Teresa Scassa - Blog

Does copyright subsist in documents that must be submitted as part of judicial or regulatory processes and that are, as a result, publicly available? Some time ago I wrote about two cases making their way through the legal system that raised this issue. A proposed class action settlement agreement in one of these cases, Waldman v. Thomson Reuters Canada, Ltd., has just been smacked down by Justice Perell of the Ontario Superior Court.

The representative plaintiff of this class action lawsuit is lawyer Lorne Waldman, who is well known for his representation of Maher Arar, among others. The defendant is Thomson Reuters Canada Ltd., which operates a major legal database on a fee-for-access basis. As part of this database it provides a “Litigator” service which includes copies of documents filed by lawyers in important cases in Canada. The kinds of documents reproduced in Litigator include affidavits, factums, and pleadings. Such documents are of use to other lawyers – and to the growing number of self-represented litigants – as precedents, or as research resources. They are also of interest to law students and legal academics.

The copyright issues around such documents are interesting. Most would be considered original works of authorship, and would normally be protected by copyright. Because these documents must be filed in court proceedings, they are generally publicly accessible under the open courts principle. However, for the most part these documents are still not available in open, electronic databases hosted by courts. Where they are not electronically available, individuals may consult the court files in person, and/or may request copies of documents for a fee. No licence is sought by the court registrars from lawyers in these circumstances for the right to copy their documents. Indeed, under the open courts principle, a lawyer could not refuse permission to access or copy these documents. Although not directly on point, in a recent court decision in the U.S., which involved claims of copyright in court documents, the court found that as between courts, clients and their lawyers, copyright issues had to take a back seat to the interests of justice.

Even if there were no general licence to copy court documents, in the case of those who are not parties to the litigation and who seek to use such materials, whether they are found in court records or in Litigator, copyright’s fair dealing exception for research or private study would most likely cover their activities. Recent Supreme Court of Canada decisions make it clear that courts should take a liberal approach to interpreting fair dealing, including fair dealing for the purposes of research or private study. In 2004, the Supreme Court of Canada specifically found that research for commercial purposes – including legal research carried out for clients – fell within the scope of this defence. It is less clear that the activities of Thomson would qualify as fair dealing, but to the extent to which they facilitate access to documents already available to the public, there may be some traction to the argument.

It is likely that rather than find that documents filed in court are not protected by copyright at all, a court would find that there is an implied licence permitting copying in respect of all documents filed in court proceedings. What is less clear is the scope of any such licence. Would it include the broad-based copying of materials so as to make them available for a fee? Would it make a difference if the cost of acquiring copies through this paid service was less than the cost of acquiring those copies through the courts?

In the settlement agreement that was brought to the court for its approval, Thomson agreed not to claim copyright in the materials in Litigator, and to provide notice to its subscribers that some material in its database might be covered by third party copyright. It also agreed that for a period of ten years (and apparently no longer) it would give notice to any lawyer whose materials it planned to include in Litigator. If the lawyer objected to the inclusion of the materials, those documents would be excluded from the service. It also agreed to create a trust fund to support public interest litigation. In exchange for the above, the class members would provide Thomson with a non-exclusive worldwide, perpetual and irrevocable licence to use the works. Class members would have the ability to opt out of the settlement. The settlement agreement also included a fee of $850,000 to be paid to the lawyers for the class.

There was support for the settlement from a number of organizations such as the Canadian Bar Association, the Canadian Civil Liberties Association, and the B.C. Civil Liberties Association. These organizations were chiefly onside because of the trust fund that would benefit public interest litigation. Six class members also wrote letters in support of the settlement. However, support was not universal. Seven class members wrote letters opposing the settlement. It may not be surprising that the lightning rod for opposition to the settlement was the huge disparity between the amount of the fund created to support public interest litigation and the fees sought by class counsel. One opponent wrote: “this smacks of lawyers taking an opportunity to make money in a scenario where there was likely little value to the individual class members.” (at para 69). Another stated: “This reeks of a distortion of the noble goal of legitimate class action proceedings”. (at para 70). A third lawyer objected on the basis that he felt that court documents were public as of the moment of filing, and should be readily available electronically. Another noted that class members received nothing of benefit in exchange for the licence they would be required to give to Thomson.

Justice Perell was unequivocal in his rejection of this settlement agreement. He found that the Agreement was not “fair, reasonable, and in the best interests of the Class Members” (at para 90). He found that the settlement allowed the plaintiffs to “emerge unscathed” from what was now “prohibitively high-risk litigation” (presumably because of the weakness of the copyright claims). For Thomson, the Agreement would allow it to acquire, at relatively low cost, 13,000 non-exclusive copyright licences and releases from copyright owners. They also would evade any litigation risk, and would be spared further costs of litigation.

Justice Perell found that the class members would derive no benefit from the agreement. In fact, he concluded that the agreement “brings the administration of justice and class actions into disrepute because: (a) the Settlement is more beneficial to Class Counsel than it is to the Class Members; and (b) in its practical effect, the Settlement expropriates the Class Members’ property rights in exchange for a charitable donation from Thomson.” (at para 95). Interestingly, Justice Perell characterized the principle at issue in this case as being “that Thomson should not take what most lawyers would be prepared to give away for free if only politely asked.” (at para 98). Here, Justice Perell found that providing Thomson with a licence did not respond to that basic principle. He found that “there is no access to substantive justice for the claims of Class Members and no meaningful behaviour modification for Thomson.” (at para 101)

Justice Perell was also scathing about the imbalance between the amount of the charitable trust fund and the amount of the lawyers’ fees. He was not mollified by the offer of class counsel to donate $150,000 of their fee payment to the trust fund. He wrote “a fairer and more reasonable resolution of this class action would have been to seek court approval of a discontinuance of the action on terms that provided for a cy-près payment and a fair and reasonable Class Counsel Fee and no granting of licences.” (at para 107)

It would seem that this suggestion of a possible settlement embraces the view that no licence is needed to copy the documents at issue. Yet, it is not clear what any settlement that did not involve a concession of licences would mean for Thomson and its desire to continue offering these materials through Litigator. Without resolution of the underlying copyright issues, the uncertainty regarding the re-use of such materials will remain.

A recent decision from the Federal Court of Canada squarely addresses the issue of copyright trolls and the impact they may have on ordinary Internet users. It also highlights the importance of public interest advocacy in a context that is rife with economic and power imbalances.

The Internet is widely used as a source of content – whether it is in the form of film, music, text or visual works. While there is a great deal of content available both free and for a fee from authorized distributors, other content is shared without the consent of copyright holders. Where unauthorized distribution takes place, copyright may be infringed – but of course whether there has been actual infringement by the downstream user may depend upon a range of considerations.

Copyright owners – particularly those in the film and music industries – have for some time now been decrying the widespread unauthorized sharing of content over the Internet. They have also adopted a variety of strategies to impede these activities. These have included suing file-sharing services such as Napster, Grokster or Pirate Bay, with a view to having them shut down, public education campaigns, and threats of legal action or actual law suits against individual downloaders of protected content. It is with respect to this latter category of action that the label “copyright troll” has been used.

In Voltage Pictures LLC v. John Doe and Jane Doe, Prothonotary Aalto of the Federal Court considered an application for an order to compel Internet service provider TekSavvy to disclose the identities of individuals linked to some 2000 IP addresses that in turn had been associated with illegal downloading of Voltage’s copyright protected films. An earlier Federal Court of Appeal decision in a case involving music downloads had outlined the circumstances in which such an order might be granted, taking into consideration the necessary balance between the applicant’s rights and the privacy rights of the individuals linked to IP addresses. Voltage argued that it had met all of the requirements of this test.

The Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, more commonly known as CIPPIC, intervened in this case in the public interest. CIPPIC’s intervention was particularly important given that there was really no other available party to speak out for the interests of the still anonymous Internet users whose identities might be disclosed were an order to be issued. It is clear as well from reading Prothonotary Aalto’s reasons, that CIPPIC’s submissions had a significant impact on the outcome.

The decision begins with a quote from a U.S. case which speaks of the rise of “copyright trolls”, and it is clear that the spectre of such trolls looms over the Federal Court’s decision. The concept of “trolls” has become common in both patent and copyright litigation. In the copyright context, a troll is a plaintiff who files “multitudes of lawsuits solely to extort quick settlements”.[1] Trolling is a business model in its own right – suits are launched not so much in order to deter or to compensate for the harm caused by infringement; rather, trolling generates revenue by compelling individuals to settle for sums that are lower than the cost of obtaining legal advice and pursing a defence to the threatened action. As Prothonotary Aalto noted in his extensive reasons, copyright trolls have been active in other jurisdictions, and courts in both the U.K. and the U.S. have striven to find an appropriate result that protects individuals while recognizing the rights of copyright owners to bring legal action.

Prothonotary Aalto’s decision is, in fact, an exploration of the issues raised and an attempt to find an appropriate balance between the rights of individuals to pursue their online activities without having their identities disclosed to third parties, and the rights of copyright owners to sue for infringing uses of their works. He begins his reasons by considering the test for a Norwich Order laid out by the Federal Court of Appeal in BMG v. John Doe, another case which required the court to balance privacy interests against the rights of copyright holders. Although in Voltage, CIPPIC argued that the threshold for the application of this test was too low, and that parties seeking disclosures of the names of individual Internet users should have to make out a prima facie case of infringement, rather than just a bona fide (good faith) claim, Prothonotary Aalto found that the test set out by the Federal Court of Appeal was both appropriate and applicable. He also found that Voltage had met the prescribed test, ruling that “the enforcement of Voltage’s rights as a copyright holder outweighs the privacy interests of the affected internet users.” (at para 57) He noted, however, that the test left room to consider and to moderate the impact of the order on privacy rights.

There was no evidence in this case that Voltage was a copyright troll. Indeed, Prothonotary Aalto found that Voltage had met its burden of showing that it had a genuine copyright infringement case and that a court order to compel TekSavvy to release the contact information of some of its customers was the only reasonable means of establishing the identities of the alleged infringers. However, he acknowledged evidence and argument by CIPPIC to the effect that there might be technological flaws in the methods used to link IP addresses to downloading activities, such that some IP addresses may have been identified in error. He also accepted that some of the downloading activity might be justifiable under one defense or another. More importantly, perhaps, he was sensitive to the evidence supplied by CIPPIC of copyright troll activities in other jurisdictions and of the concerns of courts in those jurisdictions regarding such practices.

Ultimately, Prothonotary Aalto’s decision seeks to balance the intellectual property rights of the copyright owner with the privacy rights of individuals who might be identified as a result of a court granting a Norwich Order. In his view, it is only in a case where there is “compelling evidence of improper motive on behalf of a plaintiff in seeking to obtain information about alleged infringers” that a court would be justified in refusing to grant such an order. (at para 133) Nevertheless, the court has the authority to place terms and conditions on the grant of the order, and these terms and conditions can protect the privacy of individuals by ensuring that their personal information is not shared or misused by a company that seeks this information for improper purposes, such as copyright trolling.

In issuing the Norwich Order in this case – which compels TekSavvy to furnish the information sought, Prothonotary Aalto placed significant limits on the order. In the first place, Voltage is ordered to compensate TekSavvy for its legal and administrative costs in compiling the requested information. A copy of the court’s order must accompany any correspondence sent to TekSavvy customers by Voltage as a result of the sharing of the customer information. Any such correspondence must also “clearly state in bold type that no Court has yet made a determination that such Subscriber has infringed or is liable in any way for payment of damages.” (clause 8 of the order) This is to avoid the type of demand letter seen in copyright troll cases in other jurisdictions where letters sent to individuals convey the impression that conclusions have already been reached on issues of infringement. As an additional safeguard, Prothonotary Aalto ordered that a draft of any such letter must be reviewed by the Case Management Judge appointed to oversee the process before it is sent to any individuals. The order also provides that the personal information shared by TekSavvy as a result of the order must be kept confidential by Voltage and must not be shared with anyone else – including the general public or the media -- without the court’s permission.

The decision in this case is a welcome one. It reflects a serious effort to ensure fairness and balance between the parties. It provides the applicant with the means to obtain the information it needs to pursue copyright infringement claims; at the same time, it imposes restrictions designed to ensure that the personal information is not used improperly to generate revenue well in excess of any damages suffered by the rights holder by pushing individuals into settlements in order to avoid the costs and stresses of threatened litigation. The decision is a direct result of public interest advocacy and a reminder of the important role played by organizations such as CIPPIC.

It is worth noting that the 2012 amendments to the Copyright Act included changes to the statutory damages provisions in that statute. These provisions allow plaintiffs to opt for a fixed amount of damages in cases of infringement – in other words, to be compensated without having to establish any particular losses. The 2012 amendments drastically reduced the amount of statutory damages that can be awarded against individuals whose infringing activities are essentially non-commercial. This takes away the ability for plaintiffs to stack statutory damages in suits against individual downloaders in order to arrive at the ridiculously high (and ultimately punitive) damage awards that we have seen in the U.S. in lawsuits against students or other private individuals whose downloading was simply for their own consumption. The message from Parliament is clearly that this type of conduct, while still infringing, should not be be exploited by rights holders either to “send messages” or to provide a new business model based on serial demand letters to large numbers of vulnerable individuals. The decision by Prothonotary Aalto is in keeping with this message. While copyright owners are entitled to enforce their rights through the courts, the courts must ensure that “the judicial process is not being used to support a business model intended to coerce innocent individuals to make payments to avoid being sued.” (at para 35)