Curiouser and Curiouser: Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57

Another copyright decision from the Supreme Court of Canada, another discussion of the standard of review — the “prodigal child” of Canadian law (at para. 185)* — and, again, sharp disagreement between Rothstein and Abella JJ: Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57.

At issue was the application of the principle of technological neutrality recognized by the Court in the 2012 copyright pentalogy to broadcast-incidental copies of copyrighted works, that is, copies made internally by bodies such as the CBC in order to facilitate the production of their programming. However, this litigation began with a decision by the Copyright Board before the copyright pentalogy elevated the principle of technological neutrality to a central place in Canadian copyright law. Indeed, the Federal Court of Appeal had expressly asked for further guidance from the Court on the definition and application of the principle. This awkward procedural posture created some analytical difficulties.

Two separate decisions ended up before the Court. The first was the Copyright Board’s decision that the CBC needed to purchase an additional licence to produce broadcast-incidental copies and the second was the imposition of an interim tariff to take effect after the expiry of the initial licence period.

Rothstein J. performed a standard of review analysis for five separate issues, applying a standard of correctness to one of them and a standard of reasonableness to the rest. The question whether broadcast-incidental copies form part of the “reproduction right” protected by s. 3(1)(d) of the Copyright Act was one of law that could arise before the Copyright Board or at first instance in enforcement proceedings and so, following Rogers, was to be resolved on a standard of correctness. This was predictable enough. Most of the other issues related to exercises of discretion or mixed questions of fact and law. To carefully pick them apart and treat them separately strikes me as rather odd; I certainly cannot recall an equivalent.

In dissent, Abella J. said “this takes judicial review Through the Looking Glass” (at para. 187 — though we may be there already…). In her separate dissent, Karakatsanis J. expressed the concern that Rothstein J.’s analysis “unnecessarily complicates an already overwrought area of the law” (at para. 194). For Abella J., this decision represents a “new and regressive” step (at para. 188) that effects a “significant and inexplicable change” in the law of judicial review:

This latest movement in Rothstein J.’s shifting tectonic reviewing plates — extricating the various aspects of a tribunal’s decision for their own individual standard of review analysis — creates even more confusion in an area of jurisprudence already unduly burdened by too many exceptions in the brief years since this Court decided Dunsmuir. There are always many parts of a tribunal’s decision. Requiring courts to separately assess the standard of review for each of these parts and then to decide how many of those parts must be found to be unreasonable or incorrect in order to outweigh those parts which are found to be reasonable or correct may lead, with respect, to absurd results. Reviewing courts will be left to wonder just how many unreasonable or incorrect components of a decision it takes to warrant judicial intervention (at para. 190).

Rothstein’s reply — that this was all settled by the Saguenay decision (at para. 41) — is unconvincing, because neither there nor here are we told why a particular decision should be segmented (beyond the banal observation that one of its elements is general or legal in nature) or how a reviewing court should perform a segmentation operation.

The creation of further confusion on threshold standard of review issues is, unfortunately, not offset by any additional clarity on the application of the reasonableness standard. Having concluded that broadcast-incidental copies do engage the reproduction right, Rothstein J. had to determine whether the Copyright Board’s application of the law was reasonable. But, as noted above, the Copyright Board did not have the benefit of the Court’s 2012 discussion of the principle of technological neutrality. Indeed, Rothstein J. confirmed that the goal of his analysis was to “provide…guidance” on the definition and application of this principle (at para. 69).

However, a reasonableness analysis on judicial review should start with the administrative decision-maker’s decision, not with the reviewing court’s independent analysis of the statutory provisions. Here, the awkward procedural posture made it impossible for Rothstein J. to simultaneously perform a reasonableness analysis and give comprehensive guidance on the principle of technological neutrality. He simply concluded that the Copyright Board’s decision was unreasonable because it failed to take into account the relevant factor of technological neutrality (see paras. 79. 92 and 96). Unfortunately, Rothstein J. did not attempt to place this result in the broader doctrinal context of the Court’s recent administrative law jurisprudence and so it is likely that it will be confined to its special facts.

On one issue — whether the Copyright Board can compel a user to respect a licence to which it has not consented — there was a revealing analytical slip. Rothstein J. rejected the suggestion that correctness review applied to the question whether the Copyright Board could impose a licence against the wishes of a party: this was not a ‘true’ jurisdictional question (a category that survives again, at para. 39) but rather an interpretation of the Copyright Board’s home statute (at para. 40). However, in concluding that “the burdens of a licence should not be imposed on a user who does not consent to be bound by its terms” (at para. 107), Rothstein J. made no mention of the unreasonableness of the Copyright Board’s contrary conclusion. Without even the fig leaf of “unreasonableness”, his analysis is revealed as essentially de novo, as if it were a jurisdictional question after all.

Interestingly, (see also Michael Geist) Rothstein J.’s analysis turns the Copyright Board into something of a technological traffic cop. It must consider the principle of technological neutrality when calculating the value of licences:

In an unregulated market, a commercial user will always consider whether it makes economic sense to pay the license fee demanded by the copyright holder. A license fee that precludes the user from recovering what it considers an adequate return on its investment in its technology will result in there being no license and no royalty. In the regulated context, it is the Board that must take account of such considerations. They are far from irrelevant (at para. 76).

The Copyright Board, then, is not simply an adjudicative body setting objective rates based on submissions from interested parties but has to play a proactive policy-development role in analyzing the effects of new technology on the creative process.

* If standard of review is the “prodigal child”, I suppose patent unreasonableness was the fatted calf, but that some members of the Court might not have been fully satisfied by that feast!

This content has been updated on November 26, 2015 at 21:42.