For those who are interested in recent cases and developments about copyright and related matters there have been several developments since the last entry.
The Supreme Court of Canada Grants Leave
In York University v. The Canadian Copyright Licensing Agency 174 C.P.R (4th) (FCA) 1leave to appeal to the Supreme Court of Canada has been granted. It appears that issues to be considered by the court include the following
- When determining whether copying in the educational context constitutes “fair dealing” (and thus not infringement) under ss. 29, 29.1 and 29.2 of the Copyright Act should the analysis be conducted from the perspective of the ultimate users (students), or from the perspective of the educational institution they attend;
- When determining whether copying in the educational context constitutes “fair dealing” under ss. 29, 29.1 and 29.2 of the Copyright Act, should the analysis refrain from conflating factors;
- For institutional fair dealing guidelines to be “fair” for the purposes of ss. 29, 29.1 and 29.2 of the Copyright Act, is there an obligation for an educational institution to implement safeguards to ensure compliance with the guidelines themselves; and
- Are tariffs approved by the Copyright Board under Part VII of the Copyright Act merely voluntary licence terms that users can “opt into,” or are they enforceable by a collective society against all users who copy works without lawful authority.
Broadened Jurisdiction for the Federal Court
In Salt Canada Inc. v Baker 2020 FCA 215 the Federal Court of Appeal has confirmed that the Federal Court can interpret contracts between private citizens as long as it is done under a sphere of valid federal jurisdiction vested in the Federal Court. In the absence of a specific statutory grant of jurisdiction to the Federal Court, parties cannot assert a contractual claim in the Federal Court against another private party to obtain a remedy. But where a grant of jurisdiction is present, parties can claim a remedy even if their entitlement turns on the interpretation of an agreement or other instrument.
Who is a Properly Qualified Expert?
In Rallysport Direct LLC v 242508 Ontario Ltd 2020 FC 794 the Federal Court has confirmed based on existing case law that a properly qualified expert is someone“who is shown to have acquired special or peculiar knowledge through study or experience in respect of the matters on which he or she undertakes to testify” They also must provide an impartial, independent, and unbiased opinion and not advocate for a particular party.
Concerns related to the independence and impartiality of an expert can diminish the weight of the expert's evidence, and in some extreme cases justify excluding it.But the admissibility threshold is“not particularly onerous”and is met by the otherwise-qualified expert testifying under oath that they recognize and accept their duty to the Court.
Determining the Amount of Statutory Damages
In Rallysport Direct LLC v 242508 Ontario Ltd 2020 FC 794 the Federal Court said the actual and statutory damages should not be conflated. Statutory damages are not intended to be 1:1 proportional with provable“but-for”losses; rather, they can encompass both provable economic losses and additional factors such as deterrence. Determining the quantum of damages is not a precise science.
TheCopyright Actprotects the right of copyright owners to control who uses their works. Accordingly, any actions that infringe this right, resulting in an unquantifiable loss of control, are best addressed in the context of deterrence, rather than in estimated license fees.
Deterrence ensures misconduct does not go unpunished simply because but-for causation cannot be proven for each infringement. Statutory damages“must be sufficiently high to serve a salutary message and deter future infringements on the part of the defendants and other parties”. This is especially sowhere technology makes it easy to infringe. Where a defendant continues to infringe a plaintiff's works for at least two years despite repeated warnings to cease and desist, there is a need to deter not only the defendant's infringements, but also those of others in similar circumstances.
The onus will be on the defendant to establish that an award of the minimum prescribed amount would result in a total award that is grossly out of proportion to the infringement. In making such a determination an analysis must be carried out relating to the alleged gross disproportionality which considers all of the facts of the case.
Amendments to Importation Provisions of the Copyright Act
The Canada–United States–Mexico Agreement Implementation Act S.C 2020, c.1 implements the Agreement between Canada, the United States of America, and the United Mexican States, which entered into force on July 1, 2020. Section 44.01 of the Act dealing with detention of copies by a customs officer has been amended to delete the exception relating to copies in customs transit control or customs transhipment control in Canada. In addition, section 44.04 dealing with the provision of information to a copyright owner has been amended to include the name and address of any other person involved in the movement of the copies.
Copyright in Trademarks or Logos
If copyright subsists in the trademark or logo which has been assigned to the trademark owner by the author of the work subsection 14(1) of the Copyright Act will apply and the assignment does not operate to vest in the assignee any rights in the copyright for more than 25 years after the author's death, and the reversionary interest, notwithstanding any agreement to the contrary, devolves on the author's legal representatives as part of the author's estate. Presumably this provision has no effect on the trademark rights under the Trademarks Act.
Extension of the Term of Copyright
When the Canada-United States-Mexico Agreement was finalized Canada was required to extend the term of protection for anonymous and pseudonymous works, cinematographic works, performances fixed in sound recordings and sound recordings. This has been done. Canada is also obliged to extend the general term of protection granted to authors to the life of the author plus 70 years but Canada has two and half years from the in force date of the Agreement to do this and it has not yet been done.
The extensions that have been made do not have the effect of reviving the copyright or a right to remuneration in any work, performer's performance fixed in a sound recording or sound recording in which the copyright or the right to remuneration had expired on July 1, 2020.1
Estoppel and No Challenge Clauses
In Loops v Maxill Inc Loops2 it was alleged that contrary to a previous settlement agreement, Maxill Canada had directly or indirectly attacked the validity of or assisted another person in attacking the validity of intellectual property, namely a patent, owned by Loops which Maxill Canada agreed would not attack the validity of or assist any person in attacking the validity of, either directly or indirectly. Loops sought an interlocutory injunction to enforce the provision of the settlement agreement. The court categorized the provision as a restrictive covenant.
This type of provision is common to settlement agreements relating to all types of intellectual property disputes including copyright
The court said in cases where the injunction sought involves the enforcement of a restrictive covenant, the moving party must show a strong prima facie case. If the moving party demonstrates a clear breach of the covenant, the second and third parts of the test may not need to be proven.
The restrictive covenant must be reviewed in light of the circumstances surrounding the contract and the applicable principles regarding the enforceability of restrictive covenants. The court must consider whether the restrictive covenant is reasonable both in the interests of the parties to the covenant and the interests of the public;
The onus is on the party seeking to enforce the restrictive covenant, to establish that it is reasonable in the interests of the parties. The onus for establishing that it is not reasonable in the public interest is on the party opposing the enforcement.
The court was not satisfied that the wording of the restrictive covenant was so “clear and unambiguous” that it supported the interpretation sought by Loops. Maxill's US affiliate which was attacking the validity of the patent was not mentioned in the covenant.
From Loops' perspective, the restrictive covenant was reasonable, however after reviewing US and UK decisions the court concluded that the covenant was not reasonable in the public interest since if the covenant was enforced the court would be precluded from considering the legal foundation the complaint was based on and you cannot infringe an invalid patent.
Claiming relief in Action Claiming Breach of Trademark and Copyright
A plaintiff in such a case is entitled to separate remedies for the breach of both the Trademarks Act and the Copyright Act.3
Accounting for Profits
In Nova Chemicals Corporation v. Dow Chemicals Company4 the Federal Court of Appeal provided a detailed analysis of the guiding principles that underlie the law regarding accounting of profits. The Court said, “absent some exceptional or compelling circumstance or persuasive expert evidence to the contrary in a particular case, the full cost method is the appropriate approach to deducting costs in an accounting of profits” Not only incremental costs, but also fixed costs, are deductible.5
New Offence for the Removal or Altering of Rights Management Information
The Canada-United States-Mexico Agreement Implementation Act6 has added a new offence relating to the removal or altering of rights management information.
Expediting Proceedings before the Copyright Board
Effective December 4, 2020 a new government regulation proscribes time limits for matters before the Copyright Board. In a tariff proceeding with no hearing, the Board is required to make its final decision before the effective period of the proposed tariff begins.7
In a tariff proceeding where a hearing on the matter is held as well as in an individual dispute proceeding (in which a hearing on the matter is always held), the Board is required to make its final decision no later than 12months after parties present their final submissions to the Board. 8
The Board is also required to issue a notification as to whether or not a hearing will be held for a given tariff proposal no later than three months after its publication. 9 This notification measure will help clarify the timelines applicable to decisions for all parties.
The Necessity to Identify with Precision Information Alleged to be Confidential.
In The Racing Partnership Ltd v. Sports Information Services Ltd10 the English Court of Appeal said the starting point in any confidential information case is to identify with precision the information which is alleged to be confidential. Experience shows that claimants are apt to make unfocused allegations of misuse of confidential information, and that when they are required precisely to identify the allegedly confidential information, it can turn out that the information is either not protectable or has not been misused. Moreover, even if confidential information has been misused, it is necessary precisely to identify what has been misused when it comes to considering remedies for such misuse, such as an injunction.
Footnotes
1. Section 34, S.C. 2020, c. 1.
2. 2020 ONSC 971
3 . Biofert Manufacturing Inc. v. Agrisol Manufacturing Inc 2020 FC 379,175 C.P.R. (4th) 1 at para.221; Popsockets LLC v. Case World Enterprises Ltd., 2019 FC 1154 (F.C.) at para 39.
4 2020 FCA 141 (F.C.A.)
5 At paragraph 164.
6. S.C. 2020, c. 1, s. 30
7. Time Limits in Respect of Matters Before the Copyright Board SOR/20202-264 section 2
8. Time Limits in Respect of Matters Before the Copyright Board SOR/20202-264 section 2-3
9. Time Limits in Respect of Matters Before the Copyright Board SOR/20202-264 section 5
10 2020 EWCA Civ 1300 at para. 49 and see Shenzhen Senior Technology Material Co Ltd v. Celgard, LLC 2020 EWCA Civ 1293 at para.32-33
Originally Published by GSNH, February 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
