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CourE File No.

T-1391-14

FEDERAL COURT
BETWEEN:

139S8Q4 ONTAI2I0 LTD,operating as BLf1CKLOCK'S R~POR`1'GR


Plaintiff
- and

CANAllA(ATTORNEY GrNL+'.RAL)
Defendant

AGREED STAT~I~LCNT OF I+ACT~


The Plaintiff and the Defendant, by their respective counsel, agree thlt the following facts
are,for the purpose of this action only, not in dispttte:
A. Blacldock's Ret~oitec

1. B1acklock's Reporter (`Blacklock's"), the Plaintiff, is 1 news agency operating out of


a private residence in Ottawa. Blacklock's reports almost e~chisively on federall}~
regulated industries and the Fedetal Govei7imcnt. Its content is available exc[usi~~eiy
ontine.
2. On October 26, 2012, Blacklock's managing editor told the Ottawa Business Jotu-~~al
the company's break-e~ren pout was estimlted to be 500 subscriptions at $143 per year
or the equivalent ($7~I,OOQ}.

3. In its first year of operations, Blaciclock's revenues were approximately $45,000. The
numUered company (13958Q4 Ontario [_td.) financed Black(ock's during t1~at year.
B1lcklock's is olie business line operated uiicier tlus numbered company. Tlie numbered
company was incorporated in 2001 acid is otivned and operated by Torn Kors4ci and
Holly Doan.
4. Koiski and Doan ace also the only employees and members of Blacklock's
n~a~~agement.
S. Korski is tl~e m~naguig and oily editor, whereas Doan is Blacklock's pciblisher.
Korski's duties include the coordination ofassibnments ofreporters, continuit~r ofcopy
and routi~ie administration. Doatt is responsible for cainmii~uty outreach and
negotiating licencing agreements.
6. Blacklocks' revenues have gradually increased since its inception in 2012 until today.
7. In 2015, BIacllock's generated approximately $98,000 of revenue per year.
Apgro~imately five percent (5%) of Blacktock's. revenue comes from online
advertising. The reuiaincier of tf~e revenue comes fro~u either subscriptions/licences
paid in ad~~ance or from invoices/settlements based on hat Blackloek's describes as
~~ser's acknotivIedgemeni of violations of Blacklock's terns ofzise.
8. In 2015, Blaeklock's iiictirred costs of approtiim~tely $53,000 per year. This amount is
almost e~clt~sively related to labour casts, as BIacktock's does not incur costs for rent
ar publishing pri~it editions.
9. In 2015, B1lcklock's had approximately seven eontractocs tviio contributed stories,
T~vo reporters were on retainer and received $1,700 to $2,200 per moith as
remuneration from BlackIock's. One former contrlctor ~v~s aecreditect to the Press
Gallery in exchange for a si~igle story. Another of the reporters has been remunerated
tluough a p~~ofit sharing arrangement.

T3. The Denax'tment of I'inauce


10. Tl~e Department ofFinance, tl~e Defea~dznt,("Finance") assists the Governsiient of
Canada iii developing and implementing economic, ftscal, tax aild financial sector
policies and programs. Finaice's respoiisibi[ities include the development of tariff
policy and legislation.
11. Blacklock's has contacted and received information from Finance's Media
Relations Sector in response to its media requests for its articles.
12. However, Finance ~t no tine lead either a subscription or licence to Blacklock's.
13. "On April 10, 2013, Stephanie Rubec, manager, Media Relations, Finance, wrote
Korslci an email stating: What are the chances you would send me your piece once
published?" Korski replied, "We did publish that this ?Horning. The finance department
ought to subscribe; numerous other departments and Czotvn agencies do; X148 a year.
Rubec replied, "I've asked -- tine machine isn't aicvays tke fastest ire processing
requests." Korski replied, "Ot~r office can always set you np right away if the
depaL-tment wants paper billuig by in~croice. Just forward the request with invoice data
to I-lolly Doan", and cited Doan's email address.
C. Blacl~lock's Subscriptions and Licences
14. Blacklock's in 20I5 had a~pro~liately 260 licensees and paid subscribers. T13e
difference between the tavo is that licences cover multiple nse~s while Blacklock's
Level subscriptions provide access to a single user.
15. Btacklock's single-reader subscribe~~s in 2015 geizerated between $4,083 and $6,123 of
Blacklock's reveutie: At tl~e relevant tinge, a B[acklock's Level suliscriptioii cost $1~3
and granted access to tiie stibscciber for all Blacklock's co~~tent for one year. Behveen
10 end 15 percent of the 260 Blackiock's clients in 2015, i.e. apgro~imately 26 end 39,
were single-rise subscribers.

16. Blacklock's Level subscriptions have been ~urcl~ased electronically by owners of


government em1i1 accounts

SL1CI1

as

111eCIla.tll0111~01'ltl ~CPa-aCC.~c.ca,

au account

purcI~ased b~~ Canada Revenue l~gency staff; Sophie Desjardins using the accotRnt
library-bi~liotheque(c~,fintrac-cauafe. c.ca; Sharron Dilinmlond
lic media scnlic-sc.~c.ca;

and

Annie

Trepanier

US1Ilg tI1~

using

the

account
account

ser~~iees.n~ectil cr,tt~sQe-U~~r~sc.ge.ea."
17.On Febtlialy 3, 2014, Koiski requested a comment fi~ocil Minister Jason Kenney's
office regarding the re-appointment of Brian Joluiston to the Canada Mortgage and
Housing Corporation's(CMHC)board.
18. On Febi2iazy ~, 2014, Charles Sauriol, Senior Media Relations Officer with CA~HC
responded to Mr. Korski.
19. On February 5, 201 , Blackiock's published a story entitled `B~ii(der tied to GST
scheme wins govt re~ppoititment". Blacl lock's sent a marketing email consisting of
the headline yid the t~vo sentences of the article vas sent to Peter De Banos, Vice
President ofPublic Affairs with CMHC.
20. On Febr~iary 5, 2014 at 10:21 a.m., Charles S~uriol entailed Korski and asked "would
it be possible for' yozi to send rife a copy of ~~otu' article". Korski replied at 10:27 a.m.:
"yes, by all means, I'in copying our publisher Holly Doan who manages all copy
distribution".
21. At 12:3 a.m., Holly Doan ~i~rote to Charles Sauriol quid ti~rote:
"Hi Charles,
Thad you for your interest in Blacklock's 12eporter. Apologies, but eve are a payu~alled
news service and do not distribute flee copy because it would not be fair to "MPs,
departments, goveznment agencies, industry associations and universities ~vho
subscribe.

s
Backlack's covers federal affairs not found in n~ainstrcan~ media publications you may
riot already leave",
22. A "Blacklack's Reporter" level subscription vas purci~ased online on February 5,2014
at a cost of$177.~1 under account CV1HC20I4, using email address esau~iol a,cmhe.ca
a~xd biliing address 700 Montreal Road, Ottawa.
23. Blacklock's teiYizs and conditions ofsubscription ~ue posted on its website and accessed
through a fink at the bottom of the ~vebsite. Attached as exhibit "A" to this Agreed
Statement of F~cts is a copy of the Te~ms and Conditions as they were posted on
Blacklocks' website on Apiil 19, 2013. Attached as e:clubit "B" to this flgieed
Statement of Facts is a copy of the Terms and Conditions as they were posted on
Blac(clocks' website on June 23, 2013.
24. Blaciclock's licences are customizable. Organizations have either paid the cost of the
licence ~3p front, or pxocured licences retroactively in circumst~cnces where Blacklock's
believed that organizations had breached thee terms and conditions.
25. Tl2e most Blacklock's has ciiaiged foi a licence in ciretln~stances whexe there vas no
alleged violation of terms of use is $3,925 to the Senate Liberal Caucus. This agreement
is for Febtl~ary 22, 2016 to February. 22, 2017, Tlie licence gi~ted access to 27 Liberal
Senators and pernutted pioYy readership by each Senator's staff. The caucus could
increase or decrease without a change iu the fixed fee.
26. Gt~ith respect to the other categories of lice~isees, where payments were made in
advance (and there were no issues of compliance ~~~ith terms or conditioias), the price
of the licences ~v~s:
a. For unions, approximately $1,500 to X1,900 in annual liceiace fees.
b. For libraries, approximately X500 to $2650 in annual licence fees.
c. For la~~~ fii7ils, approximatel}j X500 to $9Q0 in annual licence fees.

C
d. Por lobb}fists, public advocacy groups and research organizations, between
~5001nd $2900 iii annual licence fees.
27. Black(ock's leas also sold licences for $SOQ per yeas. Blacklock's sold a licence to the
Canada Broadcasting Corporation (CBC) reference library ~vlucl~ ranted access to
every CBC employee for $157 in September 2014, but ttus amount vas increased to
$500 in October 2014, and CBC paid the difference between these tevo aiuounts,
28. Blacklock's has sold multiple user licences at an

IIltcoductory

rate of $500. The

University of Waterloo, the University of Ottawa and York Ui~i~~ersiTy purchased


licences with Blacklock's for the introductory rate of$500.
29. Waterloo's licec~sing agreement provides access to Blacklock's content for ali st~idents,
faculty, employees and researchers associated with the University of Waterloo Library.
The ~~eexnent deems individuals ~vUo are at the library to be authorized users (i.e.
~,valk-in users")
30. Yo~k did not renew its licence beyo~zd the first year. The University of Oita~va rene~,ved
its licence and now pays Blacktock's $2650 in aru~ua( licence fees. This licensing
agreement with the University of Ottawa provides online access to Blackloek's content
to f~culry, staff, students and lffiliated researchers.
31. Blacklock's his never sold a licence far ~1 t,470, or more, to an organization u1
circumstances ~vl~ere Black(ock's lead not raised concei~s about potential violltions of
Blacklock's tei-~ns of use.
D. Blzcklocic's Settlements Ind Invoices
32. Korstci has mlde Access to Iuform~tion requests in relation to every subscriber who
Iiad a govecc~ient email adc(ress.
33. Iii just

OVBP ~~VO

years, Bl~cklock's his received responses to 24 such Access to

Information requests(ATII').

3~4. Folto~,vi~ig responses to These ATIP requests, Korski has occasionally sent invoices iii
uses 4vhere it believes that t(;ere has been a violation of Blaciclock's Terms and
Conditions.
35.I31acklock's alleged that the Privy Council Office, flgrict1[~ire Canada, Clnada
Mortgage Housing Corporation, ttie Caladian Nfuseum of ~Iistocy, Friends of Canadian
Broadcasting, Sierra Club, and the Department of Justice breached its copyrigi~t in its
articles.
3C. Claiming violations of its Teims and Conditions, Blackloc~'s sent invoices to the Pzivy
Council Office, Agt~icultttre Canada, Canada Moirtga~e Housing Corporation, the
Canadia~i l~Itiseiim of History, Friends of Canadian Broadcasting, Sie~xa Club, anc3
Department of Jttsfiee,
37. The Privy Council Office, Agriculture Canada, Canada Mortgage and Housing
Co~porafian, the Canadian IVluseum of History, and The lleparttnent of J~istice paid
Blacklock's invoices, sent following an alleged ~Jiolatian of the Terms and Conditions.
38. Friends of Canadian Broadcasting and Sie~~t~a Club did not pay the in~~oices, but instead
entered into settlement agreements `vitli Blackiock's after it commenced actions in the
Federal Cou~t.
39. Excluding tEie Friends of Canadian Broadcasting, these entities paid a total $54,b63.68
in the period 2013, 2014 and 201S to the Plaintiff.
40. Blacklock's has also sent invoices to Fina~ice, Health Canada, the Canadian food
Inspeefio;~ Agency, Publsc Works & Goveriunent Services Canada, the Bank of
Canada, the Canada Re~~enue Agency, the Competition Bureau, dze agency fornierly
l now~n as the Canadian International Development Agency, the Canadian
Transportation Agency and One Big Campaign for alleged breach of its copyzight.
These uivoices tot~Iled at least $313,69b.78.

s
~1. Amer issi~uig invoices and not receiving payment of those invoices, Bllcklock's
proceeded to litigation against some organizations, including the Canadian Food
Inspection Agency, the Privy Council Office, Public Works & Goveriunent Services
Canada; tiie Canada Revenue-Agency,tl~e Competition Bureau, the Canadian Transport
Agency, One Bio Campaign, Friends of Canadian Broadcasting, Siei7a C1tF6
Foundation, and the Caciadian Vintners Association.
42. I~l less thin two years, Bl~eklock's has initiated at least 18 actions 111eging copyright
infrulgemeiit. Fourteen of those are against federal departments and agencies. Tlie total
amount ofdamages ciaiined in the 1 S actions currently or previously befnre the Federal
Court, the Ontario Superior Coui~ or the Ontario Smatl Claims Court is appro:cunately
$601,892.1 l.
~. Bizciclocic's Articles

43. Blacklock's articles are alinost eYeiusively paywalled ~vhich means that they aie only
accessible to paying customers.
~t4. For aone-year period couuneucuig with the start of the publication in October 2012,
Blacklock's made available on its ~~t~ebsite a'digest` of weeks-olcl, previously-pa}tivatled
~rticle and made them a~c~ailable for free. If Blacklock's makes an ~u-ticle accessible to
the public (i_e. it is 'iiiilocked'), it does not take an}~ copyright enforcement measures if
tl~at ~rticIe is copied or distributed from the date it was unlocked.
45. Blacklock's posts between 25 and 30 articles per week on its website blacklocks.ca.
Korski and Doan piodtice approxunately 40 percent of B1acklocEc's content.
~6. Blacklock's and its reporters x'outinely contact and intervie~v federal goverrunent
employees for continent on stories.
47. Blacklock's rarely provides a free copy of any article to an}' }person ~vho leas contributed
to oue of its articles wiletlier by providing infoi7nation or gi~nting ~Fi intervie~~r,
including government emplo}gees.

48. 13(acklock's distributes emails comprised of the headline and two sentences that either
appear in the article or pat~aplu~ase the article. They Ire routinely sent to au emE~loyee
of an organization when the ~urticle concerns the organization or an issue affecting it.
I~'. BlacklocEc's ~~.id the Det~~3'finez~t of I`inance

49. On flugust 20, 2013, Mr. Korski made an Access to Information Request to Finance
for the folIo~ving:
Al( correspondence acid documentation since Oct.23, 2012 oii tl~e use actd(o~
distribution of ai~ticies from the publication kno~t~n as Blacklock's Re~~arfe or its
derivatives Blacklock's and blacklocks.ca
50. He received a response on September 19, 2013.
S I. On September 11, 2013, Holly Doan inquired as to whether Rlibee vas still interested
in a subscription to B(acklock's,
52. That same day, Rubec replied by email as follows: "...uciless a subscription to
Blacklock's allo4vs for the circutltion of zn article witluii the Deparkment, we caruiot
subscribe. If you have such a subscription, p(e~se let me ki~o~v,"
53. Doau replied to Ritbec as follows: "Yes, ~~re c!o leave bulk ~ates as mentioned on the
~vebsite. Rate is calculated based on t~otiv rt~any readers. Let me know hotiv many
pairs of eyes, approx, seed I wi11 pro~~ide an estimate. It's a sliding sc11e, tl~e wore
Srou buy, tf~e c~.eaper it gets.
54. Rubec further inquired as follows "cau you provide uie with a ate for 50~ then for
800?
55. On September I2, 20I3, Doan replied to Rt~bec's zequest by providing a rate card
outluuug a discount bulk rate of $11, 70 for tfie first 100 subscriptions and a quote of
X13,874 for SOQ subscriptions total and $15,6'10 for 800 subscriptions total.

T
56. In October 2013, Korski made media enquiries of Fi2~lnce's Media Relations for
information for the two articles that are the subject oC dais action both of wluch sere
authored by Koi'ski atxl for ti~~}uch Blacklock's owns coi~yrigl~t.
57. Fin~uce issued statements in response to these media requests with a final statement
delayed fill 7:25 pm on October 9, 2013.
58.On October 10,2013 a Finance media relations official, Stephanie Rubec, ~vro#e Korski
about the article eniit(ed "$30,000,Q00 Sugar Tax Is Avet~ted":"I trust yot2 ~eceived tlus
yesterday at 7:25. Tlie response was delayed since the proper context ~vasri't pro~~ided
until tivell into our email exchanges. Will you be updating the story ad removing the
no continent?
S9. On October 9, 2013, Sandra Marsden, President, Canadian Sugar Institute, gave an
uilerview to Blacklock's for the "$30,000,OQO Sugar Tas is Averted".
60. Sazidra Marsden was quoted in both articles. She eceived air email fioFii Blacklock's
at 9:12am on October 1d, 2013 ~vitt~ the headline of the article and the followig text:
"g30,000,000 Sugar Tai Is Averted
A Department of Finance error that meant a $30 million sugar tas is being
remedied following appeals from industry. A trade group said a mistaken ta~ifF
hike on Brazilian imports would have forced the closure of at least one Cauadiaii
sugar refinery: "We would Dave been a casualty."
Reid more.
61. Marsden would not ha~~e been able to "read more" without subscribing. She purchased
a `Blacklock's Reporter Level" subscription within ii~inutes of receivuig the marketing
email.
62, S1I1CIl'ii Marsden sent Patrick Halley, Senior Cluef, Tariff and Trade Policy of the
Interr~atioual Trade Policy llivision, Fin~u~ce, the two articles that are the subject ofthis
action.

63. In the October 10, 2013 email foi~varding the "$30,000,000 Sugar Tax is Averted"
article to Patrick I-Iattey, ~tarsdeci told Haley that she had been inteiviered but that
"Most of the facts are accurate althoug[~ I'm not all happ~1 with die spin- obviously I
lVOl11C1t1't gave characterized

this as a "sugar't1X" 1]OP a Department ofFinance "error"".

6~1. The article entitled "It llidn't Make Sense" o~iginall}~ published October 11, 2013 and
for~~~arded by Patrick Halley that day, was made available to ttze public for flee in
"digest" 1v~ila6le on the bl~eklocks.ca ~~ebsite on November 25,2013.
65, On October 18, 2013, Mr. Ko~~ski made another Access to liifoimation Request to
Finance for the following:
All en~ails, co~~ulluiucations, reports, electronic links, citations and/or documents
of any kind containing ttie K~ords "sugar" and "ta~~if~' from October 3 to October
16,20l 3 acid any emails communications, reports, electro~uc 1uilcs, citations and/or
documents regarding dews coverage of the sugar tariff u~ tl~e same Oct.8-16,2013
period.
66. He recei~ed a response ou Feb~'u~~}~ 5, 2014.
67. Btacklock's on February 8, 2014 contactec} Finance seeking an explanation of the
conduct that is tl~e subject of this action, and received no reply. Oii Feb~liaiy l~, 20l4
Blacklock's again contacted Finance and received a notice thlt ~. Halley ~vau(d be
Dirt of the office until February 27, 2014. On Febiliaiy t9, 2014, Blacklock's sent
Finance a $17,316.71 invoice for the alleged breach of its cop3~right in the t~vo ai~iicles
that are the subject of this action. On 11~Iaacl~ 18, 2Q14, iii response to Blacklocl:'s
invoice, Finance offered to day Blzcklock's X471.00, tfie equivalent of ttu~ee
Blacklock's Repozfer Level subscriptions, oti March 18, 2014.

ffJ
G. Authenticih~ of Docu~iients Adttiitfeci

68. The parties admit for the piuposes of this proceeding only, the authenticity of the
follotiving documents:

1. Ali documents in the Plaintiff's

davit of DoctEments and A.i~zet~ded

davit of

Docuiiie~~ts and Supplementary fl.ffidavit of Docurttents.


2. All documents in the Defendant's Affidavit of Documents, Amended Affidavits of
Documents vid Sitpplcmental Affidavit of Documents.

69. For grezter clarify, tl~e parties agree that the docuiz~ents contauzed in ttie Joint Book of
Doczaments filed in these proceedings on September 12, 2016, ire authentic and, in the
case of einails, ace evidence that the email vas either sent or received by the persons
mined in the email. T'he parties agree to argue the ~veigl~t, significance, the relevance
and admissibility to be given to the documents during argument.

Septemberl2, 2016

l
,r
William F. Pentney, Q.C.
Depute Attorney General of Canada
Per: Alexandre Kaufman
Ozlagh Q'Kelly
Department of Justice Cai~acia
Civil Litigation Sectioi2
5'~' Floor, 50 O'Con~ior Street
Ottawa, ON
K1A OH3
Tel: {613) 670-6294
Pax: (6I3) 954-1920
Solicitors fog the Defendant

13

September 12, 2016.

-= -~ ~

~"

acklock s Keporter, per


Y;~var Hameed
Hanieed la~v
Barristers and Solicitors
43 Florence Street
Otta~va, OAT
K2P OVl~6
Tel:(613)232-2688 e.Yt 228
Fas:(613)232-2630
Solicitor for the Plaisitiff

Appenix "A"

l erns and C:onditio~ls ~ tilacklock's Keporter


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