Digests

Diamant Toys Ltd. v. Jouets Bo-Jeux Toys Inc.

T-1676-01

2002 FCT 384, Nadon J.

5/4/02

24 pp.

Motion for order authorizing plaintiffs to seize before judgment products allegedly infringing their copyrighted works, AMAV brand arts and crafts products--AMAV Industries Limited (AMAV) manufacturing children's toys since 1979--AMAV's intellectual property including brand name, artistic works, trade-marks, distinctive AMAV packaging--Illustrations or photographs on package depicted what product, when assembled, would look like--Package design, construction done in-house by AMAV employees-- Photographs, taken by commercial photographers retained by AMAV, and negatives remained AMAV's property--Saved on CD-Roms--Two sets of over 900 CD-Roms compiled, each containing catalogue of original artistic works belonging to AMAV, integral to product design, distinctive packaging of AMAV's arts and crafts line of products--In 1995 AMAV's assets, including copyrights, sold to ERO NY Acquisition Inc. (ERO NY) and ERO Canada Acquisition, Ltd. (ERO Canada)--By February 1996 ERO Canada changed name to AMAV Industries Ltd.--AMAV Industries Ltd. ceased operations, assets liquidated in 2000--Defendant purchased from AMAV Industries Ltd.'s liquidator part of company's inventory of raw materials relating to arts and crafts product line--Plaintiff Diamant purchased from AMAV Industries Ltd. all of rights, title, interests including intellectual property, and in turn conveyed them to plaintiff Solton, which granted Diamant licence to use assets--When Diamant took possession of AMAV Industries Ltd.'s assets, missing one set of over 900 CD-Roms, containing electronic copies of artistic work, and including photos, illustrations used on packaging material, layouts of packaging, instruction sheets provided with products--Plaintiffs alleging defendant in possession of missing set of CD-Roms, and that using CD-Roms, launched brand of arts and crafts products closely mimicking distinctive AMAV packaging, incorporating many of artistic works created by AMAV, for which plaintiffs holding copyright--Defendants not denying products identical to AMAV brand line of arts and crafts products, but asserting plaintiffs not establishing ownership of intellectual property-- Motion allowed--Based on record, plaintiffs establishing ownership of intellectual property rights with respect to AMAV arts and crafts product line--Defendants not acquiring any intellectual property rights in regard to assets purchased-- Copyright Act, s. 38(1)(b) permitting owner of copyright to take proceedings for seizure of copies as if copies property of copyright owner--Plaintiffs relying on s. 38(1)(b), submitting entitled to seizure before judgment of certain products-- Establishing works constituting subject-matter of dispute "artistic works" as defined in Copyright Act, s. 2--Works created by individuals ordinarily resident in Canada who were employees of AMAV Industries Ltd. in ordinary course of employment--AMAV Industries Ltd. thus deemed to be first owner of copyright in work--AMAV also owner of copyright in photographs of works created by photographers retained by AMAV Industries Ltd. for that specific purpose--In reproducing plaintiffs' photographs on packaging, plaintiffs' drawings on written instructions accompanying play art products, and drawings as part of play art products, defendant infringed plaintiffs' copyright in works--Plaintiffs established prima facie case of copyright infringement--Consequently, Copyright Act, s. 38(1)(a), (b), in conjunction with Federal Court Rules, 1998, r. 377 allowing plaintiffs to seize before judgment all infringing copies of works in regard to which own copyright--If plaintiffs entitled to seizure before judgment, akin to seizure before judgment under Quebec Code of Civil Procedure, art. 734(1) then plaintiffs need not meet tripartite test applicable to interlocutory injunction applications: Théberge v. Galeries d'Art Yves Laroche Inc. (2000), 9 C.P.R. (4th) 259 (Que. C.A.)--Regardless, tripartite test met: (1) prima facie case of copyright infringement; (2) plaintiffs not required to establish will suffer irreparable harm (in International Business Machines Corporation et al. v. Ordinateurs Spirales Inc./Spirales Computers Inc. (1984), 80 C.P.R. (2d) 187 (F.C.T.D.), Reed J. stating degree of harm required to be proved in case where blatant copying not as high as that required in other cases of interlocutory injunction); (3) balance of convenience favouring plaintiffs, having established flagrant infringement: 75490 Manitoba Ltd. v. Meditables Inc. (1989), 29 C.P.R. (3d) 89 (F.C.T.D.)-- Order authorizing bailiff in Quebec to seize before judgment from defendant listed products and any other products bearing or containing any of plaintiffs' copyrighted works, along with any plates, CD-Roms and all other material associated therewith, and to remove such seized products--Copyright Act, R.S.C., 1985, c. C-42, ss. 2 "artistic works", 38 (as am. by S.C. 1997, c. 24, s. 20)--Federal Court Rules, 1998, SOR/98-106, r. 377--Quebec Code of Civil Procedure, art. 734.