By Jaimie Bordman
Canada’s Supreme Court has recently affirmed that tariffs for dealing with copyright-protected works levied by copyright collective societies and certified by the Copyright Board, are optional. Users of copyright-protected material are free to opt out of said tariffs and obtain appropriate licenses by other means, if desired.
The underlying dispute involved York University; whose professors make huge volumes of copies from copyright protected works pursuant to instructing students. The University had obtained a license for such copying via Access Copyright, a collective society representing the owners of copyright in most (if not all) of the written works that York professors were reproducing in the course of teaching their students.
The parties were negotiating to renew York’s license for reproducing the written works. When negotiations broke down, Access Copyright sought certification of an interim tariff from the Copyright Board of Canada, which would have the effect of unilaterally setting the royalty rate for the license at the current rate until negotiations could be concluded. The Copyright Board granted the request for an interim tariff, but after some time York University declined to take license rights from Access Copyright altogether and stopped paying the tariff.
York’s refusal to take a license from Access Copyright and pay the interim tariff gave rise to the central question in this matter: when a tariff is certified by the Copyright Board, setting royalty rates for a license to use copyright works, is it mandatory that anyone using the works in the manner covered by the tariff pay the tariff rates to obtain a license? Access Copyright maintained that the tariff was indeed mandatory and sought to enforce the tariff in Federal Court. The Federal Court sided with Access Copyright, but the Federal Court of Appeal disagreed, finding that Copyright Board approved tariffs are voluntary for those using the copyright material covered by the tariff.
The Supreme Court held that the interim tariff from the Copyright Board was optional and was not enforceable against York University. The Copyright Act does not contain any language that clearly, distinctly establishes a duty to pay a copyright collective society for a license under copyright pursuant to a tariff certified by the Copyright Board. Accordingly, any user of copyright-protected material is free to obtain a license in whatever manner it desires. Users are also free to determine whether they believe a license is required at all, or whether their activities fall under the “fair dealing” exception to copyright infringement (subject to the risk of a copyright infringement suit from the copyright owner, of course).
The Supreme Court’s decision is York University v. Canadian Copyright Licensing Agency (Access Copyright), 2021 SCC 32, and can be found at this link: https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/18972/index.do#
By Jaimie BORDMAN
It has been said that imitation is the sincerest form of flattery. This provides little comfort to the owners of famous brands, however, since “imitation” can cause serious problems such as confused customers and erosion of the brand owner’s valuable reputation.
One such brand owner recently put a stop to the “imitation” of its brand by a cannabis retailer in Vancouver. SUBWAY, the world-famous chain of sandwich shops, obtained an injunction and damages against the retailer, which used the trademark BUDWAY, shown below, in an obvious attempt to imitate, or at least parody, the famous sandwich retailer.
In a decision of Canada’s Federal Court, it was determined that consumers were likely to be confused and infer that BUDWAY’s goods and services were connected with SUBWAY. It was also determined that BUDWAY’s unauthorized use of this mark depreciated the value of the extensive goodwill associated with SUBWAY’s registered trademarks in Canada. The Court ordered the cannabis retailer to stop all use of the BUDWAY trademark, and pay a modest damages and court costs (CDN$40,000 in total).
Interestingly, the decision was taken by the same judge of the Federal Court (Justice Nicolas McHaffie) that decided another case of a cannabis trader “paying homage” to the famous children’s retailer Toys ‘R Us, by using the trademark Herbs ‘R Us.
In the Herbs ‘R Us matter, the Court found that the goodwill in the Toys ‘R Us trademarks had been depreciated, but the trademark rights were not directly infringed because there was no reasonable likelihood of confusion. In Herbs ‘R Us, the goods and services of the parties were so unrelated, and indeed antithetical to one another – one side being intended for children, and the other clearly not so intended – that consumers would not likely infer that Toys ‘R Us was now in the cannabis business.
The Court found that this case was different, however, in that there was some relationship between some of the parties’ goods and services. BUDWAY sold edible products including cookies and other baked goods, which SUBWAY also sells. In this context, the Court found it reasonably likely that consumers could mistakenly infer that SUBWAY was the ultimate source of the BUDWAY goods and services.
Links to the Court’s decision, and the decision in Herbs ‘R Us, can be found below:
Federal Court of Appeal Upholds Site-Blocking Order
by Ashley Chu
The Federal Court of Appeal (FCA) has upheld an unprecedented site-blocking order issued by the Federal Court.
In 2019, the Federal Court issued an order requiring a number of Canadian Internet service providers (ISPs) to block access to certain websites that were alleged to infringe the plaintiffs’ copyright. In addition to being the first of its kind in Canada, this order was notable because the ISPs were not defendants in the underlying copyright action. Teksavvy Solutions Inc. (Teksavvy), one of the ISPs, appealed the order.
In dismissing the appeal, the FCA held that the Federal Court did indeed have the power to grant the site-blocking order, finding that it is one of the possible remedies contemplated in the Canadian Copyright Act. The FCA disagreed with Teksavvy’s contention that the Telecommunications Act displaces the Federal Court’s equitable powers of injunction, which includes the ability to impose a site-blocking order.
The FCA also declined to consider whether freedom of expression, as set out in the Canadian Charter of Rights and Freedoms, was engaged by the order. It noted that it was not necessary for the judge to engage in a detailed Charter rights analysis separate and distinct from the balance of convenience analysis that is already considered when determining whether an interlocutory injunction should be issued. With respect to the judge’s analysis of the legal test for interlocutory injunctions, the FCA found no error in his analysis.
Therefore, Teksavvy’s appeal was dismissed.
This decision is significant for copyright owners, who will now have available to them site-blocking orders as a remedy for copyright infringement.
The Federal Court of Appeal’s decision is published as Teksavvy Solutions Inc. v Bell Media Inc. et al., 2021 FCA 100 and can be accessed at this link: Teksavvy Solutions Inc. v. Bell Media Inc. et al.
For more information about copyright protection in Canada, please contact the professionals at Moffat & Co.
Federal Court Provides Guidance on Fair Dealing in Copyright Law
by Jaimie Bordman
The Federal Court has recently provided guidance on the issue of fair dealing with copyright works, dismissing a claim of copyright infringement brought by Canada’s national broadcaster against one of Canada’s major political parties.
During the federal election campaign of 2019, the Conservative Party of Canada (the “Conservative Party”) produced an “attack” ad criticizing the performance of the incumbent Prime Minister, whom the Conservative Party was trying to unseat. In its ad, the Conservative Party used relatively brief clips (a few seconds in length each) from the Canadian Broadcasting Corporation’s (the “CBC”) news broadcasts. The CBC claims copyright in its news broadcasts.
In dismissing the CBC’s copyright claim, the Federal Court found that the CBC did own copyright in the news broadcasts and that the clips that were used by the Conservative Party were sufficient in quality and quantity to qualify as a “substantial part” of those broadcasts. However, the Court found that the Party’s use of the clips constituted “fair dealing”, and was not an infringement of CBC’s copyright. The doctrine of fair dealing provides users of copyright protected material with a right to use the protected material in certain circumstances. Copying protected works in a manner that constitutes fair dealing does not infringe the owner’s copyright.
In order to constitute fair dealing, the copying of a protected work must be for one of several purposes identified in the Copyright Act, such as “research”, “private study”, and “criticism”. As well, the nature of the copying and use of the work must be “fair”, which is determined on a case by case basis, with reference to several criteria.
In this case, the Court found that the ad was made, and the news clips were used, for the purpose of “criticism”. The Court found that the fair dealing purposes listed in the Copyright Act should be interpreted broadly. Using the copyright protected clips to criticize a third party (the Prime Minister) was acceptable, even though the criticism did not relate to the works themselves, or the CBC.
With regard to whether the use of the clips was “fair”, the CBC argued that the Conservative Party’s use would create the appearance that the CBC was biased in favour of the Conservative Party, which would damage the CBC’s reputation as a politically neutral provider of news. The Court agreed that this concern could be valid, and could favour a finding that the use was not fair. However, the Court found that there was no evidence showing that the ad actually had this effect in this case.
The Federal Court’s decision illustrates that the doctrine of fair dealing, often referred to as a “user’s right”, is to be given a relatively large, liberal interpretation to permit the use of copyright works by all, for the enumerated purposes, and in a manner that is fair. The decision also serves as a reminder that the question of fairness is factual in nature. Factors to be considered in the analysis must be grounded in fact, and supported by evidence.
The Federal Court’s decision is published as Canadian Broadcasting Corporation v. Conservative Party of Canada, 2021 FC 425, and can be viewed at this link: Canadian Broadcasting Corporation v. Conservative Party of Canada – Federal Court (fct-cf.gc.ca)
Contact the professionals at Moffat & Co. for more information regarding copyright protection in Canada, and the doctrine of fair dealing.
Jaimie Bordman has prepared a summary of two recent Practice Notices published by the Canadian IP Office. You can read the summary LEARN MORE.
CANADA IP UPDATE:
CIPO PRACTICE NOTICES RE: TM BACKLOG
Since 2019, when the Trademarks Branch of the Canadian Intellectual Property Office (CIPO) began implementing major revisions to Canada’s Trademarks Act and Trademarks Regulations, lead times for examination have been steadily growing. Currently, applicants for trademark registrations in Canada can expect to wait over two years from filing for a first examination report!
On May 3, 2021, CIPO published two practice notices intended to help reduce lead times in examination.
The first notice reintroduces the practice of expedited examination, in certain circumstances. For several years now, CIPO had not permitted the advancement of trademark applications out of sequence, for any reason. With the publication of CIPO’s practice notice, applicants can now request expedited examination in the following circumstances:
- A court action in Canada, relating to the applied for mark, is underway or expected;
- The applicant is in the process of combating counterfeit products at the Canadian border;
- The applicant requires registration of its trademark in order to protect its intellectual property rights from being “severely disadvantaged” in online marketplaces such as Amazon; or
- The applicant requires registration of its trademark in order to preserve its claim to priority within a defined deadline, and following a request by a foreign intellectual property office.
In all cases, an affidavit or statutory declaration will be required to establish the presence of one of the above circumstances.
The second notice is entitled “Measures to improves timeliness in examination” and contains several provisions to this effect:
- If terms in the statement of goods and services are objected to in a first examination report, examiners will no longer provide suggestions of alternative, acceptable terms;
- If the goods and services of an application are defined exclusively using terms from CIPO’s Goods and Services Manual (GSM), the application will be examined more quickly, and possibly ahead of prior filed applications that do not exclusively use terms from the GSM;
- Perhaps most significantly, CIPO will aim to issue fewer examination reports before refusing an application. In particular, examiners will only consider and respond to an issue raised in examination once. Additional argument or evidence submitted in a second response by an applicant will not be considered before the application is refused.
CIPO’s practice notices provide several useful ways in which brand owners can obtain trademark registrations in Canada more quickly. Taking the time to define goods and services using terms from the GSM at the outset of the application process can now lead to faster examination. And for brand owners dealing with infringement or counterfeiting issues in Canada, expedited examination will be a great option for obtaining a registration relatively quickly, allowing them to move forward with enforcement.
The practice notices also provide incentives for trademark applicants to put their best foot forward as soon as possible in examination. Applicants can no longer expect to have multiple chances to make their case on an issue, as was the case in past CIPO practice.
Contact Moffat & Co. today for more information and advice on how to expedite your Canadian trademark application.
Links to CIPO’s Practice Notices: