In keeping with tradition, and gambling that there won't actually be any significant entertainment/media law occurrences between now and January 1, 2013 (which is probably a pretty safe bet), we offer our humble thoughts on this year's most noteworthy Canadian entertainment and media law stories. This post has been co-written by Heenan Blaikie partner, Signal contributor, lawyer extraordinaire and all-around dude Stephen Zolf (for those keeping score at home, Zolf wrote the items which are informative, erudite and detailed - I wrote the ones which, um, aren't any of those things). In no particular order:
The Copyright Modernization Act
To be fair, this probably counts as more than one "item" - passed by Parliament in June, and with the vast majority of its provisions proclaimed into force in November, the CMA (previously Bill C-11) is the most momentous change in Canada's copyright landscape in recent memory. From expanded fair dealing (now includes parody, satire and education!) to a new photography regime to user-generated content to technological protection measures to... well, it's a big piece of legislation, so it's going to affect a lot of different things. We talked about the CMA a lot this past year here at the Signal - we summarized some of the relevant items for entertainment lawyers here, and our collected coverage can be found here.
Ontario Court of Appeal Creates Tort of "Intrusion Upon Seclusion"
In the case of Jones v Tsige, 2012 ONCA 32, the Ontario Court of Appeal created a new privacy-related tort which they dubbed "intrusion upon seclusion". One of the few instances of common law privacy protection in Canada, the new tort provides a cause of action against "one who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person". The existence of the new tort will impact clients who conduct or create investigative reporting, news reports, memoirs, documentaries, docu-dramas, even "reality" TV - really anything which involves the depiction of actual living persons. Previous Signal coverage on the topic can be found here.
Supreme Court of Canada rules that internet service providers are not "broadcasting undertakings"
In Re Broadcasting Act, 2012 SCC 4, the Supreme Court confirmed that Internet service providers (ISPs) do not act as “broadcasting undertakings” even though they provide internet users with access to broadcasting content. That conclusion meant that ISPs are not subject to CRTC regulation as broadcasters under the Broadcasting Act. If ISPs were to be treated as broadcasters, they might have been (and Canadian cultural industry coalitions had argued that they should be) subject to CRTC levies to fund the creation of new Canadian broadcasting content for new media platforms (similar to the levy paid by conventional Canadian broadcasters). Previous Signal coverage on the topic can be found here.
CIPO Begins to Accept Applications for Registration of "Sound Marks"
On March 28, 2012, the Canadian Intellectual Property Office (CIPO) announced that it would begin accepting applications for "sound marks" - though it was an application by MGM for its distinctive "roaring lion" sound was what prompted the new policy, a number of sound marks have been registered in the US, including Homer Simpson's distinctive "D'oh!", Yahoo!'s "yodel" and even the Looney Tunes' theme song (examples of US-registered sound marks can be accessed here). It's not often that a change in policy opens an entire new frontier in rights protection for Canadian rights holders, but this is one of those times. Previous Signal coverage on the topic can be found here.
Baglow v Smith Ordered to Trial
The Ontario Court of Appeal ordered a trial in the defamation action of Baglow v Smith 2012 ONCA 407, which concerns a statement made in the context of a political argument ranging across blogs and online message forums. As the Court of Appeal said, among the issues which the trial court will need to address are the following: "Nonetheless, although the respondents come close to asserting – but do not quite assert – that “anything goes” in these types of exchanges, is that the case in law? Do different legal considerations apply in determining whether a statement is or is not defamatory in these kinds of situations than apply to the publication of an article in a traditional media outlet? For that matter, do different considerations apply even within publications on the internet – to a publication on Facebook or in the “Twitterverse”, say, compared to a publication on a blog?" Previous Signal coverage of this topic can be found here.
The CRTC has no jurisdiction to implement a “value for signal” regime
On December 13, 2012 the Supreme Court of Canada released its decision in Reference re Broadcasting Regulatory Policy CRTC 2010‑167 and Broadcasting Order CRTC 2010‑168 2012 SCC 68 (). In a narrow majority decision (5-4), the Court held that the CRTC does not have the authority to permit an “over-the-air” television station to negotiate compensation for the retransmission of its local signal by terrestrial (cable/telco/IP) and satellite broadcast distributors (BDUs). Under the CRTC’s proposed regime, if no agreement was reached between the broadcaster and the BDU on the value of the distribution of the local television’s programming services, the broadcaster could require the BDU to delete any program owned by the broadcaster (or a program for which the broadcaster had acquired exclusive contractual exhibition rights).
The Court’s Decision is significant not only for its detailed analysis of the scope of the CRTC’ s statutory jurisdiction under the Broadcasting Act but also for the Court’s interpretation of the interface between broadcasting law and copyright law.
The Court determined that the CRTC did not have the authority to implement the proposed value for signal regime in the absence of a specific provision in the Broadcasting Act which expressly granted jurisdiction to the CRTC to implement such a measure. The Broadcasting Act had to be read in its entire context: as such, the creation of what would effectively be an exclusive right on broadcasters “is too far removed from the core purposes intended by Parliament and from the powers granted to the CRTC under that Act”.
But the Court did not stop there. It also found that the proposed value for signal regime conflicted with the specific statutory regime enacted by Parliament under the Copyright Act. The Court noted that, unlike the proposed value for signal right, under the Copyright Act, the program copyright owner has no right to prohibit the simultaneous retransmission of the broadcast signal; recourse is limited to receiving a prescribed royalty through a collective society (and moreover only for the retransmission of works carried in distant signals).
The Court described the regime under the Copyright Act as effectively an exceptionto the exclusive right of the copyright owners of literary, dramatic, musical or artistic works to control the communication of their works to the public by telecommunication. By contrast, the value for signal regime would effectively do an “end run” around this exception and therefore the regime would be in “conflict” with the scheme of the Copyright Act.
Ultimately, the broadcasters may have the last laugh on the issue of compensation for their local television stations: the CRTC has many other levers at its disposal to ensure the continued viability of over-the-air broadcasters in local markets across Canada. What the CRTC could not do through “the back door” (implementing the value for signal regime) might now have to be remedied through the “front door”, namely by reinstating measures such as the “local programming improvement fund” (LPIF) levied on BDUs, or through other measures under the Act to protect broadcasters, which could involve more financial contribution from BDUs (eds.: surely the CRTC would have the authority to adopt these measures notwithstanding the Supreme Court’s Decision??).
The BCE-Astral decision: "there's a new sheriff in town"
Industry watchers were taken aback when the CRTC rejected BCE's proposed acquisition of Astral. The grounds for the decision can be described as "death by a thousand cuts" in view of the confluence of a multitude of concerns on the part of the CRTC: the concentration of ownership in the television and radio markets, vertical integration and the exercise of market power in an anti-competitive manner on various broadcast platforms that would be owned by the combined entity (broadcast distribution, wireless, pay TV windows). The CRTC also noted that there were insufficient safeguards to ensure access to BCE's platforms and programing by independent non-vertically integrated broadcasters and BDUs.
Many commentators have observed that the CRTC’s rationale for denying the acquisition is infused with an underlying “consumer protection” sub-text. However, it is interesting to note that the Decision contains absolutely no direct references to “consumer protection”. Instead, one has to look to the CRTC’s press release accompanying the Decision, where the consumer angle is far more emphasized: even the title of the press release is consumer-focused (“Transaction not in the interest of Canadians and Canada’s broadcasting system”), while the rationale for denying the transaction is explained by the fact that the CRTC “was not persuaded that the transaction would have provided significant and unequivocal benefits to the Canadian broadcasting system and to Canadians sufficient to outweigh its concerns”.
On the same day of the Decision Bell issued its own press release, announcing that it was “shocked” by the CRTC’s Decision and that that it would appeal the CRTC’s Decision to the federal cabinet (ignoring the minor technicality that the Decision related to an application to acquire effective control of Astral’s broadcasting licences and not a decision to “issue, amend or renew a licence” which are the only grounds for a cabinet appeal under the Broadcasting Act).
But the cabinet appeal issue became moot only five weeks later: on November 19th the parties announced that they had filed a new application with the CRTC and that Bell had withdrawn its attempted appeal to the Cabinet. And Bell clearly struck a new consumer focus by emphasizing that it had “heard Canadians and the CRTC loud and clear” and that the transaction “will directly benefit consumers and creators”… deliver more choice for listeners and viewers, more opportunity for content creators, and more competition for the broadcasting industry”. According to the Bell-Astral revised proposal, “the consumer always comes first”.
While the Application will likely not be made public until early in the new year (with an public hearing anticipated in Spring 2013), it is clear that this new Application will involve some proposed divestitures to address the CRTC’s concerns in the October Decision, where the CRTC noted that the aggregate television viewing shares among Canadian television services that would be enjoyed by the combined Bell-Astral merged entity would be contrary to the CRTC’s “diversity of voices” ownership policy. In its November 19, 2012 press release, Bell clearly states that its re-filed proposal to the CRTC “addresses the [CRTC’s] concerns and sets out the steps the companies would take to comply with the relevant viewership thresholds” (read: selling off one or more television channels to a third party). Stand by for further updates!
CRTC calls for a national wireless telecommunications code
On the "be careful what you wish for" file, the CRTC launched a new proceeding in April 2012 to consider whether it should intervene in the retail wireless (i.e. mobile phone) market by overseeing the establishment of a national consumer code for wireless services. (See earlier Signal coverage here.) The request for CRTC action arose in response to disparate provincial bills purporting to regulate cell phone contracts under the guise of provincial jurisdiction over consumer contracts.
In its findings released in October 2012, the CRTC determined that, in order to ensure that consumers are able to participate in the competitive market in an informed and effective manner, and to fulfill the policy objectives of the Telecommunications Act, it is necessary to develop a mandatory federal code “to address the clarity and content of mobile wireless service contracts and related issues”. The CRTC initiated a public consultation on the appropriate elements of a wireless code.
The CRTC expressed its preliminary view that such a new Code should address a broad range of matters that are of concern when it comes to cell phone contracts, including the clarity of the contract terms and conditions, the ability of the customer to make changes to contract terms and conditions, permitted contract cancellation, terms governing expiration and renewal of contracts, clarity of advertised prices and notification of additional fees, and hardware warranties/loss or theft and disconnections.
However, with respect to actual oversight of rates charged by cell phone companies, the Commission found that market conditions had not changed sufficiently to require the Commission to reverse a 1990s decision that it would “forebear” from regulating cell phone rates charged by the wireless carriers or interfering in the competitiveness of the retail mobile wireless voice and data services market.
While the CRTC has encouraged Canadians to file comments on “any other specific provisions that would enable consumers to better understand their rights with respect to mobile wireless services”, it nevertheless has clarified that the public proceeding relates only “to a Code designed to improve the relationship between Canadian consumers and their wireless service providers and does not include issues related to the competitive relationship between wireless service providers” (i.e. market structure and concentration issues). However, as the first phase of comments filed with the CRTC in early December suggest, the scope of consumer interest in this proceeding is significant and comments have not been limited to those identified by the CRTC – so the genie is clearly out of the bottle.Reply comments must be filed early in the new year and a public hearing will begin on February 11, 2013. Stand by for further fireworks.
The Supreme Court of Canada's "Copyright Pentalogy"
Like The Copyright Modernization Act, the Supreme Court of Canada's five copyright decisions released in July 2012 will reverberate for years to come, affecting practice decisions and the business of our clients. As described in our initial review of the "Pentalogy" decisions, the top-line changes emanating from the decisions include: confirmation of a robust approach to the interpretation of the "fair dealing" categories (expanded by the CMA to include parody, satire and education); confirmation that "technological neutrality" is a guiding interpretive principle in the application of the Copyright Act; and a significant shifting of the copyright fulcrum away from rights collectives and towards intermediaries and users - to take a simple illustration, SOCAN's loss of millions of dollars in license fees from downloads will have significant impact on that collective and its members, while, inversely, the confirmation that online service providers do not need to obtain a SOCAN license for downloads of musical works will have a related impact on the bottom lines of those service providers.