Sookman law society_copyright_2012_conference

McCarthy Tétrault Advance™ Building Capabilities for Growth Law Society: 16th Annual Intellectual Property Law, The Year in Review - CopyrightBarry B. Sookmanbsookman@mccarthy.ca416-601-7949 January 12, 2012McCarthy Tétrault LLP / mccarthy.ca 11064494 1

CanadaMcCarthy Tétrault LLP / mccarthy.ca 11064494 2

In Supreme Court – what’s at stake ¬ Tariff 22 –SOCAN appeal - is an internet preview a fair dealing for research purposes? ¬ K-12 –fair dealing in the K-12 educational sector. ¬ what is research ¬ whose purposes should the court consider in determining the allowable purpose and fairness ¬ is the effect on the market the most important fairness factor ¬ is fair dealing to be construed to be consistent with the three step testMcCarthy Tétrault LLP / mccarthy.ca 11064494 3

In Supreme Court – what’s at stake ¬ Tariff 22 – Telco and ESA/ESAC appeals ¬ is a download a “communication” ¬ are demand services “to the public” ¬ are rights separate and distinct ¬ will the Court harmonize Canadian and US law – ASCAP v RealNetworks and Cablevision ¬ Re: Sound v Motion Picture Theatre Association of Canada 2011 FCA 70 – Are recording artists and record companies entitled to collect equitable remuneration under s. 19 of Copyright Act when their music is played in movies and on TV? How to construe the exclusion for soundtracks in the definition of sound recording?McCarthy Tétrault LLP / mccarthy.ca 11064494 4

In Supreme Court – what’s at stake ¬ Reference re Broadcasting Act 2011 FCA 64 ¬ Is the CRTC empowered under the Broadcasting Act to establish a regime (the value for signal regime) to enable private local television stations to charge royalties for the distribution of their programming? ¬ Per Sharow JA (Nadon JA dissenting) “by making the BDUs’ statutory retransmission rights in subsection 31(2) of the Copyright Act subject to paragraph 31(2)(b), Parliament has ranked the objectives of Canada’s broadcasting policy ahead of those statutory retransmission rights. I see nothing in the Copyright Act that would justify a reversal of that ranking if the Commission determines that the objectives of Canada’s broadcasting policy require the imposition of a regulation or licensing condition that would permit a private local television station to demand cash or other consideration from a BDU for the right to retransmit its signals.”McCarthy Tétrault LLP / mccarthy.ca 11064494 5

Sirius Canada Inc. v. CSI, 2010 FCA 348 –leave to appeal denied October 20, 2011 ¬ When an entity provides a service for use with its own designed and manufactured devices e.g., a satellite radio service and radio receiving set, and the use of the device with the service will necessarily result in automatic copying of the content by the user, the provider of the service (in this case XM and Sirius), can be liable for the copying which occurs on the device under a theory of authorization. ¬ The Copyright Act does not extend to acts of reproduction that take place wholly within another country (here the US), even if the act of copying is authorized from Canada or if the act of copying is initiated from Canada. The real and substantial connection test is not applicable to acts that take place wholly within another country. ¬ Copying of small amounts of information of a work in a rolling (temporary) buffer is not a reproduction of a substantial part of a work.McCarthy Tétrault LLP / mccarthy.ca 11064494 6

Crookes v. Newton 2011 SCC 47 ¬ “A hyperlink, by itself, should never be seen as “publication” of the content to which it refers.” ¬ “it is the actual creator or poster of the defamatory words in the secondary material who is publishing the libel when a person follows a hyperlink to that content“. ¬ “Recently, jurisprudence has emerged suggesting that some acts are so passive that they should not be held to be publication. In Bunt v. Tilley, [2006] EWHC 407, [2006] 3 All E.R. 336 (Q.B.), considering the potential liability of an Internet service provider, the court held that in order to hold someone liable as a publisher, “[i]t is not enough that a person merely plays a passive instrumental role in the process”; there must be “knowing involvement in the process of publication of the relevant words”... see also Metropolitan International Schools Ltd. v. Designtechnica Corp., [2009] EWHC 1765 (Q.B.)).”McCarthy Tétrault LLP / mccarthy.ca 11064494 7

France Animation v Robinson, 2011QCCA 1361¬ Whether sketches and characters of the proposed TV series Robinson curiosity was infringed by Robinson sucro?¬ “The appellants do not demonstrate a palpable and overriding error in the analysis and the conclusion of the judge. Among the unique aspects of the work Robinson Curiosity include such a Robinson who, unlike the hero of the work of Robinson Crusoe Daniel Defoe, is not alone on his island. He shares his life with many people one of which, Friday holiday, is the antithesis of the classic Friday. There is also a very precise and detailed description of the character traits of the ten characters that populate the island, and especially their relationships with each other in the context of scenarios for understanding… This dynamic, which is an essential part of the work.”¬ “In this case, the author Claude Robinson typed enough characters, their character, their relationships and their environment so that it is entitled to the protection of the LDA.”McCarthy Tétrault LLP / mccarthy.ca 11064494 8

France Animation v Robinson, 2011QCCA 1361¬ “Counterfeiting is not limited to the copy of the work…as it can be a colourable imitation as long as it resembles, if not all, at least a substantial part of or significant the work.”¬ “It is clear, moreover, that counterfeiting is assessed first by the similarities…”¬ “the LDA states that still disguised imitation is counterfeit. In other words, the differences are sometimes used to conceal infringement, which can not make it disappear.¬ “the differences may have no impact if the borrowing remains substantial. Conversely, it is also possible that the result is a new and original work, which was simply inspired by the first. Everything is matter of nuance, of degree and context, so that in this respect as in many others, these are questions of fact that are first and foremost for the trial judge…¬ if there is substantial reproduction, counterfeiting remains, despite a significant intellectual effort by the infringer… Thus, even if the infringer through his talent, has produced an "improved“ version of the original work, which some might argue here that does not change the reality: the infringement notice and the author is entitled the protection of the LDA.”McCarthy Tétrault LLP / mccarthy.ca 11064494 9

France Animation v Robinson, 2011QCCA 1361¬ “It is true that, generally, the expert testimony is not necessary for the court to determine whether there is substantial reproduction of a work. The comparison of two works by an ordinary, observer, would normally allow him to rule without the help of an expert”.¬ “in many cases, the judge is in a better position to determine if there substantial reproduction of the work. In short, the test of necessity must be considered in the circumstances of the case while ensuring that this testimony does not divert the attention of the court of the analysis on which it is done. Thats what Rothstein pointed out in Masterpiece, particularly in paragraphs 77, 79 and 93.”¬ Expert evidence was found useful in the case because: ¬ The work was in draft form and the comparison would have been very time consuming and difficult without it. ¬ The copying consisted of non-literal copying of the “structure, composition, and arrangement” of the elements and other matters that were not easily perceived directly but could be deduced from the perceptible form.McCarthy Tétrault LLP / mccarthy.ca 11064494 10

France Animation v Robinson, 2011QCCA 1361 “It is common in fact that the author is entitled to delivery of the portion of the profits of the infringer that a causal relationship to his work….Monsanto Canada inc. c. Schmeiser is relevant to this question: Although this case involved a patent issue, the principles that were laid deserve to be observed in the case of offenses relating to copyright, given the similarity of the relevant legislation in both laws. In sum, there is no causal link here between the profits made by the appellants and the respondent’s …work.”McCarthy Tétrault LLP / mccarthy.ca 11064494 11

France Animation v Robinson, 2011QCCA 1361¬ “…the intentional infringement of copyright was an infringement of the owner’s right to the enjoyment of one’s property and constituted a violation of Articles 6 and 49 of the [Quebec] Charter of human rights and freedoms”.¬ “The Copyright Act does not in as many words provide for punitive damages, though section 38.1(7) refers to them by stating the right to claim them, if applicable. These damages are acknowledged and routinely awarded based on the ordinary law of the province in which the lawsuit was instituted. In Quebec, a few judgments by our Court have acknowledged the possibility of awarding punitive damages in cases of intentional copyright infringement. Though the Court did not specify the basis for such awards, it may be possible, through article 1621 C.C.Q. and sections 6 and 49 of the Charter of human rights and freedoms, to argue intentional copyright infringement as a breach of the owners’ rights to the peaceful enjoyment of their property. quoting: Construction Denis Desjardins inc. c. Jeanson, [2010] RJQ 1600, 2010 QCCA 1287¬ Article 6 Every person has a right to the peaceful enjoyment and free disposition of his property, except to the extent provided by law.¬ Article 49 Any unlawful interference with any right or freedom recognized by this Charter entitles the victim to obtain the cessation of such interference and compensation for the moral or material prejudice resulting therefrom.¬ In case of unlawful and intentional interference, the tribunal may, in addition, condemn the person guilty of it to punitive damages.McCarthy Tétrault LLP / mccarthy.ca 11064494 12

Aga Khan v. Tajdin, 2011 FC 14¬ “A Farman is an address given before an audience. It is recorded and preserved in audio and often in video form. A Talika is a brief written religious message… These Farmans and Talikas…are literary works within the meaning of the Copyright Act.”¬ “The defendants take the position that the burden of proof is on the Aga Khan to establish that he did not give consent. In my opinion, they are very much mistaken. It is not up to the author to prove a negative, i.e. that he did not give consent. Consent is a matter of defence and so the burden must lie upon the defendants.”¬ “The defendants in the Aga Khan case were unrepresented and so could hardly have been expected to cite all the authorities that supported their position…their case should not be cited as a precedent for a reverse onus of proof of consent in copyright or any other IP infringement case.” per Prof. Vaver Jan. 31, 2011 IP Osgoode.McCarthy Tétrault LLP / mccarthy.ca 11064494 13

9077-6204 Québec inc. c. Blanchard2011 QCCQ 205¬ Is a fence an original work?¬ “The leading case in this regard CCH Canada Ltd. v. Law Society of Upper Canada…[it] emphasizes that to be "original" a work need not be innovative or unique and that the essential element is the exercise of skill and judgment of the creator... a work need not have special artistic qualities.”¬ “The expert Sheppard, meanwhile, refers to the state of the art in the field of construction and their applications in the construction of a fence. His report presents several examples of fencing. He stated that the rules of the art in the public domain and are used by any person constructing a fence...¬ the Tribunal is of the opinion that the plaintiffs failed to demonstrate the originality of the fence in relation to other types of closed type "fence“...¬ All these elements come from the public domain and carpenters knowledge of the rules of art. This is the purely mechanical part of the construction of a fence...¬ the Tribunal is of the opinion that the design and construction of the fence” is not an original work.”McCarthy Tétrault LLP / mccarthy.ca 11064494 14

9077-6204 Québec inc. c. Blanchard2011 QCCQ 205 ¬ Is a fence a work protected by copyright? ¬ "Architectural work“ means any building or structure or any model of a building or structure” ¬ “the Tribunal is of opinion that...the design and construction of the fence surrounding the property... are not a work or an architectural work or an artistic work year under the Act...a fence can hardly fall into one or other of the above definitions”. ¬ “In the circumstances, to recognize a copyright in a fence might lead and generate numerous similar cases in the present dispute between neighbours, between manufacturers and installers of fences that look like the models, thereby causing large expenditures to key stakeholders”.McCarthy Tétrault LLP / mccarthy.ca 11064494 15

Training and Management Pro-HealthInc. c. Sampietro 2011 QCCS 4256¬ Action for infringement in modules of a training program in business administration and secretarial dentistry.¬ “The applicant did not invent the language and vocabulary she used. Of course. She created something from the known. This creation is undeniable. Just be aware of the work of the applicant to see that it has used its knowledge, experience, expertise, teaching skills, his trial and his ability to develop a single document in its mode of expression. She presented an intelligible and logical information needed to prepare a diploma in dental secretariat It is therefore an original literary work in which copyright subsisted recorded.”McCarthy Tétrault LLP / mccarthy.ca 11064494 16

Perfect 10, Inc. v. Google, Inc., 2011 FC 348¬ Google’s appeal to strike out or stay Canadian action because of parallel action in the US dismissed.¬ Abuse of process: “The Learned Prothonotary examined the pleadings, noted the difference in legislative regimes between the U.S. and Canada, the different rights which potentially flow therefrom, the differences in parties and the potential scope and limitation of jurisdiction and enforcement…. I see no error in principle or misapprehension of fact at this early stage.”¬ Same claim in another jurisdiction: “For much the same reasons as reached in respect of abuse of process, the conclusion that the U.S. and Canadian actions are not the same is reasonable…In the exercise of discretion, it is reasonable to conclude that this Court (which has jurisdiction over the claim) ought not to defer to a foreign court in respect to matters arising in Canada. Google US, by operating in Canada, directly and/or through a subsidiary subjected itself to Canadian law.”McCarthy Tétrault LLP / mccarthy.ca 11064494 17

Perfect 10, Inc. v. Google, Inc., 2011 FC 348¬ Forum non-conveniens: “I cannot see that the U.S. court is more convenient and appropriate for dealing with rights under Canadian law – even assuming a U.S. court could or would make such a determination. The situation is analogous to other instances of actions based on intellectual property rights proceeding in two or more national courts at the same time. It is not forum shopping to assert Canadian rights in Canadian courts and U.S. rights in U.S. courts.”¬ “the doctrine is not strictly applicable because neither the U.S. nor Canadian courts can necessarily assume or exercise jurisdiction over the actions in the other country.” See, Lucasfilm below.¬ “The place of contract is not as relevant as the place of infringement. As the infringement on the internet potentially occurs in a number of places, including on the server, on the customers’ screen and in the marketing in Canada, the matter is balanced.”McCarthy Tétrault LLP / mccarthy.ca 11064494 18

Harmony Consulting Ltd. v. G.A. FossTransport Ltd., 2011 FC 340 ¬ Computer programs that are dictated by the operating system or reflect common programming practices are not original expression and will not receive copyright protection. ¬ Compilation of computer program elements can be protected by copyright. ¬ Minor fixes to a program which are not original are not protected by copyright. ¬ Program features developed using MS Access “wizard” not original or protectable. ¬ A nunc pro tunc copyright assignment does not satisfy the writing requirements for assignments where there was no original intention to transfer the copyright. ¬ Section 13(3) of (which vests copyright in works to employers) applies to officers, directors and employees. ¬ Use of software, without more, outside the scope of a license e.g., more seats than licensed, is not copyright infringement. ¬ Making modifications to software which include opening a file, making changes and resaving the file is not a reproduction. ¬ Making a back-up copy does not involve making a reproduction. ¬ How many errors can one court judgment contain?McCarthy Tétrault LLP / mccarthy.ca 11064494 19

Century 21 Canada Limited Partnershipv. Rogers Communications Inc., 2011BCSC 1196 ¬ Century 21 sought an injunction and damages against the defendants for their conduct in accessing Century 21 Canada’s website and copying photographs and data from that website without consent for display on a competitive website. ¬ Full property descriptions copied were a substantial portion of each real estate listing page on the Century 21 website, but copying of truncated property descriptions was not. ¬ The dealing was not fair ¬ According the case, Canadian law does not recognize transformative use as a fairness factor. ¬ The extent of the copying and its purpose, which was competitive to Century 21, were significant reasons why the dealing was not fair.McCarthy Tétrault LLP / mccarthy.ca 11064494 20

Layette Miniôme inc. c. Jarrar 2011QCCS 1743¬ Is the defendant liable for the reproductions of counterfeit clothing made in China and imported into Canada?¬ “The Quebec Civil Code sections 3134 et seq, addresses the international jurisdiction of Quebec authorities... It has been recognized by the Supreme Court of Canada that Quebec courts had jurisdiction to hear the case in question because the plaintiff company had suffered the damage alleged in the territory of the Province of Quebec... The judges also mention the principle of real and substantial connection akin to the principle of real and substantial connection.”¬ “In this case, the making of artistic works and samples was made in Canada by a Canadian company headquartered in Montreal (Quebec). The transmission of samples made from Montreal to the applicants, residents of Canada, all in compliance with a binding contract, contract established in Quebec... This Court therefore has jurisdiction to render a decision in this case.¬ We also know that the damage to the plaintiff / respondent, were in Quebec since the latter it is headquartered. Thus, the real and substantial connection with Canada is undeniable.”¬ Did the court confuse personal jurisdiction under the QCC with the territorial jurisdiction of the Copyright Act?McCarthy Tétrault LLP / mccarthy.ca 11064494 21

Layette Miniôme inc. c. Jarrar 2011QCCS 1743¬ “In this case, the plaintiffs claim is that the clothes copied with the contribution of the defendants maliciously included special features such as graphics, a particular design or material which the pattern is woven or knitted. The plaintiff alleges that it intends to demonstrate that it advances in the investigation and hearing.¬ The applicant adds that therefore, the defendants are wrong to claim that the plaintiff unilaterally can no longer rely on their copyright because it allowed the production of clothing copied to more than fifty (50) copies. Indeed, the defendants did not take into account the statutory exception provided for in Article 64 (3) of the Act...in which the plaintiff based his action and intends to prove the application during the investigation and hearing.”¬ “Section 64 (3) seeks, among other things, to protect the drawing from a utilitarian object. For example, if an artist allows a manufacturer of t-shirts to reproduce one of his drawings, t-shirts sold thousands of copies will not be protected by copyright, but the drawing of the artist and it will not be able to reproduce it on another t-shirt, a dress, a coat or a coffee mug.” quoting Limited Stores Greenberg et al. C. Import-Export René Derhy (Canada) inc. 2004 CanLII 15460 (QCCA)McCarthy Tétrault LLP / mccarthy.ca 11064494 22

Louis Vuitton Malletier S.A. v. SinggaEnterprises (Canada) Inc., 2011 FC 776¬ Court finding copyright in Multicolored Monograms used with handbags. Were they used as part of the handbag designs e.g. a pattern in a finished article under s64? Were they covered by an exception in s64(3) e.g. (a) a graphic representation that is applied to an article; (b) a trade-mark, or (c) material that has a woven or knitted pattern; suitable for piece work or surface coverings?¬ Court also finding infringement by reproduction and secondary infringement under s27(2) when distributed in association with counterfeit goods.McCarthy Tétrault LLP / mccarthy.ca 11064494 23

Louis Vuitton Malletier S.A. v. SinggaEnterprises (Canada) Inc., 2011 FC 776¬ “The British Columbia Supreme Court has previously held in counterfeiting cases that a corporation will not be allowed to be used to shield officers, directors and principal employees from their actions in the wilful and knowing sale of counterfeit and infringing goods…I adopt and apply that authority in this Court.”¬ “Damages should be awarded on the high end of the scale where the conduct of the defendants, both before and during the proceedings, is dismissive of law and order and demonstrates a necessity for deterring future infringements… The need for deterrence in awarding statutory damages is important. There is a need for deterrence where, as in the present case, a defendant ignores the Court process while continuing the counterfeit activities complained of.”¬ “the Court finds that statutory damages in the amount of $20,000, per each of the Louis Vuitton Copyrighted Works infringement, is appropriate”McCarthy Tétrault LLP / mccarthy.ca 11064494 24

Louis Vuitton Malletier S.A. v. SinggaEnterprises (Canada) Inc., 2011 FC 247¬ “This case involves counterfeiting on the part of Singga. Singga’s course of conduct demonstrates a disregard for the court process: delay in proper documentary discovery, failure to appear or provide evidence on Mr. Lim’s motion to have himself removed as counsel, and failure to ensure that a new solicitor was appointed as required by the Order of the Court dated February 9, 2011, notwithstanding the clear indication therein that the Plaintiffs would be entitled to seek to have its Statement of Defence struck.¬ Therefore, pursuant to the inherent jurisdiction of the Court and Rule 221(f), the Singga’s Statement of Defence is to be struck and Singga is to be noted in default of this proceeding.”McCarthy Tétrault LLP / mccarthy.ca 11064494 25

1429539 Ontario Limited v. Café MirageInc., 2011 FC 1290¬ ”where an author, as in the case here, applies his acquired knowledge, developed aptitude or practised ability to the development of a restaurant menu, while engaging his capacity for discernment or his ability to form an opinion or evaluation by comparing different possible outcomes, the resulting creation is clearly the product of an exercise of skill and judgment as envisioned by the Supreme Court of Canada in CCH. An author’s demonstrated ability to select the food items to be included in the menu, to generate descriptions of those items and to arrange the layout and overall design of the menu are examples of the skill and judgment required to support a finding that a restaurant menu is an original work deserving copyright protection…¬ It is clear that thought was given to the menu food items to be included, the phraseology used in descriptions and the linking with images to associate the menu with the Symposium concept. I am satisfied that Mr. Argiropoulos has described a process that meets the standard of an exercise of skill and judgment in the menu selection, arrangement and design to establish copyright.”McCarthy Tétrault LLP / mccarthy.ca 11064494 26

1429539 Ontario Limited v. Café MirageInc., 2011 FC 1290“In addition, section 34.1 of the Copyright Act provides that in anyproceeding for infringement of copyright, in which the defendant puts inissue the existence of the copyright or the Plaintiff’s title to the copyright,then copyright shall be presumed, unless the contrary is proved, to subsistin the work in any proceedings for infringement of copyright. TheDefendants have put the Symposium Café Group’s copyright at issue aswell as control over that copyright. I consider the Defendants’ denials asengaging s. 34 of the Copyright Act. Accordingly, copyright is presumedand the Defendants must prove the contrary. They have not. I need notgo further into the question of whether menu food descriptions can becopyrighted and preserved for the lifetime of an author plus fifty years.”McCarthy Tétrault LLP / mccarthy.ca 11064494 27

1429539 Ontario Limited v. Café MirageInc., 2011 FC 1290“The Defendants’ claim that the Plaintiffs waived all rights by agreeing totransfer all assets does not succeed. Copyright does not transfer with thephysical assets such as menus. There is no evidence that theSymposium Café Group ever transferred more than a license to use itstrade-marks or copyrights. At best, the license to use the menuscontinued until they opted not to join the Symposium Café franchise.Since copyright is presumed and the Defendants have failed to prove thePlaintiff was no longer entitled to exclusive copyright, the presumption ofcopyright and the Plaintiff’s entitlement to copyright continues.”McCarthy Tétrault LLP / mccarthy.ca 11064494 28

1429539 Ontario Limited v. Café MirageInc., 2011 FC 1290 ¬ “I consider the copyright infringement to have been committed at two locations, at the Sheppard Café Mirage and the Kennedy Café Mirage… ¬ I award damages in the amount of $2,500 at the Sheppard Café Mirage and $5,000 at the Kennedy Café Mirage for a total of $7,500 for copyright infringement.”McCarthy Tétrault LLP / mccarthy.ca 11064494 29

Suttie v. Canada (Attorney General),2011 FC 119¬ “As the Court has the jurisdiction to order the register to be corrected by adding information that was wrongly omitted (s 57(4)(a)), I see no reason not to grant Ms. Suttie’s request to add her son’s name to the register.”¬ ”In some cases, an author’s home address could serve as a means of identifying him or her. Therefore, to require an author to provide a home address could interfere with his or her right to remain anonymous. In my view, the requirement in the Act to provide an address does not oblige an author to identify where he or she lives – it simply requires the person to provide an address for purposes of correspondence. This interpretation is borne out by the Copyright Regulations, which require an author to provide a complete mailing address, including street name and number, and the postal code (SOR/97-457, s 4(1)).¬ Given Ms. Suttie’s privacy concerns, I am satisfied that the register contains an “error or defect” (s 57(4)(c)) and will issue an order amending the register to substitute Ms. Suttie’s counsel’s address for her home address.”McCarthy Tétrault LLP / mccarthy.ca 11064494 30

SOCAN v v. IIC Enterprises Ltd.(Cheetah’s Nightclub), 2011 FC 1088¬ “Under s. 38.1(4) of the Copyright Act, a collective society referred to in section 67 can elect, in lieu of any other remedy of a monetary nature provided by the Act, to recover an amount of statutory damages in a sum of not less than three and not more than ten times the amount of the applicable royalties owing. SOCAN made such an election and seeks an order to recover an award of statutory damages in a sum of seven times the amount of applicable royalties.”¬ “Taking into account the factors listed above, and the absence of any mitigating circumstances, I conclude that an award of statutory damages of six times the outstanding licence fees is appropriate in this case. The substantial award should serve as sufficient deterrent to the Defendant, as well as to others, who seek to profit from the Plaintiff’s musical works with impunity. It will be a reminder to all licensees of the potentially serious consequences of non-compliance with the annual reporting requirements and non-payment of the applicable licence fees under Tariff 3C. Damages available to copyright holders under the Copyright Actserve an important function and should not be treated as just another cost of doing business.”McCarthy Tétrault LLP / mccarthy.ca 11064494 31

Robertson v. ProQuest Information andLearning LLC, 2011 ONSC 2629¬ “Success at a common issues trial was by no means guaranteed... The scope of that licence was arguably unclear and the defendants claimed it included an express or implied term permitting the right to publish the works in electronic media. The plaintiff has always taken the position that class members merely licenced a one-time right to publish their works in print.”¬ ”Assuming aggregate damages were awarded, there would still be considerable uncertainty about the quantum of damages. While the plaintiff could rely on s. 38.1 of the Copyright Act to pursue statutory damages for copyright breach, there has been no case that has awarded damages on the scale sought in circumstances similar to this action.¬ It is anticipated that the defendants, and in particular the print publishers, would have argued that the royalties they received pale in comparison to the statutory damages sought, or that the statutory amounts would be grossly disproportionate to actual losses and that the court should exercise its discretion to award damages below the statutory minimums.”McCarthy Tétrault LLP / mccarthy.ca 11064494 32

Robertson v. ProQuest Information andLearning LLC, 2011 ONSC 2629¬ “In Thomson, the gross settlement was $11 million. After deducting class counsel fees ($4 million and $200,000 in G.S.T.), disbursements ($85,074.19), the cost of notice (approximately $455,000), charitable payments... ($75,000), payments to the Class Proceedings Fund ($602,050.59) and the costs of administration ($160,662.78), the net sum of $5.4 million was available for distribution to class members.”¬ ”Many of the deductions will be less in this action, leaving a larger percentage of the global fund for distribution to the class. In particular, class counsel is seeking fees in the range of $1.9 million (exclusive of taxes and disbursements)...¬ As a result, a higher proportional percentage of the settlement funds will be available for distribution to class members than in the Thomson settlement. Specifically, some $5 million, or about 63% of $7,871,894.40, versus $5.4 million, or 49% of $11 million as in Thomson.”McCarthy Tétrault LLP / mccarthy.ca 11064494 33

R. c. Fiset 2011 QCCQ 1344¬ Prosecution for selling counterfeit copies of paintings created after 1994 and offered for sale in 2008 under s42(1)(a) which makes it an offense for “Every person who knowingly... makes for sale or rental an infringing copy of a work or subject-matter in which copyright subsists”.¬ “The literal translation of ‘makes for sale’ is ‘to manufacture to sell’... the Act prohibits the reproduction of artistic works for sale.”¬ “To succeed in proving this type of crime, the prosecution must prove beyond a reasonable doubt the commission of the prohibited act and culpable mental state of its author. It must prove actual intent to commit the offense... The intention is to be analyzed subjectively...¬ Based on these principles, the Tribunal believes that the evidence must show beyond a reasonable doubt that when she is busy (engaged) to copy works, the accused intends to sell. That reproduction is a deliberate step in pursuing the goal illegal, the sale of an artistic counterfeit.”¬ In this case, the evidence does not demonstrate that when she forged the artistic work, the accused had the specific intent to sell. She did not reproduce for sale. This is not a deliberate step taken in the pursuit of the objective that is illegal to use for commercial purposes of an artistic work without the consent of its author.”McCarthy Tétrault LLP / mccarthy.ca 11064494 34

Reprographic Reproduction, 2011-2013Interim Decision March 16, 2011¬ Over the years, the Board has developed a number of principles in dealing with applications for interim decisions...They can be stated as follows: ¬ An interim decision serves above all to counteract the negative consequences caused by the length of the proceedings... ¬ An interim decision may be issued to prevent a legal vacuum... ¬ An interim decision may be issued if the main application is not plainly without merit... ¬ Interim decisions are made expeditiously on the basis of evidence often insufficient for the purposes of the final decision, and even in the absence of any evidence... ¬ Balance of convenience is taken into account in deciding whether to issue an interim decision... ¬ Generally, the best way to achieve the purposes of an interim decision is to maintain the status quo while preventing a legal vacuum. Thus, when an agreement exists between the parties, it is generally preferable to extend that agreement on an interim basis. ¬ When there is no pre-existing agreement or tariff or when new uses are involved, the Board prefers to establish a symbolic interim royalty unless the context requires a different approach. ¬ The Board can make interim decisions even when the Act provides for the automatic continuation of an existing tariff on an interim basis.McCarthy Tétrault LLP / mccarthy.ca 11064494 35

Reprographic Reproduction, 2011-2013Interim Decision March 16, 2011¬ “One of the objects of the Act is to ensure that rights holders get paid for protected uses of their works. Adopting an interim tariff favours this objective by providing a mechanism for royalty payments to rights holders during the Gap Period.”¬ “Under the Act and subject to specific exceptions, copyright owners or their agents are under no obligation to inform users of what they own or of the conditions under which they are willing to allow the use of what they own. The onus is on users to determine whether a contemplated use requires a licence and if so, to seek the copyright owner and ask for permission before any such use.¬ Much of what the Objectors advanced seems to disregard this principle. To argue that a user is entitled to use a work without the permission of the copyright owner until such time as the owner seeks payment is as reasonable as stating that a person is entitled to use a telecommunication signal without the permission of the service supplying the signal until such time as the service insists on being paid.”McCarthy Tétrault LLP / mccarthy.ca 11064494 36

Reprographic Reproduction, 2011-2013Interim Decision March 16, 2011¬ “Section 70.17 of the Act provides that “no proceedings may be brought for the infringement of a right referred to in section 3, 15, 18 or 21 against a person who has paid or offered to pay the royalties specified in an approved tariff....¬ In our view, section 70.17 sets out the parameters for the private enforcement of an approved tariff, interim or final... The “offer to pay” provision merely confirms that a user does not need the permission of the collective to use the repertoire as long as royalties are tendered: a refusal to accept payment becomes irrelevant. The collective is barred from suing a user who offers to pay only to the extent that the collective is entitled to collect. There can be no quid pro quo if the offer to pay can be made in the absence of an obligation to pay, as there can be no refusal of an offer to pay that does not come with a payment. Furthermore, how can a user comply with terms and conditions that have not been set?...¬ section 70.17 applies only to the extent that a payment can be made pursuant to a tariff, whether interim or final.... Clearly, the immunity is triggered only once the decision is issued, not before.”McCarthy Tétrault LLP / mccarthy.ca 11064494 37

Reprographic Reproduction, 2011-2013Interim Decision September 23, 2011¬ “when a collective opts for a tariff, it is in part to avoid the costs associated with transactional dealings. Such a course of conduct is rational and prima facie fair...Therefore, a collective’s refusal to deal with users outside of the tariff does not constitute misconduct warranting an intervention on the part of the Board absent exceptional circumstances”.¬ “On the other hand, the remedy Professor Katz proposes is not within the Board’s powers to grant. Once a collective has applied for a tariff pursuant to the general regime, the Board cannot force it to deal outside the tariff with users that are subject to the tariff. Neither can the Board, under any circumstances, force those who have asked the collective to act on their behalf to deal directly with users, on a transactional basis or otherwise. On this issue, Professor Katz confuses the power to regulate a collective’s dealings with users (which the Board has) with the power to regulate the dealings of a collective’s rights holders with those same users (which the Board does not have).”McCarthy Tétrault LLP / mccarthy.ca 11064494 38

Reprographic Reproduction, 2011-2013Interim Decision September 23, 2011¬ “The Board’s power to vary a tariff is so wide as to allow it to substitute a completely novel formula to that which a collective proposed, as long as the tariff remains a tariff. Even though Access applied for a tariff that offers only the FTE licence, it will be open to the Board in its final decision to set royalties according to any reasonable formula it chooses...”¬ “Reporting, monitoring and audit provisions are key to most licensing regimes: if rights holders are entitled to expect that users will seek licences without being prompted, they are also entitled to expect that users will either propose or accept mechanisms that allow the efficient monitoring of compliance with the licence. A transactional licensing regime without such provisions is an invitation to copyright violation and unthinkable”.McCarthy Tétrault LLP / mccarthy.ca 11064494 39

Unlocatable copyright owners (orphanworks)¬ Licenses granted by the Copyright Board pursuant to section 77(1): ¬ the reproduction and the communication to the public by the telecommunication of three images published in The Canadian Home Journal in a article entitled "The Media, Gendered, Fat and Other Problematic Bodies“ ¬ the mechanical reproduction and the communication to the public by telecommunication of a musical work entitled "Men are Like Street Cars" by Louis Jordan or Charley Jordan ¬ the synchronization, reproduction and communication to the public by telecommunication of an excerpt of a musical work entitled "Le temps est bon" written by Stéphane Venne and published by JFM Investments Inc. ¬ for the reproduction, synchronization and public performance of an excerpt of a musical recording entitled "Seeburg Background Music Record BA-109A" in a short film ¬ for the reproduction of a poster created by the artists group Kukryniksy ¬ the reproduction, synchronization and public performance of an extract of a television series entitled "Maria del Barrio“ ¬ the reproduction of "Chaudières marine, questions et réponses" as translated by W.D. Ewart from "Marine Boilers Questions and Answers" by G.T.H. Flanagan and published in 1984 by Stanford Maritime, London UK¬ See, http://www.cb-cda.gc.ca/unlocatable-introuvables/licences-e.htmlMcCarthy Tétrault LLP / mccarthy.ca 11064494 40

IPC Order MO-2635/June 30, 2011¬ “The affected party asserts that releasing the records would result in a breach of the provisions of the Copyright Act. It is not necessary for me to delve into this issue in great length. Sections 32.1(1)(a) and (b) of the Copyright Act, provide:¬ 32.1 (1) It is not an infringement of copyright for any person (a) to disclose, pursuant to the Access to Information Act, a record within the meaning of that Act, or to disclose, pursuant to any like Act of the legislature of a province, like material; (b) to disclose, pursuant to the Privacy Act, personal information within the meaning of that Act, or to disclose, pursuant to any like Act of the legislature of a province, like information; …”¬ “Simply put, the fact that the information contained in the records may be subject to copyright, while it may suggest some measure of ownership, it does not, in and of itself, provide a basis to deny access to the information under the provisions of the Act, or oust its application.”McCarthy Tétrault LLP / mccarthy.ca 11064494 41

United StatesMcCarthy Tétrault LLP / mccarthy.ca 11064494 42

Agency France Presse v Morel, 769F.Supp.2d 295 (S.D.N.Y. 2011)¬ Whether photos of earthquake in Haiti uploaded to Twitpic were licensed by third party news agencies for their publication uses.¬ “By their express language, Twitters terms grant a license to use content only to Twitter and its partners. Similarly, Twitpics terms grant a license to use photographs only to “Twitpic.com or affiliated sites.” AFP and TBS do not claim they are partners of Twitter or affiliates of Twitpic licensed under the terms of service. Moreover, the provision that Twitter “encourage[s] and permit[s] broad re-use of Content” does not clearly confer a right on other users to re-use copyrighted postings... Twitters terms of service do not meet that standard. Accordingly, AFP and TBS do not meet their burden to establish that they had a license to use Morels photographs.”McCarthy Tétrault LLP / mccarthy.ca 11064494 43

Warner Bros. Entertainment Inc v WTVSystems, Inc. 2011 WL 4001121 (C.D.Cal.Aug, 1, 2011)¬ Defendants provide what they describe as a DVD “rental” service known as Zediva, which is available at www.zediva.com.¬ “As in On Command, Defendants Zediva service transmits performances of Plaintiffs Copyrighted Works “directly under the language of the statute.” In this case, the Zediva service “communicates” the “images and sounds” of Plaintiffs Copyrighted Works through the use of a “device or process”—the equipment, including various servers, and internet—from a central bank of DVD players to individual customers computers, where the images and sounds are received “beyond the place from which they are sent.”¬ “Defendants transmissions are “to the public” for purposes of the transmission clause. Customers watching one of Plaintiffs Copyrighted Works on their computer through Zedivas system are not necessarily watching it in a “public place,” but those customers are nonetheless members of “the public.”McCarthy Tétrault LLP / mccarthy.ca 11064494 44

Flava Works, Inc, v Gunter dba myVidster ,2011 WL 1791557 (N.D.Ill.May 10, 2011) and2011 WL 3205399 (N.D.Ill. July 27, 2011)¬ Liability of social networking site myVidster through which site members store and “bookmark” video files and post links to third-party websites on which the files are available.¬ “Because there is no allegation that defendants caused copies of plaintiffs copyrighted works to be made, plaintiff fails to state a claim for direct copyright infringement, and Count I will be dismissed.”¬ Plaintiff “alleges that defendants provide a website that stores infringing material, allows backup copies to be made, and encourages sharing. It also alleges that myVidster has no filters or identifiers in place to prevent repeat infringers and that it took no action to stop or ban the repeat infringers who allegedly posted plaintiffs copyrighted works. These allegations are more than sufficient to allege material contribution.”¬ “We also have no doubt that defendants knew or should have known of the infringement occurring on myVidster... “The knowledge element for contributory copyright infringement is met in those cases where a party has been notified of specific infringing uses of its technology and fails to act to prevent future such infringing uses, or willfully blinds itself to such infringing uses.”... It is undisputed that over a period of several months, plaintiff sent defendants at least seven DMCA notices that identified specific infringing files and users as well as specific repeat infringers.”McCarthy Tétrault LLP / mccarthy.ca 11064494 45

Flava Works, Inc, v Gunter dba myVidster ,2011 WL 3876910 (N.D.Ill. Sep. 1, 2011) “To the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a websites servers need not actually store a copy of a work in order to “display” it. The fact that the majority of the videos displayed on myVidster reside on a third-party server does not mean that myVidster users are not causing a “display” to be made by bookmarking those videos. The display of a video on myVidster can be initiated by going to a myVidster URL and clicking “play”; that is the point of bookmarking videos on myVidster—a user can navigate to a collection of myVidster videos and does not have to go to each separate source site to view them.”McCarthy Tétrault LLP / mccarthy.ca 11064494 46

Perfect 10, Inc v Megaupload Limited 2011WL 3203117 (S.D.Cal., Jul. 27, 2011)¬ Liability of cyberlocker Megaupload for direct and contributory infringement.¬ “Drawing all reasonable inferences in Perfect 10s favor, Megaupload serves as more than a passive conduit, and more than a mere “file storage” company: it has created distinct websites, presumably in an effort to streamline users access to different types of media (e.g., megaporn.com, megavideo.com)...; it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs; it disseminates URLs for various files throughout the internet; it provides payouts to affiliate websites who maintain a catalogue of all available files; and last, at a minimum, it is plausibly aware of the ongoing, rampant infringement taking place on its websites. Taken together, Perfect 10 has adequately alleged Megaupload has engaged in volitional conduct sufficient to hold it liable for direct infringement.”¬ “Under the circumstances of this case, if Megaupload lacks knowledge of infringing activity, Plaintiffs allegations suggest such a lack of knowledge is willful. The Court concludes Perfect 10 has satisfactorily pleaded specific knowledge of contributory infringement, and therefore DENIES Megauploads motion to dismiss that claim.”McCarthy Tétrault LLP / mccarthy.ca 11064494 47

Disney Enterprises, Inc v Hotfile 798F.Supp.2d 1303 (S.D. Flo. 2011)¬ Liability of cyberlocker Hotfile for direct and contributory infringement.¬ “Hotfile and Mr. Titov are not liable for direct copyright infringement because they own and manage internet facilities that allow others to upload and download copyrighted material.” See CoStar, 373 F.3d at 550; Parker, 422 F.Supp.2d at 497.¬ “Finally, the plaintiffs contend that they have alleged a volitional act because they allege that hotfile.com makes additional copies once the copyrighted material is uploaded to the server. This argument too fails, for courts have repeatedly held that the automatic conduct of software, unaided by human intervention, is not “volitional”.¬ “The complaint alleges that hotfile.com is a website that Hotfile uses to promote copyright infringement and alleges that Hotfile took affirmative steps to foster this infringement by creating a structured business model that encourages users to commit copyright infringement. The complaint, moreover, outlines this business model in detail. At this stage, that suffices to plead a claim for inducing copyright infringement.McCarthy Tétrault LLP / mccarthy.ca 11064494 48

UMG Recordings v Shelter Capital PartnersLLC (Veoh Networks) 101 U.S.P.Q.2d 1001(9th. Cir. 2011)¬ Veoh satisfied the threshold requirement to fall within the hosting exception that the infringement be “by reason of the storage at the direction of a user of material” residing on Veoh’s system even though Veoh had transcoded the files.¬ The Court held that hosting a category of copyrightable content, such as music videos, with the general knowledge that one’s services could be used to share infringing material, is insufficient to meet the DMCA knowledge requirement. The Court also reached the same conclusion with regard to the §512(c)(1)(A)(ii) inquiry into whether a service provider is “aware of facts or circumstances from which infringing activity is apparent.” The Court held that Veoh’s general knowledge that it hosted copyrightable material and that its services could be used for infringement was insufficient to constitute a red flag.¬ Under the DMCA, a service provider is eligible for the §512(c) safe harbor only if it “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” The Court held that the “right and ability to control” under § 512(c) “requires control over specific infringing activity the provider knows about”.McCarthy Tétrault LLP / mccarthy.ca 11064494 49

Capitol Records, Inc. v. MP3tunes, LLC,101 U.S.P.Q.2d 1093 (S.D.N.Y.2011)¬ “Service providers must take down the specific infringing material identified in the notice but are not required to search for and take down other material that may infringe the identified copyrighted works.”¬ “Where service providers such as MP3tunes allow users to search for copyrighted works posted to the internet and to store those works in private accounts, to qualify for DMCA protection, those service providers must (1) keep track of the source and web address of stored copyrighted material, and (2) take content down when copyright owners identify the infringing sources in otherwise compliant notices.”¬ “General awareness of rampant infringement is not enough to disqualify a service provider of protection... Put another way, if investigation is required to determine whether material is infringing, then those facts and circumstances are not “red flags”.”¬ “MP3tunes continued to provide locker services to its users even though it knew they had unlawfully downloaded EMIs protected material. More particularly, MP3tunes allowed users to continue to store and access those works on its servers. Accordingly, EMIs motion for summary judgment on its claim for contributory infringement with respect to the songs listed in EMIs takedown notices and which MP3tunes failed to remove from users lockers is granted.”McCarthy Tétrault LLP / mccarthy.ca 11064494 50

Arista Records LLC v. MyxerInc., f/k/a VisibleTechnologies, Inc., Case No. CV 08-3935-GAF-JC (C.D. Cal. April 1, 2011)¬ Myxer Technologies, Inc., (“Myxer”) operates a website that allows Myxer’s customers to upload recorded music to the site and then, through the use of Myxer’s software, download the music to cellular phones for use as a ring tone.¬ “Pursuant to both UMG Recordings I and Youtube, the downloading at issue is covered by § 512(c) because it occurs as a result of the uploaded material, which both parties agree is clearly covered by § 512(c). See UMG Recordings I, 620 F.Supp.2d at 1088. Moreover, § 512(c)s broadly defined purpose makes clear that the downloading at issue is covered by the DMCA, lest "service providers would be greatly deterred from performing their basic, vital and salutary function-namely, providing access to information and material for the public." Youtube, 718 F. Supp. 2d at 527. Accordingly, the Court concludes that the downloading at issue fits within the scope of § 512(c)s "by reason of the storage at the direction of a user of material" because it occurs "as a result of" users uploaded material.”¬ Arista’s summary judgment motion for non-compliance with DMCA takedown process dismissed.McCarthy Tétrault LLP / mccarthy.ca 11064494 51

Arista Records LLC v. Myxer Inc., f/k/aVisible Technologies, Inc., Case No. CV 08-3935-GAF-JC (C.D. Cal. April 1, 2011)¬ “The Court finds that the purpose of the use component of the first factor weighs against finding that Myxers use of Plaintiffs works constitutes fair use; as the uploading and downloading of copyrighted sound recordings does not fall clearly within any of the purposes specifically identified in the statutes preamble, e.g., criticism, comment, news reporting, teaching, scholarship.”¬ “With respect to the remaining issues relevant to the first factor, although Myxers use is not transformative, the weight accorded the "commercial" nature of Myxers use is diminished by the fact that the downloaded copies represent only portions of the entertainment value of the original works. The second factor, which relates to the nature of the copyrighted work, weighs slightly against fair use because even though Plaintiffs copyrighted works are published, they are clearly creative in nature. Additionally, the amount and substantiality of the copyrighted excerpt supports a determination that the third factor weighs against a finding of fair use; the 25-40 second ringtones arguably constitute the "heart" of each of Plaintiffs works. Finally, Plaintiff provides sufficient basis for a reasonable jury to find that an existing or potential market that Plaintiff can exploit is adversely affected by Myxers use of its works and Myxer has wholly failed to bring forward favorable evidence about relevant markets.”McCarthy Tétrault LLP / mccarthy.ca 11064494 52

The Authors Guild et al v. GoogleInc. 770 F.Supp.2d 666 (S.D.N.Y. 2011) “While the digitization of books and the creation of a universal digital library would benefit many, the ASA would simply go too far. It would permit this class action – which was brought against defendant Google Inc. (“Google” ) to challenge its scanning of books and display of “snippets” for on-line searching to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners. Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case.”McCarthy Tétrault LLP / mccarthy.ca 11064494 53

Penguin Group (USA) Inc. v. AmericanBuddha 16 N.Y.3d 295 (Ct.App.N.Y. 2011)¬ Where is damage suffered where a literary work is uploaded onto the Internet?¬ “In sum, the role of the Internet in cases alleging the uploading of copyrighted books distinguishes them from traditional commercial tort cases where courts have generally linked the injury to the place where sales or customers are lost. The location of the infringement in online cases is of little import inasmuch as the primary aim of the infringer is to make the works available to anyone with access to an Internet connection, including computer users in New York. In addition, the injury to a New York copyright holder, while difficult to quantify, is not as remote as a purely indirect financial loss due to the broad spectrum of rights accorded by copyright law. The concurrence of these two elements—the function and nature of the Internet and the diverse ownership rights enjoyed by copyright holders situated in New York—leads us to view this case as closer to Sybron than Fantis Foods. Thus, we conclude that the alleged injury in this case occurred in New York”.McCarthy Tétrault LLP / mccarthy.ca 11064494 54

Penguin Group (USA) Inc. v. AmericanBuddha 16 N.Y.3d 295 (Ct.App.N.Y. 2011) “a New York copyright holder whose copyright is infringed suffers something more than the indirect financial loss...For instance, one of the harms arising from copyright infringement is the loss or diminishment of the incentive to publish or write... ["(P)ublishers obviously need economic incentives to publish scholarly works... If publishers cannot look forward to receiving permission fees, why should they continue publishing marginally profitable books at all? And how will artistic creativity be stimulated if the diminution of economic incentives for publishers to publish academic works means that fewer academic works will be published?"]). And, the harm to a plaintiffs property interest in copyright infringement cases "has often been characterized as irreparable in light of possible market confusion" (Salinger v Colting, 607 F.3d 68, 81 [2d Cir 2010]).”McCarthy Tétrault LLP / mccarthy.ca 11064494 55

Kernal Records Oy v. Mosley, 794F.Supp.2d 1355 (S.D.Fla. 2011) “We hold that publishing AJE on a website in Australia was an act tantamount to global and simultaneous publication of the work, bringing AJE within the definition of a “United States work” under § 101(1)(C) and subject to § 411(a)s registration requirement. Gallefoss elected to publish AJE on the Internet and the legal consequences of that decision must apply. Plaintiff was therefore required to register AJE prior to seeking judicial enforcement of its copyright rights.”McCarthy Tétrault LLP / mccarthy.ca 11064494 56

Seng-Tiong Ho v. Taflove, 2011 WL2175878 (7th.Cir, 2011) “Although the line between an expression and an idea can be difficult to determine at times, we do not believe that the record in this case presents a particularly difficult situation. The Model is an idea. In Professor Ho and Ms. Huangs own words, the Model “mimic[s] ... certain behaviors of millions of particles in a photonic device.” Appellants Br. 4. That is, the Model attempts to represent and describe reality for scientific purposes. This scientific reality was not created by the plaintiffs. Rather, the Model embodies certain newly discovered scientific principles. Granted, as the plaintiffs note, the Model makes certain hypothetical assumptions, but those hypothetical assumptions do not render the Model fictitious. Rather, the Model strives to describe reality, and, as conceded at oral arguments, the value of the Model is its ability to accurately mimic nature.”McCarthy Tétrault LLP / mccarthy.ca 11064494 57

UK and CommonwealthMcCarthy Tétrault LLP / mccarthy.ca 11064494 58

Lucasfilm Ltd & Ors v Ainsworth & Anor[2011] UKSC 39 (27 July 2011) ¬ Is a stormtroopers helmet a sculpture? ¬ “It would not accord with the normal use of language to apply the term "sculpture" to a 20th century military helmet used in the making of a film, whether it was the real thing or a replica made in different material, however great its contribution to the artistic effect of the finished film. The argument for applying the term to an Imperial Stormtrooper helmet is stronger, because of the imagination that went into the concept of the sinister cloned soldiers dressed in uniform white armour. But it was the Star Wars film that was the work of art that Mr Lucas and his companies created. The helmet was utilitarian in the sense that it was an element in the process of production of the film.”McCarthy Tétrault LLP / mccarthy.ca 11064494 59

Lucasfilm Ltd & Ors v Ainsworth & Anor[2011] UKSC 39 (27 July 2011) ¬ Is a claim to US copyright justiciable in the UK? ¬ ‘There is no doubt that the modern trend is in favour of the enforcement of foreign intellectual property rights... ¬ There are no issues of policy which militate against the enforcement of foreign copyright. States have an interest in the international recognition and enforcement of their copyrights, as the Berne Convention on the International Union for the Protection of Literary and Artistic Works shows. Many of the points relied on by the Court of Appeal to justify the application of the Moçambique rule in this case as a matter of policy would apply to many international cases over which the English court would have jurisdiction and would in principle exercise it, especially the suggestion that questions of foreign law would have to be decided. It was also said...that a defendant may be restrained by injunction from doing acts in this country which are lawful in this country. But such an injunction will be granted only if the acts are anticipated to achieve fruition in another country, and there is no objection in principle to such an injunction. Nor is there any objection in principle, as the Court of Appeal thought, to a restraint on acts in another country. Extra-territorial injunctions are commonly granted here against defendants subject to the in personam jurisdiction.”McCarthy Tétrault LLP / mccarthy.ca 11064494 60

Lucasfilm Ltd & Ors v Ainsworth & Anor[2011] UKSC 39 (27 July 2011) ¬ What is the standard of review in a copyright case? ¬ “The type of judgmental conclusion that often has to be reached in intellectual property cases – on issues such as obviousness, inventiveness, and copying – are matters on which appellate courts should be slow to interfere with the judgment of the trial judge... ¬ We would uphold the judgments below very largely for the reasons that they give. But (at the risk of appearing humourless) we are not enthusiastic about the "elephant test" in para [77] of the Court of Appeals judgment ("knowing one when you see it"). Any zoologist has no difficulty in recognising an elephant on sight, and most could no doubt also give a clear and accurate description of its essential identifying features. By contrast a judge, even one very experienced in intellectual property matters, does not have some special power of divination which leads instantly to an infallible conclusion, and no judge would claim to have such a power. The judge reads and hears the evidence (often including expert evidence), reads and listens to the advocates submissions, and takes what the Court of Appeal rightly called a multi- factorial approach. Moreover the judge has to give reasons to explain his or her conclusions.”McCarthy Tétrault LLP / mccarthy.ca 11064494 61

Lucasfilm Ltd & Ors v Ainsworth & Anor[2011] UKSC 39 (27 July 2011) ¬ Policy considerations re expanding the scope of copyright protection. ¬ “There is one other matter to which the Court of Appeal attached no weight, but which seems to us to support the judges conclusion. It is a general point as to the policy considerations underlying Parliaments development of the law in order to protect the designers and makers of three-dimensional artefacts from unfair competition... It is possible to recognise an emerging legislative purpose (though the process has been slow and laborious) of protecting three-dimensional objects in a graduated way, quite unlike the protection afforded by the indiscriminate protection of literary copyright. Different periods of protection are accorded to different classes of work. Artistic works of art (sculpture and works of artistic craftsmanship) have the fullest protection; then come works with "eye appeal" (AMP Inc v Utilux Pty Ltd [1971] FSR 572); and under Part III of the 1988 Act a modest level of protection has been extended to purely functional objects (the exhaust system of a motor car being the familiar example). Although the periods of protection accorded to the less privileged types have been progressively extended, copyright protection has always been much more generous. There are good policy reasons for the differences in the periods of protection, and the Court should not, in our view, encourage the boundaries of full copyright protection to creep outwards.”McCarthy Tétrault LLP / mccarthy.ca 11064494 62

Football Dataco Ltd & Ors v SportradarGmbH & Anor [2011] EWCA Civ 330 (29March 2011)¬ Copyright does not subsist in a database that records goals, goalscorers, own goals, penalties, yellow and red cards and substitutions and like information from football matches. “It may be that some of the information collected for the claimants includes matter which involves intellectual creation. So there may be copyright in Football Live. But what is alleged to have been copied is mere data on any reasonable view. Its recording may sometimes involve some skill (who scored in a goalmouth scramble) but it is not creative skill.”¬ Court refers following questions to ECJ on location in which extraction of data from database occurs:¬ “Where a party uploads data from a database protected by sui generis right under Directive 96/9/EC ("the Database Directive") onto that partys webserver located in member state A and in response to requests from a user in another member state B the webserver sends such data to the users computer so that the data is stored in the memory of that computer and displayed on its screen(a) is the act of sending the data an act of "extraction" or "re-utilisation" by that party?(b) does any act of extraction and/or re- utilisation by that party occur(i) in A only(ii) in B only; or(iii) in both A and B?”McCarthy Tétrault LLP / mccarthy.ca 11064494 63

Twentieth Century Fox Film Corp & Ors vBritish Telecommunications Plc [2011]EWHC 1981 (Ch) (28 July 2011) ¬ A UK court can grant an injunction requiring a UK ISP to block a foreign website in order to stop the ISP’s facilities from being used by third parties engaged in unauthorized online file sharing. ¬ Court had power to make the order under s. 97A of the CDPA enacted to implement Article 8(3) of the EU Information Society Directive. See also, [2011] EWHC 2714. BT ordered to implement IP address re-routing and DPI-based URL blocking.McCarthy Tétrault LLP / mccarthy.ca 11064494 64

ITV Broadcasting Ltd & Ors v TV CatchupLtd [2011] EWHC 1874 (Pat) (18 July 2011)¬ Does capturing streams from terrestrial or satellite broadcast signals and streaming the programming to individuals in the privacy of their homes infringe the communication “to the public” or reproduction rights.¬ ``…the aggregate of the individual communications which TVC make at any given time is properly to be regarded as a communication to the public, as opposed to a plurality of individual and private communications… It would be an unfortunate result if a point-to- multipoint communication were to be actionable but a number of point to point transmissions were not.¬ My provisional view is therefore that TVC do reproduce and authorise the reproduction of a substantial part of the films in the buffers and on the screens.McCarthy Tétrault LLP / mccarthy.ca 11064494 65

The Newspaper Licensing Agency Ltd &Ors. v Meltwater Holding BV & Ors [2011]EWCA Civ 890 (27 July 2011)¬ Can an online article clipping service can legally be operated in the UK?¬ the conclusion of Proudman J in paragraph 71 of her judgment that newspaper headlines are capable of being original literary works is plainly correct... In those circumstances the conclusion in the last sentence of paragraph 72 that “some of the headlines are independent literary works..” is, in my view, unassailable.¬ The Court of Appeal also ruled that the reproduction of extracts from the articles comprising no more than 256 characters would inevitably constitute the reproduction of a substantial part of the articles.¬ The defence of fair dealing is conferred by s.30 CDPA… I should refer to the fact that even if these conditions had been complied with Meltwater’s dealings were not ‘fair’. The judge rejected the fair dealing defence on the ground that the dealing was for commercial purposes and was encouraging end-users to infringe the Publishers’ copyright. I agreeMcCarthy Tétrault LLP / mccarthy.ca 11064494 66

Roadshow Films Pty Ltd. v iiNet Limited,[2011] FCAFC 23 (decision of High Courtpending) “Even though the Copyright Owners are not entitled to the relief claimed in this proceeding, it does not follow that that is an end of the matter. It is clear that the questions raised in the proceeding are ongoing. It does not necessarily follow that there would never be authorisation within the meaning of s 101 of the Copyright Act by a carriage service provider, where a user of the services provided by the carriage service provider engages in acts of infringement such as those about which complaint is made in this proceeding. It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.”McCarthy Tétrault LLP / mccarthy.ca 11064494 67

EU (other than UK)McCarthy Tétrault LLP / mccarthy.ca 11064494 68

La société Des Auteurs des Arts Visuels et de L’imageFixe Visual Auteurs (SAIF) v. Google France S.A.R.L.and Google Inc., Paris Court of Appeal, Jan. 26, 2011 ¬ Was Google liable for reproducing and communicating copies of visual images to the public in France? ¬ Google’s search service involved making reproductions of the copyright works of visuals artists from France, Canada and elsewhere. Those reproductions were communicated to the public in France. Hence, there were acts of direct copyright infringement that Google could have been liable for. ¬ However, the Court held that Google was not liable for those acts. Google’s search service was that of a neutral intermediary. ¬ Google is not be liable for purely automated acts that are an integral and essential part of the proper technical functioning of a search engine, at least as long Google remains an innocent intermediary by, for example, taking steps to remove or disable access to infringing content from its indexes and caches when it becomes aware of infringement (such as by complying with notices of claimed infringement and removing the allegedly infringing files from its indexes and caches).McCarthy Tétrault LLP / mccarthy.ca 11064494 69

Google v Copiepresse et al, Brussels Courtof Appeal (9th Chamber) May 5, 2011 The decision canvasses many issues including ¬ the choice of law to apply to evaluate the claims of infringement, ¬ whether Google’s caching of news articles is infringement, ¬ whether the transmission of article titles and short extracts violates the reproduction and communication to the public rights, ¬ whether Google News violates the moral rights of authors, ¬ whether statutory fair dealing defenses apply, ¬ whether Google can rely on implied licenses from publishers and authors to publish Google News, and ¬ whether intermediary safe harbors are available under Belgium law for providers of these services. See, Is Google News legal? http://www.barrysookman.com/2011/05/17/is-google-news-legal/McCarthy Tétrault LLP / mccarthy.ca 11064494 70

Premier League Football (ECJ Case C-403/08), 4 October 2011¬ Sporting events cannot be regarded as intellectual creations classifiable as works within the meaning of the Copyright Directive. That applies in particular to football matches, which are subject to rules of the game, leaving no room for creative freedom for the purposes of copyright. But, certain elements within FAPL matches, such as the opening video sequence, the highlight reels showing recent matches, and various graphics, could attract copyright protection.¬ The reproduction right extends to transient fragments of the works within the memory of a satellite decoder and on a television screen, provided that those fragments contain elements which are the expression of the authors’ own intellectual creation, and the unit composed of the fragments reproduced simultaneously must be examined in order to determine whether it contains such elements.¬ Acts of reproduction, which are performed within the memory of a satellite decoder and on a television screen, fulfil the conditions laid down in Article 5(1) of Directive 2001/29 and may be carried out without the authorisation of the copyright holders concerned.¬ Communication to the public must be interpreted as covering transmission of the broadcast works, via a television screen and speakers, to the customers present in a public house.McCarthy Tétrault LLP / mccarthy.ca 11064494 71

Scarlet Extended SA v SABAM , (ECJCase C-70/10) 24 November, 2011¬ “under Article 8(3) of Directive 2001/29 and the third sentence of Article 11 of Directive 2004/48, holders of intellectual property rights may apply for an injunction against intermediaries, such as ISPs, whose services are being used by a third party to infringe their rights.”¬ “the jurisdiction conferred on national courts …must allow them to order those intermediaries to take measures aimed not only at bringing to an end infringements already committed against intellectual-property rights using their information-society services, but also at preventing further infringements.”¬ “The protection of the right to intellectual property is indeed enshrined in Article 17(2) of the Charter of Fundamental Rights of the European Union… There is, however, nothing whatsoever in the wording of that provision or in the Court’s case-law to suggest that that right is inviolable and must for that reason be absolutely protected.”¬ EU law does not permit “an injunction made against an internet service provider which requires it to install a system for filtering all electronic communications passing via its services, in particular those involving the use of peer-to-peer software; which applies indiscriminately to all its customers; as a preventive measure; exclusively at its expense; and for an unlimited period, which is capable of identifying on that provider’s network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold intellectual-property rights, with a view to blocking the transfer of files the sharing of which infringes copyright.”McCarthy Tétrault LLP / mccarthy.ca 11064494 72

Stichting de Thuiskopie v Opus (ECJCase C-462/09) 16 June 2011¬ “It should however be recalled that, according to recital 9 in the preamble to Directive 2001/29, the European Union legislature expressed its desire for a high level of protection to be guaranteed for copyright and related rights, since they are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers, culture, industry and the public at large. Thus, according to recital 10 in the preamble to Directive 2001/29, if authors or performers are to continue their creative and artistic work, they have to receive an appropriate reward for the use of their work.”¬ “the final user who carries out, on a private basis, the reproduction of a protected work must, in principle, be regarded as the person responsible for paying the fair compensation provided for in Article 5(2)(b). However, it is open to the Member States to establish a private copying levy chargeable to the persons who make reproduction equipment, devices and media available to that final user, since they are able to pass on the amount of that levy in the price paid by the final user for that service.”¬ “Directive 2001/29, in particular Article 5(2)(b) and (5) thereof, must be interpreted as meaning that it is for the Member State which has introduced a system of private copying levies chargeable to the manufacturer or importer of media for reproduction of protected works, and on the territory of which the harm caused to authors by the use for private purposes of their work by purchasers who reside there occurs, to ensure that those authors actually receive the fair compensation intended to compensate them for that harm. In that regard, the mere fact that the commercial seller of reproduction equipment, devices and media is established in a Member State other than that in which the purchasers reside has no bearing on that obligation to achieve a certain result. It is for the national court, where it is impossible to ensure recovery of the fair compensation from the purchasers, to interpret national law in order to allow recovery of that compensation from the person responsible for payment who is acting on a commercial basis.”McCarthy Tétrault LLP / mccarthy.ca 11064494 73

Copyright law reform: Bill C-11, Copyright Modernization ActMcCarthy Tétrault LLP / mccarthy.ca 11064494 74

Overview: ¬ The Bill will: ¬ implement the rights and protections of the World Intellectual Property Organization (WIPO) Internet treaties; ¬ provide a new right of enablement; ¬ clarify the roles and responsibilities of ISPs and search engines; ¬ providing expanded exceptions for education; ¬ provide exceptions for encryption research, security testing, and technical computer processes; ¬ protect Technological Protection Measures (TPMs); ¬ create new individual exceptions to permit format shifting, time shifting, making back-up copies, creating and disseminating UGC works; ¬ reduce statutory damages where purpose is non-commercial; ¬ Process and timing.McCarthy Tétrault LLP / mccarthy.ca 11064494 75

Where technical amendments are beingsought ¬ TMPs ¬ The enablement right ¬ The Non-Commercial User-Generated Content (UGC) exception ¬ Statutory damages ¬ The ISP (network service, caching, hosting) and ILT exceptions and responsibilities ¬ The fair dealing for education exception ¬ The exceptions for encryption research, security testing, and technical computer processesMcCarthy Tétrault LLP / mccarthy.ca 11064494 76

Slides available @ barrysookman.com and mccarthy.ca * Translations of French language cases were created using Google Translate. Some translations were altered for clarification.McCarthy Tétrault LLP / mccarthy.ca 11064494 77

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