http://www.ctvnews.ca/business/calgary-seismic-firm-alleges-its-ip-rights-were-violated-over-improper-data-release-1.1635413
[I like the line about welfare for big oil and gas explorers. Pity this
comes at the expense of 250 jobs in a previously profitable company.]
Calgary seismic firm alleges its IP rights were violated over improper
data release
Lauren Krugel, The Canadian Press
Published Sunday, January 12, 2014 7:49AM EST
CALGARY -- A Calgary-based seismic company claims its business is being
undercut by regulatory agencies that have been publicly disclosing data
it says it spent hundreds of millions of dollars to collect in Canada's
offshore.
Geophysical Service Inc. makes -- or rather made -- its money by mapping
the earth's layers beneath the ocean floor using sonogram-like
technology, amassing a trove of valuable information that it would sell
to oil and gas companies hunting for their next big find.
In a bevy of lawsuits, GSI says would-be customers have been getting
hold of that data for free after files it submitted as part of the
regulatory process -- a required step in obtaining a permit to do the
mapping -- were improperly released.
GSI claims its intellectual property rights have been violated and its
assets have been expropriated without compensation, rendering its data
all but worthless.
The allegations have not been proven in court.
In its heyday, GSI was a 250-person operation that had a hand in some of
Atlantic Canada's biggest offshore oil and gas discoveries. Through its
predecessor companies, its history dates back to the 1930s.
Today its workforce can be counted on one hand. GSI doesn't do any
seismic work anymore; it was forced to sell its two ships and hasn't
booked revenues since 2009.
Instead of collecting and processing data, chief operating officer Paul
Einarsson figures GSI spends 95 per cent of its time fighting its
long-running and multi-fronted legal war against regulatory agencies,
federal departments and its own one-time customers.
"I do this 10 hours a day," said Einarsson. "This is all I do."
Einarsson pegs the replacement cost of GSI data at $800 million to $900
million.
GSI has more than 30 lawsuits on the go, with more expected to be filed
in the coming weeks. Some of the most high-profile cases are expected to
be heard in court throughout 2014.
A decision in a case against the Canada-Nova Scotia Offshore Petroleum
Board is expected soon and a case against the Canada-Newfoundland and
Labrador Offshore Petroleum Board is expected to go to court later this
year.
Other defendants include the National Energy Board, which oversees oil
and gas activity in the North, various federal government departments
and a slew of oil and gas explorers, large and small, that GSI says have
accessed its data without paying for it.
Late last year, GSI filed a more than $170-million suit against U.S.
energy heavyweight ExxonMobil and its Canadian subsidiary, Imperial Oil
Ltd. (TSX:IMO), alleging "breaches of contract" and copyright
infringement. Imperial spokesman Pius Rolheiser confirmed both his
company and Exxon had been served, but declined to further comment as
the matter is before the courts.
In an effort to modernize in the early 2000s, regulators began asking
for digital versions of the data, rather than hard copies. One of their
aims, Einarsson said, was to attract more oil and gas investment to the
offshore -- something he describes as tantamount to "welfare" for big
oil and gas explorers.
"It really meant a huge expansion of the disclosure of the data," said
Einarsson.
GSI has been forced to rely on Access-to-Information requests to find
out if data is being improperly disclosed by the regulators -- a slow
and frustrating process for Einarsson and the company's remaining staff.
The boards are to keep non-exclusive, or speculative, data, which GSI
collects in the hopes it can license it out, confidential for 10 years
after it's submitted. But GSI argues its data should never be given away.
The guidelines do not set out what is supposed to happen once the
confidentiality period is up, Einarsson said.
"It doesn't mandate disclosure. It doesn't override copyright. It
doesn't override federal laws. It doesn't override our ownership laws.
It just says nothing," said Einarsson.
The first major case began in the Supreme Court of Nova Scotia in
November and Einsarsson is expecting a decision this month or next.
In that case, GSI was not seeking damages against the Canada Nova Scotia
Offshore Petroleum Board and provincial government, but instead asked
for a declaratory judgment that the law doesn't authorize the regulator
to demand the data in the first place.
It also sought a permanent injunction "enjoining it from disclosing or
otherwise making available to any person whatsoever and in any manner or
format whatsoever the complete records, or alternatively the electronic
records."
Kathleen Funke, a spokeswoman for the Canada-Nova Scotia Offshore
Petroleum Board board declined to comment, as the matter is before the
courts, "other than to say that we believe we have followed proper
guidelines as set forth by the Accord Acts and our own geological and
geophysical guidelines."
The National Energy Board, Canada-Newfoundland and Labrador Offshore
Petroleum Board and the federal department of Natural Resources declined
to comment as the matter is before the courts.
In a statement of defence filed in the Alberta Court of Queen's Bench
this summer by the NEB, the federal regulator argues that the data is
not protected by copyright, denying the material was an "original work"
and that "skill, judgement or labour" were applied. The NEB also argues
it did not benefit financially from the data and "acted in the public
interest."
Teresa Scassa, Canada research chair in information law at the
University of Ottawa, said copyright can be a "fussy thing" when it
comes to data. The information itself may not be original, but the way
in which it's compiled or arranged may be.
She said governments are not supposed to make public confidential
information that's been provided by a private-sector company as part of
a regulatory process. But the boards could argue there's an overriding
public interest in making GSI's data public or that its data isn't
sufficiently original to be protected under copyright.
"I wouldn't say either argument is a slam dunk," she said.
The GSI case, she said "will raise some very interesting issues that
will have implications far outside of that context."
With revenues having dried up and legal bills mounting, Einsarsson says
he'll keep up the fight as long as he possibly can.
It's not about saving his company; "I'm done," he says.
"It's the principle," he said. "I want to see it through because I want
justice to be done. I don't want somebody else to have to do this. I
want to teach these guys a lesson that they can't do this to Canadians."
--
Darryl McMahon
Failure sometimes gets a helping hand.
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