Canada: Supreme Court Of Canada Confirms A Two-Part Approach To Fair Dealing Analysis And Finds That Providing Online Previews Of Musical Works Constitutes Fair Dealing Research: SOCAN v. Bell Canada (2012 SCC 36)

The issue before the Court was whether music previews available to consumers through commercial music stores on the Internet were covered by the fair dealing exception such that no royalties should be paid to copyright owners.

The Copyright Board had concluded that such music previews constitute fair dealing for the purpose of "research" by consumers under s. 29 of the Copyright Act, and as such were not remunerable. This decision was upheld by the Federal Court of Appeal.

In a unanimous decision written by Justice Abella, the Supreme Court of Canada reiterated its prior comments in CCH Canadian that at the purpose inquiry stage of the fair dealing analysis the term "research" should be given a generous interpretation. The argument that "research" should be restricted only to acts that create new works was rejected. The Court also rejected argument that the purpose inquiry should focus on the purpose of the copier and not the end user. In this case, because consumers use the previews to engage in a form of research this was found to pass the low hurdle of proper research purpose. The inquiry then moved onto the issue of "fairness," where Justice Abella indicated the analytical "heavy hitting" is performed.

In assessing whether music previews are "fair," the Court considered the six fairness factors originally set out in CCH Canadian. Recognizing that this stage of the analysis is a highly fact-specific exercise, the Court concluded that the Board had properly found that the dealings in question were fair. In particular, the Court agreed that the fact previews are streamed (a temporary copy) rather than downloaded (a permanent copy) favoured a finding of fairness. The Court also accepted that there was no reasonable alternative to listening previews for consumer research purposes. Finally, the Court found that previews did not affect sales of music negatively or compete with the sale of musical works given their temporary nature and short duration, and the fact that they are generally provided in lower quality formats. The Court also noted that the effect of previews is to increase the sale of musical works, thereby generating remuneration to their creators.

The following is a link to the full decision: http://scc.lexum.org/en/2012/2012scc36/2012scc36.html

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