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Court File No.: T-1391-14

FEDERAL COURT

B E T W E E N:

1395804 ONTARIO LTD, operating as BLACKLOCK’S REPORTER

Plaintiff

-and-

CANADA (ATTORNEY GENERAL)

Defendant

AMENDED STATEMENT OF DEFENCE

1. The Defendant the Attorney General of Canada defends this action on

behalf of Her Majesty the Queen in Right of Canada (Her Majesty) in

right of the Department of Finance Canada (Finance).

2. Except as pleaded below, the Defendant admits the facts alleged in

paragraphs 3, 5, 10, 11, and 12 of the statement of claim and has no

knowledge or insufficient knowledge of the facts in paragraphs 2 and 17 of

the statement of claim.

3. The Defendant denies that the distribution of emails occurred in the

manner set out in paragraphs 6, 8, and 9 of the statement of claim, denies

that the Plaintiff is entitled to the relief requested at paragraphs 1 and 20

of the statement of claim, and denies the facts and allegations contained

in paragraphs 4, 7, 13, 14, 15, 16, 18, and 19 of the statement of claim.

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I. Parties

4. Finance assists the Government of Canada in developing and

implementing economic, fiscal, tax and financial sector policies and

programs. Finance’s responsibilities include the development of tariff

policy and legislation.

5. The Plaintiff, Blacklock’s Reporter (Blacklock’s), is a news agency that

routinely contacts and receives information from Finance’s Media

Relations sector in response to media enquiries. This information is used

in writing its news articles.

6. The Plaintiff is a copyright troll. It claims that it owns the copyright in

internet publications authored by its employees and contractors and it

generates revenue by issuing demand letters and through litigation.

7. The Plaintiff employs a strategy of requesting information from government

departments, calling persons within those departments for quotes,

publishing online articles about that department’s activities. As part of its

strategy for generating revenue from demand letters and litigation, the

Plaintiff sends “teaser” emails to recipients at those departments. The

Plaintiff’s teaser emails are designed to interest the department in reading

and distributing the Plaintiff’s articles. Some of the Plaintiff’s articles are

incorrect or misleading.

8. The Plaintiff then requests information under the Access to Information Act

about the persons who received its articles and demands money from the

government department when its personnel forward the Plaintiff’s articles,

as anticipated by the Plaintiff.

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II. Emailing of Two News Articles

9. The emailed material at issue consists of two news articles: (1)

“$30,000,000 Sugar Tax Is Averted,” published on October 10, 2013 and

(2) “It didn’t make any sense…” published on October 11, 2013 and

publically available to nonsubscribers. These articles discussed a tariff

change enacted by the Government, mischaracterizing this change as a

Department of Finance error.

10. On October 10 and 11, 2013, Sandra Marsden, the President of the Canadian

Sugar Institute, forwarded both articles to Patrick Halley, Senior Chief of

Trade and Tariff Policy at Finance because she was concerned that her

views had been misrepresented.

11. At all times, Mr. Halley had no knowledge of the terms and conditions

attached to the use of these articles. Nor did Ms. Marsden notify Mr. Halley

whether this material was allegedly copyrighted.

12. Finance employees in the Media Relations sector also had no knowledge of

the terms and conditions attached to the distribution of the Plaintiff’s news

articles.

13. On October 10, and 11 and 18, 2013, Mr. Halley emailed the material to a

limited number of people within Finance for information and to determine

whether a departmental response to correct any inaccuracies in the articles

was required.

14. The first article was emailed to the following people within Finance:

a. Stephanie Rubec, Manager of Media Relations;

b. Karen LaHay, International Economist, Trade and Tariff

Policy;

c. Michèle Govier, Chief, Trade Rules;

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d. Dean Beyea, Director, International Trade Policy; and

e. Scott Winter, Senior International Relations Officer, Trade

and Tariff Policy.

15. The second article, which was publicly available online, was emailed to 4 of

the 5 people within Finance (Ms. LaHay, Ms. Govier, Mr. Beyea and Mr.

Winter).

16. On October 18, 20134, the articles were also shared in order to respond to a

request made under the Access to Information Act, R.S.C. 1985, c. A-1

(Access to Information Act).

Speculative invoicing

17. On February 19, 2014, the Plaintiff invoiced the Defendant for alleged

breaches of its copyright. The Plaintiff demanded $17,816.71.

18. The amount claimed by the Plaintiff does not reflect the terms upon which

the Plaintiff actually licences its articles on a commercial basis and is

instead an artificially high amount that does not reflect the actual value of

its articles.

19. The Plaintiff has sent similar speculative invoices to other federal

government departments and agencies, including but not limited to Public

Works and Government Services Canada, the Competition Bureau, the

Canada Revenue Agency, the Canadian Food Inspection Agency, the

Department of Foreign Affairs, Trade and Development, Health Canada, the

Bank of Canada, the Canadian Mint and Agriculture Canada.

III. Infringement Denied

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20. The Defendant denies the Plaintiff’s rights under the Copyright Act, R.S.C.,

1985, c. C-42(Copyright Act) were infringed by Finance.

21. The copyright in the articles that are the subject of this action has not been

assigned to the Plaintiff in writing as required by section 13(4) of the

Copyright Act.

22. The Defendant states that Mr. Halley’s sharing of the articles was done

without knowledge of any restriction on the articles’ use. The articles were

emailed for a non-commercial, research purpose and used fairly because:

a. the articles related directly to Finance’s tariff change and

contained inaccuracies and were therefore circulated for

information and to determine whether or not a response was

required;

b. the use of the Plaintiff’s material was limited to two articles

that specifically addressed the Defendant’s work and/or

addressed information submitted by the Defendant;

c. the distribution of the articles was limited to the individuals

who (i) could verify the contents of the article and/or could

determine whether a response was required from Finance, or

(ii) to respond to a request under the Access to Information

Act, which does not constitute an infringement under s.

32.1(1)(a) of the Copyright Act;

d. both works were published and available to all subscribers,

and one article was publicly available online; an

e. there was no detrimental effect on the Plaintiff as a result of

the limited distribution of the material.

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23. In the alternative, the Defendant states that if there was an infringement of

the Plaintiff’s rights under the Copyright Act, then any infringement was

committed by Ms. Marsden in initially forwarding the articles to Finance

contrary to the terms and conditions allegedly applicable to her, as a

subscriber of Blacklock’s.

24. The Defendant relies on the doctrines of copyright misuse and abus de

droit.

IV. Damages

25. The Defendant denies that the Plaintiff sustained any loss or damage as a

result of the distribution of two news articles, one of which was publicly

available, by the Defendant.

26. In the alternative, if the Plaintiff suffered any loss or damage, which is not

admitted, the Defendant pleads that such damages were neither caused nor

contributed to by any act or omission of anyone whom Her Majesty may, in

law, be responsible.

27. In the further alternative, the Defendant pleads that the loss or damage

claimed is based on 700 infringements and is grossly exaggerated and

excessive.

28. The Defendant pleads and relies on the Crown Liability and Proceedings

Act, R.S.C. 1985, c.C-50; Copyright Act, R.S.C., 1985, c. C-42, Access to

Information Act, R.S.C. 1985, c. A-1, all as amended.

29. The Defendant therefore requests that this action be dismissed with costs

DATED AT OTTAWA, ONTARIO, this day of July, 2014.

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William F. Pentney Deputy Attorney General of Canada Per: Alexandre Kaufman Department of Justice 50 O’Connor Street, Suite 500 Ottawa, Ontario K1A 0H8 Tel: (613) 288-5078 Fax: (613) 954-1920 Counsel for the Defendant

TO: Hameed & Farrokzhad Barristers & Solicitors 43 Florence Street Ottawa, Ontario K2P 0W6 Yavar Hameed Tel: (613) 232-2688 ext 228 Fax: (613) 232-2680 Counsel for the Plaintiff