Teresa Scassa - Blog

Note: the following are my speaking notes for my appearance before the Standing Committee on Transport, Infrastructure and Communities, February 14, 2017. The Committee is exploring issues relating Infrastructure and Smart Communities. I have added hyperlinks to relevant research papers or reports.

Thank you for the opportunity to address the Standing Committee on Transport, Infrastructure and Communities on the issue of smart cities. My research on smart cities is from a law and policy perspective. I have focused on issues around data ownership and control and the related issues of transparency, accountability and privacy.

The “smart” in “smart cities” is shorthand for the generation and analysis of data from sensor-laden cities. The data and its accompanying analytics are meant to enable better decision-making around planning and resource-allocation. But the smart city does not arise in a public policy vacuum. Almost in parallel to the development of so-called smart cities, is the growing open government movement that champions open data and open information as keys to greater transparency, civic engagement and innovation. My comments speak to the importance of ensuring that the development of smart cities is consistent with the goals of open government.

In the big data environment, data is a resource. Where the collection or generation of data is paid by taxpayers it is surely a public resource. My research has considered the location of rights of ownership and control over data in a variety of smart-cities contexts, and raises concerns over the potential loss of control over such data, particularly rights to re-use the data whether it is for innovation, civic engagement or transparency purposes.

Smart cities innovation will result in the collection of massive quantities of data and these data will be analyzed to generate predictions, visualizations, and other analytics. For the purposes of this very brief presentation, I will characterize this data as having 3 potential sources: 1) newly embedded sensor technologies that become part of smart cities infrastructure; 2) already existing systems by which cities collect and process data; and 3) citizen-generated data (in other words, data that is produced by citizens as a result of their daily activities and captured by some form of portable technology).

Let me briefly provide examples of these three situations.

The first scenario involves newly embedded sensors that become part of smart cities infrastructure. Assume that a municipal transit authority contracts with a private sector company for hardware and software services for the collection and processing of real-time GPS data from public transit vehicles. Who will own the data that is generated through these services? Will it be the municipality that owns and operates the fleet of vehicles, or the company that owns the sensors and the proprietary algorithms that process the data? The answer, which will be governed by the terms of the contract between the parties, will determine whether the transit authority is able to share this data with the public as open data. This example raises the issue of the extent to which ‘data sovereignty’ should be part of any smart cities plan. In other words, should policies be in place to ensure that cities own and/or control the data which they collect in relation to their operations. To go a step further, should federal funding for smart infrastructure be tied to obligations to make non-personal data available as open data?

The second scenario is where cities take their existing data and contract with the private sector for its analysis. For example, a municipal police service provides their crime incident data to a private sector company that offers analytics services such as publicly accessible crime maps. Opting to use the pre-packaged private sector platform may have implications for the availability of the same data as open data (which in turn has implications for transparency, civic engagement and innovation). It may also result in the use of data analytics services that are not appropriately customized to the particular Canadian local, regional or national contexts.

In the third scenario, a government contracts for data that has been gathered by sensors owned by private sector companies. The data may come from GPS systems installed in cars, from smart phones or their associated apps, from fitness devices, and so on. Depending upon the terms of the contract, the municipality may not be allowed to share the data upon which it is making its planning decisions. This will have important implications for the transparency of planning processes. There are also other issues. Is the city responsible for vetting the privacy policies and practices of the app companies from which they will be purchasing their data? Is there a minimum privacy standard that governments should insist upon when contracting for data collected from individuals by private sector companies? How can we reconcile private sector and public sector data protection laws where the public sector increasingly relies upon the private sector for the collection and processing of its smart cities data? Which normative regime should prevail and in what circumstances?

Finally, I would like to touch on a different yet related issue. This involves the situation where a city that collects a large volume of data – including personal information – through its operation of smart services is approached by the private sector to share or sell that data in exchange for either money or services. This could be very tempting for cash-strapped municipalities. For example, a large volume of data about the movement and daily travel habits of urban residents is collected through smart card payment systems. Under what circumstances is it appropriate for governments to monetize this type of data?

Note: This is Part 2 of my discussion of the B.C. Court of Appeal’s decision in Vancouver Community College v. Vancouver Career College (Burnaby) Inc. Part 1 can be found here. The initial post considered issues around official marks as well as the first element of the tort of passing off in which the plaintiff must establish that they have acquired goodwill/reputation in a mark. This post considers the remaining two elements: the likelihood of confusion and the likelihood of damage.

As noted in my earlier post, the B.C. Court of Appeal found that the appellant, the Vancouver Community College had considerable goodwill in the mark VCC. I was critical of this decision as it seems to conflate the official marks protection obtained by the Community College with the acronym as a trademark for the purposes of the passing off analysis. The Court of Appeal’s finding regarding the scope of the Community College’s rights in the mark VCC influences its reasoning with respect to the issue of confusion, which is the second element in the tort of passing off.

The alleged passing off in this case arose out of new marketing strategies adopted by the respondent Vancouver Career College in 2009. At that point it adopted VCCollege as a trademark and registered VCCollege.ca as a domain name for its website. The appellant Vancouver Community College objected to the use by the respondent of the acronym VCC in its “internet presence”. It also objected to the Career College’s bidding on keywords that included “VCC” and “Vancouver Community College.” It argued that the result of these activities was passing off. Because the official marks arguments had been separated from the passing off claim, the Court of Appeal considered only the issue of passing off with respect to the use of “VCC”.

The Court of Appeal summarized the essence of keyword advertising for the purposes of this case in these terms: “a bid on a keyword will make it more likely that the bidder’s advertisement with its domain name, linking to its website, will appear on the first search page revealed to the searcher.” (at para 19). The Court acknowledged that bidding on keywords in order to drive traffic to one’s website is legitimate, so long as it stays within the bounds of what is permissible. In the passing off context, the issue is whether the use of the keywords results in consumer confusion. When presented with a link in an ad on a search results page, the searcher has the option of following the link to the website to which it resolves. American case law on keyword advertising has focussed on the issue of confusion, rather than on the simple use of protected words as keywords. These cases have considered how the resulting ads are displayed on the page (e.g., whether they are in a location or font that distinguishes them from search results) and whether their content or presentation is misleading. The Court of Appeal does not address this case law or these issues in its confusion analysis.

The Court of Appeal found that “”VCC” was the keyword that generated the most “clicks” to the respondent’s website, such that the respondent’s advertisements appeared almost always in searches for VCC (over 97% of the time), and the respondent’s text advertisements always displayed VCCollege.ca in the web address line of the advertisement.” (at para 22) However, as I noted in Part 1 of my discussion of this case, VCC is an acronym shared by both the respondent and the appellant. As an acronym, it is a weak mark. The Community College led evidence of confusion among some students searching for the Community College. The trial judge had given this evidence relatively little weight, particularly in a context in which VCC was also the acronym for the respondent’s name. He noted that the respondent’s web site made it evident that it was the site for the Career College.

The Court of Appeal was critical of the trial judge for assessing confusion at the moment at which a student searching for VCC arrived at the landing page for the Career College – as opposed to when the student received the results of a browser search using VCC as a key word. According to the Court of Appeal, the authorities support a finding that first impressions are what matters in the confusion analysis. The Court of Appeal relied heavily upon Masterpiece Inc. v. Alavida Lifestyles Inc., a Supreme Court of Canada (SCC) decision involving an assessment of confusion under the Trade-marks Act. In that case, the SCC appeared to confirm that so-called “initial interest confusion” was actionable. In the internet context, initial interest confusion arises where a party’s trademarks have been used in such a way (in domain names or metatags, for example) that a person searching for the products or services of one company ends up at the website of another by mistake. In the early days of the internet, courts were more likely to find initial interest confusion to be actionable per se; more recently, courts in the United States have given searchers more credit for being able to find their way around the internet, and have looked for other evidence of uses of the marks that contribute to confusion. A searcher who quickly realizes they have made their way to a website other than the one for which they were searching is not confused. However, some have still maintained that initial interest confusion should be actionable because even if the consumer is not confused, they might still decide, once presented with similar goods or services from an alternate source, that they are happy enough to acquire them from that source rather than the one for which they were originally searching. In such circumstances, the use by a defendant of a competitor’s trademarks to draw business away from them is said to cause harm that should be actionable. In Masterpiece, the SCC stated that the diversion of consumers “diminishes the value of the goodwill associated with the trademark and business the consumer initially thought he or she was encountering in seeing the trademark. Leading consumers astray in this way is one of the evils that trademark law seeks to remedy.” (at para 73) While this has been taken by some to address initial interest confusion on the internet, it should be noted that Masterpiece did not deal with either the internet context or with passing off.

Whichever view one takes on initial interest confusion, the problem in this case is that the appellant used the appropriate acronym for its name as a key word and its domain name was one in which it would doubtless be found to have a ‘legitimate interest’ under domain name dispute resolution policies. According to the Court of Appeal, the confusion required for a finding of passing off “is fully established by proof that the respondent’s domain name is equally descriptive of the appellant and contains the same acronym long associated to it.” (at para 71) This approach gives excessive scope to what should be – in the context of passing off – relatively weak rights in VCC. The acronym is obvious and appropriate for both the Vancouver Community College and the Vancouver Career College. While the Community College may have acquired goodwill in the acronym, its highly descriptive nature necessarily limits the scope of the goodwill and does not, without more, allow it to preclude its use by the Career College, itself in business for 20 years. Weak marks deserve limited protection in passing off. Having tolerated the presence of the Vancouver Career College since 1997, the action in passing off with respect to its use of its acronym online seems misdirected.

The Court of Appeal found that the appellant had suffered damage to its goodwill. This flowed in part from “the lack of power to control the use of the marks to which the goodwill attached by unauthorized users” (at para 75). To characterize the Vancouver Career College as an “unauthorized user” of the appropriate acronym for its own name seems problematic. Essentially, the Court of Appeal would carve out an absolute monopoly for the appellant in VCC for use in association with education services notwithstanding the fact that the acronym is shared by two parties with names that are highly descriptive of similar services and that share the same acronym. In such circumstances, it is appropriate to require something more in the respondent’s conduct on which to base a finding of passing off.

Of course, the appellant is not without its nuclear option – the VCC official mark, although it is clear that there are other difficulties with the official marks claim. As noted in Part 1, official marks give the kind of absolute protection for entirely descriptive marks that the appellant is clearly seeking. While the official mark issues in this case have yet to be resolved, it is unfortunate that the passing off analysis seems to have been carried out under the shadow of the official mark. The result is an analysis peculiar to the circumstances of this case that would be dangerous to extend to other cases of passing off.


Published in Trademarks

Note: As I started to write this post, which comments on the recent B.C. Court of Appeal decision in Vancouver Community College v. Vancouver Career College (Burnaby) Inc., I realized that it was going to be far too long for a single post. I have decided to divide the issues in two. This first post will focus on the official mark question and the issue of goodwill (the first element in a passing off action). A second post will later deal with issues of confusion and damages in passing off.

The BC Court of Appeal has recently ruled in a case that involves allegations of online trademark infringement. The parties raised issues around the purchase of keyword advertising, the use of trademarks in metatags and domain names, and the infringement of official marks. However, the Court’s decision ultimately addresses only a subset of these issues, and refers the question of official marks back to the trial court because of deficiencies in the factual record. The Court of Appeal’s decision focuses on passing off. In doing so, it touches on some questions unique to the internet context.

The dispute involves two educational institutions with very similar names and a shared acronym. The appellant Vancouver Community College is a post-secondary institution with official designation under B.C.’s College and Institute Act. It began its existence as the Vancouver City College in 1964, changing its name to Vancouver Community College in 1974. The respondent is a private career college called Vancouver Career College. It has operated under that name since 1997. Over time it has expanded its operations considerably. It is regulated under the province’s Private Training Act. Not only do both institutions share the identical acronym VCC, the only difference in their full names is with respect to the middle of the three words used in each. Both names are highly descriptive, and, as such, are inherently weak trademarks.

Because of its links to government, Vancouver Community College has taken advantage of the official marks provisions of the Trade-marks Act. These provisions allow a “public authority” to circumvent the usual requirements for trademark registration in order to protect a name or mark. The protection available for official marks is more extensive and more enduring than trademark protection, and the scheme is controversial. While a business would not be allowed to register a trademark that is entirely descriptive without being able to demonstrate that it had acquired secondary meaning, the official marks regime is indiscriminate when it comes to marks. The Vancouver Community College claimed ‘VCC’ as an official mark in January 1999 and also holds the official mark ‘Vancouver Community College’ since 2005. Both dates are later than the adoption by Vancouver Career College of its name – and quite possibly its adoption of the acronym VCC. Case law supports the view that the rather generous protection for official marks is only prospective; uses of the same or highly similar marks that predate the publication of the official marks are permitted to continue, although their use cannot expand to new products or services. The trial judge had found that the prior use of its own name and acronym by the Vancouver Career College insulated it from claims that it violated the Vancouver Community College’s official marks. The Court of Appeal ruled that the factual record was not sufficient to decide the issue. They sought additional facts as to the extent and nature of the use of each of the marks, whether the use by the respondent of the acronym had so expanded as to negate the defence of prior use, as well as facts relating to whether prior use had been abandoned by the time the official marks were published. In addition, because the Court of Appeal had concluded that the Career College’s prior use was tortious, it speculated as to whether the tortious adoption of a mark could count as prior use. It is an interesting question, but as I will discuss below, the Court of Appeal’s conclusions on the tort of passing off are not entirely satisfactory. At this point, it should be noted that there is some circularity around the issue of passing off and official marks. The Community College’s ability to obtain an official mark appears to bolster its claim to goodwill/reputation in the Court of Appeal’s reasoning. Yet official marks receive no scrutiny by the Registrar; they can be descriptive, generic, or confusing with existing marks – there really are few boundaries. As a result, the two analyses must be kept distinct. There may be a violation of rights in an official mark without there being a sufficient factual basis to support a finding of passing off. The threshold for the first is much lower than the second since all that needs to be shown is the existence of an official mark. For passing off it is necessary to establish sufficient goodwill/reputation – in other words, a plaintiff has to show that a mark distinguishes it as the source of particular goods or services.

A plaintiff in a passing off case must establish three elements: goodwill, a likelihood of confusion and a likelihood of damage. The first element requires the plaintiff to prove that they have acquired goodwill in a particular mark (whether it be a name, design, acronym, or some other indicium). In this case, the mark at issue is VCC which is an acronym for both Vancouver Community College and for Vancouver Career College. The law of passing off is not particularly generous to those who lack imagination or forethought in coming up with names. Names that are entirely descriptive make poor trademarks. The law is reluctant to provide a kind of monopoly over terms that simply describe a product or service. Both college names share “Vancouver” and “College” – both institutions are based in Vancouver and are of a kind typically referred to as “colleges”. The middle word is different but starts with the same letter, leading to two identical acronyms. As a result, the Community College’s acronym, on the face of it, is very weak. It deserves almost no protection from the law of passing off unless it is able to show that it has acquired such a level of distinctiveness through use by the Community College, that the public now associates VCC with its particular services. Further, even if it succeeds in showing acquired goodwill, it is not necessarily entitled to have the defendant’s use of its mark enjoined. The defendant might still be capable of using the same descriptive mark so long as, in doing so, it takes steps to ensure there is no confusion.

The trial judge had concluded that the Vancouver Community College did not have goodwill in the VCC mark. This was in part based on his finding that ‘VCC’ had been little used by the Community College between 1990 and 2013. The trial judge referred to the added level of distinctiveness required for an entirely descriptive mark as “secondary meaning”, and he was correct to do so. Nevertheless, the Court of Appeal took issue with this approach. It opined that because what was at issue was the name of the college, it was not necessary to establish secondary meaning. Instead, it framed the question as whether the acronym VCC “carried sufficient distinctiveness in its primary sense to be recognized as designating the appellant and the educational services it provides.” (at para 40) This argument seems to either miss the point that the name of the college is entirely descriptive as well, or it conflates the name of the college with its status as a public institution. Unlike the B.C. University Act, which limits use of the term “university” to only specified institutions, the College and Institute Act gives no special protection to the term “college”. The Court of Appeal emphasized the public nature of the Community College and found that: “Its public character establishes a level of public awareness of the role it plays in the community” (at para 47). As a public institution, the Community College has access to official marks protection. Yet the huge boondoggle that is official marks protection should only count once – in the context of an official marks analysis – and should not be used to shape a passing off analysis that requires that marks be shown to be sufficiently distinctive to have acquired goodwill or reputation as a condition of their protection.

“Vancouver Community College” effectively describes a community college located in Vancouver. It is entirely descriptive. The acronym VCC similarly lacks inherent distinctiveness. In fact, it could stand for Vancouver Civic Centre, Vancouver Chamber of Commerce, Vancouver City Centre, or, in this case Vancouver Career College – to give just a few examples. The Court of Appeal’s decision sets a low threshold for goodwill/reputation in the face of a rather common acronym for a highly descriptive name. While it found sufficient evidence of an association by the public between VCC and the Community College, noting that the acronym was used in media reports, brochures, calendars and other materials, and it was the name of the SkyTrain station near the appellant’s campus. However, the extent of this association (or whether there is also a public association between VCC and the Career College) is not at all clear from the facts.

It may ultimately be that the Community College has acquired sufficient goodwill in ‘VCC’ to support an action in passing off. My difficulty with the resolution of this issue is with the road taken to get there. The Court of Appeal never acknowledged the weakness of either Vancouver Community College or VCC as marks in the context of the passing off analysis. While it is still possible to find that such a weak mark as VCC had acquired sufficient goodwill to provide a basis for an action in passing off, the inherent descriptiveness of the mark is relevant to the rest of the passing off analysis. For example, courts have found that minor differences in presentation of goods or services, or the use of disclaimers may sufficiently reduce any possibility of confusion between similar descriptive marks. The interweaving of the official marks issues with the passing off issues is perhaps to blame here. The Court of Appeal seems to be giving the Community College credit for being a public institution, and its burden of establishing goodwill seems to be lightened as a result. This approach ignores the very special (i.e., ‘anomalous ‘ or ‘problematic’) character of official marks.

Note: Part 2 of this comment is now available here.





Published in Trademarks

In an interesting decision from the small claims court of Quebec, Google has been held liable for violating the plaintiff’s privacy rights after an image of her sitting on her front steps appeared on Google Streetview.

In Grillo v. Google Inc., the plaintiff, Ms Grillo, testified that she had decided to sit on her front steps briefly one day, while on vacation. She was checking her messages on her smart phone, when she noticed the Google Car driving by, with its mounted camera. It was not until five months later that she first went online to look for her house on Streetview. She was shocked to see herself sitting barefoot and wearing a loose, sleeveless top which revealed part of one of her breasts. Also visible in the image was her car, with the licence plate unblurred, and the civic number of her house.

The plaintiff testified that she was a very private person, and, in fact, had chosen to live where she did because it was a relatively private and untraveled area of the city. After she found the image on Streetview, she testified that she was the butt of a number of jokes at the bank where she worked; her partially exposed breast was particularly commented upon by her co-workers. She testified as to her sense of shame and embarrassment. She immediately complained to the Office of the Privacy Commissioner of Canada, which suggested that she contact Google in order to have them remove the images. She claimed that she tried to do this, using the features available on the Streetview site, but without success. Shortly afterwards, she claimed to have sent two copies of a letter to Google – one to its offices in Washington D.C., and one to its corporate headquarters in California, setting out her concerns, and specifically requesting that her licence plate information be removed. Google claimed never to have received either copy of this letter. Approximately two years later, Ms Grillo sought the assistance of a lawyer, and sent a letter to Google demanding that “all photographs of our client, her breast, her car’s license plate and her civic address” be blurred or removed. The letter also claimed damages in the amount of $45,000. A short time after this letter was received, Google notified Ms Grillo’s lawyer that the images had been blurred.

Ms Grillo initiated a law suit against Google to recover damages related to the display of the images. However, perhaps because she was unrepresented at this point, she initiated her action in Quebec’s small claims court. Because this court has jurisdiction only over claims of $7000 or less, she limited her damage claim to this amount. In terms of the damages she claimed to have suffered, she noted that she had been mocked and humiliated at work, and had left her job at the bank as a result. She had also been on an extended period of sick leave prior to resigning her position – this was due to depression for which she was receiving care. She emphasized that she was a very private person who preferred her anonymity, and who had made choices about where to live and what kind of online activity to engage in (or not) with a view to this desire for privacy and anonymity.

The legal basis for the claim of violation of privacy rights in this case is found both in the Civil Code of Quebec and the Quebec Charter of Human Rights and Freedoms. The Civil Code sets out a right to privacy and identifies a series of acts that are considered to violate that right. One of these is the use of a person’s name or image without their consent for any purpose other than the legitimate information of the public. The Quebec Charter also sets out a right to privacy and to human dignity.

The leading case in Quebec on the right to privacy as it relates to the use of a person’s image is Aubry v. ÉditionsVice-Versa. In this case, the Supreme Court of Canada awarded damages after a magazine published a photograph of a young woman sitting outside on her front steps. The photograph had been taken without her knowledge or consent. Drawing on this decision, Justice Breault explained that a photograph taken of a person in a public space in Quebec could not be circulated without that person’s consent unless the public’s legitimate right to information prevailed over the right to privacy. He noted that in Quebec, the freedom of expression did not trump privacy rights; the two considerations must necessarily be balanced.

In this case, Google argued that Ms Grillo had been sitting on her front steps in plain view of her neighbors or of any passersby. Since she was in public view, it argued, she had no right to privacy. Justice Breault disagreed. He rejected the idea that there was a strict dichotomy between public and private spaces. In this case, he noted that Ms Grillo lived on a quiet street, and that the relative level of privacy on that street was something that was of importance to her. Further, she was not engaged in any sort of public activity: she was on vacation, sitting outside her home. She was entitled to expect that her privacy and her right to control her image would not be infringed by the taking and distribution of a photo without her consent.

Google also argued that Ms Grillo was not identifiable from the photograph because her face had been blurred. However, the court found that the other details in the photograph made her identifiable, and that these other details were, as a result, also “personal information”. Justice Breault noted in particular that the photograph showed her car licence plate, and her house number – details Google admitted had been missed by its blurring algorithm.

Finally, Google argued that the dissemination of the photograph without Ms Grillo’s consent could be justified as it was for the “legitimate information of the public”. In this respect, it argued that its Streetview service was of broad use and interest to the public. Justice Breault rejected “social utility” as a basis for justifying a breach of privacy. It was not enough to argue that Streetview in general served a useful public purpose; it was necessary to show that there was a dominant public interest in the circulation of the plaintiff’s image – an interest that would outweigh the plaintiff’s privacy interest. The court found that no such public interest existed in this case. Thus, Justice Breault concluded that the plaintiff’s right to privacy had been violated.

In considering the amount of damages to award, Justice Breault found that Ms Grillo had not adequately established the extent to which her image had actually been viewed by members of the public. He assumed that the number of viewers would be relatively low, and limited mainly to friends and co-workers. He also found that she had not established a causal relationship between the dissemination of her image on Streetview and the depression that she had suffered. He noted that she had produced no witnesses as to the state of her health. Justice Breault also found it significant that she had waited two years between the time she had discovered the image and the time that she had sent the lawyer’s letter to Google. He noted that the images had been blurred immediately after Google’s receipt of the letter, suggesting that she could have mitigated any harm she suffered by acting much sooner. Nevertheless, Justice Breault accepted that she had been deeply shocked by the publication of the image and that she had been hurt as well by the comments of her co-workers. He awarded her $2250 in damages, along with costs of $159.

Published in Privacy

On June 13, the Supreme Court of Canada released its much awaited decision in Spencer v. The Queen. The core issue in this crucially important privacy case was whether there was a reasonable expectation of privacy in Internet Service Provider (ISP) subscriber information linked to a particular Internet Protocol (IP) address. Although privacy experts have for some time considered this question to be a no-brainer, the federal government had stubbornly held to the position that customer name and address information, viewed in isolation, was the kind of data in which none of us has a reasonable expectation of privacy.

Concurrent with the deliberations of the Supreme Court of Canada in Spencer were debates in the House of Commons and in Committee over the Conservative government’s controversial Bill C-13. This Bill will further pave the way for government authorities to gain easy and warrantless access to subscriber information. Among other things, the Bill gives ISPs immunity from any liability for handing subscriber information over to police without notice to or consent from their customers, and upon a simple request for this information to be shared.

Even prior to Bill C-13, provisions in both the Personal Information Protection and Electronic Documents Act (PIPEDA) and the Criminal Code had been argued to grant permission to private sector companies to share personal information with authorities, at the request of those authorities, without a warrant and without notice or consent to the affected customers. The application of these provisions had led to numerous Charter challenges in the lower courts, and these courts were divided as to the interpretation these clauses should be given. Essentially, although the anonymous IP address could reveal a trail of internet-based activities, Crown lawyers argued (and some courts accepted) that the police were ultimately only seeking a simple name and address – information in which there could be little expectation of privacy – and no warrant was required.

The Supreme Court of Canada itself had been a bit iffy when it came to informational privacy. A number of split decisions in the past years showed a lack of consensus on key privacy issues, and some recent decisions were not particularly privacy-friendly. In 2004, a narrow majority of the Supreme Court of Canada found that infra-red technology used by police in fly-overs to measure the heat signature of houses was not privacy invasive, because it did not lead to precise inferences about activities taking place in the house (notwithstanding the fact that the police used the technology to draw inferences regarding the presence of a grow-ops the accused’s home). There was genuine concern that this approach placed an artificial distance between the individual and the information that could be gleaned about their activities through technology. This concern was augmented by the Court’s 2010 decision in R. v. Gomboc, where 4 of the judges found that a very precise recording of daily patterns of electrical use in a home “reveals nothing about the intimate or core personal activities of the occupants. It reveals nothing but one particular piece of information: the consumption of electricity.” (at para 14). This approach, which distanced particular pieces of information from the inferences that could be drawn from them, and that minimized the importance of the decontextualized information, was a matter of great concern to privacy advocates.

This is why the Court’s unanimous decision in Spencer v. the Queen is so important, and why so many privacy advocates awaited it with both anticipation and dread. It is perhaps fortuitous that the backdrop to the Supreme Court of Canada’s deliberations in Spencer was one of ongoing disclosures by Edward Snowden of intrusive and warrantless government surveillance of the online activities of individuals in Canada and elsewhere, and the heated debates over the Conservative government’s latest attempt to facilitate police access to information about Canadians’ online and mobile activities.

The Court in Spencer dismissed the approach that separated the name and address information from the information gleaned from the IP address. Justice Cromwell wrote: “the subject matter of the search is the identity of a subscriber whose Internet connection is linked to particular, monitored Internet activity.” (at para 33). He found as well that anonymity is an important dimension of privacy – one that is “particularly important in the context of Internet usage.” (at para 45) Noting that there is an almost unavoidable tracking of individual activity on the Internet, Justice Cromwell wrote:

The user cannot fully control or even necessarily be aware of who may observe a pattern of online activity, but by remaining anonymous — by guarding the link between the information and the identity of the person to whom it relates — the user can in large measure be assured that the activity remains private. (at para 46)

According to the Court subscriber information links certain types of information to identifiable individuals, and is thus revelatory of a great deal more information than simply a name and address. This in turn triggers a strong privacy interest.

On the issue of the provisions of both PIPEDA and the Criminal Code that permit companies to voluntarily share personal information with law enforcement officials, the Court ruled that these provisions do not override a reasonable expectation of privacy. Since a request by police for subscriber identification engages this privacy interest, it amounts to a search for which a warrant is required. The permissive provision in PIPEDA depends upon police having a lawful authority to obtain the information sought – if a warrant is required, then a request absent a warrant is not made with lawful authority. The Court also ruled that s. 487.014 of the Criminal Code merely confirms existing police powers to make enquiries, but does not give them any authority to circumvent requirements to obtain a warrant.

This decision is extremely important, and should prompt a reconsideration of parts of Bill C-13. Some caution is nonetheless warranted. The Court noted that the reasonableness of a person’s expectation of privacy in their subscriber information in the hands of their ISP may depend upon the wording of their Terms of Service and their ISP’s privacy policy. Essentially, if these documents state that the ISP will hand over customer data to police upon their request; this will undermine the reasonableness of any expectation that this information will remain protected. In an age of consumer helplessness in the face of lengthy, impenetrable and take-it-or-leave it terms of service, it is important to press ISPs – and other service providers – to respect basic privacy values.

Published in Privacy

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.

Published in Copyright Law

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)

[1] This is from TCYK, LLC v. Does 1-88, 2013 U.S. Dist LEXIS 88402. The quoted words are part of the passage in the quote that starts off the Federal Court decision.

Published in Copyright Law

My colleague Michael Deturbide and I are very honoured to have been awarded the 2013 Walter Owen Book Prize for our new book Electronic Commerce and Internet Law in Canada, published by Wolters Kluwer (CCH). We are very grateful to the Foundation for Legal Research, which awards this prize, and which also has been a strong pillar of support for legal research in Canada.


Thursday, 14 March 2013 14:33

The Failure of Privacy Law

Recently, the decision of the Ontario Court of Appeal in Jones v. Tsige was celebrated by privacy advocates for recognizing a new privacy tort in Ontario. The plaintiff/appellant Jones received an award of $10,000 in damages for harm suffered as a result of the defendant’s unauthorized access to her bank records over a period of time.

An even more recent dispute between Jones and her lawyer has highlighted a chronic problem with privacy law in Canada: the lack of meaningful recourse. Last week, a judge ordered Jones to pay her lawyer the balance of the legal fees she incurred in her ground-breaking lawsuit. These fees were in excess of $125,000 – more than 12 times Jones’ damage award. The judge made it clear that the lawyer had provided first rate representation for his client. The lesson here is that legal services are expensive, and frankly, the majority of Canadians cannot afford to go to court.

The new tort that resulted from Jones v. Tsige is similar to statutory torts in provinces such as British Columbia, Manitoba, Saskatchewan and Newfoundland and Labrador. They are fairly narrowly framed; these torts require a wilful violation of privacy. They are meant to apply in cases of stalking, voyeurism, and other deliberate privacy intrusions. The high cost of litigation combined with the fact that courts give relatively small damage awards for the difficult-to-quantify harms that flow from privacy invasion mean that these torts are of little practical use to most Canadians.

Arguably, the most pervasive threats to personal privacy come from routine over- collection of personal information, and poor information handling practices. The tort of invasion of privacy does not apply in such cases. Instead, private sector data protection legislation is meant to provide recourse to individuals when their personal information is inappropriately collected, used or disclosed by private sector organizations. Yet the Personal Information Protection and Electronic Documents Act (PIPEDA) has its own substantial defects. This law applies to activities in the federally regulated private sector, and to the private sector more broadly in those provinces without their own legislation (all provinces and territories except B.C., Alberta, and Quebec fall under PIPEDA),. Individuals may make complaints under PIPEDA; the outcome of any such complaint is a report by the Office of the Privacy Commissioner (OPC). This report may contain recommendations as to how an organization should correct deficiencies in its practices, but these recommendations are not binding. Once a report has been issued, an individual may choose to take the matter to Federal Court to get an order requiring the organization to change its practices. The individual may also seek compensation for any harm they have suffered. Once again, it costs money to go to court, and those few individuals who have exercised this option have had little success. Nammo v. Transunion of Canada Inc. has become the benchmark for awards of damages in such cases; Mr. Nammo was awarded a whopping $5000 after a credit reporting agency failed to collect accurate information about him, and shared the incorrect (and negative) credit information with a bank. It is no surprise that the majority (if not all) of those who have pursued their PIPEDA claims before the Federal Court have represented themselves. The cost of legal representation would far outstrip any likely award of damages.

The OPC does excellent work within the limits of its mandate, and it has no doubt had some success in improving how (receptive) businesses handle personal information. There is, however, little in the legislation to seriously motivate compliance. PIPEDA is a relatively toothless statute: the Privacy Commissioner has no order-making power, there is no mandatory breach disclosure provision, and there is little in the way of economic consequences for those who flout privacy principles. Yet PIPEDA has passed its first five-year review without much-needed legislative amendment (the Conservative government’s Bill C-12 died on the order paper and has yet to be revived), and it is now well overdue for its second five-year review. It is into this context that Charmaine Borg of the NDP has introduced a private member’s Bill C-475, which would impose a mandatory data breach disclosure requirement on organizations, would provide the Privacy Commissioner with order-making powers, and would create the potential for significant financial penalties for those who refuse to comply with orders.

Measures of this kind could provide a real incentive for organizations to take data protection more seriously. And let’s face it, for the vast majority of Canadians, it is not the right to go to court to sue for invasion of privacy or to seek damages for violations of PIPEDA that will make any kind of difference. These rights are rendered meaningless by both the cost of litigation and by the resultant lack of deterrent effect on bad behaviour. The best protection for individuals is a regime that gives organizations clear reasons to improve their practices and systems.

Published in Privacy

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