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Quarterly Copyright Blog - Q3

Updated: Oct 19, 2021

For those who are interested in recent cases and developments about copyright and related matters, there have been several developments since the last entry.


Copyright Term Extension

Under the Canada-United States Mexico Agreement, which entered into force on July 1, 2020, Canada must extend the general term of copyright protection from 50 years after the author's life to 70 years after the author's life. There is a 2.5-year transition period from July 1, 2020, to implement this change.


The Government of Canada consulted concerning the proposed extension, which closed on March 31, 2021, but their report has not yet been released. The Government has also said that libraries and archives, and some other stakeholders, have raised concerns over the implications of term extension for access to orphan works and out-of-commerce works. An orphan work is said to include a work in relation to which the copyright owner is not known or is known but not locatable. An out-of-commerce work refers to a work that is no longer available to the public through customary channels of commerce, such as a published book that is no longer available in print.


Amendments to the Broadcasting Act


Bill C-10 amends the Broadcasting Act (the Act). The Act sets out the broadcasting policy for Canada, the role and powers of the Canadian Radio-television and Telecommunications Commission (the Commission) in regulating and supervising the broadcasting system, and the mandate for the Canadian Broadcasting Corporation.


The Commission, an independent administrative tribunal, determines the regulatory requirements to be imposed on broadcasting undertakings to implement the Act's policy and enforce those requirements. Currently, online undertakings that deliver audio and audio-visual content over the Internet are exempt from licensing and most other regulatory requirements.


The Bill clarifies that the Broadcasting Act applies to the Internet. Clause 1 adds online undertakings as a distinct class of broadcasting undertaking subject to the Act. An online undertaking is defined as an undertaking for the transmission or retransmission of programs over the Internet to the public by means of broadcasting receiving apparatus. Accordingly, users of social media services who upload programs for sharing with other users, and are not affiliated with the service provider, are not subject to broadcasting regulation. Similarly, clause 3 specifies that the Act does not apply regarding programs uploaded by unaffiliated users to social media services for sharing with other users and regarding online undertakings whose only broadcasting consists of such programs.


The Bill provides the Commission with new powers to regulate online services and update the Commission’s regulatory powers related to traditional broadcasters.


Consequential amendments to the Copyright Act contain new definitions of “programming undertaking” and “new media retransmitter.” Stakeholders have raised concerns relating to these new definitions and the impact on the exceptions for ephemeral recordings in sections 30.8(1) and 30.9(1) of the Copyright Act, among other things.

Parliament passed the Bill and sent it onto the Senate. However, the Senate has said the bill needs more study and is declining to pass it quickly into law before Parliament’s summer recess.


Equitable Remuneration for US Makers of Sound Recordings


Makers of sound recordings, who are nationals or permanent residents of the United States or a corporation with its headquarters in the United States, can now receive equitable remuneration for the performance in public of sound recordings. After implementing the Canada-United States-Mexico Agreement (CUSMA) on July 1, 2020, limitations on the right to receive equitable remuneration for the performance in public of sound recordings for makers of sound recordings, who were at the date of the sound recordings’ first fixation nationals or permanent residents of the United States or a corporation with its headquarters in the United States, have been abolished.


CUSMA provides that regarding all categories of intellectual property covered by it, each party shall accord to nationals of another party treatment no less favourable than it accords to its own nationals regarding the protection of intellectual property rights. For greater certainty, it is provided in the footnotes that this principle extends to performances and phonograms and includes any form of payment, such as licensing fees, royalties, equitable remuneration, or levies, regarding uses that fall under the copyright and related rights in the Agreement.


Can Framing a Work be a Communication to The Public on the Internet?


In VG Bild-Kunst v. Stiftung Preubischer Kulturbesitz, (9 March 2021) Case C-392/19, the Court of Justice of the European Union considered the issue of communication to the public on the Internet. The specific issue was whether framing was a communication to the public where it was accomplished by circumventing technical protection measures adopted by the right holder or imposed by the right holder on a licensee.


The court said that the technique of framing was capable of constituting a separate act of communication to the public. However, the technical means used for this communication would be no different to those deployed by the right holder when initially making their work available. So it was imperative that the communication was to a ‘new public’ if it was to be an actionable communication to the public.


Where the right holder makes access to their works subject to technical protection measures to preclude framing, the right holder did not consent to an act of communication to the public by framing. Therefore, an act of framing which circumvents protection from framing, either by circumventing technological restrictions or ignoring a requirement for such restrictions imposed by contract, can infringe the communication to the public right.


The court clarified that “in order to ensure legal certainty and the smooth functioning of the internet, the copyright holder cannot be allowed to limit his or her consent by means other than effective technological measures …”. Absent such measures, it might prove difficult, particularly for individual users, to ascertain whether that right holder intended to oppose the framing of his or her works. To do so might prove even more difficult when that work is subject to sub-licenses.” As a result, a limitation in website terms of use or the like would not be effective.


A Comment concerning VG Bild-Kunst

In Tunein Inc. v. Warner Music UK Ltd., [2021] EWCA Civ 441, the English Court of Appeal reviewed this decision and other related decisions of the CJEU on this issue. The court confirmed that notwithstanding Brexit, they should not depart from applying the CJEU’s jurisprudence. However, the comment noted above concerning smooth functioning related to an intra-German context could not be extrapolated beyond this context. In all cases, there must be an individualized assessment that takes all the relevant factors into account.


Action is Required to Claim for Statutory Damages against an ISP for Non-compliance with the Notice-and-Notice Regime

In TBV Productions, LLC v. Doe 2021 FC 181, a claim for statutory damages against an ISP for non-compliance with the notice-and-notice regime was considered. It was said that the result in the ME2 Productions, Inc. v Doe 2019 FC 214 decision was determined by the facts and, in particular, that the order was discretionary and made by a case management judge. In the case at hand, the judge said that it is not clear that a free-standing claim of damages under the notice-and-notice regime could be initiated by application or motion. A claim for damages for non-compliance with the notice-and-notice scheme is not identified as a proceeding that can be determined in a summary way by application or action, and the procedure for advancing such a claim is not specified in the Act. The general rule, that liability and damages should be decided by way of action applied.


The Defence of Issue Estoppel.

In Rogers Communication’s Canada Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2021 FC 207, it was determined that an action for the repayment of royalties should be dismissed based on issue estoppel. The plaintiffs made a business decision to stop fighting over Tariff 24 after their loss on their judicial review application and move on, although the download issue was being debated at the time before the Copyright Board in relation to Tariff 22. The circumstances surrounding the execution of the 2010 Agreement relating to Tariff 24 lead to the simple conclusion that all parties viewed the agreement as settling any potential litigation before the Board regarding ringtone royalties to minimize risk and achieve long-term certainty. By their execution of the Agreement and their conduct consisting of complying with the agreement, the plaintiffs caused SOCAN to believe that the 2010 Agreement had fully and finally settled the ringtones proceedings for the years 2006 to 2013. SOCAN altered its position based on this belief and distributed the ringtones royalties to its members.


A Third Party’s Responsibility Liability for Breach of Confidence


In Travel Counsellors Limited v Trailfinders Limited [2021] EWCA Civ 38 (Eng. C.A.), a third party’s liability for breach of confidence was considered. In this case, Trailfinders alleged that, when the individual defendants left their employment, they took with them names, contact details and other information about their clients stored in a Trailfinders computer system. Trailfinders contended that the individual defendants acted in breach of implied terms in their employment contracts and breach of equitable obligations of confidence owed to Trailfinders. It also contended that Travel Counsellors acted in breach of an equitable obligation of confidence. The trial judge agreed with Trailfinders. Travel Counsellors appealed the finding they owed an obligation of confidence to Trailfinders.


The appeal was dismissed. The court said that where information confidential to A is disclosed by B to C in circumstances where C knows, or ought to appreciate, that the disclosure is a breach of B’s obligation of confidence to A, C will become subject to an equitable obligation of confidence owed to A. In addition, if C makes unauthorized use of the information, C will be liable to A for breach of confidence.


In some cases, the circumstances may be such that a reasonable person in the position of C would make further inquiries – and in particular, would ask A if he or she consented – before making particular use of the information. If C makes such use without making such inquiries, C will be liable for breach of confidence.


If the circumstances are to bring it to the notice of a reasonable person in the recipient's position that the information, or some of it, may be confidential to another, then the reasonable person’s response may be to make inquiries. Whether the reasonable person would make enquiries, and if so, what enquiries, is inevitably context- and fact-dependent. If the reasonable person would make enquiries, but the recipient abstains from doing so, then an obligation of confidentiality will arise.


A Claim for Breach of Confidence in a Bankruptcy


In Shaver-Kudell Manufacturing Inc v. Knight Manufacturing Inc., 2020 ONSC 7635, it was found a grant of bankruptcy did not release the defendant concerning a claim for breach of confidence. The claim came within the ambit of section 178(1) of the Bankruptcy Act relating to obtaining property by false pretences, particularly where it had been found that the defendant’s actions were deceitful.

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600

Toronto, Ontario M5G 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370

Email: mckeown@gsnh.com

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