CMRRA participated in the appeal as an intervener, reinforcing SODRAC’s position that the so-called “broadcast-incidental” copies made by television broadcasters engage the exclusive right of reproduction in the Copyright Act, are compensable as such, and require licences separately from the right to synchronize music with the visual images in a television program. We are pleased with the Court’s rulings on a number of issues on which we offered perspective.
The Court agreed with SODRAC, and with CMRRA, that broadcast-incidental copies engage the reproduction right. This is clear both from the description of the right in the Copyright Act and from the existence of specific exemptions in the Act for certain types of ephemeral copies made by broadcasters. As the Court observed, if broadcast-incidental copies were not reproductions, those exemptions would not have been necessary. In coming to its decision, the majority explicitly cited arguments to that effect in a published article written by CMRRA’s own Veronica Syrtash.
Additionally, the Court affirmed SODRAC’s position – also reinforced by CMRRA – that synchronization licences issued to program producers do not contain implied licences to make broadcast-incidental copies. The majority explicitly recognized that synchronization licences are intended to facilitate the production of audiovisual works, not the broadcasting of such works, and that it is ultimately up to the rights holder to determine whether and how to grant the further licences needed to make broadcast-incidental copies. Further, since the difference between synchronization and broadcast-incidental copies is tied to the “fundamentally distinct activities” of production and broadcasting, licensing them separately does not offend the interpretive principle of technological neutrality.
On the issue of technological neutrality, the Court made clear that the interpretive principle cannot override the clear language of the Copyright Act. However, it also held that the Copyright Board must take both technological neutrality and balance into consideration when setting royalty rates. As a result, the Court remitted the matter back to the Board for reconsideration of the royalties set in the arbitration between SODRAC and CBC. In doing so, however, the Court did not indicate that the royalties were unreasonably high; in fact, it confirmed that, when the use of new technology enables the user to realize more value from the use of musical works, the owners of copyright in those works may be entitled to additional royalties. It will now be up to the Board to reconsider the evidence in the arbitration in light of the guidance provided by the Court.
The Court also confirmed what Canadian collective societies have maintained for many years, stating: “from the moment [a] right is engaged, licence fees will necessarily follow.” The majority made clear that where an exclusive right is engaged, “it will never be the case that … royalties for the rights holder will amount to zero.” CMRRA sees this as a resounding affirmation of the principle underlying all of our tariff and licensing efforts: value must be given for value received. It’s a matter of fairness.
CMRRA is pleased with the Supreme Court’s decision in CBC v SODRAC, another successful effort to protect the rights of songwriters and music publishers. In view of this success before the Court, CMRRA is excited to be moving forward with its proposed tariffs for these same types of reproduction activities by commercial television stations, online audiovisual services, as well as the CBC.