Copyright - 2017 Year In Review

In this article, we summarize our top picks of copyright decisions from the past year, including decisions that address:

fair dealing, and, in particular, the user right to parody, the 'fairness' of bright line thresholds in fair dealing guidelines of educational institutions, and 'tributes' what online services qualify for the information location tool exemption protection for technological protection measures, and remedies for circumvention independent creation copyright in data and databases statutory damages for copyright infringement and circumvention of technological protection measures preliminary injunctions in copyright cases, and decisions relating to the Copyright Board of Canada, and submissions on reform to the Board's powers and procedures. FAIR DEALING

Fair dealing is an integral part of the Copyright Act, and allows users to engage in some activities that might otherwise amount to copyright infringement. Fair dealing is understood as a user right in Canada, rather than simply a defence.

There were several important developments in the law of fair dealing in 2017. The long-awaited decision looking at York University's Fair Dealing Guidelines calls into question the 'fairness' of bright line thresholds in fair dealing guidelines for educational institutions (e.g. 10% or less of a work). Additionally, the first Canadian case to interpret fair dealing for parody indicates that this user right may be quite narrow. Below we discuss these and a few other fair dealing decisions of note.

It is helpful to keep in mind that Canadian courts take a two-step approach to determine fair dealing. First, the dealing must be for an allowable purpose. Historically, these purposes were research, private, news reporting, review and criticism, and in 2012 this list was expanded to include education, parody and satire. Second, the dealing must be 'fair' in the surrounding circumstances. Courts will consider 'fairness' factors, including the purpose, character and amount of the dealing, the nature of the underlying work, the effect of the dealing on the underlying work, and alternatives to the dealing.

Fair Dealing Guidelines

In Canadian Copyright Licensing Agency v. York University (2017 FC 669), York University pointed to its Fair Dealing Guidelines to argue that staff who followed the Guidelines were fairly dealing when making copies of copyright protected works. The Guidelines set out that "short excerpts" could be copied, and defined such excerpts as being no more than the greater of either (1) 10% or less of a work; or (2) certain other set thresholds (e.g. one chapter from a book, a single article from a periodical, etc.). The Guidelines also included a caveat that no more of the work should be taken than required to achieve the fair dealing purpose. The Association of Universities and Colleges of Canada ("AUCC") had drafted Fair Dealing Guidelines upon which York and other educational institutions based their Guidelines.

Even though the dealings were for education, research or private study purposes, they were found not to be 'fair'. The Court considered the Guidelines in light of the various fairness factors, and its decision turned on the amount of the dealing. The Court found the fixed thresholds in York's Guidelines arbitrary and not soundly based in principle, essentially because the University could not explain why such thresholds were set or why they were "presumptively fair." The University and the AUCC's failure to justify the thresholds was seen by the Court to seriously undermine the overall fairness of the Guidelines. The Court noted that under the Guidelines different amounts of the same work could be copied depending on the source. As an example, the Court pointed to a Canadian children's story, The Hockey Sweater, which it found "could be copied freely if it appeared in an anthology, but would [be limited] if copied on its own." In coming to this conclusion, the Court did not appear to have given weight to the caveat and resulting discretion to staff.

The Court also considered the aggregate volume of copying by York, as well as by all post-secondary institutions, that could be allowed if the Guidelines or similar policies were widely adopted. This focus on the aggregate amount of copying, rather than on the individual use, is curious in view of the Supreme Court of Canada's position in Society of Composers, Authors and Music Publishers of Canada v. Bell Canada (2012 SCC 36) that "aggregate" assessments are properly considered as relevant to the "character", not the "amount", of the dealing. in SOCAN, the SCC had cautioned against focusing on the "aggregate" to assess the "amount of the dealing" since this approach could run the risk of disproportionate findings of unfairness. The Court in York may have balanced its divergence from SOCAN by recognizing that while the copying in York occurred on an institutional scale, such institutional copying was not "inherently less fair" as compared to situational or spontaneous copying.

York has appealed to the Federal Court of Appeal. This case will be closely watched by educational institutions, as well as all copyright users, to see whether there may be judicial guidance on whether it is possible to set presumptively fair threshold amounts for fair dealing.

Another case in this area to watch will be Société québécoise de gestion collective des droits de reproduction (Copibec) c. Université Laval, which saw two major decisions in 2017. First, the Quebec Court of Appeal certified a proposed class action against the University, overturning a lower court's decision to deny certification (2017 QCCS 199). Subsequently, the Quebec Superior Court denied Laval's request for a stay of the proceedings pending the outcome of the appeal in the York University case discussed above (2017 QCCS 5417). Laval had pled that its copying policies were essentially the same as York's, and that the Federal Court of Appeal's decision in York would have a direct impact on the proceedings. The Quebec Superior Court disagreed, noting that Justice Phelan's decision in York grounded its assessment of fairness in the specific facts of the case, and, without proof from Laval, it could not be taken as a given that Laval's and York's respective guidelines were the same. As a result, the interests of justice required that the matter proceed concurrently with the York appeal. It will be interesting to see if there will be a split in the law as a result of the Laval and York cases proceedings in parallel.

Parody

2017 also saw the first decision to consider fair dealing for "parody", namely United Airlines, Inc. v. Jeremy Cooperstock (2017 FC 616). The decision suggests that fair dealing for parody may be quite limited, and that this user right falls short of enabling consumer groups to criticize companies and brands using those businesses' intellectual property. Generally, if followed, the decision suggests that parodies that are too unflattering, critical or disparaging are unlikely to be 'fair'. The decision has been celebrated by brand owners as striking the right balance between permitting consumers to voice criticisms and protecting IP, by drawing a line and making it an infringement to use copyright protected assets, including branding, to deliver a disparaging message. On the other hand, the decision has been criticized by others that suggest it puts consumer and other advocacy groups on unfair footing.

Since 1997, the defendant individual had operated a consumer criticism website at www.untied.com, providing information and complaints about United Airlines. In recent years, the defendant had added a logo resembling that of United Airlines, begun tracking with official website updates by United, and had generally updated the complaint website to conform with the appearance of the United website. Before initiating legal proceedings, United had demanded that the defendant make changes to the impugned website and add a disclaimer to state that it did not belong to United Airlines.

The Federal Court found the website qualified for the allowable purpose of "parody". It interpreted "parody" as having two basic elements: (1) the evocation of an existing work while exhibiting notable differences and (2) the expression of mockery or humour. The Court declined to introduce a requirement that parody must comment, at least in part, on the underlying work, which is part of the US fair use test for parody. Both parody and satire are allowable fair dealing purposes in Canada. By contrast, in the US satire is not allowable, and the difference between parody and satire turns largely on whether the new work comments on the underlying work or something completely unrelated. It will be interesting to see how Canadian courts distinguish between satire and parody. The United Airlines decision suggests that a requirement to comment on the underlying works is not the key difference at law in Canada.

Although the defendant's "Untied" website and logo parodied the United Airlines website and logo, the Court found the dealings were not 'fair'. When assessing the fairness factors, the Court reached its decision primarily because the dealing was unflattering. As a result, the user right may be limited to humorous parody that is not too critical or mocking.

The decision also turned significantly on the degree to which the defendant's website was confusing with United's, effectively importing the trademark aspects of the decision into certain portions of the fairness analysis. This aspect of the United decision may ultimately be problematic since "confusion" is not a proper gauge of copyright infringement.

Reading the decision in United with the Federal Court's decision in Cie générale des établissements Michelin-Michelin & Cie v. CAW - Canada ([1996] F.C.J. No. 1685), consumer groups, unions or other activist organizations may not have a 'user right' to disparage or criticize a company by...