Recent Copyright Developments

In this blog entry we deal with copyright developments in the last few months.

Online News Act

After the completion of a public consultation the CRTC has established the mandatory bargaining framework under the Online News Act to apply when major online platforms and eligible Canadian news organizations work toward an agreement. 

After another consultation the CRTC also approved Google’s exemption application. Google is to contribute $100 million to Canadian news organizations through the Canadian Journalism Collective, who will distribute the funds equitably to eligible Canadian news organizations.

In it's Broadcasting Policy decision CRTC 2024-121-1 the CRTC dealt with the base contributions that specific online streaming services must make to support Canadian and Indigenous content. On August 29, 2024, the CRTC implemented the decisions that were established in the Policy. The requirement to make base contributions started during the 2024-2025 broadcast year, which began on 1 September 2024. Specific orders were issued by the CRTC requiring some operators of an online undertaking providing audio-visual service and audio services to devote not less than 5% of its annual contributions revenues (as defined in the orders) to certain specified funds. 

Amazon, Apple, Spotify and the Motion Picture Association -Canada and others have each applied for judicial review and have also been granted leave to appeal the Policy and the related orders. The Federal Court of Appeal has granted a stay of the orders until the court renders its decision in relation to the applications for judicial review and the appeals related to the Policy. The parties have agreed to an expedited and streamlined schedule to make sure the judicial reviews and appeals move forward together efficiently leading to a June 2025 hearing date. Amazon.com.ca ULC v. Attorney General of Canada 2024 FCA 217

An Act to Amend the Copyright Act (diagnosis, maintenance and repair) and An Act to amend the Copyright Act (interoperability)

Both Acts were assented to on November 7, 2024.  The first Act, S.C. 2024, c. 26 amends the Act to allow the circumvention of a technological protection measure if the circumvention is solely for the purpose of the diagnosis, maintenance or repair of certain types of products. The second Act, S.C. 2024, c. 27 amends the Act to allow a person, in certain circumstances, to circumvent a technological protection measure to make a computer program or a device, in which it is embedded, interoperable with any other computer program, device or component.

Effective November 7, 2024, the exception concerning interoperability has been expanded. The prohibitions of paragraph 41.1(1)(a) do not apply to a person who circumvents a technological protection measure that protects a lawfully obtained computer program for the purpose of

(a) obtaining information that would allow the person to make the program or a device in which it is embedded interoperable with any other computer program, device or component; or

(b) making the program or a device in which it is embedded interoperable with any other computer program, device or component.

The balance of the amended section has been amended to be consistent with the above.

Effective November 7, 2024, a new exception has been added to the Act concerning maintenance and repair. The prohibitions of paragraph 41.1(1)(a) do not apply to a person who circumvents a technological protection measure for the sole purpose of maintaining or repairing a product, including any related diagnosing, if the work, performer’s performance fixed in a sound recording or sound recording to which the technological protection measure controls access forms a part of the product. The exception extends to a person who circumvents a technological protection measure in the circumstances referred to above for another person. The definitions of “circumvent” and “technological protection measure “have been amended to include an explicit reference to a “computer program”.

The Mentmore Decision Revisited

In Lifestyle Equities CV v Ahmed [2024] UKSC 17. the UK Supreme Court considered the personal liability of directors of a corporation. First, they observed that the Mentmore decision has widely influenced the approach taken in Commonwealth jurisdictions, including England and Wales, concerning the liability of directors for torts committed by companies. However, the court said that liability should be decided by applying ordinary principles of the law of tort.

Despite their disagreement, the court shared the underlying sentiment it was unjust to hold a director personally liable for acts done in the ordinary course of performing the director's role which cause the company to commit a tort, if the director has not acted wilfully or knowingly. This was not because of any special feature of the role of a company director. It was on the broader principle that it seems unjust that anyone whose act causes another person to commit a tort should be held jointly liable for the tort as an accessory if the individual was acting in good faith and without knowledge of facts which made the act of the other person tortious. 

The relevant principles are as follows. First, there is a general principle of the common law that a person who knowingly procures another person to commit an actionable wrong will be jointly liable with that other person for the wrong committed. The liability of the procurer is an accessory liability. Where the primary wrong is a breach of contract, this accessory liability is a distinct tort. Where the primary wrong is a tort, there is no need to posit a separate tort of procuring another person to commit a tort. Where the general principle applies, the procurer is made jointly liable for the tort committed by the primary wrongdoer. 

Second, there is a further, distinct principle of accessory liability by which a person who assists another to commit a tort is made jointly liable for the tort committed by that person if the assistance is more than trivial and is given under a common design between the parties. On the facts of a particular case both principles may be engaged. But on the present state of the law, assistance which falls short of procuring the primary wrongdoer to commit the tort cannot lead to liability unless it is given under a common design.

Third, although procuring a tort and assisting another to commit a tort under a common design are distinct bases for imposing accessory liability, they must operate consistently with each other and such that the law of accessory liability in tort is coherent. Considerations of principle, authority and analogy with principles of accessory liability in other areas of private law all support the conclusion that knowledge of the essential features of the tort is necessary to justify imposing joint liability on someone who has not actually committed the tort. This is so even where, as in infringement of intellectual property rights, the tort does not itself require this knowledge. Strict liability may apply to the primary tort but is not enough for accessory liability. It remains to be seen whether the above approach will be followed by Canadian courts. 

Norwich Orders

The plaintiffs sought a Norwich order in relation to two simplified actions launched by it against unidentified consumers who bought and installed smart thermostats in their homes, which, the plaintiff claims, infringe certain patents they own. The plaintiffs allege that over 75 brands and models of smart thermostats, made by Canadian (Federal Court file T-1147-23) and foreign (Federal Court file T-1148-23) manufacturers, infringe their patents.

If granted, the requested Norwich order would have forced Apple Inc. and Apple Canada Inc. (Apple), which are non-party respondents to the motion, to disclose the names and addresses of consumers who downloaded the app from the App Store that allegedly controls these devices. The plaintiffs estimate that there are hundreds of thousands of these consumers.

The Motion Judge dismissed the motion because the plaintiffs had not shown that they have a bona fide claim against the unknown consumer defendants. As well, he was satisfied that the public interest did not favour granting the motion.

An appeal to the Federal Court of Appeal was dismissed. Seismotech IP Holdings Inc. Ecobee Technologies ULC 2024 FCA 205 The applicant must provide evidence to show that the underlying action relating to the Norwich motion was neither frivolous nor brought without justification, in effect that a “legitimate claim” exists against the alleged wrongdoers. The court agreed that appellant failed to do this.

While there was some discrepancy in the formulation of the public interest criterion besides privacy and confidentiality, other public interest concerns have been considered by the courts such as:

a) the nature and apparent strength of the plaintiff’s case, 

b) whether denying the motion would leave the plaintiff without a remedy, 

c) freedoms of expression, association and peaceful assembly under the Canadian Charter of Rights and Freedoms, 

d) the administration of justice, free press and compliance with securities legislation, 

e) the chilling effect resulting from disclosure, and

f) the interests of alleged wrongdoers and the public. 

Non-privacy concerns are well within the ambit of public policy and interests of justice considerations inherent in the extraordinary, discretionary, and equitable nature of Norwich proceedings. It was open to the Motion Judge to focus on the public interest in access to justice when considering the public interest criterion.

Generative Artificial Intelligence 

The Government of Canada conducted a Consultation on Copyright in the Age of Generative Artificial Intelligence between October 12, 2023, and January 15, 2024, to better understand the effects of generative artificial intelligence (AI) on copyright and the marketplace.

The report notes the divide between stakeholders in the cultural industries who expressed concerns about the impact of this technology. Creators see current AI practices as undermining their copyright protection, including their ability to consent to and be credited and compensated for the use of their works. Stakeholders from technology industries expressed concerns about the uncertainty surrounding the application of the copyright framework to AI systems, and the fear that the uncertainty may negatively affect AI development in Canada.

The consultation sought feedback on three copyright policy issues:

1. “the use of copyright-protected works in the training of AI systems, notably for text and data mining (TDM) activities;

2. authorship and ownership rights related to AI-generated content; and

3. questions of liability, notably when AI-generated content infringes copyright.”

   
   

There was a lack of consensus on most issues but one area of agreement regarding the need for substantial human authorship contributions to qualify for copyright protection.

There was significant interest in transparency, both regarding AI-generated content and copyright-protected content used as inputs in the development of AI although the technology industries expressed concerns. The Government recognized that additional transparency could assuage many concerns about AI. Greater transparency would be an important step forward to support copyright remedies in the context of AI and rebuild trust between stakeholders in this ecosystem.

The government continues to consider how Canadian concerns raised by generative AI, including those expressed by cultural and technology industries, could be addressed. In considering the policy issues the government said it was mindful of preserving incentives to create and distribute works created in the copyright framework, while supporting Canada's innovation strategy.

The US Copyright Office has also released a Report on Copyright and Artificial Intelligence Part 2: Copyrightability which addresses the copyrightability of outputs generated by AI systems. They concluded that existing US doctrines were sufficient to resolve questions of copyrightability. 

Data Scraping

Data scraping is closely connected to the training of AI systems, notably for text and data mining (TDM) activities. In broad terms, data scraping refers broadly to activities related to the collection and preprocessing and training of data extracted from various sources, using techniques such as web scraping, web crawling, and screen scraping. While data scraping has become commonplace, it currently lacks a broadly accepted standard definition and can encompass a range of techniques and activities. 

The OECD has published a report which examines recent developments at the intersection of artificial intelligence (AI) and intellectual property rights, particularly focusing on data scraping practices.

The capacity of data scraping technologies to collect and process vast amounts of individuals’ personal information from the internet raises significant privacy concerns, even when the information being scraped is publicly accessible.

In an initial Joint statement on data scraping and the protection of privacy the Office of the Privacy Commissioner of Canada has said that Social Media Companies and other websites are responsible for protecting individuals’ personal information from unlawful data scraping.

Techniques for scraping and extracting value from publicly accessible data are constantly emerging and evolving. Data security is a dynamic responsibility and vigilance is paramount. As no one safeguard will adequately protect against all potential privacy harms associated with data scraping, website operators should implement multi-layered technical and procedural controls to mitigate the risks. 

Discoverability

The Federal Court referred to the Supreme Court of Canada which has considered knowledge required to establish discoverability, emphasizing that absolute certainty is unnecessary. Discoverability arises once the plaintiff knows, or reasonably ought to know, sufficient material facts to support a plausible inference of liability. ITP SA v. CNOOC Petroleum North America ULC 2025 FC 684 referring to Grant Thornton LLP v New Brunswick, 2021 SCC 31.  The inference requires more than mere suspicion or speculation, as it exists only when the plaintiff can reasonably infer liability from discovered or reasonably discoverable facts. Plaintiffs' constructive knowledge of facts could be uncovered through exercising reasonable diligence. 

Mere receipt of documents does not automatically establish discoverability. The plaintiff must have constructive knowledge of sufficient facts to reasonably infer liability, and discoverability arises only when the significance of the facts becomes reasonably apparent through diligent effort.

Site Blocking Order

In Bell Media Inc. v John Doe dba Soapday.2025 FC 133  the court granted a site blocking order after a site that had been deactivated was replaced by a series of identical sites with similar domain names. It was observed that copyright owners were being forced into a digital game of “whack-a-mole”.

If you have questions, please contact me at mckeown@gsnh.com.

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600

Toronto, Ontario M5G 1V2

Direct Line: (416) 597-3371Fax: (416) 597-3370

Email: mckeown@gsnh.com

These comments are general in nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.