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OIL AND GAS - Exploration - Survey - Seismic survey - Offshore

Thursday, May 25, 2017 @ 8:47 AM  

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Appeal by Geophysical Service Incorporated (GSI) from the dismissal of its claims against multiple parties for unlawful disclosure and copyright infringement. GSI conducted offshore seismic studies and licensed its data for a fee to third parties for resource exploration. The regulatory regime pursuant to which GSI collected seismic data required it to obtain licences and authorizations from the National Energy Board and Newfoundland and Nova Scotia offshore petroleum boards. GSI was obliged to submit the data it acquired to the boards. After certain privilege periods expired, the boards permitted third parties to access and copy seismic data in their possession. GSI took the position that unfettered copying was not permitted by the regulatory regime, and that the boards were wrongfully permitting oil and gas companies to acquire valuable data without licensing the data from GSI or without paying GSI for the data. GSI took the position that third party commercial copying companies were thereby breaching its copyright to the acquired and retained seismic data. In dismissing GSI’s action against the boards, various oil and gas companies and companies involved in copying data, the court conducted a historical review of the regime and found that there had been a regulated process for obtaining permits coupled with a requirement to submit data to various regulatory bodies, and that this data had been made available for disclosure to the public after a certain period of time without compensation to the seismic data owners. The court was of the view that the Canada Petroleum Resources Act expressly affected GSI’s rights in its data once the five-year privilege period expired. The court found that the specificity of the regime trumped the more general legislative scheme governing copyright.

HELD: Appeal dismissed. The court correctly interpreted the regulatory regime as having two objectives. First, to attract investment by companies with the capacity to acquire geophysical data regarding petroleum resources in the challenging frontier and offshore. Second, to regulate dissemination of geophysical data at a pace that would broadly encourage further interest and study by the resource and investments industries, and academia, in frontier and offshore resource exploration and development, for the benefit of all Canadians. The court was also correct in finding that the provincial boards had sole authority to collect seismic data on frontier land or offshore, and to authorize a data collector to acquire data on their behalf, subject to conditions. The boards’ authority to disclose seismic data extended to granting third parties both access and opportunity to copy and re-copy all materials acquired from GSI under the regulatory regime. There was no breach of copyright by the boards’ disclosure, as GSI’s exclusivity to its seismic data expired at the end of the privilege period.

Geophysical Service Inc. v EnCana Corp. [2017] A.J. No. 419, Alberta Court of Appeal, J.D.B. McDonald, B.L. Veldhuis and F.L. Schutz JJ.A., April 28, 2017. Digest No. TLD-May222017007