Executive Summary: Key Legal and Evidentiary Issues

• Judicial review sought regarding the Copyright Board’s approval of Re:Sound Tariff 8 for non-interactive and semi-interactive streaming services.

• Legitimacy of excluding free trial periods from tariff calculations challenged by the applicant.

• Introduction of new legal arguments at the appellate stage and whether such arguments should be entertained.

• Reasonableness of the Board’s decision on the repertoire-use adjustment percentage.

• Discretion afforded to the Copyright Board in determining equitable remuneration under the Copyright Act.

• Award of costs to prevailing respondents following dismissal of the application.

Facts of the case

Re:Sound, a collective society representing music rights holders, applied for judicial review of a decision rendered by the Copyright Board of Canada. The Board had approved Re:Sound Tariff 8, which governs royalties for non-interactive and semi-interactive music streaming services for the years 2013 to 2018. In its decision, the Board excluded free trial periods of up to 31 days per year from the royalty calculations and set the repertoire-use adjustment at 73.7%, rather than the 77% requested by Re:Sound. The respondents in the case included Pandora Media, LLC, SiriusXM Canada Inc., Stingray Group Inc., and the Canadian Association of Broadcasters, all of whom are stakeholders in the digital music streaming industry.

Arguments and policy terms at issue

Re:Sound argued before the Federal Court of Appeal that the Board erred in excluding free trials from the tariff and that this exclusion was inconsistent with the right to “equitable remuneration” under section 19 of the Copyright Act. Notably, Re:Sound had not raised this specific argument before the Board but sought to introduce it for the first time on judicial review. The applicant also contended that the Board failed to adequately address its other arguments regarding the exclusion of free trials and unreasonably set the repertoire-use adjustment at a lower percentage, allegedly disregarding the evidence it presented.

Judicial review and legal reasoning

The Court emphasized that new arguments generally should not be raised for the first time on judicial review, as this deprives the administrative tribunal of the opportunity to address them. The Court found no compelling reason to exercise its discretion to remit the matter back to the Board for reconsideration on this new ground. On the substantive issues, the Court held that the Copyright Board had engaged with the evidence and arguments presented and that its decision was transparent, intelligible, and justified. The Board’s considerable discretion in determining equitable remuneration under the Copyright Act was reaffirmed, and the Court found no reviewable error in the Board’s approach to the repertoire-use adjustment or the exclusion of free trials.

Outcome and costs

The Federal Court of Appeal dismissed Re:Sound’s application for judicial review. The Court awarded costs in favor of Pandora Media, LLC and SiriusXM Canada Inc., the prevailing parties in the proceeding. However, the decision did not specify the exact amount of costs awarded, only that costs were granted to the successful respondents.