Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada's Federal Court of Appeal Allows Judicial Review to Reverse Tariff on Audio Recorders

On January 9, 2008, the Federal Court of Appeal heard the judicial review application in Apple Canada Inc., Dell Inc., Microsoft Corporation (Microsoft Canada Co.), Sandisk Corporation and Sony of Canada v. Canadian Private Collective (CCPC) and Retail Council of Canada (Federal Court of Appeal File Nos. A-369-07 and A-370-07). On January 10, 2008, the Federal Court of Appeal allowed the judicial review application.  To read a copy of the decision, please click on Apple Canada Inc., Dell Inc., Microsoft Corporation (Microsoft Canada Co.), Sandisk Corporation and Sony of Canada v. Canadian Private Collective (CCPC) and Retail Council of Canada (Federal Court of Appeal File Nos. A-369-07 and A-370-07).

The applicants objected to a July 19, 2007 determination made by the Canadian Copyright Board to impose a tariff of digital audio records (e.g., iPods, cellular phones, computers, thumb drives, disks, etc.).  To read a copy of the offending decision of the Canadian Copyright Board, please click on Private Copying 2008-2009.  Simply put, the Copyright Board would permit tariffs to be imposed on sales of each new digital audio recording device in an amount between $5 - $75 depending on the number of songs it could hold.  The tariffs were designed to compensate the recording industry for the illegal copying of music.  The opponents to the tariffs argued that the Copyright Board did not have authority to levy the tariffs and that the tariffs implied that all consumers who purchase a digital audio recorders illegally copy music.  The Retail Council of Canada has fought the tariffs since their inception in 1997 because they impose a tax on "what a consumer could possibly use it for."  Not to mention, in a North American environment, a substantial levy imposed on digital audio recorders in Canada where similar tariffs are not imposed in the United States would create an uneven playing field for Canadian retailers of like goods.

The Federal Court of Appeal determined that "the Copyright Board has no legal authority to certify a tariff on digital audio records or on memory permanently embedded in digital audio records."  As a result, the Federal Court of Appeal determined that the Copyright Board erred in law when it concluded it had the legal authority to certify the tariff that the CPCC had proposed for 2008-2009.

As an interesting notation, the Canadian Recording Industry Association (including EMI Music Canada, SONY MG MUSIC (CANADA) INC., Universal Music Canada Inc., and Warner Music Canada Co. applied to join the judicial review as interveners and were granted intervener status on October 26, 2007.  The Federal Court of Appeal limited the CRIA's role in the proceeding to addressing the three major issues before the Court in the judicial review application.  The three major issues were:

1) Is it not settled law that a digital audio recorder is not a medium as this word is used in the definition of "audio recording medium" in section 79 of the Copyright Act;

2) Examining for the first time the issue of whether a digital audio recorder is a "recording medium" cannot threaten the integrity of the process before the Board or the finality of its decisions, be unfair or oppressive or offend anyone's sense of fair play and decency [the res judicata issue];

3) A digital audio recorder is an "audio recording medium" if it is later established that it is ordinarily used by individual consumers to reproduce sound recordings.

To read a copy of the decision of the Federal court of Appeal granting the Canadian Recording Industry Association intervener status, please click on Apple Canada Inc., Dell Inc., Microsoft Corporation (Microsoft Canada Co.), Sandisk Corporation and Sony of Canada v. Canadian Private Collective (CCPC) and Retail Council of Canada (Federal Court of Appeal File Nos. A-369-07 and A-370-07) (Intervener).

 

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