Here’s a brain teaser. Who owns an e-mail? The sender? The recipient? Both? Typical e-mail footers seem to assert some type of ownership by the sender by directing that the e-mail is only for the attention of an intended recipient and that the sender prohibits retention and use by other persons. In the U.K, the answer to who owns an e-mail appears to be neither the sender nor the recipient.

In Fairstar Heavy Transport N.V. v. Adkins, [2012] EWHC 2952, decided by the Technology and Construction Court of the Queen’s Bench Division of the English High Court, the issue was whether the plaintiff company, “Fairstar” had a proprietary interest over e-mails held by the defendant “Adkins” who was formerly the CEO of Fairstar. Adkins was not directly employed by Fairstar. Instead, Fairstar contracted with Adkins’ company. The plaintiff had been taken over by a competitor in a hostile bid and Adkins had been terminated.

According the court decision, Adkin’s incoming emails while he was CEO would be automatically forwarded by Fairstar’s server to Adkin’s e-mail account hosted by a third party. Copies of the e-mails on Fairstar’s server were automatically deleted after being forwarded. Copies of e-mails sent by Adkins did not go through Fairstar’s server unless someone at Fairstar was copied.

Fairstar wanted access to the e-mails in relation to the construction of a vessel in a Chinese shipyard, which turned out to be a substantial liability for Fairstar and with respect to which Adkins was involved in the negotiations. Fairstar’s position was that, notwithstanding that it had no claim to the medium in which the e-mails were stored, it had a proprietary claim to the content of the e-mails.

In examining the possibility of a proprietary claim, the court considered five options:

1. Title to the e-mail remains with the creator (or his or her employer) irrespective of who receives the e-mail or how many times it is forwarded.

2. Title to the e-mail passes to the recipient (or his or her employer).

3. In the alternative to (1), even though title to the e-mail remains with the creator, the recipient has a licence to use the content for any legitimate purpose consistent with the circumstances in which the e-mail was sent.

4. In the alternative to (3), even though title has passed to the recipient, the creator continues to have a licence to retain the content and to use it for any legitimate purpose.

5. In the alternative to each of the foregoing, title is shared between the sender and recipient and anyone else to whom the e-mail is sent.

The court concluded that options (1) and (2) were not workable. Indeed, either option would lead to the possibility of a party having the right to demand that an e-mail (subsequently regretted) be returned or destroyed.

The court held that options (3) and (4), which involve one party retaining ownership and the other party a licence (presumably irrevocable) to use the e-mail, effectively left the concept of ownership devoid of any real meaning because only illegitimate uses could be precluded. If a breach of copyright or confidentiality was not in issue, there would be very little, if any use, left to restrain as being illegitimate.

The court also rejected option (5). The court hypothesized that the result of a joint proprietary might mean presumably that if a supplier lost its database of e-mails, it could demand all of its correspondents to deliver up a copy of the e-mail in order to reconstitute the database.

In the case of a letter, the recipient of the letter “owns” the letter in the sense of the tangible thing.  Of course, the owner’s right to reproduce the content of the letter is subject to copyright just as I might own the book on my bookshelf but my entitlement to reproduce the book or passages from it are subject to applicable copyright laws.

The question of who owns an e-mail is of course more complex since it is not a tangible thing in the same way as a letter or book.  However, might it not be analogous to the author making a copy of a letter and sending the original or the copy or the author of book retaining a copy of the manuscript.  Author and recipient each are entitled to own and use their own copy subject to copyright laws. No one would suggest that the author could demand return of the copy of the letter or book, subject, of course, to duties of confidence or other equitable rights and obligations. Might the reason why the options discussed by the court don’t make sense have to do with thinking about an e-mail as a single thing, whereas an e-mail is a message transmitted electronically and always already involves a copy (perhaps many times over) once created and even more so when sent.  Thoughts?

The majority of the provisions of Canada’s Copyright Modernization Act (the “CMA”) entered into force today, November 7.  Let’s take a look at three issues related to “data governance”:  Technological Protection Measures (TPMs), ISP liability, and private copying.

TPMs

TPMs, or “digital locks”, are technologies, devices or components that provide protection  or copyright materials through either access control or copy control.  Three types of protection for TPMs are introduced under the CMA, prohibiting:

• circumvention of access‐control TPMs;
• offering circumvention services to the public; and
• manufacturing, importing, distributing, selling, renting or providing devices, technologies or components whose primary purpose is circumvention.

“Digital locks” enable copyright holders to dictate how their material may be used. Under  the CMA amendments, however, these locks may ultimately disallow activities that the  Copyright Act deems to be non‐infringing. This could occur, for example, where a person circumvents a TPM to access a work for a purpose that falls under “fair dealing”, or to change the format of a TPM-protected song purchased on a CD to an MP3 to be played on another device. Both of these examples (fair dealing, transfer of format) are non‐infringing uses because specific exceptions apply to them. They would nonetheless be prohibited where the work is protected by an access‐control TPM.

There are certain limited instances where circumventing an access‐control TPM will not infringe copyright, including circumvention for the purposes of software interoperability, encryption research, network security, and for unlocking a wireless device (jailbreaking a cellphone). The government may enact regulations adding to the above list of exceptions.

Liability and Responsibility of Internet Service Providers (ISPs)

The Supreme Court of Canada has held that ISPs do not participate in the copyright infringement of their users (see SOCAN v. CAIP, 2004 SCC 45 ) . If they merely provide “passive connections” for content, and if acting solely as intermediaries for their users and subscribers, ISPs are generally not liable for infringing content.

The amendments effectively codify this approach to ISP liability. They grant exceptions for “providing services related to the operation of the Internet or another digital network”, for caching and other similar incidental acts, and for hosting.  This will restrict liability, for example, in the area of cloud computing. Some exceptions are also provided for search engines or “information location tools”.

Notwithstanding the limits on liability of ISPs and online service providers, however, ISPs and others who knowingly enable copyright infringement can be held civilly or criminally liable for such acts. 

Moreover, a “notice and notice” regime will apply: where a copyright holder provides notice to an ISP of potential infringement by an ISP’s subscriber, the ISP will be required to forward notice “without delay” to that user, and to maintain records of the user’s activity for six months (or one year if proceedings are commenced).  This largely codifies current industry practice, however the government has delayed entry into force of the legislated”notice and notice” regime until it has conducted further consultations with stakeholders, and enacted related Regulations. 

Private Copying – MicroSD cards 

In a previous post, we noted the government’s announcement that it intended to enact Regulations to exclude microSD cards from the application of the “private copying” regime.  The MicroSD Cards Exclusion Regulations (Copyright Act) have been enacted, and also enter into force today, November 7.

Today the Supreme Court of Canada determined that 30 second previews of songs offered by online music services constitute “fair dealing for the purpose of research”.  The Court addressed important principles of “users’ rights”, and re-stated its finding in the oft-quoted CCH Canadian Ltd. v. Law Society of Upper Canada case, that 

“‘research’ must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained”. 

The Supreme Court has therefore again come down on the side of users with an accommodating approach to fair dealing. 

The decision remains an important reminder, however, that an analysis of fair dealing is always highly fact-specific and case-by-case.  In a previous post, we cautioned that when the issue is fair dealing online, there is no “quick test” and no “one size fits all”.

In a press release entitled “Harper Government Says No to Fees on Memory Cards”, Minister of Industry Christian Paradis announced the government’s plans to exclude microSD cards from the application of a levy under Canada’s private copying regime. 

In the press release and in his announcement this afternoon at an Ottawa Future Shop store, Minister Paradis stated:

“Our government worked hard to strike the right balance in the Copyright Modernization Act, which ensures world-leading consumer and user rights while giving creators the tools to protect their work and grow their businesses. [...] An additional fee on removable memory cards is not only unwarranted but unfair to Canadian consumers.”

The Copyright Modernization Act received Royal Assent on June 29, 2012.  It has not yet entered into force.  Regulations to exclude microSD cards from the levy are expected this fall.

Mark and Constance Fournier operate the Free Dominion website as a political news discussion forum.  Richard Warman had an exclusive licence to the copyright in a National Post article entitled “Jonathan Kay on Richard Warman and Canada’s Phony Racism Industry”.  Warman alleged that the Fourniers infringed his copyright when excerpts of the article were posted on their website.

In its recent decision, the Federal Court of Canada determined that the reproduction of the excerpts on the site did not infringe Warman’s copyright.  First, the Court found that the excerpts did not amount to a “substantial part” of the work.  In the alternative, the reproduction constituted fair dealing for the purposes of news reporting. 

A quick read of the decision – and some of the subsequent commentary that has appeared online - suggest that borrowing parts of an article for a forum, blog or other piece is generally fine.  It’s important to remember, however, that there is no quick test to judge when using/borrowing/copying content that’s not your own crosses the line into copyright infringement.  For better or for worse: (1) infringement is always assessed on the facts of each individual case (there is no “one size fits all”); and (2) the legal tests are anything but straightforward. 

The comments below are not intended to critique the Federal Court’s analysis.  Instead, we simply point out the various steps the Court went through to assess the facts of this case against the law. 

“Not a substantial part”

Factors considered:

•  quality and quantity of material taken (held: less than half the work, mostly made up of facts, not commentary)
• extent to which the use adversely affects the copyright owner’s activities, diminishes copyright value (held: not directly relevant)
• whether the material taken is the proper subject-matter of copyright (not directly dealt with)
• whether the use was intentional appropriation, to save time and effort (no – intention was to preserve a record of facts)
• whether the material taken is used in the same or a similar fashion as the owner’s (not directly relevant/not directly dealt with)

Quite a murky and arguably subjective exercise.  Moreover, the above points were only part of the analysis.  The Court went on to do an alternative analysis based on:

“Fair Dealing for the Purposes of News Reporting”

The Copyright Act enumerates three accepted types of fair dealing: research or private study; criticism or review; and news reporting.  The Copyright Modernization Act will add satire, parody, and education to this list. 

Because “fair dealing” is not otherwise defined in the Copyright Act, the courts have had to define it themselves.  The Supreme Court of Canada set out six factors to determine whether dealing with a work is “fair” (see CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13):

“(1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work.  Although these considerations will not all arise in every case of fair dealing, this list of factors provides a useful analytical framework to govern determinations of fairness in future cases.”

In the Warman case, the Federal Court assessed each of these, and found that “balancing all the factors together”, the use fell within the fair dealing exception for the purpose of news reporting. 

The take-away:  before you go ahead and use that lengthy quote, or borrow those paragraphs from that book/article/blog, think about whether that use has a good chance of meeting the “fair dealing” test. 

Consider for yourself: 

• is taking several paragraphs from any article online really “news reporting”?  
• is it fair to use a work, or part of a work, to drive traffic to your site instead of the (competing) source site?
• would a link to the content – if possible - work as well as copying it?

Copying online has become commonplace, even expected in some cases and in some forums.  However, for better or for worse, the law still defines what is “fair” in this regard, and there is no quick test.