Thursday, November 10, 2016

Blacklock’s Fails in Copyright Litigation Against the Government of Canada – Fair Dealing is Upheld and Even Extended 
The Attorney General of Canada has achieved a clear victory against Blacklock’s Reporter in the latter’s attempt to collect damages of $17,209.10 based upon its supposed institutional subscription rate because a few public servants in the Department of Finance received, read and distributed two Blacklock’s articles about a file they were closely involved in that had been sent to them by a Blacklock’s subscriber.

Here’s the judgment from Justice Robert Barnes – which is unequivocally favourable in terms of fair dealing and even pushes the envelope further by emphasizing that what went on here  was based upon a “legitimate business reason” on the part of the subscriber/sender to the material and a “legitimate business purpose (i.e. to consider whether the stories required a response or correction)” on the part of the Department.

The judgment clearly rejects the essence of Blacklock’s argument, which was tantamount to asserting that copyright includes the exclusive right to “read” copyrighted material. The judgment does not deal directly with copyright misuse or abuse, though it does note certain “troubling” aspects of Blacklock’s business model and mentions the allegation that this “litigation constitutes a form of copyright abuse by a copyright troll.

[22] To resolve this matter I need only decide whether the conduct Blacklock's impugns is protected under the fair dealing provisions of the Act and, in particular, section 29. Although there are certainly some troubling aspects to Blacklock's business practices it is unnecessary to resolve the Attorney General's allegation that this litigation constitutes a form of copyright abuse by a copyright troll.

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Here are other takeaway quotations from the judgment, which was promptly and decisively delivered by the very experienced Justice Barnes in less than two months from the end of the hearing:

[36] In finding the scope of use of the articles to be fair I have considered the following factors, all of which favour the Defendant’s position:

(a) The articles were legally and appropriately obtained by Ms. Marsden who was a paid subscriber to Blacklock’s. Blacklock’s website was not hacked or accessed by illicit means. In the result, the articles were no longer behind Blacklock’s paywall when the Department obtained them.

 (b) Ms. Marsden sent the articles to Mr. Halley for a legitimate business reason (i.e., to protect her business reputation and to manage her working relationship with the Department);

(c) The Department received the articles unsolicited and used them (i.e., read them) for a legitimate business purpose (i.e., to consider whether the stories required a response or correction);

(d) The articles were circulated among only six Department officials all of whom had a reason to see them;

(e) No commercial advantage was sought or obtained by the Department’s use of the articles nor were they republished in any form;

(f) The two articles represented only a small fraction of the protected news copy on Blacklock’s website and one of them was shortly-after publically exposed on Blacklock’s website;

(g) The articles contained information obtained from the Department in response to Mr. Korski’s queries. As a source, the Department had a direct and immediate interest in their content. Indeed, a finding of copyright infringement against a news source for the simple act of reading the resulting copy is likely to have a chilling effect on the ability of the press to gather information. Such a result cannot be in the public interest;

(h) Mr. Halley and Ms. Rubec had a reasonable basis for their concern that the articles misrepresented some of the information they had conveyed to Mr. Korski and that a correction might be warranted. The involvement of their colleagues in a possible follow-up was, in the circumstances, reasonable;

(i) Neither Ms. Marsden nor the Department were aware of, or agreed to, Blacklock’s Terms and Conditions. In any event and as noted below, those provisions did not unambiguously prohibit the circulation of Blacklock’s copy for personal or non-commercial purposes. If Ms. Marsden, as a subscriber, had the right to use and distribute the articles for a non-commercial purpose, those who received the articles lawfully could reasonably expect to enjoy the same privilege;

(j) What occurred here was no more than the simple act of reading by persons with an immediate interest in the material. The act of reading, by itself, is an exercise that will almost always constitute fair dealing even when it is carried out solely for personal enlightenment or entertainment; and

(k) While the public interest is served by the vigilance of the press, copyright should not be a device that serves to protect the press from accountability for its errors and omissions. The Department had a legitimate interest in reading the articles with a view to holding Blacklock’s to account for its questionable reporting.

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As to Blacklock’s business model, Justice Barnes explicitly stated that Blacklock’s own argument “is essentially an admission that the market places little value on Blacklock's work-product” and a clear confirmation that, whatever the business model, “it is always subject to the fair dealing rights of third parties”:

[45] Blacklock’s maintains that this case challenges the viability of its business model including its right to protect news copy behind a subscription-based paywall. The suggestion that Blacklock’s business cannot survive in the face of the minor and discrete use that took place here is essentially an admission that the market places little value on Blacklock’s work-product. All subscription-based news agencies suffer from work-product leakage. But to customers who value easy, timely and unfettered access to news that may not be readily available from other sources, the price of a subscription is worth paying. It also goes without saying that whatever business model Blacklock’s employs it is always subject to the fair dealing rights of third parties. To put it another way, Blacklock’s is not entitled to special treatment because its financial interests may be adversely affected by the fair use of its material. Nothing in these reasons should however be taken as an endorsement of arguably blameworthy conduct in the form of unlawful technological breaches of a paywall, misuse of passwords or the widespread exploitation of copyrighted material to obtain a commercial or business advantage.

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The judgment does not deal directly with TPMs – technical protection measures - or circumvention, despite Blacklock’s efforts. The issue was not pleaded and the Court refused to hear evidence or argument directed to that issue as such.

The Government gets costs, and there is a comment from the Court that “offers to settle may have been exchanged”, which may mean that the Government will be entitled to get “double costs” for some or all of this litigation, depending on the timing and content of any offers.  We shall see and report in due course.

All in all this is a very clear victory for the Attorney General of Canada and for the cause of fair dealing in Canada. A business model “is always subject to the fair dealing rights of third parties.”

Because a fair dealing analysis is essentially based on fact-finding, and because the fact-finding here was extensive and careful, it is would seem that a successful appeal would be an unlikely possibility. I will update in the event that a Notice of Appeal is filed, which would be due on December 12, 2016. It remains to be seen what effect this judgment will have on the many other outstanding Blacklock’s lawsuits against the Government of Canada, some of its agencies and others.

The Government was represented by Alex Kaufman and Orlagh O’Kelly from the Department of Justice. Blacklock’s was represented by Yavar Hameed.


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