Thursday, December 01, 2016

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-2012-16.

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.
(highlight added)

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

HK



Wednesday, November 30, 2016

Senate Committee Calls for “thorough, in-depth examination of the Copyright Board of Canada’s mandate, practices and resources.”


The Senate’s Banking, Trade and Commerce Committee (“BANC”) has just released, on time as promised, its eagerly anticipated report entitled “Copyright Board: A Rationale for Urgent Review”.

With highlight added, here is the bottom line:

From the Executive Summary:
Many witnesses agreed that a review of the Board – either overall or in specific areas – should be
undertaken during the forthcoming statutory review of the Act. Consequently, the committee
strongly recommends that the mandate, practices and resources of the Copyright Board of Canada be the subject of in-depth study during the forthcoming statutory review of the Copyright Act by a committee of the Senate or of the House of Commons or of both.

From the Recommendation:

RECOMMENDATION
The Copyright Board of Canada plays a pivotal role in Canada’s cultural sector. Yet, from what the committee heard, the Board is dated, dysfunctional and in dire need of reform. Whether the reasons are statutory, structural or otherwise, the Board did not – or could not – provide the committee with solutions to the problems that were identified by witnesses. The concerns outlined in this report require further investigation and timely action.

The next statutory review of the Copyright Act will take place in 2017, as stipulated in the legislation. That same legislation also requires the review to be conducted by a committee of the Senate, of the House of Commons or of both. The committee therefore recommends that:

The forthcoming, five-year statutory review of the Copyright Act should include a
thorough, in-depth examination of the Copyright Board of Canada’s mandate,
practices and resources.

More to follow…


HPK

Monday, November 28, 2016

Outlines of Oral Arguments in Access Copyright Judicial Review of Copyright Board K-12 Decision

The oral augments were heard on November 22, 2016 before Justices Nadon, Dawson and Gauthier of the Federal Court of Appeal.

Here are the outlines of oral arguments filed with the Court:

HPK

Wednesday, November 23, 2016

Blacklock's - The Costs Submissions

https://www.blacklocks.ca/

Here are the costs submissions in the recent Blacklock's  decision of November10, 2016 that I wrote about earlier.

This is from Blacklock's which lost the case and was ordered to pay costs. Blacklock's  suggests $5,000.

This is from the Attorney General of Canada ("AGC"), which won and is entitled to costs. It has invoked Rule 420, which provides for double costs under certain conditions where a settlement offer was made and turned down.  The AGC is asking for "$115,702.30, representing 70% of its actual costs plus disbursements, or in the alternative at the high end of column IV of the Tariff: $84,584.98."

I shall report on the Court's ruling when available.

HPK




Wednesday, November 16, 2016

Judicial Review of Access Copyright K-12 Tariff to be Heard November 22, 2016 in Ottawa

The Federal Court of Appeal (“FCA”) judicial review (“JR”) hearing of the Copyright Board’s Access Copyright (“AC”) K-12 tariff will take place next Tuesday, November 22, 2016 at 9:30 AM at the 10th floor, 90 Sparks St., Ottawa. The hearing is scheduled for four hours. The panel will consist of Justices Nadon, Dawson and Gauthier. Here is Access Copyright’s factum. Here is the respondent CMEC’s factum.

I wrote at length on March 15, 2016 about the Board’s K-12 decision and what might happen. The consumables aspect makes it a surprisingly expensive tariff, as I pointed out at the time. The tariff as it stands is worth almost $10 million per year, if the school boards actually regard it as mandatory and actually pay it. AC is clearly trying to increase this amount through the JR. But even that amount is enough oxygen to keep AC in business indefinitely. However, the CMEC school boards did not file a JR application with respect to “consumables”, which account for most of the cost of the tariff. It appears that CMEC will not be dealing with the issue of whether the tariff is “mandatory” in this forum. I do not know whether CMEC intends to treat whatever the final version of the tariff may be as “mandatory”.

If CMEC’s school boards can find a less expensive and more efficient way of clearing their copyright needs than by paying the AC tariff, they now have an extremely powerful argument as why the tariff can be treated as non-mandatory. The Supreme Court of Canada “SCC”) last year accepted the argument I made on behalf of Prof. Ariel Katz and the McGill research institute run at the time by Prof. David Lametti (as he then was) in the in the CBC v. SODRAC  and ruled as follows in the words of Justice Rothstein:
(112) I conclude that the statutory licensing scheme does not contemplate that licences fixed by the Board pursuant to s. 70.2 should have a mandatory binding effect against users.

(113)
I find that licences fixed by the Board do not have mandatory binding force over a user; the Board has the statutory authority to fix the terms of licences pursuant to s. 70.2, but a user retains the ability to decide whether to become a licensee and operate pursuant to that licence, or to decline.

However, there is denial on the part of some copyright counsel who argue that the SCC ruling does not apply outside the so-called and misnamed “arbitration” regime of the Board. Such an argument is counterintuitive. If anything, the argument that tariffs, such as the K-12 tariff, imposed on objectors outside of the “arbitration” regime (and countless others not even represented) at the Board are not mandatory is even stronger.  As I said in my earlier blog about this:
So, it would appear that,  if a party to a so-called “arbitration” – which really wasn’t an “arbitration” in any normal or legal sense of the word – can treat the Board’s ruling as non-mandatory, then a fortiori, parties who are not involved in the “arbitration” mechanism and who are supposedly affected by the “general regime” and who may make a single copy of a single work in the limited repertoire of a  collective in circumstances that may amount to technical infringement  should not suddenly be liable for many millions of dollars for that one copy. For a university, that liability could amount to millions of dollars retroactively for several years – a possibility of which the SCC was clearly aware, if you read our factum and watch the hearing or read the transcript. That’s simply a ridiculous possibility – but it’s what some collectives and their lawyers, lobbyists or spokespersons want users and their often overly risk averse advisors to believe is still possible. Which brings me to the present and the future.

With respect to the “mandatory” issue, we await the decision of the Federal Court in Phase I the Access Copyright v. York University case, where closing arguments took place June 22 – 24, 2016. At issue in Phase I is mainly whether the interim tariff imposed by the Copyright Board on December 23, 2010 is “mandatory” and whether York’s fair dealing guidelines, which are very similar to those involved in next week’s hearing, fall within Canadian copyright law.

We also await a decision from the FCA in the judicial review of the Access Copyright Provincial Government tariff, which also involves fair dealing and which was heard on June 20, 2016.

And speaking of pending FCA decisions, we await the decision from the FCA in the Re:Sound Tariff 8 “Pandora” case that was heard in February 2016. This delay is unusual for the FCA, which usually renders decisions in less than six months. Here are my comments on the Board decision. This was the Board decision that prompted the shameful and disgraceful campaign by Music Canada to lobby the Board’s new Chairman. This decision may not have much to do with the present fair dealing proceedings, but it will be interesting to see what the FCA has to say about the Board’s procedures.

Last but not least, we await a decision from the Copyright Board on Access Copyright’s Post-Secondary tariff, in which the hearing concluded last January. Hopefully, we will not need to wait the usual 2+ post-hearing years that the Copyright Board takes to issue a decision on a tariff that has long been proceeding effectively unopposed and by default. There is one student who technically remains on the record, but his involvement does not make this an “opposed” tariff. Such a decision will then presumably be retroactive by 7 or 8 years. The proposed tariff was filed in 2010.

Obviously, nobody knows when, whether and how all of these decisions will come out and how they will or will not fit with each other.

What we do know is that there will be a concerted and well-funded effort to push back on the SCC’s fair dealing jurisprudence and the 2012 legislation in the course of the 2017 review.  This would be unfortunate, since Parliament and the Supreme Court have given Canada a fair dealing framework that is probably the best in the world. It is the most balanced, most clear and most consistent with the very purpose of copyright and Canada’s aspiration for innovation. Even the Copyright Board is finally “getting it” on fair dealing, after some apparent reluctance to accept the rulings from the SCC. Canada’s fair dealing regime is no more permissive than the law of “fair use” in the USA, and incorporates several specific exceptions that provide some additional comfort and certainty when the overall categories found in section 29 may not clearly be applicable.

HPK

Thursday, November 10, 2016

Blacklock’s Fails in Copyright Litigation Against the Government of Canada – Fair Dealing is Upheld and Even Extended

https://www.blacklocks.ca/ 
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.

(highlight and underline added)


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.

 (highlight and underline added)

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.

 (highlight and underline added)

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.

HPK

Tuesday, November 08, 2016

Blacklocks's Judgment Will Be Issued Thursday, November 10, 2016

Justice Barnes will deliver his judgment in the Blacklock's litigation that I've written about before on Thursday, November 10, 2016. Here's the docket.

In the meantime, and by way of interesting contrast to Blacklock's business model, it's worth noting that the New York Times is currently providing three days of completely free access to its website from November 7-9, 2016 so that interested readers can read all about the US election. This is a very smart business decision and surely not simple altruism. Low cost access to high quality content is a great business model. It isn't limited to the New York Times or The Economist or the other giants. It works too for Ottawa's Hill Times which offers lots of free content, and where one can buy a whole single current issue online for $5.00. Here's the Blacklock's Reporter website.

There will be lots more to say on or shortly after Thursday about  this closely watched case, the hearing of which concluded on September 19, 2016 - less than two months ago.

HK