Tuesday, December 11, 2018

Update and Comment on Blacklock’s Latest Move and Mega Motion: Be Careful What You Wish For?


Blacklock’s will be back in the Federal Court tomorrow on December 12, 2018 at 90 Sparks St. in Ottawa at 9:30 AM with a “mega” motion record of almost 3,000 pages. Blacklock’s is certainly very determined.

It badly lost a Federal Court case alleging copyright infringement in 2016, which it did not appeal. It was then ordered to pay costs of $65,000 –  a ruling which it appealed and badly lost. Excerpts from these rulings and links are provided below.

Following these defeats in 2016, there have been innumerable “docket” events in the active cases – see T-2090-14 for example culminating in the current massive motion filed on August 27, 2018. Blacklock’s changed counsel – but only on January 10, 2018. Note that Blacklock’s former counsel was Yavar Hameed, a well respected and experienced public interest Federal Court litigator. Its new counsel is Scott Miller of MBM Intellectual Property Law LLP.

Now, more than four years after the beginning of the “litany of litigation”, as I have called it, that has comprised 17 cases against the Federal government and its agencies, Blacklock’s is seeking in the motion returnable on December 12, 2018 to:
·       Amend old pleadings to add a new cause of action involving circumvention of technical protection measures. This comes more than two years after Justice Barnes ruled during the trial of the first case in 2016 that circumvention of TPMs has not been pleaded and allegations and arguments based on this would not be heard by the Court. Frankly, even if circumvention had been properly pleaded at the original trial, it’s very likely, as explained below, that it would have failed on the facts before the Court and any correct interpretation of the law;
·       Convert these “simplified actions”, which had an upward limit of $50,000 in terms of liability, into normal actions with an enormous theoretical damage potential based, inter alia, upon the assertion that “Statutory damages for circumvention of a TPM may include statutory damages for the library of works behind the TPM. The Locked Articles subject to potential statutory damages in each of the Blacklock's cases is in the 1000's.” (footnote omitted); and,
·       To seek punitive damages based upon extraordinarily unusual and even “personal allegations” and “personal attacks” (according to the Attorney General of Canada) on the Government’s lead senior counsel up to now, Alexandre Kaufman, which might have resulted in his removal from the file.
Interestingly, in what can only be an incredibly ironic  coincidence, Mr. Kaufman has just been appointed as on December 5, 2018 as a Master of the Superior Court of Ontario – an important position in the administration of justice and an overwhelming endorsement of Mr. Kaufman’s personal and professional qualifications. Here’s just one outside-the-courtroom example  of Blacklock’s attacks directed against Mr. Kaufman, who enjoys an outstanding reputation in both the Federal and Ontario courts as a litigation counsel, published author and adjunct professor.

Here are some excerpts from the key documents, which are on the public record, for the December 12, 2018 motion:
      1.     Blacklock’s Notice of Motion and draft amended pleading re Health Canada;
2.     Blacklock’s Written reps;
3.     Attorney General of Canada Factum; and,
4.     Blacklock’s supplemental reps.

As the Attorney General of Canada (“AGC”) summarizes Blacklock’s Motion:
1. There are two parts to this motion, one that deals with allegations made by plaintiff's counsel against Mr. Kaufman as it relates to his handling of freelancers that provided affidavits and another that deals with amendments to the pleadings, amendments that are largely time-barred. Both parts of the motion should, for the most part, be rejected by this Court.
2. As it relates to the first part of this motion, the plaintiff alleges that Mr. Kaufman breached his professional obligations by asking freelance journalists to either attend for cross-examination or withdraw their affidavits on consent. Mr. Miller contends that the act of putting an affiant to an election is the suppression of evidence for which his client is entitled to punitive damages. These facts form the basis of his amendment. There is nothing improper with asking affiants if they are prepared to stand behind an affidavit. An affiant must be prepared to face cross-examination on their evidence. The amendments in relation to Mr. Kaufman's conduct arc improper and irrelevant to any cause of action. They should not be permitted by this Court.
3. As for the second part of this motion, the plaintiff seeks to amend the various statement of claims to: (a) add a claim that the plaintiff owns copyright in all of the articles; (b) add a new cause of action of the circumvention of a technological protection measure ("TPM") under section 41.1of the Copyright Act; ( c) add a claim that the defendant's activities were for a commercial purpose; (d) expand the claim to cover all articles that were available on Blacklock's website during the relevant time and not just the specific articles that were allegedly shared; (e) change the relief sought, including adding new declarations, a permanent injunction, and changing its damages claims to one where the plaintiff may elect either damages or statutory damages. These amendments, which were not brought at the first opportunity, change the nature and substance of the claim.

Below are some comments based upon my concerns as an experienced copyright lawyer who cares about copyright policy and jurisprudence and also as a taxpayer observing the potentially very large claims against the Canadian government and the costs of defending this litany of litigation. First, here’s some background.

Blacklock’s won a Small Claims Court victory in 2015 against the Canadian Vintners Association for $11,470 plus punitive damages of $2,000 plus costs in a judgment that was clearly wrongly decided but not appealed for obvious practical reasons – and which was, in any event, of virtually no precedential value, being a Small Claims Court decision.

On November 10, 2016 Blacklock’s badly lost its first and thus far only Federal Court trial – the substantive result which it did not appeal. It was seeking $17,209.10 plus costs. Let us recall some of what Justice Barnes, a very experienced Federal Court judge, had to say about Blacklock’s in his judgment:

[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.

Blacklock’s is now presumably but arguably very belatedly placing high hopes on the last sentence, which appears to be meant as a general comment for future litigants and not as an invitation or encouragement to Blacklock’s.  Justice Barnes came to the right decision based upon the evidence before him, which included Blacklock’s use of a paywall and password protection. Litigants always have an obligation to put their “best foot forward at the first opportunity”.

Soon thereafter on December 21, 2016  Blacklock’s got a very unpleasant surprise just in time for Christmas of 2016 in the form of a harsh – though it could easily have been even worse – costs award of $65,000 from Judge Barnes, which I then characterized as a “lump of coal” coming as it did just before Christmas. Here’s some of what I said at that time:
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.
(highlight added)
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. (highlight added)

In any event, Blacklock’s very predictably lost its appeal on the costs award. As I noted in my blog:
The Federal Court of Appeal (“FCA”) heard Blacklock’s appeal of Justice Barnes’ costs ruling on September 12, 2017 and perfectly predictably dismissed the appeal with costs. The FCA not only ruled “from the bench” but, as I understand, did not even call upon the Attorney General of Canada to respond. As practicing lawyers well know, this means that Blacklock’s did not raise any issues that even needed an oral response. This was a decidedly decisive disposition.
The FCA’s judgment, which is somewhat surprisingly specific for a judgment from the bench, is available here. Notably, the FCA:
·                  Agreed with Justice Barnes that the issues – primarily the fair dealing issue – were “well-settled in the jurisprudence and, thus, neither novel nor of public significance” (para. 5)
·                  Ruled that Justice Barnes’ costs award was “amply supported” by the factors in the rules and that the Federal Court considered, among other things:
o   the respondent’s success in the litigation and the one-sided nature of the outcome,
o   the appellant’s litigation strategy,
o   the existence of a settlement offer,
o   the complexity of the litigation, and
o   the actual costs of the respondent.

Flashing forward to the current motion and nearly two years of inconclusive proceedings before two Case Management Judges of the Federal Court, here are some further comments on the current mega motion.

If Blacklock’s somehow succeeds in getting its proposed amendments allowed, its troubles may seriously increase. It will have to convince one or more trial judges and potentially the FCA and SCC that that the law and the facts are on its side, despite the fact it chose to go forward with the facts that have already been presented to Justice Barnes – who clearly ruled adversely. In this country, we have principles known as “issue estoppel” and “res judicata” – and in common English for litigants to put their best foot forward at the first opportunity”.

Blacklock’s has a tough road ahead. It faces a potentially very large costs award – even if it wins this pleadings amendment motion – and far more if it succeeds on the motion but loses at the trials.

Regarding the substance of Blacklock’s proposed amendments, many if not most copyright lawyers would be surprised and, indeed, upset if Blacklock’s succeeds. Blacklock’s theory of circumvention is based on the assertion that:
Circumvention of the Blacklock’s TPM includes:
(i) sharing of a unique subscriber password with someone who is not
authorized to have the unique subscriber password;
(ii) sharing of a Locked Article accessed from a single user subscription to
any party; or
(iii) unauthorized person(s) or entity(s) requesting and thereafter receiving a
Locked Article from anyone having access either directly or indirectly to
the Locked Article.

Even if these facts can be proven, it’s arguably extremely unlikely that any court could correctly conclude that they amount to actionable “circumvention”.  This will not be decided on this motion – where Blacklock’s needs only to establish a “reasonable prospect of success.” However, it’s very arguable that Blacklock’s has no “reasonable prospect of success” on the circumvention claims - which is the required threshold it must meet according to the case law to amend at this late stage – even leaving aside other issues, such a limitation periods. Even if it somehow succeeds Blacklock’s will have a very uphill battle going forward if it crosses this threshold.

Recall that Justice Barnes made it clear in para. 45 of this substantive judgement quoted above that: “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.” That statement is NOT obiter dicta. It is the heart of the “ratio decidendi” of this decision and is a binding and very precedential.

If the Court ultimately concludes that the mere copying of material or even an entire article behind a paywall in a manner that amounts to fair dealing is actionable circumvention, the legislation will need to be changed. However, when one looks at the legislation and the difference between “access” and “copy” control, the legislation is sufficiently clear to show that what is going on here is not actionable circumvention. Even if there is circumvention leading to unauthorized copying, the government departments are not engaged in a “service” of offering unauthorized copying – which is what s. 41.1 requires.

Leaving aside proper interpretation of the statute for the moment (which, of course, the Court cannot avoid), consider from a common-sense point of view how incongruous it would be for a court to find that merely cutting and pasting from – or even copying an entire article  behind a paywall - is actionable circumvention. This happens countless millions of times a day when people share information for fair dealing purposes that may be on a password protected newspaper website such as the New York Times, The Economist, the Toronto Star, the Globe and Mail and even much smaller niche media such as Hill Times and the Wire Report, which may  use password protected paywalls of varying sophistication and be more or less “effective” as a putative TPM. But they don’t sue their customers – who subscribe because they value the utility of the information and may actually need to conveniently share it for research purposes, for example. Above all, the intention of the legislation is stop hacking, decrypting, bypassing or “breaking” of digital locks or other devices to gain unauthorized “access” (none of which is happening here) – not to nail anyone who shares or reads any material behind a paywall – especially when such activity is “fair dealing”. In any case, “reading” is not something that is even covered by the Copyright Act.

It is obvious that Blacklock’s intends to rely – both on this motion – and going forward if it succeeds – on the one and only Federal Court decision we have to date on circumvention, namely Nintendo of America Inc. v. King, 2017 FC 246 (CanLII), <http://canlii.ca/t/h0r1j>
I wrote about that decision extensively on my blog here. The decision should not only not be given “high precedential value”. With all respect to the learned trial judge, the Nintendo decision should be given little if any precedential value.  As I said in my blog:
After the individual Respondent agreed to a consent judgment against him for $70,000, the case was “effectively uncontested”, as the Court noted. This was an “application” and not an “action”, which means that evidence can only be put in by affidavit and there are no “live” witnesses.   The Respondents had filed written representations before the commencement the hearing but provided no evidence and did not cross-examine any of Nintendo’s witnesses on their affidavits.

The Court requested and received further written final supplemental written submissions before the conclusion of the hearing.  The respondents did not, although entitled, reply. Indeed, the Respondent’s counsel did not appear for the final oral argument.

The Court proceeded on this basis to render a judgment in which all but the introductory 14 paragraphs of this 181 paragraph 51-page judgment are a virtually verbatim reproduction of Nintendo’s final supplemental written submissions. Paragraphs 14 and thereafter until the conclusion of the judgment track paragraphs 14 and thereafter of Nintendo’s supplemental written submissions.

There is nothing necessarily improper about a judge copying material from a party’s memorandum. The learned and very experienced trial judge provided acknowledgement of his request for the supplemental written submissions and how they were used. That satisfies a requirement that has been dealt with by the Federal Court of Appeal in Apotex Inc. v. Janssen-Ortho Inc., 2009 FCA 212 (CanLII), where the need for explicit “acknowledgment” of the adoption of a party’s written submissions was addressed. For those further interested in jurisprudence on what the Supreme Court of Canada recently referred to as “the long tradition of judicial copying”, see  Cojocaru v. British Columbia Women’s Hospital and Health Centre, [2013] 2 SCR 357, 2013 SCC 30.

The real issue here is that the judgment makes some sweeping pronouncements and awards an enormous amount of very likely uncollectable damages based upon “effectively uncontested” arguments and unchallenged evidence that, in the result, leaves the Court with something not much different than a default proceeding. This left the Court without the benefit of full submissions and argumentation on some of the key issues and relevant case law. That is not the way the adversarial process normally works when we depend on it to generate binding precedents. In this case, we now have a judgment that, with respect, may be wrong in certain important aspects because the Court did not have the benefit of opposing arguments.

Nintendo’s argument, as adopted into the decision resulted in an enormous – by Canadian standards – unprecedented award of statutory damages in respect of circumvention of TPM measures. It is based upon the Court’s conclusion that Nintendo is entitled to the maximum level of $20,000 of statutory damages are due “for each of the 585 Nintendo Games to which the Respondent’s circumvention devices provide unauthorized access” (para 141 if Judgement). (emphasis added).

However, it is very doubtful that Nintendo was entitled to damages for “each” of these 585 works when there was no evidence that any of them were actually illegally copied by anyone. Moreover, it appears that the Court was not provided with arguably very relevant case law that might have at least resulted in an award of a nominal fraction the maximum statutory damages of $20,000 per work. One can only begin to imagine the absurd result if such an approach to damages were used, for example, against a researcher (e.g. a university professor or student) who somehow gains unauthorized access to a newspaper website or other research database, perhaps reads a single article, is found to have “circumvented” a TPM, and is then held liable for $20,000 for each the tens or hundreds of thousands of individual articles that were never downloaded or even read on the website.

(highlight added)

Coincidentally, the defendants’ law firm in the Nintendo case was the same firm now representing Blacklock’s – namely MBM Intellectual Property Law LLP.

Blacklock’s also faces significant hurdles if it hopes to win a pot of gold at the end of the rainbow based on large damages award either from copyright infringement or circumvention of all of the articles in its database, or even the thousands of locked articles. Even if liability is somehow established based upon the proposed new pleadings, the amount of statutory minimum damages can be reduced, depending on the circumstances,  to an effectively nominal amount and there is ample case law establishing that statutory minimum damages must bear some correlation to actual damages, which in these cases would likely be at most the cost of a one-year institutional subscription, i.e. $15 to $17 K or so for each of the government departments. The government is under no obligation to have multiyear subscriptions to Blacklock’s.
Blacklock’s also faces some very serious procedural problems on this motion. For example:
·       It waited a very long time to bring this motion – almost two years after Justice Barnes ruled that circumvention needed to be specifically pleaded;
·       Most if not all the facts that Blacklock’s would presumably rely on, including the presence of password protection and how it operates, were before Judge Barnes in the first trial. The principles of stare decisis, issue estoppel and the need to put one’s “best foot forward at the first opportunity” could presumably be in play not only now but even if Blacklock’s gets to go forward;
·       Many if not most of the cases under consideration are now said by the defendants to be statute barred because of the expiration of the applicable limitation period; and,
·       Even if Blacklock’s succeeds in amending the pleadings in some of these case, it could face very large costs consequence because of, inter alia, prejudice to the defendants and the sheer scope of this motion, including the very serious and even “personal” nature of the allegations and attacks against former AGC counsel Alexandre Kaufman ­­­– now Master Kaufman.
Will this turn out for Blacklock’s to be an example of the old adage about “be careful what you wish for”?


Sunday, December 02, 2018

Fake News on Fair Dealing from Michael Enright Himself and the CBC Sunday Edition


The legendary Michael Enright – host forever of the slowly declining but still usually worthwhile  Sunday Edition on CBC – has let his listeners and the CBC down badly today with his weekly "essay" entitled “A new survey shows how poorly writers are paid in this country”.  It is apparently based on little if anything more than a Writers’ Union of Canada (“WUC”) undated press release (which he acknowledges) based in turn upon a so-called “survey” of so-called writers that yields the much quoted and highly misleading result that the average Canadian writer makes only $9,380 a year and the incomes are falling fast. He says that: “In 2012, the Harperites changed the copyright laws, reducing writers' share of educational copying by tens of millions of dollars. The government's argument was that reducing the writers' compensation would help the education sector.” This, of course, is legally and factually false. Sadly, his “essay” can charitably be called “fake news” at best. The timing is interesting, coming just a day before what promises to be an eventful #INDU committee hearing on December 3, 2018 that will include Prof. Ariel Katz and Barry Sookman and amid lots of other hot and heavy committee hearings lately sadly full of fake news.

The obvious problem is that the survey respondents here are self-selecting and self-defining. Almost anyone can qualify to be an Access Copyright (“AC”) creator affiliate – and it’s not much harder to be a Writers’ Union member, since even a self-published book “that successfully demonstrates commercial intent and professionalism” gets one in the door – for whatever benefit if any that may be available.  At least it presumably still doesn’t cost anything to join Access Copyright. I should disclose that I’ve been a member for years and earned almost $85 this past year in royalties – more than many. I obviously don’t consider myself a professional writer – though I write constantly – and I’m not about to quit my day job. Waving a magic legislative wand to double my AC payout would get me a modest lunch for two at a decent restaurant without a bottle of wine – but could cost hundreds of millions of dollars a year to the Canadian educational system.

UNEQ – the counterpart to AC  in Quebec – has been spouting similar apparently  unreliable figures, claiming according to Le Devoir on November 27, 2018  While the average salary of respondents was $ 9,169, the median wage - the point at which 50% of the sample receives a higher salary and 50% receives a lower salary - did not exceed $ 3,000.” (as translated)

If Michael and/or his staff did any other research beyond WUC and perhaps Access Copyright propaganda, its not apparent.

Anyway, here are my three tweets back to @CBCSunday. I’ve listened to Michael for decades and he’s a treasure – so it’s sad to see him and his staff get played this way, or maybe even sadder still if he has lost his sense of journalistic balance and the need for adequate research.


Thursday, November 29, 2018

My Speaking Notes for Senate BANC Committee November 21, 2018 re Copyright Board

Howard Knopf Speaking Notes for Senate BANC Committee November 21, 2018

Here is the webcast of this hearing. My opening remarks occur at 14:49.  There were some very good questions, and presentations from Jeremy de Beer and Casey Chisick.

The following are my speaking notes. The final transcript is not yet available.


1.   Thank you for the invitation and the opportunity to compress nearly 40 years of experience into 5 minutes.  Frankly, an omnibus bill approach to all these complex and controversial IP issues is absolutely NOT the way to proceed here and is unnecessary and unacceptable. There are many serious issues and problems with the nearly 100 pages of IP material in Bill C-86 but I was only invited here to talk about the Copyright Board. This is in some respects the most drastic change to the Board since 1936 and it is getting only an hour or so of Committee consideration here and much less in the other place.
2.   The clarification of criteria – including the inclusion of the terminology of “public interest” and “willing buyer and willing seller in a competitive market with all relevant information, at arm’s length and free of external constraints” may actually backfire. This will formalize in an untested and unprecedented manner what has been an informal exercise that has often resulted, for better or worse, effectively in the averaging of two extreme sets of numbers – and will almost certainly result in even more expensive and time-consuming so-called “expert evidence” about something that is circular at best and paradoxically impossible at worst – which is that determining a competitive market rate. There is no such thing as a competitive market in a world where mandatory tariffs can be set by law for the benefit of powerful monopolies that would otherwise be criminal conspiracies were they to exist without the blessing of Parliament and the Copyright Board and the Courts. Moreover, the concept of “public interest” may potentially conflict with that of a “competitive market”. We can expect longer and more expensive hearings and more judicial review in figuring out what, if anything, this will all mean.
3.   As for the commendable idea encouraging public participation without incurring the costs of full participation as indicated in the Government’s Fact Sheet, that appears to be more talk than action. If the Government means reimbursement for costs of public interest participation, that would require enabling legislation as we have with the CRTC. But that enabling legislation is simply not there in this bill.  
4.   As to streamlined timelines, the Bill simply doesn’t deliver. Moving up the filing date by 5.5 months and making tariffs last three years rather than one won’t make any difference to the fact that it usually has taken about four years for a hearing to even take place and there are few if any examples of “annual” hearings on the same tariff. It then typically takes the Board 3 years to render a decision, which is then very retroactive, and which often results in judicial review and even rehearings. Contrary to what you heard earlier today and my friend Prof. de Beer, the Board normally certifies fewer than 5 tariffs a year.
5.   The enabling legislation for regulations to specify time lines has already been there for at least three decades – and still hasn’t been used. The setting of deadlines and timelines have still been postponed and punted again. This bill does nothing to impose necessary deadlines, as we have for other tribunals and in the Federal Courts as set by the Governor in Council – for example in the case of the Federal Courts and the Competition Tribunal, which incidentally will have a much smaller budget than the Copyright Board.
6.   The bill will eliminate the requirement for music industry collectives to file tariffs that require Board oversight – even if there is no opposition. This has been a requirement since 1936 following the monumental Parker Commission Report. That means that the music industry will have even more effectively unchecked monopoly power over organizations ranging from hockey stadiums and movie theatres OTOH to barber and beauty salons OTOH. No wonder SOCAN and Re:Sound have been so quick to welcome this Bill.
7.   The elephant in the room here, of course, is the overwhelming question of whether Copyright Board tariffs are mandatory for users. I successfully argued in the SCC that this is not the case. It’s one thing for the Government to provide a train or plane tariff to get from Ottawa to Toronto – as once was the case. But, the Government never forced anyone to take either the train or plane if they wanted to take the bus or drive their own car. However, in the Access Copyright v.  York University case, York did not address the issue of whether final approved tariffs are mandatory. Let’s hope that the FCA gets this right. It will likely end up in the SCC. The issue is certain to arise in the s. 92 hearings as well. So, in this regard, I’m a little concerned about 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”?
8.   I’ll be happy to answer your questions.


Wednesday, November 28, 2018

My speaking notes for my presentation to the House of Commons INDU Committee for its s. 92 Statutory Review of the Copyright Act

Here are my speaking notes for my presentation to the House of Commons INDU Committee for its s. 92 Statutory Review of the Copyright Act. Here’s the webcast. My introductory remarks are at the 16:23:14 mark. There were good submissions as well from Marcel Boyer, Mark Hayes and Jeremy de Beer.


I’ll try not to repeat what I’ve said in the last week to the Senate BANC committee and yesterday to the CHPC committee. But I will repeat one thing I said yesterday which was this:
There’s no “Value Gap” in the copyright system. However, there’s a serious “values gap” in the fake news that is being disseminated these days about IP in general and Canadian copyright revision in particular.

Today I’ll talk about a few other issues and flag some that I’ll include in more detail in my written brief due December 10, 2018.

1.   We need to clarify that copyright board tariffs are not mandatory for users

The elephant in the room is the issues of whether Copyright Board tariffs are mandatory. They are not. I successfully argued that case in the SCC three years ago – but most of the copyright establishment is in denial or actively resisting. A tariff that sets the maximum for a train ticket from Ottawa to Toronto is fine – and we used to have such tariffs before deregulation. But travellers were always free to take the plane, bus, their own car, a limousine, their bicycle or use any other legal and likely unregulated means.

Choice and competition are essential – not only for users but for creators. Access Copyright charges educators far too much for much too little. And it pays its creators far too little – they got an average of $190 for 2017 from Access itself and from their share of the publishers’ portion.

There is intense litigation ongoing between Access Copyright and York University – now in the appellate stage and other litigation in the Federal Court involving school boards.

Unfortunately, York failed in the trial court to address the issue of whether final approved tariffs are mandatory. Hopefully, the FCA and maybe the SCC if necessary will get this right in due course. But we can’t be sure, and the other side is lobbying you heavily on this issue, including with such devious and disingenuous suggestions as imposing a statutory minimum damages regime of 3 – 10 the tariff amount on the  totally inappropriate basis of symmetry with the SOCAN regime – which is the way it is for good reasons that go back more than 80 years but would be totally inappropriate for tariffs outside the performing rights regime.

I urge you to codify and clarify for greater certainty what the SCC has said in 2015, consistently in turn with previous SCC and other jurisprudence going back decades – that Copyright Board tariffs are mandatory only for collectives but optional for users, who remain free to choose how they can best legally clear their copyright needs.

2.   We need to keep current fair dealing purposes in s. 29 and include the words “such as”

The SCC had already included the concept of education in fair dealing before the 2012 amendment kicked in. The USA allows for fair use “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use)” (emphasis added). I ask you to ignore siren calls urging you to delete the word “education” from S. 29 and urge you to add the two little words “such as”, as our friends and neighbours in the USA have had for 42 years.

3.   We Need to Ensure that fair dealing rights cannot be overridden by contract

The SCC has said (Royal Trust v. Potash, [1986] 2 SCR 351, 1986 CanLII 34 (SCC), (http://canlii.ca/t/1ftqp) that consumers cannot lose their statutory rights by contracting out or waiver in the case of, for example when it comes to paying off a mortgage after 5 years. We need to clarify and codify a similar principle that fair dealing rights and other important exceptions cannot be lost by contracting out or by waiver.

4.   We need to explicitly make technical protection measures (“TPM”) provisions subject to fair dealing

We need to clarify that users’ fair dealing rights apply to circumvention of technical protection measures at least for fair dealing purposes in s. 29 and for many if not all of other exceptions provided in the legislation as appropriate.

5.   We need mitigation for the nation

We need to mitigate the damage done by copyright term extension under both the Harper government (as deeply buried in an omnibus budget bill) and by this Government in the USMCA. These concessions could cost Canada hundreds of millions a year – and must be given now to the EU and all our other WT) TRIPs treaty partners because of the most favoured nation and national treatment principles to which Canada is bound. One small mitigation measure might be the imposition of renewal requirements and fees for those extra years of protection that are NOT required by the Berne Convention.

6.   We need to look carefully at enforcement issues.

I know you are under immense pressure from some very well-funded and powerful lobbyists and lawyers on site blocking. I’m not convinced that we need any new legislation on this issue but I’m looking into it carefully and may perhaps write about. In the meantime, you should be looking at the existing (not proposed) provisions in s. 115A of the Australian Copyright Act and UK case law.
We may also need to somehow address the issue of mass litigation against thousands of ordinary Canadians who happen to “associated with an IP address that is the subject of a notice under s. 41.26(1)(a)” and who are alleged to have infringed a movie that could be streamed or downloaded for a few dollars. This litigation is not “akin to a parking ticket”. There are systematic efforts to extract “settlements” of thousands of dollars from terrified internet account holders who may never have heard of BitTorrent until they get that dreaded registered mail letter. These efforts may succeed in many cases because access to justice is very difficult in these circumstances. If the government would do its job on the notice and notice regulations, that might be a good start.

7.   We need to repeal the blank media levy scheme

We need to get rid of the zombie-like levy scheme Part VIII of the Copyright Act and stop listening to the big three multinational record companies who conjure new kinds of taxes on digital devices, ISPs, internet users, the cloud, and whatever else looks lucrative. Even the USA doesn’t entertain such fantasies.  

8.   We need to stop this five years review ritual

We have had two major and two medium scale revisions to Canadian law in the last 100 years a few more focused ones in between. There is no need for periodic copyright policy review. It’s lucrative for lobbyists and lawyers. But it’s a waste of time – including Parliament’s time. Reacting reflexively and prematurely to new technology is usually very dangerous. If we had listened to the whining of the film industry in the early 80’s, the VCR would have become illegal and Hollywood as we know it might have committed economic suicide. Who of us of a certain age can forget the words of Jack Valenti, the famous Hollywood lobbyist, who told Congress “I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”
Particular issues can be addressed as needed, which is the way most other countries cope with copyright.
Thank you. I look forward to your questions.