The Copyright Board recently released its reasons in the Commercial Radio Tariff case, making a number of important statements about what constitutes a "reproduction" for the purposes of the Copyright Act. In particular, the Board canvassed the activities of broadcasters and examined which activities resulted in reproductions of musical works (and sound recordings) in the course of their broadcasting operations.
The case, which involved many different parties and issues, resulted in the certification of a tariff that covers a gamut of music uses by broadcasters in the course of their operations.
In its reasons for decision, the Board started its analysis by repeating what it had said in the Satellite Radio decision about the acts that are necessary for an activity to be a reproduction under the Act. For an activity to be a "reproduction," the act in question must involve: 1) the act of copying the protected work; 2) the copying must be "substantial"; and 3) the resulting copy must be in a material form.
The first element is derived from the Supreme Court’s decision in Théberge v. Galerie d’Art du Petit Champlain inc. in which the court held that multiplication of the copies is a necessary consequence of the concept of reproduction. It must involve "the physical making of something which did not exist before."
The second element, what is a substantial part, is a question of fact and depends on the quality of what was taken from the original work rather than the quantity.
The third component, what is a material form, is not defined in the Act, but is a term of broad import. Relying on English and UK authorities, the Board stated that the case law recognizes that a material form can include "digital temporary incidental copies." The Board, citing the Federal Court decision in EROS-Équipe deRecherche Opérationnelle en Santé inc. v. Conseillers en Gestion et Informatique C.G.I. inc., stated that the ordinary meaning of material is something that is "palpable, tangible and perceptible." The Board also suggested that "material form" is broader than the copyright subsistence tangibility requirement which, since the decision in Canadian Admiral Corp. v. Rediffusion, Inc., has required that "for a work to be protected by the Act, a work must be expressed in some material form capable of identification and having a more or less permanent endurance."
The Board also made a number of other important statements about the concept of reproduction in the digital context including the following:
- Relying on the decision of the US 9th Circuit Court of Appeals in the A & M Records Inc. v. Napster Inc. case, the Board stated that the act of downloading a musical file infringes the exclusive right of reproduction.
- In CD ripping (the process of digitally extracting audio from CDs to a hard drive in WAV format), the resulting digital copy that emanates from the CD is in a material form and therefore protected by the Act.
- In the context of Internet transmissions, words such as "copy" and "reproduction" probably have their ordinary meanings but others such as "transfer," "deliver," "download," "send" and "file" are more metaphors than actual facts.
- When a broadcaster downloads a musical file from a website to a server at a station’s facility, that act involves making a copy for which the broadcaster is responsible.
- The fact that a reproduction results from an "internal, fully digital, technical process" is not relevant.
The objector, the Canadian Association of Broadcasters (CAB), had argued that a download of a music file does not become a reproduction until it is incorporated into the broadcaster’s playback system. The Board rejected this contention. The evidence established that after downloading from a content distributor’s website, the audio file is available for playback. The Act has no requirement that a reproduction be usable in any particular fashion. Therefore, there is no need for the file to be ingested in the broadcaster’s digital playback system for there to be a reproduction. According to the Board:
The MDS [music delivery services] copy is just as much a reproduction as a permanent download. The online music service user who, after downloading a song, moves it to the "recycling bin" without ever playing it nevertheless reproduced the musical file. The same logic applies to the MDS copy that is downloaded onto the broadcasters’ server, whether or not it is ingested in the playback system.
In the Commercial Radio Tariff proceeding, the Board, once again, had to consider the question as to whether a music-streaming service implicates the reproduction right. According to the Board, the determination of this question involves deciding whether the streaming service creates some form of temporary or permanent file, or only small amounts of temporary buffered information. In the former case, there would be a reproduction. In the latter case, while there might be some copying involved in the streaming process, such copying would not satisfy the "substantial part" requirement for reproduction under the Act. According to the Board:
The song audition function is another service that MDS offer broadcasters. It allows them to listen to a song before deciding whether or not they want to download a certain song. According to the experts who testified, no downloading occurs when a station "auditions" or "previews" a song; that function is enabled by streaming. As noted in the past, some forms of streaming nonetheless involve the creation of a temporary (or permanent) Internet file on the temporary folder of the end user’s computer. Once the file has been played, the temporary copy is "flushed away" or appears to be erased but remains indefinitely in the temporary Internet file folder.
In this instance, this does not appear to be the case. Just as with the buffer in Satellite Radio Services, it fails to reproduce a substantial part of the copyright subject matter. Consequently, we conclude that the right of reproduction is not engaged in auditioning songs from the MDS server.
As noted in the last TLQ, Bill C-32, the Copyright Modernization Act would broaden the current ephemeral exception relied upon by broadcasters to permit them to temporarily copy music for their operations. It is unclear from the decision the extent to which this amendment would have made any difference in the royalties awarded by the Board.