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Canada Supreme Court ends royalties for music downloads

TORONTO (Reuters) - Delivering a blow to artists and a benefit to telecoms companies, Canada's Supreme Court ruled on Thursday that no performance royalties need be paid to songwriters and song publishers for downloaded music.
/ Source: Reuters

TORONTO (Reuters) - Delivering a blow to artists and a benefit to telecoms companies, Canada's Supreme Court ruled on Thursday that no performance royalties need be paid to songwriters and song publishers for downloaded music.

The court also said that previews of songs in online stores such as Apple Inc's iTunes are not an infringement of copyright laws and do not merit the payment of royalties, but it kept the royalties on streaming music from the Internet.

The rulings are "definitely good for Internet service providers and bad for songwriters and owners of copyright," said David Donahue, a copyright lawyer at Fross Zelnick Lehrman & Zissu in New York, who was not involved in the case.

The court's distinction between downloads and streaming is similar to the difference between buying a compact disc -- in which case the recording company collects -- and listening to a song on the radio, where the station typically pays the artist via the music publisher or a copyright collective.

The ruling is a blow for the creator of the music and the organizations that disburse royalties on their behalf.

"It likely means less income for composers, and the possibility that follows from that is that composers will have less incentive to write music," said David Leichtman, a lawyer at Robins, Kaplin, Miller & Ciresi, who represented a U.S. composer group in an earlier case against U.S. mobile phone companies regarding ringtones.

If the ruling on previews had gone the other way, Internet providers such as Rogers Communications Inc and Telus Corp would have had to choose between charging their customers to browse their online catalogs before purchasing, absorbing the costs themselves, or blocking previews.

The judgments were two of five related to copyright matters handed down by the Supreme Court on Thursday. Experts say it is rare for the country's highest court to rule on so many cases at one time.

The court also ruled in favor of teachers who photocopy excerpts from textbooks for classroom instruction, a blow to publishers of educational material. It also said that performance royalties are not collectable on music that has been licensed for use in films and television programs or online video games.

The cases are: Rogers Communications Inc et al v Society of Composers, Authors and Music Publishers of Canada, docket number 33922; Society of Composers, Authors and Music Publishers of Canada et al v Bell Canada Inc et al, docket number 33800; Province of Alberta et al v Canadian Copyright Licensing Agency, docket number 33888; Re:Sound v Motion Picture Theatre Associations of Canada et al, docket number 34210; and Entertainmen Software Association et al v Society of Composers, Authors and Music Publishers of Canada et al, docket number 33921.

(Editing by Peter Galloway)