$10.5 Million in damages awarded by Federal Court of Canada for copyright infringement
January 8, 2014

by Brian P. Isaac

The Honourable Justice Campbell of the Federal Court of Canada has recently awarded default judgment to Twentieth Century Fox, including $10,500,000 in damages, against an individual who had copied and posted episodes of The Simpsons and Family Guy on the internet (Fox v Hernandez). Justice Campbell also awarded broad injunctions against infringement of copyright in any works relating to the programs and enjoining infringement of copyright in any other works within which Twentieth Century Fox owns copyright, including works that come into existence after the date of the judgment.

The decision affirms the availability of significant awards through effective procedures available in the Federal Court against those who blatantly infringe copyright in Canada. Recent decisions also make it clear that copyright infringers will not be able to avoid justice by failing to defend proceedings against them.

In the Fox v Hernandez case, Justice Campbell awarded $10,000,000 in statutory damages. In the Notice of Application filed by Fox, it was alleged that the individual had copied and posted at least 700 episodes of the programs on the “Watch the Simpsons Online” and “Watch The Family Guy Online” websites that he operated. It was further alleged that the defendant profited from sales of advertising and promotional items related to the programs. In light of the number of separate episodes, the $10,000,000 award was supported despite the $20,000 per work cap on statutory damages in Canada.

In a previous case involving unauthorized sales of computer software (Adobe v Thompson), the Court awarded maximum statutory damages in respect of infringement of copyright in works proven by Adobe, Microsoft and Rosetta Stone to have been infringed by an individual selling unauthorized copies of their software. In that case, maximum statutory damages were awarded in respect of software programs proven to have been sold, as well as in respect of cover art reproduced by the individual on internet websites. The Court also awarded punitive damages of $100,000. The decision was rendered through a summary judgment motion that was not defended by the individual copyright infringer.

In the Fox v Hernandez case, Justice Campbell specifically indicated that he felt that the award of statutory damages “would be insufficient to achieve the goal of punishment and deterrence of the offence of copyright infringement in this case” and he also awarded $500,000 in punitive damages against the individual.

It is now clearly established that courts in Canada, and the Federal Court in particular, are willing to award significant damages and costs in undefended proceedings involving blatant infringement of copyright works, including through online sales or distribution. The apparent belief by some infringers of copyright in Canada that they may be able to avoid adverse consequences flowing from their infringing activities by not defending court proceedings commenced by copyright owners should now be completely laid to rest. While the Court will require evidence to establish copyright and the infringing activity, and while each case will turn on its own facts, the willingness of the Court to award significant statutory and punitive damages and costs in undefended proceedings makes it viable for copyright owners to expeditiously enforce their rights with the expectation of deterrent awards being granted.

In addition, the Federal Court has recognized in these cases that copyright may be infringed by various steps in online distribution. In the Adobe v Thompson case, the finding that posting of cover art was sufficient to warrant maximum statutory damages in the circumstances of that case was significant. In the Fox v Hernandez case, Justice Campbell found infringement at various stages, including the initial copying of the programs, copying of the programs on to a computer system, uploading the unauthorized copies to servers, creating links to the servers, communicating the programs to the public by telecommunication and by enabling the public to infringe by “downloading, streaming and/or copying … the unauthorized copies … through internet enabled devices.”

For further information, please contact a member of our IP Crime or Copyright & Media practice groups.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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