AI Litigation for the Canadian Nation

(from Kubrick’s visionary 1968 film, 2001: A Space Odyssey. AI is NOT a new concept.)

 There is a massive lawsuit underway against a number of companies comprising “OpenAI” (i.e. ChatGPT) for “misappropriation” of major Canadian news media material. It also alleges breach of ss. 3, 27 and 41 of the Copyright Act with apparently very few material facts or particulars about how these provisions were breached. “Misappropriation” is not a concept recognized by Canadian copyright law, as I explain below. Section 3 of the Copyright Act is the centrepiece of Canada’s complex copyright legislation and contains many separate and distinct provisions, none of which are identified in the Statement of Claim. It also alleges prohibited TPM circumvention, breaching terms of use, and unjust enrichment.

Michael Geist was quick off the mark with a useful analysis of some of the many difficulties that the plaintiffs face in this lawsuit, its international context, and his prediction that this is mainly about getting a settlement and a licensing deal. He followed up with a podcast with Prof. Robert Diab from Thompson Rivers University, who has also written about this case.

Actually, the case for the plaintiffs could be even weaker and more problematic than Michael or Prof. Diab suggest.

The Plaintiffs are “Canada’s leading media companies and news publishers (collectively, the “News Media Companies”)” including CBC and Canadian Press.

It was brought by the same very respected law firm that vigorously defended the concept of fair dealing in the Supreme Court of Canada in the York University case on behalf of Prof. Ariel Katz, as an intervener. Here’s the law firm’s press release.

This mega action was brought in the Superior Court of Ontario, perhaps because the Federal Court might conceivably have been dismissive of a lawsuit predicated primarily on “misappropriation”, which is a tort and a particularly vague one – and NOT a cause of action pursuant to the Copyright Act (see below). Indeed, the Federal Court conceivably might summarily toss any litigation focussed on “misappropriation”. BTW, the Ontario Court of Appeal successfully disentangled the muddling of misappropriation of personality and copyright in the ill-fated Glenn Gould case back in 1998. See Gould Estate v. Stoddart Publishing Co. Ltd., 1998 CanLII 5513 (ON CA), <https://canlii.ca/t/6gw8>

It will be interesting to see who ends up representing  the defendants here – and how the proceedings unfold.  Based on the copyright claims alone, this case could conceivably get bogged down at the outset and, if it ever does get going, for years to come, and perhaps never achieve a positive adjudicated outcome or even a satisfactory settlement from the plaintiffs’ point of view.

It will be interesting to see how the apparent lack of specificity, material facts, and particulars in the pleading and other issues could play out in procedural wrangles that could drag on with motions and discovery for a very long time. Even if the copyright causes of action survive, it is easy to predict that defences could potentially include the concepts of fair dealing, implied right, and simply non-infringement. Once again, as I’ve said, “misappropriation” is not something recognized by Canadian copyright law.

“Misappropriation” is a tort concept – i.e. judge-made common law that establishes liability for such things as negligence, product liability, taking of personality rights, etc. I shall never forget the great Prof. Harry Glasbeek’s impassioned lesson in 1^st year law school at Osgoode about how a Scottish woman was able to successfully sue after finding a dead decomposed snail in a bottle of ginger beer that she had partially consumed. See  Donoghue v Stevenson. That was a landmark of judge made tort law from the English House of Lords in 1932.

Some tort law finds its way into statute. Much of it does not. Canada’s Copyright Act explicitly excludes tort concepts. Copyright lawyers are – or ought to be - aware of the 1979 SCC decision that prominently mentioned the then very young and now the late Hon. Roger Hughes, namely Compo Co. Ltd. v. Blue Crest Music et al., 1979 CanLII 6 (SCC), [1980] 1 SCR 357, <https://canlii.ca/t/1mjth> wherein the great Justice Estey stated:

Mr. Hughes for the respondent in answer to a question from the Bench put it very well when he said that copyright law is neither tort law nor property law in classifi­cation, but is statutory law. It neither cuts across existing rights in property or conduct nor falls between rights and obligations heretofore existing in the common law. Copyright legislation simply creates rights and obligations upon the terms and in the circumstances set out in the statute. This creature of statute has been known to the law of England at least since the days of Queen Anne when the first copyright statute was passed. It does not assist the interpretive analysis to import tort concepts. The legislation speaks for itself and the actions of the appellant must be measured accord­ing to the terms of the statute.

(highlight, emphasis & underline added)

Needless to say, there is also the very important and venerable s. 89 of the Copyright Act:

No copyright, etc., except by statute

89 No person is entitled to copyright otherwise than under and in accordance with this Act or any other Act of Parliament, but nothing in this section shall be construed as abrogating any right or jurisdiction in respect of a breach of trust or confidence.

1997, c. 24, s. 50 (highlight, emphasis & underline added)

See  Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68 (CanLII), [2012] 3 SCR 489, <https://canlii.ca/t/fv76k> paras. 81, 82.

The quantum of damages sought is beyond huge – potentially statutory damages of $20,000 for each of the “hundreds of thousands, if not millions, of Owned Works across the Websites” allegedly infringed. Theoretically, that’s in the Billions. Naturally, mega injunctive relief is also sought.

Here is Section 3 of the Copyright Act. Which of these provisions are implicated here and how? The Statement of Claim – in all of its 84 pages – does not tell us:

Copyright in works

3 (1) For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right

(a) to produce, reproduce, perform or publish any translation of the work,

(b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work,

(c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise,

(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,

(e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work,

(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,

(g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan,

(h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program,

(i) in the case of a musical work, to rent out a sound recording in which the work is embodied, and

(j) in the case of a work that is in the form of a tangible object, to sell or otherwise transfer ownership of the tangible object, as long as that ownership has never previously been transferred in or outside Canada with the authorization of the copyright owner,

and to authorize any such acts.

BTW, there are also allegations of TPM infringement, breach of contract, and unjust enrichment.

The TPM issue could also be interesting because TPMs are also involved in the Blacklock’s litigation, which is presently in the Federal Court of Appeal and is likely to be finally resolved long before this AI litigation even gets fully off the ground, if ever.

Here’s the Plaintiffs’ law firm’s press release. Here’s some coverage in the NY Times.

There is also a recent lawsuit in BC based by Canlii against Clearway et al. Canlii is the very important free database of Canadian legal decisions. Here’s the Statement of Claim filed in the Supreme Court of British Columbia on November 4, 2024, also from a major law firm.  This also involves AI and the Statement of Claim alleges misappropriation, misuse, conversion, and unjust enrichment. Again, one can expect procedural issues that could last for years to come.

Stay tuned for future developments on these lawsuits. But don’t expect anything conclusive any time soon.

AI is a huge growth industry, for better or worse, and affects virtually every sector. And it is now the centrepiece of lots of litigation in Canada and elsewhere. This is inevitable given the nature of the legal profession. The lawsuits will presumably unfold with much deliberation and will hopefully be well argued by all concerned. This is probably better than some hasty and panicked legislation prompted by political opportunism that could conceivably result in bad cures for misdiagnosed problems.

HPK

Fictional, Fulsome, and/or False Fulminations Of And About Blacklock’s

Blacklock’s has announced that it will appeal Justice Roy’s decision of May 31, 2024 in 1395804 Ontario Ltd. (Blacklock's Reporter) v. Canada (Attorney General), 2024 FC 829 (CanLII), <https://canlii.ca/t/k4zfr>. See my recent blog about this here. Here is Blacklock’s Notice of Appeal dated August 30, 2024.

This was a very lucid decision about the licit use of a password by a government employee who was just doing her job. The decision carefully balanced the provisions of the Copyright Act dealing with technological protection measures and fair dealing. It must be remembered at all times that, according to no less than the Supreme Court of Canada:

• Fair dealing is a user’s right
• It must be given a large and liberal interpretation
• It is always available

See the Supreme Court of Canada (“SCC”) decision in CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 (CanLII), [2004] 1 SCR 339, <https://canlii.ca/t/1glp0>, which is the Magna Carta of Canadian copyright law.

Apart from the sometimes fictional, fulsome, and even  false fulminations of Blacklock’s and/or its very few supporters, the decision is not controversial and is certainly not “riddled with flaws”. The following respected law firms  and a noted professor have written about it responsibly and  usefully;

• Bereskin & Parr
• Fasken
• Lenzner Slaght
• Markwell Law
• Oyen Wiggs
• Michael Geist

On the other hand, we have seen Barry Sookman’s blog that is riddled with controversial comments and Lorne Gunter’s so called journalism that is unprofessional, unreliable, indefensible, and unworthy even of the  Toronto Sun. We have recently seen Blacklock’s itself has published false information, such as stating that comments by Messrs. Gay and Plotkin (who both were counsel in the Federal Court) were deleted from LinkedIn.

Blacklock’s lost the case in large part because it failed to provide adequate evidence about TPMs generally and its own site in particular and failed to show how Parks Canada allegedly broke the law in the course of its “licit” acquisition of a password and its exercise of its fair dealing rights. The judgment demonstrated how very unsophisticated Blacklock’s website and password mechanism was at the material time. (It still is.)

Copyright owners enjoy certain rights under s. 3 of the Copyright Act. These rights do NOT include:

• The right to read
• The right to link to copyrighted material
• The right to trump users’ fair dealing rights.

For example, the well respected and very opinionated maximalist copyright lawyer Barry Sookman says on the “Terms” provisions for his blog that:

Copies of blog posts may be used for educational instruction and for research, private study, and other educational purposes, as long as the dealings are fair. However, no communications to the public or making available to the public, syndication, republication, or commercial use is permitted without the express written permission of the author of the post. (highlight added)

Barry cannot stop me or anyone else from posting a link to his blog about the Blacklock’s case or from quoting some or even all of it, if appropriate, for fair dealing purposes, if such quotation meets the six factor test set forth by the SCC in the CCH decision. Such an attempt to stop such exercise of user’s rights could be a copyright “make my day” moment  😉

As for the Blacklock’s appeal:

• The grounds of appeal as set forth in the Notice of Appeal dated August 30, 2024 are unusually fulsome and numerous
• The judgment is unusually long and meticulously crafted by a careful judge whose reasons are not easy to appeal successfully – as I know very well firsthand
• The more that Blacklock’s and its acolytes kvetch about this case, the more they are likely to invite unsympathetic interveners (Blacklock’s should learn to spell that term sooner or later. Spoiler alert: it is NOT “intervenor”)
• Blacklock’s has an unblemished lengthy litany of losses in the Federal Court going back to 2016 and it didn’t even try to appeal Justice Barnes devastating decision in the Department of Finance case 1395804 Ontario Ltd. v. Canada (Attorney General), 2016 FC 1255 (CanLII), [2017] 2 FCR 256, <https://canlii.ca/t/gvrbx>, apart from a notably unsuccessful https://excesscopyright.blogspot.com/2016/12/blacklocks-must-pay-65000-for.htmlattempt to appeal the costs order
• The established and reputable mainstream media are not likely to be onside with Blacklock’s. Such organizations have sophisticated websites that make password sharing difficult if not impossible and use paywalls carefully and strategically, realizing that some copying and sharing can actually be good for business. Some, such as the NY Times and Washington Post,  even encourage such password free content sharing of whole articles with “gift” copies of otherwise paywalled articles. I know this because I subscribe to both of these admirable sites
• It will be interesting to see if the library, educational, research, consulting, or other user-friendly sectors weigh in here as interveners in favour of upholding Justice Roy’s decision. 

Blacklock’s, true to form, has tried to attack its critics, such as myself. More seriously, it has tried to attack opposing counsel, such as Alexander Kaufman, counsel in the Finance case (he has since become an Ontario Superior Court Judge), Sarah Sherhols,  and more recently Alexander Gay who had carriage of this case for the Attorney General of Canada (“AGC”). Such attacks – including on Mr. Gay’s weight (See some Blacklock’s DMs below) - are unworthy of any so-called journalist in Canada, where Trump style tactics are not acceptable.

Alexander Gay was, but no longer is,  the AGC counsel in the Federal Court case that is now under appeal. He has since moved on to much bigger targets at the Competition Bureau. He did an outstanding job as AGC counsel, even though it was apparent that the Government had tied his hands to some extent and apparently forced him to pull his punches on some key TPM related arguments. This is what Government bureaucrats sometimes do in copyright files – especially those at Heritage Canada and its predecessor the Department of Communications where I have seen this first hand. This is unfortunate and short sighted – it’s best to let good lawyers be good lawyers and not limit their ammunition or strategy. Hopefully, the AGC will not attempt to tie the hands of Mr. Gay’s successor on the file. Any such attempt may well attract notice – from me and potentially others who care about justice, the rule of law, and good policy. If the bureaucrats don’t like the legislation, they should try convince their minister to attempt to amend it. That is how things are done – or should be done. BTW, previous ministers or wannabe ministers who have attempted to controversially amend the Copyright Act have found such attempts to be career limiting. Ask Sheila Copps or Sarmite Bulte. And taking stupid policy viewpoints at the behest of ingratiating lobbyists sometimes does not end well even for bureaucrats – and can indeed end very badly.

Fortunately in this case, CIPPIC stepped in to intervene and was ably represented by James Plotkin. Mr. Plotkin did his job in the true spirit of vigorous and uncompromised  advocacy and service to the courts in the great tradition of the late Gordon F. Henderson. Mr. Plotkin did so admirably and pro bono to the great credit of Gowlings. I knew Gordon quite well in his last years and I’m confident he would have been proud and is now smiling down on this file and James’ & Gowlings’ contribution.

So – let us hope that Alexander Gay’s successor in this file in the appeal process does just as vigorous and competent a job as Mr. Gay and, if anything, has fewer restrictions on his brief. And let’s hope that James Plotkin will be there for CIPPIC with as much scope or even more to act as an essential intervener.

As for this appeal, I remind readers once again that I’m retired and not practicing law and that nothing on this blog is legal advice. That said, my personal opinion about this appeal is that Blacklock’s should be careful what it wishes for. A loss in the Federal Court of Appeal could be costly financially and substantively, and I would be very surprised if the SCC were to grant leave to appeal in this case.

HPK

***

PS – FYI, here are just some of the many unsolicited DMs I have received from Blacklock’s over the last three years. I have not responded. (highlight added)

 

Hi Howard, only blocked you with comment to make sure those MPs, Senators and Leaders’ Offices who pay for our work and follow my personal twitter account are reminded there’s a serious problem in the Justice Dept that needs to be sorted out. It worked. So, thank you for the “black eye” description, its violent tone had the desired effect on legislators. In the meantime, there are still years ahead in this litigation. I realize age is a factor so I hope your health holds out. We are working this Labour Day. What would you expect? Tenacious like nobody you’ve ever met. — Holly Doan

Sep 6, 2021, 7:34 AM

 

Hey Howard, How are you and Chubby Sleeves @alexandermgay and @mgeist doing?? We fucking love this ruling. See the reaction? Could not have asked for more. Conservative MPs reaching out DM, what do we do with this??? Me, I say do whatever you like, but Blacklock’s work continues with even greater vigour. I love accountability journalism so much!

Jun 3, 2024, 6:14 PM

 

I wonder - do you know Howard - did DOJ think that winning the right to read while withholding license would starve Blacklock’s? If so, then nobody wins. We lean in harder, subscriptions continue, and independent accountability journalism wins. So much money wasted, and nothing changes, right? Then the Conservatives take power and ask Blacklock’s opinion on how to tighten fair dealing. Holly Doan and John Degen on speed dial. Congratulations freeloaders! Does Alex have a plan for his career before the government changes?

Jun 13, 2024, 11:16 PM

 

Loved your blog BTW. Might quote it in the future. Certainly will publish that chubby sleeves photo. It’s gold! Blacklock’s revenues up 14% over last June. Legal bills paid and ready for another great decade of accountability journalism! To be sure, it’ll be different under a new administration.

Jun 28, 2024, 1:38 PM

From September 4, 2024:

Sir John A loved to quote Mark Twain: “Never argue with someone who buys ink by the barrel.”

We have always appreciated your usefulness in passing on messages to the highly emotional Alex Gay. With thanks, 🙏🏻

We have always appreciated your usefulness in passing on messages to the highly emotional Alex Gay. With thanks, 🙏🏻

In fact, just remembering, Mr Gay admitted once in a CM conference to his emotional nature. That’s what Andrew Gibb was brought on. Very wise of DOJ to take Alex off the case, no?

You there, Howard? You’re so bold in blogs but never reply. Would love to chat. We’re in the Glebe, where are you?

…

So, coffee?

 ***

Update re Blacklock’s Lengthy Litany of Losses: What Lies Ahead Following Justice Roy’s Lucid Decision about Licit Behaviour

On June 3, 2024 Barry Sookman promised via a Tweet that he would provide  a blog about the Federal Court’s Blacklock’s Reporter (“BR”)  decision of May 31, 2024 – which he said was “riddled with flaws”. On August 7, 2024 he followed up with this fulsome blog of some 17 pages in small print PDF. Readers who are connoisseurs of English language ambiguities and legal scholarship may wish to refresh their legal  linguistic lexicon by reminding themselves of the various meanings of “fulsome” and considering which one or more apply in this case.

Barry and I have appeared on opposite sides of the aisle in the Supreme Court of Canada twice. I was on the prevailing side both times.

I have lost interest in any extra-judicial or unmoderated social media or blog debate with him, after our “kerfuffle” from a dozen years ago where I, Ariel Katz,  and Bill Patry confronted him and his colleague Daniel Glover about how they “misstated” the state of American fair use law to the Supreme Court of Canada in the 2012 Alberta case, in which Barry, Daniel, Ariel & I were all  involved. Thankfully the Court wisely paid no attention in its reasons to that aspect of their submission and their side lost. I might also mention some battling blogs and live conference exchanges that Barry and I had back in 2014 concerning the Copyright Board’s waste of resources over its “unlocatable” owner mandate. Frankly, I don’t wish to engage in any sequel to those episodes. Accordingly, my comments now will be short and, hopefully, far from fulsome in any sense.

Barry’s argument is, overall, arguably a “straw man” argument.  He says:

You might think after reading the decision that

•        it decided or correctly decided that: a person can buy a single subscription to a news service and rely on fair dealing to copy and distribute articles to any interested readers to avoid paying for a bulk or organizational license and paying the usual price;
•        an online subscription service which makes reasonable efforts to bring online license terms to the attention of subscribers (including sophisticated subscribers) cannot enforce those terms unless the specific license terms are brought to the subscribers’ attention during the contracting process; fair dealing is a defense to the violation of the Copyright Act’s prohibition on circumventing TPMs;
•        fair dealing trumps the Act’s anti-circumvention prohibition; and
•        a person who buys a subscription to a news service can copy and distribute copies of articles along with passwords to enable others to unlock the articles without any person being liable for violating the Act’s legal protection of TPMs.

But, that is NOT what Justice Roy ruled. Here are some of the key extracts of what Justice Roy actually said in his decision:

[119] As a result, the issue must be circumscribed to the limited evidence brought forward by the parties. Hence, it has been established to the Court’s satisfaction that Parks Canada purchased the only type of subscription made available by Blacklock’s Reporter. That subscription gave Parks Canada access to a password which was used to gain access to some articles published by BR which concerned Parks Canada’s mandate and operations. The evidence does not establish if the sharing required to conduct the research undertaken by Parks Canada in its monitoring of articles was done by sharing the password, sharing copies of articles through e-mails or in paper format. There appears, however, to be common ground that there was some sharing of the password. The Court is satisfied that the use made of the articles accessed through the validly obtained password constituted, on the facts in this record, fair dealing according to section 29 of the Act. Fundamentally, Parks Canada did not circumvent what is presented as an effective TPM. It used the password licitly obtained for the purpose for which it was created: gaining access to articles located on a website. Once the articles were obtained, they were used in a manner consistent with recognized fair dealing.

[120] In fairness, BR was essentially reacting to the arguments put forth by CIPPIC. It remains, however, that its counter arguments were suffused with various concepts that were not defined or do not find support in our law. Thus, repeatedly BR referred to a “paywall” being circumvented. The paywall is equated with a TPM that is circumvented because the paywall is meant to “prevent access without an authorized username and a password” (Blacklock’s Reporter’s response to CIPPIC memorandum of fact and law, para 31; see also para 42). First, “paywall” is not defined. Second, it would appear doubtful that a paywall is strictly speaking a TPM, as stated at paragraph 31. That conflates the means and the end. Rather the TPM used is the means to the end, which may be a so-called “paywall” or something else. It is the technology, device or component created that results in a paywall. In other words, the TPM exists for a purpose, but it is only the means to satisfy a purpose that may be a paywall. It is the means that is not to be circumvented whether that be technology, device or component. Barnes J in the Department of Finance case said that “(t)he suggestion that Blacklock’s business model 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 … It also goes without saying that whatever business model Blacklock’s employs it is always subject to the fair dealing rights of third parties” (para 45). I certainly share that view. A paywall may be the result of some technology, device or component, but it is not the technology, device or component. The paywall is not the TPM. It protects against unauthorized intrusions and is part of a business model. That protection is not jeopardized by Parks Canada purchasing a subscription for the purpose of research constituting fair dealing. In the case at bar, there is no circumvention of a TPM simply because the password was not circumvented: it was properly obtained and used for a legitimate purpose.

[125] CIPPIC’s submissions were more fulsome. Fundamentally, it argues that the TPM provisions do not apply to restrain fair dealing; using a validly obtained password to access content is not circumvention. I agree. I would add nonetheless that how the password was obtained is significant as this may prevent a user from invoking the fair dealing provisions of the Act. Obtaining content by descrambling a signal or decrypting a communication may render invoking fair dealing very difficult to establish successfully. It is telling in my view that s 41.11(1) of the Act provides for an explicit exception for law enforcement and national security against liability for circumvention. But this is not the case before this Court. Our case is much more straightforward in my estimation and it is limited to a very narrow scenario.

JUDGMENT in T-1862-15

THIS COURT’S JUDGMENT is the following:

1.     It is hereby declared that, having purchased the only type of subscription available, which was allowing the acquisition of the password needed to access articles produced by Blacklock’s Reporter, Parks Canada’s use of the password in the circumstances of this case constitutes fair dealing under section 29 of the Copyright Act.

2.     It is hereby declared that the licit acquisition and use of a password, if it is otherwise a technological protection measure, does not constitute the circumvention of the technological protection measures of the Copyright Act.

3.     There is no order as to costs.

(highlight and emphasis added)

BTW, BR got a big break with the costs order, based upon the Attorney General of Canada’s (“AGC’s”) lack of success on the relatively minor and non-essential issue of “rectification”, which was a small part of the case. When BR lost the earlier Finance case before Justice Barnes, it got nailed for costs of $65,000 in the Federal Court and $3,500 in the Federal Court of Appeal.

BTW, Barry refers several times to the 2016 decision of Justice Barnes in the Department of Finance case which Barry says was “wrongly decided” but which was NOT appealed – other than the very unsuccessful appeal on costs.  Barry also refers several times to BR’s one tiny victory – namely the Small Claims Court “Vintners” decision. But, as any law student should know, small claims court decisions have ZERO precedential value in the Federal Court. Barry also refers to the notorious Nintendo decision, which was cut and pasted from the Plaintiff’s memorandum when the law firm representing the Defendant (the same one now acting for Blacklock’s) settled the case and did not, although entitled, reply and make final written submissions. Indeed, the Respondent’s counsel did not appear for the final oral argument.

Followers of Federal Court decisions will know that Justice Roy is very thorough, very decisive, and very solid in his rulings. Believe me, I know – having been counsel on the losing end of one of them. This one took him almost a year – which means he was exceptionally careful and deliberate. If any of it can be accurately characterized as “obiter dicta”,  so be it. Carefully crafted obiter dicta can be very instructive to careful and conscientious counsel and their clients and should not be ignored, especially in important and closely watched cases.

Anyway, I have blogged fulsomely about BR over the years. But don’t take only my word about the latest decision in its litany of losses. Here are some other takes from notable sources about Justice Roy’s BR ruling:

•        Bereskin & Parr
•        Fasken
•        Lenzner Slaght
•        Markwell Law
•        Hugh Stephens
•        Michael Geist

What lies ahead? BTW, Justice Roy refers many times to the lack of adequate evidence from BR about the technological aspects of its case re TPMs. Needless to say, it is far too late in the day to fill that gap.

We shall get some clue on August 19, 2024 when BR will “provide the Court with a status update regarding a possible appeal of the said Judgment, as well as any discontinuances to be filed." Just why BR agreed to do this by August 19, 2024 is unclear, since its deadline to actually file a Notice of Appeal from Justice Roy’s judgment isn’t until September 3, 2024 by my calculation.

FWIW, I would frankly be surprised, but not shocked, if BR actually does appeal. As I have  said, it refrained from appealing the substantive aspect of Justice Barnes very important decision and instead only appealed – and very unsuccessfully – the costs order.

An unsuccessful trip to the Federal Court of Appeal (“FCA”) could be very costly in terms of  legal costs to BR’s lawyer and to a lesser extent to the AGC.

Above all, an unsuccessful appeal would reinforce Justice Roy’s decision, which nobody, as far as I know, except Blacklock’s and Barry have suggested is wrong in any reviewable way. It must be remembered that, in any appeal here, fact finding will be reviewed only for “palpable and overriding errors” and extricable or self standing rulings on the law will be reviewed for correctness. See Housen v. Nickolaisen 2002 SCC 33. Obiter dicta is not reviewable. If BR decides to appeal to the FCA and loses, it’s very hard to conceive of why the Supreme Court of Canada would grant leave to appeal in this case. And if it gets that far and the Supreme Court actually does take the case, there’s an old adage about “be careful what you wish for…”

In any event, stay tuned. We may know more after August 19, 2024.

HPK

PS: August 22, 2024 

Blacklock's counsel advised the Court on August 13, 2024 that:

In accordance with the Direction of the Court dated July 29, 2024, Blacklock’s can advise that it will be filing an appeal of the May 31, 2024 Judgment of the Honourable Justice Roy in the Parks Canada action (T-1862-15). As such, Blacklock’s position is it is pre-mature to file any discontinuances at this time. 

This appears to have been posted only on August 19, 2024. 

Potential interveners, as well as several government departments and agencies that have related matters pending, may be interested. The deadline for Blacklock's to file its Notice of Appeal appears to be September 3, 2024.

IP Judges in the Federal Court: Chamber, Echo Chamber and/or Star Chamber?

 Chief Justice Crampton of the Federal Court has recently on March 2, 2023 formally announced the creation of three “chambers” in the Federal Court, namely:

• Intellectual Property and Competition Chambers
• Maritime and Admiralty Chambers
• Class Actions Chambers

 The Court’s Notice states that:

The Registry categorizes and codes all proceedings. This and other case information is considered by the Judicial Administrator when assigning judges to a case. It is therefore not necessary for parties to make a formal request for a matter to be assigned to a judge from the relevant Chamber. For assignments to the Intellectual Property and Competition Chambers, the Judicial Administrator will also consider sub-specialties related to practice areas particular to IP (e.g., copyright, trade-marks, patents and competition).

Assignment of matters to IP Chambers is automatic.

It is not necessary for parties to make a formal request for a matter to be assigned to a judge from the relevant Chamber. The Federal Court Registry categorizes and codes all proceedings, which is considered by the Judicial Administrator when assigning judges to a case.

(highlight added)

The list for the main category of IP & Competition is as follows, as provided by the Court:

• Chief Justice Crampton
• Associate Chief Justice Gagné
• Justice O’Reilly
• Justice Zinn
• Justice Manson
• Justice Roy
• Justice McVeigh
• Justice St-Louis
• Justice Brown
• Justice Fothergill
• Justice Gascon
• Justice Southcott
• Justice McDonald
• Justice Lafrenière
• Justice Pentney
• Justice Grammond
• Justice Walker
• Justice McHaffie
• Justice Fuhrer
• Justice Pallotta
• Justice Little
• Justice Furlanetto
• Justice Aylen
• Justice Tsimberis

This list comprises 24 of the 41 current judges of the Federal Court. Only about seven of the judges on this list had any significant experience in IP law prior to their appointment.

 In recent years, we have seen the cohort of judges with some previous IP litigation experience rise from none to one or two and now to at least seven or eight out of 41. Three of the nine Associate Judges (formerly called Prothonotaries) have a significant background in IP. Overall, this may seem like a good thing – and in many ways it is.

 Predictably, at least one  active plaintiff side litigator firm sees this a positive move that will be “An improvement to IP enforcement in Canada”. However, some cautionary notes should be considered. Some of the best IP judgements over the years have come from judges with a more generalist background who had not previously practiced in IP before being appointed. More about this below…

An ongoing and not unrelated concern on my part and that of some other thoughtful colleagues is with respect to judgments rendered in default proceedings. There is a risk above all that any judge – even one with previous IP experience – may not be sufficiently briefed in a default proceeding in which the adversarial process does  not unfold as it should. Judgments in such cases should rarely if ever be given “neutral citations” and thereby presumptive precedential status. There could be a risk that the “chamber” concept may increase the possibility of judges following their own default judgments or those of their colleagues when such judgments should have little or no precedential value. The American courts have long had a tradition of treating default judgements and some other decisions unworthy of precedential status as “unpublished” judgements that bind only the parties but nobody else and are NOT to be cited as precedents. One hopes that the chamber approach does not exacerbate the problematic potential of default judgments being given neutral and, hence, potentially precedential status. I’ve written about the problem with default judgements getting neural citations before.

 The increasing use of Anton Piller orders (which by definition result from ex parte proceedings and can potentially lead to incarceration for contempt)  - and Norwich Orders exposing the private information of hundreds of people at a time (which are rarely any longer adequately opposed) are particularly fraught with precedential peril and should not be issued on a routine basis and require a very broad understanding of fundamental legal principles. Hopefully, the chamber approach will not lessen the need for all due care and attention to these types of proceedings.

 The late, great, leader of the IP bar and one of the best all-around Canadian barristers of all time  was Gordon F. Henderson, author of the Henderson Report entitled “Intellectual Property: Litigation, Legislation, and  Education” published in 1991 (Cat. No, 43-25\1991E, ISBN 0-662-19084-X,  CCAC No. 00114 91-08) and, sadly, not available online – though hopefully it will be  one day sooner rather than later. I worked very closely with him on that project when I was in government, but it was his distinguished decades of experience that informed the main recommendations. He commented that:

 On balance, I do not think that we need to seek out specialized practitioners to constitute an intellectual property “panel” as such on the Federal Court. However, consideration should be given to the appointment of some practitioners experienced in intellectual property matters. It would not be expected that they would hear all or only intellectual property cases. This would be a solution with no significant downside. It would not require any legislation to implement, although it would require considerable consultation with the Canadian Bar Association, the Patent and Trademark Institute of Canada, and other interested parties in the ever more democratic process of judicial appointments. Those responsible for recruiting should consider no only the practicing Bar but the specialized cadres of government, industry and academia. (highlight added) 

 He cautioned against a specialized court and recommended that:

 Judges should be appointed to the Federal Court with specialized background in intellectual property law, although they should not be assigned exclusively to this area. Recruitment should consider not only private practitioners but government, industry and academia. (highlight added)

A potential danger of having too many IP judges from the private sector is, frankly, that they may tend to come from plaintiff side practices. Some IP firms have very pronounced points of view. Although a judge can leave their practices and any  conflicts behind, can they always leave their sometimes strong points of view behind?

 Copyright, in particular, has become highly polarized - not unlike labour law- where firms tend to pick one side or another. When a firm acts for a major copyright user organization on the one hand and a major copyright collective on the other hand – even where there is no direct conflict of interest – the issue of a business or philosophical conflict may at least appear to arise and some may question whether the public interest is being compromised. Waivers may not solve all the potential concerns. Indeed, certain major media companies are now simultaneously major players as ISPs, copyright owners, and copyright users in various proceedings in various fora. They presumably are doing the best for their shareholders. As for the public interest, maybe not so much. Patent practice tends also to be rather polarized overall – especially in pharmaceutical litigation – though this generality may be evolving. Trademarks law is relatively less prone to polarization.

In any event, most of the money in IP practice is on the plaintiffs’ side – in other words, in enforcement on behalf of rights owners.

 Another phenomenon is that even some IP practitioners tend to think that expertise in one of the three main areas – namely copyright, patent, and trademarks – translates to insight and expertise in the other areas. However, that is very often not the case and is an increasingly problematic proposition as these practices become more like specialized silos. Mindful of the dangers of analogies, one might ask whether a great NFL football player – but someone who can’t even skate – could suddenly be on an NHL hockey team? I would much rather take my chances with a wise generalist judge than a judge who is a former patent lawyer who mistakenly thinks they understand copyright law or vice versa. There are many IP lawyers who lack reliable expertise in all three areas. A little knowledge can be a very dangerous thing.

 Some of the best jurisprudence in IP law has come from judges who had little or no background in IP. Former CJ Beverly McLachlin  -  who penned the landmark “magna carta” Canadian copyright case in CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 (CanLII), [2004] 1 SCR 339 did have some related background in her early career having written a book on architecture and penned an important copyright trial judgement  in Slumber-Magic Adjustable Bed Co. Ltd. v. Sleep-King Adjustable Bed Co. Ltd. et al., 1984 CanLII 54 (BC SC).  

 Other important appellate jurisprudence has come in recent times, for example, from Justices Abella, Bastarache, Rothstein, Rowe, Nadon, and Stratas  - none of whom had a background as IP litigators. Another, of course, is Justice Binnie – a great all-around barrister who was appointed straight to the SCC. He did have some important experience as a litigator in some IP cases. And there have been many excellent IP trial judgments from generalist trial judges in the Federal Court over the years, as well as from judges from the Superior Courts of the provinces.

 While one has high hopes for this “chamber” development, let us not have excessive expectations. We certainly hope that the IP chamber doesn’t somehow become an echo chamber or even a star chamber. We watch with cautious optimism.

 HPK

Default Judgment Dire Doomsday for Downloaders? Update November 26, 2021

 

I am becoming increasingly concerned about how default judgments potentially may be viewed as precedents to establish sometimes sweeping and even sometimes wrong principles in IP cases. Sometimes, default judgments arise because the defendant(s) never participate, which can be for any number of reasons. Sometimes, the default can come towards the end of a case, again for various reasons. The common thread is that the presiding judge does not get to see and hear all of the evidence and all of the law in the ideal forum of the fully contested adversarial process – which is the cornerstone of our common law and the rule of law. I am working on a blog about some of the more high profile and sometimes problematic recent examples of the trend toward default judgments that can potentially take on precedential weight in IP cases, perhaps the most noteworthy of which is that of the Nintendo decision, about which I’ve written before.

There is a new default proceeding urgently looming in the Federal Court that could have profound  and dire effects on the mass litigation trend in Canada whereby hundreds of BitTorrent users are sued at once amounting to thousands overall in the approximately two dozen cases to date from the Aird & Berlis LLP firm, many of whom have been eventually persuaded to settle at relatively low amounts but may have felt the need to retain counsel in the face of an apparent potential threat of $5,000. Aird & Berlis LLP is a big, old and reputable Bay Street firm. Mr. Ken Clark handles these cases and he does so courteously and efficiently and is open to hearing any relevant mitigating factors and to dealing directly with Counsel for individual defendants caught up these mass lawsuits.

In recent years, these enforcement activities arising from alleged BitTorrent activity have been conducted on a very civilized plain, with full credit to Mr. Clark. We have not seen the nauseating trolling antics that have too often happened in the USA that have resulted, for example, in at least two American copyright lawyers sentenced to jail for long periods of time.

However, things are now taking a troubling turn in the mass BitTorrent litigation arena in Canada. Mr. Clark is bringing a motion for default judgment against more than two dozen “Doe” defendants in Federal Court case #T-513-18. These Defendants are not yet publicly named – but they will be if the motion succeeds as framed. An affidavit has been filed that suggests that some of these defendants may have downloaded some pornography based upon some of the colourful film titles. This is extremely problematic from a relevance and privacy standpoint – and I won’t post the affidavit because it may be possible, if the “Does” are eventually named, to connect the porno dots with real names. Mr. Clark is seeking statutory minimum damages of $2,250 to $5,000 plus costs in each case. If he succeeds, enforcement is bound to follow.

Here's the recent letter to Court from Mr. Clark dated July 20, 2021 seeking to “set a hearing date for the special sitting before the Case Management Judge so that we can put that information in the motion record.” He says that “The Plaintiff shall file its written representations and confidential affidavits by no later than July 26, 2021”.

 For any number of reasons, this motion could and arguably should be opposed and may be very vulnerable. However, it is not worth any one individual’s expense to do so and this is much too complicated for self-representation. The issues are potentially very complicated and Mr. Clark is a worthy and formidable adversary – so a lot of time would be required even for any very experienced counsel. There is always the risk of an adverse costs order. Last but not least, the listed “Does” may be out of time to even be allowed back, without a procedural fight, into the ring to defend.

Mr. Clark will no doubt be very thorough, forthright, and professional in his presentation to the Court. However, there are arguably a lot of issues and arguments in this proceeding that potentially could and should be considered and heard. Accordingly, this case calls out for a Court appointed “Assessor” under Rule 52 or an “Amicus Curiae”, or the intervention or the pro bono representation of one or more “Does” by a public interest clinic, e.g. CIPPIC, whose mandate and resources are ideal for this case. Otherwise, a very dangerous precedent could be set by default for masses of default judgments against potentially thousands of  Canadians for several thousand dollars each and the disgorgement of irrelevant personal private information.

HPK

UPDATE Aug. 4, 2021:

Here are Mr. Clark's Written Representations for his Motion for Default Judgment) dated and filed July 26, 2021. There are many issues that could and should be addressed here. If CIPPIC does not step up to the plate, or the Court does not somehow on its own motion seek the assistance of an "Assessor" or "Amicus Curiae", it's hard to see how this will be done.

UPDATE: Aug. 9, 2021:

The mass default judgment motion has been set down for  hearing on August 24, 2021.

UPDATE: August 11, 2021:

The Federal Court docket in T-513-18 indicates that CIPPIC wrote to the Court on August 9, 2021 seeking an adjournment so that it can potentially intervene. That's good news for the public interest!

UPDATE: October 23, 2021:

CIPPIC has been given leave to intervene by Justice Furlanetto in the default judgment motion that will now be heard during the week of November 22, 2021: 

https://www.scribd.com/document/534653567/T-513-18-Voltage-Holdings-v-Doe-OrderAndReasons-Oct-22-2021 

UPDATE: November 4, 2021

T-513-18:

 Written directions received from the Court: Chief Justice Crampton dated 27-OCT-2021 directing that The Plaintiff¿s Motion for Default Judgment (doc 158) will be heard by Zoom videoconference on Monday, November 29, 2021, at 1:30 pm EST for a duration of 3 hours. placed on file on 27-OCT-2021 Confirmed in writing to the party(ies)

UPDATE NOVEMBER 26, 2021

The motion for default judgment will be heard on November 29, 2021.

CIPPIC's intervener memorandum is here.  

Voltage's memorandum is here.