Canadian Internet Law Update – 2018*

A. Trademarks

1. Internet Use of Trademark

   Hilton Worldwide Holding LLP v. Miller Thomson, 2018 FC 895, involved an appeal from a decision of the Registrar of Trademarks expunging the registration of the "Waldorf-Astoria" trademark registered for use in association with "hotel services" because there was no physical "Waldorf-Astoria" hotel in Canada. The court confirmed the well-established principle that in order for a trademark to be used in association with services "it is essential some aspect of the services must be offered directly to Canadians or performed in Canada". The court held that determining whether services are performed in Canada requires a case-by-case assessment and analysis of the scope of the services and the nature and benefits delivered to people physically present in Canada. The court held that the "Waldorf-Astoria" trademark had been used in association with "hotel services", even though there was no physical hotel operated under that trademark in Canada. The court reasoned as follows: the word "services" should be liberally construed, and could in appropriate cases include "primary, incidental or ancillary" services; the ordinary commercial understanding of "hotel services", from the perspective of the trademark owner and consumers, included reservation services; people in Canada could take meaningful benefit from online hotel reservation services, including discounts and reward points; and the "Waldorf-Astoria" trademark was displayed on the reservation website accessed by customers in Canada and on emails and booking confirmations received by customers in Canada. The court allowed the appeal and set aside the Registrar's decision. See also Dollar General Corp. v. 2900319 Canada Inc., 2018 FC 778.

2. Infringing Domain Name

   Royal Pacific Real Estate Group Ltd. v. Dong, 2018 BCSC 1272, involved a dispute over the defendants' unauthorized use and infringement of the plaintiffs' registered "Royal Pacific and design" trademark in connection with a competing real estate agency business. The defendants used confusingly similar trademarks on their website and Facebook page and in emails. The defendants also registered the royalpacific.co domain name and used it for their real estate business website. The court held the defendants liable for trademark infringement and passing off. The court found that the defendants' use of the royalpacific.co domain name for their website, which included numerous references to aspects of the plaintiffs' business, "would have caused confusion in the mind of an 'ordinary hurried consumer', who could have confused the owner of the website with the [plaintiff]". The court awarded the plaintiffs $6,000 in general damages, an injunction prohibiting future infringement and an order transferring ownership of the royalpacific.co domain name to the plaintiffs. The court held that it had jurisdiction to order the domain name transfer pursuant to Trademarks Act s. 53.2(1), and reasoned that the order was necessary to protect the plaintiffs' rights and reduce the risk of further litigation over the use of the domain name.

   B. Copyright

1. Amendment to Copyright Act Notice and Notice Regime

   The Budget Implementation Act, 2018, No. 2 (Bill C-86) amended the Copyright Act to prohibit certain information in a notice of claimed copyright infringement delivered pursuant to the "notice and notice" regime set out in Copyright Act ss. 41.25 and 41.26. As a result of the amendments, an Internet service provider is not obligated to forward a notice of claimed copyright infringement to an alleged infringer if the notice contains any of the following: (1) an offer to settle the claimed infringement; (2) a request or demand, made in relation to the claimed infringement, for payment or for personal information; (3) a reference, including by way of hyperlink, to such an offer, request or demand; or (4) any other information that may be prescribed by regulation.

2. ISP's Entitlement to Costs under a Norwich Order

   Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38, involved a proposed reverse class proceeding against unknown defendants engaged in illegal Internet sharing of the plaintiffs' copyright protected films. The plaintiffs brought an application for a Norwich disclosure order requiring Rogers Communications, a non-party Internet service provider, to disclose contact and personal information of subscribers associated with identified Internet protocol addresses, so that the plaintiffs could name the subscribers as defendants in the class proceeding. The Supreme Court of Canada held as follows: The notice and notice regime established by the Copyright Act does not require an Internet service provider (an "ISP") to disclose to a copyright owner the identity and physical address of a person who is alleged to have committed a copyright infringement. A copyright owner who wishes to obtain that information from an ISP must obtain a Norwich disclosure order to compel the ISP to disclose the information. Copyright Act s. 41.26(2) prohibits an ISP from charging a fee for complying with the notice and notice regime (except where the Minister has fixed a maximum fee by regulation, which has not yet occurred). An ISP is entitled to its reasonable costs of compliance with a Norwich disclosure order, but is not entitled to compensation for costs that the ISP should have incurred in performing its statutory obligations under the notice and notice regime, even if it carries out those obligations only after it has been served with the Norwich disclosure order. Those obligations implicitly include: (1) determining, for the purposes of forwarding an infringement notice, who was assigned the impugned IP address at the time of the alleged infringement; (2) taking all steps necessary to verify that the ISP has done so accurately; and (3) taking all steps necessary to verify the accuracy of records that would permit the ISP to identify the name and physical address of the person to whom the infringement notice was forwarded. Those obligations do not require an ISP to actually use the records to determine the name and physical address of the person to whom an infringement notice was forwarded, or to keep the records in a form and manner that would permit a copyright owner or a court to determine that information. Consequently, an ISP is entitled to the reasonable costs of the steps necessary to discern a person's identity from the accurate records retained by the ISP in compliance with the notice and notice regime. Motions judges should carefully review an ISP's evidence of costs of compliance with a Norwich disclosure order to determine whether the costs are reasonable in light of the ISP's obligations under the notice and notice regime.

3. Link to Website Infringes Copyright

   Collett v. Northland Art Company Canada Inc., 2018 FC 269, involved a dispute between a professional photographer and a gallery that had been authorized to advertise and sell his photographs. The photographer claimed that after his business relationship with the gallery ended, the gallery infringed his copyright and moral rights by continuing to advertise and sell prints of his photographs and by maintaining unauthorized links to his personal website (which included one of the photographs and the photographer's biography). The court also held that the gallery had infringed the photographer's copyright in certain photographs by reproducing the photographs on the gallery's website. The court held that the gallery had infringed the photographer's copyright in his personal website by maintaining a link from the gallery's website to the photographer's website even though the gallery knew that it was not authorized to do so. The court ordered the gallery to pay to the plaintiff $45,000 statutory damages for copyright infringement, $10,000 for infringement of moral rights, and $25,000 punitive damages.

4. Injunction to Stop Facilitating Copyright Infringement

   Bell Canada v. Lackman, 2018 FCA 42, involved a dispute over the defendant's TVAddons.ag website, which was a repository of both infringing add-ons (which directed users to stream and download copyright protected movies and television shows without authorization from the copyright owners) and non-infringing add-ons (which directed users to legitimate websites). The plaintiff media companies sued the defendant for infringing copyright by communicating and making infringing add-ons available to the public, and by inducing or authorizing users of infringing add-ons to initiate acts of copyright infringement. The plaintiffs obtained an ex parte Anton Piller order and an ex parte interim injunction against the defendant's operation of the TVAddons.ag website. The injunction was set aside by a motions judge who held that the defendant was an Internet intermediary protected from liability by Copyright Act s. 2.4(1)(b). On appeal, the court of appeal held as follows: the motions judge misapprehended the evidence and made palpable and overriding errors; there was "clearly a strong prima facie case" that the...