Netflix Inc. v. Society of Composers, Authors and Music Publishers of Canada et al., (2015) 480 N.R. 236 (FCA)

• Judge: Nadon, Boivin and de Montigny, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: October 05, 2015
• Jurisdiction: Canada (Federal)
• Citations: (2015), 480 N.R. 236 (FCA);2015 FCA 289

Netflix Inc. v. SOCAN (2015), 480 N.R. 236 (FCA)

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[French language version follows English language version]

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

Temp. Cite: [2015] N.R. TBEd. DE.024

Netflix, Inc. (applicant) v. Society of Composers, Authors and Music Publishers of Canada, Apple Canada, Apple Inc., BCE Inc., Canadian Association of Broadcasters, Cineplex Entertainment LP, Facebook Inc., Rogers Communication Partnership, Shaw Communications Inc., Videotron G.P., and Yahoo! Canada Co. (respondents)

(A-369-14; 2015 FCA 289; 2015 CAF 289)

Indexed As: Netflix Inc. v. Society of Composers, Authors and Music Publishers of Canada et al.

Federal Court of Appeal

Nadon, Boivin and de Montigny, JJ.A.

December 17, 2015.

Summary:

Netflix Inc. provided an online streaming service that delivered movies and television programs. Netflix applied for judicial review of a decision of the Copyright Board dated July 18, 2014, certifying the tariff of royalties for audiovisual webcasts for the period running from 2007 to 2013 inclusively. Netflix challenged paragraph 3(b) of the Tariff which established a monthly minimal fee for free trials of subscription services.

The Federal Court of Appeal allowed the application. The process pursuant to which the Board certified the Tariff was not procedurally fair. The court set aside the Board's decision insofar as it pertained to royalties on free trials and returned the matter to a differently constituted panel of the Board for redetermination.

Administrative Law - Topic 222

The hearing and decision - Right to be heard - When available - [See Copyright - Topic 3440 ].

Administrative Law - Topic 2493

Natural justice - Procedure - At hearing - Right to make submissions - [See Copyright - Topic 3440 ].

Administrative Law - Topic 2494

Natural justice - Procedure - At hearing - Opportunity to present evidence - [See Copyright - Topic 3440 ].

Copyright - Topic 3440

Fees, charges or royalties - Determination of - Judicial review - Netflix Inc. provided an online streaming service that delivered movies and television programs - As a marketing tool, Netflix offered a non-renewable one month free trial - Netflix applied for judicial review of a July 18, 2014 decision of the Copyright Board, certifying the tariff of royalties for audiovisual webcasts for the period running from 2007 to 2013 inclusively - Netflix challenged paragraph 3(b) of the Tariff which established a monthly minimal fee for free trials of subscription services - The Federal Court of Appeal allowed the application - The process pursuant to which the Board certified the Tariff was not procedurally fair - The Board relied on Netflix's failure to participate in the opposition process, and on the delays which would occur if Netflix were allowed to participate at a late stage of the proceedings, to justify its refusal to allow Netflix to introduce new evidence or make submissions with respect to the fair dealing issue - Restricting the right of a party which did not avail itself of its right in a timely fashion did not, per se, constitute a breach of the duty of procedural fairness - However, in this case Netflix only objected to paragraph 3(b) of the Tariff which dealt with royalties for free trial subscriptions, a provision that did not appear in the version of the Tariff that was publicly available during the entirety of the regular objection period - Netflix had a right to be heard with respect to free trial royalties notwithstanding the fact that it did not participate in the initial opposition process - Although Netflix itself did not have that right, the industry affected by the provision at issue enjoyed that right - Procedural fairness required the Board to allow Netflix, if found to be a representative member of the affected industry (there did not appear to be any doubt that Netflix was a representative member of the affected industry), the opportunity to fully make its case, including the possibility of introducing fresh evidence and submitting new arguments on subject matters that were not included in the proposed Tariff published in the Canada Gazette - See paragraphs 35 to 52.

Cases Noticed:

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, refd to. [para. 30].

Re:Sound v. Fitness Industry Council of Canada et al. (2014), 455 N.R. 87; 2014 FCA 48, refd to. [para. 35].

Khosa v. Canada (Minister of Citizenship and Immigration), [2009] 1 S.C.R. 339; 385 N.R. 206; 2009 SCC 12, refd to. [para. 35].

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. 37].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-46, sect. 67.1 [para. 39].

Counsel:

David W. Kent and Jonathan O'Hara, for the applicant;

D. Lynne Watt and Matthew Estabrooks, for the respondents.

Solicitors of Record:

McMillan LLP, Toronto, Ontario, for the applicant;

Gowling Lafleur Henderson LLP, Ottawa, Ontario, for the respondents.

This application was heard on October 5, 2015, at Montreal, Quebec, before Nadon, Boivin and de Montigny, JJ.A., of the Federal Court of Appeal. The following judgment of the Court of Appeal was delivered by Nadon, J.A., on December 17, 2015.