The Federal Court has issued a landmark decision (Blacklock’s Reports v. Attorney General of Canada) on copyright’s anti-circumvention rules which concludes that digital locks should not trump fair dealing. Rather, the two must co-exist in harmony, leading to an interpretation that users can still rely on fair dealing even in cases involving those digital locks. The decision could have enormous implications for libraries, education, and users more broadly as it seeks to restore the copyright balance in the digital world. The decision also importantly concludes that merely requiring a password does not meet the standard needed to qualify for copyright rules involving technological protection measures. If this all sounds technical, this post provides the necessary background and then reviews the decision.

The enactment of the Copyright Modernization Act in 2012 was marked by a decade-long policy battle over how Canada would establish legal protections for digital locks as required by the WIPO Internet Treaties. Technically referred to as anti-circumvention measures, the rules provide legal protection against the circumvention of technologies such as anti-copying technology on e-books or DVDs that can be used to limit access or distribution of copyright works. The digital lock rules proved controversial around the world because of fears that they would alter the copyright balance designed to provide creators with appropriate protection for their works and ensure the public enjoyed fair access and use of those works.

The Supreme Court of Canada had long established that fair dealing was user’s right that operated in balance with creator’s rights (listen to this Law Bytes podcast episode for the behind-the-scenes story). The concern with anti-circumvention rules – which played out over several bills in Canada – was that rights holders could effectively limit the exercise of user rights by using technology to lock down copyright works. The classic example was that a user might be entitled to copy a portion of a chapter in a book, but if the book became an e-book with a digital lock, the publisher could use technology to stop copying that was otherwise permitted under the law. If the user sought to circumvent or by-pass the technology to assert their rights, that act of circumvention would itself become an infringement even if the underlying copying itself was permitted.

The Federal Court decision restores the balance by concluding that the copyright balance requires that fair dealing co-exist with these digital lock rules, an argument that was raised by CIPPIC, the University of Ottawa public interest technology law clinic, which intervened in the case on this specific issue. The case arises from years of litigation between Blacklock’s Reporter, a paywalled news service based in Ottawa, and the Canadian government. Blacklock’s had launched a series of lawsuits against various government departments, arguing that some of its articles were distributed within departments beyond the limits of its licences. The Federal Court ruled against Blacklock’s in 2016, easily concluding that fair dealing applied to two articles that were sent to department officials by a non-government paying subscriber that were then shared among several media personnel in the department.

Blacklock’s continued to press ahead with other cases with the latest decision involving 15 articles that were distributed to media personnel at Parks Canada. The department had an individual subscription to the service, but Blacklock’s argued that allowing anyone other than original subscriber to access articles constituted copyright infringement. The court found that the Blacklock’s legal language associated with its licensing was confusing and that fair dealing applied here as well.

While the affirmation of fair dealing yet again is important, more notable is the analysis on digital locks and the role of sharing passwords. Blacklock’s position on this issue was straightforward: it argued that its content was protected by a password, that passwords constituted a form of technological protection measure, and that fair dealing does not apply in the context of circumvention. In other words, it argued that the act of circumvention (in this case of a password) was itself infringing and it could not be saved by fair dealing.

The Federal Court disagreed on all points. It cited with approval CIPPIC’s argument that “the TPM provisions do not apply to restrain fair dealing; using a validly obtained password to access content is not circumvention.” Further, court noted “how the password was obtained is significant as this may prevent a user from invoking the fair dealing provisions of the Act.” In other words, not all password sharing will qualify as fair dealing. This decision is not a licence to simply share passwords with no consequences, but rather affirmation that passwords are not a technological protection measure and that using validly obtained password does not limit fair dealing rights.

The key paragraphs from the decision emphasized the copyright balance and the need to maintain it, even with digital locks:

Not only would the upending of the balance require some clear signal from Parliament, which we cannot find in the text, context, structure or even history, but the text of the prohibition against circumvention points in the opposite direction. Section 41.1 establishes a prohibition against circumvention. Subsection (2) provides specifically that the owner of the copyright in a work is entitled to all remedies conferred by law for the infringement of copyright. However, the law is careful to stress that the entitlement to remedies is “subject to this Act and any regulations made under section 41.21”. The ability to claim a remedy for circumvention is limited by the words of the Statute because, as I read it, the scheme of the Act continues to prevail.

For our purposes, it suffices to note, as we are invited to do so by CIPPIC, that paragraph 49 of CCH establishes the principle that “as an integral part of the scheme of copyright law, the s 29 fair dealing exception is always available”. The Supreme Court goes on to use as an example a library that can always use s 29; if unable to satisfy the requirements, it could turn on the library exemption of s 30.2. Specific exemptions for TPM do not, on that reasoning, displace the fundamental pillar of copyright law that is fair dealing. If there is fair dealing, there is no infringement. Actually, the structure of the Act itself places the TPM provision in the part of the Act interested in the remedies for infringement (s 41.1(2)).

Given its analysis, the court states:

If the goal of the TPM provisions was to allow copyright owners the ability to unilaterally not only to alter the balance, but to change it completely in the face of the state of copyright law, the expectation can only be that Parliament would have said so. It did not. In view of the conclusion that I have reached on the issue of whether fair dealing and TPM were meant to co-exist in some harmony so long as the dealing is fair, which includes obviously how access to the work has been accomplished and the use of the content that followed, the balance between owners of copyrights and potential users of the works remains preserved. The ability of copyright owners to protect against the distribution of their works, which is made so much more broad scale in the digital world, is now a reality. But that cannot be if the cost is to negative fair dealing.

Further, on the issue of whether a password even constitutes a technological protection measure, the court states that “licit acquisition and use of a password, if it is otherwise a technological protection measure, does not constitute the circumvention of the technological protection measures of the Copyright Act.”

What does all of this mean for copyright in Canada?

There are at least two main takeaways from this decision. First, rights holders cannot merely rely on password protecting their works in order to qualify for the anti-circumvention rules in the Copyright Act. That does not mean their works are not protected by copyright. They clearly still are. However, it does mean that if they seek the rely on anti-circumvention legislation, the technological protection measure must be a technology, device or component that must be effective in controlling access to the work or restricting the doing of some act. That isn’t a password.

Second, fair dealing still applies even in cases involving the anti-circumvention provisions. For years, many have argued for a specific exception to clarify that circumvention was permitted for fair dealing purposes, essentially making the case that users should not lose their fair dealing rights the moment a rights holder places a digital lock on their work. The Federal Court has concluded that the fair dealing rights have remained there all along and that the Copyright Act’s anti-circumvention rules must be interpreted in a manner consistent with those rights. The case could still be appealed, but for now the court has restored a critical aspect of the copyright balance after more than a decade of uncertainty and concern.