2251723 Ontario Inc. V Bell Canada, 2016 ONSC 7273 (Canlii)
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2251723 Ontario Inc. v Bell Canada, 2016 ONSC 7273 (CanLII) Date: 2016-11-22 Docket: CV-16-561545 Citation:2251723 Ontario Inc. v Bell Canada, 2016 ONSC 7273 (CanLII), <http://canlii.ca/t/gvr2k>, retrieved on 2016-11-24 CITATION: 2251723 Ontario Inc. v. Bell Canada, 2016 ONSC 7273 COURT FILE NO.: CV-16-561545 DATE: 20161122 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) 2251723 ONTARIO INC. o/a VM ) Rocco DiPucchio and Ian Matthew EDIA )) s, for the Applicant )) Applicant )) ) )) – and – BELL CANADA and BELL MED IA INC. Steven G. Mason, Junior Sirivar, a nd Brandon Kain, for the Responde Respondents nts ) ) ) HEARD: November 17, 2016 F.L. MYERS, J. REASONS FOR DECISION The Applications [1] VMedia seeks an order declaring that its new internet retransmitting service is not infringing Bell’s copyrights in CTV television broadcasts. Bell seeks the opposite relief in a counter-application under Court File No. CV-16-561611. These reasons apply to both applications. [2] VMedia says that it is entitled to simultaneously retransmit over the internet Bell’s copyrighted over-the-air CTV television signals and programming on its new service without Bell’s consent (i.e. for free). Bell says that as the owner or licensee of the copyrights in the signals and programming, it is entitled to prevent retransmission unless it consents (i.e. it is paid). The Court does not set Broadcasting Policy in Canada [3] It is the role of the court to interpret and apply the laws of the land as enacted by Parliament. Parliament has delegated the role of setting national broadcasting policy under the Broadcasting Act, SC 1991, c 11, to the Canadian Radio-television and Telecommunications Commission under the supervision of the federal cabinet. Parliament has also incorporated CRTC broadcasting policy into the definitions contained in the provisions of the Copyright Act, RSC 1985, c. C-42 that apply in this case. Therefore, resolving the matters before the court in this case requires the court to consider both the meaning of federal law passed by Parliament and policies established by the CRTC as incorporated into the law. [4] It should be clearly understood however that the court does not set broadcasting policy. It is not for the court to determine whether unregulated simultaneous retransmission of television programs over the public internet is good policy for Canadian consumers and the Canadian broadcasting industry. The court will not determine whether particular technological innovations are good or bad or should be subject to or exempt from broadcasting or copyright regulation. [5] The court’s role is to discern and declare how the existing law applies to the facts that the parties have proven before the court. If technology has overcome the existing laws and policies, it is open to interested parties to put the issues before the CRTC to try to revise the policies and the definitions discussed below. This decision says what the law is. It is for others to determine what the applicable law ought to be. [6] For the reasons which follow, under the current state of the law VMedia’s application is dismissed and Bell’s application to enforce its copyrights is granted. Background on the Overlap between Broadcasting Regulation and Copyright Protection in Canada [7] Some of the statutory drafting and terminology used in this case is confusing. I therefore provide this overview to try to set out the basic concepts at play. This section is not intended to be comprehensive or complete. It is just a brief primer to try to introduce concepts in order to try to make the rest of the reasons more accessible and comprehensible. (i) Broadcasters need Two Types of Approval [8] People or companies who want to broadcast television programming over the public airwaves in Canada need at least two types of approval: a. First, their broadcasting undertaking (that is, their broadcasting line of business) must be legal under the Broadcasting Act, SC 1991, c 11. To broadcast lawfully in Canada, a broadcaster needs either a license or an exemption order obtained from the Canadian Radio-television and Telecommunications Commission under the Broadcasting Act. b. Second, people who are entitled to broadcast television programming also need access to content to broadcast. They need TV shows or programming. The creators, authors, and owners of TV shows are protected by copyright laws. Under the Copyright Act, RSC 1985, c. C-42, the owner of the copyright in a work has the “sole right to produce or reproduce the work or any substantial part thereof in any material form whatever.” This means that if a broadcaster wants to air a program, it must either own the copyright (perhaps by producing the show itself) or obtain permission from the copyright owner to broadcast the program. This permission is often in the form of a license of the owner’s copyright(s). [9] A copyright license allows the license holder to reproduce a copyrighted work. It has nothing to do with a regulatory license to broadcast under the Broadcasting Act. There are two distinct licenses at play which reflect permissions from two different sources – the CRTC and the owner of the copyright in a TV show. [10] It is illegal under the Broadcasting Act for someone to broadcast a TV show without a license or an exemption from the CRTC even if the broadcaster owns or has permission from the copyright owner to reproduce the TV show. The converse is also true. A person with a broadcasting license or exemption order from the CRTC will breach a copyright owner’s rights if it broadcasts a copyrighted program without the permission of the copyright owner. [11] In effect, and historically, a broadcaster needed both a license from the CRTC and a license from the copyright owner in order to broadcast a TV show over the public airwaves in Canada. [12] Then cable TV was invented. (ii) The Invention of Cable TV led to Compulsory License Legislation [13] Cable TV companies receive over-the-air TV signals and simultaneously retransmit them to customers along a fixed cable/wire/fiber. The advent of cable technology greatly improved the quality of the television signals received by customers and it allowed customers to obtain access to a large number of channels that the cable company was able to receive on its big, commercial antennas that householders could not receive at their homes. [14] And Parliament said this was good. [15] But, in order to operate legally, the cable companies needed copyright permission from the TV station broadcaster to retransmit along its cables the broadcaster’s copyrighted TV signals and content. After studying the issue, the Government decided that copyright owners should not be able to use their copyrights to stop simultaneous retransmission of over-the-air TV signals by cable companies. The Government amended the Copyright Act to provide that it no longer infringed an owner’s copyright for a cable company to simultaneously retransmit over-the-air television signals in Canada provided a number of conditions were met by the cable companies. One of the conditions was that the broadcaster must be lawfully entitled to broadcast under the Broadcasting Act. [16] Although the statute does not actually provide for licensing from copyright owners to simultaneous retransmitters, since royalties can be payable in some circumstances under the statute, the situation looks much like a license and is generally referred to as a “compulsory license.” [17] Cable companies are not required to pay any royalties to simultaneously retransmit local TV signals under s. 31 of the Copyright Act. This was a policy decision taken by Parliament. This case deals with retransmitting of local CTV and CTV2 signals and programming owned or licensed by Bell. So while discussions use the terminology “compulsory license” there is no license or even royalties at play. If VMedia is successful, it will not have to pay Bell for its copyrighted works. Bell will not be asked to grant permission. Rather, VMedia’s retransmission, if lawful, will not amount to a violation of Bell’s copyright(s). [18] Then along came the internet. (iii) The CRTC’s Exemption Order for New Media Broadcasting Undertakings [19] In the late 1990s, the CRTC studied internet broadcasting and decided that it was in the best interests of Canadian broadcasting policy for internet broadcasting to remain unregulated. On May 17, 1999, the CRTC issued the Exemption Order for New Media Broadcasting Undertakings as Appendix A to Public Notice CRTC 1999-197. That order exempts from the license requirements under the Broadcasting Act all new media broadcast undertakings that “provide broadcasting services delivered and accessed over the Internet.” [20] Since, May, 1999, people who broadcast over the internet do not need to be licensed by the CRTC. (iv) The New Media (Internet) Retransmitters are Denied a Compulsory License under the Copyright Act [21] Shortly after the CRTC decided that all internet broadcasting will be legal in Canada without a license, the question arose as to whether unlicensed internet broadcasters ought to be entitled to the protection of the compulsory license provisions of the Copyright Act so as to enable them to simultaneously retransmit over-the-air television signals without infringing the program owner’s copyright(s). Recall that the compulsory license provisions of the Copyright Act did not require that the broadcaster be licensed by the CRTC in order to be freed from the requirement to obtain copyright owner’s consent to publish or republish its TV shows. The terms of the compulsory license under the Copyright Act only required that the broadcasting be lawful under the Broadcasting Act. Recall as well that the CRTC has the power to license and it also has the power to exempt broadcasters from the regulatory provisions of the statute.