Category Archives: Businesses

Court Rejects Outright Infringement Proceedings Against IKEA Relating to Stuffed Animals

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The Québec Superior Court (the “S.C.”) recently threw out a copyright infringement lawsuit alleging that IKEA had copied a line of stuffed animals from a local artist. Notwithstanding the resemblance between the concepts of the stuffed animals at issue, the court rejected the suit offhand, because it did not relate to any work recognized as such by the Canadian Copyright Act.

The case at issue, Bouchard v. Ikea Canada (2021 QCCS 1376), which pitted a Québec-based artist to the international retailer, alleged that IKEA had illegally copied a line of stuffed animals from Ms. Bouchard, which it then sold in its stores as the Sogoskatt collection. Faced with what she perceived to be a copy of her works, Ms. Bouchard filed copyright infringement proceedings against several parties, including IKEA, before Québec courts.

Unfortunately for Ms. Bouchard, Ikea managed to torpedo her lawsuit at an early stage. To do so, it filed a motion to throw out the case outright because, at law, there really was no real issue to be tried. After examining the motion at issue, the S.C. agreed this case did not present any real issue the judicial system should bother analyzing and taking on. Since this case was introduced as a copyright matter, without any “works” to justify the proceedings at issue, the courts should refuse to further hear the case. Period.

The explanation of this rejection of the case resides in what Ms. Bouchard argued was hers and which IKEA had illegally copied. Namely, the artist testified that, notwithstanding IKEA’s own stuffed animals being different from her own creations, she considered that there were substantial similarities reproducing the distinctive “style” or “look” of her own line of stuffed animals. Unfortunately for her, as you probably know, copyright law does NOT deal well with abstracts like inspiration, ideas, concepts, styles, etc. Rather, copyright is generally concerned with specific works being copied to a substantial degree. Before looking at the substantial degree to which a work has been copied, however, you first need to have… well… a “work”, as defined by the Copyright Act. No work, no possibility of any infringement.

In the case at issue, the works which the artist alleged had been copied had not been copied, or if there was a copy, it was the copy of a style, of a certain look or that of a certain way to make stuffed animals. This, of course, did NOT constitute a copy of the works (the actual stuffed animals) themselves, only of a sort of concept for stuffed animals such as these.

As a result, the S.C. had little trouble throwing out Ms. Bouchard’s case against IKEA. Sorry, but alleging you have a monopoly over a certain style of something does not a monopoly make. Sure, you may be the inventor of a new style or concept of something, but that does not mean you have the exclusive rights to it, at least certainly not by virtue of copyright law. Had this case been presented based on invention or patent rights, industrial designs or trademarks, it may have stood a chance but copyright does NOT extend to abstracts like concepts, ideas and styles. It never did and never will.

Canada Opts for New Digital Services Tax

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The media is reporting that Canada’s 2021 budget which was recently made public includes the idea of implementing a digital services tax (“DST”) that will be imposed on foreign businesses providing digital services to Canadians. This tax will, of course, apply to companies and services such as Netflix, Spotify and Amazon Prime, but also to other businesses that generate revenues through matching sellers with buyers online, dealing with user-generated content, advertisements through online platforms, and selling or licensing user data.

The rate of this new tax would be set at 3% of the income these businesses generate from digital services provided to Canadians. This, the Canadian government believes, will allow Canada to obtain its fair share of the revenues being generated from streaming and online services, which are often provided to Canadians by foreign (usually American) companies.

This new tax will come into effect on January 1, 2022, and is expected to bring in about 500 million dollars per year for the Canadian government. With figures like these, one has to admit it may be hard to resist for a country like Canada.

Statutory Damages Awarded for Copyright Infringement Through Summary Proceedings

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The Federal Court recently provided us with a decision, in Patterned Concrete Mississauga Inc. v. Bomanite Toronto Ltd. (2021 FC 314), awarding both an injunction and damages through summary proceedings rather than the more complex (and costly) type of pleadings before this court. The decision at issue stems from the alleged copying by a competitor of certain forms used to contract with customers. Faced with the apparent copying of its forms by a competitor, the plaintiff requested that the Federal Court not only enjoin such copying but also that it grant the petitioner statutory damages. Fortunately for the plaintiff, it successfully proved its employee’s creation of the original forms, coupled with the transition of a long-time employee to the defendant’s organization, which explained how the documents were likely passed between the businesses at issue. Faced with such facts, the judge accepted the plaintiff’s position that its copyrights in those works had been adequately demonstrated, as was the copying by the defendant. The judge did so in the context of summary proceedings which may allow resolution of a claim, before the Federal Court, in months rather than years, at a fraction of the cost. It seems worth mentioning that the judge did so notwithstanding an attempt by the defendant to set aside the registration certificates obtained by the plaintiff immediately prior to its filing of legal proceedings. Indeed, the judge held such certificates could be taken into consideration upon ascertaining the copyrights of a plaintiff, even in cases where they were obtained concomitantly with the filing of proceedings, especially in the absence of evidence by the defendant contradicting ownership of copyright by the plaintiff, as had been the case here. The court in this case also easily concluded that the forms at issue qualified as works protected by copyright owned by the plaintiff, notably because of testimony from the actual creator of the original forms. This allowed the court to find infringement, including by side-by-side comparison of the documents at issue, which showed clear acts of reproduction. This allowed the court to award an injunction coupled with statutory damages of $24,000, namely $8,000 for each work that had been copied. This case is part of a trend showing a growing willingness by the Federal Court to award both injunctions and damages in matters of copyright, even through summary proceedings.