Dan Ciraco, Jason Kee, Samantha McWilliams and Bob Tarantino

The Entertainment, Media & Communications Section is excited to announce the launch of the OBA Entertainment, Media and Communications Section Newsletter – Journal Edition (“Journal”). The Journal will provide Section members, their clients and the academic community with substantive scholarly work exploring legal aspects of the entertainment, media and communications industries.

The Journal is seeking members of the entertainment, media and communications bar to participate on the Journal’s Peer Review Board. Submissions indicating interest must be submitted to emcjournal@oba.org on or before February 22, 2010.

The Journal is also accepting submissions for publication in the Journal. Completed submissions must be submitted to emcjournal@oba.org on or before June 10, 2010. Articles will not be accepted past this date.

Andrew Bernstein and Jennifer Conroy

The Supreme Court of Canada has significantly changed the law of defamation in a way that may significantly enhance freedom of expression. In the companion cases of Grant v. Torstar Corp., 2009 SCC 61 and Quan v. Cusson, 2009 SCC 62, released on December 22, 2009, the Supreme Court of Canada has affirmed a new defence to a charge of defamation where the defendant communicated responsibly on a matter of public interest. The Court’s decision reflects a recalibration of defamation law towards freedom of expression. However, the extent to which the recalibrated law will lead to different outcomes remains to be seen.

Monique Lafontaine and Rochelle Graub

On 4 November 2009, the Canadian Radio-television and Telecommunications commission (“CRTC” or “Commission”) issued a decision which found that Globalive Wireless Management Corp. (“Globalive”) had not met the requirements of the ownership and control regime under the Canadian Telecommunications Act. The Commission, therefore, found that Globalive was not eligible to operate as a Canadian telecommunications common carrier. On 9 December 2009, exactly five weeks after the CRTC had released its decision on Globalive, the Privy Council varied the Commission’s decision by its own motion. As discussed below, the Privy Council found that Globalive met the Canadian ownership and control requirements based on its analysis of the facts.

Bob Tarantino

The courts of Québec continue to be a locus for the ongoing process of clarifying the nature and extent of copyright protection available for “concepts” and “formats” intended for exploitation as films or television shows. Two recent cases, discussed in more detail in this article, have made clear that concepts/formats which are given expression only as mere “outlines” are not sufficiently “original” to warrant copyright protection – but where copyright protection does subsist in a format or proposal, damages for infringement thereof can be substantial.

Dr. David Ellis and Devin Harris

Many Canadian policymakers and industry interests harbor deeply rooted misconceptions about the Internet and how it is used by the online population. These misconceptions have encouraged calls to transform the Internet into a permission-based platform optimized for showcasing Canadian content - a goal that runs completely contrary to the spirit of openness and innovation that characterizes the global public Internet. The implications of this conflict are explored in the context of the CRTC’s 2009 decision on new media broadcasting and its unprecedented call for a national digital strategy.

Barry Sookman

Barry Sookman criticizes Professor Michael Geist’s opinions on the recording industry and the Chet Baker suit.

Editor:
Dan Ciraco

Dan Ciraco, Jason Kee, Samantha McWilliams and Bob Tarantino*

The Entertainment, Media & Communications Section is excited to announce the launch of the OBA Entertainment, Media and Communications Section Newsletter – Journal Edition (“Journal”).

Our goal in producing the Journal is to provide Section members, their clients and the academic community with substantive scholarly work exploring legal aspects of the entertainment, media and communications industries. The Journal, which will be circulated electronically as the fourth regularly-scheduled OBA – EMC Newsletter, is scheduled for publication in August 2010. 

Call for Peer Review Board

The Journal is seeking between four and six members of the entertainment, media and communications bar to participate on the Journal’s Peer Review Board, with the aim that the aggregate review team will include individuals with a background in each of the three primary practice areas (i.e. entertainment, media and communications) that the Journal will cover. It is not, of course, necessary for any individual reviewer to possess a background in all three areas. A full description of Peer Review Board responsibilities is available below.

Submissions indicating interest must be returned to emcjournal@oba.org on or before February 22, 2010. Submissions should include the following:

Name:
Telephone Number:
Year of Call:
Practice area(s):
Relevant experience:

Decisions will be made by February 28, 2010.

Peer Review Board Responsibilities

The primary responsibility of Peer Review Board members is to review manuscripts submitted to the Journal with the goal of advising the editors, made up of Dan Ciraco, Samantha McWilliams, Jason Kee and Bob Tarantino (“Editors”) whether a particular manuscript is “recommended” or “not recommended” for inclusion in the Journal. The final decision regarding inclusion will lie with the Editors.

The Editors will provide Members with manuscripts for review. Reviewers are expected to make a recommendation to the Editors within one week of their receipt of the manuscript. A reviewer will not be provided with more than three submissions simultaneously.

In reviewing manuscripts, Peer Review Board members should assess the manuscript for the following characteristics:

• Suitability – does the manuscript fit within the Journal’s mandate of providing readers with academic legal articles relating to the fields of entertainment, media and communications law?

• Novelty of contribution – does the manuscript offer readers new information, or existing information which has been synthesized in a new way, or is it merely reiterating information which is already found in another format or venue without making that information more accessible?

• Readability – does the writing style of the manuscript lend itself to ease of comprehension or is it unnecessarily verbose, dull or unintelligible?

• Insight – does the manuscript offer readers an in-depth analysis (and potential solution) of a problem or issue or is it a surface-level overview which raises more questions than answers?

• Accuracy – are the legal information and conclusions drawn in the manuscript accurate?

• Timeliness – are the issues or problems discussed in the manuscript of contemporary (or future) relevance, or does it describe issues which are of largely historical interest?

For the peer review system to work, the Editors need to collaborate with Peer Reviewers who have sufficient expertise and experience, and who are prepared to devote sufficient time and take responsibility for contributing to the key decision of what material will be published in the Journal.

Peer Reviewers should inform Editors of any conflicts of interest (such as a personal relationship with the author of the manuscript) and return the manuscript to the Editors for re-allocation to another reviewer.

Call For Submissions

To be considered for our first issue, completed submissions must be sent on or before June 10, 2010. Late articles will not be accepted. It would also be greatly appreciated if prospective authors could provide the Editors with an indication of interest (including the subject-matter of the proposed article) prior to submission, but doing so is not required.

All submissions must be sent as an attached Microsoft Word document via email to emcjournal@oba.org. Further details regarding submissions are set out below. Also, please feel free to contact the Editors at the above-noted email address regarding any questions you may have concerning citation format, topic, or other issues involving the submissions process. Submissions are welcomed from any interested person, including practitioners, scholars and students - if you know of someone whose work seems appropriate for the Journal, please encourage them to submit their work.

We look forward to receiving your submissions!

The Editors of the Journal welcome the submission of unsolicited manuscripts in the form of full-length articles and case comments on important topics in entertainment, media and communications law.

Types of Submissions Accepted

Submissions will be accepted on any aspect of entertainment, media and communications law. Submissions must deal with novel issues and may not be substantively similar to articles published elsewhere. Manuscripts will be reviewed for subject-matter suitability, novelty of contribution, readability, insight, accuracy and timeliness.

Format Required

Articles submitted for consideration should be between 7,500 and 17,500 words. All submissions should include the author’s complete contact information and footnotes should comply with Canadian Guide to Uniform Legal Citation (6th Ed.).

How to Submit

Articles must be submitted via e-mail to emcjournal@oba.org, and should be attached as a Microsoft Word document, double-spaced and with footnotes (not endnotes).

*Dan Ciraco, Samantha McWilliams, Jason J. Kee and Bob Tarantino are the editors of OBA Entertainment, Media and Communications Journal. Dan is Legal Counsel at the Canadian Broadcasting Corporation. He can be reached at Dan.Ciraco@CBC.ca. Samantha is Legal Counsel at the Canadian Broadcasting Corporation. She can be reached at Samantha.McWilliams@CBC.ca. Jason is the Director of Policy & Legal Affairs at the Entertainment Software Association of Canada. He can be reached at (416) 620-7171 ext 250, and Bob is an entertainment and intellectual property lawyer with Heenan Blaikie. He can be reached at Btarantino@Heenan.ca.

Andrew Bernstein and Jennifer Conroy*

Introduction

The Supreme Court of Canada has significantly changed the law of defamation in a way that may significantly enhance freedom of expression. In the companion cases of Grant v. Torstar Corp., 2009 SCC 61 and Quan v. Cusson, 2009 SCC 62, released on December 22, 2009, the Supreme Court of Canada has affirmed a new defence to a charge of defamation where the defendant communicated responsibly on a matter of public interest. The Court’s decision reflects a recalibration of defamation law towards freedom of expression. However, the extent to which the recalibrated law will lead to different outcomes remains to be seen.

Background – the common law of defamation

At common law, defamation was a strict liability tort. The plaintiff had only to establish that words were published or uttered, that the words identified the plaintiff and had a defamatory meaning. The defendant could defend on the basis that the words uttered were true (justification), uttered on an occasion of privilege (either qualified or absolute), or were comments based on reported and true facts. Historically, the fact that the defendant had not intended to do harm to the plaintiff, or had acted responsibly, was not a defence. This is what the Court changed in the Grant and Cusson cases, which permit a defendant who uttered words in the public interest to avoid liability on the basis that it acted responsibly in the publication of the words.

The Grant and Cusson Cases: Background

The facts in the two cases were very different. Cusson involved an OPP officer who sued the Ottawa Citizen for defamation arising from articles about his going to New York City in the immediate aftermath of September 11, 2001, and (allegedly) claiming to be an RCMP officer who was assigned to assist. The other was a case against the Toronto Star by a high-profile Northern Ontario businessman for articles that questioned the impact of the plaintiff's political connections with the then-conservative Ontario government on an environmental review that the government was conducting on his application to put a private golf course on a lake in northern Ontario.

In both cases, the jury had found that the publications had published incorrect facts, and therefore awarded damages for defamation. In Cusson, the Court of Appeal confirmed the defence of responsible journalism, but held that, since the plaintiff had not argued it at trial, no new trial was warranted. In Grant, the Court of Appeal ordered a new trial. The question for the Supreme Court was whether to affirm the availability of the new defence in law, and also whether a new trial was warranted in either case. It also fell to the Court to flesh out some of the different procedural aspects of how trials should operate in light of the new defence.

The Supreme Court’s Decision

In both decisions, the Supreme Court accepted the argument that it was time for the Canadian common law of defamation to recognize a new defence of "responsible communication" on matters of public interest where the defendant can show that it acted diligently in trying to verify the allegations at issue, having regard to all the relevant circumstances. A few particular aspects of the defence bear mention:

(a) The defence of responsible communication is not the same as the defence of qualified privilege. The defence of qualified privilege is available to a defendant who utters words without malice in circumstances when the defendant had a duty to utter the words and the recipient had a concomitant duty to receive them. While media had made some headway in arguing that their work should be, at least in certain circumstances, protected by qualified privilege, the Court recognized that “[d]espite these tentative forays, the threshold for privilege remains high and the criteria for reciprocal duty and interest required to establish it unclear. It remains uncertain when, if ever, a media outlet can avail itself of the defence of qualified privilege” (Grant, para. 37).

(b) The threshold question is whether the words were published in the public interest. Not every statement published will be entitled to the benefit of the responsible communication defence. It is restricted to those statements published “in the public interest.” The concept of “public interest,” while a long-standing part of defamation law, is notoriously difficult to pin down. By way of demonstration, the following points arise from the Supreme Court’s decision:

The public interest is not synonymous with what interests the public. The public’s appetite for information on a given subject — say, the private lives of well-known people — is not on its own sufficient to render an essentially private matter public for the purposes of defamation law. An individual’s reasonable expectation of privacy must be respected in this determination (Grant, para. 102).

Conversely, the fact that much of the public would be less than riveted by a given subject matter does not remove the subject from the public interest. It is enough that some segment of the community would have a genuine interest in receiving information on the subject (Grant, para. 102).

Public interest is not confined to publications on government and political matters, as it is in Australia and New Zealand. Nor is it necessary that the plaintiff be a “public figure”, as in the American jurisprudence since Sullivan. Both qualifications cast the public interest too narrowly. The public has a genuine stake in knowing about many matters, ranging from science and the arts to the environment, religion, and morality. The democratic interest in such wide-ranging public debate must be reflected in the jurisprudence (Grant, para. 106).

It seems that the Supreme Court is fully capable of explaining what public interest is not (it is not prurient interest) and explaining how it should not be limited (it should not be limited to political matters or public figures), but even the best definition of what this difficult concept is, remains somewhat ambiguous:

To be of public interest, the subject matter “must be shown to be one inviting public attention, or about which the public has some substantial concern because it affects the welfare of citizens, or one to which considerable public notoriety or controversy has attached (Grant, para. 105).”

In Grant, the Court confirmed that this is a question that has to be decided, on a case-by-case basis, by the trial judge and not the jury. 

(c) The explanation for protecting statements made in the public interest is freedom of expression. There is already a defence to defamation for true statements: the defence of justification. So why is a defence needed for false statements? The Supreme Court had already stated in Hill v. Scientology that “defamatory statements are very tenuously related to the core values which underlie s. 2(b).” However, the Court in Grant was careful to limit that case to its unusual facts. Instead, the Court explained its rationale for adopting the responsible communication defence by noting that “[v]erification of the facts and reliability of the sources may lead a publisher to a reasonable certainty of their truth, but that is different from knowing that one will be able to prove their truth in a court of law, perhaps years later. This, in turn, may have a chilling effect on what is published. Information that is reliable and in the public’s interest to know may never see the light of day (Grant, para. 53).” 

(d) To be a valid defence, the communication has to have been responsible. The non-exhaustive factors listed by the Court are:

(a) the seriousness of the allegation;
(b) the public importance of the matter;
(c) the urgency of the matter;
(d) the status and reliability of the source;
(e) whether the plaintiff's side of the story was sought and accurately reported;
(f) whether the inclusion of the defamatory statement was justifiable;
(g) whether the defamatory statement’s public interest lay in the fact that it was made rather than its truth (“reportage”); and
(h) any other relevant circumstances. 

Essentially, the question will be whether the defendant adhered to norms (typically journalistic norms) regarding the accurate gathering of information, and whether it was reasonable or unreasonable to publish it in light of what the defendant did and knew. As the Court correctly pointed out, this is a case-by-case analysis. 

However, one interesting facet of this aspect of the defence is the Court’s decision to leave the question of “responsibility” to the jury rather than have it decided by the trial judge. While the Court relies on the fact that “responsibility” is a question of fact, and that the jury under Ontario’s Libel and Slander Act has a right to give a general verdict, it is the “negligence-like” aspect of the defence that appears to underlie the Court’s decision to leave this issue with the jury. Negligence has always been a question for the jury and the Court saw no need to depart from that in this case.

The media defendants and interveners sought to have this issue determined by the judge, on the basis that it was ultimately a constitutional question of balancing the right to preserve reputation against the right of free expression. While the media had arguably legitimate concerns about a jury’s sense of morality in these circumstances being tilted toward reputation rather than free expression, the Court rejected that argument. It will be interesting to see how this affects the practical application of the defence (if at all – the U.K. experience, where the responsibility question is decided by the judge, is that the defence rarely succeeds).

(e) The defence is not just for journalists. Although the defence that the Supreme Court adopted arises from a U.K. defence called “responsible journalism,” the Court was careful to call the defence “responsible communication”. As the Court pointed out, “the traditional media are rapidly being complemented by new ways of communicating on matters of public interest, many of them online, which do not involve journalists. These new disseminators of news and information should, absent good reasons for exclusion, be subject to the same laws as established media outlets…[T]he new defence is ‘available to anyone who publishes material of public interest in any medium (Grant, para. 96).’” In short, although the question of “reasonableness” might be heavily tilted towards what a reasonable journalist might do, the defence will nonetheless be available to anyone who communicates to the public in any forum on matters of public interest and can demonstrate that they did so responsibly.

Conclusion 

By endorsing these defences, the Court has clearly changed the way in which the court system considers the ever-present interplay between free expression and protection of reputation in the area of defamation law. However, it is worthwhile asking whether the decision will have the effects that the Court predicted. In particular, the Court’s express hope is that the defence will hit the “defrost” button on libel chill, and that matters that previously went unreported because of the difficulty of proving truth in court will now be reported. This is certainly a worthwhile goal, but handing the ultimate disposition of this issue to the jury reintroduces a level of uncertainty into the process. Journalists and editors, as well as their counsel, facing the “publish/no publish” decision might find it difficult to predict what will happen, and default to not publishing, undermining the benefit that the Court sought from its decision. On the other hand, the Grant and Cusson cases are now facing re-trial. If these trials are ultimately resolved in favour of the defendants because of the “responsible communication” defence, we may in fact be facing a new era in Canadian defamation law.

*Andrew Bernstein is a partner and Jennifer Conroy is an associate in the litigation group at Torys LLP. They regularly act for defendants in defamation matters, and (with their colleague Trisha Jackson) acted for the Canadian Civil Liberties Association in the Grant and Cusson cases before the Supreme Court. Andrew can be reached at abernstein@torys.com. Jennifer can be reached at jconroy@torys.com.

Monique Lafontaine* and Rochelle Graub**

A. Introduction

On 4 November 2009, the Canadian Radio-television and Telecommunications Commission (“CRTC” or “Commission”) issued a decision which found that Globalive Wireless Management Corp. (“Globalive”) had not met the requirements of the ownership and control regime under the Canadian Telecommunications Act.¹ The Commission, therefore, found that Globalive was not eligible to operate as a Canadian telecommunications common carrier.² In order to satisfy the ownership and control requirements, an applicant must satisfy both a test for de jure and de facto control by Canadians. In this particular instance, the Commission found that Globalive had met the test for legal control, but had failed to meet the test for control in fact.

On 9 December 2009, exactly five weeks after the CRTC had released its decision on Globalive, the Privy Council varied the Commission’s decision by its own motion.³ As discussed below, the Privy Council found that Globalive met the Canadian ownership and control requirements based on its analysis of the facts. In a statement by Industry Minister Tony Clement released 11 December 2009, Mr. Clement also stated that “[o]ur goal has always been greater competition in the telecommunications industry, which leads to lower prices, better service and more choice for consumers and business.”⁴

B. The Industry Canada Spectrum Auction

The Canadian wireless market is dominated by three major players (these are Bell, Telus and Rogers). In 2007, the Minister of Industry announced the terms of the Advanced Wireless Services (AWS) auction, which was conducted in order to encourage greater competition and choice for Canadians and businesses. The auction also set aside spectrum exclusively for new entrants. Globalive participated in the spectrum auction and successfully bid for 30 AWS spectrum licences at a cost of $442 million. As part of the auction proceedings, successful bidders were required to submit ownership and control documentation to Industry Canada for review, in order to demonstrate compliance with the Canadian ownership and control provisions of the Radiocommunications Act.⁵ Industry Canada determined that Globalive met the requirements for Canadian ownership and control under the Radiocommunications Act. Consequently, Industry Canada granted the company the spectrum licences in March of 2009.

C. The CRTC Processes

In early April 2009, Globalive filed its corporate documents with the Commission to initiate a review to determine whether it was eligible to operate as a telecommunications common carrier. Typically, a foreign ownership and control review would be conducted on a confidential ex parte basis with the telecommunications regulator. However, by mid-April, TELUS Communications Company, which was subsequently supported by Shaw Communications Inc., filed an intervention requesting that the Commission conduct an open and transparent proceeding to review the Globalive application. Their submissions were well received, since the CRTC soon thereafter initiated a public process seeking comments on whether it is appropriate in some instances to conduct Canadian ownership and control reviews under the Telecommunications Act in an open forum, rather than on a confidential basis.⁶

On 20 July 2009, the Commission determined that in certain cases, including those where the review involved complex or novel governance structures or financing arrangements, the public interest might be served by conducting that review via a public, multi-party process with an oral hearing phase.⁷ On the same day, the Commission released the lengthy schedule for the proceeding relating to Globalive’s compliance with the Canadian ownership and control regime, which culminated in an oral public hearing in late September 2009. The Commission received written comments in view of the hearing from Danoush Hooseinzadeh, the Canadian Cable Systems Alliance Inc., Bell Canada, Rogers Communications Inc., Shaw and Telus. Bell Canada, Rogers and Telus were granted permission to participate in the oral phase of the public hearing which took place in September 2009.

D. The Test for Canadian Ownership and Control

(i) Legal control

The test for legal control requires that not less than 80% of the members of the board of directors of the corporation be individual Canadians. It also requires that Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than 80% of the Corporation’s voting shares issued and outstanding.⁸ As stated earlier, the Commission found that Globalive did indeed meet the test for legal control.

(ii) Control in Fact

The Commission considers that the appropriate test for assessing de fact control is set out in the Canadian Airlines decision of 1993.⁹ In that decision, the National Transportation Agency determined the following with respect to control in fact:

…“There is no one standard definition of control in fact but generally, it can be viewed as the ongoing power or ability, whether exercised or not, to determine or decide the strategic decision-making activities of an enterprise. It can also be viewed as the ability to manage and run the day-to-day operations of an enterprise. Minority shareholders and their designated directors normally have the ability to influence a company as do others such as bankers and employees. The influence, which can be exercised either positively or negatively by way of veto rights, needs to be dominant or determining, however, for it to translate into control in fact.

…

In all previous Canadian ownership reviews and enquiries, the Agency has not only looked at individual arrangements between the shareholders and the air carrier to determine where control in fact lies but has also examined all arrangements taken together to make the determination. Individual arrangements between the minority shareholder and the airline can each result in the minority shareholder exerting a degree of influence over the company. Such influence, considered on an individual arrangement basis, may not be determining and may not result in the minority shareholder being able to exert control over the airline. All such influence taken together, however, may result in the minority shareholder being able to exert a degree of influence which translates into control.”

In conducting its control in fact analysis, the Commission found that the following matters raised concerns in the case at hand: (1) corporate governance; (2) shareholder rights; (3) commercial arrangements between Globalive and non-Canadians; and (4) economic participation of Globalive and non-Canadians. In its concluding remarks, the Commission found the factors analyzed in its decision provided Orascom Telecom Holding S.A.E. (“Orascom”), a non-Canadian shareholder, with an avenue for influence over Globalive. Such factors included the composition of the board of directors, the liquidity rights, the services provided to Globalive by Orascom pursuant to a Technical Services Agreement, Globalive’s adoption and use of trademarks belonging to an Orascom affiliate, and the concentration of debt in the hands of Orascom.

Thus, the Commission found that: “while disparate points of influence may not individually result in control, when combined they can translate into the ability to control in fact.” The Commission, therefore, decided that all factors taken together, along with the fact that Orascom provided the majority of Globalive’s debt financing, was evidence of Orascom’s ongoing ability to determine Globalive’s strategic decision-making activities. Hence, the Commission determined that Orascom controlled Globalive in fact. That being the case, Globalive did not meet the requirements set out in Section 16 of the Telecommunications Act and was therefore not eligible to operate as a telecommunications carrier.

E. The Reversal of Globalive’s Fortunes

While many expected this to be the end of the road for Globalive’s entry into the Canadian wireless market, the Governor-in-Council took a different view. The Governor-in-Council considered that, when possible, the Canadian ownership and control requirements should be applied in support of the Canadian telecommunications policy objectives set out in the Telecommunications Act, including enhancing competition in the telecommunications market. It found that Globalive was not controlled by persons that were not Canadian and, therefore, Globalive did in fact meet the Canadian ownership and control requirements under that Act.

The following sets out the key reasons given by the Governor-in-Council in its decision of 9 December 2009 for determining that Globalive was indeed Canadian owned and controlled:

(1) The Telecommunications Act did not require that a telecommunications common carrier be controlled by Canadians but rather that it not be controlled by persons that are not Canadian. The revised Globalive board structure, including the role and composition of the selection committee, ensured that the nominees of Orascom were insufficient in number to control the strategic or operational decisions of Globalive. The board members nominated by the Canadian shareholder and the independent directors were sufficient to offset the influence of Orascom.

(2) With regard to liquidity of the company, while the ‘Eligible Purchaser’ definition in the shareholders’ agreement restricted the pool of potential purchasers, this restriction did not provide Orascom with an avenue for influence over the day-to-day operations or strategic decision-making activities of Globalive and was therefore an acceptable means of protecting the remaining shareholders from being forced into a relationship with a competitor.

(3) It was true that Orascom has provided the bulk of Globalive’s current debt which represented the vast majority of Globalive’s total financing. However, the terms and conditions attached to this equity and financing, the fact that Globalive’s efforts to obtain external financing to replace Orascom’s coincided with a major downturn in the credit markets, Orascom’ s indication that it was not interested in remaining Globalive’s major lender, and the expectation that Globalive would be in a position to secure financing from third parties in the future, all led the Governor-in-Council to decide that the debt financing provided by Orascom did not enable it to control in fact either the strategic or operational decisions of Globalive.

The Governor in Council, therefore, considered Globalive to have met the Canadian ownership and control tests, and hence reversed the CRTC’s decision.

F. Conclusion: Globalive launches “WIND Mobile” & Policy Issues Arise

Within five days of the release of the Governor-in-Council’s decision, Globalive was welcoming its first customers under its brand name of “WIND Mobile”. For Canadians looking for greater competition in the wireless market, the entry of a new player is most welcome. However, to those concerned that the Globalive decision has taken the ownership and control rules in an entirely new direction, away from prior notions of what Canadian ownership and control required, this decision comes with potential for major concern.

No matter how it is viewed, the decision regarding Globalive’s entry into the Canadian market, and the overturning by the Privy Council of a CRTC decision, is fascinating, and it will undoubtedly be greatly interesting to see what kind of impact the result will have in the future on the telecommunications - and indeed the broadcasting - landscapes.
 

*Monique Lafontaine, V.P. Regulatory Affairs, S-VOX Group of Companies and **Rochelle Graub, S-VOX Group of Companies

________________

¹ S.C. 1993, c.38.
² See Telecom Decision CRTC 2009-678, 29 October 2009.
³ See Order-in-Council P.C. 2009-2009. See also section 12(1) of the Telecommunications Act, which provides the Privy Council with authority – on its own motion – to order, vary or rescind a CRTC decision, or refer the matter back to the CRTC for reconsideration of all or a portion of a CRTC decision.
⁴ Industry Canada, News Release, “Government of Canada Varies CRTC Decision on Globalive” (11 December 2009); http://www.ic.gc.ca/eic/site/ic1.nsf/eng/05211.html. This statement has, however, raised concerns about whether the rational for overturning the decision was based on an analysis of the facts or for competitive reasons. See for instance, John Geddes, “Clement Elaborates on the Globalive Decision” MacLeans.ca ( 4 January 2010). http://www.2macleans.ca/2010/01/04/clement-elaborates-on-the-globalive-decision/print/.
⁵ R.S.C. 1985, c. R-2.
⁶ Telecommunications Notice of Consultation CRTC 2009-303, 22 May 2009.
⁷ Telecom Regulatory Policy CRTC 2009-428, 20 July 2009.
⁸ Telecommunications Act, section 16(3).
⁹ National Transportation Agency Decision No. 297-A1993, 27 May 1993.
 

Bob Tarantino*

Introduction

The courts of Québec continue to be a locus for the ongoing process of clarifying the nature and extent of copyright protection available for “concepts” and “formats” intended for exploitation as films or television shows. Two recent cases, discussed in more detail in this article, have made clear that concepts/formats which are given expression only as mere “outlines” are not sufficiently “original” to warrant copyright protection – but where copyright protection does subsist in a format or proposal, damages for infringement thereof can be substantial.

The issue of copyright protection for concepts and formats is of both practical and doctrinal interest. The practical interest arises because “concepts” (understood loosely to mean germinal proposals for audio-visual works) are the predicate form of all entertainment products (all movies and shows started off as proposals) and formats can be immensely valuable (consider the value of game show formats or the Pop Idol franchise of shows). The doctrinal interest arises because concepts and formats tend to exist at the very margins of protectability and because they involve crossing various media of expression. Those factors arise because concepts and formats can consist of very short written “outlines” or descriptions of what is intended to be realized as a fully-produced aural/visual motion picture production.

Relevant Case Law

Before turning to the two recent cases, a brief summary of the applicable case law is warranted (for a more comprehensive discussion, see Bob Tarantino, “I’ve Got This Great Idea for a Show… – Copyright Protection for Television Show and Motion Picture Concepts and Proposals” 17 IPJ 189 (2004) [Tarantino]). In Hutton v. CBC ((1989), 29 CPR (3d) 398 (Alta QB), aff’d (1992), 41 CPR (3d) 45 (Alta. CA)), the Alberta Court of Appeal confirmed that copyright could subsist in a television show format, though it held that the defendant’s music video show “Good Rockin’ Tonite” had not in fact infringed the plaintiff’s copyright in the show “Star Chart”. In determining whether infringement had occurred, the court undertook a holistic quantitative and qualitative analysis of the two shows, tabulating the number of similarities (such as the presence of a host and the “countdown” of hit music videos) and dissimilarities (such as the conceit of a computerized “Music Central” in “Star Chart”) between different “elements” of the shows, while also looking at less tangible matters such as the “character” of the shows. The analysis also involved recognizing, but discounting as unprotected, certain facets of the shows, such as the mannerisms and wardrobe of the host, and certain “stock in trade” camera shots and effects. Once the court had identified the protectable elements of the two shows, it compared them and found that there were insufficient similarities between them to ground a finding of infringement – in copyright parlance, there had not been the required copying of a substantial part of an original work (in part because the elements which were duplicative (such as the host and the countdown) were not original works for which copyright protection could be claimed). In effect, the court performed a version of the “abstraction-filtration-comparison” test found in the seminal US software infringement case of Computer Associates International, Inc. v Altai Inc. (23 USPQ2d 1241 (US 2nd Cir NY, 1992)).

A similar analytical approach, and a similar conclusion, occurred in the case of Arbique v. Gabriele ([1998] AQ No. 3794 (Que. SC), aff’d [2003] JQ No. 85 (Que. CA)), which concerned a proposal and a television show which allegedly infringed the copyright in the proposal, both of which focused on the re-enactment of famous court trials. A different Québec Court of Appeal decision, that in Productions Avanti Ciné-Vidéo c. Favreau ((1999) 1 CPR (4th) 129), addressed the issue of what precisely constitutes a “substantial element” of a dramatic or cinematographic work – a critical issue since proposals and formats, in their written form, can constitute “dramatic” works and, in their filmed form, constitute “cinematographic” works. Productions Avanti is authority for the notion that copyright can subsist in the integrated expression of all elements comprising the show, including characters, “costumes and mannerisms … the whole visual aspect of [the plaintiff’s] work… [including] the musical soundtrack, decors, opening presentations … [and] all the quirks of language and characteristic expressions” (Arbique at 146-147). In Productions Avanti the court found that a pornographic spoof of a popular Québec television series had infringed the plaintiff’s copyright in the series.

Taken together, the foregoing three cases stand for the propositions that (a) copyright can subsist in concepts or formats for motion picture and television productions, so long as the elements otherwise required for copyright protection (originality and fixation) are present, and (b) the copying of a “substantial part” necessary for a finding of infringement can occur when something other than a literal reproduction of footage or duplication of scenes and lines of dialogue occurs – that is, replicating the “look and feel” of a concept or format can suffice to constitute infringement. Because copyright can subsist in any mode of fixed expression, and includes the exclusive right to adapt a work from medium to medium, it follows that if the component “elements” of a concept or format are embodied in a written treatment, proposal, screenplay or series bible, then copyright can attach thereto and copying thereof would amount to infringement (see Tarantino at page 212).

Cummings v. Canwest Global Broadcasting

Turning to two recent decisions from Québec, we can see that courts continue to develop the law in this area in a manner consistent with the cases noted above. In Cummings v. Canwest Global Broadcasting Inc. (2005 CanLII 17671 (QC C.S.) [Cummings Trial], aff’d 2007 QCCA 338 (CanLII) [Cummings Appeal]), the plaintiff asserted that the television series “Popstars” infringed copyright in the “guideline” (or written proposal) he had created for a show to be called “Dreams Come True”. The “guideline” (reproduced in the trial decision) is a 389-word document which sets out the “Nature of the Program” (being a “television program consisting of entertainment which can be viewed by the whole family … a good opportunity to present new Canadian talent to the public and, thus, promote it”), as well as, in bullet point outline, the “Objectives” of the proposed program and the necessary “Arrangements” and “Preparations” which would be required to produce the show.

In considering the defendant’s motion to dismiss, the court addressed two matters: first, whether the guideline was the subject of copyright protection at all and, second, assuming the guideline was protected, whether the defendant’s television series was sufficiently similar to the guideline that it constituted copying of a substantial part thereof. In assessing the guideline, the court observed that it contained “precious little useful detail concerning the actual contents and sequencing of the proposed television show … it does not really describe the concept in any meaningful way … [i]t is more a type of “pre-concept” that simply does not set out a sufficiently detailed explanation of anything particularly unique” [Cummings Trial at para. 32]; as a result, the court concluded that “with an eye to the degree of skill, judgment or labour required to produce such a document … Cummings’ concept, as expressed through the Guideline, is not an original work for the purpose of acquiring copyright protection. It is so minimalist and broad-brush … that the Court cannot find that any particular skill or judgment was at work there” [Cummings Trial at para. 38].

In comparing the guideline and the show, the court concluded that any similarities which existed were “of such a generic, commonplace, unimportant nature that it is impossible even to consider” that the show had copied the guideline [Cummings Trial at para. 41]; rather, the court observed, it was “the differences between the two concepts which are striking, and not the similarities” [Cummings Trial at para. 41]. As a result of the findings, the court granted the motion to dismiss, a conclusion confirmed by the Court of Appeal, which emphasized the fact that the guideline did not evidence the “exercise of skill and judgment” [see CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 SCR 339] required to satisfy the originality requirement for copyright protection.

The Cummings decision sends a clear signal that written proposals for film and TV projects require sufficient detail to set forth the “concept” of the show in a manner which details the actual contents and sequencing, i.e., the project as it would be embodied on screen. The Québec Court of Appeal made use of an apt metaphor in describing how the plaintiff’s proposal had fallen short of copyright protection: the guideline was a mere “skeleton”, bereft of “flesh” – and it was that “flesh”, the articulation of additional detail sufficient to give a reader a sense of what the visual production might actually look like, which would have evidenced the exercise of skill and judgment and hence attracted the protection of copyright [Cummings Appeal at para. 11]. Concept and format proposals should be comprehensively detailed and, when possible, accompanied by visual materials (such as drawings of characters, costumes or sets, or vivid descriptions of aural and visual elements such as musical accompaniments or colour schemes to be used) in order to properly document the proposal and to satisfy the requirements for protection.

Robinson c. Films Cinar inc.

Even more recently, in what can be fairly described as an impressively thorough decision (consisting of 1,122 numbered paragraphs occupying 241 pages of a pdf document), the Québec Superior Court held in Robinson c. Films Cinar inc. [2009 QCCS 3793 [Robinson]] that the defendant’s animated television series had infringed copyright in the plaintiff’s proposal [see also Bloom, Sookman, Deutsch and Fong, “Canadian Copyright, Design and Related Legislation and Jurisprudence – 2009”, presented at Law Society of Upper Canada, Intellectual Property – The Year in Review, January 14, 2009, at paras. 3.2, 6.1 and 8.1]. For present purposes, what is of paramount interest in the decision is the level of detail with which the plaintiff imbued his proposal: characters were “fleshed out” with detailed written descriptions of their personalities and motivations, along with sketches of their visual representation and the settings or “environments” in which characters would interact and the scenarios which they would play out were also comprehensively described. The court concluded that the plaintiff’s material had easily met the “originality” bar for copyright protection, and that, when a comparison between the two works was undertaken, that material elements of the plaintiff’s characters and setting had been reproduced without authorization. The court also held that the plaintiff’s moral rights had been infringed due to the lack of on-screen credit accorded to the plaintiff in the defendant’s production. The decision is also notable for the comparatively large value of damages awarded ($400,000 for infringement of moral rights, more than $600,000 for copyright infringement, an accounting of 50% of profits, punitive damages of $1,000,000, and costs of $1,500,000).

Conclusion

As the foregoing cases demonstrate, an abundance of detail when crafting a format or concept is thus critical both doctrinally and practically: detail is necessary in order to qualify for protection, and it also serves to ease the court’s comparative analysis between the two works (as in Robinson, where the decision helpfully displays side-by-side comparisons of drawings from the plaintiff’s proposal and stills from the defendant’s show).

*Bob Tarantino is an entertainment and intellectual property lawyer with Heenan Blaikie. He can be reached at Btarantino@Heenan.ca.

Dr. David Ellis* and Devin Harris**

When the Broadcasting Act received royal assent on February 1st, 1991, the World Wide Web did not exist. Although Tim Berners-Lee had previously developed the requisite software at CERN in Geneva, the Web didn’t go public until August 1991. Yet the first four-machine, peer-to-peer network that eventually became the Internet was operating over two decades earlier, in December 1969 - coincidentally, the year after the 1968 Broadcasting Act was introduced.

The Internet is a disruption, not a replacement

This chronology puzzles many people, because of the widespread - and mistaken - belief that the Internet and the Web are one and the same thing. This misconception, and others, have plunged Canada into a crisis over how to maintain and nurture access to an open, affordable Internet. We characterize this as a crisis for three main reasons.

First, the CRTC’s so-called “new media” proceeding last year showed that the Broadcasting Act is hopelessly outmoded and inadequate as a way to manage the Internet and the universe of digital media. The Commission said as much in their June 4 decision, especially Commissioner Denton in his Concurring Opinion. Commissioner Denton has kindly shared some of his thoughts on the issues addressed here in a series of e-mail exchanges. (They represent his personal opinions only and not those of the Commission or any of his colleagues.)

Second, the Commission is hobbled by the obligation to manage the Internet under a second key piece of enabling legislation, namely the Telecommunications Act, whose core goals are diametrically opposed to those of the Broadcasting Act.

Third, this conflict is compounded by the obligation on the CRTC to administer telecommunications under the 2006 Cabinet Direction on market forces, which we believe has best served the public interest when ignored by the very government that created it (one prominent example is the highly interventionist 40% set-aside for new entrants in the AWS auction).

This overall framework, encompassing “content” under one statute and “carriage” under the other, has created a policy environment we argue is distinctly anti-consumer in the way it has influenced the ISP, BDU and cellular markets, in terms of retail prices, service quality and choice, the state of competition, and the use of tax-based subsidies. Ottawa’s continuing reluctance to modernize this framework is undermining not only consumer welfare but the future of innovation. The Web happens to be the most successful and prominent Internet-based innovation of all time - a global service operating on top of the Internet made possible by the non-proprietary TCP/IP platform. This is the platform which has also given us e-mail, search engines, VOIP, social networks, Wikipedia, grid computing, blogs, video conferencing, distance learning, telemedicine, Mapquest, RSS feeds, BitTorrent, Amazon, YouTube, open government, Google Earth, iTunes and online banking, among hundreds of others.

No permission. Berners-Lee had some initial difficulty selling his insight to others. He therefore decided to undertake much of the work himself. One thing he did not have to do, however, was get anyone’s permission to develop and release his invention. The importance of this fact cannot be over-emphasized. As Commissioner Denton puts it, the concept of permission is significant in understanding the difference between the Internet and traditional media networks:

“I expressed as plainly as I could in my Concurring Opinion that the Broadcasting Act, if applied to the Internet, would establish a regime of communication among people by permission of the State, in the form of licensing and exemption from licensing, to which are always attached conditions as the basis of exemption. We do not communicate to each other by State permission in the normal course of events.”

The encouragement of innovation at the edges of the network, and free access for new services, are hallmarks of the Internet. They are also principal features distinguishing it from the highly centralized, voice-optimized networks operated by the large telecommunications carriers in the developed countries. Innovation is not a hallmark of incumbent carriers. Indeed, AT&T, Bell Canada and other one-time regulated monopolies fought for many years to prevent any innovation or device from being developed for their networks by third parties. It would have been difficult for any carrier to have projected that in less than two decades the number of websites would have risen from one to 200 million.

Sorry, content’s not king around here

We move now to the single most important - and misunderstood - fact about the Internet: it is and always has been a personal communications platform, not a delivery platform for third-party content. The Internet is far more like the PSTN than what professional content creators would like it to be - just another way to deliver content, especially television.

Internet use began entering the mainstream in the mid-1990s; and today about 3 in every 4 North Americans are considered regular Internet users. I’ve been following research on uses of the Internet since the late 1990s. The number one activity continues to be sending and receiving e-mail - a figure that grows in significance when we add other forms of personal messaging, such as IM, chat and communication using social software (like Facebook), platforms increasingly important to teens.

I am the killer-app. According to the Pew Internet and American Life Project, the proportion of adult onliners who use e-mail stands at 89% - just ahead of using search engines; looking for maps, health information and hobby-related information; and conducting product research. The only activity that concerns third-party, “professional” content and that is anywhere near as popular is news - consumed by 72% of onliners. Other research has also confirmed a telling fact about why onliners like broadband. To the chagrin of ISPs, portal operators and other content providers, the appeal of broadband doesn’t lie in the ability to watch video in a way that seems more like TV or going to the movies. There is no single third-party killer app; the broadband killer-app is being able to do whatever I personally want to do on the Internet, only faster and more conveniently.

Supply-side regulation has run its course

The Commission’s approach to the new media proceeding was hemmed in by its mandate under the Broadcasting Act - not to mention the expectations of those who have for many years depended on our broadcasting system to earn a living. In our own written submission to the proceeding, we were critical of the Commission’s decision to exclude both interactive services and user-generated content (UGC) from the scope of the hearings, since these are two major defining characteristics of contemporary Internet culture (the submission can be downloaded from http://www.davidellis.ca).

The framing of “new media” for purposes of the proceeding had several unfortunate side effects. First, certain participants set the precedent for “de-personalizing” the Internet by excluding all e-mail traffic as irrelevant to regulation. Second, the construction of the “regulatory Internet” helped produce a great deal of misinformation in the hearings and press reports. Claims were made that Canadians spend “most” of their time online watching video - claims that went unchallenged and added urgency to the perceived need to regulate. Third, because the proceeding took place under the aegis of the Broadcasting Act, the principle of technological agnosticism held sway, meaning there was a mistaken presumption that the Internet is an economic substitute for Canada’s television networks

One further feature of the hearings was a relentless preoccupation with Canadian content. How much is there online? Is it enough? Can it be measured? Do Canadians need webisodes? The real failing in these discussions was the pretence that Canadian end-users - 20-some million of them - have no say or interest in the matter, and are waiting poised in their armchairs to be sent to a cornucopia of Canadian content.

The neglect of actual user behavior is part and parcel of the wholesale exodus North Americans are making from conventional media, including ad-supported network television. But Canadian media consumers are not simply being neglected. For the 90% or so that receive their TV signals from a BDU, they have also been experiencing an unusually sharp rise in their cable and satellite rates. For the 2002-2008 period, the Commission indicates in its 2009 Monitoring Report (graph, p.29) that BDU rates have been going up at exactly twice the rate of the Consumer Price Index. While Commissioner Denton said he had some concerns about BDU prices, he also said it was difficult to discern how much of the price inflation could be ascribed to “public service obligations and other regulatory objectives.”

The new media decision

The Commission’s findings in the June 4 decision came as something of a surprise (Broadcasting Regulatory Policy CRTC 2009-329). The biggest single surprise was certainly the revelation that the Commission was painfully, if discreetly aware that they were hamstrung by their enabling legislation and unable to make good policy within the framework of the 1991 Act. Their conclusions are among the strongest acknowledgements we’ve ever seen by the regulator that they do not have the tools they need to do their job (para 76):

“While the Commission's focus on broadcasting in new media has been appropriate given its mandate under the Act, it is limited in scope compared to the wide range of issues resulting from developments in the digital age. The Commission recognizes that issues raised in relation to matters of taxation, copyright, privacy, spectrum management, and convergence of broadcasting and telecommunications industries, among others, are all interrelated and warrant a coordinated approach.”

What followed in the decision was even more unexpected. First of all, the Commission gave its explicit endorsement to the idea that the Government of Canada should develop a national digital strategy. Commissioner Denton then added his Concurring Opinion, an eloquent and expert look at many of the technical, economic and social issues behind the dilemmas that faced Denton and his colleagues. I had long been curious about why this was dubbed a “concurring” opinion and how it fit the broader framework of the main decision:

“My colleagues were fully aware and supportive of my views. It was the first concurring opinion published in CRTC history, to my knowledge. I received every institutional support I could have for the expression of those views. Hence it is not a question of me against them, or of the enlightened versus the unenlightened.”

The single greatest disappointment in the wake of the decision was the reaction of the cultural lobbies. Several of them, including ACTRA and the Writers Guild of Canada, expressed bitter disappointment that the Commission had not shown the courage to rescind the New Media Exemption Order and impose Canadian content requirements on entities deemed to be new media “broadcasters.”

Regulating the Internet: take it off the agenda once and for all

As we’ve argued, the Internet is not a closed, proprietary network like Canada’s “single” broadcasting system. It is not a delivery system for professional content, whose users have migrated from their place on the couch as passive TV viewers. And it is not a platform that was ever intended to promote job creation for one small segment of the economy. A huge academic, mainstream and technical literature supports our principal thesis: far more social benefits flow from allowing the Internet to remain open to innovation, free expression and personal communication, than from a regulatory strategy that construes it as just another cultural industry.

We should also be mindful of what happened in the first phase of the Web’s commercialization, from the mid-1990s to the year 2000 - sometimes referred to as Web 1.0. As we noted in our submission:

“The Web 1.0 era was characterized by the belief that the Internet would eventually fulfill its true destiny as a delivery medium for professionally produced content, which would gradually become a substitute for the content distributed by conventional media. ... When the dust from the two-year dot-com meltdown finally settled in late 2002, however, big media woke up to a stunning epiphany: the Internet is an intensely personal medium. That epiphany marked the beginning of the second age of online life - referred to popularly (though not always with the same intent) as ‘Web 2.0.’”

In conclusion, we urge the Commission and its political masters to put the whole matter of regulating Internet content to rest, once and for all. This bold move may precipitate a reconsideration of the statutory framework which, by the Commission’s own account, no longer serves it well as a framework for policymaking. A further benefit from such an initiative would be a re-examination of how the broadband access market is currently functioning - an area where re-regulation and government investment are both badly needed.

*David Ellis teaches Communication Studies at York University and works off campus as a consultant and digital evangelist. David can be reached at david@davidellis.ca. **Devin Harris has worked for two years with David Ellis as a research associate, specializing in telecommunications policy and digital media.

Barry Sookman*

Prof. Geist is no lover of the recording industry. In fact, he uses every opportunity he gets to slag and demonize it. Like a professional propaganda expert, his attacks use exaggeration, misleading information and half truths to achieve his obvious ends.

Prof. Geist went on a cross-country blitz yesterday with his blog, “Canadian Recording Industry Faces $60 Billion Copyright Infringement Lawsuit” and Toronto Star article “Record industry faces liability over `infringement’” over the Chet Baker suit, as if something new has happened with the case. In fact, the case started in August 2008 (not October 2008 as asserted by Prof. Geist). It also hasn’t only been going on “for the past year”, as he claims. Chet Baker isn’t “about to add a new claim to fame”. Despite having started over a year and a half ago, the class action case hasn’t even been certified yet. So why the fervour to publicise the case now? 

Prof. Geist tries to paint the recording industry as blatant copyright infringers, without ever delving into the industry-wide accepted custom for clearing mechanical rights. The pending list system, which has been around for decades, represents an agreed upon industry-wide consensus that songwriters, music publishers (who represent songwriters) and the recording industry use and rely on to ensure that music is released to the market efficiently and the proper copyright owners are compensated.

The mechanical licensing agreement or MLA, defines the respective obligations of music publishers and record labels to identify the proper rights holders and make sure they get paid when music is released in English language Canada (a similar agreement is negotiated with Quebec music publishers). The record labels have specified reporting requirements to provide the necessary data to identify proper rights holders, and the CMRRA and their Quebec equivalent, SODRAC, which act as agents or collectives for the songwriters and publishers, take the information provided by the labels, identify the proper rights holders, issue licenses to the labels, accept payment from the labels, and distribute the royalties to the proper rights holders. 

In many circumstances, rights are directly licensed or pre-cleared so the pending list system never even comes into play.

The pending lists regime is used to help resolve unidentified or unsettled potential claims that are not automatically identified or settled. Songs can end up on the list for many reasons: for example, ownership is still being determined by the CMRRA, ownership is disputed between one or more music publishers or songwriters, the owner can’t be found, a song may be in the public domain, the ownership may be unknown or in dispute. An individual song may contain numerous samples or snippets of other songs, and sorting out ownership can take years in some cases.

The money earmarked to be paid to someone is set aside in a “pending list”. The money is reserved pending the identification of the unidentified writers. In the meantime, all rights holders, including songwriters and music publishers, want to get the music out to consumers and earning royalties. As soon as owners are identified, or claims resolved, the publisher gets paid and the claim is removed. 

The pending lists system represents a remarkable degree of flexibility on the part of all music industry stakeholders, who, in the interests of getting music to consumers quickly, permit the reproduction of music in return for a pre-agreed compensation when proof of entitlement is made. This internationally accepted practice benefits musicians, labels, songwriters, publishers, retailers, radio stations and consumers.

In his blog, Prof. Geist claimed that the Canadian recording industry has a potential liability that “exceeds $60 billion”. Of course, nothing could be further from the truth.

The MLA – the industry wide agreement between music publishers and the record labels — values the publishers’ and songwriters’ rights in sound recordings. It is such a well established rate that the Copyright Board uses it as a proxy in fixing royalties for other uses of music. There is no conceivable way that the pending lists could produce such a staggering price tag using the MLA.

Further, as Prof. Geist must know, Canadian courts cannot award statutory damages of $20,000 “per infringement” under the Copyright Act, as he claims. Given the number of songs alleged to be on the list; it is also a mathematical impossibility that any judgement could be anywhere in Prof. Geist’s stratospheric calculations.

We all know that lawsuits almost always overstate their claims in the interest of maximizing a potential return. Yet Prof. Geist uncritically reports a “potential” claim that is surreally high, as if it was a fact. Well, exaggerated headlines get people’s attention; so why not just make up numbers? Won’t people believe what they read anyways when it comes from a “Research Chair in Internet and E-commerce Law at the University of Ottawa”?

Recently, Prof. Geist admitted in a twitter posting that his calculations were an “embarrassing math error”. (He made a similar admission in an updated blog posting.) However, by this time his inaccurate and misleading blog and Toronto Star article had already been widely disseminated and syndicated through the web to thousands of people including readers of the Toronto Star, New York Post, ZDNet, Billboard Business News, Zeropaid, TG Daily, Techdirt, Eye Weekly, and TorrentFreak.

It is fascinating to observe Prof. Geist’s sudden epiphany about “rampant infringement” in the music industry. He has repeatedly opposed copyright reforms that would better equip copyright holders to enforce their rights against BitTorrent and other file share networks and services. Several weeks ago he led a frenzied propaganda campaign attacking the Anti-Counterfeiting Trade Agreement (ACTA). See, Fear Mongering and Misinformation Used to Slag ACTA. A couple weeks ago he made disingenuous use of statistics to argue that “Canada is a low piracy country”. See, OECD counterfeiting report misinterpreted to support myth of Canada as a low piracy country. Now he makes an “embarrassing math error” in trying to make news out of an old claim against the recording industry.

*Barry Sookman is a partner with McCarthy Tétrault and the Co-Chair of its Technology Law Group. He can be reached at bsookman@mccarthy.ca.