CRIA Loses Appeal

CRIA may have suffered from another blow recently. The CSI case involved mandatory DRM (Digital Rights Management) on all music stores wishing to sell music.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

In a nutshell, if one were to start up an online music store in Canada, then that person has to put DRM on all of its sold music – and it wouldn’t matter what music was being sold. The problem is that CRIA didn’t want to be known as the collective that wanted a mandatory online music tariff.

According to the court document, “Following CRIA’s decision that it would no longer represent certain of its members (“the B Class members”) before the Board in this proceeding, the Board ordered CRIA to send a notice to its members saying that it had been instructed by the Board to advise them that it would not be representing the B Class members in the proceeding before the Board and that this was CRIA’s decision, not the Board’s.”

Who are these “B class” members? Perhaps the most well known examples were the 6 major Canadian labels that left. In essence, the “A class” would be the big four multinational record labels. The 6 labels that left in April were Nettwerk Records, Aquarius Records, the Children’s Group, Linus Entertainment, Anthem Records and True North Records. For a better understanding of how big these labels were, Nettwerk housed major acts like Billy Talent, Sum 41, Avril Lavign, Broken Social Scene, and Barenaked Ladies. These labels left on the basis that CRIA is not representing their interests, but merely representing the interests of the multi-national labels.

Going back to the CSI issue, CRIA argued on three points. “First, it says that the Board made the order in breach of the duty of fairness because the Board issued it without giving CRIA prior notice and an opportunity to make submissions […] Second, CRIA says that the order was not authorized by section 66.71 of the Copyright Act, R.S.C. 1985, c. C-30. […]Third, CRIA submits that if, contrary to its submission, the Board has the power to make the kind of order that it made in this case, it exercised its power unreasonably.”

The court’s decision on the first point: “We disagree. Any duty of fairness owed by the Board with respect to issuing the order was discharged when it subsequently confirmed the order after considering submissions from CRIA as to why the order should not have been made. Although CRIA disagrees with the reconsideration decision, it cannot say that its arguments were not heard by the Board.”

The second point: “We disagree. The language of the provision is very broad and provides that the Board ‘ may at any time cause to be distributed or published, in any manner and on any terms and conditions that it sees fit, any notice that it sees fit to be distributed or published.’ In our opinion, these words authorized the kind of order made by the Board in connection with this royalty tariff proceeding.”

And the third point: “We do not agree. It was, in our view, perfectly reasonable for the Board to seek to assure itself that the B Class members were made aware that CRIA had decided not to represent them and that their interests could therefore not be taken into consideration when the Board rendered its decision on the proposed tariff.”

The court concludes, “For these reasons, the application for judicial review will be dismissed with costs.”

Effectively, at this point, CRIA has to notify the remaining ‘B’ class members that it has opted to not represent them. From the legal ruckus CRIA caused, the court also decided that CRIA needed to foot the bill for all of this as well.

It would seem that what the 6 labels that left CRIA said is holding true – even in this case. This latest move only serves to add fuel to the fire over the idea that CRIA is merely representing the major foreign labels. How much this may damage CRIA remains to be seen.

Drew Wilson on Twitter: @icecube85 and Google+.



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