Canada’s Intellectual Property Law Firm

On Thursday September 26, 2019, the Supreme Court of Canada issued its highly anticipated decision in Keatley Surveying Ltd v Teranet Inc (2019 SCC 43), finding that the Province of Ontario holds copyright in plans of survey (Plans) published by Teranet, the third party operator of the Province’s electronic land registry system (ELRS). This was the first opportunity for the Supreme Court of Canada to examine the scope and application of Crown copyright in the nearly 100 years since the enactment of the applicable provision under section 12 of the Copyright Act. The key issue on appeal involved the interpretation of section 12, which sets out, amongst other things, when the copyright in publications will vest in the Crown. The four judge majority (authored by Abella J., with Moldaver, Karakatsanis and Martin JJ. concurring) found that there was sufficient indicia of control by the Crown over the publication process, including controls over both the publisher and the resulting publication, to vest copyright in the Crown pursuant to section 12.

Section 12 of the Copyright Act reads as follows:

Without prejudice to any rights or privileges of the Crown, where any work is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty and in that case shall continue for the remainder of the calendar year of the first publication of the work and for a period of fifty years following the end of that calendar year.

Smart & Biggar’s team of Steven Garland, Ted Sum and Laura Easton represented the Land Title and Survey Authority of British Columbia as an intervener.

Background & Procedural History

The appeal before the Supreme Court of Canada concerned a class action brought on behalf of approximately 350 land surveyors of Ontario whose Plans were scanned and copied into the respondent Teranet’s digital database and made available through the ELRS.

Prior to the creation of the ELRS, land surveyors (generally paid by their clients) would register or deposit Plans at the Ontario Land Registry Office (LRO), which would provide copies to the public for a fee, without any further fees or royalties being paid by the Province to the surveyors.  In the 1990s, the Province entered into a relationship with Teranet in order to convert the traditional paper system into an online title system.  This was completed in 2010, resulting in Plans being scanned and copied into Teranet’s digital database as part of the third party operator’s management of the Province’s ELRS. Plans are still registered or deposited with the LRO, and are then scanned into the ELRS, where licensed users may search and obtain copies of Plans for a statutorily prescribed fee.

Keatley Surveying Ltd. brought the class action proceedings on behalf of Ontario land surveyors.  The class members complained that Teranet was profiting at the expense of the surveyors, to whom Teranet did not pay any fees or royalties for the Plans. 

The parties agreed that the Plans were an “artistic work” within the meaning of the Copyright Act and that copyright subsisted in the Plans.  The primary issue throughout all three levels of the courts was whether copyright in the Plans belonged to the Province as a result of section 12 of the Act.

In the Reasons for Judgment of Justice Belobaba of the Ontario Superior Court of Justice (2016 ONSC 1717), the Justice found that the Plans were not “prepared” under the direction or control of the Province, as they were generally prepared by surveyors at the request of clients.  Belobaba J. was not persuaded by Teranet’s position that the digitization or making available online to the public was sufficient direction or control to trigger section 12, but found it did not have to decide the point.  Instead, Belobaba J. relied on the Ontario legislative regime, which he found transferred to the Province the property (including copyright) of the Plans when they were registered or deposited.  This transfer of ownership led to the Province’s “control” of the Plans, which were then therefore published under the Province’s direction or control. 

The Ontario Court of Appeal (at 2016 ONCA 748) issued a unanimous decision delivered by Doherty J.A., concurring with Belobaba that the Plans were not “prepared” but were “published” under the Province’s direction or control.  However, the Court of Appeal reached this conclusion on publication through a different analysis.  It found that the Crown’s copyright ownership did not stem directly from the provincial land registration scheme, but through section 12 of the Copyright Act, by virtue of the Crown’s direction and control of the publication of the work.  In finding such direction and control the Court of Appeal still examined the provincial scheme, looking at the property-related rights held by the Crown in the Plans, including the Crown’s ability to impose terms on form and content of the Plans, possession and custody of the Plans, the requirement to make copies available to the public, restrictions of surveyors to place copyright notations on the Plans, and the ability of the Examiner of Surveys to make changes to Plans without surveyor approval.

Ruling of the Supreme Court of Canada

The majority of the Supreme Court of Canada held that the aim of the section 12 test is to determine whether the Crown has exercised a sufficient degree of direction and control over the preparation or publication of a work, “consistent with the purposes of Crown copyright,” to vest copyright in the Crown (paragraph 63).  The majority further clarified that this examination of the publication process requires an examination of both the direction or control over the person preparing the work and over the work that is being prepared or published.

The majority agreed with the lower courts that the Plans had been “published” under the direction or control of the Crown, and in this regard adopted a similar approach to the Ontario Court of Appeal, examining the Crown’s interest in the works at the time of publication:

In determining whether a work was published “by” the Crown for the purposes of section 12 , relevant indicia of governmental direction or control may include the presence of a statutory scheme transferring property rights in the works to the Crown; a statutory scheme which places strict controls on the form and content of the works; whether the Crown physically possesses the works; whether exclusive control is given to the government to modify the works; the opt-in nature of the statutory scheme; and the necessity of the Crown making the works available to the public. It is only when it can be said that the Crown has sufficient governmental direction or control over the publication process that Crown copyright will subsist within the meaning of section 12. (paragraph 69).

The Court’s use of “may include” in the passage above suggests that this is a non-exhaustive list of examples. 

The majority further held that the above factors would also be relevant in an examination of government direction or control over a third party publication, but that such a third party examination would also require an examination of the direction or control exercised by the Crown over the third party publisher.

The majority held that in this case, the test was “readily” met:

Taken together, the provincial land registration regime gives the Crown complete control over the process of publication. The Crown has proprietary rights in the plan, and custody and control over the physical plans. The statutory scheme ensures that the Crown directs and controls the format and content of registered plans. Significantly, this control subsists after registration or deposit. It is only the Crown, through the Examiner of Surveys, who is able to alter the content of the plans, and only the Crown has ongoing control over and responsibility for the publishing process, including the final form of the work. Likewise, it is the Crown who — by validly enacted legislation — has the exclusive authority to make copies of the registered or deposited plans of survey. (paragraph 78)

The majority found these indicia applied both to works published by the LROs and by Teranet.  In considering the additional indicia of direction and control exercised by the Crown over Teranet, the majority noted the fact that Teranet acts in accordance with the terms of implementation and licensing agreements between it and the Province, and was not permitted to act outside either the agreements or the provisions of the provincial regime.

The majority further upheld the findings of the lower courts and held that the Plans were not “prepared” under the direction or control of the Crown.  The majority agreed with the lower courts that the “prepared” branch does not apply to works simply as a result of the Crown setting formal requirements or guidelines for how a work should be made.

The decision was a close split, with 3 of the 7 judges concurring in minority reasons for judgment (authored by Côté and Brown JJ., Wagner C.J. concurring).  The minority agreed in the outcome of the decision but differed in the analysis.  The minority disagreed that section 12 includes an examination of the Crown’s direction and control over both the person preparing/publishing and the work itself.  Instead, the minority held that the examination was relevant only as between the Crown and the person publishing/preparing, and whether that work was a “government work” at the time of publication.  The minority held that a “government work” is one which serves a public purpose and where Crown copyright furthers that purpose, namely where the government has an interest in the accuracy, integrity and dissemination of a work.

Take-Aways

This decision demonstrates the importance of relationships and regimes which include both governmental and non-governmental actors.  The findings in this case, in particular, with respect to Plans registered within the Ontario land registration regime demonstrate the importance of the Crown maintaining copyright in documents which underpin a key regime in the proper functioning of our society.

The test set down by the majority is a contextual, fact-specific inquiry on a case-by-case basis, and may frustrate those hoping for a “bright line” test –indeed, the minority criticizes the majority not identifying when the threshold level of direction or control will be met.  As noted by the majority, however, “Parliament is of course free to consider updating the provision in its current review as it sees fit,” and such an update could include further clarification on the requisite level of “direction or control.”

In the interim, this case provides important takeaways for both the government and the individuals or entities who work with, or for, them.

Governments will need to consider how they structure, implement and manage government-related services and problems for the public, including how to balance the efficiency of using third party contributions with the need to maintain copyright in works where the government and the public rely on the accuracy, integrity or dissemination of the work.

Conversely, persons working closely with the government, or whose authored works are then made available to the public directly or indirectly through the government, and who wish to maintain copyright or a level of control over their authored works, will need to closely examine their relationships (and governing legislative regimes) in order to assess the level of direction or control that the provincial or federal government has over the preparation or publication of the work.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.