Federal Court Of Appeal Upholds Significant Statutory And Punitive Damages For Successful Copyright Owner

• Published date: 08 March 2022
• Subject Matter: Intellectual Property, Copyright
• Law Firm: Gowling WLG
• Author: Ms Sarah Li and Doak Horne, LLB, P.Eng. (Mech. Eng.)

The Federal Court of Appeal's recent decision in 2424508 Ontario Ltd et al v. Rallysport Direct LLC (2022 FCA 24) upholding an earlier-obtained award to the plaintiff Rallysport at the trial level of statutory damages ($357,000 plus prejudgment interest) for copyright infringement as well punitive damages ($50,000) against two Ontario companies and their two directors and officers jointly and severally, will be encouraging to copyright owners, particularly in instances where the quantum and extent of the harm arising from the infringement may be difficult for the copyright owner to precisely quantify. Gowling WLG's Calgary office successfully represented the copyright owner and plaintiff Rallysport (respondent on appeal) a US automotive parts re-seller, both at the trial level and on the appeal.

The Federal Court of Appeal confirmed that a federal court judge can, where a plaintiff has elected to recover statutory damages, award significant statutory damages for infringement of a copyright owner's copyright. Moreover, punitive damages may in addition be awarded against a party or parties, and to the extent the award of statutory damages award may include a deterrence factor, such does not necessarily preclude a further award of punitive damages where circumstances warrant.

The decision under appeal arose from an earlier decision of Justice Fuhrer of the Trial Division regarding a summary judgement motion brought by the defendants, who were a competing automotive after-market reseller and who had reproduced, and throughout a substantial period of the action continued to reproduce, the plaintiff's photographic works of its automotive components and parts kits on the defendants' competing website. The defendants on such motion had argued, among other things, that where a plaintiff is not in the business of selling photographic works (the plaintiff was in the business of selling specialized automotive parts which it depicted in extensive and detailed photographs on its e-commerce website) the plaintiff could allegedly not suffer damage and thus could not claim damages. The defendants' motion further seeking to dismiss the action ultimately backfired, and Justice Fuhrer, on the plaintiff's effective cross-motion, found instead in favour of the plaintiff and ordered the defendants jointly and severally pay statutory damages in the amount of $250 per work on 1430 infringing photographic works ($357,500 in total) and also punitive damages to the plaintiff in the...