The Supreme Court of Canada just released a decision in R v Gomboc  that dealt with whether the use of a device to measure electricity consumption at a suspected grow-op without a warrant (its purpose was to form the basis to get a warrant) was proper.

The court held that is was acceptable.  The case is not as helpful as it might be for precedent value though, as it hinged on specific Alberta regulations, and the reasons for judgment were split.  Some of the judges felt there was no reasonable expectation of privacy – while some felt there was, but that the regulation overrode that expectation.

For more detail, see commentary by David Fraser, Brian Bowman, and on the Canadian Technology & IP Law blog.

Brian Bowman has a post on his On the Cutting Edge blog that says an Alberta court ruled that the University of Calgary violated students’ charter rights when it sanctioned them for posting critical comments about a professor on Facebook. 

Omar also mentioned it in a Slaw post.  (Somehow I missed them at the time.)

That is noteworthy for its position on the controversial issue of what limits there ought to be on what one can say about another on social media.  Also for the fact that the court decided that the Charter of Rights – which applies  only to government - extends its reach to bodies created and supported by government.   At least in the way it is done in Alberta.

Congratulations to my colleagues at Harrison Pensa who represented the plaintiffs in this class action.  The judgement was released Friday, almost exactly a year after the lengthy trial began.  It’s not over yet, though, as it is being appealed.

More details, and a link to the decision, is on the Harrison Pensa web site.

For the London Free Press – October 4, 2010

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The case deals with defamation on the Net and how to decide where to sue for it

(NOTE: The title in the newspaper version was “Black lawsuit a case of libel tourism” – which is incorrect. )

Conrad Black has become a household name, thanks to his notorious legal wranglings. Black also is engaged in an Ontario-based legal proceeding that is equally as interesting as the U.S. legal circus.

The case deals with Internet defamation and how to determine where to sue for it. As with traditional defamation, a party alleging Internet defamation must demonstrate they suffered damages in Ontario and also that they have a significant connection to Ontario. Where Internet defamation differs from traditional defamation is that the alleged victim must prove the statements in question targeted Ontario.

In Black v Breedan, Black brought an action for libel against directors, advisers and a vice-president of Hollinger International for statements posted on the Hollinger website. Black argued his reputation was damaged in Ontario as a result of these defamatory statements that had been reproduced in a number of prominent Canadian newspapers, such as the Globe and Mail and the National Post.

The case became interesting from a legal standpoint when the defendants brought a motion to have the case dismissed, arguing Ontario courts did not have jurisdiction in the matter. The defendants claimed the action had no real and substantial connection to Ontario and, as a result, Ontario was not the convenient forum. That was based on the notion the matters that the alleged defamation referred to took place in the U.S.

The motions judge disagreed, finding Ontario to have the requisite connection to the action and thus to be the proper jurisdiction. The Court of Appeal agreed with this and in the process provided some enlightening comments on the jurisdictional challenge posed by Internet defamation.

Where defamation actually occurs – and thus where one can sue – has been the subject of much controversy over the years. The Internet has added a new dimension to this conundrum since statements can be published on websites available around the world.

However, there would be an innumerable amount of lawsuits if one were allowed to sue in every jurisdiction where the defamatory statement was read. To guard against this, Ontario courts will determine if the website targeted its statements so that they would be read in Ontario. In Black v Breedan the Court of Appeal decided there was sufficient evidence to prove the statements did target Ontario. The court based this decision, in part, on the fact that the Hollinger website provided contact information for Canadian media. The court held that this proved Hollinger expected the statements to be read by Canadians.

Black v Breedan is noteworthy because of the online aspect of the alleged defamation. Because anything posted on the Internet can be seen anywhere in the world, it has led to “libel tourism” – where someone who thinks they have been defamed will try to sue in whatever jurisdiction they might be most successful in, and get the highest damage award.

Black v Breedan tells us that – at least in Ontario – libel tourists are not welcome.

For the London Free Press – September 20, 2010

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An Ontario Superior Court recently upheld an interlocutory injunction against several defendants alleged to be engaged in the grey market sale of DirectTV to Canadians.

The case of DirectTV, Inc. v. Donaldson dealt with defendants based in the town of Charring Cross, just outside of Chatham. The injunction prohibits the defendants from selling DirectTV dishes or having anything to do with selling DirectTV subscriptions.

Grey-market satellite customers purchase a U.S. satellite dish, and pay monthly for programming. Grey-market customers use false U.S. addresses to misrepresent that they are U.S. residents. DirectTV is the largest provider of satellite-delivered subscription television programming signals in the United States, but is not licensed for sale or use in Canada.

Obtaining an interlocutory injunction — meaning an injunction in a preliminary motion before the trial has begun — is not easy, as courts are reluctant to make such decisions without hearing all the evidence.

The test for granting an interlocutory injunction is that:

there be a serious question to be tried; irreparable harm will be suffered if the relief is not granted; and the balance of convenience favours the granting of an injunction, i.e. the harm to the plaintiff if the injunction is not granted will be greater than the harm to the defendant if the injunction is granted.

In this case, the judge said, “I am satisfied that there is a serious issue to be tried and that DirectTV’s claim is not frivolous or vexatious and stands a reasonable chance of success at trial.”

The defendants tried to argue consumers could use the dishes for things other than receiving DirectTV signals, but the court was not convinced.

The judge said:

“I am satisfied that there is a serious issue to be tried as to whether the Haskell Defendants have breached the Radio Communication Act and are liable to DirectTV therefore. I am also satisfied that there is a serious issue to be tried as to whether the Haskell Defendants have aided and abetted in the breach of the Radio Communication Act and are liable to DirectTV therefore. I am also satisfied that DirectTV can show a serious issue to be tried as to whether the Haskell Defendants are liable for fraud, fraudulent misrepresentation, conspiracy, conversion, unlawful interference with economic relations, and unjust enrichment.”

Even if this case never proceeds to trial, it sends a strong message that the sale of grey-market satellite receivers is unlawful.

This is not the first case to send that message. In the 2002 case of Bell ExpressVu Limited Partnership v. Rex, et al., it was decided that section 9(1)[copy] of the Radiocommunication Act prohibited the decoding of all encrypted satellite signals, except where authorization was acquired from a distributor holding the necessary legal rights in Canada to transmit the signal. That case also dealt with black-market satellite, meaning accessing satellite TV using hacked access cards

UPDATE:  Here’s a link to the decision in case anyone is interested in reading it.   http://www.canlii.org/en/on/onsc/doc/2010/2010onsc4062/2010onsc4062.html

For the London Free Press – September 13, 2010

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The concept they may accumulate to equal a material breach is consistent with our case law

The United Kingdom Court of Appeal recently held that many minor breaches of contract can combine to be treated the same as a single material breach.

The claimant gas supplier entered into an agreement with the defendant for installation and maintenance of a new IT system, including an automated billing. The agreement included a warranty provision requiring the defendant to take remedial action for a fundamental breach.

Fundamental breach is essentially a way for courts to ignore limitation of liability clauses in contracts where it feels the defendant’s actions make it unfair for it to escape liability.

The rollout of one of the phases of the project was delayed following disputes over scope and performance. Although this was corrected, the new plan resulted in many problems, with increasing client dissatisfaction and customer accounts going unbilled. The claimant notified the defendant of what they perceived as amounting to a fundamental breach.

The defendant failed to correct the problems. A preliminary issue at trial was whether individual errors in the system could be aggregated to constitute a fundamental breach. The Court held that minor breaches of contract that might have no consequences individually can accumulate to equal a material breach that results in greater liability and more serious consequences.

This decision is consistent with Canadian case law.

In Canada the concept of fundamental breach has been replaced with a public policy test to determine if a strict reading of a contract in favour of a defendant should be set aside. Despite that, many of the principles established in previous fundamental breach case law will likely continue to be persuasive.

There are several cases in which fundamental breach was found as a result of an aggregation of small defects. An example is Lightburn v. Belmont Sales Ltd. (1969), in which the British Columbia Supreme Court found that over a period of some eight months a car which never gave satisfactory service and was returned to the vendor for repair some 17 times as a result of various defects constituted a breach of a fundamental term of the contract.

Another example is Knowles v. Anchorage Holdings Co. (1964), where the British Columbia Supreme Court found that where defects are so numerous that, taken en masse, they destroy the workable character of the thing sold, it may amount to a fundamental and total breach of the contract, so as to disentitle the defendant from taking refuge behind an exclusionary clause upon which, if the defects were considered singly, he might rely.

A third example can be found from the Court of Queen’s Bench of Alberta where in dismissing a summary judgment application the court held that it is not “plain and obvious” or “beyond a doubt” that a trial judge would find that a series of breaches could amount to a fundamental breach.

So in the right circumstances it should still be possible to argue that a series of minor breaches may lead to limitation clauses being ignored based on public policy.

For the London Free Press – July 5, 2010

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Canadian lawyers are suing for $50 million, claiming the company is making legal documents available for a fee without the authors’ approval

A class action was filed on May 25 against Thomson Reuters Corp. and Thomson Reuters Canada Ltd. on behalf of a class of Canadian lawyers and law firms across Canada to the tune of $50 million.

The lawsuit alleges that Thomson breaches copyright laws by making lawyer-created legal documents available for a fee and subscription without permission from, or compensation to, the authors of the documents.

How do they do this? It is alleged that Thomson copies publicly available court filings. That includes legal documents such as facta, pleadings, affidavits and notices of motion, prepared by lawyers. It then makes them available for download via its “Litigator” service.

The user subscribes to the service and pays a fee, then is permitted to copy and edit the documents. At no time are the authors of these documents informed that their documents are copied, sold, or reproduced.

Of notable offence to the plaintiffs is the fact that the copies available for download are branded with a statement that asserts Thomson’s copyright over the documents: “[copy] Thomson Reuters Canada Limited or its Licensors. All rights reserved.”

Lawyers are perhaps the original mash-up artists when it comes to legal documents of all kinds. All lawyers copy parts from similar documents other lawyers create and use – whether they are contracts or court documents. It is one way lawyers have always learned and documents have been improved. Lawyers have not for the most part considered copyright issues when it comes to their own documents.

The question is whether the service Thomson provides is different and whether it crosses a copyright line.

The statement of claim issued by the plaintiffs pleads that the lawyers are the owners of copyright in these legal materials and that Thomson has infringed the Copyright Act by its actions.

More specifically, the claim states:

“The defendants took more than 50,000 legal documents created by members of the proposed class, removed them from court files and copied them, scanned them into a downloadable format, posted them in their database, and then made them available to subscribers for a fee.”

Counsel for the plaintiffs are seeking to have the lawsuit certified as a class action.

If the case is certified by the court, all persons who fit the class definition will automatically be included in the class unless they choose to opt out.

Among the many claims made, the plaintiffs have asked for $50 million in general damages for the class, disgorgement of profits made by Thomson from the infringement, $1 million in punitive damages, litigation costs, and a permanent injunction from using the documents.

Thomson of course has a different viewpoint, and will defend the action.

The case will be decided on the subtleties of copyright law. But it boils down to this.

Though the sharing of legal documents has always been an accepted and necessary way of practising law, does doing it in a commercial way such as Thomson does cross a legal line?

For the London Free Press – June 7, 2010

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Ontario court says website operators can’t always be ordered to disclose the identity of posters accused of defamation.

On May 3, 2010, an Ontario Divisional Court appeal decision addressed the issue of whether a web site operator should be required to produce information that could identify individuals who posted allegedly defamatory comments on that website.

The decision made clear that Canadian courts will order the release of information to identify anonymous posters – but only if certain tests are met first.

In Warman v. Wilkins-Fournier, the plaintiff sued Frank Fournier and Constance Wilkins-Fournier, the owners and operators of the freedominion.ca website plus eight John Does. At issue were allegedly defamatory comments posted on that site, and whether the defendants had to disclose information about the anonymous posters so the plaintiff could sue them.

To determine the identity of these individuals, Warman brought a motion before the Ontario Superior Court asking the court to require the Fourniers to provide information about the individuals’ e-mail addresses, personal information used during registration, IP addresses and documents relating to the establishment and ongoing operation of the website.

Justice Kershman was of the opinion that the plaintiff need not show anything to compel the defendants to disclose.

“In fact, the obligation is on the Defendants to disclose”, stated Kershman.

The Fourniers appealed that decision and argued those who use forums do so with the expectation that their comments will be kept anonymous.

The Canadian Civil Liberties Association and the University of Ottawa’s Canadian Internet Policy and Public Interest Clinic intervened. Both argued the court should not order disclosure unless public interest favouring disclosure outweighs freedom of expression and privacy concerns.

The Ontario Divisional Court parted with Kershman and decided the release of identifying information is not automatic.

The court relied on the Sony BMG v. Doe case, where the Canadian Recording Industry Association tried to get the names of online music file sharers. After taking into account five factors cited in that case, the Ontario Divisional Court unanimously held that although the motions judge was alert to the need to take the privacy interests of the unknown alleged wrongdoers into account, the need to consider the interest in freedom of expression was not raised by the parties or considered by the motions judge.

The court ruled judges must consider the following factors whether information on anonymous posters should be revealed in defamation cases:

• Whether the unknown alleged wrongdoer could have a reasonable expectation of anonymity in the particular circumstances;
• Whether the plaintiff has established a case against the unknown alleged wrongdoer and is acting in good faith;
• Whether the plaintiff has taken reasonable steps to identify the anonymous party and has been unable to do so; and
• Whether the public interest favouring disclosure outweigh the legitimate interests of freedom of expression and right to privacy of the persons sought to be identified if the disclosure is ordered.

The Court allowed the appeal and sent it back for re-consideration.

For the London Free Press – May 17, 2010

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Court says popular site is not responsible for counterfeit items

We are all familiar with the sayings: “buyer beware,” “all that glitters is not gold” and “if it’s too good to be true, it probably is.” Case in point: On eBay, three out of every four items advertised as Tiffany’s jewelry are counterfeit products.

Nonetheless, the United States Court of Appeals has recently upheld the decision that eBay is not liable for trademark violations as against the jewelry retailer Tiffany. This decision is significant to retailers and the general public alike.

In 2004, after suspecting knockoffs of its jewelry were being sold on the eBay site, employees of Tiffany’s purchased hundreds of purported Tiffany’s products and tested them. Tiffany’s discovered three out of every four items were fake.

Based on this information, Tiffany sued eBay for trademark violations on its site. Tiffany alleged that eBay had general knowledge that the infringement was occurring.

As noted in the appeal decision, more than six million new listings are posted on eBay daily. And on any given day, it contains more than 100 million listings. eBay’s evidence at trial was that it spends as much as $20 million a year on tools to promote trust and safety on its website. In fact, eBay has an entire “trust and safety” department with more than 4,000 employees.

One of the tools that eBay cited in its defence is a rapid notice-and-takedown system called VeRO — the verified rights owner program.

This program allows eBay to respond very quickly to trademark complaints and, when necessary, to remove infringing content. Repeat offenders were suspended from selling their goods on eBay. EBay submitted that hundreds of thousands of infringing sellers were suspended each year.

The court has come to the right decision in this case. EBay itself is not the party selling counterfeit goods or violating trademarks. And it does deal with sellers making false claims when made aware of it.

If Tiffany had been successful, it would have likely resulted in over-policing of vendors by all online intermediary selling sites. (Other examples of such sites are Craigslist and Kijiji.) If these companies had to worry about trademark lawsuits and liability for every single sale that took place on their sites — and thus verify the authenticity of everything offered for sale on their sites — there would be a chill on e-commerce.

At the very least, there would certainly be much stricter guidelines for what could be sold on the site and who could sell it. Strict guidelines would undoubtedly result in higher costs and some legitimate sellers being excluded.

The ruling should be considered a win not only for the intermediary companies, but also for online sellers and consumers as well.

It should be noted, however, that eBay has not been so successful in other jurisdictions.

For example, in 2009 a French court found eBay responsible for brand counterfeiting and ordered them to pay the luxury group LVMH 80,000 euros in compensation for damages caused to famous perfume brands such as Christian Dior and Kenzo.

John Gregory has a good post on Slaw talking about a recent English case that considered when an email is received for the purpose of accepting an offer of a contract.

In some ways, it seems odd to discuss notices by email in a time where we talk about service of court documents by facebook and twitter.

But there are some real practical issues to consider when determining when an email is actually or deemed to have been received.  The date and timing can lead to major consequences for things like contract formation or termination.

For example, what if the email gets caught in a spam filter? What if the recipient doesn’t check their email?  What if the email address is no longer in use?  Does it make a difference if the recipient carries a smartphone after business hours?

When entering a contract that has a notice provision – don’t just add email (or facebook or twitter) to the list of acceptable notice requirements without putting some thought into these issues.