Canada Supreme Court ends royalties for music downloads

Thu Jul 12, 2012 6:52pm EDT
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By Alastair Sharp and Euan Rocha

TORONTO (Reuters) - Canada's Supreme Court dealt a blow to artists and a benefit to telecoms and gaming companies by scrapping some fees for music downloaded via the Internet or used in videogames as part of five copyright rulings on Thursday.

The court also ruled that previews of songs in online digital stores such as Apple Inc's iTunes are not an infringement of laws and do not merit royalty payments.

Canada's performing rights society previously collected fees for both streamed and downloaded music on the Internet on behalf of artists. Following the rulings, the group will only collect fees on streamed music.

"The big picture is that the Supreme Court has continued to favor user rights in fair dealing issues and they have limited the rights of SOCAN - the performing rights society - to collect separate tariffs for communication to the public," said Brian Gray, an expert on patent law with Norton Rose in Toronto.

"It's a disappointment on the previews and a disappointment, though a more complex one, on downloads," said Eric Baptiste, who heads the Society of Composers, Authors and Music Publishers of Canada, which collects and distributes royalties to artists.

The ruling on previews went against claims by SOCAN, which said that providers of such 30-second music clips like Apple, Rogers Communications Inc and others, ought to pay tariffs for such previews.

If the ruling had gone the other way, providers such as Rogers and Apple would have had to choose between charging customers to browse their online catalogs before buying, absorbing the costs themselves, or blocking previews.

The court maintained that music streamed from a website -- a practice that is growing in popularity as customizable radio stations such as Rdio and Slacker emerge -- constitutes a performance and therefore must continue to pay the fee.   Continued...