Fair dealing or freeloading? iTunes previews to face the music…

Earlier this month, the Supreme Court of Canada heard five copyright cases on appeal from Canada’s Copyright Board (the “Board”).  The cases have far reaching implications for copyright owners and users alike.  The legality of photocopying textbooks for school children and previewing songs on iTunes is at stake, as is the right of copyright owners to receive royalties for music downloaded by consumers as part of video games. 

Two of the five cases heard by the Supreme Court considered the scope of the ‘fair dealing’ exception.  Much like the Australian exception, the Canadian fair dealing provisions broadly provide that “those who deal fairly with a work for the purpose of research, private study, criticism, review or news reporting, do not infringe copyright” (CCH Canadian Ltd v Law Society of Upper Canada [2004] 1 SCR 339).  However, the Society of Composers, Authors and Music Publishers of Canada (“SOCAN”) believes that the exception, as it is currently understood, is unfairly broad.

SOCAN has argued that the use of ‘previews’ by online music retailers goes beyond the fair use exception and that, as a result, SOCAN members should be compensated each time a preview is played by a consumer.  The Board previously held that providing a preview for a consumer falls within the meaning of ‘research’ and is therefore exempted by the fair use exception.  On appeal, SOCAN argued that previews are an aid to online shopping and have nothing to do with ‘research’ in the conventional sense. 

Apple and other online retailers have argued that a broader interpretation of what constitutes research should be taken in light of the modern concept of fair dealing.  Accordingly, the Canadian Supreme Court has been asked to consider whether previews constitute ‘research’, and if so, whether the using the previews is ‘fair’.

The Australian case of De Garis v Neville Jeffress Pidler Pty Ltd (1990) 95 ALR 625 (referencing the Macquarie dictionary), held that ‘research’ or ‘study’ involves “a systematic enquiry or investigation into a subject in order to discover facts or principles” – hardly an accurate description of the average online music shopper.  In that case, the court found that the defendant had infringed copyright in newspaper articles belonging to journalists who wrote them.  Beumont J saw the overriding purpose of the defendant’s use of the copyright material as commercial, and therefore not within the fair dealing for research or study exception.

In contrast, Canadian courts have previously adopted a wider interpretation of ‘research’ in order to ensure that users’ rights are not unduly constrained (CCH Canadian Ltd v Law Society of Upper Canada).  Létourneau  J of the Canadian Federal Court, whose decision is now on appeal (see our previous post on the original Canadian Federal Court decision here), looked at previews from the perspective of the person for whom they are intended (i.e. consumers), rather than only considering the commercial motivations of the seller.  Létourneau  J found that listening to previews assists consumers in their investigations and therefore falls within the scope of the fair dealing for research exception.  In coming to this conclusion, Létourneau  J noted that “the consumer is searching for an object of copyright that he or she desires and is attempting to locate and wishes to ensure its authenticity and quality before obtaining it”. 

Online music retailers will find little comfort across the border.  Having rejected the fair dealing defence twice in relation to movie previews and ringtones, US courts do not appear to share the Canadian Federal Court’s liberal interpretation of ‘research’.

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