Law Society Of Canada: Copyright Year In Review (2008)

Law Society of Upper Canada: 13th Annual Intellectual Property Law – The Year in Review

Update on Copyrights 2009

Barry B. Sookman January 15 2009 [email protected]

3715166

Canadian Decisions

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Apple Canada Inc. v. Canadian Private Copying Collective. 2008 FCA 9 (FCA) Copying Music onto Devices not Part of Private Copying Regime

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Apple. Dell, Microsoft, Sandisk, and Sony sought judicial review of the Copyright Board’s dismissal of their motions to prevent the tariff proposed by CPCC on digital audio recorders (DARs) from being considered.

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The Court held the decision in Canadian Private Copying Collective v. Canadian Storage Media Alliance [2005] 2 F.C.R. 654 was binding and that the Copyright Board does not have jurisdiction to certify a tariff on DARs or on the memory permanently embedded therein.

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Implications of decision?

Canadian Wireless Telecommunications Association v. Society of Composers, Authors and Music Publishers of Canada 2008 FCA 6 •

Whether a transmission of a ringtone to a cell phone as part of a purchase and sale transaction is a (1) “communication” that is (2) “to the public”.

(1) Are the transmissions of downloads of files communications? •

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The FCA held that the meaning of the word “communication” is the same as the word “transmission”. It held that a “communication” should be understood to include transmissions of content delivered only for later use.

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“The word “communication” connotes the passing of information from one person to another. A musical ringtone is information in the form of a digital audio file that is capable of being communicated. The normal mode of communicating a digital audio file is to transmit it. The wireless transmission of a musical ringtone to a cellphone is a communication, whether the owner of the cellphone accesses it immediately in order to hear the music, or at some later time. The fact that the technology used for the transmission does not permit the cellphone owner to listen to the music during the transmission does not mean that there is no communication. In my view, in the context of a wireless transmission, it is the receipt of the transmission that completes the communication.”

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Communications are not limited to broadcasts and similar ephemeral transmissions that can be perceived when transmitted.

Canadian Wireless Telecommunications Association v. Society of Composers, Authors and Music Publishers of Canada 2008 FCA 6 (2) Are the transmissions of copies as part of a sale transaction “to the public”

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“it seems to me that in determining whether paragraph 3(1)(f) applies to the transmission of a musical work in the form of a digital audio file, it is not enough to ask whether there is a one-to-one communication, or a one-to-one communication requested by the recipient. The answer to either of those questions would not necessarily be determinative because a series of transmissions of the same musical work to numerous different recipients may be a communication to the public if the recipients comprise the public, or a significant segment of the public.”

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“In my view, the conclusion of the Copyright Board that the transmissions in issue in this case are within the scope of paragraph 3(1)(f) of the Copyright Act is consistent with the language of that provision and its context. It also accords with common sense. If a wireless carrier were to transmit a particular ringtone simultaneously to all customers who have requested it, that transmission would be a communication to the public. It would be illogical to reach a different result simply because the transmissions are done one by one, and thus at different times.”

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Is this decision consistent with the Cablevision case?

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Implications for Internet transmissions of music and Tariff 22?

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Why was leave to the Supreme Court denied?

SOCAN-Tariff 22B-G, Decision of the Copyright Board dated October 25, 2008 Real and Substantial Connection Test

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The Copyright Board applied the real and substantial connection test in determining the royalties payable in respect of the communication of music to the public from various web sites.

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The Board held that all traffic to a Canadian radio or TV site involves a communication to the public in Canada. However, the Board held that certain Canadian sites could remove from their rate base 95% of visits from outside of Canada, suggesting that for non-radio or TV sites only 5% of visits from foreign sites have a real and substantial connection to Canada.

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The Board also permitted non-Canadian sites to remove all non-Canadian visits, thus suggesting that 100% of all Canadian visits to foreign websites would have a real and substantial connection to Canada and be communications covered by the Act.

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Is the decision correct?

SOCAN-Tariff 22B-G, Decision of the Copyright Board dated October 25, 2008 Secondary Liability for Infringement

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The Board declined to set royalties for uses of music on social networking and UGC sites.

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The Board suggested that the operators of these sites may be jointly and severally liable with users for the communications to the public of musical works from such sites.

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“Second, given the absence of any reliable evidence on which to base our decision, any tariff we would have set would have been de minimis, so as to avoid as much as possible the deleterious effects of seeking a plethora of minimum payments for a myriad of very modest uses. The effects could be all the more important if, because of joint and several liability in the communication of music, thousands of individuals who are active on the social networking or video sharing sites were deemed individually responsible for minimal payments. We refuse to certify a tariff that could potentially have such a broad scope without the proper evidence.”

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What will the Court of Appeal do in the judicial review?

Ghanotakis c. Expertises Didactiques Lyons Inc. [2007] QCCA 1866 Originality The respondents designed a series of educational board games for children and hired the appellant to provide marketing services for their products. The games contained content for different levels of difficulty, corresponding to different recommended ages of the users. As part of his work, the appellant split up the games into several “modules”, one for each difficulty level, so that they could be purchased separately. The appellant claimed copyright in the repackaged games. The Court of Appeal affirmed the trial decision that the mechanical acts of breaking up games to sell them in separate parts for marketing purposes did not create an “original” adaptation that was subject to copyright. “The Chief Justice of Canada, on the basis of a former Court of the Exchequer, writes: For a compilation under the law, there is a need for more than a simple mechanical operation. He needed to borrow a phrase often used in case law, there is a spark of creativity. "

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Médias Transcontinental s.e.n.c. c. Soumissoinnez.com Inc. [2008] QCCS 1772 Compilations on Website are Protected by Copyright “…it is reasonable to consider that a website is both a work as a whole and the consolidation of a multitude separate works. In addition, a website, like any compilation composed of ideas and data from the public domain, may be the protection of the” Copyright Act. “The compilation of tender and other information on the website of the SÉAO is made through the exercise of skill and discretion of the group research Constructo. In the opinion of the Court, this compilation is a "work" under the [Copyright Act], regardless of ownership of such tenders.” Online Webwrap Terms Enforced “By accessing the website SÉAO… it is…deemed to have accepted the conditions of access…and…is not allowed sell, publish or reproduce extracts important pages of the site.”

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Médias Transcontinental s.e.n.c. c. Soumissoinnez.com Inc. [2008] QCCS 1772 Test for Granting Permanent Information In R. v. James Lorimer and Co. Ltd., J. Mahoney of the Court of Appeals wrote: "The Act [Act copyright] is clear. Infringement does not require that the infringing work compete in the marketplace with that infringed; it requires only that the infringer do something that the copyright owner alone has the right to do. It follows that, where infringement of copyright has been established, the owner of the copyright is prima facie entitled to an injunction restraining further infringement. [...] The onus is on the infringer to establish grounds upon which the Court may properly exercise its discretion against granting such relief. Those grounds must lie in the conduct of the copyright owner, not in the conduct or motives of the infringer. The fact that the copyright owner has suffered no damages as a result of the infringement is not a basis for refusing an injunction. " “In this case, it was for the defendant to establish why the Court should exercise its discretion to refuse the application for injunction, but it did not.” Is this test correct? Note: All translations into English performed using Google. 10

Canwest Mediaworks Publications Inc. v. Horizon Publications Ltd.2008 BCSC 1609 Fair Dealing Does Not Include Parody The defendants distributed and printed a parody version of the Vancouver Sun and were sued for copyright infringement by Canwest, which owns and operates the Sun. The court held that neither parody nor the Charter (freedom of expression) are defenses to infringement under the Act following the decision in Compagnie Générale des Etablissements Michelin – Michelin & Cie v. National Automobile Aerospace, Transportation and Générale Workers Union of Canada (CAW – Canada) (1996) 71 C.P.R. (3d) 348

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Hong Everest Corp. v. Hqart Corp. [2008] O.J. No. 2456 Granting of Interlocutory Injunctions Hong Everest sought an order restraining defendant Hqart (the principal employee of which used to work for Hong) from offering for sale or marketing products using Hong Everest’s designs, pricelists or catalogues. The motion was denied for failure to satisfy the irreparable harm and balance of convenience prongs of the requirements for obtaining an injunction laid down in R.J.R. MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311 First, the plaintiff’s substantial loss of market share to the defendants did not constitute irreparable harm that could be compensated by way of damages or permanent injunction at trial. Second, the inconvenience suffered by the defendants should an injunction be granted would be at least as great as suffered by the plaintiffs should the injunction be refused Was the motion rightly decided?

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Don Hammond Photography Ltd. v. The Consignment Studio Inc. [2008] ABPC 9 Ownership of Photographs The defendants commissioned the plaintiff to produce several photographs for advertisements, but never paid the plaintiff’s account. Plaintiff sued for copyright infringement. The defendants claimed they were the first owners of the copyright pursuant to s.13(2) of the Copyright Act, which stipulates that in the case of an engraving, photograph or portrait, the person by whom the plate or other original was ordered shall be the first owner. However, s.13(2) also requires that consideration be paid for the work and, having found no such payment of consideration, Justice Ingram ruled that the plaintiff retained copyright ownership in the negatives. As such, the defendants had infringed upon the plaintiff’s copyright in the works.

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Don Hammond Photography Ltd. v. The Consignment Studio Inc. [2008] ABPC 9 Statutory Damages The defendants had agree to pay the plaintiff $1,431 for the commission of five photographs, an amount which they did not pay. The plaintiff elected for statutory damages. S.38.1(1) of the Copyright Act provides that statutory damages should be assessed at no less than $500 and no more than $20,000 per work infringed. However, s.38.1(3) provides that if an award pursuant to s.38.1(1) is grossly out of proportion to the infringement, the court may award an amount lower than $500 per work. Justice Ingram ruled that the minimum statutory damage award of $2,500 in this case would be grossly out of proportion to the damage incurred and reduced the award to $500 for all five works pursuant to s.38.1(3), plus costs to the unrepresented plaintiff.

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Louis Vuitton Malletier S.A. v. 486353 B.C. Ltd. et al. 2008 BCSC 799 Statutory Damages and Punative Damages Defendants were found to infringe both trade-marks and copyrights of Louis Vuitton. For damages under copyright, the Court awarded the maximum statutory damages of $20,000 per work. Factors leading to this high damage award included that the defendants acted wilfully and knowingly in violation of the plaintiff’s rights, that neither the service of the Anton Pillar order or the seizure of hundreds of articles deterred the defendants from continuing infringing conduct, that the defendants ignored the issuance of a cease & desist letter and that the defendants attempted to evade service, ignored production orders and failed to appear at several court dates. Based on the above, the Court also awarded punitive and exemplary damages against the defendants. A sum of $100,000 was awarded jointly and severally against the defendant corporation and two employees, and a sum of $200,000 was awarded against the principal of the enterprise. 15

Foreign Decisions

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Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) “This case implicates… the right “to reproduce the copyrighted work in copies,” and the right “to perform the copyrighted work publicly.” 17 U.S.C. § 106(1), (4). As discussed above, the district court found that Cablevision infringed the first right by 1) buffering the data from its programming stream and 2) copying content onto the Arroyo Server hard disks to enable playback of a program requested by an RSDVR customer. In addition, the district court found that Cablevision would infringe the public performance right by transmitting a program to an RS-DVR customer in response to that customer’s playback request.” The Court reversed the district court.

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Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) Does Transitory Copying of information in a Buffer Infringe the Reproduction Right? “It is undisputed that Cablevision, not any customer or other entity, takes the content from one stream of programming, after the split, and stores it, one small piece at a time, in the BMR buffer and the primary ingest buffer. As a result, the information is buffered before any customer requests a recording, and would be buffered even if no such request were made. The question is whether, by buffering the data that make up a given work, Cablevision “reproduce[s]” that work “in copies,” 17 U.S.C. 10 § 106(1), and thereby infringes the copyright holder’s reproduction right.” “Copies,” as defined in the Copyright Act, “are material objects...in which a work is fixed by any method...and from which the work can be...reproduced.” Id. § 101. The Act also provides that a work is “‘fixed’ in a tangible medium of expression when its embodiment...is sufficiently permanent or stable to permit it to be...reproduced...for a period of more than transitory duration.” “We believe that this language plainly imposes two distinct but related requirements: the work must be embodied in a medium, i.e., placed in a medium such that it can be perceived, reproduced, etc., from that medium (the “embodiment requirement”), and it must remain thus embodied “for a period of more than transitory duration” (the “duration requirement”).

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Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) The Embodiment Requirement “Cablevision does not seriously dispute that copyrighted works are “embodied” in the buffer. Data in the BMR buffer can be reformatted and transmitted to the other components of the RS-DVR system. Data in the primary ingest buffer can be copied onto the Arroyo hard disks if a user has requested a recording of that data. Thus, a work’s “embodiment” in either buffer “is sufficiently permanent or stable to permit it to be perceived, reproduced,” (as in the case of the ingest buffer) “or otherwise communicated” (as in the BMR buffer). 17 U.S.C. § 101. The result might be different if only a single second of a much longer work was placed in the buffer in isolation. In such a situation, it might be reasonable to conclude that only a minuscule portion of a work, rather than “a work” was embodied in the buffer. Here, however, where every second of an entire work is placed, one second at a time, in the buffer, we conclude that the work is embodied in the buffer.” •

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Is this consistent with the Warner and Football Association cases?

Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) The Transitory Duration Requirement “Does any such embodiment last “for a period of more than transitory duration”? No bit of data remains in any buffer for more than a fleeting 1.2 seconds. And unlike the data in cases like MAI Systems, which remained embodied in the computer’s RAM memory until the user turned the computer off, each bit of data here is rapidly and automatically overwritten as soon as it is processed. While our inquiry is necessarily fact-specific, and other factors not present here may alter the duration analysis significantly, these facts strongly suggest that the works in this case are embodied in the buffer for only a “transitory” period, thus failing the duration requirement.”

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Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) Who Is Liable for Creating Playback Copies? “When there is a dispute as to the author of an allegedly infringing instance of reproduction, Netcom and its progeny direct our attention to the volitional conduct that causes the copy to be made. There are only two instances of volitional conduct in this case: Cablevision’s conduct in designing, housing, and maintaining a system that exists only to produce a copy, and a customer’s conduct in ordering that system to produce a copy of a specific program. In the case of a VCR, it seems clear–and we know of no case holding otherwise–that the operator of the VCR, the person who actually presses the button to make the recording, supplies the necessary element of volition, not the person who manufactures, maintains, or, if distinct from the operator, owns the machine. We do not believe that an RS-DVR customer is sufficiently distinguishable from a VCR user to impose liability as a direct infringer on a different party for copies that are made automatically upon that customer’s command.” “Here, by selling access to a system that automatically produces copies on command, Cablevision more closely resembles a store proprietor who charges customers to use a photocopier on his premises, and it seems incorrect to say, without more, that such a proprietor “makes” any copies when his machines are actually operated by his customers. See Netcom, 907 F. Supp. at 1369.” (Emphasis added) 21

Twentieth Century Fox Film Corp. v. Cablevision Systems Corp., 536 F.3d. 121 (2nd. Cir. 2008) Transmission of RS-DVR Playback –Is it “to the public”? “In sum, none of the arguments advanced by plaintiffs or the district court alters our conclusion that, under the transmit clause, we must examine the potential audience of a given transmission by an alleged infringer to determine whether that transmission is “to the public.” And because the RSDVR system, as designed, only makes transmissions to one subscriber using a copy made by that subscriber, we believe that the universe of people capable of receiving an RS-DVR transmission is the single subscriber whose self-made copy is used to create that transmission.” “…it seems quite consistent with the Act to treat a transmission made using Copy A as distinct from one made using Copy B, just as we would treat a transmission made by Cablevision as distinct from an otherwise identical transmission made by Comcast. Both factors–the identity of the transmitter and the source material of the transmission–limit the potential audience of a transmission in this case and are therefore germane in determining whether that transmission is made ‘to the public.’” • 22

Will cert be granted?

Capitol Records v. Thomas, 579 F.Supp.2d 1210 (D. Minn. Nov. 2008) Does making available a file over a P2P network constitute a “distribution” under the U.S. Copyright Act? “The Copyright Act provides that “the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: . . . (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(3). The Act does not define the term ‘distribute.’” “The Court’s examination of the use of the term “distribution” in other provisions of the Copyright Act, as well as the evolution of liability for offers to sell in the analogous Patent Act, lead to the conclusion that the plain meaning of the term “distribution” does not including making available and, instead, requires actual dissemination.” •

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Is the decision correct?

Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) Whether terms of use in the Artistic Open Source license are mere covenants for which a violation is breach of contract or conditions for which a violation is copyright infringement. Jacobsen had developed model railroad design software. He made it available for public download free of charge, under the "Artistic License“. The licence permits users to copy, modify or distribute the licensed content provided that they restate the attribution information found in the software, repeat all copyright notices and document any modifications made to the software from its original form. Jacobsen alleged that Katzer downloaded his code, included it in his competing software program and failed to comply with the terms of the Artistic License. He sued Katzer for copyright infringement and sought a preliminary injunction.

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Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) The Benefits of Open Source Licensing “Traditionally, copyright owners sold their copyrighted material in exchange for money. The lack of money changing hands in open source licensing should not be presumed to mean that there is no economic consideration, however. There are substantial benefits, including economic benefits, to the creation and distribution of copyrighted works under public licenses that range far beyond traditional license royalties. For example, program creators may generate market share for their programs by providing certain components free of charge. Similarly, a programmer or company may increase its national or international reputation by incubating open source projects. Improvement to a product can come rapidly and free of charge from an expert not even known to the copyright holder. The Eleventh Circuit has recognized the economic motives inherent in public licenses, even where profit is not immediate. See Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1200 (11th Cir. 2001) (Program creator Aderived value from the distribution [under a public license] because he was able to improve his Software based on suggestions sent by end-users.”

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Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) Open Source Licensing is Popular “Open source licensing has become a widely used method of creative collaboration that serves to advance the arts and sciences in a manner and at a pace that few could have imagined just a few decades ago. For example, the Massachusetts Institute of Technology (AMIT@) uses a Creative Commons public license for an OpenCourseWare project that licenses all 1800 MIT courses. Other public licenses support the GNU/Linux operating system, the Perl programming language, the Apache web server programs, the Firefox web browser, and a collaborative web-based encyclopedia called Wikipedia. Creative Commons notes that, by some estimates, there are close to 100,000,000 works licensed under various Creative Commons licenses. The Wikimedia Foundation, another of the amici curiae, estimates that the Wikipedia website has more than 75,000 active contributors working on some 9,000,000 articles in more than 250 languages.”

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Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) The Artistic License grants users the right to copy, modify, and distribute the software provided that [the user] insert a prominent notice in each changed file stating how and when [the user] changed that file, and provided that [the user] do at least ONE of the following:

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place [the user’s] modifications in the Public Domain or otherwise make them Freely Available, such as by posting said modifications to Usenet or an equivalent medium, or placing the modifications on a major archive site such as ftp.uu.net, or by allowing the Copyright Holder to include [the user=s] modifications in the Standard Version of the Package.

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use the modified Package only within [the user=s] corporation or organization.

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rename any non-standard executables so the names do not conflict with the standard executables, which must also be provided, and provide a separate manual page for each nonstandard executable that clearly documents how it differs from the Standard Version, or

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make other distribution arrangements with the Copyright Holder.

Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) “The Artistic License states on its face that the document creates conditions: “The intent of this document is to state the conditions under which a Package may be copied.” The Artistic License also uses the traditional language of conditions by noting that the rights to copy, modify, and distribute are granted “provided that” the conditions are met.” “The clear language of the Artistic License creates conditions to protect the economic rights at issue in the granting of a public license. These conditions govern the rights to modify and distribute the computer programs and files included in the downloadable software package. The attribution and modification transparency requirements directly serve to drive traffic to the open source incubation page and to inform downstream users of the project, which is a significant economic goal of the copyright holder that the law will enforce. Through this controlled spread of information, the copyright holder gains creative collaborators to the open source project; by requiring that changes made by downstream users be visible to the copyright holder and others, the copyright holder learns about the uses for his software and gains others’ knowledge that can be used to advance future software releases.”

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Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) “Copyright holders who engage in open source licensing have the right to control the modification and distribution of copyrighted material. As the Second Circuit explained in Gilliam v. ABC, 538 F.2d 14, 21 (2d Cir. 1976), the “unauthorized editing of the underlying work, if proven, would constitute an infringement of the copyright in that work similar to any other use of a work that exceeded the license granted by the proprietor of the copyright.” Copyright licenses are designed to support the right to exclude; money damages alone do not support or enforce that right. The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes, rather than as a dollar-denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief.”

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Jacobsen v. Katzer 535 F.3d 1373 (Fed. Cir. 2008) Test for Preliminary Injunction “In determining whether to issue a preliminary injunction, the Ninth Circuit requires demonstration of (1) a combination of probability of success on the merits and the possibility of irreparable harm; or (2) serious questions going to the merits where the balance of hardships tips sharply in the moving party”s favor. Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 713-14 (9th Cir. 2007) … In cases involving copyright claims, where a copyright holder has shown likelihood of success on the merits of a copyright infringement claim, the Ninth Circuit has held that irreparable harm is presumed… But see MGM Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1212 (C.D. Cal. 2007) (noting that “the longstanding rule that irreparable harm can be a presumed after a showing of likelihood of success for purposes of a copyright preliminary injunction motion may itself have to be reevaluated in light of eBay [Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)]”). Thus, for a preliminary injunction to issue, Jacobsen must either show (1) a likelihood of success on the merits of his copyright infringement claim from which irreparable harm is presumed; or (2) a fair chance of success on the merits and a clear disparity in the relative hardships that tips sharply in his favor.” 30

Nine Network Australia Pty Ltd v. IceTV Pty Ltd. [2007] FCA 1172 The main issue in the appeal is whether the primary Judge correctly rejected the claim by the appellant (‘Nine’) that the respondents (‘Ice’) had infringed Nine’s copyright in its television program schedules, the ‘Weekly Schedules’ in producing its subscription-based ‘electronic program guide’ (‘EPG’) for television called ‘IceGuide’.

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“The time and title information incorporated into the Weekly Schedules reflected a great deal of skill and labour... Ice, to the extent it reproduced time and title information from the Weekly Schedules, appropriated the skill and labour used by Nine to create the Weekly Schedules. Contrary to her Honour’s conclusion, the skill and labour in selecting and arranging programming should not be regarded as separate and discrete from the extremely modest skill and labour involved in setting down on paper the programs already selected and presenting them in the form of the Weekly Schedules. The skill and labour expended by Nine were part of a single process leading to the creation of the copyright work as the written record of Nine’s programming decisions and the associated program information.”

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What will the High Court of Australia do on appeal?

Football Association Premier League Ltd v. QC Leisure Ltd. [2008] EWHC 1411 (Ch) •

These actions concern the use of foreign decoder cards in the UK to access foreign transmissions of live Premier League football matches.

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The claimants complain that the dealing in and use of such cards in the UK involves an infringement of their rights under s.298 of the UK CDPA and of the copyrights in various artistic and musical works, films and sound recordings embodied in the Premier League match coverage.

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Two of the actions are brought against suppliers of equipment and satellite decoder cards to pubs and bars, which enable the reception of non-Sky satellite channels (including NOVA or ART channels) that carry live Premier League matches.

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The third action (the Madden action) is against licensees or operators of four pubs that have shown live Premier League matches broadcast on ART channels. The claims contend the Madden defendants have infringed their copyrights by

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creating buffer copies of the works in the internal operation of the satellite decoder

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by displaying the works on screen

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by communicating the works to the public in pubs

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by authorising pubs (the Madden defendants) and users to whom they have supplied decoder cards.

Football Association Premier League Ltd v. QC Leisure Ltd. [2008] EWHC 1411 (Ch) Creating copies of the works in the internal operation of the satellite decoder “It is clear that fragments of the various film works, the musical work and the sound recording are stored sequentially in the decoder. The question is whether such fragments individually amount to a substantial part of the copyright work and, if not, whether they should be considered collectively.” “This dispute gives rise to two questions which are, at least to some extent, interlinked: first, does a fragment consisting of four frames of a video stream amount to a substantial part? Second, in considering whether a substantial part has been copied, does one consider whether the material in existence at any one point in time is a substantial part, or does one consider the whole volume of material which is progressively created and then destroyed?” “As to the first question, I have reached the conclusion that four frames do not constitute a substantial part of the film works. They occupy a fraction of a second and there is no suggestion that they have any inherent value other than as part of the whole.” “This brings me to the next question which is whether it is appropriate to consider the fragments on a cumulative or rolling basis... In my judgment it is simply not possible to fit such a situation into the language of the statute. It is a restricted act to make a transient copy of a substantial part of the work. In other words, the substantial part must be embodied in the transient copy, not a series of different transient copies which are stored one after the other in the decoder box.” (Emphasis added)

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Football Association Premier League Ltd v. QC Leisure Ltd. [2008] EWHC 1411 (Ch) Infringement by displaying works on a screen “I have to say that I entertain some doubt as to whether those who framed the CDPA ever contemplated that displaying an image on a television screen amounts to copying... However... despite my reservations, I have reached the conclusion that it is indeed this broad... I am confirmed in this view by the decision of Aldous J in Bookmakers Afternoon Greyhound Services v Wilf Gilbert (Staffordshire) Ltd [1994] FSR 723... which, like the CDPA, restricted "reproducing the work in any material form". Aldous J held that the defendants infringed the copyright subsisting in race cards by showing them on television monitors in their shops. This, he found, involved reproducing them in a material form. In my judgment the position under the CDPA is no different... As to whether the whole or a substantial part of the film works are reproduced, the claimants’ position is no stronger than for the decoder.” “But the position in relation to the artistic works (the various graphics, devices and logos) is different. I accept that these are reproduced in full within one frame of the broadcast signal in the decoder and as seen on the television.” 34

Football Association Premier League Ltd v. QC Leisure Ltd. [2008] EWHC 1411 (Ch) Infringement by communicating matches to the public in pubs. “The claimants... submit the publicans are communicating the copyright works to the public in two ways: rebroadcasting from the pub's satellite dish to the public bar area and by displaying the visual works on the pub's television screens and the playing of the audio works through the television's speakers.” “Have the publicans communicated the copyright works to members of the public not present at the origin of those communications? They have plainly displayed them and played them to members of the public...The audience is far wider than the publicans and their families. But it is my provisional view they have not communicated them to the public within the meaning of Article 3. There has been no retransmission by the publicans whether by wire or otherwise. They have simply received the signal, decoded it and displayed it on a television. The only acts of communication to the public have been those of the FAPL, NOVA and ART. In short, there has been no act of communication to the public within the Directive separate from the satellite broadcast itself.” •

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Decision shows difference between perform in public and communicate to the public rights.

Football Association Premier League Ltd v. QC Leisure Ltd. [2008] EWHC 1411 (Ch) Infringement by authorising pubs (the Madden defendants) and users to whom they have supplied decoder cards. “This is an important aspect of the copyright claim. It is contended that QC and AV have infringed FAPL's copyrights by authorising the infringing acts of their customers, including those of the Madden defendants. Authorisation is a primary infringement under s.16(2) of the CDPA. “In my judgment decoder cards are quite different to the twin-tape recorders the subject of the Amstrad decision. Those recorders might or might not be used to perform the allegedly infringing activities and there was nothing inherent in the sale which suggested that Amstrad had the authority to allow those activities to be carried out. By contrast, a decoder card is the key which allows the viewer to watch encrypted programming. It has one purpose only, which is to permit him access to what he would otherwise be denied. In this sense it is an authorisation in physical form. Absent a statement or some other indication to the contrary, the supply of decoder cards to customers therefore constitutes authorisation to use the decoder cards for the purpose for which they were supplied. In the case of publicans, they were supplied to allow customers to watch the television programming in the pubs. I therefore conclude that QC and AV have authorised any infringing acts of the Madden defendants and other members of the public to whom they have supplied the NOVA and ART cards.” (Emphasis Added.) 36

Lucasfilm Ltd. v. Ainsworth. [2008] EWHC 1878 (Ch.) •

This was an action for infringement of copyright related to replicas of helmets and armour of characters in Star Wars film.

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The defendant had created the prototypes and moulds for these items. He then used the original moulds and sold replicas over the Internet. He was sued by Lucas in the U.S. Who obtained a copyright infringement judgement.

Case in the U.K. involved:

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Could the U.S. Judgement be enforced in the U.K.

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Was the defendant liable for copyright infringement under U.K. Law

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Was the U.S. Claim for copyright infringement justicible in the U.K. Courts

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Who owns the copyright in designs commissioned for manufacturing purposes in the absence of a written agreement

Lucasfilm Ltd. v. Ainsworth. [2008] EWHC 1878 (Ch.) Could the U.S. Judgement be enforced in the U.K. “A proper application of Cape as it stands therefore means that neither Mr Ainsworth nor his company was sufficiently present in the United States at the date of the commencement (or service) of the US proceedings (or at any time) to allow the US judgment to be enforced here. But it remains to be considered whether it is now necessary or appropriate to extend Cape to apply to cases such as the present, of which there must be many in the light of the explosion of internet trading in the years since Cape… The first reason is that Cape is clear authority for requiring a relevant degree of literal and physical presence, and it is binding on me… Second, modern methods of internet trading do not seem to me inevitably to require a change in the law in this area anyway. The Cape principles were established at a time when trade between countries could take place by telephone, letter and telex. It was not sufficient to establish the enforceability of a foreign judgment that there be trading into that foreign country by those means, no matter how extensive the trading. Internet trading is not materially different for these purposes. It just makes the establishing of contracts easier – advertising is easier, placing an order is easier and quicker, and payment is more easily (and usually more quickly) achieved. It does not make the seller more present in the buyer's country. If Mr Ainsworth were present in the US by means of his internet trading, why is he not present in every country into which he sells goods by means of an internet deal? That would be a very far-reaching conclusion, and one which would not be justified by any underlying principle, or at least not by any principle underpinning Cape.” •

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What would be the result in Canada under Pro-Swing?

Lucasfilm Ltd. v. Ainsworth. [2008] EWHC 1878 (Ch.) Was the defendant liable for copyright infringement under U.K. law Neither the helmets nor the armour were scultpures or works of artistic craftmanship. “First, the original Stormtrooper helmet... It was a mixture of costume and prop. But its primary function is utilitarian. While it was intended to express something, that was for utilitarian purposes... it was not conceived, or created, with the intention that it should do so other than as part of character portrayal in the film.... It is not that it lacks artistic merit; it lacks artistic purpose.” “I do not consider that they are works of artistic craftsmanship... Their purpose was not to appeal to the aesthetic at all. It was to give a particular impression in a film...It was no part of their purpose that it should in any way appeal as a piece of art; or that it should be admired for any aspect of its appearance as such; or that it should do anything more than what was necessary to give the correct impression of the character inside (and perhaps an environment) when used in a film (with all the assistance that the techniques of filming can to do to enhance an impression...Unlike a work of artistic craftsmanship, they were not intended to sustain close scrutiny.”

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Lucasfilm Ltd. v. Ainsworth. [2008] EWHC 1878 (Ch.) Was the U.S. Claim for copyright infringement justicible in the U.K. Courts “an English court can, and in an appropriate case should, determine at least questions of infringement of foreign copyright cases. Those cases will include cases where subsistence is not in issue. I would not, however, hold that questions of subsistence can never be decided here. In land cases incidental questions of title can apparently now be considered. I can see no reason why the same should not apply to copyright.” “at least so far as copyright is concerned, the whole of a foreign copyright claim, no matter how fundamental the points, might be capable of being litigated here.” •

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What would the result be in Canada? See Rim v. Atari.

Lucasfilm Ltd. v. Ainsworth. [2008] EWHC 1878 (Ch.) Who owns the copyright in commissioned designs “Where the outside draftsman was merely commissioned to produce engineering or production drawings from rough sketches supplied by the manufacturer the case for saying that the manufacturer is the owner in equity is very strong indeed. The principle in operation in all these cases is that both parties intended that the manufacturer or commissioner should have the rights necessary for him to protect the property he has purchased and the enterprise for which the drawings were intended to be used. Where that is the case, the law will consider the commissioner to be entitled to the copyright in equity, and the author to be under an obligation to assign it.” “Mr Ainsworth was working to render into 3D form the copyright designs of others... He must have known that the client would expect full exploitation rights in the future for the purposes of its dramatic offering and cannot realistically have expected to have retained any for himself. If the officious bystander had asked the required question (suggesting that Lucas would have all the rights and that Mr Ainsworth would not be entitled to exploit them without Lucas's licence) then the required testy suppression would have been forthcoming. I think that this is a classic case for saying that there is an implication that the commissioner would have the copyright in the helmet (if any).” 41

SABAM v. SA Scarlet (Tiscali). No. 07/15472/A (Court of First Instance of Brussels), Oct. 22, 2008

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ISP Scarlet ordered to block infringing p2p transmissions of users through it networks.

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Scarlet asked that the decision be rescinded because blocking or filtering for infringing p2p files was not possible.

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The court held that Scarlet had not established that blocking or filtering of infringing files was not possible. An expert had identified 6 possible methods of blocking files. Scarlett was given 6 months to implement a solution or pay daily damages to SABEM.

Copyright Reform

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What is Bill C-61? Bill C-61 aimed to:

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Amend the Copyright Act in order to implement the World Intellectual Property Organization Copyright Treaty (WCT) and Performances and Phonograms Treaty (WPPT)

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Create exceptions for certain uses of copyright material for private purposes

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Create exceptions for Internet Service Providers (ISPs)

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Permit certain uses for educational and research purposes of Internet and other digital technologies, and

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Change for photographers.

Safe Harbors for ISPs Bill C-61 would have introduced four safe harbors for ISPs:

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A network services exception, intended to provide protection to intermediaries who act as conduits in relation to the Internet.

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A caching exception, which includes the act of caching where necessary to make a telecommunication more efficient.

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A hosting services exception, intended to provide an exception for providers of hosting services.

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An exception for information location tools intended to provide the operators of search engines with immunity against any remedy other than injunctions.

Consumer Exceptions Bill C-61 would have established three new exceptions to copyright infringement related to private, non-commercial uses: 1. Time shifting, which allows individuals to fix a communication signal or reproduce a work that is being broadcast in order to record a program for the purpose of watching it later. 2. Format shifting, which would permit an individual to reproduce a work onto another medium or device. 3. A special format shifting exception only for music. Bill C-61 would also have substantially reduced the potential liability of individuals who infringe copyright for private, non-commercial purposes. 46

Education and Photography Provisions

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Bill C-61 would have allowed educational institutions to make copies of copyrighted material for distance education for students

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The provisions would also allow educational institutions to copy or perform publicly available material (PAM) found on the Internet.

Bill C-61 would have repealed s.13(2) of the Copyright Act, which made a person who commissions a portrait, photograph or engraving the first owner of the copyright.

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