Canada: Key Copyright Decisions In 2018

Last Updated: February 14 2019
Article by John McKeown

It has been a very interesting year in the Copyright world with a number of significant decisions being released. The interface between the Copyright Act and the Competition Act; bright line tests in tariff hearings; the exception for those who provide the means of telecommunication; copyright in structural plans; the interface between copyright and laws of general application; the notice and notice regime and the nature of disclosure and ex parte orders have all been considered.

In Toronto Real Estate Board v. Commissioner of Competition the Competition Bureau found that the Board's restrictive practices concerning distributing web-based data substantially reduced competition contrary to section 79 and rejected the defences raised by the Board. One defence was a claim that under subsection 79(5) of the Competition Act the assertion of an intellectual property right copyright, could not be an anti-competitive act. Subsection 79(5) provides that for the purpose of the section, an act engaged in only to exercise a right under the Copyright Act is not an anti-competitive act.

On appeal to the Federal Court of Appeal, the Court said that subsection 79(5) protects the rights granted by Parliament to copyright holders and, ensures that the monopoly and exclusivity rights created are not exercised in an anti-competitive manner. The language of subsection 79(5) is unequivocal. It does not state that any assertion of an intellectual property right shields a party from what would otherwise be an anti-competitive act. Parliament intended, through the use of the word "only", to insulate intellectual property rights from allegations of anti-competitive conduct if the right granted by Parliament is the sole purpose of exercise or use. Anti-competitive behavior cannot shelter behind a claim of copyright unless the use or protection of the copyright is the sole justification for the practice.

In Canadian Copyright Licensing Agency Operating as Access Copyright v. Her Majesty the Queen in Right of the Province of Alberta an application for judicial review from a decision of the Copyright Board was dismissed by the Federal Court of Appeal. The decision under review was made in certifying a tariff. The Board concluded that copying a part of the work that was not substantial was not compensable (not infringing) for the tariff. The Court agreed that the Board correctly stated the law. The Court also said 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 in establishing non—substantiality." It will be interesting to see whether this approach will be adopted in other cases. It simplifies the process.

In Bell Canada v. Lackman the exception set out in paragraph 2.4(1)(b) was considered by the Federal Court of Appeal. The paragraph provides that participants in a telecommunication who only provide "the means of telecommunication necessary" are deemed not to be communicators. The judge at first instance dismissed a motion for an interlocutory injunction and vacated an Anton Pillar order relying on the exception set out in paragraph 2.4(1)(b) of the Copyright Act. The Court of Appeal allowed the appeal since when all the evidence was properly considered, the respondent's website could not be a mere neutral conduit for information provided by others. The Court said there was 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, infringing paragraph 2.4(1.1) and section 27 of the Copyright Act.

In Lainco Inc. v. Commission scolaire des Bois-francs the plaintiff successfully asserted copyright in the plans for and the structure itself of an indoor soccer facility. The structure designed by the plaintiff resulted from the specific combination of known concepts which provided a distinctive aesthetic appeal to the structure above the playing surface because of the use of the two main elements: the triangular master trusses, preferably arched, and Gerber secondary beams that highlighted the master trusses. To a lesser degree the plaintiff's design also included double columns used to support the master trusses.

The judge said that the combination of known elements could be protected by copyright if the arrangement produced by the author stemmed from the exercise of skill and judgment of the author. What must be considered is the overall arrangement that the author had produced. The plaintiff's design stood out from the competition and created a niche in the competitive market with the primary objective of offering a distinctive "look" that clearly met the safety, performance and sustainability requirements specific to structural engineering. That objective could only have been achieved through exercising the author's skill and judgement not through a simple mechanical application of knowledge and experience. Applying this approach, the Judge concluded that copyright subsisted "in the form represented by the compilation".

In Bell Canada v. 7265921 Canada Ltd. the Federal Court of Appeal said that the rights granted under the Copyright Act, such as in paragraph 3(1)(f) and subsection 13(4), are not unequivocal. They may be conditioned by other legislation with which copyright intersects. Just as a patent owner may exclude others from practicing the invention, patent owners are governed by all other relevant laws. The price at which patented pharmaceuticals are sold is regulated by the Patented Medicine Prices Review Board. Another example of a limitation on intellectual property rights is in section 32 of the Competition Act. It is not a defence to an allegation of anti-competitive conduct to assert that one is simply exercising an intellectual property right. The "sole right" of use under the Copyright Act does not confer immunity from other legislation. In addition, the owner of a copyright is not immune or exempt from laws of general application. While they enjoy the benefit of market exclusivity, they must nevertheless abide by the rules governing the particular market in which they participate.

In Rogers Communications Inc. v. Voltage Pictures, LLC the Supreme Court of Canada said that the notice and notice regime was enacted to serve two complementary purposes: (1) to deter online copyright infringement; and (2) to balance the rights of interested parties. The second purpose involves not only balancing the rights of copyright owners and Internet users who may infringe, but also the interests of Internet intermediaries such as ISPs.

Subsection 41.26(1)(a) requires an ISP to determine to whom the IP address belonged only in order to "forward the notice electronically" to them. The requirement of electronic (as opposed to personal) delivery can be discharged in various ways that do not require an ISP to know the relevant person's name and physical address, for example by e-mail. The subsection does not require that records (to which copyright owners and courts have no access) must be kept in a readable format that would permit copyright owners and courts to determine a person's identity from them. The ISP must also verify the accuracy of the determination, to ensure that the person who receives notice is the person to whom the IP address specified in the notice belongs.

There is a distinction between an ISP's obligation under the notice and notice regime to ensure the accuracy of its records that allow the identity of the person to whom an IP address belonged to be determined, and an ISP's obligation under a Norwich order to actually identify a person from its records.

Originally cast as an equitable bill of discovery a Norwich order is a type of pre-trial discovery which allows a rights holder to identify wrongdoers. The elements or factors that a copyright owner must satisfy to obtain a Norwich order are:

  1. a bona fide claim against the unknown alleged wrongdoer;
  2. the person from whom discovery is sought must be involved in the matter in dispute, they must be more than an innocent bystander;
  3. the person from whom discovery is sought must be the only practical source of information available to the applicants;
  4. the person from whom discovery is sought must be reasonably compensated for their expenses arising out of compliance with the discovery order besides their legal costs;
  5. the public interests in favour of disclosure must outweigh the legitimate privacy concerns.

The statutory notice and notice regime has not displaced the necessity of a copyright owner obtaining a Norwich order to compel an ISP to disclose the identity of a person alleged to have committed an infringement of copyright.

The Supreme Court also dealt with assessing the costs incurred by an ISP in complying with a Norwich order. The court disagreed with the Federal Court of Appeal's decision that the costs for which an ISP may recover in complying with a Norwich order are limited to those incurred in the act of disclosure — although an ISP may recover these costs. The statutory notice and notice regime does not require an ISP to maintain records in a manner or form that would allow copyright owners or a court to discern the identity and physical address of the person to whom notice was sent. In response to a Norwich order requiring it to furnish such information (or other supporting information), an ISP is entitled to the reasonable costs of steps that are necessary to discern a person's identity from the accurate records retained under s. 41.26(1)(b).

In Regal Ideas Inc. v. Haus Innovations Inc. the court said not every omission results 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.

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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John McKeown
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