Canadian Copyright Mid-Year Update – Looking Back Through 2018 and Ahead In 2019

We are now halfway through 2019, and it has already been an exciting year for Canadian copyright law. This Bereskin & Parr update highlights several recent Canadian copyright developments starting. With policy and legislative developments, and followed by a review of recent copyright decisions. If you would like learn more, contact the authors.

1 – LEGISLATIVE & POLICY DEVELOPMENTS

In this section, we discuss copyright policy developments including the United States–Mexico–Canada Agreement (“USMCA”) and recommendations following the Government’s review of the Copyright Act (the “Act”).

(a) USMCA

On September 30, 2018, the text of the USMCA was released, and on November 30, Canada, the United States, and Mexico signed onto the new trade agreement that replaces the North American Free Trade Agreement. The USMCA includes numerous provisions relating to intellectual property and digital media, which must be implemented into each of the signatory countries’ domestic laws within prescribed transition periods after the USMCA comes into force. 

Copyright term extension to life + 70. Among the most significant copyright provisions to Canada, the USMCA provides that the general term of copyright protection shall be “not less than the life of the author and 70 years from the author’s death”. Under Canada’s existing Act, the general term of copyright protection for works extends for 50 years from the end of the year in which the last living author dies. Canada will have up to 2.5 years from the date that USMCA enters into force to amend the Act to extend the copyright term. Absent any major changes to Canada’s trade policy, it is expected that Canada’s general copyright term will be extended by fall 2022. 

Implementation Act, Bill C-100. May 29, 2019 marked the first reading in the House of Commons of Bill C-100, An Act to implement the Agreement between Canada, the United States of America and the United Mexican States. The Bill covers a series of amendments to the various Canadian statutes to implement the new United States-Mexico-Canada Agreement, including the Copyright Act. Notably, Bill C-100 does not address the general term of copyright. However, the Bill addresses extending the term of copyright protection for certain types of works, including anonymous and pseudonymous works, cinematographic works, performer’s performances, and sound recordings. Bill C-100 also includes provisions relating to criminal offences for acts such as the unauthorized removal of rights management information for commercial purposes to facilitate or conceal infringement.

We will continue to monitor for the extension of the general term of copyright, and other copyright law changes stemming from USMCA.

(b) Budget Implementation Act, 2018, No. 2

Copyright Board and Collectives. The Budget Implementation Act (2018) (S.C. 2018, c.27) introduced sweeping changes to the formation and functioning of the Copyright Board of Canada (“the Board”), as set out in sections 66 through 66.91 of the Act. Many of these changes are geared towards improving the Board’s decision-making efficiency, such as, introducing formal case management procedures. “Fair and equitable” criteria for the Board to consider in setting royalty rates now include the “willing buyer willing seller” economic principle, public interest considerations, and any other factors which the Board may consider appropriate or which may be set by Regulation.

There are also changes impacting collective societies appearing before the Board. Some are primarily administrative, such as changing filing deadlines for proposed tariffs for review by the Board, and express allowances for collectives to withdraw and amend previously proposed tariffs before they are certified. More substantively, the prohibition against enforcement by collective societies against users that have “offered to pay” the royalties due under a tariff has been expanded. Additionally, performing rights collectives are released from being required to file tariffs before the Board to be able to assert rights in their repertoires of musical works. This change ensures that all music collectives are able to freely negotiate and enter into private licensing agreements, and should ease the Board’s duties by reducing the number of tariffs filed.

Notice and Notice. Canada does not have a US-style “notice-and-takedown” system. Instead, we have a “notice-and-notice” system that requires ISPs to notify their customers of an infringement allegation by a copyright owner. The Budget Implementation Act (2018) also introduced a number of provisions to add content restrictions for notices rights holder send to allegedly infringing users under Canada’s notice and notice regime. Specifically, it is now prohibited for claimed infringement notices to include (a) offers to settle, (b) demands for payment or personal information, or (c) hyperlinks to externally hosted offers to settle or demands for payment or personal information. Additional prohibited content may later be set by regulation. These content restrictions have been crafted to address concerns related to rights holders’ use of the notice-and-notice regime to forward aggressive settlement payment demands to internet subscribers. It is unclear if sanctions may lie for violating the provisions.

(c) Copyright Act Review

In late 2017, the Federal Government initiated parliamentary review of the Act. The Industry, Technology and Science Standing Committee (“INDU”) has conducted the review, and the Canadian Heritage Standing Committee led a concurrent study on remuneration models for artists and creative industries. Both Committees heard from a range of different stakeholders. 

On June 3, 2019, INDU released its report on the statutory review of the Act, setting out 36 policy recommendations. Earlier, on May 15, 2019, Canadian Heritage released its report, Shifting Paradigms, setting out 22 policy recommendations. 

Many of INDU’s recommendations suggest that the Government conduct further consultations with stakeholders including provincial and territorial governments, indigenous groups, and the educational sector. Additionally, certain recommendations from INDU propose specific and substantive amendments to the Act. Some of INDU’s recommended changes include that the Federal Government:

• Consider making copyright registration a requirement to enforce copyright in a work during the additional 20 years to be provided by the planned extension of the general term of copyright from the life of the author plus 50 years to life plus 70
• Provide a non-assignable right to terminate an assignment of copyright 25 years after the date of assignment, subject to (i) registration of the copyright, (ii) five years notice of intent to exercise the right, and (iii) exercising the right within five years after it becomes available
• Amend the Act to provide that an exercise of the reversionary right under section 14(1) may not take effect earlier than 10 years after a notice of intent to exercise the right
• Consider implementing an artist’s resale right
• Update the rules governing first ownership and authorship of cinematographic works to better respond to different types of industries and productions, and maintain Canada’s competitiveness in a global market
• Provide clarity around ownership of computer-generated works (e.g. works created with the assistance of artificial intelligence (AI))
• Introduce an exception to copyright to facilitate the use of lawfully acquired copyright protected works and other subject matter for informational analysis
• Amend section 29 of the Act to provide that the list of allowable fair dealing purposes is illustrative, as opposed to exhaustive
• Provide regulations to standardize notices of claimed infringement under the notice-and-notice regime to be in a prescribed, machine readable format
• Update the maximum and minimum statutory damages awards provided under the Act, and provide a mechanism to periodically increase these amounts to reflect inflation

Shifting Paradigms addresses issues related to all creative industries, as well as issues specific to the music, film and television, writing and publishing, and visual arts industries. Canadian Heritage noted some themes that it observed in submissions from industry stakeholders, including an increasing ‘value gap’, the decline of the artistic middle class, the impacts of technology on creative industries, changes in consumer culture, and Indigenous perspectives on copyright law. In response to these issues, Canadian Heritage’s recommendations included that the Federal Government:

• Expand the reversionary right to provide authors with a reversionary interest “from 25 years after assignment”
• Provide moral and economic rights for audiovisual performers
• Amend section 34.1 of the Act to deem the screenwriters and directors as co-owners of copyright and co-authors for cinematographic works (including television works)
• Limit the scope of fair dealing for the purpose of education to only apply for educational institutions when the work at issue is not commercially available
• Improve the statutory damages for non-commercial infringement under section 38.1(1) of the Act, such as by increasing the maximum award available

Reforms, if any, will depend on the outcome of the upcoming federal election in October. Stay tuned for updates!

2 – CANADIAN COPYRIGHT CASELAW

In this section, we discuss recent cases from 2019 and 2018 dealing with the scope of copyright protection, core principles around ownership and authorship, assignments, infringement, limitation periods, and more.

(a) Scope of Copyright Protection

Facts and information

A recent Manitoba decision, Albo v The Winnipeg Free Press et al. (2019 MBQB 34), has once again clarified that copyright does not extend to facts and ideas, but only protects expressions. The decision reiterates 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 plaintiff, Dr. Frank Albo, had a prior working relationship with the defendant newspaper, the Winnipeg Free Press. The parties had collaborated on a series 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 (as the previous book had resulted in a loss for The Press). 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 coffee table book (the “New Book”), which made the project viable. The Press accepted the proposal and the New Book was published, and subsequently Dr. Albo suggested that he was not adequately compensated for his contributions. After some correspondence, 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 (as expressed in various public lectures, presentations, remarks/interviews), and that this was outside the scope of his consulting agreement with The Press.

The Court dismissed both claims. On review of the breach of contract claims, the Court found that the terms of the parties’ consulting agreement included (i) Dr. Albo would contribute his research to a project for a series of articles to be written by a Press staff writer, (ii) there was no plan to create a book from the articles, and hence there would be no royalties, and (iii) The Press would pay Dr. Albo a lump sum for his services, and highlight his involvement in the project. The Court assessed the objective intent of the parties and found that The Press had met their obligations to Dr. Albo under the consulting agreement. Although Dr. Albo claimed the agreement included an implied licence to use his research and related works, the Court was unable to find evidence in the agreement to support Dr. Albo’s claims. Moreover, the Court was unable to find that the New Book reproduced a substantial part of any of Dr. Albo’s fixed expressions. Although the New Book was based on a research foundation provided by Dr. Albo, the staff writer for The Press had consulted a number of other sources and developed a “narrative arc” that (by Dr. Albo’s own admission) was significantly different than anything prepared by Dr. Albo.

The Court observed that copyright protection does not extend to research of historical facts, but instead protects an author’s specific expressions of such information; although 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. Additionally, while Dr. Albo might have participated in certain discussions that gave rise to protectable elements of the New Book, such as the title, the evidence before the Court did not provide a sufficient basis for any conclusions on the authorship of those elements. The Court further held that certain mathematical calculations by Dr. Albo amounted to a “purely mechanical exercise” that did not meet the originality requirement under copyright law. Most substantively, however, the Court conducted a close comparison of Dr. Albo’s works and the New Book and concluded that they “do not share any features or combina
tion of features to support a conclusion that the [New] Book is even a non-literal copy of any material in which Dr. Albo can claim copyright.” Finally, in the alternative the Court considered whether the New Book could be a fair dealing with Dr. Albo’s copyright protectable works, and concluded that the various fairness factors weighed towards a finding that the New Book fairly dealt with Dr. Albo’s works.

Another recent decision, Evans v. Discovery Communications LLC (2018 FC 1153) is also a good reminder of the fundamental principle that “copyright law protects the expression of ideas in … works; it does not protect ideas in and of themselves.” In dismissing the action, the Federal Court found that Evans’ allegations of “non-literal copyright infringement” in the “scientific content” of the novel amounted to a claim that the defendant had copied Evans’ ideas. The Court observed that copyright does not generally subsist in ideas, factual information and data per se (although certain exceptions have been recognized with respect to data).

Similarly, a 2018 Ontario’s Small Claims Court decision confirmed that originality is not determined by the ‘sweat of the brow’ standard. Goldi Productions Ltd. et al v Adam Bunch (Court File No.: 15-5800 (August 1, 2018) highlights that copyright subsists in original works that are the product of an author’s skill and judgment, and not merely their efforts at fact-finding. The plaintiff brought a copyright infringement claim for the use of the “entire story” of a historical figure they had researched, as well as related historic photographs uncovered during research and then digitized. The plaintiff’s “Canadian Anglo Boer War Museum” website detailed information about J. Cooper Mason, a Canadian alleged to be the first combat photographer. The plaintiff had conducted extensive research, including contacting Mr. Mason’s descendants, and prepared an account of Mr. Mason’s story. The defendant subsequently wrote an article titled “J. Cooper Mason and the Great Boer War”, which cited its sources (including the plaintiff and their website) and reproduced factual information set out on the website and Mr. Mason’s photographs. The Ontario Small Claims Court quickly dismissed the plaintiff’s claim for copyright in the “entire story” of Mr. Mason, noting that “copyright protection does not extend to facts or ideas” and so “the claim of the plaintiff in regards to copyright in the facts of the story must fail.”

Photo restorations

Goldi also provides insight into the limitations on copyright extending to the digitization of historical photos. The plaintiff had used Mr. Mason’s photographs and “enhanced” them to include on the museum website. The plaintiff gave evidence that he (1) sourced the photos from Mr. Mason’s descendants, (2) photographed the original photos, and (3) put the resulting images through a computer program to “enhance” them. Notwithstanding that the author of the photos, Mr. Mason, had died in 1923, the plaintiff claimed copyright protection in the final images as a result of his work to “enhance” the original photographs. The Court referred to the Supreme Court of Canada (“SCC”)’s decision in CCH Canadian Ltd. v. Law Society of Upper Canada (2004 SCC 13), which stated that for a work to be protected by copyright it must be “original”, and for a work to be original it “must be the product of an author’s exercise of skill and judgment … [that] must not be so trivial that it could be characterized as a purely mechanical exercise.” In this case, the Court found that the plaintiff’s process of photographing and “enhancing” Mr. Mason’s photos amounted to a purely mechanical process that did not meet the standard for originality. The time and effort involved in uncovering the historical photos (in which copyright had lapsed) did not alone give rise to copyright. The Court found that the process of photographing the photos and running the images through an enhancement program likewise amounted to a purely mechanical process as described in CCH.

The Court in Goldi observed judicial precedent for copyright in photographs more generally, noting that originality is recognized by the choice, arrangement and placement of the subject, the choice of the angle of view and lighting, and artistic work and the personal effort of the photographer. Various elements of photography may give rise to sufficient originality for copyright, and, depending on how a photographer were to retouch and “enhance” a historical photograph, arguably such augmentations could give rise to a separate layer of copyright protection in the “remastered” or “restored” image. In Goldi, although the images had been “enhanced” via a computer program (suggesting the original photos were retouched, colour corrected, or otherwise restored or altered), the plaintiff’s role in exercise was not clear from the decision. The Court’s reasons suggested that this process was entirely automated and did not involve the plaintiff’s skill and judgment. Notwithstanding the decision in Goldi, the door remains open to argue there is a separate layer of copyright in restored works if skill and judgment was involved in restoring or altering original photos.

Databases

In Canada, copyright may subsist in original databases. For a database to be original, there must be skill and judgment exercised in the selection or arrangement of data. However, proving electronic databases are original may be challenging following the SCC denying leave in Toronto Real Estate Board v Commissioner of Competition (2018, S.C.C.A. No. 24, denying leave to appeal from 2017 FCA 236). As Bereskin & Parr reported in 2017, the Federal Court of Appeal (“FCA”) denied that copyright subsisted in TREB’s Multiple Listing Service® database, finding that there was insufficient skill and judgment to give rise to it being an original compilation. The Court was reviewing a 2016 decision by the Competition Tribunal, which found that the MLS® database amounted to a collection of factual information, assembled by REALTOR® agents and entered into the database in a mechanical fashion. On review, the FCA noted that the Tribunal had not applied the correct test for originality from CCH Canadian Ltd. v. Law Society of Upper Canada (2004 SCC 13), but the error was found to be of no consequence. The FCA reached the same result after applying the appropriate test, noting “the process of data entry and its ‘almost instantaneous’ appearance in the database.” The FCA’s decision, and the SCC’s denial of leave, may be held in future to be fact specific, and distinguishable based on evidence tendered.

Benefits of registration

In P.S. Knight Co. Ltd. v Canadian Standards Association (2018 FCA 222), the FCA included some interesting comments about the evidentiary value of copyright registrations. At an earlier stage in the proceeding, the Federal Court had rejected reliance on a certificate of copyright registration from the Canadian Intellectual Property Office, noting that the Canadian Standards Association (“CSA”) had secured a copyright registration three days after the commencement of the legal action against Knight Co., and so the Court discounted the presumption of copyright ownership under section 34.1(2)(a) of the Act. On review, however, the FCA noted that CSA had previously secured copyright registration for a prior version of the Code, and so held that the timing of the registration of the version of the Code at issue before the Court was “done in the ordinary course of business”. This finding by the FCA underscores the importance of registering copyright in important business assets such as the Code, and the evidentiary value of copyright registration certificates.

(b) Ownership Principles

 Ownership vs authorship

Unlike the USA, Canada has no work-made-for-hire doctrine, and so an assignment is required for any works created outside the course of employment – including logos. Contractors in Canada are both the authors and first owners of copyright in works they prepare for their clients, absent a written agreement to the contrary. This aspect of Canadian copyright law was a turning point for the infringement claim before the Federal Court in Milano Pizza Ltd. v. 6034799 Canada Inc. (2018 FC 1112). In a complex dispute between various family members relating to a pizza business in the Ottawa area, one of the plaintiff’s claims was that the defendants had infringed copyright in the pizza business logo. The plaintiff and the defendants led contradictory evidence as to process and timing of the creation of the logo, but all agreed that it had been prepared by an independent graphic designer. The individual proprietor behind the plaintiff corporation maintained that they were responsible for the idea behind the logo design, but the Court observed that copyright protection does not extend to ideas. Further, even if the Court had found the individual proprietor to be the author of the logo by virtue of preparing the idea, they were nevertheless unable to demonstrate any evidence that they had been assigned rights in the logo to the plaintiff corporate entity. Hence, the Court held that the plaintiff corporate entity was unable to demonstrate authorship or ownership of the logo.

Assignments, misrepresentations and an experience as consideration

One matter in 2018 involved fundamental questions about the meeting of the minds and consideration involved in an assignment of copyright between two parties. In Glasz c. Choko (2018 QCCS 5020), two documentary filmmakers brought an action to set aside an alleged copyright assignment to the defendant in footage they had shot. The defendant claimed to be the producer and rightful owner of copyright in the footage. On review, the Superior Court of Quebec found that, although the plaintiffs had intended to assign their copyright, this intention had been premised on a misrepresentation by the defendant, rendering the assignment null and void.

The defendant, Alexandre Choko, sought the plaintiffs’ services to film an event at which boxer Mike Tyson would speak about his career. Instead of payment for their services, the plaintiffs were to be entitled to use the footage in a documentary on Mr. Tyson. The defendant indicated that they had a close relationship with Mr. Tyson’s wife, and promised to secure permission for the plaintiffs to use the footage in their documentary. The defendant claimed that Mrs. Tyson “was very protective of her husband’s image” and required that the plaintiffs’ footage be owned by the defendant, and the plaintiffs reluctantly agreed to this term via email in September of 2014. Ultimately the relationship between the parties broke down, and the plaintiff initiated the action and claimed the defendant had breached their agreement to use best efforts to secure permission to use Mr. Tyson’s likeness.

The Court examined the parties’ intention at the time of the September 2014 email assignment. The plaintiffs had agreed to the assignment on the understanding that it was required by Mrs. Tyson, and at trial the defendant acknowledged that this was not the case. The Court found that the defendant’s misrepresentation vitiated the plaintiff’s consent to an essential element of consideration for the assignment, and held that the assignment was null and void.

Further, the Court held that even if the assignment had been valid, “there was no consideration given by Defendant for the transfer of ownership, [and so] the assignment could be withdrawn or revoked at any time.” The defendant had argued that the “experience” of meeting Mr. Tyson in Toronto amounted to consideration for the transfer of ownership, but the Court rejected this argument, stating that “every creative work can arguably be said to involve an experience, such that, there would never be a need to remunerate the author for the assignment of copyright in his work.” The finding that an “experience” does not amount to sufficient consideration could have curious impacts in other areas, such as publicity and/or privacy releases by audience members. Though it appears likely that the facts of this matter are sufficiently specific as to narrow the impact to the decision. 

Crown copyright

On June 21, 2018, the SCC granted leave to appeal in Keatley Surveying Ltd. v. Teranet Inc. (2017 ONCA 748), a proposed class action, which raises issues of Crown Copyright under section 12 of the Act, and the term of copyright for works “prepared or published by or under the direction or control of government”. Keatley, involves a long running copyright dispute between Ontario land surveyors and Teranet, a private company that manages Ontario’s electronic land registry system as a service provider to the Government. Teranet provided copies of surveys to the public upon payment of a fee, without paying any royalties to the land surveyors who prepared those surveys. The system is governed by legislation, which prescribed the fee levied by Teranet. The plaintiff brought a class action on behalf of 350 land surveyors, alleging that Teranet infringed the surveyors’ copyright, and unlawfully appropriated the benefit of the surveyor’s work.

Both the Ontario Court of Appeal (“ONCA”) and the trial court denied class proceedings. In 2016, the Ontario Superior Court concluded that surveys registered and deposited with the Ontario Land Registry System became the property of the province, but that section 12 of the Act did not in-and-of-itself provide the Government copyright ownership. Rather, certain provisions of other provincial statutes dictated that the province attained copyright, and so the land surveyors were not entitled to a class action. In 2017, the ONCA upheld the trial decision, but found that section 12 of the Act alone brought the surveys under provincial ownership and control. Surveys registered and deposited with the Ontario Land Registry System were then digitized and reproduced, which was held to constitute “publication” within section 12.

The Keatley case has been a source of curiosity for Canadian intellectual property scholars since it began in 2016, and it has been featured in Bereskin & Parr’s Copyright Reviews for both 2016 and 2017. The SCC heard an appeal in matter on March 2
9, and so we will be keeping an