The Federal Court Imports Copyright Infringement by Inducement into Canadian Law

The Federal Court recently provided us with an interesting copyright decision, in Bell Canada v. L3D Distributing Inc. (2021 FC 832), a case that dealt with devices called set-top boxes (“STB”) used to stream content on TVs. In that case, a group of Canadian companies was sued by content owners and licensees, to stop these defendants from continuing to market and sell their STB devices in Canada, and ideally also obtain some compensation based on infringement of copyrights.

To make a long story short, in 2016 the group of plaintiffs that included Bell and Videotron sued some Canadian businesses marketing STBs in Canada, based on fact that such devices were largely being used by purchasers to infringe copyrights as to pirated TV shows and movies. The plaintiffs basically argued that availability of STBs made it too easy for Canadian consumers, allowing them to find, download and watch pirated content on their TVs. Indeed, thanks to these devices and instructions provided by the defendants at issue, Canadians could too easily get round the usual predictions against availability of pirated content -hence the proceedings filed before the Federal court.

We should mention that the defendants at issue not only marketed STBs in Canada but did so by promotion and information that made it clear that the typical function and use of these devices was essentially to obtain access to pirated content. In short, there was nothing subtle about the fact that activities of the defendants relied heavily on benefiting from allowing consumers to infringe copyrights on pirated content placed online by third parties. Looking at the promotional and other materials produced by defendants, it was clear that the main use of the devices at issue was to secure access to pirated content, particularly once purchasers installed a third-party add-on recommended by the defendants to enable pirating.

The federal court started by concluding that the defendants had in fact infringed copyrights over thousands of series and movies, by essentially making them available by telecommunications to Canadians. For the court, lack of actual copying, uploading or downloading may be disregarded in a blatant case such as this, as the defendants basically made content available through their devices and activities. Even though the defendant did not actually do any of the specific acts reserved to copyright owners by the Canadian act, the court held that the defendants’ activities related to STBs basically amounted to making pirated content available, a conclusion which many now question, including it seems to go beyond the actual provisions of the Copyright Act.

Interestingly, the Federal court here also went as far as holding that these defendants infringed copyrights not only directly (by making pirated content available, as described above), but also by merely encouraging, or rather inducing, Canadian users who purchased STBs to seek, download and watch pirated content placed online by third-parties. This is new law for Canada, as the Canadian Copyright Act does not contain any provision dealing expressly with inducement as a basis for finding infringement, contrary to the Patent Act, for example. For the court, the fact that Canadian common law generally provides for inducement as a basis for liability justifies importing that legal concept into copyright law, notwithstanding the absence of such a concept in our piece of copyright legislation.

Based on these findings of infringement, the court granted injunctive relief (of course) and awarded the plaintiffs 31 million dollars in statutory damages, along with some punitive damages, for good measure. Ouch.

I should mention that, not too surprisingly, the decision at issue was the result of ex parte proceedings and was a default judgment. One may express doubts as to whether the result would have been the same had the defendants actually participated and made submissions.

At any rate, I guess we’ll just have to see whether Canadian jurisprudence does really continue to import here the concept of infringement by inducement in copyright matters.

Beware of Nick-of-time Copyright Registrations

In Canada, copyright registrations comes cheap, very cheap. Nevertheless,.businesses and creators seldom register their rights, at least until they’re faced with a known infringer and want to sue. A recent Federal Court shows us this may not be wisest course of action when it comes to adequately protecting one’s I.P. rights.

The case at issue is that of Patterned Concrete Mississauga Inc. v. Bomanite Toronto Ltd. (2021 CF 314), a case involving a copyright owner faced with copying of some of its business forms, by a competitor called Bomanite Toronto Ltd. Faced with a clear case of copying, the copyright owner sued for infringement and eventually won a judgment awarding $8,000 in statutory damages, for each work that had been copied.

In addition to the plaintiff managing to secure such a judgment through summary proceedings, this case is also a good example of how proper copyright registration may well play a role when attempting to sue for infringement.

Here, even though PCM had done the right thing by obtaining copyrights registration certificates, prior to actually suing, it had done so around the time it first contacted the eventual defendant Bomanite. Under such circumstances, courts will sometimes question the value of the registrations at issue, given that they may have been obtained with the specific purpose of suing a specific infringer, as opposed to being obtained in the normal course of protecting the business’ IP rights, for no particular other reason.

Fortunately for the plaintiff, here the defendant failed to properly argue against existence of the copyrights at issue and/or ownership of those copyrights. Had the defendant done so, the court may have been moved to set aside the registrations, something that may well have resulted in throwing out the whole suit. In the absence of any contradictory evidence, the court allowed the registration certificates to stand.

This recent case serves as a good reminder that creators and businesses may want to revisit their habit of only registering copyrights, once an infringement problem occurs. A much better approach may be to register copyrights (over important works, at least) either as they are created or, at the very least, on a on-going basis, for example by doing a periodic sweep through the business’ most relevant and/or valuable creations, and registering copyrights thereon.

Copyright registration, in Canada, costs next to nothing and can be done through a process that requires minimal resources and information.

No Infringement Through Rehashing Facts Taken from a Book Marketed as True Crime

The Federal Court recently provided us with a note-worthy decision relating to copyrights, in Winkler c. Hendley (2021 FC 498). This judgment relates to infringement proceedings as to a recent book that was written in large part by taking facts from an other book written about 70 years ago and entitled The Black Donnellys.

The main issue dealt with in this case involved determining whether borrowing facts from another book may, under Canadian law, amount to infringement if, say, the resulting narrative is basically the same. Though we know the answer to the foregoing question is that YES, similarities may amount to infringement if the structure and organization of a 2nd work is sufficiently similar to the original (including the sequence of events, etc.), this only goes for works of fiction. Indeed, whenever dealing with works of fiction, courts will generally be somewhat more critical of attempts by third-parties to copy facts and sequences of events, potentially finding infringement even when there has been no literal copy of text.

On the other hand, works which relate scientific or historical facts, for example, are treated somewhat differently by Canadian courts when assessing copyright infringement. Indeed, for these types of works, courts are generally opposed to allowing the original author from claiming exclusivity to the facts (included in his/her work), even if he/she may have been the first to publish about them. After all, human knowledge is built on reusing and discussing scientific or historical facts, for example -something Canadian courts have recognized over the years. In short, any author who pens something spelling out what may be described as scientific or historical facts should generally forget about any hope of claiming these very facts as his/her exclusive property; they basically become part of the common collective -essentially becoming part of the public domain.

The recent Winkler decision which we’re discussing in this post dealt with a work that was published years ago and thereafter promoted as part of the “True crime” genre, because it purported to tell the actual story of an specific Ontario family’s tribulations, at a certain time and place. Indeed, for 70 years during which the book at issue remained in print, its author and the publisher maintained it reflected actual events that really occurred during the XIXth Century, etc.

However, once the holder of the copyrights to the original book realized another author had seized upon the story of the Donnellys, litigation ensued in the context of which it soon became clear the book at issue may not have been as factual as one might think given how it has been marketed and promoted. Indeed, it turns out The Black Donnellys was not entirely factual; a large part of the events and “facts” described in the book having been invented by the author.

This lead the Federal Court in the decision at issue to refuse to entertain the notion that a 2nd author may have infringed the copyrights to the original book, under the circumstances of this case. Even though it was essentially a work of fiction, the court refused to consider the content of the original book as we would factual or historical works. Here, given how the original book was willingly presented and marketed, for so long, it simply did not make sense to allow the holder of the copyrights to suddenly claim that this book was really a work of fiction and, thus, deserving broader protection.

In effect, the Federal Court held here that the objective truth of what is contained in a book is not determinative, when it comes to ascertaining whether we should consider that specific work as being factual or fiction. It may suffice that the author held his/her work as being fact, to be able to rely on this, so as to be allowed to liberally borrow facts and narrative from such a work of authorship.

No, you can’t have your cake and eat it too.