Legal Interest Tangled in a Web of Licence Agreements
1
LEGALINTERESTTANGLEDINAWEBOFLICENCEAGREEMENTS
LaurentCarrièreandLorraineLaquerre*
LEGERROBICRICHARD
,L.L.P.
Lawyers,PatentandTrademarkAgents
CentreCDPCapital
1001Square-Victoria-BlocE–8thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.(514)9876242-Fax(514)8457874
info@robic.com-www.robic.ca
InCloseUpInternationalLtdv1444943OntarioLtd(2006CanLII32925;2006-
09-27)theSuperiorCourtofOntariohasruledthatarighttobringanaction
toenforcecopyrightcannotbegrantedbymeansoflicenceagreementif
interestinthecopyrightitselfwasnotalsograntedtothelicensee.The
agreementneedstoincludespecificlanguageregardingtheassignmentof
IPrightsforalicenseetohavestandinginaCanadiancourtinacopyright
enforcementcase.
UScompanyCloseUpInternationalLtd(CUI)institutedproceedingsagainst
twonumberedcompanies,1444943OntarioLtdand1179464OntarioLtd,
andtwoCanadianresidentspersonallyforinfringingitscopyrightinfilms.It
allegedthatthedefendantsunlawfullyreproduced,sold,rentedand
distributeditsfilmswithoutlicenceorauthorization.CUI,throughamazeof
licenceagreementsbetweenseveralRussianfilmstudios,hadexclusiverights
toreproduceanddistributethecopyrightedworksthroughouttheUnited
StatesandCanada.
CUIsoughtadeclarationthatthedefendantsinfringedthecopyrightinits
works,aswellasadeclarationthattheybreacheditsexclusivelicenceand
therebyinfringeditscopyright.ItalsorequestedaninjunctionunderSection
34(1)oftheCopyrightActtorestrainthedefendantsfromsellinginfringing
worksandreproducinglabels.CUIalsoaskedfordamagesandsoughtto
enforceitstrademarkrightspertainingtothewords”CloseUp”.
CUIpleadedthatithad”grantedarightofactionforenforcementof
intellectualpropertyrightspursuanttosub-licenceagreements”totwo
companiesincorporatedinCanadaalsoreferredtoasCUCandCUO.It
maintainedthatthesecompanieshadacquireddistributionandotherrights
©CIPS,2006.*Lawyerandtrade-markagent,LaurentCarrière,isaseniorpartnerwithLEGERROBIC
RICHARD
,L.L.P.,amultidisciplinaryfirmoflawyers,andpatentandtrademarkagents.
LaorraineLaquerreisanarticlingstudentwiththefirm.Publishedinthe2006-11-30issueof
WorldCopyrightLawReport.Publication328.028.
2
toanexclusivelicence,whichgavethemarighttoenforcethecopyright
throughlegalaction.
ThedefendantsopposedtheadditionofthetwoOntariocompaniesas
plaintiffsonthebasisthattheyhadnointerestinandnostandingtoenforce
thecopyrightownedbyCUI.Further,theyarguedthatthemotiontoadd
residentcompaniesasplaintiffsshouldberejectedonthebasisthatit
constitutedanabuseofprocessgiventhatthemotionwasmadeshortly
afteracourtordertopaysecurityforcosts.
Thecourtrefusedtointerpretthelicenceagreementasgivinganexclusive
licencetothetwoCanadiancompanies.Givinganarrowinterpretationto
thewords”licencetosell,distributeandrent”foundintheagreements,the
courtinsistedonthefactthatbothagreementsdidnotprovideforanyright
toreproducethefilms,althoughthecompaniesweregrantedtheexclusive
righttowholesaledistributionofthefilmsinCanada.Thelicenseeswerealso
giventhe”fulllegalrightsforjointactionswiththedealertoenforceand
protectallrightsofthedealerinanycourt”inCanada.Theagreementswere
silentonCUOandCUCenforcingtheirowndistributionrights.
MasterRDashruledthatthelicencegiventothetwoCanadiancompanies
wasonlyasolelicence,giventhatnothingintheagreementspreventedCUI
fromdistributingthefilmsinOntarioitself.Atmost,theagreements
“recommended”or”encouraged”retailerstopurchasedirectlyfromthe
Ontariocompaniesandprovidedthattheywouldgettheprofitintheevent
thatsaleswouldbemadedirectlybyCUI.
TheCopyrightActprovidesthatonlyacopyrightowneroranexclusive
licenseeisentitledtothereliefclaimedinthestatementofclaimsfor
infringementdamages,injunctionandrecoveryofinfringingproperty.The
SuperiorCourtruledthatbecauseinterestinthecopyrightwasnotgranted
toCUCandCUObymeansofalicenceagreement,therighttobringan
actiontoenforcesaidcopyrightcouldnotbegranted.Asaresult,CUCand
CUOdonothavestandinginaCanadiancourt.
Further,thecourtruledthataddingunnecessaryOntarioresidentsas
plaintiffs,inorderthattheUS-basedCUImightavoidsecurityforcostsonthe
basisthatanyliabilityforcostswillbeajointobligation,constitutesabuseof
process.GiventhatanordertopaysecurityforcostswasissuedagainstCUI
ontheeveofthemotiontoaddtwoCanadianplaintiffs,thecourt
consideredittobeanattempttoavoidfurtherordersforsecurityforcosts.
Thejudge’sdecisionconfirmsonceagainthatitisimpossibletoread
betweenthelinesofacontract.Intentmustbeputintowords.
3
4
ROBIC,ungrouped’avocatsetd’agentsdebrevetsetdemarquesde
commercevouédepuis1892àlaprotectionetàlavalorisationdela
propriétéintellectuelledanstouslesdomaines:brevets,dessinsindustrielset
modèlesutilitaires;marquesdecommerce,marquesdecertificationet
appellationsd’origine;droitsd’auteur,propriétélittéraireetartistique,droits
voisinsetdel’artisteinterprète;informatique,logicielsetcircuitsintégrés;
biotechnologies,pharmaceutiquesetobtentionsvégétales;secretsde
commerce,know-howetconcurrence;licences,franchisesettransfertsde
technologies;commerceélectronique,distributionetdroitdesaffaires;
marquage,publicitéetétiquetage;poursuite,litigeetarbitrage;vérification
diligenteetaudit.ROBIC,agroupoflawyersandofpatentandtrademark
agentsdedicatedsince1892totheprotectionandthevalorizationofallfields
ofintellectualproperty:patents,industrialdesignsandutilitypatents;
trademarks,certificationmarksandindicationsoforigin;copyrightand
entertainmentlaw,artistsandperformers,neighbouringrights;computer,
softwareandintegratedcircuits;biotechnologies,pharmaceuticalsandplant
breeders;tradesecrets,know-how,competitionandanti-trust;licensing,
franchisingandtechnologytransfers;e-commerce,distributionandbusiness
law;marketing,publicityandlabelling;prosecutionlitigationandarbitration;
duediligence.
COPYRIGHTER
IDEASLIVEHERE
ILATOUTDEMÊMEFALLUL’INVENTER!
LAMAÎTRISEDESINTANGIBLES
LEGERROBICRICHARD
NOSFENÊTRESGRANDESOUVERTESSURLEMONDEDESAFFAIRES
PATENTER
R
ROBIC
ROBIC+DROIT+AFFAIRES+SCIENCES+ARTS
ROBIC++++
ROBIC+LAW+BUSINESS+SCIENCE+ART
THETRADEMARKERGROUP
TRADEMARKER
VOSIDÉESÀLAPORTÉEDUMONDE,DESAFFAIRESÀLAGRANDEURDELA
PLANÈTE
YOURBUSINESSISTHEWORLDOFIDEAS;OURBUSINESSBRINGSYOURIDEASTO
THEWORLD