IT.CAN Newsletter – July 18, 2012

Supreme Court of Canada

On July 12, 2012, the Supreme Court of Canada released five important copyright decisions that have given further certainty related to fair dealing and technological neutrality. All five are summarized below.

Re:Sound v. Motion Picture Theatre Associations of Canada, 2012 SCC 38

In Re:Sound v. Motion Picture Theatre Associations of Canada, the appellant Re:Sound sought to have a tariff approved before the Copyright Board related to the use of recorded music when it accompanies a movie shown in venues like movies theatres and when broadcast by commercial over‑the‑air, pay, specialty and other television services. The respondents objected, arguing that the definition of “sound recording” excludes soundtracks of cinematographic works. The Copyright Board refused to approve the proposed tariff and Re:Sound ultimately appealed to the Supreme Court of Canada.

The Court concluded that a musical recording, when it accompanies a cinematographic work, is not a “sound recording” as defined in the Copyright Act. It is, in fact, expressly excluded from the definition of “sound recording,” which is a recording consisting of sounds “but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work.” Therefore, a “soundtrack” is a “sound recording” except when it accompanies the motion picture. Otherwise, the exclusion would be superfluous.

Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37

In Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), Access Copyright sought to impose a tariff and collect royalties for teachers’ photocopying of excerpts of published works for distribution to primary and secondary students. The Copyright Board found that the use was not fair dealing and that a tariff would be applicable.

On the question of fair dealing, there was little controversy that the reproduction was for the purposes of research and/or private study.

In the absence of an ulterior commercial motive on the part of the teacher, the proper perspective for the analysis is that of the student. In addition, the Court observed that “private study” does not mean that the studying must be carried out privately, that is, in isolation. With respect to the “amount of the dealing”, the Court said the approach is the amount in relation to the entire work not the quantity of copies made. Though there may, strictly speaking, be “alternatives to the dealing”, buying books for every student is not a realistic alternative to teachers copying short excerpts to supplement student textbooks. Such purchases are additionally unreasonable because only short excerpts are to be used. The Court observed there was no evidence that this practice of photocopying excerpts led to a decline in the sales of books, so there was no significant “effect of the dealing on the work”.

In the result, the Court held that such reproduction does fall within the fair dealing exception and sent the matter back to the Copyright Board.

SOCAN v. Bell Canada, 2012 SCC 36

The Supreme Court of Canada, in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, had to consider whether the offering of free previews of music prior to purchase or downloading fits within the fair dealing exceptions in the Copyright Act.

The Appellant association representing rights owners had filed a proposed tariff with the Copyright Board for downloading music on the internet. When faced with the issue of whether the tariff would apply to brief music previews, the Board concluded it would not. The association appealed this decision to the Supreme Court of Canada.

The Court agreed with the Copyright Board that the offering of free previews constitutes fair dealing under the Copyright Act. The Court noted that when performing the analysis of the factors set out in the CCH Canadian case, it must be looked at from the perspective of the ultimate users and not the company providing the service.

With respect to “research or private study”, the Court concluded that research need not only be for creative purposes. Allowing consumers to find out about music before purchasing is “research”. The fair dealing exception must not be interpreted restrictively and “research” must be given a large and liberal interpretation.

Whether previews are “fair”, the court concluded, with respect to the character of the dealing, that users do not keep a permanent copy of the preview so that copies cannot be duplicated or further disseminated. The “amount of the dealing” is not a measure of the number if previews, but the proportion of the preview in relation to the whole work Streaming a preview of several seconds is a “modest amount” when compared to the whole work.

Under the remaining factors, there Court held there are no alternatives to the dealing that as effectively demonstrate to a consumer what a musical work sounds like when purchased. Previews are reasonably necessary to enable consumer research, without which musical works will not be disseminated. These previews do not compete with the revenue-attracting downloads, but rather enhance the promotion of such works and ultimately increase sales.

The court concluded that free previews of musical works for sale fit within the fair dealing exceptions in the Copyright Act and therefore to not infringe the rights of rightsholders and no tariff is payable.

Rogers Communications Inc. v. SOCAN, 2012 SCC 35

In Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, the appellants were challenging a tariff established in 1996 by the Copyright Board that applied to point-to-point music streaming services. The Board had concluded that such streaming comes within the creator’s right to communicate to the public by telecommunication provided by s. 3(1)(f) of the Copyright Act and a claim for communication royalties would apply.

The sole material question at issue in the appeal was the meaning of the words “to the public” in the context of whether a work is communicated “to the public”. The appellants argued that the streams at issue are point-to-point streams, from a server to an individual user, so that they are not “to the public”. The majority of the Court disagreed, and found that the individual streams should not be viewed and analyzed in isolation.

[52] ... CCH (SCC) determined that a “series of repeated ... transmissions of the same work to numerous different recipients” may constitute a communication “to the public” within the meaning of s. 3(1)(f) of the Act (CCH (SCC), at para. 78). Where such a series of point-to-point communications of the same work to an aggregation of individuals is found to exist, it matters little for the purposes of copyright protection whether the members of the public receive the communication in the same or in different places, at the same or at different times or at their own or the sender’s initiative.

Entertainment Software Association v. SOCAN, 2012 SCC 34

In Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, appellant associations representing the entertainment software industry were seeking to overturn a decision of the Copyright Board of Canada decision that held additional royalties were payable for the music soundtracks of video games when these video games are downloaded via the internet. The Board had found that the downloading via the internet was a communication of the work to the public by telecommunications and, as a result, the separate “communication” tariff would apply. The majority of the Supreme Court of Canada (Per McLachlin C.J. and Deschamps, Abella, Moldaver and Karakatsanis JJ.) allowed the appeal and determined that the Copyright Act should be read in a manner that is technologically neutral. The only difference between buying the games in a box at a retail store and downloading the same games from the internet is the mode of delivery. The Court noted:

[5] We agree with ESA. In our view, the Board’s conclusion that a separate, “communication” tariff applied to downloads of musical works violates the principle of technological neutrality, which requires that the Copyright Act apply equally between traditional and more technologically advanced forms of the same media: Robertson v. Thomson Corp., 2006 SCC 43 (CanLII), [2006] 2 S.C.R. 363, at para. 49. The principle of technological neutrality is reflected in s. 3(1) of the Act, which describes a right to produce or reproduce a work “in any material form whatever”. In our view, 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. The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.

In the result, the Court set aside the Copyright Board’s decision.

Computer-created trading records admitted as “real evidence”

In Saturley v. CIBC World Markets Inc., the plaintiff sought to prevent the admission of electronically generated records relating to the trading of securities which were sought to be admitted by the defendant. The records were created on systems owned and operated by the defendant. The Supreme Court of Nova Scotia ruled that the records were admissible and that any question about reliability of the records would influence the weight to be given to them.

Regarding the electronic records, the Defendant argued that the electronic information was automatically generated by a computer system and should be admitted as “real evidence”. In the alternative, they could be considered to be direct evidence and had been proven in the course of the trial. The plaintiff, in contrast, argued that the exhibits were different from the original electronic trading records and may have been altered. They are not reliable and their admission would violate the best evidence rule.

The Court concluded that the authorities supported the proposition that records created by a computer without human intervention may be admissible as real evidence:

22 The first step in the admissibility analysis is to determine whether the party offering the evidence can establish on a balance of probabilities that it fits within the parameters of real evidence as discussed above. That means, it must be data collected automatically by a computer system without human intervention. It appears that this could include a threshold consideration of reliability; however, it is important to remember that reliability is primarily an issue that goes to the weight to be given the evidence and not its admissibility. ...

27 Once a court is satisfied that electronic information has been generated in a manner that meets the criteria for admission as real evidence, it is still necessary to consider whether the specific evidence before the court represents the electronic information. This may be accomplished by having a witness testify that the paper copy was printed from the original source, as was the case in R. v. Hall and R. v. Spiby. If the information comes before the court in electronic form, it will be necessary to have a witness confirm that it comes from the original source. It may also be necessary to have evidence concerning the custody and protection of that information from the original source to the court, particularly if it is transferred to a number of different media.

28 As noted earlier, if electronic information does not meet the criteria for admission as real evidence, it may still be admitted if it satisfies the requirements for admission of documentary evidence. It is possible that a given item of electronic information may have aspects of both real and documentary evidence. For example, an e-mail in electronic form will include electronic data identifying the computer on which it was created and when it was sent. That information is added automatically by the computer software and would likely constitute real evidence. If the content of the e-mail is being introduced for its truth, it would be considered a document and subject to admissibility as such.

With respect to the Evidence Act (Nova Scotia), the Court noted that the Act provides that electronic records are authenticated by evidence capable of supporting a finding that the record is what the person claims it to be. For data automatically collected by a computer system, this can be accomplished by a witness who is able to testify about the operation of the computer system and identify the exhibit as coming from it. The defendant did put forward witnesses who could and did testify to this. And, the Court concluded, where real evidence is tendered, the best evidence rule is inapplicable.

Novel defamation case between political bloggers not amenable to summary dismissal

In Baglow v. Smith, the appellant was appealing a summary dismissal of a defamation action. The parties are both political bloggers, with the Plaintiff generally espousing a left-wing viewpoint and the Defendant espousing a right-wing view point. The Plaintiff brought a defamation action against the defendant on the basis of statements to the effect that the plaintiff was one of the Taliban’s more vocal supporters. The Defendant successfully sought to have the action dismissed as the statements were either not defamatory or that the defence of fair comment applied. The Plaintiff appealed.

The Court of Appeal set aside the summary judgment order and sent the matter back. The case raised too many novel issues that cannot properly be assessed at in a summary manner: namely heated political debate in the blogosphere.

The Court discussed the issue:

27 In this case, the parties have put in play a scenario that, to date, has received little judicial consideration: an allegedly defamatory statement made in the course of a robust and free-wheeling exchange of political views in the internet blogging world where, the appellant concedes, arguments "can be at times caustic, strident or even vulgar and insulting." Indeed, some measure of what may seem to be a broad range of tolerance for hyperbolic language in this context may be taken from the apparent willingness of the appellant to absorb the slings and arrows of the "traitor" and "treason" labels without complaint.

28 Nonetheless, although the respondents come close to asserting - but do not quite assert - that "anything goes" in these types of exchanges, is that the case in law? Do different legal considerations apply in determining whether a statement is or is not defamatory in these kinds of situations than apply to the publication of an article in a traditional media outlet? For that matter, do different considerations apply even within publications on the internet - to a publication on Facebook or in the "Twitterverse", say, compared to a publication on a blog?

29 These issues have not been addressed in the jurisprudence in any significant way. The responses may have far-reaching implications. They are best crafted on the basis of a full record after a trial - at least until the law evolves and crystallizes to a certain point - in my view. A trial will permit these important conclusions to be formulated on the basis of a record informed by the examination and cross-examination of witnesses and quite possibly with the assistance of expert evidence to provide the court - whose members are perhaps not always the most up-to-date in matters involving the blogosphere - with insight into how the internet blogging world functions and what may or may not be the expectations and sensibilities of those who engage in such discourse in the particular context in which that discourse occurs.

30 Although made against a slightly different background - whether a statement made using a microphone at a public rally was in law a libel or a slander - the observations of this Court in Romano v. D'Onofrio (2005), 77 O.R. (3d) 583 confirm that novel questions of law or of mixed law and fact in defamation matters ought generally to be determined at a trial. At paras. 7 and 9, the Court, citing R. D. Belanger & Associates Ltd. v. Stadium Corp. of Ontario Ltd. (1991), 5 O.R. (3d) 778, observed that "'matters of law which have not been settled fully in our jurisprudence should not be disposed of at this [interlocutory] stage in the proceedings'" because they involve a "type of interpretative analysis [that] should only be done in the context of a full factual record, possibly including appropriate expert evidence."

The summary dismissal was set aside and the matter was sent back to the trial courts.

Child pornography charges dismissed because of lack of proof of age of persons depicted

In the course of a roadside stop and arrest related to a stolen vehicle, the arresting officer viewed the screen saver on the accused’s phone, which depicted a naked female. The image was not particularly remarkable at the time, but when later perusing the photos on the phone for images of the stolen vehicle, the officer began to believe that further photos depicted underage persons. The officer consulted with the police child exploitation unit and obtained a warrant to thoroughly search the phone.

When the original perusal of the phone was challenged, the Alberta Provincial Court concluded in R. v. Lanning it was a lawful search incident to arrest because the purpose of the search was related to the purpose of the arrest, namely looking for evidence of the stolen vehicle. Though parts of the ITO were challenged, the evidence was admitted.

The accused did not call any evidence, but rested his case on an argument that the images did not meet the Criminal Code definition of child pornography in the absence of evidence related to the actual age of the persons depicted in the photos. The Court concluded that though a judge may be able to make such a determination without expert assistance, this was not such a case:

23 To the extent that defence counsel says that the sum result of those cases is that a judge may never make a decision on "apparent age" without the assistance of expert evidence in cases like this, I must respectfully disagree. If such a rule existed, given the extremely difficult task of learning the names, addresses and ages of those who appear in images like this downloaded from the internet, it would place a virtually impossible burden on the Crown. That cannot be what was intended by Parliament. The simple fact is that the law places a burden on triers of fact to weigh the evidence presented honestly and objectively in determining whether the charge has been proven beyond a reasonable doubt. That the task may be made more difficult by the nature of that evidence in prosecutions like these does not relieve judges of that obligation. Remembering that the burden on the Crown is proof beyond a reasonable doubt, not beyond any doubt, I am satisfied that judges might still, in appropriate cases, accept "apparent age" as a sufficient basis to find that the Crown's case has been proven. Whether that conclusion will survive appellate review will depend on the evidence in each case. Luckily, given the nature of that evidence, reviewing courts will be in a good position to determine whether the conclusion was reasonable or not. As I have already noted, decisions like this will often be difficult for judges, given the need to give full weight to the presumption of innocence and the duty to assess Crown evidence objectively and fairly, but it is nonetheless one of the tasks they are bound to perform.

The judge, after viewing the photographs at question, was not able to determine whether the girls photographed were underage and an acquittal was entered.

This newsletter is intended to keep members of IT.CAN informed about Canadian legal developments as well as about international developments that may have an impact on Canada. It will also be a vehicle for the Executive and Board of Directors of the Association to keep you informed of Association news such as upcoming conferences.

If you have comments or suggestions about this newsletter, please contact Professor Robert Currie, Director of the Law & Technology Institute, at robert.currie@dal.ca.

Disclaimer: The IT.CAN Newsletter is intended to provide readers with notice of certain new developments and issues of legal significance. It is not intended to be a complete statement of the law, nor is it intended to provide legal advice. No person should act or rely upon the information in the IT.CAN Newsletter without seeking specific legal advice.

© 2012 by Robert Currie, Stephen Coughlan and David Fraser. Members of IT.CAN may circulate this newsletter within their organizations. All other copying, reposting or republishing of this newsletter, in whole or in part, electronically or in print, is prohibited without express written permission.

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