Date : 20040203
Docket: T-687-88
Citation: 2004 FC 178
Ottawa, Ontario, the 3rd day of February 2004
Present: The Honourable Madam Justice Tremblay-Lamer
BETWEEN:
EROS - ÉQUIPE DE RECHERCHE OPÉRATIONNELLE
EN SANTÉ INC.
Plaintiff
AND
CONSEILLERS EN GESTION ET INFORMATIQUE C.G.I. INC.
and
RÉGIE RÉGIONALE DE LA SANTÉ ET DES
SERVICES SOCIAUX DE QUÉBEC
and
RÉGIE RÉGIONALE DE LA SANTÉ ET DES
SERVICES SOCIAUX DE LA MONTÉRÉGIE
Defendants
REASONS FOR ORDER AND ORDER
[1] This is an action in which the plaintiff Eros - Équipe de recherche opérationnelle en santé inc. (Eros) is suing the defendants Conseillers en gestion et informatique CGI inc. (CGI) and the Régie régionale de la santé et des services sociaux de Québec (Régie de Québec) jointly and severally and the Régie régionale de la santé et des services sociaux de la Montérégie (Montérégie) for an infringement of its copyright under the Copyright Act, R.S.C. 1985, c. C-42 (the Act) with respect to the use of its literary work titled Classification (des bénéficiaires) par types (de programmes) en milieu de soins prolongés (CTMSP).
[2] The defendants Régie de Québec and Montérégie are both corporations created pursuant to the Quebec Act Respecting Health Services and Social Services, R.S.Q., c. S-4.2 (Health Act).
[3] Several of the points at issue in the instant case arose before the conseils régionaux de santé et des services sociaux became the régies régionales de la santé et des services sociaux. However, to simplify reading, I have decided to refer to these organizations as "régies" at all times.
THE PLAINTIFF EROS
[4] Eros is a company duly incorporated under Canadian legislation. Mr. Tilquin is its president. He was a professor at the University of Montréal for over thirty years. His research specialty there was analysing the cost of care: Mr. Tilquin wanted to market his research results and in 1980 created the company Science des systèmes Montréal 1980 (SSM-80). In 1984 he founded Eros _ Équipe de recherche opérationnelle en santé inc., which he merged with SSM-80.
[5] Eros is a business for the evaluation, design, realization and implementation of management systems in the health field.
BACKGROUND
[6] The following background, prepared from facts admitted by the parties, helps in understanding the case.
A. Assessment of beneficiaries in the Quebec homecare and long-term care network
[7] Up to the 1980s, the Quebec homecare and long-term care network consisted of several independent establishments. There was no regional coordination of admission procedures, which resulted in several management problems and created injustices in the system of access to the institutions. Persons wishing to be admitted to the network had to make a direct application to the institution. If the institution where the person requiring care had made an application for admission rejected that person, the latter would have no means of finding a place in the network. Waiting lists for institutions therefore became uncontrollable and contained false information, with beneficiaries often making applications for admission to several places. Additionally, the result of the existence of such a network of independent institutions was to prevent the Ministère des Affaires sociales (MAS) (now the Ministère de la Santé et des Services sociaux) from knowing what the population of its homecare centres was.
[8] In order to deal with this situation the Government of Quebec, by its Decree 1320-84 of June 6, 1984, imposed on regional régies the responsibility of preparing and coordinating a regional system for admitting and transferring beneficiaries to institutions in the health and social services network in their region. The councils and the institutions were subjected to several new requirements, including those set out in sections 32 and 33 of the Organization and Management of Institutions Regulation, R.R.Q. 1981, c. S-5, r. 3.01:
32. Each regional council shall prepare a system for admitting beneficiaries to and transferring beneficiaries in institutions providing long-term care or homecare services, coordinated in cooperation with the institutions in the region.
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32. Le conseil régional élabore et coordonne avec la collaboration des établissements de la région un système d'admission et de transfert des bénéficiaires dans les établissements offrant des soins de longue durée ou des services d'hébergement.
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The system shall be prepared after consulting the institutions and practitioners involved in assessing applications for admission and directing beneficiaries towards the resource best suited to their needs, with a view to their admission.
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Un tel système est élaboré après consultation des établissements et des intervenants impliqués dans l'évaluation des demandes d'admission et l'orientation des bénéficiaires vers la ressource la mieux adaptée à leurs besoins, en vue de leur admission.
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Such system must take into account the whole of the resources of the territory served, including foster families and homecare resources and permits issued to institutions. It must be designated to promote services that complement those provided by other institutions for the users in question.
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Le système doit tenir compte de l'ensemble des ressources du territoire, incluant les familles d'accueil et les services de maintien à domicile, ainsi que des permis des établissements. Il doit être de nature à favoriser une intervention complémentaire à celle des autres établissements auprès de la clientèle visée.
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The admission system shall in particular provide for the participation of physicians, social workers and nurses.
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Le système d'admission doit notamment prévoir la participation de médecins, d'infirmières ou infirmiers et de praticiens en service social.
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The admissions system shall provide procedures for assessing the application and for setting up regional or subregional admission committees.
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Le système d'admission doit prévoir les modalités de l'évaluation de la demande et la formation d'un comité régional ou de comités sous-régionaux d'admission.
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The admissions committee shall fix the order of priority of admissions for the institutions covered by this section. The regional council shall maintain a card-index of applications for admission received by the admissions committees.
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Le comité d'admission établit l'ordre de priorité des admissions pour les établissements visés par le présent article. Le conseil régional doit constituer un fichier des demandes d'admission reçues par les comités d'admission.
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33. A beneficiary shall be admitted to an institution providing long-term care or homecare services under the following procedures:
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33. Un bénéficiaire est admis dans un établissement offrant des soins de longue durée ou des services d'hébergement selon les formalités suivantes :(1) an application for admission shall be made in writing to the local community service centre of the territory in which the beneficiary resides, or to the social service centre of the region, if there is no local community service centre;
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1) une demande d'admission est faite par écrit au centre local de services communautaires du territoire où le bénéficiaire réside, ou au centre de services sociaux de la région, s'il n'y a pas de centre local de services communautaires;
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(2) a medical assessment and an assessment of the beneficiary's autonomy, supplying the information required by the regional council, must certify the need for admission;
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2) une évaluation médicale et une évaluation de l'autonomie du bénéficiaire donnant les informations requises par le conseil régional, atteste de la nécessité de l'admission;
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(3) the application for admission shall be accepted by the regional or subregional admissions committee formed by the regional council, taking into account preferences expressed by the beneficiary;
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3) la demande d'admission est acceptée par le comité régional ou sous-régional d'admission formé par le conseil régional, en tenant compte des préférences exprimées par le bénéficiaire;
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(4) the institution designated by an admissions committee shall admit the beneficiary as soon as a bed is available.
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4) l'établissement désigné par un comité d'admission admet le bénéficiaire dès qu'un lit est disponible.
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Where an application applies to a beneficiary already sheltered in an institution, it shall be sent directly to the admissions committee with the assessment of the beneficiary, and a copy shall be sent to the local community services centre of the territory where the beneficiary resides or to the social service centre of the region, if there is no local community service centre.
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Lorsqu'une demande vise un bénéficiaire déjà hébergé dans un établissement, elle est transmise directement au comité d'admission avec l'évaluation du bénéficiaire, et une copie en est transmise au centre local de services communautaires du territoire où le bénéficiaire réside ou au centre des services sociaux de la région, s'il n'y a pas de centre local de services communautaires.
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[9] In 1984-1985, the MAS received $13,000,000, annualized at $27,000,000 the following year, for homecare centres and hospital centres for long-term care. These amounts were to be used to increase the satisfaction rate in nursing care in ergotherapy and in physiotherapy. No amount was provided for the purchase of data processing equipment or design of software.
[10] The MAS had to find a means of distributing the amounts received equitably. It decided to make province-wide assessments for the purpose of distributing the funds in accordance with regional needs. Several discussions were held to decide what tools should be used to make the assessments. The MAS chose the CTMSP.
Contract for assignment of interests
[11] On August 8, 1984, Eros concluded an agreement with the MAS for the assignment of certain of its interests in the literary work CTMSP. None of the three defendants in the case at bar took part in the negotiations which led to that contract. The clauses of the contract which are relevant here are set out below. The [TRANSLATION] "contracting party" in these extracts refers to the plaintiff Eros.
[TRANSLATION]
1.5 The Minister considers that the CTMSP 81 system is currently the most adequate tool for meeting his objectives, and to assist with its introduction and use in the social affairs network he agrees to accept it as the standard tool for assessing and directing beneficiaries.
. . . . .
3.1 The contracting party hereby grants to the Minister as of this date, finally but subject to the territorial restrictions and limitations mentioned in this agreement, an exclusive licence to exploit the original work known by the abbreviation "CTMSP 81".
3.2 Under this licence, the Minister will be exclusively entitled to do the following:
(a) all the rights and attributes pertaining to the literary exploitation of the work (printing, publication, reproduction, distribution, broadcasting, promotion and public execution of the work and its marketing);
. . . . .
(c) all the same rights and attributes regarding the transcription (adaptation) of the work CTMSP 81 in the following forms or support only: microfilm, video, television, sound tracks and any other sound or visual devices or combination thereof.
3.3 Any authorization granted to the Minister under this licence shall also apply to his employees, agents or mandataries (persons or organizations doing business with the Minister) solely for the purpose and the exercise of the attributes granted to the Minister.
. . . . .
4.6 Finally, the Minister expressly recognizes that this licence gives him no right to electronic exploitation of the work and that such right (including, but without being limited thereto, the right to use or reproduce all or part of CTMSP 81 on one or more supports, by any procedure whatever, for the purpose and aim of printing, publication, distribution, broadcasting and marketing of the work for electronic use) belongs exclusively to the contracting party. The Minister undertakes to perform no personal act which may interfere with the enjoyment of the rights retained by the contracting party.
In consideration whereof, the contracting party undertakes to inform the Minister promptly of any electronic adaptation it may make of the work or its derivatives. It further undertakes to give the Minister priority (right of first refusal) for any concession of interests relating to the exploitation of any electronic adaptation of the work or its derivatives.
[12] On October 24, 1984, the MAS distributed ministerial circular 1984-069 telling the health and social services régies and institutions of its new policies for the assessment and direction of beneficiaries. The régies were to ensure that all their institutions had the necessary resources to meet their customers' needs. To do this, it was not only important to assess the magnitude of beneficiaries' requirements, but also to be able to control such information.
[13] The circular informed its recipients that the CTMSP was the tool chosen by the MAS for the assessment and direction of beneficiaries. As a result of this assignment of interests, the paper form was made available to all the régies and institutions in the province free of charge. The circular further indicated the limits on the copyright obtained by the MAS to the CTMSP and informed recipients that the form could not be altered by users in any way.
The CTMSP
[14] The CTMSP was created by Claude Tilquin in 1976. It is a tool that makes it possible to manually assess the needs of elderly persons requiring care and to decide where they should be placed in the network. It consists of a group of forms and involves four stages.
[15] The first stage is a medical assessment of the state of the client's health. The relevant form is filled in by a physician. A nurse or social worker then completes the autonomy assessment form. This form draws up a picture of the client's autonomy, with reference to his or her ability to perform everyday activities, that is, essential activities and the activities of everyday life.
[16] The second stage involves assessing the services that will be required by the beneficiary who has made an application for admission to the network. There are two categories of service: potential services and actual services. Potential services are related to the client's general burden, that is, all the services the beneficiary will require apart from assistance he receives from persons around him. Actual services represent services the network will have to provide once the persons around the beneficiary have done their part.
[17] The form for determining nursing care and assistance services required is part of this assessment. It is at the heart of the CTMSP, as these services represent 90 per cent of the care burden.
[18] Once these forms have been filled in, a coordinator reads the assessments and ensures that everything has been properly completed. He or she then forwards the file to a multi-disciplinary team, which determines the services required. That team includes a physician, a nurse, a social worker or physiotherapist and an ergotherapist. The team must arrive at a consensus to ensure that the work plan adequately meets the beneficiary's needs. This information is then consolidated in the form for measuring resources required, which is the third stage of the CTMSP.
[19] This third stage involves calculating the total points for nursing care and services required of each other professional. This calculation can be made by the coordinator or one of the team professionals. The results of this calculation are presented in hours/care, that is, they indicate the care required by the beneficiary for each 24-hour segment.
[20] The fourth stage involves placing the beneficiary in the network of long-term care and services for the elderly. There is a complete range of programs, from programs offered to the beneficiary at home to programs offered in institutions for the most handicapped beneficiaries.
[21] In March 2002, the MAS informed the régies that the multi-client tool would henceforth be the only tool of assessment in the network. However, the CTMSP forms were and still are in use in Quebec.
Shortened CTMSP
[22] Eros created the shortened CTMSP to carry out ongoing assessment of beneficiaries already residing in a network homecare centre. The ongoing assessment is done after the initial assessment using the CTMSP. The ongoing assessment makes it possible to determine the beneficiary's progress or deterioration and to reassess his or her needs in accordance with the current state of health.
[23] The shortened CTMSP is essentially a shortened version of the CTMSP. It only includes the form for assessing nursing care and assistance required. It is completed by a nurse in the same way as the CTMSP. Then, a multi-disciplinary team reviews the form and determines the nursing care required by the beneficiary.
[24] At the time, it was also a useful tool for distributing budgetary allowances to the regions and managing the resources within institutions.
Creation of information system
[25] Ministerial circular 1984-051, which was distributed to general managers of health and social services institutions and regional régies on June 20, 1984, lists the new obligations imposed on them under Decree 1920-84. In particular it indicated that the régies should [TRANSLATION] "create a card index of admission applications received by committees and a card index of discharge of beneficiaries". The régies were thus responsible for collecting and preserving information on beneficiaries.
[26] During summer 1984, the MAS also decided that it was necessary to collect information on the beneficiaries in the network. The MAS decided to make [TRANSLATION] "a joint committee responsible for coordinating the introduction of a data gathering system to supply information systems relating to clients of the CHSLDs" (ministerial circular 1984-053, dated August 16, 1984, p. 2).
[27] In June 1980, the Régie de Québec began implementing a regional admission system, the [TRANSLATION] "Program for Evaluating and Coordinating Admissions" ("PECA"). In February 1981, all institutions in the Quebec region complied with the PECA. Under the PECA, all admission applications to reception centres, homecare centres and hospital centres for long-term care in the Québec region were assessed using a uniform tool: the CTMSP form.
[28] In fall 1983, pursuant to the PECA, the Régie de Québec conducted operation 8800, a general assessment of all clients accommodated in various institutions in the region. The Régie de Québec used the CTMSP.
SIBPA software
[29] The action at bar concerns damages caused to Eros by the creation, circulation and use of the SIBPA software containing CTMSP forms.
[30] The SIBPA software ([TRANSLATION] "information system for non-independent beneficiaries") is an information system created by the Régie de Québec to facilitate the control of admissions by PECA and other regional admission procedures. It was designed to comply with the requirements imposed by the MAS on régies under sections 32 and 33 of the Organization and Management of Institutions Regulation, supra. SIBPA was not a system intended for institutions.
[31] The purposes of SIBPA, set out by the Régie de Québec in a letter to general managers of institutions in the Québec region, were the following:
[TRANSLATION]
- support the regional and subregional procedure for assessing, directing and coordinating admissions in a program meeting the needs of non-independent persons;
- relating the needs of clients to resources available to the distributors of services and so allocating budgetary resources;
- providing longer-term planning for the management of resources and services for such clients, by identifying general trends in needs;
- assisting institutions with the production of reports of all kinds, while regularly providing them with a general review of the needs of their homecare or long-term care clients.
[32] The Régie de Québec was instructed by the MAS to design this software and received a grant of $200,000 from the latter for this purpose in January 1986. One of the conditions for the making of the grant was that once completed the software would be made available throughout the provincial health and social services network.
[33] Initially, the Régie de Québec asked CGI to conduct a preliminary study on the design of an information system on assessing sheltered beneficiaries.
[34] In due course, the Régie de Québec retained Partagec, a paragovernmental non-profit company, to create the software that became SIBPA.
[35] The Régie de Québec remained in control at all times. In the agreement between Partagec and the Régie de Québec, the latter chose to acquire the property rights to the software rather than only acquiring the rights to use the software.
[36] In late 1985 and early 1986, SIBPA was ready to be made available to the régies and was accordingly installed at the Régie de Québec. The other régies in the province were informed by a letter from the general manager of the Régie de Québec, dated May 13, 1986, that they could obtain SIBPA free of charge. The Régie de Québec received no profits relating to SIBPA.
[37] In order to acquire SIBPA, a régie only had to inform Claude Roy at Informas-IST (the successor of Partagec). He then sent a diskette with the software to the régie. The régie only had to retain the content of the diskette on the hard disk of its server.
[38] In order to make assessments with the SIBPA software, it was necessary to complete the CTMSP form. The information was then entered in the software by technicians. The software produced output containing the results of calculations made by the software for each institution and user. The results in the outputs were presented in the form of hours/care and the latter helped institutions with their internal management. This information also made it possible to calculate hours/care required by the average beneficiary for the institution as a whole. These results were helpful to the Régie de Québec when it had to allocate clientèle increase budgets.
PLAISIR system
[39] The case at bar also concerns damages relating to the Eros work PLAISIR ([TRANSLATION] "computerized planning of nursing care required"). These damages were allegedly caused by the use of the SIBPA software.
[40] The PLAISIR system, designed by Eros in the early 1980s, is a tool for assessing the needs of non-independent elderly persons already residing in a long-term care institution.
[41] PLAISIR consists only of one form, the FRAN ([TRANSLATION] "nursing actions summary form"), which must be completed by a nurse. Once completed, this form is sent to Eros where a nurse rereads it and ensures that the information is reliable and valid. This rereading is an integral part of the system. The form is then processed by Eros using software. The software determines the resources required by the beneficiary who is the subject of the assessment by seven-day periods and by work shifts.
[42] This system performs the same function as the shortened CTMSP. It is used to make an ongoing assessment of beneficiaries already accommodated in the network, not for the complete assessment of persons making an application for admission to a reception centre.
[43] However, PLAISIR is more detailed than CTMSP in the nomenclature describing nursing actions. The PLAISIR nomenclature is [TRANSLATION] "open", that is, in completing the FRAN form the nurse ticks a number of parameters which are in the list and reflect the beneficiary's needs. By ticking the parameters for the necessary actions, she creates new care actions. Unlike the CTMSP, in which the actions are already all described, FRAN thus makes possible a more flexible description of the beneficiary's needs. Once the form is complete, points are assigned to each action by the PLAISIR software at Eros. The software then calculates the results.
[44] Because PLAISIR subdivides its results by work shift, it makes possible a more accurate assessment of needs for manpower and assistance in the management of the latter. The shortened CTMSP measures workload by separating it between the nursing load and that of auxiliaries and employees, which PLAISIR does not do.
[45] The PLAISIR tool was used in Montérégie in 1983 and by the Régie de Québec from 1984 onwards. Montérégie had used PLAISIR in 1983-1984 and 1984-1985 to make assessments throughout its region. However, it cancelled the contract for the PLAISIR assessment from 1985 to 1986.
Involvement of CGI in case
[46] CGI is a company incorporated under Canadian law. CGI is the legal successor to Partagec, the Société Informas du Québec (SIQ) and IST-Informas Inc. (IST). CGI's involvement in this matter dates back to 1996, at which time it purchased Groupe IST Inc. The contract of sale provided for the purchase by CGI of Groupe IST Inc., which consisted only of the IST [TRANSLATION] "contracting out" division, not its [TRANSLATION] "health" division. CGI never purchased the division which had the SIBPA file and this software was not part of the assets purchased in May 1996. It is MédiSolution inc. which is the owner of the IST "health" division. At the same time, the contract of sale stipulated that CGI acquired Eros's action against IST. CGI therefore owns the rights and obligations of its predecessors, Partagec, SIQ and IST.
Plaintiff's arguments
[47] Eros alleged the Régie de Québec had infringed its copyrights by performing the following acts:
- authorizing the reproduction of significant portions of CTMSP forms when SIBPA was designed by CGI;
- authorizing the translation of the CTMSP into data processing language by CGI;
- reproducing the CTMSP work in the use of SIBPA;
- authorizing use of the infringing SIBPA software, and consequently reproduction of the CTMSP at the time of use;
- placing the infringing work in circulation so as to injure Eros, by offering the software to all the régies.
[48] Eros alleged that Montérégie had reproduced its CTMSP work in using the SIBPA.
[49] Eros alleged CGI had reproduced significant portions of its CTMSP work in designing SIBPA. By incorporating the CTMSP forms in the SIBPA software CGI reproduced them, but in data processing language.
II. ANALYSIS
1. Crown immunity
[50] The Régie de Québec alleged that it could not be held responsible for the damages caused by the design of SIBPA since it was acting as an agent of the Crown, and as such could rely on the benefit of the immunity of the Crown in Right of the province.
[51] In Commission des normes du travail v. Conseil régional des services de la santé et des services sociaux de la Montérégie, [1987] R.J.Q. 841 at 860 (C.A.) (Commission), the Quebec Court of Appeal clearly held that the CRSSs are agents of the Crown as a result of the significant degree of control exercised by the MAS over their activities.
[52] When the Régie de Québec acts in a specific mandate from the MAS, as in the case at bar, its status as agent is all the more obvious.
[53] It is a well-settled rule of administrative law that a Crown agent or employee enjoys Crown immunity ([1983] 2 S.C.R. 551">R. v. Eldorado Nuclear Limited, [1983] 2 S.C.R. 551- "Eldorado").
(A) Whether Copyright Act applicable to Crown in Right of province
[54] Section 17 of the federal Interpretation Act, R.S.C. 1985, c. I-21, provides that no enactment is binding on the Crown unless this expressly stated:
17. No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty's rights or prerogatives in
any manner, except as mentioned or referred to in the enactment.
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17. Sauf indication contraire y figurant, nul texte ne lie Sa Majesté ni n'a d'effet sur ses droits et prérogatives.
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[55] Since the Act does not state that it applies to the Crown, the Régie de Québec submitted that the MAS and its agents, including the régies, could rely on the Crown immunity.
[56] It is recognized at common law that the Crown in Right of Canada and the Crown in Right of the provinces enjoy a significant immunity. This immunity is covered in the interpretation statutes of the federal legislature and several of the provinces.
[57] Alberta Government Telephones v. C.R.T.C., [1989] 2 S.C.R. 225 (AGT), affirmed that the reference to Her Majesty in section 16 of the Interpretation Act, R.S.C. 1970, c. I-23 (now section 17), applies not only to the Crown in Right of Canada but to the Crown in Right of a province as well.
[58] In the case at bar, the Act does not state that it applies to the Crown. This silence accordingly makes it necessary to analyse the provisions of the Act to determine whether the Crown can still be made subject to the Act by implication.
[59] Eros alleged that section 12 of the Act is an indication that the Act is applicable to the Crown. I am not of this view. Section 12 expressly mentions that it is applicable without prejudice to any rights or privileges of the Crown:
12. Without prejudice to any rights or privileges of the Crown, where any work is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty and in that case shall continue for the remainder of the calendar year of the first publication of the work and for a period of fifty years following the end of that calendar year. [My emphasis].
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12. Sous réserve de tous les droits ou privilèges de la Couronne, le droit d'auteur sur les oeuvres préparées ou publiées par l'entremise, sous la direction ou la surveillance de Sa Majesté ou d'un ministère du gouvernement, appartient, sauf stipulation conclue avec l'auteur, à Sa Majesté et, dans ce cas, il subsiste jusqu'à la fin de la cinquantième année suivant celle de la première publication de l'oeuvre. [Je souligne].
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[60] In his text Fox's Canadian Law of Copyright and Industrial Designs, 3d ed., Toronto, Carswell, 2000 (Fox), at p. 355, John S. McKeown states that the Crown can exercise the rights conferred in section 12 of the Act without this eliminating its immunity.
Theory of waiver or [TRANSLATION]"complementarity of advantages and disadvantages"
[61] In Sparling v. Caisse de dépôt & du placement, [1988] 2 S.C.R. 1015 (Sparling), the Supreme Court of Canada held that the Crown could not benefit from rights conferred by legislation without being subject to the resulting burdens. Thus, even where there is no indication that legislation applies to the Crown, the latter may make itself subject to the Act through its own actions. The theory of waiver requires, however, that there be a quite close nexus between the benefit received by the Crown and the burden it is being made to assume.
[62] Eros stated that the MAS made itself subject to the provisions of the Act of its own volition through its negotiations with Eros of the contract for assignment of copyright. The MAS derived a benefit from this by obtaining an exclusive licence to the CTMSP. It argued that this constituted an implicit acceptance of the benefits of the provisions of the Act. The MAS therefore could not take advantage of the provisions creating and protecting the rights which were the subject of its licence without being covered by the system of responsibility for infringement of its contracting party's copyrights. If the rights resulting from the licence which the MAS obtained had been infringed, it would have wanted to sue the infringer: it therefore cannot avoid application of the provisions on which in the circumstances it would have relied. The Crown and its agents cannot take advantage of legislative provisions and then ignore the resulting burdens.
[63] In the case at bar, I consider that the MAS made use of the provisions of the Act. There is a close nexus between the benefit provided by an exclusive licence, namely the right to use a work to the exclusion of any other person, and the burden not to infringe the rights which the assigning party has chosen not to assign, here the right to electronic application of its work. The MAS and its agents are therefore bound by the provisions of the Act and cannot rely on Crown immunity.
(B) Whether actions of Québec ultra vires its mandate
[64] Additionally, I consider that even if the Régie de Québec could have relied on immunity, it exceeded the mandate conferred by the MAS when it infringed Eros's copyrights, and it consequently lost its immunity.
[65] In Eldorado, supra, at 566, the Supreme Court of Canada said the following;
When the agent steps outside the ambit of Crown purposes, however, it acts personally, and not on behalf of the state, and cannot claim to be immune as an agent of the Crown. This follows from the fact that s. 16 of the Interpretation Act works for the benefit of the state, not for the benefit of the agent personally.
[66] In AGT, supra, at 295, it stated that "this doctrine may be applied where one level of government seeks to invoke Crown immunity from a statute of the other".
[67] There is no evidence in the record that the MAS gave the Régie de Québec a mandate to infringe Eros's rights regarding electronic use of the CTMSP form. The evidence actually shows the contrary. In its ministerial circular 1984-069 the MAS informed the régies of the right assigned to the MAS by Eros. Additionally, nothing in the instructions the MAS gave to Québec required, authorized or approved computerization of the CTMSP. Also, no provision of the Act respecting health gives the régies power to contravene federal legislation in carrying out their mandates.
[68] I therefore conclude that the Régie de Québec exceeded the limits of its instructions when it decided to include the CTMSP form in the SIBPA software. As a consequence, it cannot rely on Crown immunity to protect itself from the consequences of its infringement of Eros's rights.
(C) Whether Régie de Québec became liable under C.C.L.C. civil liability
[69] Paragraph 1 of article 356 of the C.C.L.C. provides the following:
Art. 356. Secular corporations are further divided into political and civil; those that are political are governed by the public law, and only fall within the control of the civil law in their relations, in certain respects, to individual members of society.
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Art. 356. Les corporations séculières se subdivisent encore en politiques et en civiles. Les politiques sont régies par le droit public, et ne tombent sous le contrôle du droit civil que dans leurs rapports, à certains égards, avec les autres membres de la société individuellement.
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[70] Eros alleged that the design of SIBPA was not an act of policy but an act of execution, which could make the artificial entity liable in public law. By committing an act of execution, the [TRANSLATION] "political" artificial entity acts as a private person. It can therefore be subject to the rules of private law.
[71] In Fox, supra, at page 414, John S. McKeown warns against the application of private law concepts to infringement of copyright: "[b]ecause the rights in question are statutory in nature the terms of the [Copyright] Act speak for themselves and it is not helpful in interpreting those provisions to import tort concepts." This principle was recognized by the Supreme Court of Canada in [1980] 1 S.C.R. 357">Compo Co. Ltd. v. Blue Crest Music Inc., [1980] 1 S.C.R. 357, at 372-373, where it said:
Courts in this technical field of copyright have found it prudent to make their judicial answers congruent with the legal issues raised in the proceeding at hand leaving, so far as possible, analogies, examples and hypothetical questions to another day. I propose to follow this principle and therefore expressly refrain from deciding such questions as whether or not there may be in law two "makers" of a single record for the purpose of these sections of the Copyright Act. Mr. Hughes for the respondent in answer to a question from the Bench put it very well when he said that copyright law is neither tort law nor property law in classification, but is statutory law. It neither cuts across existing rights in property or conduct nor falls between rights and obligations heretofore existing in the common law. Copyright legislation simply creates rights and obligations upon the terms and in the circumstances set out in the statute. This creature of statute has been known to the law of England at least since the days of Queen Anne when the first copyright statute was passed. It does not assist the interpretive analysis to import tort concepts. The legislation speaks for itself and the actions of the appellant must be measured according to the terms of the statute. [Emphasis added.]
[72] It appears that the rules of tort liability have no place in the interpretation of copyright. In my view it is wrong to suggest, as the plaintiff did, that civil law can be the source of the defendant's fault in a case of copyright infringement.
[73] The Act in fact provides what acts can be an infringement of copyright and what remedies are available. The remedy in damages is mentioned in sections 34 and 35.
[74] I agree that in Club de golf Murray Bay v. La Commission des normes du travail, [1986] A.Q. No. 422 (QL), the Quebec Court of Appeal applied rules of liability in delict under article 1053 C.C.L.C. as a basis for its conclusion that the Commission des normes du travail had infringed the Labour Standards Act, R.S.Q. c. N-1.1. However, unlike the case at bar the Labour Standards Act provides no remedy for the plaintiff. The Court therefore relied on civil law in compensating the plaintiff for the damage caused by the fault of the Commission. The rules contained in that case are not applicable to the case at bar.
[75] In conclusion, I feel that although the Régie de Québec was an agent of the MAS in connection with the SIBPA project, it cannot rely on Crown immunity since the MAS, and therefore its agents, made itself subject to the Act when it concluded the contract for assignment of copyrights. Further, even if the Régie de Québec enjoyed immunity, it lost that immunity when it exceeded its instructions. The Régie de Québec will have to sustain the consequences of its infringing acts.
2. Knowledge by régies of existence of Eros copyrights
[76] The CTMSP forms were created by Charles Tilquin, and under his supervision. Mr. Tilquin and his assistants signed assignments to Eros of all their rights resulting from the creation of the CTMSP forms. The CTMSP forms are the subject of copyright registrations in the plaintiff's name.
[77] The parties admitted that the CTMSP forms are literary works protected by the Act.
[78] Mr. Tilquin testified that in spring 1984 he negotiated with the MAS the conditions for use of his CTMSP forms in the Quebec health network. On August 8, 1984, the assignment of interests was signed. It conferred the rights of literary exploitation of the CTMSP work on the MAS.
[79] Mr. Tilquin only wanted to assign a licence to exploit, not his rights to the CTMSP work, as if he assigned them he might lose his rights to his other works, PLAISIR and PRN. He also did not want to assign a licence for electronic use of his work, since in 1984 computerization was beginning in the networks and he saw this as an important potential for CTMSP.
[80] This intention is in fact clear from reading all the preliminary versions of the contract, which contain deletions regarding assignment of electronic exploitation. Clause 4.6 of the contract states that Eros retains its rights to electronic exploitation of the CTMSP.
[81] At the time of the negotiations the parties had contemplated a review of the CTMSP. Since the CTMSP was going to be used throughout the province, the MAS wanted to ensure that it was completely adequate for controlling admissions. The review of CTMSP-85 was to include assessment of autonomy and medical assessment, and review of the determination of services required and the measurement of resources necessary was to be made in the CTMSP-87.
[82] The MAS 1984-09 circular sent to all Quebec régies confirmed assignment of interests associated with CTMSP and indicated that only literary exploitation rights had been assigned to the MAS.
[83] Daniel Fortin, who was responsible for the SIBPA project at the Régie de Québec, testified that he saw this circular. A report submitted to his board of directors in December 1984 made reference to Eros's copyrights.
[84] The evidence is therefore conclusive that the Régie de Québec was aware of Eros's copyrights.
3. Infringement of Eros's copyright
[85] Eros maintained that each of the defendants infringed its copyrights, either by performing one of the acts mentioned in section 3 or by authorizing them. Section 3 provides the following:
3. (1) For the purposes of this Act, "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, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right
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3. (1) Le droit d'auteur sur l'oeuvre comporte le droit exclusif de produire ou reproduire la totalité ou une partie importante de l'oeuvre, sous une forme matérielle quelconque, d'en exécuter ou d'en représenter la totalité ou une partie importante en public et, si l'oeuvre n'est pas publiée, d'en publier la totalité ou une partie importante; ce droit comporte, en outre, le droit exclusif :
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(a) to produce, reproduce, perform or publish any translation of the work,
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a) de produire, reproduire, représenter ou publier une traduction de l'oeuvre; (b) in the case of a dramatic work, to convert it into a novel or other non-dramatic work,
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b) s'il s'agit d'une oeuvre dramatique, de la transformer en un roman ou en une autre oeuvre non dramatique;
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(c) in the case of a novel or other non-dramatic work, or of an artistic work, to convert it into a dramatic work, by way of performance in public or otherwise,
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c) s'il s'agit d'un roman ou d'une autre oeuvre non dramatique, ou d'une oeuvre artistique, de transformer cette oeuvre en une oeuvre dramatique, par voie de représentation publique ou autrement;
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(d) in the case of a literary, dramatic or musical work, to make any sound recording, cinematograph film or other contrivance by means of which the work may be mechanically reproduced or performed,
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d) s'il s'agit d'une oeuvre littéraire, dramatique ou musicale, d'en faire un enregistrement sonore, film cinématographique ou autre support, à l'aide desquels l'oeuvre peut être reproduite, représentée ou exécutée mécaniquement;
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(e) in the case of any literary, dramatic, musical or artistic work, to reproduce, adapt and publicly present the work as a cinematographic work,
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e) s'il s'agit d'une oeuvre littéraire, dramatique, musicale ou artistique, de reproduire, d'adapter et de présenter publiquement l'oeuvre en tant qu'oeuvre cinématographique;
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(f) in the case of any literary, dramatic, musical or artistic work, to communicate the work to the public by telecommunication,
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f) de communiquer au public, par télécommunication, une oeuvre littéraire, dramatique, musicale ou artistique;
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(g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan,
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g) de présenter au public lors d'une exposition, à des fins autres que la vente ou la location, une oeuvre artistique - autre qu'une carte géographique ou marine, un plan ou un graphique - créée après le 7 juin 1988;
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(h) in the case of a computer program that can be reproduced in the ordinary course of its use, other than by a reproduction during its execution in conjunction with a machine, device or computer, to rent out the computer program, and
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h) de louer un programme d'ordinateur qui peut être reproduit dans le cadre normal de son utilisation, sauf la reproduction effectuée pendant son exécution avec un ordinateur ou autre machine ou appareil;
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(i) in the case of a musical work, to rent out a sound recording in which the work is embodied,
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i) s'il s'agit d'une oeuvre musicale, d'en louer tout enregistrement sonore.
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and to authorize any such acts.
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Est inclus dans la présente définition le droit exclusif d'autoriser ces actes.
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[86] Subsection 27(1) of the Act provides that it is an infringement of copyright 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. Subsection 27(2) of the Act states that distribution of a work that infringes the copyright of another person is also an infringement of copyright.
27. (1) It is an infringement of copyright 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.
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27. (1) Constitue une violation du droit d'auteur l'accomplissement, sans le consentement du titulaire de ce droit, d'un acte qu'en vertu de la présente loi seul ce titulaire a la faculté d'accomplir.
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27(2) It is an infringement of copyright for any person to
(a) sell or rent out,
(b) distribute to such an extent as to affect prejudicially the owner of the copyright,
(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public,
(d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or
(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),
a copy of a work, sound recording or fixation of a performer's performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.
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27. (2) Constitue une violation du droit d'auteur l'accomplissement de tout acte ci-après en ce qui a trait à l'exemplaire d'une oeuvre, d'une fixation d'une prestation, d'un enregistrement sonore ou d'une fixation d'un signal de communication alors que la personne qui accomplit l'acte sait ou devrait savoir que la production de l'exemplaire constitue une violation de ce droit, ou en constituerait une si l'exemplaire avait été produit au Canada par la personne qui l'a produit :
a) la vente ou la location;
b) la mise en circulation de façon à porter préjudice au titulaire du droit d'auteur;
c) la mise en circulation, la mise ou l'offre en vente ou en location, ou l'exposition en public, dans un but commercial;
d) la possession en vue de l'un ou l'autre des actes visés aux alinéas a) à c);
e) l'importation au Canada en vue de l'un ou l'autre des actes visés aux alinéas a) à c).
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Whether SIBPA constitutes reproduction of substantial part of CTMSP forms?
[87] The rule for determining whether there has been reproduction of a substantial part of a work is qualitative rather than quantitative (U & R Tax Services Ltd. v. H & R Block Canada Inc. (1995), 62 C.P.R. (3d) 257 (F.C.), at 268-269). This is a question of fact which must be determined in light of all the circumstances surrounding the Act (Productions Avanti Ciné Vidéo inc. v. Favreau, [1999] R.J.Q. 1939 (C.A.), at 1945, motion for leave to appeal to the Supreme Court of Canada denied on May 25, 2000).
[88] Lucille Guénette, data processing director for Eros, testified that the source code of the SIBPA software reproduced substantial parts of the CTMSP forms.
[89] The source code of a software is a series of instructions prepared by the programmer in programming language. This is then translated into an object code, that is, instructions to be carried out by the computer. The source code contains all the instructions for the computer and comments by the programmer, in addition to all the words, expressions, figures, values and points shown on the screen when the software is operating.
[90] Ms. Guénette stated that the SIBPA source code reproduced the terminology and pointing of CTMSP 81 and 87 forms and that the latter appeared on the screen in the same order as in the forms.
[91] Ms. Guénette added that certain of the pointings for care actions in CTMSP forms did not appear either on the screen or in the SIBPA programs, but were contained in SIBPA tables of information or internal programs.
[92] She further indicated that one program in the source code made possible the printing of a report titled [TRANSLATION] "File of CTMSP 87 services required".
[93] Ms. Guénette noted that parts of the CTMSP 81 and 85 [TRANSLATION] "Autonomy Assessment Form" are contained in the SIBPA software. She confirmed that the SIBPA software can calculate hours/care required by beneficiary and by institution in nursing care, social services, physiotherapy, ergotherapy and support services. Mr. Tilquin testified that [TRANSLATION] "the heart" of his CTMSP work was the determining of the services required and measurement of the resources required. At the heart of these sections was the [TRANSLATION] "Form for determining nursing care and assistance" and the [TRANSLATION] "Form for measuring hours of nursing care and assistance required".
[94] Additionally, the defendants admitted that the guide for using the SIBPA software reproduces substantial parts of the CTMSP forms.
[95] All this evidence clearly indicates that the defendants appropriated the gist of the CTMSP work.
[96] Decisions by the courts on software infringements have not yet resolved the question of whether transposing a work into electronic language constitutes reproduction or translation of the work. In Apple Computer, Inc. v. Mackintosh Computers Ltd., [1988] 1 F.C. 673 (C.A.), affirmed in [1990] 2 S.C.R. 209, though the Supreme Court of Canada did not rule on this point, the Federal Court of Appeal had to decide whether the respondents' machine programs embodied in ROM chips were reproductions of the appellants' machine programs embodied in computer language. Mahoney J.A. concluded as follows, at 684:
I agree with the learned Trial Judge that the conversion of a text into Morse Code or shorthand does not result in a different literary work and that the text, so converted, does retain the character of the original . . . Such a conversion is not, in my opinion a translation within the contemplation of the Copyright Act. It is rather a reproduction of the original . . .
. . . . .
While I do not agree that embodiment of the programs in the ROM chips can, within the contemplation of the Copyright Act, be considered translations, they can be considered reproductions of the original programs and, if they are, the result is the same: the exclusive right to reproduce, as to translate, was the respondents'.
[97] However, Hugessen J.A. made the following comment at 712:
The appellants argued that the memory chips cannot be translations because in its proper sense a translation is always an interpretation rather than a one-for-one copy, and that, on the respondents' theory of them, the ROMs were exact replicas . . .
[98] It is certainly true that, in view of the normal ambiguity of language, translations are ordinarily nothing more than interpretations of the original texts. In this sense, translation may be regarded as an art rather than as a science.
[99] In my opinion, it is not necessary to determine whether incorporation of the plaintiff's CTMSP forms in SIBPA was a reproduction or a translation. It is clear that these forms were contained in the Régie de Québec's software word for word, and this is an infringement for which it is liable under paragraph 3(1)(a) and subsection 27(1) of the Act.
[100] The Régie de Québec maintained that SIBPA is an information system created to facilitate the admission procedure, not a software computerizing a tool of assessment, whether the CTMSP or some other.
[101] Louise Montreuil, policy development director with the Régie de Québec in January 1985, testified to this effect. SIBPA was created as an information support tool for PECA, the procedure for evaluating and coordinating admissions. Ms. Montreuil maintained that SIBPA and CTMSP are two different tools. CTMSP is a tool for assessing the physical requirements of a client, data from which was entered into SIBPA, the information system assisting the PECA admission control process used in the Régie de Québec. However, Ms. Montreuil admitted in cross-examination that certain forms contained in SIBPA originated in the CTMSP.
[102] She further acknowledged that she had been told that an action was brought against the MAS and the Régie de Québec for computerization of the CTMSP, but she did not know the details of this. She did not see fit to cease using SIBPA at that point, since she was not required to do so by the MAS.
[103] Although I accept that as a computerized system SIBPA was broader than an assessment tool, the fact remains that when it operates on the computer it reproduces substantial parts of CTMSP forms on the screen. The fact that a defendant has added original content to the infringing work is not a defence (C.P. Koch Ltd. v. Continental Steel Ltd. (1984), 82 C.P.R. (2d) 156 (B.C.S.C.)).
[104] The evidence was that the defendant Régie de Québec had complete control over creation of the SIBPA system. It placed the CTMSP forms at the disposal of Partagec and its successors, and they were used in designing SIBPA and incorporated in the software by Partagec. CGI's corporate documents disclosed that the defendant CGI owned the rights and obligations of Partagec and SIQ.
[105] The Régie de Québec accordingly authorized the infringing acts by the defendants CGI and its predecessors.
[106] Anyone who authorizes an infringement commits an infringing act in the same way as the entity which performs the act (Apple Computer Inc. et al. v. MacKintosh Computers et al. (1986), 28 D.L.R. 4th 178 (F.C.T.D.), at 224). CGI and the Régie de Québec are therefore jointly and severally liable for these acts.
Whether use of SIBPA software constitutes infringement?
[107] Montérégie did not participate in the design of the SIBPA. However, it admitted that it used this software, as did several other regional régies.
[108] Montérégie used SIBPA from January 1988 to February 1992. Use of the software was in accordance with a request by the MAS and regulations regarding organization and admission at institutions. It did not have to pay a licence fee for this use, only the cost of installation and of training staff to use it.
[109] Montérégie argued that mere use of the SIBPA software was not a copyright infringement.
[110] The plaintiff maintained, on the contrary, that by using the SIBPA software the defendants Régie de Québec and Montérégie infringed its copyright in the CTMSP forms.
[111] Claude Roy, former head of the SIBPA project with Partagec, testified that the SIBPA software was delivered on tape to the régies requesting it. The content of the cassette was then recorded on the hard disk of the régies' server. Ms. Guénette explained that simply starting the computer meant there was a reproduction of everything that could be seen in the source code.
[112] Montérégie argued that in Canadian law putting the CTMSP work on the screen does not constitute reproduction. I do not share that view, for the following reasons.
[113] Copyright in relation to a work means the sole right to reproduce the work or any substantial part thereof in any material form whatever (section 3 of the Act). There is no definition of what a material form is. Accordingly, we must look at the ordinary meaning of the words. A material form is a palpable, tangible, perceptible form.
[114] The evidence showed that the posting of substantial parts of the CTMSP form on the screen was not ephemeral. The image was not one that appeared and disappeared. The image appeared on the screen and the user entered the required information: the screen was therefore interactive.
[115] Although there are no Canadian precedents on the point, the British courts have held in Bookmakers' Afternoon Greyhound Services Ltd. et al. v. Wilf Gilbert (Staffordshire) Ltd. et al., [1994] F.S.R. 723 (H.C.J.-C.H.), that mere posting constitutes material reproduction.
[116] In that case, the plaintiff had forms for dog racing in which handicaps, dogs' winnings, histories and so on, were computerized and transferred to the bookmakers' shops. The plaintiff sued not only the person who computerized and transferred the forms to the bookmakers, but also one of the bookmakers who had a screen on which the information appeared.
[117] Like the Canadian statute, the British law does not specifically indicate what constitutes a material form.
[118] The Court concluded that there was no reason to exclude materialization on a television screen from the meaning of the words. In my opinion, the same conclusion must apply in the case of posting on a computer screen.
[119] The reproduction of the work by the Régie de Québec and the Montérégie on their computers in my opinion constitutes an infringement of the plaintiff's copyright.
[120] Aside from reproduction on the screen, the evidence showed that SIBPA generated printed reports which were themselves reproductions of substantial parts of the CTMSP forms, which constitutes another infringement of Eros's copyright.
[121] On this point, Profs. Melville B. Nimmer and David Nimmer say the following in their text Nimmer on Copyright, vol. 2, San Francisco, Matthew Bender, 2003, at page 8-122.3:
Apart from the question of whether input of a work into a computer is infringing, subsequent retrieval of the work from the computer in a tangible form - a printout, for example - clearly would constitute an infringing "copy" . . .
[122] I conclude that the use of the SIBPA software constituted an infringement and that Montérégie and Régie de Québec thus infringed the plaintiff's copyright.
Whether distribution of SIBPA by Régie de Québec constituted infringement of Eros's copyright?
[123] Paragraph 27(2)(c) of the Act provides that it is an infringement when any person distributes the disputed work to such an extent as to prejudicially affect the owner of the copyright.
[124] The evidence clearly showed that the defendants Régie de Québec and CGI "distributed" the SIBPA and that several régies used it. A letter dated May 13, 1986 from the Régie de Québec to general managers of the régies announced SIBPA was ready and they should contact Mr. Roy of Partagec to obtain the system.
Whether CGI knew that the work it was distributing contravened Eros's rights?
[125] CGI claimed it could rely on the old section 39 of the Act, a provision that was in effect in 1984 while Partagec was participating in the designing of SIBPA. That section provided that, apart from certain exceptions, a person infringing another's copyright was held responsible for his or her acts, regardless of good faith.
[126] The version of section 39 in effect before the 1997 amendments provided as follows:
39. Where proceedings are taken in respect of the infringement of the copyright in any work and the defendant in his defence alleges that he was not aware of the existence of the copyright in the work, the plaintiff is not entitled to any remedy other than an injunction in respect of the infringement if the defendant proves that at the date of the infringement he was not aware and had no reasonable ground for suspecting that copyright subsisted in the work, but if at the date of the infringement the copyright in the work was duly registered under this Act, the defendant shall be deemed to have had reasonable ground for suspecting that copyright subsisted in the work.
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39. Lorsque, dans une action exercée pour violation du droit d'auteur sur une oeuvre, le défendeur allègue pour sa défense qu'il ignorait l'existence de ce droit, le demandeur ne peut obtenir qu'une injonction à l'égard de cette violation, si le défendeur prouve que, au moment de la commettre, il ne savait pas et n'avait aucun motif raisonnable de soupçonner que l'oeuvre faisait encore l'objet d'un droit d'auteur; mais, si, lors de la violation, le droit d'auteur sur cette oeuvre était dûment enregistré sous le régime de la présente loi, le défendeur est réputé avoir eu un motif raisonnable de soupçonner que le droit d'auteur subsistait sur cette oeuvre.
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[127] One of the exceptions to this rule was that a defendant could avoid an order to pay damages if he established that he did not know or had no reasonable grounds for suspecting that the work was protected. Since the copyrights relating to CTMSP were duly registered, CGI must rebut the presumption that it had reasonable grounds to suspect the work was protected. The burden of proof on CGI is a heavy one.
[128] Serge Potvin, head of the SIBPA project with Partagec, testified that he had never considered whether he was entitled to reproduce the document, since it came from the MAS and there had never previously been any problem. He further testified that Partagec was essentially an employee of the Régie de Québec, and accordingly in his submission any question of copyright was the responsibility of the latter.
[129] In C.P. Koch Ltd. v. Continental Steel Ltd., supra, at 169, the British Columbia Supreme Court concluded that an employee of a company who had copied the plaintiff's plans was not liable:
With respect to all the incidents in question, Paulsen was, in effect, the employee of Continental Steel. He was acting entirely under the direction of Lloyd and simply following his instructions. I accept that he was not aware and that, given the course of dealings between Lloyd and Koch, he would not suspect that what he was being told by Lloyd to do was an infringement of Koch's right of copyright. The action against him is dismissed.
[130] In the case at bar, no evidence was presented to the Court to show that Partagec was an employee of the Régie de Québec when the SIBPA was designed. The contract for designing the software indicates that the Régie de Québec has complete control of the project, but that is not enough to conclude that one company is the employee of another. Further, the protocol between the two entities actually indicates that Partagec is the agent of the Régie de Québec. The fault of an agent in performing his mandate does not exclude his liability (article 1054 (7) C.C.L.C.).
[131] Further, there are indications as to the ownership of the copyrights in these forms. The document from which Partagec incorporated the data of CTMSP 85 in the SIBPA software does not contain any indication of copyright on the cover page. On the contrary, this first page includes the name and abbreviation of the Government of Quebec. On the other hand, at the bottom of page 2, though in very small letters, a copyright notice indicates that the document is the property of Eros and is reproduced by the MAS with its permission. The same notice is reproduced on page 1 of the CTMSP form and on each page which contains a table from the form. Additionally, on page 3 of the document, this time in larger lettering, it is indicated that the document is protected by copyright owned by SSM-80 and that correspondence may be addressed to Eros or to the Government of Quebec.
[132] I do not doubt the good faith of Partagec employees. In the case at bar, it is clear that Partagec employees did not know that Eros was the holder of the copyrights to the computerization of the CTMSP. Most had never heard any mention of Eros or Mr. Tilquin before the action. The employees' testimony in this regard was credible. However, the mere absence of knowledge will not suffice here, as Eros had registered its copyright.
[133] I also do not doubt the testimony of Partagec employees that the form resembled all the other forms sent to them by the government or that they had never had any problem of the kind before. However, that does not suffice to rebut the presumption created by the registration of Eros's copyright.
[134] The mere fact that there had never been a problem of infringement before does not mean that infringement is not something to be considered when a form is incorporated in new software word for word, especially when the copyright notice is reproduced at several places in the document.
[135] These facts lead me to conclude that there were reasonable grounds to believe a copyright existed on the CTMSP work. I consider that CGI has not rebutted the presumption created by section 39 of the Act and cannot rely on the exception contained therein.
[136] Further, CGI cannot rely on the exception contained in section 39 for acts which it committed after the plaintiff initiated the action at bar. The evidence was that Mr. Roy was the first person at CGI to learn of the action and he forwarded it to his boss, Mr. Tousignant, at once. Nonetheless, CGI did not cease making changes to the SIBPA software every time the Régie de Québec asked it to do so. CGI was well aware that Eros owned copyrights to the CTMSP work and should have ceased its infringing activity immediately.
[137] As regards the injury sustained, the evidence was that Eros was an actively expanding enterprise until 1986. Mr. Tilquin said that from 1983 to 1986-1987, his business was growing rapidly due to the adoption of the CTMSP by the MAS and the arrival of PLAISIR on the market. Suddenly, in 1986, the business's turnover dropped significantly and did not recover. Eros survived thanks to the régies which continued to use PLAISIR. In 1993, Eros began doing business in Switzerland and in 2001 Germany adopted PLAISIR. Since then, the Eros turnover has recovered. Mr. Tilquin explained the 1986 drop by the advent of SIBPA.
[138] Although the growth curve might not have continued at the same rate, the evidence was that the arrival of SIBPA had a financial impact on the Eros business.
[139] I conclude from this that the Régie de Québec and CGI infringed the plaintiff's copyrights within the meaning of paragraph 27(2)(c) of the Act, by distributing the disputed work in a manner prejudicial to Eros.
Remedies
[140] Section 34 of the Act indicates the remedies which an injured copyright holder has available:
34. (1) Where copyright has been infringed, the owner of the copyright is, subject to this Act, entitled to all remedies by way of injunction, damages, accounts, delivery up and otherwise that are or may be conferred by law for the infringement of a right . . .
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34. (1) En cas de violation d'un droit d'auteur, le titulaire du droit est admis, sous réserve des autres dispositions de la présente loi, à exercer tous les recours - en vue notamment d'une injonction, de dommages-intérêts, d'une reddition de compte ou d'une remise - que la loi accorde ou peut accorder pour la violation d'un droit . . .
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[141] Section 35 deals more specifically with the damages to which he is entitled to remedy the infringement:
35. (1) Where a person infringes copyright, the person is liable to pay such damages to the owner of the copyright as the owner has suffered due to the infringement and, in addition to those damages, such part of the profits that the infringer has made from the infringement and that were not taken into account in calculating the damages as the court considers just.
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35. (1) Quiconque viole le droit d'auteur est passible de payer, au titulaire du droit qui a été violé, des dommages-intérêts et, en sus, la proportion, que le tribunal peut juger équitable, des profits qu'il a réalisés en commettant cette violation et qui n'ont pas été pris en compte pour la fixation des dommages-intérêts.
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(2) In proving profits,
(a) the plaintiff shall be required to prove only receipts or revenues derived from the infringement; and
(b) the defendant shall be required to prove every element of cost that the defendant claims.
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(2) Dans la détermination des profits, le demandeur n'est tenu d'établir que ceux provenant de la violation et le défendeur doit prouver chaque élément du coût qu'il allègue.
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[142] Eros is claiming damages under two separate heads. First, Eros is claiming loss of income relating directly to the electronic exploitation of its CTMSP work, alleging that the defendants designed and marketed the SIBPA software based on the CTMSP and that this software cut into Eros's market share. Second, Eros is claiming loss of income resulting from loss of earnings from sales of the system PLAISIR, the market for which was partly taken over by the infringing SIBPA software.
Period covered by assessment of financial loss
[143] Paul Levine, an accounting expert hired by Eros to assess the financial loss, calculated the plaintiff's losses from the period from January 1987 to June 2001 for the CTMSP and PLAISIR works. I feel that this period is too long, since the evidence showed that the SIBPA software was abandoned by the defendants in 1992. In my view, therefore, there is no justification for calculating the damages beyond that period.
[144] The methodology used by Mr. Levine to assess the financial loss differed for CTMSP and for PLAISIR. I must therefore examine the two counts of damages separately.
1. Losses relating to electronic exploitation of CTMSP
[145] To assess the financial loss sustained by Eros, Mr. Levine used an approach based on the royalty rate granted for licences in the health industry.
[146] Mr. Levine assumed that Eros would not have created the software internally but would have given a third party a licence to design the software. In exchange, Eros would have received royalties on sales of the software by the supplier. This method is based on the method of billing for comparable software in North America, including the MDS which is used in Ontario and the United States to assess elderly persons in long-term care institutions.
[147] Mr. Levine contacted about a dozen suppliers of MDS and SICHELD softwares, which are softwares comparable to what an electronic version of CTMSP would have been, and he took an average of the amounts billed by these suppliers.
Turnover
[148] Mr. Levine considered there were two possible scenarios for calculating the losses based on billing for services:
Scenario A : this scenario contemplated an initial installation price by institution and by workplace, and then an annual maintenance amount calculated as a percentage of the initial price (17%) which covered technical assistance and updating; or
Scenario B : this scenario contemplated an initial installation price by institution only, and then an annual maintenance amount calculated by workplace.
Scenario A
[149] The initial installation price in this scenario would have been calculated according to the number of institutions (hospitals, CLSCs, CHSLDs and so on), beds and workplaces in which the electronic CTMSP would be installed.
Turnover and royalty rates
[150] The turnover is calculated according to the scenario selected and then multiplied by the royalty rate. The royalty rate was calculated from information given to Mr. Levine by the Licensing Economics Review (according to Mr. Levine's research, 5.05% is an average rate). The result of this operation represented what Eros would have obtained from sales of the electronic CTMSP.
Profit/marginal contribution rate
[151] It is also necessary to apply the profit/marginal contribution rate Eros would have realized but for the infringement of the CTMSP. This rate represents the profit made on a sale. It is calculated by taking the turnover and deducting all variable costs directly associated with the realization of the turnover. Mr. Levine chose to use the turnovers for 1991 and 1992 to calculate the rate, as Eros only had profits from PLAISIR during those two years. Mr. Levine assumed that the cost structure would have been similar for a CTMSP software.
[152] According to Mr. Levine's calculations, the profit/marginal contribution rate Eros would have made on the electronic CTMSP is 87.73%. That rate is what Mr. Levine chose to apply throughout the period of Eros's losses.
Annual amount of maintenance
[153] The loss of profit for annual maintenance costs was calculated by applying to the sales figures a percentage of 17% (calculated by averaging the amounts billed by the various suppliers whom Mr. Levine contacted). Eros would also have received royalties on this amount. The figure was accordingly multiplied by the 5.05% royalty rate established earlier. Mr. Levine again applied the 87.73% profit/marginal contribution rates to get the amount representing Eros's losses for annual maintenance.
Conversion rate
[154] Finally, Mr. Levine applied the conversion factor for the Consumer Price Index to convert the amounts into 2001 dollars.
Scenario B
[155] The installation price in Scenario B is calculated in the same way as in Scenario A, except that the calculation only took account of the institution, not the number of workplaces in which the electronic CTMSP would have been installed.
Annual amount of maintenance
[156] The annual amount of maintenance in Scenario B is calculated by workplace. Mr. Levine used the average of amounts billed by the two suppliers he contacted, which used this pricing structure, to arrive at a price applicable to Eros ($833). This amount was then multiplied by the number of workplaces in which the software would have been installed. It is also necessary to add the 5.05% royalty rate which Eros would have received and the 87.73% profit/contribution rate to the amount obtained.
[157] Mr. Levine applied the conversion factor for the Consumer Price Index, as in Scenario A.
Mr. Levine's conclusions
[158] The amounts obtained by the two scenarios are very similar as regards to the installation price and the annual cost of maintenance. Mr. Levine averaged the amounts of the two scenarios to calculate a loss of profit/marginal contributions for the initial installation for Eros of $185,588 in 1987, plus a loss of profit/marginal contributions for annual maintenance totalling $627,175 (not adjusted) for the period from January 1987 to June 2001. According to the calculations of the Eros expert, therefore, the total Eros losses associated with CTMSP would total $812,763 (not adjusted).
[159] The defendant's accounting expert, Bruno Fortin, challenged the methodology based on a royalty rate chosen by Mr. Levine. Although acceptable at first sight, Mr. Fortin considered this approach was not the most likely. In view of the agreement between Eros and the MAS regarding the literary work CTMSP, Mr. Fortin felt that the MAS would have purchased the plaintiff's interests relating to its electronic adaptation. The [TRANSLATION] "owner" approach would have been given priority, since the MAS held all the rights relating to CTMSP except for its electronic use, and purchase is much simpler than managing a royalty agreement. This would especially have been the case as a right of first refusal was contained in the contract between Eros and the MAS.
[160] According to the amounts calculated by Mr. Levine, it would have cost the MAS about $7,000,000 for the initial installation and $1,100,000 per year in maintenance costs, or a total of about $24,000,000 over 15 years for use of the electronic version of the CTMSP. The evidence was that the MAS paid design costs of some $200,000 for the SIBPA system.
[161] I agree with Mr. Fortin that this was the more likely scenario, since historically this is the approach the MAS adopted in its agreement with Partagec for the infringing software SIBPA. The protocol between the Régie de Québec and Partagec for the design of SIBPA stated that the Régie de Québec had an option to acquire a user licence in SIBPA or to retain all rights of ownership over the software. The Régie de Québec chose the second option. This approach was much more economical and made it possible to offer the software to the régies free of charge.
[162] Further, the evidence confirmed that the MAS was not prepared to spend large sums to purchase or design software. Ms. Bilodeau, who worked for the MAS at the time in question, testified that in 1984-1985 the MAS received $13,500,000, annualized to $27,000,000 the following year for homecare centres and hospital centres for long-term care. These amounts were to be used to raise the satisfaction rate in nursing requirements, ergotherapy and physiotherapy. No amount was provided for the purchase of equipment or design of software. Nonetheless, Mr. Tilquin testified that if he had wanted to sell a CTMSP software, he would also have wanted to sell the PRN and PLAISIR to MAS for about $10,000,000. I do not think that the MAS would have been prepared to pay this amount for the Eros tools. Reading the correspondence exchanged between the MAS and Eros in the negotiations for a settlement confirms that the MAS was not prepared to pay such a price for the creation of an electronic tool.
[163] Consequently, I feel that an amount of $200,000, the cost of designing SIBPA, is reasonable. To this amount I add $70,000 to allow for amounts spent by the Régie de Québec to make subsequent modifications to the SIBPA software. This gives a total of $270,000.
[164] We then have to apply Eros's beneficiary margin of 53.72%, which seems reasonable to the Court, since it is Eros's historical margin, to obtain the amount of the profits lost, which comes to $312,729.
[165] I also accept that Eros would have received expenses for the annual maintenance of its electronic CTMSP software. At the undisputed rate of 17%, this represents an annual amount of profit lost of $53,164, an amount which will have to be increased in accordance with the Consumer Price Index from 1986, the date of the infringement, to 1992, the date SIBPA ceased to be used by the defendants.
2. Losses associated with loss of earnings on sales of PLAISIR software
[166] This head of damages was based on the assumption that the infringing software SIBPA partly took over the market for the PLAISIR software.
[167] The defendants objected to such a claim on the ground that while the SIBPA software cut into the PLAISIR sales market, the same thing would have happened if Eros had computerized the CTMSP.
[168] According to Mr. Fortin, the expert witness for the defendants, since SIBPA included the CTMSP in its software in its entirety, and was in competition with PLAISIR, a computerized CTMSP would also have competed with PLAISIR. Accordingly, he maintained, Eros's claims for CTMSP and for PLAISIR overlapped. Thus, the award of damages for losses relating to CTMSP should exclude the award of damages for PLAISIR.
[169] The Régie de Québec submitted that shortened CTMSP was created by Mr. Tilquin to meet the needs of régies that did not want to use PLAISIR. In creating the shortened CTMSP to calculate hours/care, Mr. Tilquin had already marketed a tool which was competing with PLAISIR. The Régie de Québec chose to use the shortened CTMSP instead of PLAISIR and submitted that it was fanciful to think that the network would have spent anything for the use of the shortened CTMSP.
[170] Mr. Tilquin said he would never have created a product which would have [TRANSLATION] "cannibalized" another of his own products. He argued that if a régie had preferred to use the shortened CTMSP together with a CTMSP software to make its ongoing assessments, he would have billed the régie for each of the ongoing assessments done in this way. The cost would have been calculated to compensate Eros for the loss of profits from use of PLAISIR. Accordingly, compensation for his profits for CTMSP and PLAISIR would not be duplication.
[171] Would software computerizing the CTMSP have been a product competing with PLAISIR in the field of ongoing assessments?
[172] It is clear that a CTMSP software would have incorporated all the CTMSP forms. Probably, it would have been possible to input data compiled with the [TRANSLATION] "Form for Determining Services Required" of the shortened CTMSP into the software for making ongoing assessments of beneficiaries, since the shortened CTMSP was only a reduced version of the CTMSP.
[173] Further, if a régie was capable of making an ongoing assessment using the SIBPA software, a software which incorporated CTMSP forms word for word, in my opinion it is not plausible for Eros to argue that a software it would have created, incorporating its CTMSP forms word for word, could not have been used to achieve that purpose.
[174] If a computerized CTMSP with which ongoing assessments could also be made had been marketed instead of SIBPA and distributed free of charge, the Quebec, Montérégie, Estrie and Bas St-Laurent régies which used SIBPA would probably have used it to do their ongoing assessments. Eros would accordingly have suffered losses relating to PLAISIR in any case.
[175] I also note that there were other tools enabling régies to undertake ongoing assessments, such as Info-admission and IMAGES. The evidence was that certain régies were already using these tools and it is conceivable that the régies which uses SIBPA would have used these products competing with PLAISIR if SIBPA had never been marketed.
[176] Finally, Eros admitted that the shortened CTMSP and PLAISIR were interchangeable systems. In that case, how can we deny that the CTMSP software used with the shortened CTMSP would not have fully served the régies in making ongoing assessments?
[177] It is difficult to believe that a government organization such as a régie would have spent an amount for PLAISIR ongoing assessments when it could have made them internally at no cost with the shortened CTMSP and a CTMSP software as tools.
[178] Mr. Tilquin responded that if the régies wanted to use his computerized CTMSP to do ongoing assessments, he would have made them pay for each one. However, it seems unrealistic for Mr. Tilquin to think that the MAS would have bought his software and would then have been prepared to pay charges for each assessment it did with its own software. The question arises as to how Mr. Tilquin would have obtained the information necessary for billing. How can he argue that he could sell a product and then continue to make the purchaser pay for using the product?
[179] I therefore conclude that it is inevitable that a CTMSP software would have competed with Eros's PLAISIR product.
[180] Since the Court must avoid overlaps and duplications (Pro Arts Inc. v. Campus Crafts Holdings Ltd. et al. (1980), 28 O.R. (2d) 422, Ont. H.C.J.), I feel that Eros cannot claim for both damages relating to the use of PLAISIR and damages relating to computerization of the CTMSP.
3. Action against Montérégie
[181] Eros's claim against Montérégie is based on its use of the SIBPA software.
[182] The evidence clearly showed that Montérégie used the infringing SIBPA software for its ongoing assessments knowing that Eros had retained its rights of computerization over CTMSP.
[183] As I held earlier, by using the software Montérégie reproduced the infringing CTMSP several times and these acts constitute infringements of Eros's copyrights.
[184] The courts have created a presumption of damage when it is established that a copyright has been infringed (Netupsky et al. v. Dominion Bridge Co. Ltd. (1969), 58 C.P.R._7, B.C.C.A.).
[185] However, the plaintiff must present evidence of the quantum of the damage resulting from that infringement. That damage must be direct and certain.
[186] Proof of Eros's damage rests on the computerization of CTMSP. There is no conclusive evidence that Montérégie would have used PLAISIR if SIBPA had not been marketed. Although the contract between Montérégie and Eros was suspended and then cancelled at nearly the same time as SIBPA was marketed, several things in the evidence indicate that there were reasons other than SIBPA for Montérégie placing a moratorium on PLAISIR assessments.
[187] Ms. Juneau, who was Montérégie acting director general from October 1986 to April 1987, testified that there were problems with the accuracy of the calculations made with the FRAN form, the predecessor of PLAISIR. The Montérégie board of directors was concerned as information from ongoing assessments had to be accurate if budgets were to be properly allocated. Ms. Juneau admitted that the 1986 contract between Montérégie and Eros for PLAISIR was signed despite the objections of certain individuals, such as Mr. Desnoyers, who testified in the instant case.
[188] Mr. Desnoyers testified that there were discrepancies between the reality at the reception centre and the results of PLAISIR assessments, that he doubted the effectiveness of the system and that he had spoken to the Montérégie board of directors about it. Ms. Bélisle, who was responsible for relations with the reception and homecare centres, orientation programs and budgetary allowances at Montérégie between 1983 and 1986, testified that Mr. Desnoyers was not the only institutional director general who was dissatisfied with the results of PLAISIR in the region.
[189] Finally, Ms. Normandeau, who was head nurse at the Champlain reception centre during the 1980s, testified that there were often discrepancies between the actual staffing needs in the institution and the results calculated by PLAISIR. Ms. Normandeau also testified that she found the validation process done with Eros theoretical.
[190] Additionally, the minutes of the meeting of the Montérégie board of directors on January 21, 1987, indicated that 23% of the region's institutions had refused to participate in assessing the PLAISIR software, which was the subject of the 1986 contract between the two parties. I accept that Montérégie could not proceed with an assessment that was supposed to be made across the region when one-fourth of its institutions did not want to participate. The value of the exercise had been lost.
[191] I conclude that Eros has not shown that the cessation of use of PLAISIR in Montérégie was directly related to the use of SIBPA.
[192] Where a plaintiff has not satisfactorily proven that he has suffered damage caused by the infringement, nominal damages can be awarded, and these are not necessarily modest amounts (Bouchet v. Kyriacopoulos (1964), 45 C.P.R. 265 (Ex.Ct.), Prism Hospital Software Inc. v. Hospital Medical Records Institute (1994), 57 C.P.R. (3d) 129 (B.C.S.C.)). The leading case on token damages is Underwriters' Survey Bureau Ltd. v. Massie & Renwick Ltd. (1941), 1 C.P.R. 207 (Ex. Ct.), where the following was held at 215:
I may say at once, that I found it impossible to find any proof of actual damage (loss) sustained by the plaintiffs as resulting from the infringement. I think, however, that the defendant must pay something for his tortious act and for the invasion of the plaintiffs' property. There can be no doubt that even in the absence of proof of specific damage or actual loss the plaintiffs are entitled to judgment for a sum to be fixed, under the head of damages at large, including nominal, as explained further, and exemplary damages.
[193] In Sotramex inc. v. Sorenviq inc., REJB 1998-07735 (Q.S.C.) (Sotramex), the Quebec Superior Court awarded the plaintiff $10,000 in nominal damages. In that case the defendant had copied several passages from a text written by the plaintiff on its Internet site without the plaintiff's consent and without referring to the latter as the owner of copyrights to the text. The Court concluded there had been an infringement of the plaintiff's rights, but that it had not presented any evidence of damage caused by the illicit reproduction of its work. The evidence had only showed that a hundred persons visited the site after the work was reproduced on it and the plaintiff had lost no clients because of this infringement of its rights.
[194] In the case at bar, although Montérégie used the infringing software for years, it was not the infringing agent and did not actively participate in the reproduction of the plaintiff's work nor in its distribution. In my opinion, in the circumstances an amount greater than that awarded in Sotramex, supra, would not be appropriate.
[195] I accordingly award nominal damages of $10,000 to the plaintiff.
4. Punitive damages
[196] Eros also claimed punitive damages, alleging the defendants' indifference, which showed flagrant disrespect for Eros's rights despite notification and proof of action.
[197] The courts have recognized that punitive damages may be awarded, depending on the circumstances and the infringer's actions.
[198] The plaintiff will only be entitled to such damages if it proves an element of fraud, an intention to deceive or malicious conduct which clearly departs from the ordinary standards of good conduct. The purpose is to punish the defendant and to use financial means to dissuade it and others from such conduct in future. In Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, at 645, the Supreme Court of Canada laid down the following tests:
(1) Punitive damages are very much the exception rather than the rule, (2) imposed only if there has been high-handed malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour. (3) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, (4) having regard to any other fines or penalties suffered by the defendant for the misconduct in question. (5) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation. (6) Their purpose is not to compensate the plaintiff, but (7) to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community's collective condemnation (denunciation) of what has happened. (8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and (9) they are given in an amount that is no greater than necessary to rationally accomplish their purpose. (10) While normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a "windfall" in addition to compensatory damages. (11) Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.
The Régie de Québec
[199] The evidence showed that Eros benefited from support of the Quebec health network, and especially the Régie de Québec, in designing its tools. The Régie de Québec was the first to use the paper CTMSP throughout its region. Additionally, Mr. Tilquin admitted that the fact that several régies, including Québec which was the second in size, had already installed the CTMSP, worked in his favour in 1984 when the time came for the MAS to select an assessment tool for the province. The CTMSP was in fact the final choice of the MAS. In view of this relationship between the parties, I conclude that the Régie de Québec did not seek to harm the plaintiff.
[200] Additionally, the Régie de Québec considered that the SIBPA system was much broader than the CTMSP tool. Louise Montreuil, policy development director at the Régie de Québec from 1985 to 1992, testified that in her view CTMSP and SIBPA were different tools with different purposes. CTMSP was an assessment tool, while SIBPA was a system used to support the PECA.
[201] When the action at bar was brought, the Régie de Québec believed an agreement would be reached between Eros and the MAS and that since the MAS had not required it to do so it was not justified in blocking the regional admission/orientation procedure and possibly causing injury to persons awaiting homecare. Unfortunately, it is what would have happened if the Régie de Québec had ceased using SIBPA immediately, as it is not only an assessment tool but a software which supported the admissions procedure in the region.
[202] Further, the evidence was conclusive that the Régie de Québec honestly believed a settlement would be reached between Eros and the MAS.
[203] In such circumstances, where there is no evidence of malicious intent or an intent to injure, I cannot award punitive damages.
Montérégie
[204] Like the Régie de Québec, Montérégie was one of the first régies to use the CTMSP. The evidence showed that it gave Eros access to its institutions and its clients, and on several occasions served as a pilot site. The background was that relations between Eros and Montérégie were harmonious.
[205] The evidence showed that in January 1988 Mr. Tilquin met with Hubert Gauthier, general director of the defendant Montérégie, to tell him that the SIBPA software was infringing his copyright over the CTMSP. Montérégie continued using the SIBPA software despite Mr. Tilquin's visit and despite the filing of this action in April 1988. However, in the circumstances, I consider that Montérégie's actions do not justify the awarding of punitive damages since evidence of a malicious intent or intent to injure was not established.
[206] Ms. Juneau testified that Montérégie contacted the MAS after the action was filed. The latter never asked Montégérie to cease using the SIBPA software. On the contrary, everything indicated that there would be an out-of-court settlement in the matter. A letter to Mr. Gauthier from the MAS shows that Montérégie was right to believe that the MAS was going to take care of the matter. Although Montérégie was wrong about this, it does not in any way alter the fact that it acted in good faith after the action began as it thought that Eros and the MAS would find common ground.
[207] Accordingly, I cannot conclude that the conduct was so reprehensible that it could be a basis for punitive damages.
CGI
[208] I feel Eros has not presented evidence of any intent to harm or malicious conduct by the CGI.
[209] Messrs. Tousignant, Potvin and Roy testified about the actions taken by CGI's predecessors.
[210] I gather from their testimony that before the action began CGI's predecessors did not know the Régie de Québec was not entitled to use the CTMSP forms in designing the SIBPA software. The evidence showed that the ministerial circular of October 1984, which confirmed that the CTMSP was protected by the Act and that the MAS had acquired literary rights of exploitation of the work, was not sent to Partagec and no one at Partagec was aware of it.
[211] These witnesses stated that they had taken part in the computerization of forms from the MAS on several previous occasions without it creating a problem regarding a third party. There was therefore no reason to doubt the good faith of the Régie de Québec when it sent Partagec the CTMSP forms to be incorporated in the software. Further, as I will explain below, I feel that as the controlling party the Régie de Québec did not carry out its duty of information toward CGI (article 1024 C.C.L.C.).
[212] With respect to actions taken after the proceeding began, Mr. Tousignant testified that corrections, updates and support relating to the SIBPA software were maintained at the request of the Régie de Québec. I conclude from the evidence as a whole that CGI's predecessors had understood there were negotiations between Eros and the MAS to arrive at an amicable settlement and that the Régie de Québec or the MAS was going to be responsible for the matter.
[213] Although they were mistaken in this regard, I conclude that there was no evidence to show that they acted fraudulently or with an intent to injure the plaintiff when they made updates to the SIBPA software at the request of the Régie de Québec. Accordingly, I award no punitive damages against the defendant CGI.
5. Interest
[214] Section 36 of the Federal Court Act, R.S.C. 1985, c. F-7, provides for the calculation of prejudgment interest:
36. (1) Prejudgment interest, cause of action within province - Except as otherwise provided in any other Act of Parliament, and subject to subsection (2), the laws relating to prejudgment interest in proceedings between subject and subject that are in force in a province apply to any proceedings in the Court in respect of any cause of action arising in that province.
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36. (1) Intérêt avant jugement - Fait survenu dans une province - Sauf disposition contraire de toute autre loi fédérale, et sous réserve du paragraphe (2), les règles de droit en matière d'intérêt avant jugement qui, dans une province, régissent les rapports entre particuliers s'appliquent à toute instance devant la Cour et dont le fait générateur est survenu dans cette province.
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[215] As the cause of action arose in Quebec reference must be made to article 1056c of the C.C.L.C., in effect at the time:
Art. 1056c. The amount awarded by judgment for damages resulting from an offence or a quasi-offence shall bear interest at the legal rate as from the date when the action at law was instituted.
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Art. 1056c. Le montant accordé par jugement pour dommages résultant d'un délit ou d'un quasi-délit porte intérêt au taux légal depuis la date de l'institution de la demande en justice.
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There may be added to the amount so awarded an indemnity computed by applying to the amount, from such date, a percentage equal to the excess of the interest rate fixed according to section 29 of the Act respecting the Ministère du Revenu (R.S.Q., chapter M-31) over the legal interest rate.
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Il peut être ajouté au montant ainsi accordé une indemnité calculée en appliquant à ce montant, à compter de ladite date, un pourcentage égal à l'excédent du taux d'intérêt fixé suivant l'article 28 de la Loi sur le ministère du Revenu (L.R.Q., chapitre M-31) sur le taux légal d'intérêt.
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[216] The legal rate under article 1056c of the C.C.L.C. is 5%, as provided in section 3 of the Interest Act, R.S.C. 1985, c. I-15. Eros is thus entitled to interest at a 5% rate from the date the action was served, namely April 1988.
[217] Although the awarding of an additional indemnity is the rule, since in the case at bar the delays between the beginning of the action and the hearing are largely due to Eros, and considering the grossly exaggerated claims which in practice excluded any realistic possibility of settlement, there is no basis for awarding an additional indemnity (Canadian Newspaper Co. v. Snyder, [1995] R.D.J. 392 (Q.C.A.).
6. Appeal in warranty
[218] CGI's appeal in warranty is based on the failure of the Régie de Québec to perform its duty of information in the contract for the design of SIBPA. The Régie de Québec did not oppose the appeal in warranty for damages caused by the actions of CGI's predecessors or before or after the action was filed.
[219] Mr. Fortin, data processing director at the Régie de Québec when the SIBPA was designed, admitted he discussed the right of the Régie de Québec to use and reproduce the CTMSP paper forms with Mr. Tilquin several times in 1981 and 1982.
[220] He never told anyone at Partagec about questions regarding the existence of copyrights for Mr. Tilquin over the CTMSP forms or of the existence of discussions about this between Mr. Tilquin and MAS.
[221] CGI submitted that it was the duty of the Régie de Québec as controlling party over the SIBPA, to inform Partagec about the limits existing on the assignment of copyrights by Eros to the MAS before giving it instructions to incorporate the CTMSP forms in the SIBPA software in 1985. I am also of that view.
[222] Article 1024 C.C.L.C. imposes an implicit duty of good faith, which includes an implicit obligation by the controlling party to provide information to the contractor in a contract of service or enterprise. Article 1024 of the C.C.L.C. provides the following:
Art. 1024 The obligation of a contract extends not only to what is expressed in it, but also to all the consequences which, by equity, usage, or law, are incident to the contract, according to its nature.
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Art. 1024 Les obligations d'un contrat s'étendent non seulement à ce qui y est exprimé, mais encore à toutes les conséquences qui en découlent, d'après sa nature, et suivant l'équité, l'usage ou la loi.
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[223] In Bank of Montreal v. Bail, [1992] 2 S.C.R. 554 (Bail), Gonthier J. stated a general theory of the obligation to provide information in Quebec civil law. Citing Ghestin, he listed the three criteria on which the information obligation rests in contractual relations, at pages 586-87:
- knowledge of the information, whether actual or presumed, by the parties which owes the obligation to inform;
- the fact that the information in question is of decisive importance;
- the fact that it is impossible for the party to whom the duty to inform is owed to inform itself, or that the creditor is legitimately relying on the debtor of the obligation.
[224] This obligation to inform is implicit in any contractual relationship. The evidence showed that the Régie de Québec was in direct contact with the MAS, that it had negotiated the copyright assignment agreement and that it had discussions with the MAS about Eros's rights. It also knew that the MAS had had discussions with Eros about the extent of its rights. Partagec therefore had good reason to assume that the Régie de Québec would have knowledge of any limitation on the copyrights of the CTMSP. The first test in Bail, supra, is thus met.
[225] On the second test, it goes without saying that the existence of copyright to a form which is to be incorporated into software is information that is decisive for the business responsible for creating the software.
[226] Accordingly, the Court must determine whether Partagec was unable to have access to this information itself or was justified in thinking that the Régie de Québec would give it any decisive information.
[227] The Régie de Québec was the party in control of the SIBPA project: it even insisted on having this responsibility. Further, it received the ministerial circular describing the extent of the rights acquired by the MAS exactly. Partagec, on the other hand, was not a recipient of the circular.
[228] The evidence showed that Partagec had already worked on other files dealing with computerization of forms supplied by the MAS and had never had any problems similar to those generated by the action at bar. The CTMSP forms supplied to Partagec for input into the software bore the name of the MAS and the abbreviation of the Government of Quebec logo on page 1. Partagec had no reason to think that the forms used in this project were going to be different from previous projects.
[229] In such circumstances, I consider that the Régie de Québec failed in its duty to disclose to Partagec any decisive information relating to their contract. Partagec had to be able to rely on the information supplied by its co-contractor in this project, especially as the Régie de Québec was in control. In Grandmont et Fils Ltée v. Québec (Procureur Général), [1996] 1 R.J.Q. 1290 (S.C.), a private undertaking sued the Quebec ministère des Transports. Crête J. said the following, at 1295:
[TRANSLATION]
Thus, a contractor might be justified in regarding as accurate and complete the information provided to it by the ministère des Transports on a particular subject, in view of its ability to obtain all useful information and the objectivity that it must maintain in its relation with its contractors.
[230] I agree with that proposition. In view of a government body's capacity to obtain any useful information, and in particular the objectivity that body must maintain in its relations with its co-contractors, Partagec was entitled to rely on the information provided by the Régie de Québec.
[231] CGI also claimed that the Régie de Québec should be called in warranty for the damage caused by CGI for its actions taken after the proceeding began. CGI relied in this regard on Ateliers Tango argentin Inc. v. Festival d'Espagne et d'Amérique latine Inc., [1997] 2 R.J.Q. 3030 (Q. S.C.). In that case the plaintiff sued several defendants for infringements of its copyrights regarding a photograph. The photographer who took the infringing photo, Mr. McNeil, called one of the co-defendants, Mr. Bueno, in warranty, alleging that the latter had misled him as to the ownership of the photo. When Mr. Bueno made the order for reproduction of a photograph, he told Mr. McNeil that the photo he wanted to reproduce belonged to him, but he did not have the negative. The Court concluded that, although Mr. McNeil was in good faith, he had infringed the plaintiff's rights. The Court further concluded, at page 3044, that as Mr. McNeil was an experienced photographer he had [TRANSLATION] "seriously failed to exercise diligence and almost demonstrated wilful blindness". Despite this conclusion, Crête J. held at page 3047 that the call in warranty was valid:
[TRANSLATION]
. . . in view of the misrepresentations by Mr. Bueno to Mr. McNeil, the latter was entitled to call in warranty and ask to be compensated for the damages he will have to pay the plaintiffs, in the proportion set by the Court below.
[232] In the case at bar, the evidence showed that the SIQ knew that there were negotiations under way toward a settlement between Eros and MAS or the Régie de Québec, and that the MAS or the Régie de Québec would be defending its interests.
[233] Although good faith does not in any way alter the responsibility of CGI's predecessors, who infringed Eros's copyrights, in all the circumstances in the case at bar I allow the appeal in warranty against the Régie de Québec for the damages which CGI has been ordered to pay in this case, with costs against the Régie de Québec.
7. Other remedies
[234] The plaintiff asked the Court to issue a permanent injunction directing the defendants to cease infringing the plaintiff's copyrights in its CTMSP work.
[235] The evidence showed that the defendants ceased using the infringing software over ten years ago. An injunction in such a case seems pointless to me.
[236] In the same way, although the plaintiff asked to be given all the copies of the infringing software, the evidence showed that there are no more copies of the SIBPA software. An order to this effect would thus be futile.
[237] Finally, Eros will be entitled to costs, which will be calculated in accordance with column III of Tariff B of the Federal Court Rules (1998), SOR/98-106.
ORDER
For these reasons, this Court:
A. ALLOWS the plaintiff's action;
B. DECLARES inter partes that the original literary work CTMSP is a protected work, the plaintiff is the sole owner of the copyrights therein and the defendants infringed and usurped the plaintiff's patrimonial rights and copyrights in its work;
C. ORDERS the defendants Régie de Québec and CGI jointly and severally to pay the plaintiff the sum of $312,729, with interest at the legal rate of 5% as of April 1988;
D. ORDERS the defendants Régie de Québec and CGI jointly and severally to pay the sum of $53,164, an amount to be increased in accordance with the Consumer Price Index from 1986 to 1992, with interest at the legal rate of 5% as of April 1988;
E. ORDERS the defendant Montérégie to pay the sum of $10,000 as nominal damages, with interest at the legal rate of 5% as of April 1988;
F. ALLOWS the defendant CGI's appeal in warranty against the defendant Régie de Québec and ORDERS the latter to compensate CGI for any order made against it under this judgment, with costs against the Régie de Québec;
G. ORDERS the defendants to render an account of profits, if any, from the infringement to the plaintiff.
With costs to be calculated pursuant to column III of Tariff B of the Federal Court Rules (1998).
"Danièle Tremblay-Lamer"
J.F.C.
Certified true translation
Suzanne M. Gauthier, C Tr, LLL
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-687-88
STYLE OF CAUSE: EROS - ÉQUIPE DE RECHERCHE OPÉRATIONNELLE
EN SANTÉ INC.
Plaintiff
and
CONSEILLERS EN GESTION ET INFORMATIQUE C.G.I. INC.
and
RÉGIE RÉGIONALE DE LA SANTÉ ET DES SERVICES SOCIAUX DE QUÉBEC
and
RÉGIE RÉGIONALE DE LA SANTÉ ET DES SERVICES SOCIAUX DE LA MONTÉRÉGIE
Defendants
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October 27, 2003
REASONS FOR JUDGMENT BY: THE HONOURABLE MADAM JUSTICE TREMBLAY-LAMER
DATE OF REASONS: February 3, 2004
APPEARANCES:
Marek Nitoslawski FOR THE PLAINTIFF
Karine Joizil
Sophie Picard FOR THE DEFENDANT CGI
Luc de la Sablonnière FOR THE DEFENDANT QUÉBEC
Marie-Nancy Paquet
Marie-Josée Corriveau FOR THE DEFENDANT MONTÉRÉGIE
SOLICITORS OF RECORD:
Fasken, Martineau, DuMoulin FOR THE DEFENDANT
Montréal, Quebec
Desjardins, Ducharme, Stein, Monast FOR THE DEFENDANT CGI
Montréal, Quebec
Pothier, Delisle FOR THE DEFENDANT QUÉBEC
Sainte-Foy, Quebec
Joli-Coeur, Lacasse, Geoffrion FOR THE DEFENDANT MONTÉRÉGIE
Montréal, Quebec