By-passing paywall and circumventing TPM sinks fair dealing defense: Blacklock’s Reporter v CVA

Does by-passing a subscription paywall to access a news article violate the new prohibitions in the Copyright Act that make it an infringement to circumvent a technological protection measure (TPM)? Yes, according to a decision just released by an Ontario court in 395804 Ontario Limited (Blacklock’s Reporter) v Canadian Vintners Association, 2015 CanLII 65885 (ON SCSM). Can a defendant rely on the new fair dealing defense for education to excuse the copying if the defendant illegally accessed the work by circumventing a TPM to do so? No, the fair dealing defense cannot apply where a work is obtained illegally.

The facts in the Blacklock’s case are fairly straightforward. The plaintiff is a news publisher that publishes a subscription based newsletter. It used a paywall to ensure that only paying subscribers could get access to the news articles. The defendant sought to obtain a copy of an article, ostensibly for an educational fair dealing purpose, a purpose the Court found was “disingenuous”. It did so by obtaining the assistance of another subscriber, presumably through the unauthorized use of a password or other circumvention means to obtain a copy of the article.

The Copyright Act was amended in 2012 by the Copyright Modernization Act to implement the TPM provisions of the WIPO Copyright Treaty (WCT). See, Barry Sookman, An FAQ on TPMs, Copyright and Bill C-32. Under s.41.1(1)

“No person shall (a) circumvent a technological protection measure within the meaning of paragraph (a) of the definition “technological protection measure” in section 41”.

The term “technological protection measure” is defined to mean “any effective technology, device or component that, in the ordinary course of its operation, (a) controls access to a work, to a performer’s performance fixed in a sound recording or to a sound recording and whose use is authorized by the copyright owner…”

The Court held that by circumventing the paywall that controlled access to the article the defendants had violated the prohibition against circumventing TPMs in the Act.

Applying the law to the foregoing findings of fact relating to the basic question as to whether the Defendants have breached the Plaintiff’s copyright, section 41. 1 (1) is clear and applicable. You are prohibited from circumventing a technological protection which uses an effective technology to control access to a work. What the Defendants did is just that. They knew there was limited access to the full article. They knew that access was subscription based only and that subscriptions cost money. They knew that there was a technological barrier to that access. They knew that unless they paid they could not get it. They knew and chose another way around it. Having breached that prohibition, they have obtained copyrighted material belonging to the Plaintiff illegally.

Having found that the defendants had violated the TPM provisions in the Act, the Court then considered whether the defendants could claim the defense of fair dealing for the purpose of education to prevent copyright liability for the unauthorized copying of the article. The Court held that the defendants could not having illegally gained access to the article.

Notwithstanding the foregoing conclusion that the Defendants have illegally obtained the Plaintiff’s copyrighted material, can they still avail themselves of the protection afforded of fair dealing under the Act?

Having reviewed the case law authorities cited to me and considering the scheme and policy objectives of the Act and most importantly section 41.1 (1) thereof, it is patently clear that unless you have obtained the material legally, you cannot avail yourself of the defence of fair dealing for the purpose of education, criticism or review. The facts in CCH and the law cited therein make it perfectly clear that you must first obtain the material legally and with colour of right….

Moreover, the other facts in the case strongly militated against a finding of fairness:

As stated above, it cannot be said that the purpose here was genuine given the fact that nothing came of the research (obtaining the full article) once obtained. Giving the Defendants the benefit of the doubt here that the intention was genuine, the follow through was not. The character of the dealing is not favourable to the Defendants. They obtained the material illegally and persisted until the court Order was made in keeping the source hidden from the Plaintiff. They were given an opportunity to pay for the work even after accessing it illegally and chose not do so. They had alternative processes available to them to challenge the accuracy of the statements but chose not to use them or engage the Plaintiff in a discussion thereof. They knew that the publication had economic value upon which the Plaintiff relied and bypassed the paywall to obtain it. The nature of the work was important to the Plaintiff nonetheless because of its economic value to the Plaintiff. The effect of the dealing was to deny the Plaintiff due consideration for its time, cost and effort in publishing the work, making it in the eyes of the Plaintiff an economic and commercial venture. Although the Defendants did not disseminate the work widely, it came to the attention of the organization’s governance leaving it open to wider distribution. It must be remembered that the corporate Defendant had in mind its own economic and commercial value in accessing the material as it was seeking to maintain its credibility as a lobbyist with government, and to protect its member’s financial interests.

When the infringement was discovered by the plaintiff, it gave the defendants an opportunity “to make things right” (to use the words of the trial judge) by paying $314, the cost of two individual subscriptions to cover the copying for the two people that had received a copy of the article. The defendants refused to settle and ended up having to pay damages of $11,470, the price of an institutional license. The Court refused to award nominal damages, in part, because “Defendants’…viewed the Plaintiff’s position as trivial and the value of its copyright as worthy of circumvention”.

The Defendants were also ordered to pay punitive damages in the amount of $2,000. The Court viewed the Defendants’ lack of respect for the plaintiff’s copyright and their acts of circumvention as some of the reasons for this award.

Do their actions meet the test for an award in punitive damages? The Plaintiff submits that punitive damages are appropriate in this case. The test to determine if punitive damages are appropriate is to determine if any of the Defendants’ conduct amounts to being high-handed, malicious, vindictive and oppressive. They are intended to be compensatory. They reflect the court’s view that compensatory damages will not achieve sufficient deterrence thereby forming a basis for punishing the defendant’s actions. There is precedent for awarding punitive damages in copyright infringement cases. (see SOCAM v. 348803 Alberta Ltd., 1997 CanLII 5389 (FC), 1997 CanLII 5389 and Louis Vutton Malletier S.A. et al. v. Lin Pi-Chu Yang et al.  2007 FC 1179 (CanLII).

I agree with the Plaintiff’s submissions that this is a case where punitive damages are appropriate taking into account amongst which are the following factors: the Defendants’ attitude trivializing the value of the Plaintiff’s work and its efforts at protecting its copyrighted material; the manner in which the copyright was illegally obtained; asserting that the purpose in obtaining the material was for educational and research purposes when ultimately neither was engaged in; refusing to reveal the source of the material until ordered to do so and involving a third party exposing it to an action for infringement. In this case, an appropriate amount for punitive damages is in the sum of $2000.00.