As ably predicted by Howard Knopf yesterday, SOCAN has filed an application for leave to appeal in the Supreme Court of Canada from the decision of the Federal Court (SOCAN v Bell Canada, 2010 FCA 123) in its tariff dispute with online music service providers.

Earlier this year, the FCA upheld a decision of the Copyright Board holding that the provision of 30 second previews of songs which could be purchased by online customers constituted research within the meaning of section 29 and that the dealing was fair.

It is important to note that SOCAN is relying on the recent decision of the FCA on the Access Copyright K-12 Tariff (Province of Alberta, et. al., v Access Copyright, 2010 FCA 198) where they making photocopies of textbooks for use in a classroom for educational purposes was not fair dealing.

An initial review of the application shows that SOCAN is misconstruing the meaning of the CCH decision in two important respects. First, they try to distinguish CCH because in the current music preview case there is an available licensing scheme. They argue:

In CCH, the fair dealing defence was necessary to ensure that the dissemination of important works was not unduly restricted. Here, the compulsory licensing scheme created by the Act achieves that same purpose. (Application, para. 56)

Second, in citing two US decisions that reached the contrary conclusion on previews, SOCAN seems to be making the argument that the FCA erred in not following these decisions as binding:

The Court of Appeal here has taken an approach to American jurisprudence that diverges from that taken by this Court in Instead of drawing on the American law of fair use to inform the Canadian law of fair dealing, the Court of Appeal has arrived at a result that is directly opposite to the result arrived at by the United States District Court in a case with virtually identical facts. (Application, para. 69)

Again, SOCAN misconstrues the meaning of CCH. Notwithstanding the similarly between the six factor analysis it adopted and the four factor statutory fair use analysis, CCH does not stand for the proposition that US case law is necessarily binding. It might be, but SOCAN is overstating the necessity of doing so.

These two flaws are closely related. The underlying meaning of CCH is that fair dealing is not simply a cure for market failure that may be tossed aside if a licensing scheme is becomes available. Quite the contrary. Not only did the CCH court frame its analysis in terms of users rights which are to be considered an integral part of the act, they specifically considered and rejected the argument that the availability of a license can be used to defeat a fair dealing claim.

The availability of a licence is not relevant to deciding whether a dealing has been fair.  As discussed, fair dealing is an integral part of the scheme of copyright law in Canada.  Any act falling within the fair dealing exception will not infringe copyright.  If a copyright owner were allowed to license people to use its work and then point to a person’s decision not to obtain a licence as proof that his or her dealings were not fair, this would extend the scope of the owner’s monopoly over the use of his or her work in a manner that would not be consistent with the Copyright Act’s balance between owner’s rights and user’s interests” (CCH, paragraph 70).

Pointing to the recent FCA decision on the Access Copyright K-12 Tariff, Knopf argues that there is now a “significant inconsistency here between these two decisions within less than three months of each other of different panels of the FCA. ” He adds that “when different panels of the FCA come to apparently inconsistent conclusions within a few weeks of each other on an important issue arising from two cases from the Copyright Board, the situation may become much more interesting and even compelling to the SCC.”

It remains to be seen, however, whether CMEC or any of the school boards will be seeking leave to appeal on the K-12 Tariff decision.