Cabinet faces a $1 billion NAFTA claim for copyright theft by federal agencies. A Texas family-owned business yesterday served notice it will seek arbitration against the Government of Canada for breaching international copyright law.
“I think this is a wake-up call for American investors looking at Canada,” said Paul Einarsson, chair of Geophysical Service Inc. “Many Canadians have no idea this country is a piracy haven. Copyright creators have a big problem with Canada.”
The marine survey firm said it had to cut Calgary operations and lay off 250 employees after federal agencies copied and gave away its database, the largest collection of its kind in Canada. The Department of Foreign Affairs did not comment.
“No banana republic would do this,” said Einarsson. “Canada is the worst, but there is little awareness of it. This should be a front-page story. It’s plain property rights. How can the government just take away your property?”
Geophysical from 1969 to 2009 compiled offshore seismic maps for sale to oil and gas companies and deposited data with the National Energy Board and others as a condition of federal licensing. “The whole impetus for government licensing was for public safety and protection of the environment,” said Einarsson. “Then they decided to give away this copyright material. The whole thing is shocking.”
Einarsson said from 1999 using the Access To Information Act the company confirmed agencies sold or distributed its proprietary data without permission. Evidence submitted in 2014 to the Alberta Court of Queen’s Bench showed in one case, millions’ worth of Beaufort Sea seismic maps were sold to third parties for $759 by the Canada-Newfoundland & Labrador Offshore Petroleum Board.
Company lawyers in a notice to cabinet said they will seek arbitration and damages for breach of the 1994 North American Free Trade Agreement. “When Canada signed NAFTA, the Canadian government committed to provide all American investors with core investment protections including that it would not require the transfer of proprietary knowledge to its persons from investors,” said the notice: “Canada has blatantly contravened international law, failed to live up to its commitments and should remedy that failure.”
Claim Unlawful Expropriation
Geophysical fought 25 separate court actions against the Energy Board, Department of Natural Resources, Offshore Petroleum Boards in Halifax and St. John’s and others. The Alberta Court of Queen’s Bench in 2016 ruled under an obscure provision of the 1953 Canada Petroleum Resources Act the firm’s copyright expired after five years, not 50 years from a creator’s death as detailed in the Copyright Act.
The Resources Act allows records to be “disclosed” but not “copied”, “republished” or “distributed”, company lawyers wrote cabinet. “When that Act was written in the 1950s the technology didn’t exist, and there was no ability to copy data,” said Einarsson. “Nobody knew those were the rules because the rules were not clear. That’s why we went to court. They never told us our copyright would be confiscated after five years. You had a level of bureaucrats running off and creating policy that was never intended in the legislation.”
The Supreme Court in 2017 declined to hear the company’s appeal. The 90-day NAFTA arbitration notice under Chapter 11 of the Trade Agreement accuses federal agencies of “shocking” breach of copyright, and expropriation of intellectual property.
“If the intent is to confiscate GSI’s seismic data through the Canada Petroleum Resources Act, that was a politically-driven decision for which Canada should compensate GSI for the fair market value of the seismic data it expropriated and the consequential losses of its business,” wrote the firm’s lawyers Borden Ladner Gervais LLP of Calgary.