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Focus: Feds must take action on copyright trolls

Focus on: Intellectual Property Law
|Written By Michael McKiernan

The time has come for Canadian courts to weigh in on copyright misuse by trolls, according to the director of an Ottawa law and technology clinic.

The defence of copyright misuse, based on the idea that rights holders should face sanctions for attempting to inflate their rights beyond their entitlement in law, is regularly used in the U.S., but it has not yet caught on in this country.

However, it has come up in recent Federal Court cases, and David Fewer, the director of the Canadian Internet Policy and Public Interest Clinic, says a recent spate of cases alleging abuse of the notice-and-notice regime for copyright infringement would make some judicial guidance particularly timely.

“We’re seeing more copyright misuse here in Canada by lots of copyright trolls.

“Allegations of infringement are being used to secure settlements that aren’t just.

“Where there is any infringement, it’s not in proportion to the harm alleged,” Fewer says.  

Following the recent release of Federal Court Justice Robert Barnes’ decision in 1395804 Ontario Ltd. (Blacklock’s Reporter) v. Canada Attorney General, Fewer lamented the judge’s decision not to deal with allegations by the defendant that Blacklock’s conduct constituted abuse of copyright.

Barnes found the copying and distribution of two paywalled articles to six staffers at the federal Department of Finance was protected by fair dealing and dismissed the online publication’s demand for $17,000 in damages, the equivalent of a bulk subscription for the ministry’s 700 employees.

While noting that “there are certainly some troubling aspects to Blacklock’s business practices,” the judge found it unnecessary to address the government’s allegation “that this litigation constitutes a form of copyright abuse by a copyright troll.”

“I think the time is right. If these cases aren’t going to allow the courts to develop misuse law, I don’t know what has to happen,” Fewer says, adding that he was still encouraged by aspects of Barnes’ decision.

“If you read between the lines, you can tell there is dissatisfaction with the conduct of Blacklock’s, and I think the case is a clear signal to future copyright trolls that this isn’t going to be tolerated,” he adds.

In 2014 and 2015 Fewer acted as counsel for defendants in two separate copyright actions by Blacklock’s, both settled out of court. The most recent Ontario Superior Court action resulted in a Dec. 16, 2016 settlement in which Fewer’s clients paid $21,750 to Blacklock’s  and issued a public apology.

In his costs decision awarding $65,000 to Canada — still well short of the $115,000 requested — Barnes said he wanted the amount to reflect his concern with Blacklock’s’ litigation strategy and rejected the publication’s claim for a costs reduction due to the “strong public interest considerations” raised by the case.

“Rather, this case was about the Plaintiff’s attempt to recover disproportionate damages without any apparent consideration to the legal merits of the claim or to the costs that it imposed on the taxpayers of Canada,” Barnes wrote.

No reporter with the barest knowledge of copyright could have reasonably concluded the ministry staffers’ use of the articles represented copyright infringement, the judge said, adding that fair dealing protection was so obviously applicable to the case “that the litigation should never have been commenced let alone carried to trial.”

Fewer and CIPPIC led a previous crusade against copyright trolling last year when they wrote to then federal Industry Minister James Moore to request that a provision “to prohibit and sanction misuse of copyright” be added to the Copyright Act in the next round of intellectual property law reform.

That letter raised concern about the notice-and-notice copyright regime that came into force in early 2015 as part of the 2012 Copyright Modernization Act. Under the system, Internet service providers must forward notices from copyright owners to users whose Internet addresses are identified as potential sources of infringement.

But regulations governing the content of notices never arrived, leaving the process open to abuse, according to Internet lawyer Allen Mendelsohn.

“It’s not only open to abuse; it is being abused,” he says.

“Copyright holders are free to write whatever they want in these notices.

Time and time again, we have seen what I will charitably call stretching of the truth as to what the law is,” Mendelsohn says.

“Hopefully, the government will revisit the system at some stage in the future and give some guidelines as to what can be included.”

In the fall, the CBC reported that the University of Manitoba had passed on about 6,000 infringement notices requesting settlement fees from students for downloading files containing copyrighted material.

At the time, the university’s copyright strategy manager, Joel Guénette, told the CBC that students felt threatened by the letters, and that some had even paid out of fear that the penalties could grow further down the road.

Mendelsohn says he has received many emails from people asking him for advice after receiving similar notices but that getting these cases into court for a ruling on copyright misuse would be particularly difficult.

“For the most part, they want to remain anonymous, so that also represents a significant barrier,” he says.

John Simpson, the founder of Toronto intellectual property firm Shift Law, is more relaxed about the lack of judicial guidance on copyright trolling, in part because he says the business model for trolls is not viable in this country.

“I think rights owners are making the most that they can of the notice-and-notice regime, which is to say not much.

“Owners of pornographic content are probably making the most of the system because illegal downloaders of this content are typically embarrassed about getting caught and want a quick resolution,” he says.

Update: information added on February 10 regarding David Fewer, director of the Canadian Internet Policy and Public Interest Clinic

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