Canada court rules no royalties for music downloads

Canada's Supreme Court ruled Thursday that no royalties need to be paid to recording artists or song publishers when videogames or movie soundtracks are downloaded over the Internet.

Deciding on five landmark copyright cases, the court said that record labels and recording artists are not eligible for additional "communication" royalties for soundtracks when videogames or films are downloaded.

Reproduction royalties to the copyright owners are already paid upfront and the recording artists do not receive extra money when customers buy videogames or movies with soundtracks in stores.

A group representing musicians had sought to expand what qualified for the fees, arguing essentially that music downloads should be viewed in the same light as radio broadcasts, which do draw extra royalties.

"There is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet," the court said.

"The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user."

The ruling said that introducing royalties for downloads would be "imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user.

"To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies," it said.

However, the court did uphold fees for streamed music.

Similarly, movie theaters, broadcasters and cable companies should not be charged for the music that is part of a film or a television program that they are showing, the court ruled.

Online music stores such as Apple's iTunes also do not have to pay royalties for song previews, usually lasting only 30 seconds and deemed by the court to be "research," just as a shopper might try on clothes at a store before buying them.

Eric Baptiste, head of the Society of Composers, Authors and Music Publishers of Canada which represents 110,000 creators and publishers, said the copyright collective is "disappointed that the court chose not to uphold the rights of our members in all of its decisions."

Composers, lyricists, songwriters and publishers earn much of their living through royalties in the form of license fees paid by businesses that use music as part of their operations.

However, Baptiste added, "We believe that the right final decision has been made in the case of Internet streaming."

In another case, the Supreme Court justices found that works photocopied and distributed to students as part of class instruction was "fair dealing," or allowable for research or private study.

But it sent the matter back to the Copyright Board for reconsideration.

The legal battles pitted groups representing artists against a provincial education minister, Canada's public broadcaster, associations for moviemakers and software companies, and Canada's three biggest Internet providers, as well as Apple Canada.

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