Archive for October, 2019

The Scope of Crown Copyright

By Richard Stobbe

It’s time to update our 2015 post about copyright in survey plans!  In the course of their work, land surveyors in Ontario prepare a survey document, and that document is routinely scanned into the province’s land registry database. Copies of survey documents can be ordered from the registry for a fee.

Land surveyors commenced a copyright class action lawsuit against Teranet Inc., the manager of the land registry system in Ontario.  The case travelled all the way up to Canada’s top court and in Keatley Surveying Ltd. v. Teranet Inc.  2019 SCC 43 the Supreme Court of Canada (SCC) rendered a decision on the appeal: Copyright in plans of survey registered or deposited in the land registry office belongs to the Province of Ontario under s. 12 of the Copyright Act.

Section 12 of the Copyright Act provides a statutory basis for Crown copyright.

Under this section, the Crown holds copyright in any work “prepared or published by or under the direction or control of Her Majesty”.

The court aimed to balance the rights of the Crown in works that are prepared or published under the control of the Crown, where it’s necessary to guarantee the authenticity, accuracy and integrity of the works. However, the scope of Crown copyright should not expropriate the copyright of creators and authors.

Basically, Crown copyright applies where:

  1. The work is prepared by a Crown employee in the course of his or her employment or
  2. The Crown determines whether and how a work will be made, even if the work is produced by an independent contractor.

In both situations, the Crown exercises “direction and control” for the purposes of Section 12 of the Act.

In the Teranet case, the main question was whether the registered and deposited survey plans were published by or under the “direction or control” of the Crown. The court concluded that “When either the Crown or Teranet publishes the registered or deposited plans of survey, copyright vests in the Crown because the Crown exercises direction or control over the publication process.”

Applying the principle of technological neutrality, the court indicated that the province’s use of new technologies (after digitization of the survey plans and publication process) did not change the court’s assessment of whether the Crown has copyright by virtue of s. 12. Finally, because the Crown owns copyright in the survey plans pursuant to s. 12 of the Act, there could be no infringement under the electronic registry system, and the class action was dismissed.

Background Reading:

Copyright in Survey Plans

Calgary – 07:00 MST

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Canadian Smart Contract Law: Is it broke and do we need to fix it?

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By Richard Stobbe

The idea of a ‘smart contract’ has been a lot of things: it’s upheld as the next big thing, a beacon of change for society, a nail in the coffin of an inefficient legal services profession, and it’s criticized as a misnomer for ‘dumb code’.  Our review of smart contracts continues with this question:  Are ‘smart contracts’ in need of specific laws and regulations in Canada?

In other words, is ‘smart contract’ law broken and in need of fixing?

(Need a quick primer on smart contracts? Can Smart Contracts Really be Smart?)

For those who may recall, the advent of other technologies has caused similar hand-wringing. For example the courts have, over the years, dealt with contract formation involving the telephone, radio, telex and fax … and email … yes, and the formation of contracts by tapping “I accept” on a screen.

There is a very good argument that the existing electronic transactions laws in Canada adequately cover the most common situations where so-called ‘smart contracts’ would be used in commercial relationships. For example, the Alberta Electronic Transactions Act (a piece of legislation that was introduced almost 20 years ago, when people talked about the “information superhighway”), was intentionally designed to be technology neutral.

The term “electronic signature” is defined in that law as “electronic information that a person creates or adopts in order to sign a record and that is in, attached to or associated with the record”. It’s so broad that the term can arguably apply to any number of possible applications, including situations where someone approves a transactional step within a smart contract work flow. Of course, this still has to be tested in court, where a judge would apply the law in an assessment of the specific facts of a particular dispute.

Does that create uncertainty? Yes, to a degree.

But the risks associated with that approach are preferable to the alternative. The alternative is to go the way of Arkansas, or other jurisdictions who have decided to wade in by prescriptively defining “smart contracts”.   For example, a 2019 law in Arkansas – “An Act Concerning Blockchain Technology” HB 1944 – amends that state’s electronic transactions law by defining “blockchain distributed ledger technology,” “blockchain technology” and “smart contract.”  By imposing specific definitions, these laws may have the unintended effect of excluding certain technologies that should be included, or catching use cases that were not intended to be caught.  This would be the equivalent of trying, in 2001, to define an electronic transaction by looking at  Amazon’s 1-click checkout. Sure, it was innovative at that time, but to peg a legal definition to that technology would have been short-sighted and unnecessarily constraining.

A second problem is a lack of standardization or uniformity in how different jurisdictions are choosing to define these technologies. This creates more uncertainty than a reliance on existing electronic transactions laws.

As blockchain and smart contract technology develops, the rush to have legal definitions cast in stone is premature and unwarranted.

Related Reading:

Blockchain Legislation – Too Soon?

 

Calgary – 07:00 MST

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