Executive Summary: Key Legal and Evidentiary Issues

• The Federal Court of Appeal considered whether a Copyright Board interlocutory ruling could be challenged by judicial review before the underlying administrative process concluded.
   
• Three respondents moved to strike SOCAN's application, arguing the Phase I Ruling was not a reviewable decision.
   
• Judicial review at this early stage required the respondents to show the application was so clearly improper as to be bereft of any possibility of success.
   
• Administrative law principles generally require parties to exhaust the administrative process before seeking court intervention, absent exceptional circumstances.
   
• SOCAN argued the Board's reconsideration safeguard was inadequate because some Phase I conclusions addressed pure questions of law that evidence could not disturb.
   
• Costs became a contested issue, with respondents seeking $20,000 and SOCAN proposing $5,000 if the motion succeeded.
   

Facts of the case

The Society of Composers, Authors and Music Publishers of Canada (SOCAN) brought a proceeding before the Copyright Board seeking tariffs payable by users of musical works in online audiovisual and user-generated content services for 2014–2026. The Board split the proceeding into two phases and identified four preliminary issues for Phase I, including the applicability of CBC v SODRAC, the scope of certain statutory exceptions, the interpretation of paragraph 66.501(a) of the Copyright Act, and which rights are triggered by offline viewing copies. The Board's Phase I Notice included a safeguard allowing parties to ask the Board to reconsider a Phase I conclusion if Phase II evidence later threw it into doubt. On November 21, 2025, the Board issued its Phase I Ruling, expressly stating it did not constitute the Board's final determination on the proposed tariffs. SOCAN applied for judicial review of that ruling. Three respondents — Buena Vista International, Inc., Warner Bros. Entertainment Inc. and Netflix Inc. — moved to strike SOCAN's application, arguing it was premature, and sought lump sum costs of $20,000 or costs on a heightened basis. SOCAN opposed heightened costs and proposed $5,000 as more appropriate if the motion succeeded.

Policy and legislative provisions at issue

The case centred on provisions of the Copyright Act, R.S.C. 1985, c. C-42, including the statutory exceptions in sections 29.21, 29.24, 30.7, 30.71 and 31.1, and the interpretation of paragraph 66.501(a). The Board's broad procedural powers under section 66.7 of the Act, along with the Copyright Board Rules of Practice and Procedure, SOR/2023-24 (including sections 3(a), 4, 28–32 and 39), were also relevant, as they underpinned the Board's authority to bifurcate the proceeding, manage its case record, and vary its own orders and procedures.

Reasoning and analysis

Justice Monaghan, writing for the Court, applied the established test for striking a judicial review application: the respondents needed to show the application was so clearly improper as to be bereft of any possibility of success, a high threshold. No evidence is admissible on such a motion, and the facts in the notice of application are presumed true, though documents referenced in it may be considered. Addressing the doctrine of prematurity, the Court reiterated that parties must generally exhaust an administrative process before turning to the courts, absent exceptional circumstances, to avoid fragmenting proceedings and incurring unnecessary costs and delay. First, the Court found the Phase I Ruling was not amenable to judicial review because it did not affect legal rights, impose obligations, or cause prejudicial effects to SOCAN; the Board had not yet applied its Phase I legal interpretations, so their impact would only crystallize once a final tariff decision was made. The Court distinguished SOCAN's reliance on the earlier CAIP decision, noting that case involved a final order that disentitled SOCAN from collecting from an entire class of users, unlike the interlocutory ruling here. Second, even if reviewable, SOCAN had not exhausted its alternative remedies, since the Board's safeguard permitted reconsideration of Phase I conclusions if Phase II evidence threw them into doubt, and the Board remained master of its own procedure. Third, the Court found no exceptional circumstances existed, as the consequences of the Phase I Ruling were not so immediate and radical as to call into question the rule of law. Finally, the Court noted SOCAN could still raise its objections before the Board during Phase II, or, if unsuccessful, on judicial review of the Board's eventual final decision.

Ruling and overall outcome

The Court granted the respondents' motion to strike and dismissed SOCAN's application for judicial review as premature, without prejudice to SOCAN raising the same issues if it later seeks judicial review of the Board's final Phase II decision. On costs, the Court agreed the respondents — Buena Vista International, Inc., Warner Bros. Entertainment Inc. and Netflix Inc. — were entitled to an award, but rejected their request for $20,000 or heightened costs, instead accepting SOCAN's proposed figure and awarding a lump sum, all-inclusive costs award of $5,000 in the respondents' favour.