Understanding subscription licenses, fair dealing and legal protection for TPMs in Canada: A critical commentary of the Blacklock’s Reporter Parks Canada decision

The Federal Court issued another troubling copyright decision involving Blacklock’s Reporter (BR) in the recent case, 1395804 Ontario Ltd, operating as Blacklock’s Reporter v AG Canada, 2024 FC 829. In reasons that are very difficult to follow and untangle, Justice Roy of the Federal Court held that Parks Canada did not infringe copyright or breach the Copyright Act’s legal protection of technological protection measures by circulating copies of articles and passwords to locked articles published by BR.

The Blacklock’s Reporter decision is riddled with mistakes. It misconstrued the BR terms and conditions, came to the conclusion that they were binding on Parks Canada, but then decided the case as if they were not binding. The decision found that Parks Canada’s unauthorized copying was a fair dealing, but this analysis was tainted by it’s contract/license analysis, a flawed analysis of fair dealing, and its ambiguous and questionable obiter dicta about the technological protection measures (TPMs) provisions in the Copyright Act and their relationship to the fair dealing defense.

You might think after reading the decision that it decided or correctly decided that:

• a person can buy a single subscription to a news service and rely on fair dealing to copy and distribute articles to any interested readers to avoid paying for a bulk or organizational license and paying the usual price;
• an online subscription service which makes reasonable efforts to bring online license terms to the attention of subscribers (including sophisticated subscribers) cannot enforce those terms unless the specific license terms are brought to the subscribers’ attention during the contracting process;
• fair dealing is a defense to the violation of the Copyright Act’s prohibition on circumventing TPMs;
• fair dealing trumps the Act’s anti-circumvention prohibition; and
• a person who buys a subscription to a news service can copy and distribute copies of articles along with passwords to enable others to unlock the articles without any person being liable for violating the Act’s legal protection of TPMs.

You would be wrong to come to such conclusions. However, the Blacklock’s Reporter court decision could leave online news services scratching their corporate heads asking whether after this decision they have any effective legal protection against subscribers – and especially Government of Canada subscribers – disavowing online subscription terms, copying and distributing articles without infringing copyrights, and bypassing or avoiding TPMs that protect against unauthorized access to articles.

In this post, I first summarize the facts, the court’s decision, and then provide a lengthy critical commentary of the decision.

Background

The dispute in the case arose out of a subscription by Parks Canada (“Parks Canada” or the “Agency”) to Blacklock’s Reporter, a subscription-based news corporation based out of Ottawa. An officer at Parks Canada purchased a $148 subscription to the news service using a Parks Canada credit card. After enrolling for a subscription, the Parks Canada employee obtained copies of articles and a password. These were shared with other Agency employees and with other Government of Canada departments.

BR launched an action in the Federal Court alleging that officers at Parks Canada used the subscription in breach of the BR subscription terms (the “TOS”), infringed copyright in news articles, and violated the Copyright Act’s (the “Act”) legal protection for TPMs.

The Attorney General for Canada (the “AGC”) defended the claim, and when BR tried to discontinue the action, the AGC instituted a motion seeking declaratory relief that the Agency did not breach the TOS or infringe copyright based on a fair dealing defense, and that it did not violate the TPM provisions in the Act. Specifically, the AGC sought these declarations:

• There was no binding agreement between the parties, or there was a unilateral mistake on the part of Parks Canada, thus opening the door to rectification;
• Parks Canada did not infringe BR’s copyright; and
• No circumvention of TPMs occurred in this case.

The case followed two earlier decisions involving the allegedly unauthorized access and copying of articles published by BR. In the first case, Blacklock’s Reporter v Canadian Vintners Association, 2015 CanLII 65885 (ON SCSM) (“BR v Vintners”, summarized here), an Ontario court held that by-passing a subscription paywall to access a BR news article violated the Act’s TMP provisions. It also held that the defendant could not rely on the fair dealing defense to excuse copying because the defendant illegally accessed the work by circumventing a TPM to do so.

In the second case, 1395804 Ontario Ltd. (Blacklock’s Reporter) v. Canada (Attorney General), 2016 FC 1255, [“Department of Finance” or “BR v DOF”], Justice Robert Barnes held that the DOF was not liable for copyright infringement when an employee downloaded articles from the BR site and circulated them to a limited number of DOF staff based on the fair dealing defense. He also found that the DOF was not bound by the TOS. I wrote a critical commentary on that case, expressing the view that that decision was wrongly decided. See, Browsewraps, fair dealing and Blacklock’s Reporter v Canada: a critical commentary – Barry Sookman (I refer to this blog here as my “Prior BR Blog”.

The facts of this case

Justice Roy found that Parks Canada officials accessed 15 articles from BR’s site. The ostensible purpose was to correct erroneous or misleading information in BR articles. The articles, together with passwords obtained from BR were circulated to personnel within the Agency who possibly had an interest in responding to the articles. The articles, and presumably the passwords, were also shared with “central agencies” “when the mandate or responsibilities of other governmental entities” were engaged.

The BR subscription was purchased by a media relations officer at Parks Canada who was experienced in the purchase of subscriptions for Parks Canada. To purchase the subscription she filled out the Membership Checkout form identifying the purchaser as Parks Canada and paid for the subscription with the Agency’s credit card.

There was no dispute as to how Parks Canada, or any potential subscriber, could purchase a subscription. There was a tab on the website page which indicated “Subscribe now”. Once having clicked on the tab, the subscriber was taken to a page called “Membership Levels”. On that page there was only one membership level. The subscriber then had to click on “I want Blacklock’s Reporter”, which was a link to another page: Membership Checkout. The website subscription sequence (including screenshots) was shown in my Prior BR Blog.

A core dispute in the case was whether the Agency purchased a single subscription limited to a single individual within the Agency or whether by purchasing a subscription the Agency had somehow acquired an institutional subscription which would have given it a right to share the articles and passwords within the Agency. There was an evidentiary dispute as to whether the Membership Checkout form contained wording that “For institutional subscribers who would like to share or distribute content in-house, please contact manager Holly Doan for custom bulk rates at “. The court made a finding that the form in existence at the time did not contain this wording.

After the purchase was completed, BR sent an e-mail to Parks Canada confirming the subscription purchase. The email read as follows:

The BR site at which the subscription was purchased contained these TOS:

You acknowledge and agree one subscription is allotted per subscriber. Distribution of articles, photographs, images, writings or other content of any kind by a single subscriber by paper, electronic file, disc, intranet or any and all methods is not permissible. For purchase of bulk subscriptions, see “Contact”.

Reproduction, duplication, or distribution of Blacklock’s Reporter and/or all or any part of its content for anything other than your personal, non-commercial use is a violation not only of these Terms and Conditions but also of copyright laws unless you have written permission from Blacklock’s Reporter. The content on Blacklock’s Reporter is made available to you for non-commercial, personal, or educational purposes only.[i] (emphasis added)

Although it is clear that BR used a password system to secure access to its articles, the court found there was no information about how the system or password worked.

Findings of the Court

Whether the Agency was bound by the TOS

The AGC contended that the TOS were not enforceable against the Agency. It claimed the terms were inconspicuous, buried deep in the BR webpages and were not brought to the Agency’s attention at the time the subscription was purchased. Justice Roy disagreed and found that the TOS were binding on Parks Canada in a portion of the decision that dealt with the declaratory relief sought by the Agency.

The contention is that the terms of the agreement between BR and Ms. Patenaude, on behalf of Parks Canada, “were buried deep in the Blacklock’s webpage, barely perceivable to the naked eye and were never pointed out to the purchaser. In these circumstances, there was no consent by Parks Canada and there is no binding contract” (Moving Party’s memorandum of fact and law, para 43). I cannot accept that contention. For starters, the mention of the terms and conditions was not buried deep in the webpage. The words were in my estimation plainly visible although inconspicuous. What is true is that Ms. Patenaude did not see them or did not pay attention to them but, as I pointed out during the hearing, Ms. Patenaude had purchased subscriptions before. She was not a neophyte. Terms and conditions were not a novelty. Could BR have made the matter clearer by requiring a purchaser to click on an “I accept” button? Most probably….(emphasis added)

Had Ms. Patenaude been curious enough, she would have clicked on the button “Terms and Conditions” and, right upfront, she would have read the paragraphs already reproduced in these Reasons for Judgment (para 56).

Despite the clear finding that the TOS were agreed to by the Agency, Justice Roy also made a contrary statement in the portion of his decision which dealt with the fair dealing defense in which he said the following as a reason for finding the sharing of the articles to be fair:

Neither [XXX] nor the Department were aware of, or agreed to, Blacklock’s Terms and Conditions.

What Type of subscription did the Agency Have?

Having found that the TOS were binding on Parks Canada, one would have expected the court to have reviewed the terms and to have decided what the scope of the license was. If, on the other hand, no express license had been agreed to, one would have expected the court to determine what type of implied license Parks Canada had. But, instead of doing this, the court skipped over this analysis and went right to the question as to whether Parks Canada had a fair dealing defense to infringement.

In the course of the fair dealing analyses, however, the court expressed its opinion on what the TOS permitted, or at least did not prohibit.

As noted above, a key dispute between the parties was whether the Agency had a single “institutional” subscription or a subscription that was limited to a single individual within the Agency. The further dispute concerned the scope of use the subscriber could made under the TOS.

Justice Roy found the TOS to be ambiguous and spent considerable attention on analyzing the scope of use under them.[ii] He found that the wording of the last sentence in the second paragraph of the terms had to be read disjunctively under which the subscriber could make either personal, non-commercial, or educational uses of the articles[iii]. He found that the words “distribute” and “bulk subscription” in the TOS were ambiguous, [iv] and relying on the contra proferentum doctrine stated that the terms did not unambiguously prohibit the circulation of Blacklock’s articles for personal or non-commercial purposes.

Did the Agency have a fair dealing defense?

This case should have started and ended with a finding that the TOS were binding. Instead, while the court made the express finding that the TOS were binding on the Agency, it went on to assess whether the Agency could benefit from the fair dealing defense. It did so, admittedly, “largely based on the findings made in the Department of Finance case”.

To constitute a fair dealing under the Act, the dealing must be a use for an enumerated purpose and it must be fair.

Following the decision in the BR v DOF case, the Court concluded that the purpose was for the allowable research purpose. In that case, the court accepted that the DOF’s purpose was research because the copiers either had “legitimate concerns about the fairness and accuracy” of the BR reporting and the persons to whom the articles were distributed “had a legitimate need to be aware in the event that further action was deemed necessary”. Implicitly finding the facts to be similar, the court accepted that there was “no reason to depart from the conclusion reached in the Department of Finance case (para 33) where Barnes J concluded that the same kind of activities as those proven in the case at bar constituted a proper research purpose.”

The court also accepted that the dealings were fair by comparing the eleven factors considered in the BR v DOF case with the Agency case.

• BR’s website was not hacked or accessed by illicit means. A subscription was purchased.
• The subscription was used for a legitimate business reason, that is to identify articles targeting Parks Canada to seek to protect its reputation and to correct mistakes, errors or misrepresentations in the public interest.
• The use made by Parks Canada was limited to its valid business purpose.
• The circulation of the articles was limited to persons who needed to know for business reasons linked to the Agency’s core mandate.
• There was no commercial advantage either sought or obtained by Parks Canada.
• A “small” number of articles (15) was shared among a small number of relevant officials outside of the Agency for the specific business reasons linked to the Agency’s mandate.
• There was a reasonable basis for concern about articles which contained citations seen as misleading and alarmist which called for the sharing with appropriate officials.
• The TOS were not ignored, and, they “did not unambiguously prohibit the circulation of Blacklock’s copy or personal or non-commercial purposes”. In fact, those terms are to be read disjunctively.
• The TOS and the invoice sent to the Agency, did not “dissipate the confusion”. “The lack of definition of what constitutes “distribution”, “bulk subscription” in the Terms and Conditions and “bulk rates” in the invoice makes it impossible to know what the limitations may be”.
• Referring to the TOS, “something as simple as an acknowledgement that the terms and conditions have been read and accepted was not present”. BR did not “establish that the terms of use actually prohibit the access or distribution in question and that the person involved was aware of the limitations”.
• The use made by the officials was “the simple act of reading” “with an immediate interest in the articles for business related reasons”.
• There was a significant public interest in reading articles with a view to protecting the public, and the press, against errors and omissions.
• There was no reason to think that sharing a very limited number of articles to a limited number of officials solely interested in the content for business reasons having to do with the Agency’s mandate and reputation could constitute somehow a violation of the Act.

Did the Agency violate the Copyright Act’s TPM provisions?

As noted above, the Agency sought a declaration that the legal protection of TPMs in the Act were not violated. The declaration was sought even though, according to the court, “the issue raised clearly lacks any evidence of a technical nature”; there “was no evidence of the extent of the use of the password associated with the subscription purchased”, or any evidence “either of what a ‘password” is and what it was in this case; or any expert evidence on whether the TPM was “an effective” protection measure.

The Agency made three arguments in support of its request for declaratory relief:

• The subscription “allowed for the sharing of articles”.
• The “sharing of a password, which appears to have taken place to some extent in this case, does not constitute circumvention of the TPM.”
• The “fair dealing provisions of the Act are such that there was no circumvention under the Copyright Act”.

The court’s reasons on these issues are difficult to follow. However, the court appears to have found no violation of the TPM provisions for the following reasons:

• The subscription purchased by Parks Canada “gave it access to a password which was used to gain access to some articles published by BR which concerned Parks Canada’s mandate and operations.”
• Parks Canada did not circumvent any TPM because it “used the password licitly obtained for the purpose for which it was created: gaining access to articles located on a website.”
• “In the case at bar, there is no circumvention of a TPM simply because the password was not circumvented: it was properly obtained and used for a legitimate purpose.”

The court also made some statements about the interrelationship between the TPM and the fair dealing provisions. These statements, which contain many legal frailties discussed below, are as follows.

• Where a password is “licitly” obtained the TPM provisions are not a bar to making out a fair dealing defense.
• Using “a validly obtained password to access content is not circumvention”.
• How a “password was obtained is significant as this may prevent a user from invoking the fair dealing provisions of the Act. Obtaining content by descrambling a signal or decrypting a communication may render invoking fair dealing very difficult to establish successfully.”
• “Fair dealing has been found by authorities binding on this Court to be an integral part of a scheme, not a mere exception to the scheme or a defence to an infringement. It must be accounted for in considering the TPM provisions.”
• The “TPM provisions do not apply to restrain fair dealing”. “Specific exemptions for TPM do not…displace the fundamental pillar of copyright law that is fair dealing. If there is fair dealing, there is no infringement.
• “The TPM Provisions’ purpose was to better enable digital copyright owners to enforce copyright in the online environment. They provide an additional remedial arrow in the copyright owner’s quiver where an infringement occurs in a digital context “to better address the challenges and opportunities of the Internet”. They were not intended to effectively enlarge copyright protection for digital works by allowing owners to employ TPMs to defeat fair dealing, an inherently non-infringing activity.”

Following the above summarized reasons, the court found it could grant the following declarations:

• Parks Canada, is entitled to the declaration that, “having purchased the only type of subscription offered which allowed the acquisition of a password needed to access articles produced by Blacklock’s Reporter, Parks Canada’s use of the password in the circumstances of this case constitutes fair dealing under section 29 of the Copyright Act.”
• The “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. “

Critical Commentary

The TOS were binding on the Agency

As summarized above, the decision contains inconsistent findings about the enforceability of the TOS. In the portion of the decision dealing with rectification Justice Roy made a clear finding that there was a “binding contract” between the Agency and BR. This holding was premised on his finding that “the mention of the terms and conditions was not buried deep” in the BR webpage, the words identifying the TOS were “plainly visible”, the Agency official who purchased the subscription was experienced in purchasing subscriptions, and could have clicked the link to view the terms. However, in the portion of the decision dealing with fair dealing, Justice Roy seems to have disregarded the import of his prior findings in expressing the view that for the TOS to have restricted the Agency’s copying “it must be shown that the person involved was aware of the limitations”.

The court’s findings in relation to the TOS are problematic. If, as the court found found, the Agency had agreed to the TOS, then there was no further requirement to bring any of the limitations to the Agency’s attention. If, on the other hand, the court’s statements in the course of the fair dealing analysis were intended to reflect the belief that the Agency official had to be made aware of the limitations in the TOS to be effective, that holding would be open to doubt.

In my Prior BR Blog I pointed out that at common law, website subscription terms are binding on persons if the website operator has taken steps that were reasonably sufficient to give subscribers notice of its terms. They do not have to ensure that subscribers are aware of the specific terms. Nor are they required to obtain any acknowledgement that the terms are read and accepted. I referred to the leading Canadian and U.K. cases on point. The recent U.K. Court of Appeals decision in Parker‑Grennan v Camelot UK Lotteries Ltd. [2024] EWCA Civ 185 (01 March 2024) further supports this conclusion summarizing the law as follows:

“It is not necessary that the conditions contained in the standard form document should have been read by the person receiving it or that they should have been made subjectively aware of their import or effect. The rules which have been laid down by the courts regarding notice in such circumstances are three in number:

• If the person receiving the document did not know that there was writing or printing on it they are not bound (although the likelihood that a person will not know of the existence of writing or printing is now probably very low);

• If they knew that the writing or printing contained or referred to conditions, they are bound;

• If the party tendering the document did what was reasonably sufficient to give the other party notice of the conditions, and if the other party knew that there was writing or printing on the document but did not know it contained conditions, then the conditions will become the terms of the contract between them.”

In summary, the court was right when it first concluded that the TOS was binding on the Agency. That conclusion is consistent with the applicable law based on the court’s findings of fact. The subsequent apparent renunciation of this holding and the statements about what needed to be drawn to the attention of the Agency to make the contractual restrictions binding is not consistent with the leading authorities and other than relying on the BR v DOF case, the court did not refer to any authorities to support its conclusion.

The TOS did not give the Agency an institutional license

While the TOS were not a model of clarity, on a proper construction of them, they limited the Agency to a subscription by a single individual, prohibited the individual from making or distributing copies, and only permitted that individual to make personal, non-commercial, or educational uses of the articles.

The court, however, appeared to have read them as giving the Agency an institutional subscription holding that:

In any event and as noted below, those provisions did not unambiguously prohibit the circulation of Blacklock’s copy for personal or non-commercial purposes. If [XXX], as a subscriber, had the right to use and distribute the articles for a non-commercial purpose, those who received the articles lawfully could reasonably expect to enjoy the same privilege.

This conclusion, which is open to significant doubt and was arrived at by disregarding the modern principles of contract interpretation which require courts to apply the following principles in construing contract terms.

• Contract law principles give priority to the parties’ intentions in a manner that modifies and relaxes some of the stricter and more technical approaches which found expression in certain prior cases.
• The interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine the intent of the parties and the scope of their understanding.
• The intention of the parties is determined from an examination of a number considerations including the language of the written document itself and in which the court interprets contracts in a way that gives meaning to all its terms.
• The court, in understanding the objective intention of the parties, may consider the surrounding circumstances or relevant background against which the contract was concluded. The courts consider the “factual matrix” or context underlying the contract. excluding subjective evidence of the parties’ intention.
• Commercial contracts must be interpreted in accordance with sound commercial principles and good business sense, avoiding any commercial absurdity.
• An ambiguous contract term can be interpreted against its drafter under the doctrine of contra proferentem. This principle, however, should be invoked only as a last resort when all other construction principles fail to ascertain the contract’s correct meaning.[v]

Notably, the reasons for decision did not purport to analyze the lead in paragraph of the terms to determine whether, on the words of the TOS, a single individual or single institutional license was granted. To repeat it, the first paragraph read as follows:

You acknowledge and agree one subscription is allotted per subscriber. Distribution of articles, photographs, images, writings or other content of any kind by a single subscriber by paper, electronic file, disc, intranet or any and all methods is not permissible. For purchase of bulk subscriptions, see “Contact”. (emphasis added)

To read this paragraph as conferring, in effect, an institutional license, one would have to read the above words in a non-sensical and unreasonable way of conferring one institutional subscription per single institution and that the distribution of articles was limited to distribution by the single institutional subscriber. In other words, to transpose the court’s interpretation, the Agency had one subscription that is allotted per the Agency. The much more straightforward way to read the terms is that they confer a subscription for a single individual within the Agency and prohibited that individual from distributing copies of the articles. That reading is fortified by the wording in the second paragraph that limited uses for “personal uses”.

The court also incorrectly interpreted the second paragraph in the terms which, to repeat, read as follows:

Reproduction, duplication, or distribution of Blacklock’s Reporter and/or all or any part of its content for anything other than your personal, non-commercial use is a violation not only of these Terms and Conditions but also of copyright laws unless you have written permission from Blacklock’s Reporter. The content on Blacklock’s Reporter is made available to you for non-commercial, personal, or educational purposes only …

First, the court failed to read the second paragraph in light of the first paragraph. Under the first paragraph, the right to make copies prevented the single individual who had the single subscription from distributing any articles.

Second, the court failed to give effect to first sentence of the second paragraph that prevented distribution other than for “personal, non-commercial use”. That formulation of the restriction was conjunctive. This means that both conditions—personal and non-commercial—had to be met simultaneously for the use to be permissible under the terms of the license. The word “personal” generally means that the use must be for an individual’s private purposes and not for public or shared use. The term “non-commercial” generally connotes that the use must not involve any financial gain or commercial advantage.

Third, the court failed to recognize that the last sentence in the second paragraph did not address the right to distribute content, but was a further limitation setting out the types of purposes that could be made of the articles, namely, “non-commercial, personal, or educational purposes only”.

Fourth, the court applied the ccontra proferentem precipitously, and not as a last resort.

Fifth, one might ask why the court did not include in the reasons the factual matrix or any analysis of sound commercial principles and seek to avoid a commercial absurdity. In essence the decision found that for the payment of $148 the entire Agency received a license to copy and distribute BR articles within the Agency to any interested individuals and to other interested departments with an interest in Parks Canada. The court did not refer to the costs of an institutional membership. But, in the BR v Vintners case the court referred to the evidence of Tom Korski who testified that a single-use subscription costed $157.00 and a typical institutional membership was charged out at $11,470.00. The application of sound commercial principles would strongly suggest that for a mere $148 the Agency did not have a “bulk license” or an “institutional license” (easily understood terms)  to copy and distribute BR articles. This is re-enforced by the email sent by BR after the subscription was agreed to noting that for institutional subscribers wanting to share content in-house, higher fees were applicable.

The Agency did not have an implied license that permitted institutional wide copying and distribution

While the court stated that the Agency had agreed to the TOS, it also proceeded to analyze the case as if there was no express agreement to these terms. The court went straight to whether the Agency had a fair dealing defense. In doing so the court overlooked a critical inquiry, namely, whether the Agency had an implied license, and if so what was the scope of that license. In fact, since the fair dealing fairness analysis is highly dependent on all of the facts, it is hard to see how the court could justify not determining what license rights the Agency had if the TOS was not binding.

It is well established that a license may be express or implied. As would be applicable here, a term could be presumed from the circumstances and the conduct of the parties. It seems clear that the Agency paid for a subscription and that at least some copying was going to be associated with reading the articles. It can therefore be presumed that some license had to be implied in the circumstances.

To make out such a license, the implied term must be necessary to give business efficacy to the contract or otherwise meet the ‘officious bystander’ test as a term which the parties would say, if questioned, that they had “obviously assumed”.

Where it is necessary to imply the grant of some license to fill a lacuna in a contract, the choice is that which does not exceed what is necessary in the circumstances. An implication may only be made if this is necessary, and then only of what is necessary and no more. Further, in considering the scope of implied licenses, courts look to the joint contemplation of the parties at the time of contracting, and where the payment is nominal, the license is also likely to be narrower than other alternatives.[vi]

The court did not even consider what implied license existed. Had it done so, it might have concluded that the Agency only had a single personal subscription that could be used by an employee of the Agency. The fact that the Agency had only paid $148 might have been a telling factor. This conclusion would have been bolstered by the email the Agency received which, on an objective basis, would have conveyed BR’s intention not to grant a broad institutional or bulk right to copy and distribute BR articles for the payment of a single subscription license fee. The court might, however, have come to a different conclusion. However, the failure to even engage in this analysis was a major flaw in the reasons and this also tainted his fair dealing analysis.

The Agency did not have a fair dealing defense

In my Prior BR Blog, I explained why the finding of fair dealing in the BR v DOF case was erroneous. The court there, as in here, wrongfully concluded that the purpose of the dealing was research and that the dealing was fair. I refer readers to the lengthy criticisms in my Prior BR Blog which I do not repeat here.

Without derogating my prior lengthy criticisms, there are several errors that taint the entire fair dealing analysis. These include:

• The court should not have engaged in the fair dealing inquiry, at least without considering the TOS to be binding or the scope of any implied license. Had it correctly analyzed the license issues, the applicable terms would unlikely to have been an institutional license that permitted copying and distribution within and outside of the Agency. On a proper analysis the Agency would have been liable for breach of contract and that would have negatively affected the fair dealing assessment, assuming it was appropriate to even engage in it based on a proper assessment of the applicable license terms.
• The court relied heavily on the misconstruction of the terms of the TOS in finding fair dealing. This tainted the entire fair dealing analysis. In the BR v Vintners case, the court held that a person cannot rely on the fair dealing defense where materials have been obtained illegally. If the Agency only had a single license subscription, the persons who had received copies of the articles would have received them illegally and these dealings, arguably, should not have been regarded as fair.
• The court’s decision had little regard for the effect of the dealings on the market. BR had 9 other cases that were stayed pending the decision in this case. As noted by the Federal Court in a motion to stay the other cases, these cases had common issues including whether the fair dealing defense was applicable. So clearly, 10 cases could all turn on whether government departments and agencies could subscribe for a single subscription and rely on fair dealing to avoid paying the usual price for expanded uses. Moreover, the effect on the market factor examines whether the practice, if it became widespread, would create market harms, something the court also did not consider. There is a good basis to believe that many news subscription services could be negatively impacted if the purchase of a single subsection for a low price gave rise to a fair dealing “bulk” or “institutional” license to copy and distribute articles to anyone in the organization who might be interested in them.
• The court’s mis-interpretation of the TPM provisions in the Act, explained below, also tainted the fair dealing analysis.

The court erred in its interpretation of the TPM provisions

As summarized above, the Court made many statements concerning the interpretation of the TPM provisions in the Act and their relationship to the fair dealing defense. Much of it is obiter dicta and most of it reflects a profound misunderstanding of the Act.

It is arguable that the entire portion of the decision dealing with TPMs is obiter dicta because Justice Roy stated there was no technical evidence to support that BR had a TPM within the meaning of the Act. Without a finding that BR had a TPM within the meaning of the Act, there could be no infringement of the TPM provisions.

As the TPM provisions are important rights under the Act and as the decision makes many incorrect findings regarding them, it is worth commenting on some of the errors.

First, the court seems to have approached the case as if the password was the TPM and to violate the anti-circumvention provisions the password itself would have had to be circumvented (subject to his views regarding whether the password was obtained licitly). His statements in this regard illustrate a confusion regarding what was the TPM and which acts were capable of being acts of circumvention. He also seems to have suggested that a “paywall” could not be a TPM.[vii]

It is unfortunate that technical evidence was not (according to the judge) proffered on how password systems that protect documents from unauthorized access work. Under the Act, an access control TPM is defined to mean

“any effective technology, device or component that, in the ordinary course of its operation…controls access to a work… and whose use is authorized by the copyright owner”. (emphasis added)

In Nintendo of America Inc. v. King, 2017 FC 246 (the Nintendo case), the Federal Court noted that this was “open-ended” “language reflecting Parliament’s intention to empower copyright owners to protect their business models with any technological tool at their disposal”.

Thus, there is good reason to believe that password systems that lock document files and paywalls that require the use of a password to enable access to paywalled content can be access control TPMs. In fact, password systems have been recognized as such under the DMCA.[viii] Note in these instances, the TPM is the password system and the circumvention prohibition is against circumventing that system and not the password itself.

Second, the court stated that the fair dealing defense can apply as a defense to the contravention of the TPM provisions in the Act.[xi] This is clearly incorrect. The fair dealing defense in Section 29 only provides that fair dealing for an allowable purpose of research, private study, education, parody or satire does not infringe copyright. Neither the definitions of “infringe” or “copyright” extend to the circumvention of a TPM and the prohibition against circumvention does not refer to the act being an infringement of copyright.[xii] Therefore, fair dealing does not provide a defense to the circumvention of a TPM protecting access to a work.

Third, the court suggested that if a person has properly obtained a password that can be used to unlock a TPM that protects access to a work, it is lawful to share that password and for others to unlock and access copies of the work. No Canadian case has considered this issue and the court’s reasons for decision leave unresolved the basis on which it came to this conclusion. A finding that there can never be a circumvention of a TPM because a password was licitly obtained does not address the statutory issues of  whether there had been sufficient authorization to use the password for all instances in which it is used and whether any such uses could constitute a circumvention within the meaning of that term in the Act. But, the court did not address these issues within the framework of the TPM provisions.

Under the Act, an access control TPM is infringed if specified acts of circumvention are done without the authority of the copyright owner. ^[ix] BR’s case was that the Agency had infringed the TPM provisions by circumventing a TPM. On the court’s view of the facts, the subscription purchased by Parks Canada “gave it access to a password which was used to gain access to some articles published by BR which concerned Parks Canada’s mandate and operations.” The Agency could circumvent the password system because it “used the password licitly obtained for the purpose for which it was created: gaining access to articles located on a website,” and that there was no circumvention of a TPM because the password was “properly obtained and used for a legitimate purpose.” The court also apparently relied on its finding that fair dealing applies as a defense to circumvention activities.

One might infer that the court believed that the password could be shared with non-subscribers and used to unlock copies of articles based on an implied license to do so.  But,  the court never considered whether BR had authorized the uses of the password to unlock the BR articles by all of the persons who used it within and outside the Agency. In fact, the court never considered what license if any, the Agency had to the BR articles or to use the password to unlock them. As noted above, the court went directly to a fair dealing analysis, completing skipping any such analysis. Had the court found an express or implied license to engage in institutional or bulk copying, it may have been open to it to have implied an authorization to use the passwords within the scope of the license and to use this finding to support its conclusion. But, on the court’s analysis of the case the right to make and distribute copies and to circumvent the TPMs was tethered to fair dealing with the articles and the password system, a defense to copyright infringement that is only necessary if there are acts of infringement such as where infringing acts are done without consent of the copyright holder.  Further, as shown above, fair dealing is not a defense to the violation of the Act’s TPM  prohibition against circumvention and presumably even if it was, it would only apply if there was no consent to the acts of circumvention. Accordingly, it is hard to see how the court’s findings on the password having been licitly obtained and that the acts of circumvention were a fair dealing can be squared with the Act’s TPM framework.

Because of the lack of evidence, the court also never considered whether using a licitly obtained password could constitute an act of circumvention within the meaning of the Act. As the Nintendo case found

“the definition of ‘circumvent’ for an access control TPM extends beyond descrambling and decryption (or other similar transformation) to anything else that otherwise avoids, bypasses, removes, deactivates, or impairs the technological protection measure.”

It is therefore arguable that such uses of a password could violate the Act, but whether it does or doesn’t ideally requires technical evidence and statutory interpretation of the TPM provisions, none of which are found in case.[x]

Fourth, the court incorrectly stated that if a password is “licitly” obtained, the TPM provisions are not a bar to making out a fair dealing defense. This is only partly true. Using a “lictly” obtained password is not necessarily a bar to making out a fair dealing defense. However, as Justice Roy foun,d how a “password was obtained is significant as this may prevent a user from invoking the fair dealing provisions of the Act, and further, obtaining content by violating the prohibitions against circumvention “may render invoking fair dealing very difficult to establish successfully.” Therefore, even if a TPM has been lawfully obtained if it is used in a way that violates the Act’s TPM prohibitions it follows that this may impact the fairness of the dealing.

The court also stated that the “TPM provisions do not apply to restrain fair dealing”. “Specific exemptions for TPM do not…displace the fundamental pillar of copyright law that is fair dealing. If there is fair dealing, there is no infringement. That is true as explained below, but the statement omits that violating the TPM provisions to access a work can have a negative bearing on the fair dealing analysis, as he noted in his decision.

Fifth, the court stated that “[F]air dealing has been found by authorities binding on this Court to be an integral part of a scheme, not a mere exception to the scheme or a defence to an infringement. It must be accounted for in considering the TPM provisions.” He went even further stating that the TPM provisions “were not intended to effectively enlarge copyright protection for digital works by allowing owners to employ TPMs to defeat fair dealing, an inherently non-infringing activity.”

It is unclear what the court meant by these statements. It is possible that the court intended the sentence above merely to state that the TPM provisions do not alter the copyright law rules as to what can be done with a work after it is circumvented including infringing copyright or defenses to infringement such as fair dealing, but did not intend the sentence to imply that fair dealing trumped the Act’s anti-circumvention rules. Such an interpretation of the provisions would be consistent with the interpretation of the DMCA’s similar provisions.[xiii] If the court was suggesting that a copy control TPM can be circumvented to engage in a fair dealing, that would also be right. But, if the court intended the sentence to imply that an access control TPM can be circumvented for the purpose of engaging in a fair dealing not covered by an exception set out in the Act, or promulgated through a regulation, the court would be incorrect.

Such an interpretation of the statement would not take into account the principles of statutory construction fundamental to understanding the scope of the TPM provisions. It is true that under the modern principles of statutory construction relevant terms in a statute can be used as an aid in construing other terms. It may be that principles underlying the construction of the Act such as “balance”, “user rights” (applied to defenses to infringement), “technological neutrality”, legislative history, and the influence of treaties and conventions that Canada has adhered to with respect to TPMs (such as the WIPO Internet Treaties and CUMSA) may all have a role to play in construing the TPM provisions. But, it is a stretch, for the reasons set out below, to find that the fair dealing regime itself or alone should be used to construe or even trump the TPM provisions.

It may be argued that the TPM provisions should be construed narrowly in order to help foster fair dealing. However, this argument fails to take several key considerations into account.

As the recent U.S. District of Columbia Circuit Court of Appeals case Green v U.S. department of Justice, No. 23-5159 (D.Col.Cir, Aug 2, 2024), found, TPMs foster the goals of copyright by creating incentives for authors to create and disseminate works, especially digitally. This was also a stated goal of these provisions which is reflected in the recitals to the Copyright Modernization Act (quoted with approval in the Nintendo case) which stated:

Whereas the Government of Canada is committed to enhancing the protection of copyright works or other subject-matter, including through the recognition of technological protection measures, in a manner that promotes culture and innovation, competition and investment in the Canadian economy;

The legal protection of TPMs was intended to protect online news publishers against the circumvention of their digital locks, as evidenced by a contemporaneous statement by the Government (also quoted in the Nintendo case):

Protecting digital locks gives copyright industries the certainty they need to roll out new products and services, such as online subscription services, software and video games, if they choose to use this technology. Not only will this promote investment and growth in Canada’s digital economy, it will also encourage the introduction of innovative online services that offer access to content. Such services are increasingly available in other countries.

The Bill recognizes that certain protections, such as restricted content on news websites or locked video games, are important tools for copyright owners to protect their digital works and are often an important part of online and digital business models.

In fact, legal research on the uses of TPMs has confirmed that they have fostered innovative business models, without resulting in digital lock-up of works.[xiv] The argument, therefore, that the fair dealing provisions in the Act should be read to cut down or eviscerate the TPM provisions fails to take into account that fair dealing weakens rather than strengthens legal protection for works, something the legal protection of TPMs were enacted to foster.

Moreover, the argument that fair dealing somehow trumps the legal protection of TPMs is bellied by the legislative history of the TPM provisions. Opponents of the legal protection of TPMs argued vociferously against such protection lobbying to limit the legal protection only where circumvention took place for the purposes of an Infringement so as to leave open circumvention for the purpose of a fair dealing. Yet, Parliament refused to accede to this narrowing of protections for access control TPMs as bills progressed through Parliament.[xv] This legislative history clearly shows that Parliament did not intend fair dealing to trump legal protection for TPMs.

Moreover, as found by the Federal Court in the Nintendo case, the TPM provisions in the Act must be construed in a technologically neutral manner. The access control prohibitions are akin to prohibitions against digital trespass. They no more provide a right to break into a bookstore to be able to engage in a fair dealing with books on store shelves than to pick a digital lock protecting access to a work. These principles were recently emphasised in Green v U.S. department of Justice in construing the DMCA’s TPM provisions:

“The first provision is the Act’s anticircumvention provision, which forbids “circumvent[ing] a technological USCA Case #23-5159 Document #2067976 Filed: 08/02/2024 Page 7 of 37 8 measure that effectively controls access to a work protected” by copyright law. 17 U.S.C. § 1201(a)(1)(A). It prohibits individuals from overcoming technological access controls on copyrighted material, including by “descrambl[ing] a scrambled work” or “decrypt[ing] an encrypted work” absent “the authority of the copyright owner.” Id. § 1201(a)(3)(A). Congress noted that “the conduct of circumvention was never before made unlawful,” S. Rep. 105-190, at 12, but explained the need for the new protection as akin to “making it illegal to break into a house using a tool, the primary purpose of which is to break into houses,” id. at 11. In other words, the anticircumvention provision is designed to operate as a prohibition against digital trespass.”

“As the government aptly notes, trafficking is no more identified with expression than is the sale of lock picks for breaking into bookstores identified with the expressive conduct of reading the stores’ books”.

The TPM provisions also expressly permit the promulgation of exceptions to the circumvention prohibition in light of several factors of which one includes “whether not being permitted to circumvent a technological protection measure that is subject to that paragraph could adversely affect criticism, review, news reporting, commentary, parody, satire, teaching, scholarship or research”. As a matter of statutory construction, this suggests that any diminution of the TPMs provisions to foster fair dealing is a matter for the Governor in Council and not the courts to read down the provisions to facilitate a fair dealing with a work.

Further, as confirmed recently by the Supreme Court in SOCAN v Entertainment Software Association, 2022 SCC 30, under the presumption of conformity, treaties that Canada has entered into with respect to copyright are highly relevant in construing the Act. In this regard, a construction of the Act that would subject the TPM provisions to a fair dealing defense or have them trumped by fair dealing would violate Article 20.66 of CUMSA. This treaty requires that “Each Party shall provide that a violation of a measure implementing this Article is a separate cause of action, independent of any infringement that might occur under the Party’s law on copyright and related rights.” Further, it requires parties to confine exceptions and limitation to specified measures, none of which includes a broad right to engage in a fair use or fair dealing.

In any event, even the principles of balance, technological neutrality and the importance the Supreme Court has placed on fair dealing, are subject to the express provisions in the Act. As the Supreme Court found in the SODRAC case, the “scope of a right under the Copyright Act is determined, first and foremost, by the Act itself. The principles at work in Théberge and ESA can inform the interpretation and application of the terms of the Act, but they cannot supplant them”. In this regard, it is unclear how one could read the TPM provisions in a way that promotes fair dealing or has them trump the TPM provisions without reading in an exception to the provisions not in the Act. In any event, it is unclear how in the case before him Justice Roy considered how the TPM provisions should be construed in light of the fair dealing provisions in the Act.

Final remarks

It is clear that the recent Blacklock’s Reporter case is riddled with mistakes and many of its findings are open to significant doubt.

This is a case that cries out for appellate review.

But that is not all. The Government of Canada should take stock of the impacts of its legal positions on the news industry. It professes a desire to build a strong and independent newspaper industry. Yet, the government’s positions in court – contesting the enforceability of online subscription agreements,  pressing to construe online agreements in ways that promote free dealings, relying on fair dealing instead of paying for the licenses it needs, and contending that the law against circumvention of TMPs should be weakened to facilitate unlicensed uses of news articles – all suggest the opposite.

It is high time the Government decides whether it wants to win its suits with Blacklock’s at all costs and in the process create precedents which undermine news services and other cultural industries in Canada or do the right thing and support Canadian news publishing. A good start would be revisiting its legal argument and if this case is appealed, think about what it is really trying to accomplish.

^[i]     The terms shown above are the same as those considered by Barnes J in the Department of Finance case. Barnes J, found that those same paragraphs from the Terms and Conditions were ambiguous about the downstream distribution because they permit distribution for personal or non-commercial use. The interpretation of the clause must be the one most favourable to the user as it is the drafter who created the ambiguity. As the distribution in the Department of Finance case was for a non-commercial purpose, it must be seen as being permitted.

^[ii]     Justice’s Roy’s analyses of the terms was spent in considering whether the Agency had a fair dealing defense.

^[iii]    “But there is more. Barnes J found that the Terms and Conditions contain a material ambiguity in that distribution is seemingly prohibited while distribution is said to be a violation of the Act “for anything other than your personal, non-commercial use” (Terms and Conditions, 5th para). Barnes J read the two terms, “personal” and “non-commercial”, disjunctively. I agree. Personal and non-commercial are two very different concepts. As a matter of fact the very next sentence from the Terms and Conditions speaks of the content being made available “for non-commercial, personal, or educational purposes only”. Surely the three nouns refer to distinct notions or concepts. The Supreme Court seems to have had the same understanding of the difference between the two when the Chief Justice wrote for a unanimous Court in CCH that “I agree with the Court of Appeal that research is not limited to non-commercial or private contexts” (para 51).”

^[iv]    “The invoice sent to Ms. Patenaude shortly after sending the filled out Checkout form and concluding the agreement between the parties referred to “institutional subscribers who would like to show or distribute content in-house, please contact manager for custom bulk rates …”. Again, none of the terms used is defined. For instance, there is only one type of subscriber: what is an “institutional subscriber” other than a subscriber who happens to be an institution of some sort? What is a “bulk subscription”? What constitutes “distribution” or share? And how about “custom bulk rates”? Indeed, Ms. Patenaude testified that when she saw these words shortly after the contract was completed and the account was indicated as being active, she believed this did not apply to the subscription just purchased and, in particular, the words “custom bulk rates” had no application (cross-examination of Genevieve Patenaude, questions 103-107-108-109-116). That is reasonable…

These instruments did not dissipate the confusion. The lack of definition of what constitutes “distribution”, “bulk subscription” in the Terms and Conditions and “bulk rates” in the invoice makes it impossible to know what the limitations may be, especially in the context of the limited use made of the password and the access to articles for a purpose recognized as fair dealing. The very notion of “bulk”, whether it be “bulk subscription” or “custom bulk rates” suggests a large quantity, some magnitude which obviously does not correspond to what might be required to satisfy the requirements for fair dealing. Large scale distribution for a purpose other than the kind of legitimate reasons encountered in this case runs the risk of not qualifying under s 29. As aptly remarked by Barnes J, “subscribers and downstream users are subject to the obligations imposed on them by the Act. But at the same time they enjoy the considerable protection afforded to them under the statutory fair dealing provisions” (para 44).

^[v]     See, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, Sunsource v. University of Windsor, 2022 ONSC 604,Goodlife Fitness Centres Inc. v. Rock Developments Inc., 2019 ONCA 58, Salah v. Timothy’s Coffees of the World Inc., 2010 ONCA 673, Bell Canada v. The Plan Group, 2009 ONCA 548, Jamel Metals Inc. v. Evraz Inc., 2012 SKCA 116, Stevenson v. Reliance Petroleum Limited., 1956 CanLII 27 (SCC).

^[vi]    M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 SCR 619; Canadian Pacific Hotel Ltd v Bank of Montreal [1987] 1 S.C.R 711;, Double N Earthmovers Ltd v Edmonton (City) [2007] 1 S.C.R. 116, Liverpool City Council v. Irwin [1977] AC 239, Netupsky v. Dominion Bridge Co. Ltd. (1971), 24 D.L.R. (3d) 484 (S.C.C.), Bishop v. Stevens, [1990] 2 S.C.R. 467, Tremblay v Orio Canada Inc., 2013 FC 109 Robin Ray v. Classic FM, [1998] FSR 622, Stovin-Bradford v. Volpoint Properties Ltd [1971] 1 Ch 1007

^[vii]   See, the following extracts from the decision which show the court’s thoughts on this.

“There is no description or explanation as to what constitutes a password from a technical standpoint. In fact, there is no indication that access to a password was used by Finance officials”

“A few paragraphs of the affidavit are dedicated to the technological protection measures Mr. Korski claims are used by BR. Once again, the paragraphs are more argumentative than informative. The affidavit states that the protection consists of a password that is required to gain access to articles. There is no information concerning what constitutes a password or the system used by BR. In fact, on cross-examination, Mr. Korski readily acknowledged that “I actually don’t know how the IT works” (question 63) and “I have never bought a password Mr. Gay” (question 67). There is no evidence on this record of how the IT works or, for that matter, what was the actual password used by Parks Canada. One would have thought that it is relevant to whether or not there may have been circumvention of a technological protection measure where the means to gain access are only through the use of a password.”

“The case before the Court is actually that the password obtained through a subscription was used to gain access to material for the purpose of conducting activities said to be covered by s 29 of the Act. The password was used, it was not hacked. Moreover, there is no evidence whatsoever about the password in this case, or passwords in general. The Court was urged by BR and the intervener to refrain from entering that field without any expert evidence.”

“The Moving Party, the AGC, seeks a third declaration. The subscription, he says, allowed for the sharing of articles and, accordingly, there is no breach of any technological protection measure [TPM]. In any event, the sharing of a password, which appears to have taken place to some extent in this case, does not constitute circumvention of the TPM.”

“There is no evidence either of what a “password” is and what it was in this case: thus, there was no expert evidence led by either party on what, in this case, constitutes the TPM. The Act requires that the TPM be “effective” (in French, “efficacement”). The absence of evidence may well be significant if the facts of this case require an understanding of what a “password” is. What appears clear, however, is that there was no “hacking”, whatever that may mean from a technical standpoint. In the context of this case, it is taken as meaning that the password was not discovered by force, whether that be by trial and error or otherwise. In other cases, courts have declined to address issues concerning TPM without a solid evidentiary base (Wiseau Studio LLC et al v Harper, 2020 ONSC 2504, 174 CPR (4th) 262; Allarco Entertainment 2008 Inc v Staples Canada ULC, 2021 ABQB 340). It follows that this Court must also be circumspect in addressing what appears to be a novel issue, especially in view of the Plaintiff having chosen to discontinue its action.”

“The Court has carefully reviewed the submissions of counsel for BR, the AGC and CIPPIC, and has listened again to the recording of the hearing of this case. As a matter of fact, I was somewhat dubious that the procedural vehicle of a motion for summary judgment, for an outcome constituted of declarations, was completely appropriate on a record comprised of limited affidavits when one of the important issues being debated was what constitutes a technological protection measure, without any expert evidence as to what constitutes a password.”

“A paywall may be the result of some technology, device or component, but it is not the technology, device or component… In the case at bar, there is no circumvention of a TPM simply because the password was not circumvented: it was properly obtained and used for a legitimate purpose.”

“There remains the issue of whether a “password” is a technological protection measure, which requires that the technology, device or component be effective to control access to the work. The definition of “circumvent” requires that the person in breach of the prohibition must descramble or decrypt or to otherwise avoid, bypass, remove, deactivate or impair the technological protection measure in order to gain access. It stands to reason that the starting point has to be what is the technology, device or component at issue in this case before seeking to address whether it is effective or not. There is not a paucity of evidence: there is instead a complete absence on the record before the Court.”

“It will suffice to conclude that the very use of the password, which arguably could constitute a TPM, can hardly be the circumvention of itself when used as it was meant to be used.”

^[viii]   See, for example, United States v. Reichert 747 F.3d 445 (6th Cir. 2014) (“The term “technological protection measure” (“TPM”) refers to a wide variety of technologies that are used to control or restrict access to digital content or electronic devices. TPMs “range from the basic to the sophisticated” and include “password protection, copy protection, encryption, digital watermarking and, increasingly, rights management systems incorporating one or more of the foregoing.” June M. Besek, Anti–Circumvention Laws and Copyright: A Reportfrom the Kernochan Center for Law, Media and the Arts, 27 Columb. J.L. & Arts 385, 391–392 (2004)”; Dish Network L.L.C. v. World Cable Inc. 893 F. Supp. 2d 452, 464 (E.D.N.Y. 2012) (“As the Second Circuit has explained, the DMCA is aimed at protecting “the efforts of copyright owners to protect their works from piracy behind digital walls such as encryption codes or password protections”. Universal City Studios, Inc. v. Corley, 273 F.3d 429, 435 (2d Cir.2001) (emphasis added))

^[ix]    See s41(a) circumvent means, in respect of a technological protection measure within the meaning of paragraph (a) of the definition technological protection measure, to descramble a scrambled work or decrypt an encrypted work or to otherwise avoid, bypass, remove, deactivate or impair the technological protection measure, unless it is done with the authority of the copyright owner; (emphasis added)

^[x]     The U.S. cases construing the DMCA are mixed on the question of whether using a valid but unauthorized use of a password to access a locked file violates the U.S. anti-circumvention provisions. See, for example, Synopsys, Inc. v. InnoGrit, Corp.Case No. 19-CV-02082-LHK, (N.D. Cal. Oct. 1, 2019) (“The majority of the courts in this district have found that a defendant’s unauthorized use of license keys or passwords, as Synopsys has alleged, constitutes circumvention under Section 1201(a)(1). See Actuate Corp. v. Internat’l Bus. Machines Corp., 2010 WL 1340519 (N.D. Cal. Apr. 5, 2010) (Spero, M.J.) (“[U]nauthorized distribution of passwords and usernames avoids and bypasses a technological measure in violation of sections 1201(a)(2) and (b)(1).”); Microsoft Corp. v. EEE Bus. Inc., 555 F. Supp. 2d 1051, 1059 (N.D. Cal. 2008) (White, J.) (“By distributing a VLK without authorization, [defendant] effectively circumvented [plaintiff’s] technological measure to control access to a copyrighted work in violation of the DCMA.”); 321 Studios v. MGM Studios, Inc., 307 F. Supp. 2d 1085, 1098 (N.D. Cal. 2004) (N.D. Cal. 2004) (Illston, J.) (“However, while [defendant’s] software does use the authorized key to access the DVD, it does not have authority to use this key, as licensed DVD players do, and it therefore avoids and bypasses [the technological measure].”); see also Burroughs Payment Sys., Inc. v. Symco Grp., Inc., 2012 WL 1670163, at *4 (N.D. Cal. May 14, 2012) (Spero, M.J.) (explaining that the Northern District of California has taken the “view that unauthorized use of a valid password ‘circumvents’ technology measures” (quoting Burroughs Payment Sys., Inc. v. Symco Grp., Inc., 2011 WL 13217738, at *5 (N.D. Ga. Dec. 13, 2011)). Under the holdings of these cases, InnoGrit’s conduct clearly constitutes circumvention under Section 1201(a)(1) of the DMCA because the SAC specifically alleges that InnoGrit lacked authorization to use the license key on the 15 InnoGrit computers in San Jose, California. SAC ¶ 27.”) Contra, for example, Egilman v. Keller Heckman, Llp., 401 F. Supp. 2d 105 (D.D.C. 2005); I.M.S. Inquiry Mgmt. Sys., Ltd. v. Berkshire Info. Sys., Inc., 307 F. Supp. 2d 521 (S.D.N.Y. 2004).

^[xi]    This is reflected in the declaration he granted “Parks Canada’s use of the password in the circumstances of this case constitutes fair dealing under section 29 of the Copyright Act.”

^[xii]   The term “copyright” is defined in the Act to means the rights described in section 3, in the case of a work, sections 15 and 26, in the case of a performer’s performance, section 18, in the case of a sound recording, section 21, in the case of a communication signal. The term infringing is defined to mean(a) in relation to a work in which copyright subsists, any copy, including any colourable imitation, made or dealt with in contravention of this Act, (b) in relation to a performer’s performance in respect of which copyright subsists, any fixation or copy of a fixation of it made or dealt with in contravention of this Act, (c) in relation to a sound recording in respect of which copyright subsists, any copy of it made or dealt with in contravention of this Act, or(d) in relation to a communication signal in respect of which copyright subsists, any fixation or copy of a fixation of it made or dealt with in contravention of this Act. The prohibition against a circumvention of an access control TPM states: “No person shall (a) circumvent a technological protection measure within the meaning of paragraph (a) of the definition technological protection measure in section 41“.

^[xiii]   See, Universal City Studios,Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001). “First, they contend that subsection 1201(c)(1), which provides that “[n]othing in this section shall affect rights, remedies, limitations or defenses to copyright infringement, including fair use, under this title,” can be read to allow the circumvention of encryption technology protecting copyrighted material when the material will be put to “fair uses” exempt from copyright liability. We disagree that subsection 1201(c)(1) permits such a reading. Instead, it simply clarifies that the DMCA targets the circumvention of digital walls guarding copyrighted material (and trafficking in circumvention tools), but does not concern itself with the use of those materials after circumvention has occurred. Subsection 1201(c)(1) ensures that the DMCA is not read to prohibit the “fair use” of information just because that information was obtained in a manner made illegal by the DMCA. The Appellants’ much more expansive interpretation of subsection 1201(c)(1) is not only outside the range of plausible readings of the provision, but is also clearly refuted by the statute’s legislative history. See Commodity Futures Trading Commission v. Schor, 478 U.S. 833, 841, 106 S.Ct. 3245, 92 L.Ed.2d 675 (1986) (constitutional doubt canon “does not give a court the prerogative to ignore the legislative will”).”

^[xiv]   See, Barry Sookman, Computer, Internet, and e-Commerce Law, Section “Digital Lock-up and Impairment of Fair Dealing”.

^[xv]   See, Navigating the Copyright Modernization Act: Key Changes and Implications – Barry Sookman; An FAQ on TPMs, Copyright and Bill C-32 – Barry Sookman