What the Supreme Court's copyright rulings mean for you

The top court's decisions about downloading video and music represent mostly good news for consumers, while students benefit from access to photocopied research material. Tech writer Peter Nowak provides a summary of what the rulings mean.
The Supreme Court's ruling on Thursday should be good news for music and video lovers who download from sites like iTunes. (Associated Press)

The Supreme Court on Thursday issued a raft of landmark copyright decisions that will affect how Canadians listen to and buy music online.

It also kept open the doors to the kinds of research materials, primarily photocopies, that will be available freely to students.

With the large number of simultaneous decisions — five in total — and a considerable amount of legalese to wade through, experts on all sides of the arguments are still figuring out what everything means.

Here, though, is a quick summary of what the rulings appear to mean for the average consumer and student.

Music downloads

In what is perhaps the most wide-ranging of the decisions, the Supreme Court decided against an industry plan that would have authorized the collection of additional royalties on music downloaded through services such as Apple's iTunes.

The court said that downloading a copy of a song is essentially the same as going to buy it in a store — so no additional royalties should be added beyond what the artist already gets through existing licensing agreements.

Had the original decision by the Copyright Board, the first arbiter on such matters, been upheld, there would have been new fees for the artist on downloaded materials, and experts say that music download services would have either had to swallow these costs or, more likely, raise prices.

So the Supreme Court's decision is good news for consumers. But the just-approved C-11 copyright law contains a provision that could ultimately invalidate this ruling. Observers say the entire battle over this particular aspect of royalties may therefore have to be fought again and that could take years to resolve.

Music previews

The Society of Composers, Authors and Music Publishers of Canada (SOCAN) was also seeking new fees on song previews, the short snippets that potential buyers can play for free through services such as iTunes.

The court ruled that such previews constitute "research" on the part of the consumer, so it rejected these extra charges.

Had such a fee been allowed, two possible outcomes could have occurred. Download services would either have dropped previews entirely or, more likely, would have kept them but raised prices on the downloaded items themselves.

Music in game downloads

SOCAN was also looking for new royalties on music used in downloadable video games. Similar to its ruling on regular music downloads, the court rejected the idea on the grounds that game downloads are one-time purchases rather than broadcast communications.

Video-game makers already license and pay for the music to begin with, and they argued that such new royalties would have amounted to "double-dipping."

They also said that if the new fees had been allowed, the cost and therefore the prices of their goods would inevitably have gone up.

Similarly, new royalties were also being sought for soundtracks that air during movies and television shows. But the court said such music is considered part of the cinematographic work.

Consumers would not likely have seen the extra charges in this case, but costs for producers would have risen.

Music streaming

The court ruled that streaming music services such as Rdio and online radio sites like the CBC's do indeed constitute a form of communication or broadcasting, so they should be subject to new royalty fees.

Such services are now likely to face higher costs to do business, but whether they pass that on in the form of increased prices for consumers will vary from case to case.

Rdio, for one, has not commented on what exactly the ruling could mean for its service.

"We are very mindful of talent compensation and will continue to pay performance fees," said Rdio chief executive Drew Larner. "We are always looking for new and innovative ways to support artists and provide a platform that benefits both artists and fans so they may discover and share music together."

Experts say it is difficult to legally differentiate online streaming from broadcasting, so this is an area where new charges were probable.

Textbook photocopying

Access Copyright, a collective that collects fees on behalf of publishers and authors from businesses and schools for the use of printed materials such as books, was looking for royalties on photocopied materials in classrooms.

The court, however, rejected the effort on the grounds that, like song previews on iTunes, educational use of photocopies constitutes research.

Access Copyright critics such as University of Ottawa professor Michael Geist warned that such new fees would have greatly increased the cost of educational materials for students, in some cases forcing them to buy entire textbooks when photocopies of short snippets would do.

Consumer impact

Generally speaking, the rulings were big wins for consumers, students and schools, since there won't be new fees on music downloads, video games or educational materials.

The possible exception is music streaming services, which could get more expensive.

When this potential added expense is connected to the relatively low internet data usage limits in Canada, especially on mobile phones and tablets, such streaming services may have a harder time making a go of it here.

Artist impact

Royalty organizations have argued that all of the new fees sought were necessary for ensuring the financial well-being of musicians.

But the counter-argument has always been that lower prices encourage a higher volume of legitimate buying, while higher prices often encourage piracy, in which case artists don't see any revenue.

Publisher impact

The court noted that Access Copyright had failed to show that photocopying in schools adversely affects the market for printed works.

In other words, if publishers are having problems or are seeing declining revenues, it's not because students are using photocopies.