Federal Court of Canada Awards Over $29M in Statutory Damages for Copyright Infringement and Finds Defendants Induced Infringement

On August 10, 2021, the Federal Court of Canada (the Court) issued its decision in Bell Canada v L3D Distributing Inc., 2021 FC 832, in which it granted the plaintiffs’ motion for default judgement, awarding over $29 million in statutory damages for copyright infringement relating to pre-loaded set-top boxes and internet protocol television (IPTV) services, and finding the defendants knowingly induced infringement. This decision appears to be the first time the Court has applied the common law inducement test in the context of copyright infringement.

The plaintiffs are well-known Canadian broadcasters and distributors of broadcasts.  The plaintiffs brought an action for copyright infringement against three businesses and an individual that had advertised, offered for sale, and sold pre-loaded set-top boxes and IPTV services, which provide unauthorized access to the plaintiffs’ content.

The defendants did not respond to or participate in the action.  So, the plaintiffs brought a motion for default judgement.

In assessing the plaintiffs’ claims, the Court found that copyright subsists in the works and the plaintiffs either own or exclusively license the copyright.  The Court went on to find that the defendants had infringed the plaintiffs’ copyright by making the works available to the public without the plaintiffs’ permission.  The Court also found that the defendants authorized others to infringe copyright, contrary to the Copyright Act.

On the issue of inducement, Justice Fuhrer stated that she sees no reason why the common law inducement test “should be restricted to any particular type of intellectual property rights, such as patents”. The Court held that the plaintiffs had satisfied the common law test of inducement in establishing that the defendants had knowingly induced others to infringe the plaintiffs’ copyright.

In awarding statutory damages, the Court held that $10,000 per work ($29,300,000 in total) was more proportionate than the statutory maximum of $20,000 per work given the plaintiffs intention to pursue default judgement against more defendants and in light of the plaintiffs’ admission that declines in subscriptions were only partly a result of piracy.  The Court also awarded punitive damages of $100,000 against each of the three defendants.

Summary By: Michelle Noonan