Date: 20060619
Dockets: A-2-06
A-3-06
Citation: 2006 FCA 227
CORAM: LÉTOURNEAU
J.A.
NOËL
J.A.
PELLETIER
J.A.
BETWEEN:
ADACEL TECHNOLOGIES LTD.,
ADACEL INC. and CAE INC.
Appellants (Defendants)
and
NAV CANADA
Respondent (Plaintiff)
REASONS FOR JUDGMENT
PELLETIER J.A.
[1]
This is an appeal of the decision of Pinard J.,
reported at 2005 FC 1678, dismissing an appeal from the decision of Prothonotary
Aronovitch dismissing the appellants’ (defendants in the action) motion for an
order for further and better particulars. The motion arose in the context of an
action by Nav Canada alleging
infringement of copyright in certain software, the GAATS software, which it
claims to have acquired from the Federal crown in the context of the Civil
Air Navigation Services Commercialization Act S.C. 1996 c. 20. Nav Canada alleges that the appellant CAE Inc.,
who was once licensed to use the technology by the Minister of Transport, has
breached its copyright in the GAATS software by selling products incorporating
the software to others and by licensing the appellants Adacel Inc. and/or
Adacel Technologies to use the software in products which they sell.
[2]
The appellants sought particulars from the
respondent on a number of issues, only two of which are material to this
appeal. The first is the means by which the respondent acquired the rights which
it claims in the software; the second is the basis upon which the respondent
alleges that its copyright has been infringed.
[3]
The Prothonotary adopted as her own 34 of the 35
paragraphs of the respondent’s submissions and found that the pleadings were sufficient
to allow the appellants to plead to the claims against them. In her view, the
matters in respect of which further particulars were sought were matters best
taken up at examination for discovery.
[4]
On appeal to the Federal Court, the motions judge dismissed the appeal. He
adopted paragraphs 6 to 12 of the respondent’s submissions with respect to the
issue of the means by which the respondent acquired title to the software, and
paragraphs 13 to 18 of the same submissions with respect to the basis upon
which infringement was alleged.
[5]
As an aside, it is entirely open to a judge or
prothonotary to adopt, in whole or in part, the submissions of one or the other
of the parties, but it would add to the clarity and to the coherence of their
reasons, as well as simplifying the task of working with the record, if the
parts which they adopt were reproduced, either in their reasons or as an annex
to their reasons. Otherwise, only a person with access to the entire record at
the time of reading the reasons is able to appreciate their true import.
[6]
The standard of review of a prothonotary’s
discretionary decision is well known. The Court should not interfere unless the
prothonotary has acted upon a wrong principle, or a misapprehension of the
facts, or unless the question is vital to the “final issue” in the case (Canada
v. Aqua-Gem Investments Ltd, [1993] 2 F.C. 425 at 454).
[7]
The question of the means by which the
respondent acquired the title to the rights it asserts arises because of
subsection 13(4) of the Copyright Act, which provides as follows:
|
(4) The owner of the copyright in any
work may assign the right, either wholly or partially, and either generally
or subject to limitations relating to territory, medium or sector of the
market or other limitations relating to the scope of the assignment, and
either for the whole term of the copyright or for any other part thereof, and
may grant any interest in the right by licence, but no assignment or grant is
valid unless it is in writing signed by the owner of the right in respect of
which the assignment or grant is made, or by the owner’s duly authorized
agent.
|
(4) Le titulaire du droit d’auteur sur
une oeuvre peut céder ce droit, en totalité ou en partie, d’une façon
générale ou avec des restrictions relatives au territoire, au support
matériel, au secteur du marché ou à la portée de la cession, pour la durée
complète ou partielle de la protection; il peut également concéder, par une
licence, un intérêt quelconque dans ce droit; mais la cession ou la
concession n’est valable que si elle est rédigée par écrit et signée par le
titulaire du droit qui en fait l’objet, ou par son agent dûment autorisé.
|
[8]
It has been held that the plaintiff is bound to
plead its chain of title and that the failure to do so can be fatal to the
plaintiff’s claim. See Durand & Cie v. La Patrie Publishing Co. Ltd
(1951), 15 C.P.R. 86 and Havana House Cigar and Tobacco Merchants Ltd v.
Nieni (1980), 80 C.P.R (3rd) 132 as to the first point, and Unipeixe-Exportadora
De Peixe Limitada v. J. Gaspar and sons. (1980), 48 C.P.R.(2nd)
7 as to the second.
[9]
Counsel for the respondents candidly admitted
that if subsection13(4) applies, the question of whether or not there is a
written agreement is a material fact. However, he argues that subsection 13(4) does
not apply to the respondent’s acquisition of the copyright. The submission is
that since the Crown can convey title to copyright without the need for a
written agreement, it necessarily follows that Nav Canada can acquire title
from the Crown without a written agreement.
[10]
The prothonotary rejected the appellants’ motion
on the basis that the statement of claim was complete in that it disclosed from
whom, when and what rights were acquired. She went on to say that “The exact
method by which those rights were transferred is a matter of evidence, not
particulars”.
[11]
The difficulty is this. Just as the plaintiff is
not required to plead to anticipate a defence, the defendant is not required to
plead to every hypothetical possibility. The respondent could have acquired its
interest in the software by operation of law, by assignment, by licence or in
other ways limited only by the considerable ingenuity of the intellectual
property bar. So long as the mode of transfer does not give rise to a defence,
it is correct to say that it is only the fact of title to the copyright which
is material. But where one of those modes of transfer (written agreement) may
give rise to a specific defence (invalidity of the assignment by reason of a
failure to specifically refer to the copyright), the question of whether that
mode of transfer was employed becomes material. Where a defendant demands
particulars of the mode of transfer, the plaintiff cannot avoid the question by
refusing to disclose the mode of transfer. To hold otherwise is to require the
defendant to assume the facts for the purpose of pleading a defence based on that
assumption, when those facts are material and known to the respondent. This is
not a case of requiring the appellants to plead in the alternative, as suggested
by counsel, but rather a case of requiring them to plead in the dark.
[12]
The Prothonotary erred in principle in failing
to recognize that subsection 13(4) of the Copyright Act made the issue
of a written agreement material because it gave rise to a possible defence
based on the existence of the agreement and its terms. It was therefore an
appropriate subject for an order for further and better particulars and should
not have been left to be addressed in the course of examinations for discovery.
It is the pleadings which define the scope of the examinations for discovery,
not the other way around. The motions judge ought to have intervened to make
the order which the prothonotary ought to have made.
[13]
Turning to the second issue in the appeal, the
appellants point out that the question before the motions judge was not the
question which was argued before the prothonotary. Before the latter, the
appellants argued that they were entitled to particulars of the infringing
computer code, something which the respondent would be hard pressed to identify
without having access to the appellants’ software. Before the motions judge,
the appellants abandoned their argument as to the computer code and argued
instead that they were entitled to know the source of the respondent’s belief
that they were infringing its copyright.
[14]
The appellants relied on the following passage
from Bean v. Noble (1993), 51 C.P.R. (3d) 161 (Ont. Ct., Gen. Div.), a
case which also dealt with an allegation of infringement of copyright in a computer
program:
On the other
hand, from a practical point of view, the plaintiff would not be in a position
to produce parts of the defendant's programme as, unlike a book where the hard
copy is available to the public, the computer programme would only be available
to those who had purchased it from the defendant.
The plaintiff
should, however, be able to expand on this paragraph by stating the source of
such information. This also applies to para. 17 where the plaintiff alleges
that he discovered that the defendant was producing "Mechanical
Contrivances" (computer discs) of the defendant's Derivative Program and
selling them to podiatrists. The plaintiff must, at least, explain the source
of such information.
[15]
The appellants say that they are entitled to know
the source of the respondent’s allegation that its copyright has been
infringed. When questioned, counsel for the appellant CAE agreed that he was
not asking for the name of the person who told the respondent of the possible
infringement, but rather the facts upon which the respondent relied in alleging
infringement.
[16]
With respect, neither the source of the
information nor the facts which lead the respondent to believe that
infringement has occurred, is a matter which requires an order for further and better
particulars. Section 27 of the Copyright Act says that it is an act of
infringement “for any person to do, without the consent of the owner of the
copyright, anything that by this Act only the owner of the copyright has the
right to do.” Section 3 of the Act says that the copyright, in relation to a
work, means “the sole right to produce or reproduce the work or any substantial
part thereof in any material form whatever, … if the work is unpublished, to
publish the work or any substantial part thereof, and includes the sole right
…to produce, reproduce, perform or publish any translation of the work…”. To
allege infringement is to allege that the defendant has reproduced a work or a
substantial portion of a work without the consent of the owner. Thus the
material facts are the existence of the work, the ownership of copyright in the
work, the existence of the infringing work and the absence of the owner’s
consent to the production or reproduction of the work. The respondent has
pleaded all of those facts. Nothing further is required to allow the appellants
to respond to the claim. The means by which the plaintiff has become aware of
these facts is not material.
[17]
For those reasons, I would not grant the
appellants any relief with respect to this ground of appeal.
[18]
In the end result, I would allow the appeal with
costs and set aside the part of the Federal Court’s decision relating to the
production of particulars concerning the means by which the respondent acquired
the copyright which it asserts. Proceeding to make the order that the Federal
Court should have made, I would allow with costs the appeal from the decision
of the prothonotary in respect of this issue and order the respondent to
provide the appellants the particulars of the means by which they acquired the
copyright in the GAATS software, by agreement or otherwise. If the rights were
acquired by agreement, the respondent shall comply with Rule 206.
“J.D. Denis Pelletier”
“I agree
Gilles
Létourneau J.A.”
“I agree.
Marc
Noël J.A.”
Email this Content