Supreme Court Upholds Canadian Ringtone Royalty Payments

Canada's Supreme Court has refused to hear an appeal against a court case which requires ringtone sellers to make back-payments for ringtones sold between 2003-05. The Canadian Wireless Telecommunications Association (CWTA) wanted to appeal a Federal Court decision which had approved the royalty payments.

The CWTA and two mobile operators had tried to appeal on a technical issue - but the Supreme Court decided not to hear the appeal. As is usual in these situations, the court does not explain its reasoning.

The case is the Canadian Wireless Telecommunications Association, Bell Mobility and Telus Communications versus the Society of Composers, Authors and Music Publishers of Canada (SOCAN).

The three parties had sought a judicial review of that decision on the basis that the transmission of a ringtone to a cell phone was not a communication and was not a communication to the public and that, under the Copyright Act, a communication to the public needed to be heard by the recipient at the moment of transmission, otherwise, it was not a communication. The court, however, ruled that this definition of "communication" is simply too narrow.

As a result of the ruling, the royalty payable is 6 percent of the price paid by the subscriber for the ringtone, net of any network usage fees, subject to a minimum royalty of 6¢ each time a ringtone is supplied in 2004 or 2005.

When the original court ruling was granted in January, SOCAN said that the decision confirms its position that the transmission of a ringtone to subscribers by ringtone suppliers constitutes a "communication to the public by telecommunication" and allows SOCAN to seek licence fees from wireless carriers for the communication of musical works via ringtones in Canada.

Posted to the site on 19th September 2008