Docket:
T-1700-12
Citation:
2014 FC 526
Ottawa, Ontario, May 30, 2014
PRESENT: The
Honourable Mr. Justice Phelan
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BETWEEN:
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S. MICHAEL KENNEDY
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Plaintiff-Applicant
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and
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WALDEMAR RUMINSKI
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Defendant-Respondent
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and
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ME HAROLD ASHENMIL
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Mis en cause
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JUDGMENT AND REASONS
I.
Introduction
[1]
This is an application under s 57(4) of the Copyright
Act, RSC 1985 c C-42 [Act] to require the Registrar of Copyrights to
correct the name of the holder of three copyright certificates registered on
September 14, 2009 by naming the Applicant as the holder of those rights.
[2]
The Certificates of Registration are:
•
Registration No. 1071140 (“LOL
Data Manager”)
•
Registration No. 1071141 (“Workflow Designer”)
•
Registration No. 1071142 (“MS
Word Add-Ins”)
The registrations relate to a corporate data management
system software called Law of the Lan intended to be used by law firms for
corporate filings. The software is not complete and has not been marketed or
sold.
[3]
The Certificates are registered in the name of the Respondent Waldemar
Ruminski who either worked for or with S. Michael Kennedy as a programmer
between 2001 and 2010. The central issue in this case is the ownership of the
works, specifically whether the works were created during the course of alleged
employment with the Applicant.
[4]
The Certificates are not descriptive of the works and the Respondent has
refused to provide additional description.
[5]
The pertinent legislation is s 13(3) and s 57(4) of the Act.
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13. (3) Where the
author of a work was in the employment of some other person under a contract
of service or apprenticeship and the work was made in the course of his
employment by that person, the person by whom the author was employed shall,
in the absence of any agreement to the contrary, be the first owner of the
copyright, but where the work is an article or other contribution to a
newspaper, magazine or similar periodical, there shall, in the absence of any
agreement to the contrary, be deemed to be reserved to the author a right to
restrain the publication of the work, otherwise than as part of a newspaper,
magazine or similar periodical.
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13. (3) Lorsque
l’auteur est employé par une autre personne en vertu d’un contrat de louage
de service ou d’apprentissage, et que l’oeuvre est exécutée dans l’exercice
de cet emploi, l’employeur est, à moins de stipulation contraire, le premier
titulaire du droit d’auteur; mais lorsque l’oeuvre est un article ou une
autre contribution, à un journal, à une revue ou à un périodique du même
genre, l’auteur, en l’absence de convention contraire, est réputé posséder le
droit d’interdire la publication de cette oeuvre ailleurs que dans un
journal, une revue ou un périodique semblable.
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57. (4) The Federal
Court may, on application of the Registrar of Copyrights or of any interested
person, order the rectification of the Register of Copyrights by
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57. (4) La Cour
fédérale peut, sur demande du registraire des droits d’auteur ou de toute
personne intéressée, ordonner la rectification d’un enregistrement de droit
d’auteur effectué en vertu de la présente loi :
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(a) the making of any entry wrongly
omitted to be made in the Register,
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a) soit
en y faisant une inscription qui a été omise du registre par erreur;
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(b) the expunging of any entry wrongly
made in or remaining on the Register, or
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b) soit
en radiant une inscription qui a été faite par erreur ou est restée dans le
registre par erreur;
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(c) the correction of any error or
defect in the Register,
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c) soit
en corrigeant une erreur ou un défaut dans le registre.
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and any rectification of the Register under this subsection shall
be retroactive from such date as the Court may order.
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Pareille rectification du registre a effet rétroactif à compter de
la date que peut déterminer la Cour.
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II.
Background
[6]
To say that the facts are confusing and
that the parties have done little to clarify the facts is an understatement.
[7]
The Applicant began the design and
development process of Law of the Lan system in 1986 along with his lawyer
wife. He hired several programmers to assist him with the project.
[8]
The parties met in 2001 and the Applicant
hired the Respondent on May 29, 2001 as a salaried employee to upgrade and
enhance the Law of the Lan project. The evidence included T‑4 slips given
to the Respondent in recognition of the weekly payments he received. This
evidence counters any suggestion that the payments were “draws”.
[9]
The Respondent takes the position that he
had created “works” on his own between 1998 and 2000 prior to any relationship
with the Applicant. I accept the Respondent’s evidence that the “works” were
technical libraries, the existence of which and the independent development of
which is confirmed in a Memorandum of November 3, 2003 between the parties.
[10]
The bizarre aspect of this case is that the
Applicant cannot disprove the Respondent’s contention and more significantly
cannot establish what is covered by the Certificates because the Respondent
refuses to tell the Applicant except under a court order what the Certificates
cover. The Applicant did not obtain that type of order.
[11]
Since it is the Applicant who claims
ownership, it is reasonable to expect the Applicant to know what he owns or to
obtain the evidence to establish ownership.
[12]
On November 3, 2003, the parties entered
into the Memorandum purporting to set out the respective shares in the
project’s intellectual property. The Memorandum was drafted by a lay person and
is no model of clarity in drafting. The key provisions are:
The parties agree that they have all made contributions to LoL
(Law of the Lan) Project and Product (in final development), and wish to
establish the share in the IP (Intellectual Property) that accrues to each of
the parties.
Mike Kennedy
(Product Conception & Project Financing) 80%
Val Ruminski
(Database Design & Programming) 20%
…
In addition, certain Technical Libraries have been developed
independently by Val Ruminski, and used in the LoL project. These technical
Libraries are to be licensed, free of any charges, for use by the LoL Product
and its direct derivatives.
[13]
In the spring of 2009 the Respondent advised the Applicant that the
project was complete. However, upon testing, there were numerous deficiencies
which the Respondent was to fix.
[14]
On September 14, 2009, the Respondent registered for the three Certificates.
[15]
Two weeks after registration of the certificates (then unknown to the
Applicant), the Applicant requested the Respondent load the software, source
code, executable code and other documentation into an office computer for
independent evaluation. The Respondent refused to do so.
[16]
Relations between the parties declined, and the Respondent continuously
refused the Applicant’s request for the source code. Eventually the Applicant
refused to make the weekly payments, changed the locks and effectively ended
the relationship.
[17]
On February 21, 2010, the Respondent made a claim for employment
insurance benefits. While he was initially unsuccessful because his refusal to
follow his employer’s orders constituted misconduct, on appeal it was found
that the timelines of the employer’s demands were unreasonable.
[18]
At no time in the employment insurance proceedings was there a finding
that the Respondent was not the employee he claimed to be.
III.
Analysis
[19]
The issues in this matter are:
a)
whether the Applicant has met the evidentiary burden of establishing
error in the Certificates;
b)
was the Respondent an employee? and
c)
who is the owner of the works covered by the Certificates?
A.
Evidentiary Burden
[20]
This case is complicated by the fact that it is no longer possible to
identify what was brought into the project by the Respondent or what the state
of the project was at the time the Certificates were registered. It appears
that the technical libraries, such as they were in 2000, were commingled with
the work done by the Respondent during the course of his relationship with the
Applicant and are no longer identifiable.
[21]
Therefore, the Applicant has not established what software is covered by
the registrations. Indeed he admits to not knowing what software is covered by
the Certificates. He also admits that he does not know and has never seen the
technical libraries referred to in the Memorandum.
[22]
However, the Applicant has established that further work on the project
was done by the Respondent which on a balance of probabilities included more
than the technical libraries. The Respondent has not shown that only the
technical libraries are covered by the Certificates. For reasons discussed
under Employment, the Applicant has established an interest in the Certificates
and therefore their issuance (including the manner in which it was done) was in
error in not reflecting the Applicant’s interest.
B.
Employment
[23]
I find no merit in the Respondent’s contention that the relationship at
issue was a partnership with a weekly draw.
[24]
The Respondent reported his income as employment income for tax purposes
and identified the Applicant as his employer. He knew that the Applicant made
the necessary source deductions from his weekly pay cheques.
His claim for
employment benefits constitutes an admission that at least he saw himself as an
employee. This fact, combined with the nature of weekly payments and his
characterization of them as employment income, is sufficient in this case to
establish that he was an employee.
[25]
As a result of this finding, s 13(3) of the Act is relevant. It vests
copyright in the works created during the course of the Respondent’s employment
with the Applicant unless there is an agreement to the contrary.
[26]
The Memorandum constitutes such an agreement. It governs the respective
ownership interests of the Applicant and Respondent in the works created by the
Respondent during the course of the employment relationship.
C.
Ownership
[27]
The Memorandum purports to create “shares of IP” and/or “interests in IP”. This is inconsistent with
complete ownership of copyright in the works created during the course of the
employment relationship belonging to either party.
[28]
The Memorandum creates a 20% ownership in
the project with the remaining 80% being held by the Applicant who was
responsible for the financing.
[29]
The technical libraries to
the extent that they can now be identified, having been created before
employment, are outside ownership in the Certificates. The technical libraries became part of the project but only
by way of a free license.
[30]
There is no evidence that the Certificates were only to cover the
technical libraries. The evidence suggests that they covered the work done
after the Memorandum came into effect.
[31]
Therefore, the Certificates should have reflected the co-ownership of
the Applicant and Respondent.
IV.
Conclusion
[32]
The application will be granted in part. The Registrar of Copyrights
shall be directed to amend the registration to reflect joint ownership. The
result being mixed, no order for costs will be made.
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