Court FileNo:T- (94-47 FEDERAL COURT BETWEEN: 1395804 Ontario Ltd., operating as Blacklock’s Reporter Plaintiff -and- Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Defendant STATEMENT OF CLAIM TO THE DEFENDANT: A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the Plaintiff. The claim made against you is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or a solicitor acting for you are required to prepare a statement of defence in Form 171B prescribed by the Federal Courts Rules, serve it on the Plaintiff's solicitor or, where the Plaintiff does not have a solicitor, serve it on the Plaintiff, and file it, with proof of service, at a local office of this Court, WITHIN 30 DAYS after this statement of claim is served on you, if you are served within Canada. If you are served in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period for serving and filing your statement of defence is, sixty days. Copies of the Federal Courts Rules, information concerning the local offices of the Court and other necessary information may be obtained on request to the Administrator of this Court at Ottawa (telephone 613-992-4238) or at any local office.IF YOU FAIL TO DEFEND THIS PROCEEDING, judgment may be given against you in your absence and without further notice to you. JEAN-FRANCOIS DUT REGISTRY Gt Ete rE January 26, 2017 Issued by: Office MONT Hi: egis Federal Court of Canada 90 Sparks Street, 1*' Floor Ottawa, Ontario K1A OH9 Tel: 613-992-4238 Fax: 613-947-2141 To: William F. Pentney Deputy Attorney General of Canada 284 Wellington Street Ottawa, ON K1A OH8 Tel: (613)957-4998 Fax: (613)941-2279 AND TO: FINTRAC 24" floor, 234 Laurier Avenue West Ottawa ON K1P 1H7 CANADACLAIM 1. The Plaintiff, 1395804 Ontario Ltd., operating as Blacklock's Reporter (“Blacklock’s”), claims: i) Damages for breach of the Copyright Act, R.S.C., 1985 (“the Act”), c. C- 42 for the unauthorized use, distribution, and third party dissemination of its subscription based content and/or breach of contract in the amount of $11,470 plus taxes; ii) Punitive and/or exemplary damages in the amount of $5,000; ili) A declaration that the Defendant has breached the Copyright Act; iv) Prejudgment and post judgment interest in accordance with the provisions of the Courts of Justice Act, R.S.O. 1990, ¢.43 as amended; ¥) Costs of this action together with any applicable goods and services tax; and, vi) Such further and other relief as this Honourable Court may deem just. The 2. The Plaintiff is a subscription based news corporation that covers politics, bills and regulations, reports and committees, as well as Federal Court and public accounts in Canada. It is a reporter-owned and operated newsroom in Ottawa that provides news on a subscription basis to business, labour and associations 3. The Plaintiff maintains its online articles as pay walled meaning that the general public cannot access its articles without a subscription. Blacklock’s material is copyright protected and may not be disseminated. Single use electronic subscriptions were available in 2014 for $157 plus tax. These terms and conditions are posted on its website. Institutions and organizations may purchase bulk rate subscriptions by contacting Blacklock's directly, further to which a licensing contract is negotiated between the parties.4, The present claim relates specifically to the actions of the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC” website, is Canada’s financial intelligence unit, itis an independent agency, reporting to the Minister of Finance, who is accountable to Parliament for the activities of the Centre. It was established in 2000 and operates within the ambit of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations. It has approximately 355 employees j who, according to their 5. The Plaintiff states that the body of literature and electronic resources owned and/or controlled by the Plaintiff must be lawfully procured in a manner authorized by the Copyright Act (“the Act”) and according to the terms of use of its source authors and media content providers. 6. The Plaintiff states that it owns the copyright for all of Blacklock’s articles and/or has obtained assignment copyright for all content produced by Blacklock’s and available to its subscribers. 7. On June 19, 2014, the Defendant purchased an individual single-user electronic subscription to Blacklock’s, in the name of Sophie Desjardins (“Desjardins”), and using the email address, library-bibliotheque@fintrac-canafe.ge.ca. 8 The Plaintiff's Terms and Conditions were posted on its website at the time Desjardins purchased a subscription, which included, inter alia, a prohibition on the use of the Plaintiff's content for institutional purposes andlor dissemination within an institution. 9. In or about December 2015, the Plaintiff made a request to the Access to Information and Privacy Coordinator of FINTRAC pursuant to the Access toInformation Act. This request sought the following records: “From June 1, 2014 all documents and correspondence including electronic communication citing or referring to the publication Blacklock’s Reporter, also known by its derivatives. Blacklock’s or Blacklocks.ca, including distribution of any content, text or image via the account library-bibliotheque@fintrac-canate.qc.ca." 10.At the time of making its access to information request, the Plaintiff did not presume or suspect that Desjardins had violated Blacklock’s terms of use or had distributed content to and/or on behalf of FINTRAC to its staff or third parties. ‘The Plaintiff does periodic access to information requests of individual subscribers who have purchased individual subscriptions by registering a Government of Canada email account. 11. There is no prohibition from using whatever emalll account is chosen by an individual subscriber and the Plaintiff does not monitor online subscription in real time. It does file access to information requests, however, on a periodic basis to ensure that individual subscribers are complying with the prescribed terms of use and copyright of Blacklock’s. Breach of Copyright Act and Breach of Contract 12.On or about April 19, 2016, the Plaintiff received a return from the Access to Information Coordinator relating to FINTRAC. The return reveals that the subscription purchased by Desjardins was used to internally distribute Blacklock’s copyright protected content on several occasions to various recipients within FINTRAC. The Plaintiff is unaware of the scope of dissemination of its copyright protected material to third party recipients outside of FINTRAC,13. The Plaintiff states and it is the fact that the Defendant internally distributed an article produced by Blacklock’s dated July 9, 2014 entitled, “Feds Cited for Random Fine". The article in question was related to a then recent Federal Court of Canada decision that questioned the transparency and intelligibility of the FINTRAC rules establishing monetary penalties for violation of terrorist financing regulations. 14.Blacklock’s had sought comment from FINTRAC relating to the Federal Court decision prior to the publication of its article, but specific comments were not provided by the Defendant at that time. 15. The article was distributed by the Defendant internally within FINTRAC on or about July 9" and 10" 2014 and March 15, 2016 to various recipients, beyond Ms. Desjardins, including but not limited to the following recipients: “Communication — News/Nouvelles Distribution’, Human Resources, Carol Stevenson, Darren Gibb, Peter Lamey, Monique Paquin, Marnie Waller Spice, Gerald Cossette (FINTRAC Director), Jacques Moreau, Sylvie Archambault, Erica Codner, Angela Coppola, Lisa Freeman, Annie Lalonde, Sandy Piazza, Mireille Velghe and “Executive Committee (Members Only)”. 16. Other Blacklock’s articles disseminated by the Defendant also include but are not, limited to the following: “A Mega-Crime Database” (October 16, 2013); *20 Million Transactions” (November 30, 2013); “Canada Regulates Bit-Coin” (February 12, 2014); “Photocopy Error Cited for Anti-Terror Punishment” (January 17, 2014). No Bulk Subscription Purchased by FINTRAC 17. Upon receipt of the access to information return relating to FINTRAC, the Plaintiff discovered that the Defendant stated in internal correspondence dated February 12, 2015 exchanged between John Widdis and Paul Dubrule that its subscription was a “bulk subscription", which commenced on June 19, 2014,18.On or about February 12, 2015, in a further email also between John Widdis and Paul Dubrule, Mr. Widdis states that FINTRAC has no license agreement with the Plaintif. 19. The Plaintiff states and it is the fact that the subscription purchased by Desjardins on June 19, 2014 was an individual subscription and that the Defendant has at no time purchased a bulk subscription or license for institutional use of its content. 20.On or about April 29, 2016, the Plaintiff wrote to the Defendant raising the concern about the statements in the February 12, 2015 email exchange and the fact that there had been distribution of numerous stories within FINTRAC. The Plaintiff further offered the Defendant to suggest a way by which the matter could be resolved Damages for Breach of Copyright Act 21. The Plaintiff relies upon the Copyright Act and states that the Defendant has. violated the Act by virtue of its unauthorized use and dissemination of its copyright protected material, 22. The Defendant's distribution of the Plaintiff's material was unauthorized and circumvented the Plaintiff's license of its copyright protected and pay walled electronic news content. 23. The Plaintiff charges $11,470 for subscriptions by clients with 100 individual employees. For institutions with over 100 individual employees or users, the Plaintiff may negotiate bulk institutional rates; however, such negotiation is done on a case-by-case basis with each institutional user. 24. The Plaintiff states that once its content is sent to third parties, it can neithercontrol nor account for distribution of its content to the world at large. Damages for Breach of Contract 25. The Plaintiff states that its content was provided, without authorization, from Desjardins to other FINTRAC users for the purpose of mass distribution. 26. As an employee and agent of FINTRAC, the actions of Desjardins, which breached the terms of use of Blacklock’s content, attract vicarious liability to FINTRAC. 27. The Defendant's distribution was done without authorization by the Plaintiff and was contrary to the terms of the subscription procured by Desjardins and in violation of Biacklock’s copyright. 28. FINTRAC, at the material time of the distribution of the Plaintiff's material, was in possession of a copy of Blacklock's terms and conditions. 29. The Plaintiff states that the use and dissemination of its copyright protected material by the Defendant was done for the benefit of the Defendant and was motivated in whole or in part upon the institutional interests and mandate of the Defendant. 30. The Piaintif states that the Defendant's actions were designed to and/or had the effect of circumventing the lawful purchase of an institutional annual subscription of a license for Blacklock’s content by FINTRAC.Punitive and/or Aggravated Damages 311.In addition to damages for breach of copyright and breach of contract, the Plaintiff claims punitive and/or aggravated damages in the amount of $6,000 based on the manner of conduct of the Defendant and relies upon the following facts in support of its claim: a) The Plaintiff publicized the terms of use of its content through its website, which was available to the Defendant at the time its individual subscription was purchased; b) Circumvention of subscription based lawful access of online news content erodes the basis of the Plaintif's business and its ability to charge a fee for its services; ©) The Defendant as a financial regulator should be aware of the gravity of the unlawful distribution of copyright protected material and breach of contractual terms of use; d) The Defendant has a statutory and fiduciary duty, given its direct accountability to the Minister of Finance, to comply with the Copyright Act and to this end should not undermine copyright or unjustly benefit from a violation of copyright in the exercise of its functions; ) The Defendant is or should have been aware that institutional subscriptions are different than personal use subscriptions and that federal agencies are not individual or personal users; 32. The Plaintiff reserves its right to amend its pleading based upon discovery of other instances of unauthorized disclosure of its copyright protected content bythe Defendant, 33. The Plaintiff pleads and relies upon the Copyright Act, R.S.C., 1985, c. C-42. January 26, 2017 | HEREDY CERT athe sor gocuer i ‘tho origina es in the Courts ee — SE CERP G9 coca deans me Arigna! copo8e au qonsler deb ‘owredemae on ling to Bato Fett lo. F Y EAN-FRANCONS DUVOF REGISTRY GEEE AGENT DUG HAMEED LAW Barristers and Solicitors 43 Florence Street Ottawa, ON K2P owe Per: Yavar Hameed Tel: (613) 232-2688 ext 228 Fax: (613) 232-2680 Solicitor for the Plaintiff, 1395804 Ontario Ltd., operating as Blacklock's Reporter 10