For much of the past two decades, copyright groups have steadfastly sought to deny what the Supreme Court of Canada has repeatedly endorsed, namely that the purpose of Canadian copyright law is to serve the public interest by balancing users’ and authors’ rights. Last week provided the latest episode in the ongoing series as the Court delivered yet another strong affirmation on the importance of copyright balance and the role of technological neutrality, confirming that “[c]opyright law does not exist solely for the benefit of authors.” The decision – SOCAN v. Entertainment Software Association – can read on at least four levels: (1) as a repudiation of SOCAN’s effort to establish a new, additional royalty for the “making available” of music; (2) as a confirmation of the importance of technological neutrality and copyright balance; (3) as an example of the flexibility associated with implementing the WIPO Internet treaties, and (4) as the undeniable entrenchment of Canadian copyright jurisprudence that now features deeply layered precedents on users’ rights.
If the parties to the case sound familiar, it may be because the Supreme Court issued a decision nearly ten years earlier to the day involving the same two litigants. In the 2012 ESA v. SOCAN decision, SOCAN was seeking payment for the downloading of video games that contained musical works. The inclusion of musical works within the games was already compensated, but the copyright collective argued that there should be an additional payment for the act of downloading the game containing music. The Supreme Court rejected the request, concluding that an additional payment for downloads would violate the principle of technological neutrality, famously stating:
In our view, there is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.
Ten years later, SOCAN was back with Music Canada seeking yet another additional royalty. This time, the collective relied on the 2012 copyright reform process that added a section to the Copyright Act clarifying that the right to communicate a work to the public by telecommunication includes making the work available online by uploading it to the Internet. SOCAN insisted that the act of “making available” created a new royalty, meaning that rights holders would be entitled to be paid separate royalties both for the act of uploading the work and for downloading or streaming it. SOCAN and Music Canada argued that this approach was consistent with the WIPO Internet treaties, maintaining that to adopt an alternate approach risked violating Canada’s commitment in trade and copyright treaties.
Despite the dire warnings, the court once again rejected the request, assessing the making available provision as part of a single, continuous act that is triggered as soon as the work is uploaded and does not require actual downloading or streaming. Given that it is single act, only a single royalty is engaged:
Section 2.4(1.1) ensures that on-demand streams receive similar treatment. Section 2.4(1.1) makes it clear that a work is performed as soon as it is made available to the public for on-demand streaming because, at that point, users are given the opportunity to temporarily experience the work. Once a work is made available for on-demand streaming, all users have to do is tune in to the stream to experience the work. This is the digital equivalent of flipping to a 24/7 television channel that is continuously playing — that is performing — a particular work.
This interpretation does not require treating the act of making the work available as a separate performance from the work’s subsequent transmission as a stream. The work is performed as soon as it is made available for on-demand streaming. At this point, a royalty is payable. If a user later experiences this performance by streaming the work, they are experiencing an already ongoing performance, not starting a new one. No separate royalty is payable at that point. The “act of ‘communication to the public’ in the form of ‘making available’ is completed by merely making a work available for on˗demand transmission. If then the work is actually transmitted in that way, it does not mean that two acts are carried out: ‘making available’ and ‘communication to the public’. The entire act thus carried out will be regarded as communication to the public”: Ficsor, at p. 508. In other words, the making available of a stream and a stream by a user are both protected as a single performance — a single communication to the public.
Beyond the court’s affirmation of a single act and a single royalty, the case can also be read as a re-affirmation of the purpose of the Copyright Act. There are two key elements here. First, the role of technological neutrality, which the Court notes “that, absent parliamentary intent to the contrary, the Copyright Act should not be interpreted in a way that either favours or discriminates against any form of technology.” Applied in this case:
The Board’s interpretation of s. 2.4(1.1) violates the principle of technological neutrality because it requires that users pay additional royalties to access works online. To illustrate, consider a retailer that allows customers to purchase a digital or physical copy of an album. Regardless of whether the work is sold digitally or physically, the author’s reproduction interest in s. 3(1) is engaged because the user receives a durable copy of the work: ESA, at para. 31. The author is therefore entitled to a reproduction royalty. But under the Board’s interpretation of s. 2.4(1.1), purchasing the album online would entitle the author to an additional royalty — a performance royalty for making the work available for online purchase. Similarly, streaming the album online would require paying a “making available performance” royalty and a “streaming performance” royalty. But playing that same album on the radio would only require paying one performance royalty. Requiring that users pay additional royalties based solely on the mode of the work’s distribution violates the principle of technological neutrality.
In addition to its endorsement of technological neutrality, the Court again affirms the broader purpose of balance in copyright, which can be achieved using additional tools such as fair dealing. It states:
Copyright law does not exist solely for the benefit of authors: York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32, at paras. 90-91. Its overarching purpose is to balance users’ and authors’ rights. It does this by securing just rewards for authors while facilitating “public access to and dissemination of artistic and intellectual works, which enrich society and often provide users with the tools and inspiration to generate works of their own”: Access Copyright, at para. 92; see also Théberge, at paras. 30-31.
The Copyright Act uses various tools to achieve this balance. Fair dealing, for example, promotes this balance by allowing “users to engage in some activities that might otherwise amount to copyright infringement”: Bell, at para. 11; see also Access Copyright, at para. 90. Similarly, the idea/expression dichotomy protects this balance by extending copyright protection to only original artistic expressions, not original ideas. This ensures that the public can freely use new ideas to inspire their own original works: CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13,  1 S.C.R. 339, at para. 8; A. Drassinower, “Copyright Is Not About Copying” (2012), 125 Harv. L. Rev. F. 108, at p. 111.
Like fair dealing and the idea/expression dichotomy, the principle of technological neutrality is a tool for balancing users’ and authors’ rights. It ensures that authors retain the same rights over their works regardless of the technological means used to distribute those works. If the Copyright Act entitles authors to receive a certain royalty when their work is reproduced or performed offline, technological neutrality preserves an author’s right to receive that same royalty when their work is reproduced or performed online. As a corollary, it also protects users by preventing authors from extracting more royalties merely because their work is reproduced or performed online.
The decision also represents a clear recognition of the flexibility that exists in implementing the provisions found in the WIPO Copyright treaties. This was a major source of debate when the government introduced the legislative provisions to implement the treaties in the 2012 reform process, particularly with respect to the anti-circumvention rules (also referred to as the “digital lock rules”). While some groups argued that only a U.S.-style restrictive DMCA approach was permissible, the experience globally confirmed that the treaties offered considerable flexibility in implementation (I wrote an entire article on the subject).
In this case, the court examined the making available provision in the WIPO treaty (Article 8), but the same rationale would apply to other provisions. Described as the “umbrella solution”, the court states:
In accordance with the umbrella solution, member countries have protected the act of making works available through a variety of means. Some have adopted wording similar to that in art. 8. Others have made no statutory changes, relying instead on existing rights to give effect to the obligations under art. 8. The United States, for example, has relied on its existing reproduction, performance, and distribution rights to give effect to its art. 8 obligations: United States Copyright Office, at pp. 74-77; Foong, at p. 84; Makeen, at pp. 256-57.
In sum, the umbrella solution gave “relative freedom [to] national legislators in choosing the right of distribution, the right of communication to the public, the combination of these rights, or a new right, to fulfil obligations under Article 8”: M. Ficsor, The Law of Copyright and the Internet: The 1996 WIPO Treaties, their Interpretation and Implementation (2002), at p. 501. Accordingly, provided that the Copyright Act gives effect to art. 8’s goals through any combination of rights, Canada will be in compliance with its obligations under art. 8.
Finally, the case also provides a further entrenchment of Canadian copyright jurisprudence that holds users’ rights and the copyright balance as foundational elements of the law. As was evident in last year’s York University v. Access Copyright decision, the court’s support for these principles is not obiter, rhetoric, or likely to change. Indeed, copyright lobby groups have spent much of the past two decades in denial, convinced that somehow the growing body of Supreme Court copyright cases will be reversed the next time the court confronts the issue. That has now led to multiple defeats at Canada’s highest court by copyright collectives such as Access Copyright and SOCAN. In each case, the core copyright principles have remained unchanged. Indeed, if anything, they have become more solidified as precedent builds upon precedent. Given these outcomes and last week’s SOCAN v. ESA decision, it is long past time for these groups to engage in copyright policy based on the realities of balance, users’ rights, and technological neutrality.