Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 3L JD Candidate at Osgoode Hall Law School.

What did your look like this year? As music streaming services grow in popularity, more people have included them as part of their daily lives. On November 29th, The Competition and Markets Authority (CMA) released its of its market study into music and music streaming. According to the report, streaming services are the primary method of music distribution for labels and artists, with 39 million active users and over 138 billion streams in the UK in 2021. Moreover, competition between music streaming services and the digitization of the market improved consumer outcomes greatly, though creators still had concerns about their earnings from streaming.

Falling subscription fees, benefits for emerging artists

Music streaming services have evolved to significantly benefit consumers in today's market. These services offer consumers access to an enormous catalogue of music, better audio quality, and new features, without the price tag. In fact, the report reveals that the price of music streaming plans dropped more than 20% between 2009 and 2021 because they did not keep up with inflation.

The music streaming market is also showing some positive results for creators, especially new artists. First, virtually anyone can share their music. Although the market is highly competitive, it has never been easier to create and record music and share it on streaming services. Secondly, deal options for creators are improving. Although creators do not necessarily need a label to share their music on streaming services, many of them are finding that they have more options in what type of deal they would prefer (for example, DIY distribution, A&L services, traditional record deals). Moreover, artists find that having an existing prominent following online helps them while negotiating a record deal. Major contracts with new artists for multi-track deals revealed more favourable terms for creators — an increase in average gross royalty rates, shorter minimum commitment periods and a reduction in the proportion of recordings owned by labels.

Average UK artist yearly streaming earnings from majors and average UK royalty rates. Source: CMA analysis of data from the majors.

Challenges call for broader policy debate, not competition intervention

Digitization has also presented some challenges. Market digitization has primarily limited competition to already popular artists — although streaming services offer a wide selection of music, consumer tastes tend to favour a small number of successful artists. Moreover, streaming allows both new and old music to reach new audiences, increasing competition as new music competes with older music for a share of streaming revenue.

Ultimately, the report concludes that these outcomes are not primarily caused by market competition and therefore, a competition intervention probably would not increase revenues for artists. Rather, the report calls for a broader policy debate, encouraging the government to consider further legislative and policy reforms for creator compensation in collaboration with DCMS Select Committee recommendations.

Labels are urged to provide more transparency to their artists about how streaming service earnings are calculated and how existing deals with streaming services will impact their current and future earnings. In addition, government and policymakers should examine options available to incentivize songwriting, such as determining a fair split between publishing and recording shares and exploring the licensing rates for music streaming. Future conversations revolving around these issues are critical, as the sustainability of the music streaming market depends on consumers and creators alike.

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Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 3L JD Candidate at Osgoode Hall Law School.

This past summer, Amazon made headlines when it announced an update that would make Alexa capable of , just after hearing under a minute of audio. While people are still unsure as to whether this is heartwarming or just plain creepy, AI continues to evolve, with recent developments showing its ability to not only mimic human speech but also singing.

AI-based audio technologies have been making waves worldwide. Last month, Google announced “”, which proposes “a new framework for audio generation that learns to generate realistic speech and piano music by listening to audio only”. More recently, , China’s leading music entertainment platform, demonstrated the influence of AI in music. According to Music Business Worldwide, the company has released over - one of the tracks surpassing 100 M streams. TME utilized a “patented voice synthesis technology” called “Lingyin Engine”, which the company claims can “quickly and vividly replicate singers’ voices to produce original songs of any style and language.” South Korea has been a strong player, with its most prominent AI-based audio start-up, . The company claims that its voice synthesis and real-time voice enhancement technology can create a hyper-realistic voice that is indistinguishable from real humans.

So far, these AI voice technologies have largely been publicized as an innovative way of and preserving the memories of lost loved ones. Nevertheless, companies will likely aggressively pursue these technologies for profit. In fact, according to NME, (record label of globally recognized boy band, BTS), which equates to about $44.6 million Canadian Dollars. last month, HYBE’s CEO confirmed that the company plans to “unveil new content and services to [its] fans by combining our content-creation capabilities with Supertone’s AI-based speaking and singing vocal synthesis technology.”

HYBE’s huge investment in Supertone starts to make a little more sense once we discover that the company’s “” in Q3 2022 was its Artist ‘Indirect-involvement’ revenues. BTS’s success suggests how more entertainment companies will follow HYBE’s footsteps to increase profits without the headache of coordinating any physical appearances of its artists.

The development of voice AI opens a plethora of legal questions to consider. These issues were highlighted more recently by the recent - who is given permission to use it and does the artist hold any rights to license their voice to third parties for use in other films? More specifically for , how do we determine who owns the copyright to the work? Does it make sense to look at the creators of the voice AI technologies themselves or at the source of the vocal data (the artist)? These questions clarify that the development of voice AI places our artists in a very vulnerable position — suggesting a much-needed intermission for this chaotic programme.

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Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 3L JD Candidate at Osgoode Hall Law School.

According to , tensions are rising in the Livingston family as to who earns the royalties from the Academy Award-winning composer, Jay Livingston’s hit songs. ��These songs include such as Que Sera, Sera and theme songs for various television programs. Jay Livingston’s granddaughter, Tammy Livingston, launched a complaint against her mother Travilyn Livingston on July 17, 2022 and her publishing company, Jay Livingston Music Inc, for exercising copyright termination rights in several of her grandfather’s songs. , and how they may diverge what the artist originally intended. Copyright law may diverge from what the artist originally intended.

The Livingston Trust

Jay Livingston is known for co-writing several famous compositions, such as Que Sera, Sera, Bonanza and Mona Lisa. The composer died in 2001 and left a detailed estate plan to ensure that his family members get a share of royalties from his songs. The complaint states that Jay Livingston established trusts that took over 15 years to design and required the assistance of several estate planning attorneys.��The complex trust relationships were outlined in the .

All these elaborate plans, however, were thrown into disarray when Jay Livingston assigned his song rights to Travilyn Livingston's music publishing company, a year before creating the estate plans. According to of the United States Copyright Law (Title 17), authors and their statutory heirs can terminate copyright assignments and licenses made after 1978 as early as 35 years after they were first created. Travilyn Livingston exercised exactly that right and terminated the assignments to Jay Livingston Music 35 years later. As a result, any further royalty income will be out of Tammy Livingston's reach if the terminations are found to be valid.��

But what about what Jay Livingston wanted? Transfers by will are not subject to copyright termination, but since Jay assigned his copyrights to Tammy’s company, the termination rights are still exercisable.

The Deal with Copyright Termination

The US Copyright Law also defines the entitled to serve a termination notice. In the Livingston situation, since the artist’s spouse is deceased, the entire termination interest will be held by the artist’s children. Consequently, Travilyn Livingston, Jay Livingston's only living child, is the entitled heir and holds all of Jay's termination rights as well as all the recaptured copyrights, despite the composer’s clear intent for Tammy to receive her share.

The clause is meant to give authors the opportunity to regain rights in works they may have signed away when they had little bargaining power”as well as give the artist’s heirs “a second chance to exploit previously-assigned copyrights”. The Canadian copyright regime (the Copyright Act) similarly has section 14, , which excludes works made in the course of employment. However, the Livingston situation shows how the copyright termination statutes can be deliberately wielded to ruin detailed estate plans left by the artist.

To avoid similar situations, estate planners should plan ahead and include any copyright interests in a will or pour-over will to ensure that their strategic plans will be carried out after their passing. But with no will to be found, Tammy Livingston will just have to take her grandfather’s advice, whatever will be, will be.

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Serena Nath is an IPilogue Writer and a 2L JD candidate at Osgoode Hall Law School.

In a recent installment in the series of intellectual property disputes in the music industry, electronic artist Four Tet, also known as Kieran Hebden, has against his independent British record label, Domino Record Label, over how much he is paid every time one of his songs is downloaded or streamed. Four Tet had ; a time where CDs were still popular and long before the invention and popularization of music streaming. In this contract, it was stipulated that for licences, he would be paid a royalty rate of but for a sale, such as the sale of a CD, he would be paid a royalty

Sales vs Licences

When Four Tet’s contract was signed in 2001, these standard licensing terms were for the music industry. For music sales, such as selling music via CDs, vinyl, and cassettes, overhead costs for record labels were much higher due to manufacturing and distribution expenses. Thus, in order to cover the overhead costs, record labels would pay their artists a lower royalty rate compared to the royalty rate for licences. For licences, it was understood that the third party licensing the music, such as for a movie, television show, or advertisement, would take on the extra costs, allowing for an artist to receive a higher royalty rate from the record label.

However, with advancements in technology for music consumption, the landscape of the music industry changed. Record labels no longer had high overhead expenses due to no longer having to manufacture and distribute CDs, vinyl or cassettes. Yet record labels continue to ��argue that music downloads and streams should be considered as sales as this is a new technology format. Artists have typically disagreed with this and insist that this type of royalty model is unfair. For example, in 2011, against Eminem’s record company, Universal Music Group for unpaid royalties, due to the producers arguing that streamed and downloaded music should be considered akin to licencing of music and not sales.

The Case at Hand

In 2020, Four Tet against Domino for unpaid royalties. Similar to the Eminem case, Four Tet argued that he should be paid a royalty rate of 50% for streams and downloads of his music, not the 18% that the record label had been paying him. Four Tet reasoned that streams and downloads of music are like licences; not sales. In response to the lawsuit, Domino removed three of Four Tet’s four albums produced with the record label, without Four Tet’s consent, from all streaming services and online stores in November, 2021, which ” Four Tet. Four Tet responded by adding a claim for breach of contract, resulting in Domino threatening to take the case to the High Court.

The case, which took place in the Intellectual Property and Enterprise Court, ultimately and Domino agreed to pay the requested royalty rate of 50% on streams and downloads as they are now considered to be licences. Domino also paid Four Tet £56,921.08 to account for the difference in income owed as a result of the difference between the royalty rates of 18% and 50% and simple interest calculated at a rate of 5% per year during the accounting period commencing July 1, 2017.

Future Impacts

The settlement may significantly impact the way the music industry values streaming and downloading and thus may impact royalty rates. This is particularly important as the music industry seems to be undergoing a reform regarding royalty payments. , a committee of UK MPs published a report advocating for a 50/50 royalty split between the record label and the artist. Similarly, the US Copyright Royalty Board has to increase streaming royalty rates to 15.1% for songwriters/publishers. ��These decisions, including Four Tet’s successful settlement, indicate that the music industry is changing and artists will start gaining fairer deals when it comes to royalties from streaming and downloading.

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Emily Xiang is an IPilogue Writer, the President of the Intellectual Property Society of Osgoode, and a 2L JD candidate at Osgoode Hall Law School.

This article is part of a series covering the 5th Annual IP Data & Research Conference, hosted by the Canadian Intellectual Property Office and the Centre for International Governance Innovation.

On Thursday, March 24th, 2022, the Canadian Intellectual Property Office (CIPO) and the Centre for International Governance Innovation (CIGI) hosted their 5th Annual IP Data & Research Conference. For their third themed session, “IP Metrics”, experts were invited to speak about the ways they have been observing global IP trends, making IP data more accessible, and measuring the impact of IP on economic growth in Canada.

Where do Canadians Patent? Implications for Canada’s Patent Regime

Joel Blit, Professor of Economics at the University of Waterloo and CIGI Senior Fellow, kicked off the session. Blit examined the countries in which Canadian investors filed patent applications and sought to determine the extent to which the Canadian patent regime fosters domestic innovation. He found that Canadians were increasingly filing patents abroad, with more Canadians filing in at least one other country each year. Results also showed that patents filed exclusively in the US related to more advanced fields of computer sciences and technologies, while Canada-exclusive patents focused more on special-purpose machinery and the resources and energy sectors. Canadian patents also tended to belong to individual inventors rather than larger assignees, involved fewer inventors, and were cited less frequently, making them relatively less valuable in the global market for innovation.

Blit puts forward several potential explanations. One is that the Canadian patent system is providing less incentive over time for protecting domestic innovations. Another explanation is that Canadian patents are too strong, meaning it may be preferable to “weaken” them by setting higher examination standards, limiting patentable subject matter, or reducing the scope of issuable patents. That Canadians are increasingly patenting abroad could mean that Canadian inventors are becoming increasingly sophisticated, yet it could also mean that Canadian innovations and ideas are more frequently bought up by multinationals. Either way, the current Canadian patents regime seems to play a relatively minor role in promoting domestic innovation worldwide.

Identifying Artificial Intelligence (AI) Invention: A Novel AI Patent Dataset

Nicholas A. Pairolero, Economist in the Office of the Chief Economist at the United States Patent and Trademark Office (USPTO). delivered the second presentation of the session. Pairolero’s team sought to make data on AI more accessible to the public by developing a novel dataset that identified AI tech components in over 13.2 million USPTO patents and pre-grant publications.

After first determining a definition of AI, Pairolero and his team searched through USPTO’s patents using an automated machine learning (ML) model that differentiated between patent documents that did and did not contain any AI component technology. In the evaluation stage, expert AI examiners evaluated each document for AI component technology. Compared to more traditional, query-based approaches, the ML approach resulted in relatively lower precision (as a much larger number of documents were identified as containing AI), but a much higher recall (higher probability of correctly identifying AI). Moreover, both machines and humans seemed to struggle with classification at the boundaries of the various AI component technologies. However, results indicated that the ML approach achieved state-of-the-art overall performance relative to a variety of existing benchmarks from academic and policy literature, holding much promise for the future of automated processing in expediting the transmission of publicly available data.

Missions, Mandates and Metrics: What are the Right Metrics for Academic Technology Transfer?

The session concluded with a pair of presentations by Mike Szarka, Director of Research Partnerships at the University of Waterloo, and Natalie Raffoul, IP Lawyer and Managing Partner at Brion Raffoul LLP. Szarka began by suggesting that most Technology Transfer Offices (TTOs) focused on some combination of a) maximizing gross revenue and licensing income generally; b) focusing on the few projects that would maximize profits; c) maximizing knowledge mobilization and research impact; d) maximizing local economic growth, and e) maximizing client satisfaction and prioritizing the needs of faculty and students. Szarka’s surveying of TTO directors across the country demonstrated that knowledge mobilization, economic development, and service to academic communities ranked much higher in the minds of the respondents than revenue generation, indicating that commonplace TTO metrics focused on royalties do not reflect the true priorities and missions of most TTOs.

Raffoul identified several alternative metrics focused on “the betterment of Canadian society”. Average reported business expenditures invested into research and development () and have been low in Canada compared to the global stage. The greater concern is whether Canadians are owning their ideas and subsequently having the opportunity to commercialize those ideas downstream (instead of assigning their rights over to foreign firms). Raffoul suggested that TTOs ought to track the number of patents they are licensing/optioning/transferring to Canadian headquartered firms compared to foreign ones, along with the revenue generated from those licenses/options/transfers and any research collaborations with those firms. For company-sponsored academic research, co-ownership of patents ought to be held up to co-authorship of papers and publications, in order to correlate evidence of knowledge creation with the ultimate ownership and control of that knowledge.

Conclusion

Though there is much work to be done for Canadian innovators and owners to remain competitive in the global market, the most recent advancements in research and technology prove that Canada is well-positioned to identify shortcomings and well-equipped to tackle them.

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Shawn Dhue is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On October 13, 2021, legendary singer and icon Cher filed a at the California Central District Federal Court against Mary Bono [Bono], former Republican U.S. Representative. Bono is the fourth wife and widow of the late Sonny Bono [Sonny], Cher’s ex-husband and famous singing partner. Cher and Sonny recorded famous songs such as , , , and more.��

Cher filed the lawsuit due to Bono and Sonny’s estate refusing to pay Cher royalties from the singing duo’s music catalogue. Overdue to pay these royalties, Bono has made her opinions clear, with her lawyer commenting to the Los Angeles Times: “.” With tensions high, the are nowhere in sight.

Bono claims that Cher is no longer entitled to 50 percent of the royalties from Sonny and Cher’s songs as per the ex-couple’s divorce settlement agreement. The claim states that Cher and Sonny agreed when divorcing that the two will split the royalties of the songs they created together.

Pursuant to section 203 of the U.S.’s ��“Act”], authors are able to cancel transfers of copyright protections and claim all rights after 35 years in certain situations. This notion has been in the news lately involving the late . This section, however, is challenged by section 302(b) of the Act which states: “In the case of a joint work … the copyright endures for a term consisting of the life of the last surviving author and 70 years after such last surviving author’s death.” If section 302 takes priority, Cher should be able to decide the royalties until her death and then 70 years more.

Bono, the trustee of Sonny’s entire estate and trust, configured the trust earlier in 2016. In the lawsuit, Cher states that in 2016, . One of those partnerships is Cher. These changes were only brought to Cher’s attention in September 2021, when she was also alerted that she was no longer allowed to approve the uses of their songs and many other entitled rights.

says that this claim comes down to who . The owner of the music should be the one who decides who is able to transfer and reclaim rights. Most importantly, though, it is absurd that Bono has decided for herself to reclaim all transfers and to end Cher’s royalties.

Cher is now seeking a million dollars in damages and asking the court to make a declaratory judgment saying the estate did not end her rights. This claim will most likely be handled through settlement, but as the public, we should sit back, enjoy this , and watch as .

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Emily Prieur is an IPilogue Writer and a 3L JD Candidate at Queen’s University Faculty of Law

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Olivia Rodrigo rose to stardom this year when her song Drivers License dominated pop music charts across the world. However, Rodrigo’s subsequent album Sour has recently been circulating the news cycle for less sweet reasons. Rodrigo has come under fire for copyright theft and plagiarism for her songs Deja Vu and Good 4 U.

What happened?

Rodrigo’s highly anticipated debut album, Sour, was released in the wake of the success of Drivers License. Music fans quickly noted the similarities between Rodrigo’s songs and already popularized songs including . Despite the similarities, some are arguing it’s questionable if Rodrigo committed copyright theft. Good 4 U has a similar melody and chord progressions with Paramore’s Misery Business, but besides the angsty punk undertones many generations of teens have come to love, many contend the songs are not all that similar.

What is copyright and copyright infringement?

Copyright is the or perform a musical work. Copyright infringement is the use or production of copyright-protected material without the permission of the copyright holder. In essence, copyright infringement is plagiarism. In Canada, courts will determine whether a body of work has been infringed upon using the . Copyright protections are granted as soon as a work is created, so long as it meets the conditions set out in the Act.

What are music royalties? Why did Rodrigo pay them?

Music royalties are payments received by songwriters, music composers, and publishers . Essentially, artists pay royalties to copyright holders in exchange for using part of their work. Like them or not, the music industry heavily depends on royalties and many artists rely on them as a primary form of income. The growing popularity of music streaming platforms like Spotify, , further cements their importance.

This royalty debacle has been costly for Rodrigo. Hayley Williams and Joshua Farro were given writing credits on Good 4 U and Swift, Antonoff, and Clark will also receive writing credits and on Deja Vu. These moves will likely cost Rodrigo millions of dollars in publishing royalties. When weighing the costs of paying royalties versus lengthy litigation against fellow hitmakers in court, Rodrigo and her team likely felt it was most cost-beneficial to simply pay the royalties.

Are artists abusing copyright?

Artists are becoming increasingly concerned about outlandish copyright claims in the wake of the 2013 case involving the estate of Marvin Gaye and the trio behind Blurred Lines, Robin Thicke, Pharrell Williams, and Clifford Harris Jr. (T.I.). The trio alleged that the Gaye estate staked an ownership claim of not a song or an album, but rather an entire genre of music. Thicke and Williams were found guilty of copyright infringement and were ordered to pay This amount was , in addition to half of all future royalties from Blurred Lines.

Although caselaw is rife with examples of major royalty deals ordered to artists, not all cases end with million-dollar payouts. Katy Perry was successful in her appeal against rapper Flame for her song Dark Horse, which Flame asserted plagiarized his song, Joyful Noise. Specifically, the case centered around an eight-note “ostinato.” The judge ruled that the ostinato . Perry’s lawyer praised the ruling and proudly stated, “building blocks cannot be monopolized.”

The controversy has only further advanced the argument that outrageous music copyright lawsuits are going to lead to stagnation in the music industry. Some record labels are going so far as to hire on-call musicologists who can review new releases for potential copyright claims. Artists signed with major record labels are also encouraged to sign “Errors and Omissions” insurance, which protects them from legal challenges to their intellectual property. Errors and Omissions policies . Shockingly, copyright litigation in the United States . Along with its high costs, the fear of copyright litigation risks preventing less established, albeit talented, musicians from climbing the charts without the support of a major record label.

Although new to the hit music scene, Olivia Rodrigo has not only offered music lovers catchy pop anthems, but has also advanced the conversation surrounding copyright theft in the music industry. While some believe Rodrigo is guilty of plagiarism, others feel she is a victim of the corollary impacts of the growing popularity of streaming services and increasingly outrageous copyright infringement suits. The latter camp can only hope that the courts will become more stringent in future suits to prevent music monopolies.

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Meena Alnajar is an��IPilogue��Writer, IP Innovation Clinic Fellow,��and a 2L JD Candidate at��Osgoode��Hall Law School.��

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Authors create works that can last generations, being passed from one person to another. While second-hand book sales allow books to reach larger audiences, they are not traditionally sustainable for authors. In the U.K., the used book market has a predicted value of around , but authors gain little from the process. They do not receive royalties on second-hand sales of their books like they would from library borrowing or direct book sales. Royalties are a payment per sale of a book, ranging from . The royalty rate is depending on production costs, retailer agreements, and discounting. To resolve the issue of diminishing royalties and support authors’ lasting works, U.K.-based corporation created a system to remunerate authors for the sale of second-hand books.

is a U.K.-based author and founder of the used bookseller Bookbarn International. He thought of , but needed a partnership to bring the idea to life. World of Books, the U.K.’s largest retailer of used books, partnered with Pryor to help fund AuthorSHARE. As of May 31, 2021, second-hand royalties for authors in the U.K. are a reality.

World of Books established a royalty fund of , with the hopes of expanding funds for the future. Through AuthorSHARE, authors are paid each time a second-hand book is bought from either World of Books or Bookbarn International websites, with . said Pryor.

Bookbarn and World of Books created a payment plan in collaboration with the Authors’ Licensing and Collecting Society (ALCS). Retailers will report royalty prices to the ALCS, who will then match the prices and pay out royalties as . As such, AuthorSHARE who register their works.

AuthorSHARE helps propagate authors’ income with new avenues for profit, which can mitigate any loss of author earnings. In 2018, the Authors Guild reported in America compared to earnings in 2009. AuthorSHARE can provide future creators supplementary income to mitigate these kinds of losses.

ALCS has not fully outlined how they will match prices or if this price matching is fair. The royalty system depends on several factors beyond the author’s control. For example, . Accordingly, royalties do not always reflect the author’s efforts and writing quality. With the biases in royalty rates themselves, AuthorSHARE’s renumeration model may not reflect the author’s work, but rather how the author’s subject matter was perceived at the time of publishing. Although limited to two retailers and this price-matching system, AuthorSHARE still sets an intriguing precedent that books can still be worth something—even after they have left the shelves.

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Katerini Zaikos is a Guest Writer and a first-year Dual J.D. student at the University of Windsor and the University of Detroit Mercy.����

Apple Music, the widely popular music streaming service, revealed in April 2021 that they will begin paying an average of to music rights-holders. Their biggest competitor, Spotify, has yet to adopt a comparable per-stream payout model, currently paying between .

The key question is whether music streaming platforms enable music workers to be fairly compensated for their intellectual property. A user-centric licencing model is a step in the right direction.

Royalties are payments made to artists in exchange for the licenced use of their copyrighted music. Evidently, royalties are one of the main sources of an artist’s income. In 2020, Apple Music claimed they paid royalties to . In November of the same year, Spotify announced that they will promote artists’ music to more users in exchange for .

However, (UMAW), representing thousands of music workers, has criticized Spotify for claiming to give artists the ability to “,” given that the current payout is extraordinarily less than a penny per stream. They insist Spotify adopts a “user-centric payment model”, such as the one recently implemented by , another popular streaming platform. Essentially, this model tracks users’ total listening time per artist and pays music rights holders in proportion to this individualized metric.

SoundCloud’s platform indie artists, rather than the royalty model geared towards mainstream artists. A pro rata model focuses on an artist’s popularity in general, while a user-centric model compensates artists based on subscribers’ behaviour and their interaction with artists on music streaming platforms. Here, a small percentage of users’ monthly subscription fee goes directly to the artists that the subscriber has listened to that month. Being the first in the industry to introduce these “”, SoundCloud has . This unique version of a user-centric model will almost certainly benefit . ��

Apple Music and Spotify have not commented on this model, favouring their own payout schemes. Although Apple Music has since announced their higher royalty payout, historically, Spotify has a larger userbase. Spotify reported in 2020, while Apple Music reported about in 2019. It remains unclear if Apple Music’s new royalty payout model will affect these numbers.

Notably, the $0.01 per stream royalty . Rather, this $0.01 per stream is between the labels, publishers, and distributors. The artists are then paid based on their agreements with their recording company.

Artists are among the many individuals suffering a financial loss due to the COVID-19 pandemic. As the UMAW notes, without the , artists are relying more on streaming income than ever. As such, artists are seeking by advocating for higher royalty payments and more user-centric payout models.

Hence, the long-standing battle between music streaming services continues. It is evident that largely favour user-centric payouts. These models must endure in the world of music streaming, which has become the to music, to fairly compensate creative artists.

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It is a well-established principle of copyright law that as per Section 3(1) of the , copyright means “the sole right to produce or reproduce the work or any substantial part thereof.” However, as noted by other copyright law , Canadian courts have frequently avoided defining what a “substantial part” actually means. In the Court stated that it is a flexible and contextual concept rooted in quality rather than quantity. Conversely, in , the Supreme Court explained it as being “not trivial” or “important.” As such, if an insignificant part of a work (a part that is not “substantial”) is copied the copyright owner’s rights are not violated. What a “substantial part” actually is is therefore quite important to an infringement analysis, and comments by the Copyright Board in their recent decision are worthy of discussion.

The Access Copyright stemmed from objections by various provincial and territorial governments to the proposed statements of royalties that the Canadian Copyright Licensing Agency (operating as ) filed in March 2004 and 2009 pursuant to the . Specifically, the royalties to be collected concerned the reproduction of various literary works. In the decision, the Board had to determine what copying occurred in order to determine the proper royalty calculations. In doing so, the Board made the following finding at :

In this matter, without the benefit of a qualitative analysis of each of the copied works, and without even knowing which portions of a work were copied, in our opinion the amounts [of]…1 to 2 pages of a work, are reasonable approximations in establishing non-substantiality. However, since 1 to 2 pages of a short work can amount to a great portion of that work, we further limit this approximation by requiring that the copying of 1 to 2 pages not constitute more than 2.5 per cent of the entire work…Thus, for the purposes of calculating a royalty rate for this Tariff, we consider that copying events where 2 pages were copied from a work of 80 pages or more, or 1 page were copied from a work of 40 pages or more, represent copying that was not a substantial amount of the work.

In my opinion, the Board has navigated into dangerous waters in this attempt to quantify what makes “substantial part” substantial. Imagine hypothetically that I wrote a 100-page work which takes only two consecutive pages to describe the plot and characters (forget that this sounds like a pretty awful book unlikely to be infringed). If another author used the information from those two pages (and nothing from the rest), would my rights be unprotected because the copying percentage falls below 2.5 percent? Or would my rights be protected by a qualitative assessment of the work as a whole with those two pages deemed substantial, omitting a quantitative analysis? In either circumstance, the Board is making murky waters murkier, not clearer, by adding a number to an assessment that has traditionally remained (in my opinion for good reason) concerned with what was copied from the page rather than how many pages were copied.

It is possible that these fears are premature. notes that the Board’s decisions are not court decisions, and this one is particularly tempered with an acknowledgement by the Board that the above numbers were determined “without the benefit of a qualitative analysis.” Yet, the fact that the Board felt compelled to define “substantial” in order to conduct its calculations may indicate that this is a practice it will embrace not just in regards to literary works, but other protected creations in the future.

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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