Date: 20090917
Docket: T-1928-04
Citation: 2009 FC 849
Ottawa, Ontario, September 17, 2009
PRESENT: The Honourable Mr. Justice Mandamin
BETWEEN:
MICROSOFT
CORPORATION
Plaintiff
and
1276916 ONTARIO LTD., SAMIR MOHAMED
JISRI,
AFI KHAN and ASH MATAR
Defendants
AMENDED REASONS FOR JUDGMENT
AND JUDGMENT
[1]
The
Plaintiff, Microsoft Corporation (“Microsoft”) commenced the underlying action
for copyright infringement against the Defendants. Microsoft is the owner of
the copyright in the various computer programs in question. The action relates
to a business operated by the Defendants under the name “Smart Buy” which has
been selling and distributing unlicensed copies of Microsoft computer programs installed
in the computer systems it sells.
[2]
Microsoft
now brings a motion for default judgment against 1276916 Ontario Ltd. and
Samir Mohamed Jisri. Mr. Jirsi is the sole director and shareholder of 1276916
Ontario Ltd. Microsoft has discontinued against the other Defendants, Afi Khan
and Ash Matar.
[3]
Initially, 1276916 Ontario Ltd. and Samir
Mohamed Jisri (“Smart Buy”) were represented by counsel and defended the
action. Smart Buy frequently missed court imposed deadlines, necessitating the
Plaintiff to follow-up with counsel and the Court. Smart Buy misled Microsoft
about whether it was still in business. It persisted in infringing activities
after the litigation was commenced. It generally delayed the conduct of this
action. Eventually, Smart Buy’s counsel withdrew from the action because
counsel could not contact and obtain instructions from its client. Smart Buy’s
Statement of Defence was struck out by Order of Prothonotary Aalto dated
February 2, 2009 for failure to comply with court orders and participate in the
action.
[4]
Microsoft now applies for default judgment against
1276916 Ontario Ltd and Samir Mohamed Jisri, the directing mind of 1276916
Ontario Ltd., seeking as relief:
a. statutory damages of $120,000
b.
punitive damages of at
least $50,000;
c. a permanent injunction; and,
d. solicitor client costs.
[5]
Microsoft has registered copyright in Canada for the eight software programs in
issue in this action. Those programs are:
§
Microsoft Office Access 2003
§
Microsoft Office Excel 2003
§
Microsoft Office PowerPoint 2003
§
Microsoft Office Professional Edition 2003
§
Microsoft Office Publisher 2003
§
Microsoft Office Word 2003
§
Microsoft Windows XP Professional
[6]
When a business sells a computer system with
licensed Microsoft software installed on the computer, the complete software
package should include, among other things, the appropriate: (a) CD-ROM(s);
(b) a Certificate of Authenticity (COA) label; and (c) in the case of Microsoft
Windows XP Professional, a manual.
Smart Buy
[7]
The business of Smart Buy includes the sale of
computers and related products. 1276916 Ontario Ltd. remains an active Ontario corporation; however, the Smart Buy
store at 755 Queensway East, Unit 101, Mississauga,
Ontario no longer in business.
Copyright
Violations
[8]
Microsoft maintains a database of reports
relating to software piracy. Members of the public can report instances of
suspected piracy to Microsoft with the assurance their identity will remain
secret. Prior to the commencement of the lawsuit against Smart Buy, Microsoft
received ten piracy reports regarding Smart Buy. The reports described a range
of activities, including installing unlicensed copies of Microsoft software
onto new computers and either not providing the customer with CD-ROM(s) or
providing burned CD-Rs of the Microsoft software installed. Customers were
also asked to sign a document indicating any “illegal” software installed on
the computer was theirs.
September, 2003 Offer to Sell
[9]
On September 19, 2003, an investigator visited
Smart Buy. Smart Buy’s store manager offered to sell a computer system with
copies of Microsoft Windows XP Professional and Microsoft Office XP
Professional pre-installed on the computer at no cost, with “back-up” copies of
the software in question rather than the original CD-ROMs. It appears Smart
Buy offered to install unlicensed copies of Microsoft software, specifically
Microsoft Windows XP and Microsoft Office XP Professional, onto the hard drive
of the computer being offered for sale.
Cease and
Desist Letter
[10]
As a result, a cease and desist letter from
Microsoft’s outside counsel dated October 22, 2003 was sent to Smart Buy. After
sending the cease and desist letter to Smart Buy, Microsoft continued to
receive piracy reports relating to Smart Buy. Microsoft then sent a warning
letter dated March 8, 2004 to Smart Buy.
July, 2004 Sale of a Computer with Unauthorized
Microsoft Programs
[11]
The specific allegations that underlie the Statement
of Claim relate to events that took place in July, 2004. A Microsoft investigator
visited Smart Buy on July 16, 2004, and dealt with an individual who identified
himself as “Afi Khan”. The investigator requested a quote for a new clone
computer. The investigator indicated he wanted Windows XP and Microsoft
Office. Afi Khan told the investigator that the programs would be loaded on
the computer but that no CDs or Certificates of Authenticity (COAs) would be
included. The investigator provided a $100 deposit to purchase the computer
system and returned on July 21, 2004 to pick it up.
[12]
When the investigator returned to pick up the
computer, the investigator dealt with a person named “Ash Matar”. The
investigator asked Ash Matar if the investigator could see the computer running
before paying the balance of the computer. Ash Matar hooked the computer up
and demonstrated Windows XP had been installed. The investigator noted
Microsoft Office had not been installed and told Ash Matar this program was to
have been installed on the computer. Ash Matar proceeded to manually install
the program on the computer. The computer system sold by Smart Buy contained
unauthorized copies of the following Microsoft computer programs copied onto
the hard drive: Microsoft Office Access 2003; Microsoft Office Excel
2003; Microsoft Office PowerPoint 2003; Microsoft Office
Professional Edition 2003, Microsoft Office Publisher 2003; Microsoft Office
Word 2003 and Microsoft Windows XP Professional.
History of
this Action
[13]
Microsoft commenced this action on October 29,
2004. Service was accepted on behalf of 1276916 Ontario Ltd. and Samir Mohamed
Jisri on November 4, 2004 and the Defendants subsequently filed a brief Statement
of Defence.
[14]
Microsoft continued to receive piracy reports
relating to Smart Buy after the lawsuit was commenced. In January, 2006, where
Smart Buy sold a customer computer systems with copies of Microsoft Windows XP
and Microsoft Office installed on the computers, the customer did not receive
CD-ROMs or Certificate of Authenticity labels for the software. In addition,
the invoice that Smart Buy provided to the customer for the sale of the
computers was stamped “No Software was installed or sold with this
system/invoice. The client holds full responsibility for any illegal software
installed or copied.”
[15]
Pursuant to the Order of Madam Prothonotary
Milczynski dated January 31, 2006 (the “January 31st, 2006 Order”),
a schedule was set for the steps in the proceeding.
[16]
A direction to attend was served by counsel for
Microsoft requiring a representative of 1276916 Ontario Ltd. and Samir Mohamed
Jisri to attend on examination for discovery on February 24, 2006. Two days
before the scheduled day for discovery, on February 22, 2006, Smart Buy’s
counsel contacted Plaintiff’s counsel and stated their clients informed them
that Smart Buy was no longer in business.
[17]
On February 23, 2006, an investigator visited
Smart Buy to confirm if Smart Buy was still in business and investigate Smart
Buy for possible copyright infringement. Smart Buy was still in business. Smart
Buy offered to sell the investigator a computer with unlicensed copies of
Microsoft software installed on it notwithstanding Microsoft’s lawsuit against the
company.
[18]
The examination for discovery of Samir Mohamed
Jisri on his own behalf and as a representative of 1276916 Ontario Ltd. took
place on February 24, 2006. Despite the service of various Directions to
Attend by Microsoft’s counsel and requests for the production of specific
documents, the Defendant arrived empty handed.
[19]
Mr. Jisri described his role and involvement
with 1276916 Ontario Ltd., Mr. Jisri confirmed he was the owner and CEO of the
company and the driving force behind the incorporation of 1276916 Ontario Ltd.
His responsibilities include purchasing, marketing, advertising, international
relations, computer sales and dealing with customers. Among other things, Mr.
Jisri signed the lease on behalf of the company, signs company cheques and
deals with the company’s banking. Mr. Jisri also testified that Smart Buy’s
business was “more of a family business”, that his brother and his cousin were
involved in the business in sales and watching the store.
[20]
Notwithstanding that
undertakings given at the examination for discovery of Mr. Jisri and the
January 31st, 2006 Order imposed a deadline of April 30, 2006 for
the answers to undertakings, Smart Buy failed to meet the court imposed
deadline.
[21]
Microsoft’s counsel therefore wrote to counsel
for Smart Buy by letter dated November 22, 2007 requesting dates in January and
February, 2008 when it would be convenient for defendants’ counsel and his
client to attend the pre-trial conference. Smart Buy’s counsel responded to
the request for available pre-trial dates by letter dated November 23, 2007.
That letter stated in part:
Please be advised that I have just been
notified that Smart Buy Canada is no longer in business. Unfortunately, I have
tried to contact my client, but I understand he is out of the jurisdiction and
I have no instructions with respect to this matter.
[22]
Microsoft investigated Smart Buy’s claim that it
was no longer in business. These inquiries revealed not only that Smart Buy
was still in business, but that Smart Buy’s pattern of infringing behaviour
continued.
[23]
In December, 2007, an investigator visited Smart
Buy and the investigator asked an individual identified as “Alex” for a quote
for a new custom built computer system. The investigator told Alex he was
interested in the $300 computer. The investigator asked Alex if the operating
system was included in the price. Alex told the investigator that Microsoft
Windows XP Home was $49.99 extra and Microsoft Windows XP Professional was
$69.99 extra. The investigator gave Alex a $60.00 deposit and Alex indicated
that it would take 2-3 days to assemble the computer and provided the
investigator with an invoice. The investigator returned to Smart Buy on
December 6, 2007 to pick up the computer system. A technician hooked up the
computer and demonstrated that Windows XP Professional and Microsoft Word had
been installed.
[24]
The computer system sold by Smart Buy contained
unauthorized copies of the following Microsoft computer programs copied onto
the hard drive: Microsoft Office Access 2003; Microsoft Office Excel
2003; Microsoft Office PowerPoint 2003; Microsoft Office
Professional Edition 2003, Microsoft Office Publisher 2003; Microsoft Office
Word 2003 and Microsoft Windows XP Professional.
[25]
On January 18, 2008, Microsoft informed Smart
Buy’s counsel that his client was still in business and that Smart Buy’s
pattern of infringing behaviour continued. In the same letter, Microsoft again
requested dates in January, February or March, 2008 for Smart Buy and its
counsel to attend on a pre-trial conference. No response was received from
Smart Buy’s counsel to the January 18, 2008 letter. As a result, a further
follow up letter was sent by counsel for Microsoft to counsel for Smart Buy.
Again, no response was received from Smart Buy’s counsel.
[26]
In the context of discussions on a completely
unrelated matter, Smart Buy’s counsel indicated that he had received no
response from his client and that he may bring a motion to get off the record.
Ultimately, by notice of motion dated April 24, 2008, Smart Buy’s counsel,
brought a motion to be removed as solicitor of record which such motion was
heard on June 16, 2008.
[27]
By Order of Prothonotary Kevin R. Aalto dated
June 16, 2008 (the “June 16th, 2008 Order”), Klaiman Edmonds was
removed as the solicitor of record for Smart Buy. The June 16th,
2008 Order also stated:
2. Klaiman, Edmonds shall send a copy of this Order by
regular mail to the Defendants, 1276919 [sic – 1276916] Ontario Ltd. and Samir
Mohamed Jisri, at the following addressees:
755
Queensway, Unit 101
Mississauga, Ontario
L4Y 4C5
and
1119
Shadeland Drive,
Mississauga, Ont.
L5C 1P2
3. Klaiman,
Edmonds shall also e-mail a
copy of this Order to the Defendants, 1276919 [sic – 1276916] Ontario Ltd. and
Samir Mohamed Jisri, at sjisri@cct.ca
4.
The Defendant, 1276916 Ontario Ltd., shall appoint solicitors to
represent it in this proceeding on or before July 15, 2008 failing which it
shall bring a motion that it be granted leave to be represented by one of its
Shareholders, Directors or Officers.
4. The Defendants, 1276916 Ontario Ltd. and
Samir Mohamed Jisri, shall provide to the Court on or before July 15, 2008
current active phone numbers where these Defendants can be reached so that a
case conference can be convened to set a schedule for next steps in this
proceeding.
[28]
Copies of the June 16th, 2008 Order
were served on 1276916 Ontario Ltd. and Samir Mohamed Jisri. 1276916 Ontario
Ltd. did not appoint a solicitor to represent it, nor did it seek leave to be
represented by one of its shareholders, officers or directors.
[29]
Ultimately the Statement of Defence was struck
out by Order of Prothonotary Aalto dated February 2, 2009,
for a failure to comply with court orders and participate in this action. By
Order of Prothontary Kevin R. Aalto dated February 2, 2009 (the “February 2,
2009 Order”) the Court ordered as follows:
THIS COURT ORDERS
that:
1. The
statement of defence of the Defendants 1276916 Ontario Ltd. and Samir Mohamed
Jisri dated November 18, 2004 is hereby struck out for the failure of 1276916
Ontario Ltd. and Samir Mohamed Jisri to comply with the Order of Prothonotary
Kevin Aalto dated June 16, 2008, which such order required the Defendants,
1276916 Ontario Ltd. to appoint solicitors to represent it in this proceeding
on or before July 15, 2008, failing which is [sic – it] was to bring a motion
to be granted leave to be represented by one of its shareholders, directors or
officers and which such Order required the Defendants 1276916 Ontario Ltd. and
Samir Mohamed Jisri to provide to the Court on or before July 15, 2008 current
active phone numbers at which these Defendants could be reached so that a case
conference could be convened to set a schedule for next steps.
2. Plaintiff’s
counsel, Osler, Hoskin & Harcourt LLP (“Osler”) shall send a copy of this
Order by regular mail to the Defendants, 1276916 Ontario Ltd. and Samir Mohamed
Jisri, at the following addresses:
755 Queensway, Unit 101
Mississauga, Ontario
L4Y 4C5
and
1119 Shadeland Drive
Mississauga, Ontario
L5C 1P2
3. Osler
shall also e-mail a copy of this Order to the Defendants, 1276916 Ontario Ltd.
and Samir Mohamed Jisri, at sjisri@cct.ca.
4. 1276916
Ontario Ltd. and Samir Mohamed Jisri shall have 30 days from service of this
Order to provide their contact details to the Court, and, to the extent that
1276916 Ontario Ltd. and Samir Mohamed Jisri wish to participate in this
action, to file a statement of defence, failing which Microsoft may move for
default judgment.
[29]
Copies of the February 2nd, 2009
Order, together with a cover letter dated February 3, 2009, were served by
regular mail and by e-mail to the addresses as specified in the February 2nd
Order.
[30]
Pursuant to paragraph 4 of the February 2nd,
2009 Order, 1276916 Ontario Ltd. and Samir Mohamed Jisri had 30 days from
service of the February 2nd, 2008 Order “to provide their contact
details to the Court, and, to the extent that 1276916 Ontario Ltd. and Samir
Mohamed Jisri wish to participate in this action, to file a Statement of
Defence, failing which Microsoft may move for default judgment.” 1276916
Ontario Ltd. and Samir Mohamed Jisri have failed to provide their contact
details to the Court. Moreover, neither 1276916 Ontario Ltd. nor Samir Mohamed
Jisri has filed a Statement of Defence since the February 2, 2009 Order.
APPLICABLE RULES
[31]
The applicable rule is Rule 210 of the Federal
Court Rules, which provides as follows:
210. (1) Motion
for default judgment - Where a Defendant fails to serve and file a
statement of defence within the time set out in rule 204 or any other time
fixed by an order of the Court, the plaintiff may bring a motion for judgment
against the Defendant on the statement of claim.
(2) Motion
in writing - Subject to section 25 of the Crown Liability and
Proceedings Act, a motion under subsection (1) may be brought ex parte
and in accordance with rule 369.
(3) Affidavit
evidence - A motion under subsection (1) shall be supported by affidavit
evidence.
(4) Disposition
of motion - On a motion under subsection (1), the Court may
(a) grant
judgment;
(b) dismiss
the action; or
(c) order that the action proceed to
trial and that the plaintiff prove its case in such a manner as the Court may
direct.
CASE LAW
[32]
The approach to be taken on a motion for default
judgment and the applicable test was summarized by Snider J. in Louis
Vuitton Malletier S.A. v. Yang as follows:
[4] On
a motion for default judgment, where no Statement of Defence has been filed,
every allegation in the Statement of Claim must be treated as denied. A
plaintiff must first establish that the defendant was served with the Statement
of Claim and has not filed a defence within the deadline specified in Rule 204
of the Federal Courts Rules, SOR/98-106. Evidence must be led that
enables the Court to find, on a balance of probabilities, that infringement has
occurred within the meaning of the relevant statute. . .
Louis Vuitton
Malletier S.A. v. Yang,
2007 FC 1197, at para 4
[33]
The decision in Louis Vuitton Malletier S.A. v.
Yang sets out the issues on a motion for default judgment on copyright
infringement as follows:
(a)
has the defendant been served with the statement
of claim;
(b)
has the defendant not filed a statement of
defence within the deadline specified in Rule 204;
(c)
has the plaintiff established ownership of the
copyrights in question;
(d)
has the plaintiff established infringement of
those rights by the defendant; and
(e)
the relief to be granted.
Louis Vuitton Malletier S.A. v. Yang, supra, at paras 4, 7 to 16
[34]
The first four issues are factual in nature. The
evidence above establishes these facts in this case.
RELIEF SOUGHT
[35]
Microsoft seeks the following relief: (a) statutory damages of $15,000 for each of the 8 works infringed for
a total of $120,000; (b) punitive damages of at least
$50,000; (c) a permanent injunction; and, (d) solicitor client costs.
Statutory Damages – Copyright
Infringement
[36]
With respect to the claim for copyright
infringement, Microsoft has elected statutory damages. The applicable
provision of the Copyright Act R.S. 1985, c. C-42 is section
38.1, which provide as follows:
38.1 (1) Subject
to this section, a copyright owner may elect, at any time before final judgment
is rendered, to recover, instead of damages and profits referred to in
subsection 35(1), an award of statutory damages for all infringements involved
in the proceedings, with respect to any one work or other
subject-matter, for which any one infringer is liable individually, or for
which any two or more infringers are liable jointly and severally, in a sum of
not less than $500 or more than $20,000 as the court considers just.
. . .
(5) In
exercising its discretion under subsections (1) to (4), the court shall
consider all relevant factors, including
(a) the
good faith or bad faith of the defendant;
(b) the
conduct of the parties before and during the proceedings; and
(c) the
need to deter other infringements of the copyright in question.
. . .
(7) An
election under subsection (1) does not affect any right that the copyright
owner may have to exemplary or punitive damages.
[37]
A number of cases have now considered section
38.1 and granted statutory damages. There are three decisions that are
noteworthy for present purposes. The first is the decision of Harrington J. in
Microsoft v. 9038-3746 Quebec Inc., 2006 FC
1509, Harrington J. awarded the maximum permitted statutory damages of
$20,000 per work for each of the 25 computer programs that had been infringed
for a total of $500,000 in statutory damages, as well as punitive damages.
[38]
The second decision is the subsequent decision
of Snider J. in Louis Vuitton Malletier S.A. v. Yang, 2007 FC
1179. Snider J., after reviewing the applicable factors, awarded the maximum
statutory damages of $20,000 for each of the two works infringed.
[39]
The third decision is my decision in Microsoft
Corporation v. PC Village Co. Ltd., 2009 FC 401. It also involved a
motion for default judgment. The underlying infringement in the action also
related to the sale of computers with unauthorized copies of Microsoft computer
programs. After reviewing the applicable factors I awarded statutory damages
of $10,000 each per work infringed for a total of $150,000.
[40]
The first and second factors enumerated in
section 38.1(5), are bad faith and conduct before and during the proceedings. An
important consideration in relation to both factors is the continuation of the
infringing activity after receipt of notice. Another consideration is whether
or not the infringing conduct is an isolated incident. I
find Smart Buy’s conduct clearly demonstrated bad faith. Smart Buy continued
its infringing activities not only after warnings but also after the action
commenced in Court. Further, Smart Buy sought to mislead the Plaintiff by
advising it was no longer in business when it was, all while its infringing
activities persisted.
[41]
With respect to the third factor, deterrence,
the following comments in Louis Vuitton Malletier S.A. v. Yang, supra
are appropriate.
[25]
Next, I turn to the need to deter others. ...
Another aspect of deterrence that is relevant is the behaviour of the
Defendants. The award in this case should attempt to deter conduct where orders
of the Court and other legal remedies are blatantly ignored. In my view, a high
award is necessary to deter future infringement and, secondarily, to deter open
disrespect for Canada’s copyright protection laws.
[42]
I conclude the amount of
statutory damages must reflect not only the Defendants’ bad faith and their
disregard for the rights of the Plaintiff. In light of
Smart Buy’s ongoing infringement of Microsoft’s copyrights despite having
received notice of its infringing activities, including through the
commencement of this lawsuit, there is a need to deter further infringing
activity by Smart Buy. In my
view, the amount for statutory copyright damages must be sufficiently high to
serve a salutary message and deter future infringements.
[43]
Further, software piracy is a significant
problem affecting Microsoft. In addition, it not only adversely impacts
Microsoft, but other computer retailers competing with Smart Buy. A business
like Smart Buy that distributes unlicensed software with its computer systems
has a competitive price advantage over businesses that distribute licensed software.
This behaviour should be specifically discouraged.
[44]
Smart Buy’s bad faith and its conduct before and
during proceedings are closely related. I find Smart Buy acted in bad faith and
its conduct before and during the proceedings justifies a statutory award
consistent with the amount in Microsoft Corporation v. PC Village Co. Ltd.
I would award $10,000 for each of the eight software works infringed.
Punitive
and Exemplary Damages
[45]
Subsection 38.1(7) of the Copyright Act provides
for the awarding of punitive and exemplary damages in addition to statutory
damages.
[46]
Recent copyright infringement cases have
attracted significant punitive damage awards, in circumstances similar to the
present case. Specifically:
a)
In Microsoft v. 9038-3746 Quebec Inc.,
supra the trial judge, Harrington J., awarded a total of $200,000 in punitive
damages, $100,000 against the individual defendant and $100,000 against the
corporate defendants.
b)
In Louis Vuitton Malletier S.A. v. Yang,
supra Snider J., awarded $100,000 in punitive damages on a motion for default
judgment, in addition to the maximum statutory damages award.
c)
In Louis Vuitton Malletier S.A. v. 486353,
B.C. Ltd., supra a decision of the British Columbia Supreme Court, the
motions judge awarded a total of $300,000 in punitive damages comprised
$200,000 against the individual that was the principal of the enterprise in
question and $100,000 against the remainder of the defendants.
d)
In Microsoft v. PC Village Co. Ltd.
I awarded a total of $50,000 in punitive damages against all of the defendants
jointly and severally.
[47]
In these cases, the Court referred to the
factors enumerated by Binnie J. in Whiten v. Pilot Insurance
Co. 2002 SCC 18. The law in this regard is summarized by Boyd J. in Louis
Vuitton Malletier S.A. v. 486353 B.C. Ltd., who in addition
to considering the Whiten case, also considered the decisions in Microsoft
v. 9038-3746 Quebec Inc. and Louis Vuitton Malletier S.A. v. Yang.
After reviewing some of the general principles, Boyd J. stated:
[86] Punitive and exemplary damages
have been awarded in cases of trade-mark and copyright infringement, where, for
example, the conduct of the defendants was “outrageous” or “highly
reprehensible”, or where the defendant’s actions constituted a callous
disregard for the rights of the plaintiff or for injunctions granted by the
Court. Similarly, in determining whether punitive and exemplary damages
ought to be awarded, the Court will consider whether the defendant has little
regard for the legal process, thus requiring the plaintiff to expend additional
time and money in enforcing its rights (Microsoft
at paras. 118 to 120; Yang at para. 48-49; Pro Arts, Inc. v.
Campus Crafts Holdings Ltd. (1980), 50 C.P.R. (2d) 230 at 250-252 (Ont.
H.C.J.); 2703203 Manitoba Inc. v. Parks, 2006 NSSC 6,
47 C.P.R. (4th) 276 at paras. 37-40; Society of Composers,
Authors and Music Publishers of Canada v. 728859 Alberta Ltd. (2000),
6 C.P.R. (4th) 354 at paras. 19-24 (F.C. T.D. Proth.).
[48]
An additional consideration in this case is Smart
Buy’s attempt to shift liability to the customer. The Defendant asked
customers to sign a document indicating that any “illegal” software installed
on the computer was the responsibility of the customer when it was Smart Buy’s
agents that installed the software in question.
[49]
Accordingly, I award punitive damages of $50,000.
Personal Liability
[50]
Personal liability for the infringing activities
of the corporation will be imposed where the individual authorizes, directs or
participates in activities knowing they are likely to constitute infringement
or that reflect an indifference to the risk of it. Microsoft v. 9038-3746 Quebec Inc., supra, at paras 91, 92 and 98 and Louis Vuitton Malletier S.A. v.
486353 B.C. Ltd., supra, paras 45 to 48.
[51]
In result, the Defendant Jisri is also liable
for the infringing activities of the Defendant 1276916 Ontario Ltd.
Permanent Injunction
[52]
Microsoft submits that a permanent injunction
should be granted. It argues a wide injunction provided for in section 39.1 of
the Copyright Act is appropriate. However, the evidence indicates the Defendants’
infringing actions related to specific popular software programs and operating
systems. The Defendants’ infringing activities involved what could be
described as illegal installation of the Plaintiff’s computer operating systems
and basic software programs rather than infringement across a broader range
including business or entertainment computer programs. Without more, I
consider the injunction should be restricted to previous, current and future variations
of the Microsoft software programs and operating systems identified by
Microsoft’s investigator.
COSTS
[53]
Clearly, Microsoft is entitled to costs.
Microsoft submits costs should be awarded in a fixed, substantial, amount.
This action against a single business with somewhat limited court proceedings
would be more properly assessed in the usual manner.
[54]
Given the conduct of the Defendants in delaying
and deserting the proceedings, I will grant costs on a solicitor client basis.
CONCLUSION
[55]
In summary, the defendants infringed Microsoft’s
copyrights. Accordingly, I conclude that in light of the Smart Buy’s conduct,
it would be appropriate to grant relief as follows:
(a) an award of statutory damages in the amount of $80,000;
(b) an award of punitive damages of at least $50,000;
(c) a permanent injunction in respect of the
software programs listed in Schedule A; and,
(d) costs on a solicitor and client basis.
JUDGMENT
[1]
THIS COURT DECLARES that the Plaintiff, Microsoft Corporation, is the owner of the
copyrights in various computer programs which are literary works, namely those
listed in Schedule “A” (the “Microsoft Programs”) and that the copyrights have
been infringed by the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri
contrary to sections 3 and 27 of the Copyright Act.
[2]
THIS COURT ORDERS that the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri, the servants, employees or agents of
these Defendants, the officers and directors of 1276916
Ontario Ltd., and any person, corporation or
entity acting under the instructions of the foregoing and anyone aware of this
Judgment are hereby permanently enjoined and restrained from directly or
indirectly:
a)
infringing Microsoft’s copyrights in the
Microsoft Programs as set out in subparagraph b) below, including, without
limitation, from:
i)producing or
reproducing, or causing to be produced or reproduced, all or a substantial part
of the Microsoft Programs in any material form including, without limitation,
installing or causing to be installed unlicensed copies of the Microsoft
Programs on computers;
ii) selling, distributing,
exposing for sale, or offering for sale copies of any of the Microsoft Programs
and/or related documentation which infringe Microsoft’s copyrights;
iii) possessing for the
purposes of selling, distributing, exposing for sale or offering for sale
copies of any of the Microsoft Programs and/or the related documentation which
infringe Microsoft’s copyrights;
iv) importing into Canada copies of any of the
Microsoft Programs which infringe Microsoft’s copyrights;
v) selling, distributing,
exposing for sale, or offering for sale copies of any of the Microsoft Programs
in any manner which is contrary to limitations and/or license terms appearing
on or accompanying the Microsoft Programs; and
vi) ordering, abetting,
authorizing or assisting others to do any of the foregoing; and
b)
infringing in any manner whatsoever, including
by means of the activities described above, the copyright in the works in
respect of which Microsoft owns copyright, including:
i)the copyright in the computer programs identified in
Schedule “A” including all previous, current and future variants of the
computer programs.
[3]
THIS COURT ORDERS that the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri
shall pay forthwith to the Plaintiff the amount of $80,000 payable jointly and
severally as statutory damages pursuant to section 38.1 of the Copyright Act.
[4]
THIS COURT ORDERS that the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri
shall pay forthwith to the Plaintiff the amount of $50,000 payable jointly and
severally as punitive and exemplary damages.
[5]
THIS COURT ORDERS that the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri
shall pay post-judgment interest on the amount awarded in paragraph 3 of this
Judgment to the Plaintiff at a rate of 2% calculated from the date of Judgment.
[6]
THIS COURT ORDERS that the Defendants 1276916 Ontario Ltd. and Samir Mohamed Jisri
shall pay forthwith to the Plaintiff its solicitor and client costs of these
proceedings inclusive of all costs and disbursements payable jointly and
severally.
“Leonard
S. Mandamin”
SCHEDULE
“A”
List
of Microsoft Programs and Copyright Registration Numbers
1.
Getting Results with Microsoft Access 97,
Registration No. 461565
2.
Getting
Results with Microsoft Excel 97, Registration No. 461569
3.
Getting
Results with Microsoft Office 97, Registration No. 461564
4.
Getting
Results with Microsoft Outlook 97, Registration No. 461568
5.
Getting
Results with Microsoft PowerPoint 97, Registration No. 461567
6.
Getting
Results with Microsoft Word 97, Registration No. 461566
7.
Guide
D'Utilisation De Microsoft Word, Registration No. 384656
8.
Introducing
Microsoft Windows 95, Registration No. 453836
9.
Manuel De
Reference De Microsoft Excel, Registration No. 384659
10.
Microsoft
Access, Version 2.0, Registration No. 441809
11.
Microsoft
Access for Windows 95, Registration No. 450102
12.
Microsoft
Access 97, Registration No. 461574
13.
Microsoft
Access 97 (French Edition), Registration No. 488267
14.
Microsoft
Access 2000, Registration No. 480075
15.
Microsoft Access
2000, Registration No. 1004098 [French Version]
16.
Microsoft Access
Version 2002, Registration No. 494603
17.
Microsoft Excel For The Apple MacIntosh Version
1.5, Registration No. 384624
18.
Microsoft
Excel For Windows Version 2.1, Registration No. 384622
19.
Microsoft
Excel Getting The Most From Your Hardware With Microsoft Excel Version 2.10,
Registration No. 384623
20.
Microsoft
Excel For Windows Version 3.00, Registration No. 417086
21.
Microsoft
Excel For Windows Version 4.0, Registration No. 428708
22.
Microsoft Excel for Windows Version 5.0,
Registration No. 438734
23.
Microsoft
Excel for Windows 95, Registration No. 450103
24.
Microsoft
Excel 97, Registration No. 461578
25.
Microsoft
Excel 97 (French Edition), Registration No. 488265
26.
Microsoft
Excel 2000, Registration No. 480076
27.
Microsoft Excel
2000, Registration No. 1004101 [French Version]
28.
Microsoft Excel
Version 2002, Registration No. 494604
29.
Microsoft
Excel User's Guide, Registration No. 384625
30.
Microsoft
Office 95 (Professional Edition), Registration No. 448204
31.
Microsoft Office
97 Developer Edition, Registration No. 1006127
32.
Microsoft
Office 97 Professional Edition, Registration No. 460415
33.
Microsoft
Office 97 Professional (French Edition), Registration No. 488264
34.
Microsoft Office
97 Small Business Edition, Registration No. 1006131
35.
Microsoft Office
97 Small Business Edition Version 2, Registration No. 1006132
36.
Microsoft
Office 97 (Standard Edition), Registration No. 486896
37.
Microsoft Office
2000 Premium (French Version), Registration No. 1004094
38.
Microsoft
Office 2000 (Premium Edition), Registration No. 481008
39.
Microsoft
Office 2000 Professional, Registration No. 480078
40.
Microsoft
Office 2000 Small Business, Registration No. 490325
41.
Microsoft
Office 2000 (Standard Edition), Registration No. 486895
42.
Microsoft Office Access 2003, Registration No.
1024568
43.
Microsoft Office Access 2003 (French Edition),
Registration No. 1065359
44.
Microsoft Office Access 2007, Registration No.
1061087
45.
Microsoft Office Basic 2007, Registration No.
1052765
46.
Microsoft Office Enterprise 2007, Registration
No. 1052307
47.
Microsoft Office Excel 2003, Registration No.
1024578
48.
Microsoft Office
Excel 2003 (French Edition), Registration No. 1065360
49.
Microsoft Office
Excel 2007, Registration No. 1060929
50.
Microsoft Office PowerPoint 2003, Registration
No. 1024577
51.
Microsoft Office
PowerPoint 2003 (French Edition), Registration No. 1065361
52.
Microsoft Office PowerPoint 2007, Registration
No. 1061313
53.
Microsoft Office Professional 2007, Registration
No. 1052752
54.
Microsoft Office Professional Edition 2003,
Registration No. 1024572
55.
Microsoft Office
Professional Edition 2003 (French Edition), Registration No. 1065358
56.
Microsoft Office Standard Edition 2003,
Registration No. 1024574
57.
Microsoft Office Standard 2007, Registration No.
1052751
58.
Microsoft Office Ultimate 2007, Registration No.
1052766
59.
Microsoft Office Word 2003, Registration No.
1024573
60.
Microsoft Office Word 2003 (French Edition),
Registration No. 1065366
61.
Microsoft Office Word 2007, Registration No.
1060933
62.
Microsoft Office
XP Standard, Registration No. 494602
63.
Microsoft Office
XP Professional, Registration No. 494601
64.
Microsoft Office
XP Professional with FrontPage, Registration No. 1006123
65.
Microsoft Office
XP Professional Special Edition, Registration No. 494600
66.
Microsoft Office
XP Standard, Registration No. 494602
67.
Microsoft
PowerPoint for Windows, Version 4.0, Registration No. 441811
68.
Microsoft
PowerPoint for Windows 95, Registration No. 451395
69.
Microsoft
PowerPoint 97, Registration No. 461573
70.
Microsoft
PowerPoint 97 (French Edition), Registration No. 488263
71.
Microsoft PowerPoint 2000, Registration No. 480079
72.
Microsoft
PowerPoint 2000, Registration No. 1004100 [French Version]
73.
Microsoft PowerPoint
Version 2002, Registration No. 494609
74.
Microsoft
Windows 95, Registration No. 446946
75.
Microsoft
Windows 98, Registration No. 471484
76.
Microsoft
Windows 98 Resource Kit, Registration No. 485800
77.
Microsoft
Windows 98 Second Edition, Registration No. 486771
78.
Microsoft Windows
98 Second Edition, Registration No. 1004154 [French Version]
79.
Microsoft Windows
2000 Advanced Server, Registration No. 1006126
80.
Microsoft Windows
2000 Datacenter Server, Registration No. 1006125
81.
Microsoft Windows
2000 Home, Registration No. 1006124
82.
Microsoft
Windows 2000 (Professional Edition), Registration No. 486507
83.
Microsoft
Windows 2000 (Server Edition), Registration No. 486506
84.
Microsoft
Windows ME (Millennium Edition), Registration No. 487264
85.
Microsoft
Windows NT Server Installation Guide, Registration No. 461571
86.
Microsoft
Windows NT Server Start Here: Basics and Installation, Registration No. 461570
87.
Microsoft
Windows NT Server Version 3.5, Registration No. 460413
88.
Microsoft
Windows NT Workstation, Version 3.5, Registration No. 449110
89.
Microsoft
Windows NT Workstation, Version 4.0, Registration No. 453556
90.
Microsoft
Windows NT Workstation, Version 4.0, Registration No. 486772
91.
Microsoft
Windows NT Server Version 4.0, Registration No. 460414
92.
Microsoft
Windows NT Workstation Installation Guide, Registration No. 461575
93.
Microsoft
Windows NT Workstation Start Here: Basics and Installation, Registration No.
461577
94.
Microsoft Windows Server 2003 Enterprise Edition, Registration No. 1064801
95.
Microsoft Windows Server 2003 Standard Edition,
Registration No. 1051922
96.
Microsoft
Windows Systeme D'Exploitation Version 3.1, Registration No. 428709
97.
Microsoft
Windows Version 3.0, Registration No. 417087
98.
Microsoft
Windows Version 3.1, Registration No. 417088
99.
Microsoft
Windows Version 3.11, Registration No. 435679
100.
Microsoft Windows Vista Business, Registration
No. 1052159
101.
Microsoft Windows Vista Home Basic, Registration
No. 1052149
102.
Microsoft Windows Vista Home Premium,
Registration No. 1052158
103.
Microsoft Windows Vista Ultimate, Registration No. 1052160
104.
Microsoft Windows
for Workgroups 3.11 User's Guides (Certificate of Correction), Registration No.
436788
105.
Microsoft
Windows for Workgroups Version 3.11, Registration No. 436787
106.
Microsoft Windows
XP Home Edition, Registration No. 494599
107.
Microsoft Windows
XP Professional, Registration No. 494598
108.
Microsoft
Word Version 2.0, Registration No. 353642
109.
Microsoft
Word for Windows 2.0, Registration No. 427355
110.
Microsoft
Word Version 3.0, Registration No. 353643
111.
Microsoft
Word Version 4.0, Registration No. 384620
112.
Microsoft
Word for Windows, Version 6.0, Registration No. 441807
113.
Microsoft
Word for Windows 95, Registration No. 450104
114.
Microsoft
Word 97, Registration No. 461576
115.
Microsoft
Word 97 (French Edition), Registration No. 488262
116.
Microsoft
Word 2000, Registration No. 480080
117.
Microsoft Word
2000, Registration No. 1004096 [French Version]
118.
Microsoft Word
Version 2002, Registration No. 494606
119.
Microsoft
Works for Windows Version 3.0, Registration No. 449111
120.
Microsoft
Works for Windows 95, Registration No. 448789
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