Idées

Regard sur l’année 2020 : le droit d’auteur au Canada

January 29, 2021

Par François Larose, Naomi Zener, Martin Brandsma et Prudence Etkin

2020 a certes été marquée par les bouleversements causés par la pandémie de COVID-19. Cette pandémie n’a toutefois pas empêché l’année 2020 d’être prolifique en matière de droit d'auteur – par exemple, l’entrée en vigueur de modifications législatives adoptées en vertu de l’Accord Canada–États-Unis–Mexique (ACEUM) et les développements jurisprudentielles touchant, notamment, des questions d'utilisation équitable.

Nous vous présentons ci-dessous notre revue de l'année 2020 en droit d'auteur au Canada (en anglais).

 

1) COPYRIGHT LEGISLATION

In 2020, the notable legislative changes to the Copyright Act (the “Act”) came in the form of: (a) Bill C-209, a Parliamentary response to the Supreme Court of Canada’s decision in Keatley Surveying Ltd. v. Teranet Inc., 2019 SCC 43 (“Keatley”), which we reported on in 2019; and (b) the Canada-United States-Mexico Agreement Implementation Act, S.C. 2020, c. 1, which received Royal Assent on March 1, 2020.

In both our 2018 and 2019 Copyright year-in-review articles, we discussed the government’s legislative reviews of copyright, specifically the changes to copyright as a result of the ratification and implementation of USCMA, and the consultations by, and recommendations put forth by the Standing Committee on Industry, Technology and Science (“INDU”) and Canadian Heritage. For your ease of reference, we have reproduced the recommendations made by (c) INDU and (d) Canadian Heritage below.

A – Bill C-209

On September 23, 2020, Bill C-209 An Act to amend the Copyright Act (Crown copyright) was introduced in response to the Supreme Court of Canada’s decision in Keatley. Bill C-209 aims to amend the Act to clarify that no copyright subsists in any work that is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, without prejudicing any rights or privileges of the Crown. Mr. Masse, the Bill’s sponsor, stated during the first reading that “the government has a closed door when it comes to government publications, research and a number of published periodicals. This costs taxpayers a significant amount of money. It is against open government and is based upon a law that Canada enacted in 1921, which was based on a law from 1911 in the U.K.”. Mr. Masse’s objective with this legislative amendment to s. 12 of the Act is to save taxpayers money providing for “open government for educators and innovators, and it would bring accountability” and “bring Canada in line with so many other countries that have information available for business or civil society for national advancement.” The Bill does not speak to moral rights of authors, and with its stated goals, it would strip the Crown of copyright in any works prepared or published by or under the direction or control of the Crown, not requiring any amendments to the moral rights provisions of the Act.

In our review of Keatley, we noted the spectre of possibility that if left unchecked by Parliament, as Justice Abella (writing for the majority) stated in her decision, Crown copyright could end up applying to more works than it should. While it is reasonable for the Crown to own copyright in its works (as s. 12 of the Act is written and interpreted by the Supreme Court of Canada) these changes could result in copyright claims for works that the Crown would never have thought to claim, including works of independent contractors in the creative industries, as well as affecting copyright terms, namely either: (1) shortening copyright terms in Crown copyrights to 50 years from the end of the year in which the work was first published, instead of 50 years from the end of the year in which the author died: or (2) lengthening copyright terms for unpublished works prepared under the direction or control of government, since the term of Crown copyright starts with the date of the first publication of the work. Furthermore, given that s. 12 is a deeming provision, meaning that copyright “belongs” to the Crown, rather than being “assigned” or otherwise “transferred”, the government is in a position to expropriate the ownership of copyright by virtue of its publication of them. Not addressed in Keatley was the issue of moral rights, which would not be waived by the author of the work without a written waiver of such. If Bill C-209 becomes law, it would obviate any issue arising with the Crown owning copyright in works prepared and/or published under its direction and control and the moral rights of such works’ authors.

B – Canada-United States-Mexico Agreement (CUSMA/UCSMA)

On March 13, 2020, the Canada–United States–Mexico Agreement Implementation Act S.C 2020, c.1 (the “CUSMA/UCSMA Act”) received Royal Assent. The CUSMA/UCSMA Act implements the Agreement between Canada, the United States of America, and the United Mexican States, as amended by the subsequent Protocol. The Agreement came into force on July 1, 2020.

The CUSMA/UCSMA Act introduces the following amendments to the Act:

  • The term of protection of copyright is extended in some situations to the life of the author plus 70 years, and in the case of anonymous, pseudonym, and cinematographic works, the term has now been extended to the earlier of the end of 75 years following the end of the calendar year in which the first publication occurs and 100 years following the end of the calendar year in which the work was made:
    • sound recordings (ss. 23(1) of the Act);
    • anonymous and pseudonymous works (including works of joint authorship) (ss. 6.1 and 6.2 of the Act)); and
    • cinematographic works (s. 11.1 of the Act);
  • Changes to ss. 6.1, 6.2, 11.1, 23(1) and 23(1.1) of the Act, do not revive copyright or create a right to remuneration in any work, performer’s performance fixed in a sound recording or sound recording in which the copyright or the right to remuneration had expired;
  • Subsection 42(3.2) of the Act is a new criminal offence added relating to the removal or altering of rights management information (subject to an exception for a person who is acting on behalf of a library, archive or museum or an educational institution);
  • Section 44.01 of the 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 transshipment control in Canada; and
  • Canada’s Criminal Code was also amended to add a new offense relating to trade secrets.

C Standing Committee Report: The Standing Committee on Industry, Technology and Science (“INDU”) Statutory Review of the Act

  • We reported on INDU’s recommendations in 2018 and in 2019, and it remains to be seen whether any of them will be implemented in a further amendment to the Act, including to provide clarity around ownership of computer-generated works (e.g., works created with the assistance of artificial intelligence (AI))and amend s. 29 of the Act to provide that the list of allowable fair dealing purposes that is illustrative, as opposed to exhaustive.

We will continue to wait and see if the recommended legislative and policy changes will be made into law. Stay tuned!

D Standing Committee Report: The Standing Committee on Canadian Heritage (“CHPC”) Statutory Review of the Act: “Shifting Paradigms”

The CHPC conducted its own review of the Act and those creative industries principally affected, including the music, film & television, writing & publishing and visual arts industry. The major themes covered were: (1) the increasing value gap between creatives, distributors and others; (2) the decline in the artistic middle class; (3) the impact of technology on creative industries; (4) the changes in consumer culture; and (5) indigenous perspectives on copyright.

For a full discussion on the issues, a copy of the report can be accessed here. As with INDU’s recommendations, we continue to wait and see if Heritage’s recommended legislative and policy changes will be made into law. Stay tuned!)

E – Time Limits in Respect of Matters Before the Copyright Board Regulations, SOR/2020-264

On December 4, 2020 Time Limits in Respect of Matters Before the Copyright Board Regulations (the “Regulations”) came into force. The regulations address delays in the Copyright Board decision making processes. As a result royalties determined by the Board were often payable retroactively creating a number of challenges for rights holders and creators (as detailed in the Regulatory Impact Analysis Statement released on April 27,2019). The Regulations specify deadlines by which the Board must render final decisions in its proceedings:

  • within 12 months after the day the parties present their final submissions in a tariff proceeding where a hearing on the matter is held; and
  • in any other case, before the day on which the effective period of the proposed tariff begins in a tariff proceeding with no hearing.

 

2) COPYRIGHT JURISPRUDENCE

Standing to Sue & Copyright Infringement

Lickerish, Ltd. v. Airg Inc., 2020 FC 1128

The Plaintiff, a UK-incorporated syndicated photography agency, brought an action under the Federal Court’s simplified procedure for the Defendant’s unauthorized use of two photographs of Meghan Markle on its website. The Plaintiff argued that it had entered an exclusive agency contract to act on behalf of the photographer. The Court held that the Plaintiff lacked standing to bring the action as it provided no evidence that it either authored or owned the copyright in the two photographs, including by way of assignment or exclusive license.

The Plaintiff provided no direct evidence from the photographer regarding authorship or the supposed contract with the Plaintiff, and instead relied on an affidavit from the Plaintiff’s Director. The Court found the Plaintiff’s evidence amounted to inadmissible hearsay and was not satisfied that any specific or general hearsay exception applied. Consequently, the Plaintiff lacked standing as it had not established that the photographer in fact owned the copyright at issue, or that the Plaintiff received an exclusive license from the owner of the copyright.

Interestingly, the Plaintiff attempted to introduce into evidence a US Certification of Registration under the certified copies provision of the Canada Evidence Act (s. 24). The Court found the evidence inadmissible as they were not in fact certified copies, and in any event, the Plaintiff provided no authority to suggest that s. 24 of the Canada Evidence Act applied to foreign documents. The Court also found that the Plaintiff failed to provide any authority that suggested s. 53 of the Act, which provides that the register of copyrights is evidence of the particulars entered in it, applies to a foreign certificate of registration.

Notwithstanding the findings on ownership, the Court proceeded to find that even if the photographer was the copyright owner, the Plaintiff still failed to establish the existence of an exclusive licence. The licence agreement in question was mired with problems: it was supposedly countersigned by the photographer by email but that email was not produced; the photographer’s name appeared nowhere in the licence agreement; the agreement was not attached as an exhibit to an affidavit; and there was no evidence that the photographer in fact signed the agreement (which was blank).

The Court also considered the issue of infringement. The Plaintiff’s main infringement evidence was based on website screen captures. To prove authenticity of the captures, the Plaintiff relied on the statutory presumption contained in ss. 31.3(b) of the Canada Evidence Act, which provides that, in the absence of evidence to the contrary, the integrity of an electronic document system by or in which an electronic document was recorded or stores
is proven if it is established that the electronic document was recorded or stores by a party who is adverse in interest to the party seeking to introduce it. The Court found the screen captures inadmissible. In particular, the presumption in ss. 31.3(b) did not apply as the captures were not taken by a party adverse in interest to the Plaintiff. There was no evidence of who recorded and stored the original screen captures, or whether the captures accurately reflected what appeared on the Defendant’s website when the captures were taken. The Court also found that even if the screen captures were admissible, the Plaintiff failed to demonstrate a “real and substantial connection” between the Defendant’s website and the jurisdiction of Canada. There was no evidence that the website was controlled by the Defendant, that the website was hosted on a server in Canada, or that anyone accessed the Defendant’s website from within Canada.

Interlocutory Injunction

Equustek Solutions Inc v Jack, 2020 BCSC 793

This case stems from a complex, lengthy litigation where Equustek (the Plaintiff) claimed an intellectual property infringement against Datalink (represented through Defendants including Morgan Jack). Equustek alleged that Datalink re-branded Equustek’s goods and sold them as competing products using the plaintiffs’ trade secrets. This dispute resulted in a number of proceedings including several interlocutory injunctions which required Google to “de-index” Datalink’s websites which would remove all links to Datalink-affiliated websites from its search engines.

 This decision by the Supreme Court of British Columbia asses the merits of the underlying action which brought a number of claims against the Plaintiff, in civil conspiracy, passing off, breach of confidence, breach of contract, unjust enrichments and various breaches under the Copyright Act.

The plaintiffs claimed the following violations of the Act: 1) that the Defendants used, altered and reproduced Equustek’s DL3500 manual to create the GW1000 manual by deleting references to Equustek and its products and replacing them with reference to Datalink and its product; 2) the Plaintiffs claimed the same with Equustek’s DL3500 application note. The trial judge found that the similarities between the Plaintiff’s manual and note were obvious, and that certain Defendants had knowingly and intentionally copied a vast quantity of Plaintiff’s manual and application notes to save time and effort.

On various findings for the Plaintiff the court ordered damages of $1million CAD based on an assessment of Equustek’s loss of sales prior to trial. The court stated that the plaintiff’s claim for future losses and/or injunctive relief would be determined at a post judgment hearing. Equustek has filed for appeal, we will continue to wait and see if the trial judge’s finding for breach of copyright with be upheld.

While the SCC’s decision to grant a worldwide interlocutory injunction against Google Inc. in Google Inc v Equustek Solutions Inc, 2017 SCC 34 was unprecedented, this decision is significant as it highlights the potential and extent of damages for lost profits for vendors when in the context of online intermediaries such as Google.

Facts and Information

Albo v The Winnipeg Free Press et al, 2020 MBCA 50

The Plaintiff, Dr. Albo, appealed a judgment of the Manitoba Queen’s Bench that dismissed his action for damages against The Winnipeg Free Press for copyright infringement and breach of contract. The appeal was dismissed with costs.

As we reported in 2019 regarding the lower court judgment, the Plaintiff, Dr. Frank Albo, had a prior working relationship with the Defendant newspaper. The parties had collaborated on a series of articles about the history of Winnipeg that were later published as a book. Dr. Albo then agreed to consult for research on a new series of articles, to be written by a staff writer at The Press. The articles were expressly not intended for book publication. However, after the new series of articles was released, The Press was approached by a third party with a cost-sharing proposal to publish the articles as a book (the “New Book”). Dr. Albo initiated a claim for copyright infringement and breach of contract, stating that the New Book reproduced a substantial part of Dr. Albo’s research, and that this was outside the scope of his consulting agreement with The Press. The lower court held that while Dr. Albo might have copyright in certain compilations of the products of his research, this did not allow him to control the use of any particular historical facts included in his research compilations. The lower court dismissed the action, also noting that copyright protection in Canada is assessed on the basis of originality and an author’s skill and judgment, and not the “sweat of the brow” standard.

The Appellant did not appeal the lower court’s finding that there was nothing in the New Book in which the Appellant could claim copyright. Rather, the appeal centered on three issues: (1) contractual interpretation of the consulting agreement between Dr. Albo and The Press; (2) whether the lower court adjudicated the contract claim independent of the copyright claim; and (3) whether The Press performed the contract in good faith. The Appeals Court found the Appellant failed to established that the lower court had made a palpable and overriding error on each issue, and dismissed the appeal.  

Applicable Law & Time Limitations

Trout Point Lodge Limited v. Automattic Inc., 2020 NSSC 212             

This motion for a summary judgement was brought by the defendant in response to an action commenced by the plaintiff in 2012. The claims brought before the Supreme Court of Nova Scotia included promissory estoppel, copyright infringement, fraudulent misrepresentation, breach of agreement/contract and breach of duty of honesty in contractual dealings.

The defendant, Automattic Inc., owns and operated a blog web-hosting service, WordPress.com (WordPress), that hosts blog content on its servers located in the United Sates, providing a platform for others to create and post blog content. The plaintiff is a restaurant and resort, True Point Lodge Limited, and its principals, who alleged that various entities and content on blog hosted by WordPress infringed the Plaintiff’s copyright.

With respect to the claim of copyright infringement, the Plaintiffs asserted the Act applied, while the defendant argued that US copyright law applied. Ultimately on the issue of applicable law the court determined that the defendant was exempt from liability under either jurisdiction.

In determining whether to grant the summary judgment and dismiss the Plaintiffs’ claims against the defendant for copyright infringement the court considered the following issues:

  • Is Automattic an Internet Service Provider and pursuant to the provisions of the Canadian and U.S. copyright  legislation, thereby, immune for any copyright  infringement by the  blog creator?
  • Should the Plaintiff’s copyright infringement claims against Automattic be dismissed because the applicable limitation periods have expired?
  • Should the claims of copyright infringement be dismissed as an abuse of process?

The summary judgment with respect to the Plaintiff’s claims of copyright infringement against the defendant were denied for the following reasons: 1) The court held that Automattic did  not  advance any arguments that there was an issue with ownership in relation to the Trout Point Lodge photos; 2) as the choice of law question remained to be determined, so did a determination on the applicable limitation period; and 3) the Defendant did not meet the burden of proof with respect to the assertion that the Plaintiff’s claims of copyright infringement were an abuse of process.

Copyright Infringement; Importance of Copyright Assignments/Waiver of Moral Rights

Derek Mailhiot (dba The Junk Guy) v. 1095148 B.C. Ltd., 2020 BCCRT 945

In this British Columbia Small Claims Court matter, the Applicant claimed the Respondent used his logo in commercial advertisements without his permission, thereby infringing the copyright in his business logo. The Applicant sought $5,000 for the alleged infringement.

The case centered on the issue of copyright ownership. The Applicant retained the services of a graphic designer to create the logo. The Court found that some of the logo’s design elements were derived from an “iStock” photo, but it was unclear from the evidence whether the designer held copyright in the “iStock” elements. As for the logo’s original design elements, the Court found that the designer was the author and first owner of the copyright in the logo under s. 13 of the Act. However, there was no evidence that ownership ever transferred to the Applicant. Consequently, while the Court found that the Respondent had “substantially copied” the logo, the Applicant’s claim was dismissed for lack of standing.

This case highlights the importance of always obtaining a copyright assignment and moral rights waiver from any third party creating a logo for one’s business. In Canada, unlike in the U.S., there is no corporate authorship outside of the employer-employee context. Even though an employer owns the copyright in works made during the course of employment, the Act does not provide for an automatic waiver of the employee’s moral rights. Thus, it is prudent to ensure that all employee agreements, as well as all independent contractor agreements, always have a copyright assignment and waiver of moral rights from the author of the work to ensure that the person or entity engaging the author for the creation of that work owns the copyright and won’t have to contend with any moral rights claims from the author.

Copyright Infringement; Costs

Drouin (Succession de Côté-Drouin) c. Pépin, 2020 QCCS 1424

This matter was subject of a split proceeding, where the issue on infringement was heard first and a subsequent hearing would be held on damages, if necessary. With respect to copyright infringement, the trial judge declared that some of the works in question, the National Dictionary of French Canadians (volume 3) and the family genealogies produced by Gabriel Drouin are original works within the meaning of the Act and that the Estate of the late Jeanne Côté-Drouin holds the related copyright, and ordered the defendants to cease all reproduction, communication to the public and exploitation, in whole or in part, of these works.

This decision pertains to the damages to be awarded and the legal costs. The Plaintiff chose to claim statutory damages, which under the Act can range from $500 to $20,000 per work infringed, except that the court may reduce the damages to $200 if it is convinced that the Defendants were not aware and had no reasonable ground to believe that they were infringing copyright. Observing the conduct of the Defendants (e.g. they were convinced that they had purchased copyright in the works), the court concludes that the Defendants acted in good faith, and therefore held that they were entitled to a reduction of the statutory damages to $200 per work. Moreover, under the Act, the court, may further reduce the amount with respect to each work if the award even of the minimum amount would result in a total award that would be grossly out of proportion to the infringement. In this case, the court awarded $200 for copyright infringement in the National Dictionary of French Canadians (volume 3) and $25 for each of the family genealogies, for a total of $31,225. The court, however, did not order punitive damages since there was no malicious intent from the part of the Defendants. The court further ordered the Defendants to destroy copies of the infringed work as requested by the plaintiff.

Interestingly, the Defendants had filed a counterclaim alleging that the Plaintiff’s action was abusive, and requested $225,000 in damages.  The court found that their counterclaim amounted to unnecessary time and efforts spent by the plaintiff to defend it and awarded $8,880 as damages to the plaintiff for the extra costs that they suffered in connection with this counterclaim.

Biofert Manufacturing Inc. v. Agrisol Manufacturing Inc., 2020 FC 379

In this action for copyright and trademark infringement, the Plaintiff, Biofert Manufacturing Inc., was a subsidiary of a larger company that acquired the assets of a bankrupt competitor that inc
luded various intellectual prop

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