Docket: T-538-12
Citation:
2015 FC 1219
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, October 29, 2015
Present: The Honourable Mr. Justice LeBlanc
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BETWEEN:
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MATHIEU
CROCHETIÈRE-BROUSSEAU
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Applicant
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and
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9107-0235
QUÉBEC INC. (GRATTEX)
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Respondent
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ORDER AND REASONS
I.
Introduction
[1]
This is an action taken under the Copyright
Act R.S.C. (1985), c. C-42 (the Act). The applicant claims from the
respondent damages and interest of $49,999. He argues that the respondent had
allegedly infringed the copyright that he considers he has in the modifications
that he made to the respondent’s Web site in carrying out a contract to modernize
and improve this site’s performance.
[2]
The applicant also claims the full costs, calculated
on a solicitor and client basis.
II.
Background
A.
The redesign of the respondent’s Web site
[3]
The respondent, who does business as Grattex, is
a specialized company in the development, manufacture and sale of snow scrapers
and various farm equipment. Since 2002, it has had a Web site where it posts
its commercial resume, its products and other instructions for use. This site is
specifically designed to allow it to receive orders online.
[4]
In May 2011, the respondent decided to make
improvements to its Web site. The applicant, who had at that time a college diploma
in computer science and was studying in the same field at the Université du
Québec à Trois-Rivières, offered his services to the respondent and submitted a
cost estimate (Exhibit P-2) for them. The proposed work specifically covered
(i) improving the site referencing on search engines such as Google, (ii)
facilitating navigation by restructuring the menu, (iii) setting up an automatic
recognition mechanism of the client’s language; and (iv) freeing up some disk
space by incorporating a YouTube link.
[5]
Following discussions, the parties agree that the
work would be performed for a lump sum of $2,700. The applicant considered
that 15 to 20 business days would be required to complete the said work. Besides
the estimate prepared by the applicant, there was nothing in writing setting
out the contract made between the parties. Furthermore, for the purposes of
completing the work specified in the contract, the applicant was dealing with the
respondent’s director of sales, Patrick Staquet. Mr. Staquet was examined
earlier, in writing, in the summer of 2012. He died before the trial was held.
B.
Delivery of the new Web site and deterioration of
the parties’ relationship
[6]
According to the applicant’s testimony, the new
Web site, for which he provided hosting, was officially delivered to the
respondent on September 21, 2011, although it had been operational since July 20,
2011. The respondent did not see things in the same way. It considered that the
applicant largely exceeded the time to carry out the contract while being
unable to deliver a new site meeting the requirements of the said contract. The
relationship became bitter and culminated in an exchange of demand letters.
[7]
Specifically, the respondent refused pay the
invoice that the applicant sent him on September 21, 2011 (Exhibit P-4), which
reflected the price agreed on by the parties and made a formal demand that he
perform the work not done, failing which it stated it reserved the right to
reduce the contract price and give this work to another programmer (Exhibit
D-9). It complained mainly about the fact that the site delivered by the
applicant did not provide the function of ordering parts online, a rather
essential component, in its opinion, of the work to be completed under the
contract.
[8]
In a letter that he addressed to the respondent on
October 13, 2011 (Exhibit D-10), the applicant refuted any blame. He argued
that to proceed with the redesign that the respondent wanted, given the source
files in place at the time, it required a considerable amount of work than had
been planned originally, that the respondent said it was perfectly aware and
that he accommodated the respondent by accepting to do this work without additional
compensation. Furthermore, he warned the respondent that the source files of
the site delivered on September 21 are his creation and belong to him and
that he can dispose of them as he sees fit, including by blocking access by the
respondent’s clients to the site so long as the amount for the contract had not
been paid. In this respect, the applicant advised the respondent that the
above-noted accommodation no longer held and, thus, he claimed from it additional
fees of $6,390. Therefore, the total bill for completing the work to upgrade
the respondent’s Web site increased to $10,494.84. The applicant requested payment
within five days.
[9]
The letter of October 13, 2011, did not
specifically address the respondent’s allegation that the new site did not offer
the function for ordering parts online. At the trial, the applicant testified
that this function was not incorporated to the new Web site because it would
require a considerable amount of work, which was not provided for in the contract.
[10]
The respondent quickly reacted to the letter of
October 13. In a letter dated October 17, 2011, and signed by counsel
representing it at the time (Exhibit P-6), the respondent warned the applicant against
any interruption of service of his client’s Web site and informed him that it
wished to terminate the contract. However, in order to settle the dispute [translation] "as
quickly as possible", it proposed to pay the applicant $2,500.00 [translation] "in
exchange for a full and final release, handing over the computer content of the
site on DVD, a commitment from him to transfer the site to another server hosting
it and keeping the site online until this transfer." Counsel specified
that failure to respond to this offer within three days of its receipt, his
instructions are to [translation] “file any legal proceeding enabling (his) client to recover
the computer data required for its Web site to function and to claim any
damages it has suffered."
[11]
On November 21, 2011, the respondent advised
the applicant, through this same counsel, that it had no other choice but to completely
reprogram its Web site given the [translation]
"major deficiencies" affecting
the work carried out by the applicant (Exhibit P-7). It explained that to do
so, it [translation] "started from scratch" and [translation] “did
not keep any programming (he) completed”. Considering that he did not respect
the contract between the parties and that, as a result, it had to pay for corrective
work, the respondent informed the applicant that it reserved the right to claim
damages that it felt it suffered. According to Exhibit D-11, the corrective
work was performed in November 2011 by Sylvain Mallet, for $2,400. The Web site
reprogrammed by Mr. Mallet was put online on November 21, 2011. It replaced
the one delivered by the applicant two months earlier.
[12]
On November 23 and 30, 2011, the applicant, through
his counsel, seeks clarification from the respondent of the nature of the deficiencies
that, in its opinion, allegedly affected the site that he delivered to it under
the contract between the parties. This correspondence remained unanswered.
C.
Legal proceedings
[13]
The applicant brought this action, in the form
of a simplified action, March 13, 2012. He alleged that the computer program
that the developed to enable the operation, by the respondent, of an improved Web
site, is a work protected by the Act. He alleged specifically that his rights
resulting from the Act in connection with this work were infringed in two ways
by the respondent, first, by the use, between September 21 and November 21,
2011, of the site delivered by the applicant without paying him any
consideration and, second, by the use, since November 21, 2011, of a Web site
powered by a computer program copied onto its computer.
[14]
The applicant considers that he has a right to
claim from the respondent, as a result of these infringements, the sum of $20,000
in lost profits on fees and profits collected by the respondent, and the sum of
$29,999 in exemplary damages. At the trial, the applicant amended his statement
of claim so as to substitute the claim for lost profits on fees and profits collected
by the respondent for a claim of [translation]
“predetermined damages” within the meaning of
section 38.1 of the Act.
[15]
On July 2, 2013, the respondent produced an
amended defence and counterclaim to which is attached an action in warranty against
the programmer, Sylvain Mallet. It argued essentially, in defence, that it
purchased the work of the applicant, which confers on it the right to use the
computer program developed by him. It denied, among other things, that it
ordered additional work from the applicant and considered that it had the right,
after serving a demand on him to correct his computer program in order to make
the new Web site functional, to have a third party do the required corrective
work.
[16]
As plaintiff by counterclaim, the respondent claimed
from the applicant the sum of $25,000 as a result of his failure to deliver the
new Web site within the timeframe specified in the estimate and for the loss of
profits resulting from the deficiencies of this new site. Finally, it argued
that insofar as there was a copyright infringement, as the applicant alleged, the
infringement is the fact that Sylvain Mallet was given the task in October 2011
to reprogram its Web site. Mr. Mallet did not appear in this case.
[17]
On June 6, 2014, the respondent paid the amount
of the invoice of September 21, 2011. However, this payment was made by the
respondent and accepted by the applicant without prejudice to their respective positions
in this dispute.
D.
The trial
[18]
The trial was conducted on April 28 and 29, 2015.
In addition to providing his testimony, the applicant heard an expert witness,
Adam Jolly, PhD student and lecturer on computer science at the Mathematics and
Computer Sciences Department at the Université du Québec à Trois-Rivières. Mr.
Jolly’s mandate was to determine, based on archived content of each Web site, whether
the version delivered and put online by Mr. Mallette on November 21, 2011,
plagiarized the one designed by the applicant. Mr. Jolly concluded that the
version delivered and put online by Mr. Mallet was the result of partial but significant
plagiarism of the version developed by the applicant.
[19]
The respondent did not cross-examine Mr. Joly and
did not have an expert testify on this issue. It also abandoned its counterclaim
and its third party claim against Mr. Mallet. Moreover, it did not dispute
that the computer program developed by the applicant under the contract between
the parties is a “literary work” within the
meaning of the Act.
[20]
Once these updates were carried out, the
respondent called three witnesses: the owner of the company, Mr. Charrette, the
creator of the respondent’s original Web site, Mr. Drouin, as well as the
respondent’s factory supervisor, Mr. Garceau. Mr. Charrette was cross-examined
at length on Mr. Staquet’s role in the business and on the functionality
of the site delivered by the applicant on September 21, 2011. In
particular, he was not able to say that this site was not functional and
recognized that it is possible that equipment orders were made through this site
between September 21 and November 21, 2011. As for Mr. Garceau’s testimony, it
was used to establish that the ordering of parts online continued to be done
from the original site developed by Mr. Drouin, since neither the site developed
by the applicant nor the site reworked by Mr. Mallet allowed this type of
orders. Furthermore, nothing very useful came out of Mr. Drouin’s testimony.
[21]
Given the death of Mr. Staquet before the
hearing was held, the evidence provided by Mr. Charrette and Mr. Garceau as
to the relationship between the respondent and the applicant during the production
phase of the work planned in the contract between the parties ended up being peripheral
and, ultimately, of little use.
III.
Issues
[22]
Given the realignment of the respondent’s position
at trial, I find that this case raises the following three questions:
- Does the computer program developed by the applicant under the
terms of the contract between the parties, to his benefit, constitute a “work” within the meaning of the Act?
- If so, did the respondent infringe on the applicant’s rights under
the Act in this regard? and
- If so, is the applicant entitled, in whole or in part, to the damages
he is claiming in this case?
IV.
Analysis
A.
Does the computer program developed by the
applicant constitute a “work” within the meaning of the Act?
[23]
As we saw above, the respondent concedes that
the computer program designed by the applicant under the contract between the
parties is a “literary work” within the meaning
of the Act. I am also of that opinion.
[24]
Subsection 5(1) of the Act stipulates that copyright
shall subsist in Canada, if certain conditions, which do not apply here, are
met, in “every original literary, dramatic, musical and
artistic work”. For a “work” to benefit
from copyright protection in Canada, it must meet the following three criteria:
(i) it must be an original work; (ii) it must qualify as a literary, dramatic,
musical and artistic work; and (iii) be in a fixed material form (Grignon v
Roussel (1991), 38 CPR (3d) 4 (FCTD), at page 7).
[25]
The computer program in this case satisfied the
second and third criteria insofar as the Act incorporates computer programs into
the definition of literary work and the expression “computer
program” is defined in the Act as a “set of
instructions or statements, expressed, fixed, embodied or stored in any manner
that is to be used directly or indirectly in a computer in order to bring about
a specific result”.
[26]
Moreover, to be “original”
within the meaning of the Act, a work must be the product of an author’s
exercise of skill and judgment without also having to be novel or unique, and
the exercise must not be so trivial that it could be characterized as a purely
mechanical exercise (CCH Canadienne Ltd v Law Society of Upper Canada,
2004 SCC 13, [2004] 1 S.C.R. 339, at para 16).
[27]
According to the evidence in the record, the performance
of an integration task, such as that which the applicant had to complete, requires
judgment and talent by a programmer in the sense that it requires from him intellectual
effort that is not trivial, i.e., using his personal knowledge, ability to form
an opinion or evaluation by comparing different possible options.
[28]
Therefore, I am ready to recognize that the computer
program developed by the applicant meets these three conditions and, as a
result, that it is a “literary work” within the
meaning of the Act.
B.
Was there an infringement of the applicant’s
copyright in this case?
[29]
According to subsection 3(1) of the Act, the
copyright on a work includes 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. Under subsection 13(1) of
the Act, the author of a work shall be the first owner.
[30]
Dealing with the scope of the protection conferred
on copyright by the Act, the Supreme Court of Canada recalled again recently in
Cinar Corporation v Robinson, 2013 SCC 73, [2013] 3 S.C.R. 1168, that the
Act aims to strike “a balance between promoting the
public interest in the encouragement and dissemination of works of the arts and
intellect and obtaining a just reward for the creator”, and thus to
ensure that the creator “will reap the benefits of his
efforts, in order to incentivize the creation of new works” (Robinson,
at para 23).
[31]
According to what is provided in
subsection 27(1) of the Act, it is an infringement of copyright when,
without the consent of the owner of the copyright anything is done that by this
Act only the owner of the copyright has the right to do, including, as we have
seen, producing or reproducing the work in whole or in a significant part (see
also Microsoft Corporation v 9038-3746 Québec Inc. et al, 2006 FC 1509,
at para 8).
[32]
In this case, according to the evidence in the
record, which is not challenged by the respondent, the version of the site put
online by Mr. Mallet significantly reproduced the version developed by the
applicant. Therefore, unless the applicant consented to this reproduction, it
is an infringement of his rights as owner of the copyright to the computer
program that he developed under the contract.
[33]
Moreover, the respondent argued that the said
contract contained an implied authorization to use the computer program developed
by the applicant for payment and it was therefore available to it to make, on
its own or by a third party, any changes or improvements considered desirable.
It found that, under the circumstances, there was no infringement of the
applicant’s copyright. I agree.
[34]
In a matter of copyright involving work to
improve software, the Federal Court of Appeal found, as had the trial judge, that
there is an implied user licence (Tremblay v Orio Canada Inc., 2013 FCA
225). In this matter, Orio Canada had retained the services of Mr. Tremblay’s company
(Service Informatique Professionnel) to improve his appointment management
software in the field of automotive mechanics, the Service Appointment Monitor (SAM).
The new version of the software delivered by the applicant was twice the size
of the original version and contained several complementary modules. Once it
was delivered, Orio Canada continued developing its software this time using a
competitor of Mr. Tremblay to whom it gave a copy of the source code developed
by Mr. Tremblay.
[35]
Mr. Tremblay considered that, as owner of the copyright
of the modified software that he had delivered to Orio Canada, it could not copy
the source code to have it reworked by a third party. Orio Canada argued that M.
Tremblay had relinquished all rights to the said software under a clause contained
in the estimate prepared by Mr. Tremblay, which read as follows:
[translation]
Any development done for Orio Canada Inc.
shall become the exclusive property thereof and may not therefore be marketed
or reused by Service Informatique Professionnel or any other party.
[36]
However, Mr. Tremblay argued that this assignment
was void given the fact that he had not formally signed these submission
documents, as required, in his view, by subsection 13(4) of the Act. This
provision reads as follows:
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13. (4) The owner of the copyright in any work may assign the
right, either wholly or partially, and either generally or subject to
limitations relating to territory, medium or sector of the market or other
limitations relating to the scope of the assignment, and either for the whole
term of the copyright or for any other part thereof, and may grant any
interest in the right by licence, but no assignment or grant is valid unless
it is in writing signed by the owner of the right in respect of which the
assignment or grant is made, or by the owner’s duly authorized agent.
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13. (4) Le titulaire du droit d’auteur sur une œuvre peut céder ce
droit, en totalité ou en partie, d’une façon générale ou avec des
restrictions relatives au territoire, au support matériel, au secteur du
marché ou à la portée de la cession, pour la durée complète ou partielle de
la protection; il peut également concéder, par une licence, un intérêt
quelconque dans ce droit; mais la cession ou la concession n’est valable que
si elle est rédigée par écrit et signée par le titulaire du droit qui en fait
l’objet, ou par son agent dûment autorisé.
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[37]
The trial judge considered that the copyright
assignment contained in the estimate was indeed void to Mr. Tremblay, but he
nevertheless found that Mr. Tremblay had granted to Orio Canada an implied user
license in the modified software that he had delivered to it (Tremblay,
at para 12). The Federal Court of Appeal upheld in these terms the trial
judge’s finding on this issue:
[25] As for the implied user licence, I see
no error in the judge's holding that, in the circumstances, the appellant had
consented not only to an implied licence to market the modified SAM program,
but also to the possibility of further modifications by Orio in order to
increase sales. In this respect, Netupsky v. Dominion Bridge, [1972]
S.C.R. 368, a Supreme Court of Canada case, seems to be analogous to this case.
In that case, the SCC recognized an implied licence to modify plans for a civil
engineering work. At pages 377-78 of that case, Justice Judson adopted the
following statement of the Supreme Court of New South Wales in Beck v.
Montana Construction Pty. Ltd. (1963), 305 F.L.R. 298 at pages 304-5:
“…that the engagement for reward of a
person to produce material of a nature which is capable of being the subject of
copyright implies a permission or consent or licence in the person making the
engagement to use the material in the manner and for the purpose in which and
for which it was contemplated between the parties that it would be used at the
time of the engagement.”
[38]
As I have already noted, the estimate submitted
by the applicant was not followed by a written contract between parties. The estimate
itself does not contain any clause relating to copyrights. The agreement
between the parties is silent in this regard. However, it appears to me to be
clear that the contract between the parties contained, to the benefit of the
respondent, an implied user licence for the computer program that the applicant
was to deliver, a licence that also authorized him to modify the said program
in such a way as to improve its effectiveness based on his needs. Otherwise, one
could wonder why the respondent would have given the applicant, faced with the
payment of compensation and without it being possible for him to make other modifications
for his own use, the task of modernizing his Web site.
[39]
This situation is very different than that prevailing
in Microsoft, above, the only authority brought to the attention of the
Court by the applicant. No blame is being placed on anyone here of knowingly
and without a right retailing copies of the computer program developed by the
applicant. Also, it was not proven or even alleged that the respondent sold, rented
or assigned the applicant’s computer program to a third party or again that it
had authorized a third party, including Mr. Mallet, to use it for his own
purposes, which would have greatly exceeded the parameters of the implied licence
resulting from the contract between the parties.
[40]
This situation is also very different from that
which led Claude Robinson to prosecute Les Films Cinar for having knowingly and
without authorization copied his work for the purpose of producing it and profiting
from it.
[41]
The contract between the parties provided for the
creation of a “work” for payment freely
negotiated between them. In other words, it provided what the applicant had no
doubt considered, by committing to complete the work, “a
just reward for the creator” (Robinson, above at para 23). Therefore,
in my view, it was at a matter of course that the respondent was authorized to
use the work and eventually make improvements for the purpose for which he had
ordered it.
[42]
It is true that the applicant was not paid upon
delivery of the work, that a dispute was initiated regarding the scope and the fair
value of the work completed and that no compromise could be found. However, in
my view this relates to the law of contracts and not of copyrights, an
independent right that ensures that the creator of a work will “reap the benefits of his efforts, in order to incentivize
the creation of new works” (Robinson, above at para 23). The contract
gave the applicant a benefit and nothing prevented him from ensuring, before
the appropriate forum, its full performance under the law of contracts. The function
of copyright is not to substitute for contract rules and standards otherwise
applicable.
[43]
I feel compelled to find that the Act provides
no assistance to the applicant in the circumstances of this case. The
situation is quite unfortunate for the applicant, but he will have at least received
from the respondent, in June 2014, the payment to which the parties agreed in the
spring of 2011.
[44]
It seems to me that this matter, resulting from
the performance of a contract that was quite modest, could have been settled
otherwise. In these circumstances, I find that each party must pay their costs.
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