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Federal copyright lawsuit involving Blacklock's Reporter puts content paywalls at stake

The four-year-old Ottawa-based subscription news site claims staffers at Finance Canada used the subscriber account of a third party to access two articles from its website

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One of two radically different things will be taking place in an Ottawa court starting Monday.

If you believe one side, a forum is being given to a “troll” website that hoodwinks government agencies into accessing content and then unfairly sues them for copyright infringement in order to make money.

If you believe the other, an upstart media outlet is making an unprecedented defence of Canadian intellectual property rights in the digital era against federal bureaucrats who would rather steal than pay for content.

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What’s not at issue is that the potential implications for Canadian copyright law are tremendous.

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Blacklock’s Reporter, a four-year-old Ottawa-based subscription news site that caters to policy wonks, is suing the Government of Canada, claiming that staffers at Finance Canada used the subscriber account of a third party to access two articles from its website. Blacklock’s does not disclose its number of subscribers, although says it has bulk subscriptions in all 10 provinces. An individual annual membership to its website currently costs $314.

According to Blacklock’s statement of claim filed in Federal Court, in 2014 an industry association president forwarded the articles in e-mails to a Finance Canada staffer, who then electronically distributed them within the government department. This occurred several months after a media relations manager at Finance Canada allegedly contacted Blacklock’s to inquire about a quote for a bulk subscription of 800.

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“When there’s copyright infringement, there’s no police to call or tribunals,” Tom Korski, the Managing Editor of Blacklock’s, said in an interview. “The resolution of a copyright dispute has to be in court, so we had no choice.”

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Blacklock’s discovered the internal circulation of its articles through federal access to information requests, and is suing for $17,816 in damages — or what it says constitutes roughly a standard bulk rate for 700 subscriptions with discounts. None of the allegations has been proven.

In its statement of defence, the government argues that Blacklock’s is a “copyright troll,” or an unruly actor that excessively enforces its copyrights in order to obtain statutory damages. The government argues that the publisher uses a strategy of contacting government departments about subscriptions while also publishing articles about their activities and then filing information requests from those departments in search of perceived copyright violations to litigate. To this effect, the government claims Blacklock’s sends teaser emails “designed to interest the department in reading and distributing articles.”

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Blacklock’s currently has more than a dozen pending suits against federal departments and agencies in Federal and Ontario courts, and the government claims it “generates revenue by issuing demand letters and through litigation.” Last year it won a similar judgment against the Canadian Vintners Association for $13,000 in Small Claims Court, but that ruling did not have the impact of legal precedent that a Federal Court ruling will.

The Government also argues that some of Blacklock’s articles are incorrect and misleading, and that staff accessed them for “a non-commercial, research purpose” to verify their accuracy.

The Government’s reason for accessing the articles is especially important, according to Giuseppina D’Agostino, the founder and director of IP Osgoode, the Intellectual Property Law and Technology Program at Osgoode Hall Law School, who says she sides against Blacklock’s. “It never ceases to amaze me, the claims that come out in the copyright world,” she said in an interview. “The Government has a right to fair dealing in Canada, which means that they can access and review the material for non-commercial reasons, in this case because it’s about them. This is very much an attack on their right to read.”

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If they pay up, then it’s sort of like conceding to a bully

“If you don’t subscribe to the service but want to make sure that the record is correct, that’s pretty straightforward,” she added, noting she believes it is important for the court to establish a precedent against Blacklock’s litigation. “If they pay up, then it’s sort of like conceding to a bully.”

However, another legal expert thinks Blacklock’s is advancing a number of important causes for digital content makers.

“The central issue is whether a paywall is deemed a form of technological protection measure that can be used to prevent hacking and access to content,” said Barry Sookman, a senior partner at McCarthy Tétrault and a former head of the firm’s intellectual property group.

In 2012, the Copyright Act was amended by Parliament, making it illegal to circumvent a “technology protection measure” that controls access to copyrighted material.

“There are many industries, including the news industry but also increasingly all content industries like Netflix for example, that put content behind different forms of paywalls,” said Sookman. “But if someone can legally go through a paywall or obtain content from them in a way that doesn’t create civil liability, it removes some of the economic and legal rationale in support of this business model.”

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Sookman also said he is concerned the case could establish a precedent that the fair dealing defence could apply to content that was illegally obtained.

“Beyond that, there’s a concern about the government’s attempt to raise the issue of copyright misuse, which has not been adopted in Canada to date,” he added, referring to the argument that Blacklock’s is a “copyright troll” because of its tactics and the number of lawsuits if has launched.

I don’t see anything wrong with Blacklock’s filing multiple cases because that pertains to the number of times this has supposedly happened. What’s the misuse in asserting your rights multiple times when your rights are violated multiple times?”

Financial Post

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