33 Million Dollar Copyright Suit Against Southam Inc. The World Wide Web and Copyright Considerations in the Course of Employment


33MILLIONDOLLARCOPYRIGHTSUITAGAINSTSOUTHAMINC.THEWORLDWIDE
WEBANDCOPYRIGHTCONSIDERATIONSINTHECOURSEOFEMPLOYMENT

by
HuguesG.Richard*
LEGERROBICRICHARD,Lawyers
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
1001Square-Victoria-BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.:(514)9876242-Fax:(514)8457874
www.robic.ca-info@robic.com
INTRODUCTION
InapendingcasebeforetheSuperiorCourtofQuebec,theElectronic-Rights
DefenceCommittee(E.R.D.C.)hasinstituteda33milliondollarclassactionsuit
onbehalfoffreelancewritersagainstSouthamandCEDRON-SNIInc.,(hereafter
the”Southamcase”).
Thefreelancewritersareclaiming,inaccordancewithanallegedoral
agreement,thatSouthamhastherighttoreproducetheirarticlesonlyonetime
andsolelyforprintpublicationinTheGazette,anewspaperownedbySoutham.
Theplaintiffsfurtherclaimthatbymakingtheirworkaccessibleonaworld-wide
basisbyelectronicmeansandwithneithertheirconsentnorcompensation,the
defendantsarecausingthemfuturelossesbydiminishingthevalueoftheir
copyright.TheyclaimthattheneteffectofSoutham’selectronicactivitiesisto
deprivethemofopportunitiestoassignandlicensetheuseoftheirworksby
“recycling”,theindustrytermusedtodesignatetheupdatingofstoriessothat
theymayberepublishedatasubsequentdateandindifferentmarkets.
Copyrightgenerallyresideswiththeauthoroftheworkubsection.13(1)ofthe
CopyrightAct
1(R.S.C.1985,c.C-42).Iftheauthorisanindependentcontractor,
suchasafreelancewriter,thegeneralruleappliesi.e.copyrightresideswiththe
authorsubsection13(1).Copyrightcanbeassignedorlicencedtothepublisher.

LEGERROBICRICHARD,1994-2003.
*OfthelawfirmLEGERROBICRICHARD,g.p.andofthepatent&trademarkagencyfirmROBIC,
g.p.
1AllreferencestosectionsinthispaperarereferencestosectionsoftheCopyrightAct,
unlessotherwiseindicated.


Assignmentofcopyrightmustbeinwriting(subsection13(4)).Copyrightcanbe
licencedinawriting,throughanoralagreement,orbyimpliedlicence.
Anexceptiontothegeneralruleofcopyrightresidingwiththeauthorarises
duringanemploymentrelationship.Theemployerisdeemedthefirstownerof
thecopyrightwhentheauthorisemployedbytheemployerunderacontractof
serviceandtheworkismadeinthecourseofhisemploymentsubsection13(3).
Iftheworkisanarticleorothercontributiontoanewspaper,magazineorsimilar
periodical,theemployedjournalistcanrestrainthepublicationofthework
otherwisethanaspartofanewspaper,magazineorsimilarperiodicalsubsection
13(3)infine.
TheSouthamcasehighlightsaninterestinghypotheticalquestion,namely,can
anemployedjournalistrestrainthepublicationofhisworksontheInternet?
Subsection13(3)readsasfollows:
Wheretheauthorofaworkwasintheemploymentofsomeotherperson
underacontractofserviceorapprentice-shipandtheworkwasmadein
thecourseofhisemploymentbythatperson,thepersonbywhomthe
authorwasemployedshall,intheabsenceofanyagreementtothe
contrary,bethefirstownerofthecopyright,butwheretheworkisan
articleorothercontributiontoanewspaper,magazine,orsimilar
periodical,thereshall,inabsenceofanyagreementtothecontrary,be
deemedtobereservedtotheauthorarighttorestrainthepublicationof
thework,otherwisethanaspartofanewspaper,magazineorsimilar
periodical.
Thediscussionofthisquestionwillproceedintwoparts.Firstly,wewilldiscuss
brieflythenatureoftheInternetanditsuseinthepublishingindustryandwhat
constitutesinfringementundersubsection13(3).Secondly,wewillsummarily
provideaninterpretationofs.13(3)anditsapplicationtothepublicationonthe
Internetofworkscreatedbyemployedjournalists.
THEINTERNET
Nosingleall-encompassingdefinitionoftheInternetcanbesaidtoexist.
However,forthepurposesofthisarticle,theWorldWideWeb(WWW),whichisa
componentoftheInternet,maybeconsideredasavastcollectionof
interconnecteddocuments.ToaccessdocumentsontheWWW,usersrequirea
“browser”.Thebrowserisacomputerprogramwhichreadsandformats


documentsretrievedfromtheWWWserver.AdocumentfoundonaWWW
serverisnotlimitedsimplytotextbutmayalsoincludesoundandimages.
Aswithothercreationsoftheelectronicage,copyingofretrieveddocumentsis
extraordinarilyeasy.FewpeoplewillquarrelwiththepropositionthatInternetisa
meansbywhichaworkcanbecommunicatedtothepublicby
telecommunication.
Ithasbecomeapracticeformanypublishersofnewspapersandmagazinesto
giveaccesstoelectronicversionsoftheirpaperpublicationstopersons
providingelectronicdatabaseservices.Inturnthesepersonsprovideaccess
throughtheInternettothewholeorpartoftheseelectronicpublicationstothe
generalpublic.
Theprovidingofaccesstotheseelectronicversionscanoccur
contemporaneouslywiththepublicationofthepaperversionofthenewspaper
ormagazine,oritcanalsooccuratseparatetimes.Forinstanceapublisher
maydecidetodaytoprovideaccesstoitselectronicversionofnewspaper
articleswhichwerepublishedonpapermanyyearsago,atatimewhenInternet
didnotevenexistorwasnotaspopular.Apublishercouldalsodecidetopublish
ontheInternetselectionsofarticlespublishedpreviouslyonpaper.
WHATCONSTITUTESINFRINGEMENTUNDERSUBSECTION13(3)
Section3oftheCopyrightActgrantsacopyrightowner(theemployer)
exclusiverights.Thoseparticularlyrelevanttothisdiscussionincludetherightto
produceorreproducetheworkoranysubstantialpartoftheworkinany
materialformwhatever,subsection3(1),andtherighttocommunicatethework
tothepublicbytelecommunicationatparagraph3(1)(f).Subsection27(1)
statesthatitisaninfringementtodowithouttheconsentoftheownerofthe
copyright(theemployer),anythingthatbytheActonlytheownerofcopyright
hastherighttodo.Subsection27(4)providesthatitisalsoaninfringementof
copyrighttodealwithacopyofaprotectedworkundergivencircumstances.
Subsection13(3),providedcertainconditionsaremet,deemsthatthepersonby
whomtheauthorwasemployedisthefirstownerofthecopyrightonthework
createdbytheauthor.Evenwhentheworkbeingtheobjectofthecopyrightis
anarticleorothercontributiontoanewspaper,magazineorsimilarperiodical,
thefirstownerofthecopyrightremainstheemployer.Subsection13(3)infine,
however,insuchcircumstances,reservestotheauthortherighttorestrainthe
publicationoftheworkotherwisethanaspartofa
newspaper,magazineor


similarperiodical.
Iftheauthor/employeedoesnotavailhimselfofthis”righttorestrain”,the
publisher/employer,ascopyrightowner,canexploithiscopyrightfreely.The
“right”oftheauthor/employeeto”restrain”isnota”copyright”,itisalimitedsui
generisrightwhichdoesnotallowtheauthor/employeetodothethings
enounciatedinsection3,whicharetheexclusiverightsofthecopyrightowner.
Inotherwords,subsection13(3)doesnotgivetheauthor/employeetherightto
produceorreproducethework,northerighttodealwithit.The
author/employeecanonlyrestrain,inaverylimitedway,themannerinwhich
hisemployerwillexploithiscopyright.
Itfollowsthatifanauthor/employeeavailshimselfoftherightto”restrain”his
employer’scopyrightandiftheemployerrefusestocomply,theemployershould
notbeconsideredasa”copyrightinfringer”asprovidedundersections27and
34,andtheresultingworkshouldnotbeconsideredasaninfringingwork(see
section38).Thelegalconsequencesofthesedistinctionscanbefarreaching
butitwouldgobeyondthescopeofthispapertogoanydeeperinthis
discussion.
Comingbacktoourearlierquestion,cananemployedjournalistrestrainthe
publicationofhisworkontheInternet?WeknowofnoCanadiancaselaw
2
whichanswersthisquestiondirectly.Regardlessofthemeagerstateofour
jurisprudenceonthispoint,wewillattempttogivesomeanswerstothis
interestingquestion.
Undersubsection13(3),therightwhichisgiventotheauthor/employeeto
“restrain”isapplicableonlytocontributionstosomespecifictypesofworksandit
isinregardtothoseworksonlythatthe”righttorestrain”willcomeintoplay.With
respecttoothertypesofworks,theemployerdoesnotneedtoworrywiththe
possibilityoftheauthor/employeesavailingthemselvesofthe”righttorestrain”,
sincetheyhavenone.
ThetypesofworkswhichareidentifiedbyParliamentare”newspaper,magazine
orsimilarperiodical”.TheActdoesnotdefinethesewords.Theyshouldbe

2Someforeigncaseshavedealtwithperipheralissues,suchas,Tasiniv.TheNewYorkTimes
Co.,(1997),43USPQ2d1801,972F.Supp804(S.D.N.Y.);DeGarvisv.NevilleJeffressPidlerPtyLtd
(1990),95ALR625,18I.P.R.292(Fed.C.ofAustralia);SunNewspapersLtd.v.WhippieandAnor
(1928),[1928]N.S.W.473,45N.S.W.W.N.126,[1928-35]MacG.Cop.Cas.184(N.S.W.S.C.);Beckv.
MontanaConstructionsPtyLtd(1963)80W.N.N.S.W.1578,[1964-65]N.S.W.R.229,5F.L.R.298
(N.S.W.S.S.).


interpretedinaccordancewiththeirordinarymeaning.Thisordinarymeaning
canhoweverevolvewiththechangesoccurringinthepublishingindustry.
If,whensubsection13(3)wasadopted,theonlymediumonwhichanewspaper
ormagazinecouldconceivablybepublishedwaspaper,suchisnotthecase
anymore.Therearenumberofmagazinesorsimilarperiodicals,suchas
newslettersorbulletinswhicharetodayonlypublishedelectronically.Todeprive
theauthorsemployedinthewritingofarticlesforsuchelectronicpublications
fromthe”righttorestrain”providedundersubsection13(3),wouldseemtobe
bothunfairandinconsistantwiththepurposesofsubsection13(3)infine.
Ifwearerightinassumingthatsubsection13(3)isnotconcernedwiththe
mediumbutwiththeintrinsectnatureofthepublication,thenitshouldfollowon
theonehandthatanewspaper,magazineorsimilarperiodicalpublished
electronicallyisanewspaper,magazineorsimilarperiodicalwithinthescopeof
subsection13(3).Thismeans,ontheotherhand,thatanauthor/employeecould
notrestrainhisemployerfrompublishinghisworkonanelectronicmedium(the
Internet)inasmuchastheresultingelectronicpublicationisanewspaper,
magazineorsimilarperiodical.Thiswouldexcludeothertypesofpublications
whichcouldfindtheirwayontheInternet.
Itwouldexcludeforexampletheelectronicpublicationofselectedarticles
separatelyfromanewspaper,magazineorsimilarperiodicalsuchasaselection
ofeditorialsofagivennewspaper.InDeGarvisv.NevilleJeffressPidlerPtyLtd
(1990),95ALR625(Fed.C.ofAustralia),BeaumontJ.stated:
Theordinaryunderstandingofthewordnewspaperisapublication
containinganarrativeofrecenteventsandoccurrences,published
regularlyatshortintervalsfromtimetotime…Inmyview,thedistributionof
photocopiesofselectednewspaperarticlesdoesnotconstitutethe
publicationofanewspaper,magazineorsimilarperiodicalforthe
purposesofs.35(4).Theactivityofprovidingpressclippingsona
commercialbasisisdifferentincharacterfromtheactivityofpublishinga
newspaper.
Theseremarks,whichapplytophotocopiesofselectednewspaperarticles,
shouldbejustasmuchapplicabletotheselectionofnewspaperarticles
publishedontheInternet.
Theanswerthereforetoourpreviousquestionisthattheauthor/employeewillbe
allowedtorestrainthepublicationofhisworksontheInternetifhisworksarenot
publishedaspartofanewspaper,magazineorsimilarperiodicalontheInternet.


Itisourviewthatwhetherthemediumispaper,electronicorotherwisehasa
neutraleffect,itisthenatureofthepublicationitselfwhichshouldbe
determining,whateverbethemediumthroughwhichitispublished.Therefore
anauthor/employeeshouldbeabletorestrainthepublicationofhisworkson
theInternetaspartofsomeothertypesofpublicationsuchasmereselectionor
compilationofarticles.
However,thedefinitionof”publication”informerparagraph4(1)(f)andinnew
paragraph2.2(1)(c)excludesfromthemeaningof”publication””the
communicationtothepublicbytelecommunicationofaliterary,dramatic,
musicalorartisticworkorasoundrecording”.Inasmuchastheright”torestrain”
whichisgivenbysubsection13(3)totheauthor/employeeistherighttorestrain
the”publication”ofhiswork,andinasmuchastheword”publication”forthe
purposesoftheCopyrightActdoesnotinclude”communicationtothepublicby
telecommunication”,itcouldbearguedontheonehandthatthe
author/employeecannotrestrainthecommunicationofhisworkontheInternet
sincesuchcommunicationisnota”publication”whichistheonlythingan
author/employeecanrestrainundersubsection13(3)infine.
Ontheotherhand,itcouldbeargued,thateventhoughparagraph2.2(1)(c)
defines”publication”forthepurposesoftheCopyrightActasawhole,the
definitionshouldnotapplytosection13(3)infine,wheretheword”publication”is
usednotinthecontextofsection5(publishedvsunpublishedworks)buttogive
toauthor/employeesalimitedright”torestrain”theexploitationoftheemployer’s
alreadysubsistingcopyrightinaworkwhichcouldbepublishedornotforthe
purposesofsection5.Subsection13(3)doesnotpurporttograntanycopyright
totheauthor/employee.Thefactthattheworkcreatedbythe
author/employeebeconsideredpublishedornotforthepurposesofsection5,
shouldnotaffecttherightoftheauthor/employeeto”restrain”theexploitation
ofhisemployer’scopyrightundersubsection13(3).
Theuncertaintyresidingwiththeinterpretationofthedefinitionof”publication”
whenappliedtosubsection13(3)maycreateseriousunforeseenproblemsfor
author/employeeswhowouldwanttoavailthemselvesoftheright”torestrain”
theiremployer’scopyright.
Onewaytosolvetheproblemwouldbetoremovetheword”publication”in
subsection13(3)andreplaceitbytheword”reproduction”.Thismightbean
amendmenttobeconsideredinafutureIPImprovementBill,butasfaraswe
know,suchBillisnottobetabledinanyforeseablefuture.





ROBIC,ungrouped’avocatsetd’agentsdebrevetsetdemarquesdecommercevouédepuis
1892àlaprotectionetàlavalorisationdelapropriétéintellectuelledanstouslesdomaines:
brevets,dessinsindustrielsetmodèlesutilitaires;marquesdecommerce,marquesde
certificationetappellationsd’origine;droitsd’auteur,propriétélittéraireetartistique,droitsvoisins
etdel’artisteinterprète;informatique,logicielsetcircuitsintégrés;biotechnologies,
pharmaceutiquesetobtentionsvégétales;secretsdecommerce,know-howetconcurrence;
licences,franchisesettransfertsdetechnologies;commerceélectronique,distributionetdroit
desaffaires;marquage,publicitéetétiquetage;poursuite,litigeetarbitrage;vérification
diligenteetaudit;etce,tantauCanadaqu’ailleursdanslemonde.Lamaîtrisedesintangibles.
ROBIC,agroupoflawyersandofpatentandtrademarkagentsdedicatedsince1892tothe
protectionandthevalorizationofallfieldsofintellectualproperty:patents,industrialdesignsand
utilitypatents;trademarks,certificationmarksandindicationsoforigin;copyrightand
entertainmentlaw,artistsandperformers,neighbouringrights;computer,softwareand
integratedcircuits;biotechnologies,pharmaceuticalsandplantbreeders;tradesecrets,know-
how,competitionandanti-trust;licensing,franchisingandtechnologytransfers;e-commerce,
distributionandbusinesslaw;marketing,publicityandlabelling;prosecutionlitigationand
arbitration;duediligence;inCanadaandthroughouttheworld.Ideaslivehere.
COPYRIGHTER
IDEASLIVEHERE
ILATOUTDEMÊMEFALLUL’INVENTER!
LAMAÎTRISEDESINTANGIBLES
LEGERROBICRICHARD
NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
PATENTER
R
ROBIC
ROBIC+DROIT+AFFAIRES+SCIENCES+ARTS
ROBIC++++
ROBIC+LAW+BUSINESS+SCIENCE+ART
THETRADEMARKERGROUP
TRADEMARKER
VOSIDÉESÀLAPORTÉEDUMONDE,DESAFFAIRESÀLAGRANDEURDELAPLANÈTE
YOURBUSINESSISTHEWORLDOFIDEAS;OURBUSINESSBRINGSYOURIDEASTOTHEWORLD