The Supreme Court of Canada heard arguments yesterday in the copyright case of CBC v. SODRAC. While the case was ultimately about whether CBC should be required to pay royalties for incidental copies necessary to use new broadcast technologies, at stake was something far bigger: the future of technological neutrality under Canadian copyright law.

CBC argued that technological neutrality means that it should not pay for incidental copies since it already pays for the use of music in broadcasts. The incidental copies – copies which are made to create the final broadcast version of a program (including copies from the master to a content management system or other internal copies to facilitate the broadcast) – do not generate revenue and are simply made to facilitate use of the music that is paid for through a licence. SODRAC, a Quebec-based copyright collective, countered that CBC had always paid for these copies and that the CBC argument was the reverse of technological neutrality, since it wanted to avoid payment in the digital world for copies that were being paid for with earlier, analog technologies.

The case emerged as an important one when the question of the meaning of technological neutrality took centre stage. That elicited interveners such as Music Canada, which argued for a narrow interpretation of the principle, claiming that it was just an “interpretative metaphor” (similar arguments about users’ rights being no more than a metaphor were rejected by the Supreme Court in 2012). The danger in the case from a technological neutrality perspective is that the Supreme Court could roll back its finding that technological neutrality is a foundational principle within the law. Moreover, if the court were to rule that all copies – no matter how incidental – are copies for the purposes of the Copyright Act, there would be the very real possibility of payment demands for the myriad of copies that occur through modern technologies.

For those concerned with this outcome, the hearing did not start well, as the Supreme Court was clearly skeptical of the CBC’s arguments, leaving some judges confused and others openly critical (I attended the hearing). The first intervener, Howard Knopf, raised important arguments on behalf of the Centre for Intellectual Property Policy and Professor Ariel Katz on whether Copyright Board tariffs can be mandatory on users. Those arguments felt like a prelude to a future battle with Access Copyright and the court may lay the groundwork for that potential case with this decision.

Technological neutrality was left to my colleague, Jeremy deBeer, appearing on behalf of CIPPIC, which also intervened in the case. CIPPIC’s argument provided the court with another option: establish a test grounded in existing law on when a copy should be treated as a copy for copyright law purposes. CIPPIC’s fear:

In a digital environment, treating literally every copy as a reproduction is simply not realistic. Take basic web browsing for example, which involves countless ephemeral reproductions not only by intermediaries but also by end users. Reading an e-book is impossible without ephemeral copying. Interpreting the reproduction right literally would, in practical terms, give copyright owners unprecedented control over other people’s ability to even access digital content – in technological terms, accessing digital content cannot be done without prolific ephemeral copying.

CIPPIC’s brief notes that the Supreme Court has already ruled that not all communications fall within the Copyright Act’s communication right and that the same should be true for reproductions. Simply put, not all copies have value and deserve compensation. The challenge is to develop a test that identifies where the value lies. During the argument, deBeer invited the court to establish a clear test for when a copy qualifies as a reproduction by citing three criteria: there must be a reproduction (as Theberge held), the copy must be durable (drawing from ESA), and it must be material (taken from Section 3 of the Copyright Act).

The proposed test clearly attracted the court’s attention because it opened the door to establishing a technologically neutral approach to reproduction. In fact, SODRAC indicated during argument that it agreed with deBeer’s proposal (contending that the copies in this case qualified as reproductions under the test). Moreover, Casey Chisick, representing several music publisher groups, also noted that “the test was difficult to quibble with.” He proceeded to agree that the requirement of multiplication is something that the Supreme Court court made very clear in Theberge, that durability is not a quality that necessarily anybody takes issue with (and that the government enacted some reforms in durability in 2012), and that on materiality it is impossible to take issue with the proposition that in order to be a reproduction under the Act a copy must be in a material form. He did note, however, that materiality was a subjective issue that might be best addressed in a different case.

As for a narrow interpretation of technological neutrality, the court did not seem interested in backtracking on its earlier decisions. In fact, when Music Canada’s counsel Barry Sookman raised the issue, Justice Marshall Rothstein, who wrote the dissent in the ESA technological neutrality decision, noted that “I thought we lost that argument in ESA.”

While it is risky to read too much into oral arguments, given the fact that the government referenced technological neutrality in the 2012 copyright law amendments (which the court also mentioned), the case may ultimately serve to reinforce the importance of the technological neutrality principle and confirm that in the digital world, not every copy is a copy for the purposes of the Copyright Act.