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Netflix Gets Rewind of Copyright Board Decision

In a late December decision, Netflix, Inc v SOCAN et al, 2015 FCA 289, the Federal Court of Appeal (“FCA”), perhaps binge-writing decisions prior to the holidays, granted Netflix’s application for judicial review of the Copyright Board’s decision in Tariff 22.D.1 – royalties for audiovisual webcasts for the years 2007 to 2013 (“Tariff 22.D.1 Decision”).

Netflix challenged the Board’s imposition of royalties for free trial subscriptions, claiming such use was fair dealing. The FCA disposed of the matter as one of procedural fairness, finding the Board erred by refusing to allow Netflix to present evidence on new provisions not included in the proposed tariff published in the Canada Gazette (para 51).

The reason, penned by Justice Nadon (Boivin JA and de Montigny JA concurring), mostly address procedural fairness head-on (paras 39-52). However, upon a second look, the FCA’s dicta is interesting in a few respects.

The FCA took issue with a Board decision dated May 24, 2012 (Re:Sound Tariff 5), where the Board stated that “prospective users who did not file a timely objection no longer have a right to air their views before the Board” (at para 49). However, the proceeding before the FCA was a judicial review of the Tariff 22.D.1 Decision, where the Board did not quote or paraphrase the portion of paragraph 10 from Re:Sound Tariff 5 that the FCA disagreed with. While the remainder of paragraph 49 does address the procedural fairness issue in the Tariff 22.D.1 Decision, one still queries why the FCA specifically noted its disagreement with a cited portion of a decision not on judicial review before it.

Another tidbit is hidden in the conclusion is the FCA’s remittance of the matter to a “differently constituted panel of the Board […]” (para 53). The previous Chair of the Copyright Board, the Honourable William J. Vancise, one of three panel members from the Tariff 22.D.1 Decision, has retired and the new Board Chair is Justice Robert A. Blair. However, the other two members of the Board from the Tariff 22.D.1 Decision, Vice-Chairs Claude Majeau and Nelson J. Landry, are the only other current members of the Copyright Board. Thus, absent newly appointed Chairperson Blair hearing Netflix’s case on free trials as a one-member panel, it will be interesting to see if and how the Board constitutes a different three-members panel for redetermination.

One thing is certain: Netflix will get a replay on Tariff 22.D.1.

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