cautions. f|-25-() FEDERAL COURT OF APPEAL 11995804 Ontario Ltd,, operating as Blacklock’s Reporter Appellant and Attorney General of Canada Respondent APPEAL PURSUANT TO SECTION 27 OF THE FEDERAL COURTS ACT NOTICE OF APPEAL TO THE RESPONDENT: A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the appellant. The relief claimed by the appellant appears on the folowing page. THIS APPEAL wil be heard by the Court ata time and place to be fixed by the ‘Judicial Administrator. Unless the Court directs otherwise, the place of hearing wll be {as requested by the appellant. The appellant requests that this appeal be heard at (place where Federal Court of Appeal (or Federal Court) ordinarly sit). IF YOU WISH TO OPPOSE THIS APPEAL, to receive notice of any step in the appeal or to be served with any documents in the appeal, you or a solicitor acting for you must prepare a notice of appearance in Form 341 prescribed by the Federal Courts Rules and serve iton the appellant's solicitor, or where the appellants eel-tepresented, fon the appellant, WITHIN 10 DAYS of being served with this notice of appeal IF YOU INTEND TO SEEK A DIFFERENT DISPOSITION of the order appealed ‘rom, you must serve and flea notice of cross-appeal in Form 341 prescribed by the Federal Courts Rules instead of serving and fling a notice of appearance. Copies ofthe Federal Courts Rules information concerning the local offices of the Court and other necessary information may be obtained on request to the Administrator 1ofthis Court at Ottawa (telephone 613-992-4298) oat any local office, IF YOU FAIL TO OPPOSE THIS APPEAL, JUDGMENT MAY BE GIVEN IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. (oatey (P-FAO DOT STEPHEN GREEN teued by lie /L— REGISTRY ASSISTANT (Registry Offcen ADJOINT AU GREFFE. ‘Address of local office: First Foor, 90 Sparks Sireet Oltawa, ON K1A OHO To: DEPUTY ATTORNEY GENERAL OF CANADA, Willam F. Peniney 284 Wellington Street ‘Ottawa, ON KAA Fis AND To: ‘Alexandre Kaufman Counsel, Civil Litigation Section Department of Justice Canada ‘80 O'Connor Street, 5° Floor Ottawa, ON Kia orsAPPEAL, THE APPELLANT appeals to the Federal Court of Appeal from the order of the Honourable Justice Bames of the Federal Court dated December 21, 2016 relating to the costs ruling following his trial judgment of November 21, 2016 in the same matter. ‘THE APPELLANT asks that the decision ofthe Federal Court dated December 21, 2016 ‘ordering payment of costs of $65,000 by the Appellant be set aside and that each party be ordered to bear ts own costs, or that nominal costs be awarded, based on the fact the underlying action raises a novel issue at law and in view of the fact thatthe award of double costs is inappropriate, Disproportionate C: red against the (On December 30, 2018, the Respondent requested immediate payment ofthe $65,000 costs award against the Appellant, which represents the equivalent of 280 percent of the Appellants claim, and 120 percent ofthe Appellant's net 2014 revenue at Blacklock’s as determined by the Respondent's extensive discovery of the Appellant. ‘The Appellant is a smal, family-ovned online publisher carrying on business as Blacklock’s Reporter, an electronic dally covering bils and regulations on Parliament Hill, The Respondent, the Government of Canada, acknowledged in 2014 that it copied the Appellant's work without payment or permission. Accordingly, the Appellant claimed ‘copyright infingement by the Department of Finance in copying its work 12 times ~ two stories, distributed and reviewed internally by six employees, over two days - seeking $517,000 in damages. The Appellants articles were only avalable to pald subscribers; however, the Respondent was not a subscriber a the time it distributed and reviewed the Appellants content, In the present action, the trial took five days due to the number of witnesses called by the Respondent and the large volume of documents entered into evidence by the Respondent. The Appellant called only two witnesses at tial. The Respondent named seven witnesses; two were not called. It also obtained by Court order more than 3,000 pages of documents in an attempt to prove that the Appellants a “copyright trol 3Novel Issue Raised by the Action Warrants No Costs In ordering costs of $65,000 plus interest against the Appellant, the Court felled to cexplcily address the Appeltant's argument that the action raised a novel issue at aw. Instead, the Court opined that "...any reporter with the barest understanding of copyright law could not have reasonably concluded that the Department’ limited use of the subject news articles represented a copyright infringement. Indeed, the fair dealing protection afforded by section 29 of the Copyright Act, RSC 1985, Is so obviously applicable to the acknowledged facts ofthis case that the Iigation should never have been commenced let alone carried to trial In making his conclusion, the Trial Judge rendered a perverse ruling in suggesting that the agreed facts could not reasonable sustain a conclusion of copyright intingement ‘and thatthe application of fair dealing was so utterly obvious tothe facts of thé case that was beyond dispute. At the time of trial, there was virtually no jurisprudence in Canada based on similar facts involving the intemal distribution and review of a paywalled article by a government or non-governmental agency. Infect, the only relevant jurisprudence was a Small Claims Court case filed by the Appellant, where the Appellant was awarded the full value ofits license plus punitive costs, Accordingly, the Courts failure to exercise its discretion to render an award of no costs based on the: existence of a novel issue constitutes a reviewable error that taints the entire costs decision. Ofer to Settle Does not Merit Double Costs ‘The Respondent sought to settle the underlying action for $2,000. The Honourable Justice Barnes described the Respondent's $2,000 settiement offer as “reasonable” and proceeded to order double costs against the Appellant. However, the settlement ‘amount undervalues the Appellant’ terms of sale that were known to the Department of Finance. The Respondent knew it could not obtain free content from the Appellant; that the Appellant did not sell individual stories; and that content could only be obtained by licensing agreement, with fees determined by the number of employees with access to the Appellant's work and not any audit of actual readers, The Appellant, ike all 4electronic media content providers, has no means of monitoring in-house distbution of its work by a licensee. Weeks prior to copying the Appellants work, the Respondent requested and was quoted a $17,000 cost for a icense to access the Appellant's work; however, the Respondent falled to purchase a icense. “The Respondent defended the underlying action as if it were an action based on the ‘cumulative damages claimed in 12 other actions fled by the Appellant against the Government of Canada. Common to its defense in the other actions, the Respondent asserted an unrestricted right to copy the Appellant's work without permission or licensing agreement dozens and hundreds and thousands of times. The other actions ‘were stayed at the request ofthe Respondent pending the determination ofthe Underlying action, which the Respondent sought to address as a “test case" contrary to the objection of the Appellant. In the context ofthis inextricable and forced test case: ligation, the offer to settle proffered does not constitute a legal compromise that ‘warrants triggering double costs. Improper Judicial Notice Taken of Copyrht Standard for Online Media In opining in his costs awerd as to what “any reporter withthe barest understanding of copyright law" would know, the Trial Judge took judicial notice ofthe functioning of copyright protection in Canada for online media reporting and the allowance for work ‘product leakage. This area, however, had never been tested previously in Canadian jurisprudence and is a matter of ongoing public controversy. Moreover, the Trial Judge's improper conclusion appears to continue the logic ofthe bare assertion in his ruling of November 21, 2016 in which he wrote that ‘all subscription-based news agencies suffer from work-product leakage.” Based on this inappropriate judicial ‘conclusion, the Cour further opined that the Appellant's business model's fallure to ‘account for such leakage effectively constitutes “..an admission that the market places litle value on Blacklock’s work:product." The Appellant could not have reasonably assumed that the Court would take judicial notice of "work product leakage” and condone same as the acceptable legal standard 5{or doing business online that all reporters should be aware of this fact. tis not @ forgone conclusion that work product willbe distributed without permission, and, the ‘Appellant could not have anticipated that the Court would necessarily conclude that @ {government entity is eniled to copy content forthe purpose of drawing its own media lines in response to paywalled content. Public commentary, including that of leading information technology and intelectual property authority, Barry Sookman, has ‘specifically ortcized the legal implications of condoning leakage in copyright law, noting: ".. While retailers might expect a certain amount of inventory shinkage due to shopliting these transgressions are stl considéred breaches of the civil and criminal law and there is recognition thatthe ability to enforce these laws has a deterrent effect that is inthe public interest. Shopliters don't get a ‘ree-pass' from liablty because ‘others also steal from retailers. Retailers and other property owners are not expected to forego their rights to pursue thieves and neither should copyright owners be without remedies for unauthorized copying thet infringes their rights" ‘Addtionally, the Court, in concluding thatthe Appellant's action should never have been fled, Ignored the implications of allowing the Government of Canada to have the right to review paywalled stories in order to create Its own media lines. Not only dd the Court determine it was patently obvious that the Government has such a right, it concluded it ‘was equally obvious that a fair dealing defense should apply to the Government's actions provided the circle of distibution was relatively small, With respect, this ight (whether broad or of limited purview) was not obvious and has been the subject of considerable academic and legal discussion throughout Canada, It constitutes the very antithesis of a matter on which judicial notice should have appropriately been taken. Following the Cours unfounded claim of judicial notice regarding the factual circumstances ofthis case, an anonymous employee of the Courts Administration ‘Services (CAS) of the Federal Court of Canada altered a third party administered public information page, Wikipedia, that describes the Appellant within minutes of the December 21, 2016 ruling being released tothe parties and prior to t being accessible tothe general public. Accordingly, tis apparent thatthe reputation and practices of theAppellant are the subject of considerable public interest and are of special interest to the Cour, ‘The Federal Court's engagement in articulating the public narrative/ impression ofthis ‘case beyond the Federal Court's own website is exceptional, There continues to be a \idespread and reasonable concern by online media journalists thet the legal condonation of use and distribution of paywalled content is eroding the viabilly of online journalism — a point that is in direct contradiction to the conclusion of the Court and is bears directly on the rationale ofthe costs award against the Appellant in this ‘unprecedented case, ‘THE GROUNDS OF APPEAL aro as follows: 1. The Court erred in awarding disproportionate and excessive costs against the Appellant, 2, The Court erred in awarding costs that were disproportionate to the amount claimed Inthe action. 3 The Court erred in taking judicial notice of copyright standards that are expected to ‘be common knowdedge for online media companies, 4, The Court erred in law in concluding that the Appellant should never have even filed the underlying action against the Respondent. 5. The Court erred in law in concluding that any reporter with “the barest Understanding of copyright law" shoul! have known that a fair dealing defense applies to the Respondents use of its material on the facts ofthe case. 6. The Court erred in suggesting that copytight law was abundantly clear in respect of its determination ofthe legal result ofthe dispute between the parties ‘notwithstanding the fact that no single decision had ever been decided in a Canadian superior or federal court on similar facts, 7. The Court erred in law in faling to consider the relevance of considerable academic ‘and public debate around the issues raised by the Appellant's action, which 1demonstrated a divergence of opinion on the subject of how copyright infringement ‘should be determined on the facts of the dispute between the parties. 8. The Cour ered in fang to exercise its discretion t6 award WOTorHomnaly costs in view ofthe novel issues, which arose inthis case. 9. The Court erred in exercising its discretion to award double costs against the ‘Appellant despite the fact thatthe underlying case was framed asa testcase by the Respondent, while the Respondent's offer was only made in respect of single case and could not jpso fact resolve the larger dispute between the parties, which ‘was designed tobe addressed by the Itigation on its mers 10.Such further and other grounds as counsel may advise and this Honorable Court ‘may permit January 19, 2017 HAMEED LAW Barretere and Solicitore 43 Florence Street Ottawa, ON kaP ows er: Yavar Hameed Tel: (613) 232-2688 ext. 228 Fax: (613) 232-2680 ‘Solicitor forthe Appellant, 1988504 Ontario Li. (Operating as Blacklock’s Reporter