Ruling says judicial review application arising from royalty rates setting request is premature
The Federal Court of Appeal has denied an application for judicial review of an interlocutory ruling arising from a tariff-setting proceeding that the Society of Composers, Authors and Music Publishers of Canada (SOCAN) brought before the Copyright Board.
In Society of Composers, Authors and Music Publishers of Canada v. Apple Canada Inc., 2026 FCA 122, SOCAN sought an order under the Copyright Act, 1985, to establish the royalty rates SOCAN would collect for 2014–26 from users of musical works in online audiovisual services and user-generated content services.
During case management, the Board opted to split the proceeding into two phases and identified four preliminary issues for consideration in the first phase:
- Did CBC v SODRAC, 2015 SCC 57, apply to tariff proceedings before the Board? If so, how?
- Could the statutory exceptions under ss. 29.21, 29.24, 30.7, 30.71, and 31.1 of the Copyright Act apply to a class of services covered by the proposed tariffs?
- What was the interpretation of s. 66.501(a) of the Copyright Act?
- Which rights did the offering, creation, and use of offline viewing copies trigger?
The Board’s first-phase notice included two safeguards. Under the relevant safeguard, parties could ask the Board to reconsider if evidence in the second phase significantly cast doubt on a first-phase conclusion.
On Nov. 21, 2025, the Board made a ruling on the preliminary issues. In the ruling, the Board stated that it did not finally determine the proposed tariffs under consideration and reminded the parties of the safeguard. SOCAN applied for a judicial review of the first-phase ruling.
Three respondents – Buena Vista International, Inc., Warner Bros. Entertainment Inc., and Netflix Inc. – moved to strike the application. They alleged that:
- The first-phase ruling was interlocutory, was part of a broader ongoing administrative process, and was thus not a “decision” amenable to judicial review
- Even if the court could judicially review a decision in principle, SOCAN had not exhausted sufficient and effective alternative recourse
- No exceptional circumstances warranted early judicial intervention
These respondents requested lump sum costs of $20,000 or heightened costs because SOCAN allegedly should never have filed its application.
Application dismissed
The Federal Court of Appeal granted the motion to strike. The appeal court found SOCAN’s judicial review application premature for the following reasons.
First, the appeal court did not find the first-phase ruling amenable to judicial review. The appeal court held that the ruling did not impact legal rights, impose legal obligations, or prejudice SOCAN, such that judicial review was warranted at this stage of the proceeding.
The appeal court noted that the first-phase ruling expressly acknowledged its preliminary nature and confirmed the parties’ right to ask the Board to revisit a first-phase conclusion if the second-phase evidence substantially cast doubt upon that conclusion.
Second, even if the first-phase ruling were amenable to judicial review in principle, the appeal court determined that SOCAN had not exhausted the available adequate alternative remedies. The appeal court added that SOCAN could later raise the same challenges it was currently raising.
The appeal court explained that nothing prevented SOCAN from raising the issues it raised in its judicial review application from the first-phase ruling in a future judicial review application from the second-phase decision upon the conclusion of the administrative process, subject to certain principles.
Third, the appeal court saw no exceptional circumstances warranting early judicial recourse in connection with the first-phase ruling. The appeal court explained that the interlocutory first-phase ruling’s effects were not so immediate and radical as to call into question the rule of law.
Finally, the appeal court awarded the three respondents all-inclusive lump sum costs of $5,000.
