The Copyright Pentalogy: Overview and Implications of Five Supreme Court Cases on Copyright Law

On July 12th, 2012, the Supreme Court of Canada released its reasoning on five significant copyright cases that were argued in December 2011. These cases have had a major impact on copyright law in Canada.

The recent passing of the Copyright Modernization Act, along with what has been dubbed the “Copyright Pentalogy,” has simultaneously reshaped Canadian copyright law. What follows is an overview of the key rules coming out of these cases and their implications on copyright law, including subsequent interpretations and recent case law.

Streaming and Not Downloading is a Communication to the Public

In Entertainment Software Association v. SOCAN, the collective representing copyright holders of musical works sought to collect a licensing fee for downloaded purchases of video games that contained musical works. This additional tariff for “communication to the public” was argued to be separate from the tariff already received for allowing the “reproduction” of music used in the game.

The SCC took a technologically neutral stance by classifying the Internet as a “technological taxi.” It simply provides another way of distributing a single durable copy of a work to a user, much like a retail store or mail delivery. Copyright holders of music and other forms of creative work will not be able to collect two different revenue streams from the same activity.

However, online streaming—such as movies or music—has been distinguished from downloading by the SCC as a series of repeated transmissions of the same work to different customers. This distinction, made clear in Rogers Communication Inc. v. SOCAN, entitles SOCAN to a licensing fee for online streams. Taken together with Entertainment Software, this decision provides some predictability in revenue forecasts for entities offering creative works online.

Read Entertainment Software Association v. SOCAN on CanLII

Read Rogers Communications Inc. v. SOCAN on CanLII

Fair Dealing in Copyright Law: A “Large and Liberal” Interpretation

The SCC upheld its broad interpretation of “fair dealing” from CCH Canadian Ltd. v. Law Society of Upper Canada in two of the five cases. Fair dealing, an exception to copyright infringement, allows use for purposes of research, private study, criticism, review, and news reporting.

In assessing a fair dealing claim, the purpose of the infringement must fall within one of these categories. The “analytical heavy lifting” comes in determining whether the dealing is fair by looking at purpose, character, amount, alternatives, nature, and effect.

In SOCAN v. Bell Canada, the court lowered the threshold for research by holding that free online music previews could qualify as fair dealing for the purpose of research. Consumers use these previews as a means of researching whether they would purchase a particular song or album, with factors like shorter length and reduced quality supporting this conclusion.

Similarly, in Alberta v. Access Copyright, the court considered the student’s perspective, ruling that photocopies made by teachers for students could qualify as fair dealing for “private study.” This decision emphasized that the user’s purpose should be considered in analyzing fair dealing.

Read SOCAN v. Bell Canada on CanLII

Read Alberta v. Access Copyright on CanLII

Soundtracks Are Not “Sound Recordings” When Part of a Film or Television Program

The SCC’s ruling in Re:Sound v. Motion Picture Theatre Associations of Canada clarified that soundtracks embedded in films or television programs do not qualify as “sound recordings” eligible for separate royalties. This decision reaffirms the statutory exclusion of soundtracks from sound recording royalties when part of audiovisual works.

Read Re:Sound v. Motion Picture Theatre Associations of Canada on CanLII

Subsequent Developments in Fair Dealing and Copyright Tariffs

1. York University v. Access Copyright (2021)

In York University v. Access Copyright, the Supreme Court addressed the enforceability of tariffs approved by copyright collectives. It ruled that such tariffs are not mandatory for users who have not agreed to be bound by them, reinforcing the voluntary nature of copyright tariffs in Canada.

Read York University v. Access Copyright on CanLII

2. Canadian Broadcasting Corp. v. SODRAC 2003 Inc. (2015)

In Canadian Broadcasting Corp. v. SODRAC 2003 Inc., the Court examined licensing requirements for incidental copies made during broadcasting. It ruled that licenses are needed for such copies but advised caution in setting royalty rates, emphasizing a balanced approach in copyright’s digital applications.

Read Canadian Broadcasting Corp. v. SODRAC on CanLII

Implications of the Copyright Pentalogy and Beyond

These cases represent a fundamental shift in Canadian copyright law, promoting a fairer balance between user rights and copyright holders’ interests:

• Users: Expanded interpretations of fair dealing grant users greater flexibility in using copyrighted content, especially in educational and research contexts.

• Creators: The rulings limit some revenue avenues, but licensing structures and royalties remain important, particularly as digital markets grow.

• Educational Institutions: The decisions clarify the scope of fair dealing, allowing for broader use of materials in teaching and research.

• Digital Media and Streaming Services: These cases offer guidance on licensing and distribution in digital environments, supporting clear legal frameworks for content streaming and media businesses.

The copyright landscape in Canada is likely to continue evolving as courts and legislators address emerging digital challenges. Staying informed on these developments is essential for anyone working in media, education, or content creation.

*DISCLAIMER: This article provides an overview of legal changes in copyright law and is intended solely for informational purposes. For specific legal advice, consult a qualified legal professional.