IT.CAN Newsletter/Bulletin
January 4, 2017/4 janvier 2017

Hard Copy on the Highway

Court rules that image of liability insurance card on smartphone is not a “card” for purpose of offence of not having card in vehicle

In R. v. Albert, Justice John Walsh of the New Brunswick Court of Queen’s Bench heard a summary conviction appeal by the Crown from an acquittal in provincial court. The accused had been visiting family when her insurance liability card expired, and had her insurance company email her a copy of a new temporary card; she was unable to print this because she had no access to a printer, but had a copy stored on her phone. Stopped for speeding, the accused was charged under s. 28(1.1) of the New Brunswick Motor Vehicle Act, which provides:

No person shall operate a motor vehicle that is required to be registered under this Act unless a motor vehicle liability insurance card … is being carried in the motor vehicle or by the driver of the motor vehicle.

The Provincial Court judge who presided over the trial issued an acquittal, on the basis that the ticket issued to the accused stated that she was “not carrying evidence of insurance”, and since the judge believed that the accused had been carrying “what purported to be” an insurance card then she had clearly had “evidence of insurance” and thus the offence was not proven.

In reversing the acquittal, Justice Walsh began by noting that the words used on the ticket itself did not change the underlying legislation, which did indeed require the carrying of “evidence of insurance” but specified the means of proof: a “card.” The real question, he stated, was whether the word “card” could be interpreted to include an electronic image of a card. The canons of statutory interpretation mandated interpreting terms within the scope of their ordinary meaning in the context of the relevant legislation. The ordinary meaning of “card” was clear, and it was notable that there was no provision for any other format set out in the section, whereas in other sections of the Act proof by means of a “photo-static copy” was permitted.

Justice Walsh also made the interesting observation that the relevant section of the Act provided that the “card” had to be “deliver[ed] into the peace officer’s hands, for examination in detail by the peace officer.” He noted:

if the word card has the expanded meaning argued for by the respondent, i.e. permits an electronically displayed format, could it also have been the intention of the law makers to require that a private citizen turn over into the hands of the police upon demand something as personal and private as a hand held-computer, at least without any provision addressing privacy protection? What would be the range of risks for the citizen and, for that matter, for the peace officer?

Moreover:

The Court recognizes, of course, that in today’s lexicon there are so-called “electronic cards”. The Court also recognizes that in our technological, virtual world, a legislative provision for only a “card” (as traditionally understood) to be used as proof of something could be viewed by many as archaic. However, nowhere in the Motor Vehicle Act is there any reference to electronic means of proof, let alone provisions defining those means or addressing the authenticity and integrity of such means (Compare e.g. Evidence Act, S.N.B., s. 47.1 regarding electronically stored documents; See also: Canada Evidence Act, ss. 31.1, 31.3; Freedom of Information and Protection of Privacy, S.C. 2000, s. 31 (1); Criminal Code, s. 841).

In the end, it was not for the court to fill in gaps in legislation, but rather for the legislature. The case was remitted back to the trial judge for imposition of sentence.

Justice Walsh’s invocation of the term “archaic” as a means of describing the legislation is well-placed, in the sense that this case is one of many demonstrating that legislative updating is needed in order to accommodate technological realities (see e.g. R. v. Ikede, reported in an earlier issue of this newsletter). Legislation, and particularly prohibitory legislation like this which is meant to be interpreted restrictively, should be drafted in as technologically neutral a manner as possible. That said, Justice Walsh (a noted and respected criminal law expert) also notes the tricky privacy interests which might come into play via a provision that required a citizen to surrender their electronic device, even temporarily, to a police officer in the highway traffic setting. It is easy to imagine the mischief that could be caused by an officer accidentally or purposefully doing even a cursory search of the device and discovering something that the officer views as evidence of an offence. It may be that there is sometimes a place for analogue means of proof in our increasingly digital world.

Technology Justifies Bail Denial

Man sought for extradition to U.S. denied bail because of history of breach of conditions around computer use, limits of electronic monitoring

In United States v. Viscomi, Justice Eileen Gillese of the Ontario Court of Appeal (In Chambers) heard an application for bail pending appeal of an order of committal for extradition. The applicant is wanted in the U.S. for up to 70 charges on computer-related offences, in which he is alleged to have threatened, intimidated and abuse young girls in sexually sadistic ways and specifically by way of online video chats. While he was under arrest in an earlier extradition proceeding, the applicant had been released on bail to the care of his parents, who were acting as his sureties. He had breached his bail conditions by maintaining a data plan on his iPhone for two months and continuing to possess the phone despite its wifi capabilities—all specifically prohibited. The father admitted he was not overly computer literate and unable to monitor the applicant’s computer use.

Re-arrested on the current (and related) extradition proceeding, the applicant applied for bail, proposing that he live with his parents, be fitted with an electronic monitoring device and have an electronic monitoring system installed at their house, and be prohibited from possessing an internet-enabled device. Justice Gillese denied bail on a number of grounds, including public safety, and within the latter context she remarked:

It is acknowledged that electronic monitoring cannot restrict the Applicant's movements and is subject to the possibility of technological deterioration or failure. Further, the proposed plan of supervision leaves open a real risk that the Applicant might obtain access to the internet. There will still be an internet line into his parents' home, where he would reside. His parents both work outside the home, with the result that he will be home alone for at least 20 hours each week. Access to wireless internet now is "ubiquitous", as the Attorney General argued. All of this is compounded by the sureties' admittedly limited technological capabilities which translates into their limited capacity to supervise the Applicant's use of technology.

Former employee, through a corporation, creates infringing copy of employer’s website

Federal Court orders damages and injunction for trade-mark and copyright infringement

The Federal Court of Canada has ordered, in Thoi Bao Inc. v. 1913075 Ontario Limited, damages against a former employee of a Vietnamese media company for setting up a website and service that was nearly identical to his former employer. The Court also ordered an injunction.

The defendant Mr. Vo was formerly employed by Thoi Bao Inc. (“TB Inc.”), which is a Vietnamese language news company offering information through a number of channels, including radio, newspapers, television and online. Their principal web presence was through the website www.thoibao.com, which streamed audio, video, television shows and other newscasts. While still employed, Mr. Vo registered the domain name www.thoibaotv.com and through a numbered corporation doing business as “Vo Media” offered vietnamese programming from the site, including online news and media services. This he did without the knowledge or sanction of his employer.

The Court noted the following commonalities between the two websites:

[10] The infringing website is substantially similar to TB Inc.’s website, www.thoibao.com, in the following ways:

  1. Prominent use of the term TBTV Online as the website title;
  2. Audio and video streaming of television shows and newscasts that were produced by TB Inc.;
  3. An Internet news portal featuring links to news agency services;
  4. An online website with news, editorials and opinions on current events;
  5. Meta tags incorporating the Mark THOI BAO throughout its source code; and,
  6. Webcasts of news shows that were produced by TB Inc.

Thoi Bao brought an action against a range of associated parties, but settled with all but Mr. Vo. The lawsuit alleged a range of causes of action, including trade-mark infringement, passing off, deprecation of goodwill, and copyright infringement.

The first question to be addressed was whether the defendant, Mr. Vo, could be held personally liable for any infringement, if found. This would be despite the interposition of the numbered corporation. The court considered the following, and concluded that Mr. Vo would be personally liable:

[20] According to Mr. Nguyen, after Mr. Vo and Ms. Tran left the company, they launched Vo Media together in August 2014. A Business Names Report attached to Mr. Nguyen’s affidavit indicates that the name “Vo Media”, which is the business name of the Respondent’s numbered company, which was registered on May 12, 2014. Ms. Tran is listed as the sole director of Vo Media. However, according to Mr. Nguyen, both Mr. Vo and Ms. Tran have publically acknowledged that they are co-founders of the business. As proof, Mr. Nguyen presents two screenshots of a YouTube video, dated September 2014 (Exhibit M), in which Ms. Tran states that she and Mr. Vo are the co-founders. Mr. Nguyen has also adduced a THOI BAO newspaper article, dated September 6, 2014, which covered the launch of Vo Media in support of the company’s former employees (Exhibit N).

[21] Based upon the evidence, I am satisfied that Mr. Vo had a hands-on and personal involvement in the deployment of Vo Media and its website development and content. Therefore, if TB Inc. can establish the existence of infringing activity, Mr. Vo will be personally responsible.

With respect to the causes of action, the court concluded that the claims had been made out against Mr. Vo: The Defendant was found liable for trade-mark infringement, as there was a likelihood of confusion given that the two websites were nearly identical: “the website name used by Mr. Vo is THOIBAO, while TB Inc.’s registered mark is THOI-BAO” (at para 28). The Court also found passing off contrary to s. 7(b) of the Trade-marks Act, using the test from Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, which requires:

  1. the existence of goodwill
  2. deception of the public due to misrepresentation and
  3. actual or potential damage to the Applicant (at para 33)

The Court concluded that Mr. Vo’s actions have or are likely to have the effect of depreciating goodwill associated with TB Inc.’s (at para 37). As for the claims under the Copyright Act, the Court found that Mr. Vo’s site was broadcasting video footage from the plaintiff’s daily broadcasts.

As for the remedy, no evidence was led regarding the revenues gained by Mr. Vo for the infringement. For trade-mark infringement damages, the Court agreed with the plaintiff that a reasonable license fee for the use of the trade-mark would be $15,000 and ordered that against the defendant. Under the copyright claim, the Court sought to “arrive at a reasonable assessment in all of the circumstances in order to yield a just result” (at para 49). The court found that an award of $5,000 per incident, for a total of $10,000 would be appropriate “given the wilful and knowing conduct of Mr. Vo in infringing TB Inc.’s copyright” (at para 50). Though the plaintiff sought punitive damages, the Court declined to award them.

The plaintiff also sought an injunction, which was granted.

Online sale of Mexico vacation package to Albertan through chain of contracts results in “real and substantial connection”

Tort claim against Mexican hotel can proceed in Alberta courts

Following an extremely unpleasant incident staying in a resort hotel in Mexico, Ms. Kerry Toews sought to sue the hotel in the Alberta courts. On an appeal to the Court of Queen’s Bench, in Toews v. Grand Palladium Vallarta Resort & Spa, the Court agreed that since a contract formed in Alberta was connected to the tort claim, there is a sufficient, real and substantial connection to the province granting the Court jurisdiction.

Ms. Toews drank from an unlabeled bottle in her room’s minibar, assuming it to be water. It was cleaning fluid which burned her esophagus, requiring 87 surgeries (see para 5). The Toews booked their vacation through selloffvacations.com, which is operated by First Choice Canada Inc. First Choice contracted with Dominican Entertainment, which had in turn contracted with the company that owned the hotel. Both the hotel owner and Dominican Entertainment are owned by the same Netherlands corporation.

The appellant hotel owner brought an application for a stay arguing that the Alberta courts lack jurisdiction or, alternatively, that Mexico was the proper forum. This application was denied by a Master and was appealed to the Court of Queen’s Bench and then to the Court of Appeal. The Master had applied the test from Van Breda v. Village Resorts Ltd., 2012 SCC 17, which the Court of Appeal applied:

[9] Although Rule 11.25(3) of the Alberta Rules of Court is arguably engaged, the appeal is capable of adjudication on the basis of the Van Breda “real and substantial connection” test alone. Indeed, Rule 11.25(3) expressly adopts the jurisdictional standard of a “real and substantial connection.” What is required is a claim which “relates to” or is “connected with” a contract made in Alberta. In Van Breda Lebel, J. recognized that a presumptive connecting factor exists where a contract connected with a dispute was made in the Province.

[90] To recap, in a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:

[---]

(d) a contract connected with the dispute was made in the province.

The appellants argued that such logic (where there is only one Alberta contract of a long chain of non-Alberta contracts) would result in universal jurisdiction, which would be contrary to private international law.

In support of their position, the respondents pointed to the more recent decision of Lapointe Rosenstein Marchand Melançon LLP v. Cassels Brock & Blackwell LLP, 2016 SCC 30, which interpreted Van Breda.

[11] The respondents rely upon a more recent decision of the Supreme Court of Canada in Lapointe where the proposition that all that is required is a connection between the claim and a contract that was made in the province where jurisdiction is sought to be assumed. That decision was not available to the Master, nor to the Queen’s Bench judge. The Court reaffirmed:

It is worth noting that nothing in Van Breda suggests that the fourth factor is unavailable when more than one contract is involved, or that a different inquiry applies in these circumstances. Nor does Van Breda limit this factor to situations where the defendant’s liability flows immediately from his or her contractual obligations, or require that the defendant be a party to the contract: Pixiu Solutions Inc. v. Canadian General-Tower Ltd., 2016 ONSC 906, at para. 28 (CanLII). It is sufficient that the dispute be “connected” to a contract made in the province or territory where jurisdiction is proposed to be assumed: Van Breda, at para. 117. This merely requires that a defendant’s conduct brings him or her within the scope of the contractual relationship and that the events that give rise to the claim flow from the relationship created by the contract: paras. 116-17. (emphasis added)

The Court of Appeal agreed that the original Alberta contract “relate[d] to” or is “connected with” the claim against the Mexican hotel, so that there was a real and substantial connection to Alberta. Thus, the appeal was dismissed.

CRTC creates fund for high-speed internet targets

In a release issued on December 21, 2016, Jean-Pierre Blais, the chair of the CRTC, declared that broadband internet access in a “basic telecommunications service for all Canadians” and announced the creation of a new fund to invest $750 million to expand access to broadband internet access in Canada.

Blais in quoted in the media release:

“Access to broadband Internet service is vital and a basic telecommunication service all Canadians are entitled to receive. Canadians who participated during our process told us that no matter where they live or work in our vast country — whether in a small town in northern Yukon, a rural area of eastern Quebec or in downtown Calgary — everyone needs access to high-quality fixed Internet and mobile services. We are doing our part to bring broadband services to rural and remote communities.

The availability of broadband Internet, however, is an issue that can’t be solved by the CRTC alone. All players in the Canadian communications landscape will need to do their part to ensure Canadians have access to the services they need to participate in the digital economy.

All levels of government must address gaps in digital literacy. Affordability concerns are best addressed by the emergence of a dynamic market place where service providers compete on price for telecommunication services, in conjunction with social responsibility programs of telecommunications carriers and different levels of government.

High quality and reliable digital connectivity is essential for the quality of life of Canadians and Canada’s economic prosperity.”

Arkansas police seek access to Amazon Echo recording for murder investigation

First of the new wave of “internet of things” at crime scenes?

Various media outlets (including Engadget) are reporting that police and prosecutors in Arkansas are seeking to obtain from Amazon information that may have been collected by an Amazon Echo device that is relevant to a murder investigation. The Echo is an “always-on” voice-triggered assistant. The device usually actively listens for the trigger word “Alexa” and then records the instructions for transmission to Amazon’s servicers to be acted upon. It appears the police hope that the device overheard and recording goings-on in the house at the time of the murder.

Engadget reports that the police have been able to obtain some information from the device itself, but Amazon has refused to provide any recordings it may have. They did however provide account-related information:

Amazon declined to give police any of the information that the Echo logged on its servers, but it did hand over Bates' account details and purchases. Police say they were able to pull data off of the speaker, but it's unclear what info they were able to access. Due to the so-called always on nature of the connected device, the authorities are after any audio the speaker may have picked up that night. Sure, the Echo is activated by certain words, but it's not uncommon for the IoT gadget to be alerted to listen by accident.

The case will be closely watched and one wonders if this is just the beginning of silent “internet of things” witnesses at crime scenes.

The E-Taxman Cometh

US DOJ obtains John Doe order authorizing IRS to investigate Bitcoin holders

US-based tax advisors are reporting that on 30 November 2016 the US Department of Justice obtained a court order which allows the IRS to issue a John Doe summons “to Coinbase Inc., the largest exchanger of Bitcoin into dollars in the United States as of last year” (United States v. Doe, No. 3:16-cv-6658 (N.D. Calif., filed 17 November 2016). Stemming from a 2013 IRS advisory note that exchanging Bitcoin could generate taxable income in some circumstances, the order seeks to have Coinbase disclose personal information about Bitcoin holders who have used its services, as well as details of the transactions, so that their potential tax liability can be assessed. One affected individual has already challenged the order, and his hearing is to take place in January 2017.

Perhaps not coincidentally, it was recently reported that the value of Bitcoin doubled in 2016, exceeding US$1,000 for the first time.