Date: 20000614
Docket: A-19-00
CORAM: LINDEN J.A.
ROTHSTEIN J.A.
McDONALD J.A.
BETWEEN:
| AVS Technologies Inc; Fuji Photo Film Canada Inc.; Kodak Canada Inc.; Maxell Canada; Sony of Canada Ltd.; and Verbatim Corporation (also known as Canadian Storage Media Alliance (CSMA)) |
Applicants
- and -
| Canadian Mechanical Reproduction Rights Agency (CMRRA), Neighbouring Rights Collective of Canada (NRCC); Societe de gestion des droits des artistes-musiciens (SOGEDAM); Societe |
| du droit de reproduction des auteurs, compositeurs et editeurs au Canada (SODRAC); Society of Composers, Authors and |
| Music Publishers of Canada (SOCAN); (also known as the Canadian Private Copying Collective (CPCC)); Precision |
| Sound Corporation, Summit Media Ltd., Western Imperial Magnetics Inc; Evangelical Fellowship of Canada; Camrose Church of God; Grande Prairie Alliance Church; First Church |
| of the Nazarene; United Church of God and Messrs. Ken Dahl, |
| Al Schmalz and Greg Watrich.(also known as Independent Canadian Recording Media Coalition (ICRMC)); First |
| Evangelical Lutheran Church; Bluebird Events and Studio A-Mirador; Attorney General for British Columbia; Graham |
Newton; and West Klause
Respondents
HEARD at Ottawa, Ontario, on Wednesday, June 14, 2000
JUDGMENT delivered from the Bench on Wednesday, June 14, 2000
REASONS FOR JUDGMENT OF THE COURT BY: LINDEN J.A.
Date: 20000614
Docket: A-19-00
CORAM: LINDEN J.A.
ROTHSTEIN J.A.
McDONALD J.A.
BETWEEN:
| AVS Technologies Inc; Fuji Photo Film Canada Inc.; Kodak Canada Inc.; Maxell Canada; Sony of Canada Ltd.; and Verbatim Corporation (also known as Canadian Storage Media Alliance (CSMA)) |
Applicants
- and -
| Canadian Mechanical Reproduction Rights Agency (CMRRA), Neighbouring Rights Collective of Canada (NRCC); Societe de gestion des droits des artistes-musiciens (SOGEDAM); Societe |
| du droit de reproduction des auteurs, compositeurs et editeurs au Canada (SODRAC); Society of Composers, Authors and |
| Music Publishers of Canada (SOCAN); (also known as the Canadian Private Copying Collective (CPCC)); Precision |
| Sound Corporation, Summit Media Ltd., Western Imperial Magnetics Inc; Evangelical Fellowship of Canada; Camrose Church of God; Grande Prairie Alliance Church; First Church |
| of the Nazarene; United Church of God and Messrs. Ken Dahl, |
| Al Schmalz and Greg Watrich.(also known as Independent Canadian Recording Media Coalition (ICRMC)); First |
| Evangelical Lutheran Church; Bluebird Events and Studio A-Mirador; Attorney General for British Columbia; Graham |
Newton; and West Klause
Respondents
REASONS FOR JUDGMENT
(Delivered from the Bench at Ottawa,
Ontario, on Wednesday, June 14, 2000)
LINDEN J.A.
[1] The issue in this case is whether this Court should interfere with a decision of the Copyright Board dated December 17, 1999 interpreting a definition provision of the Copyright Act R.S.C. 1985, c. C-42, which reads:
| 79. In this Part, "audio recording medium" means a recording medium, regardless of its material form onto which a sound recording may be reproduced and that is of a kind ordinarily used by individual consumers for that purpose, excluding any prescribed kind of recording medium; |
79. Les définitions qui suivent s"appliquent à la présente partie. "support audio" tout support audio habituellement utilisé par les consommateurs our reproduire des enregistrements sonores, à l"exception toutefois de ceux exclus par règlement. |
[2] In particular, the issue was whether certain CD"s were leviable at the manufacturers" and importers" level, which they would be if they were "of a kind ordinarily used by individual consumers for that purpose", i.e. reproducing a sound recording.
[3] The Board"s reasons on the matter, which in total occupied 69 pages and dealt with several other issues, were as follows:
| Although the word "ordinarily" is broad, context sensitive and "very fluid", dictionaries and case law greatly help in understanding its meaning. "Ordinary" is used to describe anything from that which is regular, normal or average, to what is merely recurring or consistent. Therefore, the ordinary character of an occurrence is not necessarily a function of quantity, but rather a matter of consistency. One can ordinarily spend Christmas with one"s family even though this only occurs once a year: the regularity of a person"s visit with kin makes it "ordinary". |
| Court decisions also tend to emphasize consistency rather than frequency. An ordinary activity need not be a person"s main activity, as long as it is on which is not rare or abnormal or minimal, that is, not trivial or insignificant. The use of a secondary residence by a family needs to be consistent, not frequent, in order for it to be ordinary. |
| Modern statutory interpretation generally gives to an expression the meaning that a reasonable individual would ascribe to it, taking into account the context, linguistic conventions and what we know of the world, including the purpose of the legislation where the expression is found and the policy considerations motivating its use. So the purpose of the regime is of primary importance in interpreting as fluid a notion as "ordinary". One of the purposes of the regime is to legalize private copying. Another is to adequately compensate eligible authors, performers and producers of musical works. This will not happen if the definition of "blank audio recording medium" is interpreted restrictively. Too restrictive an interpretation will strip the regime of any meaning" A broad interpretation of the definition helps to level the playing field for importers and manufacturers by ensuring that only those media that clearly are not used to make private copies are not subject to the levy. Consequently, ordinary use, as that expression is found in the definition of "audio recording medium", ought to be interpreted as including all non-negligible uses. |
| Therefore, a person who made two copies of sound recordings onto a type of medium in each of the last two years ordinarily uses that type of medium for private copying, even though that same person may well use many more such media for other purposes: a medium can have more than one ordinary use. |
| Furthermore, since the definition speaks of ordinary use by individual consumers, the analysis must focus on the person who uses the medium for her own enjoyment, to the exclusion of others. Thus, the fact that only five per cent of a given type of medium is sold to individual consumers does not mean that it does not qualify. In fact, all those media, including the 95 per cent sold to "non-consumers", will be subject to the levy as long as a non-marginal number of consumers use them for private copying in a fashion that is not marginal. |
| By contrast, media essentially reserved for corporate or professional uses will not qualify even if a few individuals use the technology to make private copies of music. The "personal consumer use" must involve more than a few eccentrics. |
[4] This Court must now decide whether to interfere with this decision. I am of the view that we should not.
[5] In our view, this issue is mainly a question of law, that is, the interpretation of legislation that the Board administers. Such a determination falls squarely within the jurisdiction of the Board. It is in its home territory. The issue is a polycentric one dealing with the interests of artists, manufacturers, importers, consumers who record sound, consumers who do not record sound and others. The purpose of Part VIII of the Act is mainly an economic one - that is, to fairly compensate artists and the other creative people for their work by establishing fair and equitable levies. These are matters within the expertise of the Board which has been given the authority to decide inter alia the manner of determining the levies, who pays, how much they pay and the terms and conditions of the payment. (See subsection 83(8).) The Board, therefore, should know the industry it is regulating better than the Court. Hence, applying the "functional and pragmatic" test of Pushpanathan v. Canada , [1998] 1 S.C.R. 982, and having looked at the factors outlined, the proper standard of review on this issue, even though there is no privative clause, is patent unreasonableness, as considerable curial deference is due to this Board on this question. (See for cases applying this standard to this Board in other technical matters, SOCAN v. C.A.B., [1999] F.C.J. No. 389 (F.C.A.); C.A.B. v. SOCAN, [1994] 58 C.P.R. (3d) 190 (F.C.A.); Réseau Premier Choix Inc. v. Canadian Cable Television Association, [1997] F.C.J. No. 1723 (F.C.A.).
[6] The key point is whether the Board had to decide the meaning of "ordinarily used" by looking at the products generally, as contended for by the applicant, or by considering the use by individual consumers of that product. In my view, it is the usage by individual consumers that must be ordinary, not the use of the product generally, because of the insertion of the words "by individual consumers", which have to be given some meaning. If these words were not there, the applicants" contention would have been more solidly grounded. The French version is consistent with this interpretation as there is also a reference to use by "consommateurs", who are generally considered to be individuals, not corporations or institutions.
[7] It must be recalled that the scheme devised by Parliament was to fairly compensate artists and others for copyright infringement by those who illegally copied their work. It was not an easy task to charge individuals a levy, so that a system was devised to place the levy on importers and manufacturers of products based on an estimate of the value of the copyright which was infringed by individuals who ordinarily copied music on those products. Such a scheme cannot be perfect; it is a rough estimate, involving possible overcharging of some and undercharging of others. The main goal is to be as fair and equitable as possible to both the artists and those who enjoy and profit from their work, and those upon whom the levy may be imposed but who do not copy the work.
[8] The applicants argued that the interpretation of the term "ordinarily" should be guided by dictionary definitions such as "usually" or "commonly" and by certain authorities from other contexts they cited (for example, Healy v. The Queen , [1979] C.T.C. 44; R. v. Johnny (1983), 149 D.L.R. (3d) 710 (B.C.C.A.); Grimard v. Berry [1991] S.J. No. 290.), which indicated it should be defined as "chiefly" or "mainly". Later, they suggested that a number approaching 50
percent of the products used in this way might be considered to be used ordinarily. In my view, these definitions and cases are not very helpful. Nor is the percentage approach, for that would be arbitrary. Moreover, it would mean that the artists would receive no compensation at all for the infringement of their copyrights until nearly one-half of the products are so used. This would hardly be consistent with the object of the legislation.
[9] In short, the applicants have not demonstrated that the Board"s approach was obviously or clearly wrong or that another approach would be more obvious.
[10] It should be recalled that the Board, after concluding that the products in question fell within the definition, reduced the levy by some 80 percent to reflect the fact that, according to the research, only a small proportion of the products were actually used to record music. Such a result seems more in harmony with the statutory scheme.
[11] I, therefore, cannot conclude that the Board"s decision was patently unreasonable.
[12] The applicants are, therefore, left with only a possible political remedy, pursuant to section 87, whereby they may seek exemption of the products in issue from any levy by regulation.
[13] The application should be dismissed with costs to the respondent fixed at $5,000 inclusive of all disbursements.
"A.M. Linden"
J.A.