Canadian court says thirty-second clips royalty free

By | Published on Tuesday 18 May 2010

The Canadian federal appeals court has ruled that no royalty is due on thirty-second clips on iTunes-style digital music services, where the clips act as a preview ahead of possible purchase.

The royalty status of such preview clips varies from country to country, but according to the Canadian courts, in Canada no royalty is due at all. The appeal court was upholding a ruling made by the Copyright Board Of Canada last year. That original ruling was appealed by the country’s songwriter collecting society SOCAN. Interestingly, the Copyright Board said that no royalty is due on preview clips because such things are covered by the ‘fair dealing’ provisions in Canadian copyright law. The concept of ‘fair dealing’ is found in both the Canadian and English copyright systems, and is a narrower version of the more commonly discussed ‘fair use’ concept that exists in the US.

A key fair dealing provision allows for the use of copyright material without licence in certain research circumstances, and it’s on these grounds that the Board ruled that thirty second clips required no royalty, on the basis thy were used by consumers to research what music they might want to buy. SOCAN argued that research-based fair dealing only applied to proper academic or scientific research which, to be fair, is the traditional interpretation of that provision.

But the Board said research did include circumstances when a “consumer is searching for an object of copyright that he or she desires and is attempting to locate and wishes to ensure its authenticity and quality before obtaining it”.

Canadian copyright rulings can be persuasive in English law, so it will be interesting to see whether any download stores in this country might try to circumvent their royalty obligations on thirty-second clips by applying the ‘research fair-dealing’ argument.