Supreme Court removes double royalties for streaming or downloading music online
OTTAWA — Songwriters are entitled to one royalty — not two — when their music is streamed or downloaded through an online service, the Supreme Court of Canada has ruled.
The superior court’s decision on Friday clarifies the meaning of a provision of Canadian copyright law dealing with the communication of a work to the public online.
Canada adopted the provision after signing an international treaty that required member countries to protect on-demand transmissions and give authors the right to control when and how their work is made available for download or streaming.
The Copyright Board of Canada ruled that the statutory provision meant that the making available of a song or other artistic work was a separately protected activity for which there must be compensation.
The council said this entitles rightsholders to two payments when a work is distributed online: one when it is made available on a platform such as iTunes or Spotify, and a second when it is actually streamed or downloaded by a listener.
The Federal Court of Appeal overturned the council’s decision.
The Society of Composers, Authors and Music Publishers of Canada and Music Canada, which represents major record labels, asked the Supreme Court to overturn the Court of Appeal’s decision and adopt the board’s interpretation .
Parties, including Apple Canada and major telecommunications companies, said the court should reject this position on the grounds that copyright law does not require the payment of two royalties each time a work is broadcast streaming or downloaded.
Writing on behalf of the majority of the Supreme Court, Justice Malcolm Rowe said that copyright law does not exist solely for the benefit of authors.
“Its primary goal is to balance the rights of authors and users by ensuring fair rewards for authors while facilitating public access to works,” Rowe wrote.
“When this balance is achieved, society is enriched. Authors are encouraged to produce more works, and users have access to works that they can use to inspire their own original artistic and intellectual creations.”
The court said the board’s interpretation undermined the purpose of copyright law, violating the principle of “technological neutrality” by requiring users to pay additional royalties to access works online.
“This principle states that, unless Parliament intends otherwise, the Copyright Act shall not be construed to favor or discriminate against any form of technology,” Rowe said.
“It protects authors and users by ensuring that works attract the same rights and give rise to the same royalties regardless of the technological means used to disseminate the works.”
The Copyright Act grants authors rights relating to the reproduction and performance of their works.
“As with offline distributions, the downloading or streaming of works will continue to incur only one copyright and will require the payment of a royalty – a reproduction royalty for downloads or a royalty performance for streams,” Rowe wrote.
By law, a work is “played” as soon as it is made available for on-demand streaming, he added. At this point, a fee is payable. If the work is subsequently streamed by a user, no additional royalties are due because the stream is part of a continuing act of performance that began when the work was made available.
The value of those rights was not at issue in the appeal, Rowe noted. Therefore, setting the appropriate royalties when these rights come into play is a matter for the board to decide.
This report from The Canadian Press was first published on July 15, 2022.
Jim Bronskill, The Canadian Press