Blacklock’s Must Pay $65,000 for Litigation that “should never have been commenced let alone carried to trial”

http://www.clipartkid.com/lump-of-coal-cliparts/

In an unusually trenchant costs award, Justice Barnes of the Federal Court has ruled that Blacklock’s must pay the taxpayers of Canada an “all-inclusive amount of $65,000 plus interest….” This follows decisively upon Blacklock’s clear loss in the first case of what I have called a “litany of litigation” of 11 lawsuits against the Government of Canada and/or its agencies, not to mention several other cases against other parties in the Federal and Ontario courts.

The Court accepted that the Government was entitled to costs based on the mid-level of Column III and double the otherwise payable costs from the date of its early settlement offer of $2,000, which was “...more than double the cost of individual subscriptions for each of the Department of Finance officials who received and read the subject articles over which Blacklock's claimed copyright protection.”

The Court observed that:

[7] …I also reject the Plaintiff's argument that this case raised "strong public interest considerations". Rather, this case was about the Plaintiff's attempt to recover disproportionate damages without any apparent consideration to the legal merits of the claim or to the costs that it imposed on the taxpayers of Canada.

[8] Any reporter with the barest understanding of copyright law could not have reasonably concluded that the Department's limited use of the subject news articles represented a copyright infringement. Indeed, the fair dealing protection afforded by section 29 of the Copyright Act, RSC, 1985, c C-42, is so obviously applicable to the acknowledged facts of this case that the litigation should never have been commenced let alone carried to trial.

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The Court went on to say that:

[9] I am also troubled by Plaintiff's attempt to claim an excessive amount of damages beginning with its demand for compensation completely divorced from the Department's limited use of the two articles. In no circumstances would Blacklock's losses have exceeded the cost of individual subscriptions by the six officials who read the articles; yet Blacklock's demanded a license fee equivalent to its bulk subscription rate of over $17,000.00. This practice appears to be consistent with Blacklock's usual approach which is to hunt down, by Access to Information requests, alleged infringers and then demand compensation based on an unwarranted and self-serving assertion of indiscriminate and wide-spread infringement. The record discloses that in several instances government departments acquiesced for business reasons and paid the full amounts demanded. In this instance the Department appropriately took a hard line and succeeded in its defence.

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Canadian Courts are increasingly using costs award to send messages that may encourage meritorious litigation or discourage the type of litigation that "should never have been commenced let alone carried to trial.”

While the Ontario courts tend to award amounts closer to actual costs, the Federal Court is headed in that direction – for better or worse. As long as the judges have discretion and use it wisely, the Federal Court mechanism for costs can generally mete out justice fairly.

In this case, the Court moderated the amount claimed by the Government, which was “$115,702.30, based on 70% of the actual value of professional hours expended in the defence of the claim and including disbursements of $7,020.98.”

Costs awards are usually very hard to appeal successfully – especially one such as this where Justice Barnes has provided ample reasoning and a detailed calculation in Annex “A”.  It will be interesting to see how Blacklock’s clear, convincing and un-appealed loss in its first Federal Court case together with this notable costs award will affect the remainder of Blacklock’s “litany of litigation”. Indeed, it will be interesting to see whether Blacklock’s proceeds at all in view of these recent substantive and costs rulings.

It is difficult, given the time of year and the circumstances, not to think about a “lump of coal” – indeed 65,000 of them.  However, the Federal Court – while refraining to date from ruling on copyright misuse or abuse – is clearly sending a strong message to Blacklock’s.

HPK

Deadline for Blacklock's Appeal from Justice Barnes' Judgment Comes and Goes

https://www.blacklocks.ca/

The much watched deadline date of December 12, 2016 has come and gone. This was the deadline for Blacklock's to file a Notice of Appeal of the Decision dated November 10, 2016 from Justice Barnes, of which I noted at time:

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.

That decision contianed the following among several notable paragrpahs:

 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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It is will be interesting to see what effect this latest development, namely Blacklock's failure to file a timely Notice of Appeal, has on the other ten (10) Blacklock's cases pending against the Government of Canada and its agencies.  

HPK

Google v. Equustek in the SCC - Webcast Live December 6, 2016 at 9:30 AM ET

This very interesting and extraordinarily important case will be heard tomorrow in the Supreme Court of Canada. Here's the Court's Summary:

36602

Google Inc. v. EquustekSolutions Inc., et al.

(British Columbia) (Civil) (By Leave)

Keywords

Administrative law - Interlocutory orders, Injunctions, Private international law, Extraterritoriality, Communications law, Internet, Intellectual property, Industrial design.

Summary

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Administrative law — Interlocutory orders — Injunctions — Private international law — Extraterritoriality — Communications law — Internet — Intellectual property — Industrial design — Interim injunction issued against non-party to litigation — Google prohibited from displaying impugned websites in Internet search results — Under what circumstances may a court order a search engine to block search results, having regard to the interest in access to information and freedom of expression, and what limits (either geographic or temporal) must be imposed on those orders? — Do Canadian courts have the authority to block search results outside of Canada’s borders? — Under what circumstances, if any, is a litigant entitled to an interlocutory injunction against a non-party that is not alleged to have done anything wrong?

The plaintiffs sued their former distributors for unlawful appropriation of trade secrets, alleging that the distributors designed and sold counterfeit versions of their products. The plaintiffs obtained injunctions against the distributors, prohibiting them from carrying on any business online. When this proved ineffective, the plaintiffs sought a court order against Google, to prohibit it from displaying search results that included the distributors’ websites.

The Supreme Court of British Columbia granted a worldwide injunction against Google, finding that it had territorial competence over Google and that it possessed an inherent jurisdiction to maintain the rule of law and protect its processes, which in appropriate circumstances may include an injunction against non-parties. In this case, the balance of convenience favoured granting an injunction. The Court of Appeal agreed that the court held jurisdiction over Google with respect to the injunction application. It also concluded that it was permissible to seek interim relief against a non-party. The power to grant injunctions is presumptively unlimited, and injunctions aimed at maintaining order need not be directed solely at the parties involved in litigation. In this case, an injunction with worldwide effect was justified.

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The webcast should be available live here at 9:30 AM ET.

Here are the factums on appeal.

HPK

Date modified:

Blacklock's Sues the Government of Canada - Again

Blacklock's has sued the Government of Canada once again - this time with respect to alleged breach of the Copyright Act and alleged breach of contract by Environment and Climate Change Canada.

Here, without specific comment, is the latest Statement of Claim in Simplified Action #T-20142-16.

This is now the 11th case in what I have called the "litany of litigation" against the Government of Canada and some of its agencies.  Except for the case referred to below that Blacklock's resoundingly lost, the other nine cases were stayed until 45 days after the judgement below.

It will be recalled that Blacklock's lost it first Federal Court case to go to trial in a judgment issued on November 10, 2016 which included the following language:

[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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We shall know on or before December 12, 2016 whether Blacklock's intends to appeal the above ruling.

HK