Court File No.

A-394-12 and A-395-12 FEDERAL COURT OF APPEAL BETWEEN: RICHARD WARMAN and NATIONAL POST COMPANY Appellants - and -

MARK FOURNIER and CONSTANCE FOURNIER Respondents

MEMORANDUM OF FACT AND LAW OF THE APPELLANT, NATIONAL POST COMPANY

CASSELS BROCK & BLACKWELL LLP 2100 Scotia Plaza 40 King Street West Toronto, ON M5H 3C2 Casey M. Chisick LSUC #: 46572R Tel: 416.869.5403 Fax: 416.644.9326 cchisick@casselsbrock.com Jason Beitchman LSUC #: 564770 Tel: 416.860.2988 Fax: 647.259.7993 jbeitchman@casselsbrock.com Solicitors for the Appellant, National Post Company

2 TO: BRAZEAU SELLER LLP Barristers and Solicitors 55 Metcalfe Street Suite 750 Ottawa ON K1P 6L5 James Katz Tel: 613.237.4000 ext. 267 Fax: 613.237.4001 Solicitors for the Applicant, Richard Warman AND TO: MARK FOURNIER 2000 Unity Road Elginburg ON KOH 1 NO Tel: 613.929.9265 Fax: 609.379.8793 Respondent AND TO: CONSTANCE FOURNIER 2000 Unity Road Elginburg ON KOH 1 NO Tel: 613.929.9265 Fax: 609.379.8793 Respondent

Court File No. A-394-12 and A-395-12 FEDERAL COURT OF APPEAL BETWEEN: RICHARD WARMAN and NATIONAL POST COMPANY Appellants - and -

MARK FOURNIER and CONSTANCE FOURNIER Respondents

TABLE OF CONTENTS Page No.
OVERVIEW................................................................................................................................1 PART I - SUMMARY OF FACTS................................................................................................3 1. 2. 3. THE COPYRIGHT WORK.....................................................................................................3 THE RESPONDENTS' INFRINGING CONDUCT........................................................................3 THE DECISION OF THE APPLICATION JUDGE........................................................................5

PARTII - POINTS IN ISSUES ....................................................................................................8 PARTIII - SUBMISSIONS..........................................................................................................8 1. 2. STANDARD OF REVIEW ......................................................................................................8 THE RESPONDENTS INFRINGED COPYRIGHT IN THE KAY WORK ...........................................9 2.1 The full-text reproduction of the Kay Work infringed copyright...................................10 2.1.1

The statutory limitation period is no bar to a finding of infringement...................11

2.2 The application judge erred in concluding the excerpts were not a "substantial part" ofthe Kay Work.........................................................................................................13 2.2.1

The reproduction was quantitatively substantial .................................................14

2.2.2 The reproduction was qualitatively substantial ...................................................15 3. THE RESPONDENTS' USE OF THE KAY WORK WAS NOT FAIR DEALING FOR THE PURPOSE OF NEWS REPORTING .....................................................................................................18 3.1 It was an Error to Apply the News Reporting Exception.............................................20 3.1.1 The source of the Kay Work was not mentioned in the reproduction..................20

3.1.2 There is no evidence that the respondents' purpose was for news reporting .....21 3.2 The Misapplication of the Fairness Factors ...............................................................24 3.2.1 Purpose of the Dealing ......................................................................................25

3.2.2 Character of the Dealing ....................................................................................26 3.2.3 Amount of the Dealing .......................................................................................26 3.2.4 Alternatives to the Dealing .................................................................................27 3.3 Conclusion on Fair Dealing .......................................................................................28 4. THE APPELLANTS ARE ENTITLED TO STATUTORY DAMAGES FOR INFRINGEMENT OFCOPYRIGHT ...............................................................................................................29

PART IV -ORDER SOUGHT ...................................................................................................29 PART V -LIST OF AUTHORITIES...........................................................................................31 FULL TEXT REPRODUCTION OF THE KAY WORK .........................................APPENDIX "A" EXCERPTED REPRODUCTION OF THE KAY WORK ......................................APPENDIX "B"

Court File No. A-394-12 and A-395-12 FEDERAL COURT OF APPEAL BETWEEN: RICHARD WARMAN and NATIONAL POST COMPANY Appellants - and -

MARK FOURNIER and CONSTANCE FOURNIER Respondents

MEMORANDUM OF FACT AND LAW OF THE APPELLANT, NATIONAL POST COMPANY

OVERVIEW 1. This appeal concerns the correct interpretation of what constitutes a "substantial

part" of a work, as defined in subsection 3(1) of the Copyright Act,' and what constitutes fair dealing for the purpose of news reporting as defined in section 29.2 of the Act. 2. The respondents operate a website message board on which a full-text

reproduction of a newspaper article and its headline was posted. Copyright in this article is owned by the National Post Company. Subsequent to delivery of a cease and desist letter from Richard Warman, the exclusive licensee of copyright in the work, the respondents removed the full-text reproduction of the work and replaced it with selected excerpts of the article. Ultimately, an application was commenced in the Federal Court alleging infringement of copyright in the work, and other works, and seeking damages.

R.S.C., 1985, c. C-42 [Copyright Act]

3.

The application judge dismissed the application. In so doing, he failed to consider

whether the full-text reproduction of the work infringed copyright. He further determined, incorrectly, that the excerpts of the work posted on the respondents' website were not a "substantial part" of the work and therefore did not engage the exclusive rights of the copyright owner under subsection 3(1) of the Act. Finally, the application judge wrongly concluded that the respondents' reproduction of the excerpts was fair dealing for the purpose of news reporting, even though the evidence clearly established that the respondents' purpose in dealing with the work was not for news reporting and that they did not mention the source from which the excerpt originated, as required by subsection 29.2(a) of the Act. He also misapplied the fairness factors set out in CCH Canada Ltd. v.

Law Society of Upper Canada2 in finding that the dealing was fair.
4. The National Post Company brings this appeal for the purpose of correcting errors

in the interpretation of the CopyrightAct and the effect those errors might have on broader issues involving the nature and scope of copyright in newspaper articles generally. While the underlying facts of this case disclose a dispute between Mr. Warman and the respondents, the National Post Company takes no position on that dispute. 5. For all these reasons, the decision of the application judge was wrong in law and in

fact. The appeal should be allowed and a finding entered that the respondents infringed copyright in the work owned by the National Post Company.

Z

2004 SCC 13[CCH].

3 PART I - SUMMARY OF FACTS 1. 6. The Copyright Work The work at issue in this appeal is a newspaper article authored by Jonathan Kay,

an employee of the National Post Company, entitled "Jonathan Kay on Richard Warman and Canada's Phony-Racism Industry"(the "Kay Work").3 7. Postmedia Network Inc., which is the successor corporation to the National Post

Company (collectively referred to as the "National Post"), is the sole owner of the copyright in the Kay Work. This work was first published on the Internet by the National Post on the website www.nationalpost.com, on or about February 18, 2008.4 8. Mr. Warman obtained an exclusive licence to the copyright in the Kay Work

through an agreement with the National Post on January 13, 2010. Mr. Warman registered his copyright in the Kay Work on March 10, 2011.5 2. 9. The Respondents' Infringing Conduct The respondents, Constance and Mark Fournier, own and operate an Internet

website located at the URLs www.freedominion.com and www.freedominion.com.pa

3 Reasons for Judgment and Judgment of The Honourable Mr. Justice Rennie, dated June 21, 2012 (the "Judgment") at pars. 3, Appeal Book, Vol. 1, Tab 3. Two additional works were at issue in the proceeding below. The Court's findings in respect of those works are not challenged in this appeal. 4

"Warman Affidavit") at paras. 7-12, Appeal Book, Vol. Affidavit of Richard Warman, sworn June 6, 2011( 1, Tab 7, p. 79. Judgment at pars. 3, Appeal Book, Vol. 1, Tab 3. A copy of the exclusive licence appears in the record as Exhibit "B" to the Warman Affidavit, Appeal Book, Vol. 1, Tab 76, p. 103.

5

0 ( "Free Dominion"). The respondents control all the content that is published on Free Dominion.6 10. On February 18, 2008, the same day that the Kay Work was originally posted on

the National Post website, the complete text of the Kay Work was posted to a message board on the Free Dominion website.' 11. The Free Dominion posting identified the work by title and listed Jonathan Kay as

the author. It did not, however, identify the National Post or www.nationalpost.com as the source of the work or the publication in which the Kay Work was published.$ 12. On April 16, 2010, Mr. Warman sent a cease and desist letter to the respondents,

asking that the Kay Work be removed from the Free Dominion website. The complete text of the work was removed from the website and replaced with excerpts of the Kay Work on April 18, 2010.9 13. The complete Kay Work consists of a headline and 11 paragraphs.10 The excerpts

reproduced on Free Dominion on April 18, 2010 included the headline, three complete

6

Warman Affidavit at paras. 19-20, Appeal Book, Vol. 1, Tab 7, p. 80.

Supplementary Affidavit of Connie Fournier, dated October 4, 2011 ( "Supplementary Fournier Affidavit") at pars. 14, Appeal Book, Vol. 4, Tab 9, p. 1271.
8 9

Warman Affidavit, Exhibit "E", Appeal Book, Vol. 1, Tab 7E, p. 116

Warman Affidavit, Exhibit "F", Appeal Book, Vol. 1, Tab 7F, p. 127; see also Respondents' Memorandum of Fact and Law, Appeal Book, Vol. 4, Tab 13, p. 1396, pars. 37.
'o

The full-text of the Kay Work as posted on the Free Dominion website is reproduced as Appendix "A" to this memorandum.

5 paragraphs, and part of a fourth paragraph." The excerpts of the Kay Work were removed from the Free Dominion website on April 7, 2011.12 14. A Notice of Application was issued on May 9, 2011, in Court File No. T-784-11,

naming Mr. Warman and the National Post Company as applicants, and Constance and Mark Fournier as respondents.13 The application alleged that the respondents infringed copyright in three works, including the Kay Work. 15. While the National Post was named as an applicant, it had no knowledge that the

proceeding had been commenced, was never served with any of the documents in the proceeding (including the originating process), and had no knowledge of the application until after the judgment was issued. After learning of the judgment, the National Post instructed counsel to commence this appeal. 3. 16. The Decision of the Application Judge The Application was heard on May 28, 2012. Reasons for Judgment and

Judgment were rendered on June 21, 2012, dismissing the application in respect of all three of the works. 17. Regarding the Kay Work, the application judge determined that there was no

infringement of copyright since, in his view, the respondents had not reproduced a "substantial part" of the Kay Work as required by subsection 3(1) of the Copyright Act. He

"The excerpted portions of the Kay Work as posted on the Free Dominion website is reproduced as Appendix "B" to this memorandum.
'Z 13

Supplementary Fournier Affidavit at para. 23, Appeal Book, Vol. 4, Tab 9, p. 1272. Notice of Application in Court File No. T-784-11, Appeal Book, Vol. 1, Tab 4, p. 36.

n .~

determined that, because the amount reproduced was "less than half of the work," this was not quantitatively a "substantial part."14 18. Qualitatively, the application judge compared the reproduced excerpts, which he

described as the "hook" of the article and the opening paragraphs, to the portions of the article that were not reproduced, and determined that the reproduction was not substantial since, in his view,"most of the commentary and original thought expressed by the author" was not reproduced.15 19. In making this comparison and assessing the quality and quantity of the

reproduction, the application judge failed to consider the significance of reproducing the headline of the article, notwithstanding the fact that, under the Copyright Act, a work "includes the title thereof where such title is original and distinctive."16 20. The application judge further failed to address the fact that the respondents had

also reproduced the full text of the Kay Work, which appeared on their website from February 18, 2008 until April 18, 2010, and did not consider whether this reproduction of the full text amounted to copyright infringement. 21. The application judge went on to conclude, in the alternative, that, even if the

reproduced portions of the work did amount to a substantial part, the reproduction

'a Judgment at para. 25, Appeal Book, Vol. 1, Tab 3, p. 28. 15 Ibid. 16 Copyright Act, s. 2, definition of "work".

~l constituted fair dealing for the purpose of news reporting and were thus exempted from liability for copyright infringement under section 29.2 of the Copyright Act.' 22. The application judge did not indicate in what way the statutory conditions for fair

dealing in section 29.2 were satisfied or where in the record the source or author was referenced. In fact, a review of the record suggests that there was no reference on the Free Dominion website to either the National Post or www.nationalpost.com as the source of the Kay Work. At no time in their evidence or submissions did the respondents indicate where the National Post was allegedly credited as the source of the Kay Work. 23. Further, neither of the affidavits filed by the respondents in response to the

Application gave evidence that the dealing was for the purpose of news reporting.$ On cross-examination on her affidavit, Ms. Fournier admitted that her purpose in publishing Mr. Warman's copyright works was to "critique" his activities. She did not mention news reporting.19 The purpose of the Free Dominion message board was to "discuss" topics of interest to its anonymous members, not to report news.20

"Judgment at paras. 29-34, Appeal Book, Vol. 1, Tab 3, pp. 29-30. "Amended Fournier 18 See the Amended Affidavit of Constance Fournier, sworn November 26, 2011 ( Affidavit"), Appeal Book, Vol. 1, Tab 8; and see the Supplementary Fournier Affidavit, Appeal Book, Vol. 4, Tab 9. 19 Transcript of the Cross-examination of Constance Fournier, dated December 8, 2011, Appeal Book, Vol. 4, Tab 10, p. 1342, Qs. 28-30. 20 Amended Fournier Affidavit, Appeal Book, Vol. 1, Tab 8, pp. 192-93, at paras. 2-3.

24.

Nonetheless, the application judge concluded, despite the lack of any supporting

evidence, that the purpose of the respondents' reproduction of the Kay Work was for news reporting.21 25. Finally, the application judge wrongly concluded that the application of the fairness

factors enumerated by the Supreme Court of Canada in CCH suggested that the reproduction of the excerpts of the Kay Work fell within the fair dealing exception.22 PART II - POINTS IN ISSUES 26. There are three issues in this appeal: (a) Did the application judge err by finding that the respondents did not infringe copyright in the Kay Work both by reproducing the full text of the work and by reproducing substantial parts of the work in the form of excerpts? (b) Did the application judge err by finding that the respondents' use of the Kay Work was fair dealing for the purposes of news reporting? (c) Did the application judge err by failing to award damages for infringement of copyright in the Kay Work? PART III - SUBMISSIONS 1. 27. Standard of Review The standard of review on a question of law is correctness.23 The standard of

review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a "palpable and overriding error."24

21

Judgment at para. 31, Appeal Book, Vol. 1, Tab 3, p. 29.

zz Judgment at paras. 29-34, Appeal Book, Vol. 1, Tab 3, pp. 29-31.

28.

Matters of mixed fact and law lie along a spectrum. Where,for instance, an error

can be attributed to the application of an incorrect standard, a failure to consider a required element of a legal test, or a similar error in principle, such an error can be characterized as an error of law, subject to a standard of correctness. Where the legal principle is not readily extricable, then the matter is one of "mixed law and fact" and is subject to a more stringent standard.25 29. The errors raised in this appeal amount, generally speaking, to questions of mixed

fact and law. However, in most cases the nature of the application judge's errors can be readily extricable as errors of law in that he applied an incorrect standard or failed to consider a required element of a legal test. These are errors in principle that are to be reviewed on a standard of correctness. 30. 2. 31. Each of the application judge's errors are set out, and further discussed, below. The Respondents Infringed Copyright in the Kay Work The respondents infringed copyright in the Kay Work in two ways. First, they

reproduced the full text of the Kay Work on the Free Dominion website from February 18, 2008 until April 18, 2010. Second, they reproduced substantial excerpts of the Kay Work on the Free Dominion website from April 18, 2010 until April 7, 2011.26

23 24 25

Housen v. Nikolaisen, 2002 SCC 33[Housen] at para. 8. Housen, supra at pars. 10. Housen, supra at pars. 36. Fournier Affidavit, Appeal Book, Vol. 4, Tab 9, p. 1272, para. 23

26Supplementary

10 32. In determining whether there has been copyright infringement, the Court must first

establish whether copyright exists in the work in question. In this case, the respondents did not dispute that copyright subsists in the Kay Work, an original "literary work" for the purposes of the Copyright Act.27 33. Subsection 3(1) of the Copyright Act provides that "copyright", in relation to a

literary, dramatic, musical, or artistic work, includes "the sole right to produce or reproduce a work or any substantial part of a work in any material form."28 34. Pursuant to subsection 27(1) of the CopyrightAct, it is an infringement of copyright

for any person to do, without the consent of the owner of the copyright, anything that only the copyright owner has the right to do.29 35. Therefore, copying a work, or a substantial part of it, without the consent of the

copyright owner is an infringement of the right to reproduce the work or any substantial part of it.3o 2.1 36. The full-text reproduction of the Kay Work infringed copyright Each day from February 18, 2008 until April 18, 2010, afull-text reproduction of the

Kay Work was posted on the Free Dominion website. That clearly constituted reproduction of the work within the meaning of subsection 3(1) of the Copyright Act.

27 Judgment, Appeal 28

Book, Vol. 1, Tab 3, pars. 22; Copyright Act, s. 5(1).

Copyright Act, s.3(1). John S. McKeown, Fox Canadian Law of Copyright and Industrial Designs, 4'h ed. (Toronto: Thompson Reuters Canada Limited, 2009)[Fox] at page 21-11.

291bid, s.27(1). 3o

11 37. This reproduction was made without the consent of either the National Post, the

owner of copyright in the work, or Mr. Warman, the exclusive licensee of copyright, and therefore infringed copyright in the Kay Work pursuant to subsection 27(1) of the Copyright Act. 38. The application judge failed to consider whether this conduct constituted an

infringement of copyright in the Kay Work, instead limiting his analysis to the excerpts reproduced after April 18, 2010. 39. The failure to consider and apply the law to the clear reproduction of the entire Kay

Work constitutes an error of law and gives this Court the ability to reconsider the issue on a standard of correctness. 40. On the facts of this case, the respondents, quite simply, have no defence to avoid

liability for copyright infringement as a result of reproducing a copyright work in its entirety. They did not have the requisite consent to reproduce the Kay Work and thus violated subsection 27(1) of the Act by doing so. Further, the reproduction of the Kay Work was verbatim, and thus renders moot any possible question as to whether the reproduction was of expression or of ideas. 2.1.1 The statutory limitation period is no bar to a finding of infringement 41. Section 43.1 of the Copyright Act provides for athree-year limitation period on

claims for copyright infringement, and requires that a plaintiff commence a proceeding

12 within three years of when the plaintiff knew or could reasonably have been expected to know that a breach of the Act had occurred.31 42. This section of the Act does not extinguish the cause of action or the copyright in

the Kay Work.32 It does not preclude a finding of copyright infringement in a work, even if that infringement occurred more than three years prior to commencement of a claim. Rather, this limitation period is purely procedural; it only limits a copyright owner's ability to recover damages for atime-barred infringement. 43. Furthermore, while section 43.1 may bar recovery for infringements that are more

than three years old, it does not bar recovery for copyright infringement committed on an ongoing basis or for infringements that occur subsequent to a statute-barred infringement.33

44.

The respondents have admitted that afull-text reproduction of the Kay Work was

posted on the Free Dominion website each day from the date of publication until April 18, 2010.34 This constitutes an ongoing breach and a continuous infringement of copyright in the Kay Work through April 18, 2010. The respondents are liable for that infringement for each day it occurred.

31 32

Copyright Act, s. 43.1(1)(a). Wall v. Horn Abbot Ltd., 2007 NSSC 197 at paras. 454, 474.

331bid. See

also Society of Composers, Authors and Music Publishers v. Barrymore's Inc., 2003 FCT 114; and see Dolmage v. Erskine, 2003 CanLll 8350 (ONSC): "As to copyright infringement the evidence is overwhelming that the plaintiff has been aware of the alleged infringements from the beginning. Consequently his remedies for alleged copyright infringement are available for acts of copyright infringement occurring only after April 12, 1998."
3a

Supplementary Fournier Affidavit, Appeal Book, Vol. 4, Tab 9, p. 1271 at paras. 14 and 19; and see the Amended Fournier Affidavit at para. 4, Appeal Book, Vol. 1, Tab 8, p. 196.

13 45. The application underlying this appeal was commenced on May 9, 2011.

Therefore, section 43.1 cannot bar a remedy for infringing acts that occurred on or after May 9, 2008, including the full-text reproductions of the Kay Work that were posted on the Free Dominion website every day between May 9, 2008 and April 18, 2010. 2.2 The application judge erred in concluding the excerpts were not a "substantial part" of the Kay Work After receiving a cease and desist letter from Mr. Warman, the respondents

46.

removed the full-text reproduction of the Kay Work from their website and replaced it with excerpts of that work. 47. An infringer does not escape liability for copyright infringement by reproducing a

substantial part of the work as opposed to the whole of it.35 48. In determining whether a reproduction constitutes a "substantial part," the court is

to consider whether the reproduction has the "distinct traits of the original work,"36 whether there is "sufficient objective similarity" between the reproduction and the original work, 37 and whether the very "essence" or "principal features" of a work are appropriated.38

35 36

Theberge v. Galerie d'Art du Petit Champlain inc., 2002 SCC 34 [Theberge] at pars. 51.

Compagnie Generale des Etablissements Michelin--Michelin &Cie v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), 1996 CanLll 3920 (FC),[1997] 2 F.C. 306 (T.D.), at para. 50; and see Theberge, supra at para. 142 (dissent). Prism Hospital Software Inc. v. Hospital Medical Records Institute (1994), 97 BCLR (2d) 201 (BCSC) at pars. 615. Eduti/e Inc. v. Automobile Protection Assn.,(APA)(2000) 188 DLR (4th) 132,[2000]4 FC 194 [Edutile] at paras. 17 and 23.

37

38

14 49. A reproduction is substantially similar to the original when it "comes so near to the

original as to give every person seeing it the idea created by the original." This level of similarity "creates prima facie evidence of copying~~.39

50.

The standard to be applied requires "more emphasis on the quality of what was

taken from the original work rather than the quantity." There may be additional considerations, including "whether the defendant intentionally appropriated the plaintiff's work to save time and effort."4o 51. The application judge failed to apply this legal standard when determining whether

a substantial part of the Kay Work was reproduced. Failing to do so was an extricable legal error and therefore can be reviewed on a standard of correctness. 2.2.1 The reproduction was quantitatively substantial 52. The application judge erred by applying an incorrect quantitative analysis when he

determined summarily that "less than half of the work" was not a substantial part of the work. 53. Court have held that "to enter upon a simple calculation of percentages or

proportions in order to determine whether there was an infringement would be to unduly minimize the protection given to copyright."a'

Canada Limited v. AREVA NP Canada Ltd., 2009 FC 980 at para. 36. ao U & R Tax Services Ltd. v. H & R Block Canada Inc.,[1995] F.C.J. No. 962(F.C.) at pars. 35. 41 France Animation, s.a. c. Robinson, 2011 QCCA 1361 at para. 59-60 citing Edutile Inc. v. Automobile Protection Assn.,(APA)(2000) 188 DLR (4th) 132,[2000]4 FC 194 [Edutile] at para. 22.

3s Atomic Energy of

15 54. Even the reproduction of a small number of words in a newspaper article can be an

impermissible reproduction. In the case of Infopaq Int'1 A/S v. Danske Dagblades Forening,42 the European Union Court of Justice concluded that an 11-word excerpt from a newspaper article can constitute an impermissible reproduction of a copyright work if the excerpt is the intellectual creation of the original author:
51. [...] [A]n act occurring during a data capture process, which consists of storing an extract of a protected work comprising 11 words and printing out that extract, is such as to come within the concept of reproduction in part within the meaning of Article 2 of Directive 2001/29, if the elements thus reproduced are the expression of the intellectual creation of their author; it is for the national court to make this determination.

55.

The excerpt of the Kay Work reproduced by the respondents amounts to more

than one third of the work. The application judge incorrectly minimized this as an insubstantial amount. 2.2.2 The reproduction was qualitatively substantial 56. Even if a relatively small amount of a work is reproduced, the reproduction may

amount to infringement if, qualitatively, it constituted an appropriation by the reproducing party of the skill and time and talent of the author.43 57. Applying the correct standard, as set out in paragraphs 48 to 50, above, there is no

question that the reproduced excerpts of the Kay Work have the "distinct traits" of the original publication. The excerpts stand on their own and are clearly identifiable as the original work. The excerpts convey the ideas advanced in the original work and reach the
4Z a3

Case C-5/08, Infopaq Int'I A/S v. Danske Dagblades Forening,[2009] ECR I-6569 at pars. 51.
Breen v Hancock House Publishers Ltd.(1985),6 C.I.P.R. 129(Fed. T.D.); see also Fox, supra, note 5 at

page 21-16.3.

16 same conclusions as the original work. A person reading the excerpts would understand and appreciate both the "essence" of the complete work and its distinct traits. 58. The excerpts from the Kay Work had a "sufficient objective similarity" to the original

publication. The "essence" and "principal features" of the Kay Work, which are to criticize Mr. Warman and the so-called "phony-racism industry," are reproduced entirely, notwithstanding the fact that not all of the words of the original work are reproduced. 59. Further, the respondents "intentionally appropriated" the Kay Work "to save time

and effort." The subject matter of the Kay Work was such that it could have been summarized by the respondents rather than reproduced verbatim. The respondents, instead, simply copied and reproduced both the full-text Kay Work and the excerpts later posted to the Free Dominion website. 60. The reproduced excerpts contained all of the distinct features and hallmarks of the

complete Kay Work, and therefore constituted a "substantial part" of the work. Contrary to the application judge's view, whether a verbatim extract from a work constitutes a substantial part has nothing to do with whether it contains "more" or "less" original thought or commentary than some other hypothetical part of the same work. 61. Rather, the correct approach is to compare the reproduction to the work as a

whole, assess the similarities between the two, and determine qualitatively whether the excerpt discloses an exercise of the author's skill and judgment.44 That was clearly the case with the excerpts at issue here, which included the very "hook" of the article —the

4a

France Animation, s.a. c. Robinson, 2011 QCCA 1361 at para. 61.

17 words selected by the author expressly to grab the reader's attention by presenting the selected topic in an original, thought-provoking manner. 62. Moreover, the headline of the article was also a substantial part of the work. The

application judge erred by failing to consider the effect of reproducing the headline of the article even though the Copyright Act defines a "work" as including the title of that work "when such title is original and distinctive."45 63. The headline of the article was both original and distinctive. In Canada, the

threshold for originality in a work is "rather low." In order for a work (or the title of a work) to be "original", all that is required is an exercise of skill and judgment by the author, which involves intellectual effort. Such exercise must not be so trivial that it could be characterized as a purely mechanical exercise.46 However, the statutory requirement of originality does not imply inventive originality. It is enough that the work is the production of something in a new form as a result of the skill, labour and judgment of the author.47 64. Something that is "distinctive" is "serving to differentiate or distinguish; peculiar to

one person or thing as distinct from others, characteristic; having well-marked properties; easily recognized."48 Something that is "distinct" is "distinguished as not being the same; not identical; separate; different in nature or quality."49 The title of the Kay Work

a5 a6

Copyright Act, s. 2, definition of "work" CCH, supra at pars 16. v. Toronto Star Newspapers Ltd. (1997), 36 O.R.(3d) 201 (Ont. Div. Ct.)[Allen] at pars. 16

47 Allen 48

New Shorter Oxford English Dictionary, vol. A, s.v. "distinctive". Random House Dictionary of the English Language, 2nd ed., s.v. "distinct".

as

possesses these qualities, distinguishing the Kay Work from other newspaper articles, and in so doing is distinctive. 65. The headline, "Jonathan Kay on Richard Warman and Canada's Phony-Racism

Industry", clearly demonstrates creativity, originality and distinctiveness, including the distinctive and original concept of a "phony-racism industry." 66. Even if not a legally extricable error, the application judge made a palpable and

overriding error when he concluded that the excerpted portions were not original or qualitatively substantive. Examining the excerpts demonstrates that they contained considerable original thought and analysis, including descriptive terminology that carried meaning far beyond a mere recitation of facts. 67. For all these reasons, it is submitted that the reproduced excerpts were

qualitatively a substantial part of the Kay Work, and thus infringed copyright in violation of subsection 27(1) of the Copyright Act. 3. The Respondents' Use of the Kay Work was not Fair Dealing for the Purpose of News Reporting As an alternative finding, the application judge determined that, even if he was

68.

incorrect and the excerpt of the Kay Work was a substantial part of the work, the respondents' use of the Kay Work was nevertheless fair dealing for the purpose of news reporting.

19 69. Counsel to the National Post has been unable to identify any court decision in any

jurisdiction in Canada that has considered the exception to copyright infringement in section 29.2 of the Copyright Act for fair dealing for the purpose of news reporting.5o 70. Generally speaking, the concept of fair dealing allows users to engage in some

activities that might otherwise amount to copyright infringement.51 While it may be that the fair dealing provisions in the Act are not to be interpreted restrictively,52 there are nonetheless a number of statutory and common law prerequisites that a user must satisfy before it may rely on a fair dealing exception. 71. The news reporting exception in section 29.2 of the Act provides that fair dealing

for the purpose of news reporting does not infringe copyright if: (a) the source is mentioned; and (b) if given in the source, the name of the author, in the case of a work.53 72. It is only once these statutory pre-conditions are satisfied that the two-step fair

dealing test established in CCH is to be applied. This two-step test asks:(1) whether the dealing is for an allowable purpose (including news reporting); and, if so,(2) whether the dealing is "fair" in accordance with the factors set out in CCH. The onus of proof is on the person invoking "fair dealing" to satisfy both aspects of the test.5a

5o

The case of Allen v. Toronto Star Newspapers Ltd.(1997), 36 O.R.(3d)201 (Ont. Div. Ct.)considered the previous exception for fair dealing for the purpose of "newspaper summary." Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36[SOCAN Bell] at para. 11.

521bid. 53

v.

s'

Copyright Act, s. 29.2. SOCAN v Bell, supra at pars. 13.

sa

20 73. The application judge erred in his application of the fair dealing exception in three

ways:(1) he wrongly concluded that the statutory pre-condition to mention the source of the work was met;(2) he wrongly concluded that the respondents' purpose in dealing with the work was for news reporting; and (3) he misapplied the CCH factors and thus wrongly concluded that the dealing with the work was fair. 3.1 It was an Error to Apply the News Reporting Exception

3.1.1 The source of the Kay Work was not mentioned in the reproduction 74. The application judge's first error in the application of the fair dealing exception

was in concluding that the respondents had met the statutory conditions precedent in subsections 29.2(a) and (b) of the Act. 75. The onus of proof to demonstrate compliance with the statutory pre-conditions in

subsections 29.1 and 29.2 lies on the person invoking the exception.55 76. The application judge did not describe where or how the source of the Kay Work

was mentioned. It is entirely unclear from a review of the record the basis upon which the application judge reached this conclusion. 77. Although it appears that the respondents mentioned the author of the Kay Work,

thus adequately satisfying the statutory precondition in paragraph 29.2(b)(i), there is no reference to the National Post or www.nationalpost.com as the source of the Kay Work in the Free Dominion thread in which the work appeared, as required by subsection 29.2(a). The respondents did not at any time in their evidence, or in their written or oral

55

Michelin, supra at pars. 59.

21 submissions, indicate where the National Post was credited as the source of the Kay Work, or suggest that the National Post was so credited. 78. Given that there is no mention of the National Post as the source of the Kay Work,

there was no evidentiary foundation upon which the application judge could have concluded that the respondents had mentioned the source of the article as opposed to merely its author. In that way, the application judge erred in finding that the statutory condition precedent in subsection 29.2(a) of the Copyright Act was satisfied in this case. For that reason alone, the fair dealing for news reporting exception is inapplicable, and the application judge erred in law by concluding otherwise. 3.1.2 There is no evidence that the respondents' purpose was for news reporting 79. The application judge further erred by applying the news reporting exception when

there was simply no evidence that the purpose of the respondents' dealing with the Kay Work was for news reporting. 80. In determining the purpose of a dealing, "courts should attempt to make an

objective assessment of the user/defendant's real purpose or motive in using the copyrighted work.'°56 81. To establish the real purpose or motive in using a work on an objective standard

requires some factual evidence of that purpose, either directly or by inference.57 The onus of proof to establish this purpose is on the party claiming the exception.58

56

CCH, supra at pars. 54. Inc. v. Apotex Inc., 2007 FC 971 at pars. 109.

57 Pfizer Canada

22 82. There is no such evidence in this case, and therefore no objective basis on which

to conclude that the purpose of the dealing was for news reporting. Neither Ms. Fournier's Amended Affidavit, sworn November 26, 2011, nor her Supplementary Affidavit, sworn October 4, 2011,59 suggest that the Kay Work was reproduced for the purpose of news reporting. In fact, neither affidavit suggests any reason why the work was reproduced. 83. The evidence that does exist confirms that the purpose of the respondents'

reproduction was for something other than news reporting. On cross-examination on her affidavit, Ms. Fournier admitted that her purpose in publishing Mr. Warman's copyright works was to "critique" Mr. Warman's activities:6o
28. Q. Okay, thanks. Will you agree with me that the purpose behind publishing the Warman work was to be an illicit criticism of Mr. Warman personally? A. Um, no. Um, critique, I believe, would be a better way of putting it. 29. Q. Critique then of Mr. Warman's activities? A. Yes. 30. Q. Okay. A. It's a political forum, that's the kind of thing we talk about.

84.

This constitutes an admission by the respondents that they reproduced one of Mr.

Warman's copyright works for a purpose other than news reporting. It is further an

58 59

SOCAN v. Bell, supra at para. 13.

Amended Fournier Affidavit, Appeal Book, Vol. 1, Tab 8; Supplementary Fournier Affidavit, Appeal Book, Vol. 4, Tab 9.

6o

Transcript of the Cross-examination of Constance Fournier, dated December 8, 2011, Appeal Book, Vol. 4, Tab 10, p. 1342, Qs. 28-30.

23 admission that it was not the work itself that was being discussed on the Free Dominion website, but rather that the contents of the work were being used for the alternate, collateral purpose of critiquing Mr. Warman's activities. Although these admissions concerned one of the other works at issue in the application, it can, and should, be inferred that the respondents' conduct was the same in respect of the Kay Work. 85. Further, the purpose of the Free Dominion website is not news reporting. As

described in Ms. Fournier's Amended Affidavit, the website is a "message board...[that] entitles members to post their own opinion directly to the board once they open an account. Almost all people who join the board do so anonymously, posting under pseudonyms (emphasis added)." The message board allows members to "discuss" various issues of interest to them.61 86. The definition of "discuss" is "to consider or examine by argument, comment, etc.;

talk over or write about, esp. to explore solutions; debate"62 and "discussion" is "a conversation or exchange of views" on specific subjects.63 A message board that permits anonymous users to "discuss" issues of importance to them is not news reporting any more than a book club, where members discuss a literary work, is news reporting. 87. In Allen v. Toronto Star Newspapers, which concerned the reproduction of a

photograph on the cover of Saturday Night magazine, one of the defences raised to copyright infringement was fair dealing for the purpose of news summary, as the

Amended Fournier Affidavit, Appeal Book, Vol. 1, Tab 8, pp. 192-93, at paras. 2-3.
Random House Dictionary of the English Language, 2nd ed., s.v. "discuss". Canadian Oxford Dictionary, s.v. "discussion".

62 63

s'

25 the dealing;(3) the amount of the dealing;(4) alternatives to the dealing;(5)the nature of the work; and (6) the effect of the dealing on the work.66 92. Further, while the question of whether a dealing is "fair" is a question of fact and

depends on the facts of each case,67 there can still be an error of law if the application judge misdirected himself in respect of the applicable legal test.68 3.2.1 Purpose of the Dealing 93. The purpose of a dealing will be fair if it is for one of the allowable purposes under

the Copyright Act. Courts should attempt to make an objective assessment of the user/defendant's real purpose or motive in using the copyrighted work.69 94. As discussed in paragraphs 79 to 89, above, the application judge erred in

concluding that the purpose of the dealing was for news reporting. In any event, the application judge engaged in no analysis at all when considering this factor and made no attempt to objectively assess the respondents' real purpose or motive for using the copyrighted work. Instead, he simply reiterated his conclusion that the purpose of the dealing was for news reporting, and in so doing applied the incorrect legal standard by failing to consider important evidence of the competing purposes in this case, and by failing to determine which of these purposes was predominant.

CCH, supra at para 53. The Court notes that, while this list of factors is "useful" and outlines what "could be considered" in assessing the fairness of a dealing, these considerations "will not all arise in every case of fair dealing" and ought not be rigidly applied in governing determinations of fairness.
67

s6

SOCAN v. Bell, supra at pars. 32. Housen, supra at para. 36. CCH, supra at para. 54.

69

s$

26 95. It is submitted that the record indicates the predominant purpose of this dealing

was for the purpose of either critiquing or promoting discussion about Mr. Warman. Either way, it was not for the purpose of news reporting. 3.2.2 Character of the Dealing 96. In assessing the character of a dealing, courts must examine how the work was

dealt with. If multiple copies of a work are widely distributed, this will tend to be unfair.70 97. The application judge acknowledged that "the character of the dealing does not

strongly support a finding of fair dealing. The excerpts are widely distributed on the Internet as opposed to the making of a private copy. 98.
""

Ms. Fournier admitted on cross-examination that there were 35,770 views of the

discussion thread in which the Kay Work was posted on the Free Dominion website.72 Rather than "not support" a finding of fairness, the character of the respondents' dealing firmly supports a finding of unfairness. 3.2.3 Amount of the Dealing 99. CCH instructs that the quantity of the work taken will not be determinative of

fairness, but that it can help in the determination, and that the amount taken may also be more or less fair depending on the purpose of the dealing.73

70

CCH, supra at para. 55.

"Judgment, Appeal Book, Vol. 1, Tab 3 at para. 34. Cross-examination of Constance Fournier, dated December 8, 2011, Appeal Book, Vol. 4, Tab 10, p. 1351, Qs. 82-84.
72 Transcript of the 73

CCH, supra at pars. 56.

27 100. The "amount" factor is not a qualitative assessment of the amount copied. Rather, it is a quantitative examination of the proportion between the excerpted copy and the entire work.74 101. In his analysis of this factor, the application judge concluded "the amount of the dealing was very limited. The reproduced portion of the Kay Work contained mostly facts and did not contain most of the original commentary by the author." This is a qualitative analysis, which is not a relevant factor in considering the amount of the dealing. Further, it is not a correct assessment of the amount of the dealing when examined in proportion between the excerpted copy and the entire work. 102. In fact, the reproduced excerpt constitutes a significant amount of the Kay Work: approximately one third of the body of the article, plus the headline, which holds substantial independent significance in and of itself. 103. It is submitted that, given the large amount of the work reproduced, the amount of the respondents' dealing with the Kay Work points to a finding of unfairness. 3.2.4 Alternatives to the Dealing 104. CCH instructs that a court should attempt to determine whether the dealing was "reasonably necessary to achieve the ultimate purpose." Similarly, if a user could have used anon-copyrighted equivalent of the work instead of the copyrighted work, this suggests unfairness.75

74 SOCAN v. Bell, supra at pars. 41; see also Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 at pars. 29. 75

CCH, supra at para. 57.

105. The application judge acknowledged that "there was arguably an alternative to the dealing, namely providing a summary of the Kay Work instead of reproducing excerpts."76 In his view, this factor weighed "less strongly in favour of a finding of fair dealing." 106. In fact, it was entirely open to the respondents to summarize the Kay Work instead of reproducing excerpts. Given that the complete work was relatively short, it would not have been difficult or time-consuming to summarize. It was unfair of the respondents to reproduce substantial portions of the Kay Work when a summary would have achieved the same result. 3.3 Conclusion on Fair Dealing

107. The application judge erred in his fair dealing analysis on multiple fronts. First, the respondents never met their burden of demonstrating that they mentioned the source of the work reproduced. Second, he erred in concluding that the respondents' purpose in dealing with the Kay Work was for news reporting, when there was no evidence to support this conclusion. Third, he misapplied the fairness factors in CCH and thus incorrectly determined that the respondents' dealing with the excerpts of the Kay Work was fair. 108. For these reasons, the exception for fair dealing for the purpose of news reporting is inapplicable in this case and the Court ought not to absolve the respondents of their infringing conduct.

76

Judgment at pars. 34, Appeal Book, Vol. 1, Tab 3.

29 4. The Appellants are Entitled to Statutory Damages for Infringement of Copyright

109. It is submitted that, for all the reasons set out above, the respondents infringed copyright in the Kay Work and therefore the National Post is entitled to damages for copyright infringement. 110. Where copyright has been infringed, the owner of the copyright is entitled to damages for the infringement of a right." Damages are based on the damage that the owner has suffered due to the infringement and the profits that the infringer has made from the infringement that were not taken into account in calculating the damages, each as the court considers just.'$ In the alternative to damages or profits, a copyright owner may elect to recover an award of statutory damages.79 111. It is submitted that the matter of quantum of damages should be remitted to the application judge to determine the appropriate amount. PART IV -ORDER SOUGHT 112. The appellant, National Post Company, requests an order allowing the appeal and declaring that: (a) the respondents infringed copyright in the Kay Work, contrary to subsection 27(1) of the Act, by reproducing the full text of the work between February 18, 2008 and April 18, 2010;

~~ Copyright Act, ss. 34(1). 78 Ibid. ss. 35(1). 79 Section 38.1 of the Copyright Act, as it existed prior to the coming-into-force of Bill C-11 on November 7, 2012, allowed for statutory damages in a sum of not less than $500 and not more than $20,000 per work infringed.

30 (b) the respondents infringed copyright in the Kay Work, contrary to subsection 27(1) of the Act, by reproducing excerpts of the work from April 18, 2010 until April 7, 2011; (c) the respondents are not exempt from liability for copyright infringement of the Kay Work pursuant to section 29.2 of the Act; and (d) the appellants are entitled to statutory damages for infringement of copyright in the Kay Work, 113. And an order requiring that: (a) the respondents remove any posting of the Kay Work or any substantial part thereof from the Free Dominion website; (b) the respondents be enjoined from further publishing the Kay Work or any substantial part thereof; (c) (d) the respondents pay to the National Post the costs of this appeal; and the appellants be granted such further and other relief as this Honourable Court deems just. ALL OF WHICH IS RESPECTFULLY SUBMITTED this 8th day of March, 2013.

CASSELS BROCNC ~&iBLi94CKWELL LLP Solicitors for the Appellant, National Post Company

31

PART V -LIST OF AUTHORITIES Statutes 1. Copyright Act, R.S.C., 1985, c. C-42

Perodicals 2. 3. 4. 5. John S. McKeown, Fox Canadian Law of Copyright and Industrial Designs, 4th ed. (Toronto: Thompson Reuters Canada Limited, 2009) Canadian Oxford English Dictionary, definition of "discussion" and "distinctive" New Shorter Oxford English Dictionary, definition of "distinctive" Random House Dictionary of the English Language, definition of "discuss"

Jurisprudence

6. 7. 8. 9. 10. 11. 12.

CCH Canada Ltd, v. Law Society of Upper Canada, 2004 SCC 13 Housen v. Nikolaisen, 2002 SCC 33 Wall v. Horn Abbot Ltd., 2007 NSSC 197 Society of Composers, Authors and Music Publishers v. Barrymore's Inc., 2003 FCT 114 Dolmage v. Erskine, 2003 CanLll 8350(ONSC) Theberge v. Galerie d'Art du Petit Champlain inc., 2002 SCC 34 Compagnie Generale des Etablissements Michelin--Michelin &Cie v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW-Canada), 1996 CanLll 3920 (FC),[1997]2 F.C. 306 (T.D.) Prism Hospital Software Inc. v. Hospital Medical Records Institute (1994), 97 BCLR (2d) 201 (BCSC) Edutile Inc. v. Automobile Protection Assn. (APA) (2000), 188 DLR (4th) 132, [2000]4 FC 195 Atomic Energy of Canada Limited v. AREVA NP Canada Ltd., 2009 FC 980

13. 14. 15.

32 16. 17. 18. 19. 20. 21. 22. 23. U & R Tax Services Ltd. v. H & R Block Canada Inc.,[1995] F.C.J. 962(F.C.)

France Animation, s.a. c. Robinson, 2011 QCCA 1361 Infopaq Int'1 A/S v. Danske Dagblades Forening,[2009] ECR I-6569 Breen v Hancock House Publishers Ltd. (1985), 6 C.I.P.R. 129(Fed. T.D.) Allen v. Toronto Star Newspapers Ltd.(1997), 36 O.R.(3d) 201 (Ont. Div. Ct.) Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, 2012 SCC 36 Pfizer Canada Inc. v. Apotex Inc., 2007 FC 971 Alberta (Education) v. Canadian Copyright Licensing Agency(Access Copyright), 2012 SCC 37

Court File No. A-394-12 and A-395-12

FEDERAL COURT OF APPEAL

BETWEEN: RICHARD WARMAN and NATIONAL POST COMPANY Appellants -and-

MARK FOURNIER and CONSTANCE FOURNIER Respondents

MEMORANDUM OF FACT AND LAW OF THE APPELLANT, NATIONAL POST COMPANY (DATED: March 8, 2013) Cassels Brock &Blackwell LLP 2100 Scotia Plaza 40 King Street West Toronto, ON M5H 3C2 Casey Chisick LSUC #: 46572R Tel: 416.869.5403 Fax: 416.644.9326
cchisick@casselsbrock.com

Jason Beitchman LSUC #: 564770 Tel: 416.860.2988 Fax: 647.259.7993
jbeitchman@casselsbrock.com

Solicitors for the Appellant, National Post Company

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