Canada one step closer to ratifying ACTA

Bill C-56, otherwise known as the Combating Counterfeit Products Act, got its second Parliamentary reading last month. The Bill, which was proposed earlier this year, seeks to amend the Copyright Act, Trade-marks Act and the Criminal Code, and would bring Canada one step closer to ratifying the Anti-Counterfeiting Trade Agreement (ACTA) which it signed in 2011.

ACTA is a multi-national treaty which seeks to establish robust standards for the enforcement of intellectual property rights, and primarily those combating counterfeit goods, copyright infringement and piracy worldwide. Though acrimoniously received in Europe, and subsequently rejected by the EU, Canada is seeking to implement these standards at home.

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CRTC Denies BCE Bid for Astral

The CRTC today denied the application of BCE Inc. to assume control of Astral Media Inc. The CRTC noted that the proposed transaction would not only “remove the last major independent, non-integrated broadcaster from the system, but transfer its undertakings to the largest vertically integrated broadcaster and telecommunications service provider in Canada. The CRTC held that the benefits which BCE had proposed were not sufficient and that BCE had not made out a case for arguing that it needed to get bigger in order to deal with international competition, including Internet-based “over the top” services. The CRTC further found that the proposed transaction “would have been to the detriment of the entire industry”.

This is a seismic event in the regulation of telecommunications and broadcasting in Canada. The CRTC has essentially put the brakes on the consolidation in the broadcasting industry that has been taking place over the past few years and has signalled that it will defend competitiveness in the industry. The fight is probably not over, and it is inevitable that BCE will take its case either to the Federal Court of Appeal for judicial review or directly to the federal Cabinet.

The CRTC decision.

Supreme Court of Canada Confirms No Royalties for Audiovisual Uses of Sound Recordings

In a unanimous judgment released today, the Supreme Court of Canada confirmed that Re:Sound (the copyright collective representing record labels and performers) cannot collect royalties from television, Internet and other audiovisual uses of sound recording. The Copyright Board and the Federal Court of Appeal had previously held that such royalties were not permitted.

The case centred on the definition of “sound recording” in the Copyright Act. That definition provides that a “sound recording” is a collection of recorded sounds, “but excludes any soundtrack of a cinematographic work where it accompanies [a] cinematographic work.” Since the introduction of the “neighbouring rights” accorded to record labels and performers in 1997, it had been generally understood that this exclusion prevented the collection of royalties for the communication of films and television programs, and Re:Sound had instead collected significant royalties for audio only communications such as radio broadcasts. However, in 2008 Re:Sound filed proposed tariffs claiming royalties for the performance and communication of audiovisual works from broadcasters, motion picture theatres and others.

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Supreme Court Finds Internet Downloads Not “Communications”

In a ground-breaking 5-4 decision, the Supreme Court of Canada has ruled in Entertainment Software Association v. SOCAN that downloading a file which contains a musical work does not mean that the work is “communicated” to the user, but is simply “reproduced”. The Society of Composers, Authors and Music Publishers of Canada (SOCAN) argued that transmission of an electronic copy of the game via digital download also constituted a “communication”, as the work was “transmitted” to the end user, and was therefore subject to additional copyright protection.

The majority of the Court held that there is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet, and that the Copyright Act must be read in a technologically neutral manner. As a result, SOCAN should not be entitled to additional royalties simply based on the medium the work is delivered through.

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Supreme Court Clarifies Analysis of Fair Dealing for Purposes of Research and Private Study

The Supreme Court of Canada released its decision in Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright) 2012 SCC 37 today, finding that the copying of material for the purpose of instruction in primary and secondary schools was “fair dealing” for the purposes of the Copyright Act. This landmark case greatly clarifies the interpretation of test for fair dealing as it pertains to research and private study.

The Court split 5-4 and allowed the appeal by various provincial ministries of education, applying the 2-part test in the seminal case of CCH v. Law Society of Upper Canada; which looks at (1) whether the dealing is for the allowable purpose of “research or private study,” “criticism or review,” or “news reporting,”; and (2) if the dealing is fair.

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Supreme Court of Canada: Free Musical Samples Don’t Violate Copyright Act

The Supreme Court of Canada affirmed the decision made by the Federal Court of Appeal that no royalties be paid when musical previews are listened by potential buyers. (Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36) Typically, musical previews consist of 30 to 90 seconds of a musical track providing a sample of what the potential buyers would be purchasing. Earlier, the Copyright Board decided that SOCAN was entitled to royalties when musical works are downloaded but not for previews. This decision was affirmed by the Federal Court of Appeal.

In upholding the Board’s decision, the Supreme Court considered whether or not previews constitute “fair dealing” under Section 29 of the Copyright Act, R.S.C. 1985, c. C-42 (“Act”). If the provision of previews were determined to be “fair dealing” for the purpose of the Act, providing previews without compensation would not infringe copyright.

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Supreme Court Shakes Up Canadian Copyright

In December 2011, the Supreme Court of Canada heard an unprecedented 5 copyright cases simultaneously. All of these appeals dealt with issues that had first arisen with the Copyright Board of Canada, and involved online downloading, educational uses of copyright material, previews of music and the use of sound recordings.

The Supreme Court released decisions in all 5 cases today, and the results will be nothing less than seismic. Heydary Hayes will be posting detailed descriptions of the 5 cases today, but here are the highlights:

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Supreme Court Lowers the Bar on the "Average Consumer" and Makes Advertising More Misleading

The Supreme Court of Canada today issued an important case with significant implications for any company dealing with Canadian consumers.

In Richard v. Time Inc., the plaintiff Jean Marc Richard, a Francophone resident in Quebec, had received advertising material which contained, in prominent letters, the statement "SWEEPSTAKES RESULTS ARE NOW FINAL: MR JEAN MARC RICHARD HAS WON A CASH PRIZE OF $833,337.00!". In smaller letters, the document made it clear that "If you have and return the Grand Prize winning entry in time and correctly answer a skill-testing question, we will officially announce that..." Mr. Richard would win the grand prize. After reading the document more than once, and consulting other individuals, Mr. Richard concluded that he had won the grand prize and dutifully sent off his entry (including a subscription to Time Magazine). After waiting for some time for his prize cheque, Mr. Richard contacted Time and was informed that the document was simply an offer to enter a sweepstakes, and that he had not in fact won the grand prize.

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Ontario Court of Appeal Opens Pandora's Box of Privacy Tort

In an important, and potentially revolutionary, decision issued today in Jones v. Tsige, 2012 ONCA 32, the Ontario Court of Appeal has recognized for the first time a tort of "intrusion upon seclusion", opening the door to a wide-ranging tort of invasion of privacy not previously recognized in any Canadian jurisdiction.

The facts of the case are not complex. Both Jones and Tsige were employees of the Bank of Montreal. Tsige became involved in a relationship with Jones' former husband and, for reasons that were not entirely clear, over a period of approximately 4 years Tsige repeatedly accessed details about Jones' personal BMO bank accounts using the BMO computer system.

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Feds Missed the Mark on Use of Social Media Guidelines

The federal government's new "Guideline for External Use of Web 2.0," released on November 22, 2011, is intended to "facilitate interactive and rapid communication and engagement between government departments, their partners and their clients." The bureaucrats, however, have missed the mark badly.

It's remarkable how terrible this document is. We spend a lot of time working with clients to craft this type of policy, and the government has managed to do pretty much everything wrong.

The length of the guideline (over 12,000 words), the overly technical language (it is written in the absolute worst of bureaucratese and is practically unreadable) and the excessive rules and regulations (for example, every social media undertaking has to satisfy 15 separate elements, in addition to detailed language requirements) means it will likely take weeks or even months to try to get permission to post a note on Facebook or Twitter. This will likely severely curtail public servant use of social media sites and services and make it harder, not easier, to communicate with the federal government in the future.

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Emailer Beware: Canada's Anti-Spam Legislation Catches Commercial Practice in its Web

What was slated to be Canada's comprehensive anti-spam framework may have missed its mark due to the law's overly broad scope and application to commercial electronic messages (CEMs). The most recent round of public consultation on the regulations proposed by the Canadian Radio-television and Telecommunications Commission (CRTC) and Industry Canada brought further speculation that the law may do more to hinder the promotion and development of Canada's digital economy than to facilitate its growth.

The legislation and regulations as drafted tend to center on computers and email as the primary source of spam, failing to effectively address existing methods of communication and emerging technologies, such as text messaging and social media platforms. The anti-spyware provisions of the legislation also appear to fall short of adequately dealing with network software updates and industry practices that are actually intended to protect the consumer from malicious acts such as fraud and hacking.

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New Federal Breach Notification Requirement: Building on the Alberta Experience?

On September 29, 2011, the Canadian federal government introduced Bill C-12, "An Act to Amend the Personal Information Protection and Electronic Documents Act" ("Bill C-12"). Among various other proposed amendments to the Personal Information Protection and Electronic Documents Act ("PIPEDA"), the new breach notification requirement would mean nationwide introduction of a concept that is already in place in Alberta through its Personal Information Protection Act ("PIPA").

Alberta's PIPA requires that Alberta organizations notify the provincial Privacy Commissioner when a loss, unauthorized access to or disclosure of personal information occurs, but only where a reasonable person would consider that a real risk of significant harm to an individual exists. The Commissioner may direct the organization in question to also inform the affected individual, but it is not required to do so. By contrast, Bill C-12 directly requires notification to both the Privacy Commissioner of Canada (for any material breach) and to the affected individual (if it is reasonable to expect that such a material breach poses a real risk of significant harm to an individual). Private sector organizations all over Canada will now be looking at the Alberta experience to see how this new requirement may affect day to day operations, and to consider whether the mandatory individual notification requirement will add an additional burden.

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Hyperlinks decision may impact how lower courts interprete Internet matters

The Supreme Court of Canada released Crookes v. Newton, a highly-anticipated Internet defamation case, in which the court decided that providing a hyperlink to a defamatory online article does not constitute "publication". As a result, unless the provider of the hyperlink repeats the defamatory content, they will not be liable for defamation.

"This is obviously a very important decision, both in a micro and macro sense," said Mark Hayes of Hayes eLaw LLP in Toronto. "In terms of the specific defamation issue before the Court, the resolution by the majority of the judges is consistent with the historical principle of 'publication' and will ensure that Internet content aggregators will not be faced with unexpected defamation liability."

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