Friday, January 7, 2011

No Primary Infringement, No Secondary Infringement : An Interesting Canadian Case – Part I

In matters of copyright infringement, a finding of secondary infringement does not happen too often.

A. Section 51(a)(ii), which treats as infringement, the profitable permitting of any place for the purpose of communication of the work to the public where such communication itself constitutes an infringement of the copyright in the work, and

B. Section 51(b), which treats as infringement, the selling, renting, distribution, exhibition or importation of infringing copies, are the instances in Indian law when secondary infringement is frowned upon.

To my knowledge, very few decisions by Indian courts have made use of these provisions or explained them from a conceptual point of view. Different matter that there may have been very few opportunities so far to delve into this at all! At the end of the day, Courts of law work within a factual setting.

United States Supreme Court has rendered two path-breaking judgments on secondary infringement, one in 80s and the other 20 years later, in 2005. In Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984), popularly known as the Betamax case, the US Supreme Court held that the manufacturers of home video recording devices such as Betamax would not be liable to copyright owners for secondary infringement since the technology was capable of substantially non-infringing and legitimate purposes.

The business of supplying such devices could therefore not be stifled simply because the equipment was used by some individuals to make unauthorized reproductions of copyrighted works. The 2005 decision in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) re-examined the principles laid down in the ’84 decision and came to a finding of contributory infringement on the facts involved therein. This case called into question the liability of websites that facilitated peer-to-peer (P2P) file-sharing, a mode commonly used to share infringing copies.

Re-formulating the test for copyright infringement, the US Supreme Court held that ‘one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties’.

Apart from some of these celebrated instances, cases of secondary infringement with prescient expressions of law are few and far between. It is at this juncture that we came to know of a Canadian decision on this issue.

A Perspective from Canada
The DemandingMistress now examines a significant verdict of the Canadian Supreme Court on the issue of secondary liability, in Euro Excellence Inc. v. Kraft Canada Inc., available here. The facts in brief:

Kraft Canada Inc., the plaintiff in the initial action, was the exclusive licensee for distribution of chocolate brands such as Toblerone and Côte d’Or, which were manufactured by Belgian and Swiss companies. The license was exclusively for the territory of Canada. Euro-Excellence Inc., the prior licensee for these products in Canada and the defendant in the initial action, continued to import these products to Canada and distribute the same even after its license with the manufacturer had expired.

This was resisted by the plaintiff who alleged secondary infringement under Section 27(2)(e) of the Canadian Copyright Act. This provision was relied on precisely due to the copyright registration obtained in Canada by the manufacturers for the Toblerone and Côte d’Or logos in the category of artistic works. As per this provision, importing the copy of a work into Canada would infringe the copyright in that work, provided the person who made the copy would have been liable for infringement had such copy been made in Canada.

The basic purpose of this Section appears to be preventing an infringer from getting over his infringement by committing such infringement outside the territorial limits of Canada and then importing the infringing copy to Canada. There is also another limitation contained in Section 27(2)(e) – the importation of the copy has to be for any of the purposes mentioned in the earlier sub-clauses.

The purposes stated are (a) sell or rent out the infringing copies, (b) distribute the infringing copies to such an extent as to affect prejudicially the owner of the copyright, and (c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public, the infringing copies.

The defendant’s contentions were two-fold: (i) the importation of the chocolates was not for the purpose of selling or distributing the logos, but only to sell the actual chocolates; and (ii) the logos were reproduced by the manufacturer himself on the packets sold in territories outside Canada, and if the manufacturer had done the same in Canada, he would not be liable. So, there was no primary act of infringement that would arise at all in this case, since the defendant had never personally made the copies of the logo. He had only imported them into Canada.

There were multiple responses from the Supreme Court and my next post will discuss the verdict.

1 comment:

  1. Ananth, interesting post! Looking forward to your discussion of the verdict.