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T.24 - SOCAN Response to Appn ToVary, September 10, 2012 Ltr to Gilles McDougall-OTT_LAW-3299187-V5

T.24 - SOCAN Response to Appn ToVary, September 10, 2012 Ltr to Gilles McDougall-OTT_LAW-3299187-V5

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Published by: hknopf on Nov 15, 2012
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D. Lynne Watt
Direct 613-786-8695Direct Fax 613-788-3509lynne.watt@gowlings.comFile No. 03370632
September 10, 2012
V
IA
E-M
AIL
Mr. Gilles McDougallSecretary GeneralCopyright Board of Canada56 Sparks StreetSuite 800Ottawa, ON K1A 0C9Dear Mr. McDougall:
Re:SOCAN Tariff 24 (2003-2005 and 2006-2013) Ringtones and Ringbacks
 Application to Vary 
filed by Bell Mobility et al.
This constitutes SOCAN’s response to the submissions filed by the Applicants on August 1, 2012,with supplementary submissions filed on August 24, 2012, in support of their application to vary theBoard’s decisions of August18, 2006 and June 29, 2012, certifying SOCAN Tariff 24 (2003-2005)and Tariff 24 (2006-2013), respectively.While styled as an “application to vary”, the application is, in fact, an application to rescind andrevoke the two certified tariffs, on the basis of the Supreme Court of Canada’s decisions in
Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada
, 2012 SCC 34 (the “
ESA
Decision”) and
Rogers Communications Inc. et al. v. SOCAN 
,2012 SCC 35 (the “
Rogers
Decision”). In addition, the Applicants have unilaterally ceased payinglicence fees under Tariff 24 (a fact that is not mentioned in their Application) and are, in effect,seeking a declaration from the Board in order to insulate them from the risk of having to paystatutory damages.SOCAN submits that the Board is the best forum to deal with the matter tabled by the Applicants,that the Board should entertain the application but should dismiss it for the reasons set out below.
Summary of submissions1.
SOCAN submits that the
ESA
Decision can have no retroactive effect on Tariff 24 for the period2003 to 2005, i.e. the tariff that was confirmed to be valid by the Federal Court of Appeal (“FCA”) in2008 (with leave to appeal to the Supreme Court of Canadadenied). The Applicants are precluded,because of the doctrine of 
res judicata
, from applying to the Court to overturn the Board’s decisionof August 18, 2006 on Tariff 24 (2003-2005). SOCAN submits that they should not be permitted tomake a collateralattack on that same decision under the guise of “material change”. Public policyrationales underlying the doctrine of 
res judicata
, such as certainty and finality of judgments, should
 
Page 2
preclude any party from attempting to re-litigate “spent” decisions (i.e. decisions that are “out of thesystem”) when the state of the law changes, whether by legislative amendment or by a judicialdecision. To rule otherwise would have untenable consequences as it would make all prior decisions of a Tribunal (or a court)subject to attack whenever there is a change in the law.There are several important differences between the Supreme Court’s decisions in
ESA
and
Rogers
which invalidated Tariff 22 in respect of downloads of videogames and musical works for the period1996-2006 and the Applicants’ attempt to retroactively overturn a six year old decision of the Board.Tariff 22 for the years 1996-2006 was directly in issue before the Supreme Court in
ESA
and
Rogers
. By contrast, the Board’s decision of August 18, 2006 on Tariff 24 (2003-2005) has alreadybeen reviewed by the FCA and upheld, with leave denied by the SCC. Tariff 24 (2003-2005) cannotsubsequently be attacked.For the same reason, the Board’s decision of June 29, 2012, certifying SOCAN Tariff 24 (2006-2013), is immune from attack. The Applicants had the statutory right to seek judicial review of theBoard’s decision but did not do so within the time permitted under the
Federal Courts Act 
. Thatdecision is therefore immutable.In the alternative, if the release of a Supreme Court of Canada decision or an amendment to the
Copyright Act 
could amount to a material change, such a change should only take effect from thedate of the material change –in this case, July 12, 2012.
2.
SOCAN submits that the
ESA
and
Rogers
Decisions in respect of Tariff 22 do not amount to amaterial change in respect of the Tariff 24 decisions of the Board. The factual bases upon which the
ESA
Decision was made in respect of the download of videogames, and subsequently applied in
Rogers
in respect of the downloads of full track musical works, do not apply equally to ringtonesand ringbacks.In the alternative, there is not sufficient evidence to conclude definitively that this is the case,particularly in the case of ringbacks which were not even the subject of the Board’s 2003-2005decision and in respect of which no evidence was filed. The Board should be extremely cautious,when asked to apply a decision from one context to another, to ensure that the facts are identicalandto ensure that it has sufficient evidence before it to make that decision.It is open to the Applicants, the next time there is a Tariff 24 hearing, to lead evidence as to why
ESA
should be applied to ringtones. SOCAN would have the opportunity to ask interrogatories, tofile evidence on the issue and to challenge the evidence filed by the Objectors.
3.
With respect to the Board’s June 29, 2012 decision on Tariff 24 (2006-2013), that decisioncertified a tariff that was proposed by SOCAN andthe Applicants (as signatories to the agreementthe parties had signed). It was open to the parties to incorporate a “material change” provision butthey chose not to do so.
4.
Finally, if the Board were to conclude that the
ESA
and
Rogers
Decisions do amount to amaterial change sufficient to call into question their decisions in respect of Tariff 24, SOCANsubmits that the Board should exercise its discretion not to interfere because of the imminentcoming into force of Bill C-11 which will restore SOCAN’s rightto collect royalties for downloads withthe introduction of the making available right (“MAR”).
 
Page 3
Background
 A tariff for ringtones was first approved by the Copyright Board in 2006 for the years 2003-2005.That decision was the subject of judicial review in the FCA, where the users (many of whom are thesame companies as the Applicants in this matter) took the position, among others, that the Internetdelivery of a ringtone did not constitute a “communication” within the meaning of section 3(1)(f) of the
Copyright Act 
. The FCA dismissed the application (“
CWTA
”) and, subsequently, the SupremeCourt of Canada dismissed the users’ application for leave to appeal.In June 2010, SOCAN and the Tariff 24 Objectors reached an agreement on the royalties to be paidfor ringtones (and ringbacks) for the period 2006 to 2013, and asked the Board to approve the tariff in accordance with that agreement. The Board certified the tariff, as requested by the parties, onJune 29, 2012.Shortly thereafter, the
ESA
Decision was issued on July 12, 2012. The majority in
ESA
referred tothe
CWTA
decision and stated (incorrectly in our submission) that
CWTA
had not examined thelegislative history behind the term “communicate” or the connection between communication andperformance.
1
While the majority decided that the download of videogames and full-length musicalworks were not “communications”, the majority did not expressly overturn
CWTA
.
CWTA
is subject to the doctrine of 
res judicata
The doctrine of 
res judicata
is a fundamental doctrine of the justice system.
2
The SCC has definedthe doctrine as “something that has clearly been decided” and “has passed into a matter adjudged”.
3
Therefore, a final judgment concludes the issues between parties.
4
 The effect of the doctrine is that when any possibility to appeal a decision has lapsed, that decisionis final as between the parties, on that particular set of facts. Unless retroactive legislation isadopted, the parties have no recourse to substitute a decision even where future cases change theinterpretation of a statute, or even if the statute itself is amended, repealed or struck because it isunconstitutional.
Res judicata
is grounded on several principles and policy rationales. Public policy dictates that it isin the interest of the public that an end be put to litigation. There is a social necessity requiring thefinality and validity of judgments, on the basis that adjudicated issues are received as “the truth”.
5
Res judicata
is also based on the individual rightthat no one should be twice vexed by the samecause.
1
The fact that the FCA in
CWTA
did not expressly refer to the legislative history of s.3(1)(f) in its written reasons does notmeanthat it did not consider it. Both the appellants CWTA, Bell and TELUS, and the respondent SOCAN provideddetailed argument in their written facta about the legislative history of the provision and made submissions in oralargument on the point.
2
R. v. Van Rassel 
, [1990] 1 S.C.R. 225 at 238.
3
R. v. Riddle
(1979), 48 C.C.C. (2d) 365 (S.C.C.). at 369.
4
Donald J. Lange,
The Doctrine of Res Judicata in Canada
, 3
rd
ed. (Markham: LexisNexis, 2010) at p. 4-5;
Clark v.Phinney 
(1896), 25 S.C.R. 633 at 642-644.
5
Toronto (City) v. Canadian Union of Public Employees, Local 
79, [2003] S.C.J. No. 64 at para. 55;
Roberge v. Bolduc 
,[1991] 1 S.C.R. 374 at 402; Minott
v. O’Shanter Development Co.
, (1999), 42 O.R. (3d) 321 (C.A.) at 329;
Children’s Aid Society of the Niagara Region v. D.P.
, [2002] O.J. No. 4015 (S.C.J.). at para. 12.

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