Supreme Court of Canada Releases a Welcome Decision in SOCAN v ESA

The Supreme Court of Canada today released its long-awaited decision in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association, 2022 SCC 30 [1].

Canada amended its legislation in 2012 to, in part, implement Canada’s obligations under the 1996 WIPO Copyright Treaty. The Treaty included an obligation to ensure that authors’ rights include the right to benefit from “pull” technologies - business models that make content available to consumers at a time and place of their choosing (in contrast to “push” technologies like radio, where the broadcaster determines the time and place).  At issue was the impact of the "making available" provisions of the Copyright Act: do these entitle copyright owners to payment for making a work available to stream, and a second payment when the stream actually occurs? 

CIPPIC intervened [2] in this case to argue for just this outcome, emphasizing the importance of technological neutrality, efficiency in administering rights, the need to avoid needless duplicative and expensive royalty-stacking, and the promotion of innovation in the delivery of content online through services that both compensate creators and meet consumer needs. We are very pleased that this is the interpretation that prevailed.

Practically, the decision clarifies the copyright clearance path for online services.  The decision re-articulates the Supreme Court of Canada’s view of the scheme of the Act as being divided among three “activities”: reproduction (such as downloads), performance (such as streams), and first publication. The Court observed that copyright “activities” typically implicate just a single right relating to just one of these activities. For example, as in this case, companies like Spotify “make available” content for later streaming by consumers. The plaintiffs sought to be paid twice for this service: once for the making available of Spotify’s library, and a second time when the content is actually streamed. The Court disagreed, saying this is all part of a single activity: the provision of a streaming service. Only a single royalty ought to be paid. CIPPIC is particularly pleased that the Court grounded its decision in technological neutrality, an interpretational approach that CIPPIC had emphasized in its intervention (and numerous previous interventions). 

The Court also took the opportunity to distinguish “making available” for streaming from the provision of content for downloads. Performances, such as the streaming services at issue in this case, implicate the “communications right”. In contrast, posting content for others to download involves the reproduction right (infringed by an unauthorized download) and the authorization right (infringed by the initial unauthorized posting, regardless of whether anyone subsequently downloads the content).

The result streamlines the process for obtaining tariffs on digital services and permits innovators to come to market more quickly, with fewer regulatory and litigation complications, and with certainty over their copyright obligations.