Canada: Quarterly Copyright Blog #6

Last Updated: August 15 2019
Article by John McKeown

For those who are interested in recent cases and developments concerning copyright and related matters, there have been several developments since the last entry.

INDU Committee Report 1

Section 92 of the Copyright Act provides that the Act must be reviewed every five years by a designated or established parliamentary committee. On 13 December 2017, the House of Commons designated the Standing Committee on Industry, Science and Technology (the Committee) to review the Act. A report was released on June 3, 2019, which presents 36 recommendations. It remains to be seen what actions will be taken as a result of the recommendations.

Shifting Paradigms -Report of the Standing Committee on Canadian Heritage 2

On 29 March 2018, the House of Commons Standing Committee on Canadian Heritage directed the Standing Committee on Canadian Heritage to conduct a study on remuneration models for artists and creative industries, including rights management and the challenges and opportunities of new access points for creative content. In May 2019 the Committee released its report and made 15 recommendations for the consideration of the House of Commons or the Government.

Regulations Establishing Time Limits in Relation to Matters Before the Copyright Board. 3

The Government has published proposed regulations said to be a key element of the Government's plan to address decision-making delays of the Board, while preserving the independence of its decision-making process. The comment period for the regulations closed May 27, 2019. Concerns have been raised about the effectiveness of the regulations and submissions have been made by stakeholders. The final form of the regulations will be published in the Canada Gazette.

Arysta Lifescience North America, LLC v. Agracity Crop & Nutrition Ltd. 2019 FC 530

A judge of the Federal Court confirmed that in situations involving urgency an interim injunction may be granted but the onus of proof is on the moving party to demonstrate that it is a situation of urgency and the usual matters justifying the grant of an injunction before trial. The facts strongly favoured the plaintiff. In addition, there were concerns about the defendant's ability to pay any damage award if the injunction was not granted. The judge was satisfied that the plaintiff established, through clear and non-speculative evidence the defendant could not pay a damage award which satisfied the test of showing irreparable harm.

ME2 Productions, Inc. v. Doe [1], 2019 FC 214

On an appeal from a prothonatory, acting as case management judge, the Federal court practice concerning applications for a Norwich order was considered. The prothonatory had issued a Norwich order and determined that a claim against the ISP involved for statutory damages could proceed as a part of the application. The ISP attacked the grant of the order.

The judge confirmed that a Norwich order is extraordinary equitable relief; derived from the equitable bill of discovery and is a means of obtaining necessary information from a third party. Cases are generally brought ex parte, and so the applicant must make full and frank disclosure of all relevant information.

The ISP had information relevant to whether the applicant met their obligation to the court sufficient to give the ISP standing to raise the claim. In addition, the ISP had both a legal and commercial interest that warranted granting it standing. It is the choice of an ISP whether to participate in such applications and it should not be barred at the courthouse door.

The duty to make full and frank disclosure is owed to the Court, not to any party. Failing to meet this duty requires no intention to mislead the Court, although the intentional withholding of relevant information – and information which would be adverse to the applicant's position – is of particular concern to the Court.

A judge hearing such claims has discretion concerning non-disclosure – it does not automatically result in a dismissal of the ex parte proceeding. Among the considerations in exercising this discretion, courts have found that the nature of the failure and the degree and extent of the applicant's culpability, are highly material factors.

The judge said that the initial threshold to obtain a Norwich order is not generally a high bar – all that is required is to demonstrate that the applicant has a bona fide case. But it has long been recognized that a Norwich order is extraordinary equitable relief and courts must exercise caution in granting such orders.

The Court is entitled to demand the best available evidence be filed to support a motion seeking the extraordinary equitable relief of a Norwich order. The evidence submitted did not comply with the Federal Court rules and was not sufficient.

The final issue related to the claim against the ISP for statutory damages. The Judge was not convinced that making this ruling was inappropriate.

The decision concludes with directions for future applications:

  1. Copyright owners must ensure that they meet their obligations to make full and frank disclosure of all relevant information and that their motion records are accurate and organized so the Court can fulfil its responsibilities;
  2. The core evidence to support a motion – setting out the details of the alleged copyright infringement, the connection to a particular IP address and its association with an ISP, and the details regarding the notice sent under the notice and notice regime – should all be contained in affidavit(s) that can be subject to cross-examination. If this cannot be done, an affidavit explaining why, and setting out the best available evidence, should be provided;
  3. Granting a Norwich order forcing an ISP to disclose the names and addresses of subscribers is available under the Rules and binding jurisprudence. This follows the intent of Parliament in adopting the notice and notice regime and is an essential backstop to that regime. Giving practical effect to that backstop, by ensuring that copyright owners can take effective steps to enforce their rights in the face of widespread unlawful downloading on the Internet, is an important responsibility which Parliament has left to the Courts to fulfil.
  4. A Norwich order can be an intrusive and extraordinary remedy that must be exercised with caution. When Parliament adopted the notice and notice regime, it sought to balance the interests of copyright owners, individual subscribers, and Internet intermediaries such as ISPs. Achieving that balance requires copyright owners to act with diligence in preparing their material and meeting the normal standards of evidence by way of affidavit. It also requires ISPs to deliver the notice to their subscribers and to maintain associated records or to face a claim of statutory damages for breach of these obligations. Finally, it requires courts to play their role in granting – or refusing – Norwich orders, and then dealing with claims of copyright infringement.

The Canadian Copyright Licensing Agency v. York University 2017 FC 669, 2018 FCA 81

In this case, the Federal Court considered the application of the exception for fair dealing for the purpose of education. The University had developed Fair Dealing guidelines relating to copying based on guidelines established by the Association of Universities and Community Colleges. The court concluded that Guidelines were not fair in either their terms or their application. The Guidelines did not withstand the application of the two-part test laid down by the Supreme Court of Canada jurisprudence. The court also found that an interim tariff was enforceable in the courts in the same way as a "final" tariff.

This decision has been appealed to the Federal Court of Appeal. Universities Canada, an association representing 96 universities from across Canada, the Canadian Association of University Teachers and the Canadian Federation of Students have been granted leave to intervene in the appeal. The appeal has been argued and a decision is pending.

Digital Access Service (DAS) for Industrial Design Applications

CIPO is participating in the World Intellectual Property Organization Digital Access Service (DAS) for industrial design applications. DAS is an electronic digital library service to facilitate the secure exchange of priority documents between intellectual property offices (IPOs). DAS provides an electronic system where applicants may request that the initial IPO provide priority documents on the system. The applicant may then request that other IPOs retrieve those documents via the service for applications filed subsequently. As a result, it will no longer be necessary to request certified copies of documents for filing.

Protective Orders

a) Canadian National Railway Company v. BNSF Railway Company 2019 FC 281

A judge of the Federal Court disagreed with the approach taken in the decision of another judge of the court because it failed to consider whether the requested protective order was necessary since reasonably alternative measures would not prevent the risk to the interests in the confidential information in issue. On reviewing the implied undertaking rule and its application the judge concluded that the reasonable alternative measure of a protective agreement would protect the parties' confidential information as well as the requested protective order. The judge refused to grant a protective order.

b) Dtechs EPM Ltd v British Columbia Hydro & Power Authority; Paid Search Engine Tools, LLC v. Google Canada Corporation 2019 FC 559

Other judges have disagreed with the approach taken in Canadian National Railway decision and issued protective orders. The reasoning of these decisions is compelling, but the matter will have to be resolved by the Federal Court of Appeal. Meanwhile, there is uncertainty concerning the issuance of protective orders.

Footnotes

1. Currently available at https://www.ourcommons.ca/DocumentViewer/en/42-1/INDU/report-16/page-42

2. Currently available at https://www.ourcommons.ca/DocumentViewer/en/42-1/CHPC/report-19/page-18

3 . Currently available at http://gazette.gc.ca/rp-pr/p1/2019/2019-04-27/html/reg2-eng.html

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