Harmony Consulting Ltd. v. Foss (G.A.) Transport Ltd. et al., (2012) 435 N.R. 200 (FCA)

JudgeLayden-Stevenson*, Gauthier and Stratas, JJ.A.
CourtFederal Court of Appeal (Canada)
Case DateFebruary 14, 2012
JurisdictionCanada (Federal)
Citations(2012), 435 N.R. 200 (FCA);2012 FCA 226

Harmony Consulting v. Foss Transport (2012), 435 N.R. 200 (FCA)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

Temp. Cite: [2012] N.R. TBEd. SE.006

Harmony Consulting Ltd. (appellant) v. G.A. Foss Transport Ltd., Gordon A. Foss and Joe Cristello (respondents)

(A-166-11; 2012 FCA 226; 2012 CAF 226)

Indexed As: Harmony Consulting Ltd. v. Foss (G.A.) Transport Ltd. et al.

Federal Court of Appeal

Layden-Stevenson*, Gauthier and Stratas, JJ.A.

August 31, 2012.

Summary:

The plaintiff sued the defendants for copyright infringement respecting certain computer programs.

The Federal Court, in a decision reported at 386 F.T.R. 171, dismissed the action. The plaintiff appealed.

The Federal Court of Appeal dismissed the appeal.

*Note: Layden-Stevenson, J.A., was unable to participate in the Court's deliberations and died on June 27, 2012. This judgment and the reasons were issued under s. 45(3) of the Federal Courts Act, R.S.C. 1985, c. F-7.

Editor's Note: A costs decision was reported at 389 F.T.R. 273 (F.C.).

Copyright - Topic 602

Nature of copyright - Reproduction - What constitutes - The plaintiff company brought an action for copyright infringement respecting certain computer programs, including Petro Dispatch (Petro) - Chari, the plaintiff's sole shareholder and director, had authored Petro - The plaintiff argued that its copyright in Petro was breached when modifications to Petro were made by programmers other than Chari - The plaintiff characterized all modifications as inherently requiring reproduction - The plaintiff argued that any modification was actually a copy of substantially all of the software - The trial judge held that opening a file, making modifications and then saving that file did not make a reproduction within the scope of s. 3 of the Copyright Act - Further, making a single backup copy for the purpose of modifying the software was not equivalent to the concept of multiplication - In any event, the defendants had the plaintiff's express consent to make backup copies under the licensing agreements - The plaintiff appealed and submitted, inter alia, that although the trial judge did not specifically refer to s. 30.6(b) of the Act in her reasons, she implicitly applied it to conclude that a single backup copy of the software was not a reproduction - The Federal Court of Appeal held that the copies could constitute infringing reproductions (s. 3) of the licensed programs, if done without consent - On the basis of the facts found by the trial judge, s. 30.6(b) did not apply - However, the plaintiff had not met its burden to prove the absence of consent - There was no evidence that these copies were used for any other purposes than backup, as permitted by the license agreements - The judge may have used the wrong turn of phrase ("making a single backup copy for the purpose of modifying the software" instead of "before modifying"), but this did not affect the validity of her findings - See paragraphs 70 to 74.

Copyright - Topic 1007

Works subject to copyright - General - Original works - The plaintiff company brought an action for copyright infringement respecting certain computer programs, including Petro Dispatch (Petro) - Chari, the plaintiff's sole shareholder and director, had authored Petro - The plaintiff argued that its copyright in Petro was breached when modifications to Petro were made by programmers other than Chari - The trial judge held that the defendants did not breach the plaintiff's copyright - Even though the defendants' modifications were substantial, they were not original - The Federal Court of Appeal held that the trial judge exhibited no palpable and overriding error in reaching this conclusion - One could easily describe the modifications as substantial when one considered that the corporate defendant could not dispatch or issue invoices without, for example, the proper prices, rates, or units of measure in place - However, this did not mean that such modifications were anything other than mechanical amendments that did not involve any significant skill and judgment as the trial judge found - See paragraphs 33 to 39.

Copyright - Topic 1025

Works subject to copyright - Particular works - Computer programs - At issue in this action, inter alia, was whether copyright subsisted in certain computer programs - The Federal Court of Appeal stated that "Generally, copyright in a compilation are independent and distinct from the copyright that may subsist in its individual parts ..." - See paragraph 66.

Copyright - Topic 1025

Works subject to copyright - Particular works - Computer programs - Section 2 of the Copyright Act provided, inter alia, that: "'computer program' means a set of instructions or statements, expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result;" - The Federal Court of Appeal disagreed with the statement that a screen display was simply a reproduction of the object code - The screen display on a user monitor was the result of such a set of instructions rather than a reproduction of the set of instructions in another form - To use the analogy used in Cuisenaire v. South West Imports Ltd., [1969] S.C.R. 208, the screen display was the rabbit pie rather than the recipe (being the set of instructions) - See paragraphs 85 to 90.

Copyright - Topic 1943

Ownership - By authorship - Where author an employee - The plaintiff company brought an action for copyright infringement respecting certain computer programs, including Petro Dispatch (Petro) - Chari, the plaintiff's sole shareholder and director, had authored Petro while working for Atrimed, a company owned by himself and his brother - The trial judge dismissed the action - The plaintiff appealed, submitting that the trial judge erred in finding that Chari did not own the copyrights in Petro (except for the moral rights), but that Atrimed did - It argued that she ignored compelling evidence in reaching the conclusion that Chari performed his work under a contract of service and so s. 13(3) of the Copyright Act applied to make Atrimed the owner - The Federal Court of Appeal held that the trial judge committed no palpable and overriding error in coming to this conclusion - See paragraphs 48 to 63.

Copyright - Topic 2203

Transfer of copyright - General - Assignment - What constitutes - The plaintiff company brought an action for copyright infringement respecting certain computer programs, including Petro Dispatch (Petro) - Chari, the plaintiff's sole shareholder and director, had authored Petro - The trial judge stated that where the defendants had challenged the title of the copyright, s. 34.1(1)(b) of the Copyright Act created a rebuttable presumption that Chari, as author, owned the copyright - This created a problem as Chari was not a named plaintiff - Chari relied on a nunc pro tunc assignment, dated June 10, 2009, to support the plaintiff's claim to ownership of Petro - The June 10, 2009 assignment purported to confirm a March 16, 2000 assignment from Chari to the plaintiff - However, there was no written assignment on the earlier date - Chari, whom the court found not to be credible, testified that the March 2000 assignment was solely in his mind - Under s. 13(4) of the Act, all assignments had to be in writing - There was insufficient evidence to support an inference that there was an intention, on or about March 16, 2000, to assign the copyright in Petro to the plaintiff - The court found that the assignment dated June 10, 2009, was purely a self-serving attempt to avoid the problems arising from the fact that Chari was not a party to the action - The Federal Court of Appeal found no palpable and overriding error in this conclusion - See paragraph 60.

Copyright - Topic 2208

Transfer of copyright - General - Moral rights - The Federal Court of Appeal stated that moral rights, such as the alleged misattribution of the work in the case before it, were vested in the author and could not be assigned - See paragraph 74.

Copyright - Topic 4484

Infringement of copyright - Acts constituting an infringement - Copying or using computer programs - [See Copyright - Topic 602 ].

Copyright - Topic 4553

Infringement of copyright - Acts not constituting an infringement - Copying or using computer programs - [See Copyright - Topic 602 ].

Copyright - Topic 6004

Practice - Evidence - Burden of proof - [See Copyright - Topic 6061 ].

Copyright - Topic 6004

Practice - Evidence - Burden of proof - The Federal Court of Appeal discussed the burden of proof in copyright cases, particularly the element of consent - See paragraphs 28 to 32.

Copyright - Topic 6061

Practice - Pleadings - General - The plaintiff company brought an action for copyright infringement respecting certain computer programs, including Petro Dispatch (Petro) - The plaintiff argued that the defendants should not have been entitled to challenge ownership by presenting a "new" argument that was not in its statement of defence as particularized - It noted that the defendants had not pleaded that Chari (Petro's author) or Atrimed (Chari's former company) owned the copyrights in Petro, since the defendants had not pleaded it in their statement of defence - The trial judge rejected the argument - Ownership of the copyright was challenged by the defendants in their pleadings and in the evidence obtained in cross-examining the plaintiff's representative - In any event, since copyright was a creature of statute, the plaintiff had to prove, on a balance of probabilities, each element of copyright infringement - One element was that the plaintiff owned the copyright allegedly infringed - The Federal Court of Appeal dismissed the plaintiff's appeal - In the end, the plaintiff had to prove its ownership - Regardless of the pleadings issue, the plaintiff by its own actions placed the relationship between Atrimed and Chari in issue by raising a nunc pro tunc assignment of the copyright to the plaintiff - See paragraphs 40 to 46.

Evidence - Topic 950

Real or demonstrative evidence - General - The plaintiff company brought an action for copyright infringement respecting certain computer programs - The trial judge dismissed the action - On appeal, the plaintiff submitted, inter alia, that it was entitled to a new trial because the trial judge's decision was vitiated by an evidentiary ruling respecting demonstrative evidence she had made, which ultimately impacted on her assessment of the credibility of the plaintiff's main witness, Chari - The Federal Court of Appeal dismissed the appeal - The judge applied the correct test by weighing the risk of allowing such a demonstration (prejudicial effect) against its probative value - Further, the trial judge had many reasons to support her finding that Chari was not credible, and those reasons were undisturbed on appeal - See paragraphs 95 to 101.

Evidence - Topic 1026

Relevant facts - Relevance and materiality - Admissibility - Prejudicial evidence - [See Evidence - Topic 950 ].

Practice - Topic 1335

Pleadings - The issues - Issues to be raised must be pleaded - [See Copyright - Topic 6061 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, appld. [para. 24].

South Yukon Forest Corp. et al. v. Canada (2012), 431 N.R. 286; 2012 FCA 165, refd to. [para. 25].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201; 44 B.L.R.(3d) 165 (C.A.), refd to. [para. 26].

Aga Khan v. Tajdin et al. (2011), 386 F.T.R. 171; 329 D.L.R.(4th) 521; 2011 FC 14, affd. (2012), 426 N.R. 190; 2012 FCA 12, refd to. [para. 29].

Positive Attitude Safety System Inc. et al. v. Albian Sands Energy Inc. et al., [2006] 2 F.C.R. 50; 343 N.R. 235; 2005 FCA 332, refd to. [para. 29].

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al., [2001] 2 S.C.R. 983; 274 N.R. 366; 150 O.A.C. 12; 2001 SCC 59, refd to. [para. 56].

Star-Kist Foods Inc. v. Registrar of Trademarks - see Marcus & Associates v. Quaker Oats Co. of Canada.

Marcus & Associates v. Quaker Oats Co. of Canada. (1988), 90 N.R. 310; 19 C.I.P.R. 60 (F.C.A.), refd to. [para. 61].

De Ball (J.L.) Canada Inc. v. 421254 Ontario Ltd. et al. (1999), 179 F.T.R. 231; 94 A.C.W.S.(3d) 738 (T.D.), refd to. [para. 61].

Star Data Systems Inc. v. Quasimodo Consulting Services Ltd. (1996), 18 O.T.C. 42, 67 A.C.W.S. (3d) 55 (Gen. Div.), refd to. [para. 66].

CCH Canadian Ltd. et al. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339; 317 N.R. 107; 2004 SCC 13, refd to. [para. 66].

Robertson v. Thompson Corp. et al., [2006] 2 S.C.R. 363; 353 N.R. 104; 217 O.A.C. 332; 2006 SCC 43, refd to. [para. 66].

Delrina Corp. v. Triolet Systems Inc. et al. (1993), 69 O.T.C. 1; 9 B.L.R.(2d) 140; 47 C.P.R.(3d) 1 (Gen. Div.), affd. (2002), 156 O.A.C. 166; 58 O.R.(3d) 339 (C.A.), refd to. [para. 77].

Eros - Équipe de recherche opérationnelle en santé inc. v. Conseillers en gestion et informatique C.G.I. inc. et al. (2004), 258 F.T.R. 172; 2004 FC 178, refd to. [para. 77].

Cuisenaire v. South West Imports Ltd., [1969] S.C.R. 208; 2 D.L.R.(3d) 430, appld. [para. 89].

Authors and Works Noticed:

Vaver, David, Consent or No Consent: The Burden of Proof in Intellectual Property Infringement Suits (2001), 23 I.P.J. 147, pp. 148, 149 [para. 32].

Counsel:

Anthony Prenol, for the appellant;

Christopher J. Staples, for the respondent.

Solicitors of Record:

Blake, Cassels & Grayson LLP, Toronto, Ontario, for the appellant;

Chaitons LLP, Toronto, Ontario, for the respondent.

This appeal was heard at Ottawa, Ontario, on February 14, 2012, by Layden-Stevenson, Gauthier and Stratas, JJ.A., of the Federal Court of Appeal. On August 31, 2012, Gauthier, J.A., delivered the following decision, which was concurred in by Stratas, J.A. Layden-Stevenson, J.A., was unable to participate in the court's deliberations and died on June 27, 2012.

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8 practice notes
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    • Irwin Books Statutory Interpretation. Third Edition Preliminary Sections
    • June 23, 2016
    ...Columbia (Minister of Forests), 2004 SCC 73 ............. 252 STATUTORY INTERPRETATION 386 Harmony Consulting Ltd v GA Foss Transport Ltd, 2012 FCA 226 ................... 74 Hartling v Nova Scotia (Attorney General), 2009 NSCA 130 ........................... 298 Harvard College v Canada (C......
  • Technical Meaning and Meanings Fixed by Law
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    ...also Canada (National Revenue) v Meyers Norris Penny Limited , 2014 ABCA 176 at para 20; Harmony Consulting Ltd v GA Foss Transport Ltd , 2012 FCA 226 at para 72. Technical Meaning and Meanings Fixed by Law 75 “derivative,” established through judicial notice, was “drugs originating in or o......
  • Keatley Surveying Ltd. v. Teranet Inc., 2012 ONSC 7120
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    • Superior Court of Justice of Ontario (Canada)
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    ...basis to prove their infringement claim. This follows the recent decision in Harmony Consulting Ltd. v. G.A. Foss Transport Ltd. , 2012 FCA 226, [2012] F.C.J. No. 1131 at para. 31, where the court confirmed that the burden rests on the plaintiff to prove lack of consent. Therefore, the dete......
  • Tremblay c. Orio Canada Inc.,
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    • Federal Court (Canada)
    • January 31, 2013
    ...339. diSTinGUiSHed: dÉCiSiOn diFFÉrenCiÉe : Harmony Consulting Ltd. v. G.A. Foss Transport Ltd., 2011 FC 340, 92 C.P.r. (4th) 6, affd 2012 FCa 226, 107 C.P.r. (4th) Harmony Consulting Ltd. c. G.A. Foss Transport Ltd., 2011 CF 340, conf. par 2012 CaF 226. COnSidered: dÉCiSiOnS examinÉeS : Tr......
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6 cases
  • Keatley Surveying Ltd. v. Teranet Inc., 2012 ONSC 7120
    • Canada
    • Superior Court of Justice of Ontario (Canada)
    • December 14, 2012
    ...basis to prove their infringement claim. This follows the recent decision in Harmony Consulting Ltd. v. G.A. Foss Transport Ltd. , 2012 FCA 226, [2012] F.C.J. No. 1131 at para. 31, where the court confirmed that the burden rests on the plaintiff to prove lack of consent. Therefore, the dete......
  • Tremblay c. Orio Canada Inc.,
    • Canada
    • Federal Court (Canada)
    • January 31, 2013
    ...339. diSTinGUiSHed: dÉCiSiOn diFFÉrenCiÉe : Harmony Consulting Ltd. v. G.A. Foss Transport Ltd., 2011 FC 340, 92 C.P.r. (4th) 6, affd 2012 FCa 226, 107 C.P.r. (4th) Harmony Consulting Ltd. c. G.A. Foss Transport Ltd., 2011 CF 340, conf. par 2012 CaF 226. COnSidered: dÉCiSiOnS examinÉeS : Tr......
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    ...Tri-tex Co inc v Ghaly, 1999 CanLII 13314, 1 CPR (4th) 160 (QC CA) at pp 171-172; Harmony Consulting Ltd v GA Foss Transport Ltd, 2012 FCA 226 at paras 88–89; Proline Pipe Equipment Inc v Provincial Rentals Ltd, 2019 ABQB 983 at paras [71] For its part, GEREC asserts that copyri......
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    ...SCC 13, refd to. [para. 27]. Harmony Consulting Ltd. v. Foss (G.A.) Transport Ltd. et al. (2011), 386 F.T.R. 171; 2011 FC 340, affd. (2012), 435 N.R. 200; 2012 FCA 226, dist. [para. Mensys Business Solution Centre Ltd. v. Drummond (Municipalité régionale de comté), [2002] R.J.Q. 765, refd t......
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2 books & journal articles
  • Table of cases
    • Canada
    • Irwin Books Statutory Interpretation. Third Edition Preliminary Sections
    • June 23, 2016
    ...Columbia (Minister of Forests), 2004 SCC 73 ............. 252 STATUTORY INTERPRETATION 386 Harmony Consulting Ltd v GA Foss Transport Ltd, 2012 FCA 226 ................... 74 Hartling v Nova Scotia (Attorney General), 2009 NSCA 130 ........................... 298 Harvard College v Canada (C......
  • Technical Meaning and Meanings Fixed by Law
    • Canada
    • Irwin Books Statutory Interpretation. Third Edition Establishing First Impression Meaning
    • June 23, 2016
    ...also Canada (National Revenue) v Meyers Norris Penny Limited , 2014 ABCA 176 at para 20; Harmony Consulting Ltd v GA Foss Transport Ltd , 2012 FCA 226 at para 72. Technical Meaning and Meanings Fixed by Law 75 “derivative,” established through judicial notice, was “drugs originating in or o......

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