  {"id":20137,"date":"2013-02-20T08:00:21","date_gmt":"2013-02-20T13:00:21","guid":{"rendered":"http:\/\/www.iposgoode.ca\/?p=20137"},"modified":"2013-02-20T08:00:21","modified_gmt":"2013-02-20T13:00:21","slug":"equitable-copyright-on-the-table","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2013\/02\/20\/equitable-copyright-on-the-table\/","title":{"rendered":"Equitable Copyright on The Table"},"content":{"rendered":"<p>A\u00a0<a href=\"http:\/\/canlii.ca\/en\/on\/onsc\/doc\/2013\/2013onsc582\/2013onsc582.html\" target=\"_blank\" rel=\"noopener noreferrer\">recent Ontario Superior Court ruling<\/a>\u00a0has attracted the attention of the copyright law community.\u00a0On January 24<sup>th<\/sup>\u00a0Master Abrams allowed the\u00a0Delta Hotels v. Backus-Naur et al. motion pleading equitable ownership of copyright, an equity doctrine in many Commonwealth countries that is currently not legally recognized in Canada.<\/p>\n<p><!--more--><\/p>\n<p>Ultimately the case for equitable ownership of copyright divides into three points.<\/p>\n<p><strong>I. Relevant UK Law<\/strong><\/p>\n<p>This was the main issue addressed in the Master\u2019s decision.\u00a0\u201cEquitable ownership of copyright is a recognized principle in the United Kingdom,\u201d she wrote.\u00a0\u201cWhile I accept, as [defendant counsel] Mr. Seed has argued, that there is now no precedent in Canadian law for the alternative plea proposed, I cannot say that it\u00a0necessarily\u00a0follows that on the specific facts of any given case, or this case, there could never be.\u00a0 To say that foreign copyright cases may not be easily transferable to Canada as the Supreme Court did in\u00a0CCH Canadian Ltd.\u00a0v.\u00a0Law Society of Upper Canada,\u00a0<a href=\"http:\/\/canlii.ca\/en\/ca\/scc\/doc\/2004\/2004scc13\/2004scc13.html\" target=\"_blank\" rel=\"noopener noreferrer\">2004 SCC 13 (CanLII)<\/a>, [2004] 1 S.C.R. 339, para. 22 is not to say that they are at no time and under any circumstances transferable.\u201d\u00a0The judge expressed agreement with the plaintiff\u2019s counsel that though the equitable copyright claim is \u201cnovel\u201d, it may yet have a place in Canadian law.<\/p>\n<p><strong>II. Historical Antecedents and Modern Interpretation<\/strong><\/p>\n<p>This argument is further validated when reviewing closely the clause on which the potential equity claim hinges,\u00a0<a href=\"http:\/\/laws-lois.justice.gc.ca\/eng\/acts\/C-42\/page-77.html#h-90\" target=\"_blank\" rel=\"noopener noreferrer\">section 89<\/a>. Section 89 expressly allows actions for breach of trust or confidence:<\/p>\n<p><em>89.\u00a0No person is entitled to copyright otherwise than under and in accordance with this Act or any other Act of Parliament, but nothing in this section shall be construed as abrogating any right or jurisdiction in respect of a breach of trust or confidence.<\/em><\/p>\n<p>Moreover, s. 89 of the Canadian Copyright Act is taken directly from the 1911 UK Copyright Act. It\u2019s this same original provision that is being used in UK copyright equity cases today.\u00a0Even by the strictest interpretation of s. 89, there is room for a claim in equity. When considering the modern applicability of the UK statue and subsequent precedent, the argument becomes even stronger.<\/p>\n<p><strong>III. Canadian Court Dicta<\/strong><\/p>\n<p>The Supreme Court wrote in Compo Co. Ltd v. Blue Crest Music at 372-73: \u201ccopyright law is neither tor law nor property law in classification, but is statutory law\u2026 Copyright legislation simply creates rights and obligations upon the terms and circumstances set out in the statute.\u201d\u00a0The Canadian Copyright Act is a code, but only partly. The Supreme Court\u2019s interpretation in\u00a0Compo\u00a0is not comprehensive.<\/p>\n<p>Wrote\u00a0<strong>IP Osgoode's Professor<\/strong><strong>\u00a0<\/strong><strong><a href=\"http:\/\/www.iposgoode.ca\/members\/\" target=\"_blank\" rel=\"noopener noreferrer\">David Vaver<\/a><\/strong>\u00a0in\u00a0<a href=\"http:\/\/www.irwinlaw.com\/store\/product\/677\/intellectual-property-law--copyright-patents-trade-marks-second-edition\" target=\"_blank\" rel=\"noopener noreferrer\">Intellectual Property Law: Copyright, Patents, Trade-Marks, 2<sup>nd<\/sup>\u00a0ed<\/a>. at 19-20, \u00a0\u201cThis clarification forestalls arguments that common or civil law principles automatically solve a copyright dispute, or that the Copyright Act is merely a backdrop of such principles\u2026 The situation is nevertheless more complex than the Supreme Court\u2019s statement implies, for the Act is only a partial code. It leaves much unsaid about copyright: for example, whether copyright can be inherited, co-owned, seized by unpaid creditors, or used as securities to raise money.\u201d<\/p>\n<p>The Master said in her judgment that there is yet no direct discussion in Canadian jurisprudence either for or against equitable ownership of copyright. But\u00a0 if you consider the following trifecta of cases, two Canadian as well as one recent one from the UK, we're certainly getting close.<\/p>\n<p>There is obiter dictum in a federal case by Harrington J in <a href=\"http:\/\/www.canlii.org\/eliisa\/highlight.do?text=jordan+Video+Inc.+v.+Elmaleh&amp;language=en&amp;searchTitle=Search+all+CanLII+Databases&amp;path=\/en\/ca\/fct\/doc\/2009\/2009fc488\/2009fc488.html&amp;searchUrlHash=AAAAAQAcam9yZGFuIFZpZGVvIEluYy4gdi4gRWxtYWxlaAAAAAAAAAE\" target=\"_blank\" rel=\"noopener noreferrer\">Jordan Video Inc. v. Elmaleh<em>,<\/em> 2009 FC 488 at [18]<\/a> that suggests the potential to joint interests applying to copyright.<\/p>\n<p><em>\u201cTheir relationship may be a joint venture, principal and agent, assignor and assignee, or licensor or licensee, be it on an exclusive or non-exclusive basis. Section 36 of the Copyright Act contemplates that an assignor may be named as a co-plaintiff. One might also have to consider the distinction between legal ownership on the one hand, and beneficial ownership on the other.\u201d<\/em><\/p>\n<p>As well, the Supreme Court has applied equitable principles to personalty in\u00a0<a href=\"http:\/\/scc.lexum.org\/decisia-scc-csc\/scc-csc\/scc-csc\/en\/item\/2355\/index.do?r=AAAAAQAPUGVjb3JlIHYgUGVjb3JlAAAAAAAAAQ\" target=\"_blank\" rel=\"noopener noreferrer\">Pecore v Pecore 2007 1 SCR 795<\/a>. Certainly the closeness of personalty and copyright in intellectual property makes a distinction for legal purposes difficult. The law is conclusively stated in\u00a0Performing Right Society v London Theatre of Varieties\u00a0[1924] AC 1 169 (HL).\u00a0 Assuming the Supreme Court would follow such precedent \u2013 a fair assumption \u2013 it paints a clear guideline.<\/p>\n<p><em>\u201cThe appellants are therefore equitable assignees of these performing rights. It has been established by a long series of cases that an action for an injunction to restrain an infringement of copyright can be brought by an equitable owner in his own name.\u201d<\/em><\/p>\n<p>And on a final argumentative note, the British Columbia Supreme Court recently used Performing Right Society, as well as Professor Vaver's analysis, to apply the principles of equity ownership in deciding to award an injunction in <a href=\"http:\/\/www.canlii.org\/en\/bc\/bcsc\/doc\/2011\/2011bcsc1196\/2011bcsc1196.html\" target=\"_blank\" rel=\"noopener noreferrer\">Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196<\/a>. This cutting edge case answered important questions about website copyright and digital \"Terms of Use\" contracts, as covered by IPilogue <a href=\"http:\/\/www.iposgoode.ca\/2011\/09\/century-21-v-zoocasa-contract-and-copyright-in-the-electronic-world\/\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>. The case specifically stated (emphasis added):<\/p>\n<p>&nbsp;<\/p>\n<div><em> \"With respect to the lack of a provision relating to future created Works the agreement does not address the issue of past, present or future works. \u00a0Copyright in a non-existent (future) work cannot be assigned, just as you cannot transfer property in non-existent land or goods. \u00a0However, on the authority of Performing Right Society v. London Theatre of Varieties, [1924] A.C. 1 at 13 (HL) when a work that is not yet created is assigned, parties are treated in equity as promising to assign the future copyright once the work is created. \u00a0At that point, the promisee becomes the equitable assignee and the beneficial owner of the copyright, and the promissor is the equitable assignor with a bare legal title: David Vaver, Intellectual Property Law (Irwin Law: Toronto, Ont, 1997) at 245. \u00a0The power of assignment is not confined to an assignment of the legal property, but will apply to the transfer of any interest, whether legal or equitable: Performing Right Society at 18. \u00a0<span style=\"text-decoration: underline\">As a result, the assignment of future created works is still valid in equity as between the parties provided it is made for valuable consideration. \u00a0As soon as the works are created the copyright is validly assigned to the assignee.<\/span>\"<\/em><\/div>\n<p><strong>Conclusion<\/strong><\/p>\n<p>Ultimately, regardless of outcome, a shortcoming is clear. The state of Equity education in modern day Canadian legal education is insufficient.<\/p>\n<p><em>\"Since the teaching of Equity as a subject is so rare these days in Canadian law schools, many lawyers are going into practice inadequately prepared to understand the interplay of law and equity,\u201d said Professor Vaver.<\/em><\/p>\n<p><em>\u201cEven in Quebec, the injustice that equity corrects in common law jurisdictions should be addressed by comparable doctrine, as it is in civilian jurisdictions elsewhere. \u00a0When a formality of federal law is involved, it would be anomalous if the result of a case differed according to where in Canada the transaction took place.\"<\/em><\/p>\n<p>Hopefully this case is the first of many that wakes up the Canadian legal establishment to the fact that even with a decided Copyright Act, there is still\u00a0 much to be decided.<\/p>\n<p>Plaintiff\u2019s counsel relied on\u00a0Succar\u00a0v.\u00a0Wawanesa Mutual Insurance Co., 2006 CarswellOnt (S.C.J.), at paras 2, 8-9, as well as Professor Vaver\u2019s\u00a0<a href=\"http:\/\/www.irwinlaw.com\/store\/product\/677\/intellectual-property-law--copyright-patents-trade-marks-second-edition\" target=\"_blank\" rel=\"noopener noreferrer\">Intellectual Property Law:\u00a0 Copyright, Patents, Trademarks<\/a>, 2d ed., at 140.\u00a0These issues are also addressed in\u00a0<strong>IP Osgoode Founder and Director<\/strong><strong>\u00a0<\/strong><strong><a href=\"http:\/\/www.osgoode.yorku.ca\/faculty\/full-time\/giuseppina-dagostino\" target=\"_blank\" rel=\"noopener noreferrer\">Giuseppina D\u2019Agostino<\/a>\u2019s<\/strong><strong>\u00a0<\/strong><a href=\"http:\/\/www.amazon.ca\/Copyright-Contracts-Creators-Media-Rules\/dp\/1847201067\" target=\"_blank\" rel=\"noopener noreferrer\">Copyright, Contracts, Creators: New Media, New Rules<\/a>\u00a0at 55, 72-75, 135-137.<\/p>\n<p>Finally, for unquestionable hipster meme proof of the value of equitable ownership of copyright, please review this UK case synopsis regarding the\u00a0<a href=\"http:\/\/www.lawdit.co.uk\/reading_room\/room\/view_article.asp?name=..\/articles\/Equitable%20Ownership%20of%20Copyright%20Part%203.htm\" target=\"_blank\" rel=\"noopener noreferrer\">important issue of cat illustrations<\/a>.<\/p>\n<p><em>Denise Brunsdon is a JD\/MBA candidate at Western University.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>Editor's note (22\/02\/13): This article was updated to correct a typo that incorrectly referred to Master Abrams using a male pronoun.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A\u00a0recent Ontario Superior Court ruling\u00a0has attracted the attention of the copyright law community.\u00a0On January 24th\u00a0Master Abrams allowed the\u00a0Delta Hotels v. Backus-Naur et al. motion pleading equitable ownership of copyright, an equity doctrine in many Commonwealth countries that is currently not legally recognized in Canada.<\/p>\n","protected":false},"author":2140,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[1106,65,278,60,1064,138,1],"tags":[1733],"class_list":["post-20137","post","type-post","status-publish","format-standard","hentry","category-canada","category-copyright","category-copyright-reform","category-ip","category-ip-litigation-practice","category-jurisdiction","category-uncategorized","tag-denise-brunsdon"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Equitable Copyright on The Table - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2013\/02\/20\/equitable-copyright-on-the-table\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Equitable Copyright on The Table - IPOsgoode\" \/>\n<meta property=\"og:description\" content=\"A\u00a0recent Ontario Superior Court ruling\u00a0has attracted the attention of the copyright law community.\u00a0On January 24th\u00a0Master Abrams allowed the\u00a0Delta Hotels v. 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