Recording Industry to SCC: Scale Back Fair Dealing

In a factum submitted last week, the Canadian Recording Industry Association (CRIA) is arguing that the Supreme Court of Canada should substantially narrow the scope of Canada’s fair dealing standard, a standard established in the seminal CCH v. Law Society of Upper Canada decision in 2004.

Last year, the Federal Court of Appeal  upheld a decision (SOCAN v. Bell Canada) by the Copyright Board that the provision of 30-second previews of songs, used by online music services, functions as consumer research and thus are eligible as fair dealing according to s.29 of the Copyright Act. In response to this, the CRIA is claiming here that the definition of “research” according to the Federal Court of Appeal, in the context of the fair dealing exception, is in error because that definition creates too broad and liberal of an exception, thereby conflicting with the object and purpose of the Act (to balance the interests between consumers and rights-holders).

The CRIA is also arguing that the application of the CCH standard by the Board and the Federal Court of Appeal is inconsistent with Canada’s international copyright obligations under TRIPS. According to the “Three-Step Test” in s.13, exceptions to copyright require that (1) the exception apply in special cases, (2) that the reproduction not conflict with a normal exploitation of the work and (3) that the reproduction not unreasonably prejudice the legitimate interests of the author.

As such, the CRIA is promoting a new fair dealing framework in which:

1. exceptions form a balance to protect against excessive control of copyright holders that would limit the ability to incorporate and embellish creative innovation on the public domain;
2. exceptions should be clearly defined and narrow in scope and reach;
3. exceptions should not permit uses which enter into economic competition with the ways that copyright holders normally extract economic value and thereby deprive copyright holders of significant or tangible commercial gains; and
4. exceptions should not cause or have the potential to cause an unreasonable loss to the copyright holder.

So according to this framework, communication of 30-second music previews is not for the purpose of research, that copyright holders lose economic value with free previews should be considered, and thus online use of music previews is not fair and does not qualify for fair dealing protection. As Prof .Trosow of the University of Western points out in his blog, “the breadth and scope of fair dealing will be a central dispute in that proceeding and will be a determinative factor in the amount of the tariff ultimately set by the Board.”

While I understand the CRIA’s legal arguments, though some have called them weak, what I don’t understand is why the CRIA is seeking to make legal online purchasing of music more difficult or expensive than it already is. And I mean this particularly when the alternative of peer-to-peer file sharing is so easily accessible, free and pretty much socially, if not legally, acceptable.

Music previews is a great marketing tool to allow potential buyers to test the quality and character of a product to determine whether they wish to purchase it. Take that away, or increase the price (passed down to consumers because of higher tariffs) and customers have even fewer incentives to purchase their music. Competing with “free” is already difficult enough for the recording industry, but making the purchasing process more costly is certainly not going to encourage consumers to get their music through legal, online channels.