Transactions & Cases Detail



Transaction/Case Details

Supreme Court of Canada makes landmark decision in copyright of music downloads

DATE CLOSED

July 12, 2012

BUSINESS SECTOR

Technology

LEAD OFFICE

Toronto


OVERVIEW

This successful appeal on behalf of the Entertainment Software Association and the Entertainment Software Association of Canada challenged the right of the copyright society SOCAN to collect royalties on downloads containing music. The majority opinion has been described as a “landmark decision” establishing important general principles of technological neutrality for Canadian copyright law. It ensures that copies of video games purchased in a store or delivered by mail are not treated differently from those downloaded over the Internet or sent by email. The approach adopted on final appeal to the Supreme Court was thought to be a long shot because of prior obiter statements at the Supreme Court and the Federal Court of Appeal, but McCarthy Tétrault convinced the Court of the new appellate position through legislative history, policy arguments and the development of a parallel line of case law.

As a result of the decision, SOCAN was found to have no claim to royalties for the downloading of video games and will be required to refund any royalties that it has collected from video game sites since the tariff was first certified in 2007. The decision also resulted in the overturning of SOCAN’s entitlements to royalties for pure music downloads on sites such as iTunes.

The Entertainment Software Association is a coalition of video game publishers and distributors who enable their customers to download copies of video games over the internet.

McCarthy Tétrault LLP represented Entertainment Software Association, the appellant, with a team led by Barry Sookman that also included Steven Mason and Daniel Glover.

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