Copyright limitation: a valid reason for inadmissibility

2007-01-01

C
OPYRIGHTLIMITATION:AVALIDREASONFORINADMISSIBILITY

LAURENTCARRIÈREANDROYMACHAALANY*
LEGERROBICRICHARD
,L.L.P.
L
AWYERS,PATENTANDTRADEMARKAGENTS
InExpertisesDidactiquesLyonsIncvGhanotakistheSuperiorCourtofQuébechas
reiteratedthattheapplicablelimitationforinfringement,intheabsenceofbelated
knowledge,isthreeyearsforanycivilremedypursuanttotheCopyrightAct.
ExpertisesDidactiquesLyons(EDL)initiatedanactionagainstGeorgesGhanotakis,
whowasatthetimeinsolvent,afterlearningthathewaslikelytoreceivea
significantsumofmoneyfromanotherproceeding.Thisactioncomprised:
·atortclaimforC$150,000forfeesandextrajudicialexpensesincurredsince
1996;
·aroyaltypaymentclaimforC$105,000basedontwodistinctperiods;and
·acompensationforinfringementforC$45,000pursuanttotheCopyrightAct.
Ghanotakisintroducedtwomotionsfordismissalpursuantto(i)Section165ofthe
QuébecCodeofCivilProcedureindicatingthattheapplicant’sproceedingwas
unfoundedinlaw,resjudicataandabsenceofinterest,and(ii)Section75.1ofthe
code,wheretheexaminationhasshowedthat“theactionisfrivolousorclearly
unfounded”.
Inorderforthefirstmotiontobesuccessful,itwasessentialthatalltheclaimsbe
clearlyunfoundedinlaw.Inthisregard,EDLpointedthatitwouldnothaveentered
intoanagreementifithadknownGhanotakis’strueintentionsandthathewasnotin
facttheauthorofaparticularbookashehadpretended.
First,thecourtheldthatthereisnoprivitybetweentheinitialstatementandthe
legitimateinferenceandconclusionssought.Indeed,thereisnochainofcausation
betweenthefactthattheapplicantswereerroneouslyinducedwhensigningthe
agreementandthemanysubsequentlawsuitsandexpenses,aswellasbetween
theallegedfaultanddamage.

©CIPS,2007.*Lawyerandtrade-markagent,LaurentCarrière,isaseniorpartnerwithLEGERROBICRICHARD,
L.L.P.,
amultidisciplinaryfirmoflawyers,andpatentandtrademarkagents.RoyMacHaalanyisan
articlingstudentwiththefirm.Publishedinthe200710-18issueofWorldCopyrightLawReport.
Publication328.038.

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Second,accordingtotheCourtofAppealofQuébec,extrajudicialfeescanbe
grantedasdamagesonlywhentheotherpartyabusesthelegalsystemandnotasa
punishmentformisconduct.ThusEDLcannotthusclaimextrajudicialfeesjust
becauseitwasthevictimoffraud.Besides,EDLdidnotbringforwardanyallegation
ofabuseofrighttosue.
Third,therewasresjudicatawithregardstotheinfringementactionwhere
extrajudicialfeeshavealreadybeenclaimed.Thisactionwasrejectedsincethere
wasinsufficientjustificationforanadversejudgment.Astheclaimforextrajudicial
feeswasnotappealed,EDLcouldnotthusreconsider.Forthesereasons,theclaim
fortheextrajudicialfeeswasinadmissible.
Asfortheroyaltypaymentclaim,EDLarguedthatwhenGhanotakiswaspresident
ofLearnedEntreprisesInternationales(LEI)hehadfailedtorevealthesales
revenuesandtopaytheprescribedroyalties.Moreover,aspertheagreement,
theseroyaltiesbelongonlytoMondiaÉditeursIncandonlyitcouldinstitutea
proceeding.Further,thisactionwaspersonallybroughtagainstGhanotakis,
excludingLEI,whichwentbankruptandwhoserightsandassetswereacquiredby
EDL.Inthesecircumstances,wouldGhanotakisbepersonallyliableforthenon-
paymentofroyalties?TheCourtofAppealheldthatwhenanactionisbasedona
contractualliabilityagainstacompany,itsadministratorcannotbeheldextra-
contractuallyliableintheabsenceofabuseorfraud.
TheCivilCodeofQuébecandSection41oftheCopyrightActindicatethatacourt
maynotawardaremedyunlessproceedingsarecommencedwithinthreeyears
aftertheinfringementoccurredwheretheplaintiffkneworcouldreasonablyhave
beenexpectedtoknow.Therefore,anyproceedingsfiledafterthethree-yearperiod
arebarred.TheSupremeCourtofCanada,inMassie&RenwickLtdvUnderwriters’
SurveyBureauLtd([1937]SCR265),reiteratedthatthelimitationappliestoallcivil
remediesundertheCopyrightAct.Theroyaltiesinquestioncoveredtheperiod
endingin2001.Consequently,becausethereisnoallegationofbelatedknowledge,
itwasheldthattheactionwasprescribed,andthusinadmissible.
Thelastclaimcoveredthecompensationforinfringement.Theallegationwasby
itselfverylimitedandtheonlysignificantprecisionwasbroughtatthehearingby
EDLscounselindicatingthattheinfringementonlyoccurredin2002.Consequently,
theapplicablelimitationwasalsothatofSection41.Therewasnoexplanationfor
thisbelatedactionsotherecoursewassimilarlydeemedprescribed.
Forallthesereasons,thecourtconcludedthatnoneofEDL’sclaimsareadmissible,
althoughthepleadedfactsweretrue.Ghanotakis’smotionforinadmissibility,
pursuanttoSection165oftheQuébecCivilCodeofProcedure,wasthusallowed.

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