The following is a timeline of broadcast reproduction copyright developments, leading to yesterday’s Supreme Court of Canada decision in CBC v. SODRAC.

1980’s: SODRAC, a copyright collective society managing (largely French-language) music reproduction rights, licences the reproduction of musical works in its repertoire to television producers.

1990: Bishop v. Stevens [1990] 2 S.C.R. 467 – The Supreme Court determines that “ephemeral” copies made by a TV broadcaster engage the reproduction right under the Copyright Act. Making copies of musical works to facilitate a broadcast, and actually broadcasting musical works, engage two different rights. Each of those rights may be licensed and paid for separately. Following this decision, SODRAC begins to distinguish between synchronization licences and copies made for other purposes.

1992: CBC and SODRAC negotiate a licence agreement for all copies made by CBC – synchronization and any other copies – for radio and TV. According to SODRAC, this is the first general reproduction rights agreement with a radio and television broadcaster in North America.

1990’s: CBC and other broadcasters begin to make greater use of digital systems to prepare programming for broadcast, gradually replacing older analog systems.

2002: Théberge v. Galerie d’Art du Petit Champlain inc. [2002] 2 S.C.R. 336 – The Supreme Court examines the nature of the reproduction right (must a work be multiplied to be ‘reproduced’? – yes) and emphasizes the balance between the rights of users and copyright owners:

The proper balance among these and other public policy objectives lies not only in recognizing the creator’s rights but in giving due weight to their limited nature. In crassly economic terms it would be as inefficient to overcompensate artists and authors for the right of reproduction as it would be self-defeating to undercompensate them. Once an authorized copy of a work is sold to a member of the public, it is generally for the purchaser, not the author, to determine what happens to it.

November 2012: Copyright Board SODRAC-CBC Arbitration Decision – The Board confirms that broadcast-incidental copies are reproductions under the Act, and do not benefit from a statutory exception. The Board finds that there are “clear benefits [to CBC] from copy-dependant technologies”, and SODRAC is entitled to remuneration that reflects those benefits.

November 2012: The Copyright Modernization Act – a broad set of amendments intended to better reflect copyright in the context of modern technologies – enter into force. Among other things, the “ephemeral exception” for broadcast copies is amended and expanded in part.

December 2012: Entertainment Software Association v. SOCAN [2012] 2 S.C.R. 231 – In one of the 2012 “pentalogy” of copyright cases, the Supreme Court determines that the Copyright Board was incorrect to apply a separate “communication” tariff – over and above the reproduction right payment – to downloads of musical works for video games. The principle of technological neutrality requires that the Copyright Act apply equally between traditional and more technologically advanced media.

“There is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. Absent evidence of Parliamentary intent to the contrary, we interpret the Act in a way that avoids imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user. To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies. The Internet should be seen as a technological taxi that delivers a durable copy of the same work to the end user. The traditional balance in copyright between promoting the public interest in the encouragement and dissemination of works and obtaining a just reward for the creators of those works should be preserved in the digital environment.

January 2013: Copyright Board Interim SODRAC-CBC Arbitration Decision – The Board extends the 2008-2012 licence on an interim basis pending its final determination of terms to 2016. The Board rejects CBC’s argument that the Copyright Modernization Act amendments provide a statutory exception for its broadcast-incidental copies.

March 2014: CBC v. SODRAC Federal Court of Appeal, [2015] 1 F.C.R. 509. The Federal Court of Appeal rejects the broadcasters’ argument that the Supreme Court’s decision in ESA has overtaken Bishop v. Stevens. Broadcast copies are reproductions under the Act. The Court states, however, that it is “difficult to know how one is to approach technological neutrality post-ESA”, and finds that Bishop v. Stevens determines the outcome unless Bishop is “overturned or disavowed by the Supreme Court”.

November 2015: CBC v. SODRAC – in a 7-2 split decision, Justice Rothstein, for a majority of the Supreme Court, confirms that broadcast-incidental (or “ephemeral”) copies that facilitate broadcasting are reproductions under the Copyright Act. The bulk of the decision then focuses on valuation of the reproduction right. The majority finds that the Board failed to take the principles of technological neutrality and balance into consideration when setting the fees for the copies.

The majority expressly responds to the Court of Appeal’s call for guidance on how to approach technological neutrality.  Pursuant to ESA, if there is no practical difference in the value to a user as between its old and new technologies, then there should be no difference in valuing the right. The Copyright Board should compare the value derived by the user from the use of the reproduction, considering older and newer technologies. In the present case, if CBC derives greater value from using broadcast-incidental copies in digital technology than it did with its old analog technology, then the copright owner has become entitled to greater royalties for the copies.

The majority recalls that in Théberge, the Court established that copyright law maintains a balance between the rights of copyright owners and users, and that it would be as inefficient to overcompensate artists as it would be self-defeating to undercompensate them. Relevant factors in valuation include the user’s risk and investment in using new technologies, and how making reproductions contributes to value to the user. In this case, the user’s risk and investment were high, and the value of the reproductions to the user were low.  The matter of valuation is sent back to the Copyright Board for reconsideration.

Justice Abella writes a vigorous dissent, agreed to in part by Justice Karakatsanis. The dissent takes issue with the majority’s approach to the principle of technological neutrality, which effectively ties copyright owner compensation to users’ actions that are irrelevant to the rights, and focuses on the value that new technologies create for the user. The dissent distinguishes “media neutrality” (focused on the medium of expression) from “functional equivalence” (focused on what the technology actually does), stating that functionally, broadcast-incidental copies are simply part of the core activity of broadcasting. Just as the Court confirmed in ESA, “technological neutrality operates to prevent imposing additional, gratuitous fees on the user simply for the use of more efficient technologies” […] “SODRAC is not entitled to be compensated for how efficiently CBC uses technology to achieve its broadcast”. The Board’s decision to impose fees for broadcast-incidental copies is unreasonable.