The Supreme Court of Canada affirmed the decision made by the Federal Court of Appeal that no royalties be paid when musical previews are listened by potential buyers. (Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36) Typically, musical previews consist of 30 to 90 seconds of a musical track providing a sample of what the potential buyers would be purchasing. Earlier, the Copyright Board decided that SOCAN was entitled to royalties when musical works are downloaded but not for previews. This decision was affirmed by the Federal Court of Appeal.

In upholding the Board’s decision, the Supreme Court considered whether or not previews constitute “fair dealing” under Section 29 of the Copyright Act, R.S.C. 1985, c. C-42 (“Act”). If the provision of previews were determined to be “fair dealing” for the purpose of the Act, providing previews without compensation would not infringe copyright.

Speaking for a unanimous Court, Justice Abella quoted an earlier Supreme Court decision in CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339 (“CCH”), and reaffirmed the two-step test to determine fair dealing:

1. Whether the dealing is for the purpose of either “research” or “private study”; and
2. Whether the dealing is “fair.”

On the first issue, Justice Abella rejected SOCAN’s argument that the scope of “research” should be narrowed and agreed to the Copyright Board’s earlier decision that the previews serve the purpose of “conducting research to identity which music to purchase.”

On the second issue, Justice Abella considered six fairness factors established in the CCH decision: the purpose, character, and amount of the dealing; the existence of any alternatives to the dealing; the nature of the work; and the effect of the dealing on the work. After considering each factor, she concluded that all of the factors confirm the Copyright Board’s decision and that such decision was consistent with the current law that was established in CCH and that providing samples to potential purchasers without charging them fell in the category of “fair dealings” under s. 29 of the Act.

This decision by the Supreme Court will allow the continued development of innovative preview and sampling techniques that will further enhance e-commerce related to copyright content.