Decision clarifies the limits of copyright protection for data
Big data is big business - but protecting that data can be challenging in Canada’s regulatory regime.
“The world’s most valuable resource is no longer oil, but data.” That is the title of a May 2016 article in The Economist. Data is valuable. But who, if anyone, can own, control and distribute data? Data, like other valuable resources, attracts disputes over ownership and control. Still, the legal basis for ownership of data is not well understood.
Claims to data ownership are often based in copyright, even though “there can be no copyright in information.” (Nautical Data International, Inc. v. C-Map USA Inc. 2013 FCA 63 at paragraph 11). In Canada (Commissioner of Competition) v. Toronto Real Estate Board 2017 FCA 236, the Federal Court of Appeal provides another reminder that there is no stand-alone ownership right in data. The decision demonstrates the legal risks that result from an imprecise understanding of rights in data.
It also offers useful lessons. For example, ownership and control rights in data depend on existing areas of law like intellectual property, contracts, privacy and confidentiality.
Copyright can protect original data and original aggregations of data. Originality is more likely when people — not machines — curate, annotate, select and arrange the data. Mechanically aggregating large amounts of data does not necessarily provide copyright protection.
Contract law provides greater certainty over data ownership. Canadian law restricts contracting parties from disputing the validity of licensed intellectual property rights (see e.g., Coyle v. Sproule [1942] OR 307). Third parties, though, are free to challenge validity. References to copyright in contracts do not demonstrate originality when third parties are concerned. That gives sellers an incentive to negotiate contracts.
Uncertainty over data ownership presents greater risks for dominant business. Aggressively asserting intellectual property rights or privacy considerations could invite unwanted oversight from regulators. Dominant businesses should scrutinize ownership claims using a legal lens. Licences, contracts and settlement agreements governing data should align with established legal rights. Regulators may be less likely than counterparts in business to accept ownership claims in data at face value.
The Toronto Real Estate Board (TREB) represents real estate practitioners in the Greater Toronto Area. TREB operates a database system that hosts property information, such as addresses, list prices and photographs. TREB’s members receive full access to the database, including to data entered by other members. TREB permits members to share that data with their clients. At the same time, TREB restricts its members from sharing some of that data through “virtual office websites” (VOWs) accessible to clients. In effect, TREB permits members to share more data through fax, email or telephone than through VOWs.
The Competition Tribunal had determined that the restriction prevented competition, contrary to subsection 76(1) of the Competition Act. The Federal Court of Appeal dismissed TREB’s appeal of that decision.
TREB argued that the restrictions were justified because they protected the privacy of its members’ clients. This argument was unsuccessful, in part because the Federal Court of Appeal found that the restrictions were unnecessary for privacy compliance.
TREB also argued that the restrictions simply represented TREB’s enforcement of its copyright in the database. This argument failed for two reasons. First, TREB’s restrictions were not “only” an exercise of copyright — they were an attempt to insulate members from new entrants and new forms of competition. Second, the database did not meet the “originality” requirement for copyright.
In its analysis, the Federal Court of Appeal treated TREB’s database as a “compilation” — that is, an arrangement of data. Copyright does not protect data; rather, it protects the expression of that data, for example, as an original compilation. So the court turned to CCH Canadian Ltd. v. Law Society of Upper Canada 2004 SCC 13, the leading Canadian case on originality, to determine whether the database met the “originality” requirement for copyright.
CCH provides that a work (such as a compilation) is original only if it results from the exercise of skill and judgment. “Skill” means the use of the author’s knowledge or aptitude in developing the work; “judgment” means the use of the author’s capacity to discern among possible options in producing the work. This requires the exercise of non-trivial, intellectual effort. At the same time, there is no requirement for “creativity.” The Federal Court of Appeal also surveyed other contemporary decisions. In a difficult area, the court distilled the principles from those decisions and offered the following useful guidance:
- When an idea can be expressed in only a limited number of ways, then the threshold of originality is not met.
- If a compilation results from the application of common standards of selection in the industry, that is one factor for assessing originality. However, if observing industry standards amounts merely to “mechanical amendments”, the compilation will not meet the originality requirement.
- Similarly, there is no originality if the content and layout of a form is largely dictated by utility or legislative requirements.
- Contracts between third parties that refer to a work as copyright protected do not prove originality. In this case, TREB did not show that the database met the originality requirement. Members provided the data to populate the database. Once uploaded, the information was available to others almost instantaneously. The arrangement of the database followed industry norms across Canada. Finally, TREB outsourced the correction of database errors. The upshot was that TREB could not rely on copyright exceptions or privacy concerns to justify its restrictions on members’ VOWs.
A version of this article was published on January 2, 2018 in The Lawyer’s Daily. The Supreme Court of Canada dismissed TREB’s application for leave to appeal in August 2018.
