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Court File No.: T-1391-14

FEDERAL COURT
B E T W E E N:
1395804 ONTARIO LTD, operating as BLACKLOCKS REPORTER
Plaintiff
-andCANADA (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.
4.

Parties

Finance assists the Government of Canada in developing and

implementing economic, fiscal, tax and financial sector policies and
programs. Finances responsibilities include the development of tariff
policy and legislation.

5.

The Plaintiff, Blacklocks Reporter (Blacklocks), is a news agency that

routinely contacts and receives information from Finances 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 departments 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
Plaintiffs teaser emails are designed to interest the department in reading
and distributing the Plaintiffs articles. Some of the Plaintiffs 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 Plaintiffs articles,
as anticipated by the Plaintiff.

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II.
9.

Emailing of Two News Articles

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 didnt 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 Plaintiffs 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. Michle 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 Plaintiffs 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. Halleys 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 Finances 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 Plaintiffs material was limited to two articles
that specifically addressed the Defendants 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 Plaintiffs 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 Blacklocks.
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.

William F. Pentney
Deputy Attorney General of Canada
Per: Alexandre Kaufman
Department of Justice
50 OConnor 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:
Fax:

(613) 232-2688 ext 228

(613) 232-2680

Counsel for the Plaintiff