Focus: Ruling creates a ‘bizarre scenario,’ says lawyer

A flawed Small Claims Court decision vindicates critics who said digital lock amendments to the Copyright Act enacted in 2012 were too broad, according to a Toronto intellectual property lawyer.

In 13595804 Ontario Limited (Blacklock’s Reporter) v. Canadian Vintners Association, an Ottawa deputy judge ruled that the fair dealing exception to copyright infringement was not available to the winemakers’ group because it had violated the new technological protection measure provisions of the Copyright Act when bypassing the online publication’s subscriber paywall to access a news article.

“It creates a bizarre scenario where a copyright owner could prevent any fair dealing of their work from occurring simply by setting up a restrictive paywall, which undermines the fundamental concept of copyright law in Canada,” says John Simpson, the founder of intellectual property and new media law firm Shift Law.

The 2012 amendments prohibit circumvention of “any effective technology, device or component” that controls access to a copyrighted work, and were introduced to bring Canada into compliance with the World Intellectual Property Organization Copyright Treaty. Although a group of then-opposition Liberal Members of Parliament supported a move to preserve the fair dealing defence by explicitly allowing circumvention of TPMs for lawful purposes, their proposal was rejected at the committee stage of the legislative process.

“There was an argument that it should be left to the courts to get it right,” Simpson says. “Now the first one to have a chance is a Small Claims Court judge who probably doesn’t have much experience dealing with copyright matters, and is encountering some pretty poorly drafted legislation, and you have a perfect storm for getting it wrong.”

The dispute has its roots in a December 2013 appearance by Dan Paszkowski, the president and CEO of the CVA, before a House of Commons committee. A subsequent story by Blacklock’s Reporter, a subscription-only news publication focused on the workings of Parliament, quoted Paszkowski, and he received a short preview of the article by e-mail.

According to Deputy Judge Lyon Gilbert’s Oct. 16 decision, Paszkowski was concerned by what he saw as inaccuracies in the preview, but he was unable to view the full story since it was behind the Blacklock’s paywall. He had previously decided against purchasing a subscription, so he asked another friend in the drinks industry who subscribed to send him a copy of the article.

When Paszkowski called the web site’s publisher to discuss the story, she asked him how he had managed to view the article, and within days Paszkowski had received a letter alleging a breach of Blacklock’s copyright, as well as an invoice for $314 plus HST. That represented the price of two one-time subscriptions to the service, since the president had admitted sharing the full story with another colleague at the CVA.

When Paszkowski refused to pay, Blacklock’s sued in Small Claims Court, and won a damages award worth $11,500, the price of an annual institutional membership with Blacklock’s, plus $2,000 in punitive damages.

In his decision, Deputy Judge Gilbert concluded Paszkowski’s actions had violated the TPM provisions in s. 41.1 (1) of the Copyright Act.

“Section 41. 1 (1) is clear and applicable. You are prohibited from circumventing a technological protection which uses an effective technology to control access to a work. What the Defendants did is just that. They knew there was limited access to the full article. They knew that access was subscription based only and that subscriptions cost money. They knew that there was a technological barrier to that access. They knew that unless they paid they could not get it. They knew and chose another way around it. Having breached that prohibition, they have obtained copyrighted material belonging to the Plaintiff illegally,” Gilbert wrote.

He also dismissed the defendants’ claim of fair dealing, stating that case law on the subject made it “patently clear that unless you have obtained the material legally, you cannot avail yourself of the defence of fair dealing for the purpose of education, criticism or review.” In any case, he said a fair dealing claim based on the purpose of research would not stand up “given the fact nothing came of the research . . . once obtained.”

Punitive damages were warranted, Gilbert wrote, because of the CVA’s “attitude trivializing the value of the Plaintiff’s work and its efforts at protecting its copyrighted material; the manner in which the copyright was illegally obtained; asserting that the purpose in obtaining the material was for educational and research purposes when ultimately neither was engaged in; refusing to reveal the source of the material until ordered to do so and involving a third party exposing it to an action for infringement.”

Bill Northcote, a partner with Shibley Righton LLP, says the decision raises questions about technological neutrality because similar facts in the analogue world would yield a different result.

“If I buy a newspaper, and you ask to see an article about you in it, there is no copyright infringement there in the traditional analysis,” he says.

Northcote says he was also troubled by the suggestion in Gilbert’s judgment that something must come of research or private study in order for that fair dealing purpose to be considered genuine.

“There are all kinds of good tactical reasons why you may decide to do nothing with your research, rather than getting into an argument with a publisher,” he says.  

In any case, Northcote says Paszkowski’s call to the Blacklock’s publisher to discuss the story could be regarded as the sort of action Gilbert found lacking, adding that the punitive damages award “seems excessive.”

Jill Tonus, the head of the new media and copyright practice group at Bereskin and Parr LLP, says she is not sure copying and pasting an article is the sort of circumvention legislators had in mind when they enacted the TPM provisions. After the CVA announced it would not appeal the judgment, she says it’s “a bit frustrating” that a higher court won’t get to weigh in on the issues raised in more detail.

“I think it would have been more surprising if this decision had been by a Federal Court judge,” says Tonus, who works out of the firm’s Toronto office. “We don’t have a lot of case law on this fairly new and fairly complex legislation, and there are a lot of very interesting issues of copyright that a lot of us are wondering about since these new sections came in, so it would be nice to have a good, detailed, and thorough decision to discuss how it’s being applied.”

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