The Toronto Real Estate Board is Back in the Copyright News

An important milestone in Canadian competition and copyright law was the resounding defeat in 2017 of the Toronto Real Estate Board (TREB) in its attempt to use copyright law to control the use of some key data concerning the Toronto real estate market. See TorontoReal Estate Board v. Commissioner of Competition, 2017 FCA 236. Leave to appeal to the Supreme Court of Canada was dismissed: Toronto Real Estate Board v. Commissioner of Competition, 2014 CanLII 40510 (SCC).

Justice Nadon of the Federal Court of Appeal summarized the issues at the outset of the FCA decision

[2] TREB maintains a database of information on current and previously available property listings in the GTA. TREB makes some of this information available to its members via an electronic data feed, which its members can then use to populate their websites. However, some data available in the database is not distributed via the data feed, and can only be viewed and distributed through more traditional channels. The Commissioner of Competition says this disadvantages innovative brokers who would prefer to establish virtual offices, resulting in a substantial prevention or lessening of competition in violation of subsection 79(1) of the Competition Act, R.S.C. 1985, c. C-34 (Competition Act). TREB says that the restrictions do not have the effect of substantially preventing or lessening competition. Furthermore, TREB claims the restrictions are due to privacy concerns and that its brokers’ clients have not consented to such disclosure of their information. TREB also claims a copyright interest in the database it has compiled, and that under subsection 79(5) of the Competition Act, the assertion of an intellectual property right cannot be an anti-competitive act.

[3] For the reasons that follow, we would dismiss the appeal.

It seems, however, that TREB hasn’t given up trying to control the use of information from its database. It has recently obtained a consent order against a business called MongoHouse.com, presumably the entity behind this website.  

TREB has issued a press release dated April 17, 2019 that states that “The Court has affirmed TREB’s right to protect its proprietary and copyright information and stop any unlawful attempts to sell or monetize TREB MLS® data.” This has been picked up to some extent by main stream media, e.g. here.

Consent orders are not binding precedent and are often a practical conclusion to an unsuccessful encounter by a David with a Goliath. The unreported consent order reads as follows in this instance :

1. It is hereby ordered and declared that as the owner of the TREB MULTIPLE

LISTING SERVICE (“TREB MLS®”) and the TREB MLS® Database, TREB is the

owner of the copyrights associated therewith, pursuant to the Copyright Act, RSC

1985, c C-42 (the “Act”). It is acknowledged in relation to this declaration that the

MLS® logo is a registered trademark of the Canadian Real Estate Association

(“CREA”) and is used under license by TREB in association with the TREB MLS®.

2. It is hereby ordered and declared that the unauthorized copying, data scraping,

downloading, display, distribution, access to make available for distribution,

streaming for public display any TREB MLS® data is a breach of TREB’s

proprietary rights and copyrights associated with the TREB MLS®.

3. It is hereby ordered and declared that any access to the TREB MLS® other than as

authorized by TREB using any means to avoid, bypass, deactivate, impair, or to

circumvent in any manner a technological protection measure (“TPMs”) is a breach

of Section 41 of the Act and is an infringement of TREB’s rights.

Page: 3

4. A permanent injunction is hereby granted against the Mongohouse Defendants

restraining each of them, their officers, directors, employees, agents, assigns,

servants, or any person acting under their instructions, from:

a) accessing, copying, data scraping, downloading, displaying, distributing,

accessing to make available for distribution, streaming for public display any

TREB MLS® data or information, unless expressly authorized in writing by

TREB;

b) using any method to avoid, bypass, remove, deactivate, impair or circumvent any

TPMs put in place to protect or limit access to the TREB MLS® system and data;

c) from operating, conducting, or having any involvement in or providing or offering

means to access the TREB MLS® system, or assisting in the collection or display

of the TREB MLS® data, unless expressly authorized in writing by TREB;

d) from maintaining, operating, implementing, marketing, or having any

involvement with any business or enterprise used in any manner or form for the

purpose of providing or offering a means to access the TREB MLS® system via

any means or method, including any internet based technology, without the

express written permission of TREB.

5. The action is otherwise hereby dismissed on a without costs basis and the

Counterclaim is hereby dismissed on a without costs basis.

(highlight added)

It is far from clear how this order squares with the very clear reasoning of the FCA in the reported decision cited above that concludes, inter alia:

[194] The Tribunal considered a number of criteria relevant to the determination of originality (paragraphs 737 - 738 and 740 - 745). Those included the process of data entry and its “almost instantaneous” appearance in the database. It found that “TREB’s specific compilation of data from real estate listings amounts to a mechanical exercise” (TR at para. 740). We find, on these facts, that the originality threshold was not met. (emphasis and underline added)

Even if it could be argued the FCA’s decision with respect to copyright was technically obiter dicta in light of its findings under the Competition Act, the FCA’s reasons regarding copyright are very clear and detailed (see paras. 176-196) and were meant to have an effect.

It will be interesting to see whether the Competition Bureau follows up on what appears to be a result that may be inconsistent with the Commissioner’s clear victory in the Federal Court of Appeal.

HPK

PS: HT to Alan Macek and Graham Honsa.

"Lesser artists borrow, great artists steal" - Igor Stravinsky (Guest Blog by Graham Honsa)

Rains v Molea, 2013 ONSC  5016

Chiappetta J

Date of Judgment: 15 August 2013

The Ontario Superior Court recently released a lengthy judgment in a curious case with a predictable outcome.

Recently appointed Judge Victoria Chiappetta dismissed the plaintiff’s claim after what must have been a very expensive ten-day trial. She neatly summarised the case before her in her conclusion at paragraph 99 of the decision:

 This case involves two artists who had the same (and not unique) idea to paint crumpled paper in a realistic way using conventional painting techniques. Their motivations are different. Their processes are different. Their resultant expressions are different. The Act protects each original Rains painting and each original Molea painting from infringement. If any of Molea’s 17 comparison works were substantial copies or colourable imitations of Rains’ comparable images, Rains would be successful in his claim of copyright infringement. However, simply because Rains expressed his idea before Molea and found commercial success and critical acclaim for doing so, does not mean that Molea or any other painter is forever prohibited from independently creating an expression of crumpled paper in still life form. In my view, to give Rains exclusive access to this territory would unfairly silence independent expressions of the idea and render absurd the very purpose of the Act.

Since 1991, Malcom Rains painted around 200 still life depictions of crumpled paper in his ‘Classical Series’. Molea, who immigrated to Canada in 1999, began making similar paintings in 2000. At trial, he admitted to having seen some of Rains’ paintings but he was able to establish that he independently produced his impugned works.

This case won’t break any new legal ground—this is another instance where a plaintiff tries to convince a court that copyright law should protect his idea. What makes this case interesting, however, is how far Rains was able to take his argument. I said this case had a predictable ending, but others apparently disagreed; the gallery where Molea’s works were displayed settled with Rains for an undisclosed sum, and Rains told the Court he succeeded in preventing another artist “from continuing to paint realistic images of crumpled paper” (at para 37).

It seems Rains got where he did because the large amounts of evidence and expert testimony from both sides obscured the relatively straightforward issues in this case. The prime example of this lies in Rains’ assertion, and the Court’s discussion, of protection underlying the compilation as a whole. The basis for the assertion was the expert testimony from the art critic Wilkin, who stated that Rains’ work had a certain ‘gestalt’, or “qualities that are difficult to articulate but that you recognize when you look at art” (at para 19). Wilkin defined the ‘gestalt’ of Rains’ series as clear and crisply rendered with a high sense of illusionism and indeterminate sense of space.

How the concept of ‘gestalt’ related to copyright law was unclear, but apparently Rains submitted that his works possessed a “feeling or evocation” that rendered the ‘Classical Series’ a compilation (at para 18). The Copyright Act only protects a compilation if the compilation itself meets the test for originality—yet there was no indication in this case that ‘gestalt’ could assist the Court in determining whether the ‘Classical Series’ met that test. If ‘gestalt’ was a stand-in for “qualities that are difficult to articulate but that you recognize when you look at art”, it was neither relevant nor necessary. 

Unfortunately, Judge Chiappetta did not reject outright Wilkin’s proposition as irrelevant to the issue of whether the series constituted a compilation deserving protection. Instead, she deferred to Molea’s expert, Kisick, who discredited Wilkin’s proposition from an art criticism perspective.  

Judge Chiappetta should have emphatically rejected Wilkins’ testimony on ‘gestalt’ as a message to future litigants to tighten the scope of expert testimony. This could have been an opportunity to apply to the copyright context Justice Rothstein’s lesson from trade-marks law. The evidence was irrelevant and distracting and sought to replace an expert’s opinion for the trial judge’s in a situation where this was unnecessary, exactly what the Supreme Court warned against in Masterpiece v Alavida Lifestyles, 2011 SCC 27. As Justice Rothstein stated: “What is required is that the opinion be necessary in the sense that it provide information “which is likely to be outside the experience and knowledge of a judge or jury”” (at para 75). He worried that some expert testimony could complicate court proceedings and lead to more costly proceedings.

In this case, the trial judge was as capable as Wilkin of assessing the qualities that she recognised when she viewed Rains’ collection. It is unlikely, however, that she would have done so, because that would not have informed the analysis. In contrast, when Molea’s expert, Kisick, provided evidence that depictions of crumpled paper have been taught since at least the eighteenth century, his testimony contributed to the issues of the case in a way that the trial judge would have been unqualified to do.

Graham Honsa

[HPK – Graham Honsa has just completed his articles at Macera & Jarzyna, LLP in Ottawa, where I am Counsel. I thank him for all of his good work and for bringing this interesting recent decision to my attention and taking the time to write about it.  His views are his own and do not represent those of the firm or any of its clients. I am happy to publish guest blogs by anyone, especially students or young lawyers, as long as the blogs are – like this one - carefully researched, well-written, of interest to this readership – and last but not least, in good taste and high quality.]