Copyright law in Canada faces an inherent balancing between two underlying objectives of the Copyright Act, namely the rights of the copyright owners versus those of users of copyrighted works. One of the tools employed to achieve the proper balancing of these rights is the “fair dealing” provisions, which allow users to engage in certain activities that would otherwise constitute copyright infringement.

The Supreme Court of Canada has recently affirmed the broad and liberal interpretation to be applied to the fair dealing provisions in the Copyright Act as a “user’s right” in:

  • SOCAN v Bell Canada (2012 SCC 36) (“SOCAN”), which related to free previews of musical works used by customers prior to purchase on a commercial website such as iTunes; and
  • Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright) (2012 SCC 37) (“Alberta”), which related to the copying of short excerpts from textbooks by teachers to be provided to students as part of class instruction.

Prior to its decisions in SOCAN and Alberta, the Supreme Court of Canada adopted the following two-part test for the fair dealing provisions:

  1. the dealing must fall within one of the allowable purposes set out in the Copyright Act, namely research or private study, criticism or review, or news reporting; and
  2. the dealing must be “fair”.

For the second element of the test, the Supreme Court established six factors to be considered:

  1. the purpose of the dealing;
  2. the character of the dealing;
  3. the amount of the dealing;
  4. alternatives to the dealing;
  5. the nature of the work; and
  6. the effect of the dealing on the work.

The Supreme Court of Canada’s decisions in SOCAN and Alberta stress the importance of considering the test from the perspective of the user.

Allowable purpose. In its previous rulings, the Supreme Court of Canada held that the allowable purposes set out in the fair dealing provisions of the Copyright Act should be afforded a “large and liberal interpretation”. In both SOCAN and Alberta, the Supreme Court of Canada emphasized that the fair dealing provisions are user’s rights and thus must be considered from the perspective of the user of the work, and not from the perspective of the provider. For example, in SOCAN, the Supreme Court concluded that “research” included customers using short previews of musical works for review prior to purchase of the work.

Fairness factors. The decisions in SOCAN and Alberta further emphasize the broad interpretation that the Supreme Court of Canada has applied to the fairness factors under the second element of the test, and the importance of the users’ perspective in analyzing these factors.

The “purpose of the dealing” is an assessment of the “real purpose or motive” behind the use of the copyrighted work. In both SOCAN and Alberta, the Supreme Court concluded that the predominant perspective of the dealing in issue was that of the user, namely the customers that used the music previews to help research and identify musical works to purchase and the students that used the copies of the excerpts from textbooks supplied by a teacher for the purpose of “research or private study”. In Alberta, the Supreme Court also concluded that “private study” should not be interpreted so narrowly as to exclude “private study” by a student where the studying is performed in groups or classes.

The “character of the dealing” is a factor that takes into consideration the number of copies reproduced. In SOCAN, the Court held that an assessment of this factor favoured a finding of fairness, as the customers did not download a copy of the preview but rather streamed the preview and thus did not retain a permanent copy thereof. In Alberta, the Court stressed that this factor is to be assessed from the perspective of the student, and as such there was only one instance of copying rather than multiple copies.

Under the “alternatives to the dealing” factor, the Supreme Court clarified that an “alternative” must be a practical, economical and safe way of achieving the ultimate purpose. As such, the following were not considered viable alternatives:

  • providing album artwork, textual descriptions and user-generated album reviews and return policies in the event that a user accidentally downloads the wrong musical work; and
  • the purchasing of textbooks for all students or placing a copy of the textbook in the library for consultation.

Under the “effect of the dealing on the work” factor, in both SOCAN and Alberta the Supreme Court of Canada concluded that the dealing in issue would not compete with the original work and thus favoured fairness. For example, in SOCAN, the previews were of a short duration and inferior quality and thus would not compete with the musical works themselves. Similarly, in Alberta, the Court concluded that the copying of the short excerpts by the teachers did not result in lost sales of the textbooks because the excerpts were short, and if the students were not provided the supplementary materials it was more likely that the students would simply go without or consult a copy of the textbook already owned by the school.

Conclusion. Overall, the recent decisions of the Supreme Court of Canada have reiterated the importance of interpreting the Canadian Copyright Act in a manner that ensures a balance between user’s rights and those of the creator or copyright owner by emphasizing the importance of considering the test for the “fair dealing” provisions from the perspective of the user rather than the provider of the copies.