Dutil, Hamilton, Lavallée

Appeal from a judgment of the Superior Court. The principal appeal is allowed in part and the incidental appeal is dismissed.

The appellants, the creators and owners of a psychometric test called the AEC Method (AEC), allege that the respondents, former distributors of the test, copied their method and infringed the distribution contract between the parties. The trial judge found there was infringement within the meaning of the Copyright Act (R.S.C. 1985, c. C-42). He held, however, that the appellants did not have the interest to act against the respondents on that basis because they did not own the copyright in the plagiarized work. According to the judge, the modified work created by Fabart was based on a work owned by Cleaver. Cleaver was the sole owner of the copyright in that work and in the modified work, by virtue of the non-exclusive licensing agreement with the appellants. The appellants argue that the judge erred in finding that this license does not give them the interest to claim damages for infringement. They also argue that the judge erred in rejecting their claims based on unfair competition.

The judge did not err in finding that the appellants created a [translation] “collection” or  [translation] “arrangement”, which had an added value that transcends the mere sum of its components. Indeed, to qualify as a “work”, a creation must be more than a copy, but it need not also be [translation] “novel or unique”. The essential element [translation] “is the exercise of skill and judgment” by its author, which necessarily implies intellectual effort.

The judge, however, made a palpable and overriding error in finding that the appellants did not have the interest to bring proceedings to enforce this protection because all of the components of the AEC Method are covered by Cleaver’s non-exclusive license. According to the evidence, the appellants’ complete and comprehensive work is not a modification of Cleaver’s work, but a new work, even though it was inspired by and derived from Cleaver’s model. The appellants, as authors, own the copyright in this new and original work (s. 13(1) of the Copyright Act) and therefore have the legal interest required to sue the respondents for infringement (s. 41.23 of the Act).

The judge’s conclusion that the respondents infringed the AEC Method is based on the evidence and is consistent with the law.

What remedy should be awarded to the appellants based on infringement?

Under s. 38.1(1) of the Copyright Act, statutory damages are awarded based on the number of works infringed. All infringements that can be associated with a work are therefore treated as a whole when awarding statutory damages.

In this case, the respondents should have confined themselves to suing the appellants for the unilateral abusive and inappropriate breach of the distribution contract binding the parties, and avoided knowingly infringing the AEC Method, thereby acting against good faith requirements, and causing damage to the appellants. The respondent corporations should therefore be condemned to pay the maximum amount provided for copyright infringement, that is, $20,000.

Unfair competition

Furthermore, the appellants have established a breach of the Trade-marks Act (R.S.C. 1985, c. T-13) and the resulting damage from the infringement of their trademark but failed to quantify that damage. It is nevertheless possible to award them symbolic damages under s. 53.2 of that Act.

Given the facts of this case and the nature of the allegations that can be made against the respondents under the Trade-marks Act, it is reasonable to condemn the respondent corporations solidarily to pay a lump sum of $10,000.

Text of the decision: http://citoyens.soquij.qc.ca