On February 19, 2014, the Ontario Superior Court released the decision of Justice Perell in Waldman v Thomson Reuters Canada Limited,1 in which he refused to approve a settlement agreement reached in a copyright class action. The underlying action was brought on behalf of lawyers and paralegals whose court documents were published by Thomson Reuters Canada Limited (“Thomson”) via its legal publishing branch. The plaintiff alleged that by making lawyers’ court documents available to subscribers without the lawyers’ permission, Thomson infringed the copyrights of class members under the Canadian Copyright Act.
The parties reached a settlement agreement, pursuant to which Thomson agreed, inter alia, (a) to pay $350,000 to settle a cy-près trust fund to support public interest litigation, (b) to amend its copyright notices, (c) to notify counsel named on a court document prior to its inclusion on the electronic database, for a 10-year period, in order to give lawyers an opportunity to opt out of publication, and (d) to pay $825,000 to class counsel as costs. In exchange, class members were to grant (a) a release of claims advanced in the class action and (b) a non-exclusive license in respect of their court documents on Thomson’s database.
Justice Perell determined that the proposed settlement was not fair, reasonable or in the best interests of the class as a whole. Notably, class members did not receive any direct benefit in exchange for their licenses,2 nor did the terms of the agreement prompt any behaviour modification by Thomson beyond the temporary 10-year notice period.3 As a result, the settlement agreement “was inconsistent with the purposes of the class action, which was never about the money but about the principle that Thomson should not infringe the Class Members’ copyrights in court documents.”4
In a framework that seeks to provide “procedural and substantive access to justice to Class Members”,5 a settlement agreement which provides no direct benefit to class members, bears no connection to the issues in the litigation and is more beneficial for class counsel than class members, will likely not be upheld.
Link to decision of Justice Perell: