TLDR: The Federal Court of Appeal overturned a lower court decision that declared sharing of passwords by Parks Canada was fair dealing that did not constitute circumvention of TPMs. The scope of fair dealing and whether passwords and paywalls constitute effective TPMs are now re-opened as live legal questions.
In the latest episode of a long-running saga, Blacklock’s Reporter succeeded in an appeal of a copyright decision to the Federal Court of Appeal (Blacklock’s Reporter v. Canada (Attorney General), 2026 FCA 56), thereby nullifying a trial decision that declared government employees’ sharing of passwords to access articles was fair dealing.
Original FC Decision Dealt with Fair Dealing and TPMs
Context: In the decision at first instance (2024 FC 829), Blacklock’s Reporter, a publisher of news articles that operated a subscription-based paywall, sued Parks Canada for copyright infringement because its employees were sharing a single password (paid for by the department) to access its articles. Many similar cases had been filed by Blacklock’s against various government departments.
Blacklock’s had discontinued its claim in the Federal Court. However, the day before the Notice of Discontinuance was filed, Parks Canada filed a counterclaim seeking various declarations to the effect that its employees’ actions constituted fair dealing.
Parks Canada (via the Attorney General of Canada) brought a summary judgment motion to decide its counterclaim, submitting that it would deal with unresolved legal issues that were also relevant to other similar cases filed by Blacklock’s.
The Federal Court determined that the counterclaim could proceed. In the decision on the merits, Justice Roy addressed the intersection of two oft-debated topics in copyright law: whether fair dealing applies to circumvention of technological protection measures (TPMs).
Findings below on TPMs: In brief, the Federal Court decided that fair dealing trumps TPMs, holding that: “TPM provisions do not apply to restrain fair dealing” and found that “fair dealing and TPM were meant to co-exist in some harmony so long as the dealing is fair”.
Interestingly, the Federal Court had also found that Blacklock’s paywall was “not the TPM” because it “protects against unauthorized intrusions and is part of a business model”. Instead, the Court had found that the “password” was the TPM. This finding contrasted with previous decisions which had held that bypassing a website’s terms of use constituted copyright infringement.1
In the result, the defendant Parks Canada was found not liable for their employees’ sharing of a legitimately-obtained password to an institutional account to access a paywalled article.
More specifically, in its judgment, the Federal Court had declared (1) Parks Canada’s use of the subscription password in the circumstances was fair dealing under s. 29, and (2) the “licit” (legitimate) acquisition and use of a password (if it is a TPM) is not circumvention of TPMs under the Copyright Act.
The Federal Court decision was seen as precedential in deciding this novel issue, as it was previously unclear whether and to what extent fair dealing applied to TPMs.
Appeal allowed based on lack of live controversy
On appeal, however, Blacklock’s Reporter argued that the Federal Court should not have made the judgment that it did, because the issues decided by the court “lacked practical utility” and did not “resolve a live controversy” – in other words, because the main claim was discontinued, the issue of copyright infringement was said to be moot and should not have been decided.2
The Federal Court of Appeal accepted this argument and set aside the two declarations made by the Federal Court.
According to the FCA, once the infringement action was discontinued, there was no longer a real dispute to settle between the parties. The declarations sought by Parks Canada were either factually tied to the specific case against Parks Canada or so qualified (given the court’s declaration embedded the premise that the password was obtained “licitly” and that passwords were a TPM) that they could not meaningfully set an example for other pending cases.
The FCA was critical of the implicit circularity of the judgment below:
[34] The second declaration does not make any finding concerning whether a password is a TPM. It does not resolve any “live controversy” between the parties. The second declaration is also limited to “the licit acquisition and use of a password”. This is simply a generic statement that the authorized acquisition and use of a password by anyone (if the password is a TPM) does not constitute circumvention of a TPM for the purposes of the Copyright Act. If the acquisition and use is authorized, it would follow that such acquisition and use should not be prohibited. Such a generic statement does not settle any “live controversy”, let alone a “live controversy” between the parties.
Impact of Appeal
This appellate ruling effectively nullifies the precedential value of the judgment below. Specifically, the comments of Justice Roy on the scope of fair dealing in the context of password sharing are no longer binding on the parties and are at best obiter commentary until further resolution of this case or other similar cases.
Moreover, the FCA explicitly noted that the court’s findings below that Blacklock’s paywall was “not the TPM” (as distinct from the password) was obiter dicta and not binding. While the FCA declined to endorse or criticize this comment, it appears that the FCA was skeptical of the findings of Justice Roy.
Based on the FCA’s declaration, the case relating to Parks Canada is practically concluded (given the main claim was discontinued and the FCA held the summary judgment motion on the counterclaim should not have been granted). However, there remain other pending cases that were held in abeyance pending this decision. Based on Blacklock’s history of pursuing these lawsuits, we may see further developments in the near future.