Canada: Copyright Quarterly: Issue 1

Last Updated: July 11 2018
Article by John McKeown

For those who are interested in recent cases and developments relating to copyright and related matters there have been a number of developments since the last entry. They are set out below:

The Statutory Review of the Canadian Copyright Act

On 27 March 2018, the Standing Committee on Industry, Science and Technology published a plan under which it will conduct its review of the Copyright Act. The review will be carried out in three phases. The Committee will hear testimony from:

Witnesses representing specific sectors of activity, including publishing, visual arts, software and telecommunications (Phase I);

Witnesses representing a range of stakeholders involved in multiple sectors of activity, such as Indigenous communities and various interest groups (Phase II); and

Legal experts, including individual lawyers and academics, along with professional associations (Phase III).

All three phases are to be completed by early 2019.

Canada's New Intellectual Property Strategy

On April 26, 2018 the government launched a new Intellectual Property Strategy to help Canadian entrepreneurs better understand and protect intellectual property and also get better access to shared intellectual property. The components of the Strategy that will affect copyright include the following proposed legislative changes:

"The Notice and Notice Regime

While most rights holders have used the notice and notice regime responsibly, a small number of bad actors have leveraged it to send threatening demands to make settlement payments. We will make it explicit that notices that include such demands do not comply with the regime. This would protect consumers while ensuring that the Notice and Notice regime remains effective in discouraging infringement.

IP Licences in Bankruptcy Proceedings

Currently, in restructuring, IP licensees in good standing can continue to use the IP if the debtor disclaims the licence. New amendments will extend this right to liquidation proceedings."

In addition Government has also announced that it will:

"Expedited IP dispute resolution

IP rights' owners and users will benefit from more efficient and less costly IP dispute resolution and copyright tariff setting at the Federal Court and Copyright Board of Canada."

No details concerning when these changes will be implemented have been provided.

CASE LAW

The Board's Fair Dealing Analysis was Correct

An application for judicial review from the decision of the Copyright Board concerning the Access Copyright Provincial and Territorial Governments Tariff 2005-2014 was dismissed. The Federal Court of Appeal said that in its assessment of fair dealing the Board faithfully applied the teachings of the Supreme Court of Canada to the case. The Board assigned weight to the evidence as it was entitled to do and reached a conclusion that was acceptable and defensible. The court also said that there was much to be said for the adoption of a bright-line rule that one to two copied pages of a published work that did not exceed 2.5% of the overall work constituted "reasonable approximations and establishing non–substantiality The Canadian Copyright Licensing Agency Operating as Access Copyright v. Her Majesty the Queen In Right of the Province Of Alberta 2018 FCA 58.

The Scope of the Exception for Providing the Means of Telcommunicaion

The scope of the exception set out in paragraph 2.4(1)(b) was considered by the Federal Court of Appeal in the case of Bell Canada v. Lackman 2018 FCA 42. The court said that there was clearly a strong prima facie case that the respondent, by hosting and distributing infringing add-ons on its website, was making the appellants' programs and stations available to the public by telecommunication in a way that allowed users to access them from a place and at a time of their choosing, thereby infringing paragraph 2.4(1.1) and section 27 of the Copyright Act.

Non-Disclosure and Ex Parte Orders

Not every omission will result in an ex parte order being set aside. The full, frank and fair disclosure requirement is not a standard of perfection and it is impractical to expect every nuance of the situation to be brought to the attention of the court: The materiality of any alleged non-disclosure must be assessed by considering the importance of the alleged non-disclosure to the issues decided at the ex parte hearing. Regal Ideas Inc. v. Haus Innovations Inc. 154 C.P.R. (4th) 108 (B.C. S.C.)

Damages for the Infringement of Moral Rights

In Collett v. Northland Art Company Canada Inc. 2018 FC 269 the defendant produced inferior versions of the plaintiff's photographs in a significant quantity, attributed inferior versions to another artist and then sold the inferior product into the very marketplace in which Collett carried on business. This was found to be a violation of the plaintiff's moral rights in the photograph for which damages in the amount of $10,000 was awarded.

Industrial Design Features Applied to a Useful Article Dictated Solely by a Utilitarian Function

In the European Union, Article 8(1) of the regulation dealing with Community designs provides that a Community design shall not subsist in features of appearance of a product which are solely dictated by its technical function. In order for regulation to apply it must be determined whether technical function is the only factor which determined the appearance of the features. The Court of Justice for the European Union has said that in order to determine whether the relevant features of appearance of a product are solely dictated by its technical function, an assessment must be made, having regard to the design at issue, of the objective circumstances indicative of the reasons which dictated the choice of features of appearance of the product concerned, or information on its use or the existence of alternative designs which fulfil the same technical function. In short the national court must take account of all the objective circumstances relevant to each individual case. There is no need to base those findings on the perception of an 'objective observer'. Doceram GmbH v. Ceram Tec GmbH, (8 March 2018) case C-395/16 (Court of Justice of the EU).

An Industrial Design Filing Strategy

An applicant for an industrial design needs to develop an appropriate filing strategy and consider, among other things:

  1. Whether the product and the designs in issue have sufficient potential commercial value to justify the cost of filing;
  2. In what countries should applications be filed considering the market, the country or countries where manufacturing occurs and the countries where infringement typically occurs;
  3. Whether the applications should relate to the whole of the design, the shape only or a specific feature of the design.

Low Threshold Concerning What is Confidential Information

In the case of Brand Name Marketing Inc. v. Rogers Communications Inc. 2016 ONSC 4567 it was said that equity has set a relatively low threshold on what kinds of information are capable of constituting confidential information and that "some product of the human brain applied to existing knowledge" could suffice. Reference was made to Cadberry-Schweppes v FBI Foods Ltd. [1999] 1 S.C.R. 142 at paras. 75 and 76 where it is suggested that even information of little or no actual value may qualify as confidential information. It appears that the value of the information will, instead, be a factor for consideration in deciding whether to grant equitable relief or as a factor affecting the quantum of damages.

Assessing damages for Breach of Confidence

In TDC Broadband Inc. v. Nova Scotia (Attorney General) 2018 NSCA 22 (N.S.C.A.) the Nova Scotia Court of Appeal said that where injury has been suffered in a complex commercial setting, a "flexible and imaginative approach" to the assessment of the damages may be required. An appeal was dismissed since the trial judge utilized a flexible approach to the facts as he found them. There was no error in combining a willing seller/willing buyer approach with one that also recognized a depreciation in the value of the information disclosed.

Confidentiality Orders in the Federal Court

In the context of counsel's eyes only confidential orders in the Federal Court order to prevent disclosure to in-house counsel there must be concrete evidence to show that there will be prejudice if disclosure is made to such individuals. Angelcare Development Inc. v. Munchkin, Inc. 2018 FC 447

In Seedlings Life Science Ventures LLC v. Pfizer Canada Inc. 2018 FC 443 following Live Face on Web, LLC v. Soldan Fence and Metals (2009) Ltd. 2017 FC 858 a Prothonotary of the Federal Court took the position that given the existence of the implied undertaking rule, the court should no longer routinely issue consent protective orders. It was said that the majority of the substantive provisions of a typical protective order, do not need to be expressed in an order because they are already covered by the implied undertaking. Unless the necessity of an express order is demonstrated or other unusual circumstances exist, issuing protective orders was undesirable as it tends to devalue the implied undertaking, may lead to abuse or misunderstanding of the parties' obligations under the implied undertaking, and unnecessarily uses the court's time and resources.

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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