An Update on Copyright, Industrial Designs and Breach of Confidence Developments in 2025

The past year has brought a wave of developments in copyright, industrial design, and breach of confidence law, driven in part by the rapid evolution of generative AI and shifting regulatory landscapes. This update highlights notable decisions, legislative trends, and policy shifts shaping this environment in 2025.

Generative Artificial Intelligence

The US Copyright Office released a Report on Copyright and Artificial Intelligence Part 3: Generative AI Training in a prepublication version which addresses the use of copyrighted works in the development of generative AI systems.

The release of the report seems to have been driven by political considerations. On May 8, 2025, the Librarian of Congress in the US, who oversees the US copyright Office, was fired by President Donald Trump. On May 9, 2025, the Copyright Office took the unusual step of releasing the report on a “pre-publication basis”.

The report provides a useful technical background describing how and why copyrighted works are used in the development of generative AI models. The report also deals with the US concept of fair use. The report emphasizes that whether a fair use defence would be available depends on the specific facts of each case. This approach may favour copyright owners.

Legislative Approach

The US approach seems to be a more decentralized, sector-specific, and state-level approach allowing different industries and jurisdictions to develop guidelines suited to their needs. Individual states have also developed their own AI regulations. 

The EU has taken a different approach. In April 2012 the European Commission proposed the first EU AI law which led to the Artificial Intelligence Act. The Act adopts a risk based approach with treatment depending on the risk level. The approach emphasizes ethical AI, transparency and accountability.

It remains to be seen what approach the Canadian Government will take.

Subsistence of Copyright

Section 5 of the Copyright Act sets out clear conditions for the subsistence of copyright. The first condition is that the author was, at the date of making the work, a citizen or subject of, or a person ordinarily resident in, a treaty country. “treaty country” is defined as meaning a Berne Convention country, UCC country, WCT country or WTO Member.  The definition is broad but there are still countries that are outside the definition.  In Gold line Telemanagement Inc. v. Ereele GMBH  2025 FC 904 the defendant did not prove the conditions of subsection 5(1) of the Act existed for cinematographic works apparently created in Iran, which is not a treaty country.

Obtaining a copyright registration is frequently advantageous. In addition to potential impact on remedies in the courts, a copyright owner has the right to exercise takedown rights on public websites as a result of contractual takedown policies implemented by the operators of such sites. The policies are specific to each website but there are commonalities. They often meet the US Digital Millenium Copyright Act requirements and require a registration.

Presumptions

In any proceeding for infringement of copyright, if the defendant puts in issue the existence of copyright or the plaintiff's title thereto, copyright shall be presumed, unless the contrary is proved, to subsist in the work, performer's performance, sound recording or communication signal. The presumption does not apply on a motion seeking a Norwich order where the information is sought regarding unknown potential defendants as no defendant puts in issue the existence or title of the copyright. Similar considerations apply to the presumption relating to the name of the maker Hellboy Productions, Inc. v. Doe#1 2025 FC 1766 

Works Made in the Course of Employment

Subsection 13(3) of the Act states that an employer will be the first owner of the copyright of a work created by an employee in the course of their employment. Because the subsection generally only applies if the author is an employee and not a freelancer or independent contractor, a determination of whether the employer owns the copyright must be made.  The relationship between the parties must be analysed to determine if the author is an independent contractor or under the control of whoever is paying him or her.

In Nexus v. Krougly 2025 ONSC 1346 the court applied the “Integration test” to make the determination. Under a contract of service, a person is employed as part of the business, and his or her work is done as an integral part of the business; under a contract for services, the work, although done for the business, is not integrated into it, but is only accessory to it. 

Statutory Damages 

The Federal Court of Appeal has confirmed that statutory damages can be awarded even if no monetary damages are suffered by the copyright holder and no business is lost. 2424508 0ntario Ltd v. Rallysport Direct LLC 2022 FCA 24. However, where actual damages can be quantified, they are a relevant factor in the analysis.  Similar considerations apply to the defendant’s earnings or profits. Yelda Haber Ve Görsel Yayincilik A.S. v. GLWiZ Inc. 2025 FC 1107  

Bad faith in this context refers to conduct that is contrary to community standards of honesty, reasonableness or fairness. What is bad faith is contextual and may include: (i) ignoring a cease-and-desist letter, (ii) repeatedly infringing different products, (iii) scraping or copying photos directly from a website, (iv) ignoring offers not to litigate if they stop infringement, and (v) using a false name to avoid being detected. Yelda Haber Ve Görsel Yayincilik A.S. v. GLWiZ Inc. 2025 FC 1107

If a copyright owner has made an election for an award of statutory damages and the defendant satisfies the court that the defendant was not aware and had no reasonable grounds to believe that the defendant had infringed copyright, the court may reduce the amount of the award to less than $500, but not less than $200 for each work. A defendant cannot rely on this reduction where they have received information that their activities could be copyright infringement and still carry on with their activities. Yelda Haber Ve Görsel Yayincilik A.S. v. GLWiZ Inc. 2025 FC 1107

Similar Fact Evidence 

In Yelda Haber Ve Görsel Yayincilik A.S. v. GLWiZ Inc. 2025 FC 1107 the court reviewed the admissibility of similar fact evidence. 

The Failure to Timely Disclose of a Settlement with Co-defendants

In Peninsula Employment v. Castillo 2025 ONSC 1121 the plaintiff failed to disclose that it settled its claims with co-defendants resulting in an order permanently staying the action.

The Online Streaming Act

In Broadcasting Regulatory Policy CRTC 2025-299, the CTRC has provided a new definition of “Canadian program” and certification framework for Canadian programs, artificial intelligence, data collection and publication, and reporting requirements.

The Copyright Board

Scope of a Redetermination When Ordered by the Federal Court of Appeal

If after an application for judicial review of a decision of the Copyright Board, a redetermination is ordered, the scope of the Board’s decision on the redetermination is constrained by the decision of the Court and the focus should be on the decision to determine which parts of the original Board determination can be revisited in the redetermination. Aside from the court’s decision concerning the redetermination, the Board’s power to change its original decision is essentially limited to (i) slips in drawing up the formal judgment and errors in expressing the Board’s manifest intention; and (ii) material changes in circumstances since the original decision under section 66.52 of the Copyright Act. Copyright Collective of Canada v. Bell Canada 2025 FCA 92. Application for leave to appeal to the Supreme Court of Canada filed (SCC #41926)

Levies on Blank Audio Recording Media 2025-2027

On November 7, 2025, in CPCC -Private Copying Tariff (2025-2027), 2025 CB 18 the Copyright Board released its decision concerning proposed levies to be collected in 2025-2027 on the sale of blank audio recording media. The Board concluded that the evidence, while not strong, supported the conclusion that blank CDs will be “ordinarily used” to copy music in 2025, 2026 and 2027 and that a levy of $0.29 was appropriate during these years.

Scope of Judicial Review 

In Re Sound v. Pandora Media, LLC 2025 FCA 201 the Federal Court of Appeal confirmed that the Copyright Board in the context of an application seeking judicial review is given “considerable leeway” in deciding the quantum of equitable payment. The decision is complex and multifaceted and is relatively unconstrained. 

Industrial DesignsReinstating Expired Industrial Design Registrations

In Poseidon v. Canada (Commissioner of Patents) 2025 FC 225 the applicant sought to reinstate two industrial design registrations in Canada that expired due to unpaid maintenance fees. The applicant claimed that attempts to pay fees were prevented by the Canadian Intellectual Property Office's (CIPO) online payment system. The Judge confirmed that the Court has jurisdiction to rectify an entry in the Register of Industrial Designs made "without sufficient cause" if there is material new evidence that is "sufficiently substantial and significant" and "of probative value". 

The application was dismissed since failing to pay the maintenance fees arose from human error by the applicant’s agents, and not due to a failure of CIPO's processes or systems. Further the Court has no jurisdiction to retroactively grant registration to designs that, by the operation of the statutory provisions, have expired. 

Application for One Design Only

Since the definition of a design under the Industrial Design Act refers to a singular “design” and “article”, a registered design must be limited to one design applied to a single finished article or set, or to variants applied to a single finished article or set. Safestand Limited v. Weston Homes PLC [2025] EWCA Civ 374 (U.K.C.A.)

Modular Products

In Safestand Limited v. Weston Homes PLC [2025] EWCA Civ 374 (U.K.C.A.) it was agreed it was possible to register a design for a modular product if it was the design for a single product. It remains to be seen whether such a modular design would be considered a “kit” under the Canadian Act.

Breach of Confidence 

Limitation Defences

When there are multiple claims of breach of confidence, each claim may be a separate cause of action, particularly if the claim is raised by an amendment to the statement of claim. The limitation period relating to each claim may be different.

In Total Meter Services Inc. v. GVM Integration, 2025 ONCA 321 the Ontario Court of Appeal considered whether the trial Judge erred in failing to consider the appellants’ Limitations Act defence. They concluded there was a valid limitation defence.

A limitation defence will apply to a cause of action asserted after the expiry of the applicable limitation period. In this context, “cause of action” refers to “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”, rather than the legal label attached to a claim (such as “breach of confidence or fiduciary duty”). In considering whether an amendment raises a new cause of action, the court must consider whether the original pleading already contains the factual matrix – the acts or omissions said to give rise to liability – to support the claim in the proposed amendment, or whether the proposed amendment seeks to put forward additional facts that are necessary to a new and different claim.

If you have questions, please contact me at jmckeown@Ln.Law

John McKeown

Loopstra Nixon LLP.  

130 Adelaide St W Suite 2800Toronto, Ontario, M5H 3P5Canada

jmckeown@Ln.Law

416-746-4710

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances.