Geophysical Service Incorporated v Arcis Seismic Solutions Corp, 2015 ABQB 88
The Court of Queen’s Bench of Alberta resolved a jurisdictional dispute between the plaintiff Geophysical Service Incorporated (“GSI”) and the Canada-Newfoundland and Labrador Offshore Petroleum Board (the “Board”) when it determined that Alberta, rather than Newfoundland and Labrador, had a real and substantial connection to the underlying dispute and was the forum conveniens. [62, 78]
The underlying dispute was a claim for copyright infringement, conversion, abuse of public office, unjust enrichment, and expropriation brought by GSI against the Board, Arcis Seismis Solutions Corp, and other entities. [2] GSI, a geophysical data gathering company, had amassed geophysical data on the Beaufort Sea and offshore Newfoundland and Labrador that it intended to market to oil and gas exploration companies. [3] The essence of GSI’s grievance was that the Board sent copies of its seismic data to competing companies in Alberta, which the Board contends it was statutorily permitted to do, but did so without regard to GSI’s proprietary interests in the data. [3]
The Court favoured jurisdiction in Alberta after making the determination that the Board was a “necessary or proper party” to the dispute, [40-44] that the alleged conversion occurred in Alberta, [52] and that the copyrighted materials were sent to Alberta corporations. [62]
As a “Necessary or Proper Party”, the Board should have expected to Litigate in Alberta
The Master hearing the originating action against the Board struck the action for lack of jurisdiction. [6]
In part of its reasons, the Master found that the “necessary or proper party” factor, which is a factor that could point towards a real and substantial connection with Alberta under Rule 11.25(3) of the Alberta Rules of Court, [32] was not a presumptive connecting factor. [6] The ABQB reversed, finding that for service outside of Alberta and within Canada, the “necessary or proper party” connecting factor is a presumptive connecting factor where “the subject matter of the action is connected to Alberta and the other principal players in the dispute are Alberta corporations”. [42]
In this case, the Board was a necessary or proper party because resolving the underlying dispute could involve the interpretation of the statutes which allegedly permitted the Board to share GSI’s seismic data with the other defendants. [40] These statutes were the Canada-Newfoundland Atlantic Accord Implementation Act, SC 1987, c 3 and the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act, RSNL 1990, c C-2 (collectively the “Canada and NL Accord Acts”). [3]
The Court was firmly of the view that the Board could have reasonably expected in these circumstances that it would be called on to answer legal proceedings in Alberta. [44]
Other Presumptive Connecting Factors: Copyright Infringement, Conversion, Damages Sustained
The Court was of the view that conversion and copyright infringement are very similar to the tort of misuse of confidential information where receipt of the information is a significant part of the tort. [52]
The Court first considered whether the alleged conversion favoured jurisdiction in Alberta. Relying on Wolfe v Pickar, 2011 ONCA 347, for the principle that misappropriation of confidential information occurs where the confidential information is received, [52] the Court found that the fact that the Board sent GSI’s seismic materials to an Alberta corporation favoured jurisdiction in Alberta. [52]
Considering the copyright claim, the Court first determined that the site of copyright infringement is a presumptive connecting factor of a real and substantial connection based on the test in Society of Composers, Authors and Music Publishers of Canada v Canadian Assn of Internet Providers, 2004 SCC 45. [60] Then, since in this case the copyrighted materials were sent by the Board directly to Alberta corporations, and because copyright law is of general application throughout Canada, the Court found Alberta to have a real and substantial connection to the subject matter of the litigation. [62]
The Court thought it ultimately unnecessary to rule on whether damages sustained is a presumptive connecting factor for claims in conversion or copyright, but commented that the alleged economic damages sustained by GSI in Alberta makes the case for Alberta more compelling. [68]
The Board could not Rebut Alberta’s Jurisdiction or Establish Forum Nonconveniens
The Board could not rebut Alberta’s jurisdiction by establishing that the connection to Alberta was merely a weak one. The Board argued that any alleged torts would have occurred in Newfoundland and Labrador, since that is where the Board filed and stored GSI’s seismic materials and where it handles requests for information, [70] but the Court found it more important that GSI and GSI’s competitors whom obtained the seismic materials were based in Alberta. [71]
The Board also could not establish forum nonconveniens. All of the parties to the underlying dispute were in Alberta, except for the Board, with whom GSI expressed an intent to question via written statements and video conferencing. [77]The fact that another similar suit was already ongoing between GSI and the Board in Newfoundland and Labrador was found to be irrelevant since all the other parties involved were different entities based in Newfoundland and Labrador. [78]
Commentary
The deciding factor that led the ABQB to grant jurisdiction in Alberta in this case appears to have been that the copyrighted material was sent to Alberta corporations. The “necessary or proper party” argument, the conversion claim, and the “damages sustained” argument, were factors that merely pushed in favour of jurisdiction in Alberta. [44, 52, 68] It is only under the copyright argument that the Court explicitly states that Alberta has a real and substantial connection to the subject matter of the litigation. [62]
The Court analogized misuse of confidential information (where receipt of the information is significant) to copyright infringement to decide that the jurisdiction where the copyright-infringing material was received was also significant. [52] It seems reasonable for a court to extend the analogy to patent infringement to hold that the relevant jurisdiction is impacted by where an act of patent infringement occurs.
It is also interesting how the Court weighs the factors in favour of Alberta versus the factors in favour of Newfoundland and Labrador under the rebutting analysis. [69-72] The Court acknowledges that part of the conversion and copyright claims occurred in Newfoundland and Labrador, since that is where the Board handled the data, but found it to be more important that all of the competing players who would make use of the data were based in Alberta. This case would seem to stand for the broader principle that the location of the head offices of the alleged copyright-infringing entities in a jurisdiction is more than just a weak connection to be rebutted.