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Who Can Sue for Copyright Infringement?

Case management Judge Trent Horne of the Federal Court recently said “The Copyright Act is, at the risk of understatement, complex.”[1]

His case serves to illuminate several key points of that complexity. Generally, copyright owners need to be added as parties to a lawsuit or their not being added has to be justified. Secondly, the pleadings must satisfy the Court that a licensee has the right to sue.

The starting point is that a copyright owner can sue a defendant for copyright infringement and the owner would generally be a party to that lawsuit.

The status of a licensee is more involved. The status is provided in Section 41.23(1) of the Copyright Act, which states:

Subject to this section, the owner of any copyright, or any person or persons deriving any right, title or interest by assignment or grant in writing from the owner, may individually for himself or herself, as a party to the proceedings in his or her own name, protect and enforce any right that he or she holds, and, to the extent of that right, title and interest, is entitled to the remedies provided by this Act.

Section 41.23(1) of the Copyright Act provides that a licensee or other person deriving any right, title or interest under a copyright by assignment or grant in writing may enforce that right under the Copyright Act.

The Federal Court has held that a statement of claim may be struck if it does not explicitly plead that the grant is in writing.[2]

It can also be problematic if the copyright owner is not a party to the copyright infringement lawsuit.

Under Section 41.23(2) of the Copyright Act the default position is that the copyright owner shall be made a party to the proceedings.[3] That Section provides:

If proceedings under subsection (1) are taken by a person other than the copyright owner, the copyright owner shall be made a party to those proceedings, except

(a) in the case of proceedings taken under section 44.12, 44.2 or 44.4;

(b) in the case of interlocutory proceedings, unless the court is of the opinion that the interests of justice require the copyright owner to be a party; and

(c) in any other case in which the court is of the opinion that the interests of justice do not require the copyright owner to be a party.

The plaintiff bears the onus of showing why it is in the interest of justice that the copyright owners not be added as parties.[4]

Courts have considered factors relevant to assessing if is in the interests of justice to dispense with adding the copyright holders as a part to a copyright infringement action, as follows:

(a) the copyright owner has an interest in the action or the relief claimed;

(b) the defences to the action relate to the copyright owner’s interest;

(c) the plaintiff or defendant demonstrates an interest in having the copyright owner added;

(d) the copyright owner would participate in the proceedings or consent to being added as a plaintiff;

(e) the addition of the copyright owner would cause unnecessary complexity, cost, or delay;

(f) the defendant will be exposed to further litigation if the copyright owner is not made a party;

(g) the party seeking the addition would be prejudiced by the denial; and

(h) the plaintiff has the authority or the contractual obligation to represent the legal rights of the copyright owner.[5]

In a case where the plaintiff does not add copyright owners to an action and fails to meet its onus to clearly state what persons or entities are sought to be excused from direct participation, and demonstrate or describe the material facts and documents that justify the relief for each of them then the claim may be struck with leave to amend.[6]

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[1] See Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC) at para 9.

[2] See Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC) at para 26.

[3] See Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC) at para 32. Note that subsections (a), (b) and (c) provide for specific exceptions to the general rule.

[4] See Spanski Enterprises, Inc v IMB+ Records Inc, 2013 ONSC 5382 at para 6; Allarco Entertainment 2008 Inc v Staples Canada ULC, 2021 ABQB 340 at para 19; Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC) at para 33.

[5] See Allarco Entertainment 2008 Inc v Staples Canada ULC, 2021 ABQB 340 at paras 9 – 14; applied in Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC) at para 37.

[6] See Sony Music Entertainment Canada Inc. v. SUVA Beauty Inc. T-1256-21 Jan 31, 2022 (FC)

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