Spectre: Canadian Copyright and the Mandatory Tariff - Part I

Abstract

Canadian copyright collectives and the Copyright Board have in recent years advanced the theory that when the Board certifies collectives’ tariffs (or fixes the royalties in individual cases), those tariffs become mandatory on users. Users have no choice whether to deal with the collective; they must pay the specified royalties as long as they make a single unauthorized use of a work from the collective’s repertoire. Many users, for some strange reason, have also subscribed to this view, despite its extraordinary consequences.

This article, first in a series of two, shows that this spectre of a “mandatory tariff” lacks any basis in law. Established case law debunks it, standard principles of statutory interpretation contradict it and the legislative history discredits it. An approved tariff creates a compulsory licence that interested users can avail themselves of, if they wish to obtain a licence, but it does not force users to become licensees. Copyright collectives can recover unpaid royalties only from users who offered to pay them and later default on their payment.

Keywords: copyright, copyright collectives, monopoly, royalty stacking, antitrust