We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
11 November 2019
On 26 September 2019 the Supreme Court issued its highly anticipated decision in Keatley Surveying Ltd v Teranet Inc (2019 SCC 43). It found that Ontario holds the copyright in plans of survey published by Teranet – the third-party operator of the province's electronic land registry system (ELRS). This case was the Supreme Court's first opportunity to examine the scope and application of Crown copyright in the nearly 100 years since the applicable provision under Section 12 of the Copyright Act was enacted. The key issue on appeal involved the interpretation of Section 12, which sets out, among other things, when the copyright in publications vests in the Crown. The four-judge majority opinion (authored by Judge Abella, with Judges Moldaver, Karakatsanis and Martin concurring) found that the Crown had had sufficient indicia of control over the publication process, including control 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.
The appeal before the Supreme Court concerned a class action brought on behalf of approximately 350 Ontario land surveyors, whose plans were scanned and copied into Teranet's digital database and made available through the ELRS.
Prior to the ELRS's creation, 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 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 can search and obtain copies of such plans for a statutorily prescribed fee.
Keatley Surveying Ltd brought the class action proceedings on behalf of the Ontario land surveyors. The class members complained that Teranet was profiting at the surveyors' expense, to whom Teranet paid no 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 his reasons for judgment, Judge Belobaba of the Ontario Superior Court of Justice found that the plans had not been prepared under the province's direction or control, as they were generally prepared by surveyors at the request of clients (2016 ONSC 1717). Belobaba was not persuaded by Teranet's position that the plans' digitisation or making available online to the public was sufficient direction or control to trigger Section 12, but found that it did not have to decide the point. Instead, Belobaba 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 published under its direction or control.
The Ontario Court of Appeal (2016 ONCA 748) issued a unanimous decision (delivered by Judge Doherty), which concurred with Belobaba that the plans had not been prepared but had been published under the province's direction or control. However, the court of appeal reached this conclusion 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 majority of the Supreme Court held that the Section 12 test aims 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.(1) The majority further clarified that this examination of the publication process requires an examination of the direction or control over both the person preparing the work and the work that is being prepared or published.
The majority agreed with the lower courts that the plans had been published under the Crown's direction or control, 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.(2)
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 Crown's direction or control over the third-party publisher.
The majority held that in this case, the test had been 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.(3)
The majority found that these indicia applied to works published by both the LROs and 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 is not permitted to act outside either the agreements or the provisions of the provincial regime.
The majority further upheld the lower courts' findings and held that the plans had not been prepared under the Crown's direction or control. 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 three of the seven judges concurring in minority reasons for judgment (authored by Judges Côté and Brown, with Judge Wagner concurring). The minority agreed with the decision but differed in its analysis. The minority disagreed that Section 12 includes an examination of the Crown's direction and control over both the person preparing or publishing the work and the work itself. Instead, the minority held that this examination should concern only the Crown and the person publishing or preparing the work 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.
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 Canadian society.
The test set down by the majority is a contextual, fact-specific enquiry on a case-by-case basis and may frustrate those hoping for a 'bright line' test – indeed, the minority criticised the majority for not identifying when the threshold level of direction or control will be met. However, as noted by the majority "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 that work with or for them.
Governments must 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 on whose accuracy, integrity or dissemination the government and public rely.
Conversely, persons who work 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 must 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.
For further information on this topic please contact Steven Garland at Smart & Biggar's Ottawa office by telephone (+1 613 232 2486) or email (firstname.lastname@example.org). Alternatively, please contact Theodore Sum at Smart & Biggar's Vancouver office by telephone (+1 604 682 7780) or email (email@example.com). The Smart & Biggar website can be accessed at www.smart-biggar.ca.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.