I’ve been a bit behind on newsletters and blog posts lately, so although this may not be the most timely discussion, I still think its interesting. Last month the Supreme Court of Canada came down with a few quite notable copyright decisions. Among them was a decision to not require video game publishers to pay tariffs to SOCAN on music used by publishers in video games distributed digitally.
The Entertainment Software Association (and its Canadian cousin) (“ESA“) an entity representing a coalition of video game publishers and distributors who enable customers to download video games from the Internet.
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The Society of Composers, Authors and Music Publishers of Canada (“SOCAN“) an entity which administers the right to “communicate” musical works on behalf of copyright owners by managing who uses music and how it is used, as well as by collecting tariffs on behalf of artists for the use and/or distribution of music (i.e. by online sale, through download, “brick and mortar”, etc.).
SOCAN applied to the Copyright Board for the imposition of a tariff on downloads of musical works via the Internet. The Copyright Board concluded that the download of a file containing a musical work was a “communication” within the meaning of the Copyright Act (the “Act“), and therefore, SOCAN artists’ are entitled to collect a tariff on games containing music when downloaded, even if publishers already paid a license fee to artists prior to distribution of the games containing such works.
The ESA appealed to the Federal Court, which upheld the decision. The ESA then appealed to the SCC…
The SCC held that the appeal should be allowed and a separate tariff should not apply to games digitally distributed online which contain musical works. Why, you might ask? Well, the majority argued that there is no real difference btween buying a copy off the shelf and downloading a copy of the game online. When you buy it at your nearest game dealer, you don’t pay a separate tariff. So, why should the artist be able to essentially “double dip” when the distribution is done online? In fact, the majority thought that to do so would “impose a gratuitous cost for the use of more efficient, Internet-based technologies.” In particular, the majority held that the Copyright Board’s mistake lay in the fact that they defined a download as a “communication” thus bringing the action within the wording of relevant sections of the Act. Rather, the majority interpreted a “download” as “an additional, more efficient way to deliver copies of the games to customers. The downloaded copy is identical to copies purchased in stores or shipped to customers by mail, and the game publishers already pay copyright owners reproduction royalties for all of these copying activities.”
Talk amongst yourselves:
Although the decision makes some sense to some (and no sense to others) I was left with a question regarding streaming of games. As we know, streaming of games from the “cloud” is a new and definitely viable method of game distribution. The key difference, as I’ve discussed before, is that a download allows the transmission of a durable copy whereas a stream is a temporary transmission with little to no fixed imprint following the cessation of the stream.
Two key phrases in the decision led me to thinking about this:
- First, the reference to s. 3(1) of the Act at para. 5, which states that , “the principle of technological neutrality…describes a right to produce or reproduce a work ‘in any material form whatever’”
- Second, the majority’s statement that “The Internet is a technological taxi that delivers a durable copy of the same work to the end user.”
These two statements are not to be taken independently, and surely, the second ought to be read in light of the first. With regards to streaming, it seems evident that “technological neutrality” would treat streaming much the same way as downloading, and in this case in particular, also deny music creators additional royalties on music which is communicated via stream as well as download. In all likelihood, if the question were to be put to the court re: streaming of games and music royalties, the court would end up with the same outcome based on its understanding of “communicate” as well as that the Act allows one with the right to do so, to reproduce a work in any material form whatever.”
Moving on. The second statement, in light of the first, would, on the face of it, be taken to mean the same thing: the streamed copy of the game is a durable copy which constitutes a communication inclusive of music to which initial payments were made, and to which additional royalties won’t apply.
Read independently, however, an issue arises: a streamed copy of anything is not, in its essence, a “durable copy”. It’s existence is fleeting. Although certain components necessary to run the game on a user’s system will reside on said system permanently, the gameplay itself (including the music forming an underlying element of the game) do not sit anywhere before, during or after the streaming session, except for the cloud from which the game is streamed. Notwithstanding the fact that, although not “durable”, a streamed video game is a more or less material reproduction (all the necessary elements to interact with the game and use it as intended are there) the durability of such a reproduction may, at least somewhat, the “materiality” of such a reproduction and, therefore, question the validity of technological neutrality in such circumstances.
Then again, “neutral” is just that – neutral. The law as intended ought to treat streaming as it does any other technologically reproduced copy of a copyrighted work.
All in all, I have no answer. I do believe, though, that the historical copyright decisions in relation to stage performance, particularly the debates surrounding the passing nature of a performance’s existence, will influence how we look at streamed content and copyright in the future.
You can read the decision in its entirety here.
This discussion is not to be taken as legal advice. Please contact a lawyer before making any decisions which require legal advice.