2021 Year in Review: Canadian Copyright
Tamara Céline Winegust, William Audet, Adam Aucoin, and Mitchel Fleming
For Copyright Law in Canada, 2021 will likely be seen as a year that sowed the seeds of development in this area—from forward-looking government consultations on emerging issues in Copyright, like Artificial Intelligence; to a long-awaited Supreme Court decision that saw now-retired Justice Abella pen unanimous reasons forecasting how Courts should approach fair dealing; to Courts sanctioning claims that represent novel approaches to copyright enforcement in Canada, including inducement to infringe, reverse class actions, and dynamic site-blocking orders.
Below are some of the most notable Copyright developments in Canada from 2021, including links to our articles on these developments and decisions written throughout the year.
1) COPYRIGHT LEGISLATION AND PARLIAMENTARY ACTION
In 2021, the Federal Government launched three separate consultations on potential changes to the Copyright Act: (a) on how to implement an extended general term of protection; (b) on a framework for online intermediaries; and (c) on a framework for artificial intelligence and the internet of things. Several bills that directly or indirectly could affect the Copyright Act were also introduced into Parliament. They are discussed below.
A – Consultation on How to Implement an Extended General Term of Copyright Protection in Canada
This year we reported on the Federal Government’s launch of its consultation for the planned implementation of its Canada–United States–Mexico Agreement (CUSMA) commitment to extend Canada’s copyright protection term from “life plus 50 years” to “life plus 70 years”. The consultation sought feedback on the consequences of such an extension and suggestions on how to address those consequences. In our 2020 Copyright Year in Review, we reported on the Federal Government Canada–United States–Mexico Agreement Implementation Act S.C 2020, c.1 extended the term of copyright protection for sound recordings, anonymous and pseudonymous works, and cinematographic works to life of the author plus 70, 75 or 100 years, as the case may be, in accordance with the Canadian Government’s obligations under CUSMA. The consultation on the extension for the general copyright term closed on March 31, 2021.
B – Consultation on a Modern Copyright Framework for Online Intermediaries
The Federal Government launched this consultation on April 14th, 2021 to ensure the continued relevance of Canada’s copyright framework for online intermediaries in the face of rapidly developing technological and market changes. We reported on potential options for reform canvassed during the consultation. This included clarifying intermediaries’ safe harbour protections, compelling remuneration through collective licensing, increasing transparency in remuneration processes, and clarifying and/or strengthening enforcement tools against online infringement.
C – Consultation on a Modern Copyright Framework for Artificial Intelligence and the Internet of Things
In 2021, the Federal Government launched a consultation for the development of a copyright framework to address the impacts of the proliferation of artificial intelligence (“AI”) and the Internet of Things (“IoT”), which we reported on. This consultation primarily sought comments on text and data mining, authorship and ownership of works generated by AI, infringement and liability in relation to AI, the right to repair, technological protection measures, and interoperability. AI—a general-purpose technology with widespread economic and social impacts—and the IoT—the term used to refer to an interconnected web of software-enabled products—are profoundly changing how Canadians do business, innovate, and distribute cultural products. Their proliferation will likely require a re-evaluation of the balance in copyright law to help foster a marketplace suited to the changing needs of users while preserving creators’ rights to encourage investment and job creation. The consultation closed on September 17, 2021.
D – Bill C-10
Bill C-10: An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts was tabled in Parliament on November 3rd, 2020, and included amendments to the Copyright Act, The amendments included new definitions of “programming,” “undertaking,” “new media” and “retransmitter,” as well as elements considered by many to be controversial, including discoverability and other requirements imposed on streaming platforms and CRTC oversight of user-generated content. Bill C-10 died on the order sheet when Parliament was dissolved on September 20th, 2021, in anticipation of the Federal Election. The Federal Liberal government has expressed an intention to reintroduce the Bill in 2022.
E – Bill S-225
We reported on Bill S-225: An Act to amend the Copyright Act (remuneration for journalistic works), which proposed copyright reforms to address challenges faced by the news media sector, specifically by providing Canadian journalistic organizations with a right to remuneration (to be managed by a collective society) for certain digital distributions of their works as a means to combat these organizations declining advertising revenues. While the Bill targeted platforms such as Google and Facebook, it exempted hyperlinks from its scope of application (which is the primary way the platforms targeted by the Bill provide access to news articles). Bill S-225 has not yet received First Reading in the 44th Parliament.
F – Bill C-272
We reported on Bill C-272: An Act to Amend the Copyright Act (diagnosis, maintenance or repair), which proposed amendments to the prohibition of circumvention of technological protective measures (“TPMs”) provisions in the Copyright Act. The proposed amendments would have created an exception to permit diagnosis, maintenance, or repair of a product with an embedded computer program. Bill C-272 has not yet received First Reading in the 44th Parliament.
2) CASE LAW DEVELOPMENTS
A – Fair Dealing
York University v. Canadian Copyright Licensing Agency (Access Copyright) 2021 SCC 32: In 2011, York University implemented “Fair Dealing Guidelines”, and took the position that such guidelines excused the copying of works by its students and staff for educational purposes; thus, there was no need to enter into a licence with Access Copyright and pay for copies of works in that collective’s repertoire. Whether York’s position had merit was the subject of much debate throughout the appeal process, and many hoped the Supreme Court would provide a definitive answer. They did not – and the decision instead turned on whether licenses obtained through the Copyright Board were mandatory (they are not). However, Justice Abella nevertheless devoted a fair portion of space outlining the Court’s preferred approach to fair dealing, including suggestions of how the fair dealing category of “education” ought to be interpreted in the future, positioning her final decision for the Court as one that is likely to guide future developments in fair dealing jurisprudence. For our full analysis of the decision, click here.
Canadian Broadcasting Corporation v. Conservative Party of Canada, 2021 FC 425
This Federal Court decision established that fair dealing for the purpose of criticism and review need not provide a critique of the copyrighted work used so long as its use supports the overarching hypothesis of the work in which it is included. It has the potential to impact how documentary filmmakers employ copyrighted works in their films. Prior to this decision, Canadian jurisprudence held that to meet the requirements of criticism and review, the copyrighted work in use must be critiqued and analyzed. Furthermore, the Court held that for attribution of the source and author, the inclusion of the CBC’s logo was sufficient to meet the attribution and source requirements under the Copyright Act, which changes the attribution requirements for criticism and review and news reporting fair dealing where the copyright owner’s logo is sufficiently recognizable. For our full article on the decision, click here.
Stross v. Trend Hunter Inc., 2021 FC 955
The decision considered the attribution requirements for a dealing with a copyrighted work to qualify as “fair” in the context of news reporting. The Federal Court held that if an author and the source of a work can be readily identified or inferred from the source, the attribution requirements for “news reporting” could be met; but the attribution requirements would not be satisfied if additional research is required (e.g. clicking through hyperlinks) to determine the author and source of the work. For a full summary of the case, read our article here.
B – Emerging Approaches to Copyright Enforcement
Bell Canada v. L3D Distributing Inc. (INL3D), 2021 FC 832
On a recent ex parte default judgment motion in the Federal Court of Canada, the Court determined the Plaintiffs established, inter alia, a claim that the Defendants knowingly induced copyright infringement through the advertising and sale of pre-programmed set-top boxes for streaming alleged pirated content. Such cause of action is not squarely found in the Copyright Act. This decision may be the first application of a common law inducement test—regularly applied in the context of patent law—to an instance of copyright infringement. For a full summary of the decision, click here.
Teksavvy Solutions Inc. v. Bell Media Inc., 2021 FCA 100
The Federal Court of Appeal unanimously affirmed a site-blocking order issued by the Federal Court requiring Teksavvy Solutions Inc. and several other Canadian ISPs to block their customers from accessing websites (in this case, goldtv.biz and goldtv.ca) that stream infringing content. The decision confirms the availability of “static” site-blocking orders aimed at combating copyright infringement, and that such orders can be updated to account for subsequent circumvention tactics. For our full article on the decision, click here.
Rogers Media Inc. v. John Doe 1, 2021 CanLII 107613 (FC)
The Plaintiffs in this case had requested an interlocutory injunction requiring Canadian ISPs to block or attempt to block the unauthorized streaming of hockey games, which remedy would have amounted to what is known as a “dynamic blocking order”. Unlike a static blocking order—which specifies domain names and IP addresses to be blocked (granted in Teksavvy Solutions Inc v. Bell Media Inc)—a dynamic blocking order of the type sought by the Plaintiffs’ would require ISPs to actively block or attempt to block users’ access to unauthorized material in real-time without specific judicial authorization relating to each domain name or IP address. Such an order has never been granted in Canada. The Samuelson-Glushko Canadian Internet Policy & Public Interest Clinic (“CIPPIC”), and Beanfield Technologies Inc. (“Beanfield”) sought leave to intervene. In this decision, the Court granted the intervener request. In doing so, they noted that CIPPIC’s intervention would bring a unique public interest perspective based on its institutional role and knowledge and its prior intervention experience; and Beanfield’s intervention would be limited to issues
relating to the distinct technical configuration and network architecture implications of the order.
Salna v. Voltage Pictures, LLC, 2021 FCA 176
The Federal Court of Appeal set aside the Federal Court’s 2019 decision in Voltage Pictures, LLC v Salna, 2019 FC 1412 to decline certification of a proposed “reverse class action” for copyright infringement over a BitTorrent network. The Appellate Court’s decision dealt primarily with whether the Federal Court committed a reversible error when it rejected the five class certification criteria. Of note, this decision leaves the door open to copyright holders bringing claims that users of BitTorrent sites have authorized infringement via using the technology, and that rights-holders may be able to use the “notice-and-notice” regime to have internet service providers contact customers identified as Defendants in a proceeding. The decision ultimately confirms that “reverse class actions” may allow copyright owners to address infringement by thousands of individual acts where the relief available against a single infringer or in respect of a single infringement may not justify investing the resources necessary to obtain it. For our full summary of the case, see our article here.
Trimble Solutions Corporation v. Quantum Dynamics Inc., 2021 FC 63
We previously reported on the Federal Court’s decision to embrace the use of antipiracy technology to enforce property rights. In this decision, the Federal Court assessed damages for copyright infringement in a computer program based on an infringement report generated by antipiracy software. Please see our article here.
August Image, LLC v. airG Inc., 2021 FC 272
This Federal Court decision dealt with accusations of copyright trolling and defending against statutory damages claim based on a Plaintiff’s conduct. In this appeal of a prothonotary decision, the Federal Court found a palpable and overriding error in the prothonotary’s grant of August Image’s motion to strike portions of the Statement of Defense that dealt with a “copyright troll” and alleged professional misconduct by the Plaintiff’s counsel. The prothonotary found no material facts supporting the Defendant’s “copyright troll” claim. The Federal Court also held that section 38.1(5)(b) of the Copyright Act permitted the Defendant to defend against a statutory damage claim by pointing to the Plaintiff’s conduct early in the proceedings. This finding was based on the discretion given to the Court by the Act to award statutory damages on the basis of the conduct of the parties before and during the proceedings, which may include the actions of corporate officers or employees and encompass actions taken on a party’s behalf by counsel. The matter was remitted back to the prothonotary to determine whether the impugned paragraphs of the Statement of Defense could be amended in accordance with the Court’s reasons.
C – Copyright Board Licenses and Tariffs
York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32
Access Copyright is a copyright collective representing creators and publishers who own copyrighted works in Canada. York University had entered into license agreements with Access Copyright to pay for students to copy works in Access Copyright’s repertoire. In 2011, York opted to forego a license, and instead implemented its own “Fair Dealing Guidelines”. The Supreme Court’s decision considered whether a tariff set by the Copyright Board was mandatory and could be enforced against the University, and included substantive comments about the Court’s approach to fair dealing (the particulars of the University’s Guidelines were not considered). Writing for a unanimous Supreme Court, now-retired Justice Abella held that while the Copyright Act did set out a license regime, it was not mandatory—users could choose whether to participate and contract. Moreover, Access Copyright lacked standing to sue for copyright infringement as they were neither the copyright owners nor the exclusive licensees of the copied works. For our full analysis of the decision, click here.
SODRAC 2003 Inc. v. CBC, 2021 CB 1
The Copyright Board found that archival copies do not infringe copyright on the basis of fair dealing. SODRAC 2003 Inc. (the Applicant) applied to the Copyright Board to fix royalty rates for the CBC’s reproduction of musical works in the Applicant’s repertoire. Of concern were the royalties payable for use of the musical works in “broadcast incidental copies” (BICs), namely those made for radio and television broadcasts (conventional and Internet). In setting the Tariff, the Board determined that each BIC would be categorized as either: (1) exempt, (2) exempt if CBC meets certain conditions; and (3) non-exempt. The Board decision is noteworthy because it held that the Archive Copies made by CBC did not infringe copyright as they constituted “fair dealing” for the purposes of “private study”, “research” and “education”—and thus fell into the “exempt” category. In particular, the Board found that Archive Copies of television broadcasts were “fair dealing” because they: (1) are made for the purpose of preserving culturally important programming for posterity (the business use is secondary), (2) copy a small volume; (3) can only serve their purpose if the entire works are preserved; (4) cannot be made in any other reasonable manner; (5) are copies of works intended for public consumption; and (6) have no negative effect on the dealing because they don’t compete with the original works.
Rogers Communications Canada Inc. v. Society of Composers, Authors and Music Publishers of Canada (SOCAN), 2021 FC 207
This decision of the Federal Court is the latest step in a long history of litigation over royalty payments for downloadable ringtones. It confirms that notwithstanding the Supreme Court of Canada’s decisions in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 34 (“ESA”) and Rogers Communications Inc v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35 (“Rogers”), telecommunications companies are not entitled to repayment from SOCAN (the Society of Composers, Authors, and Music Publishers) of royalties paid with respect to communicating downloadable mobile phone ringtones under certified tariffs and settlement agreements entered into prior to the Supreme Court’s decision. Moreover, telecommunications companies that withheld payments owed to SOCAN under such certified tariffs or settlement agreements were required to pay the amount withheld to SOCAN, with interest. For our full article, click here.
D – Scope of Copyright Protection
Winkler v. Hendley, 2021 FC 498
The Federal Court of Canada confirmed the longstanding principle that facts are part of the public domain and free to use by all—even when they are later claimed to be fictional. In Winkler v. Hendley, 2021 FC 498 (“Winkler”), Justice McHaffie held that historical facts held out as true (in this case, held out as true for nearly 70 years and based on “unimpeachable sources”) are not protected by copyright, regardless of their objective truth, even if some of the “facts” were later determined to be of the author’s own creation. Consequently, the Defendant’s copying of (untrue) facts for his own book based on the same events did not amount to a taking of a “substantial part” of the original portion of the Plaintiff’s work and was not copyright infringement. For our full report on the decision, click here.
Patterned Concrete Mississauga Inc. v. Bomanite Toronto Ltd., 2021 FC 314
The Federal Court granted this motion for summary judgment in favour of the Plaintiff (“Patterned Concrete”) in the context of a copyright infringement action against its competitor (“Bomanite”). Patterned Concrete asserted copyright in a quotation form, a contract form, and a limited warranty certificate developed for its business. It sought statutory damages for past infringement under section 38.1 of the Copyright Act, punitive damages, and an order enjoining the defendant from infringing copyright in the asserted works. For our full summary of the decision, see our article here.
After the Case Management Judge granted the Defendant’s motion to strike the Plaintiff’s (Toronto Regional Real Estate Board (“TRREB”)) claim for copyright infringement for no reasonable cause of action and abuse of process, the Plaintiff moved to appeal under Rule 51 of the Federal Courts Rules. The Federal Court upheld the decision on the basis that the Federal Court of Appeal had already decided that copyright does not subsist in TRREB’s MLS System in a separate and earlier decision (See Toronto Real Estate Board v Commissioner of Competition, 2017 FCA 236). For a full summary of the decision, click here. In addition, click here for our report on TRREB’s other recent litigation.
Ark Innovation Technology Inc. v. Matidor Technologies Inc., 2021 FC 1336
Ark Innovation Technology Inc. and Ark Platforms Inc. (the “Plaintiffs”) claimed that Mr. Lam and Matidor (the “Defendants”) infringed copyright in the Plaintiffs’ Arkit map-based project management software and promotional materials, as well as engaged in passing off. The Defendants admitted that their Matidor software had infringed copyright in the Arkit software and various associated promotional and logistical works, at one point in time. However, they contested whether the most recently updated version of their software infringed Ark’s copyright. The Defendants admitted that their Matidor software was premised upon using the Arkit source code and released a publicly accessible version, but claimed their later versions of Matidor did not copy the Plaintiff’s source code. The Court ultimately found that all versions of the Matidor software infringed copyright in the Arkit software. The Court awarded $277,400 in damages; however, the Plaintiffs’ claims for a $900,000 “at large” damages award and punitive damages were rejected. The Court explained that “at large” damages means that there is no distinction between damages for copyright infringement and for passing off. The Court noted that its ability to grant damages at large does not excuse the Plaintiffs from their obligation to prove damages. Further, it clarified that “damages at large” does not necessarily mean “large damages,” and that the assessment of compensatory damages remains an assessment of the damage caused and/or profits gained by the infringement. in rejecting the punitive damages claim, the Court found the intentional copying was not malicious enough to warrant an exemplary award. Finally, the Court ordered the Defendants to deliver up infringing material and enjoined them from further infringement of copyright. However, the Court refused to enjoin the Defendants from making further substantial use of the Arkit software on the ground that it would have precluded the Defendants from using software that did not infringe copyright in the Arkit software.
E – Interlocutory Injunctions
Allarco Entertainment 2008 Inc v. Staples Canada ULC, 2021 ABQB 340
This case involved several distinct claims by the Plaintiff, Allarco Entertainment 2008 Inc., against four major retailers who were alleged to be “fanning the flames of piracy” through the promotion and sale of TV
set-top boxes and advising on