Punitive Damages Gain Momentum in Nova-Scotia’s Court of Appeal

2007-01-01

P
UNITIVEDAMAGESGAINMOMENTUMINNOVA-SCOTIA’SCOURTOF
APPEAL

LAURENTCARRIÈREANDMARC-ANDRÉROUET*
LEGERROBICRICHARD
,L.L.P.
L
AWYERS,PATENTANDTRADEMARKAGENTS

In2703203ManitobaInc.v.Parks,2007NSCA36(2007-04-03),theNovaScotia
CourtofAppealalmostentirelyaffirmsthetrialdecision,therebygrowingthelistof
copyrightinfringementcasesleadingtopunitivedamages.
Therespondent2703203ManitobaInc.franchisesCoffeeNews,atrademarked
publication.Eachfranchiseeisresponsibleforsellingadvertisementandarrangefor
theprintinganddistributionofthepaperinitsallocatedgeographicalarea.The
appellantParksandhiscompany,Parrcom,acquiredseveralfranchisesand
eventuallydevelopedtheFlyingCow,acompetingpublicationidenticalindesignto
CoffeeNews.JeanDaum,2703203’spresident,chiefoperatingofficerandsole
director,putandendtothefranchisingcontractssoonafterdiscoveringthesituation.
Thetrialjudgefoundtheappellantsjointlyandseverallyliableforcopyright
infringementandforthetortsofpassing-offandinterferencewithcontractual
relations.Heawarded$139,000ingeneraldamages,$100,000inpunitivedamages
and$10,000forcosts(see2703203ManitobaInc.v.Parks,2006NSSC6(Nova-
ScotiaSuperiorCourt,2006-01-06)).
ParksfirstpointsoutthattheimpugnedcopyrightbelongstoMsDaumandthatno
proofsheassigneditto2703203wasproduced.Thecourtrejectsthisgroundof
appeal,acceptingtheargumentthattherespondentwouldhavebeenreadytoface
theissuehaditbeenraisedattrial.Asfortheexistenceofcopyright,theCourtis
satisfiedthatthetrialjudge’srelianceonprinciplessetoutinBritishColumbia
JockeyClubv.Standen,1983B.C.J.No.1769andinTheModernLawOfCopyright
(London:Butterworths,1980)resultedinthe“sweatofthebrow”andthe“skilland
judgement”testsbeingapplied,eventhoughtheirlatestincarnationbytheCanadian
SupremeCourtinCCHCanadianLtd.v.LawSocietyofUpperCanada,[2004]1
S.C.R.339wasnotreferredto.

©CIPS,2007.*Lawyerandtrade-markagent,LaurentCarrière,isaseniorpartnerwithLEGERROBICRICHARD,
L.L.P.,
amultidisciplinaryfirmoflawyers,andpatentandtrademarkagents.Marc-AndréRouetisan
articlingstudentwiththefirm.PublishedinWorldCopyrightLawReport.Publication328.037.

2
Onthepassing-offissue,theCourtcanseenopalpableandoverridingerrorinthis
mixedquestionoffactsandlaw.Theissuewaspleadedaroundthecommonlawtort
ofpassing-offratherthanons.7oftheTrade-marksAct,R.S.C.1985,C.T-13.The
strongfindingsmadeagainsttheappellantsamplysupportthistort’scomponents:
goodwillattachedtotheproductbyvirtueofits”get-up”andmisrepresentation
(whetherintentionalornot)resultingorlikelytoresultindamagesbyreasonof
confusionastotheproduct’ssource.
TheCourtagreedwiththeappellantParksthattheproofwasinsufficienttoestablish
thetortofinterferencewithcontractualrelations,butconsideredthatthegeneral
damagesawardedwhereintendedtobringrelieftotherespondent’sother
grievances.Therefore,therespondent’sfailuretosupportaclaimforadditional
damagesonthegroundofinterferencewithcontractualrelationshasnoimpacton
theoutcomeoftheappeal.
Underthegeneraldamageshead,theCourtarbitrateda$4,000uncertaintyinthe
proofattherespondent’sexpenseandqualifiedtherespondent’sdecisiontowrite-
offotherfranchisees’feesasacreativewaytosaveherbusinessratherthanasa
self-inflictedloss.Thesplitoccurredoversomeotherpartsoftherespondent’sproof:
themajorityheldhasprovenalldamageassessmentsleftunchallengedattrialwhile
theminoritywentontore-assesthembasedontheproofonrecord.
Finally,thegeneralityoftheremediesavailableunders.34(1)ofthe
CopyrightAct,
R.S.C.1985,c.C-42
andtheapprovalofpunitivedamagesincopyrightinfringement
casessignaledbyFederalCourtofAppealinLubrizolCorp.v.ImperialOilLtd
(1996)197N.R.241convincedthecourtthatpunitivedamagesareavailablein
copyrightinfringementcases,althoughtheyshouldremainexceptional.Itagreed
withthetrialjudgethatthepresentcasecalledforsome,butwentontoreducethem
to$40,000forthetrialjudgeerredinlawbyrestrictingtheanalysisunderthe
proportionalityprinciple(oneofthe10principlessetoutinWhitenv.PilotInsurance
Co.,[2002]1S.C.R.595)totheappellants’blameworthiness.

3
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