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

From the new North America Free Trade Agreement revisions and implementation to amendments to the Copyright Act, read below for recent cases, highlights, and important developments in copyright law.

Canada-United States-Mexico Agreement

On December 10, 2019, Canada, the United States and Mexico agreed to revise certain elements of the new North America Free Trade Agreement (NAFTA) to improve the final outcome and clear the path toward ratification and implementation of the Canada-United States-Mexico Agreement in all three countries. Changes were made in the areas of state-to-state dispute settlement, labour, environment, intellectual property and rules of origin. The changes in the intellectual property (IP) chapter will affect copyright.

Ratification and Implementation

All three parties to the Agreement have ratified and passed the domestic implementing legislation. Canada was the last to do so when Bill C-4 was passed March 13, 2020. Canada has notified the United States and Mexico that domestic ratification process has been completed. Mexico has also issued a notification, but the US has not yet done so although it has completed its domestic ratification process. The three countries are continuing to work to determine an 'entry into force' date that is mutually beneficial. Time and effort must be expended to implement new compliance measures.  In addition, compliance is more difficult because of the pandemic.

Amendments to the Copyright Act

The Agreement provides that each Party shall provide that where the term of protection of a work, performance, or phonogram is to be calculated: 

  1. based on the life of a natural person, the term shall be not less than the life of the author and 70 years after the author's death; and
  2. on a basis other than the life of a natural person, the term shall be:
    • not less than 75 years from the end of the calendar year of the first authorized publication of the work, performance, or phonogram, or
    • failing such authorized publication within 25 years from the creation of the work, performance, or phonogram, not less than 70 years from the end of the calendar year of the creation of the work, performance, or phonogram.

For item (1) above Canada is entitled to a transition period of 2.5 years which begins on the date of entry into force of this Agreement.

Bill C-4 does not amend the basic provision concerning the term of copyright protection based on the life of the author which will continue to be the life of the author, the remainder of the calendar year in which the author dies, and fifty years following the end of that calendar year. It does amend the other provisions not based on the life of a natural person. At a later date the Act will be amended to amend the basic provision. If existing terms of protection based on the life of the author expire before the additional amendment is in force protection under the Act will be lost.

Voltage Pictures, LLC v. Salna 2019 FC 1412

In thiscase the plaintiff brought a reverse class action under the Federal Court Rules to enforce the copyright it owned in several films. It was alleged that copyrights in issue were being infringed through peer-to-peer networks using BitTorrent, a communication protocol for file sharing. A person who wishes to share a computer file with others saves that file in a computer folder. The BitTorrent software then offers that file for download to anyone using compatible BitTorrent software who requests that file.

A reverse class proceeding is a civil action brought against persons defending on behalf of a group of similarly situated persons.  This proceeding evolved to provide plaintiffs with an enforceable remedy where it was otherwise impractical to secure the attendance of all potential defendants, while ensuring those affected by the outcome, although absent, were sufficiently protected. Adequate representation of absentee defendants was considered a sufficient substitute for the natural justice requirements of individual notice and the opportunity to be heard.

The plaintiff alleged that the proposed representative respondents infringed in three ways: (i) making a film available for download by means of a BitTorrent network offering the file for uploading, or actually uploading a film; (ii) advertising by way of the BitTorrent protocol that a film is available for download; and (iii) failing to take reasonable steps to ensure that the first and second unlawful acts did not take place in respect of an internet account controlled by an Internet Account Subscriber, and by doing so authorized such unlawful acts. The plaintiff defined an "Internet Account Subscriber" or "internet subscriber" as a person contractually obligated to an internet service provider [ISP] to pay for internet services.   

The plaintiff moved to certify its proceeding as a class proceeding but failed. The judge found that the plaintiff had not met the low threshold requirement of showing that the pleadings disclosed a reasonable cause of action with respect to the Authorizing Infringers who were Internet subscribers. At best, it established that questions of copyright subsistence and copyright ownership were common to each respondent regarding at least one film.

The appropriate class membership could not be determined without an in-depth examination of the merits of individual liability issues. The nexus between an IP address and the person responsible for copyright infringement is highly technical and difficult to assess without considering individual liability issues. The plaintiff only presented evidence that a specific IP address was involved in each infringement. There was little or no evidence concerning the actual individual who infringed. For example, in some cases many individuals had access to device(s) connected to the IP address.

In addition, the judge concluded that:

  1. A class proceeding was not a preferable procedure for the just and efficient resolution of any common issues since multiple individual fact-findings for each class member on almost every issue would be required. The factual context in which an internet subscriber may permit users to access his or her internet connection could vary widely from one class member to another;
  2. There were other means of resolving the plaintiff's claims that were preferable; namely joinder of multiple defendants to the action or consolidation of actions;
  3. The plaintiff's litigation plan depended upon the notice-and-notice regime and would place an additional burden on ISPs, which was not contemplated by Parliament. The plaintiff was also seeking to inappropriately use the notice-and-notice regime as a litigation support service; and  
  4. The proposed class respondents lacked the incentive to defend the action with diligence and vigor.

Louis Vuitton Malletier S.A. v. Wang 2019 FC 1389

In this case, the plaintiff alleged infringements under the Trademarks Act and the Copyright Act, relating to sale of counterfeit copies. The plaintiff moved for summary trial. Because the plaintiff's goods are luxury goods a significant attraction for counterfeiters and customers is the difference in price between the counterfeits and the actual product. It was recognized that given the nature of the counterfeit business, someone who buys a "knock off" would not necessarily have otherwise bought a genuine product.

As it is notoriously difficult to assess lost sales, the courts have sought to assess damages as best as it can be done. In 2002, the Federal Court found that not only is a defendant's ability to pay not a factor in deciding if damages are owed, but that the difficulty in reaching an appropriate amount of damages cannot relieve the court from seeking to assess damages. The difficulty is compounded by the fact that the quantity and the value of counterfeit items are often unknown and unknowable, absent business records, as is often case in these cases.

The Court has developed, over time, an approach that has been applied in uncontested cases,-plaintiffs have been awarded damages of $3,000 in the case of street vendors and flea market operators, $6,000 in the case of sales from fixed retail premises, and $24,000 in the case of manufacturers and distributors.

The evidence showed that the defendants were uncooperative, not being disposed to produce any documentation or adequate records concerning their operations. In such circumstances, it was impossible to estimate the actual damages.

The initial three amounts reflect the size of the operation in a particular context. The amount of $24,000 (before factoring in inflation since 1997) reflects that the counterfeiter operates on a significant grander scale than a retailer. To come within the last category there must be evidence that quantities of counterfeit products are larger and distributed to retailers.

The judge referred to a previous decision of the Federal Court of Appeal for the proposition that a nominal damages award, on the basis set out above, is justified where the defendants are uncooperative, proof of actual damages is difficult and it is hard to estimate the harm done to the trademark owner's goodwill through the sale of inferior quality counterfeit good. As a result, significant damages were assessed using this approach for trademark infringement.

The court also awarded the maximum amount of statutory damages for copyright infringement for two works in issue. However, if the plaintiff had not elected for statutory damages the approach noted about could have been applied.

Copying for Private Use, (December 13, 2019) unreported decision (Copyright Board)

The private copying regime came into force in 1998. The Copyright Act provides that it is not an infringement of copyright to reproduce a sound recording onto an "audio recording medium" for the private use of the person who makes the copy.  In return, the regime provides that eligible authors, performers and makers of sound recordings may receive remuneration from manufacturers and importers of blank audio recording media concerning the reproduction onto an "audio recording medium", for private use, of sound recordings and the musical works and performers' performances. The remuneration takes the form of a levy set by the Board following filing a proposed tariff by CPCC, to be paid regarding each blank audio recording medium disposed of in Canada.

The Canadian Private Copying Collective (CPCC) proposed a tariff with a levy of 29¢ for each blank CD made in, or imported, into Canada.  On December 13, 2019 the Board released its decision which concluded that blank CDs continued to qualify as a "blank audio recording medium" under the Act.  It was also agreed that a levy of 29¢ for each blank CD was appropriate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.