Actuate Canada Corp. et al. v. Symcor Services Inc., 2016 ONCA 217
Jurisdiction | Ontario |
Judge | Gillese, van Rensburg and Miller, JJ.A. |
Court | Court of Appeal (Ontario) |
Citation | 2016 ONCA 217,(2016), 347 O.A.C. 155 (CA) |
Date | 06 October 2015 |
Actuate Can. v. Symcor Services (2016), 347 O.A.C. 155 (CA)
MLB headnote and full text
Temp. Cite: [2016] O.A.C. TBEd. MR.024
Actuate Canada Corporation and Actuate Corporation (plaintiffs/appellants) v. Symcor Services Inc. (defendant/respondent)
(C60073; 2016 ONCA 217)
Indexed As: Actuate Canada Corp. et al. v. Symcor Services Inc.
Ontario Court of Appeal
Gillese, van Rensburg and Miller, JJ.A.
March 18, 2016.
Summary:
The plaintiff ("Xenos") held a copyright in certain software which it licensed to Symcor Services Inc. pursuant to a License, Services and Support Agreement (LSSA). Xenos sued Symcor for breach of contract and copyright infringement, asserting that Symcor had violated the LSSA by (1) using the software on more than one production server and more than two non-production servers; (2) employing the software on operating systems other than IBM's AIX operating system; and (3) using the software in association with database systems other than IBM's CMOD system. Symcor admitted that it had used the software on multiple servers, on non-AIX operating systems and in association with non-CMOD database systems, but argued that the LSSA did not restrict these activities. Symcor also raised estoppel and limitation period defences, and argued that Xenos consented to its activities. Xenos moved for summary judgment on the liability issues and requested an order directing a reference or trial on damages.
The Ontario Superior Court, in a decision with neutral citation 2015 ONSC 689, granted the motion in part. The court found that the LSSA did not restrict Symcor's use to one server per licence, but that Symcor had breached the LSSA by using the software on operating systems other than AIX and with database systems other than CMOD. The court found that these breaches of contract also constituted copyright infringement within the meaning of the Copyright Act. The court rejected Symcor's estoppel defence and directed that the limitation period defence proceed as a component of the trial on damages. In a decision with neutral citation 2015 ONSC 1667, the court fixed Xenos's partial indemnity costs for the summary judgment motion at $280,000, but ordered that the determination of whether Xenos would be awarded such costs await the determination of its success at the damages trial. Xenos appealed, arguing that (1) the court erred in concluding that the LSSA permitted Symcor to use the software on more than one server per licence; and (2) the payment of its costs should not await the disposition of the damages trial. Symcor cross-appealed, arguing that the court erred in (1) concluding that the LSSA restricted its use of the software to AIX operating systems; (2) dismissing its estoppel defence; and (3) assessing costs.
The Ontario Court of Appeal dismissed Xenos's appeal and allowed Symcor's cross-appeal in part. The court set aside the dismissal of Symcor's estoppel defence in relation to the AIX restriction and referred this issue to trial along with the limitation period defence and the assessment of damages. The matter of costs was remitted to the motion judge for determination given Symcor's success on the estoppel issue.
Contracts - Topic 2165
Terms - Incorporation by reference - Schedules - Xenos held a copyright in certain software which it licensed to Symcor Services Inc. pursuant to a License, Services and Support Agreement (LSSA) - Xenos sued Symcor for breach of contract and copyright infringement, asserting that Symcor had violated the LSSA by employing the software on operating systems other than the AIX operating system - A motion judge found that Symcor had breached the LSSA by using the software on operating systems other than AIX, and that this breach of contract also constituted copyright infringement within the meaning of the Copyright Act - The motion judge noted that the Product Schedules under the LSSA described the software as being licensed for use on an AIX hardware platform, and rejected Symcor's argument that the Product Schedules were descriptive only, telling the user what the software was designed to work on rather than constituting a limitation on its license - The Ontario Court of Appeal dismissed Symcor's appeal on this issue - The Product Schedules were an integral part of the LSSA and defined or specified the software to be licensed - The fact that Symcor was required to pay for technical support required as a result of the software's unintended use did not mean that Xenos granted a license for such use - See paragraphs 70 to 82.
Contracts - Topic 7407
Interpretation - General principles - Whole contract to considered - Xenos held a copyright in certain software which it licensed to Symcor Services Inc. pursuant to a License, Services and Support Agreement (LSSA) - Xenos sued Symcor for breach of contract and copyright infringement, asserting that Symcor had violated the LSSA by using the software on multiple servers - A motion judge found that the LSSA did not restrict Symcor's use of the software to one server per licence - The Ontario Court of Appeal dismissed Xenos's appeal - There was no error in principle in the motion judge's interpretation of the LSSA, and any error of fact did not materially inform the motion judge's decision about the scope of and restrictions to Symcor's licenses - The motion judge looked at the contract as a whole and sought to give meaning to all of its terms and avoid an interpretation that would render one or more terms ineffective - The LSSA contained terms that were inconsistent with any restriction on the number of servers on which the software could be deployed - There was nothing commercially unreasonable in finding that the licenses granted under the LSSA were for use on an enterprise wide basis - See paragraphs 35 to 69.
Contracts - Topic 7416
Interpretation - General principles - Most commercially reasonable interpretation - [See Contracts - Topic 7407].
Estoppel - Topic 1161
Estoppel in pais (by conduct) - Representations - By conduct - Acquiescence - [See Practice - Topic 5708].
Practice - Topic 5702
Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - [See Practice - Topic 5708].
Practice - Topic 5708
Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - Xenos held a copyright in certain software which it licensed to Symcor Services Inc. pursuant to a License, Services and Support Agreement (LSSA) - Xenos sued Symcor for breach of contract and copyright infringement, asserting that Symcor had used the software in ways that were restricted by the LSSA - Symcor raised the estoppel defence, arguing that Xenos, through its post-contractual conduct, had consented to the way Symcor used the software - A judge on a summary judgment motion concluded that there was no genuine issue requiring a trial on the estoppel defence - The Ontario Court of Appeal allowed Symcor's appeal on this issue - The motion judge made a palpable and overriding error in stating that there was no evidence that anyone at Xenos with knowledge, responsibility or authority over licensing matters knew of the breaches before 2011 - There was evidence in the record of communications within Xenos that included the responsible account managers in 2005 and 2007, where it was apparent that Symcor was using the software on an unauthorized operating system - It was also illogical for the motion judge to dismiss the estoppel defence while allowing Symcor's limitation period defence to proceed to trial - Some of the same evidence would be relevant to both issues and it made sense for the estoppel issue to also proceed to trial - See paragraphs 83 to 104.
Practice - Topic 5720
Judgments and orders - Summary judgments - Order to proceed to trial - Terms - [See Practice - Topic 5708].
Practice - Topic 5725
Judgments and orders - Summary judgments - Costs - Xenos sued Symcor Services Inc. for breach of contract and copyright infringement - Xenos moved for summary judgment on the liability issues and requested an order directing a reference or trial on damages - The motion judge granted the motion on certain issues - The motion judge fixed Xenos's partial indemnity costs for the motion at $280,000, but ordered that the determination of whether Xenos would be awarded such costs await the determination of its success at the damages trial - Xenos appealed, arguing that the motion judge erred in declining to award Xenos its costs of the completed liability phase of the action and in deferring the award of costs of the motion until after the damages trial - The Ontario Court of Appeal dismissed the appeal - The motion judge's approach was sensible - His order permitted the necessary flexibility in the event that Xenos was awarded no damages or damages less than were provided for in Symcor's undisclosed offer to settle - See paragraphs 105 to 108.
Practice - Topic 6926
Costs - General principles - Time to award costs - [See Practice - Topic 5725].
Practice - Topic 7044
Costs - Party and party costs - Entitlement to - Where issues of liability and damages severed - [See Practice - Topic 5725].
Cases Noticed:
Ventas Inc. et al. v. Sunrise Senior Living Real Estate Investment Trust et al. (2007), 222 O.A.C. 102; 85 O.R.(3d) 254; 2007 ONCA 205, refd to. [para. 37].
Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 38].
Kentucky Fried Chicken Canada v. Scott Food Services Inc. et al. (1998), 114 O.A.C. 357; 41 B.L.R.(2d) 42; 1998 CanLII 4427 (C.A.), refd to. [para. 59].
Hryniak v. Mauldin, [2014] 1 S.C.R. 87; 453 N.R. 51; 314 O.A.C. 1; 2014 SCC 7, refd to. [para. 95].
D.L.G. & Associates Ltd. v. Minto Properties Inc. (2015), 341 O.A.C. 50; 391 D.L.R.(4th) 505; 2015 ONCA 705, refd to. [para. 102].
Manitoba Pool Elevators v. Gorrell (1998), 127 Man.R.(2d) 4 (Q.B.), refd to. [para. 102].
Counsel:
Matthew P. Gottlieb, Daniel A. Schwartz and Laura M. Wagner, for the appellants;
Daniel S. Murdoch, Patrick G. Duffy and Sean E. Gibson, for the respondent.
This appeal was heard on October 6, 2015, before Gillese, van Rensburg and Miller, JJ.A., of the Ontario Court of Appeal. The following judgment of the court was delivered by van Rensburg, J.A., on March 18, 2016.
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