For those who are interested in recent cases and developments about copyright and related matters, there have been several developments since the last entry.
Canada-United States-Mexico Agreement
Canada–United States–Mexico Agreement Implementation Act S.C 2020, c.1 was introduced on January 29, 2020 and assented to on March 13, 2020. The Act implements the Agreement between Canada, the United States of America, and the United Mexican States, as amended by the subsequent Protocol. The Agreement will enter into force on July 1, 2020.
The Act introduces the following amendments to the Copyright Act:
- the term of protection of copyright is extended in some situations but not globally;
- a new offence has been added relating to the removal or altering of rights management information;
- section 44.01 of the Copyright Act dealing with detention of copies by a customs officer has been amended to delete the exception relating to copies in customs transit control or customs transhipment control in Canada; and
- the Criminal Code has been amended to add a new offense relating to trade secrets.
Rallysport Direct LLC v. 2424508 Ontario Ltd 2019 FC 1524
This case deals will the subsistence of copyright. On a motion for summary judgement, it was found that the plaintiff’s employees originally created photographs and product descriptions after situating, and photographing individual automotive parts and accessories – sometimes arranging them into “kits” – and selecting the most appealing photos. This involved judgment and skill to the level required by the decision of the Supreme Court of Canada in CCH Canadian Ltd. v Law Society of Upper Canada. 2004 SCC 13. The product descriptions also meet this threshold. While the product descriptions were not overly creative, they did not have to be. What is important is they were an exercise of skill and judgment that involved intellectual effort, not the mere collation of data. The descriptions themselves explained the products in such a way as to incentivize buyers to purchase them over others.
Stross v. Trend Hunter 2020 FC 201.
This case considers the exception for fair dealing for the purpose of research. The court concluded that a computerized form of market research that measured consumer interaction and preferences to generate data for clients was “research” for the purpose of the exception. The court then went on to determine whether the dealing was fair. This determination ”is a question of fact to be assessed on the circumstances of each case bearing in mind the following six relevant factors: (i) the purpose of the dealing; (ii) the character of the dealing; (iii) the amount of the dealing; (iv) alternatives to the dealing; (v) the nature of the work; and (vi) the effect of the dealing on the work.” After reviewing the six factors the court was not convinced the dealing was “fair”.
York University v. The Canadian Copyright Licensing Agency 2020 FCA 77
The Federal Court of Appeal considered the rights of a collective society to collect royalties specified in a tariff against a user who had not taken a license from the collective society. The Court reviewed the legislative history related to subsection 68.2(1). The court concluded that the rights of a collective society had always been limited to collecting royalties from those who had agreed to take a license. To assert rights against a user who had not taken a license it was necessary to sue for infringement. Little or no previous case law considered this point. Enforcement of tariffs had taken place but without considering the issue because of the confounding of the enforcement of the tariff with awarding damages based on tariff amounts. This appears to have led to the mistaken view that tariffs are mandatory since the measure of damages for infringement has been held to be the amounts prescribed by the tariff.
The Court concluded that the General Regime followed the structure of the Performing Rights Regime fairly closely and the same result was arrived at for the General Regime. A final tariff would not be enforceable against York because tariffs do not bind non-licensees. If a final tariff would not be binding, the conclusion can hardly be different for an interim tariff.
Acts of infringement do not turn infringers into licensees to make them liable for the payment of royalties. Infringers are subject to an action for infringement and liability for damages but only at the instance of the copyright owner, its assignee or exclusive licensee.
Canadian National Railway Company v. BNSF Railway Company 2020 FCA 45
The Federal Court of Appeal settled the law concerning granting protective orders and confidentiality orders. Protective orders prescribe the treatment of confidential information between the parties to an action during the discovery process but do not address filing confidential information with the Court. Confidentiality orders cover filing confidential information with the Court and granting sealing orders. Hybrid orders contain provisions that govern both confidential information exchanged between parties and confidential information to be filed. The underlying interests in seeking protective orders and confidentiality orders are different. A protective order has no deleterious impact on the principle of open and public courts unlike confidentiality orders.
The test for issuing a protective order is as follows:
“Before issuing a protective order relating to information to be produced, the Court must be satisfied that “the moving party believes that its proprietary, commercial and scientific interests would be seriously harmed by producing information upon which those interests are based” [citing AB Hassle v. Canada (Minister of National Health and Welfare) (1998), 161 F.T.R. 15, 83 C.P.R. (3d) 428 at paras. 15, 20-30, affirmed in AB Hassle v. Canada (Minister of National Health and Welfare), [2000] 3 F.C. 360, 5 C.P.R. (4th) 149 (Fed. C.A.); See also Sierra Club at para. 14]. In the event a party challenges a confidential designation made by the other party, in determining whether information is confidential, the Court must be satisfied that it “has been treated by the party at all relevant times as confidential,” and that “on a balance of probabilities, [the disclosing party’s] proprietary, commercial and scientific interests could reasonably be harmed by the disclosure of information” (the “AB Hassle test”). (Footnotes omitted.)”
The test for granting a confidentiality order has been determined by the Supreme Court of Canada in Sierra Club of Canada v. Canada (Minister of Finance) 2002 SCC 41, [2002] 2 S.C.R. 52. The Supreme Court said that determining whether a confidentiality order is required by the first prong of the test is as follows:
“At this stage, it must be determined whether disclosure of the Confidential Documents would impose a serious risk on an important commercial interest of the appellant, and whether there are reasonable alternatives, either to the order itself, or to its terms. [Emphasis added.] “
There was no justification for applying the same onerous Sierra Club test applied to confidentiality orders to protective orders. It was an error of law to consider alternative measures to a protective order.
The test for granting a hybrid order is the same as the test for granting a protective order. Hybrid orders also address materials that may be filed with a confidential designation. However, a party who wishes to have the court treat documents subject to the hybrid order as confidential must bring a motion under Rule 151 of the Federal Courts Rules immediately after filing the documents. When the court is being asked to seal documents, the Sierra Club test, will apply.
Although the Federal Court is not obliged to grant a protective order, there was no significant and compelling changes to the law that justify the refusal to grant a protective order on consent (or not) if (i) the AB Hassle test is met and (ii) the protective order submitted to the Federal Court is in accordance with the protective order template jointly developed over the years between the Intellectual Property Bar and the Federal Court. To facilitate the Court’s review, the parties should provide sufficient evidence to support their motion for a protective order. The parties should also adopt the practice of identifying the portions of their draft protective order added to the template or removed from it.
Protective orders are useful for intellectual property litigants and there is no justification, legal or otherwise, for stifling this long-standing practice of granting them. Protective orders provide “structure and enforceability in ways the implied undertaking, or private agreements, cannot.”
Wiseau Studio, LLC v. Harper 2020 FCA 45
In this case the court found that the fair dealing exception for the purpose of criticism applied to a documentary. If the fair dealing was for the purpose of criticism, the criticism could be strongly expressed and unbalanced without forfeiting the fair dealing defence; an author’s remedy for malicious and unjustified criticism lies (if it lies anywhere) in the law of defamation, not copyright. Like the term “fair comment” in defamation law, “fair dealing” is a misleading term, as it is not determined by the plaintiff’s, or the court’s, sense that something is “unfair,” but is based on a range of factors that respect the rights of speakers and users to communicate information and views to the public without undue restrictions. A documentary can be many things and can be positive or negative about its subject. If a documentary uses copyrighted material for the purposes of criticism, review or news reporting, such use is for an allowable purpose under the fair dealing provisions of the Act.
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These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.