Vous êtes sur la page 1sur 136

Court File Numbers: T-2090-14;

T-269-15; T-477-15; T-1085-15; T-1234-15; T-1862-15;


T-2042-16;
T-117-17; T-132-17; T-133-17; T-134-17

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Attorney General of Canada


Defendant
(Moving Party)

Court File No. T-745-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Bank of Canada
Defendant
(Moving Party)
Court File No. T-897-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Canadian Transportation Agency


Defendant
(Moving Party)

Court File No. T-1726-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Library of Parliament
Defendant
(Moving Party)
MOTION RECORD
FOR MOTION TO STAY ALL BLACKLOCKS ACTIONS pending the determination
of Actions against Health Canada and one non-AG Canada Defendant

HAMEED LAW
43 Florence Street
Ottawa, ON
K2P 0W6
Per: Yavar Hameed
Tel: (613) 232-2688 ext. 228
Fax: (613) 232-2680

Solicitors for the Plaintiff, 1395804


Ontario Ltd., o/a Blacklock's Reporter
TO: Alexandre Kaufman and Sarah Sherhols
Department of Justice
50 OConnor Street, Suite 500
Ottawa, ON K1A 0H8

Tel: (613) 670- 6297 / (613) 670 - 6287


Fax: (613) 954-1920

Solicitors for the Defendant


William F. Pentney
Deputy Attorney General of Canada

AND TO: Allan Matte


Legal Services Directorate
Canadian Transportation Agency
15 Eddy Street
Gatineau, QC K1A 0N9

Tel: 819-994-2226
Fax: 819-953-9269

Solicitors for the Defendant


Canadian Transportation Agency

AND TO: Ariel Thomas


Fasken Martineau Dumoulin LLP
55 Metcalfe Street, Suite 1300
Ottawa, ON K1P 6L5
Tel: (613) 236-3882
Fax: (613) 230-6423

Solicitors for the Defendant


Library of Parliament

AND TO: Larry Elliot


Andrea Pitts
Borden Ladner Gervais LLP
100 Queen Street, Suite 1300
Ottawa, ON K1P 1J9
Tel: (613) 237-5160
Fax: (613) 230-8842

Solicitors for the Defendant


Bank of Canada
1395804 Ontario Ltd., operating as Blacklock's Reporter v. AGC;
1395804 Ontario Ltd., operating as Blacklock's Reporter v. Bank of Canada;
1395804 Ontario Ltd., operating as Blacklock's Reporter v. Canadian Transport
Agency
1395804 Ontario Ltd., operating as Blacklock's Reporter v. Library of Parliament

Table of Contents

TAB DOCUMENT PAGE NO.

Volume I

1 Notice of Motion, dated March 21, 2017 1

2 Affidavit of Tom Korski, sworn March 20, 2017 9

Exhibit A Stay Order of Case Management Judge Mireille Tabib, 21


dated March 3, 2016

Exhibit B Justice Barnes decision on Finance, dated November 29


10, 2016

Exhibit C CRA Statement of Claim, dated October 9, 2014 52

Exhibit D CIDA Statement of Claim, dated February 23, 2015 60

Exhibit E CFIA Statement of Claim, dated March 31, 2015 67

Exhibit F CB Statement of Claim, dated June 29, 2015 75

Exhibit G Public Works Statement of Claim, dated July 24, 2015 85

Exhibit H Parks Canada Statement of Claim, dated November 4, 93


2015

Exhibit I Bank of Canada Statement of Claim, dated May 6, 2015 103

Exhibit J Canadian Transportation Agency Amended Statement 112


of Claim, dated July 15, 2015

Exhibit K Library of Parliament Statement of Claim, dated 119


October 14, 2015

Exhibit L Environment Canada Statement of Claim, dated 131


November 28, 2015
Exhibit M Health Canada Statement of Claim, dated January 24, 146
2017

Exhibit N EDSC Statement of Claim, dated January 26, 2017 158

Exhibit O Transport Canada Statement of Claim, dated January 167


26, 2017

Exhibit P FINTRAC Statement of Claim, dated January 26, 2017 179

Exhibit Q Email to Ms. Drummond, dated July 14, 2014 190

Exhibit R List of Emails 192

Exhibit S Email from Mr. Folz, dated September 19, 2014 250

Exhibit T ATI request from Health Canada, 2014 252

Exhibit U ATI Request from Health Canada, 2016 256

Exhibit V Email exchange between H. Doan and L. Desrosiers, 262


dated December 19, 2016
266
Exhibit W Inquiry of Ministry, dated May 30, 2014

Volume II

Memorandum of Fact and Law, dated March 21, 2017

Volume III

Book of Authorities
1

Court File Numbers: T-2090-14;


T-269-15; T-477-15; T-1085-15; T-1234-15; T-1862-15;
T-2042-16;
T-117-17; T-132-17; T-133-17; T-134-17

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Attorney General of Canada


Defendant
(Moving Party)

Court File No. T-745-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Bank of Canada
Defendant
(Moving Party)
2

Court File No. T-897-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Canadian Transportation Agency


Defendant
(Moving Party)

Court File No. T-1726-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Library of Parliament
Defendant
(Moving Party)
3

NOTICE OF MOTION
FOR MOTION TO STAY ALL BLACKLOCKS ACTIONS pending the determination
of Actions against Health Canada and one non-AG Canada Defendant

TAKE NOTICE THAT the Plaintiff (moving party), 1395804 Ontario Ltd., operating as
Blacklock's Reporter, will make a motion to the Court, orally, pursuant to Rule 385 of the
Federal Courts Rules at a special sitting of the Federal Court on May 2, 2017 at 9:30
a.m. or as soon thereafter as this Court may permit.

THE MOTION IS FOR

1. An Order pursuant to Rule 385, requiring as follows:

a) That the parties proceed to trial with action T-117-17 in respect of


Health Canada;
b) That the parties proceed to trial with one action as filed against a non-
AG Canada Defendant in any of T-745-15 (Bank of Canada); T-897-15
(Canadian Transportation Agency), or T-1726-15 (Library of
Parliament);
c) That pending the disposition of the actions described above, all other
actions case managed by the Federal Court relating to copyright
infringement of the Plaintiff be stayed;
d) Each party bears its own costs for the present motion.

2. Such further and other Order as this Court may deem just for the further

administration of the within noted actions.

THE GROUNDS FOR THE MOTION ARE:

1. The present motion seeks a stay of proceedings in respect of twelve of fourteen


actions alleging copyright infringement filed against the Attorney General of
4

Canada and other non-AG Canada defendants by the Plaintiff, 1395804 Ontario
Ltd. Operating as Blacklocks (Blacklocks Reporter). The stay sought is
pending the disposition of one action against the Attorney General of Canada in
relation to Health Canada in Court File No. T-117-17 (the Health Canada
action) and one action against a non-Attorney General of Canada Defendant.

2. The Plaintiff is a reporter-owned and operated Ottawa based news corporation


that provides news on a subscription basis to individuals, businesses, and
associations. The Plaintiff maintains its articles as paywalled and password
protected meaning that the general public cannot access its articles without a
subscription.

3. The Plaintiff alleges that the Defendants, (various government departments and
agencies) have unlawfully distributed its articles and breached its copyright after
having obtained the articles by way of single use subscriptions and through
misuse of passwords.

4. The Plaintiff currently has 14 actions that it has filed against the Attorney General
of Canada (AG Canada) and other non-AG Canada defendants in the Federal
Court since 2014, which remain either to proceed to discoveries and/or to be
scheduled for a pretrial and trial.

5. Eleven (11) actions have been filed against various federal government
departments and three (3) actions have been filed against non-AG Canada
Defendants, the Bank of Canada (T-745-15), Canadian Transportation Agency
(T-897-15), Library of Parliament (T-1728-15).

6. In March of 2016, this Court ordered that all actions then filed by the Plaintiff
against AG Canada and others be stayed until the disposition of the action in
court file No. T-1391-14 involving Finance Canada. The trial in T-1391-14
proceeded in September 2016 and the Court rendered its judgment on
5

November 10, 2016 in favour of the Defendant.

7. The trial decision of Justice Barnes in T-1391-14 states: Nothing in these


reasons should however be taken as an endorsement of arguably blameworthy
conduct in the form of unlawful technological breaches of a paywall (or) misuse
of passwords.

8. During case management conferences held on January 23, 2017 and March 6,
2017, the parties discussed methods of proceeding with the remaining matters
following the expiry of the March 2016 stay order. The Plaintiff indicated that the
Health Canada action should proceed and all other actions should be stayed.
The Defendants, however, jointly took the position that another action should
proceed first that involved a more moderate size of distribution of Blacklocks
copyright protected articles.

9. The Defendant AG Canada also advanced a novel proposal that would bifurcate
all matters commencing first with a joint determination of damages in all files
followed by a determination of liability. However, it was unable to confirm the unit
price or the method of quantifying the unit price of Blacklocks articles for the
purpose of its intended bifurcation approach.

10. The Court also suggested that there were several options open to the parties -
including the possibility of proceeding with two actions.

11. The parties are generally ad idem with respect to the applicability of a stay of
proceedings, but disagree as to which actions should be stayed.

12. Proceeding with the Health Canada action as the next case constitutes the most
expeditious, least expensive and most just manner of addressing all issues
raised by the Plaintiffs copyright actions.

13. The breadth of issues covered by the Health Canada action would reasonably
allow for determination of the legal and factual copyright concerns that were not
6

addressed by the Finance action in T-1391-14.

14. In view of the Defendants contention that a more moderate scope distribution
claim should proceed and in view of the fact that issue estoppel and res judicata
would, in any event, not bind non-AG Canada parties to a ruling relating to AG
Canada, it would be reasonable to also proceed with a second case against a
non-AG Canada defendant.

15. The particulars of the Defendant Attorney Generals alternative novel proposal of
bifurcation have not been identified and would in any event require consent of all
parties with respect to reversing the legal and factual order of proceeding with
liability and damages assessment. The Plaintiff reserves its right to respond to
the Defendants cross-motion in respect of its novel proposal.

16. The Health Canada action is distinguishable on its facts from the action in T-
1391-14.

17. The Health Canada action involves alleged misuse and/or sharing of a password.

18. The size of distribution of articles in the Health Canada action will require a ruling
that deals with large scale internal and external distribution of Blacklocks content
and subsumes smaller scale distribution.

19. The Health Canada action involves a matter of ongoing copyright violation further
to multiple advisories against distribution from the Plaintiff.

20. By also proceeding with a non-AG Canada defendant, the parties will be able to
address smaller scale distribution in an institutional framework different than that
of the Government of Canada.

21. Rule 385 of the Federal Courts Rules.

22. Such further and other grounds as counsel may advise.


7

THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the


motion:

1. The affidavit of Tom Korski and attached exhibits or such other affidavit as may
be required;
2. Such further material as Counsel may advise and this Honourable Court may
permit.

March 21, 2017

______________________________

HAMEED LAW
43 Florence Street
Ottawa, ON
K2P 0W6
Per: Yavar Hameed
Tel: (613) 232-2688 ext. 228
Fax: (613) 232-2680

Solicitors for the Plaintiff, 1395804 Ontario


Ltd., o/a Blacklock's Reporter

TO: Alexandre Kaufman and Sarah Sherhols


Department of Justice
50 OConnor Street, Suite 500
Ottawa, ON K1A 0H8

Tel: (613) 670- 6297 / (613) 670 - 6287


Fax: (613) 954-1920

Solicitors for the Defendant


William F. Pentney
Deputy Attorney General of Canada
8

AND TO: Allan Matte


Legal Services Directorate
Canadian Transportation Agency
15 Eddy Street
Gatineau, QC K1A 0N9

Tel: 819-994-2226
Fax: 819-953-9269

Solicitors for the Defendant


Canadian Transportation Agency

AND TO: Ariel Thomas


Fasken Martineau Dumoulin LLP
55 Metcalfe Street, Suite 1300
Ottawa, ON K1P 6L5
Tel: (613) 236-3882
Fax: (613) 230-6423

Solicitors for the Defendant


Library of Parliament

AND TO: Larry Elliot


Andrea Pitts
Borden Ladner Gervais LLP
100 Queen Street, Suite 1300
Ottawa, ON K1P 1J9
Tel: (613) 237-5160
Fax: (613) 230-8842

Solicitors for the Defendant


Bank of Canada
9

Court File Numbers: T-2090-14;


T-269-15; T-477-15; T-1085-15; T-1234-15; T-1862-15;
T-2042-16;
T-117-17; T-132-17; T-133-17; T-134-17

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Attorney General of Canada


Defendant
(Moving Party)

Court File No. T-745-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Bank of Canada
Defendant
(Moving Party)
10

Court File No. T-897-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Canadian Transportation Agency


Defendant
(Moving Party)

Court File No. T-1726-15

FEDERAL COURT

B E T W E E N:

1395804 Ontario Ltd., operating as Blacklock's Reporter

Plaintiff
(Responding Party)

-and-

Library of Parliament
Defendant
(Moving Party)

AFFIDAVIT OF TOM KORSKI


11

FOR MOTION TO STAY ALL BLACKLOCKS ACTIONS pending the determination


of Actions against Health Canada and one non-AG Canada Defendant

I, Tom Korski, of the City of Ottawa, in the Province of Ontario DO SOLEMNLY


AFFIRM:

1. I am one of the owners and principal shareholders of the Plaintiff corporation and
have been directly involved in all litigation regarding claims of copyright infringement
involving Blacklocks password protected news articles as filed by the Plaintiff in both
the Federal Court of Canada and the Superior Court of Justice. Since 2014, the Plaintiff
has filed 15 actions in the Federal Court for breach of its copyright. One of these
actions has been proceeded to trial and 14 actions remain to be scheduled for
discoveries and/or trial. The present motion relates to the Plaintiffs request to stay all
actions with the exception of the action filed against the Attorney General in Court File
No. T-117-17 as well as one non-AG Canada defendant in any of Court Files T-745-15,
T-897-15 or T-1726-15.

Prior Stay order of March 2016


2. In March of 2016, this Court ordered that all actions then filed by the Plaintiff
against AG Canada and others be stayed until the disposition of the action in court file
No. T-1391-14 involving Finance Canada. Attached hereto and marked as Exhibit A
is the stay order of Madam Prothonotary Tabib dated March 3, 2016 in Court File
Number T-2090-14, applicable to all copyright actions then filed by the Plaintiff in
Federal Court.

3. The action in respect of Court File No. T-1391-14 relating to Finance Canada
(Finance Action) was heard at trial in September 2016 and a decision was rendered
by Justice Barnes dismissing the Plaintiffs action on November 10, 2016. The decision
of Justice Barnes is attached hereto as Exhibit B.

4. The Finance Action related to the distribution of two password-protected news


articles from a third party to the Department of Finance, which was subsequently further
12

distributed internally within the Department. The Court found that there was no
distribution beyond the six recipients of the two articles and that the articles were not
distributed by Department officials outside of the Department. Based on these facts, the
Court concluded that a fair dealings defense applied to the sharing and review of
Blacklocks articles and denied the Plaintiffs claim for copyright damages. Pending the
final disposition of the Finance Action, the other 9 actions filed by the Plaintiff were
stayed since March 2016. The statements of claim in respect of these actions are
attached to this affidavit as follows:

Nine Actions Stayed by the Courts Order of March 3, 2016

5. The Plaintiffs claim against the Attorney General relating to the Canada
Revenue Agency (CRA) in Court File NumberT-2090-14 is attached hereto as Exhibit
C.

6. The Plaintiffs claim against the Attorney General relating to the Canadian
International Development Agency (CIDA) in Court File Number T-269-15 is attached
hereto as Exhibit D.

7. The Plaintiffs claim against the Attorney General relating to the Canada Food
Inspection Agency (CFIA) in Court File Number T-477-15 is attached hereto as Exhibit
E.

8. The Plaintiffs claim against the Attorney General relating to the Competition
Bureau in Court File Number T-1085-15 is attached hereto as Exhibit F.

9. The Plaintiffs claim against the Attorney General relating to Public Works in
Court File Number T-1234-15 is attached hereto as Exhibit G.

10. The Plaintiffs claim against the Attorney General relating to Parks Canada in
Court File Number T-1862-15 is attached hereto as Exhibit H.
13

11. The Plaintiffs claim against the Bank of Canada in Court File Number T-745-15
is attached hereto as Exhibit I.

12. The Plaintiffs amended claim against the Canadian Transportation Agency
(CTA) in Court File Number T-897-15 is attached hereto as Exhibit J.

13. The Plaintiffs claim against the Library of Parliament in Court File Number T-
1726-15 is attached hereto as Exhibit K.

Additional 5 Actions Filed Since March 2016

14. From March 2016 to the present, five additional actions were filed by the Plaintiff
against the Attorney General of Canada. The Plaintiff filed one action against
Environment Canada (T-2042-16) in Federal Court. Additionally, four other actions,
which were originally filed in Superior Court were refiled in Federal Court in January
2017 against the following departments: Health Canada (T-117-17); Employment and
Social Development Canada (T-132-17); Transport Canada (T-133-17); Financial
Transactions and Reports Analysis Centre (T-134-17).

15. The Plaintiff is in the process of discontinuing the four Superior Court actions, so
that all actions filed may be case managed in Federal Court and proceed in one forum.
The Plaintiff does not intend to maintain actions in two forums, but rather, it seeks to
proceed with all actions against all defendants in Federal Court.

16. The Plaintiffs claim against the Attorney General relating to Environment Canada
in Court File Number T-2042-16 is attached hereto as Exhibit L.

17. The Plaintiffs claim against the Attorney General relating to Health Canada in
Court File Number T-117-17 is attached hereto as Exhibit M.

18. The Plaintiffs claim against the Attorney General relating to ESDC in Court File
14

Number T-132-17 is attached hereto as Exhibit N.

19. The Plaintiffs claim against the Attorney General relating to Transport Canada in
in Court File Number T-133-17 is attached hereto as Exhibit O.

20. The Plaintiffs claim against the Attorney General relating to FINTRAC in Court
File Number T-134-17 is attached hereto as Exhibit P.

21. With the exception of the Plaintiffs action against the Canadian Food Inspection
Agency (CFIA), the Defendants have not moved for summary judgment against any of
the Plaintiffs actions based on the decision in the Finance Action.

Factual Issues Arising in 14 Claims

22. The actions filed by the Plaintiff that remain to be scheduled for discovery and/or
pretrial and trial involve a variety of issues that are distinct from the Finance action.
These issues include the following: varying distribution sizes of Blacklocks articles,
distribution of multiple articles authored by Blacklocks, distribution to other parties
beyond a single government department, the use of media monitoring, purchase of
individual subscriptions, repeat distribution after warnings from the Plaintiff, advice from
Department of Justice not to distribute.

23. The issues arising in the 14 actions as filed by the Plaintiff can be summarized
according to the chart I have prepared and set out below:

Defendant Court Damages Single Use Password Estimated Distribution Media Advised Repeat
File Subscription Sharing Overall to other Monitoring Against Distribution
Number Purchase Distribution Departments Distribution after
warning
1 CRA T-2090- Statutory Yes Yes 43 articles Yes Yes Yes Yes
14; TBD 440 staff
Punitives :
$20,000
2 CIDA T-269- $15,193.50 Yes Yes 632 staff Yes Yes N/A N/A
15;

3 CFIA T-477- $12,961.10 No No answer Unknown Unknown N/A Yes Yes


15; (N/A)
4 Competition T-1085- $25,922.20 Yes Yes 30 articles Yes Yes Yes Yes
Bureau 15; Punitive: 300 staff
$20,000
15

5 Public Works T-1234- $27, 793 Yes N/A 11 articles Unknown N/A Yes No
15; Punitive : (cut and
$10,000 paste)
6 Parks T-1862- $11,470 Yes Yes 15 articles Unknown Yes Yes No
Canada 15; Punitive : 2,160
$10,000
7 Environment T-2042- Statutory Yes Yes 31 articles Unknown N/A Yes Yes
16; TBD Unknown
Punitives : distribution
$20,000
8 Health T-117- $90,155 Yes. Yes 119 articles Extensive Yes Yes Yes
Canada 17; Punitive : Repeated 1,192 staff distribution
$25,000 purchase. to other
depts
9 ESDC T-132- Statutory Yes Yes, 813 staff Unknown N/A Yes Yes
17; TBD
Punitive:
$20,000
10 Transport T-133- $85,228.50 Yes Yes Over 4,000 Unknown N/A Yes Yes
Canada 17; Punitive: staff
$10,000
11 FINTRAC T-134-17 $11,470 Yes Yes 355 staff Unknown N/A Yes N/A
Punitive:
$5,000
Actions Relating to Non-AG Canada Defendants
12 Bank of T-745-15 $25,922.20 Yes Yes Over 30 TBD Yes N/A N/A N/A
Canada Punitive: at discovery
$20,000
13 CTA T-897-15 $13,639.10 Yes Yes 15 articles Unknown Unknown Yes Yes
Punitive:
$10,000
14 LOP T-1726- $30,000 Yes Unknown TBD Yes Unknown Yes, three in- Yes
15 Punitive: (1 article person
$25,000 confirmed meetings
pre-
discovery)

24. The above-chart summarizes key facts relating to each of the actions filed by the
Plaintiff in Federal Court as set out in the Plaintiffs claims. At present, certain facts are
not known by the Plaintiff for which the corresponding box in the chart is marked as
Unknown and the relevant particulars have not been pleaded in the statement of
claim. In other instances, despite requests made by the Plaintiff prior to litigation, there
has been no answer by the Defendant, in which the case the corresponding box is
marked as No Answer or N/A. The Plaintiff summarizes these issues to reflect
factual contentions raised that will affect the scope of litigation.

25. The Defendants have defended each of the above actions based on the principle
of fair dealing and/or based on the doctrine of copyright misuse.

26. The nine actions that were stayed before this Court and administered under case
16

management of Madam Prothonotary Tabib were scheduled for a case management


conference on January 23, 2017. At this time, the Plaintiff indicated that matter T-117-
17 relating to Health Canada should proceed and all other actions should be stayed.
The Defendants, however, jointly took the position that another action should proceed
first that involved a more moderate size of distribution of Blacklocks copyright protected
articles. During this case conference, it was decided that the parties should consult
regarding the most appropriate manner of proceeding with the remaining Blacklocks
actions, while adding file T-2024-16 (relating to Environment Canada) to the roster of
case managed files.

27. On March 6, 2017, a further case management conference was held at which
point, the Plaintiff reiterated its request to proceed first with the action against Health
Canada (T-117-17). The AG Canada defendants advanced two proposals: 1) to
proceed with another case with more limited distribution than the Health Canada action;
or 2) to proceed with an approach that would bifurcate all matters commencing first with
a joint determination of damages in all files followed by a determination of liability. The
Defendant AG Canada was unable to confirm the method of quantifying the unit price of
Blacklocks articles or the unit price of same for the purpose of its intended bifurcation
approach.

28. The Court suggested that there were several options open to the parties
including the possibility of proceeding with two actions. However, it was decided that the
parties should have an opportunity to advance their proposals for stay and/or
management of the proceedings commencing with a motion from the Plaintiff and a
cross motion from the Defendants with rights of reply for each party. A timetable was
scheduled for proceeding the required motions.

Health Canada Claim (T-117-17)

29. To date, there has been written discoveries on certain files, whereas other files
have not proceeded to either examination for discovery or written interrogatories. The
Health Canada action, having been recently filed in Federal Court, has not proceeded to
17

examination for discovery; however, as with other actions, the parties have agreed that
the discoveries from T-1391-14 may apply.

30. In the Health Canada action the following facts have been pleaded as set out in
the statement of claim in Court File No. T-117-17 (see: Exhibit M):

an initial single subscription to Blacklocks was purchased by Heath Canada


employee Sharron Drummond on July 4, 2013.

On or about September 12, 2013, the Plaintiff and the Defendant exchanged
communications. During this exchange, Holly Doan, publisher at Blacklock's
Reporter, sent an email to Sean Upton, communications officer at Health
Canada, in which she advised: I note that Health Canada has purchased one
subscription to BL. Please let me know if you wish to distribute copy as per our
terms and conditions on the website and I would be happy to calculate a
discounted bulk rate.' Mr. Upton acknowledged the email."

On or about January 8, 2014, the Plaintiff communicated with Gary Holub, Media
Relations Officer, Health Canada, in reference to an interview regarding a story
relating to Health Canada. At the end of this communication, Health Canada
requested a copy of a Blacklocks article and was directed to contact Holly Doan
for subscription inquiries. The Defendant did not follow up on this inquiry or
contact Ms. Doan.

On April 7, 2014, the Plaintiff submitted an Access To Information request (ATI


request) to Health Canada requesting all correspondence, documentation,
distribution, use, storage, and citation of articles or any other content by paper,
electronic, intranet, USB key or any other means via the July 4, 2013 purchase of
a subscription to the publication of Blacklocks Reporter in the name of account
holder Sharron Drummond at hc_media_sc@hc-sc.gc.ca.

On July 14, 2014, the Plaintiff sent an email to Drummond, indicating that this
subscription did not allow for redistribution of Blacklocks news content. The
Plaintiff also directed Drummond to its terms and conditions. The Plaintiffs email
communication to Ms. Drummond is attached hereto as Exhibit Q.

On July 15, 2014, Mark Montreuil (Montreuil), Chief Communications Executive


at Health Canada, replied to the Plaintiffs email of July 14, 2014 and requested a
quote for a distribution license for up to 240 users. The Plaintiff responded and
indicated the previous use of the Drummond account was under review.

On August 22, 2014, the Plaintiff sent an email to the Defendant indicating that it
had identified approximately 121 stories that were distributed to approximately
2000 names. Accordingly, the Plaintiff requested that Health Canada confirm
18

whether its content was in fact distributed to 2000 users and also requested the
identity of a gmail user whose name was redacted from the ATI request.

On September 4, 2014, Montreuil indicated that no more than 500 people


received the Articles directly from Health Canada. He also revealed the name of
the gmail account holder.

On September 27, 2014, after the Plaintiff undertook its own calculations, the
Plaintiff sent Health Canada an invoice in the amount of $90,100.55. This amount
represents the cost of an institutional license to a department the size of Health
Canada, and institutional license charges for the multiple instances of third-party
distribution to people within the Privy Council Office, Citizenship and Immigration
Canada, the Department of Agriculture, and the Canadian Food Inspection
Agency.

31. The ATI return, as described in the statement of claim, contains more than 50
pages or more of email addresses corresponding to more than 1,000 email accounts
that received Blacklocks articles on the media monitoring list of Health Canada. This
list, which contains email accounts from Agriculture Canada, CFIA, Citizenship Canada
and the Privy Council Office, is attached hereto as Exhibit R.

32. Through a separate ATI request unrelated to Health Canada, I am aware that
Health Canada was apprised of a series of actions filed by the Plaintiff against various
departments of the Government of Canada by virtue of an email from Patrick Folz,
acting manager, IP Law Group at the Department of Justice, referring to the Plaintiff
Blacklocks in the following terms: The company appears to be using information
obtained through access to information requests to inform its claims of copyright
infringement by the Crown The company has launched a civil action relating to its
infringement claims, a matter which received media attention. The email from Mr. Folz
is attached hereto as Exhibit S.

33. On November 30, 2014, the Plaintiff filed another ATI request relating to Health
Canada on Alberta Newsclips, at the address, alberta.newsclips@hc-sc.gc.ca, in the
normal course of its business to ensure copyright compliance. No records were found
to be responsive to this request. At the time, the Plaintiff was unaware that the account
was being managed by Line Desrosiers who was forwarding the information for use by
19

the communications officer for Health Canada in Alberta. Moreover, the failure of the
ATI request to return any documents suggested to me that the account was dormant.
The attached records relating to the Plaintiffs request and formal response from Health
Canada are attached hereto as Exhibit T.

34. On April 18, 2016, Assistant Deputy Minister Michelle Kovacevic bought a single
subscription from a personal email account, rudynoonie@gmail.com. As part of the
Plaintiffs routine due diligence follow up, the Plaintiff made an ATI request relating to
his purchase. No records were found as being responsive to this request, which is
attached hereto as Exhibit U.

35. The Plaintiff filed an action against Health Canada in the Superior Court of
Justice on May 2, 2016, which relates to the same alleged copyright violations that are
the subject of the claim in Court File Number T-117-17 before the Federal Court.
Accordingly, as of May 2016, the Defendant had knowledge of legal claims of copyright
infringement being made against Health Canada.

36. On December 19, 2016, the Plaintiff received an email from Line Desrosiers, a
media relations officer for Health Canada in Alberta, seeking renewal of her subscription
to Blacklocks. In her correspondence, she explains as follows: The account is in my
name as I am the administrative officer responsible for paying the bill, but the
subscription information goes to our Alberta Communications mailbox. This mailbox is
supported by our communications officer, who accesses the publication as part of
ongoing daily news and media monitoring for Health Canada in Alberta. The Plaintiff
previously had no knowledge of this ongoing violation of its copyright by Health Canada
in light of the misleading ATI return received in April 2014. The email exchange
between Holly Doan and Ms. Desrosiers is attached hereto as Exhibit V.

37. I am also aware, as per the attached Inquiry of Ministry tabled in the House of
Commons, identified as Exhibit W that Health Canada paid approximately $289,000
in media monitoring contracts in 2014.
20
21
22

Date: 20160303

Docket: T-2090-14

Ottawa, Ontario, March 3, 2016

PRESENT: Case Management Judge Mireille Tabib

BETWEEN:

1395804 ONTARIO LTD., OPERATING AS


BLACKLOCK'S REPORTER

Plaintiff

and

CANADA (ATTORNEY GENERAL)

Defendant

ORDER

UPON the motion of the Defendant for an order staying this action until the action in

T-1391-14 is finally determined or the Court orders otherwise;

CONSIDERING the Defendants motion record, the Plaintiffs responding motion

record and the Defendants written representations in reply;

The Plaintiff has instituted, within a 17-month span, 10 different actions for copyright

infringement. Seven were instituted against various departments or agencies of the Federal
23
Page: 2

Government, and three against other Crown corporations or agencies (The Canadian

Transportation Agency, the Library of Parliament and the Bank of Canada).

The facts upon which liability is alleged to arise are different in each case: The alleged

copyrighted materials news articles are different and often involve different authors, and the

specific acts of infringement copying and transmission to others internally are different in

each case.

It is in the defences, however, that commonality and similarities mostly arise: In all but

one case (T-2090-14), the Plaintiff claims damages based on lost profits, calculated in reference

to the value of an institutional licence for the agency or department in question; the Defendants

contend that these amount are inflated, speculative and not reflective of the real value of the

articles. In all cases, the Defendants raise the defence of fair dealing, because the internal

dissemination of the articles was for non-commercial purposes, such as research, media

monitoring, verification of accuracy or consideration of whether a response is required. In all

cases, the Defendants have raised, or expressed the intention to amend to raise, the novel defence

of abuse of copyright. This last defence, in particular, relies on the alleged similarities in the

conduct of the Plaintiff in each of the 10 actions at issue, such that all actions cross-reference

each other. It is also worth noting that the amounts claimed in all actions are modest: where

specified, all claims are in amounts ranging from $10,000 to $55,000.

The commonalities between all claims and their modest amounts cry out for some form

of streamlining and a search for efficiencies. Indeed, given particularly the interrelated defences

of abuse of copyright, the notion that there could be 10 different trials, at which the same
24
Page: 3

evidence will be led ten different times, with the attendant risk of contradictory judgements, is

abhorrent to the sound administration of limited judicial resources.

Since the Defendants first raised the possibility of a stay of proceedings in November

2015, the Court has held two case management conferences to attempt to get the parties to work

cooperatively towards a solution that would achieve the just, most expeditious and least

expensive determination of the issues.

Given that there are four different defendants, represented by different counsel, and that

the ruling in one test case would not necessarily be binding on the other defendants, it was the

Courts view that, unless the parties reached an agreement as to the applicability of certain

rulings to other cases, some form consolidation or common trial would be indicated. To address

the defendants concerns about the potentially wasted costs and the unwieldiness of defending

the non-common elements of all ten cases concurrently, the Court encouraged the parties to

discuss the possibility of severing some aspects of the actions, so that these might proceed

independently of each other. Regretfully, while some concessions were made, the parties did not

achieve an agreement. The defendants continue to pursue the stay of all actions pending the

resolution of the first, most advanced case, and the Plaintiff continues to refuse any stay and to

demand that all actions continue to be litigated and made ready for trial independently and to

address whether and how the time, manner, and date of the trials might be managed at some

unidentified later time. No party has suggested, even as an alternative remedy to the stay

requested by the defendants, that some form of consolidation, with or without bifurcation, be

ordered.
25
Page: 4

I suspect that each side remained so entrenched and focussed on their initial goals (the

Plaintiff, to move all cases as expeditiously as possible, and the Defendants, to have the validity

of their common defences ruled upon as inexpensively as possible), that they failed to open their

minds to the creative solutions that might have accommodated both sides goals. Be that as it

may, given the complexities involved and the need for all parties to work cooperatively in order

to make any compromise solution work, the Court cannot simply impose on the parties the

solution it considers best. If the parties cannot arrive at a mutually acceptable solution by

themselves, even with the Courts guidance, then they are most unlikely to be able to work

sufficiently well together for a Court-imposed solution to be effective.

The only options that are left to be considered are therefore the stay of all actions pending

the determination of T-1391-14 one of the few actions to proceed under the normal, rather than

the simplified proceedings rules and also the most advanced or, as advocated by the Plaintiff,

to allow all actions to proceed until the pre-trial conference, and only then to consider how to

manage the trials.

I am satisfied that, in the circumstances, the stay of the proceedings is the option that best

achieves the interests of justice and the just, most expeditious and least expensive determination

of the issues.

The Plaintiffs solution, in which a consideration of how the trials of all 10 cases could be

managed is deferred to a pre-trial conference, is a non-solution. The Plaintiff is pressing for each

case to move independently and as expeditiously as possible. Indeed, T-1391-14 is coming to a

pre-trial conference in 10 days. Unless T-1391-14 is stayed and all cases proceed in lock step or

are stayed as they reach the stage of a pre-trial conference, so that the pre-trial conferences can
26
Page: 5

be held in all cases concurrently, there will not be any opportunity to manage how and when

the trials are heard, as each would proceed to a pre-trial conference individually, as they are

ready, and can therefore not be assessed for a duration and trial date otherwise than in isolation.

It will be impossible to identify and account for duplications, or the potential for consolidation.

The Plaintiff has not suggested that it has contemplated, or acquiesced to delaying all pre-trials

so that they could be held together.

Even if the Court were to order that all pre-trials be held together, the Plaintiff has

offered no indication of what managing the trials might entail. A single, consolidated trial on

all issues would likely be lengthy and unwieldly without a concerted effort of the parties to

cooperate to narrow issues and simplify evidence. Given the parties less than stellar

demonstration of an ability to compromise and work cooperatively so far, I hold no great hopes

of success. If the resulting consolidated trial is to last even as little as three weeks, the costs of

such a long trial would still remain out of proportion for those defendants who are facing claims

of less than $50,000. The exercise would also effectively delay the determination of even the

most advanced actions, and deliver very little cost savings to the Court or the Plaintiff, if any.

Absent a consolidation of the trials, managing trials can only mean to withhold fixing

trial dates in all or some cases pending the determination of a test case or group of cases.

Indeed, even if the ten actions can be regrouped in subgroups, it would still be wasteful and give

rise to an unacceptable risk of contradictory judgments to have four, five or even two different

trials proceed almost simultaneously before different judges on the virtually the same facts.

Withholding trial dates at a pre-trial conference is, effectively, a stay of proceedings, but one
27
Page: 6

ordered after the costs of preparing for trial have been expended in full in all cases. It is

nonsensical.

Accordingly, I find that staying all actions pending the determination of T-1391-14 is the

only solution consonant with the interests of justice. The stay will not work an injustice or

prejudice to the Plaintiff. T-1391-14 is proceeding apace, and is effectively ready to proceed to

trial. I am not satisfied that the relatively short delay to the other actions a stay would entail

would be prejudicial to the Plaintiff. I am not satisfied there is any on-going harm being suffered

by the Plaintiff that would be unnecessarily prolonged by a stay. The Plaintiffs claim is for

damages suffered from discrete, past, instances of infringement. While the determination of T-

1391-14 will not necessarily resolve all or even substantially all of the issues in the other cases,

there is a very high likelihood that it will lead to a significant narrowing of the issues. At least in

respect of the cases where the Attorney General is a defendant, the principles of issue estoppel

will likely apply to many issues between the parties. T-1391-14 is not only the most advanced, it

is proceeding as a regular action rather than a simplified action, and therefore will allow for as

thorough a contestation as is possible under the Rules. As the consolidation of the trials is likely

to be fraught with difficulty, and may not result in a more expeditious less expensive

determination of the issues, a stay is the only means by which the very real risk of contradictory

judgment and a significant waste of the Courts resources can be avoided. In turn, the earlier the

stay is ordered, the more likely it is that costs can be saved from the early determination of issues

in the first case to proceed.

The defendants proposed order contains a provision to the effect that, to the extent any

issue remains to be determined in the other actions following the determination of T-1391-14,
28
Page: 7

the same judge be assigned to preside over the subsequent trials. It may well be in the interests

of justice that the same judge be assigned to the other actions. That would particularly be so if

the determinations in T-1391-14 and the outstanding cases are heavily fact driven. It is,

however, premature in my view to make that assessment and to tie the Courts hands. The issue

can and should be addressed at a common case management conference to be held after the

determination of T-1391-14.

THIS COURT ORDERS that:

1. This action is stayed until 45 days following the determination of T-1391-14, or

until the Court orders otherwise.

2. The parties shall, upon the lifting of the stay and having consulted each other,

advise the Court as to their intentions with respect to the continuation of this

action and provide the Court with their mutual dates of availability to participate

in a case management telephone conference to discuss the issues that remain to be

determined and a schedule for the further steps to be taken.

3. Costs of this motion shall be paid by the Plaintiff to the Defendant.

Mireille Tabib
Case Management Judge
29
30

f der o

Date: 20161110

Docket: T-1391-14

Citation: 2016 FC 1255

Ottaw a, Ontario, N ovember 10, 2016

PRESENT: The Honourable Mr. Justice Barnes

BETWEEN:

1395804 ONTARIO LTD., OPERATING AS


BLACKLOCK'S REPORTER

Plaintiff

and

CANADA (ATTORNEY GENERAL)

Defendant

JUDGMENT AND REASONS

[I] This is a case about copyright. More specifically, it is a case about the fair dealing

provisions of the Copyright Act, RSC, 1985, c C-42 [the Act] in the context of third party use of

content protected by a paywall.


31
Page: 2

[2] The Plaintiff, carrying on business as Blacklock's Reporter [Blacklock's], contends that

officials in the Department of Finance [the Department] violated its copyright by obtaining,

reading and distributing two of its news articles without authorization.

(3] The Attorney General argues that Blacklock's conduct is a misuse of copyright and that

the conduct Blacklock' s complains about constitutes fair dealing under section 29 of the Act.

l. Background

(4] Blacklock's is a small Ottawa-based, online news agency. It is owned and operated by

Tom Korski and Holly Doan. Mr. Korski is the managing editor and Ms. Doan is the publisher.

Mr. Korski writes news copy for Blacklock's along with a number of free-lance reporters.

Among other duties, Ms. Doan looks after the negotiation of licensing agreements for

institutional subscribers.

[5] Blacklock's employs a paywall to protect its news copy. In order to gain access to the full

content of its news articles a paid subscription and a password are required. Single subscriptions

are available through an online application. The application does not require a subscriber to

acknowledge and accept any terms of use before the transaction is concluded. It does, however,

refer to the purchase of custom bulk rates for institutional subscribers who would like to

distribute or share Blacklock's content in-house. At the foot of the subscription application is a

reference to "Terms and Conditions" but these are not particularized and would only be seen by a

subscriber following a search of Blacklock' s website.


32
Page: 3

[6] Blacklock's complains that in October 2013 certain Department officials acquired and

distributed two of its news articles without its consent and without payment. For this alleged

infringement it seeks damages of $17,20~. 10.

[7] The underlying relevant facts are largely undisputed. Indeed, the parties tendered an

Agreed Statement of Facts which generally describes the conduct that is the subject of this

proceeding.

(8] In the course of writing a news story about changes to Canadian sugar tariffs, Mr. Korski

interviewed the President of the Canadian Sugar Institute, Sandra Marsden. Mr. Korski also

made enquiries of the Department seeking information about the tariff changes. The

Department's media relations officer. Stephanie Rubec, responded to Mr. Korski and provided

an explanation. Further emai l exchanges between Mr. Korski and Ms. Rubec took place

throughout the afternoon of October 9, 2013 culminating in a detailed response sent to

Mr. Korski by Ms. Rubec at 7:25 pm. According to Mr. Korski, he had earlier signed off on his

article and did not see Ms. Rubec 's final response until sometime the next day. Mr..Korski 's

article was then published online on October 10, 2013 without any reference to Ms. Rubec's last

response.

l9J Mr. Korski ' s article carried the headline '$30,000,000 Sugar Tax is Averted'.

Notwithstanding Ms. Rubec's several on-the-record responses to Mr. Korski's questions, his

article improperly attributed "did not comment" to the Defendant. 1 The article quoted

1
This is a practise Mr. Korski adopts when he does not accept or approve of the answers he is given from a source:
see Exhibits D-33 and D-52 and confinned by Mr. Korski's testimony.
33
Page:4

Ms. Marsden at length and included Mr. Korski 's characterization of a 'Department of Finance

error" in the imposition of a $30 million sugar tax on the Canadian sugar industry.

[10] Ms. Marsden's attention was drawn to Mr. Korski's article upon receipt of an email sent

to her by Blacklock's at 9:12 am on October 10, 2013. The email included the following digest

of Mr. Korski ' s article:

$30,000,000 Sugar Tax Is Averted

A Department of Finance error that meant a $30 million sugar tax


is being remedied following appeals from industry. A trade group
said a mistaken tariff hike on Brazilian imports would have forced
the closure of at least one Canadian sugar refinery: ' We would
have been a casualty."

Read more.

[See Exhibit D-53]

[11] At about the same time, a Twitter message was sent by Blacklock's to Ms. Marsden

stating: ..Lucy and Ethel at Finance Canada impose a $30M sugar tax by mistake at

blacklocks.ca".

[ 12] Because Ms. Marsden could not access the entire article without a subscription she went

online and paid for a single annual subscription at a price of $148.00. She then copied

Mr. Korski's article.

[13] Ms. Marsden testified that she was immediately concerned about the accuracy of

Mr. Korski 's article and particularly, with his pejorative attribution of an "error" to the

Department. She was concerned that this statement might be linked to her and cause damage to
34
Page: 5

her working relationship with Department officials. In order to manage that relationship she sent

Mr. Korski's article to Patrick Halley in the International Trade Policy Division by pasting the

content of the article into an email. Ms. Marsden's email stated: 'Most of the facts are accurate

although I'm not all happy with the spin - obviously I wouldn't have characterized this as a

'sugar tax' nor a Department of Finance 'error'."

[14] On October 11, 2013 Mr. Korski wrote a second article on the same subject. The title of

the second piece was "'It didn't make any sense ..... Once again Mr. Korski cast the Department

in an unfavourable light. Notwithstanding Mr. Korski's awareness of Ms. Rubec's detailed

responses, this article contained the following opening sentence:

The Department of Finance is at a Joss to explain how it


mistakenly set a $30 million sugar tax, then had to withdraw it by
special amendment amid industry protest.

[15] Using her subscription password Ms. Marsden obtained a copy of this article and again

sent it by email to Mr. Halley. Ms. Marsden testified that she was unaware of Black.lock's Terms

and Conditions for use and it never crossed her mind that, by sending the articles to Mr. Halley,

she could be infringing Blacklock's copyright.

[16] At the time of receiving the subject articles, the Department did not have a Blacklock's

subscription. The evidence disclosc:s, how1:vc::r, that Ms. Rubec had made an earlier enquiry to

Ms. Doan about a bulk subscription allowing for general departmental access. Ms. Doan

provided multiple user rates of between $11,470.00 and $15,670.00 (see Exhibit P-61), but

nothing further came of the matter.


35
Page: 6

[17] When Mr. Halley received the first Blacklock's article he forwarded it by emai l to

Ms. Rubec. Mr. Halley expressed some concern about the content of the story stating: " I think

the spin can be corrected by going through the dates and facts, especially as sugar industry

clearly understands what we did and does not agree with the reporter's characterization" (see

Exhibit D-83). Ms. Rubec responded, in part, as follows: "The reporter wrote at about 4 :30 that

he would put us down as a no comment regardless and was set on his spin [ ... ].I'm going to ask

the reporter to update his story with what I provided as lengthy information/comment. I' II let you

know what he says."

[18] Mr. Halley also forwarded the first article to his departmental colleagues Dean Beyea and

Scott Winter, advising them that he was in contact with Ms. Rubec "in Media Relations on

whether follow-up is needed''. Scott Winter, in tum, sent the article to his colleague,

Karen LaHay. 2

[19] When Mr. Halley received Blacklock's second story "It didn't make any sense ... " he sent

it to another colleague, Michele Govier. He also sent it to Mr. Beyea, Mr. Winter and Ms. LaHay

with the comment: ..Not totally accurate still but better than the first story" (see Exhibit D-84).

[20] Mr. Winter was a senior policy analyst in Mr. Halley's working group and Mr. Beyea

was Mr. Halley's immediate supervisor. Ms. LaHay was also a senior policy analyst who worke;;d

with Mr. Winter in Mr. Halley's group. Mr. Halley testified that each of these individuals was

included in the circulation of the Blacklock's articles because of their possible involvement in a

follow-up to the articles. Ms. Govier was included because she was working on a related anti-
36
Page: 7

dumping file involving the sugar industry. Ms. Rubec was involved because she was the media

relations officer who had been directly communicating with Mr. Korski on the story and who

would be expected to communicate with him in the future.

(21] The documentary record indicates that only six departmental officials received copies of

one or both of the Blacklock's articles beginning with Mr. Halley.3 Notwithstanding the stated

departmental concerns about the content of Mr. Korski's articles no further follow-up was

deemed necessary and the matter was dropped.

II. Analysis

[22] To resolve this matter I need only decide whether the conduct Blacklock"s impugns is

protected under the fair dealing provisions of the Act and. in particular, section 29. Although

there are certainly some troubling aspects to Blacklock's business practices it is unnecessary to

resolve the Attorney General's allegation that this litigation constitutes a form of copyright abuse

by a copyright troll.

[23] I accept Blacklock's point that it has established that its copyrighted material was used by

the Department without payment or consent. Indeed, the Defendant admits those facts. The

burden accordingly rests on the Attorney General to establish, on a balance of probabilities, that

this acknowledged use is protected by section 29 of the Act.

2
Ms. LaHay also received a copy of the article by email from Mr. Halley on October 18, 2013.
3
1 do not accept that the evidence establishes that the articles made their way to the Minister's office, but even if
they did, nothing turns on that point.
37
Page: 8

[24] Fair dealing by a user of copyrighted material is a well-recognized right under the Act.

Section 29 provides basic legal protection where the purpose of use is ..research, private study,

education, parody or satire." The scope of protection afforded by section 29 is also well-

understood. The policy rationale for protecting user rights has been described by

Professor David Vaver in Intellectual Property Law: Copyright, Patents, Trade-marks, 2d ed

(Toronto: Irwin Law, 201 1) at page 21 5:

The Copyright Act lets users carry on a wide range of activities


without needing to worry about copyright. What the Act
specifically permits is not an infringement. Whoever does a
permitted act is not just taking advantage of a limitation, exception,
exemption, defence, "loophole," or gracious indulgence extended
by a copyright owner. He is exercising a right inherent in the
balance the Copyright Act strikes between owners and users. Both
owner and user rights must receive the fair and balanced reading
that befits remedial legislation. User rights need to be as liberally
interpreted as owner rights are, lest copyrights become
"instruments of oppression and extortion" and unduly interfere
with people' s rights to deal as they wish with their own tangible
property.

[Footnotes omitted.]

(25] The two leading cases dealing with section 29 are CCH Canadian Ltd v Law Society (?f

Upper Canada, 2004 SCC 13, (2004] I SCR 339 [CCH] and Society of Composers. Authors and

Music Publishers ofCanada v Bell Media, 2012 SCC 36, (2012] 2 SCR 326 [SOCAN]. In CCH

Chief Justice McLachlin writing for the Court noted that, in order to maintain the proper balance

between the protection of and access to copyrighted materials in the Act, the fair dealing

provision "must not be interpreted restrictively" (paras 48, 54). The Court set out a two-part test

for determining whether use of copyrighted material constitutes fair dealing, which it

characterized not as a defence but as a "user's right" (para 48):


38
Page:9

1. Whether the dealing is for the purpose of "research'' or "private study", also

known as an allowable purpose; and

2. Whether the dealing is ..fair" (para 50).

[26] While the Court in CCH did not define 'research", it notably concluded that "[r]esearch'

must be given a large and liberal interpretation in order to ensure that users' rights are not unduly

constrained'' (para 51 ). With respect to the second part of the test, whether something is "fair" is a

question of fact and depends on the facts of each case (CCH, para 52). Relevant factors to

consider are:

1. The purpose of the dealing, where an objective assessment is made of the ..real

purpose or motive" behind using the copyrighted work. such as for commercial

purposes versus charitable purposes (para 54);

2. The character of the dealing, examining how the works were dealt with, such as

whether multiple copies of works are being widely distributed, or whether a single

copy of a work is used for a legitimate purpose (para 55);

3. The quantity or amount of the dealing, including the importance of the work

allegedly infringed (para 56);

4. Alternatives to the dealing, such as whether there is a non-copyrighted equivalent

of the work that could have been used instead (para 57);

5. The nature of the work, such as whether the work has been published or is

confidential (para 58); and

6. The effect of the dealing on the work, such as whether a reproduced work is likely

to compete with the market of the original work (para 59).


39
Page: IO

[27] In CCH, the issue was whether the Law Society of Upper Canada's [LSUC] provision of

custom photocopy services to members of the LSUC was an infringement oflegal publishers'

copyrights, or whether it constituted "fair dealing". The Court's operative conclusion with

respect to the service being an allowable purpose is as follows:

64 The Law Society's custom photocopying service is


provided for the purpose of research, review and privale sludy.
The Law Society' s Access Policy states that '[s]ingle copies of
library materials, required for the purposes of research, review.
private study and criticism ... may be provided to users of the
Great Library." When the Great Library staff make copies of the
requested cases, statutes, excerpts from legal texts and legal
commentary, they do so for the purpose of research. Although the
retrieval and photocopying of legal works are not research in and
of themselves, they are necessary conditions of research and thus
part of the research process. The reproduction of legal works is for
the purpose of research in that it is an essential element of the legal
research process. There is no other purpose for the copying; the
Law Society does not profit from this service. Put simply, its
custom photocopy service helps to ensure that legal professionals
in Ontario can access the materials necessary to conduct the
research required to carry on the practice of law. In sum, the Law
Society's custom photocopy service is an integral part of the legal
research process, an allowable purpose under s. 29 of the
Copyright Act.

[28] The Court went on to conclude that the dealing was also fair, considering the LSUC

provides single copies of works for the specific purposes allowed under section 29, the existence

of an 'Access Policy" provided to all users, the lack of alternatives to the custom photocopy

service, the public interest in access to judicial decisions and other legal resources not being

unjustifiably restrained, and the lack of evidence tendered to show the market for the publishers

work decreased as a result of the copies being made.

[29] Also notable in the CCH decision is the following:


40
Page: 11

[t]he availability of a license is not relevant to deciding whether a


dealing has been fair ... If a copyright owner were allowed to
license people to use its work and then point to a person's decision
not to obtain a licence as proof that his or her dealings were not
fair, this would extend the scope of the owner's monopoly over the
use of his or her work in a manner that would not be consistent
with the Copyright Act's balance between owner's rights and
user's interests (para 70).

[30] In SOCAN, the issue was whether the appellants were entitled to collect royalties from

Bell for the provision of music previews" - 30 to 90 second excerpts - that could be streamed

online by consumers before purchasing the entire musical track. The previews helped users

decide whether to purchase a permanent download of the work. In concluding that the use of the

previews constituted 'research" under section 29, Madam Justice Abella said:

[ 18] The Federal Court of Appeal endorsed the Board's view


that listening to previews was part of planning the purchase of a
download of a musical work and was therefore "for the purpose of
research", concluding:

... it would not be unreasonable to g ive the word


"research" its primary and ordinary meaning. The
consumer is searching for an object of copyright
that he or she desires and is attempting to locate and
wishes to ensure its authenticity and quality before
obtaining it. ... "[L]istening to previews assists in
this investigation". [para. 20]

[21] It is true that an important goal of fair dealing is to allow


users to employ copyrighted works in a way that helps them
engage in their own acts of authorship and creativity: Abraham
Drassinower, "Taking User Rights Seriously", in Michael Geist,
ed., In the Public Interest: The Future o_[Canadian Copyright Law
(2005), 462, at pp. 467-72. But that does not argue for permitting
only creative purposes to qualify as 'research" under s. 29 of the
Copyright Act. To do so would ignore the fact that the
d issemination of works is also one of the Act's purposes, which
means that dissemination too, with or without creativity, is in the
public interest. It would also ignore that "private study", a concept
41
Page: 12

that has no intrinsic relationship with creativity, was also expressly


included as an allowable purpose ins. 29. Since ..research" and
"private study" both qualify as fair dealing purposes under s. 29,
we should not interpret the term "research" more restrictively than
"private study".

[22] Limiting research to creative purposes would also run


counter to the ordinary meaning of 'research", which can include
many activities that do not demand the establishment of new facts
or conclusions. It can be piecemeal, infom1al. exploratory, or
confirmatory. It can in fact be undertaken for no purpose except
personal interest. It is true that research can be for the purpose of
reaching new conclusions, but this should be seen as only one, not
the primary component of the definitional framework.

[2 7] In mandating a generous interpretation of the fair dealing


purposes, including "research", the Court in CCH created a
relatively low threshold for the first step so that the analytical
heavy-hitting is done in determining whether the dealing was fair.
SOCAN's submission that "research'. be restricted to the creation
of new works would conflate the allowable purpose with the
fairness analysis and unduly raise the bar for entering that analysis.
Moreover, its restricted definitional scope of "research'. contradicts
not only the Court's admonition in CCR that "[i]n order to
maintain the proper balance between the rights of a copyright
owner and users' interests, [the fair dealing exception] must not be
interpreted restrictively" (para. 48), but also its direction that the
term research" be given a 'large and liberal interpretation" so that
in maintaining that balance, users' rights are not unduly
constrai ned (paras. 48 and 51 ).

[30] Similarly, in considering whether previews are for the


purpose of " research" under the first step of CCH, the Board
properly considered them from the perspective of the user or
consumer's purpose. And from that perspective, consumers used
the previews for the purpose of conducting research to identify
which music to purchase, purchases which trigger dissemination of
musical works and compensation for their creators, both of which
are outcomes the Act seeks to encourage.

[Emphasis added.]
42
Page: 13

[31] From the discussion of "research" in SOCAN, the following additional principles can be

distilled:

1. Research does not need to be undertaken for the purpose of the user engaging in

its own act of authorship or creativity;

2. Research is not limited to creative purposes but can be "piecemeal, informal,

exploratory, or confirmatory", and can be undertaken for no purpose except

personal interest;

3. The first step in the fair dealing analysis is a relatively low threshold and does not

require the creation of a new work; and

4. The analysis should be undertaken from the perspective of the user or consumer's

purpose.

[32] In Warman v Fournier, 2012 FC 803 at para 5,414 FTR 249, this Court also found fair

dealing to exist where website operators reproduced a copyrighted article on their website,

described as an "online political news discussion forum which is accessible to any member of the

public and which is used for discussing political issues from a conservative viewpoint."

Justice Rennie held that the use was for an allowable purpose (news reporting under section

29.2), and was fair, despite there being an arguable alternative to the dealing and despite the

excerpts being widely distributed on the internet.

[33] I am satisfied that the Department's acknowledged use of the two Blacklock's articles

constituted fair dealing. There is no question that the circulation of this news copy within the
43
Page: 14

Department was done for a proper research purpose. There is also no question that the admitted

scope of use was, in the circumstances, fair.

[34] The evidence establishes that Mr. Halley and Ms. Rubec were directly involved in

responding to Mr. Korski. They each had legitimate concerns about the fairness and accuracy of

Mr. Korski 's reporting. In particular, Mr. Korski's attribution of "no comment" to the

Department was a misrepresentation and his attribution of a mistake to the Department was, at

best, ill-informed. Even Mr. Korski admitted that this pejorative description was based on

assumptions about what had occurred. Based on what actually took place Blacklock's reference

to 'Lucy and Ethel" was also inapt and unfair. Mr. Halley and Ms. Rubec therefore had an

interest in correcting the record with Blacklock's.

[35] Mr. Halley's further limited distribution of the articles to five departmental colleagues for

their review also falls squarely within the scope of permitted research. Everyone involved had a

legitimate need to be aware in the event that further action was deemed necessary.

[36] In finding the scope of use of the articles to be fair I have considered the following

factors, all of which favour the Defendant's position:

(a) The articles were legally and appropriately obtained by Ms. Marsden who was a

paid subscriber to Blacklock' s. Blacklock's website was not hacked or accessed

by illicit means. In the result, the articles were no longer behind Blacklock's

paywall when the Department obtained them.


44
Page: 15

(b) Ms. Marsden sent the articles to Mr. Halley for a legitimate business reason

(i.e. , to protect her business reputation and to manage her working relationship

with the Department);

(c) The Department received the articles unsolicited and used them (i.e., read them)

for a legitimate business purpose (i.e., to consider w hether the stories required a

response or correction);

(d) The articles were circulated among only six Department officials all of whom had

a reason to see them;

(e) No commercial advantage was sought or obtained by the Department' s use of the

articles nor were they republished in any form;

(f) The two articles represented only a small fraction of the protected news copy on

Black.lock's website and one of them was shortly-after publically exposed on

Blacklock' s website;

(g) The articles contained information obtained from the Department in response to

Mr. Korski ' s queries. As a source, the Department had a direct and immediate

interest in their content. Indeed, a finding of copyright infringement against a

news source for the simple act of reading the resulting copy is likely to have a

chilling effect on the ability of the press to gather information. Such a result

cannot be in the public interest;

(h) Mr. Halley and Ms. Rubec had a reasonable basis for their concern that the

articles misrepresented some of the information they had conveyed to Mr. Korski
45
Page: 16

and that a correction might be warranted. The involvement of their colleagues in a

possible follow-up was, in the circumstances, reasonable;

(i) Neither Ms. Marsden nor the Department were aware of. or agreed to, Blacklock's

Terms and Conditions. In any event and as noted below, those provisions did not

unambiguously prohibit the circulation of Blacklock's copy for personal or non-

commercial purposes. If Ms. Marsden, as a subscriber, had the right to use and

distribute the articles for a non-commercial purpose, those who received the

articles lawfully could reasonably expect to enjoy the same privilege;

U) What occurred here was no more than the simple act of reading by persons with

an immediate interest in the material. The act of reading, by itself, is an exercise

that will almost always constitute fair dealing even when it is carried out solely

for personal enlightenment or entertainment; and

(k) While the public interest is served by the vigilance of the press, copyright should

not be a device that serves to protect the press from accountability for its errors

and omissions. The Department had a legitimate interest in reading the articles

with a view to holding Blacklock's to account for its questionable reporting.

(37] I agree with Mr. Hameed that the deliberate breach of the accepted terms of access to and

use of copyrighted material, whether protected by a paywall or not, is a relevant consideration in

applying the fair dealing provisions of the Act. However, the owner of copyright must establish

that the terms of use actually prohibit the access or distribution in question and that the person

involved was aware of the limitations.


46
Page: 17

[3 8] It is a simple exercise to bring the stipulated terms of use to the attention of a subscriber

to a paywall-protected news service. All that is required is an acknowledgement at the time of

acquiring access that the terms in question were read and accepted.

[39] In this case Blacklock's failed to ensure that its subscribers were aware of the Terms and

Conditions it sought to impose. According to Mr. Korski and Ms. Doan, an astute or

sophisticated subscriber to Blacklock' s would be aware of its limitations on use by the reference

on the application form to bulk user access and by the generic reference to 'Terms and

Conditions" at the foot of every website page.

[40] In my view Blacklock's approach is deficient and potentially misleading to subscribers

like Ms. Marsden. Because the Terms and Conditions of use were not clearly brought to

Ms. Marsden' s attention for acceptance, she had no reason to think that by sharing the two

Blacklock's articles she was breaching Blacklock's copyright or facilitating a breach by others.

[41] The requirement for bringing contractual conditions to the attention of a subscriber at the

time of purchase is well-known in the law. It is not something that is imposed by bare inference

or by falling back on the supposed sophistication of users. At a minimum the party to be bound

must be shown to have been aware of the Terms and Conditions at the time of purchase: see

Kobelt Manufacturing Co v Pacific Rim Engineered Products (1987) Ltd, 2011 BCSC 224 at

para 124, 84 BLR (4 th) 189.


47
Page: 18

[42] I do not accept that Ms. Marsden or the Department should be taken to be aware of

Blacklock's web-based tenns of use. 4 But even if they had been aware they would have been no

further ahead. Blacklock's Terms and Conditions contain a material ambiguity concerning

downstream distribution. On the one hand they seemingly prohibit distribution by subscribers

but, on the other, they permit it for personal, or non-commercial uses:

Blacklock 's Reporter and its contents are the property of 1395804
Ontario Ltd., and are protected, without limitation, pursuant to
Canadian and foreign copyright and trademark laws.

You acknowledge and agree one subscription is allotted per


subscriber. Distribution of articles, photographs, images, writings
or other content of any kind by a single subscriber by paper,
electronic file, disc, intranet or any and all methods is not
permissible. For purchase of bulk subscriptions, see "Contact".

Reproduction, duplication, or distribution of Blacldock's Reporter


and/or all or any part of its content for anything other than your
personal, non-commercial use is a violation not only of these
Terms and Conditions but also of copyright laws unless you have
written permission from Blacklock 's Reporter. The content on
Blacklock 's Reporter is made available to you for non-commercial,
personal, or educational purposes only. The content may not be
modified in any manner and the intellectual property notice must
be included on every display and copy of the content. No other use
is permitted. Nothing contained herein shall be construed as
conferring any right under any copyright of Blacklock 's Reporter
or any other person who owns the copyright in the content
provided on Blacklock 's Reporter. [Emphasis added.]

[43] As the drafter of the above conditions, Blacklock's is bound to the interpretation most

favourable to the users of its copy which, in this case, permitted Ms. Marsdcn's distribution to

the Department for a non-commercial purpose, and by implication, permitted a similar use by

Mr. Halley.

~Ms.Marsden testified that she only wanted copies of the two articles and had no reason to search Blacklock's
website for its conditions of use when she completed the subscription application.
48
Page: 19

[44] All of this is not to say that subscribers like Ms. Marsden have unlimited rights of use of

copyrighted material. Absent consent, subscribers and downstream users are subject to the

obligations imposed on them by the Act. But at the same time they enjoy the considerable

protection afforded to them under the statutory fair dealing provisions.

[45] Blacklock' s maintains that this case challenges the viability of its business model

including its right to protect news copy behind a subscription-based paywall. The suggestion that

Blacklock' s business cannot survive in the face of the minor and discrete use that took place here

is essentially an admission that the market places little value on Blacklock's work-product. All

subscription-based news agencies suffer from work-product leakage. But to customers who value

easy, timely and unfettered access to news that may not be readily available from other sources,

the price of a subscription is worth paying. It also goes without saying that whatever business

model Blacklock's employs it is always subject to the fair dealing rights of third parties. To put it

another way, Blacklock's is not entitled to special treatment because its fi nancial interests may

be adversely affected by the fair use of its material. Nothing in these reasons should however be

taken as an endorsement of arguably blameworthy conduct in the form of unlawful technological

breaches of a paywall, misuse of passwords or the widespread exploitation of copyrighted

material to obtain a commercial or business advantage.

III. Conclusion

[46] For the foregoing reasons this action is dismissed with costs payable to the Defendant. I

am given to understand that offers to settle may have been exchanged. I will therefore invite the
49
Page: 20

parties to address this issue in writing within ten days of this decision. Neither submission is to

exceed ten pages in length.


50
Page: 21

JUDGMENT

THIS COURT'S JUDGMENT is that this action is dismissed.

THE COURT FURTHER ORDERS that the issue of costs is reserved pending the

receipt of written submissions from the parties.

"R.L. Barnes"
Judge
51

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET: T-1391-14

STYLE OF CAUSE: 1395804 ONTARIO LTD., OPERATING AS


BLACKLOCK'S REPORTER v CANADA (ATTORNEY
GENERAL)

PLACE OF HEARING: OTTAWA, ONTARIO

DATE OF HEARING: SEPTEMBER 19 TO 23, 2016

JUDGMENT AND REASONS: BARNES J.

DATED: NOVEMBER 10, 2016

APPEARANCES:

Mr. Yavar Hameed FOR THE DEFENDANT

Mr. Alex Kaufman FOR THE DEFENDANT


Ms. Orlagh O'Kelly

SOLICITORS OF RECORD:

Hameed Law FOR THE DEFENDANT


Barristers and Solicitors
Ottawa, ON

William F. Pentney FOR THE DEFENDANT


Deputy Attorney General of Canada
Ottawa, ON
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130