Supreme Court Majority Applies Royalty Fees To Broadcast-Incidental Copies

The Supreme Court issued its decision on November 26, 2015 in CBC v SODRAC 2003 Inc. The majority decision, written by Justice Rothstein, allowed the appeal and remitted the Statutory Licence Decision to the Copyright Board for reconsideration of the valuation of broadcast-incidental copies in accordance with the principles of technological neutrality.

The case is an appeal from the Copyright Board's decision to impose royalty payments on the CBC for broad-cast-incidental copies, which are required to be made in the process of turning a television program into a broadcast. In 2012, the Copyright Board held that: (1) CBC's broadcast-incidental copying activity engaged the reproduction right; (2) that a licence for such copies could not be implied from synchronization licences covering the production process; and (3) that CBC required a separate reproduction licence to legitimize its broadcast-incidental copying. The Board issued the 2008-2012 licence and later issued an interim licence. The Board's decision was appealed to the Federal Court of Appeal. On appeal to the FCA, the main issue concerned whether the Board's statutory Licence Decision was inconsistent with the principle of technological neutrality as discussed by the SCC in ESA v SOCAN. The Federal Court of Appeal affirmed both the 2008-2012 licence and the interim licence that followed, subject to minor amendments. Our summary of the decision of the Federal Court of Appeal can be found here.

The main issue on appeal concerned the relationship between broadcast-incidental copies and the reproduction right established by section 3(1)(d) of the Copyright Act. The Court found that the Board was correct in finding that broadcast-incidental copying engages the reproduction right, consistent with the SCC decision in Bishop v Stevens, [1990] 2 SCR 467, and the context of the statutory scheme set out in the Copyright Act. While the Court considered subsequent jurisprudence, including its decisions in Théberge and ESA, which refined our understanding of the purposes of copyright, the Court confirmed that the central holing in Bishop, that ephemeral copies engage the reproduction right, remains sound. There is nothing in the text of the Copyright Act or legislative history of ss. 3(1), 30.8 or 30.9 to support the view that broadcast-incidental copies are not reproductions. While the principles in Théberge and ESA can inform the interpretation and application of other terms of the Act, they...