CIPPIC Seeks Leave to Intervene at the Supreme Court of Canada in Rogers v. SOCAN and ESA v. SOCAN

| August 16, 2011

CIPPIC has filed a motion to intervene in the Supreme Court of Canada case of Rogers v. SOCAN. This follows CIPPIC's filing of a similar motion last week to inteverne in a companion case, ESA v. SOCAN.

In these two cases, SOCAN proposes that it should be allowed to levy more fees on online distributors of music and videos games. However, as CIPPIC proposes to argue, these online distributors already pay fair compensation to rights holders. They do so by licensing the right to reproduce and distribute music online, in much the same manner that traditional retail services obtain the rights to sell CDs and sell video game on DVDs. The additional fees that SOCAN proposes will only slow innovation and raise costs to customers.

Nonetheless, SOCAN wants a piece of the pie in the burgeoning online music marketplace. The problem is, SOCAN's mandate is only to collect fees for public perfomances of musical works. They collect licensing fees for music played through radio broadcasts and other public performances of musical works. SOCAN's mandate does not cover levying fees on reproductions of music, such as for sales of music sold through retail outlets.

To avoid this restriction and extend its mandate to cover online transactions, SOCAN is arguing in Rogers v. SOCAN that online downloads are within their purview as "communications to the public by telecommunication". In ESA v. SOCAN, they take this claim even further and argue that the background music in video games is, likewise, a "communication to the public by telecommunication" whenever a consumer downloads music-containing video games over the internet.

Is this a tenuous claim? Absolutely. CIPPIC proposes to challenge this creative, but ill-founded interpretation.

If granted leave to intervene, CIPPIC will argue that:

  • the pith and substance of music downloads involves reproduction rights, for which online distributors already negotiate with the rights holders in a healthy and functioning marketplace. These downloads do not involve a telecommunication to the public by telecommunication;
  • even if these transactions were to implicate the right to communicate to the public by telecommunication, the manner in which they may do so is purely for technical reasons and merely incidental to the copying of the work;
  • stacking a new royalty into the existing healthy marketplace will not only create market inefficiencies and introduce further costs to customers, but will also discourage innovation by putting online distributors at a disadvantage vis-à-vis their physical-store counterparts; and
  • the objectives of the Copyright Act include a strong public interest component. Any interpretation of the rights at issue must be consistent with the objective of enhancing innovation -- an objective that further fragmenting rights, further stacking royalties, and complicating the administration of copyright will not achieve.

CIPPIC also proposes to argue that courts should review Copyright Board decisions -- such as the ones at issue where the Copyright Board decided that SOCAN could charge these fees -- on the high standard of correctness. This will help ensure sound internet and public interest policy.

CIPPIC hopes to submit further arguments to the Court and present oral arguments during the hearings on December 6, 2011.