Copyright Royalty Stacking
M. Geist, ed, The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law (Toronto: Irwin Law, 2013), p. 335-72.
38 Pages Posted: 28 Sep 2015
Date Written: 2013
My legal analysis of key Supreme Court decisions and amendments to the Copyright Act interpreted in light of the copyright quintet indicates that Canadian jurisprudential developments will probably reduce copyright royalty stacking. The potential implications discussed in this chapter are substantial. Changes in Canadian copyright law could reduce royalties flowing to or through certain collective management organizations in the foreseeable future. However, according to established economic theory, a more streamlined system of copyright licensing would increase certainty and reduce transaction costs, thereby growing the market for copyright-protected content. In the long run, this would lead to more commercial opportunities for entrepreneurial upstarts seeking to establish new businesses offering innovative products and services in creative industries, more choices for consumers in the legal market for creative content and, ultimately, more money for creators individually and in the aggregate. While only time will tell if legal economic theory will prove true in practice, aspects of the copyright quintet and statutory reforms that reduce royalty stacking set up a conceptually sound structural framework for continued economic development of Canadian cultural industries.
I begin this chapter by defining the concept of copyright royalty stacking, setting out core features and practical examples of this phenomenon. Next, I analyze aspects of the Supreme Court’s recent decisions that are directly or indirectly relevant to copyright royalty stacking, and synthesize implications in the historical context of Canadian copyright law and in light of very recent legislative reforms. Royalty stacking is related to several basic theoretical problems with property rights, including intellectual property rights, which become apparent in this chapter through the lens of law and economics. After explaining the theoretical implications of unstacking copyright royalties, I conclude the chapter by examining ongoing developments at the Copyright Board of Canada, the quasi-judicial tribunal addressing royalty stacking most immediately and directly.
Keywords: Copyright Law
JEL Classification: O34
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