Executive summary: key legal and evidentiary issues

• Blacklock's Reporter alleged Parks Canada improperly used its subscription to access, read, and distribute copyrighted articles contrary to the Copyright Act.

• The Attorney General filed a counterclaim seeking 10 different declarations, including that Parks Canada's use constituted fair dealing under section 29 and that no circumvention of technological protection measures (TPMs) occurred.

• Conflicting evidence arose between Parks Canada's subscriber and Blacklock's managing editor regarding what was included in the text on the website payment page at the time of purchase.

• The Federal Court issued only two of the ten requested declarations — one on fair dealing and one on licit password use — while declining to issue a declaration on contract rectification.

• On appeal, the Federal Court of Appeal found the Federal Court erred by failing to apply the Daniels test, which requires declarations to have "practical utility" by settling a "live controversy" between the parties.

• The appeal was allowed and the Federal Court's Judgment was set aside, with the Attorney General's motion for summary judgment on the declarations dismissed.

The copyright infringement dispute and the parties involved

Blacklock's Reporter, an online news publication operated by 1395804 Ontario Ltd., brought an action against the Attorney General of Canada, acting on behalf of Parks Canada. The core allegation was that, even though Parks Canada had purchased a subscription to Blacklock's Reporter, Parks Canada used that subscription improperly to access, read, and distribute articles contrary to the Copyright Act, R.S.C. 1985, c. C-42. This case was one of a number of actions commenced by Blacklock's Reporter alleging copyright infringement by various federal government departments and Crown corporations, all of which had been stayed pending a "test case" involving the Department of Finance. That test case was decided on November 10, 2016 (2016 FC 1255), but it appears that it did not resolve or limit the issues in the other actions.

The subscription purchase and the evidentiary conflict

Genevieve Patenaude, acting on behalf of Parks Canada, purchased a subscription to Blacklock's Reporter on September 18, 2013. By purchasing the subscription, she obtained the password and gained access to the articles posted online by Blacklock's Reporter. A key factual dispute emerged between Ms. Patenaude and Tom Korski, the managing editor and an officer and director of Blacklock's Reporter. Ms. Patenaude's evidence was that there was no indication on the form that she filled out that "institutional subscribers who would like to share or distribute content in-house" were to contact a particular individual for "custom bulk rates." Mr. Korski's evidence was that a notification to this effect was added to the text on the website payment page before Parks Canada acquired its subscription. The reference to institutional subscribers and custom bulk rates was included in an email that Ms. Patenaude received after she had purchased the subscription. She stated that she "understood the word 'bulk subscriptions' to mean that if Parks Canada wanted to share the articles widely, beyond the Parks Canada organization, it was required to contact a manager at Blacklock's." The Federal Court Judge, after reviewing the evidence, accepted the evidence of Ms. Patenaude and found that the only subscription available for purchase by Parks Canada was the single subscription that it purchased.

The discontinuance and the counterclaim for declarations

Blacklock's Reporter discontinued its action on Monday, July 6, 2020. On Sunday, July 5, 2020, the Attorney General served an amended defence and counterclaim on Blacklock's Reporter seeking 10 different declarations. This amended defence and counterclaim was filed on July 7, 2020. The declarations sought concerned three distinct matters: the terms and conditions relative to the subscription to gain access to Blacklock's Reporter's website; whether the use of articles accessed by Parks Canada constituted "fair dealing" in accordance with section 29 of the Copyright Act; and whether the sharing of a password required to access articles from Blacklock's Reporter's website constituted circumvention of technological protection measures. The Attorney General also brought a motion for summary judgment in relation to these declarations.

The Federal Court's decision and the two declarations issued

The Federal Court (2024 FC 829) conducted a lengthy and detailed analysis and ultimately issued only two declarations. The first declared that, having purchased the only type of subscription available, which was allowing the acquisition of the password needed to access articles produced by Blacklock's Reporter, Parks Canada's use of the password in the circumstances of this case constitutes fair dealing under section 29 of the Copyright Act. The second declared that the licit acquisition and use of a password, if it is otherwise a technological protection measure, does not constitute the circumvention of the technological protection measures of the Copyright Act. The court found that the Attorney General had not established that a declaration should be issued for rectification of the contract, and therefore no declaration was issued on that point. With respect to TPMs, the Federal Court Judge highlighted the lack of "evidence of a technical nature," noting that there was no expert evidence led by either party on what, in this case, constitutes the TPM. The Federal Court Judge also stated in paragraph 120 of his reasons that "the paywall is not the TPM," though this finding was not reflected in either of the two declarations that constitute the Judgment.

The appeal and the practical utility requirement

Blacklock's Reporter appealed the Judgment of the Federal Court to the Federal Court of Appeal. Although neither party referred to Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12 in their memoranda in this appeal, the Court at the hearing raised the issue of whether the two declarations lacked the requisite utility to justify their granting. The Daniels test, as restated by the Supreme Court of Canada, provides that a declaration can only be granted if it will have practical utility, that is, if it will settle a "live controversy" between the parties. The Federal Court of Appeal noted that there was no further discussion of Daniels in the reasons of the Federal Court Judge, nor any explanation of why the declarations that were granted would have practical utility. The failure to apply a binding decision of the Supreme Court of Canada, and as a result failing to consider a required element of a legal test, was identified as an error of law reviewable on the standard of correctness.

The Federal Court of Appeal's analysis of each declaration

Regarding the first declaration on fair dealing, the appellate court found it was inextricably linked to the factual findings concerning Parks Canada's purchase of the subscription and use of the password "in the circumstances of this case." Since the underlying copyright infringement action had been discontinued, there was no longer a "live controversy" with respect to Parks Canada's purchase of the subscription or its access to or use of the articles posted by Blacklock's Reporter. It was also far from clear how this declaration, based on the facts related to Parks Canada's purchase of the subscription, would have any practical utility in another action concerning the purchase of a subscription by another government department. As for the second declaration concerning licit password use, the court observed that it was simply a generic statement that the authorized acquisition and use of a password by anyone (if the password is a TPM) does not constitute circumvention of a TPM for the purposes of the Copyright Act. The court reasoned that if the acquisition and use is authorized, it would follow that such acquisition and use should not be prohibited, and such a generic statement does not settle any "live controversy" between the parties. Additionally, the Federal Court of Appeal noted that the issue of whether the paywall is the TPM does not arise in this proceeding based on the pleadings, and the Federal Court Judge's comment that the paywall is not the TPM is obiter dicta as it was not necessary to dispose of the issues arising from the only pleading before the Federal Court — the counterclaim.

The ruling and overall outcome

The Federal Court of Appeal, in a unanimous decision written by Justice Webb and concurred in by Justices Monaghan and Pamel, allowed the appeal and set aside the Judgment of the Federal Court. Rendering the Judgment that the Federal Court should have made, the court dismissed the Attorney General's motion for summary judgment with respect to the requested declarations. Blacklock's Reporter was the successful party on appeal. No exact amount of costs was determined in the Judgment; the court granted the parties an opportunity to determine if they could reach an agreement on the costs that should be paid by the Attorney General to Blacklock's Reporter for the hearing in the Federal Court and in this Court, with a deadline of April 8, 2026 for reaching agreement, failing which a schedule for written submissions on costs was set.