Canadian Broadcasting Corp. v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. et al.,

• Jurisdiction: Federal Jurisdiction (Canada)
• Judge: Noël, Pelletier and Trudel, JJ.A.
• Citation: (2014), 457 N.R. 156 (FCA),2014 FCA 84
• Court: Court of Appeal (Canada)
• Date: 01 October 2013

CBC v. SODRAC (2014), 457 N.R. 156 (FCA)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.R. TBEd. AP.002

Canadian Broadcasting Corporation/Société Radio-Canada (applicant) v. SODRAC 2003 Inc. and Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. (respondents)

(A-516-12)

Astral Media Inc. (applicant) v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. (respondent)

(A-527-12)

Canadian Broadcasting Corporation/Société Radio-Canada (applicant) v. SODRAC 2003 Inc. and Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. (respondents)

(A-63-13; 2014 FCA 84; 2014 CAF 84)

Indexed As: Canadian Broadcasting Corp. v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. et al.

Federal Court of Appeal

Noël, Pelletier and Trudel, JJ.A.

March 31, 2014.

Summary:

In a November 2, 2012 decision (the Decision), the Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters (Canadian Broadcasting Corp. (CBC) and Astral Media Inc.) by a collective society which administered reproduction rights (SODRAC). The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities. This aspect of the Board's decision rested on the Supreme Court of Canada's decision in Bishop v. Stevens (1990 SCC). The broadcasters brought three applications for judicial review. CBC applied to set aside several terms of the 2008-2012 licence issued to it pursuant to the Decision. Astral Media Inc. applied to set aside a number of the terms of the 2008-2012 licence issued to it pursuant to the Decision. CBC also applied for judicial review with respect to the Board's January 16, 2013 decision extending the 2008-2012 licence to the 2012-2016 period on an interim basis pending a final determination of SODRAC's s. 70.2 application with respect to that period. The broadcasters argued that Bishop v. Stevens had to be read in the light of Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada (2012 SCC), a decision in which the Supreme Court affirmed the principle of technological neutrality in copyright matters. The result, in the applicants' view, was that ephemeral copies should no longer attract royalties.

The Federal Court of Appeal held that Bishop v. Stevens continued to be good law. The court allowed the applications for judicial review in part, but only for the purpose of amending the discount formula established by the Board.

Copyright - Topic 3001

Licences - General - In a November 2, 2012 decision (the Decision) the Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters (Canadian Broadcasting Corp. (CBC) and Astral Media Inc.) by a collective society which administered reproduction rights (SODRAC) - The licences issued by the Board following its November 2, 2012 Decision expired on March 31, 2012 (CBC) and August 31, 2012 (Astral) - However, in 2009, the Board made an interim order continuing the then existing licences in place until it rendered its decision with respect to the 2008-2012 period - Those interim orders were of no further effect as of November 2, 2012 when the Board issued its Decision and the concomitant licences - That left a legal vacuum as the 2009 interim licences were at an end and the new licences had already expired - In order to fill that legal vacuum, on January 16, 2013, the Board ordered that the licences for the 2008-2012 periods would continue in effect from the date of their expiry until the Board rendered a final decision with respect to the s. 70.2 application made by SODRAC for the 2012-2016 periods - CBC applied for judicial review of the Board's interim decision and the licences issued as a result - CBC stressed that the status quo was the state of affairs that was in place prior to the issuance of the 2008-2012 licence, particularly since the execution of that licence was stayed pending the outcome of these proceedings - It also pointed to the effect that it said the newly added s. 30.9 of the Copyright Act would have on the question of incidental licences - The Federal Court of Appeal dismissed the application - Once the Board settled the terms of the 2008-2012 licence, it became the status quo between the parties, notwithstanding the stay of execution of that licence - As for the changes in the way the parties would do business in the future, that was a matter best considered by the Board in the hearings on the merits for the 2012-2016 licence - See paragraphs 86 to 94.

Copyright - Topic 3041

Licences - Effect of - General - [See first Copyright - Topic 3426 ].

Copyright - Topic 3425

Fees, charges or royalties - Determination of - Formula - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters by a collective society which administered reproduction rights (SODRAC) - The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities - The broadcasters applied for judicial review - The Federal Court of Appeal allowed the applications in part to allow for the amendment of a discount formula which was designed to give the broadcasters credit when they broadcast a program in which the producer had obtained a through-to-the viewer licence from SODRAC - The formula was flawed and needed to be corrected - See paragraphs 70 to 82.

Copyright - Topic 3426

Fees, charges or royalties - Determination of - Relevant considerations - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters by a collective society which administered reproduction rights (SODRAC) - The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities - The broadcasters applied for judicial review - The broadcasters argued that any value attached to ephemeral copies was compensated in the through-to-the-viewer licence issued to the producers who paid for a synchronization licence with respect to an audiovisual work - The broadcasters argued that the Board could not and should not make an order contrary to established commercial practice in the broadcasting industry - The Federal Court of Appeal stated that "The Board examined the evidence submitted by the parties on this question, including a number of synchronization licences issued by SODRAC and came to the conclusion that 'in the relevant market, the province of Québec, through-to-the-viewer licensing exists but is not the norm' ... The Board's conclusion is based on the evidence, it is intelligible and it is within the range of acceptable outcomes, having regard to the facts and the law. The Broadcasters also challenge the Board's conclusion that Québec is the relevant market but in light of the fact that SODRAC represents the majority of reproduction rights holders in Québec ... it is not unreasonable to consider the market where SODRAC is the most active as the relevant market" - See paragraphs 51 to 57.

Copyright - Topic 3426

Fees, charges or royalties - Determination of - Relevant considerations - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters (Canadian Broadcasting Corp. (CBC) and Astral Media Inc.) by a collective society which administered reproduction rights (SODRAC) - The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities - The broadcasters applied for judicial review - CBC argued that the Board failed to consider a relevant factor when it refused to take into account the CBC's ability to pay when fixing licence fees that were substantially more than those which CBC had paid historically - The Federal Court of Appeal rejected the argument - The court stated that "CBC is a publicly funded broadcaster whose basic allocation is voted by Parliament. If the CBC is not properly funded, as its submissions suggest, it is not the role of the artists whose works it uses in its broadcasts and productions to make up the shortfall by accepting less than the economic value of their rights under the Act. The Board's role as economic regulator does not extend to protecting CBC from the cost consequences of the programming choices it makes" - See paragraphs 83 to 84.

Copyright - Topic 3440

Fees, charges or royalties - Determination of - Judicial review - [See first Copyright - Topic 3426 ].

Copyright - Topic 3440

Fees, charges or royalties - Determination of - Judicial review - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters by a collective society which administered reproduction rights (SODRAC) - The broadcasters applied for judicial review - The broadcasters argued that the Board failed to carry out or to properly carry out its role as economic regulator by wrongly deciding a number of questions that arose before it in the course of its decision - Some of the "economic" issues involved questions such as the fixing of SODRAC's royalties as a percentage of royalties payable to SOCAN, and the fact that some royalties imposed by the Board were inconsistent with those ratios - The Federal Court of Appeal stated that "These decisions are based upon the evidence that the Board had before it and to which it makes reference in its Decision. The Board has expertise in the setting of appropriate royalties as a result of its long experience in doing so. It has the advantage of having heard all the evidence as well as having an in-depth understanding of the context in which these questions arise. These factors suggest that we should defer to the Board's expertise, unless it can be shown that the Board has come to an unreasonable conclusion. That has not been shown with respect to these issues" - See paragraph 59.

Copyright - Topic 4487

Infringement of copyright - Acts constituting an infringement - Music (incl. ephemeral copies) - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters by a collective society which administered reproduction rights - The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities - Ephemeral copies were copies or reproductions that existed only to facilitate a technological operation by which audiovisual work was created or broadcast - This aspect of the Board's decision rested on the decision in Bishop v. Stevens (1990 SCC), in which the Supreme Court held that ephemeral recordings of a performance of a work, made solely for the purpose of facilitating the broadcast of that performance, were, if unauthorized, an infringement of the copyright holder's rights - The broadcasters applied for judicial review - The broadcasters argued that Bishop v. Stevens had to be read in the light of Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada (2012 SCC), in which the Supreme Court affirmed the principle of technological neutrality in copyright matters - The result, in the applicants' view, was that ephemeral copies should no longer attract royalties - The Federal Court of Appeal held that Bishop v. Stevens continued to be good law - The Entertainment Software Association decision had not changed the legal landscape to the point where the Board erred in finding that incidental copies were protected by copyright - See paragraphs 27 to 49.

Copyright - Topic 5666

Copyright Board - Jurisdiction - Respecting approval of royalties - The Copyright Board exercised its mandate under s. 70.2 of the Copyright Act to settle the terms of a licence to be granted to two broadcasters (Canadian Broadcasting Corp. (CBC) and Astral Media Inc.) by a collective society which administered reproduction rights - The terms of the licence reflected the Board's view that royalties were payable with respect to ephemeral copies of works made by the broadcasters in the normal course of their production or broadcasting activities - The broadcasters applied for judicial review - CBC argued that the Board exceeded its jurisdiction when it imposed a general licence on it notwithstanding CBC's expressed preference for transaction-based licences in the event that the Board ordered the payment of royalties for ephemeral reproductions - CBC argued that the power to "fix the royalties and their related terms and conditions" in s. 70.2 did not include the power to decide if the parties would enter into a licensing agreement at all - The Federal Court of Appeal held that CBC's argument on this issue failed - See paragraphs 60 to 69.

Cases Noticed:

Bishop v. Stevens - see Bishop v. Télé-Métropole Inc.

Bishop v. Télé-Métropole Inc., [1990] 2 S.C.R. 467; 111 N.R. 376, folld. [para. 2].

Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada, [2012] 2 S.C.R. 231; 432 N.R. 200; 2012 SCC 34, consd. [para. 2].

Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada et al., [2012] 2 S.C.R. 283; 432 N.R. 1; 2012 SCC 35, refd to. [para. 27].

Khosa v. Canada (Minister of Citizenship and Immigration), [2009] 1 S.C.R. 339; 385 N.R. 206; 2009 SCC 12, refd to. [para. 27].

Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (2007) 61 C.P.R.(4th) 353 (Copyright Bd.), affd. (2010), 406 N.R. 288; 2010 FCA 221, refd to. [para. 35].

Robertson v. Thomson Corp. et al., [2006] 2 S.C.R. 363; 353 N.R. 104; 217 O.A.C. 332; 2006 SCC 43, consd. [para. 39].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 52].

CTV Television Network Ltd. v. Copyright Board (Can.) et al., [1990] 3 F.C. 489; 34 F.T.R. 142 (T.D.), refd to. [para. 68].

Composers, Authors and Publishers Association of Canada Ltd. v. CTV Television Network Ltd., [1968] S.C.R. 676, refd to. [para. 68].

Bell Canada v. Canadian Radio-Television and Telecommunications Commission, [1989] 1 S.C.R. 1722; 97 N.R. 15, refd to. [para. 68].

Society of Composers, Authors and Music Publishers of Canada v. Bell Canada et al., [2012] 2 S.C.R. 326; 432 N.R. 103; 2012 SCC 36, refd to. [para. 89].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-42, sect. 3(1) [para. 31]; sect. 70.2 [para. 12].

Counsel:

Marek Nitoslawski and Karine Joizil, for the applicants, Canadian Broadcasting Corporation/Société Radio-Canada and Astral Media Inc.;

Colette Matteau and Lisanne Bertrand, for the respondents, SODRAC 2003 Inc. and Society for the Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc.

Solicitors of Record:

Fasken Martineau du Moulin LLP, Montreal, Quebec, for the applicants, Canadian Broadcasting Corporation/Société Radio-Canada and Astral Media Inc.;

Matteau Poirier Avocats, Montreal, Quebec, for the respondents, SODRAC 2003 Inc. and Society for the Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc.

These applications were heard on October 1, 2013, at Montreal, Quebec, before Noël, Pelletier and Trudel, JJ.A., of the Federal Court of Appeal. The following judgment of the Court of Appeal was delivered by Pelletier, J.A., on March 31, 2014.