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Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
Bloom sookman lsuc   2013 copyright year-in-review
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Bloom sookman lsuc 2013 copyright year-in-review

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Glen Bloom and Barry Sookman Copyright Law 2013

Glen Bloom and Barry Sookman Copyright Law 2013

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  • 1. COPYRIGHT AND INDUSTRIAL DESIGN DEVELOPMENTS – 2013 Presented by Glen Bloom Barry Sookman Osler, Hoskin & Harcourt LLP McCarthy Tétrault LLP Barristers & Solicitors Barristers & Solicitors Patent & Trade-mark Agents Patent & Trade-mark Agents Ottawa, Ontario Toronto, Ontario INTELLECTUAL PROPERTY – THE YEAR IN REVIEW LAW SOCIETY OF UPPER CANADA Toronto: January 16, 2014 Ottawa, January 17, 2014 © 2014 Glen Bloom and Barry Sookman LEGAL_1:29245128.3
  • 2. TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................................... 1 JURISPRUDENCE ........................................................................................................................ 3 COPYRIGHT ................................................................................................................................. 3 1. 2. 3. 4. 5. LEGAL_1:29245128.3 Supreme Court of Canada ...................................................................................... 3 (a) Cinar Corporation v. Robinson, 2013 SCC 73........................................... 3 Federal Court of Appeal....................................................................................... 10 (a) Nautical Data International, Inc. v. C-Map USA Inc., 2013 FCA 63 ...... 10 (b) National Gallery of Canada v. Canadian Artists’ Representation / Le Front Des Artistes Canadiens, 2013 FCA 64...................................... 10 (c) Manitoba v. Access Copyright, 2013 FCA 91 ......................................... 13 (d) Leuthold v. Canadian Broadcasting Association, 2013 FCA 95 ............. 14 (e) Doris Tremblay v. Orio Canada Inc., 2013 FCA 225 .............................. 14 (f) Domenic Pub v. Premium Sports Broadcasting Inc., 2013 FCA 288 ...... 15 Other Appellate Decisions ................................................................................... 16 (a) R. v. Strowbridge, 2013 NLCA 57 .......................................................... 16 (b) Nova Scotia v. Roué, 2013 NSCA 94 ...................................................... 16 Federal Court ....................................................................................................... 17 (a) Doris Tremblay v. Orio Canada Inc., 2013 FC 109 ................................. 17 (b) The Spangler Candy Company v. 3651410 Canada Inc., 2013 FC 253............................................................................................................ 18 (c) Planification-Organisation-Publications Systèmes (POPS) Ltée v. 9054-8181 Québec Inc., 2013 FC 427 ..................................................... 18 (d) Pinto v. Bronfman Jewish Education Centre et al., 2013 FC 945 ........... 19 (e) Distrimedic Inc v. Dispill Inc, 2013 FC 1043 .......................................... 19 (f) Twentieth Century Fox Film Corporation v. Nicholas Hernandez et al., T-1618-13 (Unreported) .................................................................... 20 Other Decisions of First Instance ......................................................................... 21 (a) Roué v. Nova Scotia, 2013 NSSC 45....................................................... 21 (b) Roué v. Nova Scotia, 2013 NSSC 254..................................................... 21 (c) Canada (United States of America) v. Equinix Inc., 2013 ONSC 193............................................................................................................ 22 (d) Delta Hotels v. Backus-Naur, 2013 ONSC 582 ....................................... 23 (e) A.G.C. v. Madeleine Rundle c.o.b. NEC Plus Ultra, 2013 ONSC 2747.......................................................................................................... 23 (f) Rains v. Molea, 2013 ONSC 5016 ........................................................... 24 (g) Spanski Enterprises, Inc. et al. v. IMB+ Records Inc., 2013 ONSC 5382.......................................................................................................... 26 (h) Mobin v. Stephens, 2013 ONCJ 53.......................................................... 26 (i) Oakcraft Homes Inc. v. Ecklund, [2013] O.J. No. 3215 (OSCJ) ............. 26 (j) Pelchat v. Zone 3 Inc., 2013 QCCS 78 .................................................... 27 -i-
  • 3. TABLE OF CONTENTS (continued) Page (k) (l) (m) (n) (o) 6. LEGAL_1:29245128.3 Biocad Medical Inc. v. Panthera Dentaire Inc., 2013 QCCS 905 ............ 28 Boire v. Lefebvre, 2013 QCCQ 921 ........................................................ 28 Tency Music SAS v. Lefrançois, 2013 QCCS 1947 ................................ 29 Isle-Principia (USA) Inc. v. Guimond, 2013 QCCS 3730 ....................... 30 Bell Media Inc. v. Société du Droit de Reproduction des Auteurs Compositeurs et Editeurs au Canada, 2013 QCCS 5203 ......................... 30 (p) Gestion Reper Inc. v. Brassard, 2013 QCCS 5453 .................................. 31 (q) Stoyanova v. Disques Mile End, 2013 QCCS 5631 ................................ 31 (r) Éditions Québec Amérique Inc. v. Druide Informatique Inc., 2013 QCCS 5693 .............................................................................................. 32 (s) Chélin v. Girouard, 2013 QCCQ 8742..................................................... 33 (t) (AOM) NA Inc. et al. v. Reveal Group, 2013 ONSC 8014 ..................... 33 Copyright Board................................................................................................... 34 (a) Society For Reproduction Rights Of Authors, Composers And Publishers In Canada v. Canadian Broadcasting Corporation, Copyright Board of Canada, January 16, 2013 ........................................ 34 (b) Statement Of Royalties To Be Collected By Access Copyright For The Reprographic Reproduction, In Canada, Of Works In Its Repertoire (Education Institutions – 2005-2009), Copyright Board of Canada (Redetermination), January 18, 2013 ..................................... 35 (c) Statement Of Royalties To Be Collected By Access Copyright For The Reprographic Reproduction, In Canada, Of Works In Its Repertoire (Educational Institutions – 2010-2015), Copyright Board of Canada, May 29, 2013 .............................................................. 36 (d) Statement Of Royalties To Be Collected For The Retransmission Of Distant Television And Radio Signals For The Years 2009 to 2013, Copyright Board of Canada, November 29, 2013 ......................... 37 (e) Statement of Royalties to be Collected by ERCC from Educational Institutions, in Canada, for the Reproduction and Performance of Works or Other Subject-Matters Communicated to the Public by Telecommunication for the Years 2012 to 2016, Copyright Board of Canada, December 19, 2013 ................................................................ 38 (f) Interim Tariff For The Retransmission Of Distant Television And Radio Signals, 2014-2018, Copyright Board of Canada, December 19, 2013.................................................................................................... 38 (g) Tariff of Levies to be Collected by CPCC in 2012, 2013 and 2014 on the Sale of Blank Audio Recording Media, in Canada, in Respect of the Reproduction for Private Use of Musical Works Embodied in Sound Recordings, of Performer’s Performances of Such Works Or of Sound Recordings in Which Such Works and Performances are Embodied (Private Copying 2012, 2013 and 2014), Copyright Board of Canada, August 30, 2013 ............................. 38 -ii-
  • 4. TABLE OF CONTENTS (continued) Page (h) Statement Of Royalties To Be Collected By SOCAN For The Public Performance Or The Communication To The Public By Telecommunication, In Canada, Of Musical Or Dramatico-Musical Works (Tariff No. 24 – Ringtones (2003-2005), Ringtones and Ringbacks (2006-2013), Copyright Board of Canada, January 18, 2013.......................................................................................................... 40 (i) Statement Of Royalties To Be Collected By SODRAC For The Reproduction, In Canada, Of Musical Works Embodied Into Cinematographic Works For The Purposes Of Distribution Of Copies Of The Cinematographic Works For Private Use Or Of Theatrical Exhibition For The Years 2009 To 2012 (SODRAC Tariff No. 5), Copyright Board of Canada, July 5, 2013 ......................... 41 INDUSTRIAL DESIGNS ............................................................................................................ 42 1. LEGAL_1:29245128.3 Federal Court ....................................................................................................... 42 (a) Zero Spill Systems (Int’l) Inc. v. 614248 Alberta Ltd. (Lea-Der Coatings), 2013 FC 616 ........................................................................... 42 (b) Bodum USA, Inc. v. Trudeau Corporation (1889) Inc., 2013 FC 128............................................................................................................ 43 -iii-
  • 5. 1 COPYRIGHT AND INDUSTRIAL DESIGN DEVELOPMENTS – 2013 Glen Bloom,1 Barry Sookman,2 John Cotter,3 Barry Fong,4 Martin Brandsma,5 Keith Rose6, and Vanessa Cotric7 Presented by Glen Bloom and Barry Sookman INTRODUCTION The developments in Canadian copyright law in 2013 pale in comparison with those in 2012 which, in our paper for the last Intellectual Property – The Year in Review, we described as a banner year. It is unlikely that in any one year we will ever see the proliferation of decisions of the Supreme Court of Canada that we saw in 2012. 2012 brought us copyright reform through the passage of the Copyright Modernization Act. 2013 brought no new legislative reform and the sections of the Copyright Modernization Act that had not come into force at the end of 2012 have still yet to come into force. Nevertheless, with the release by the Supreme Court of Canada on December 23, 2013 of its decision in Cinar Corporation v. Robinson (“Robinson”), 2013 has proved to be an important year for the development of Canadian copyright law. In the last decade, the Supreme Court has canvassed many important issues in copyright law, including the scope of the rights of reproduction and authorization, what makes a work original, and how to apply the fair dealing defense. In Robinson, a unanimous Supreme Court released an important precedent dealing with many other core areas of copyright including the framework for how to assess if a “substantial part” of a work has been reproduced, the assessment of damages for infringement including 1 Glen Bloom is a partner of Osler, Hoskin & Harcourt LLP, and practises in the Ottawa office. 2 Barry Sookman is a partner of McCarthy Tétrault LLP, and practises in the Toronto office. 3 John Cotter is a partner of Osler, Hoskin & Harcourt LLP, and practises in the Toronto office. 4 Barry Fong is an associate in the Ottawa office of Osler, Hoskin & Harcourt LLP. 5 Martin Brandsma is an associate in the Ottawa office of Osler, Hoskin & Harcourt LLP. 6 Keith Rose is an associate in the Toronto office of McCarthy Tétrault LLP. 7 Vanessa Cotric is an articling student in the Toronto office of Osler, Hoskin & Harcourt LLP. LEGAL_1:29245128.3
  • 6. 2 accounting of profits, non-pecuniary damages and punitive damages, the use of experts in a copyright case, and the vicarious liability of directors for infringement. For copyright lawyers, this case is a goldmine – a treasure trove – of important copyright holdings by the Supreme Court. In 2013 the Supreme Court of Canada also granted leave to appeal the decision of the Federal Court of Appeal in National Gallery of Canada v. Canadian Artists’ Representation / Le Front Des Artistes Canadiens. In 2014 the Supreme Court will be grappling with the relationship between the Copyright Act and the Status of the Artist Act. The Ontario Superior Court issued its decision in Rains v. Molea which, like Robinson, dealt with the issue of what constitutes a substantial part of a copyright protected work. It is perhaps unfortunate for the plaintiff Rains that his counsel and the Court did not have the benefit of the Supreme Court’s decision in Robinson before Rains’ claim was tried and decided. Consistent with recent years, the Copyright Board of Canada issued a number of decisions in 2013. The decisions, although important to the participants, do not address issues of broad significance for copyright law in general, as had been the case in prior years. The cases in 2013 deal with more technical issues including issues relating to an interim license, redetermination, the treatment of interest, the truncation of the term of a certified tariff and the extension of a certified tariff on an interim basis. It is expected that Canada will ratify the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty in 2014. With the ratification most of the remaining provisions of the Copyright Modernization Act will come into force. In 2014 we might also expect the Supreme Court to issue its decision in the National Gallery case extending to three number of consecutive years in which that court has decided a copyright case. The format of this paper has been changed from the format that we have used in prior years. We have provided below summaries of the decisions of the courts and the Copyright Board of Canada that were released in 2013 and that addressed copyright matters. The summaries are ordered in accordance with the level of court. We have concluded with summaries of the Board decisions and the two court decisions that addressed industrial design matters in 2013. LEGAL_1:29245128.3
  • 7. 3 JURISPRUDENCE COPYRIGHT 1. Supreme Court of Canada (a) Cinar Corporation v. Robinson, 2013 SCC 73 This case involved an educational children’s television show, “The Adventures of Robinson Curiosity” (“Curiosity”) created by Robinson. He developed characters, drew detailed sketches and storyboards, wrote scripts and synopses, and designed promotional materials for his Curiosity project. The infringement action was against Cinar and several of its officers and directors and co-producers who produced and distributed a children’s show named “Robinson Sucroë” (“Sucroë”). Robinson claimed that Sucroë was a blatant copy of Curiosity. His claim, however, was largely based on the presence of many non-literal similarities including similarities in characters such as their personalities and interactions, and their environment. He sued for infringement and was awarded substantial damages by a Quebec court. The decision was mostly affirmed by the Quebec Court of Appeal. A summary of the major holdings of the Court is set out below. The Scope of the Protection Afforded by the Copyright Act It is a basic principle of copyright law that the Act protects only original expression in a work and not mere ideas, stock devices, or elements in the public domain. If a substantial part of the original expression is reproduced, infringement may result.8 The Court re-affirmed these principles. It is also a fundamental tenet that copyright does not protect all copying from a work. Unless all or a substantial part of a work is reproduced the copying will not be considered an infringement. A substantial part is measured by its quality rather than its quantity. Whether qualitatively a substantial part of a work has been taken is assessed by determining whether a substantial portion of the originality in the work, a substantial portion of the author’s skill and judgment 8 CCH Canadian Ltd. v. Law Society of Upper Canada (2002), 18 C.P.R. (4th) 161 (Fed. C.A.), Newspaper Licensing Agency Ltd. (The) v. Marks & Spencer Plc, [2002] 3 All E.R. 977 (H.L.), IceTV Pty Ltd. v. Nine Network Australia Pty Ltd., [2009] HCA 14 (H.C. Aust.). LEGAL_1:29245128.3
  • 8. 4 expressed in the work, has been copied. It is also fundamental that copyright infringement can be made out by literal or non-literal copying of a substantial part of a work. The Standard of Review Before delving into the merits of the case, the Court confirmed that the standard of review on a finding of whether a substantial part of a work has been infringed is one of mixed fact and law which is entitled to appellant deference. The Correct Approach to Assessing Whether a “Substantial Part” of a Work is Reproduced Until the Robinson case, there were different approaches used by the courts in Canada for comparing the infringed and the allegedly infringing works to determine if a substantial part had been copied. Some cases had assessed whether there is an “objective similarity” between the two works. This test examines whether there are similarities in the expression of an idea and not merely a representation of a general idea in a different form. It was formulated in the leading UK case, Francis Day & Hunter Ltd. v. Bron, [1963] Ch. 587 (Eng. C.A.). In the case of artistic works, a test that was sometimes applied was a purely visual one. The two works are compared oculis subjecta fidelibus.9 In Hanfstaengl v. Baines & Co. the English House of Lords applied a test that requires that the two works be compared as a whole.10 9 King Features Syndicate (Inc.) v. Kleemann (O. & M.) Ltd., [1941] 2 All E.R. 403 (H.L.). 10 Hanfstaengl v. Baines & Co. Ltd., [1895] A.C. 20 (H.L.); See also Designers Guild Ltd. v. Russell Williams (Textiles) Ltd., [2001] 1 All E.R. 700 (H.L.) per Lord Scott “The judge, in rejecting that argument, said, at p. 828: “In my judgment there has been copying of a substantial part.” He went on to emphasize that it was “the whole work” that had to be looked at “to determine whether the alleged infringing material [had] adopted the essential features and substance of the original”. He said:”The right approach is to look at the end result of the acetate, the striped artwork, the modifications made by Mrs. Williams (especially making the stripes less harsh) and her selection of colour ways, and the printed fabric. That end result is an infringement of the painting on which Ixia was based.” In my opinion, the judge’s approach in comparing Ixia (“the whole work”) with Marguerite (“the end result”) was correct. And having made the comparison he expressed his conclusion that: “It is the design which was copied and has been reproduced” (emphasis added). So, what had been copied was the design, and the design was a substantial part. In dealing in this way with the “substantial part” argument that had been addressed to him by counsel, the judge was re-affirming his conclusion that the Ixia design had been copied.” LEGAL_1:29245128.3
  • 9. 5 The Ontario Court of Appeal in the Delrina case,11 had favorably commented on the “abstraction-filtration-comparison” methodology, which is commonly applied in computer program infringement cases in the U.S. to weed out unprotectable portions of a work before comparing the two works.12 The appellants had argued that this test should have been applied by the trial judge. The Court did not rule out that abstraction-filtration-comparison methodology could be applied in a different type of case, such as a computer program infringement case. However, instead the Supreme Court adopted principles from the leading UK cases requiring a “qualitative and holistic” approach to assessing substantiality. Despite declining to apply the abstraction-filtration-comparison test, the Court noted that the trial court had correctly taken the unprotectable elements of Robison’s work into account in doing the comparison between the two works. Relevance of differences between the copyright and allegedly infringing work Under well-established law, when examining substantiality the focus is on the similarities and not on the differences. A defendant is not exonerated from infringement by adding substantial new features to its work. The dissimilarities are irrelevant if in other respects a substantial part of the original work has been copied.13 However, since the converse of similar is different, the courts regularly as part of the substantiality analysis evaluate the similarities and differences to determine if the part of the plaintiff’s work that is alleged to have been copied is really manifest or evident in the defendant’s work or is really just a different mode of expressing the same idea. If the points of 11 Delrina Corporations v. Triolet Systems Inc. (2002), 17 C.P.R. (4th) 289 (Ont. C.A.). 12 See, Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 693 (2nd Cir. 1992). 13 Designers Guild, supra note 10. LEGAL_1:29245128.3
  • 10. 6 dissimilarity not only exceed the points of similarity, but indicate that the remaining points of similarity are of minimal importance to the plaintiff’s work, then there can be no infringement. 14 The respondents contended that the trial judge had failed to take into account the substantial differences between the two works in assessing infringement. The Court, consistent with wellestablished law, noted that what is important in a copyright case is the extent of the similarities not the extent of the differences. The Court also noted that the differences could be so extensive as to make the allegedly infringing work a new original work. An infringing work may also be an original work. Accordingly, this statement by the Court might be interpreted to mean that substantial differences in two works may suggest that the defendant has not reproduced all or any substantial part of the allegedly infringed work. The scope of copyright in a TV series The appellants argued that even though there had been coping in creating Sucroë, what was copied were unprotectable ideas or stock devices or materials that were otherwise not original or in the public domain. The Court rejected these arguments finding that the trial judge had based his decision on copying expression of ideas and not the ideas themselves. In so holding, the Supreme Court implicitly accepted that copyright in a TV series can extend to the graphic appearance and personality traits of characters, interactions between characters, and the graphic appearance of settings. Whose perspective is used in determining if a substantial part has been copied A question that has bedeviled courts, particularly in the U.S. where the concept of substantial similarity is central to a finding of infringement, is the question of whose perspective is to be used in making the comparison between the two works. 14 See, Hanfstaengl v. Baines, Designers Guild, Hutton v. Canadian Broadcasting Corp., 1992 ABCA 39, Grignon v. Roussel (1991), 38 C.P.R. (3d) 4. LEGAL_1:29245128.3
  • 11. 7 Anglo-Canadian courts have not generally canvassed this question in detail. In Francis Day, a music case, Lord Wilberforce suggested the perspective should be an assessment of an ordinary reasonable experienced listener who might think that one work had come from another. Other authorities have suggested that the assessment is to be done by the person to whom the work is normally addressed. Many cases are silent on the test. However, a test that has often been applied is the perception of the judge assisted by evidence, almost invariably by expert evidence, that is helpful to identify objective resemblances.15 There is a great deal of case law on this issue in the U.S. where the courts use a variety of different tests including a “lay or ordinary observer” test, the “actual or intended audience” for the work test, and a more “discerning intended audience” for the work test. In general, and at a very high level, the “ordinary observer” test attempts to gauge the reaction of the ordinary man on the street to the two works. The intended audience test asks if the audience to whom the works are directed would consider them substantially similar based on their spontaneous and immediate impression. In the more discerning test the fact finder attempts to extract the unprotectable elements from consideration and considers whether the protectable elements as a whole are substantially similar.16 Without referring to any Anglo-Canadian or U.S. cases on the point, the Supreme Court expressed the opinion that the proper perspective is the “intended audience for the works at issue”. However, because similarities can be patent or latent or difficult to appreciate, it may sometimes be necessary to go beyond this to call upon an expert versed in the relevant art or technology to help the trial judge. Admissibility of expert evidence Expert evidence is regularly admitted in copyright cases. It is especially important in cases to avoid under protecting or over protecting works, where the expert evidence is outside of the knowledge of the judge who may not be able to appreciate what is commonplace, a stock device, 15 Garnett, Copinger and Skone James on Copyright, 16th ed., London: Sweet & Maxwell, 2011 at P.477, Designers Guild Ltd. v. Russell Williams (Textiles) Ltd., [1999] E.W.J. No. 1422 (Eng. C.A.), Francis Day, Grignon. 16 See generally, Nimmer on Copyright at 13.03[A][1], [E][2], [E][3][a] IA72, LEGAL_1:29245128.3
  • 12. 8 or what is original. In music cases, for example, expert evidence is invariably called to educate the court in the nuances of melody, rhythm, orchestration, and even lyrics and to identify and explain common or unusual musical features.17 Despite the importance of expert evidence in copyright cases, no appellant Canadian case had authoritatively canvassed the admissibility of such evidence. The appellants had challenged the use of the evidence of a semiologist, Dr. Charles Perraton. Dr. Perraton offered evidence that, quite apart from the surface meaning of the works at issue, there were latent similarities in how the two works used atmosphere, dynamics, motifs, symbols, and structure to convey meaning. The trial judge relied on this evidence in concluding that the Cinar appellants had copied a substantial part of Robinson’s work. The Court explained that expert evidence can be admitted to help the trial judge in areas outside of his/her expertise. The court went further and held the evidence of Dr Perraton was admissible in accordance with generally applicable principles related to admissibility of experts in intellectual property cases. Vicarious liability of officers and directors In many copyright cases, and in particular, in cases of copyright piracy, officer and directors, the directing minds of the corporate defendant, are sued for infringement. The Court applied the reasoning in Mentmore, stating that, for a director or officer to be personally liable, it must be reasonable to conclude that there was a deliberate, willful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it. 18 Accounting of profits Pursuant to s. 35 of the Copyright Act, the trial judge awarded both compensatory damages to account for Robinson’s losses (including non-pecuniary damages) and 50 percent of the profits made by the infringers, against all the Cinar appellants, on a solidary (joint and several) basis. On the facts of the case, the appellants had used a soundtrack created by Robinson in Sucroë. Robinson had claimed the profits from Sucroë based on the use of the soundtrack. The appellants 17 Copinger at p. 430. 18 Mentmore Manufacturing Co. v. National Merchandising Manufacturing Co. (1978), 89 D.L.R. (3d) 195 (F.C.A.), at pp. 204-5, per Le Dain J. LEGAL_1:29245128.3
  • 13. 9 had argued that the profits had to be apportioned and that profits earned from the use of the soundtrack should not have awarded. The Court refused to apportion the profits based on the factual finding of the trial judge that the music revenues could not be disassociated from the overall work. Joint and several liability for accounting of profits Another issue in the case was whether the remedy of accounting of profits can be assessed on a joint and several basis. The Court explained the purposes of the accounting of profits remedy and held that it cannot be imposed on a joint and several basis, at least not under Quebec civil law. Non-pecuniary damages The trial judge awarded Robinson $400,000 in non-pecuniary damages as compensation for his psychological suffering. He analogized Robinson’s psychological suffering to the injury sustained by a victim of defamation. The Court agreed with the trial judge that damages for Robinson’s psychological suffering could be assessed under principles analogous to those used in assessing damages for defamation. Punitive damages The trial awarded $1,000,000 in punitive damages on a joint and several basis against Cinar and a number of the other appellants. The Court of Appeal reduced the award to $250,000. The Court increased the award to $500,000. In doing so the Court reviewed the statutory basis for the award as well as the proper approach to awarding punitive damages for copyright infringement. In Quebec, punitive damages can only be awarded where they are provided for by a specific enabling enactment. The Court found such a basis in the Quebec Charter of human rights and freedoms. In particular, the Court found that copyright infringement violated two of Robinson’s Charter rights. First, the infringement violated his rights under s. 6 of the Charter which provides that “[e]very person has a right to the peaceful enjoyment and free disposition of his property, except to the extent provided by law”. In addition, the infringement of copyright interfered with Robinson’s personal rights to inviolability and to dignity, recognized by ss. 1 and 4 of the Charter. LEGAL_1:29245128.3
  • 14. 10 Finally, the Court determined that it was not permissible under Quebec law to assess punitive damages on a joint and several basis. 2. Federal Court of Appeal (a) Nautical Data International, Inc. v. C-Map USA Inc., 2013 FCA 63 The appellant (plaintiff) appealed from a summary judgment decision dismissing its actions for copyright infringement for lack of standing (see summary of Federal Court decision below at 4(a)). The plaintiff produced digital navigation charts from data licensed from the Canadian Hydrographic Service (CHS), a federal government agency. The defendants admitted to producing electronic charts incorporating CHS data. The defendants argued that the plaintiff had no right to claim damages in respect of the CHS works, as copyright in those works vested solely in the Crown. The Court allowed the appeal and dismissed the motion for summary judgment. Although the license agreement between the plaintiff and the Crown referred only to the CHS data, which might refer only to information which was not subject to copyright, the agreement referred to Crown copyright in the CHS data. This suggested that the plaintiff and CHS understood the license as applying to the works, on the basis that the plaintiff’s digital charts could be said to reproduce the CHS works in substantial part. The evidence on the record was not sufficient to determine whether or not the plaintiff had an exclusive license to reproduce the CHS works in digital form, and consequently the defendants had not met their burden to prove there was no genuine issue for trial. (b) National Gallery of Canada v. Canadian Artists’ Representation / Le Front Des Artistes Canadiens, 2013 FCA 64 The applicant, a producer within the meaning of that term under the Status of the Artist Act (the “SA Act”), brought an application for judicial review of a decision of the Canadian Artists and Producers Professional Relations Tribunal (the “Tribunal”) finding that the applicant had failed to bargain in good faith a scale agreement with the respondents in respect of existing artworks. The respondents, certified by the Tribunal as representative organizations for Canadian visual artists, had given notice to the applicant to bargain a scale agreement and advised the applicant LEGAL_1:29245128.3
  • 15. 11 of a list of items which the respondents wished to bargain. The list included minimum fees for the use of existing artworks (e.g., fees for exhibition and reproduction of such works). Over a four year period the applicant and the respondents negotiated the issue of the fees for the use of such works. The applicant then secured a legal opinion on whether it was required to negotiate copyright-related issues in a scale agreement under the SA Act. The opinion concluded that a representative organization that is not authorized by a copyright holder cannot deal with issues related to the copyright because, under section 3 of the Copyright Act, only the copyright holder can authorize others to do the acts that fall within the rights of copyright. The opinion also concluded that the SA Act confers on representative organizations the exclusive right to negotiate with respect to labour relations, but not with respect to copyright-related issues. The applicant shared the legal opinion with the respondents and then presented to them a revised draft scale agreement from which all reference to minimum fees had been removed. The applicant also advised the respondents that it was not prepared to consider the respondents’ position that the scale agreement include a minimum fee schedule for existing works. The respondents then filed a complaint with the Tribunal that the applicant had failed to bargain in good faith. The Tribunal resolved the complaint in favour of the respondents finding that: (1) the right to use an existing work is a service that the artist who holds copyright may provide to a producer and that therefore copyright matters may be negotiated in scale agreements; and (2) in the circumstances of the negotiation over previous four years, the failure of the applicant to negotiate or discuss matters relating to copyright created a rigid stance resulting in the failure to conclude an agreement and that therefore the applicant had violated its obligation under section 32 of the SA Act to bargain in good faith. In its decision the Tribunal excluded from the obligation to negotiate copyright-related matters any copyright represented by copyright collectives such as SODRAC. The applicant claimed that the Tribunal erred in declaring that copyright could be the subject of a scale agreement under the SA Act and in concluding that the applicant had not negotiated in good faith. LEGAL_1:29245128.3
  • 16. 12 The Court allowed the application for judicial review and set aside the decision of the Tribunal, Pelletier, J.A. dissenting. Per the majority (Noel, J.A. and Trudel, J.A.): the Tribunal has no authority to compel negotiations in a scale agreement in matters relating to copyright and therefore the applicant’s refusal to negotiate such matters cannot be attributed to a failure to negotiate in good faith. Under the SA Act a scale agreement means an agreement “for the provision of artists’ services and other related matters”. Where a scale agreement relates to commissioned works no copyright is involved; the agreement involves the provision of artists’ services to produce the commissioned works. In such circumstances, there is no conflict between the SA Act and the Copyright Act. Where however there is an attempt to extend a scale agreement to works other than commissioned works, such a conflict arises. A mandatory royalty under a scale agreement for the use of a pre-existing work, even a mandatory minimum, restricts the right of the copyright holder under the Copyright Act to set a royalty rate less than the minimum specified in a scale agreement. In extending the SA Act to cover copyright-related matters in pre-existing works the Tribunal distorted the words in the statute. An assignment of copyright cannot be described as a “provision of artists’ services” in the definition of scale agreement. An assignment of rights is a transfer of property, not a provision of a service. The “provision of ... services” has a plain meaning when read contextually in the SA Act, and in particular with section 6(2)(a). That section applies the relevant part of the statute to certain producers “that engage one or more artists to provide an artistic production”. Read in context, a “scale agreement” contemplates the provision of such services and for compensation for the works thereby created. Per Pelletier, J.A. (dissenting): whether the “provision of services” includes authorizing others to do only what the copyright holder has the exclusive right to do is a question of law for the Tribunal to decide in the course of construing its home statute. In view of Dunsmuir and other recent jurisprudence of the Supreme Court of Canada, the standard of review is reasonableness. The Tribunal’s position was that, once the applicant had agreed to negotiate minimum fees, it could not refuse to continue to do so. This position was not dependent on whether the applicant LEGAL_1:29245128.3
  • 17. 13 could be compelled to negotiate such fees. The Tribunal’s conclusion on the question of law was reasonable. The fact that copyright is property does not preclude a finding that granting another the right to use that property is not a service. The service is the provision of the right by the artist. The setting of fees is not one of the matters specifically and exclusively reserved to the artist in the Copyright Act. The Tribunal’s interpretation of the provision of services was reasonable. On August 15, 2013 the Supreme Court of Canada granted leave to appeal the decision of the Federal Court of Appeal (SCC docket 35353). The appeal is tentatively scheduled to be heard May 14, 2014. (c) Manitoba v. Access Copyright, 2013 FCA 91 The governments of the Provinces of Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan (the Applicants) sought judicial review of the decision of the Copyright Board of Canada (the “Board”), which held that the Board had jurisdiction to establish a tariff that would apply to them in respect of the reprographic reproduction of copyrighted works in the repertoire of the Canadian Copyright Licensing Agency (“Access”). The Board had dismissed the Applicants’ argument that they are immune from the Copyright Act (the “Act”) pursuant to section 17 of the Interpretation Act, which provides that “[n]o enactment is binding on Her Majesty or affects Her Majesty or Her Majesty’s rights or prerogatives in any manner, except as mentioned or referred to in the enactment”. On judicial review, the Applicants argued the Board erred in four separate points of law. The Respondent, The Canadian Licensing Agency (“Access”), argued, inter alia, that any other interpretation of the Act contrary to the Board’s determination, would result in a breach of Canada’s international obligations under NAFTA, TRIPS or any other intentional convention ratified and implemented in Canada. The application was dismissed. The Federal Court of Appeal found that, on a standard of correctness, the Board understood and applied the proper approach to determine whether section 17 of the Interpretation Act could apply. In addition, the Court found that the references in the Act to very strict conditions, to tariffs fixed by the Board, to the consent of the copyright owners, and to the power of the court when the defendant is an “educational institution”, including a LEGAL_1:29245128.3
  • 18. 14 federal or provincial government department, all pointed to only one logical and plausible conclusion, namely, that the Crown is bound by the Act. The Court found it unnecessary to address Access’ argument regarding international agreements and conventions. (d) Leuthold v. Canadian Broadcasting Association, 2013 FCA 95 The respondent (defendant) brought a motion for security for costs under Rule 416 of the Federal Courts Rules in an appeal of the award limiting the appellant’s (plaintiff’s) damages to $19,200 for unauthorized communication to the public of her photograph of the September 11, 2001 attack on the World Trade Center in New York. The appellant was impecunious and asked the Court to exercise its discretion under Rule 417 to decline to order security. The Court declined to order security for costs. Although Justice Noël was skeptical that the appellant would receive anywhere near the recovery she sought, the appeal might lead to an award that was more favourable to her. Consequently, it could not be said that the appeal was without merit. (e) Doris Tremblay v. Orio Canada Inc., 2013 FCA 225 The appellant, Tremblay appealed a summary trial decision of the Federal Court concerning alleged copyright infringement in a computer program called Service Appointment Monitor (“SAM”), which Tremblay won in part as the plaintiff and defendant to counterclaim. The appellant did not challenge the trial judge’s conclusion that the respondent, Orio Canada, had an implied license to use the modified SAM software owned by the appellant. However, the appellant argued that the trial judge erred in extending the scope of the implied license beyond the right to market the modified SAM software to include the right to copy and further modify the software. The respondent argued that the broad reach to the implied license recognized by the trial judge was justified by the wording of the unsigned (and therefore ineffective) written assignment clause that the appellant had included in a tender document provided to the respondent. The Court dismissed the appeal. There was no doubt from the unsigned written assignment clause that the parties intended for any development work on the SAM software done by the appellant to become the exclusive property of the respondent. The Court stated that it seemed to LEGAL_1:29245128.3
  • 19. 15 be “exaggerated formalism” to make ineffective an assignment clause that had been written by the owner of copyright himself, in a case where it had been recognized in court that the owner had consented to the transfer of ownership, for the simple reason that the assignment was unsigned. The Court noted that, in the particular circumstances of this case, “the form should not prevail over substance”. However, the Court declined to amend the trial judge’s decision with respect to this issue since it had not been raised on appeal by the parties. As for the implied license to use inferred by the trial judge, the Court saw no error in the trial judge’s decision. Given the circumstances, the appellant had consented not only to an implied marketing license for the modified SAM software, but also to further modifications to be made to the software in order to improve its marketing. The implied license inferred from the conduct of the parties therefore allowed the respondent to copy the source code of the modified SAM software to be further modified by the respondent or its designated third parties. (f) Domenic Pub v. Premium Sports Broadcasting Inc., 2013 FCA 288 The appellant appealed a decision of the Federal Court dismissing its motion pursuant to Rule 399(1) of the Federal Courts Rules (the “Rules”) to set aside a default judgment dated August 26, 2011, which was rendered against the appellant for failure to file a statement of defence. In its default judgment, the court found that the appellant knowingly infringed the respondent’s copyright in Ultimate Fighting Championship (UFC) pay-per-view matches and events by broadcasting them at its venue without the respondent’s authorization, and had ordered $20,000 in damages and costs of $1,500. The appellant argued, inter alia, that it had only learned of the amended statement of claim nearly two years later, in September 2012. The Court dismissed the appeal. The Court found that the trial judge’s reasons were clear and comprehensive, revealed no error warranting intervention in the exercise of her discretion, and in particular, that there was ample evidence to enable the trial judge to find that the amended statement of claim had been served in accordance with the Rules. LEGAL_1:29245128.3
  • 20. 16 3. Other Appellate Decisions (a) R. v. Strowbridge, 2013 NLCA 57 The appellant applied for judicial interim release and leave to appeal a criminal sentence including a term of six months’ imprisonment for copyright and trade-mark infringement. The appellant argued that the sentence did not fit within the appropriate range of sentences, where the typical disposition of a conviction for copyright or trademark infringement was a fine. The Crown agreed that most cases resulted in a six month conditional sentence, but none of the previous cases involved as extensive a prior criminal record as the appellant’s and none of them were cases in which the crime was committed in breach of an existing probation order. The Court granted leave to appeal. Where there was no authoritative decision establishing the need for a prison term or the range of sentence applicable to the circumstances, the appellant should have the opportunity to make submissions about the appropriate range. The appeal had sufficient merit that it should not be rendered nugatory by having the custodial detention begin before it was heard. (b) Nova Scotia v. Roué, 2013 NSCA 94 The respondents appealed the denial of their motion to convert an application into an action, as well as the alternative motions to strike pleadings or order particulars. The respondents argued that the judge below had failed to consider the seriousness of the allegations against them and had construed the legal issues and mischaracterized the evidence before him. The Court granted leave to appeal only on the conversion issue, but upheld the decision to deny the motion. The conversion issue was novel and warranted consideration for that reason. However, the Court concluded that the judge had correctly set out the applicable law. There was nothing wrong in either the careful and comprehensive analysis or the result. The decision was discretionary and, provided the proper factors were considered, an appellate court should generally be loath to interfere. LEGAL_1:29245128.3
  • 21. 17 4. Federal Court (a) Doris Tremblay v. Orio Canada Inc., 2013 FC 109 The plaintiff and defendant to counterclaim (“Tremblay”) brought a motion for summary trial in a copyright infringement action concerning a computer program called Service Appointment Monitor (“SAM”) that Tremblay had, under contract, programmed for the defendant and plaintiff to counterclaim (“Orio Canada”). Tremblay alleged ownership of copyright in the developments and improvements that were made to the SAM software between April 2006 and June 2009 (the “modified SAM program”) and alleged that Orio Canada infringed his copyright by allowing the software to be copied and modified, and by installing, selling, and distributing the program to its clients. Tremblay sought a declaration to that effect and also sought an order directing Orio Canada to delete and destroy its copies of the modified SAM program and enjoin it from selling and installing the software. Orio Canada argued that it was the owner of the modified SAM program and, by counterclaim, sought summary judgment in its favour and an order dismissing Tremblay’s motion, among other things. In the alternative, Orio Canada sought an order declaring that it held a licence to use the modified SAM program and that licence authorized it to sell and reproduce the software freely in perpetuity. The Court held that Tremblay was the copyright owner, but that there was no infringement as Orio Canada had an implied licence from Tremblay authorizing it to use the modified SAM program. Tremblay, through the work of his employees, was the author of the modified SAM program. While Tremblay had included an assignment clause in his work tenders to Orio Canada, the written document containing the clause had not been signed and the Court could only conclude that Tremblay had not assigned his copyright. The Court noted that the Copyright Act “requires not only that an assignment of copyright be in writing to be valid, but also that the writing be signed.” However, the Court did conclude that Tremblay granted an implied licence of use to Orio Canada, which the Court inferred from the parties’ conduct. The implied licence did not need to be made in writing. Accordingly, there was no infringement of Tremblay’s copyright since there was consent to Orio Canada’s use of the modified SAM program. The decision was appealed (see summary of the decision at 2(a) above). LEGAL_1:29245128.3
  • 22. 18 (b) The Spangler Candy Company v. 3651410 Canada Inc., 2013 FC 253 The defendants brought a motion under subsection 51(1) of the Federal Courts Rules appealing a decision of a prothonotary denying their motion to strike the plaintiff’s statement of claim. The claim arose from the termination of a long-standing contractual relationship under which the first defendant (Regal) distributed and sold the plaintiff’s candy canes. The plaintiff purported to terminate the contract; Regal contended this was a breach of the terms of the contract and, to mitigate their losses, second-sourced the plaintiff’s product from the second defendant. The defendants brought a motion for dismissal for want of jurisdiction or, in the alternative, for a stay in favour of a comprehensive action in a provincial court. The prothonotary dismissed this motion, on the basis that the plaintiff’s statement of claim was entirely based on intellectual property issues even though some contractual issues might have to be considered. The Court dismissed the appeal. The plaintiff’s claims related exclusively to trade-mark and copyright infringement and all of the remedies sought arose under the Trade-marks Act or Copyright Act. There was no privity of contract between the plaintiff and the second defendant. An injunction on a national scale would not be available from a provincial court. The fact that the defendants’ counterclaim was outside the jurisdiction of the Court was not a ground for excluding the plaintiff’s intellectual property claim. (c) Planification-Organisation-Publications Systèmes (POPS) Ltée v. 9054-8181 Québec Inc., 2013 FC 427 The plaintiffs brought an action seeking damages, inter alia, against the defendants for copyright infringement regarding a business simulation software product and certain of its adaptations. The defendants brought a counterclaim seeking, amongst other things, expungement of the plaintiffs’ registered copyright in the software and confirmation that they held a perpetual license to use the software at issue. A central issue before the Court was the interpretation of various alleged copyright assignments. The Court dismissed the plaintiffs’ action and allowed the defendants’ counterclaim in part. The Court found that the plaintiff was the owner of the copyright in the software since, inter alia, the language in one of the alleged assignments was more consistent with a promotion or distribution agreement than with an assignment of copyright. However, the Court found that the defendant LEGAL_1:29245128.3
  • 23. 19 did have a non-revocable licence to use the software, any of its adaptations, and any future adaptations it developed. As a result, the defendant did not infringe the plaintiffs’ copyright in the software. The Court also struck a certificate of registration of copyright in respect of an adaptation of the software registered by the plaintiffs on the grounds that the defendants’ had rebutted any presumption of the plaintiffs’ ownership in the software. (d) Pinto v. Bronfman Jewish Education Centre et al., 2013 FC 945 The plaintiff brought an action seeking damages from the defendants for copyright infringement of his work composing, performing, producing and recording music for TaL AM, a curriculum for teaching Jewish language, religion, culture and history in elementary schools, developed by the defendants and others. The defendants agreed that the plaintiff owned the copyright to his original compositions, but argued the plaintiff gave permission for the use of his music, as part of the contract for his services. The Court dismissed the action. The Court found that the plaintiff did provide consent to the use of his music, granting an implied licence to the defendants, and that the defendants had not exceeded the scope of this licence. The Court reasoned that an implied licence may be found when an artistic work was created as part of a freelance contract at the request of the purchaser, and that in such cases, the freelance contract is construed as including an implied licence for the purchaser to use the work for the purpose it was created. The Court concluded that where a licence is granted in exchange for consideration, as was the case before the Court, it cannot be unilaterally revoked. In the alternative, the Court went on to determine the amount of statutory damages the plaintiff would have been entitled to had infringement been established, finding that relevant considerations, including the defendants’ acting in good faith, indicated an award of damages at the low end of the spectrum: $300 for each of the 58 works, for an award of $17,400. (e) Distrimedic Inc v. Dispill Inc, 2013 FC 1043 The plaintiff by counterclaim claimed infringements of patent, trade-mark and copyright, in response to a suit for a declaration of non-infringement. The original suit was subsequently discontinued, but the counterclaim continued. The claims related to a system for preparing LEGAL_1:29245128.3
  • 24. 20 customized pill dispenser trays to organize medication according to when it is to be taken. The copyright claim related solely to the software forms used to generate labels for the trays. The Court dismissed the copyright infringement claim. The forms did not meet the standard of originality, because most of the label contents were dictated either by provincial regulations or by utility. No evidence had been presented that the layout or arrangement of the user interface was particularly different from what was commonly in use in the relevant time period. In any case, the original DOS software had been replaced by a Windows version created by a third party and there was no evidence that anything other than functionality had been reproduced from the original DOS software. Furthermore, the plaintiff by counterclaim was admittedly not the author of either work and had failed to prove a valid chain of title for any copyright. The asset purchase agreement transferring the original business made no reference to any copyright, and there was no evidence of any other assignment. Moreover, even if there was any valid copyright in the form, and the plaintiff by counterclaim could establish ownership of it, there was no infringement by the defendants. The defendants by counterclaim used software created by the author of the Windows software, who was not a party to the action. The original DOS software had been abandoned before the main defendant of the counterclaim had been incorporated. If there was any reproduction of the original form in the current Windows software, it was not a substantial part and, in any case, none of the defendants had authorized any such reproduction. (f) Twentieth Century Fox Film Corporation v. Nicholas Hernandez et al., T-1618-13 (Unreported) The plaintiff brought a motion for default judgment against the defendant, who operated the websites “Watch The Simpsons Online” and “Watch Family Guy Online”. The plaintiff, owner of copyright in the television programs “The Simpsons” and “Family Guy”, alleged that the defendant infringed its copyright by, among other things, copying the programs from television broadcasts or other media, uploading the unauthorized copies to computer servers, communicating the programs to the public by telecommunication, and enabling the public to infringe the plaintiff’s copyright. The Court granted the motion and awarded the plaintiff $10 million in statutory damages. The defendant’s actions had been in bad faith and for commercial purposes. Accordingly, the Court LEGAL_1:29245128.3
  • 25. 21 found that the statutory damages elected by the plaintiff would be insufficient to achieve the goal of punishment and deterrence and also awarded $500,000 in punitive and exemplary damages, plus substantial indemnity costs and interest. In addition, the Court ordered an injunction against any future infringement by the defendant and an order for delivery up of any infringing copies, documents, materials and equipment. No reasons were issued by the Court. 5. Other Decisions of First Instance (a) Roué v. Nova Scotia, 2013 NSSC 45 The respondents brought motions under Rules 6.01, 13.03 and 38.10 of the Civil Procedure Rules to have an application converted into an action or, in the alternative, to have the claim struck or an order for particulars. The respondents owned the Bluenose II; the applicants, descendants of the designer of the original Bluenose, claim that the respondents’ restoration of the Bluenose II infringed copyright or moral rights which they own. The proceeding is on-going, and the respondents contest the claim on multiple substantive grounds, however this motion was procedural. The Court declined to convert the application into an action. Neither an application nor an action was presumptively favoured. In the particular case, the parties had been aware of the legal controversy for several years and many of the important witnesses had been identified, so the parties could be ready for trial in months rather than years. Most of the core factual issues in the case would likely be addressed by experts. If it was necessary to present viva voce evidence to adequately assess credibility, this could be accommodated within the application procedure. The new Application in Court procedure was designed to be flexible and efficient. The respondents bore the onus to prove that it would not be adequate; they had not met that onus. The Court also declined to strike the pleadings or order particulars. (b) Roué v. Nova Scotia, 2013 NSSC 254 The applicants brought three discovery motions: requesting that the respondents produce an index and description of the documents over which they claimed privilege, requesting a discovery subpoena for a particular witness, and requesting production of certain contracts, all in connection with their claim for copyright or moral rights infringement in the restoration of the LEGAL_1:29245128.3
  • 26. 22 Bluenose II. The applicants argued that the disclosure obligations applicable to actions must be satisfied in an Application in Court, even though the Rules did not specify how a privilege claim is to be asserted in that context. They also argued that the witness they sought to examine was a key employee who was involved in meetings in which instructions were provided to use the original Bluenose plans in the restoration. Finally, they argued that the respondents had implicitly conceded that the contracts were relevant documents, since they had referred to them in their pleadings; they could not be permitted to selectively disclose certain portions of the contracts without producing the documents. The Court ordered the respondents to produce a list of the documents over which it claimed privilege along with a brief description of the subject matter and the basis for the privilege claim. The Court also ordered production of the contracts. These were relevant documents and the respondents could not shield them from production merely by claiming that they had admitted all material facts that could be extracted from them. However the Court declined to issue the subpoena. This was a discretionary decision and the burden was on the applicants to convince the Court that it was necessary. At this stage it was not clear that the evidence they sought could not be obtained by other means, so a subpoena would be premature at that point. (c) Canada (United States of America) v. Equinix Inc., 2013 ONSC 193 The Attorney General of Canada brought an application under section 15 of the Mutual Legal Assistance in Criminal Matters Act for an order authorizing the sending of mirror image copies of 32 computer servers to U.S. prosecutors, in connection with a criminal copyright infringement and conspiracy charges against Megaupload Ltd. The respondents opposed the order on the basis that the request was overbroad, given the volume of data involved and the scant evidence connecting the servers in question to the alleged crimes. The respondents asked for the order to be denied or, in the alternative, for an order under section 15(2) that the servers be brought before the court in the form of an independent forensic report as to the contents of the servers. The Crown indicated that, if such an order was made, counsel would consult to determine whether it was possible to reach a consensus on how to sort the irrelevant data from the potentially relevant data. LEGAL_1:29245128.3
  • 27. 23 The Court issued an order under section 15(2) for the servers to be (metaphorically) brought before the court. While a broad range of information would potentially be relevant evidence in the case, and there was no dispute that the search warrant was properly executed, authority to search a computer did not convey unfettered access to all of the data located on it. Consequently, the appropriate balancing of the state interest in gathering evidence and the privacy rights at stake required some refinement of what evidence was to be sent to U.S. prosecutors. (d) Delta Hotels v. Backus-Naur, 2013 ONSC 582 The plaintiff brought a motion pursuant to Rule 26.01 of the Ontario Rules of Civil Procedure to amend its statement of claim, which included allegations pertaining to the ownership of copyright and other proprietary rights by the plaintiff and the assignment of ownership of copyright in inventions by the corporate defendant. The defendants claimed that they would be prejudiced by the amendment and that therefore the amendment should be disallowed. The defendants also argued, inter alia, that the plaintiff’s claim of equitable ownership of copyright was an untenable plea and, as such, should be disallowed. The Court dismissed the plaintiff’s motion. The Court found that the amendment would not prejudice the defendants because, inter alia, examination for discovery of the plaintiff’s representative had not yet been conducted, the mediation had not been held nor scheduled, and the proceedings had not been set down for trial. While the Court accepted that there is no precedent in Canadian law that addresses equitable ownership of copyright, it does not necessarily follow that, on the specific facts of any given case, a claim of equitable ownership of copyright could never be established. (e) A.G.C. v. Madeleine Rundle c.o.b. NEC Plus Ultra, 2013 ONSC 2747 The plaintiff brought motions to strike the defence, for summary judgment for copyright infringement and breach of confidence, and for a permanent injunction, all in relation to the public service Second Language Examinations (SLEs). The defendant had reportedly not shown any interest in defending the suit after her counsel obtained an order removing them as solicitors of record. LEGAL_1:29245128.3
  • 28. 24 The Court granted all relief requested. The affidavit evidence indicated that the defendant had questioned students as to the content of the tests, including about specific questions. The defendant’s “practice” tests were virtually identical to the official tests and reproduced the vast majority of the official test questions. The tests were literary works which satisfied the original expression standard. The defendant had access to the works, through her students. Indirect copying, including from memory, infringed the copyright in the work. Where infringement was established, the onus was on the infringer to show why a permanent injunction should not be granted, even where there was no proof of damages. The defendant had not satisfied that onus. (f) Rains v. Molea, 2013 ONSC 5016 The plaintiff commenced an action against the defendant for infringement of copyright in the plaintiff’s artist works, namely, paintings featuring white crumpled paper in still life form against a dark background. The plaintiff commenced to create a series of such paintings in 1991 which he titled “Classical Series”. The series, comprising over 200 works, had met with commercial success. The defendant, a Romanian-born artist, immigrated to Canada in 1999. Prior to immigrating to Canada the defendant painted paintings in an expressionistic style that primarily emphasized human figuration, particularly the nude female form. In 2000, the defendant began painting realistic still life works featuring crumpled paper. The plaintiff claimed that the defendant’s works infringed copyright in 17 of the plaintiff’s works and infringed compilation copyright in the Classical Series as a whole. The plaintiff claimed a declaration, nominal damages, and accounting of profits and an injunction. The Court dismissed the plaintiff’s claim. Each image in the plaintiff’s Classical Series originated from the plaintiff, was not copied from another work and was the product of the plaintiff’s skill and judgment. The images are therefore original. The fact that many elements of the images are not unique to the plaintiff in that he used common place tropes used by painters for centuries does not render the images less original. The Classical Series is not however a compilation as defined in the Copyright Act. There is no evidence that the plaintiff exercised skill and judgment to select a crumpled page image and arrange it with others such that copyright LEGAL_1:29245128.3
  • 29. 25 subsists in the series as a whole. The gestalt or the feeling of the series is not sufficient for the series to be protected as a compilation. Copyright is infringed if a defendant has produced a substantial copy or a colourable imitation of a plaintiff’s work. The similarities between the plaintiff’s and defendant’s paintings are not unique to the plaintiff but are common, long-established artistic techniques. While the similarities represent a substantial part of the respective works they have no originality and do not enjoy copyright protection. Other than the shape of the crumpled paper, the plaintiff relies on the comparison of the use of crushed white paper against a dark or earth-tone background on a lighter flat base with, on occasion, a Mediterranean tile. Although the plaintiff’s paintings are original works, they are thoroughly conventional employing a practice that has been in place for at least 200 years. In determining whether similarities between works are sufficiently close to render one substantially similar to another, similarities that are common place, unoriginal or consist of general ideas may be disregarded. After disregarding the unoriginal elements in the plaintiff’s works, all that remained as similarities between the parties’ works was the shapes of the crumpled paper. The shapes are not however sufficiently similar. They are the result of a coincidence and randomness, but limited by the original pre-crumpled rectangular shape of the paper. Although the evidence shows that the defendant had access to some images in the Classical Series, the evidence was insufficient to establish direct access to the images allegedly copied. Furthermore, the evidence was that the defendant had no reference to any of the plaintiff’s images in creating his works. The defendant painted his works from photographs that he made of crumpled paper. The defendant furnished copies of the photographic model for each of his art works at issue. The defendant had therefore established that his works were independently created from the plaintiff’s works. If infringement had been found, the Court would have granted declaratory relief, the defendant’s profits earned from the infringement and an injunction limited to the 17 existing works. There was no evidence to support even a nominal damage award. LEGAL_1:29245128.3
  • 30. 26 (g) Spanski Enterprises, Inc. et al. v. IMB+ Records Inc., 2013 ONSC 5382 The defendants brought a motion under section 106 of the Courts of Justice Act to stay the portion of the action under the Copyright Act until such time as the owners of the copyright in question were added as parties to the action or delivered their consent to be bound by the decision in the action. Under paragraph 41.23(2)(c) of the Copyright Act, the plaintiffs had the onus to prove that it was in the interest of justice that the copyright owner not be added as a party. The Court dismissed the motion. The plaintiffs had the authority and, in some cases, the contractual obligation, to represent the legal rights of the owners. At least one of the owners was aware of the proceedings and had chosen not to participate. Furthermore, there had been delay in bringing the motion. Pleadings were closed; affidavits of documents had been served; and examinations for discovery had been conducted. To add the owners as parties would delay the proceedings, which were otherwise close to being set down for trial. (h) Mobin v. Stephens, 2013 ONCJ 53 The respondent father brought a motion for summary determination under Rule 16(12) of the Family Law Rules that a sum of $175,000 paid in settlement of a copyright infringement claim was not income for the purposes of the Child Support Guidelines and a corresponding reduction of his child support obligations. The Court held that the settlement funds were income for the purpose of the Child Support Guidelines, whether or not they were considered taxable income. The Court reasoned by analogy to damage awards for motor vehicle accidents, which were treated as income for child support purposes, although they were not taxable. The father would be entitled to a deduction for reasonable expenses incurred to recover the settlement, but the onus to prove those expenses lay with him. (i) Oakcraft Homes Inc. v. Ecklund, [2013] O.J. No. 3215 (OSCJ) The plaintiff is a builder of custom homes and brought an action for copyright infringement in house plans. The plaintiff alleged that the defendants Ecklund took house plans designed by the plaintiff to another builder, Toscana, which in turn used those plans to build the Ecklunds a LEGAL_1:29245128.3
  • 31. 27 home. The defendants Ecklund and Toscana both asserted that there was nothing original in the plaintiff’s house plans, that they were common plans, that they were unmarked as to ownership and copyright claims, and that in any event the plaintiff’s house plans were not the ones used by the defendants. In addition, the defendant Toscana alleged that the plaintiff was not the owner of the house plans, but rather that the owner was Brent Thompson, the principal, directing mind, officer and owner of the plaintiff, but not a named party to the action. Toscana also alleged that it had no knowledge as to the source of the house plans when it received them from the defendants Ecklund. The Court held that the plaintiff’s house plans were deserving of copyright protection, that the defendants infringed the plaintiff’s copyright, and awarded the plaintiff damages in the amount of $11,600. The Court cited numerous authorities supporting the conclusion that house plans are subject to copyright protection, so long as the originality requirement is met. The evidence showed that the plaintiff’s plan was an original artistic work deserving of copyright protection. The defendant Toscana’s modifications to the plaintiff’s house plans that it received from the defendants Ecklund were so minor they could not satisfy the test of originality. The Court also held that the plaintiff was the owner of the house plans and the proper party to bring the action, since Thompson created the work while employed by the plaintiff as principle and owner. The plaintiff’s failure to mark the house plans with ownership and copyright claims did not defeat the right to copyright. In the absence of cogent proof of value of the plaintiff’s house plans, the Court set damages at $11,600 being the midpoint between the amount claimed by the plaintiff and the proper value alleged by the defendant Toscana. The defendants Ecklund and the defendant Toscana were held jointly and severally liable for the damages award since the Court was unable to determine the respective degree of fault between them. (j) Pelchat v. Zone 3 Inc., 2013 QCCS 78 The plaintiff brought suit infringement of copyright in a television series. The plaintiff had been involved in various beauty and fashion-related television programs and series, dating back to 1971. The plaintiff claimed that a series produced by the defendants between 2002 and 2008 infringed his copyright in the “framework” defining his earlier works. LEGAL_1:29245128.3
  • 32. 28 The Court dismissed the action. The plaintiff had no copyright in the idea underlying his works. The Court followed the Quebec Court of Appeal decision in Robinson to apply the ordinary observer standard and rejected expert evidence which it considered unhelpful. The two series were not even remotely similar, aside from the underlying ideas of beauty and transformation. The plaintiff’s works had a contest format and a high-glamour setting; the shows were shot in a studio, with an audience; the shows featured extensive product placement and emphasized the idea of luxury far more than the transformation itself, which occupied relatively little air-time. By contrast, the defendants’ series was shot on location, with no audience; product choices were driven by the preferences of the candidate; and the focus was on the candidate and her reasons for wanting to undergo a transformation. Furthermore, even if there was any similarity between the works, the Court rejected the plaintiff’s evidence on access or copying and found that the defendants’ series was an independent creation. (k) Biocad Medical Inc. v. Panthera Dentaire Inc., 2013 QCCS 905 The applicants sought an order ancillary to a writ of pre-judgment seizure of allegedly infringing software, to permit certain experts to examine the defendant’s computer systems, to assist bailiffs in identifying the software in question and to make copies of it. The Court granted the motion. The suggested procedure was reasonable, in that it would preserve evidence but would not deprive the defendant of possession of its computers before the application for the interlocutory injunction could be heard. (l) Boire v. Lefebvre, 2013 QCCQ 921 The plaintiff, a sculptor, sought $1,325 in damages for the use of a photograph of his sculpture by the owner of an art gallery in which the work was being exhibited on consignment. The defendant had included a photograph of the gallery, in which the sculpture was visible, in a promotional document. The defendant claimed this was part of the promotion which she performed on behalf of, and to the benefit of, all the artists whose work was offered for sale through the gallery. The defendant had obtained the plaintiff’s consent to include images of the plaintiff’s work on the gallery’s web site; she believed that consent extended to the promotional document at issue. LEGAL_1:29245128.3
  • 33. 29 The Court found for the plaintiff, but reduced the damage award to $500. The promotional document was a distinct use of the work from the web site and the uncontested evidence was that the defendant did not have the plaintiff’s authorization for that use. Although the decision does not mention the plaintiff ever electing to claim statutory damages, the Court assessed the damages by reference to the range of statutory damages for commercial infringement in subsection 38.1(a) of the Copyright Act. The Court noted that this was unquestionably a commercial use, but offered no other explanation for the award. (m) Tency Music SAS v. Lefrançois, 2013 QCCS 1947 The plaintiff, a French vendor of karaoke recordings, sued the defendant for copyright infringement. The plaintiff operated a web site through which it offered karaoke recordings for personal use. The defendant downloaded at least 987 separate recordings from this web site and then offered derivative works for sale through his own website, included in a catalog of more than 8,000 titles purchased from different sources. The plaintiff sought statutory damages of $493,000, plus punitive damages. The court found for the plaintiff, but awarded reduced statutory damages of $12,000. The Court concluded that, prior to being contacted by the plaintiff, the defendant had mistakenly but in good faith believed that his transformational use of the works was not infringing. The damages sought by the plaintiff would be disproportionate given the defendant’s total income from the complete catalog was only on the order of $2,000 per month and the plaintiff’s work consisted only of 12% of the total. Moreover, the plaintiff’s insistence that the defendant completely shut down his web site went beyond any remedy that the plaintiff was entitled to by law, justifying a defence of the claim. However, the defendant had continued to make commercial use of the plaintiff’s work after he could no longer reasonably claim to have no cause to suspect that his use of the works was infringing. The Court considered damages of $100 for each of the approximately 120 works downloaded after the defendant had notice of the claim to be equitable under the circumstances. LEGAL_1:29245128.3
  • 34. 30 (n) Isle-Principia (USA) Inc. v. Guimond, 2013 QCCS 3730 This case involved two related actions by the producer and the author and director of a film, in which the producer claimed that a licensing contract was valid and binding, and which the author considered rescinded. The author had multiple claims involving different areas of law including the Charter, constitutional law and civil law. The author challenged the creation of the film, including images used, the display of his name in the credits, and the producer’s lack of authorization to use the author’s personal photos. The Court allowed the producer’s motion to institute proceedings, declaring the licensing contract valid and binding. The Court determined that when an author assigns copyright by way of a licence, which was the case here, the licence replaces the Copyright Act and is subject to the general rules of contract interpretation. The film in large part respected the parameters of the licensing contract. The Court ordered the producer to remove unauthorized images from the film and the author’s name from the credits of the film and to pay damages to the author. To succeed at his argument of unauthorized images, the author was required to show that the producer had used his work outside of the licensing contract or, within the parameters of the licensing contract, that the producer perverted the author’s work by disrespecting his moral rights. The Court emphasized that although the author assigned the copyright in the licensing contract, he did not waive his moral rights. (o) Bell Media Inc. v. Société du Droit de Reproduction des Auteurs Compositeurs et Editeurs au Canada, 2013 QCCS 5203 This was a motion by the defendant to dismiss the plaintiff’s action pursuant to section 165 of the Code of Civil Procedure of Québec. The defendant had already engaged the Copyright Board of Canada with the same questions about the Copyright Act as the plaintiff raised in the Superior Court. At issue was a royalty agreement, in which the plaintiff was to pay royalties to the defendant for broadcasting the defendant’s musical works. The Board determined that for the period of 2008 to 2012 the plaintiff was to pay a certain percentage of royalties to the defendant. The plaintiff is appealing this decision to the Federal Court of Appeal. LEGAL_1:29245128.3
  • 35. 31 The plaintiff and defendant are attempting to negotiate a licence for a new period (2012- 2016). According to the plaintiff, there is no obligation to pay royalties to the defendant for this period due to new exemptions in the Copyright Act which have been in force since November 2012. The defendant applied to the Board to set the royalties for the new period, and the plaintiff requested that the Board suspend the motion until the Federal Court of Appeal issued its decision on the previous period. The plaintiff also applied to the Superior Court for a declaratory judgment on the period of 2012 to 2016. The defendant’s motion was allowed. The Court acknowledged the Superior Court’s jurisdiction to interpret the Copyright Act. However, the Court decided that it was more appropriate and cost efficient to allow the procedure before the Board to continue. (p) Gestion Reper Inc. v. Brassard, 2013 QCCS 5453 The plaintiffs, creditors in a bankruptcy, sought an order that a piece of software and related IP formed part of the estate and damages. The plaintiffs alleged that the defendant, a co-founder of the bankrupt company, had engaged a third party to create an unauthorized derivative of the company’s software in order to continue using it after the bankruptcy. The defendant argued that the new software was not completed until after the bankruptcy and denied that it was a derivative of the original work. The Court found for the plaintiffs; it declared any conveyance of the software or related IP to be invalid and found the defendant personally liable for damages. The project to create the new software began long before the bankruptcy and the Court did not accept the defendant’s evidence of independent creation. Expert evidence indicated that the “new” software was highly similar to the older software. The evidence did not support a conclusion that the “new” work was a wholly-original creation, distinct from the older work. The Court found that the purported bill of sale for the new software was a fraudulent attempt to deprive the creditors of value to which they were entitled. (q) Stoyanova v. Disques Mile End, 2013 QCCS 5631 The plaintiff moved, under Articles 54.1 and 165.4 of the Code of Civil Procedure, to strike the defence against a claim for, among other things, infringement of copyright in song lyrics and a LEGAL_1:29245128.3
  • 36. 32 vocal performance for being clearly unfounded, frivolous, vexatious and dilatory or made in bad faith. One of the defendants was another artist with whom the plaintiff had been romantically involved. The plaintiff alleged that the defendant included part of a recording of her original song, as well as a sample from an unauthorized intimate recording of the two of them, in a musical recording commercially released by the co-defendant record company. The defendants argued the commercial release of the song was authorized, and relied, in part on an email exchange discussing how the plaintiff should be credited on the record. The Court declined to strike the defence. Taking the defendants’ evidence at its highest, there was a reasonable prospect that an implied license to use the plaintiff’s song might have existed. Moreover, even if there was no authorization, the defendants’ denial of any damages to the plaintiff was not unreasonable, on the record. There was no indication of bad faith or blameworthy conduct on the part of the defendants in defending the claim. (r) Éditions Québec Amérique Inc. v. Druide Informatique Inc., 2013 QCCS 5693 The defendant brought a motion to remove from the Court file an expert report produced by the plaintiff. The originating litigation involved the plaintiff requesting an injunction against the defendant, who claimed damages after the alleged illegal use of illustrations belonging to the plaintiff in the software program Antidote created by the defendant. In his report, the expert described the editor’s obligations by referring to international conventions and the Copyright Act, namely, the requirement of written authorization to use illustrations and photographs created by others. The plaintiff stated its preference that the report be entirely removed rather than partially, and requested the opportunity to produce a new report in the future notwithstanding the removal of the report in question. The defendant’s motion was allowed and the expert’s report was removed from the litigation file. The Court found that only two short phrases in the report corresponded with the document’s stated mandate. The Court confirmed that this decision must not harm the plaintiff’s rights to put forward evidence in relation to its claim. LEGAL_1:29245128.3
  • 37. 33 (s) Chélin v. Girouard, 2013 QCCQ 8742 The plaintiff claimed damages in the amount of $6,560.77 for unauthorized use of a photograph of her on a website. The plaintiff was one of four co-founders of a municipal political party in Montreal. After the photograph was taken and posted to the party’s website, the plaintiff resigned from the party and requested that the photograph be removed. The party did not remove the photograph, but did add a note stating that the plaintiff had resigned her position. The plaintiff then claimed to have purchased the copyright in the photograph from the photographer and demanded compensation. The court dismissed the action. The plaintiff had not proven title to the copyright in the photograph. The purported assignment to the plaintiff was invalid because the photographer was not the owner of the copyright at the time. The original photograph was taken on behalf of a newspaper, which presumptively owned the copyright. In any event, even if the plaintiff could establish ownership of the copyright, the Court concluded that she had suffered no damages. (t) (AOM) NA Inc. et al. v. Reveal Group, 2013 ONSC 8014 The defendant brought a motion to strike certain paragraphs from the statement of claim or alternatively a motion for particulars. The plaintiffs had brought an action for, inter alia, for breach of copyright, alleging that the defendant had copied its software and method related to the management of processing centres and incoming contact centres. The defendant claimed that the pleading for breach of copyright was deficient because the plaintiff failed to plead material facts permitting it to assert a claim of copyright infringement under the Copyright Act. The Court granted the motion to strike the claim for copyright infringement with leave to amend, but dismissed the balance of the motion on the allegations not relating to copyright as the defendant had sufficient particulars to plead. The Court agreed with the defendant that the chain of title and the particulars of the “grant in writing” as stated in section 41.23 of the Copyright Act, must be pled because they are a constituent part of the statutory right of action. The Court identified that the pleading was vague about what was subject to copyright and what was alleged to have been the breach of copyright as copyright cannot attach to an idea such as a method or to what a computer program does. The Court also held that it was not clear from the pleading LEGAL_1:29245128.3
  • 38. 34 whether one of the plaintiffs had a “right, title or interest” in specific copyright pursuant to an “assignment or grant in writing from the owner” as required by section 41.23 of the Copyright Act and whether any such assignment is valid under section 13(4). 6. Copyright Board (a) Society For Reproduction Rights Of Authors, Composers And Publishers In Canada v. Canadian Broadcasting Corporation, Copyright Board of Canada, January 16, 2013 The collective, SODRAC, representing the reproduction rights of authors, composers and music publishers in Canada, brought an application before the Copyright Board for an interim license for the use of its repertoire by the Canadian Broadcasting Corporation/Société Radio-Canada (CBC/SRC). The request by SODRAC was for the Board to apply the rates recently established for the 2008-2012 licence period on an interim basis pending the Board’s final decision concerning SODRAC’s licence application for the 2012-2016 licence period. In addition, SODRAC also suggested an additional interim royalty of $1 per month for activities related to CBC/SRC’s Explora channel, which was not part of the 2008-2012 licence but was part of a prior interim licence application by SODRAC. SODRAC argued that the 2008-2012 licence represented the status quo. CBC/SRC argued that the 2008-2012 licence did not represent the status quo for a number of reasons: (1) the 2008-2012 licence imposed a significant retroactive increase and that faced with financial constraints, CBC/SRC was in the process of reviewing and adjusting its operations; (2) that copyright case law in Canada had evolved, noting the recent decisions of the Supreme Court of Canada; and (3) the coming into force of the Copyright Modernization Act, which introduced new exceptions. CBC/SRC claimed that only four of its activities would result in royalties payable to SODRAC going forward: (1) the sale of physical or digital copies of a program; (2) the sale or licensing of a program; (3) archival copies; and (4) synchronization copies. With respect to synchronization, CBC/SRC noted that it intended to negotiate transactional licences going forward, rather than obtain a blanket licence. The Board set the interim royalties for the sale or licensing of programs at the rates established in the 2008-2012 licence, which CBC/SRC had consented to. The Board also maintained the LEGAL_1:29245128.3
  • 39. 35 nominal $1 per month interim royalty for the Explora channel activities. With respect to CBC/SRC’s incidental radio, television and Internet reproduction activities and synchronization activities, the Board disagreed with CBC/SRC’s claim that the 2008-2012 licence did not represent the status quo. The Board noted that CBC/SRC’s arguments on the impact of recent legislative and jurisprudential changes and its ability to rely on certain new exceptions or rights, were best considered at the full hearing and not at the interim stage. The Board held that the 2008-2012 licence rates were to continue on an interim basis for incidental reproductions. Finally, the Board addressed synchronization reproductions and the CBC/SRC’s claim that its intention was to negotiate transactional licences going forward. The Board noted that “[t]he fact that CBC intends to modify its operations in no way guarantees that this is indeed what will happen.” There was no evidence before the Board that would have allowed it to assess the extent and impact of CBC/SRC’s potential changes on its use of SODRAC’s repertoire. SODRAC sought maintenance of the status quo, which was a lump-sum synchronization licence. However, the Board had previously expressed concerns with respect to lump-sum synchronization licences and had also previously recognized the suitability of transactional licensing for music use in television programs. To balance these concerns and the interests of the parties on an interim basis, the Board extended the existing lump-sum synchronization licence but applied a 20 per cent discount. The Board noted that such a solution communicated the Board’s “firm intention to consider, if not encourage, transactional dealings in the relevant rights”, among the several advantages of the Board’s adopted approach. (b) Statement Of Royalties To Be Collected By Access Copyright For The Reprographic Reproduction, In Canada, Of Works In Its Repertoire (Education Institutions – 2005-2009), Copyright Board of Canada (Redetermination), January 18, 2013 The Copyright Board of Canada (the “Board”) redetermined the royalties pursuant to the Access Copyright Elementary and Secondary School Tariff, 2005-2009, which the Board previously set at $5.16 per full-time equivalent (“FTE”) student on June 26, 2009. On July 23, 2010, the Federal Court of Appeal remitted the decision to the Board to determine the meaning of the words “in a medium that is appropriate for the purpose” as found in subsection 29.4(3) (the “carve-out” provision) of the Copyright Act (the “Act”) and the assess whether copies made for the purpose of examinations came within the meaning of these words (Alberta (Education v. LEGAL_1:29245128.3
  • 40. 36 Access Copyright, 2010 FCA 198). The Canadian Copyright Licensing Agency (“Access”) argued that if it offers a licence to copy a work, the work is commercially available in an appropriate medium. The Objectors argued that the carve-out provision only applied to a work already in a physical form the teacher would use to administer a test or examination (e.g., standardized tests that are sold to educational institutions) and that whatever an institution needs must be available in the marketplace exactly as it needs it for examinations if the carve-out is to apply. In addition, on July 12, 2012, the Supreme Court of Canada held that the Board had erred in its application of the principle of fair dealing to certain of the copies at issue, namely “Category 4 copies” (Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright), 2012 SCC 37 (“Access (SCC)”)). Following Access (SCC) on September 19, 2012 the Board ruled that the Category 4 copies constitute fair dealing for an allowable purpose and as such, are non-compensable, therefore requiring a reduction in the FTE rate. After omitting the Category 4 copies, the Board, in its redetermination, reduced the FTE rate from $5.16 to $4.81. On the issue of subsection 29.4(3), the Board held that if the tariff authorizes an institution to copy a work onto a medium that will be used to administer a test or examination, the work is available “in a medium that is appropriate for the purpose” of that test or examination, and therefore, the work need not be available in the marketplace in a format exactly as required for an examination for the carve-out to apply as had been argued by the objectors. As a result of its redeterminations, the Board held that licensees who complied with the tariff certified on June 27, 2009 overpaid Access by 31.5 cents per FTE student in 2005 to 2008 and by 35 cents per FTE student in 2009. (c) Statement Of Royalties To Be Collected By Access Copyright For The Reprographic Reproduction, In Canada, Of Works In Its Repertoire (Educational Institutions – 2010-2015), Copyright Board of Canada, May 29, 2013 The Canadian Copyright Licensing Agency (“Access”) applied to the Copyright Board of Canada (the “Board”) for an interim tariff that would continue the Access Copyright Elementary and Secondary School Tariff, 2005-2009 (the “K-12 Tariff”), certified in 2013, from January 1, 2013 until the final tariffs are certified for 2010 to 2015 (the “Interim Tariff”). Access sought the LEGAL_1:29245128.3
  • 41. 37 Interim Tariff to counteract the objectors’ decision to stop paying royalties under the K-12 Tariff as a result of recent changes to the Copyright Act (the “Act”), recent decisions of the Supreme Court of Canada, and because compensable copies were being licensed through other channels. The objectors opposed the application, arguing that the K-12 Tariff continued to operate on an interim basis until the Board certified the final tariff for the relevant period. The Board allowed the application. The Board found that the only reason to adopt a new interim tariff was as a result of recent amendments to section 29.4 of the Act, which provided that examination copies that were once compensable by the sole reason that Access offered a licence, no longer attracted royalties. The Board reasoned that the record of the proceedings that led to the K-12 Tariff showed that approximately 15 cents of the rate of $4.81 was attributable to such examination copies and that since Access proposed to cease collecting those 15 cents pursuant to its Interim Tariff, that this was precisely the sort of change in status quo that ought to be reflected in an interim tariff. (d) Statement Of Royalties To Be Collected For The Retransmission Of Distant Television And Radio Signals For The Years 2009 to 2013, Copyright Board of Canada, November 29, 2013 A group of collectives filed proposed tariffs for the retransmission of television signals under section 71(1) of the Copyright Act, covering the period from 2009 to 2013. Prior to finalizing this tariff, the retransmitters had paid interim royalties by agreement with the collectives. The allocation of these royalties was subject to adjustment, based on the allocation formula certified in the final tariff. The main substantive issue for this decision was whether interest should be paid on these allocation adjustments. The Board certified the tariff and imposed interest obligations based on the Bank of Canada’s published prime rate. A delay in collecting tariffs entailed an opportunity cost for both the collectives and their members. This was a loss that should be compensated through interest. However there was no basis to increase the interest rate above the Bank rate; higher interest might encourage a user to pay royalties promptly but would be unlikely to affect reallocations between collectives who were subject to trust obligations to their members and who had less incentive to delay payment since they were required to invest their reserves conservatively. LEGAL_1:29245128.3
  • 42. 38 (e) Statement of Royalties to be Collected by ERCC from Educational Institutions, in Canada, for the Reproduction and Performance of Works or Other Subject-Matters Communicated to the Public by Telecommunication for the Years 2012 to 2016, Copyright Board of Canada, December 19, 2013 The Educational Rights Collective of Canada (“ERCC”) applied to the Copyright Board of Canada (the “Board”) to vary its Educational Rights Tariff, 2012-2016, certified on December 24, 2011, to eliminate the years 2014 to 2016 from the current certified tariff such that the tariff ends on December 31, 2013. The ERCC collects royalties for radio and television programs within its repertoire used and copied by educational institutions. The ERCC’s application came as a consequence of the ERCC’s board of directors’ decision to dissolve the ERCC, as the cost of receiving royalties had been and was expected to continue to be higher than amounts received. The ERCC required the variation to begin arrangements with debtors and creditors. The Board granted the application. The Board agreed with the ERCC’s reasoning, and found that from a practical point of view, the variation would not prejudice education institutions, who would now be entitled to make the relevant protected uses for free, nor rights holders, since there was not, and would never be, anything to distribute among them. (f) Interim Tariff For The Retransmission Of Distant Television And Radio Signals, 2014-2018, Copyright Board of Canada, December 19, 2013 Various collective societies and objectors sought an extension from the Copyright Board of Canada (the “Board”), on an interim basis, of the application of the Television Retransmission Tariff, 2009-2013 and of the Radio Retransmission Tariff, 2009-2013. The Board granted the application. The Board did not provide a detailed analysis in its decision. (g) Tariff of Levies to be Collected by CPCC in 2012, 2013 and 2014 on the Sale of Blank Audio Recording Media, in Canada, in Respect of the Reproduction for Private Use of Musical Works Embodied in Sound Recordings, of Performer’s Performances of Such Works Or of Sound Recordings in Which Such Works and Performances are Embodied (Private Copying 2012, 2013 and 2014), Copyright Board of Canada, August 30, 2013 This decision concerned the certification of the private copying tariff filed by the Canadian Private Copying Collective (“CPCC”). CDs and microSD cards were the media in question. LEGAL_1:29245128.3
  • 43. 39 The case raised a number of issues as a result of the declining use of CDs, as well as regulations that came into effect excluding microSD cards from the definition of “audio recording medium” in section 79 of the Copyright Act. The Board divided the proceeding into two phases and this decision related to Phase I. The issues considered by the Board included: whether a CD is still an “audio recording medium”; if so, what should be the levy on blank CDs; whether a microSD card is an “audio recording medium” (for the time period prior to the regulations coming into force); and if so, whether the circumstances were such that it would not be fair and reasonable to set a tariff on microSD cards. The Board concluded that CDs continue to be an “audio recording medium”. The issue arose because the definition of “audio recording medium” in section 79 of the Copyright Act includes a threshold requirement, namely that the recording medium “is of a kind ordinarily used by individual consumers” for the purpose of reproducing sound recordings. The Board concluded that “blank CDs will continue to meet the threshold of “ordinary use” until the tariff ends with the year 2014”. The Board noted that in “2011-2012, Canadians copied 373.5 million music tracks onto 14.3 million CDs”. The Board also noted that these numbers will fall, but that even if they were to fall by 70% during the tariff, the threshold requirement would still be met. In considering the levy to be set, the Board noted that it had used a particular model intermittently since 1999 in determining the levy. The Board went on to conclude that when “a technology reaches the end of its lifecycle, the information that can be obtained, especially from surveys, will tend to be sufficiently unstable to become unreliable”. The Board held that the use of blank CDs is in decline and “will almost certainly have reached the end of its technology lifecycle by the end of 2014”. As a result, the Board decided that it would no longer use the particular model in question. The Board referred to evidence relating to foreign rates and noted that it “will continue its practice of reviewing foreign rates with caution”. The Board opted to continue the existing levy of $0.29 per blank CD. On the issue of whether a microSD card fell within the definition of “audio recording medium”, the Board concluded on the record before it that a microSD card fell within the definition (in Phase I only CPCC provided evidence on microSD cards; the objectors were to provide their evidence on microSD cards in Phase II). LEGAL_1:29245128.3 As a result, the Board concluded that barring
  • 44. 40 exceptional circumstances, and any evidence that might be filed in Phase II, “CPCC would be entitled to royalties on microSD cards”. However, in certifying a tariff the Board “shall satisfy itself that the levies are fair and equitable” (as per the wording in subsection 83(9) of the Copyright Act). The Board concluded that exceptional circumstances existed and that “any tariff we set would be, under these very special circumstances, manifestly unfair and inequitable”. As a result, the Board declined to certify a rate for microSD cards. The exceptional circumstances referred to by the Board included the following. MicroSD cards had not previously ever been the subject of a private copying levy and after October 18, 2012, because of the regulations noted above, could not be subject to a levy. Any levy certified would only be for the period January 1 to October 17, 2012 (a period of less than 10 months). The cost to the parties of creating the additional record necessary to decide whether a microSD card is an “audio recording medium” in Phase II of the proceedings would be significant. In addition, the royalties generated “would most likely be relatively modest”. Further the “time, effort and money associated with creating reporting systems, reporting, auditing and anything else that may be required to comply with the tariff and to assess such compliance would be nonrecoupable”. The Board also noted that the tariff would be “short-lived and totally retroactive”. (h) Statement Of Royalties To Be Collected By SOCAN For The Public Performance Or The Communication To The Public By Telecommunication, In Canada, Of Musical Or Dramatico-Musical Works (Tariff No. 24 – Ringtones (2003-2005), Ringtones and Ringbacks (2006-2013), Copyright Board of Canada, January 18, 2013 This was an application to the Board to vary, and in effect, to repeal, SOCAN’s Tariff 24 relating to ringtones for the years 2003 to 2005 and 2006 to 2013. The basis for the application was the Supreme Court of Canada’s decisions in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada and in Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada which, according to the Board, “stand for the proposition that the Internet delivery of a permanent copy does not involve the communication right”. Although the Board made a preliminary determination that the above-noted Supreme Court of Canada decisions constituted a material change in circumstances within the meaning of Section LEGAL_1:29245128.3
  • 45. 41 66.52 of the Copyright Act (the section permitting an application to vary), the Board denied the application to vary Tariff 24 for the years 2003 to 2005. It also denied the application to vary the 2006 to 2013 Tariff for the period from January 1, 2006 to November 6, 2012. The Board concluded that it would consider in due course the application to vary the 2006 to 2013 Tariff from November 7, 2012 (the date amendments to the Copyright Act came into force dealing with the making available right), and invited the parties to apply for a decision making interim the certified 2006 to 2013 Tariff as of November 7, 2012. With respect to whether the Board’s power to vary a tariff includes the power to rescind or repeal its initial decision, the Board concluded that the “power to vary may include the power to substitute”, but that it does not have the power to rescind or repeal tariffs already certified. The Board also concluded that, based on the wording of the tariffs, the application would achieve nothing. The Board stated that the wording of the tariff is such that royalties are payable only if a SOCAN licence is required and if “the transmission of a ringtone does not trigger a protected use of the SOCAN repertoire, no SOCAN license is required; the applicants need not comply with the tariff”. The Board also found that the application was really about “whether the applicants are entitled to a refund for the past and whether SOCAN can invoke the 2006-2013 tariff to get paid for the future”. It was of the view that this was an enforcement issue and as such, outside the power of the Board. The Board was also of the opinion that a court rather than the Board, was the best forum to deal with the issues raised. (i) Statement Of Royalties To Be Collected By SODRAC For The Reproduction, In Canada, Of Musical Works Embodied Into Cinematographic Works For The Purposes Of Distribution Of Copies Of The Cinematographic Works For Private Use Or Of Theatrical Exhibition For The Years 2009 To 2012 (SODRAC Tariff No. 5), Copyright Board of Canada, July 5, 2013 This decision involves the redetermination by the Board of the tariff for reproducing music on DVDs for private use under SODRAC’s Tariff 5 for the years 2009-2012. The Board had previously certified the tariff and then, subsequently, as a result of an application by the LEGAL_1:29245128.3
  • 46. 42 Association of Film Distributors and Exporters (“CAFDE”), the Board suspended the application of the tariff on the basis that: its earlier decision contained an error that the Board had the power to correct; and the decision was rendered in breach of procedural fairness with the result that the tariff was null and void. As a result, the tariff for reproducing music on DVDs for private use had to be redetermined (theatrical copies were not in issue). In setting the tariff, the Board had to choose between two competing proposals, one put forward by SODRAC and the other put forward by CAFDE, and this was the focus of the decision. SODRAC requested that the distributors targeted in Tariff 5 pay the same royalties that had already been certified for CBC. The CBC rates were cents-per-minute, per-copy rates, and differentiated between feature music and background music. The rates proposed by CAFDE were cents-per-copy, and did not distinguish between feature music and background music. In addition, the rates proposed by CAFDE were much lower. Both proposals included tiered rates. The Board held that the CAFDE proposal was “unreasonably low and the proposal is slipshod”. The Board held that the CBC rate schedule was prima facie fair since the Board had already certified it and that it was fair to “import the CBC rate schedule into SODRAC Tariff 5”. However, in order to accommodate CAFDE as a result of certain issues it raised, the Board decided to provide distributors with an option, which could be exercised once a year, in advance, to either be bound by the CBC rate schedule, or alternatively, a tiered rate schedule with a single rate (CAFDE had been proposing a single rate). The Board then went on to develop a tiered rate schedule containing a single rate based on the rates in the CBC schedule. An application for judicial review of the Board’s decision was filed on August 6, 2013 by the Canadian Association of Film Distributors & Exporters (Court File No. A-265-13). INDUSTRIAL DESIGNS 1. Federal Court (a) Zero Spill Systems (Int’l) Inc. v. 614248 Alberta Ltd. (Lea-Der Coatings), 2013 FC 616 The plaintiffs brought an action for infringement of a number of patents and an industrial design registration, all for products related to oil field fluid containment. With respect to the industrial design, the design at issue was for a fluid catchment tray or line pipe tray that would capture LEGAL_1:29245128.3
  • 47. 43 escaping fluid in a tray cavity located beneath supported sections of drill pipe as they were disconnected on the ground (the “793 Design”). In addition to the allegations of patent infringement made against the various defendants, the plaintiff alleged that the defendant Bill Heide and his companies (the “Heide Defendants”) had infringed the 793 Design by selling a product that was substantially similar in appearance. The Heide Defendants were businesses in the plastics industry selling competing products, which they alleged did not infringe the plaintiff’s patents or the 793 Design. The Court dismissed the action and held that one of the patents at issue was invalid. With respect to the allegations concerning the 793 Design, the Court found that the plaintiff’s industrial design had not been infringed. While the Heide Defendants’ competing pipe tray product bore a close resemblance to the 793 Design, the common features were all fundamentally functional. None of the distinctive non-functional features of the 793 Design had been copied. (b) Bodum USA, Inc. v. Trudeau Corporation (1889) Inc., 2013 FC 128 The defendant in an unsuccessful Industrial Design infringement suit sought a costs award under Rule 400 of the Federal Courts Rules. The defendant sought a lump sum of $250,000, representing 50% of its costs, plus disbursements of slightly over $40,000. The plaintiff argued this amount was disproportionate and that costs should be assessed based on Column III of Tariff B of the Rules. The Court awarded a lump sum of $90,000, inclusive of disbursements and taxes. The Court considered that it was bound by a previous decision in the case that the defendant’s settlement offer satisfied the requirements of Rule 420. The plaintiff did not formally abandon its unfair competition argument until the last day of the trial, so the defendant could not be faulted for preparing to respond to that argument. However, the case was not particularly long or complex and the fees claimed by the defendant were excessive. LEGAL_1:29245128.3

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