Federal Court of Canada Dismisses Wiseau Studio’s Appeal on Copyright Infringement Action

On March 16, 2023, the Federal Court of Canada (the Federal Court) issued its decision in Wiseau Studio, LLC v Harper, 2023 FC 354, dismissing Wiseau Studio, LLC’s (the Plaintiff’s) appeal from a previous decision finding that its cause of action for copyright infringement was barred based on cause of action estoppel, as previously reported by the E-TIPS® Newsletter here.  

The Plaintiff claimed to hold copyright in the film “The Room” and the Defendants made a documentary called the “Room Full of Spoons”, which contains footage from the Plaintiff’s movie. Based on the Defendants' use of the footage, the Plaintiff brought a lawsuit against the Defendants in the Superior Court of Ontario alleging that its movie infringed the Plaintiff's copyright and breached its moral rights. This action was dismissed in its entirety, and the Plaintiff’s appeals failed. The Plaintiff then launched two further actions: one in the Ontario Court and one in the Federal Court. The action in the Ontario Court included allegations of copyright infringement relating to sections 27 and 14.1/28.1 of the Copyright Act (the Act). The Federal Court action also alleged copyright infringement, relying on the Defendants’ alleged breach of section 41.1 of the Act by circumventing technological protection measures installed on Blu-ray discs containing the Plaintiff’s film. The second Ontario action was dismissed and in 2022, an associate judge of the Federal Court held that the Plaintiff’s action was barred by cause of action estoppel. The Plaintiff appealed the 2022 Federal Court ruling.

On the appeal, the Plaintiff argued that in applying the doctrinal elements of cause of action estoppel as set out in Grandview v Doering, [1976] 2 SCR 621, the Federal Court in the 2022 decision erred in finding that the Plaintiff’s causes of action in its Ontario and Federal Court proceedings against the Defendants were not separate and distinct. As a result, the central issue in the current matter was to determine whether there was a palpable and overriding error in the 2022 Federal Court decision.

In its decision on the appeal, the Federal Court noted that whether the same cause of action animates both proceedings is a question of mixed law and fact, with the standard of review being the “palpable and overriding” standard. The Federal Court agreed with the 2022 Federal Court decision that the action involved the same parties, the same wrongdoing, and the same harm to the Plaintiff as the previous action. The Plaintiff’s claim underlying both actions was based on “substantially the same facts” and there was no error in the 2022 Federal Court’s decision that the doctrine of cause of action estoppel applies to bar the Plaintiff’s action before the Federal Court.

Summary By: Victoria Di Felice