Supreme Court finds fair dealing for music review use Canada as part of five big copyright decisions

August 2012

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Consumers and educators emerged victorious in five significant Supreme Court of Canada rulings that have modernised Canadian copyright law. The five cases touched on tariffs set by the Copyright Board governing music downloading, photocopying textbooks, videogames and movie and TV soundtracks. All cases pitted the societies that collect fees on behalf of creators against the distributors or users of the copyrighted materials.

University of Ottawa law professor Michael Geist told the Toronto Star “I think it’s definitely pro-consumer,” adding “It’s also a pro-business decision as the court has recognized that innovation that is so crucial for the Canadian economy relies on flexibility in copyright.”

In the first case The SCC unanimously held that music previews used by services such as Apple’s iTunes to allow customers to hear music before they buy constitute fair dealing under the Copyright Act. The SCC applied its fair dealing test set out in CCH Canadian Ltd. v. Law Society of Upper Canada (known as the “law library photocopy case”).  The rationale behind the fair dealing analysis is to determine if the proper balance has been achieved between the protection of the exclusive rights of authors and copyright owners vs. public access to copyright works: The test has two steps: Firstly, is the use ‘research or private study’ and a liberal interpretation covers previews; and Secondly, is the dealing ‘fair’.

In the second case, school boards across the country faced a claim from the body that collects royalty fees for publishers. The court sided with the educators. Queen’s University professor Laura Murray pointed out that universities and school boards already pay an annual tariff for the right to photocopy parts of textbooks; an extra fee on each individual work copied, which the court rejected, would have sent costs spiralling with Murray saying “It restores a measure of common sense to Copyright debate,” and again the Supreme Court’s supported “fair dealing” when teachers copy limited parts from texts on a 5-4 majority.

The court’s findings also reflect a discomfort with the “layering of rights,” Geist said, where a business that had bought the required licensing right being forced to pay another fee when a song is downloaded by a consumer saying “It feels as if the courts almost just said ‘Enough!’ The payment is of course appropriate, but multiple payments for basically the same thing isn’t.”

The SCC also ruled said that there should be no copyright fees levied on cable companies or other digital providers when music is downloaded, but that artists should be compensated when it is streamed online. SOCAN is taking its time to review the “disappointing” downloading ruling which means the potential loss of royalties from permanent downloads which usually constitute 3.1 per cent, on each iTunes track purchased. SOCAN has been collecting money for both streaming and downloading but has not distributed the funds to its members given the pending cases. It is a difficult decision for the music industry.

The judges also ruled movie theatres, broadcasters and cable companies shouldn’t be charged for the music that’s part of a film or a TV program they are showing. “It seems incongruous that songwriters should be compensated when their work is broadcast on TV and in motion pictures, while the actual performers of the recordings are not,” said Ian MacKay, president of Re: Sound Music Licensing Company, a non-profit dedicated to obtaining fair compensation for artists and record companies for their performance rights.

Similarly, the court ruled software companies that sell video games online should not have to pay royalties for the music included in the games. Video game manufacturers argued that a royalty would be redundant given they already pay licensing fees for the pop songs used in games like “Guitar Hero,” and own the copyrights to original music used in games.


Society of Composers, Authors and Music Publishers of Canada et al. v. Bell Canada, et al., 2012 SCC 36.

Province of Alberta as represented by the Minister of Education;, et al. v. Canadian Copyright Licensing Agency Operating as “Access Copyright” 2012 Case: 33888 SCC 37

Rogers Communications Inc., et al. v. Society of Composers, Authors and Music Publishers of Canada 2012 Case: 33922

Re:Sound v. Motion Picture Theatre Associations of Canada, et al.  2012 Case: 34210

Entertainment Software Association, et al. v. Society of Composers, Authors and Music Publishers of Canada 2012  Case: 33921–supreme-court-rules-against-copyright-fees-on-music-videos-printed-matter

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