Court File and Parties

COURT FILE NO.: CV-18-599966

RELEASED: 2019/10/15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Damon Pourshian,

Plaintiff

AND:

Walt Disney Company, Walt Disney Pictures Inc., Pixar Animation Studios, Disney Enterprises Inc., Disney Shopping, Inc., Walt Disney Studios Home Entertainment, Disney Consumer Products and Interactive Media, Walt Disney Studios Motion Pictures, and American Broadcasting Company, Inc.,

Defendants

BEFORE: Master Graham

HEARD: June 10, 2019

COUNSEL: G. Régimbald and M. Crichton, counsel for the plaintiff

T. Lowman and L.E.T. Horne, counsel for the defendants (moving parties)

REASONS FOR DECISION

(Defendants’ motion to stay action for lack of jurisdiction)

[1] INSIDE OUT is a feature-length computer-animated film made by Pixar and released in North America on June 19, 2015. It concerns the emotions of an 11 year-old girl named Riley as she copes with the adjustments in her life arising from her family’s move from Minnesota to California. The film portrays both Riley’s external and interior worlds, and her emotions of Joy, Sadness, Anger, Fear and Disgust take the form of anthropomorphised characters that interact as they attempt to influence her behaviour. The film won various awards including the Academy Award for Best Animated Feature.

[2] The plaintiff Damon Pourshian alleges that in 1998, while in high school, he conceived the idea of a film in which five of the protagonist’s organs, Heart, Stomach, Colon, Bladder and Brain, become personified characters that guide his behaviour. In 2000, while a student at the Faculty of Film and Television at Sheridan College in Oakville, Ontario, he wrote a screenplay and oversaw the production of a 14 minute film called Inside Out based on his idea. This film was shown widely at the College including at an annual public showcase of student work.

[3] In this action, Pourshian claims damages from the defendants on the basis that they have infringed his copyright in his film Inside Out, contrary to s. 27 of the Copyright Act, RSC 1985, c. C-42.

[4] On this motion, the defendants submit that because they are both incorporated and have their principal places of business in various American states, Pixar’s INSIDE OUT[^1] was made in California, and Canada’s Copyright Act has no extraterritorial application, this court should refuse to assume jurisdiction, service of the statement of claim should be set aside, and the action should be stayed. The defendants acknowledge that the claim against the defendant Disney Shopping Inc., which it is alleged distributed or sold merchandise related to the Pixar INSIDE OUT in Ontario, may proceed in Ontario.

[5] For these reasons, the motion to stay the action is dismissed with respect to the defendants Pixar Animation Studios, Walt Disney Pictures Inc. and Disney Shopping Inc. and granted with respect to all other defendants.

The statement of claim

[6] Pourshian’s claims include the following:

• A declaration that he is the owner of copyright in his screenplay, live theatrical production, and short film, each of which are titled Inside Out (“The Original Works”), and that the defendants have infringed those copyrights “by production, reproduction, distribution and communication to the public by telecommunication of the film INSIDE OUT” (“the Infringing Work”);

• An injunction restraining the defendants from “producing or reproducing, or authorizing the production or reproduction of any of the Original Works or any substantial part thereof” without his consent or authorization;

• Damages and an accounting of profits for copyright infringement.

[7] Pourshian pleads that he lives and works in Toronto, Ontario. The defendants are described as follows:

• Walt Disney Company is a Delaware corporation with its principal place of business in Burbank, California. It is the parent company of each of the other defendants. (statement of claim, paragraph 3)

• Walt Disney Pictures Inc. is a California corporation with its principal place of business in Burbank, California. It is a subsidiary film studio of Walt Disney Studios (which is not named as a party), is owned by Walt Disney Company, and releases and distributes films produced by the defendant Pixar Animation Studios. (paragraph 4)

• Pixar Animation Studios (“Pixar”) is a California corporation with its principal place of business in Emeryville, California. It is a subsidiary of Walt Disney Studios, is owned by Walt Disney Company, and is responsible for the filming and production of Walt Disney Company’s animated films. (paragraph 5)

• Disney Enterprises Inc. is a Delaware Corporation with its principal place of business in Burbank, California. It is the copyright owner of the version of INSIDE OUT alleged to be the Infringing Work and has various trademark registrations for INSIDE OUT in Canada and the U.S. (paragraph 6)

• Disney Shopping, Inc. is a Delaware Corporation with its principal place of business in Burbank, California. It is a subsidiary of the defendant Disney Enterprises Inc., and is responsible for the sale of Walt Disney Studios merchandise, including merchandise associated with its animated films. (paragraph 7)

• Walt Disney Studios Home Entertainment is a California corporation with its principal place of business in Burbank, California. It is the home video distribution division of the defendant Walt Disney Company. (paragraph 8)

• Disney Consumer Products and Interactive Media is a California Corporation with its principal place of business in Burbank, California. It is responsible for the merchandising and development of the physical products and “digital experiences” of the defendant Walt Disney Company, including those associated with the animated films of Walt Disney Studios. (paragraph 9)

• Walt Disney Studios Motion Pictures is a California corporation with its principal place of business in Burbank, California. It is the film distributor for Walt Disney Company responsible for the distribution, marketing, and promotion of films released by the defendants Walt Disney Pictures Inc. and Pixar Animation Studios and by Walt Disney Studios and other unidentified affiliates. (paragraph 10)

• American Broadcasting Company, Inc. is a New York corporation with its principal place of business in Burbank, California. It is responsible for the television distribution of Walt Disney Studios films released by the defendant Pixar and other of its affiliates. (paragraph 11)

[8] Pourshian then pleads:

• A description of Pourshian’s conception and production of his screenplay and short film Inside Out, including the premise of that work as summarized in paragraph [2] above, and his ownership of the copyright in the Original Works and his rights arising under the Copyright Act (paragraphs 12-28);

• That INSIDE OUT was produced by the defendants Pixar and Walt Disney Pictures Inc. (paragraph 30);

• That “the Infringing Work . . . was released widely in the US and Canada by WDPI [the defendant Walt Disney Pictures Inc.] on June 19, 2015” (paragraph 31), “ultimately grossing $365 million (US) in the US and Canada” (paragraph 32);

• A description of the Pixar INSIDE OUT (paragraphs 36-37);

• The particulars of the alleged similarities between the two works (paragraphs 39-61), and how the defendants could have gained access to Pourshian’s Original Works (paragraphs 62-71);

• His alleged damages as a result of the defendants’ infringement of his copyright in his Original Works (paragraphs 72-77).

[9] Finally, Pourshian pleads various sections of the Copyright Act (paragraph 77), and the various paragraphs in rule 17.02 of the Rules of Civil Procedure on which he relies for service of the statement of claim outside of Ontario (paragraph 78), on the basis that his claims relate to:

(1) personal property in Ontario, including the Original Works (rule 17.02(a));

(2) an injunction ordering a party to refrain from doing certain things, or affecting real or personal property in Ontario, including an injunction with respect to certain activities in relation to the Original Works (rule 17.02(i));

(3) authorization by or under the Copyright Act (rule 17.02(n));

(4) persons carrying on business in Ontario (rule 17.02(p)).

Applicable rules and statutes

[10] The defendants’ motion is to set aside service of the statement of claim and to stay or dismiss the action. Rule 17.02 addresses when a party may be served outside Ontario with an originating process, without a court order. I have included only those portions of the rule that could possibly apply in this case.

17.02 A party to a proceeding may, without a court order, be served outside Ontario with an originating process or notice of a reference where the proceeding against the party consists of a claim or claims,

(a) Property in Ontario – in respect of real or personal property in Ontario; . . .

(g) Tort Committed in Ontario – in respect of a tort committed in Ontario; . . . (Although this part of the rule is not pleaded in the statement of claim, it is one of the presumptive connecting factors to be considered under Van Breda, discussed below.)

(i) Injunctions – for an injunction ordering a party to do, or refrain from doing, anything in Ontario or affecting real or personal property in Ontario; . . .

(n) Authorized by Statute – authorized by statute to be made against a person outside Ontario by a proceeding commenced in Ontario; . . .

(p) Person Resident or Carrying on Business in Ontario – against a person ordinarily resident or carrying on business in Ontario; . . .

[11] The motion to set aside service is under rule 17.06(1) and (2):

17.06(1) A party who has been served with an originating process outside Ontario may move, before delivering a defence, notice of intent to defend or notice of appearance,

(a) for an order setting aside the service and any order that authorized the service; or

(b) for an order staying the proceeding.

(2) The court may make an order under subrule (1) or such other order as is just where it is satisfied that,

(a) service outside Ontario is not authorized by these rules;

(b) an order granting leave to serve outside Ontario should be set aside; or

(c) Ontario is not a convenient forum for the hearing of the proceeding.

(Sub-rule 17.06(2)(b) is not applicable because no order has been made granting leave to serve outside Ontario. Sub-rule 17.06(2)(c) is not applicable because the defendants submit only that the Ontario court should not assume jurisdiction over the action but not that another forum would be more convenient.)

[12] The motion to stay the action is under rule 17.06(1)(b) supra and s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 as amended:

106 A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.

[13] As stated, the plaintiff’s action is for damages for infringement of copyright under Canada’s Copyright Act, RSC 1985, c. C-42. The applicable sections of the Act are s. 3, which defines “copyright” and particularizes the sole rights of the owner of the copyright in a work, s. 27(1) which defines primary infringement of a copyright, and s. 27(2) which defines secondary infringement. These sections are:

3 (1) For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right

(a) to produce, reproduce, perform or publish any translation of the work,

(b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work,

(c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise,

(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,

(e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work,

(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,

(g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan,

(h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program,

(i) in the case of a musical work, to rent out a sound recording in which the work is embodied, and

(j) in the case of a work that is in the form of a tangible object, to sell or otherwise transfer ownership of the tangible object, as long as that ownership has never previously been transferred in or outside Canada with the authorization of the copyright owner,

and to authorize any such acts.

27 (1) It is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.

(2) It is an infringement of copyright for any person to

(a) sell or rent out,

(b) distribute to such an extent as to affect prejudicially the owner of the copyright,

(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public,

(d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or

(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),

a copy of a work, sound recording or fixation of a performer’s performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.

Case law

[14] The main issue on this motion is whether the Ontario court should assume jurisdiction over Pourshian’s action. In Club Resorts Ltd. v. Van Breda, 2012 SCC 17, the Supreme Court reiterated the “real and substantial connection test” as an appropriate common law conflicts rule for the assumption of jurisdiction (see Van Breda para. 34). The court then stated (para. 64):

64 . . . [W]hen one of the presumptive connecting factors applies, the court will assume jurisdiction unless the defendant can demonstrate the absence of a real and substantial connection. If, on the other hand, none of the presumptive connecting factors are found to apply to the claim, the onus rests on the plaintiff to prove that a sufficient relationship exists between the litigation and the forum. In addition to the list of presumptive and non-presumptive factors, parties can rely on other connecting factors informed by the principles that govern the analysis.

[15] In establishing a framework for the assumption of jurisdiction, the court set out both the established presumptive connecting factors and considerations that would assist in identifying new factors (paras. 90 and 91):

90 To recap, in a case concerning a tort, the following factors are presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction over a dispute:

(a) the defendant is domiciled or resident in the province;

(b) the defendant carries on business in the province;

(c) the tort was committed in the province; and

(d) a contract connected with the dispute was made in the province.

91 As I mentioned above, the list of presumptive factors is not closed. Over time, courts may identify new factors which also presumptively entitle a court to assume jurisdiction. In identifying new presumptive factors, a court should look to connections that give rise to a relationship with the forum that is similar in nature to the ones which result from the listed factors. Relevant considerations include:

(a) Similarity of the connecting factor with the recognized presumptive connecting factors;

(b) Treatment of the connecting factor in the case law;

(c) Treatment of the connecting factor in statute law; and

(d) Treatment of the connecting factor in the private international law of other legal systems with a shared commitment to order, fairness and comity.

[16] The court in Van Breda also stated (at paras. 81 and 95):

81 The presumption with respect to a factor will not be irrebuttable. In such a case, the defendant will bear the burden of negating the presumptive effect of the listed or new factor and convincing the court that the proposed assumption of jurisdiction would be inappropriate. If no presumptive connecting factor, either listed or new, applies in the circumstances of a case or if the presumption of jurisdiction resulting from such a factor is properly rebutted, the court will lack jurisdiction on the basis of the common law real and substantial connection test.

95 . . . [T]he party challenging the assumption of jurisdiction must establish facts which demonstrate that the presumptive connecting factor does not point to any real relationship between the subject matter of the litigation and the forum or points only to a weak relationship between them.

[17] The standard to be met on a motion to set aside service of a statement of claim outside of Ontario was summarized by Brown J. (as he then was) in Yaiguaje v. Chevron Corporation, 2013 ONSC 2527, at para. 76:

(i) Where a defendant moves to set aside service ex juris on the ground that there is no real and substantial connection with Ontario, the question will be whether there is a good arguable case that the connection exists; . . .

(vii) In considering whether a “good arguable case” is made that a real and substantial connection exists, the court does not try the merits according to the civil standard of proof for the purpose of resolving issues of fact that arise. A plaintiff need only show that a “good arguable case” for an assumption of jurisdiction is made out. A “good arguable case” has been compared to “a serious issue to be tried” or a “genuine issue” or “with some chance of success”. The threshold test is a low one. [emphasis added]

[18] In support of its position that Canada’s Copyright Act has no extraterritorial application, the defendants rely on Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, 2003 SCC 45, (referred to below as SOCAN), at paras. 54 and 55:

54 While the Parliament of Canada, unlike the legislatures of the Provinces, has the legislative competence to enact laws having extraterritorial effect, it is presumed not to do so, in the absence of clear words or necessary implication to the contrary. This is because “[i]n our modern world of easy travel and with the emergence of a global economic order, chaotic situations would often result if the principle of territorial jurisdiction were not, at least generally, respected”; see Tolofson v. Jensen, 1994 CanLII 44 (SCC), [1994] 3 S.C.R. 1022, at p. 1051 per La Forest J..

55 While the notion of comity among independent nation States lacks the constitutional status it enjoys among the provinces of the Canadian federation (Morguard Investments Ltd. v. DeSavoye, 1990 CanLII 29 (SCC), [1990] 3 S.C.R. 1077, at p. 1098), and does not operate as a limitation on Parliament’s legislative competence, the courts nevertheless presume, in the absence of clear words to the contrary, that Parliament did not intend its legislation to receive extraterritorial application. [emphasis added]

Issues on the motion

[19] The issues on the motion are:

1. Is there a good arguable case that there is a presumptive connecting factor, as enumerated in paragraph 90 of Van Breda, between the subject matter of the plaintiff’s claim and Ontario?

2. Is there a good arguable case that there are other connecting factors which would presumptively entitle a court to assume jurisdiction, as contemplated in paragraph 91 of Van Breda?

3. If there are one or more presumptive connecting factors between the claim and Ontario, is the presumption rebuttable, under paragraphs 81 and 95 of Van Breda?

Analysis of the issues

1. Is there a good arguable case that there is a presumptive connecting factor as enumerated in paragraph 90 of Van Breda, between the subject matter of the plaintiff’s claim and Ontario?

[20] Pourshian alleges in his statement of claim that all of the defendants are incorporated in various American states, including Delaware, California and New York, and that the principal places of business of all of the defendants are also in the United States, specifically, Emeryville, California in the case of Pixar, and Burbank, California in the case of all of the other defendants. Therefore, the connecting factor in item (a) of paragraph 90 of Van Breda is not present because none of the defendants are domiciled or resident in Ontario.

[21] There is also no pleading of any contract connected with Pourshian’s claim having been made in Ontario, so the connecting factor in item (d) of Van Breda is not present.

[22] Accordingly, the issues to be resolved in determining whether any of the presumptive connecting factors in Van Breda are present are whether any of the defendants carry on business in Ontario (Van Breda, item (b)), and whether the action concerns a tort committed in Ontario (Van Breda, item (d)). These factors correspond with civil procedure rules 17.02(g) and 17.02(p) which allow for service of an originating process outside Ontario without a court order “(g) in respect of a tort committed in Ontario” and “(p) against a person . . . carrying on business in Ontario”.

[23] The first question is whether any of the defendants carry on business in Ontario. In relation to this issue, the court in Van Breda commented (at para. 87):

87 Carrying on business in the jurisdiction may also be considered an appropriate connecting factor. But considering it to be one may raise more difficult issues. Resolving those issues may require some caution in order to avoid creating what would amount to forms of universal jurisdiction in respect of tort claims arising out of certain categories of business or commercial activity. Active advertising in the jurisdiction, or, for example, the fact that a Web site can be accessed from the jurisdiction would not suffice to establish that the defendant is carrying on business there. The notion of carrying on business requires some form of actual, not only virtual, presence in the jurisdiction, such as maintaining an office there or regularly visiting the territory of the particular jurisdiction.

[24] The defendants, in paragraph 21 of their factum, state that “there is no dispute that INSIDE OUT was theatrically released in Canada”, but go on to submit that “the statement of claim does not identify which (if any) defendant is alleged to be responsible for the distribution of the film in Ontario or elsewhere in Canada”. This submission is incorrect because Pourshian alleges, in paragraph 31 of his statement of claim, that the defendant Walt Disney Pictures Inc. released INSIDE OUT in Canada on June 19, 2015.

[25] Even considering the matter with the caution mandated by Van Breda, the release of a film in Canada, which would include Ontario, presumably so that people would go to a movie theatre and pay to see it, is precisely the sort of actual presence in the jurisdiction contemplated by the Court. Pourshian’s pleading that Walt Disney Pictures Inc. released INSIDE OUT in Canada creates a “good arguable case” that that defendant carried on business in Canada in relation to the subject matter of the action.

[26] Similarly, Pourshian pleads in paragraph 30 of the statement of claim that the defendants Pixar and Walt Disney Pictures Inc. are the producers of INSIDE OUT. The court can reasonably infer that these defendants made the film in the expectation that people would pay to see it, which required that it be shown in movie theatres. Pixar, by releasing INSIDE OUT to be shown in theatres in Ontario, even if through another entity, was in substance offering it for sale to the province’s movie-going public, thus creating at least a “good arguable case” that Pixar was carrying on business in Ontario.

[27] Accordingly, by producing INSIDE OUT and releasing it for distribution to Ontario movie theatres, the defendants Pixar and Walt Disney Pictures Inc. were carrying on business in Ontario. The presumptive connecting factor of carrying on business in Ontario is therefore established.

[28] The second question under this issue is whether Pourshian’s claim is in respect of a tort committed in Ontario.

[29] Pourshian submits that the breach by the defendants of his copyright constitutes a tort committed in Ontario. The defendants submit that there is no allegation in the statement of claim that any of them breached the plaintiff’s copyright in Ontario and there is therefore no pleading of any tort committed in Ontario.

[30] As stated, the defendants acknowledge that INSIDE OUT was theatrically released in Canada but submit that no individual defendant is alleged to be responsible for the distribution of the film in Ontario. As also stated, this submission is incorrect because Pourshian alleges that the defendant Walt Disney Pictures Inc. released INSIDE OUT in Canada.

[31] Under s. 27(2) of the Copyright Act, it is an infringement of copyright for any person to (b) distribute, or (e) import into Canada, a copy of a work “that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it”. These acts, if proven, would constitute secondary infringement of Pourshian’s copyright in his original Inside Out works. In this regard, therefore, Pourshian’s claim against Walt Disney Pictures Inc. is in respect of a tort committed in Ontario, so this presumptive connecting factor is also present in respect of that defendant.

2. Is there a good arguable case that there are other connecting factors which would presumptively entitle a court to assume jurisdiction, as contemplated in paragraph 91 of Van Breda?

[32] Pourshian has pleaded that Ontario’s Rules of Civil Procedure entitled him to serve the statement of claim on the defendants outside of Ontario, based on an alleged tort committed in Ontario and the defendants carrying on business in Ontario, which have been examined above. He has also pleaded the right to serve his statement of claim outside Ontario on the basis that the proceeding consists of a claim “in respect of property in Ontario” (rule 17.02(a)), “for an injunction ordering a party to do, or refrain from doing, anything in Ontario or affecting real or personal property in Ontario” (rule 17.02(i)), and “authorized by statute to be made against a person in Ontario by a proceeding commenced in Ontario”(rule 17.02(n)).

[33] In paragraph 91 of Van Breda, the court acknowledges that “courts may identify new factors which also presumptively entitle a court to assume jurisdiction.” One of the considerations in identifying potential new presumptive connecting factors is “(c) Treatment of the connecting factor in statute law”, which would include a regulation authorized by statute such as the Rules of Civil Procedure.

[34] Pourshian claims declarations that he is the owner of the copyrights in the original Inside Out works and that the defendants have infringed those copyrights through production, reproduction, distribution and telecommunication of INSIDE OUT without his consent or authorization, and damages for copyright infringement. The proceeding therefore consists of a claim “in respect of property in Ontario”, being Pourshian’s copyright. This constitutes a further presumptive connecting factor between the subject of the action and Ontario.

[35] Pourshian also claims an injunction restraining the defendants from “producing or reproducing, or authorizing the production or reproduction of any of the Original Works or any substantial part thereof” without his consent. Significantly, however, the injunction claimed is only in respect of the production or reproduction of his copyrighted works. The statement of claim, while alleging secondary infringement of his copyright based on distribution and importing into Canada of the Pixar INSIDE OUT, does not allege that any actual production or reproduction of Pourshian’s original works took place in Canada. As the injunction claimed is not in respect of any alleged conduct on the part of the defendants in Canada, there is no “good arguable case” that that claim has a real and substantial connection to Ontario such as would justify the Ontario court assuming jurisdiction on that basis.

[36] Finally, Pourshian submits that he was entitled to serve the defendants outside Ontario, thus creating a presumptive connecting factor to Ontario, on the basis that his action is one authorized by statute to be made against a person outside Ontario by a proceeding commenced in Ontario. Pourshian’s action is exclusively for relief for the defendants’ breach of his copyright in Inside Out and is based solely on the Copyright Act. However, the Copyright Act has no extra-territorial application (per SOCAN, supra), and therefore does not authorize proceedings against a person outside Canada. There is therefore no applicable statute that authorizes this action and no corresponding presumptive connecting factor.

3. If there are one or more presumptive connecting factors between the claim and Ontario, is the presumption rebuttable, under paragraphs 81 and 95 of Van Breda?

[37] For the reasons set out above with respect to the first two issues, there are good arguable cases for presumptive connecting factors between Pourshian’s claims against Pixar and Walt Disney Pictures Inc., and Ontario, in that:

1. His action concerns his copyright in his Inside Out works, which is personal property in Ontario (rule 17.02(a));

2. He alleges that the defendant Walt Disney Pictures Inc. distributed INSIDE OUT for release in Canada which would constitute the tort of breach of copyright in Ontario (Van Breda and rule 17.02(g));

3. The defendants Walt Disney Pictures Inc. and Pixar have carried on business in Ontario with the theatrical release of the alleged Infringing Work INSIDE OUT in Ontario (Van Breda and rule 17.02(p)).

[38] The defendants submit that because any possible copyright infringement is not alleged to have occurred in Canada, and the only relief claimed is under Canada’s Copyright Act, which has no extraterritorial effect, there is no basis for the Ontario court to assume jurisdiction over the action, regardless of any presumptive connecting factors. As stated above, the single exception acknowledged by the defendant is in respect of Disney Shopping Inc..

[39] I accept that Pourshian’s claims are exclusively under the Copyright Act, which has no application outside Canada (SOCAN, supra). However, as concluded above, the alleged conduct of Walt Disney Pictures Inc. in distributing INSIDE OUT for release in Canada, or importing the film into Canada for the purpose of distributing or exhibiting it, would amount to secondary infringement in Canada of Pourshian’s copyright under s.27(2)(b) and (e) of the Act. Further, the conduct of both Pixar and Walt Disney Pictures Inc. in carrying on business in Ontario by allowing INSIDE OUT to be shown in Ontario theatres, such as to “expose or offer [it] for sale or rental, or exhibit [it] in public”, would constitute secondary infringement in Canada under s.27(2)(c) of the Act.

[40] As stated above, all of the defendants are incorporated in and have their principal places of business in the United States. There are no allegations in the statement of claim that could enable the court to conclude that any of them other than Pixar Animation Studios, Walt Disney Pictures Inc. and Disney Shopping Inc. infringed Pourshian’s copyright under the Copyright Act in Ontario or elsewhere in Canada. In fact, other than in the description of the defendants as summarized in paragraph [7] above, there are very few references to most of the defendants in the statement of claim. Pourshian pleads in paragraph 34 of the statement of claim that INSIDE OUT was “reproduced and broadcast on television and through online streaming by ABC [the defendant American Broadcasting Company]” but there is no allegation that ABC broadcast it into Canada.

Decision

[41] In summary, the production of INSIDE OUT by Pixar and Walt Disney Pictures Inc., in part for the purpose of carrying on business in Ontario, and the release of INSIDE OUT by Walt Disney Pictures Inc. for distribution to theatres in Canada, do create a good arguable case of a real and substantial connection between the claims against those defendants and Ontario. This conduct on the part of the defendants Pixar and Walt Disney Pictures Inc. would constitute secondary infringement of Pourshian’s copyright in his Inside Out in Ontario, such that the presumptive connecting factors are not rebutted.

[42] With respect to the defendants against which the action would be stayed based on a lack of sufficient connection to Ontario, Pourshian submits that the statement of claim should be read to allow for possible curing amendments. However, the court cannot simply assume that the plaintiff will amend the statement of claim, or speculate as to the substance of any proposed amendments or that any amendments will be permitted. The court’s ruling must be based on the pleading as currently constituted. In the absence of any real and substantial connection to Ontario, or allegations of any actionable wrong committed in Ontario, Pourshian’s action is hereby stayed as against the defendants Walt Disney Company, Disney Enterprises Inc., Walt Disney Studios Home Entertainment, Disney Consumer Products and Interactive Media, Walt Disney Studios Motion Pictures and American Broadcasting Company, Inc.. The action may proceed against the defendants Pixar Animation Studios, Walt Disney Pictures Inc. and Disney Shopping Inc..

[43] Costs: Counsel have filed costs outlines. If they cannot agree to the disposition of the costs of the motion, they may make written submissions, the defendants within 30 days and the plaintiff within 20 days thereafter.

MASTER GRAHAM

Date: October 15, 2019

[^1]: As the titles of the two works are identical, in these Reasons the Pixar INSIDE OUT will be written in upper case letters and Pourshian’s Inside Out in lower case, as they are written in the statement of claim.