Canada: Top Canadian Copyright Cases For 2017

Last Updated: January 26 2018
Article by John McKeown

2017 was a significant year for copyright decisions. The reported decisions reflect the broad impact of copyright on commercial activities. Key decisions have considered sculptures, architectural plans, technical protection measures on computer games, photographs, remedies for infringement, interlocutory injunctions, Norwich orders, the fair dealing exception, Anton Pillar orders, the making available right, plans of survey and freedom of expression. The decisions are discussed below.

1. In Corocord Raumnetz GMBH v. Dynamo Industries Inc1 the copyright subsisting in the design of a line of playground "sculptures" was in issue. While the sculptures had aesthetic features they are also designed to be playful and safe, and were subject to technical safety requirements including requirements relating to arm reach and rope size. The court concluded that as a result of this practical use the sculptures were "useful articles".

It was not disputed that the copyright owner had authorized that more than the 50 reproductions of each of its playground sculptures be manufactured on a worldwide basis, which had occurred before the defendant copied the sculptures. However, each of the playground sculptures had not been reproduced more than 50 times in Canada when the defendant commenced selling and manufacturing the impugned products.

The judge concluded that the limitation relating to 50 reproductions should be applied when an article is reproduced in a quantity of more than fifty in Canada and elsewhere and the plaintiff's action was dismissed.

2. In Ankenman Associates Architects Inc. v. 09811478 B.C. Ltd.2 the court found that the architect of the plans relating to an apartment development continued to own the copyright in the plans but that in return for payment of the services rendered the developer acquired the right to use the plans for the purpose of constructing the development. In effect there was a non-proprietary licence in favor of the developer. However, when the developer failed to make payment as required by the agreement with the architect the implied licence was implicitly revoked. The intervening foreclosure of the development and the sale of the development to a new purchaser did not affect the architect's copyright in the plans. The new purchaser's use of the plans to complete the development without the architects consent was an infringement of the architect's copyright.

3. In Nintendo of America Inc. v King3 a judge of the Federal Court in the context of an essentially undefended proceeding considered whether the physical configuration of Nintendo game cards was an effective measure for controlling access to the Nintendo Games. The evidence showed that the physical configuration of Nintendo game cartridges, including the shape of the card and the arrangement of the electrical pins, was designed to fit specifically into a corresponding slot on each of the Nintendo consoles. Together they operated much like a lock and key and were quite effective in controlling access to genuine Nintendo Games on the game cards.

In the normal course, a work contained on another medium with a different physical configuration, cannot be accessed by a user through a Nintendo console. A user without a Nintendo console is also unable to access a Nintendo Game on a genuine game card. As a result the physical configuration was an access control technical protection measure (TPM) under the Act.

In order to find liability under s. 41.1(1)(c) of the Copyright Act (Act), the plaintiff must establish that the defendant has committed one of the prohibited acts (e.g. offer for sale a device in this case a Game Copier) and one of the conditions (i), (ii), or (iii). Each of these conditions incorporate the word "circumvent". The definition of this word extends beyond descrambling and decryption (or other similar transformation) to anything else that otherwise avoids, bypasses, removes, deactivates or impairs the technological protection measure. It is apparent that Parliament intended TPMs to extend beyond TPMs that merely serve as barrier to copying. As a result it was found that the replication of the physical configuration of Nintendo game cartridges circumvented Nintendo's physical configuration TPM.

4. In Trader Corporation v. CarGurus4 the plaintiff's photographers took photos of motor vehicles to include in listings on its website. The plaintiff's evidence was that, as the result of their training, the photographers exercised skill in photographing the vehicles. They applied their judgment in selecting among the various options for taking photographs, taking into account variables such as the subject matter, angles, staging and framing. The judge said the fact that the photographers received training and followed standardized procedures did not eliminate the use of their skill and judgment in taking the photos, nor did it reduce the exercise of taking the photos to a simple mechanical exercise. It was found that the photos were original and protected by copyright.

The defendant argued that it had not actually reproduced the photographs but had "framed" them. The photographs were not on the defendant's website but the website of a third party. The court did not accept this defence and said that when the defendant displayed the photographs on its website it was "making them available to the public by telecommunication in a way that allowed a member of the public to have access to it from a place and at a time individually chosen by that person", regardless of whether the photo was actually stored on the defendant's website server or on a third party's server.

The defendant also argued that it was exempt from the plaintiff's claim for statutory damages on the basis that it operated a search engine and was the provider of an "information location tool". The court did not agree. The judge said that the crux of the defined term "information location tool" in the Act was the locating of information – it is a tool that it "makes it possible to locate information that is available through the Internet". Parliament did not intend to afford protection to providers like the defendant that gather information from the Internet and make it available to the user on the provider's own website.

5. In Voltage Pictures, LLC v. John Doe #15 the Federal Court of Appeal said that the purpose of the "notice and notice" system under the Act is "to reduce the complications and answer many of the questions that can arise when a Norwich order is sought. In this way, it makes the process more administrative in nature, more predictable, simpler and faster, to the benefit of all involved—but most of all to copyright owners who need to protect and vindicate their rights."6

The overall aim of the Parliament when it enacted the "notice and notice" system was to ensure that in the age of the internet, the balance between legitimate access to works and a just reward for creators is maintained. The internet must not become a collection of safe houses from which pirates, with impunity, can pilfer the products of others' dedication, creativity and industry. To the extent it can, the legislative system must be interpreted to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all.7

The internet service provider must forward the notice of claimed infringement to "the person to whom the electronic location identified by the location data specified in the notice belongs," namely the suspected infringer. An internet service provider should maintain its records in a manner and form that allow it to identify suspected infringers quickly and efficiently. It should search for and locate the relevant records and then analyze the records to satisfy itself that it has identified the suspected infringers accurately. To the extent the internet service provider must conduct verification activities to ensure accuracy, the verification activities must be part and parcel of their statutory obligations.8

The internet service provider must "retain records" that "will allow the identity of the person to whom the electronic location belongs to be determined" by those who will use the records. The "records" are those the internet service provider has located and maintains in a manner and form usable by it to identify suspected infringers in accordance with its statutory obligations.

The records must be in a form that can be used by the copyright owner to determine its options and, ultimately, by the court to determine issues of copyright infringement and remedy. To the extent that the records must be translated or modified in any way the internet service provider must perform that work as part of its obligations.9

Under the Act the Minister of Industry, may, by regulation, fix the maximum fee that an internet service provider can charge for performing the obligations set out above. But if no maximum fee is fixed by regulation, the internet service provider may not charge anything for performing its obligations.10

Unless an internet service provider is willing to hand over the retained records voluntarily, the copyright owner must seek an order for disclosure. It is reasonable for an internet service provider to insist that a disclosure order be sought. The order can protect it against aggrieved customers whose information is being disclosed.

The grant of a Norwich order is discretionary but the court's power to impose conditions and make directions is restricted in one major way. A court is bound by obligations set out in the Act. In the absence of a regulation, the Act forbids the charging of a fee for the internet service providers' discharge of its obligations.11

6. In two cases involving unlocatable copyright owners the Copyright Board concluded that since the communication of a work to the public by telecommunication included making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public, works that are made available are not published.12

7. In United Airlines, Inc. v Cooperstock13 the Federal Court considered a claim of fair dealing for the purpose of parody. The court found that parody should be understood as having two basic elements: the evocation of an existing work while exhibiting noticeable differences and the expression of mockery or humour.

The court also concluded that the fair dealing exception for the purpose of parody did not require a user to identify the source of the work being parodied. In addition, parody did not require that the expression of mockery or humour be directed at the exact thing being parodied.

The court concluded that the defendant's activities fell within the definition of "parody" and considered the six factors approved by the Supreme Court of Canada.14 The court referred to the questionable purpose of the dealing, amount of the dealing, and effect of the dealing and concluded that the dealing was not fair.15

8. The case of Google Inc. v. Equustek Solutions Inc.16 proceeded to the Supreme Court of Canada. Google argued that the injunction issued against requiring the world wide removal to references to the defendant's websites was unnecessary to prevent irreparable harm, and that it was not effective. It was also argued that as a non-party, it should be immune from the injunction.

Regarding the argument that non-parties should be immune the Court said it was well established injunctive relief can be ordered against someone who is not a party to the underlying lawsuit. The test for granting an interlocutory injunction in this context has not changed since injunctions may be issued in all cases in which it appears to the court to be just or convenient that the order should be made on terms and conditions the court thinks just.

The Court referred by analogy to Norwich orders and Mareva injunctions. Norwich orders can compel non-parties to disclose information or documents in their possession required by a claimant. Norwich orders have increasingly been used in the online context by plaintiffs who allege that they are being anonymously defamed or defrauded and seek orders against Internet service providers to disclose the identity of the perpetrator. Norwich disclosure may be ordered against non-parties who are not themselves guilty of wrongdoing, but who are so involved in the wrongful acts of others that they facilitate the harm.

Mareva injunctions are used to freeze assets to prevent their dissipation pending the conclusion of a trial or action. A Mareva injunction that requires a defendant not to dissipate his or her assets sometimes requires the assistance of a non-party, which in turn can result in an injunction against the non-party if it is just and equitable to do so.

Much like a Norwich order or a Mareva injunction against a non-party, the interlocutory injunction granted flowed from the necessity of Google's assistance to prevent the facilitation of the defendants' ability to defy court orders and do irreparable harm to Equustek. Without the injunctive relief, Google would continue to facilitate that ongoing harm.

The Court said that the problem was occurring online and globally. The Internet has no borders – its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates – globally.

9. In Bell Canada v. Lackman17 the reviewing judge determined that the Anton Pillar order in issue had been designed by counsel for the plaintiffs to shut down the defendant's operation and that the true purpose of the order was to destroy the livelihood of the defendant, to deny him the financial resources to finance a defence and to provide an opportunity for discovery in circumstances where none of the procedural safeguards of the civil justice system would be applicable. On reviewing the plaintiff's case the judge determined that nothing more than a serious issue had been shown and the higher threshold of a strong prima facie case was not met. As a result the Anton Pillar order was vacated.

10. In Canadian Copyright Licensing Agency v. York University18 the Federal Court considered the application of the fair dealing for the purpose of education exception. The court applied the approach specified by the Supreme Court of Canada. The analysis is a two-step process: first, the authorized purpose (in this case education) must be established and second, the dealing must be fair.

"Fair" is not defined and is a question of fact depending on the circumstances of each case. The fairness analysis engages six non-exhaustive factors:

  1. purpose of the dealing,
  2. the character of the dealing,
  3. the amount of the dealing (amount of copying),
  4. alternatives to the dealing,
  5. the nature of the work, and
  6. the effect of the dealing on the work.

The first five features must be established by the University. To the extent the plaintiff claims a negative effect of the dealing, the burden shifts to it to establish that factor.

The University had developed Fair Dealing Guidelines relating to copying based on guidelines that had been established by the Association of Universities and Community Colleges. The Association had previously represented the interests of York and other Universities in the proceedings before the Copyright Board that had resulted in the interim tariff. York's position was that any reproductions made fell within the Fair Dealing Guidelines and came within the exception.

The court concluded that Guidelines where not fair in either their terms or their application. The Guidelines did not withstand the application of the two-part test laid down by Supreme Court of Canada jurisprudence. It was left to the second phase of the action to determine what was due under the interim tariff including a determination as to whether the fair dealing defence applied.

11. In Communication to the Public By Telecommunication- Scope of Section 2.4(1.1) of the Copyright Act– Making Available [Online Music Services Services (CSI: 2011-2013; SOCAN: 2011-2013; SODRAC: 2010-2013)]19 the Copyright Board was considering statements of royalties to be collected for the communication to the public by telecommunication or the reproduction, in Canada, of musical works as noted above. The tariffs were examined jointly and merged into a single proceeding.

The impact of the coming into force of most provisions of the Copyright Modernization Act, including the introduction of subsection 2.4(1.1) of the Act, on November 7, 2012, was directly relevant to the tariffs. The subsection provides that

[f]or the purposes of this Act, communication of a work or other subject matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.

The Board issued a Notice stating that it was not possible to certify the proposed tariffs without deciding what effect the introduction of subsection 2.4(1.1) had on SOCAN's and others ability to receive royalties for such activities.20

The Board determined that: a) any collective that may, now or later, act for those whose works, performances or recordings may be made available in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public; and b) any objector who may make available a work, performance or recording in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public, including all current objectors, could file written submissions. Many interested parties choose to do so.

The Board said that interpretation of the Supreme Court of Canada in ESA21 was based on the performance-based activities covered by Articles 11 and 11bis of the Berne Convention which subsection 3(1) and paragraph 3(1)(f) of the Act were intended to implement. The Berne Convention and the amendments made as a result of the 1988 Canada-US Free Trade Agreement did not explicitly require protection for the transmission of copies. The Supreme Court in ESA did not consider the effects of the WIPO Copyright Treaty (WCT), as Canada had not yet implemented the WIPO Internet Treaties.

The legislative history of subsection 2.4(1.1) clearly distinguished the issue before the Board from the issue before the Supreme Court of Canada in ESA. While in ESA the Supreme Court held that "communication by telecommunication" was an act that occurs when a work is streamed, but not when it is downloaded, the Court did not consider the scope of "making [a work] available by telecommunication".

The Board concluded that the effect of the deeming provision in subsection 2.4(1.1) of the Act was to expand the meaning of the right of communication to the public by telecommunication, by reason that no definition of "communication" includes the preparatory act—that is, the "making available" of content in and of itself. The word, in its grammatical and ordinary meaning, includes only the successful transmission or conveyance of information from one person to another. Therefore, subsection 2.4(1.1) creates the legal fiction that the act of "making available" a work in the manner described is an act of communication to the public by telecommunication of that work. The previous interpretation of "communicate" in ESA focused only on the transmission element of that right and is distinguishable; it does not restrict the interpretation of subsection 2.4(1.1). As such, while many parties referred to the concept in subsection 2.4(1.1) of the Act as a "making available right" or MAR, it is probably more accurate to refer to it as a component of the right to communicate to the public by telecommunication.22

12. In Keatley Surveying Ltd v. Teranet Inc.23 the Ontario Court of Appeal considered the ownership of copyright in plans of survey that have been registered or deposited under provincial legislation. Teranet was obligated under the legislation to provide copies of registered or deposited plans of survey to members of the public upon payment of the prescribed fee. The court concluded that under the statutory scheme, Teranet had "published" the plans of survey when they make copies of those plans available to the public. However, mere publication by the Crown did not trigger copyright in the Crown under section 12. Instead for the section to apply it must be shown that the publication was "by or under the direction or control of Her Majesty". The court concluded that the statutory scheme gave the Crown complete control over registered or deposited plans of survey and complete control over the "publication" of those plans of survey. As a result certified copies of plans of survey made available to members of the public under the statutory scheme were works published under the "direction or control" of the Crown for the purposes of section 12 of the Act. Copyright in the registered or deposited plans of survey belonged to the Crown for the period of time prescribed in the section.

13. In Vancouver Aquarium Marine Science Centre v. Charbonneau,24 the British Columbia Court of Appeal considered the grant of an interlocutory injunction to restrain the publication of a documentary critical of the plaintiff. A filmmaker filmed and produced an hour-long, low-budget documentary film entitled "Vancouver Aquarium Uncovered" (the "Documentary"). The Documentary was primarily about the Vancouver Aquarium Marine Science Centre (the "Aquarium") and challenged claims regarding the Aquarium's research and education efforts and was critical of the Aquarium's practice of keeping whales and dolphins in captivity.

The Aquarium brought an action and applied for an interlocutory injunction to restrain use of its copyright material pending the trial. The judge who heard the application found there was a serious question to be tried and the balance of convenience favoured the removal of the contested segments of the Documentary.

The filmmaker appealed to the British Columbia Court of Appeal. The British Columbia Civil Liberties Association (BCCLA) intervened. BCCLA stressed the importance of freedom of expression and argued this right should be expressly recognized in the law governing interlocutory injunctions in civil proceedings. Animal Justice also intervened and argued that a claim for copyright in the Documentary should not be capable of suppressing unfavourable and critical commentary regarding animal rights.

The Court repeated the well-known test for the grant of an interlocutory injunction. Before issuing an interlocutory injunction, there must be a preliminary assessment of the merits of the case to ascertain there is i) a serious question to be tried, ii) a consideration of whether the applicant will suffer irreparable harm if the application were dismissed, and finally, iii) an assessment of the "balance of convenience", that is, which of the parties would suffer the greater harm from the granting or refusing the injunction pending a decision on the merits of the case. The fundamental question is whether granting an injunction is just and equitable in the circumstances of the case.

With respect to the irreparable harm the Court said that "irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured.

The Court referred to the position adopted by the Federal Court of Appeal to the effect that that the evidentiary foundation required to establish irreparable harm must be clear and based on non-speculative evidence that irreparable harm will occur if the injunction is not granted. The party seeking the injunction cannot simply rely on assertions.

The grant of an interlocutory injunction pending trial is significant and should only be granted when the three elements are established on a sound evidentiary foundation. This is particularly so in cases involving intellectual property rights since frequently the grant of an interlocutory injunction can effectively decide the dispute.

The Court found there was no evidence supporting the judge's conclusion about irreparable harm. If the damages were in the form of loss of donations, the loss of attendance or on a similar basis this should have been set out in the Aquarium's affidavits. It was not and the judge's conclusion could not stand.

The Court said that the judge also failed to carry out a sufficient analysis concerning the balance of convenience including freedom of expression.

The Supreme Court of Canada attaches great weight to the freedom of expression and stresses the societal importance of this right as guaranteed by s. 2(b) of the Charter of Rights and Freedoms. It has said that freedom of expression plays a critical role in the development of our society and was among the most fundamental rights possessed by Canadians.

Because of the importance of freedom of expression any attempts to restrict it must be subjected to careful scrutiny. In context of an application for an interlocutory injunction the potential for harm to the freedom of expression must be considered when the balance of convenience is considered.

Following this approach the Court concluded the balance of convenience favoured the filmmaker. The film was part of a public dialogue and debate on the issue of whether cetaceans should be kept in captivity, and the value of freedom of expression must weigh against granting the injunctive relief. As a result of its conclusions concerning irreparable harm and the balance of convenience the appeal was allowed and the interlocutory injunction set aside.

Footnotes

1 2016 FC 1369 (F.C.)

2 2017 BCSC 333 (B.C.S.C.)

3. Nintendo of America Inc. v King 2017 FC 246 (F.C.) at paragraphs 85-87

4. 2017 ONSC 1841.

5. 2017 FCA 97 (F.C.A.) Leave to appeal allowed (S.C.C., Nov 23, 2017)

6.Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F.C.A.) paragraph 21

7. Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F. C.A.) paragraphs 26-7.

8.Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F. C.A.) paragraphs 34-5.

9. Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F. C.A.) paragraphs 37-9.

10. Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F. C.A.) paragraphs 42-3.

11. Voltage Pictures, LLC v. John Doe #1 2017 FCA 97 (F. C.A.) paragraph 58.

12. Unlocatable Copyright Owners -2016-UO/TI-24, May 11, 2017 (Copyright Board), Unlocatable Copyright Owners –2016-UO/TI-08, May 11, 2017 (Copyright Board)

13. 2017 FC 616

14. See paragraph 10 of this note.

15. 2017 FC 616 at paragraph 141.

16. Google Inc. v. Equustek Solutions Inc. 2017 SCC 34

17. 2017 FC 634 (F.C.) this decision is under appeal and the order vacating the Anton Pillar order has been stayed pending the determination of the appeal.

18. 2017 FC 669

19. unreported decision of the Copyright Board dated August 25, 2017

20. Communication to the Public By Telecommunication- Scope of Section 2.4(1.1) of the Copyright Act– Making Available Online Music Services (CSI: 2011-2013; SOCAN: 2011-2013; SODRAC: 2010-2013)] unreported decision of the Copyright Board dated August 25, 2017

21. Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada. 2012 SCC 34, [2012] 2 SCR 231.

22. Communication to the Public By Telecommunication- Scope of Section 2.4(1.1) of the Copyright Act– Making Available [Online Music Services (CSI: 2011-2013; SOCAN: 2011-2013; SODRAC: 2010-2013)] unreported decision of the Copyright Board dated August 25, 2017 at paragraphs 117-118

23. Keatley Surveying Ltd v. Teranet Inc. 2017 ONCA 748 (Ont. C.A.)

24. 2017 BCCA 395

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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