Google Photos Class Action in Québec Derailed Off the Bat

The Québec Superior Court recently rejected a proposed class action involving Google Photos and the allege misuse of biometrics data resulting from this Google service. In the decision at issue, Homsy v. Google (2022 QCCS 722), the court refused to authorize the proposed class action, because the plaintiff failed to show he had even mere color of rights. In short, he failed to demonstrate that he had a case or, rather, what could be reasonably considered a real case.

Legally, the explanation of the rejection off hand of this (proposed) class action stems from the requirement that any such proceedings in Québec seem, at the very least, to hold water, if you will. To do so, the court should conclude, looking at the claim as presented, that if the alleged facts were true, then this case would justify a Québec court indeed awarding the remedy requested by that plaintiff.

Even though one might think this allows anyone to sue like this by alleging X, Y and Z, it is not so, as it could force unfounded and/or unworthy proceedings on the Québec justice system -something we collectively definitely do not need.

Indeed, jurisprudence is now teaching us that not mere allegations in initial proceedings (to institute a class action) may NOT suffice to allow a class action in Québec to stand. In effect, simply alleging a bunch of suppositions and theories isn’t sufficient to introduce a valid class action before Québec courts. You need more; maybe not tons more, but more. Thus, given the lack of even a modicum of evidence in the case at issue, the court agreed to throw it out (or, rather, refuse to authorize this class action against Google); this case simply did not pass muster. As cases such as this one demonstrate, even though Québec rules generally seek to facilitate class actions (as compared to your ordinary proceedings, anyway), you do need more than mere conjecture, theories, suppositions and inferences . If this is all you have initially (as was the case in Homsy), then the court may simply refuse to authorize your action -sorry.

US$237 Settlement by Boeing Directors Further to Boeing 737 MAX Safety Issues

The media reported this weekend that directors of the Boeing corporation just settled a lawsuit by shareholders, in connection with the massive problems of the Boeing 737 MAX, a debacle that included planes literally falling from the sky.

As we were reminding everyone recently, sitting on a board of directors isn’t all cocktails and schmoozing, it’s also real important work that can entail very real liability. In the case at hand, the liability at issue resulted in a settlement of US$237M which, to say the least, isn’t pocket change.  This is a good example of the reality that, yes, being a director entails exposure to eventual lawsuits, including by shareholders who may be impacted by bad decisions by the corporation’s board.

Here, the shareholders sued, based on the alleged directors’ failure, in their fiduciary responsibility, to adequately monitor safety issues of with the new model (then) being developed by Boeing. According to the shareholders’ claim before the courts, the lack of discussions and monitoring of safety issues by the board amounted to negligence. For example, the shareholders demonstrated that the Boeing board has created no specific committee to monitor safety issues which, in turn, allowed the corporation’s adoption of “unsafe business practices”.

This case also serves as a good reminder that, generally speaking, any potential director would do well to make sure he/she will be covered by adequate E&O insurance, before accepting to sit on the board of any corporation. Of course, it goes without saying that the coverage of those policies should be adapted to each case, being understood, for example, that acting on the board of a local business that runs restaurants does not entail the same level of risk and exposure as sitting on the board of a multinational aerospace company.

Yup, the reality is that being a director may have you sued down the line. Expect it, plan for it, including by taking your role seriously and making sure that the minutes and resolutions do reflect discussions and the work done by the board, over time. You never know when that evidence may come-in handy, to avoid liability. Failing that, decent E&O insurance coverage may be your best ally, make sure it is in place.

The Federal Court Imports Copyright Infringement by Inducement into Canadian Law

The Federal Court recently provided us with an interesting copyright decision, in Bell Canada v. L3D Distributing Inc. (2021 FC 832), a case that dealt with devices called set-top boxes (“STB”) used to stream content on TVs. In that case, a group of Canadian companies was sued by content owners and licensees, to stop these defendants from continuing to market and sell their STB devices in Canada, and ideally also obtain some compensation based on infringement of copyrights.

To make a long story short, in 2016 the group of plaintiffs that included Bell and Videotron sued some Canadian businesses marketing STBs in Canada, based on fact that such devices were largely being used by purchasers to infringe copyrights as to pirated TV shows and movies. The plaintiffs basically argued that availability of STBs made it too easy for Canadian consumers, allowing them to find, download and watch pirated content on their TVs. Indeed, thanks to these devices and instructions provided by the defendants at issue, Canadians could too easily get round the usual predictions against availability of pirated content -hence the proceedings filed before the Federal court.

We should mention that the defendants at issue not only marketed STBs in Canada but did so by promotion and information that made it clear that the typical function and use of these devices was essentially to obtain access to pirated content. In short, there was nothing subtle about the fact that activities of the defendants relied heavily on benefiting from allowing consumers to infringe copyrights on pirated content placed online by third parties. Looking at the promotional and other materials produced by defendants, it was clear that the main use of the devices at issue was to secure access to pirated content, particularly once purchasers installed a third-party add-on recommended by the defendants to enable pirating.

The federal court started by concluding that the defendants had in fact infringed copyrights over thousands of series and movies, by essentially making them available by telecommunications to Canadians. For the court, lack of actual copying, uploading or downloading may be disregarded in a blatant case such as this, as the defendants basically made content available through their devices and activities. Even though the defendant did not actually do any of the specific acts reserved to copyright owners by the Canadian act, the court held that the defendants’ activities related to STBs basically amounted to making pirated content available, a conclusion which many now question, including it seems to go beyond the actual provisions of the Copyright Act.

Interestingly, the Federal court here also went as far as holding that these defendants infringed copyrights not only directly (by making pirated content available, as described above), but also by merely encouraging, or rather inducing, Canadian users who purchased STBs to seek, download and watch pirated content placed online by third-parties. This is new law for Canada, as the Canadian Copyright Act does not contain any provision dealing expressly with inducement as a basis for finding infringement, contrary to the Patent Act, for example. For the court, the fact that Canadian common law generally provides for inducement as a basis for liability justifies importing that legal concept into copyright law, notwithstanding the absence of such a concept in our piece of copyright legislation.

Based on these findings of infringement, the court granted injunctive relief (of course) and awarded the plaintiffs 31 million dollars in statutory damages, along with some punitive damages, for good measure. Ouch.

I should mention that, not too surprisingly, the decision at issue was the result of ex parte proceedings and was a default judgment. One may express doubts as to whether the result would have been the same had the defendants actually participated and made submissions.

At any rate, I guess we’ll just have to see whether Canadian jurisprudence does really continue to import here the concept of infringement by inducement in copyright matters.