Date: 20130301
Dockets: A-115-12
A-116-12
Citation: 2013 FCA 63
CORAM: NADON
J.A.
SHARLOW
J.A.
DAWSON J.A.
BETWEEN:
Docket: A-115-12
NAUTICAL DATA INTERNATIONAL, INC.
Appellant
and
C-MAP USA INC., and DOE CO.
Respondents
and
HER MAJESTY IN RIGHT OF CANADA
Copyright Owner added
pursuant to s. 36(2) of Copyright
Act
AND
BETWEEN:
Docket: A-116-12
NAUTICAL DATA INTERNATIONAL, INC.
Appellant
and
NAVIONICS INC., and DOE CO.
Respondents
and
HER MAJESTY IN RIGHT OF CANADA
Copyright Owner added
pursuant to s. 36(2) of Copyright
Act
REASONS FOR JUDGMENT
NADON AND SHARLOW JJ.A.
[1]
Nautical
Data International Inc. (“NDI”) brought actions in the Federal Court against C‑Map
USA Inc. and Navionics Inc for copyright infringement. The actions dealt with the
same copyright claims and they proceeded together. C-Map and Navionics
submitted a joint motion for summary judgment dismissing both claims. By the
time the motion was heard, the only outstanding issue was whether NDI had
standing to sue C-Map and Navionics under the Copyright Act, R.S.C.
1985, c. 42, for certain acts they took between June 24, 2001 and March 30,
2007 in respect of what the parties have referred to as the “CHS Works”. In an
order dated April 3, 2012, Justice Zinn granted the summary judgment motion and
dismissed the actions (2012 FC 300). NDI now appeals that order. For the
reasons that follow, we would allow the appeal.
[2]
The
undisputed factual background to this case is well summarized by Justice Zinn
in paragraphs 3 to 6 of his reasons, which are reproduced here:
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[3] Canadian
Hydrographic Service (CHS), a federal government agency in the Science Sector
of the Department of Fisheries and Oceans, produces hydrographic charts in
paper format, containing data that is owned by Canada and maintained by the
CHS (the CHS Works). CHS also produces electronic navigation charts in S-57
compliant digital vector format, containing data that is owned by Canada and maintained by the CHS (the Additional CHS Works).
[4] In 1993 NDI
entered into an agreement with CHS with respect to the data used to produce
these navigation charts. In 1998 and 2000, CHS and NDI revised their
agreement. The agreement between NDI and CHS will be referred to in these
reasons as the Agreement or the Licence.
[5] By virtue of
the Licence, CHS provided the raw data and data source materials used in the
preparation of the CHS Works and the Additional CHS Works for conversion into
electronic charts and updates. After CHS verified the accuracy of its
electronic charts, NDI would reproduce them in a variety of digital formats
(the NDI Works) which it licensed directly to end-users, and indirectly to
end-users through distributors, value-added licensees, and resellers.
[6] The defendants
sell electronic hydrographic charts in proprietary data and media formats for
use in their equipment. Specifically, they produce electronic vector charts
and charting systems for use in marine, aeronautical, and land navigation.
The defendants admit to using CHS Works to produce their digital charts and recognize
that CHS has the authority to produce hydrographic charts in Canada.
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[3]
As
indicated in this excerpt, the phrase “CHS Works” is used by the parties to
refer to nautical charts in paper form produced by the Canadian Hydrographic
Service (which for convenience I will refer to as the “Crown”). Only the CHS
Works – the paper nautical charts – are the subject of this litigation. The
copyright in the CHS Works belongs to the Crown. The information (the “CHS
Data”) embodied in the CHS Works is held and maintained by the Crown.
[4]
The
rights of NDI that are the subject of the dispute in this case are embodied in
an agreement – the Licence – the terms of which are set out in a document
entitled “Canada-NDI Consolidated Agreement – Version 1.3 as amended on January
21, 2002 for Marketing and Distribution of Electronic Charts and Other Digital
Nautical Products”. The relevant provisions read as follows:
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[RECITALS]
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1.
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The
Canadian Hydrographic Service (CHS) of the Department of Fisheries and Oceans
has the sole authority in Canada to produce nautical charts for Canadian
territorial waters. CHS is responsible for providing nautical charts which
meet the regulatory standards for safe navigation, and for providing an
adequate supply of such charts under the Charts and Nautical Publications
Regulations 1995 of the Canada Shipping Act.
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2.
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CHS
produces paper nautical charts and sells them through a network of authorized
dealers in and outside Canada.
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3.
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CHS
is interested in supplementing its standard paper chart with electronic
navigation charts and other digital data products and for that purpose has
developed and continues to develop methodologies and standards designed to
produce these products.
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4.
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Canada owns the exclusive right to
the paper charts and digital data products produced by the CHS.
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5.
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CHS
is interested in meeting its digital data product marketing and distribution
requirements through licensing arrangements.
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6.
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NDI
is interested in acquiring the marketing and distribution rights to CHS
electronic charts and other digital data products, and in cooperating with
CHS in the production and quality control of these products.
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[…]
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DEFINITIONS
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[…]
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“CHS”
means the Canadian Hydrographic Service, Science Sector of the Department of
Fisheries and Oceans.
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“CHS
Certified Products” shall describe any product that is certified by CHS to
meet its data product standards.
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“CHS
Data” means any data owned by Canada and maintained by CHS.
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“ENC”
means an IMO compliant Electronic Navigational Chart.
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“IHO”
means the International Hydrographic Organization.
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“IMO”
means the International Maritime Organization.
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[…]
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“Product”
means any digital data product based on CHS Data (including CHS Certified
Products), the definitive list of which […] is to be agreed upon by the
Parties and set out in Schedule 1 and including but not limited to:
•
Vector
Charts, such as ENCs, and
•
Raster
Charts, such as a raster version of CHS paper charts and any copies thereof.
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“Product
Update” means a digital file, based on CHS Data (including CHS Certified
Products), the definitive list of which […] is to be agreed upon by the
Parties and set out in Schedule 1 and containing data that is required to
update a corresponding Product.
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[…]
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2.
LICENSE
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2.1
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Subject
to the rights reserved in Sections 2.4 and 2.5 below, Canada grants to NDI a
sole worldwide right and license (the “License”) to use the CHS Data to
produce Products and Product Updates, to integrate these Products with other
products or services (provided that such integrated offerings do not derogate
in any respect from the availability or reliability of the Products or
Product Updates) and to distribute same directly or through third parties to
whom a sublicense is granted in accordance with the terms hereof. Except as
expressly set out herein, CHS shall have no right to distribute the Products
or Product Updates to any person.
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2.2
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NDI
may not transfer to other parties CHS Data, Products, and Product Updates
unless such parties have been granted the appropriate sublicense by NDI, in
accordance with either Schedule 3: End-user License, or Schedule 4: Value
Added Remarketer License or any other type of distribution arrangements with
third parties approved by NDI and CHS. Any such sublicense shall hereinafter
be referred to as “NDI License”, and any NDI sublicensee shall hereinafter be
referred to as “NDI Licensee”. A transfer of any data and data products shall
be deemed to have occurred under the Revised Agreement whenever a third party
shall have access to such data and data products.
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2.3
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The
License may not be assigned by NDI without CHS’ prior written authorization.
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2.4
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CHS
may provide CHS Data, Products that are CHS Certified, and Product Updates
that are CHS Certified directly, for non-commercial purposes, to any Canadian
(Federal or Provincial) Government Department or Agency, to any Canadian
university or other educational institution, to any Hydrographic Office with
which CHS has bilateral arrangements, or, in case of a national emergency, as
defined in the Emergencies Act, to any other third party. CHS will use
its best efforts to ensure that all requests for CHS Data, Products, and
Product Updates are routed through NDI.
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2.5
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In
the event of a national emergency, as defined in the Emergencies Act,
and on written notification from CHS, NDI will immediately cease, to the
extent and under any conditions specified in the notification, the
distribution of any CHS Data, Products that are CHS certified, or Product
Updates that are CHS Certified. NDI will not renew distribution of any CHS
Data, Products that are CHS Certified, or Product Updates that are CHS
Certified without written notification from CHS. In this Section,
notification shall come from the Director General of CHS or any supervisory
officer of the Director General of CHS.
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[…]
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6.
COPYRIGHT
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6.1
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NDI
agrees that the copyright in the CHS Data, Products that are CHS Certified
and Product Updates that are CHS Certified is and shall remain the property
of Canada. Where NDI has developed a Product or Product Update, the ownership
of same shall be assigned to CHS if it is CHS Certified provided that NDI
receives commercially reasonable compensation for its investment in such
development. NDI shall ensure that, for all Products that are CHS Certified
and Product Updates that are CHS Certified the following copyright notice is
displayed in accordance with accepted industry practices related to copyright
notices pertaining to published and licensed data:
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©
(year)
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Her
Majesty in right of Canada, Canadian Hydrographic Service/
Sa
majesté en Chef du Canada, Service Hydrographique du Canada
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[5]
It
appears from section 2.1 of the Licence that the Crown furnished NDI with CHS
Data, not CHS Works. If section 2.1 is read literally, it would be only the CHS
Data that NDI has been licensed to use to make the digital products it sells.
However, NDI is asserting against C-Map and Navionics a claim for damages for
breach of copyright in the CHS Works, which are not specifically mentioned in
section 2.1.
[6]
C-Map
and Navionics admit that they use CHS Works to produce their own digital
charts. However, the basis of their summary judgment motion is that as a matter
of law, NDI has no right to claim damages against them under the Copyright
Act in respect of the CHS Works, because the copyright in the CHS Works
belongs to the Crown alone.
[7]
It
is common ground that, according to subsection 36(1) of the Copyright Act,
NDI is entitled to sue in its own name for breach of the copyright in the CHS
Works if it has a right, title or interest in the Crown’s copyright by virtue of the
Licence. Subsection 36(1) of the Copyright Act which reads as follows:
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36.
(1)
Subject to this section, the owner of any copyright, or any person or persons
deriving any right, title or interest by assignment or grant in writing from
the owner, may individually for himself or herself, as a party to the
proceedings in his or her own name, protect and enforce any right that he or
she holds, and, to the extent of that right, title and interest, is entitled
to the remedies provided by this Act.
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36. (1) Sous réserve des
autres dispositions du présent article, le titulaire d’un droit d’auteur, ou
quiconque possède un droit, un titre ou un intérêt acquis par cession ou
concession consentie par écrit par le titulaire peut, individuellement pour
son propre compte, en son propre nom comme partie à une procédure, soutenir
et faire valoir les droits qu’il détient, et il peut exercer les recours
prévus par la présente loi dans toute l’étendue de son droit, de son titre et
de son intérêt.
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[8]
It is also
common ground that subsection 36(1) of the Copyright Act is of
assistance to NDI only if its rights under the Licence meet the definition of
“exclusive licence” in section 2.7 of the Copyright Act, which reads as
follows:
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2.7 For the purposes of
this Act, an exclusive licence is an authorization to do any act that is
subject to copyright to the exclusion of all others including the copyright
owner, whether the authorization is granted by the owner or an exclusive
licensee claiming under the owner.
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2.7 Pour l’application de la
présente loi, une licence exclusive est l’autorisation accordée au licencié
d’accomplir un acte visé par un droit d’auteur de façon exclusive, qu’elle
soit accordée par le titulaire du droit d’auteur ou par une personne déjà titulaire
d’une licence exclusive; l’exclusion vise tous les titulaires.
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[9]
So, the first
question is simply this: Does anything in the Licence authorize NDI to do anything
with respect to the CHS Works that is subject to copyright, to the exclusion of
all others including the Crown?
[10]
The acts that
are “subject to copyright” are those listed in section 3 of the Copyright
Act. This is essentially a list of things that can be done in respect of a
copyrighted work only by or with the consent of the copyright holder
(necessarily including the consent of the copyright holder that is given by way
of licence). Section 3 reads in relevant part as follows:
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3.
(1)
For the purposes of this Act, “copyright”, in relation to a work, means the
sole right to produce or reproduce the work or any substantial part thereof
in any material form whatever, to perform the work or any substantial part
thereof in public or, if the work is unpublished, to publish the work or any
substantial part thereof, and includes the sole right
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3.
(1)
Le droit d’auteur sur l’oeuvre comporte le droit exclusif de produire ou
reproduire la totalité ou une partie importante de l’oeuvre, sous une forme
matérielle quelconque, d’en exécuter ou d’en représenter la totalité ou une
partie importante en public et, si l’oeuvre n’est pas publiée, d’en publier
la totalité ou une partie importante; ce droit comporte, en outre, le droit
exclusif :
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(a) to produce,
reproduce, perform or publish any translation of the work,
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a) de produire,
reproduire, représenter ou publier une traduction de l’oeuvre;
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[…]
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[…]
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and
to authorize any such acts.
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Est inclus dans la présente
définition le droit exclusif d’autoriser ces actes.
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[11]
A problem for
NDI is that the key provision of the Licence, section 2.1, authorizes NDI to
make use of the CHS Data – the information – but there can be no copyright in
information. More importantly, section 2.1 does not expressly authorize NDI to
produce or reproduce, or do anything at all, with respect to the CHS Works –
the paper nautical charts – to which the Crown copyright attaches. That the
subject of the Licence is the CHS
Data and not the CHS Works is underscored by section 2.2, 2.4 and 2.5. If
section 2.1 were read literally and in isolation, NDI could not succeed in this
action.
[12]
However,
section 2.1 must be read in its context. And when the Licence is considered in
its entirety, an ambiguity becomes apparent because of section 6.1.
[13]
Section
6.1 is intended to be a formal acknowledgement of Crown copyright, but it
refers to copyright in the CHS Data. Either the parties were unaware
that copyright could not subsist in information (which we would not presume),
or they understood the phrase “CHS Data” by necessary implication to mean or at
least include the CHS Works, even though the definition of “CHS Data” in the
Licence seems to limit its meaning to “data”.
[14]
NDI’s
statements of claim allege that the Crown “owns” the CHS Data. That allegation
presents the same ambiguity. If it is intended to mean that data can be owned in
the same way as property can be owned, then there is some question as to
whether it is correct as a matter of law. Generally speaking, data – mere
information – cannot be “owned” as though it were property. It can be kept
confidential by its creator or the person who is in possession of it, and a
legal obligation can be imposed on others by contract or by legislation to keep
the information confidential. However, there is no principle of property law that
would preclude anyone from making use of information displayed in a publicly
available paper nautical chart, even if the information originated with the
Crown or is maintained by the Crown.
[15]
On
the other hand, a reproduction in digital form of a paper nautical chart
produced by CHS might be a breach of the Crown’s copyright pursuant to section
3 of the Copyright Act. It may be that the parties to the Licence
contemplated that the products NDI would produce using the CHS Data – the
information – would necessarily be copies of the CHS Works or such a
substantial part of the CHS Works that they would infringe the Crown copyright
but for the Crown’s consent to the reproduction. On that basis, section 2.1
could plausibly be read as authorizing NDI to reproduce the CHS Works in
digital form. That interpretation of section 2.1 appears to be consistent with
the definition of “Product” in the Licence, which suggests that NDI could
produce “Raster Charts” that would be reproductions of CHS paper charts.
[16]
That
may be what NDI was trying to convey in its argument that section 2.1
authorized it to “integrate” the CHS Works into its products. Justice Zinn
notes at paragraph 22 of his reasons that NDI submits that it was given three
“permissions” under the Licence, namely “the right to produce, to integrate and
to distribute”. Then, at paragraph 23, Justice Zinn concludes, without
analysis:
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[23]
CHS having permitted NDI to produce and integrate CHS Works as protected by
the Copyright Act, one must next ask whether CHS promised not to give
anyone else permission to produce or integrate the CHS Works for the duration
of the licence.
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As we read this paragraph,
Justice Zinn interpreted section 2.1 of the License as granting NDI the right
to produce digital copies of the CHS Works. We are not sure that interpretation
is correct, because in our view the record does not contain enough evidence of
the relevant factual matrix to make that determination. However, for the moment
we will assume it is correct.
[17]
Having
interpreted section 2.1 of the Licence as he did, Justice Zinn was obliged to
consider whether the rights granted to NDI under that provision fell within the
statutory definition of “exclusive licence” in section 2.7 of the Copyright
Act. As mentioned above, it is undisputed that if NDI did not have an
exclusive licence, it does not have standing to sue C-Map and Navionics for
copyright infringement.
[18]
C-Map
and Navionics did not argue that the Crown could have given another party the
right to produce digital copies of the CHS Works for the duration of the
License. Therefore, the issue was whether the License precluded the Crown from
making such digital copies itself.
[19]
Section
2.1 of the Licence opens with words of reservation (“subject to the rights
reserved in Sections 2.4 and 2.5”). However, sections 2.4 and 2.5 do not
reserve to the Crown any right to make digital copies of the CHS Works. Section
2.4 gives the Crown the right to provide CHS Data and certain NDI products to
specified parties for certain purposes, and section 2.5 provides for the
termination of the authorization in the event of a national emergency.
[20]
There
is no other provision in the Licence that says expressly that the Crown
reserved to itself the right to make digital copies of the CHS Works. That
would tend to support the argument of NDI that the Licence was intended to be
an exclusive licence. However, Justice Zinn concluded the contrary, primarily
because he relied on the evidence given by a Crown official in an examination
for discovery that the Crown did not consider NDI to have an “exclusive licence
in the paper charts” and that “paper charts were excluded from the definition
of Products and Product Updates”.
[21]
We
agree with NDI that Justice Zinn erred in law in relying on this evidence to
determine the parties’ contractual intention (Eli Lilly & Co. v.
Novopharm Ltd., [1998] 2 S.C.R. 129, at paragraph 54). (We would also note
that if the discovery evidence of the Crown official were relevant, it would
tend to contradict the conclusion that the Licence authorized NDI to make
digital copies of the CHS Works – the paper charts.)
[22]
Disregarding
the discovery evidence of the Crown official leaves only the Licence itself as
the basis for determining whether NDI’s licence was exclusive. In our
respectful view, the lack of any express provision that permits the Crown to
make digital copies is consistent with the position of NDI that its licence was
exclusive.
[23]
That
does not conclude the matter, however. As indicated above, the apparent
inconsistency between section 2.1 and section 6.1 of the Licence leaves open a
question as to the subject of the Licence itself. That is, it remains unclear
whether NDI was licensed only to use the CHS Data (the information) to make its
digital products, or whether it was licensed to make digital copies of the CHS
Works. In our view, the record on the summary judgment motion does not provide
a basis for resolving that ambiguity, and therefore C-Map and Navionics have
not met the burden of proving that there is no genuine issue for trial. We
conclude, therefore, that the motion for summary judgment should have been
dismissed.
[24]
For
these reasons, we would allow the appeal with costs in this Court and in the
Federal Court. We would set aside the judgment under appeal and, making the
order that should have been made, we would dismiss the summary judgment motion.
“M. Nadon”
“K. Sharlow”
“I
agree.
Eleanor R. Dawson J.A.”
FEDERAL COURT OF
APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-115-12
APPEAL FROM AN ORDER OF THE
HONOURABLE JUSTICE ZINN DATED APRIL 3, 2012 DOCKET NUMBER T-1219-04
STYLE OF CAUSE: Nautical
Data International, Inc. v. C-Map USA Inc. et al
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: December
6, 2012
REASONS FOR JUDGMENT
BY: NADON,
SHARLOW JJ.A.
CONCURRED IN BY: DAWSON J.A.
DATED: March
1, 2013
APPEARANCES:
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James
Mills
Chantal
Saunders
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FOR
THE APPELLANT
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Gary
Daniel
Catherine
Flood
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FOR
THE RESPONDENTS C-MAP USA INC. and DOE CO.
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SOLICITORS OF RECORD:
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Borden
Ladner Gervais LLP
Ottawa, Ontario
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FOR
THE APPELLANT
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Blake,
Cassels & Graydon LLP
Toronto, Ontario
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FOR
THE RESPONDENTS C-MAP USA INC. and DOE CO.
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FEDERAL COURT OF
APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-116-12
APPEAL FROM AN ORDER OF THE
HONOURABLE JUSTICE ZINN DATED APRIL 3, 2012, DOCKET NUMBER T-1220-04
STYLE OF CAUSE: Nautical
Data International, Inc. v. Navionics Inc. et al
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: December
6, 2012
REASONS FOR JUDGMENT
BY: NADON,
SHARLOW JJ.A.
CONCURRED IN BY: DAWSON J.A.
DATED: March
1, 2013
APPEARANCES:
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James
Mills
Chantal
Saunders
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FOR
THE APPELLANT
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Gary
Daniel
Catherine
Flood
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FOR
THE RESPONDENTS NAVIONICS INC. and DOE CO.
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SOLICITORS OF RECORD:
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Borden
Ladner Gervais LLP
Ottawa, Ontario
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FOR
THE APPELLANT
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Blake,
Cassels & Graydon LLP
Toronto, Ontario
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FOR
THE RESPONDENTS NAVIONICS INC. and DOE CO.
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