A five-day Federal Court case beginning Monday, September 19 will likely be a precedent-setting ruling for copyright law in Canada. The plaintiff, a digital media company called Blacklock's Reporter, is suing the federal government for copyright infringement.
Blacklock's Reporter, a startup online news source, is seeking $17,816.71 in damages because it claims Finance Canada employees had "unauthorized use and/or of its subscription based content."
Holly Doan, publisher of Blacklock's, says she was surprised when she discovered that Finance had obtained the news provider's copy without paying. Blacklock's currently has another 14 lawsuits filed against federal government departments and agencies in both Federal Court and Ontario Superior Court.
"The facts in the cases are all different and Blacklock's intends to litigate each one. We are not a troll suing for quick settlement. We are litigating to prove that journalism has value and intellectual property ought to be protected under the Copyright Act. Mainstream media organizations in Canada are struggling. The Canadian Newspapers Association appeared before the Canadian Heritage committee on the future of media and mused about copyright protection. But they're giving away product for free. How do you argue for copyright when you've been giving it away?" said Doan.
Doan says her company has bulk subscribers in ten provinces; large private and public sector unions, university libraries, advocacy groups and industry associations. The company has also had its work cited by other large news organizations like The New York Times and Wall Street Journal.
In the upcoming case involving Finance Canada, the plaintiffs claim a senior staff member in the communications department contacted Doan for a quote on a bulk subscription for Finance Canada. (Buying media subscriptions for "media monitoring" is standard practice by departments, and according to documents tabled in the House of Commons in 2014, the federal government spends 20-million-dollars a year on it.) Months later, the government department used another organization's Blacklock's Reporter account to access articles from the site. Blacklock's Reporter discovered the department had accessed its content by filing an access to information request.
Intellectual property lawyer and Ottawa University law professor Teresa Scassa has been following Blacklock's litigation. Blacklock's has thus far won one ruling in an Ottawa lower court which has no precedent on the Federal Court's ruling later this month that Scassa and others in the intellectual property academic community are concerned could severely limit fair dealing in the future if the Federal Court's ruling is similar to that of the lower court's on the issue of infringement.
"Copyright misuse relies on an argument that the copyright owner, through its conduct, is attempting to secure for themselves a broader right than it is entitled to by law. The defence now has a considerable track record in the United States, but remains novel in Canada," stated Scassa.
Scassa noted many copyright infringement lawsuits don't make it to court in Canada. "First, Canadians are less litigious in general (so fewer lawsuits are filed). Second, parties with limited resources will settle rather than going to court because they simply cannot afford to fight their case in court."
The lack of copyright infringement cases that go to court in Canada is a main reason why the paywall has yet to be tested in Federal Court.
The defendants in the upcoming case are claiming that Blacklock's is a "copyright troll" claiming more rights than it's entitled to under the Copyright Act. In the statement of defence, the defendants claim that Blacklock's "employs a strategy of requesting information from government departments, calling persons within for quotes, [and] publishing articles about the department's activities." They also contest the news site then sends "teaser emails" with cutlines and headlines "designed to interest the department in reading and distributing articles." The defendants claim some of Blacklock's articles are "incorrect and misleading" and that the plaintiffs use access to information requests "anticipat[ing]" the department would access the Blacklock's articles so that the media company can litigate. The defendants also claim the articles were only used for "a non-commercial, research purpose."
Andrew Gowing, of media relations for the Department of Justice, gave the following comment: "As outlined in the [statement of defence], the Attorney General of Canada has pleaded fair dealing and believes this is an example of copyright misuse."
The case becomes more complicated by the fact that the Copyright Act was amended in 2012 by the Harper government's Copyright Modernization Act. Within the amendments to the Act, it is now illegal to circumvent a "technology protection measure" (i.e. paywall) to access copyrighted material. This newer legislation will likely be tested and better defined by this Federal Court case's ruling. Scassa and other intellectual property academics are concerned that if Blacklock's Reporter wins its case the ruling could give "glorified status to the paywall." She sees this as an issue for "the right to read" and fair dealing. She believes that there needs to be a fine balance struck between copyright protection and fair dealing.
Whatever the judge's ruling, the findings of this case should have implications on the extent of Canadian media's rights over its content.
Strengthening of Canadian copyright would definitely be a welcomed development for some players in a floundering industry. Stronger control over copyright could help publications achieve profitability by combatting a digital age of ubiquitous free sharing.
A report from the American Press Institute researched the top 98 newspapers in America and found that there was a major shift in the market from free online sites to paywall models by the vast majority of the papers in the last five years. In Canada, it seems there may also be a similar shift towards paywalls as National Observer and other online Canadian publications have recently switched over to paywalls.
Online media startup entrepreneurs Ezra Levant (co-founder of Rebel Media) and Allison Smith (founder of Queen's Park Today) both find that copyright infringement of their intellectual property has been only a minor issue.
"We have free content (on our website and on YouTube) and premium content behind a paywall. Both generate revenue… Like all broadcasters, we have occasional copyright infringers, but companies like YouTube and Facebook have been good at handling any issues that arise. It frankly hasn't been a big issue," wrote Levant by email.
Despite the protection afforded creators contributing to large social media companies, other smaller media startups are more dependent on paywalls.
"Niche publications rely more heavily on paywalls because we have a smaller audience base. I don't think it's about denying the public our information, but about making a living off our work. I offer free trials to anyone who asks (and probably a few bots). I believe many/most paywalled publications will sell individual articles to non-subscribers who are interested. So the info can be freed in small, specific doses, but has to [be mostly] paid for… in order for it to exist," wrote Smith.
Now, with The New York Times expanding into Canada and others in the market switching to paywalls, this upcoming court ruling could inform some Canadian publications on how restrictive their paywalls should be in the future.
Barry Sookman, a Toronto intellectual property lawyer, declined to comment specifically on the upcoming trial but believes that paywalls need to be protected under the Copyright Act.
"Most ordinary Canadians would not in any way find it offensive if it was illegal to hack somebody's security system to get access to content knowing that the paywall was designed to prevent access so as to ensure that the investments made by the creator could be recouped by making the content available for a fee," said Sookman.
He also points out that the copyright misuse as defence to a copyright action doesn't exist in Canada, and that it wasn't adopted in a Canadian Supreme Court ruling. "There is support in the commonwealth and in the United States that a person cannot rely on a fair dealing or fair use defence where the person has illegally gained access to the content. In short, obtaining illegal access is not fair."
Sookman believes that the paywall is vital in ensuring content creators are rightfully compensated for their work and the press survives. "If a paywall is not considered to be a TPM it would theoretically permit anyone to hack the TPMs and obtain content without paying. This could undermine subscription based services that are relied on extensively by the creative communities including newspapers and other publishers, providers of software as a service, video entertainment subscription services as well as many streaming services, including Netflix and music streaming services.
Leading Canadian newspapers like The Globe and Mail rely on paywalls as a basis for obtaining revenues to offset the massive declines in paper-based sales. Even with the paywall, newspapers like The Globe, are suffering declines in revenues, as evidenced by their announcement this week offering voluntary layoffs because of declining revenues. If people could hack their paywall, and thereby avoid paying for content, this could further damage The Globe. This would reduce its capacity to continue to employ its many authors that the public relies on for accurate and comprehensive news. If this were to happen, the public at large would also suffer as would the democratic principles and government accountability that newspapers foster. Therefore, while it may superficially appear to be appealing that there is no harm in bypassing paywalls, the reality is that laws protecting paywalls serve a vital public policy purpose."
The upcoming Federal Court case, Blacklock's Reporter v. AGC, will certainly be one to watch. The judge and courtroom for the hearing should be announced early this week.
Written by Graeme C. Gordon
