In Capital Records v. Tennenbaum, the US
District Court for Massachusetts rejected the defendant
file-sharer's defence that his sharing of musical files over a
peer-to-peer (P2P) network was a "fair use" that should
insulate him from liability under the US Copyright Act.
The Act allows limited "fair use" of copyrighted material
without the rights holder's permission.
The defendant had contended that his uploading of more than 800
songs onto a P2P network was fair in light of the statutory
criteria requiring courts to consider (a) the purpose and character
of the use; (b) the nature of the copyrighted work; (c) the amount
and substantiality of the portion taken; and (d) the effect of the
use upon the potential market.
In rejecting the defence before trial, the court commented that
the defendant's suggested interpretation of the US
Copyright Act" proposes a fair use defense so broad
that it would swallow the copyright protections that Congress has
created. Indeed, the Court can discern almost no limiting
principle: [thus interpreted, the Act] would shield from liability
any person who downloaded copyrighted songs for his or her own
While the court found that there might be certain circumstances
in which a file-sharer could assert such a defence, it suggested
that such defences might be limited to acts undertaken in the
"infancy" of P2P file-sharing, where the purposes of the
use were otherwise in line with the fair use case law in the US.
This was not the case for this defendant, who had shared hundreds
of songs over the course of many years.
After the court's rejection of the fair use defence, the
case went directly to a jury without significant dispute as to the
extent of the file-sharing, and the defendant was assessed $675,000
in civil penalties based on the US statutory damages regime.
McCarthy Tétrault Notes:
The findings on fair use are consistent with other results in
the US courts. However, this decision must be applied with care in
a Canadian context, where the "fair dealing" doctrine
requires all such defences to be anchored in the specific purposes
set out in Canada's Copyright Act. The US Act's
fair use defence allows, in theory, for any use to be justified as
fair, while the fair dealing defence in Canada is only available in
certain enumerated situations — such as for research or
private study. The enumerations under the Canadian Act make it far
more difficult for Canadian mass infringers to argue that a
particular use was "fair" in any given context.
Recent calls have been made to adopt an open-ended fair use
system in Canada. These calls do not address the fact that US
courts have applied fair use law on a common law basis since 1841,
and on a statutory basis since 1976. In light of this long line of
jurisprudence, the doctrine has some meaning and boundaries,
allowing outrider cases such as Tennenbaum to be more
By contrast, adopting fair use into the Canadian legal system,
which lacks this backdrop, would result in confusion and
unpredictable application. The resulting uncertainty would inhibit
both users and creators from understanding what is permissible and
what is not. This concern is a major reason why a coalition of
close to 50 prominent Canadian organizations joined together in the
recent round of copyright consultations to oppose calls for a new
fair use system. Their joint submission was authored by Barry
Sookman and Daniel Glover of McCarthy Tétrault LLP.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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