The Indigo Kills Kids Site Blocking Injunction Case – Update

 

vs.

The interim (temporary short duration) wide ranging site blocking injunction obtained by Indigo Books from Justice Fuhrer of the Federal Court has now been extended to two years following an unopposed hearing on October 22, 2024. This proceeding has been unopposed by any actual defendant and the ISPs have appeared and taken no position. (Nice work if you can get it 😉)  Bell did not even bother to appear.

I recently blogged about the interim injunction decision dated September 17, 2024, which has been reported. For whatever reason, the interlocutory decision dated October 23, 2024 which was rendered right after the one sided follow up hearing, has not been reported.  But here at the two unreported substantive decisions and orders from October 23, 2024, which I have obtained from the Court:

·       ·  Order and Reasons

·  Order

The reasons for the interlocutory decision are based on what appears, with respect, to be a problematic conflation of trademark law with copyright law, and some very dubious precedent. Where a dispute is really about a trademark, copyright law should not be contorted and muddled with trademark law in order to bring about a result that trademark law should not provide.

So sayeth the Supreme Court of Canada in the landmark decision Euro-Excellence Inc. v. Kraft Canada Inc., 2007 SCC 37 (CanLII), [2007] 3 SCR 20, <https://canlii.ca/t/1s72h>. See para. 65 and note how Kraft unsuccessfully used a “copyright action as an “interesting strategy in an effort to thwart Euro-Excellence’s distribution of” the chocolate bars” in order to get around the inevitable failure of trademarks law to address the issue. Kraft tried but utterly failed to rely on copyright in the small “bear” logo that adorns Toblerone chocolate bars. I recall Justice Binnie at the hearing asking whether anyone would buy a Toblerone chocolate bar in order to frame the wrapper and throw away the chocolate, or words to that effect. I made the prevailing arguments in this case at the SCC on behalf of the Retail Council of Canada.

Now, Indigo Books is using the artifice of apparently minimal copyright entitlement in a logo to bring about a result that would not be available under trademarks law. But nobody was there to argue to the contrary.

While there may be little or no credible sympathy for the absent defendants in this case, their absence means that potentially very important legal arguments were not addressed.  For example, the Plaintiff successfully invoked the wrongly decided (IMHO) United Airlines, Inc. v. Cooperstock, 2017 FC 616 (CanLII), [2018] 1 FCR 188, <https://canlii.ca/t/h4jzk> decision. That was a case in which Dr. Cooperstock was self-represented at trial and which likely would have been successfully appealed. However the appeal, which was in the hands of a major law firm, was suddenly discontinued just four days before the hearing under circumstances that I have refrained from mentioning.

Maybe it’s just as well that the interlocutory Indigo Kids  decision is not formally reported. Given that it was unopposed, and that the reasons are respectfully, IMHO, flawed, it is not, with respect, a helpful or persuasive addition to Canadian IP jurisprudence.

Curiously, there’s also a letter request from Indigo’s very experienced lawyer to block from the record the telephone numbers of the counsel involved. This is very unusual. Anybody can google a lawyer’s phone number and work address in a second or two – so what’s the point?

HPK

AI Litigation for the Canadian Nation

(from Kubrick’s visionary 1968 film, 2001: A Space Odyssey. AI is NOT a new concept.)

 There is a massive lawsuit underway against a number of companies comprising “OpenAI” (i.e. ChatGPT) for “misappropriation” of major Canadian news media material. It also alleges breach of ss. 3, 27 and 41 of the Copyright Act with apparently very few material facts or particulars about how these provisions were breached. “Misappropriation” is not a concept recognized by Canadian copyright law, as I explain below. Section 3 of the Copyright Act is the centrepiece of Canada’s complex copyright legislation and contains many separate and distinct provisions, none of which are identified in the Statement of Claim. It also alleges prohibited TPM circumvention, breaching terms of use, and unjust enrichment.

Michael Geist was quick off the mark with a useful analysis of some of the many difficulties that the plaintiffs face in this lawsuit, its international context, and his prediction that this is mainly about getting a settlement and a licensing deal. He followed up with a podcast with Prof. Robert Diab from Thompson Rivers University, who has also written about this case.

Actually, the case for the plaintiffs could be even weaker and more problematic than Michael or Prof. Diab suggest.

The Plaintiffs are “Canada’s leading media companies and news publishers (collectively, the “News Media Companies”)” including CBC and Canadian Press.

It was brought by the same very respected law firm that vigorously defended the concept of fair dealing in the Supreme Court of Canada in the York University case on behalf of Prof. Ariel Katz, as an intervener. Here’s the law firm’s press release.

This mega action was brought in the Superior Court of Ontario, perhaps because the Federal Court might conceivably have been dismissive of a lawsuit predicated primarily on “misappropriation”, which is a tort and a particularly vague one – and NOT a cause of action pursuant to the Copyright Act (see below). Indeed, the Federal Court conceivably might summarily toss any litigation focussed on “misappropriation”. BTW, the Ontario Court of Appeal successfully disentangled the muddling of misappropriation of personality and copyright in the ill-fated Glenn Gould case back in 1998. See Gould Estate v. Stoddart Publishing Co. Ltd., 1998 CanLII 5513 (ON CA), <https://canlii.ca/t/6gw8>

It will be interesting to see who ends up representing  the defendants here – and how the proceedings unfold.  Based on the copyright claims alone, this case could conceivably get bogged down at the outset and, if it ever does get going, for years to come, and perhaps never achieve a positive adjudicated outcome or even a satisfactory settlement from the plaintiffs’ point of view.

It will be interesting to see how the apparent lack of specificity, material facts, and particulars in the pleading and other issues could play out in procedural wrangles that could drag on with motions and discovery for a very long time. Even if the copyright causes of action survive, it is easy to predict that defences could potentially include the concepts of fair dealing, implied right, and simply non-infringement. Once again, as I’ve said, “misappropriation” is not something recognized by Canadian copyright law.

“Misappropriation” is a tort concept – i.e. judge-made common law that establishes liability for such things as negligence, product liability, taking of personality rights, etc. I shall never forget the great Prof. Harry Glasbeek’s impassioned lesson in 1^st year law school at Osgoode about how a Scottish woman was able to successfully sue after finding a dead decomposed snail in a bottle of ginger beer that she had partially consumed. See  Donoghue v Stevenson. That was a landmark of judge made tort law from the English House of Lords in 1932.

Some tort law finds its way into statute. Much of it does not. Canada’s Copyright Act explicitly excludes tort concepts. Copyright lawyers are – or ought to be - aware of the 1979 SCC decision that prominently mentioned the then very young and now the late Hon. Roger Hughes, namely Compo Co. Ltd. v. Blue Crest Music et al., 1979 CanLII 6 (SCC), [1980] 1 SCR 357, <https://canlii.ca/t/1mjth> wherein the great Justice Estey stated:

Mr. Hughes for the respondent in answer to a question from the Bench put it very well when he said that copyright law is neither tort law nor property law in classifi­cation, but is statutory law. It neither cuts across existing rights in property or conduct nor falls between rights and obligations heretofore existing in the common law. Copyright legislation simply creates rights and obligations upon the terms and in the circumstances set out in the statute. This creature of statute has been known to the law of England at least since the days of Queen Anne when the first copyright statute was passed. It does not assist the interpretive analysis to import tort concepts. The legislation speaks for itself and the actions of the appellant must be measured accord­ing to the terms of the statute.

(highlight, emphasis & underline added)

Needless to say, there is also the very important and venerable s. 89 of the Copyright Act:

No copyright, etc., except by statute

89 No person is entitled to copyright otherwise than under and in accordance with this Act or any other Act of Parliament, but nothing in this section shall be construed as abrogating any right or jurisdiction in respect of a breach of trust or confidence.

1997, c. 24, s. 50 (highlight, emphasis & underline added)

See  Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68 (CanLII), [2012] 3 SCR 489, <https://canlii.ca/t/fv76k> paras. 81, 82.

The quantum of damages sought is beyond huge – potentially statutory damages of $20,000 for each of the “hundreds of thousands, if not millions, of Owned Works across the Websites” allegedly infringed. Theoretically, that’s in the Billions. Naturally, mega injunctive relief is also sought.

Here is Section 3 of the Copyright Act. Which of these provisions are implicated here and how? The Statement of Claim – in all of its 84 pages – does not tell us:

Copyright in works

3 (1) For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right

(a) to produce, reproduce, perform or publish any translation of the work,

(b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work,

(c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise,

(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,

(e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work,

(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,

(g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan,

(h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program,

(i) in the case of a musical work, to rent out a sound recording in which the work is embodied, and

(j) in the case of a work that is in the form of a tangible object, to sell or otherwise transfer ownership of the tangible object, as long as that ownership has never previously been transferred in or outside Canada with the authorization of the copyright owner,

and to authorize any such acts.

BTW, there are also allegations of TPM infringement, breach of contract, and unjust enrichment.

The TPM issue could also be interesting because TPMs are also involved in the Blacklock’s litigation, which is presently in the Federal Court of Appeal and is likely to be finally resolved long before this AI litigation even gets fully off the ground, if ever.

Here’s the Plaintiffs’ law firm’s press release. Here’s some coverage in the NY Times.

There is also a recent lawsuit in BC based by Canlii against Clearway et al. Canlii is the very important free database of Canadian legal decisions. Here’s the Statement of Claim filed in the Supreme Court of British Columbia on November 4, 2024, also from a major law firm.  This also involves AI and the Statement of Claim alleges misappropriation, misuse, conversion, and unjust enrichment. Again, one can expect procedural issues that could last for years to come.

Stay tuned for future developments on these lawsuits. But don’t expect anything conclusive any time soon.

AI is a huge growth industry, for better or worse, and affects virtually every sector. And it is now the centrepiece of lots of litigation in Canada and elsewhere. This is inevitable given the nature of the legal profession. The lawsuits will presumably unfold with much deliberation and will hopefully be well argued by all concerned. This is probably better than some hasty and panicked legislation prompted by political opportunism that could conceivably result in bad cures for misdiagnosed problems.

HPK

Blacklock’s Bombastic Appeal Memorandum

Blacklock’s has filed its Memorandum in its appeal from Justice Roy’s decision earlier this year that meticulously ruled against it holding that :

1. It is hereby declared that, having purchased the only type of subscription

available, which was allowing the acquisition of the password needed to access

articles produced by Blacklock’s Reporter, Parks Canada’s use of the password in

the circumstances of this case constitutes fair dealing under section 29 of the

Copyright Act.

2. It is hereby declared that the licit acquisition and use of a password, if it is

otherwise a technological protection measure, does not constitute the

circumvention of the technological protection measures of the Copyright Act.

3. There is no order as to costs.

(highlight added)

Blacklock’s unusually begins its memorandum with bombastic, histrionic, fulsome, fulminating,  and patently problematic language untethered to the record and unusual (to put it very mildly) in my experience in the Federal Court of Appeal, especially over the signature of experienced counsel:

A Case of David vs Goliath

1.Before addressing the substance of the appeal, this case warrants a brief explanation of the circumstances that form the backdrop of this proceeding. Over the years, the Attorney General of Canada’s (“AGC”) long-standing strategy has been to characterize the Appellant, 1395804 ONTARIO LTD.’s (“Blacklock’s”) (and Mr. Korski) as a vexatious litigant and a copyright troll, with the intention of deflecting the narrative away from the numerous government departments that have knowingly or carelessly violated Blacklock’s copyright and technological protection measure (“TPM”). While at the hearing the Trial Judge was adamant that no credence was to be given to the allegations of copyright trolling, it is clear from the Judgment that the Trial Judge’s perception of Blacklock’s was polluted. Throughout the Judgment, Parks Canada is unduly painted as righteous,1 and Blacklock’s is unnecessarily and inordinately tarred and feathered, including the Trial Judge, without cause, impetuously accusing Mr. Korski (Blacklock’s) of fabricating or tampering with evidence. This is a classic case of David vs Goliath, and despite the evidence and law favouring Blacklock’s, Blacklock’s has been pummeled by years of litigation, and unfair treatment, all because Blacklock’s engages in investigative journalism that that exposes cases of waste and/or mismanagement in government departments..

1 The Trial Judge uses words such as “legitimate”; “valid”; “good faith” in describing Parks Canada, see paragraph 101 of the Judgment as an example (AB Tab 2, p 62).

(highlight, bold, & underline added) 

I will refrain from commenting further on Blacklock’s Memorandum until I see  the Memoranda of the Attorney General (AG) and, presumably, the intervener CIPPIC. BTW, the AG has consented to CIPPIC’s proposed intervention and Blacklock’s has indicated that that it will not oppose CIPPIC’s intervention.

Notably, and despite all the whining, there are no other potential interveners in sight. As I’ve suggested, Justice Roy’s decision is actually good news for major media outlets that have sophisticated websites and password mechanisms.  Here’s my blog from September 4, 2024. As I said then:

So – let us hope that Alexander Gay’s successor in this file in the appeal process does just as vigorous and competent a job as Mr. Gay and, if anything, has fewer restrictions on his brief. And let’s hope that James Plotkin will be there for CIPPIC with as much scope or even more to act as an essential intervener.

As for this appeal, I remind readers once again that I’m retired and not practicing law and that nothing on this blog is legal advice. That said, my personal opinion about this appeal is that Blacklock’s should be careful what it wishes for. A loss in the Federal Court of Appeal could be costly financially and substantively, and I would be very surprised if the SCC were to grant leave to appeal in this case.

 HPK