Making available right established for downloads, but no rates set

The Copyright Board has ruled that the making available right under the Copyright Act applies to downloads, settling a case that began four years ago, but declined to set a value for the tariff. That means while groups like the Society of Composers, Authors and Music Publishers of Canada (SOCAN) theoretically have the right to collect royalties on music that has been made available for download online, the value of those royalties for the years that were under consideration by the Copyright Board is zero. “While the Copyright Board’s recognition that the new making available right is a separate and distinct right for which royalties can be collected is welcome, its scope falls short of what SOCAN had been seeking,” SOCAN general counsel Gilles Daigle said in an emailed statement, noting the group is still in the process of studying the decision. “And in the absence of approved royalties for the at this time, it is impossible to assess the extent to which, if any, rightsholders will ultimately benefit from its inclusion in the Act.” The board had been considering royalties for SOCAN for between 2011 and 2013, meaning that the earliest years for which SOCAN could see any monetary benefit from the newly-established right is 2014. The ruling settles a Copyright Board process that began after a Supreme Court's decision in 2012 said music rightsholders cannot charge communications royalties from online download services. In 2013, SOCAN argued in a proceeding in front of the board that the Copyright Act’s then-new making available right extended SOCAN's communication right to cover download music services, meaning SOCAN could collect royalties on when copies are offered for download. Royalties for copies that are then downloaded are covered by a separate reproduction tariff for making copies, which is collected by other copyright societies. Canadian telecoms and international giants like Apple Inc., Alphabet Inc.’s Google and Microsoft Inc. responded at the time that those legislative amendments created no such right. In its accompanying decision on royalties for online music services Friday, the Copyright Board also lowered the royalties for streaming services. Daigle said that reduction is “of much greater concern” for SOCAN, calling it a “major disappointment.” He added: “While the revenue base to which those rates apply has been expanded to include advertising revenues, that is not at all likely to outweigh the harm caused by the rate reductions.” There has been a shift in consumer preferences when it comes to listening to music in recent years, away from downloading services like Apple Inc.’s iTunes to music streaming services like that offered by Spotify AB, which have grown significantly. However, lawyer Barry Sookman, who represented Music Canada in the proceeding, noted that some of those streaming services still offer music for download and those would be covered under the new right — for instance, someone downloading an album from Spotify for offline listening. He added that the Copyright Board’s establishment of a making available right for downloads has bigger implications in the fight against piracy. “It also makes it clear that any other copyright holder has the right to control the making available of a work and to both licence it and to use it for anti-piracy purposes,” he noted. Sookman added that previously, it could be hard to prove that works were actually being illegally distributed, and it was necessary to have forensic experts monitor what was happening with the work. “With this decision, there’s no longer the same kind of need to determine or to prove there’s actually been a downloading and that it’s been downloaded into Canada. It’s enough that you can prove that it’s been made available to Canadians.” He added: “So it’s a very important decision for anti-piracy.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Making available right established for downloads, but no rates set

Broadcast | August 29, 2017

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Making available right established for downloads, but no rates set

Broadcast | August 29, 2017

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