When the Supreme Court of Canada issued its SODRAC v. CBC decision last fall, critics warned that the decision may be anti-technology. The majority of the court ruling included a paragraph in which it suggested that users that invest in new technologies may be required to share some of the benefits with copyright holders:
Where the user of one technology derives greater value from the use of reproductions of copyright protected work than another user using reproductions of the copyright protected work in a different technology, technological neutrality will imply that the copyright holder should be entitled to a larger royalty from the user who obtains such greater value. Simply put, it would not be technologically neutral to treat these two technologies as if they were deriving the same value from the reproductions.
The danger with the decision should be immediately obvious as it creates disincentives to invest in new technologies. I argued in a post on the decision:
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The Supreme Court of Canada issued its long-awaited decision in SODRAC v. CBC today, a case that has major implications for the role of technological neutrality in copyright. As I noted when it was argued before the court, though the case was about whether CBC should be required to pay royalties for incidental copies necessary to use new broadcast technologies, at stake was something far bigger: the future of technological neutrality under Canadian copyright law. The case offers wins and losses for both users and creators, but the manner in which the court strongly affirmed the principle of technological neutrality runs the risk of actually undermining technological adoption.
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The Supreme Court of Canada heard arguments yesterday in the copyright case of CBC v. SODRAC. While the case was ultimately about whether CBC should be required to pay royalties for incidental copies necessary to use new broadcast technologies, at stake was something far bigger: the future of technological neutrality under Canadian copyright law.
CBC argued that technological neutrality means that it should not pay for incidental copies since it already pays for the use of music in broadcasts. The incidental copies – copies which are made to create the final broadcast version of a program (including copies from the master to a content management system or other internal copies to facilitate the broadcast) – do not generate revenue and are simply made to facilitate use of the music that is paid for through a licence. SODRAC, a Quebec-based copyright collective, countered that CBC had always paid for these copies and that the CBC argument was the reverse of technological neutrality, since it wanted to avoid payment in the digital world for copies that were being paid for with earlier, analog technologies.
The case emerged as an important one when the question of the meaning of technological neutrality took centre stage. That elicited interveners such as Music Canada, which argued for a narrow interpretation of the principle, claiming that it was just an “interpretative metaphor” (similar arguments about users’ rights being no more than a metaphor were rejected by the Supreme Court in 2012). The danger in the case from a technological neutrality perspective is that the Supreme Court could roll back its finding that technological neutrality is a foundational principle within the law. Moreover, if the court were to rule that all copies – no matter how incidental – are copies for the purposes of the Copyright Act, there would be the very real possibility of payment demands for the myriad of copies that occur through modern technologies.
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Over the past month, Music Canada, the lead lobby group for the Canadian recording industry, has launched a social media campaign criticizing a recent Copyright Board of Canada decision that set some of the fees for Internet music streaming companies such as Pandora. The long-overdue decision seemingly paves the way for new online music services to enter the Canadian market, yet the industry is furious about rates it claims are among the worst in the world.
The Federal Court of Appeal will review the decision, but the industry has managed to get many musicians and music labels worked up over rates it labels 10 percent of nothing. While the Copyright Board has more than its fair share of faults, a closer examination of the Internet music streaming decision suggests that this is not one of them.
The Music Canada claim, which is supported by Re:Sound (the copyright collective that was seeking a tariff or fee for music streaming), is that the Canadian rates are only 10 percent of the equivalent rate in the United States. That has led to suggestions that decision devalues music and imperils artists’ livelihood.
My weekly technology law column (Toronto Star version, homepage version) argues the reality is far more complex.
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The Copyright Board of Canada has released a decision in which it admits to palpable error that resulted in a hugely inflated tariff. The case involved a tariff for SODRAC for reproduction of music works in cinematographic works for private use of for theatrical exhibition. The Canadian Association of Film […]
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