Thursday, November 08, 2018

Follow Up on Bill C-86 – The Omnibus Bill that Amends Canadian IP Law


Bill C-86 has already been given second reading and is at the Finance Committee of the House of Commons. Yesterday, November 7, 2018, in the Finance Committee, there were about 10 minutes in total testimony by Grant Lynds, past President of the Intellectual Property Institute of Canada(“IPIC”) and Michael Geist in his own capacity on There were some subsequent questions. This takes place in the second hour of the webcast.

IPIC is the main professional association that represents intellectual property lawyers and agents in Canada. (I have been a member of IPIC forever and have spoken at many IPIC annual meetings). Michael Geist needs no introduction.

Mr. Lynds made some important points about file wrapper estoppel and how an immediate change may impact pending prosecutions and litigation. He also raised some important points about the proposed College of Patent and Trademark agents.

Michael Geist was largely positive about the package but concerned about the need for regulations re patent and copyright trolling notices and a need for an exception for informational analysis for text and data mining exception.  Michael did not deal at this time with the issue of whether the existing copyright law is adequate to implement the necessary regulations to prohibit the inclusion of settlement demands in s. 41.25 and 41.26 notices. In my humble opinion, it is, and it is inexplicable that this hasn’t been done in the last six years.  The question of patent trolling notices and demand letters is potentially much more complex and controversial and may yet not be ripe for specificity in the form of a detailed statutory requirement or even a regulation.

Both Grant and Michael were invited to provide “one line” drafts of amendments about their concerns.

Their concerns are not necessarily susceptible to one-line cures – at least not without considerable potential controversy. And both have many concerns that go way beyond one-line solutions. And needless to say, these two people – able as they are – can hardly speak for all in the IP community.

Neither Grant nor Michael were critical of the omnibus process of this bill, which was disappointing. Even if they mostly like this bill – apart from the serious concerns both raised which are not fixable by one-line amendments – this sets a dreadful precedent for the future. I’m surprised that neither made that point.

It was noted, if I heard correctly, that amendments must be proposed by November 15, 2018 and “clause by clause” will take on November 20, 2018.

There’s no downside in carving out the 100 pages or so of IP provision in C-86 and putting them into a separate IP bill – for which there are many precedents – which could get a few days worth of necessary, dedicated, and informed committee hearings and debate.

Instead, it looks like this will get literally only a few minutes – with perhaps of couple of “one line” token amendments… that may well be controversial and will certainly deal only with the tip of the iceberg.

There is no precedent in Canadian IP history for this massive bypass of parliamentary democracy. There is no urgency here to justify this departure from democracy.

While none of the provisions are obviously “evil”, some are potentially complicated and fraught with uncertainty and unintended consequences.

On the good news front, the LEGISinfo site indicated that the Senate Banking, Trade and Commerce Committee, which include Senator Joe Day – a former IP practitioner – and which has done good IP work before, for example on the Copyright Board, will hold hearings on the IP part of his bill even before it gets to the Senate.

On the bad news front, it also is unusual for the Senate to do is review in advance and this confirms the unseemly and completely unnecessary haste inherent in this unprecedented and unwarranted omnibus approach to IP law review in Canada.

HPK


Tuesday, November 06, 2018

Massive Canadian IP Law Reform in a Budget Bill – Throwing Parliamentary Scrutiny Under the Omnibus Bus with Bill C-86



We will not resort to legislative tricks to avoid scrutiny.

Stephen Harper has used prorogation to avoid difficult political circumstances. We will not.

Stephen Harper has also used omnibus bills to prevent Parliament from properly reviewing and debating his proposals. We will change the House of Commons Standing Orders to bring an end to this undemocratic practice.

Justin Trudeau: 2015 Campaign Platform
(highlight added)

Bill C-86, which was given first reading on October 29, 2018, is 884 pages long. It is an omnibus budget implementation bill that touches innumerable unrelated issues and amends dozens of acts. This is not the first Liberal omnibus bill that that breaks an important campaign promise. But it is the longest and most obviously “omnibus” bill to date. To the Liberal’s credit, there is now a procedure to divide omnibus bills with a Speaker’s ruling – EXCEPT notably in the case of budget bills. However, division has apparently even been done recently even in the case of a budget bill based upon a Speaker’s ruling. The NDP now wants this done again.  
Peter Julian MP (NDP) has raised the possibility of such division on Bill C-86 as a point of order. He appears to have a major point, without even focussing on IP. He has called this bill the “the largest and the worst omnibus bill ever presented in Canadian Parliament.”

Omnibus bills raise interesting and even existentially important questions about the democratic process. For example:
  • When is it appropriate to use an omnibus bill – even a budget bill – that mixes together so many unrelated issues that may be fraught with complexity and even controversy and may bear only a nebulous relationship to the budget, which in turn may be an artificial berth for such proposal in the first place?  After all, budgets in the Westminster tradition have traditionally been about taxation and other important financial and fiscal matters – not extremely detailed micromanagement of arcane aspects of IP law, for example.
  • Even if the provisions are welcome and uncontroversial, how can there be assurance of “quality” of the drafting when there may be only token and extremely abbreviated committee hearings and debate?
  • How can Canadian be assured of the advantage of “crowd sourcing” – which is a new term that could be applied to the very old concept of Parliamentary democracy and the law but essential procedure that entails three readings in each of the House of Commons and Senate, detailed committee consideration in both places, floor debate and eventual passage and royal assent? That takes time and is meant to take time. Otherwise, why would we need that big building on Wellington Street known as the Centre Block with its 338 Members of Parliament and 105 Senators?

Many of the IP issues dealt with in Bill C-86 cannot be said to be “provisions that were announced in the budget presentation or in the documents tabled during the budget presentation” as required by Standing Order 69.1(2) so as to prevent division. The Government’s IP Strategy announced on April 26, 2018 along with a promise to spend $85.3 million as part of the Budget  was extremely vague in general and devoid of any specific documents. The few references in it to proposed legislation, in the colourful but non-specific and largely uninformative web presentation were very uninformative and devoid of documentation . The closest the April announcement comes to Copyright Board reform is a vague reference to “less costly IP dispute resolution and copyright tariff setting at the Federal Court and Copyright Board of Canada.” That is a very thin basis for one of the two or three most drastic structural changes to the Copyright Board and its predecessor in the last 80+ years – all of which involved substantial standalone legislation and considerable scrutiny.

The Bill contains nearly 100 pages of dense, complicated and game changing IP legislation that will result in some significant structural change in several respects and may result in potentially controversial, costly and unintended consequences.  Ostensibly, this is about implementing this Government’s extremely vague IP strategy, and this is the pretext for including all of this in giant sized omnibus bill.

On the IP side, among other things, Bill C-86;
  • Uses the heavy and not easily correctable hand of legislation on many issues when regulatory authority has been available for years, but the government didn’t act, for whatever reason
  • Will establish a new and inevitably very expensive “college” of patent and trademark agents
  • Will quite possibly slow down the work of the Copyright Board rather than expedite it and stops well short of establishing hard-wired deadlines to hold hearings or render decisions, which could have been decisively done by regulation long ago
  • Introduces numerous complex and potentially controversial changes, such as patent “file wrapper estoppel” – an American concept that may help Canadian users/defendants in some cases but may backfire on innovator/patentees in others.

More specifically:

On copyright:

Bill C-86 contains provisions in ss. 243 – 246 of the bill that amend the Copyright Act “in order to specify that certain information is not permitted to be included within a notice under the notice and notice regime and to provide for a regulation-making power to prohibit further types of information from being included within such a notice.”  That’s OK  - but it is six years late and arguably unnecessary, since the authority to implement regulations prohibiting such abusive messaging is probably already sufficiently there in s. 41.25. This is better late than never, though we will never know how much money was unnecessarily paid by unsophisticated recipients who were naïve enough to unnecessarily respond to abusive notices and who needlessly put themselves on the radar of a troll after the in appropriate notices were passed along without apparent protest by risk averse and profit motivated ISPs

More complicated by far are the 20 pages of amendments from pages 216 -236 of the bill concerning the Copyright Board. The amendments purport to amend the Copyright Act:

in order to modernize the legislative framework relating to the
Copyright Board so as to improve the timeliness and clarity of its
proceedings and decision-making processes. More specifically, it
repeals spent provisions and
(a) codifies the Board’s mandate and establishes decision making
criteria;
(b) establishes new timelines in respect of Board matters, including
earlier filing dates for proposed tariffs and longer effective
periods for approved tariffs, and empowers the Governor
in Council to make additional timelines by regulation;
(c) formalizes case management of Board proceedings;
(d) reduces the number of matters that must be considered
by the Board;
(e) streamlines procedural steps across different tariff contexts,
maintaining differences between them only where necessary;
(f) amends relevant enforcement provisions, including the
availability of statutory damages for certain parties in respect
of Board-set royalty rates and enforcement of Board-set
terms and conditions; and
(g) modernizes existing language and structure for greater
clarity and consistency

That is reasonably accurate summary, as far as it goes, and is included in the bill. However, there are some detailed and new provisions that may have unintended consequences. In anything this complex, the devil is in the details – and there’s 20 pages of details.

Most of what needed to be done to the Copyright Board to speed things up and lower costs could have been and should have been done by regulation, since the authority for timelines, case management, etc. is already there. Here’s a copy of my submission to Industry Canada in 2017 incorporating my previous submission to the Senate BANC Committee, showing how most of the immediately pressing concerns can be dealt with by regulations.

There was a conference call on very short notice on November 1, 2018 with officials. A number of important questions were raised, such as the following:
  • What is the purpose or need for the new s. 73.1 which imports language from the “mandatory” levy scheme in Part VIII of the act re enforcement of “terms and conditions”?
  • Why will the 80+ year-old requirement of tariff filing and board hearings in the music sector – because it is such a powerful monopolist when operating collectively – be suddenly rendered obsolete? The Parker Commission recommended this in 1935, and the government of day approved it for reasons that are essentially just as valid today as they were more than 80 years ago.
  • How can it help small businesses to potentially have to negotiate separately with SOCAN and RE:SOUND who have millions a year to spend on legal fees and other costs associated with collective administration and pushing revenues up?
  • Has the permissive language of “may” referred to the in the SCC decision in CBC v. SODRAC in current s. 70.4 disappeared?
  • Will the imposition of explicit criteria re “competitive market” and “public interest” cause more mischief, costs and need for protracted and expensive evidence from so-called experts? The Board has purported to be concerned with the public interest all along – so do we really need to etch this into stone, whatever it may mean? Even John Degen agreed with me that this was cause for concern – thought for difference reasons. But the fact that Mr. Degen and I agreed on something should tell you something.
  • How will the great idea of cost recovery for public interest involvement is a great idea – but which I have not been able to find in the nearly 100 pages of IP legislation in Bill C-86 amount to anything other than an empty gesture? At the CRTC, cost recovery is provided for in legislation where appropriate.

The conference call Q&A was short, highly managed and scripted, and frankly not very satisfactory. While it was useful for those invited, it was no substitute for the normal committee hearing process which is the basis of good legislation.

Bill C-86 also contains other IP stuff – some of it potentially controversial, such as:
  • Regulations on patent demand letters
  • File wrapper estoppel, as noted above
  • A “college” for patent and trademark agents that have great powers and potentially great complexity and operational costs and resembling a provincial law society
  • Trademark “use” and inability of registered users to sue for three years unless they have actual “use’
  • “Official marks” that makes only a tiny incremental step forward on a massive problem
  • Awarding of costs in Trademark Opposition Board proceedings – but no details as to how or on what scale.

Again, there was a conference call on October 31, 2018 on very short notice. Questions were managed, truncated and/or ignored, perhaps but not clearly due to technical reasons. There was no discussion at all about the “College” – a potentially huge topic. There were mostly unsatisfactory answers to some good questions.

At least this is not stealth legislation, as we saw with Stephen Harper’s gratuitous windfall to the American recording industry in a budget bill on his way out the door in 2015. Or as we saw in the Liberal’s stealth attempt to prolong the copyright term in the name of Lucy Maude Montgomery in 2003 buried away in a “machinery of government” bill to merge the national library and archives.

True, there have been consultations on many though not all of the IP matters in Bill C-86. But this is no way to do IP legislation. The good intentions and hard work of the government and officials have led to a very dangerous procedural precedent because there will be no meaningful review of this work. Nearly 100 pages of dense legislation require parliamentary scrutiny – not a rubber stamp. Prior consultation is not and never will be an excuse to avoid parliamentary scrutiny.

This is a bad procedural precedent. Good intentions by ministers and officials are not necessarily sufficient for good legislation. Parliament is there for a reason. It should be allowed to do its job – without artificial shortcuts, and especially where there is no urgency to warrant any short cut. Good legislation requires good drafting – but also close scrutiny, testimony from interested parties, debate in committee and in the house and senate. Otherwise, what’s parliament for?

Bills and regulations require public comment and scrutiny. Errors and omissions can get corrected.  Even policy changes can be made, if warranted.  In the case of a free-standing bill with normal committee hearings and debate, there would also be a legislative history – which can be very important in subsequent litigation.

Prime Minister Trudeau made an important campaign promise about omnibus legislation. Hopefully, he will now ensure that the IP stuff is divided out of this Bill – or at least send it off to dedicated hearings at the INDU committee in the House and the BANC Committee in the Senate – and give these complicated provisions all the time they need for further consideration.

A token hearing by the Finance Committee, which has no experience or expertise in IP law, is no substitute for a normal hearing on a complicated IP bill.

The Ministers Letter to the INDU Committee

Here is a link to an undated  (presumably October 29, 2018 – the day of Bill C-86 first reading) letter from Ministers to the INDU Committee.

The letter has a heavy focus on the educational sector. Certain officials are widely believed to have been responsible for the ill-fated and temporarily derailed attempt to make Access Copyright tariffs effectively mandatory through the artifice of harmonizing statutory damage regimes to provide Access Copyright the same 3 -10 times statutory damage nuclear weapon available to SOCAN. This shameful attempt was heavily criticized by many, including Michael Geist and me. The rumoured legislation that would have done this failed to materialize in the spring. Nonetheless, the letter from the Ministers to the INDU Committee confirms that this very bad idea is very much alive and suggests that the certain bureaucrats apparently won’t let go of it.  The letter seems to unduly focus on educational issues, where there has clearly been intense lobbying and more than the usual litany of fake news about starving artists and who they are being failed by the allegedly inadequate copyright laws. The letter concludes as follows with an explicit invitation to the INDU Committee:

We are eager to receive the results of your work. We would appreciate any
recommendations the committees are able to offer on fairness and predictability in educational markets, including recommendations on the applicability and enforcement of Board-set rates.
(highlight added)

It looks like the confrontation over mandatory tariffs will be one of the main battle fronts in the s. 92 review. It will be fought not only in the Courts but also in Parliament. It seems that officials and Ministers and even parties who ought to know better  are either unable or unwilling to embrace the ruling of the Supreme Court of Canada in Canadian Broadcasting Corp. v. SODRAC 2003 Inc., [2015] 3 SCR 615, 2015 SCC 57 that tariffs set in the course of the so-called “arbitration” regime are not mandatory for users. This is a ruling resulting from arguments I made in the Supreme Court of Canada on behalf of Prof. Ariel Katz and the Centre for Intellectual Property Policy (“CIPP”) at McGill. If such tariffs are not mandatory even for users who voluntary submit to the Board’s so-called “arbitration” regime, how can tariffs be mandatory for those who are not party to any Board proceeding and wish to have no dealings with a collective because they can clear their copyright needs more efficiently in other ways? The issue is pending in the Federal Court of Appeal – and will likely end up in the Supreme Court of Canada.
With all of the above, and the Government’s extremely costly capitulation to Trump on the life + 70-year copyright term in the USMCA, which this Government is proclaiming as a victory, Canadian copyright is in great turmoil.
The one thing that should be obvious at this point is that an omnibus bill is not the way to proceed to fix Canada’s IP laws and lead to innovation for the nation.
Oone of my best law school professors, the wonderful Harry Glasbeek, said that anytime there’s a new Supreme Court of Canada decision or new legislation, think of the worst possible unintended consequence – and rest assured that it will indeed come to pass and sooner rather than later. Another cliché comes to mind, namely that “if it ain’t broke, don’t fix it.”

If I sound like a crusty old curmudgeon here, that may be because that’s what I may well be. It displeases me that decisions and actions are being taken on major IP issues by officials who may, in some cases, have little actual corporate memory and virtually no real IP expertise, which is somewhat understandable the way the bureaucracy works and people come and go. That is why we have Parliament to study and enact, if so inclined and after adequate study and debate, the legislation devised and drafted by officials.

There will presumably be some discussion in the Finance Committee of the House of Commons of the “subject matter” of Bill C-86 beginning tomorrow.  IPIC and Michael Geist will have a few minutes on November 7, 2018.

HPK

PS - It seems that Speaker Geoff Regan  has concerns about this process and has already begun to divide the bill upon the request of Peter Julian MP according to this report from the Globe and Mail.

Monday, October 29, 2018

Buried Deep in a Budget Bill - Sweeping Amendments re Canada's Copyright Board

Buried in a Budget Bill  introduced today are dozens of pages of very complicated amendments concerning Canada's Copyright Board.

Here is the Bill

See pages 216-236 for starters of this 884 page bill.

I haven't examined it yet - but will do so ASAP in the morning with great trepidation.

It looks like the most drastic and comprehensive amendments concerning the Copyright Board at least since 1988 and possibly since the 1930's.

Whether these amendments are good or bad or both, it would seem inexplicable and inexcusable to include them hidden away in a budget bill in such a manner that meaningful debate or committee hearings are virtually impossible.

The last time that a significant copyright amendment was buried in a budget bill was Stephen Harper's gratuitous windfall handout re sound recording term extension to the American music industry in 2015.

I regret having to ruin your evening.

HPK

Friday, October 19, 2018

Voltage Pictures and the Massive Mass Litigation Mess in Canada




Voltage Pictures has been trying to sue 55,000 Canadians all at once through an unprecedented federal “reverse class action” in which one defendant was singled out and expected to defend the interests of the entire so-called class. Voltage seems to have picked its fight with the wrong defendant – Mr. Robert Salna - who is a landlord and who is sufficiently principled and financially able to have retained capable counsel. In the course of this quest, Voltage Pictures also managed to fight with Rogers as an ISP from which it sought disclosure of names and addresses. Both of the fights found their way to the Supreme Court of Canada, which recently declined to hear Voltage's appeal in one case and ruled against Voltage in the other. 
The Supreme Court of Canada (“SCC”) ruled on September 14, 2018 in   Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38 (CanLII), that Rogers is entitled to be reimbursed for “its reasonable costs of compliance with the Norwich order” to disclose the names and addresses of alleged copyright infringers. Here is the webcast of the SCC hearing that took place on April 26, 2018. This was in the context of the controversial “reverse class action” by Voltage Pictures against 55,000 or so individuals. The ruling will clearly affect future mass litigation and should have a serious and chilling impact on other pending mass litigation, of which there are at least 17 examples in the Federal Court involving thousands of individual “Doe” defendants. These 17 or so actions are not reverse class actions but typically sweep in hundreds of “Doe” defendants alleged to have infringed the same movie using BitTorrent.  All of these cases have been launched by Mr. Kenneth Clark of Aird and Berlis LLP

These costs – to be determined by the motions judge and this time with an adequate evidentiary record – can include only the steps above and beyond those already required by the Copyright Act pursuant the Notice and Notice regime. The SCC decision is notable for many reasons.

The issuance of the decision followed unusually quickly – less than five months after the April 26, 2018 oral hearing. The Court usually takes about six months or so.

It follows the major SCC setback for Voltage when on August 9, 2018 the SCC dismissed Voltage Pictures et al’s application for leave to appeal from a judgment from the Federal Court of Appeal (FCA) affirming the Federal Courts’ February 2, 2017 order regarding security for costs but for very different reasons. Voltage had been ordered to pay $75,000 into court for security for costs forthwith – which dates back to February 2, 2017 – more than 19 months ago. This payment apparently still has not been made, so the “reverse class action” has presumably fizzled fatally and finally. The reverse class action never got to the “certification” stage, where it would very likely have failed. The astonishing concept of forcing one individual chosen by the plaintiff to retain counsel and defend a class of 55,000 others - each of whom may have a different story to tell – was apparently predicated upon an untested reading of the Federal Courts Rules, which have not been and almost certainly were never meant to be used in the reverse mode as contemplated in this way.

This hearing was about an interlocutory procedural matter involving an apparently very small amount of money with an inadequate evidentiary record and very little explanation by the motions judge of why he thought $100/hour was appropriate – or a suggestion as to how many hours would be required. The SCC rarely gets involved in such matters but obviously saw the importance of this issue. Given the inadequate record below, the SCC hearing at times resembled a motion in the Federal Court with experienced lawyers and justices at times seeming to speak the language of systems analysis.

Oral arguments can and do matter - and Voltage said some things discussed below that may have backfired in this case and may cause it problems in the future beyond the obvious fact that it and others will now have to pay an amount – not necessarily “negligible” – for the details of each alleged infringer’s name and address.

It is clear that the SCC is concerned about the torrent of BitTorrent litigation in Canada. It has been clear since 2011 that Voltage and some apparently related entities are trying to unleash a Torrent of “BitTorrent” litigation. There have been changes in lawyers and strategies along the way in the quest to bring what many would call “copyright trolling” litigation – or worse - to Canada.

Justice Abella challenged Mr. Kenneth Clark, the counsel from Aird & Berlis LLP, for Voltage in the SCC hearing, as to whether his concerns that “The sky isn't necessarily fallen, but it has certainly caused a lot of damage” was based upon actual evidence or “just anecdotal.” He had no good answer. Indeed, he told her that “The United States has been complaining about Canada's position as a copyright infringer for a long time and in our materials we included a 2017 report saying Canada is still a haven for copyright pirates.” Voltage placed a lot of reliance on anecdotal and unreliable secondary sources – such as an IIPA report from 2017.   That report was  an IIPA report from 2017, which is an annual report from an American lobbying firm used to heavily influence USTR “301” reports. These reports are argumentative, mostly anecdotal and virtually devoid of scholarly rigor or actual evidence.  As I said in 2010 about these IIPA reports, the IIPA is the powerful Washington lobbying organization that is highly influential in the content of the notorious annual USTR “Special 301" report - which provides predictable and perennial negative commentary about Canada that our own Government says "lacks reliable and objective analysis". They are not taken seriously by the Canadian government. It is hardly a legal authority and should never have been filed as an authority in the SCC. Clearly, the SCC wisely ignored it.

In this case, Voltage’s counsel told the Supreme Court that he was trying “to make copyright infringement akin to a parking ticket” and that he was looking for “$100 or $200, in the ballpark…” per defendant. So, why has he been looking for $5,000 settlements in the 17 other mass litigation BitTorrent actions he has been pursuing in the Federal Court beginning in 2016? $5000 is quite a parking ticket. It’s the maximum the statute allows for statutory damages for non-commercial infringement and 50 time more than the minimum of $100. And why would anyone ever agree to settle at the max at the beginning of a process that is extremely unlikely to go to trial?

Voltage and other will now have to come up with real money when the Federal Court determines reasonable costs of compliance with Norwich orders. In the past, Voltage fizzled when it came to paying $33,380 costs in the TekSavvy case and now has failed to pay $75,000 into court for security of costs in this reverse class action case.

Above all, the SCC has made it explicitly clear that merely “being associated with an IP address that is the subject of a notice under s. 41.26(1)(a) is not conclusive of guilt”.  The SCC also clearly stated in the 2004  CCH v. LSUC decision that liability for “authorization” must entail “sufficient control” over the person doing the infringing, which is surely an oxymoron when it comes to teenage children and their friends using the household Wi-Fi with numerous devices. So, it’s open to question now whether there can even be any massive drift net type of action based upon any sustainable one-size-fits- all pleading – especially by way of a simplified action involving BitTorrent activity.

The Court’s judgment should put the brakes on some of the arguably overly informal procedures and accommodating rulings in the name of efficiency by the Federal Court in these 17 actions. This approach has apparently been based upon the sweeping dicta of Justice Stratas in the FCA decision below that culminated in his urging that these cases be dealt with “as quickly, easily and efficiently as possible while ensuring fair treatment of all.” Hopefully, more attention will now be paid on the “fair treatment for all” rather than the “quickly” and “easily” wording.

Here are perhaps the two most consequential paragraphs in the judgment – which put a severe chill on all the legal basis of the outstanding mass BitTorrent cases:
[35] I acknowledge that there will likely be instances in which the person who receives notice of a claimed copyright infringement will not in fact have illegally shared copyrighted content online. This might occur, for example, where one IP address, while registered to the person who receives notice of an infringement, is available for the use of a number of individuals at any given time. Even in such instances, however, accuracy is crucial. Where, for example, a parent or an employer receives notice, he or she may know or be able to determine who was using the IP address at the time of the alleged infringement and could take steps to discourage or halt continued copyright infringement. Similarly, while institutions or businesses offering Internet access to the public may not know precisely who used their IP addresses to illegally share copyrighted works online, they may be able, upon receiving notice, to take steps to secure its internet account with its ISP against online copyright infringement in the future.

[41] It must be borne in mind that being associated with an IP address that is the subject of a notice under s. 41.26(1)(a) is not conclusive of guilt.  As I have explained, the person to whom an IP address belonged at the time of an alleged infringement may not be the same person who has shared copyrighted content online. It is also possible that an error on the part of a copyright owner would result in the incorrect identification of an IP address as having been the source of online copyright infringement. Requiring an ISP to identify by name and physical address the person to whom the pertinent IP address belonged would, therefore, not only alter the balance which Parliament struck in legislating the notice and notice regime, but do so to the detriment of the privacy interests of persons, including innocent persons, receiving notice.
(highlight and emphasis added)

Even if these comments from the SCC go beyond the narrow “ratio decidendi” (what is actually decided and what is generally rooted in the facts) to the those that are “obiter dicta”, the latter type of comments can still be authoritative if they are closely related to “ratio decidendi”.  Those who are curious about the role of SCC “obiter dicta” may want to read the SCC’s own important 2005 decision regarding this issue. See  R. v. Henry.  In this instance, these comments were arguably closely related to the “ratio” and should now be regarded as binding authority.

Hopefully, these statements from the SCC will send a clear signal to the case management prothonotaries and judges in the Federal Court to proceed with caution, to ask the necessary questions in default proceedings, and not to inappropriately sign default judgments or even consent judgments that do not appear to be appropriate in individual cases. Above all, the SCC judgment may serve to prevent hundreds or thousands of unsuspecting individuals having judgments entered against them en masse in default proceeding for up to $5,000 each– with all the attendant consequences that could follow.

We are, unfortunately, seeing American-style mass litigation in Canada predicated upon the notion that few defendants will retain counsel to fight a “parking ticket” but will settle for some portion or, inexplicably in some cases apparently even all -  of the maximum amount of $5,000. This is being fueled by lack of access to justice. Sadly, the law school clinics are not stepping up to the plate. In some cases, lawyers may be giving questionable advice. All of this will hopefully somehow soon stop. Presumably, the Federal Court will get the message from the SCC.

HPK

Tuesday, October 02, 2018

NAFTA/USMCA is Even Worse Than You Thought on Intellectual Property: CETA Victory is Now Forfeited & Long Live Life + 70 etc.




(What Goes Up Must Come Down - Except in the case of IP in treaty law)

A possibly unintended and certainly unwelcome consequence of the sad capitulation of Canada in the IP Chapter of NAFTA/USMCA is that the positive aspects of CETA – holding the line on copyright term of life + 50, the effective 8-year term of protection of market exclusivity for biologics, etc. - have been thrown under the bus. 

The extension of the copyright term to life + 70 and the period of market exclusivity for biologics to 10 years will cost Canada billions and are effectively irreversible policy errors that should have been avoided.

This is because of the operation of national treatment and most favoured nation (“MFN”) provisions in CETA itself and the tangled web of other treaties and agreements to which Canada is bound. Indeed, Canada may now have effectively made these concessions to at least the other 163 members of the WTO, except perhaps where the Berne Convention rule of the shorter term may apply in the case of copyright.

National treatment is the golden rule of international IP law. Every country must provide nationals of other treaty countries the same rights as their own nationals.

The MFN principle holds that each country must provide investors, for example, with treatment no less favourable than the treatment it accords in like situations.

This means that the stronger protection now conceded by Canada to Trump’s USA will apply to the EU, thus vitiating Canada’s successful negotiation where we held the line on Canada’s existing regimes for copyright term and market exclusivity for biologics.

It is sad to see Canada’s proud history of 150 years of being a smart middle power on IP and acting largely in our own interest and even leading the world in some respects fade so quickly.

As I and many others never cease to remind, IP is a one-way ratchet. Needless increases in IP protection are not only bad for free trade and innovation. They cannot be reversed.

Both I and Ton Zuijdwijk discussed these principles in our CIGI Papers that formed the IP substantive component of the recent book publication Reflections on Canada’s Past, Present and Future in International Law.

Our papers are here:

Canada is now worse off in terms of IP than we were before and under CUSFTA, NAFTA and WTO TRIPS. It will be interesting to find out – if we ever do – why this happened.

And, in this case, contrary to that great golden oldie hit of Canadian David Clayton Thomas and Blood, Sweat and Tears, what goes up can’t come down.

HPK

Monday, October 01, 2018

The Cost of Canadian IP Capitulation in NAFTA.



(Wikimedia)

Here are a few quick initial points on the IP chapter in the new NAFTA and Canada’s capitulation to US lobby groups, their Canadian surrogates and American bluffing and bullying.

The extension of the copyright term to life + 70 was a very unfortunate, gratuitous, unnecessary and costly mistake. This could cost Canada more than  $450 million a year and most of this would be outflows to the USA.  It will make research and education more expensive and chill innovation. And, according to at least a couple of respected Canadian academics, namely Ariel Katz and Graham Reynolds, it may well be unconstitutional.

The extension of criminal penalties is alarming and dangerous. This could affect employment relationships and even reach into class rooms, especially if the Federal Court’s decision in Access Copyright v. York University is not convincingly overturned on appeal.

It is of little or no use or comfort to say that Canada can reassess this in the future. Increasing IP rights is a one-way ratchet. There is rarely if ever a legally or politically acceptable way to back down from vested rights, no matter how improvidently bestowed.

This is a significant setback to the multilateral liberal order in free trade. Canada has now become a victim by capitulating to a bluffing bully regime bent on weakening or destroying institutions such as the WTO and WIPO. I have written about how Canada was smart and managed to mostly punch well above its weight and in its own best interests and even positively influence and show leadership on the world stage involving trade and IP for 150 years. It seems that those days are sadly over.

I have no doubt that Canada’s negotiators did their homework and did their best. But there will no doubt be lots of questions about whether there was adequate consultation and transparency, whether Canada should have called the American’s bluff and waited until the mid-terms are over, why we retreated from victories in CETA and CPTPP, etc. But for now, regarding the IP chapter, all that can be said is that Canada caved and capitulated “bigly”.

HPK

PS: Here's the statement of  Canadian Generic Pharmaceutical Association (CGPA), on the pharmaceutical intellectual property aspects of the United States-Mexico-Canada Agreement (USMCA). 


Friday, September 14, 2018

Rogers v. Voltage - My comments today September 14, 2018 on CTV



Here's the judgment and SCC summary.

My further comments will follow.

HPK

Rogers Wins in Supreme Court of Canada

From the head note:


                   The respondents are film production companies that allege that their copyrights have been infringed online by unidentified Internet subscribers who have shared their films using peer to peer file sharing networks. They sued one such unknown person and brought a motion for a Norwich order to compel his Internet service provider (“ISP”), Rogers, to disclose his contact and personal information. The respondents sought that the disclosure order be made without fees or disbursements payable to Rogers, relying on ss. 41.25 and 41.26 of the Copyright Act. These provisions, referred to as the “notice and notice” regime, require that an ISP, upon receiving notice from a copyright owner that a person at a certain IP address has infringed the owner’s copyright, forward that notice of claimed infringement to the person to whom the IP address was assigned. They also prohibit ISPs from charging a fee for complying with their obligations under the regime.
                   The motion judge granted the Norwich order and allowed Rogers to recover the costs of all steps that were necessary to comply with it. He found that while the statutory notice and notice regime regulates the process by which notice of claimed copyright infringement is provided to an ISP and an Internet subscriber, as well as the retention of records relating to that notice, it does not regulate an ISP’s disclosure of a subscriber’s identity to a copyright owner. The Federal Court of Appeal agreed with the motion judge that the statutory notice and notice regime does not regulate the disclosure of a person’s identity from an ISP’s records, but it confined Rogers’ recovery to the costs of complying with the Norwich order that did not overlap with the steps that formed part of Rogers’ implicit obligations under the statutory regime. Rogers appealed.
                   Held: The appeal should be allowed and the matter remitted to the motion judge to determine the quantum of Rogers’ entitlement to its reasonable costs of compliance with the Norwich order.
https://scc-csc.lexum.com/scc-csc/news/en/item/6360/index.do


More later.....