This paper* summarizes selected developments in Canadian Internet law during 2019. Internet law is a vast area that continues to develop rapidly. Reference to current legislation, regulatory policies, guidelines and case law is essential for anyone addressing these issues in practice.
1. Internet Use of Trademark
Live! Holdings, LLC v. Oyen Wiggs Green & Mutala LLP, 2019 FC 1042, involved an application to expunge the Canadian trademark registration for the trademark LIVE! on the basis that it had not been used for the services – advertising and marketing services, entertainment services and hotel services – for which it was registered. Live did not have any "bricks and mortar" facilities in Canada. The Registrar of Trade-marks decided to expunge the registration, and Live appealed. Live argued that the LIVE! trademark had been used in Canada because people in Canada were able to access websites bearing the trademark, buy tickets to entertainment events in the United States that were advertised with the trademark, and hold a reservation at a hotel in the United States bearing the trademark. The court rejected those arguments on the basis that they did not establish that any of the services for which the trademark was registered were performed in Canada. The court reasoned that the term "services", as used in the Trade-marks Act, is to be given a liberal but not unlimited interpretation, and that to sustain a trademark registration for services some aspect of the services must be offered to people in Canada or performed or delivered in Canada so that they receive a "meaningful and tangible benefit" in Canada without leaving Canada. The court held that the mere display of a trademark on a computer screen is not sufficient to establish use of the trademark in Canada, and that people in Canada do not receive a tangible and meaningful benefit simply by accessing a website that provides information about events or hotels in the United States or by using online reservation portals that permit them to purchase tickets or book rooms for events or hotels in the United States. The court concluded: "Although the jurisprudence suggests a trend toward an expansive view of "use" and acknowledges that we must adapt to the realities of ecommerce, the basic principle remains that the use of a trade-mark in Canada requires that the registered services or wares result in a tangible and meaningful benefit to people in Canada". The court dismissed the appeal.
2. Injunction to Continue Use of Domain Name
Canivate Growing Systems Ltd. v. Brazier, 2019 BCSC 899, involved a dispute over the ownership and use of the canivate.com domain name. The defendant, one of the plaintiff's founders, registered the domain name in his own name before the plaintiff was incorporated for use by the plaintiff in connection with its cannabis greenhouse technology business. The plaintiff used the CANIVATE trademark and the canivate.com domain name (for its website and as part of the email addresses for its employees and other personnel) in connection with its business and related start-up activities (e.g., investor-relations) for approximately one year. The defendant retained registered ownership of the domain name. After a dispute arose among the plaintiff's shareholders, the defendant disputed ownership of the canivate.com domain name and disabled the domain name so that it no longer resolved to the plaintiff's website and related email addresses no longer functioned. The defendant acknowledged that he did not intend to use the domain name, but rather disabled it to gain leverage in the shareholders' dispute. The plaintiff sued and applied for a pre-trial injunction requiring the defendant to restore the plaintiff's use of the domain name. The court held that the plaintiff had established a strong prima facie case of passing off and would suffer irreparable harm if an injunction were not granted, and that the balance of convenience favoured granting an injunction. The court reasoned that it would be impossible to measure the harm to the plaintiff caused by its loss of control over its message, disruption of its business interests while in a start-up, fundraising mode and the potential loss of confidence by investors. The court also reasoned that the defendant could easily, with a "keystroke exercise", restore the plaintiff's use of the domain name. The court granted the injunction and ordered the defendant to restore the plaintiff's use of the domain name.
1. Site-blocking Order
Bell Media Inc. v. GoldTV.Biz, 2019 FC 1432, involved an application by Canadian broadcasting companies for an interlocutory mandatory injunction (a "site-blocking order") against innocent third-party Internet service providers (ISPs) requiring that they block access to websites and Internet services, operated by the anonymous defendants, that infringed copyright in the plaintiffs' programming content. The application was opposed by one of the ISPs. The court noted that a site-blocking order had not previously been issued in Canada, but had been issued in the United Kingdom. The court held that it had equitable jurisdiction to issue a site-blocking order against non-parties who had not engaged in any wrongdoing, and the provisions of the Copyright Act and the Telecommunications Act did not support the view that the court should decline to exercise its jurisdiction. The court held that an applicant for a site-blocking order was required to establish: (1) there is a serious issue to be tried; (2) irreparable harm will result if the order is not granted; (3) the balance of convenience favours issuing the order; (4) the proposed order is properly targeted; (5) the third party respondents should be justifiably bound by the order; and (6) considering the balance of convenience, the effects of the order are proportional and appropriately balance the interests of the defendants, the third party respondents, and the public. The court explained that the fundamental question is whether the granting of the site-blocking order is just and equitable in all of the circumstances, including the following principles or factors endorsed by the English Court of Appeal in Cartier International AG v. British Sky Broadcasting Ltd.,  EWCA Civ 658: necessity, effectiveness, dissuasiveness, complexity and cost, barriers to legitimate use or trade, fairness, substitution and safeguards. The court held that the plaintiffs met the test for a site-blocking order. The court rejected the arguments that site-blocking is an extreme measure that risks inadvertently stifling free expression by blocking legitimate content, and that the impact of a site-blocking order on the ISPs and consumers outweighed any harm to the plaintiffs caused by the copyright infringing activity. The court found that a site-blocking order would be an effective means of protecting the plaintiffs' rights, even though the site-blocking process could be circumvented and the order was not directed to all Canadian ISPs. The court noted that the proposed order made provision for the technical limitations of the ISPs, recognized that the ISPs should not bear the cost of implementation, included measures to minimize the risk of over blocking and a process to address inadvertent overblocking, and expired after two years. The order required the plaintiffs to indemnify the ISPs for the reasonable marginal cost of complying with the order, and for reasonably incurred costs, losses and liabilities resulting from third party claims and proceedings against the ISPs as a result of their compliance with the order.
2. Application to Certify Reverse Class Action
Voltage Pictures, LLC v. Salna, 2019 FC 1412, involved an application by film production companies for certification of a "respondent class proceeding", also known as a "reverse class action", for infringement of copyright in films that were distributed using peer-to-peer networks and file sharing software. The proposed class respondents were Internet account subscribers whose accounts had been used to upload the films during the prior six-month period. The film production companies argued that the proposed class proceeding would be more efficient than the alternative of naming thousands of respondents personally in separate proceedings, particularly since statutory damages for non-commercial infringements under the Copyright Act are limited to $100 to $5,000. The court dismissed the certification application on various grounds. The court held that the pleadings did not allege the facts necessary to disclose a reasonable cause of action for primary or secondary copyright infringement. The court also held that the film production companies had failed to establish that there was an identifiable class of two or more respondents. The court also held that a class proceeding was not a preferable procedure because the proceeding would require multiple individual fact-findings for each class member on almost every issue, depended on the availability of uncertain public resources, would invoke the Copyright Act notice-and-notice regime in a way that was unsustainable and would unfairly overburden Internet service providers, did not address the possibility that members of the proposed respondent class would opt-out, and did not name a suitable representative respondent. The court concluded that there were other available means of resolving the claims (i.e., joinder or consolidation) that were preferable to a reverse class action.
* Copyright © 2020 Bradley Freedman. All rights reserved. This paper is an abridged version of a chapter in Annual Review of Law & Practice, 2020, Continuing Legal Education Society of British Columbia.
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Originally published 25 April, 2020
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