Archive for July, 2014

Copyright Litigation and the Risk of Double Costs

By Richard Stobbe

An American photojournalist, Ms. Leuthold, was on the scene in New York City on September 11, 2001. She licensed a number of still photographs to the CBC for use in a documentary about the 9/11 attacks. The photos were included in 2 versions of the documentary, and the documentary was aired a number of times betwen 2002 and 2004. We originally wrote about this in an earlier post: Copyright Infringement & Licensing Pitfalls. The court found that the CBC had infringed copyright in the photographs in six broadcasts which were not covered by the licenses. Though Leuthold claimed damages of over $20 million, only $20,000 was awarded as damages by the court.

In Leuthold v. Canadian Broadcasting Corporation, 2014 FCA 174, the Federal Court of Appeal upheld an award of double costs against Leuthold. Early in the litigation process, the CBC had formally offered to settle for $37,500 plus costs. Ms. Leuthold did not accept the CBC’s offer and went to trial where she was awarded $20,000. Ms. Leuthold’s total recovery was substantially less that the amount of the CBC’s offer. When this happens, a plaintiff can be liable under Rule 420 for double costs, which was awarded in this case. Double costs amounted to approximately $80,000 in these circumstances, which means Ms. Leuthold is liable for about 4 times the amount of the damage award. Although Ms. Leuthold objected that such a disproportionate costs award was “punitive”, the court concluded:

“The sad fact of the matter is that litigation produces winners and losers; that is why it is such a blunt tool in the administration of justice. But justice is not served by allowing persons who have imposed costs on others by pursuing or defending a claim which lacks merit to avoid the consequences of their behaviour. Such a policy would be more likely to bring the administration of justice into disrepute than the result in this case.”

For copyright litigation and licensing advice, contact the Field Law Intellectual Property & Technology Group.

Calgary – 07:00 MST

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Court Orders Google to Remove Site from Worldwide Search Results

By Richard Stobbe

In a recent decision by the British Columbia courts (Equustek Solutions Inc. v Jack , 2014 BCSC 1063), Google has been ordered to de-index a website selling goods that were the subject of intellectual property (IP) infringement claims. While this may seem quotidian – after all, Google does comply with de-indexing requests on a regular and voluntary basis – this decision has broader implications for several reasons. This decision is the first Canadian decision to compel Google to delist a website after the so-called “right to be forgotten” case in the EU, and while that case involved personal privacy rights rather than IP rights, both cases have far-reaching implications for Google’s role in providing a practical remedy for an aggrieved party. This is a role that Google has resisted, but cannot avoid in light of its ever-expanding presence in the lives of individuals and the affairs of business.

The underlying dispute involved a trade-secret misappropriation and passing-off claim by a manufacturer against a rival company. Specifically, the plaintiff Equustek alleged that a competing product known as GW1000 was an unauthorized knock-off, built using trade secrets of the plaintiff. The plaintiff Equustek won an initial order barring sales of the offending GW1000 product and then engaged in a time-consuming process of chasing the defendant to obtain some meaningful and practical remedy. This involved repeated requests to Google to block hundreds of specific individual webpages and URLs from Google Canada search results, a game that the court described as “whac-a-mole”. Finally the plaintiff sought an order compelling Google to de-index the defendant’s sites from all Google search results worldwide. The resulting order is important for a number of reasons:

  1. In order to make its order, the court had to assert jurisdiction over Google Inc. rather than the Canadian subsidiary Google Canada. In coming to this decision, the B.C. court relied in part on the EU “right to be forgotten” case. Interestingly, the court commented that the California choice-of-law clauses in Google’s various user agreements and advertising contracts did not prevent the Canadian court from asserting jurisdiction. This is due to the fact that this dispute did not arise out of any contract-related claims. Rather, the court found that it had scope to make an order (with extra-territorial reach) over Google (a non-party) under its inherent jurisdiction under the Law and Equity Act.
  2. The court also commented on the fact that Google is not merely a passive site, but rather it conduct active and ongoing business with British Columbia companies and individuals.
  3. The court found that blocking individual URLs was not as effective as blocking so-called “mother sites”. In effect, the court agreed that Google’s current practice of voluntarily complying with individual requests to block specific URLs does not provide an effective remedy. This will certainly be cited in future website blocking cases.
  4. Regarding Google’s role, the court commented that “Google is an innocent bystander but it is unwittingly facilitating the defendants’ ongoing breaches of this Court’s orders. There is no other practical way for the defendants’ website sales to be stopped.”

After renewing the traditional criteria for assessing the merits of an injunction application, the court granted the order. Google is appealing this decision.

Calgary – 07:00 MST

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