Appeal court overturns double royalties ruling in a win for Apple

OTTAWA – The Federal Court of Appeal has ruled that songwriters are entitled to royalties not when music is first posted online, but only after it has been downloaded.

The decision overturns an administrative body ruling from 2017 that found composers and publishers can collect two sets of royalties: one when a song is made available on a music service such as iTunes or Spotify, and a second when the work is downloaded or streamed.

Justice David Stratas wrote that the Copyright Board of Canada "skewed its analysis in favour of one particular result" and relied on "leaps of reasoning" that clash with precedent and federal legislation.

The decision hinged in part on the definition of "communication" of a musical work, which the Supreme Court of Canada has ruled refers to streaming or downloading, but not to the act of posting it for purchase online.

The ruling comes as the music industry continues to reel from the COVID-19 crisis, which has led to cancelled concerts around the globe and made royalty revenue all the more important.

The judicial tribunal's case was between Apple Inc. and the Society of Composers, Authors and Music Publishers of Canada (SOCAN) along with more than 30 other respondents.

SOCAN chief legal officer Andrea Kokonis said the group was "disappointed" with the ruling, "particularly…at a time when many music creators and publishers are struggling as much of their livelihood has been halted due to the coronavirus lockdown."

Kokonis said the decision puts Canada "far behind other jurisdictions in terms of compensating copyright owners for the use of their music."

Apple Canada did not respond immediately to requests for comment.

This report by The Canadian Press was first published June 8, 2020.