Rogers Communications Partnership et al. v. Society of Composers, Authors and Music Publishers of Canada, 2015 FC 286

JudgeO'Reilly, J.
CourtFederal Court (Canada)
Case DateMarch 06, 2015
JurisdictionCanada (Federal)
Citations2015 FC 286;(2015), 472 F.T.R. 208 (FC)

Rogers Com. v. SOCAN (2015), 472 F.T.R. 208 (FC)

MLB headnote and full text

Temp. Cite: [2015] F.T.R. TBEd. MR.046

Rogers Communications Partnership, Telus Communications Company, Bell Mobility Inc. and Quebecor Media Inc. (plaintiffs/defendants by counterclaim) v. Society of Composers, Authors and Music Publishers of Canada (a.k.a. SOCAN)

(defendant/plaintiff by counterclaim)

(T-2046-12; 2015 FC 286)

Indexed As: Rogers Communications Partnership et al. v. Society of Composers, Authors and Music Publishers of Canada

Federal Court

O'Reilly, J.

March 6, 2015.

Summary:

The Copyright Board established Tariff 24 that required the plaintiffs to pay royalties to the defendant Society of Composers, Authors and Music Publishers of Canada (SOCAN) in respect of ringtones. The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under the tariff. They moved for an order declaring that Tariff 24 was invalid because the transmission of ringtones to their subscribers did not involve the communication of musical works to the public under s. 3(1)(f) of the Copyright Act. Alternatively, they argued that the Board lacked jurisdiction to certify Tariff 24 in respect of ringtones. Further, the plaintiffs asserted that SOCAN had been unjustly enriched by royalties already paid under the tariff, and that they were entitled to a tracing order. SOCAN's arguments included that the plaintiffs' claim was precluded by the doctrines of res judicata and estoppel.

The Federal Court ordered that: (1) the plaintiffs' claim had not been finally decided against them; (2) the 2010 agreement between the plaintiffs and SOCAN did not prevent them from claiming the relief they sought; (3) the internet transmission of a ringtone file did not constitute the communication of a musical work to the public; (4) the Board had jurisdiction to certify Tariff 24; (5) SOCAN had not been unjustly enriched by its receipt of Tariff 24 royalties; and (6) the plaintiffs were not entitled to a tracing order.

Copyright - Topic 602

Nature of copyright - Reproduction - What constitutes - [See third Copyright - Topic 3436 ].

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of the Supreme Court's decisions in 2012 relating to downloads of musical works, the plaintiffs applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On this motion, SOCAN argued that the paintiffs' claim had already been finally decided against them, based on the previous decisions of the Board and the Federal Court of Appeal - The Federal Court disagreed - The earlier decision was not final for purposes of res judicata - "[P]ursuant to the Copyright Act, the Board always has the power to vary its royalty decisions where there has been a subsequent material change in circumstances (s. 66.52). In that sense, a decision of the Board is never really final. ... Here, it is a decision of the Supreme Court of Canada itself that allegedly brought about a material change of circumstances" - In any event, "this is a case where it might have been unfair to stop the plaintiffs from seeking relief by way of this action. Where a judicial decision dictates, in effect, that an earlier ruling was clearly wrong, an aggrieved party may be entitled to seek the benefit of the later decision ... The doctrine of res judicata, whose purpose is to advance the interests of justice, may admit exceptions in special circumstances such as these." - See paragraphs 16 to 26.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The plaintiffs began an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On this motion, SOCAN argued that the plaintiffs were precluded from denying their obligation to pay ringtone royalties given that they expressly agreed in 2010 to be bound by Tariff 24 until 2013 - The Federal Court disagreed - "First, the parties clearly did not have a common understanding of the significance of the agreement. ... Second, given that there was no common understanding of the meaning of the agreement, SOCAN cannot claim that it relied on that common understanding. ... [G]iven the absence of a common understanding, I cannot characterize the plaintiffs' position as amounting to a repudiation of a mutual assumption to SOCAN's detriment ... . The agreement between them did not specifically rule out the possibility of this form of action and cannot, in my view, be used to stop the plaintiffs from bringing it." - See paragraphs 27 to 36.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The plaintiffs began an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On this motion, SOCAN argued that the Internet transmission of ringtone downloads constituted a communication of musical works to the public by telecommunication - The Federal Court rejected the argument - "In my view, the Supreme Court of Canada has decided otherwise. Its decisions are binding on me. ... [T]he majority in ESA [Entertainment Software Association v. SOCAN] concluded that the Internet delivery of a copy of a video game containing a musical work did not amount to a communication of that work. It follows that the transmission of a ringtone download containing a musical work does not constitute a communication of that work. ... I agree with SOCAN that there are differences between downloads of ringtones and downloads of other forms of musical works. However, I fail to see how these differences make ringtones akin to performances of musical works, which would engage the communication right under the [Copyright] Act. In my view, the transmission of ringtone downloads, like the transmission of downloads of digital musical files considered in Rogers [Rogers Communications Inc. et al. v. SOCAN] and ESA, represent reproductions of musical works, not public communications of them." - See paragraphs 37 to 44.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - The plaintiffs sued SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On this motion, the plaintiffs argued that, given the Supreme Court's jurisprudence relating to downloads of musical works ("ESA" and "Rogers"), certifying Tariff 24 was beyond the Board's jurisdiction - The Federal Court distinguished this case from ESA and Rogers - "In those cases, the Board's decisions to certify tariffs relating to downloads was challenged directly and immediately and pursued all the way to the Supreme Court of Canada. The Supreme Court determined conclusively that the Board had wrongly certified the tariffs in issue and overturned them. The effect of the Court's decisions was to nullify the tariffs entirely. That is not the case before me. The plaintiffs unsuccessfully challenged the Board's decision to certify Tariff 24. Accordingly, the Tariff has been in force from the date of the Board's first decision relating to it. To date, there has been no decision overturning or varying it. While the correctness of the Board's decision is an issue before me by way of this separate action, strictly speaking, the validity of Tariff 24 is not. ... However, ... Tariff 24, in effect, became unenforceable after Rogers and ESA." - See paragraphs 45 to 50.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On this motion, the plaintiffs argued that their payments of royalties for ringtone downloads unjustly enriched SOCAN because those payments were not legally required - The Federal Court held that there had been no unjust enrichment - There was a juristic reason for those payments, namely, Tariff 24 - However, "one cannot overlook the fact that the Supreme Court of Canada, in effect, ruled that the Copyright Act does not authorize tariffs such as Tariff 24 ... [B]oth parties anticipated that Rogers [Rogers Communications Inc. et al. v. SOCAN] and ESA [Entertainment Software Association v. SOCAN] could affect their positions in respect of Tariff 24. ... I cannot characterize SOCAN's receipt of ringtone royalties as an unjust enrichment prior to the Supreme Court's decisions in ESA and Rogers. ... However, once the Supreme Court of Canada decided ESA and Rogers, SOCAN was clearly put on notice that the legal basis for Tariff 24 was, at best, thin. In my view, any royalty payments made after the release of those decisions would have amounted to an unjust enrichment. ... [T]he plaintiffs ceased making royalty payments at that point. So, as a matter of fact, there has been no unjust enrichment." - See paragraphs 51 to 60.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On this motion, the plaintiffs maintained that, if it failed in its argument on unjust enrichment, then SOCAN be ordered to identify which of its members received ringtone royalties in order to enable the plaintiffs to recover from them directly - The Federal Court held that the plaintiffs were not entitled to an order tracing the distribution of Tariff 24 royalties - "SOCAN was not unjustly enriched by its receipt of ringtone royalties pursuant to Tariff 24. Payments by the plaintiffs ceased once SOCAN was put on notice that the legal basis for Tariff 24 might be unsound. ... The evidence before me shows that SOCAN distributed, but did not collect, ringtone royalties after the Supreme Court issued its decisions in Rogers [Rogers Communications Inc. et al. v. SOCAN] and ESA [Entertainment Software Association v. SOCAN]. Since SOCAN was not unjustly enriched by any royalty payments before or after those decisions were released (because the plaintiffs stopped making them), there is no basis for issuing a tracing order." - See paragraphs 61 to 63.

Copyright - Topic 5666

Copyright Board - Jurisdiction - Respecting approval of royalties - [See first and fourth Copyright - Topic 3436 ].

Courts - Topic 2284

Jurisdiction - Bars - Res judicata - [See first Copyright - Topic 3436 ].

Equity - Topic 1007

Equitable relief - General - Tracing - [See sixth Copyright - Topic 3436 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See first Copyright - Topic 3436 ].

Estoppel - Topic 428

Estoppel by record (res judicata) - Matters precluding estoppel - Denial of procedural fairness - [See first Copyright - Topic 3436 ].

Estoppel - Topic 1022

Estoppel in pais (by conduct) - By agreement - What constitutes - [See second Copyright - Topic 3436 ].

Restitution - Topic 64

Unjust enrichment - General - Juristic reason for enrichment - [See fifth Copyright - Topic 3436 ].

Cases Noticed:

Canadian Wireless Telecommunications Assoc. et al. v. Society of Composers, Authors and Music Publishers of Canada (2008), 371 N.R. 272; 2008 FCA 6, refd to. [para. 8].

Bell Canada et al. v. Society of Composers, Authors and Music Publishers of Canada et al. (2010), 409 N.R. 102; 2010 FCA 220, refd to. [para. 11].

Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (2010), 406 N.R. 288; 2010 FCA 221, refd to. [para. 11].

Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada et al. (2012), 432 N.R. 1; 2012 SCC 35, consd. [paras. 12 et seq.].

Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (2012), 432 N.R. 200; 2012 SCC 34, consd. [paras. 12 et seq.].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 18].

Doering v. Grandview (Town), [1976] 2 S.C.R. 621; 7 N.R. 299, refd to. [para. 18].

Adar et al. v. Canada (Minister of Citizenship and Immigration) (1997), 132 F.T.R. 35 (T.D.), refd to. [para. 23].

Sanofi-Aventis Canada Inc. v. Pharmascience Inc. et al. (2007), 329 F.T.R. 1; 2007 FC 1057, affd. [2008] N.R. Uned. 182; 2008 FCA 213, refd to. [para. 26].

Hockin et al. v. Bank of British Columbia et al. (1995), 57 B.C.A.C. 255; 94 W.A.C. 255 (B.C.C.A.), refd to. [para. 26].

Ryan v. Moore et al. (2005), 334 N.R. 355; 247 Nfld. & P.E.I.R. 286; 735 A.P.R. 286; 2005 SCC 38, refd to. [para. 28].

Garland v. Consumers' Gas Co., [2004] 1 S.C.R. 629; 319 N.R. 38; 186 O.A.C. 128; 2004 SCC 25, refd to. [para. 55].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-42, sect. 3(1)(f), sect. 66.52 [Annex].

Counsel:

Gerald Kerr-Wilson, Peter Mantas, Ariel Thomas and Yael Wexler, for the plaintiffs/defendants by counterclaim;

Lynne Watt, Matthew Estabrooks and Anca Sattler, for the defendant/plaintiff by counterclaim.

Solicitors of Record:

Fasken Martineau Dumoulin, LLP, Ottawa, Ontario, for the plaintiffs/defendants by counterclaim;

Gowling Lafleur Henderson, LLP, Ottawa, Ontario, for the defendant/plaintiff by counterclaim.

This motion was heard at Ottawa, Ontario, on September 3-4, 2014, before O'Reilly, J., of the Federal Court, who delivered the following order and reasons, dated March 6, 2015.

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