Docket: T-1545-13
Citation:
2014 FC 562
Ottawa, Ontario, June 11, 2014
PRESENT: The
Honourable Mr. Justice Annis
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BETWEEN:
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MITCHELL REPAIR INFORMATION COMPANY, L.L.C.
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Plaintiff
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and
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WAYNE LONG, D.B.A. FUTURE TECHNOLOGY WIZARDS
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Defendant
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JUDGMENT AND REASONS
[1]
The plaintiff brought this motion for default
judgment on May 20, 2014 seeking damages, a permanent injunction, and other
related remedies in respect of copyright infringement, trade-mark infringement
and misuse of confidential information in relation to its ON-DEMAND electronic
automobile repair information system.
[2]
In light of the failure of the defendant to
defend the action and the materials filed in support of the motion, including
affidavits attesting to personal service of the motion materials and the
failure to defend, evidence of the nature of the plaintiff’s products and
operations, copyright and trade-mark registrations and use, evidence of
infringement and the identification of the defendant as the infringing party,
the Court will grant the orders requested for declarations as set out in the
plaintiff’s notice of motion at paragraphs 1(1), 1(2), and 1(3), namely that:
1.
This Court declares that the defendant was
served with the plaintiff’s statement of claim;
2.
This Court declares that the time period during
which the defendant should have filed a statement of defence has lapsed; and
3.
This Court declares that as a result of the
foregoing, the defendant is in default.
The Court makes the
further order in substitution for that requested at paragraph 2(4) of the
notice of motion as follows:
4.
This Court orders that the defendant, at his
sole expense, is to immediately shut down or remove from any public viewing or
access any and all advertisements, web pages, profiles and the like maintained
or used by the defendant which in any way are associated with the defendant in
respect of the plaintiff’s intellectual property, including but not limited to
the copying, reproducing, storing, offering for sale, distribution, use,
telecommunicating, servicing and/or sale of any of the Mitchell Databases or
any part thereof which may incorporate any of the Mitchell Trade Marks and/or
Mitchell Copyright Registrations.
[3]
The remaining outstanding issues for
consideration include orders directed at third parties to remove or disclose
all information etc. with respect to this matter; damages including statutory
damages under the Copyright Act, RSC 1985 c C-42 for trade-mark
infringement, and for use of confidential information, including also punitive
damages; and costs and pre-judgment and post-judgment interest.
I. Third-party
Orders
[4]
The plaintiff requested orders directed at third
parties to shut down or remove from public viewing and access infringing
advertisements, web pages, profiles etc., in addition to requiring other third
parties to disclose information related to these matters. These third parties
in some instances were not identified and in others, such as with Paypal, were
named, but without being served or otherwise put on notice of the requests for
injunctive orders directed at them. Courts would not normally make orders, and
in particular injunctions, against third parties unless they have been put on
notice and provided with an opportunity to respond and participate in the
application. The plaintiff provided no jurisprudence demonstrating that similar
orders had been granted without notice to persons affected thereby. The
requested orders are therefore refused.
II. Statutory
Damages under Section 38.1 of the Copyright Act
[5]
The plaintiff requests an order awarding it
$20,000 in statutory damages pursuant to section 38.1 of the Copyright Act
instead of the damages and profits otherwise claimable which are referred to in
subsection 35(1).
[6]
In exercising its discretion to award statutory
damages, the Court is required to consider all relevant factors including the
good or bad faith of the defendant, the conduct of the parties before and
during the proceedings and the need to deter other infringements of the
copyright in question.
[7]
The evidence in this matter demonstrates that
the defendant acted in bad faith by attempting to conceal and obfuscate his
identity, including posing as a lawyer warning the plaintiff not to proceed
further. In addition, the defendant refused to discontinue infringing copyright
when asked and held the plaintiff in derision by taunting it with words to the
effect that he could not be found or stopped and showing the “Jolly Roger” sign
in one of his rejoinders.
[8]
As if this were not sufficiently outrageous and
high-handed, the plaintiff’s email contained derogatory invective, including
the use of swearing and statements intended to be derogatory concerning the
sexual orientations of the plaintiff’s personnel, accompanied by pornographic
materials and boasting about his unlawful conduct. For example, one email
contained the following reply after being informed of his infringement: “Lol you stupid f--k I’m in canada [sic] I’m protected
here first offence 250 dollars lol”.
[9]
The plaintiff was only able to demonstrate one
sale of the product obtained by his affidavit, but I am satisfied that many
other illicit sales of the product were made by the defendant. The price
differential on the average sale by the plaintiff in comparison with that by
the defendant was in the order of $1,100.
[10]
I award the plaintiff statutory damages in the
total amount of $20,000.
III. Damages for
Trade-mark Infringement
[11]
The measure of damages for trade-mark
infringement is the actual loss suffered by the defendant or which is incurred
due to the natural and direct consequences of the unlawful acts of the
defendant. See David Dixon & Son, Ltd v Cornwall Pants & Clothing Co
(1942), 2 CPR 81.
[12]
The defendant, by not participating in the
proceedings, has denied the plaintiff the opportunity through discovery and
other means of actually determining the true scope of his infringements and
profits. However, damages can be established by showing the probability of loss
and the Court is entitled to make its best estimate of those damages without
necessarily being limited to nominal damages. See 2 for 1 Subs Ltd v
Ventresca (2006), 48 CPR (4th) 311 at para 55; Aquasmart Technologies Inc
v Klassen, 2011 FC 212 at paras 71-72.
[13]
The plaintiff seeks compensatory damages in the
amount of $7,250 each for the use of the “MITCHELL ON-DEMAND” and “ON-DEMAND5”
for a total claim of $14,500. Bearing in mind other awards in Harley-Davidson
Motor Co v Manoukian, 2013 FC 193 [Harley-Davidson], I order damages
payable by the defendant to the plaintiff for trade-mark infringement in the
total amount of $10,000.
IV. Punitive Damages
[14]
It is noted that opting for statutory damages
pursuant to section 38.1 of the Copyright Act does not affect any right
that the copyright owner may have to an award of exemplary or punitive damages.
[15]
Based on the evidence generally described above,
I agree with the plaintiff’s submission that all of these factors suggest that
punitive damages are appropriate in this case.
[16]
In Harley-Davidson, the Court considered
the relevant factors to an award of punitive damages to be: whether the conduct
was planned and deliberate; the intent and motive of the defendant; whether the
defendant persisted in the outrageous conduct over a lengthy period of time;
whether the defendant concealed or attempted to cover up its misconduct; the
defendant’s awareness that what it was doing was wrong; and whether the
defendant profited from its misconduct.
[17]
I award the plaintiff $15,000 in punitive
damages.
V. Costs and
Interest
[18]
The plaintiff’s bill of costs sets out costs
according to Column III and Column V of Tariff B of the Federal Courts
Rules, SOR/98-106, as well as actual costs for fee amounts and taxes. These
amount to $3,005.80, $7,119.00 and $21,446.84 respectively, plus disbursements
of $2,964.78.
[19]
The plaintiff seeks costs of the action at the
highest possible level, i.e. $10,083.78. While the Court may award all or part
of costs on a solicitor-and-client basis, having already awarded damages of a
punitive nature, I do not believe that it would be appropriate to do so.
However, I am satisfied that the defendant’s conduct has increased the
plaintiff’s cost of litigation. Due to this, and having regard to the other
cost factors set out in Rule 400(3) of the Federal Courts Rules, I award
the plaintiff an all-in amount of $8,000.
[20]
The plaintiff is further entitled to
pre-judgment interest on its monetary awards other than the punitive damages
and the costs award, and to post-judgment interest on its monetary awards other
than the costs award, in accordance with section 36 of the Federal Courts
Act, RSC 1985, c F-7, and sections 127-129 of the Courts of Justice
Act, RSO 1990, c C-43:
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Federal Courts Act
R.S.C., 1985, c. F-7
36. (1) 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 Federal Court of Appeal or the
Federal Court in respect of any cause of action arising in that province.
(2) A person who is entitled to an order for the payment of money
in respect of a cause of action arising outside a province or in respect of
causes of action arising in more than one province is entitled to claim and
have included in the order an award of interest on the payment at any rate
that the Federal Court of Appeal or the Federal Court considers reasonable in
the circumstances, calculated
(a) where the order is made on a liquidated claim, from the date
or dates the cause of action or causes of action arose to the date of the
order; or
(b) where the order is made on an unliquidated claim, from the
date the person entitled gave notice in writing of the claim to the person
liable therefor to the date of the order.
(3) Where an order referred to in subsection (2) includes an
amount for special damages, the interest shall be calculated under that
subsection on the balance of special damages incurred as totalled at the end
of each six month period following the notice in writing referred to in
paragraph (2)(b) and at the date of the order.
(4) Interest shall not be awarded under subsection (2)
(a) on exemplary or punitive damages;
(b) on interest accruing under this section;
(c) on an award of costs in the proceeding;
[…]
Courts of Justice Act
R.S.O. 1990,
CHAPTER C.43
127. (1) In this section and in sections 128 and 129,
[…]
“postjudgment interest rate” means the bank rate at the end of the
first day of the last month of the quarter preceding the quarter in which the
date of the order falls, rounded to the next higher whole number where the
bank rate includes a fraction, plus 1 per cent; (“taux d’intérêt postérieur au jugement”)
“prejudgment interest rate” means the bank rate at the end of the
first day of the last month of the quarter preceding the quarter in which the
proceeding was commenced, rounded to the nearest tenth of a percentage point;
(“taux d’intérêt
antérieur au jugement”)
[…]
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Loi sur les Cours fédérales
L.R.C. (1985), ch. F-7
36. (1) 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 d’appel fédérale ou
la Cour fédérale et dont le fait générateur est survenu dans cette province.
(2) Dans toute instance devant la Cour d’appel fédérale ou la Cour
fédérale et dont le fait générateur n’est pas survenu dans une province ou
dont les faits générateurs sont survenus dans plusieurs provinces, les
intérêts avant jugement sont calculés au taux que la Cour d’appel fédérale ou
la Cour fédérale, selon le cas, estime raisonnable dans les circonstances et
:
a) s’il s’agit d’une créance d’une somme déterminée, depuis la ou
les dates du ou des faits générateurs jusqu’à la date de l’ordonnance de
paiement;
b) si la somme n’est pas déterminée, depuis la date à laquelle le
créancier a avisé par écrit le débiteur de sa demande jusqu’à la date de
l’ordonnance de paiement.
(3) Si l’ordonnance de paiement accorde des dommages-intérêts
spéciaux, les intérêts prévus au paragraphe (2) sont calculés sur le solde du
montant des dommages-intérêts spéciaux accumulés à la fin de chaque période
de six mois postérieure à l’avis écrit mentionné à l’alinéa (2)b) ainsi qu’à
la date de cette ordonnance.
(4) Il n’est pas accordé d’intérêts aux termes du paragraphe (2) :
a) sur les dommages-intérêts exemplaires ou punitifs;
b) sur les intérêts accumulés aux termes du présent article;
c) sur les dépens de l’instance;
[…].
Loi sur les tribunaux judiciaires
L.R.O. 1990,
CHAPITRE C.43
127. (1) Les définitions qui suivent s’appliquent au présent
article et aux articles 128 et 129.
[…]
«taux d’intérêt antérieur au jugement» Le taux d’escompte à la fin
du premier jour du dernier mois du trimestre précédant le trimestre au cours
duquel l’instance a été introduite, arrondi au dixième près d’un point de
pourcentage. («prejudgment interest rate»)
«taux d’intérêt postérieur au jugement» Le taux d’escompte à la
fin du premier jour du dernier mois du trimestre précédant le trimestre au
cours duquel se situe la date de l’ordonnance, arrondi au nombre entier
supérieur si le taux comprend une fraction, plus 1 pour cent. («postjudgment interest rate»)
[…]
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JUDGMENT
THIS COURT’S JUDGMENT is that:
1.
THE COURT DECLARES that the defendant was served with the plaintiff’s statement of claim
issued September 19, 2013 and service was effected on September 23, 2013;
2.
THE COURT DECLARES that the time period during which the defendant should have
filed a statement of defence has lapsed;
3.
THE COURT DECLARES that as a result of the foregoing, the defendant is noted in default for
failing to serve and file a statement of defence;
4.
THE COURT DECLARES that copyright subsists and is owned by the plaintiff in each of the
components of the plaintiff’s “ON-DEMAND” electronic automobile repair
information system and in the system as a whole and that the defendant has
infringed such copyright;
5.
THE COURT DECLARES that the defendant has passed off his wares, services, and/or business
in association with the Mitchell trade-marks, as and for those of the plaintiff
contrary to law;
6.
THE COURT DECLARES that the defendant has directed attention to his wares, services, and/or
business in such a manner as to cause or be likely to cause confusion contrary
to law;
7.
THE COURT DECLARES that the defendant has falsely and misleadingly represented his
infringing and inferior copies of “ON-DEMAND” as legitimate and genuine “ON-DEMAND”
products, contrary to law, thereby tending to discredit the wares, services,
and/or business of the plaintiff;
8.
THE COURT DECLARES that the defendant has made improper and unauthorized use and
dissemination of the plaintiff’s confidential information including install
discs and passwords;
9.
THE COURT DECLARES that the defendant has authorized, induced, and assisted
others to do the foregoing;
10.
THE COURT ORDERS that the defendant, at his sole expense, is to immediately shut down or
remove from any public viewing or access any and all advertisements, web pages,
profiles and the like maintained or used by the defendant which in any way are
associated with the defendant in respect of the plaintiff’s intellectual
property, including but not limited to the copying, reproducing, storing,
offering for sale, distribution, use, telecommunicating, servicing and/or sale
of any of the Mitchell Databases or any part thereof which may incorporate any
of the Mitchell Trade Marks and/or Mitchell Copyright Registrations;
11.
THE COURT ORDERS that the defendant is liable for:
a)
Statutory damages under section 38.1 of the Copyright
Act in the amount of $20,000;
b)
Damages for trade-mark infringement of the
plaintiff’s “MITCHELL ON-DEMAND” and “ON-DEMAND5” trade-marks in the amount of
$10,000;
c)
Punitive, exemplary, and aggravated damages in
the amount of $15,000;
d)
Costs of this action in the amount of $8,000;
e)
Pre-judgment and post-judgment interest on the
monetary awards as detailed above; and
12.
THE COURT ORDERS that all amounts noted above are payable within thirty (30) days of
being served with this Judgment.
"Peter Annis"
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