Supreme Court Releases Decision in CBC v. SODRAC 2003 Inc., 2015 SCC 57

| November 26, 2015
In a 7-2 decision, the Court upheld the Copyright Board's decision to characterize broadcast-incidental copies as "reproductions" for the purposes of the Copyright Act, but overturned the Board's method of calculating fees payable for such activities.  The majority found no reason to depart from long-standing caselaw on the character of ephemeral copies as reproductions for the purposes of the Act, and concluded that the separation of synchronization and broadcast‑incidental licences does not offend technological neutrality or impose new layers of protection or fees based solely on technological change.  However, the majority concluded that the Board failed to consider the principles of technological neutrality and balance in valuing the ephemeral licence.  The Court concluded that balance between user and right‑holder interests requires that the Board assess the respective contributions of the user and the copyright‑protected works to the value enjoyed by the user. Factors relevant to this balance include:
  • the risks taken by the user, 
  • the extent of the investment made by the user in the new technology, and 
  • the nature of the copyright protected work’s use in the new technology.  
Justice Abella in a robust dissent, concurred with in this part by Justice Karakatsanis, would have said that broadcast incidental copies are not reproductions for the purposes of the Act since they are part of the activity of broadcasting, and to hold otherwise violates the principle of technological neutrality.  Justice Abella argues that the principle of technological neutrality requires an inquiry into whether there is (a) media neutrality or (b) functional equivalence between the old and new technology in a way that maintains the balance between copyright owner and user interests.  The dissent is deeply critical of the majority's approach to technological neutrality, suggesting that it ascribes value to copyright owners on the basis of user innovation that has nothing to do with the user's central activity or the rights of the copyright owner, and invites fragmentation and royalty stacking in a way that previous decisions of the Court had strived to avoid.