SOCAN v Bell: The 30-Second Preview as Infringement or Fair Dealing?

Do you like to try before you buy? Also known as the “Apple iTunes” case, SOCAN v Bell considers whether the 30-second preview clips made available to consumers by online music retailers constitute an exception pursuant to s. 29 of the Copyright Act, RSC 1985, c C-42, which states that “[f]air dealing for the purpose of research or private study does not infringe copyright,” and if so, whether the use of these previews is fair.

Background

In 1995, the Society of Composers, Authors and Music Publishers (“SOCAN”) applied to the Copyright Board of Canada (“the Board”) for a new royalty tariff (“Tariff 22”) for copyrighted music transmitted over the Internet (for example, music streamed on a webpage or an internet radio station, or any online music downloads including from retailers). Initially, SOCAN argued that all parties involved in these transmissions, including Internet service providers were responsible for paying the tariffs. This issue was dealt with in SOCAN v. Canadian Assn. of Internet Providers, [2004] 2 SCR 427, where the court held that ISPs, as mere intermediaries, acted only as conduits for communication by other persons and were not liable for paying royalties.

A second issue with Tariff 22 concerns a ruling by the Board that the transmission of a single download to a member of the public constitutes communication to the public by telecommunication under s. 3(1)(f) of the Act and thus was liable for Tariff 22 fees. The Federal Court of Appeal upheld the Board’s decision. This case was recently heard by the Supreme Court to establish whether a transmission of a copyrighted work over the Internet amounts to communication of that work to the public by telecommunication.

The third issue with Tariff 22 is in regards to the brief previews online music retailers (such as iTunes) offer prospective consumers.

Judicial History

In 2007, the Board decided that SOCAN was not entitled to royalties on these short clips as they were covered under the fair dealing exception. The Board concluded that previews “offer an excerpt of the work that is long enough for the user to do his research, but short enough and of a sufficiently degraded quality that it cannot replace the complete work” [Re Public Performance of Musical Works (2007), 61 CPR (4th) 353]. The Federal Court of Appeal upheld the Board’s decision (see SOCAN v Bell Canada, 2010 FCA 123 [SOCAN, FCA]), finding that the previews were within the meaning of the word “research” set out in s. 29 of the Act. In particular, the court stated that:

The legislator chose not to add restrictive qualifiers to the word “research” in section 29. It could have specified that the research be “scientific”, “economic”, “cultural”, etc. Instead it opted not to qualify it so that the term could be applied to the context in which it was used, and to maintain a proper balance between the rights of a copyright owner and users’ interests.

… it would not be unreasonable to give the word “research” its primary and ordinary meaning. The consumer is searching for an object of copyright that he or she desires and is attempting to locate and wishes to ensure its authenticity and quality before obtaining it. I agree with the Board that “[l]istening to previews assists in this investigation”.

Justice Létourneau also acknowledged SOCAN’s contention that the primary purpose of the previews is of a commercial nature, that is, to increase sales and accordingly, profits. However, he maintained that “[w]e must consider previews from the point of the view of the person for whom they are intended: the customer of the subject-matter of the copyright. Their purpose is to assist the consumer in seeking and finding the desired musical work” [SOCAN, FCA].

The Issues

The issue we are awaiting the Supreme Court to decide on is whether commercial previews are within the meaning of the word “research”. More broadly, we can ask what constitutes “research”? Broader still, the decision will aid in a discussion, that began prominently in CCH Canadian Ltd. v Law Society of Upper Canada, [2004] 1 SCR 339, of how fair dealing provisions ought to be interpreted. In the appeal decision, Justice Linden wrote:

There is no basis in law or in policy for such an approach. An overly restrictive interpretation of the exemptions contained in the Act would be inconsistent with the mandate of copyright law to harmonized owners’ rights with legitimate public interests. Instead, courts should employ the usual modern rules of purposive construction in the context.

Chief Justice McLachlin supported this position in the Supreme Court decision, stating that the scope of enumerated allowable purposes must be given a “large and liberal interpretation in order to ensure that users’ rights are not unduly constrained.” She reiterated Justice Linden’s contention that fair dealing is a user’s right and that it is more properly understood as an integral part of the Act rather than simply a defence or loophole and thus ought not to be interpreted restrictively.

If the Court abides by similar reasoning and policy objectives in SOCAN v Bell, the Court of Appeal and the Board’s decisions will likely be affirmed. We have been waiting for a solid approach from the Supreme Court on how to construe fair dealing since Michelin v C.A.W. Canada, [1997] 2 FCR 306, and more recently, Canwest v Horizon, 2008 BCSC 1609, two cases that employed a restrictive construction contrary to the CCH decisions.

This decision will be especially relevant in light of the impending Copyright Modernization Act, which seeks to add three more purposes to s. 29 (education, satire, and parody).

Nancy Situ is a second year student at Osgoode Hall Law School.