Entral Group International Inc. et al. v. Mcue Enterprise Corp. et al., 2010 FC 606

• Judge: Russell, J.
• Court: Federal Court (Canada)
• Case Date: March 30, 2010
• Jurisdiction: Canada (Federal)
• Citations: 2010 FC 606;(2010), 371 F.T.R. 56 (FC)

Entral Group Intl. Inc. v. Mcue Ent. Corp. (2010), 371 F.T.R. 56 (FC)

MLB headnote and full text

Temp. Cite: [2010] F.T.R. TBEd. JN.032

Entral Group International Inc., TC Worldwide Ltd., Universal Music Limited, EMI Group Hong Kong Limited, Emperor Entertainment (Hong Kong) Limited, Go East Entertainment Company Limited and its subsidiary What's Music International (Hong Kong) Limited, Cinepoly Record Co., Warner Music Hong Kong Ltd. (plaintiffs) v. Mcue Enterprise Corp., d/b/a/ Di Da Di Karaoke Company, Vitus Wai-Kwan Lee, Yuk Shi (Tom) Lo (defendants)

Mcue Enterprise Corp., d/b/a/ Di Da Di Karaoke Company, (plaintiff by counterclaim) v. Entral Group International Inc., TC Worldwide Ltd., Universal Music Limited, EMI Group Hong Kong Limited, Emperor Entertainment (Hong Kong) Limited, Go East Entertainment Company Limited and its Subsidiary What's Music International (Hong Kong) Limited, Cinepoly Record Co., Warner Music Hong Kong Ltd. (defendants by counterclaim)

(T-1009-04; 2010 FC 606)

Indexed As: Entral Group International Inc. et al. v. Mcue Enterprise Corp. et al.

Federal Court

Russell, J.

June 3, 2010.

Summary:

The plaintiffs owned the copyright in a number of musical works. EGI-Canada was authorized to licence reproduction, distribution, use and authorization of the works. The defendants were a business offering karaoke entertainment services to the public for a fee and its directors. The defendants used copies of the works in their business. EGI-Canada repeatedly warned the defendants that they were violating the plaintiffs' copyright and that they needed to enter into a licensing agreement or cease infringing the copyright. The defendants "stone-walled" by continuing to knowingly infringe copyright for approximately two years without entering a licensing agreement, forcing the plaintiffs to litigate. The plaintiffs brought a motion for summary judgment for declaratory and injunctive relief, and damages, under the Copyright Act, and dismissal of the defendant's counterclaim. The defendant filed no record on the hearing of the motion.

The Federal Court held that the defendants knowingly infringed the plaintiffs' copyright for an extended period of time. The court granted summary judgment for the declaratory and injunctive relief sought. The court ordered the defendants to pay $15,000 statutory damages for each of seven titles (plaintiffs sought the maximum $20,000), for a total of $105,000, plus punitive damages of $100,000. The defendants, guilty of reprehensible, scandalous and outrageous conduct, were also ordered to pay solicitor-client costs on a lump sum basis.

Copyright - Topic 4410

Infringement of copyright - General principles - Summary judgment - [See Copyright - Topic 4487 ].

Copyright - Topic 4487

Infringement of copyright - Acts constituting an infringement - Music - The plaintiffs owned the copyright in seven musical works - The defendants (karaoke business and its directors) intentionally, and for profit, violated the plaintiffs' copyright for approximately two years notwithstanding that they were warned to either cease using the copyrighted works or agree to pay a reasonable licensing fee - The plaintiffs sought summary judgment in their claim for declaratory and injunctive relief, statutory damages under the Copyright Act, and solicitor and client costs - The defendants did not file a record at the hearing of the motion - The Federal Court granted summary judgment, as there was no genuine issue for trial - The defendants flagrantly violated the plaintiffs' copyright despite having knowledge of the infringement - They were guilty of both primary and secondary infringement - The defendants forced the plaintiffs to incur the inconvenience and expense of court proceedings, while they continued to profit from using the copyrighted material without paying a reasonable licensing fee - The defendants were guilty of extreme bad faith and inexcusable conduct before and during the proceedings - A significant sanction was required for deterrence, and the malicious and high-handed disregard of the plaintiffs' copyright warranted punitive damages - The court awarded the plaintiffs $15,000 for each of the seven copyrighted works (maximum statutory award was $20,000), for a total of $105,000 - The court also awarded $100,000 punitive damages and ordered the defendants to pay solicitor and client costs.

Copyright - Topic 4586

Infringement of copyright - Remedies - Damages - [See Copyright - Topic 4487 ].

Damage Awards - Topic 2030.1

Exemplary or punitive damages - Copyright infringement - [See Copyright - Topic 4487 ].

Damage Awards - Topic 2423

Intellectual property - Copyright infringement - [See Copyright - Topic 4487 ].

Practice - Topic 7466.6

Costs - Solicitor and client costs - Entitlement to solicitor and client costs - Copyright actions - [See Copyright - Topic 4487 ].

Cases Noticed:

Interbox Promotion Corp. v. 9012-4314 Québec Inc. et al. (2003), 253 F.T.R. 1; 2003 FC 1254, refd to. [para. 25].

NFL Enterprises Limited Partnership v. 1019491 Ontario Ltd. et al. (1998), 229 N.R. 231; 85 C.P.R.(3d) 328 (F.C.A.), refd to. [para. 25].

Microsoft Corp. v. 1276916 Ontario Ltd. et al. (2009), 347 F.T.R. 248; 2009 FC 849, refd to. [para. 29].

Microsoft Corp. v. 9038-3746 Quebec Inc. et al. (2006), 305 F.T.R. 69; 2006 FC 1509, refd to. [para. 31].

L.S. Entertainment Group Inc. et al. v. Formosa Video (Canada) Ltd. et al. (2005), 281 F.T.R. 99; 2005 FC 1347, refd to. [para. 31].

Film City Entertainment Ltd. et al. v. Golden Formosa Entertainment Ltd. et al., [2006] F.T.R. Uned. 916; 2006 FC 1149, refd to. [para. 31].

Telewizja Polsat S.A. et al. v. Radiopol Inc. et al. (2006), 292 F.T.R. 195; 2006 FC 584, refd to. [para. 31].

Oakley Inc. et al. v. Doe et al. (2000), 193 F.T.R. 42 (T.D.), refd to. [para. 32].

Louis Vuitton Malletier S.A. et al. v. Yang et al., [2007] F.T.R. Uned. 803; 2007 FC 1179, refd to. [para. 34].

Profekta International Inc. v. Lee et al. (1997), 214 N.R. 309 (F.C.A.), refd to. [para. 35].

Louis Vuitton Malletier S.A. et al. v. 486353 B.C. et al., [2008] B.C.T.C. Uned. 454; 2008 BCSC 799, refd to. [para. 34].

Microsoft Corp. v. 9038-3746 Quebec Inc. et al. (2007), 314 F.T.R. 217; 2007 FC 659, refd to. [para. 36].

Microsoft Corp. v. PC Village Co. et al. (2009), 345 F.T.R. 57; 2009 FC 401, refd to. [para. 47].

Evocation Publishing Corp. v. Hamilton et al., [2002] B.C.T.C. Uned. 315; 24 C.P.R.(4th) 52 (S.C.), refd to. [para. 54].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-42, sect. 3(1), sect. 27(1), sect. 27(2), sect. 34, sect. 35, sect. 38.1(1), sect. 38.1(5), sect. 38.1(7) [para. 22].

Counsel:

Thomas M. Slahta, for the plaintiffs;

Vitus Wai-Kwan Lee, for the defendants.

Solicitors of Record:

Kestenberg Siegal Lipkus, LLP, Toronto, Ontario, for the plaintiffs;

Vitus Wai-Kwan Lee, Burnaby, British Columbia, for the defendants.

This motion was heard on March 30, 2010, at Toronto, Ontario, before Russell, J., of the Federal Court, who delivered the following judgment on June 3, 2010.