Monday, July 25, 2022

Twin Royalties Paradox

 The Supreme Court of Canada clarified the Canadian Copyright Act (R.S.C., 1985, c. C-42) when it rendered its judgment in Society of Composers et al. v. Entertainment Software Association on July 15, 2022.  At issue was whether the Copyright Act added a new legal right for authors by amending §3(1)(f), which grants to authors the right "to communicate the work to the public by telecommunication", when the Canadian Parliament attempted to incorporate Article 8 of the WIPO Copyright Treaty into the Copyright Act.  The Copyright Board of Canada had earlier ruled that §2.4(1.1) had modified §3(1)(f) in such a way as to require that users of works of authorship "needed to pay two royalties to access works online - a royalty for "making works available" and an additional royalty when the work was actually downloaded or streamed."  The Federal Court of Appeal overturned the Copyright Board, holding that there is no independent royalty simply for making a work available.  The Supreme Court broadly agreed, explaining,

If a work is downloaded or made available for downloading, §3(1)(f) is not engaged.  If a work is made available for streaming and later streamed, §3(1)(f) is only engaged once.

In addition to its decision finding no additional "making available" royalty, the Supreme Court decided to other issues.  One involved the appropriate standard of review.  The other considered how international treaties, such as the WIPO Copyright Treaty, should contribute to the interpretation of statutory provisions intended to implement such treaties into national law.  Although the Supreme Court noted that "A treaty should be considered when interpreting statutes that purport to implement the treaty", and that "There is no need to find textual ambiguity in a statute before considering the treaty", a court must "intepret what the legislature (federally or provincially) has enacted and not subordinate this to what federal executive has agreed to internationally."  In short, "It is always the domestic statute that governs".

Just as Aristotle may have observed that a friend is "One soul dwelling in two bodies"Society of Composers et al. v. Entertainment Software Association suggests that online copyright may be one royalty dwelling in two legal rights.