This article highlights noteworthy Canadian copyright law decisions and developments from 2018.

Notice and Notice Regime and Norwich Order

Rogers Communications Inc v Voltage Pictures, LLC, 2018 SCC 38

The Supreme Court of Canada weighed in on the obligations of internet service providers (ISP) under Canada's "notice and notice" regime and what costs are recoverable by ISPs when they comply with a Norwich order (i.e. an order that requires the ISP disclose the identity of the person who allegedly infringed the copyright).

Voltage had alleged that their copyrights were infringed online by approximately 55,000 people. Voltage brought a motion for a Norwich order compelling Rogers to disclose the identity of the owners of the identified IP addresses. Voltage further sought to have this Norwich order made at no cost payable to Rogers. Rogers took no position on whether Voltage was entitled to the Norwich order but maintained that it should be able to recover its costs if the order was granted.

Currently, ISPs are prohibited from charging any amount for complying with their obligations to forward the notice of claimed infringement to the person to whom the IP address belongs pursuant to the notice and notice regime, as the Minster has not fixed a maximum fee under the Regulations. At issue in this proceeding was whether the ISP could recover its costs of compliance with the Norwich order if the steps which it must take to comply with the order overlap with its obligations under the notice and notice regime.

Justice Brown held that in addition to the express obligations that are set out in s. 41.26(1) of the Copyright Act, ISPs also have implicit obligations under the notice and notice regime including:

  1. Determining, for the purpose of forwarding notice electronically, the person to whom the IP address belonged;
  2. Taking necessary steps to verify that the notice is accurately forwarded; and
  3. Taking necessary steps to verify the accuracy of those records that an ISP must retain and would allow that identity of the person who owns the IP address (name and address) to be determined.

To the extent that an ISP incurred expenses in performing its statutory obligations under s. 41.26(1), those costs are not recoverable. Recoverable costs must be reasonable and arise from compliance with the Norwich order such as the cost of discerning a person's identity from its records.

On the question of whether Roger's costs of compliance with the Norwich order were reasonable, Brown J ordered that the matter be returned to the motion judge for re-determination.

Standard of Review

Canadian Copyright Licensing Agency (Access Copyright) v Canada, 2018 FCA 58

The Federal Court of Appeal dismissed an application by Access Copyright for judicial review of a Copyright Board decision certifying the royalty rates payable to Access Copyright for the reproduction of copyright-protected works by the provincial and territorial governments.

The central issue on judicial review was the Board's decision to exclude the "Deletion Provision" and with it digital copies from one of the two proposed tariffs. The Deletion Provision would have required the government licensees delete digital copies of work subject to the tariff after the tariff period.

Access Copyright argued that the Board had no authority under the Copyright Act to vary the terms and conditions on digital uses that Access Copyright agreed to authorize. It characterized the Board's decision as a "removal" of the Deletion Provision and one that attracts a correctness standard because it is a jurisdictional matter.

The respondents characterized the Board's decision differently. The respondents argued that the Board decided not to include the Deletion Provision in its tariff which it was within its discretion to do.

The Federal Court of Appeal conducted a detailed analysis of the appropriate standard of review to be applied to decisions of administrative bodies. The Court provided a detailed analysis of "jurisdictional questions" with an analysis of the law going back to C.U.P.E., Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227, 97 D.L.R. (3d) 417 (S.C.C.). The Court held that the appropriate standard of review for the Board's decision was reasonableness.

The Court ultimately agreed with the respondent's characterization of the decision under review and dismissed the appeal, holding that the Board has the authority under s. 70.15 of the Copyright Act to decide what matters should form part of a tariff. The Court analyzed the decision of the Board and held that the Board's decision to not include the Deletion Provision was reasonable.

Anton Piller Order and Interlocutory Injunction

Bell Canada et al v Lackman, 2018 FCA 42

The appellants (Bell Canada et al) appealed an order of Justice Bell where he vacated an Anton Piller order and dismissed their motion for an interlocutory injunction. Justice LeBlanc has granted the Anton Piller order and interim injunction against the respondent – the respondent was involved in a TV Addons website. The TV Addons website contained a repository of infringing add-ons which enabled users to access and stream digital contents through media players such as the KODI. The appellants alleged that the respondent infringed copyright by communicating and making available to the public the appellant's programs, and by inducing and/or authorizing users of infringing add-ons to infringe by virtue of operating the TV Addons business.

Justice Bell was highly critical of how the Anton Piller order was executed and refused to convert the interim injunction to an interlocutory injunction on the basis of the balance of convenience favoured the respondent. The Federal Court of Appeal allowed the appeal, set aside Justice Bell's order, declared the Anton Piller and interim injunction to have been lawfully conducted and issued the interlocutory injunction.

On the issue of the Anton Piller order, the Court found that Justice Bell misapprehended the evidence and made a palpable and overriding error in his assessment of the strength of the appellants' case. The Court held that the appellants had a strong primia facie case of copyright infringement and paragraph 2.4(1)(b) of the Copyright Act did not apply as the respondent's website was not a mere neutral conduit for information provided by others. The Court then held that had the reversible errors not been committed, the appellants would have met all the criteria for the issuance of an Anton Piller order. The Court also reviewed how the Anton Piller order was conducted, and concluded that it was legally executed and that Justice Bell's criticism were not warranted.

On the issue of the interlocutory injunction, the Court considered Justice Bell's finding that the balance of convenience favored the respondent. In analyzing the balance of convenience factor, the Court adopted its reasons related to the Anton Piller order and highlighted the lack of evidence of the financial means of the respondent. The Court allowed the appeal and granted the interlocutory injunction.

Crown Copyright in Works Incorporated by Reference into Regulations

PS Knight Co Ltd v Canadian Standards Association, 2018 FCA 222

The Federal Court of Appeal upheld the Federal Court decisions that found that copyright subsisted in the 2015 version of the Canadian Standards Association (CSA) Electric Code, that CSA owned that copyright, that the appellants' use of the Code was not fair and ordered costs to the respondents. The CSA Electrical Code is published by CSA and has been incorporated by reference into various legislation and regulations regarding electrical safety. The corporate appellant is a commercial competitor of CSA that sought to distribute complete and identical copies of the Code for a reduced price.

On the issue of whether copyright subsisted in the Code, the appellants argued that the Code had become law and was subject to the Crown copyright provisions. Justice Gleason, for the majority, found that the Code was neither a statutory instrument nor an enactment, and held that the Code did not became law by virtue of being incorporated by reference into statutes and regulations.

Justice Gleason held that the Crown's unique rights and privileges in the nature of copyright do not lend themselves to being raised as a defense by a third party, only the Crown can assert the Crown's prerogative. Justice Gleason also held that the Code is not published by or under the direction or control of the Crown or any government department, and therefore copyright had not been vested in the Crown under s .12 of the Copyright Act. Reference to the Code in statutes or regulations was not sufficient for the Crown to own the copyright in the Code. Justice Webb dissented on this point.

Justice Gleason also held that s. 34.1(2)(b) of the Copyright Act created a presumption that CSA owned the copyright in the Code; the presumption under s. 34(1)(2)(a) of the Copyright Act did not apply because CSA was not a person and therefore could not be an author. Justice Gleason ultimately held that copyright in the Code belonged to CSA.

Justice Gleason also rejected the appellants' fair dealings defense and held that the appellants' dealing was not fair.

Summary Judgment - Genuine Issue for Trial of Copyright Infringement Claim

Milano Pizza Ltd v 6034799 Canada Inc, 2018 FC 1112

This decision relates to cross-summary judgment motions brought by both parties. The Court granted summary judgment in the plaintiff's favor with respect to the registrability of the trademark registration at issue, granted summary judgment in the defendants' favor dismissing the copyright claim, and found there were genuine issues for trial with respect to the remaining issues raised by the parties in their pleadings.

With respect to the copyright claim, Mactavish J concluded that there was no genuine issue for trial. Although there was conflicting evidence over the creation of the MILANO logo, Mactavish J found that there was insufficient evidence to support the assertion that the plaintiff had any enforceable copyright rights in the logo. Specifically, the plaintiff failed to demonstrate that it was the author who exercised skill and judgment in creating the logo, or that there was a copyright assignment to the plaintiff. Accordingly, the Court granted summary judgment in favour of the defendants and dismissed the plaintiff's copyright claim.

Evans v Discovery Communications LLC, 2018 FC 1153

The Federal Court summarily dismissed a copyright claim based on alleged similarities between the plaintiff's novel, Glimpses of a Black Ops, and the defendant's television series, Futurescape. The plaintiff did not assert that the television series copied the novel, but rather that scientific content was similar between the two works. The Court found that such an allegation could not support a finding of copyright infringement.

In his reasons for dismissing the plaintiff's action, Zinn J applied the long-standing principle that there can be no copyright in ideas, only in the expression of ideas, and that there is no copyright in facts. He was unable to conclude that the expression of ideas in the two works were substantially similar. Furthermore, not only was there no evidence to suggest that anyone involved in the creation of the TV series accessed the novel or was even aware of its existence, the defendant's expert witness explained that the themes and topics explored in both works are common to science fiction. For those reasons and others, the Court granted the defendant's motion for summary judgment dismissing the action.

Hunter v British Columbia Lottery Corporation, 2018 BCSC 816

The British Columbia Supreme Court dismissed a motion for summary judgment on an application seeking a declaration that an item of artistic commercial design was an original work, thus covered by copyright owned by the plaintiff. The plaintiff, an artist and graphic designer, claimed to have spent considerable time in creating a Leaf Image. The Leaf Image was created from a leaf she had found, preserved, scanned into her computer and digitally altered. The British Columbia Lottery Corporation used a maple leaf design in a scratch and win ticket designed for Canadas 150th birthday. The plaintiff claimed that the defendant infringed her copyright in the Leaf Image. The defendant denied the claim and alleged that the lottery ticket was designed by a graphic design company.

While the parties framed the question to be decided on summary judgment as whether the Leaf Image was subject to copyright, the Court opined that this was an oversimplification considering the surrounding circumstances. The Court was not convinced that the Leaf Image is subject to copyright and held that there were contentious issues for determination at trial.

Monetary Awards

Collett v Northland Art Company Canada Inc, 2018 FC 269

By way of summary trial, the Federal Court awarded $80,000 in combined statutory, moral and punitive damages against Northland Art Company for infringement of copyright and moral rights. The plaintiff, a professional photographer, had previously supplied prints of his work to the defendants who were in the business of reselling them. After their relationship deteriorated, the plaintiff alleged that the defendants continued to reproduce his works thereby infringing his copyright and moral rights.

The Court first addressed the issue of whether the two corporate defendants were jointly and severally liable if infringement was found. Since NAC Canada did not exist as a corporation at the time of the alleged infringing activity, Gleeson J concluded that it could not be held liable.

Of the several works that were alleged to have been infringed, the evidence supported a finding that the plaintiff's copyright was infringed for three of the works. His moral rights and copyright were also nfringed for the work titled "Spirit of Our Land" which Northland had reproduced without the plaintiff's authorization and attributed to another photographer.

In assessing damages, the Court awarded the maximum statutory damages of $20,000 for copyright infringement of "Spirt of Our Land", and assessed lower damage awards ($7,500 to $10,000) for the other three works that were found to be infringed. For infringement of moral rights, the plaintiff was awarded $10,000. The Court also found that punitive damages were appropriate in this case and awarded the plaintiff $25,000 in light of Northland's conduct. Costs of $20,000 were ordered, which was approximately 50% of the plaintiffs actual legal costs. Finally, Gleeson J granted a permanent injunction against both corporate defendants.

Paragon Testing Enterprises Inc v Lee, 2018 BCSC 634

The British Columbia Supreme Court awarded over $174,000 in combined damages, disgorgement of profits, and punitive damages for copyright and trademark infringement in an undefended application for determination of relief following default judgment. Paragon operated an English language proficiency testing business which involved creating a proficiency test known as the Canadian English Language Proficiency Index Program ("CELPIP"). In addition to owning the copyright in CELPIP-related testing materials, Paragon was also the owner of two trademarks involving the term CELPIP.

Based on Paragon's evidence, the defendant Lee infringed Paragon's copyright by reproducing all or a substantial part of the CELPIP-related testing materials for use in Lee's own testing business. Lee also infringed Paragon's trademarks when he used them to market his business. Having previously obtained a default judgment against Lee, the only issue to be determined was whether Paragon was entitled the relief sought.

On Paragon's request for common law damages, the Court noted that, in this case, there was no material difference in the assessment of damages under the Trade-marks Act or the Copyright Act. Damages were assessed at $80,796.54 for the cost of replacing compromised test questions and investigation costs.

On Paragon's request for disgorgement of profits, pursuant to section 35(1) of the Copyright Act, the Court awarded $78,880 for the estimated revenue received by Lee from his improper use of the copyrighted testing material.

On Paragon's request for punitive damages, the Court found that Lee's dishonest and deliberate conduct met the test for punitive damages and assessed the award at $15,000, the amount being sought by Paragon.

Finally, the Court granted Paragon a permanent injunctive relief against Lee enjoining him from further infringing Paragon's copyright and trademark rights.

Sandhu Singh Hamdard Trust v. Navsun Holdings Ltd., 2018 FC 1039

Though this matter primarily concerned passing off and trademark infringement, the plaintiff also claimed for copyright infringement. The Court held that there was copyright infringement, but declined to order the $2 million being claimed for the relevant period. The Court determined that was there no direct or circumstantial evidence that the defendant's activities had any real impact on the plaintiff's business and ordered nominal damages of $5000.

The trademark aspects of this decision were appealed and the appeal was dismissed (2019 FCA 10).

Time-Limited and Encumbered Copyright

Geophysical Service Inc v Canada, 2018 FC 670.

The Federal Court dismissed a claim for compensation from the government over the alleged de facto expropriation of copyright over seismic data. The plaintiff, GSI, alleged that the legislative scheme required it to submit marine seismic data to various Crown agencies. In doing so, GSI claimed that the scheme amounts to a de facto expropriation of copyright because the Crown is authorized to disclose the data after a defined privilege period pursuant to a disclosure provision.

Based on the Alberta Court of Queen's Bench decision of Geophysical Service Inc v Encana Corp, 2016 ABQB 230, affirmed in 2017 ABCA 125, the Court found that the legislative scheme was set up to allow copyright itself to be created and acquired by authorizing access to lands or offshore areas upon which seismic data could be collected. From its inception, however, copyright in the seismic data was encumbered and time-limited by the disclosure provision. The legislative regime was a complete code and trumped the Copyright Act. Since copyright in the seismic data after the privilege period never accrued to GSI, the Court struck GSI's claim for expropriation. GSI's claim of unjust enrichment was similarly struck on the basis that GSI never had unencumbered rights in the data and therefore could not be deprived of a right that never existed. The remaining claims made by GSI were also struck with leave to amend.

Copyright Claim Against an Employee

1586091 Ontario Ltd v Waffle, 2018 ONSC 3943

The Ontario Superior Court of Justice (Divisional Court) upheld a trial judge's finding that an employee (respondent) of a hotel that used the appellant's logo was not liable for copyright infringement. The appellant brought an action against the respondent alleging copyright infringement due to the use of the logo in the redesign of the hotel's website and exterior signage.

On appeal was the trial judge's finding that the respondent was not liable for copyright infringement because the ownership of the logo had been transferred to the predecessor who operated the hotel (TTHC), and in the alterative, the respondent's use of the logo was in the course of her employment.

On the ownership issue, Swinton J declined to interfere with the trial judge's finding that the appellant had been paid and therefore, pursuant to a contract between the appellant and TTHC, ownership of the logo had been transferred to TTHC.

With respect to the employment issue, Swinton J concluded that the trial judge did not err in finding that the respondent was acting under the direction of her hotel employer when she used the logo and therefore did not herself infringement copyright in the logo.

The Court granted the appeal of the costs award.

Original Works and Fair Dealing Defence

Goldi Production Ltd v Bunch, Court File No.: 15-5800, dated August 1, 2018

The Ontario Superior Court of Justice ruled that the process of sourcing photos, photographing the photos, and enhancing the photos using a computer program was purely mechanical and therefore not "original" for the purpose of attracting copyright protection. Goldi created an "internet museum" which included photos and diary entries from a Canadian (Mason) involved in the Boer War. Original photos and diary entries were sourced from Mason's descendants. The plaintiffs alleged copyright infringement against the defendant for use of the photos and the story of Mason in his article which the defendant acknowledged were derived from the internet museum.

The defendant raised two defenses to the copyright infringement action. The first is that no copyright subsisted in the photos or the facts contained in the internet museum. The Court agreed that the facts of Mason's story could not be copyright protected. The Court also concluded that the photos contained in the internet museum were not protected by copyright as they were a product of a purely mechanical exercise and not skill and judgment.

While the Court's conclusion on the first defense was sufficient to dispose of the action, the Court also concluded that the second defense of fair dealing had been made out on the basis that the purpose of the defendant's article was to promote history.

Ownership of Copyright

Glasz v Choko, 2018 QCCS 5020

The Superior Court of Quebec ruled that an assignment of copyright to film footage was null and void. The defendant, a boxing promoter, allowed the plaintiffs to access and film two events starring Mike Tyson. The plaintiffs were filmmakers and operated their own production company. When the defendant informed the plaintiffs that Mrs. Tyson required the film footage to be owned by the defendant, the plaintiffs indicated in an email to the defendant that he would personally own all the footage.

The plaintiffs claimed ownership of the film footage and sought a declaration that the email in which they purportedly assigned their copyright to the defendant to be null and void. The defendant argued that film footage was validly assigned to him and further that it was created in the course of the plaintiff's employment with the defendant.

On the employment issue, the Court found that the plaintiffs were independent contractors and not employees and therefore were presumed to be the owner of the copyright. In her reasons, the judge noted that the plaintiffs received no remuneration, leased their own equipment, travelled to one of the events at their own cost, and received no creative direction or control from the defendant.

On the assignment issue, the Court found that the plaintiffs consented to assigning their copyright on the understanding that it was a condition to filming Mike Tyson. The defendant admitted that this was not true The Court held that the plaintiffs were induced into the assignment as a result of the defendant's misrepresentation, and declared the assignment null and void.

Online Copyright Piracy

Asian Television Network International, Re, Telecom Decision CRTC 2018-384

The Canadian Radio-television and Telecommunications Commission denied an application filed by a Coalition of over 25 stakeholders requesting that the Commission create a regime that addresses online copyright piracy. The regime would identify websites that blatantly, overwhelmingly or structurally engaged in copyright piracy and require ISPs to block end user access to those websites and services.

Over 150,600 interventions responded to the Coalition's application. Following a summarized review of the various submissions, the Commission conducted a statutory interpretation analysis to determine whether it had jurisdiction to rule on the application. The Coalition relied on sections 24 and 24.1 of the Telecommunications Act to establish the Commission's jurisdiction. However, the Commission found that when these two sections were broadly interpreted, they did not grant the Commission the power to implement the proposed regime. Specifically, without explicit language conferring copyright jurisdiction on the Commission, creating new copyright remedies under the Telecommunications Act would "conflict with Parliament's intent in creating an exhaustive copyright code in the Copyright Act". The Commission also reasoned that the proposed regime would conflict with Parliament's rejection of a notice and take-down regime and the ISP exemptions set out in paragraph 2.4(1)(b) and section 31.1 of the Copyright Act.

Having concluded that the Commission had no jurisdiction to rule on the application, the application was denied.

Copyright Board Decisions

SODRAC Tariff 5 – Reproduction of Musical Works Embedded into Cinematographic Works, Copyright Board of Canada, CB-CDA 2018-196 (September 28, 2018)

The Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) sought to certify a tariff for the reproduction of musical works embedded into cinematographic works for private use or theatrical exhibitions. The Canadian Association of Film Distributors and Exporters (CAFDE) previously objected to SODRAC's proposed tariffs, but later entered into a Settlement Tariff for the years 2009-2016. Both parties requested Board certification of the Settlement Tariff.

The Board noted that the royalties under the Settlement Tariff were different from SODRAC's proposed rates originally published in the Canada Gazette. Concerned that the revised rate structure under the Settlement Tariff could adversely impact certain users, the Board sent notices to non-CAFDE distributors inviting them to comment on the Settlement Tariff. Although no submissions were received from these distributors, the Board was satisfied that it had discharged its duties with respect to procedural fairness and certified the Settlement Tariff with some modifications, including removing the application of interest factors to retroactive payments.

SOCAN Tariff 22 – Internet – Other Uses of Music – Other Sites, Copyright Board of Canada, CB-CDA 2018-214 (November 6, 2018)

The Society of Authors, Composers and Music Publishers of Canada (SOCAN) proposed royalties to be collected for the communication to the public of musical works on "other sites" on the internet. When asked to clarify the activities to which the proposed tariffs would apply to, SOCAN indicated that it was not aware of any online audio uses that were not already covered by its other internet tariffs. Since the scope of the application could not be defined, the Board concluded that it would be acting arbitrarily and unreasonably if it certified the proposed tariff, and therefore declined certification.

Treaties

Comprehensive and Progressive Agreements for Trans-Pacific Partnership (CPTPP)

On December 30, 2018, the CPTPP came into force in Canada, Australia, Japan, Mexico, New Zealand and Singapore. This followed the United States' decision in January 2017 to not ratify the Trans-Pacific Partnership. The new agreement incorporates, by reference, the provisions of the former TPP, but with certain provisions being suspended. With respect to copyright, these suspended provisions include:

  • Term of copyright protection of life of the author plus 70 years;
  • Providing legal protection and remedies against the circumvention of technological protection measures (TPMs);
  • Providing legal remedies to protect rights management information (RMI);
  • Providing legal protection for encrypted program-carrying satellite and cable signals; and
  • Providing safe harbours for internet service providers (ISPs) while ensuring legal remedies are available for right holders to address online copyright infringement.

Canada-United States-Mexico Agreement (CUSMA)

On November 30, 2018, Canada, the United States and Mexico signed a revised trade agreement. Canada has yet to ratified this new agreement which it has called CUSMA, but Canada's obligation with respect to copyright will include:

  • Extending the term of copyright protection of life of author plus 70 years for works; and
  • Implementing civil and criminal remedies for altering or removing rights management information (RMI, i.e. "digital watermarks).

Legislation

Bill C-86, Budget Implementation Act, 2018, No. 2

On December 13, 2018, Bill C-86, Budget Implementation Act, 2018, No. 2, received Royal Assent which introduced changes to the Copyright Act. One of these changes is the content of a notice of claimed infringement under the notice and notice regime. It is now prohibited to include settlement offers/demands in relation to the claimed infringement.

Bill C-86 also drastically reformed the Copyright Board. These reforms are largely procedural and are intended to expedite matters before the Board. They include:

  • Implementing case management procedures and empowering the Board to deal with matters "informally and expeditiously"; and
  • Requiring proposed tariffs to be filed earlier and cover a longer effective period.