By Richard Stobbe

We just wrote about a dispute resolution clause that was enforceable in the Uber case. Last year, a privacy class action claim landed in the Supreme Curt of Canada (SCC) and I see that we haven’t had a chance to write this one up yet.

In our earlier post ( Facebook Follows Google to the SCC  ) we provided some of the background: The plaintiff Ms. Douez alleged that Facebook used the names and likenesses of Facebook customers for advertising through so-called “Sponsored Stories”.  The claim alleged that Facebook ran the “Sponsored Stories” program without the permission of customers, contrary to of s. 3(2) of the B.C. Privacy Act. The basic question was whether Facebook’s terms (which apply California law) should be enforced in Canada or whether they should give way to local B.C. law. The lower court accepted that, on its face, the Terms of Service were valid, clear and enforceable and the lower court went on to decide that Facebook’s Forum Selection Clause should be set aside in this case, and the claim should proceed in a B.C. court. Facebook appealed that decision: Douez v. Facebook, Inc., 2015 BCCA 279 (CanLII) (See this link to the Court of Appeal decision). The appeal court reversed and decided that the Forum Selection Clause should be enforced. Then the case went up to the SCC.

In Douez v. Facebook, Inc., [2017] 1 SCR 751, 2017 SCC 33 (CanLII), the SCC found that Facebook’s forum selection clause is unenforceable.

How did the court get to this decision?   Um…. hard to say, even for the SCC itself, since there was a 3-1-3 split in the 7 member court, with some judges agreeing on the result, but using different reasoning, making it tricky to find a clear line of legal reasoning to follow.  The court endorsed its own “strong cause” test from Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27 (CanLII): When parties agree to a jurisdiction for the resolution of disputes, courts will give effect to that agreement, unless the claimant establishes strong cause for not doing so.  Here, the Court tells us that public policy considerations must be weighed when applying the “strong cause” test to forum selection clauses in the consumer context. The public policy factors appear to be as follows:

• Are we dealing with a consumer contract of adhesion between an individual consumer and a large corporation?
• Is there a “gross inequality of bargaining power” between the parties?
• Is there a statutory cause of action, implicating the quasi-constitutional privacy rights? These constitutional and quasi-constitutional rights play an essential role in a free and democratic society and embody key Canadian values, so this will influence the court’s analysis.
• The court will also assess “the interests of justice” and decide which court is better positioned to assess the purpose and intent of the legislation at issue (as in this case, where there was a statutory cause of action under the BC Privacy Act).
• Lastly, the court will assess the expense and inconvenience of requiring an individual consumer to litigate in a foreign jurisdiction (California, in this case), compared to the comparative expense and inconvenience to the big bad corporation (Facebook, in this case).

The court noted that, in order to become a user of Facebook, a consumer “must accept all the terms stipulated in the terms of use, including the forum selection clause. No bargaining, no choice, no adjustments.” But wait… Facebook is not a mandatory service, is it?  The fact that a consumer’s decision to use Facebook is entirely voluntary seems to be missing from the majority’s analysis.  A consumer must accept the terms, yes, but there is a clear choice: don’t become a user of Facebook.  That option does not appear to be a factor in the court’s analysis.

The take-home lesson is that forum selection clauses will have to be carefully handled in consumer contracts of adhesion.  It is possible that this decision will be limited to these unique circumstances.

Calgary – 07:00 MST

By Richard Stobbe

Last month we asked: The Google vs. Equustek Decision: What comes next?

Part of the answer was handed down recently by a B.C. court in Equustek Solutions Inc. v Jack, 2018 BCSC 329 (CanLII), after Google applied to vacate or vary the original order of Madam Justice Fenlon, which was granted way back in 2014. That was the order that set off a furious international debate about the reach of Canadian courts, since it required Google to de-index certain sites from Google’s worldwide search results, based on an underlying lawsuit that the plaintiff Equustek brought against the defendants (which is finally set for trial in April, 2018).

Google of course was always invited to seek a variation of that original court order. As noted by the latest judgment, that right to apply to vary has been recognized by the B.C. Court of Appeal and the Supreme Court of Canada. After Google received a favourable decision last year from a US court, the way was paved to vary the original order that has caused Google so much heartburn. The next step is that Google will seek a cancellation or limitation of the scope of that original order, so that the order applies only to search results in Canada through google.ca.

The last step, with luck, will be a hearing of the merits of the underlying IP claims; some commentators have questioned why Google was used to obtain a practical worldwide remedy when the IP rights asserted by Equustek do not appear to be global in scope. As I mentioned in my earlier article, there has been very little analysis of Equustek’s IP rights by any of the different levels of court. Since this entire case involved pre-trial remedies, the merits of the underlying allegations and the strength of Equustek’s IP rights have never been tested at trial. In order for the injunction to make sense, one must assume that the IP rights were valid. Even if they are valid, Equustek’s rights couldn’t possibly be worldwide in nature. There was no evidence of any worldwide patent rights or international trademark portfolio. So, the court somehow skipped from “the internet is borderless” to “the infringed rights are borderless” and are deserving of a worldwide remedy.

To be continued…

Calgary – 07:00 MST

.

By Richard Stobbe

One of Uber’s drivers, an Ontario resident named David Heller, sued Uber under a class action claim seeking $400 million in damages. What did poor Uber do to deserve this? According to the claim, drivers should be considered employees of Uber and entitled to the benefits of Ontario’s Employment Standards Act (See: Heller v. Uber Technologies Inc., 2018 ONSC 718 (CanLII)).

As the court phrased it, while “millions of businesses and persons use Uber’s software Apps, there is a fierce debate about whether the users are customers, independent contractors, or employees.” If all of the drivers are to be treated as employees, the costs to Uber would skyrocket. Uber, of course, resisted this lawsuit, arguing that according to the app terms of service, the drivers actually enter into an agreement with Uber B.V., an entity incorporated under the laws of the Netherlands. By clicking or tapping “I agree” in the app terms of service, the drivers also accept a certain dispute resolution clause: by contract, the parties pick arbitration in Amsterdam to resolve any disputes.

Really, at this stage Uber’s defence was not to say “this claim should not proceed because all of the drivers are independent contractors, not employees”. Rather, Uber argued that “this claim should not proceed because all of the drivers agreed to settle disputes with us by arbitration in the Netherlands.”

So the court had to wrestle with this question:  Should the dispute resolution clause in the click-through terms be upheld? Or should the drivers be entitled to have their day in court in Canada? 

The law in this area is very interesting and frankly, a bit muddled. This is because there are two distinct issues in this legal thicket: a forum-selection clause (the laws of the Netherlands govern any interpretation of the agreement), and a dispute resolution clause (here, arbitration is the parties’ chosen method to resolve any disputes under the agreement). For these two different issues, Canadian courts have applied different tests to determine whether such clauses should be upheld:

1. In the case of forum selection clause, the Supreme Court of Canada (SCC) tells us that the rule from Z.I. Pompey Industries is that a forum selection clause should be enforced unless there is “strong cause” not to enforce it.  In the context of a consumer contract (as opposed to a “commercial agreement”), the SCC says there may be strong reasons to refrain from enforcing a forum selection clause (such as unequal bargaining power between the parties, the convenience and expense of litigation in another jurisdiction, public policy reasons, and the interests of justice). In the commercial context (as opposed to a consumer agreement), forum selection clauses are generally upheld.
2. In the case of upholding arbitration clauses, the courts have applied a different analysis: arbitration is generally favoured as a means to settle disputes, using the “competence-competence principle”. Again, it’s an SCC decision that gives us guidance on this: unless there is clear legislative language to the contrary, or the dispute falls outside the scope of the arbitration agreement, courts must enforce arbitration agreements.

The court said this case “is not about a discretionary court jurisdiction where there is a forum selection clause to refuse to stay proceedings where a strong cause might justify refusing a stay; rather, it is about a very strong legislative direction under the Arbitration Act, 1991 or the International Commercial Arbitration Act, 2017 and numerous cases that hold that courts should only refuse a reference to arbitration if it is clear that the dispute falls outside the arbitration agreement.”

Applying the competence-competence analysis, the court (in my view) properly ruled in favour of Uber, upheld the app terms of service, and deferred this dispute to the arbitrator in the Netherlands.  This class action, as a result, must hit the brakes.

The decision is reportedly under appeal.

Calgary – 07:00 MST

By Richard Stobbe

The blockchain technology underlying BitCoin and other cryptocurrencies was originally designed and conceived as an open protocol that would not be owned by any one centralized entity, whether government or private.  Just like other foundational protocols that were created in the early days of the internet (email is based on POP, SMTP and IMAP, and websites rely on HTTP, and file transfers use FTP and TCP/IP), no-one really owns these protocols.  No-one collects royalties or patent licensing fees for the use of these protocols (…though some patent assertion entities might argue otherwise).

Similarly, the peer-to-peer vision underlying “the blockchain” was conceptually directed to maintaining the integrity of peer-to-peer transactions that function outside the realm of a centralized overseer such as a bank or government registry.  Where, traditionally, a bank served as the trusted and verifiable record of a transaction, the use of blockchain technology could provide an alternative trusted and verifiable record of a transaction. No bank required.

It should come as no surprise, then, that banks are rushing to own a piece of this space.

A recent U.S. report shows: “The financial industry dominates the list of the top ten blockchain-related patent holders. …  Leading the list is Bank of America with 43 patents, MasterCard International with 27 patents, FMR LLC (Fidelity) with 14 patents, and TD Bank with 11 patents. Other major financial institutions with blockchain patents include Visa Inc. with 7 patents, American Express with 6 patents, and Nasdaq Inc. with 5 patents.” (Blockchain Patent Filings Dominated by Financial Services Industry, Posted on January 12, 2018  by Alex Lee)

Will the privatization of blockchain technologies spur adoption of this technology in the business-to-business layer? Or will the patent gold rush merely erect proprietary fences in a way that constrains adoption?

Calgary – 07:00 MST

.

By Richard Stobbe

An online video shows someone jogging on a public pathway during a 2-second clip. Let me get this straight… does this constitute a breach of privacy rights? According to an Ontario court, the answer is yes.

This is a scenario that is likely repeated every year across the country in a variety of industries. In this case, a real estate developer engaged a video developer to produce a sales video for a residential condominium project. To capture the “lifestyle” of the neighbourhood, the video developer shot footage of local shops, bicycling paths, jogging trails, and other local amenities. In the course of this project, the plaintiff – a jogger – was caught on video, and after editing, a 2-second clip of the plaintiff was included in the final 2-minute promotional video.

Like all video, this one was posted to YouTube, where it lived for 1 week, before being taken down in response to the plaintiff’s complaints.

In Vanderveen v Waterbridge Media Inc., 2017 CanLII 77435 (ON SCSM), the court considered the claim that this clip of the jogger constituted a violation of privacy rights and appropriation of personality rights.   In the analysis, the court considered the tort of “intrusion upon seclusion”, which was designed to provide a remedy for conduct that intrudes upon private affairs where the invasion of privacy is considered “highly offensive”.

The court in this case decided that a 2-second video clip of someone jogging on a public pathway does constitute a “highly offensive” invasion of a person’s private affairs. The plaintiff was awarded $4,000 for the breach of privacy rights and $100 for the appropriation of personality.

Some points to consider:

• It is unclear why the court did not spend more time considering the issue of “reasonable expectation of privacy”. A number of court decisions have looked at this issue as it relates to video or photography on public beaches, public schools and other public places. This is not a new issue in privacy law, but it appears to have been given short shrift in this decision.
• The impact of this decision must be put into context: it is an Ontario small claims court decision, so it won’t be binding on other courts. However, it may be referred to in other cases of this type. The decision is unlikely to be appealed considering the amounts at issue, so we probably won’t see a review of the analysis at a higher level of court.
• Consider the implications of this approach to privacy and personality rights in light of the use of drone footage in making promotional videos – something that is becoming more common as costs lower and access to this technology increases.
• When entering into contracts for any promotional or marketing collateral – website content, images, video footage, film, advertisements, print materials – both sides should review the terms to confirm who bears the risk of addressing complaints such as this one, and who bears the responsibility for obtaining consents or releases from recognizable individuals who appear in the media content.

For advice regarding privacy rights, personality rights, drone law, and video development contracts, contact Field Law.

Calgary – 10:00 MST

By Richard Stobbe

In 2015 an independent film-maker shot a film critical of the Vancouver aquarium, using some footage over which the Aquarium claimed copyright.  The Aquarium moved to block the online publication of the film.

Last year we wrote about that dispute and the preliminary injunction that prevented publication of parts of that documentary. In Vancouver Aquarium Marine Science Centre v. Charbonneau, 2017 BCCA 395 (CanLII),  the preliminary order was appealed, and the documentary film-maker won. The decision is noteworthy for a number of reasons:

• In a preliminary injunction, at the “balance of convenience” analysis, freedom of expression should be weighed, particularly in a case such as this, where the documentary film engages a topic of public and social importance. The court affirmed that freedom of expression is among the most fundamental rights possessed by Canadians.
• The Copyright Act has an exception related to “user-generated content” under section 29.21 of the Act. This unique provision has been somewhat neglected by the courts since it was introduced in 2012.  This case remains the sole judicial consideration of section 29.21. At the lower level, the judge did not sufficiently analyze the issue of “fair dealing”, including whether this content qualified as non-commercial user-generated content under s. 29.21. However, we will still have to wait until a trial on the merits, to see how the court will deal with the bounds of non-commercial user-generated content under the Copyright Act.

The court sided with the documentary film-maker and set aside the earlier injunction. If this case goes to trial, it will finally provide some guidance on the application of section 29.21.

Calgary – 10:00 MST

By Richard Stobbe

As noted in our recent summary of the Supreme Court of Canada (SCC) decision in the ongoing fight between Google and Equustek Solutions, Google lost in Canada’s top court. Google promptly filed an application in US Federal Court in California its home jurisdiction, on July 24, 2017,  seeking relief from the reach of the SCC order.

In a decision released November 2, 2017, the US court handed down its decision in Google v. Equustek, Case 5:17-cv-04207-EJD, N.D. Cal. (Nov. 2, 2017). The first few pages of the US decision provide a useful summary of the Google/Equustek story. The US Court entertained Google’s application that the SCC’s order is “unenforceable in the United States because it directly conflicts with the First Amendment, disregards the Communications Decency Act’s immunity for interactive service providers, and violates principles of international comity.”

The US court quickly concluded that Google is eligible in the US for Section 230 immunity under the Communications Decency Act. Essentially, under US law, Google is merely an intermediary or “interactive service provider”, and not a “publisher” of the offending content. As an intermediary, it takes the cover of certain provisions granting immunity from liability. Section 230 immunity is well-tilled soil in US courts, and Google has fought and won a number of cases under Section 230 already, so Google’s immunity was not news to Google.  By compelling the search engine to de-index content that is protected speech in America, the SCC order had the effect of undercutting Section 230 immunity for service providers, thereby undermining the goals of Section 230 which is to preserve free speech online.

This preliminary injunction releases Google – in the United States – from compliance with the Canadian court order. Whether Google is content to rely on this, or whether it will pursue a final decision on the full merits, and whether Google will apply to the Canadian court (as the SCC invited it to do) for a variance of the Canadian order… all remains to be seen.

Calgary – 15:00 MST

By Richard Stobbe

When can a Canadian court reach across borders and control online activity that happens outside Canada? The Supreme Court of Canada (SCC) handed down its decision in Google v. Equustek Solutions Inc., a case that started as a garden-variety intellectual property (IP) dispute, and ended up in the country’s top court as a significant guide for when the law will be imposed on those beyond Canadian borders, and those who are not even a party to the original dispute. The recent judgment deals with an IP owner – Equustek – who sought a practical remedy against an IP infringer, Datalink.

Equustek alleged that Datalink had engaged in misappropriation of trade secrets, passing off and breach of confidentiality. When Datalink refused to comply with the court’s original orders to cease sales of the allegedly infringing products, Equustek turned to Google, asking the search engine provider to block or de-list Datalink’s website. Equustek argued that it could only find an effective remedy against a determined infringer by blocking access to the infringing webpages, where the competing products were being sold by Datalink. (See our earlier posts for a more detailed summary of the facts of this case.)

The issue on appeal to the SCC was whether Google can be ordered, before a trial, to “globally de-index the websites of a company which, in breach of several court orders, is using those websites to unlawfully sell the intellectual property of another company.” Applying what it called “classic interlocutory injunction jurisprudence”, the SCC rejected Google’s counter-arguments and decided to uphold the injunction against Google. Thus the current state of the law in Canada is that non-party actors such as Google can be ordered by a Canadian court to take certain steps with worldwide effect, reaching outside Canada’s borders.

There are a number of fascinating elements to this case, which is why it has garnered so much attention and commentary. It’s worth emphasizing a few points from this controversial case:

1. Remember, Google was never a party to the original lawsuit. The search engine did nothing illegal or improper, nor was it implicated in the infringing conduct other than acting as a passive intermediary. However the Court noted that Google was so involved in facilitating the allegedly infringing behavior that the Court was justified in constraining Google’s activities in order to prevent the harmful conduct of the infringer. This, the Court said, is nothing new. Non-parties such as Google are often the subject of court orders.

2. Google had offered to block the search result listings from its < google.ca > site, but Equustek argued (and the Court agreed) that, to be effective, the order against Google had to be worldwide in effect. If restricted to Canada only, the order would not have the intended effect of preventing the irreparable harm to Equustek. “The Internet has no borders — its natural habitat is global,” said the Court. “The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. ”

However this ignores the fact that Equustek’s IP rights are not global in scope. Indeed, there was very little analysis of Equustek’s IP rights by any of the different levels of court, something noted by the dissent. Since this entire case involved pre-trial remedies, the merits of the underlying allegations and the strength of Equustek’s IP rights were never tested at trial. In order for the injunction to make sense, one must assumed that the IP rights were valid. Even so, Equustek’s rights couldn’t possibly be worldwide in nature. There was no evidence of any worldwide patent or trademark portfolio. So, the court somehow skipped from “the internet is borderless” to “the infringed rights are borderless” and are deserving of a worldwide remedy.

3. Lastly, Google raised a few other arguments – based on freedom of speech and international comity – that the Court batted away. Free speech, the Court argued, does not extend to protect the sale of articles that infringe IP rights. And as for international comity – the idea that each country should have mutual reciprocal respect for the laws of other countries in the international community, and that one law should not compel a person to break the laws of another country – the Court sidestepped this issue.  If there is any such offense to the principles of international comity, said the Court, then Google is free to apply again to the Canadian courts to vary the order accordingly. At the date of the hearing at the SCC, Google had made no such application. However, as soon as the ink had dried on the judgement, Google applied to Federal Court in California, its home jurisdiction, seeking relief from the reach of the SCC order. This request has been supported by a line-up of intervenors in the US blaring headlines such as “Top Canadian Court Permits Worldwide Internet Censorship“!

A copy of Google’s motion for relief in the US court is here.

With this maneuver, Google may be writing a rule-book on how to delimit or constrain the scope of the SCC’s reach by appealing to US courts. As between Canada and the US, this may help clarify the limits of how Canadian court orders will impact US persons. Let’s not forget that US courts don’t hesitate to make extraterritorial orders of their own. Other countries routinely do the same, so this is by no means a uniquely Canadian scenario.

I noted in January, 2016 that this case was one to watch, and in 2017 it remains true. We will monitor and report back on the results of Google’s US Federal Court action.

Calgary – 07:00 MST

By Richard Stobbe

Is Google a brand or just a word meaning “conduct an online search”?

A trademark can suffer “genericide” when it becomes so commonly used that it transforms from a unique brand name into a generic word which is synonymous with a product or service. In a very interesting decision from the US Ninth Circuit Court Court of Appeals in Elliott and Gillespie v. Google Inc. , the trademark GOOGLE was challenged on this basis: that it had become a word describing “searching on the internet” in a general sense, rather than a being distinctive of search services provided through the GOOGLE-brand search engine.

The court had a good description of “genericide”: “Genericide occurs when the public appropriates a trademark and uses it as a generic name for particular types of goods or services irrespective of its source. For example, ASPIRIN, CELLOPHANE, and THERMOS were once protectable as arbitrary or fanciful marks because they were primarily understood as identifying the source of certain goods. But the public appropriated those marks and now primarily understands aspirin, cellophane, and thermos as generic names for those same goods.”

This case arose due to an underlying domain name complaint. Google asserted its trademark rights against Elliott and Gillespie based on their registration of hundreds of domain names that included the word “google”; for example, “googledisney.com,” “googlebarackobama. net,” and “googlenewtvs.com.”  Elliott and Gillespie fought back because hey, if you’re going to fight back, why not take on Google? They petitioned to cancel the trademark registrations for GOOGLE, which would in turn eliminate the basis for Google’s domain name complaint.

Elliott and Gillespie argued the “indisputable fact that a majority of the relevant public uses the word ‘google’ as a verb—i.e., by saying ‘I googled it,’ and … verb use constitutes generic use.”

The court reviewed the history of genericide under trademark law and applied a test of whether the relevant public understands a mark as describing where a product comes from, or what a product is.  Put another way, if a word still describes where the product comes from, then the term is still valid as a trademark.  But if consuming public understands the word to have become the product itself (and not the producer of the product), then the mark slips into being a generic term. Escalator is another example. It became synonymous with a moving staircase product, rather than distinctive of the Otis Elevator Company as the producer of that product.

In Google’s case, the court  asserted that verb use (the use of the mark as a verb instead of an adjective) does not automatically result in a finding of genericness. The court also noted that a claim of genericide must relate to a particular type of product or service. “In order to show that there is no efficient alternative for the word “google” as a generic term,” the court argued, “Elliott must show that there is no way to describe ‘internet search engines’ without calling them ‘googles.’ Because not a single competitor calls its search engine ‘a google,’ and because members of the consuming public recognize and refer to different ‘internet search engines,’ Elliott has not shown that there is no available substitute for the word ‘google’ as a generic term.”

Compare this to the case of Q-TIPS which concluded that “medical swab” and “cotton-tipped applicator” are efficient alternatives for the brand Q-TIPS, whereas a US case involving the ASPIRIN mark concluded that, at the time, there was no efficient substitute for the term “aspirin” because consumers did not know the term “acetylsalicylic acid”, so they used “aspirin” in a generic sense.  Interestingly, the brand ASPIRIN remains a registered mark in Canada, although Bayer lost its trademark rights to genericide in the US.

Google survived the genericide test this time. To keep track of future attempts to challenge Google’s trademark rights, please conduct an internet search using a GOOGLE^® brand search engine.

Calgary – 07:00 MST

By Richard Stobbe

If photos are available on the internet, then… they’re free for the taking, right?

Wait, that’s not how copyright law works? In the world of copyright, each original image theoretically has an “author” who created the image, and is the first owner of the copyright. The exception to this rule is that an image (or, indeed, any other copyright-protected work), which is created by an employee in the course of employment is owned by the employer. So, an image has an owner, even if that owner chose to post the image online. And copying that image without the permission of the owner could be an infringement of the owner’s copyright.

That seemingly simple question was the subject of a lawsuit between two rival companies who are in the business of listing online advertisements for new and used vehicles. Trader Corp. had a head start in the Canadian marketplace with its autotrader.ca website. Trader had the practice of training its employees and contractors to take vehicle photos in a certain way, with certain staging and lighting. A U.S. competitor, CarGurus, entered the market in 2015. It was CarGurus practice to obtain its vehicle images by “indexing” or “scraping” Dealers’ websites. Essentially, the CarGurus software would “crawl” an online image to identify data of interest, and then extract the data for use on the CarGurus site.

As part of its “indexing” or “scraping”, the CarGurus site apparently included some photos that were owned by Trader. Although some back-and-forth between the parties resulted in the takedown of a large number of images from the CarGurus site, the dispute boiled over into litigation in late 2015 – the lawsuit by Trader alleged copyright infringement in relation to thousands of photos over which Trader claimed ownership.

Some interesting points arise from the decision in Trader v. CarGurus, 2017 ONSC 1841 (CanLII):

Trader was only able to establish ownership in 152,532 photos. There were thousands of photos for which Trader could not show convincing evidence of ownership. This speaks to the inherent difficulty in establishing a solid evidentiary record of ownership of individual images across a complex business operation.

CarGurus raised a number of noteworthy defences:

• First, CarGurus argued that in the case of some of the photos there was no actual “copying” or “reproduction” of the original image file. Rather, CarGurus argued that it merely framed the image files. Put another way, “although the images from Dealers’ websites appeared to be part of CarGurus’ website, they were not physically present on CarGurus’ server, but located on servers hosting the Dealers’ websites.”
  The court was not convinced by the novel argument. “In my view” the court declared, “when CarGurus displayed the photo on its website, it was ‘making it available’ to the public by telecommunication (in a way that allowed a member of the public to have access to it from a place and at a time individually chosen by that member), regardless of whether the photo was actually stored on CarGurus’ server or on a third party’s server.”
  The court decided that by making the images available to the public in through its framing technique, CarGurus infringed Trader’s copyright.
  This tells us that copyright infringement can occur even where the infringer is not storing or hosting the copyright-protected work on its own server.
• Second, CarGurus attempted to mount a “fair dealing” defense. It is not an infringement if the copying is for the purpose of “research or private study.” The court also rejected this argument, saying that even if a consumer was engaged in “research” when viewing the images in the course of car shopping, it would be too much of a stretch to accept that CarGurus was engaged in research. Theirs was clearly a commercial purpose.
• Lastly, the lawyers for CarGuru argued that, even if infringement did occur, CarGurus should be shielded from any damages award by virtue of section 41.27(1) of the Copyright Act. This provision was originally designed as a “safe harbour” for search engines and other network intermediaries who might inadvertently cache or reproduce copyright-protected works in the course of providing services, provided the search engine or intermediary met the definition of an “information location tool”. Although CarGurus does assist users with search functions (after all, it searches and finds vehicle listings), the court batted away this argument, pointing out that CarGurus cannot be considered an intermediary in the same way a search engine is. This particular subsection has never been the subject of judicial interpretation until now.

Having dismissed these defences, the Court assessed damages for copyright infringement at $2.00 per photo, for a total statutory damages award in the amount of $305,064.

CALGARY – 07:00 MT

By Richard Stobbe

In the midst of a challenging period for a condominium owners association in a property located in Costa Rica, the president of the association resigned in frustration. Someone had overheard a rumour that the president resigned because he had been accused of theft. This rumour was false and when it was repeated by email – an email sent by means of the trusty ‘reply-all’ feature – all 37 condo owners were copied with the defamatory rumours.

An Ontario court recently rendered a decision in this email defamation case (McNairn v Murphy, 2017 ONSC 1678 (CanLII)), noting that the defamation occurred in ‘cyberspace’: “Communications via the Internet such as email, are potentially more pervasive than other forms of communication since control over its distribution is lost in numerous people may have access to it [and an] email containing a defamatory statement may be sent by [a] recipient to others who in turn may send it to an even larger audience. The Internet has the extraordinary capacity to replicate a defamatory statement, in [its] sleep. As a result, the mode in extent of publication, is [a] particularly significant consideration in assessing general damages [in]Internet defamation cases.”

In awarding damages of $160,000 against two defendants, the court noted that damages in defamation cases are assumed if publication of defamatory statements is evidenced, assuming there are no defences. The defamed individual need not show any specific loss. General damages in defamation cases can serve three functions:

(a) to console the plaintiff for the distress suffered in the publication of the defence;

(b) to repair the harm to the plaintiff’s reputation including, where relevant, business reputation; and

(c) to vindicate the plaintiff’s reputation.

The court applied the following six factors in determining general damages in defamation cases:

1. the plaintiff’s position and standing;

2. the nature and seriousness of the defamatory statements;

3. the mode or type of publication;

4. the absence or refusal to retract or apologize for the statements;

5. the conduct and motive of the defendant; and

6. the presence of aggravating or mitigating circumstances.

Defamation by means of mouse click is easy to do.

And, it should be noted, it’s not that difficult to make a full retraction and apology by the click of a mouse, particularly in a small community of 37 individuals. From the facts available in this case, an unreserved retraction and sincere apology may have been worth $160,000.

Calgary – 07:00 MT

By Richard Stobbe

A patent owner notices that knock-off products are listed for sale on eBay. The knock-offs appear to infringe his patent. When eBay refuses to remove the allegedly infringing articles. The patent owner sues eBay for patent infringement, claiming that eBay is infringing the patent merely by hosting the listings, since listing the infringing articles amounts to an infringing “sale” or an infringing “offer to sell” the patented invention.

These are the facts faced by a U.S. court in Blazer v. eBay Inc. which decided that merely listing the articles for sale does not constitute patent infringement by means of an infringing sale, where it’s clear that the articles are not owned by eBay and are not directly sold by eBay.  In fact,  in the eBay model the seller makes a sale directly to the buyer – eBay can be characterized as a platform for hosting third party listings, rather than a seller.  

Some interesting points arise from this decision:

• Prior patent infringement cases involving Amazon and Alibaba have suggested that the court will look closely at how the items are listed. For example, in those earlier cases, the court noted the use of the term “supplier” to describe the party selling the item, whereas the word “seller” is used in the eBay model. The term “supplier” might be taken to mean that the listing party is merely supplying the item to the platform provider, such as Amazon or Alibaba, who then sells to the end-buyer. Whereas the term “seller” identifies that the listing party is entering into a separate transaction with the end-buyer, leaving the platform provider out of that buy-sell transaction.
• The court in Blazer was clear that it will look at the entire context of the exchange to determine not only if an offer is being made, but who is making the offer.
• The “Terms of Use” or “Terms of Service” will be scrutinized by the court to help with this determination. The eBay terms explicitly advise users that eBay is not making an offer through a listing, and eBay lacks title and possession of the items listed.

Related Reading: eBay Not Liable for Listing Infringing Products of Third-Party Sellers – Not an Offer to Sell by eBay

Calgary – 07:00 MT

By Richard Stobbe

This fascinating Ontario case deals with an Alberta-based individual who complained of certain material that was re-published on the website Globe24h.com based in Romania. The server that hosted the website was located in Romania. The material in question was essentially a re-publication of certain publicly available Canadian court and tribunal decisions.

The Alberta individual complained that this conduct – the re-publication of a Canadian tribunal decision on a foreign server – was a breach of his privacy rights since he was named personally in this tribunal decision.

So, let’s get this straight, this is a privacy-based complaint relating to republication in public of a publicly available decision?

Yes, you heard that right. This Romanian site scraped decisions from Canadian court and tribunal websites (information that was already online) and made this content searchable on the internet (making it …available online).

This is an interesting decision, and we’ll just review two elements:

The first issue was whether Canadian privacy laws (such as PIPEDA ) have extraterritorial application to Globe24h.com as a foreign-based organization.  On this point, the Ontario court, citing a range of past decisions (including the Google v. Equustek decision which is currently being appealed to the Supreme Court of Canada) said:

“In this case, the location of the website operator and host server is Romania. However, when an organization’s activities take place exclusively through a website, the physical location of the website operator or host server is not determinative because telecommunications occur “both here and there”: Libman v The Queen, 1985 CanLII 51 (SCC), [1985] 2 SCR 178 at p 208 [Emphasis added]

Secondly, the Ontario court reviewed whether the Romanian business was engaged in “commercial activities” (since that is an element of PIPEDA) . The court noted the Romanian site  “was seeking payment for the removal of the personal information from the website. The fees solicited for doingdoing so varied widely. Moreover, if payment was made with respect to removal of one version of the decision, additional payments could be demanded for removal of other versions of the same information. This included, for example, the translation of the same decision in a Federal Court proceeding or earlier rulings in the same case.”

The Romanian site made a business out of removing data from this content, but the court’s conclusion that “The evidence leads to the conclusion that the respondent was running a profit-making scheme to exploit the online publication of Canadian court and tribunal decisions containing personal information.” [Emphasis added] – in a general sense, that statement could just as easily apply to Google or any of the commercial legal databases which are marketed to lawyers.

The court concluded that it could take jurisdiction over the Romanian website, and ordered the foreign party to take-down the offending content.

This decision represent another reach by a Canadian court to takedown content that has implications outside the borders of Canada.  From the context, it is likely that this decision is going to stand, since the respondent did not contest this lawsuit. The issue of extra-terrtorial reach of Canadian courts in the internet context is going to be overtaken by the pending Supreme Court decision in Equustek. Stay tuned.

Calgary – 07:00 MT

.

By Richard Stobbe

When we’re talking about trademarks, at which point do we measure whether there is confusion in the mind of the consumer?

We reviewed this issue in 2015 (See: No copyright or trademark protection for metatags). In that earlier decision, Vancouver Community College sued a rival college for trademark infringement, on the basis of the rival college using “VCC” as part of a search-engine optimization and keyword advertising strategy. The court in that case said: “The authorities on passing off provide that it is the ‘first impression’ of the searcher at which the potential for confusion arises which may lead to liability. In my opinion, the ‘first impression’ cannot arise on a Google AdWords search at an earlier time than when the searcher reaches a website.” In other words, it is the point at which a searcher reaches the website when this “first impression” is gauged. Where the website is clearly identified without the use of any of the competitor’s trademarks, then there will be no confusion. That was then.

That decision was appealed and reversed in Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2017 BCCA 41 (CanLII). The BC Court of Appeal decided that the moment for assessing confusion is not when the searcher lands on the ‘destination’ website, but rather when the searcher first encounters the search results on the search page.  This comes from an analysis of the Trade-marks Act (Section 6) which says confusion occurs where “the use of the first mentioned trade-mark … would cause confusion with the last mentioned trade-mark.”

And it draws upon the mythical consumer or searcher – the “casual consumer somewhat in a hurry“. The BC court reinforced that “the test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry”, and as applied to the internet search context, this occurs when the searcher sees the initial search results.

To borrow a few phrases from other cases, trade-marks have a particular function: they provide a “shortcut to get consumers to where they want to go” and “Leading consumers astray in this way is one of the evils that trade-mark law seeks to remedy.” (As quoted in the VCC case at paragraph 68).  Putting this another way, the ‘evil’ of leading casual consumers astray occurs when the consumer sees the search results displaying the confusing marks.

On the subject of whether bidding on keywords constitutes an infringement of trademarks or passing-off, the court was clear: “More significantly, the critical factor in the confusion component is the message communicated by the defendant. Merely bidding on words, by itself, is not delivery of a message. What is key is how the defendant has presented itself, and in this the fact of bidding on a keyword is not sufficient to amount to a component of passing off…” (Paragraph 72, emphasis added).

The BC Court issued a permanent injunction against Vancouver Career College, restraining them from use of the mark “VCC” and the term “VCCollege” in connection with its internet presence.

Calgary – 07:00 MT

.
By Richard Stobbe

Ever wanted to remove something after it had been swallowed up in the gaping maw of the internet? Then you will relate to this story about an individual’s struggle to have certain content deleted from the self-appointed memory banks of the web.

The Federal Court recently rendered a procedural decision in the case of Davydiuk v. Internet Archive Canada and Internet Archive 2016 FC 1313 (for background, visit the Wayback Machine… or see our original post Copyright Implications of a “Right to be Forgotten”? Or How to Take-Down the Internet Archive).

For those who forget the details, this case relates to a long-running plan by Mr. Davydiuk to remove certain adult video content in which he appeared about a dozen years ago. He secured the copyright in the videos and all related material including images and photographs, and went about using copyright to remove the online reproductions of the content. In 2009, he discovered that Internet Archive, a defendant in these proceedings, was hosting some of this video material as part of its web archive collection.  It is Mr. Davydiuk’s apparent goal to remove all of the content from the Internet Archive – not only the video but also associated images, photos, and screenshots taken from the video.

The merits of the case are still to be decided, but the Federal Court has decided a procedural matter which touches upon an interesting copyright question:

When a screenshot is taken from a video, is there sufficient originality for copyright to extend to that screenshot? Or is it a “purely mechanical exercise not capable of copyright protection”?

This case is really about the use of copyright in aid of personal information and privacy goals. The Internet Archive argued that it shouldn’t be obliged to remove material for which there is no copyright. Remember, for copyright to attach to a work, it must be “original”. The Supreme Court of Canada (SCC) has made it clear that:

For a work to be “original” within the meaning of the Copyright Act, it must be more than a mere copy of another work.  At the same time, it need not be creative, in the sense of being novel or unique.  What is required to attract copyright protection in the expression of an idea is an exercise of skill and judgment.  By skill, I mean the use of one’s knowledge, developed aptitude or practised ability in producing the work.  By judgment, I mean the use of one’s capacity for discernment or ability to form an opinion or evaluation by comparing different possible options in producing the work. This exercise of skill and judgment will necessarily involve intellectual effort. The exercise of skill and judgment required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise.  For example, any skill and judgment that might be involved in simply changing the font of a work to produce “another” work would be too trivial to merit copyright protection as an “original” work. [Emphasis added]

From this, we know that changing font (without more) is NOT sufficient to qualify for the purposes of originality. Making a “mere copy” of another work is also not considered original. For example, an exact replica photo of a photo is not original, and the replica photo will not enjoy copyright protection.  So where does a screenshot fall?

The Internet Archive argued that the video screenshots were not like original photographs, but more like a photo of a photo – a mere unoriginal copy of a work requiring a trivial effort.

On the other side, the plaintiff argued that someone had to make a decision in selecting which screenshots to extract from the original video, and this represented an exercise of sufficient “skill and judgment”.  The SCC did not say that the bar for “skill and judgment” is very high – it just has to be higher than a purely mechanical exercise.

At this stage in the lawsuit, the court merely found that there was enough evidence to show that this is a genuine issue. In other words, the issue is a live one, and it has to be assessed with the benefit of all the evidence. So far, the issue of copyright in a screenshot is still undetermined, but we can see from the court’s reasoning that if there is evidence of the exercise of “skill and judgment” involved in the decision-making process as to which particular screenshots to take, then these screenshots will be capable of supporting copyright protection.

Stay tuned.

Calgary – 07:00 MT

 
By Richard Stobbe

Last week, hearings concluded in the important case of Google Inc. v. Equustek Solutions Inc., et al.  The Supreme Court of Canada (SCC) will render its judgment in writing, and the current expectation is that it will clarify the limits of extraterritoriality, and the unique issues of protected expression in the context of IP rights and search engines.

In Part 1, I admonished Google, saying “you’re not a natural person and you don’t enjoy Charter rights.” Some commentators have pointed out that this is too broad, and that’s a fair comment.  Indeed, it’s worth clarifying that corporate entities can benefit from certain Charter rights, and can challenge a law on the basis of unconstitutionality. The Court has also held that freedom of expression under s. 2(b) can include commercial expression, and that government action to unreasonably restrict that expression can properly be the subject of a Charter challenge.

The counter-argument about delimiting corporate enjoyment of Charter rights is grounded in a line of cases stretching back to the SCC’s 1989 decision in Irwin Toy where the court was clear that the term “everyone” in s. 7 of the Charter, read in light of the rest of that section, excludes “corporations and other artificial entities incapable of enjoying life, liberty or security of the person, and includes only human beings”.

Thus, in Irwin Toy and Dywidag Systems v. Zutphen Brothers  (see also: Mancuso v. Canada (National Health and Welfare), 2015 FCA 227 (CanLII)), the SCC has consistently held that corporations do not have the capacity to enjoy certain Charter-protected interests – particularly life, liberty and security of the person – since these are attributes of human beings and not artificial persons such as corporate entities.

It is also worth noting that the Charter is understood to place restrictions on government, but does not provide a right of a corporation to enforce Charter rights as against another corporation. Put another way, one corporation cannot raise a claim that another corporation has violated its Charter rights. While there can be no doubt that a corporation cannot avail itself of the protection offered by section 7 of the Charter, a corporate entity can avail itself of Charter protections related to unreasonable limits on commercial expression, where such limits have been placed on the corporate entity by the government – for example, by a law or regulation enacted by provincial or federal governments.

There is a good argument that the limited Charter rights that are afforded to corporate entities should not extend to permit a corporation to complain of a Charter violation where its “commercial expression” is restricted at the behest of another corporation in the context of an intellectual property infringement dispute.

Calgary – 07:00 MT

 
By Richard Stobbe

Google Inc. v. Equustek Solutions Inc., et al., the long-running case involving a court’s ability to restrict online search results, and Google’s obligations to restrict search results has finally reached the Supreme Court of Canada (SCC). Hearings are proceeding this week, and the list of intervenors jostling for position at the podium is like a who’s-who of free speech advocates and media lobby groups. Here is a list of many of the intervenors who will have representatives in attendance, some of whom have their 10 minutes of fame to speak at the hearing:

• The Attorney General of Canada,
• Attorney General of Ontario,
• Canadian Civil Liberties Association,
• OpenMedia Engagement Network,
• Reporters Committee for Freedom of the Press,
• American Society of News Editors,
• Association of Alternative Newsmedia,
• Center for Investigative Reporting,
• Dow Jones & Company, Inc.,
• First Amendment Coalition,
• First Look Media Works Inc.,
• New England First Amendment Coalition,
• Newspaper Association of America,
• AOL Inc.,
• California Newspaper Publishers Association,
• Associated Press,
• Investigative Reporting Workshop at American University,
• Online News Association and the Society of Professional Journalists (joint as the Media Coalition),
• Human Rights Watch,
• ARTICLE 19,
• Open Net (Korea),
• Software Freedom Law Centre and the Center for Technology and Society (joint),
• Wikimedia Foundation,
• British Columbia Civil Liberties Association,
• Electronic Frontier Foundation,
• International Federation of the Phonographic Industry,
• Music Canada,
• Canadian Publishers’ Council,
• Association of Canadian Publishers,
• International Confederation of Societies of Authors and Composers,
• International Confederation of Music Publishers and the Worldwide Independent Network (joint) and
• International Federation of Film Producers Associations.

The line-up at Starbucks must have been killer.

The case has generated a lot of interest, including this recent article (Should Canadian Courts Have the Power to Censor Search Results?) which speaks to the underlying unease that many have with the precedent that could be set and its wider implications for free speech.

You may recall that this case is originally about IP rights, not free speech rights. Equustek sued Datalink Technologies for infringement of the IP rights of Equustek. The original lawsuit was based on trademark infringement and misappropriation of trade secrets. Equustek successfully obtained injunctions prohibiting this infringement. It was Equustek’s efforts at stopping the ongoing online infringement, however, that first led to the injunction prohibiting Google from serving up search results which directed customers to the infringing websites.

It is common for an intellectual property infringer (as the defendant Datalink was in this case) to be ordered to remove offending material from a website. Even an intermediary such as YouTube or another social media platform, can be compelled to remove infringing material – infringing trademarks, counterfeit products, even defamatory materials. That is not unusual, nor should it automatically touch off a debate about free speech rights and government censorship.

This is because the Charter-protected rights of freedom of speech are much different from the enforcement of IP rights.

The Court of Appeal did turn its attention to free speech issues, noting that “courts should be very cautious in making orders that might place limits on expression in another country. Where there is a realistic possibility that an order with extraterritorial effect may offend another state’s core values, the order should not be made.  In the case before us, there is no realistic assertion that the judge’s order will offend the sensibilities of any other nation. It has not been suggested that the order prohibiting the defendants from advertising wares that violate the intellectual property rights of the plaintiffs offends the core values of any nation. The order made against Google is a very limited ancillary order designed to ensure that the plaintiffs’ core rights are respected.”

Thus, the fear cannot be that this order against Google impinges on free-speech rights; rather, there is a broader fear about the ability of any court to order a search engine to restrict certain search results in a way that might be used to restrict free speech rights in other situations.  In Canada, the Charter guarantees that everyone has the right to: “freedom of …expression, including freedom of the press and other media of communication…” It is important to remember that in Canada a corporation is not entitled to guarantees found in Section 7 of the Charter. (See: Irwin Toy Ltd. v. Quebec (Attorney General), 1989 CanLII 87 (SCC), [1989] 1 S.C.R. 927)

So, while there have been complaints that Charter rights have been given short shrift in the lower court decisions dealing with the injunction against Google, it’s worth remembering that Google cannot avail itself of these protections. Sorry Google, but you’re not a natural person and you don’t enjoy Charter rights. [See Part 2 for more discussion on a corporation’s entitlement to Charter protections.]

Although free speech will be hotly debated at the courthouse, the Google case is, perhaps, not the appropriate case to test the limits of free speech. This is a case about IP rights enforcement, not government censorship.

Calgary – 07:00 MT

.
By Richard Stobbe

Xylem Water Solutions is the owner of the registered Canadian trademark AQUAVIEW in association with software for water treatment plants and pump stations.  Xylem received a Section 45 notice from a trademark lawyer, probably on behalf of an anonymous competitor of Xylem, or an anonymous party who wanted to claim the mark AQUAVIEW for themselves. This is a common tactic to challenge, and perhaps knock-out, a competitor’s mark.

A Section 45 notice under the Trade-marks Act requires the owner of a registered trademark to prove that the mark has been used in Canada during the three-year period immediately before the notice date. As readers of ipblog.ca will know, the term “use” has a special meaning in trademark law. In this case, Xylem was put to the task of showing “use” of the mark AQUAVIEW in association with software.

How does a software vendor show “use” of a trademark on software in Canada?

The Act tells us that “A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed…” (Section 4)

The general rule is that a trademark should be displayed at the point of sale (See: our earlier post on Scott Paper v. Georgia Pacific). In that case, involving a toilet paper trademark, Georgia-Pacific’s mark had not developed any reputation since it was not visible until after the packaging was opened. As we noted in our earlier post, if a mark is not visible at the point of purchase, it can’t function as a trade-mark, regardless of how many times consumers saw the mark after they opened the packaging to use the product.

The decision in Ashenmil v Xylem Water Solutions AB, 2016 TMOB 155 (CanLII),  tackles this problem as it relates to software sales. In some ways, Xylem faced a similar problem to the one which faced Georgia-Pacific. The evidence showed that the AQUAVIEW mark was displayed on website screenshots, technical specifications, and screenshots from the software.

The decision frames the problem this way: “…even if the Mark did appear onscreen during operation of the software, it would have been seen by the user only after the purchaser had acquired the software.  … seeing a mark displayed, when the software is operating without proof of the mark having been used at the time of the transfer of possession of the ware, is not use of the mark” as required by the Act.

The decision ultimately accepted this evidence of use and upheld the registration of the AQUAVIEW mark. It’s worth noting the following take-aways from the decision:

• The display of a mark within the actual software would be viewed by customers only after transfer of the software.  This kind of display might constitute use of the mark in cases where a customer renews its license, but is unlikely to suffice as evidence of use for new customers.
• In this case, the software was “complicated” software for water treatment plants. The owner sold only four licenses in Canada within a three-year period.  In light of this, it was reasonable to infer that purchasers would take their time in making a decision and would have reviewed the technical documentation prior to purchase.  Thus, the display of the mark on technical documentation was accepted as “use” prior to the purchase. This would not be the case for, say, a 99¢ mobile app or off-the-shelf consumer software where technical documentation is unlikely to be reviewed prior to purchase.
• Website screenshots and digital marketing brochures which clearly display the mark can bolster the evidence of use. Again, depending on the software, purchasers can be expected to review such materials prior to purchase.
• Software companies are well advised to ensure that their marks are clearly displayed on materials that the purchaser sees prior to purchase, which will differ depending on the type of software. The display of a mark on software screenshots is not discouraged; but it should not be the only evidence of use. If software is downloadable, then the mark should be clearly displayed to the purchaser at the point of checkout.
• The cases have shown some flexibility to determine each case on its facts, but don’t rely on the mercy of the court: software vendors should ensure that they have strong evidence of actual use of the mark prior to purchase. Clear evidence may even prevent a section 45 challenge in the first place.

To discuss protection for your software and trademarks,  contact us.

Calgary – 07:00 MST

.

By Richard Stobbe

Canada’s Anti-Spam Legislation (CASL) is overly complex and notoriously difficult to interpret – heck, even lawyers start to see double when they read the official title of the law (An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act).

The concept of implied consent (as opposed to express consent) is built into the law, and the trick is to interpret when, exactly, a company can rely on implied consent to send commercial electronic messages (CEMs). There are a number of different types of implied consent, including a pre-existing business or non-business relationship, and the so-called “conspicuous publication exemption”.

One recent administrative decision (Compliance and Enforcement Decision CRTC 2016-428 re: Blackstone Learning Corp.) focused on “conspicuous publication” under Section 10(9) of the Act. A company may rely on implied consent to send CEMs where there is:

1. conspicuous publication of the email address in question,
2. the email address is not accompanied by a statement that the person does not wish to receive unsolicited commercial electronic messages at the electronic address; and
3. the message is relevant to the person’s business, role, functions, or duties in a business or official capacity.

In this case, Blackstone Learning sent about 380,000 emails to government employees during 9 separate ad campaigns over a 3 month period in 2014. The case against Blackstone by the CRTC did not dwell on the evidence – in fact, Blackstone admitted the essential facts. Rather, this case focused on the defense raised by Blackstone. The company pointed to the “conspicuous publication exemption” and argued that it could rely on implied consent for the CEMs since the email addresses of the government employees were all conspicuously published online.

However, the company provided very little support for this assertion, and it did not provide back-up related to the other two elements of the defense; namely, that the email addresses were not accompanied by a “no spam” statement, and that the CEMs were relevant to the role or business of the recipients. The CRTC’s decision provides some guidance on implied consent and “conspicuous publication”:

• The CRTC observed that “The conspicuous publication exemption and the requirements thereof set out in paragraph 10(9)(b) of the Act set a higher standard than the simple public availability of electronic addresses.” In other words, finding an email address online is not enough.
• First, the exemption only applies if the email recipient publishes the email address or authorizes someone else to publish it. Let’s take the example of a sales rep who might publish his or her email, and also authorize a reseller or distributor to publish the email address. However, the CRTC notes if a third party were to collect and sell a list of such addresses on its own then “this would not create implied consent on its own, because in that instance neither the account holder nor the message recipient would be publishing the address, or be causing it to be published.”
• The decision does not provide a lot of context around the relevance factor, or how that should be interpreted. CRTC guidance provides some obvious examples – an email advertising how to be an administrative assistant is not relevant to a CEO.  In this case, Blackstone was advertising courses related to technical writing, grammar and stress management. Arguably, these topics might be relevant to a broad range of people within the government.
• Note that the onus of proving consent, including all the elements of the “conspicuous publication exception”, rests with the person relying on it. The CRTC is not going to do you any favours here. Make sure you have accurate and complete records to show why this exemption is available.
• Essentially, the email address must “be published in such a manner that it is reasonable to infer consent to receive the type of message sent, in the circumstances.” Those fact-sepecific circumstances, of course, will ultimately be decided by the CRTC.
• Lastly, the company’s efforts at compliance may factor into the ultimate penalty. Initially, the CRTC assessed an administrative monetary penalty (AMP) of $640,000 against Blackstone. The decision noted that Blackstone’s correspondence with the Department of Industry showed the “potential for self-correction” even if Blackstone’s compliance efforts were “not particularly robust”. These compliance efforts, among other factors, convinced the commission to reduce the AMP to $50,000.

As always, when it comes to CEMs, an ounce of CASL prevention is worth a pound of AMPs. Get advice from professionals about CASL compliance.

See our CASL archive for more background.

Calgary 07:00 MST

By Richard Stobbe

It’s not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term “titanic” I certainly don’t mean to suggest that anything disastrous is in the future.

After the New York Times published personal allegations of sexual assault against presidential candidate Donald Trump, the candidate’s lawyers promptly fired a shot across the bow, threatening legal action for libel and demanding that the article be removed from the Times’s website. Last week, the lawyer for the New York Times responded to lawyers for Mr.  Trump with a succinct defense of their publication of the article, arguing “We did what the law allows: We published newsworthy information about a subject of deep public concern.”

If this had happened in Canada, the law would almost certainly favour the position taken by the Times. In Quan v. Cusson, [2009] 3 SCR 712, the Supreme Court of Canada confirmed the defense of “responsible communication on matters of public interest” permitting journalists to report on matters of public interest. That case, interestingly, dealt with an Ontario police officer who attended in New York City shortly after the events of September 11, 2001 in order to assist with the search and rescue effort at Ground Zero. The officer sued for defamation after a newspaper published articles alleging that he had misrepresented himself to the New York authorities and possibly interfered with the rescue operation. As noted by the CBA this defense of responsible journalism applies if:

• the news was urgent, serious, and of public importance,
• the journalist used reliable sources, and
• the journalist tried to get and report the other side of the story.

Calgary – 07:00 MST