Intellectual Property Law

The appellant infringed a patent held by the respondents for metallocene linear low-density polyethylenes (thin but strong plastics).

Following a liability finding, a reference judge awarded the respondents an accounting of profits equal to the appellant's actual revenue minus actual full costs, and also awarded springboard profits — profits earned post-patent-expiry causally attributable to infringement during the patent period.

The majority dismissed the appeal, holding that an accounting of profits requires disgorgement of all profits causally attributable to the invention using a three-step framework; the appellant's concession that no non-infringing option existed precluded reduction of the award; and springboard profits are legally permissible and factually supported.

Côté J. dissented, arguing the differential profit approach should have been available and the matter remitted to the Federal Court.

The appellants challenged the Federal Court of Appeal's decision setting aside the Copyright Board of Canada's tariff determination, which had held that s. 2.4(1.1) of the Copyright Act created a separate compensable 'making available' right triggering royalties both when works are made available online and again when downloaded or streamed.

The majority held that the Board's interpretation violated the principle of technological neutrality and was inconsistent with the text, structure, and purpose of the Act; correctness was the applicable standard of review as concurrent first instance jurisdiction between courts and the Board constitutes a sixth category of correctness review.

Section 2.4(1.1) was interpreted as clarifying only that s. 3(1)(f) applies to on-demand streams and that a work is performed as soon as it is made available for on-demand streaming, with Canada's obligations under art. 8 of the WIPO Copyright Treaty satisfied through a combination of existing performance, reproduction, and authorization rights.

The concurring minority would have applied a reasonableness standard but agreed the Board's decision was unreasonable for disregarding binding precedent and the principle of technological neutrality.

Appeal dismissed.

A copyright collective society sought to enforce an interim tariff against a university that had refused to continue as a licensee, while the university counterclaimed for a declaration that its fair dealing guidelines protected its copying activities.

The Court held that Board-approved tariffs are not mandatory against users who choose not to be licensed, as the relevant statutory provision only gives a collective society the right to collect defaulted payments from voluntary licensees.

Because the tariff was unenforceable, there was no live dispute to ground the university's request for declaratory relief on fair dealing.

The Court nonetheless identified significant errors in the lower courts' fair dealing analysis, which wrongly focused exclusively on the institutional perspective rather than the perspective of the students as the ultimate users.

A land surveying company brought a class action on behalf of Ontario land surveyors whose plans of survey had been digitized, stored, and copied by the province's electronic land registry service provider without payment of royalties.

The appellant argued that Crown copyright under s. 12 of the Copyright Act did not vest in the registered and deposited plans.

The majority held that the comprehensive provincial land registration regime gave the Crown complete control over the publication process, satisfying the requirements of s. 12.

A concurring minority agreed on the outcome but adopted a different interpretive framework, requiring both that the work be published 'by or under the direction or control' of the Crown and that the work qualify as a 'government work' serving a public purpose.

The appeal was dismissed without costs.

The plaintiff, Knowmadics, sought an interim injunction to restrain the defendants, Lisa Cinnamon and LDX Inc., from offering for sale and selling certain software ("cover app") and requiring its removal from their website.

Knowmadics alleged copyright infringement and breach of confidentiality agreements regarding software developed while Cinnamon was an employee and contractor.

The defendants claimed prior ownership of the cover app.

The court applied the three-part test for an interim injunction, finding a serious issue to be tried regarding ownership and NDA infringement, irreparable harm to Knowmadics due to customer confusion and devaluation of investment, and that the balance of convenience favored Knowmadics.

The motion for interim relief was granted.

Appeal from a trial judgment dismissing the appellant's action for misuse of confidential information and spoliation.

The appellant alleged that the respondent West Face Capital Inc. improperly obtained and used confidential information about the appellant's bid to acquire WIND Mobile Inc., allegedly obtained from a former employee who moved to West Face.

The trial judge dismissed all claims, finding that the appellant failed to prove that confidential information was provided to West Face or that any such information was used in West Face's successful competing bid.

The trial judge also found that the appellant's choice to terminate negotiations due to a break fee demand, rather than West Face's competing bid, caused the failure of the appellant's acquisition.

The Court of Appeal upheld the trial judgment and dismissed the appeal, as well as the application for leave to appeal the costs orders.

The plaintiff, Oz Optics, alleged that former employees Jing Ru Zhang and Nai-Guang Wang, along with their daughter Chen Wang, appropriated confidential information upon their resignation and sold it.

Both the plaintiff and defendants brought motions for further and better affidavits of documents.

The court ordered the defendants to produce records relating to cash receipts for 2010-2015 and Chen Wang to provide an affidavit of documents with similar records.

The court also ordered Oz Optics to produce annual and monthly sales figures and financial statements for 2010-2015, while denying many of the defendants' broader document requests based on proportionality.

The plaintiff, One Street Digital Inc. (OSD), brought a motion seeking a final order declaring its ownership of proprietary software ("Foundation Framework"), restraining the defendant, Berkeley Payment Solutions Inc. (BPS), from using or altering it, and requesting costs.

The court dismissed OSD's motion, finding that OSD failed to provide sufficient evidence to precisely identify the non-copyrighted proprietary software it claimed.

The court also determined that the relief sought was analogous to injunctive relief, and OSD did not demonstrate irreparable harm, as potential damages related to licensing fees and intellectual property value could be adequately assessed at trial.

The plaintiff, Arnold Hennessy Holdings Inc., moved for summary judgment against Flapperless Inc. and Philip Hennessy for unpaid royalties under licensing agreements for "tip-tank" toilet technology.

The defendants argued the claim should be brought by Arnold Hennessy's estate, was statute-barred, and that an oral agreement amended the written contracts.

They also raised procedural issues regarding disclosure and counsel.

The court dismissed the defendants' preliminary objections and found Hennessy Holdings to be the proper plaintiff.

The action was deemed not statute-barred, as the plaintiff discovered the breach within the limitation period.

The court rejected the existence of an oral agreement to vary the written terms, finding Philip Hennessy's uncorroborated evidence insufficient.

While Philip Hennessy was a proper party, the court found no basis to pierce the corporate veil to hold him personally liable for Flapperless's financial obligations.

The plaintiff was granted judgment for unpaid royalties against Flapperless Inc. but denied a declaration seeking to enjoin the transfer of intellectual property to Philip Hennessy, as the transfer had already occurred upon Arnold Hennessy's death and damages were an adequate remedy.

The plaintiff, Keatley Surveying Ltd., brought a class action against Teranet Inc., alleging copyright infringement for scanning, copying, and making available online plans of survey registered in Ontario's electronic land registry system.

Both parties moved for summary judgment on common issues, primarily concerning whether copyright in the plans belonged to the Province of Ontario under s. 12 of the Copyright Act upon registration or deposit.

The court held that while copyright subsisted in the plans, it belonged to the Province of Ontario pursuant to s. 12 of the Copyright Act, as a result of their registration or deposit in the land registry office, which transferred ownership of the property, including copyright, to the Crown.

Consequently, Teranet, acting under license from the province, did not infringe copyright.

The defendant's motion for summary judgment was granted, and the class action was dismissed.

The respondent father brought a motion for a summary decision on whether settlement funds of $175,000 USD received for copyright infringement of his musical composition constituted "income" for child support purposes under the Child Support Guidelines.

The applicant mother cross-moved, arguing the funds were income or, alternatively, that income should be imputed.

The court held that the settlement funds constitute "income" for child support purposes, even if not taxable for income tax purposes, as they represent compensation for lost royalties and profits from the copyright.

The court allowed reasonable deductions for expenses directly incurred in recovering the damages and addressed tax grossing-up and currency conversion issues.

The Court considered whether a patent specification for erectile-dysfunction treatment satisfied disclosure obligations under s. 27(3) of the Patent Act where cascading claims ended with two individual compounds but did not identify the tested effective compound.

The Court held sufficiency must be assessed on the specification as a whole and not by isolating a single surviving claim under s. 58.

Because a skilled person would need further testing to determine which claimed compound worked, the specification did not enable successful use of the invention from the disclosure alone.

The appeal was allowed, the prohibition order was set aside, and the patent was held invalid for insufficient disclosure.

The appeal concerned whether downloading a video game containing musical works over the Internet engages the communication right under s. 3(1)(f) of the Copyright Act in addition to reproduction rights.

A majority held that applying a separate communication tariff to permanent downloads would offend technological neutrality because downloading a durable copy is functionally equivalent to purchasing a copy in physical form.

The majority interpreted the communication right as historically tied to performance-based activity and set aside the tariff certification as applied to downloads.

The dissent would have treated communication and reproduction as distinct independent rights both engaged by Internet downloads.

In a copyright tariff appeal concerning online music services, the Court addressed whether on-demand transmissions over the Internet constitute communication to the public by telecommunication under the Copyright Act.

The Court held that individual user-initiated streaming transmissions are not private in character when viewed as repeated transmissions to members of the public, and therefore remain within the communication right.

In light of the companion ruling on downloads, the download issue was moot and the appeal succeeded only to that extent.

The Court further held that correctness applied to the legal question under the statutory scheme, while a concurrence preferred reasonableness deference to the specialized tribunal.

The appeal concerned whether online music previews streamed before purchase are fair dealing for the purpose of research under the Copyright Act.

The Court held that research must be interpreted broadly and assessed from the user perspective, not only from the service provider perspective.

Applying the CCH framework, the Court found the previews fair in purpose, character, amount, alternatives, nature of the work, and market effect.

Because the previews were short, lower quality, temporary, and supported consumer selection without substituting for purchases, no additional royalties were payable for them.

In an appeal from judicial review of a copyright tariff ruling, the Court examined whether teacher-made classroom photocopies qualified as fair dealing for research or private study under s. 29 of the Copyright Act.

The majority held the tribunal unreasonably applied key fairness factors by separating teacher and student purposes, assessing amount on aggregate copying rather than excerpt-to-work proportion, treating additional textbook purchases as a practical alternative, and inferring market harm without an adequate evidentiary link.

Applying reasonableness review, the Court concluded the unfairness determination could not stand and remitted the matter for reconsideration.

A dissent would have deferred to the tribunal’s multifactor factual assessment and would have upheld the result despite one flawed effect-of-the-dealing finding.

In a copyright appeal, the Court considered whether pre-existing sound recordings embedded in film and television soundtracks remain subject to equitable remuneration under s. 19 of the Copyright Act when the soundtrack accompanies a cinematographic work.

Applying modern statutory interpretation, the Court held that the soundtrack exclusion in the definition of sound recording captures pre-existing recordings in that context.

The Court found this reading consistent with the legislative scheme, parliamentary intent, and international obligations under the Rome Convention.

As a result, the proposed tariffs could not be certified for performances or communications of recordings when accompanying cinematographic works.

On a motion in related leave applications, the moving parties sought an order requiring multiple opposing parties to post $3,250,000 as security for amounts payable if appeals were unsuccessful.

The Court held that security under s. 60(1)(b) of the Supreme Court Act has traditionally been symbolic and that the substantial security requested is ordinarily addressed in stay proceedings under ss. 65 or 65.1 or equivalent provincial provisions.

The Court found that existing stay conditions imposed by the court below continued to govern and that the motion effectively attempted to review that decision.

The Court also emphasized access-to-court considerations in the leave framework.

The motion was dismissed without costs.