You Can’t Lose What You Never Had: Government Can’t Expropriate Unencumbered Seismic Data Copyright That Never Existed

In Geophysical Service Inc. v. The Queen, Prothonotary Tabib of the Federal Court struck GSI’s Statement of claim. In doing so, Prothonotary Tabib held that, where the rights to a work are in some way encumbered when it is created, the copyright in that work may be limited.

The collection of offshore seismic information is highly regulated. The Regulatory Regime requires seismic operators to obtain licences to collect information and to submit collected information to various Regulatory Bodies. The Regulatory Regime allows the Regulatory Bodies to publicly disclose information submitted by seismic operators after the expiry of a Confidentiality Period.

GSI is a seismic operator that licenses the information it collects to oil and gas companies. Some companies obtain information collected by GSI directly from the Regulatory Bodies. GSI commenced actions against various companies and Regulatory Bodies (see our previous blogs on these proceedings here and here).

Expropriation and injurious affection

In the present case, GSI asserted that the Regulatory Regime amounted to de facto expropriation of the copyright in its seismic data that injuriously affected the value of its licensing agreements. In doing so, GSI relied on previous decisions (see here) which determined that seismic data is protected by the Copyright Act and that the Regulatory Regime effectively created a compulsory licence to that data. The Regulatory Bodies brought a motion to strike GSI’s statement of claim.

Prothonotary Tabib reviewed the previous decisions and determined that GSI may have been in a better position if the Regulatory Regime had been enacted after it had collected the seismic data or if the Confidentiality Period had been shortened. Because those conditions did not arise, Prothonotary Tabib concluded that GSI’s claim should be struck:

… rights over the data were, from the moment they were created, encumbered by the superseding provisions of the regulatory regime. As a result, GSI never had nor acquired the full, unfettered copyright it claims has been expropriated. Legislation cannot expropriate rights which never existed. I therefore find that it is plain and obvious that GSI’s action, to the extent it is based on de facto expropriation or injurious affection, cannot succeed and must be struck.

Early disclosure of seismic information

GSI also alleged that the Regulatory Bodies acted beyond the scope of the Regulatory Regime by disclosing seismic information prior to the expiry of the Confidentiality Period. Prothonotary Tabib struck this allegation, concluding that it was merely a conclusory statement devoid of any material facts. However, Prothonotary Tabib granted GSI leave to amend its pleading to properly plead this cause of action.

Other claims

Prothonotary Tabib struck GSI’s claim for unjust enrichment on the basis that GSI had not been deprived of any rights or benefits in respect of the seismic data and that the Regulatory Regime was a valid juristic reason for disclosure of the seismic data.

Prothonotary Tabib also struck the aspects of the statement of claim which sought relief in the nature of mandamus as such claims can only proceed via an application for judicial review, not an action.

A copy of the decision may be found here. GSI has appealed the decision.