A-883-90
FWS Joint Sports Claimants (Applicant)
v.
Copyright Board, Border Broadcasters'
Collective, Canadian Broadcasters Retransmission
Rights Agency Inc., Canadian Retransmission
Collective, Canadian Retransmission Right
Association, Composers, Authors and Publishers
Association of Canada, Limited, Copyright
Collective of Canada, Major League Baseball
Collective of Canada, Inc., Performing Rights
Organization of Canada Limited, Canadian Cable
Television Association, Cl Cablesystems Inc.,
Canadian Satellite Communications Inc., and the
Deputy Attorney General of Canada
(Respondents)
INDEXED AS: FWS JOINT SPORTS CLAIMANTS V. CANADA
(COPYRIGHT BOARD) (CA.)
Court of Appeal, Mahoney, MacGuigan and Linden,
JJ.A.—Montréal, May 13, 14, 15, 16 and 17; Ottawa,
June 3, 1991.
Copyright — Royalties for retransmission of distant broad
casts of football games — Whether agreement with ABC Tele
vision Network assigning rights to NFL — Whether Board
erred in admitting parol evidence as to agreement — Board
must decide legal existence of right in order to place value
thereon — No copyright in playing of football game as out
come uncertain — No copyright in order of transmission of
programs — No error in scaling royalty payments according to
number of subscribers.
This was an application for review of a decision of the
Copyright Board fixing the royalties to be paid, for the first
time, for retransmission of distant radio and television signals,
following upon the amendments to the Copyright Act pursuant
to the Canada-United States Free Trade Agreement Imple
mentation Act. The Board held that the contractual arrange
ments between the National Football League and the ABC Tel
evision Network did not alienate the Network's rights in the
broadcast of League games. It used a comparable services
approach to arrive at the total value, and allocated the global
sum based on viewership. It held that there was copyright in
the television production of a sports game, but not in the play
ing thereof. It also held that there was no copyright in the daily
schedule of broadcast programs. It used the cost ratio between
music and programs to determine the royalty rate for music. It
set a flat rate of $100 per annum for systems having fewer than
1,000 subscribers, and set a series of advantageous rates for
systems having between 1,000 and 6,000 subscribers.
Held, the application should be dismissed.
Whether the contract between the NFL and ABC assigns
copyright is a question of law. The Board may decide such
questions and must do so since it can only value a right if it
exists. The wording being unclear, the Board properly relied
on parol evidence to the effect that the assignment clause was
only intended to permit the League to sue bars which showed
local games, to encourage local fans to purchase tickets, and
that the Network never deals away copyright or retransmission
rights. The Board did not err in preferring other evidence to
that presented by the applicant as to the value of the retrans-
mission rights, or in allocating payments in a manner which is
at variance with the calculations suggested by the applicant.
Administrative convenience is a rational factor for the Board
to consider.
The Board correctly ruled that, although there is copyright
in the coaches' play books and game plans, as well as in team
crests and uniform designs, the cable operators do not exploit
those, and there is no copyright in the game itself. A mere
spectacle standing alone cannot be copyrighted. Nor can
changing materials which lack certainty or unity. In spite of
the planning which goes into a football game, it is not choreo
graphed in the way that a ballet is. Each team tries to confound
the plans of the other, creating the uncertainty which gives the
contest its interest. No one ever bet on the outcome of a per
formance of Swan Lake.
There can be no copyright in a compilation of television pro
grams in which others hold copyright. Although the written
schedule for the broadcast day is a literary work, the order in
which the programs are transmitted does not add a new right
for the broadcaster. The Board is given a broad discretion
under the Act to fix the amount of royalties to be paid and to
determine how the burden of payment is to be borne. Since the
Act does not prohibit the creation of classes of intermediate-
sized systems, there is no reviewable error in the Board's
determination of a scale of royalty payments generally based
on the number of subscribers.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada-United States Free Trade Agreement Implementa
tion Act, S.C. 1988, c. 65.
Copyright Act, R.S.C., 1985, c. C-42, ss. 2 (as am. by I
R.S.C., 1985 (4th Supp.), c. 10, s. 1; S.C. 1988, c. 65, s.
61), 70.63 (as enacted by S.C. 1988, c. 65, s. 65), 70.64
(as am. idem).
Definition of Small Retransmission Systems Regulations,
SOR/89-255, s. 3(1).
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Pioneer Shipping Ltd v BTP Tioxide Ltd, [1981] 2 All ER
1030 (H.L.); Alampi v. Swartz, [1964] 1 O.R. 488; (1964),
43 D.L.R. (2d) 11 (C.A.); Posen v. Minister of Consumer
and Corporate Affairs Canada, [1980] 2 F.C. 259; (1979),
46 C.P.R. 2d 63; 36 N.R. 572 (C.A.); Re Rohm & Haas
Canada Ltd. and Anti-dumping Tribunal (1978), 91
D.L.R. (3d) 212; 22 N.R. 175 (F.C.A.); Canadian Admi
ral Comm Ltd. v. Rediffusion Inc., [1954] Ex.C.R. 382;
(1954), 20 C.P.R. 75; 14 Fox Pat. C. 114; Tate v. Ful-
brook, [1908] 1 K.B. 821 (C.A.); Green v Broadcasting
Corp of New Zealand, [1989] 2 All ER 1056 (P.C.);
Kantel, Frederick W. v. Frank E. Grant et al., [1933] Ex.
C.R. 84; Wilson v. Broadcasting Corporation of New Zea-
land, [1990] 2 NZLR 565 (H.C.); Baltimore Orioles, Inc.
v. Major League Baseball, 805 F. 2d 663 (7th Circ. 1986);
Macmillan & Co. v. Cooper (1923), 93 L.J.P.C. 113;
Football League Ltd. v. Littlewood's Pools Ltd., [1959]
Ch. 637; Ladbroke (Football), Ltd. v. William Hill (Foot-
ball) Ltd., [1964] 1 All E.R. 465 (H.L.); Express Newspa
pers Plc. v. Liverpool Daily Post & Echo Plc., [1985] 1
W.L.R. 1089 (Ch. D.).
AUTHORS CITED
Fox, Harold G. The Canadian Law of Copyright and
Industrial Designs, 2nd ed., Toronto: Carswell Co.
Ltd., 1967.
Nimmer, Melville and Nimmer, David. Nimmer on Copy
right, vol. 1, New York: Matthew Bender & Co. Inc.,
1990.
COUNSEL:
Daniel R. Bereskin and G. A. Piasetski for appli
cant.
Mario Bouchard for respondent Copyright
Board.
Gilles Marc Daigle for respondent Border
Broadcasters' Collective.
D. W. Kent for respondent Canadian Broadcast
ers Retransmission Rights Agency Inc.
H. G. Intven for respondent Canadian Retrans-
mission Collective.
Jacques R. Alleyn and Peter E. Robinson for
respondent Canadian Retransmission Rights
Association.
Y. A. George Hynna for respondents Composers,
Authors and Publishers Association of Canada,
Limited and Performing Rights Organization of
Canada Limited.
G. A. Hainey and M. S. Koch for respondent
Copyright Collective of Canada.
Richard Storrey for respondent Major League
Baseball Collective of Canada, Inc.
Michael K. Eisen and Stephen G. Rawson for
respondent Canadian Cable Television Associa
tion.
J. A. O'Neill for respondents Canadian Satellite
Communications Inc. and Cl Cablesystems Inc.
SOLICITORS:
Rogers, Bereskin & Parr, Toronto, for applicant.
Copyright Board for respondent Copyright
Board.
Gowling, Strathy & Henderson, Ottawa, for
respondent Border Broadcasters' Collective.
McMillan Binch, Toronto, for respondent Cana-
dian Broadcasters Retransmission Rights
Agency Inc.
McCarthy Tétrault, Toronto, for respondent
Canadian Retransmission Collective.
Canadian Broadcasting Corporation, Ottawa,
for respondent Canadian Retransmission Right
Association.
Cowling, Strathy & Henderson, Ottawa, for
respondents Composers, Authors and Publishers
Association of Canada, Limited and Performing
Rights Organization of Canada Limited.
Smith, Lyons, Torrance, Stevenson & Mayer,
Toronto, for respondent Copyright Collective of
Canada.
Goodman & Goodman, Toronto, for respondent
Major League Baseball Collective of Canada,
Inc.
Morris/Rose/Ledgett, Toronto, for respondent
Canadian Cable Television Association.
Johnston & Buchan, Ottawa, for respondents
Canadian Satellite Communications Inc. and Cl
Cablesystems Inc.
The following are the reasons for judgment ren
dered in English by
LINDEN J.A.: On October 2, 1990, the Copyright
Board of Canada released its decision Statement of
Royalties to be Paid for the Retransmission of Distant
Radio and Television Signals. This was its first con
sideration of the amendments to the Copyright Act,
R.S.C., 1985, c. C-42, which were enacted pursuant
to the Canada-United States Free Trade Agreement
Implementation Act (S.C. 1988, c. 65). Prior to the
passage of this legislation, there were no royalties
payable by those who retransmitted these distant sig
nals, which lacuna in the law was filled by the new
legislation. The Board was, among other things, man
dated by the legislation (section 70.63 [as enacted by
S.C. 1988, c. 65, s. 65]) to establish "a manner of
determining the amount of the royalties to be paid by
each class of transmitter" and to "determine what
portion of the royalties ... is to be paid to each col
lecting body." Using the value of the Arts and
Entertainment channel as a proxy, the Board fixed the
total amount to be paid at approximately 51 million
dollars for each of 1990 and 1991. This amount was
then apportioned among the various collectives as
follows:
CCC 57.087 (per cent)
CRC 12.806
CRRA 11.752
CBRRA 5.814
BBC 2.938
FWS 2.711
MLB 3.588
CAPAC 1.980
PROCAN 1.320
TOTAL 99.996
The decision was attacked in three separate section
28 [Federal Court Act, R.S.C., 1985, c. F-7] applica
tions, which were heard together. Various parties
objected to different aspects of the Board's decision.
The Canadian Cable Television Association (CCTA),
in the first application (File No. A-832-90), attacked
the entire decision, FWS Joint Sports Claimants chal
lenged certain elements of the decision (File No. A-
883-90), other parties, as respondents, objected to
several points, and there was another application, as
well (File No. A-834-90), which was withdrawn. The
CCTA application was dismissed in a unanimous
decision of this Court, written by Mr. Justice
MacGuigan. The application of FWS is being dealt
with separately in these reasons. There are eight
remaining issues which must be considered here.
Three issues were raised by FWS Joint Sports
Claimants, which is the collecting body for the
National Hockey League (NHL), the Canadian Foot
ball League (CFL), the National Football League
(NFL) and the National Basketball Association
(NBA).
The first issue concerned the interpretation of a
contract between the NFL and the ABC Television
Network, whereby the retransmission rights were
held to belong to ABC and its collecting body, the
Canadian Retransmission Right Association (CRRA).
The contractual provision in question, which is not
a model of precision, reads as follows:
9. Copyright. Network will cause each live telecast to be
simultaneously videotaped and will deliver tapes to League
upon request (but tapes need not be preserved more than 30
days after the original telecast). Network hereby assigns to
League those protectible copyright elements in the telecast of
each game necessary to enable League to sue to prevent
threatened infringement or for damages. Network will cooper
ate in any such suit and any substantial expenses will be reim
bursed by League. Network may sue in its own name and at its
own expense to prevent threatened infringement or for dam
ages (and may retain any damages it recovers) if League is
asked but declines to do so. In such cases, League will cooper
ate, and any substantial expenses will be reimbursed by Net
work. Network also agrees to air notices of League and
member club ownership and proprietary rights in each game
telecast, consistent with the past. League by this assignment of
copyright does not acquire the right to exploit the videotaped
recordings in any media without Network's prior consent.
This language, it is argued, amounts to an assignment
of the copyright in the telecast to the NFL, but that
interpretation is contested. It is not contested that this
issue is a question of law (Pioneer Shipping Ltd y
BTP Tioxide Ltd, [1981] 2 All ER 1030 (H.L.) at page
1035). Although it does appear that certain elements
of the copyright are assigned to the League by the
contract terms, there are other elements that are not
assigned. Cooperation is required in certain circum
stances. Nothing is expressly included about retrans-
mission rights, but the video rights could not be
exploited without the consent of the network. In
short, it is not clear from the wording that there has
been an assignment of the retransmission rights. In
these circumstances, parol evidence may be consid
ered (Alampi v. Swartz, [1964] 1 O.R. 488 (C.A.)).
Having considered the parol evidence of Mr. Stan-
ford and Mr. Vanderstar, the Board concluded, and I
agree, that the purpose of the assignment clause in
the contract was merely to permit the League, in
order to ensure better attendance at home games, to
sue local bars that showed the games to their patrons.
The wording was drafted by ABC and the League felt
it could not "quibble" with someone who paid all
those millions for the broadcast rights. The evidence
is that there was no intention to assign the entire
copyright nor the retransmission rights to the League.
Indeed, if the League had asked for that during the
negotiations, the ABC would have responded that
they never give those rights away, as Mr. Stanford
testified. Consequently, I am of the view that the
Board did not err in interpreting the contract as it did.
In future negotiations, now that the situation regard
ing retransmission rights has changed, this matter
will undoubtedly be covered with more exactitude
than it was in the agreement in question.
As for the matter of the Board deciding questions
of contractual rights, it is clear that the Board must do
so, at least in a preliminary way, as a necessary inci
dent to the exercise of its jurisdiction. It cannot value
a right unless it exists. The Board's conclusion as to
legal rights may not bind everyone for all time, but it
cannot perform its mandate without making a legal
determination about these rights. It may be different,
however, where all that the Board is asked to do is to
determine the rights of the parties (see Posen v. Min
ister of Consumer and Corporate Affairs Canada,
[1980] 2 F.C. 259 (C.A.)).
The second issue raised by FWS is that the Board
ignored its evidence of fair market value and relied
exclusively on viewership in evaluating its claim. It
further complained that it was required by the Board
to offer evidence to assist in determining a universal
scheme for allocation, when it sought only to offer
evidence about the value of its own claim. The
Board, it was suggested, fettered its discretion in so
doing.
I am not convinced that the Board erred in its treat
ment of the FWS evidence. The Board did not ignore
the evidence, it just did not accept it. The Board did
not force parties to offer evidence of a universal
scheme, thereby fettering its discretion, it just pre
ferred the evidence of those who did. The evidence of
FWS was certainly plausible, but the Board, after
considering it, preferred to accept the evidence of
others in deciding how to allocate the royalties. The
Board, basing itself on other evidence, chose a com
parable services approach, using the Arts and
Entertainment Network cost as a starting point for the
global sum and then it used a viewership approach
based on a test year for the allocation. This was not
inconsistent with its statutory authority, nor did it
violate any principle of law or natural justice, even
though FWS may feel that its sports programs are
being undervalued by this method. Administrative
convenience is a rational factor for the Board to con
sider in choosing a method of evaluation and alloca
tion. It was not the only factor it assessed. The Board
did not err in doing so. In my view, the requirements
of Re Rohm & Haas Canada Ltd. and Anti-dumping
Tribunal (1978), 91 D.L.R. (3d) 212 (F.C.A.), at page
214 have not been met by FWS.
The third issue argued by FWS was whether there
is a copyright in the playing of a sports game. The
Board decided there was no such copyright, although
there was in the television production of a game. It
also held that there was copyright in the coaches'
written play books and game plans, as well as in the
team crests and uniform designs, but that these were
not used by the cable operators. As for the playing of
the game itself, even though it is played as much as
possible in accordance with those plans, the Board
found that this was not copyrightable, since it was not
a "choreographic work, because, unlike dance, a
sporting event is for the most part a random series of
events. The unpredictability of the action is inconsis
tent with the concept of choreography."
I agree with the Board. Even though sports teams
may seek to follow the plays as planned by their
coaches, as actors follow a script, the other teams are
dedicated to preventing that from occurring and often
succeed. As well, the opposing team tries to follow
its own game plan, which, in turn, the other team
tries to thwart. In the end, what transpires on the field
is usually not what is planned, but something that is
totally unpredictable. That is one of the reasons why
sports games are so appealing to their spectators. No
one can forecast what will happen. This is not the
same as a ballet, where, barring an unforeseen acci
dent, what is performed is exactly what is planned.
No one bets on the outcome of a performance of
Swan Lake. Ballet is, therefore, copyrightable, but
team sports events, despite the high degree of plan
ning now involved in them, are not. (See Fox, The
Canadian Law of Copyright and Industrial Designs
(2nd ed., 1967), page 139; Nimmer on Copyright
(1990), at page 2-138; Canadian Admiral Corpn. Ltd.
v. Rediffusion Inc., [ 1954] Ex.C.R. 382, at page 400.)
A "mere spectacle standing alone" cannot be copy
righted. (See Tate v. Fulbrook, [1908] 1 K.B. 821
(C.A.), at page 832.) It is necessary for copyright not
to have "changing materials" that are "lacking in cer
tainty" or "unity". (See Green y Broadcasting Corp
of New Zealand, [ 1989] 2 All ER 1056 (P.C.), at page
1058 per Lord Bridge), even though some variations
could be permitted (see Kantel, Frederick W. v.
Frank E. Grant et al., [1933] Ex.C.R. 84, at page 95;
see also Wilson v. Broadcasting Corporation of New
Zealand, [1990] 2 NZLR 565 (H.C.)). The unpredict
ability in the playing of a football or hockey game is
so pervasive, despite the high degree of planning, that
it cannot be said to be copyrightable. The American
cases are not helpful here, given the different statu
tory provisions and jurisprudence. (See, for example,
Baltimore Orioles, Inc. v. Major League Baseball,
805 F. 2d 663 (7th Circ. 1986).)
The fourth issue is whether there can be copyright
in the compilation of television programs in which
others own the copyright. This combination or sched
uling of programs, sometimes called the "broadcast
day" requires considerable skill and effort to organ
ize. Thus, it is argued by the Canadian Broadcasters
Retransmission Rights Agency Inc. (CBRRA) that
the "broadcaster's telecommunication [is] equivalent
to a printed compilation such as an anthology." There
are not only daily, but weekly, seasonal and yearly
schedules designed. The majority of the Board recog
nized the expertise and creativity required to make
these compilations, which might lead to copyright
protection for the written schedule itself, in accor
dance with section 2, Copyright Act [as am. by
R.S.C., 1985 (4th Supp.), c. 10, s. 1; S.C. 1988, c. 65,
s. 61], which reads:
2....
"literary" work includes tables, compilations, translations and
computer programs.
The Board, however, decided against according
copyright protection to these programs as they are
broadcast in totality in accordance with the agenda
that has been prepared. The Board wrote [at page 56]:
A broadcaster's program schedule is a literary work; however
the retransmission of the programs listed in the schedule does
not constitute a retransmission of the schedule.
A "broadcast day", in other words, is not a literary
work as broadcast, even though the written schedule
for it may be such a work.
The Court recognizes the difference between there
being no copyright in a broadcast per se and there
being no copyright in a broadcast according to a
schedule of certain programs that are then "logged"
or "recorded". In either case, there is nothing to be
copyrighted in addition to the actual shows being
broadcast, which have already been copyrighted by
their owners. It is not a new work. There is no editing
or creative input added to the shows themselves. The
written compilation may be a collection of literary or
dramatic works, but that does not make the broadcast
day a literary or dramatic work itself. Nor is the
broadcast day a cinematographic production. The
compilation is not unlike the playbooks of the
coaches in sports games. The Board was correct in
denying copyright protection to the broadcast day.
(See Macmillan & Co. v. Cooper (1923), 93 L.J.P.C.
113; Football League Ltd. v. Littlewood's Pools Ltd.,
[ 1959] Ch. 637; Ladbroke (Football), Ltd. v. William
Hill (Football) Ltd., [1964] 1 All E.R. 465 (H.L.);
Express Newspapers Plc. v. Liverpool Daily Post &
Echo Plc., [1985] 1 W.L.R. 1089 (Ch.D.).)
The fifth issue was raised by the Performing
Rights Organization of Canada Limited (PROCAN)
and Composers, Authors and Publishers Association
of Canada (CAPAC) who contend that the Board
failed to value the music component of programming
or take it into account in its considerations of the
total royalties payable. They argued that the evidence
showed that the basis of comparison used by the
Board—the Arts and Entertainment network—was
inappropriate, since the wholesale price of this net
work did not include any amount for royalties for
music.
This Court is not persuaded by that argument. The
Board's decision discloses that it did value the music
component of programming. However, rather than
accept the 2.1 per cent royalty rate suggested by the
music collectives (based on the gross revenues paid
by the commercial television industry in Canada) the
Board preferred the argument of the CRC that the
"ratio of the payment for the music and the retrans-
mission royalties should be the same as the ratio
between the cost of music and the cost of programs to
the industry." While this resulted in a lower royalty
rate than that sought by PROCAN and CAPAC, it
cannot be considered a reviewable error.
The sixth issue, which was also advanced by PRO-
CAN and CAPAC, was that, in allocating the royal
ties, the method used to determine the royalty rate
was not relevant for establishing the value of the
music component of the programming retransmitted
by the cable industry. This formula was argued to be
inequitable to the music collectives because there is
no rational connection between the cost of music and
the cost of programs to originating broadcasters.
Once again, this Court is not convinced by the
argument of the music collectives. The Board specifi
cally gave its rationale for preferring the formula for
the allocation of royalties to the music collectives as
follows [at page 69]:
The Board finds this ratio more appropriate since the royalties
represent the costs to the retransmitters of all programming on
distant signals.
It was within the Board's discretion to prefer this
method to that proposed by the music collectives. In
allocating the royalties, the Board had to balance a
number of competing interests and it chose this
method as the one which most fairly addressed the
various concerns. I am not persuaded that there is any
basis for this Court to interfere with the Board's allo
cation.
The seventh issue is whether the Board erred in
fixing a rate of $100 per annum for each small sys
tem, that is, one having no more than 1,000 subscrib
ers (Copyright Act, subsection 70.64(2) [as enacted
by S.C. 1988, c. 65, s. 65]; Definition of Small
Retransmission Systems Regulations, SOR/89-255,
subsection 3(1)). It was argued that subsection
70.64(1) [as enacted by S.C. 1988, c. 65, s. 65] of the
Act required a "preferential" rate for these small sys
tems, but that this figure was not that—rather it was
merely a "nominal" rate which did not reflect the
value of the property rights nor the factors which
influenced the fixing of the non-preferential rate, and
hence should be set aside as irrational.
The Board was given a broad discretion under this
Act to fix the amount of royalties to be paid and to
determine how the burden of these payments would
be borne. In deciding that $100 was an appropriate
figure for these small systems, the Board offered
three reasons. A flat rate reduced the administrative
and reporting burden on small systems. It made the
royalty burden smaller than that carried by large sys
tems for all small systems with over 41 subscribers.
The $100 amount recognized the obligation of the
small system to pay for the use of distant signals.
This Court can see no reviewable error in these rea
sons, even though it can understand why PROCAN
and CAPAC would object to this rather unscientific
method of rate-fixing. The Board was within its dis
cretion in setting a $100 amount for small systems.
The eighth issue to be considered, also raised by
CAPAC and PROCAN, was whether the Board erred
in setting a series of different, advantageous rates for
systems having between 1,000 and 6,000 subscribers.
It is contended that there was no specific statutory
authorization for the Board to do this, as there was in
the case of small systems. It is also argued that a sys
tem of preferential rates was established for some of
the "large" systems, whereas the statute provided for
such n benefit only for "small" systems as defined in
the regulations.
In arriving at its decision, the Board mentioned the
"special concerns of small systems" beyond "the
boundary between small and large systems" and
responded to them by creating a series of increasing
rates for the systems with 1,000 to 6,000 subscribers,
even though these systems used distant signals to a
larger extent than the larger systems. In making use
of its broad discretion, the Board took as its guiding
principle that the rates it set be fair and equitable.
Many of the parties proposed taking the number of
subscribers into account in rate-fixing so that clearly
they did not feel this to be an unfair or inequitable
method of allocation. Consequently, the Board set out
a scale of royalty payments generally based on the
number of subscribers to each system. Given that the
Act does not expressly prohibit the creation of classes
of intermediate-sized systems, the Court can find no
reviewable error in this determination.
In the result, this section 28 application will be dis
missed.
MAHONEY J.A.: I agree.
MACGUIGAN J.A.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.