Friday, October 30, 2015

Copyright Trolling in Canada: Is Blacklock’s a Copyright Troll & "Frequent Flyer" Litigator?


The decision deals with the issues of whether a person without an account to a pay-walled website who receives a “teaser” by email from the website publisher about an article of potential concern to that person or his/her organization and who requests a copy of the work in question from that website from a third party who does have an account is infringing copyright, circumventing a Technical Protection Measure (“TPM”) and can invoke a fair dealing defence in these circumstances. There was also a claim for inducing breach of contract and punitive damages.  The Court came down heavily on the defendants on all issues. The Court found that the defendants were liable for the cost of an institutional subscription in the amount of$11,470 plus punitive damages of $2,000 plus costs.

A few points must be made at the outset:
-          Decisions of the Ontario Small Claims Court, even if correctly decided, have minimal, if any,  precedential status  – other than perhaps in a limited sense of “comity” or “collegiality” amongst other small claims court judges in Ontario. Under the doctrine of “stare decisis”, courts are bound to follow decisions of higher courts to which their decision could be appealed. So, the Federal Court, the Copyright Board and even the Ontario Superior Court are clearly not bound by a decision of an Ontario Small Claims Court.
-          In any event, and with all due respect to the clearly well-intentioned and lengthy reasons of the Deputy Judge (who is not an actual “Judge” but a lawyer who serves part-time as Deputy Judge in the Small Claims Court) who wrote the decision, there are many reasons to doubt that this particular decision was correctly decided in all or even any material respects. It’s arguably an unwarranted and unprecedented stretch of the law to conflate either asking someone for a copy or providing someone with a copy with illegal “circumvention” of a TPM just because the work is behind a paywall.  It’s not even clear that the Blacklock’s paywall constituted a TPM, as defined in the Copyright Act or that there was any circumvention, as defined, in this instance or that any of the activity alleged was prohibited by the legislation. Above all, as Prof. Scassa states succinctly here, “Receiving and reading a copy of an article sent by another person is not per se copyright infringement.” Her conclusion is that This decision is so entirely lacking in the balance mandated by the Supreme Court of Canada that one can only hope it is nothing more than a strange outlier.”  There are other problems with the decision as well, but I won’t get into them here and now. There’s no need for the moment because it’s a Small Claims Court decision and is of virtually no precedential consequence.
-          In any event, the Supreme Court of Canada made it very clear in the 2004 CCH v. LSUC decision that:
o   As an integral part of the scheme of copyright law, the s. 29 fair dealing exception is always available.” (para 49)
o   “The availability of a licence is not relevant to deciding whether a dealing has been fair.” (para 70)
-          Much else could be said about the problems with the decision, but now is not the time or place. Anyway, once again with all respect, it’s just a Small Claims Court decision.

There have been a number of instances in which small claims court judges have written long decisions in Canadian copyright cases. This is interesting, but ironic – because these decisions don’t really count, for better or for worse. However, this is understandable because these cases are probably much more interesting to these judges than the usual types of cases that are handled in their courts. And given the relative paucity of copyright jurisprudence in Canada, they are clearly trying to be helpful.

An interesting question is why this particular case wasn’t brought in the Federal Court – either as an application or a simplified action. Given the amount of money at stake, it could have been brought in either court. Moreover, the Federal Court has procedures for dealing with applications and “simplified actions” that can be fast and economical, while still allowing for adequate document production, cross-examination or discovery as appropriate in advance of a hearing.

Indeed, Blacklock’s has brought several other cases in the Federal Court. Here are 10 cases filed since mid-2014, mostly against the Federal Government or its agencies and a couple of NGOs:

Court Number
Style of Cause
Nature of Proceeding
1395804 ONTARIO LTD. (Blacklock's Reporter) v. ATTORNEY GENERAL OF CANADA
Others - Crown (v. Queen) [Actions]
1395804 ONTARIO LTD., operation as Blacklock's Reporter v. AGC
Others - Crown (v. Queen) [Actions]
1395804 Ontario LTD. v. Canadian Transportation Agency
Copyright Infringement [Actions]
1395804 Ontario Ltd, operating as Blacklock's Reporter v. Bank of Canada
Copyright Infringement [Actions]
Copyright Infringement [Actions]
Admiralty - Damage (Property & Facilities)
Copyright Infringement [Actions]
Copyright Infringement [Actions]
Copyright Infringement [Actions]
Copyright Infringement [Actions]

Some of these have been discontinued, which may – though does not necessarily - mean that there was a settlement. However, the cases against the Government are being apparently vigorously defended – and some interesting defences are emerging.

It appears, on the basis of the Government of Canada's amended pleading (see below), that it is going to fight these cases on the basis, inter alia, that Blacklock’s is allegedly a “copyright troll”, uses “teaser emails that are designed to interest the department in reading and distributing the Plaintiff’s articles”, engages in “speculative invoicing” and is engaged in copyright “misuse”.  The Government of Canada has just won a clear and convincing procedural victory on a motion to amend its statement of defence to plead along these lines – along with a costs order of $4,000 against Blacklock’s on a procedural motion and a comment from the Court that:
The motion was contested, it was contested extensively and it took a lot of time. There was a need for cross-examination. In the course of the argument, I made comments to the effect that the Plaintiff’s argument and choice of the way in which it chose to understand questions or construed questions was obtuse to the point of being obstructive.

This is harsh language and a very significant costs order as far as these things go. Here’s the Court’s Order dated October 26, 2015.

Here is the Statement of Claim and Amended Statement of Defence in T-1391-14This seems to emerging as the lead case.

Blacklock’s appears to have become one of the most "frequent flyers", as it were, in Canadian copyright litigation in the short time of just over one year. I cannot recall any single party bringing ten lawsuits in the Federal Court in just over one year.

For those who are unfamiliar, Blacklock’s is a relatively new online high priced media service ($157 for a personal subscription and $11, 470 for an institutional one) that, according to itself, “…covers news you won’t find anywhere else: bills and regulations; reports and committees; Federal Court and public accounts. We’re the only reporter-owned and operated newsroom in Ottawa that finds the facts needed by business, labour and associations.”

I have been interviewed by Blacklock’s on at least one occasion. I must say that I will now become rather reluctant to be interviewed again by Blacklock’s again, if the allegations in the Federal Government’s amended statement of defence are true.

The business model of a subscription based media service with a narrow and relatively small audience with a timely need to know is a tricky one. It has been practiced to a high level of apparent success and respect by the family owned Hill Times organization in Ottawa, since 1989, for a mostly Ottawa-centric  audience of “Cabinet ministers, MPs, Senators, political staffers, lobbyists, 'backroomers,' political junkies, and some of the top decision-makers in the country, including influential players in Parliament, Cabinet, the Prime Minister's Office, the Privy Council, the Finance Department, Treasury Board, the Department of National Defence, the Justice Department, and more.”

The Hill Times organization seems to know how to successfully balance paper and online publication and free and pay-walled material.  I’m not aware of the Hill Times ever having sued anyone for copyright infringement.  I’m always happy to be interviewed by and occasionally write for the Hill Times and its various specialized offshoots such as the Wire Report or Embassy News.  Nor have I ever heard of large media organizations such as The Economist or the New York Times ever suing anyone for sharing the occasional article that is behind a paywall.

Speaking generally and not about this or any other particular case, suing one’s customers – or potential customers – is rarely a good business model, whether it be for deterrence or, worse still, as a source of revenue or a business model. Ask the RIAA how their campaign against a 12 year old child, a 71 year old grandfather and a dead grandmother worked out. Likewise, and again speaking generally and not about this or any other particular case, there have been recent examples in the USA and UK where some “troll” litigation has backfired badly.

Needless to say, if any of these Blacklock’s Federal Court cases result in a judgment, this would be something worthy of notice because it would potentially have significant precedential value.

If CVA appeals the Small Claims Court decision, things could get very interesting. The appeal would go the Ontario Divisional Court, which, as copyright lawyers should know, delivered an excellent pro-fair dealing ruling in 1997 in the Allen v. Toronto Star case involving the reproduction on the front page of a Toronto Star edition with a major article about Sheila Copps of a whole magazine cover from Saturday Night Magazine featuring a picture of Sheila Copps. It’s not clear that it would be cost beneficial for CVA to appeal the current decision, even if they win. But if it does, it’s reasonable to expect some interest on the part of potential interveners – on both sides of the fence. A decision of the Ontario Divisional Court is one that could indeed have some precedential value.

In any event, interested eyes are – or should be - on the Federal Court cases. If anyone becomes aware of any other Blacklock’s litigation or threatening letters, please feel free to let me know and pass along details, anonymously if you so wish.

Anyway, speaking of alleged copyright trolls, the hearing of Teksavvy’s quest in the Voltage case to appeal the  decision by Prothonotary Roza Aronovitch of the Federal Court regarding TekSavvy’s claim to entitlement to $346,480.68 in which Teksavvy was awarded only $21,557.50 – about 6% of what it asked for overall coming up on November 9, 2015. Although CIPPIC is no longer active in this matter, it would be helpful if CIPPIC would update its website regarding this case soon and post the most pertinent of the obviously voluminous material filed in the Court so that folks who may wish to follow or attend the hearing on November 9, 2015 can be better informed.

More to follow without doubt on both Blacklock’s and Teksavvy soon.


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