Blacklock’s Reporter v AG Canada Wraps Up
The trial in Blacklock’s Reporter v Attorney-General Canada ended today with the parties’ closing arguments.
Justice Barnes opened the day inviting the parties to make submissions focusing on the legal implications of what happened between the parties.
Plaintiff’s counsel opened argument with a brief review of the documentary evidence, and suggested that there were four issues: (1) infringement, (2) fair dealing, (3) copyright misuse, and (4) damages.
1. Infringement. Plaintiff argued that there is a prima facie infringement. The question is what is to be made of Finance’s receipt of Blacklock’s content, and the use made of the content. Justice Barnes asked whether the receipt of the email was actionable. Counsel responded that there is “no harm and no foul” in the receipt and reading of an email. Justice Barnes clarified that “there is a right to read.” Counsel agreed that there is a right to read, but once you do something with that content – including forwarding the email to others, even for research purposes – then liability attaches. The use – forwarding the email to colleagues within Finance – counsel characterized as “distribution”.
Counsel moved on to the issue of further distribution within the department, which he said violated s. 3(1) rights.
2. Fair Dealing. Counsel noted that the evidence shows that Finance doesn’t have a policy for dealing with third party content for which Finance has no license. Counsel suggested that CCH establishes that dealings in accordance with a policy can be fair, and the absence of a policy suggests that sharing is a prohibited use. Counsel noted that the onus rests on the person trying to establish a fair dealing defense to make its case. Citing CCH, counsel observed that the defendant must make first that the dealing is for an allowable purpose, and second whether the dealing was fair. Defendant has to show that either each individual downstream user’s infringing dealing was fair, or were undertaken in accordance with a practice that is fair. Justice Barnes suggested that the government’s media monitoring departments do engage in mass distribution for informational purposes, and would have policies, but for one-off person-to-person sharing for informational purposes, fair dealing seems to cover the activity. Justice Barnes observed that this kind of sharing happens all the time, every day. Justice Barnes observed that he received such emails all the time, and if he had to check with the legal department every time he got such an email, he wouldn’t get much work done. Counsel replied that the department needs a policy to guide it on how to lawfully deal with such content. In the absence of a policy, each infringing action has to be assessed for fairness.
Justice Barnes asked whether plaintiff would concede that everything done downstream of the internal Finance distribution was fair dealing. Counsel responded no, such dealings were not “research” or any other allowable purpose under the Act. Distributing content is not “research”. Justice Barnes suggested that someone doing researching sending content to another also doing research is still research. Counsel disagreed, characterizing the distribution otherwise: sending information on an “FYI” basis was not research. “Being informed” is not research. “Distribution is not research.” Mr. Justice Barnes replied, “I have a lot of trouble with that.”
Counsel concluded his submissions on fair dealing purposes by suggesting that the Charter could be used as an interpretive tool to interpret “research” in a way that would not discourage the publication of expressive journalistic enterprises such as Blacklock’s. Counsel suggested that if a fair dealing right to research includes the right to procure content distributed through a paywall, that will have a “chilling effect” on journalistic enterprise. This is particularly true in cases involving the government, who has an obligation not to go too far not to chill speech. Counsel suggested that this is a slippery slope:
With respect to fairness, plaintiff’s counsel focused on the character of the dealing. Counsel said that the scope of dissemination was not “limited”, as argued by the defendant, but significant given that the source was a paywalled site. Justice Barnes protested that the content had been obtained from a third party, who legitimately had access to the content, and individuals within the department had a legitimate and pressing interest in its content. Counsel replied she could have no interest in al “illegitimate” copy obtained otherwise than through the paywall. Justice Barnes gently reminded counsel that it was the court’s task to determine whether or not the copy was legitimate, having regard to the fair dealing test and all its applicable factors. Justice Barnes distinguished between a mass internal email and the business issue being discussed by the small number of people on the distribution list in this case. The purposes of mass distribution differ from the research purposes of the 5-6 individuals in the Finance Department. Counsel suggested that uncertainty over the scope of distribution goes to fairness. Justice Barnes reminded counsel that it is the plaintiff’s burden to prove infringement, relying on discovery, interrogatories, and motions to ascertain the scope of the distribution. Counsel replied that ATI only goes so far, and there is a gap in the evidence. Justice Barnes was having none of that, referring again to the tools of the court: “There is nowhere to hide.” You just have to ask the questions.
Counsel moved on to discuss alternatives to the dealing. Counsel characterized the dealing as “media monitoring”. Government media monitoring services ought to be paid for. Mr. Halley, the first recipient of the article in Finance, had the alternative to direct his colleagues to the website, where they could have obtained paid individual subscriptions to the content. Justice Barnes repeatedly came back to the exchange between Finance and Blacklock’s – Blacklock’s statement that the Department had “no comment” when the evidence showed that it had provided a comment, Blacklock’s characterization of Finance’s tariff dealings as “a mistake”, and Blacklock’s tweet that the Department “Lucy and Ethel” (a reference to the venerable sitcom, “I Love Lucy”). Justice Barnes stated that his job was to decide whether, in this context, the defendant’s conduct was reasonable. Counsel replied that the defendant never came back to Blacklock’s to address this context. Justice Barnes reminded counsel that Blacklock’s testified that it never corrects original content, but writes a new story, so there was no point in going back to Blacklock’s. The problematic article would stay online.
3. Copyright Misuse. Counsel reviewed the defendant’s misuse defense, which amounted to (a) writing misleading or erroneous articles with the expectation that they would be shared internally, (b) filing ATI requests to find evidence of such sharing, and (c) alleging copyright infringement and demanding excessive payment for such sharing. Justice Barnes expressed some concern over the evidence he heard about other cases, and he had some concern about those practices, but was unsure whether he had enough evidence to undertake such an analysis. Counsel agreed, saying his client has a right to pursue copyright protection. Second, counsel defended Blacklock’s use of ATI, characterizing ATI as a fundamental right that attempts to chill the plaintiff in bringing cases to court and in seeking statutory damages. Justice Barnes observed that patent trolls usually take assignments, but don’t produce anything, which is not the case here.
4. Damages. Counsel emphasized the Court’s discretion under s. 35 to award statutory damages that are just. Counsel argued that the value of existing institutional agreements with government departments provided an accurate measure of damages. Counsel suggested that there is a link between the license that was not procured in this case and the potential for a 500-800 person license. Justice Barnes protested that what happened here was a “2-off: 2 licenses, limited distribution”. Justice Barnes stated that the measure of damages asks “what have we lost?” In this case, he asked, isn’t that just six licenses? Counsel replied that this organization has media monitoring capacity, and that is what the defendant has undertaken in respect of these articles. Accordingly, it ought to have secured a media monitoring license. The defendant ought not to have been put in a better position than it would have occupied had it acted properly and obtained an appropriate subscription. These agreements provide a reasonable basis for an award of statutory damages. Counsel went on to suggest that Blacklock’s union subscription model permits some sharing but is not a media monitoring scenario, which might offer an alternate model. Finally, counsel pointed to Blacklock’s “rate card” as an appropriate model for a damages award. Justice Barnes was troubled by the evidence that the only time “anyone” paid a subscription fee as high as Blacklock’s requests was in the face of an allegation of copyright infringement. Counsel referred to his plaintiff’s paywall, which is the heart of its business model, and the problems with people accessing content outside of the paywall. Justice Barnes responded that that the defendants in this case did not breach the paywall, and suggested this case was all about fair dealing. “People are entitled to deal fairly with copyrighted material.” Justice Barnes confessed to skepticism about whether the kind of dealing he was faced with in this case had the catastrophic effect counsel suggested. This was not a case of “widespread indiscriminate use” – stolen passwords, mass emails, etc.
The Attroney-General's counsel suggested the same issues.
1. Copyright Misuse. Defendant’s counsel suggested that the issue of consent bound the defenses together: his theory of the case suggests that Blacklock’s intends for government agencies to wish to procure its content outside of its paywall, so that it can follow up with an ATI and demand for a settlement. Justice Barnes expressed his reservations that he did not have nearly enough information in these other cases to come to the conclusion the defendant suggests. Counsel acknowledged that concern, but suggested that Justice Barnes keep an open mind after considering all of the evidence.
Moving on to the values demanded, Justice Barnes suggested this wasn’t very much. Counsel responded that there were over $600,000 in demands before the courts, and the he speculated that Blacklock’s was playing the “long game”: getting one judgement to encourage all of the others to settle. Justice Barnes questioned whether this was a good case for Blacklock’s to seek a precedent on – and wasn’t there a small claims decision? – to which counsel replied that this case was filed first, and the others had been stayed pending the outcome of this case. Defendant then made an interesting observation: Blacklock’s consistently filed ATI requests approximately 9 months after institutional users obtained single-use subscriptions. Counsel argued that this showed a deliberate strategy: Blacklock’s observes a suspected institutional user, allows 9 months to pass then uses ATI to identify institutional use of the subscription, and follows that with an aggressive demand. Justice Barnes agreed this was an “aggressive strategy”, but asked how a decision on misuse in this case could say anything about the other cases. Counsel replied that the evidence in the other cases would be the same.
Justice Barnes asked if he had to make a finding that Blacklock’s had deliberately misrepresented the content of the article to make a finding of misuse? Counsel suggested that he did, but that there was more than enough on the record to allow the court to conclude that Blacklock’s used its article to “bait” the government. Counsel suggested that “spin was one thing, but deliberate misrepresentation was another.”
The legal underpinning for misuse is the Euro-Excellence case. The Supreme Court said that misuse is an effort to extend copyright beyond its proper bounds to violate copyright law or the public policy underlying copyright law. The Court relied on Katherine Judge’s seminal argument which described misuse as extending copyright beyond its proper bounds. Counsel relied upon a number of cases, texts and authors to support the proposition that Blacklock’s conduct as tendered in evidence could support a misuse defense.
2. Infringement. On the question of infringement, counsel suggested that there was no evidence that anyone reading an email is making a copy. Justice Barnes replied that he was “not excited to go there!” Counsel went on to argue that s. 27(1) requires that plaintiff to prove that there is no consent to an otherwise infringing use of content. Counsel argued that Blacklock’s article, about the Finance Department, was written with the intent that individuals implicated would obtain and read the article. Consent to their use of the content is implied.
Counsel argued that merely receiving and reading an email implicates no infringing act on the recipient’s part. However, counsel acknowledged that forwarding an email involved reproducing the content.
On the fairness factors, counsel suggested that the character of the dealing was fair: 2 articles, small distribution group, colleagues involved with working with one another on an issue. With respect to the amount of the dealing, while the entire articles were implicated, the case law (CCH) supports such use. Counsel took issue with Blacklock’s argument that taking a subscription is an alternative to the dealing. CCH says that the availability of a license is irrelevant. Counsel moved on to addressing the need for robust debate on matters of public interest. One must have the right to copy a work to review and criticize it, and to respond. Relying on Torstar, counsel argued that if we can tolerate that someone may be defamed by a responsible journalist in the pursuit of truth, surely copyright protected content can be copied in service of the pursuit of truth. Surely the government has to have the ability to respond. Finally, with respect to the effect on the wok, counsel argued that there was no effect whatsoever on Blacklock’s.
Counsel offered, as a general proposition, if an article is written about you, you have an interest in review that article and reproducing it for the purposes of research. This is not a floodgates argument. It only applies to the person that is the subject of the article.
4. Damages. Counsel offered two essential points: (1) given the scope of reproductions, amounts should be nominal; and (2) even an annual subscription for each infringing action would grossly overcompensate the plaintiff.
Justice Barnes asked, why isn’t an annual subscription the proper measure of damages? Counsel responded that a subscription provides a year’s worth of articles, when what was obtained was a pair of articles. Justice Barnes asked, why isn’t a subscription the proper measure of what Blacklock’s is out of pocket? Counsel responded by looking at annual licenses for other organizations. Justice Barnes protested that it was impossible to say what “would have happened”. Counsel responded by saying it would be helpful to go to “first principles”, and cited Professor Vaver’s discussion of trivial copying and the lack of infringement in such cases. Counsel then turned to the potential of the finding of a nominal license fee would be a possibility.
The plaintiff offered no reply argument.
Justice Barnes thanked counsel for an interesting case and their mutually respectful approaches, and reserved judgement.