Apple, Microsoft, Yahoo, argue against new music download royalty

Apple Inc., Microsoft Inc., Yahoo! Inc. and Canada's largest Internet and mobile wireless providers said the Conservative government's amendments to the Copyright Act last year did not create a new right for the collection of online music royalties. Apple, Microsoft, Yahoo, BCE Inc., Google Inc., Rogers Communications Inc., Shaw Communications Inc., and Quebecor Media Inc., said in submissions filed with the Copyright Board this month that they object to arguments made by The Society of Composers, Authors and Music Publishers of Canada (SOCAN), a copyright collective which told the board the Copyright Act's new “making available right,” passed into law last year, extends its tariffs to online music services. “If SOCAN’s submission is accepted, an album downloaded from an internet retailer would be subject to just such an additional layer of protections and fees over a CD purchased in a brick-and-mortar store. SOCAN’s submission should therefore be rejected,” Apple said in its submission to the Copyright Board. Microsoft, in a separate submission, agreed, writing: “As a matter of proper statutory interpretation, the Amendment extends the communication right to the making available of musical works for access by streaming, but no further. It does not extend the communication right to include making available for the purpose of downloads.” SOCAN collects royalties on the performance or “communication” of music, such as concerts, movies, radio and television broadcasts, and distributes them to copyright owners. If SOCAN's submission is approved for online music services, a new tariff would be collected in addition to an existing reproduction tariff for making copies, which is collected by other copyright societies. The Supreme Court's decision in Entertainment Software Association v. SOCAN, issued last year, struck down the collection of communications royalties from online download services like Apple's iTunes. The file transmissions are “reproductions” as opposed to “performances,” the court said. SOCAN is now arguing at the Copyright Board, as well as in a separate case against Rogers at the Federal Court, that the Conservative government's Bill C-11 restores the royalty for downloads that the Supreme Court struck down. Bill C-11 amended the Copyright Act by introducing a new “making available right” for rights owners to control the distribution or posting of works online. At the Federal Court, SOCAN is fighting a lawsuit launched by Canadian mobile providers for the return of $15 million in ringtone royalty payments, due to the Supreme Court decision that struck down the fees. No hearing date has been set for that case. Apple, in its submission, referred to the Supreme Court's point about the “principle of technological neutrality.” The court said it interprets the Copyright Act “in a way that avoids imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user. To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies.” BCE, Google, Rogers, Shaw, Quebecor, and Yahoo filed a joint submission to the Copyright Board this month, which agreed with Apple and Microsoft and said it would be “inappropriate and unnecessary” for the board to accept SOCAN's interpretation of the making available right. The companies said the right would “grant authors a new, freestanding, additional sui generis right that is to be layered on top of their existing rights. To do so would create needless inefficiencies for all parties, and would fly in the face of the Supreme Court's findings in ESA.” The Canadian Association of Broadcasters also filed a submission disagreeing with SOCAN. In a filing with the board in March, SOCAN said that, as a result of the passage of Bill C-11, its members are entitled to receive the fees. The Copyright Act “recognizes that a download now involves two separate acts protected by two separate rights: the act of making a work available, which is an act of communication; and the act of transmitting a permanent copy, which is an act of reproduction," SOCAN said. The Copyright Board is reviewing the new making available right in advance of a November hearing on online music services. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Apple, Microsoft, Yahoo, argue against new music download royalty

News | 06/26/2013 9:38 pm EDT

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