction tariff for making copies. Mobile subscribers can purchase and download ringtones from their wireless carriers. In two related copyright decisions issued in July, Rogers v. SOCAN and Entertainment Software Association v. SOCAN, the Supreme Court said music rightsholders cannot charge communications royalties from online download services like Apple Inc.'s iTunes. As a result of the Supreme Court decision, the carriers argued in their Federal Court claim filed in November that the Copyright Board royalty covering ringtones, called Tariff 24 and first certified by the board in 2006 for the years 2003-2005, effectively had no basis in law. The companies said restitution of $15 million should be returned to them. SOCAN said it disagrees with the carriers' interpretation of the Supreme Court decisions. It said that, in an earlier case, the Federal Court of Appeal reviewed the Copyright Board's Tariff 24, ruling in favour of it, and that the Supreme Court in 2008 decided not to hear another appeal of the tariff. SOCAN then distributed the royalties to its members. “The plaintiffs' claim in this action is a collateral attack on decided cases of the Board, the Federal Court of Appeal, and the Supreme Court of Canada,” SOCAN said. “It would be inequitable to trace the distribution of Tariff 24 royalties into the hands of SOCAN's members.” The group added that the Conservative government's amendments to the Copyright Act, which came into force on Nov. 7, 2012, included a new “making available right” that “restores SOCAN's right to collect royalties on downloads of ringtones." SOCAN said the wireless carriers have failed to pay communications rights royalties since the Supreme Court decisions were issued on July 12, 2012, and filed a counterclaim seeking damages of three to 10 times the “applicable royalties due and payable to SOCAN.” According to a Copyright Board Tariff 24 certification for the years 2009-2013, the mobile carriers were to pay royalties of five per cent of ringtone revenues from mobile subscribers or a minimum fee of five cents per ringtone. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Nicholas Kyonka at nkyonka@thewirereport.ca

SOCAN fights ringtones case, launches counterclaim for unpaid royalties

News | February 20, 2013

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