Q: What Changes Have Resulted From the 2007 Canadian Royalty Rates Decision?

A: Below is a very brief graphical summary of the recent decision of the Copyright Board of Canada. In regard to the Collective Administration of Performing Rights and of Communication Rights, the Board issued its decision entitled, “Statement of Royalties to be collected by SOCAN for the Communication to the Public by Telecommunication, in Canada, of Musical or Dramatic Musical Works”. In its decision, the Board concluded that for downloads, limited downloads and interactive streaming, the combined royalty for the mechanical (reproduction) right and the performance (communication) right is 12.2% of the retail price paid by consumers or subscribers (not including advertising). The Board ruled that the following allocations of the 12.2% should be made with respect to each type of service. Significantly, the Board also ruled that the use of preview clips to promote the sale of such music is “fair dealing” under Canadian law. Such decisions could have an impact on deliberations in the U.S. set to decide similar issues.