Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1484268
30 www.lexpert.ca Top 10 Business Decisions WRITTEN BY AIDAN MACNAB, BERNISE CAROLINO, JASON TAN, AND ANGELICA DINO IN THIS intellectual property decision, the Supreme Court of Canada dealt with the correct interpretation of s. 2.4(1.1) of the Copyright Act, finding that while copyright owners are owed a royalty when their works are uploaded onto the internet, they are not owed an additional royalty when those works are downloaded or streamed. Canada signed the World Intellectual Prop- erty Organization (WIPO) Copyright Treaty in 1997. e agreement's purpose was to align international copyright rules with new tech- nologies emerging alongside the rise of the internet. Canada codified the treaty's protec- tions in 2012 with the Copyright Moderniza- tion Act, which added s. 2.4(1.1). Under s. 3(1)(f ), copyright owners have the sole right "to communicate the work to the public by telecommunication." And s. 2.4(1.1) states: "For the purposes of this Act, commu- nication of a work or other subject-matter to the public by telecommunication includes making it available to the public by telecom- munication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public." e Copyright Board decided that s. 2.4(1.1) meant that "making works available" was a protected and compensable activity re- quiring a royalty payment. e result was that when a copyrighted work is distributed online, not only would a royalty be attached to the ac- tion of streaming or downloading, but a roy- alty would also be required when the work is made available for streaming or downloading. e Federal Court of Appeal found that Parliament did not intend for two separate royalties and overturned the Copyright Board's ruling. e SCC then dismissed the appeal brought by SOCAN and Music Canada. But according to Justices Karakatsanis and Martin, while Vavilov le open the possibili- ty of recognizing additional categories, their establishment was reserved for "possible cir- cumstances which could not be realistically foreseen." And the court had foreseen the circumstance in Vavilov because it had cited Rogers Communications Inc. v. Society of Com- posers, Authors and Music Publishers of Canada, a 2012 SCC ruling which had considered the issue of concurrent first-instance jurisdiction. SOCIETY OF COMPOSERS, AUTHORS AND MUSIC PUBLISHERS OF CANADA V. ENTERTAINMENT SOFTWARE ASSOCIATION, 2022 SCC 30 • Society of Composers, Authors and Music Publishers of Canada > Gowling WLG (Canada) LLP > D. Lynne Watt, Matthew Estabrooks, Casey M. Chisick, Eric Mayzel • Music Canada > McCarthy Tétrault LLP > Barry B. Sookman, Daniel G.C. Glover, Connor Bildfell • Entertainment Software Association, Bell Canada, Quebecor Media Inc., Rogers Communications, Shaw Communications > Fasken Martineau DuMoulin LLP > Ger- ald L. (Jay) Kerr-Wilson > Stacey Smydo > Michael Shortt • Apple Inc. > Goodmans LLP > Michael Koch, Julie Rosenthal • Pandora Media Inc. > McMillan LLP > David W. Kent, Jonathan O'Hara • Ariel Katz > Lenczner Slaght LLP > Sana Halwani, Andrew Moeser, Alexis Vaughan • Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic > Univer- sité d'Ottawa > David Fewer • Canadian Music Publishers Association carrying on business as "Music Pub- lishers Canada" and Professional Music Publishers Association > Cassels Brock & Blackwell LLP > Jessica Zagar • Canadian Association of Law Libraries, Library Futures Institute > JFK Law Cor- poration > Robert Janes, Kim P. Nayyer CLIENTS > FIRMS > LAWYERS e SCC found that the Copyright Board's interpretation of the provision violated the principle of technological neutrality, that sim- ilar activities be treated equally even when in- volving different technologies. While the court was unanimous on the issues under appeal, Justice Andromache Karakatsanis and Justice Sheilah Martin dif- fered with their colleagues on the standard of review. According to the majority, when an admin- istrative body shares concurrent first-instance jurisdiction with the courts – as is the case with the Copyright Board – questions of law are reviewed under the standard of correct- ness. Canada (Minister of Citizenship and Immigration) v. Vavilov had established a pre- sumption of reasonableness only displaceable in five situations, and concurrent jurisdiction was not among them. But "in rare and excep- tional circumstances," the court can create new "correctness categories" when using reason- ableness would undermine legislative intent or the rule of law, which the majority said applied to concurrent first-instance jurisdiction. "Only three years aer the Supreme Court's decision in Vavilov was intended to provide certainty and predictability in terms of the standard of review of administrative decisions, the majority of the Court has created a new sixth category of correctness review," says Laura Wagner, a litigator at Bor- den Ladner Gervais LLP. e majority reasoned that "concurrent first instance jurisdiction indicates the legis- lature intends the court to be involved in the administrative scheme such that correctness review is consistent with legislative intent" and that "it will ensure consistency regard- less of whether the issue originated with the Board or in the courts, consistent with the rule of law," says Wagner.