Yesterday, the Supreme Court of Canada released its long-awaited decision in Robinson v. Cinar Corporation. At issue: whether an animated television series based on the well-known novel, Robinson Crusoe, infringed copyright in another proposed series based on the same underlying work and developed by some of the parties to whom the first series had been pitched, and the appropriate amount to be paid to the creator of the original property if so.
While several important copyright issues were addressed, the main items include:
- How courts should analyze whether a substantial part of a work has been reproduced.
- How, and whether, expert evidence should be used to assist courts in determining whether a substantial part of a work has been reproduced.
- Whether directors can be held personally liable for disgorgement of profits earned by a corporation.
- How non-pecuniary and punitive damages are to be assessed in copyright cases.
Naturally, all of this played out against the background of the usual balance in copyright law between the need to afford adequate protection to creators and rights-holders, on the one hand, and the interests of users in access to creative works, on the other.
The history of all four cases – Robinson v. France Animation, Izard v. Robinson, Weinberg v. Les Productions Nilem and Cinar Corporation v. Robinson – began when Claude Robinson, a Montreal artist, created a series of sketches and character creations for a projected children's television series called Robinson Curiosité. Robinson then proceeded to develop the proposed series further over a number of years, pitching it to a series of different television production companies (including several of the other parties to the litigation), but the series was not produced.
Several years later, Robinson resurrected Robinson Curiosité and began pitching it again, including to a developer of educational software who was interested in proceeding with the project. However, those efforts were cut short when, in the meantime, the first episode of Robinson Sucroë – a series produced by one of the producers to whom Robinson had pitched Robinson Curiosité – was broadcast. Having viewed the episode, Robinson believed that there was too much resemblance between the new show and his own project to go forth with production of Robinson Curiosité. Instead, he sued the producers of Robinson Sucroë for copyright infringement.
The trial judge found that the defendants had indeed infringed Robinson's copyright in Robinson Curiosité and awarded substantial damages against the defendant producers. On appeal to the Quebec Court of Appeal, the finding of copyright infringement was upheld but the award of damages to Robinson was reduced substantially.
The Supreme Court of Canada determined that the lower courts were correct in their treatment of infringement and correct in part in their treatment of damages.
The Issues on Appeal
Robinson's appeal focused largely on the Court of Appeal's reduction of the damages awards, which Robinson maintained was improper. He argued not only that reducing damages in the circumstances of the case sent the message that copyright infringement is profitable, but also that the practical outcome of the decision was to restrict the availability of copyright protection.
The other three appeals concerned the lower courts' determination that a substantial part of Robinson Curiosité was reproduced in the making of Robinson Sucroë. The decision of the Court was expected to articulate and clarify the proper analytical methodology for determining when a substantial part of a work has been reproduced.
The Court's Decision
"Substantial Part" Analysis
The appellants argued that the trial judge conducted the substantial part analysis incorrectly. They argued that the trial judge should have dissected the work so as to "weed out" those parts which were not original and non-protectable, including elements derived from a common public domain source: Daniel Defoe's Robinson Crusoe, first published in 1719. The approach proposed by the appellants was similar to the "abstraction-filtration-comparison" technique used in the United States.
The Court stated that, while the reductive analysis proposed by the appellants might be useful for computer software, for example, which is easily broken down into its constituent parts, works like those at issue in the current case do not lend themselves to such dissection. The Court concluded that determining whether a substantial part of a work has been reproduced requires a holistic assessment that focuses on the cumulative effect of the features copied. The question is not whether individual parts of a work are original and protectable but whether, looking at the work as a whole, the essence of the work has been copied. The Court confirmed that this analysis is qualitative, not quantitative, and that, "as a general proposition, a substantial part of a work is a part of the work that represents a substantial part of the author's skill and judgment expressed therein."
The Court also commented on the way differences between works should factor into the analysis. The Court stated that the relevant focus is whether the copied features are a substantial part of the plaintiff's work: "The alteration of copied features or their integration into a work that is notably different from the plaintiff's work does not necessarily preclude a claim that a substantial part of a work has been copied." In other words, if the defendant has copied the essence of the plaintiff's work, the presence of differences will not render the defendant's work any less an imitation than if the differences were not there at all.
Finally, the Court addressed the appellants' contention that both their work and Robinson's work were derived from Robinson Crusoe, a common public domain source. The Court found that Robinson's work was protected not because of the idea it conveyed, but because of the way it expressed the story of the character inspired by Robinson Crusoe. As such, the appellants had not copied the idea of Robinson Crusoe; they had copied Robinson's expression of that idea.
Having concluded that the trial judge made no palpable or overriding error, the Court left intact the trial judge's finding of infringement.
The appellants argued that the question of whether a substantial part of a work has been reproduced should be judged from the position of a layperson. As such, according to the appellants, the trial judge erred in relying on expert evidence to determine that a substantial part of Robinson's work had been reproduced.
The Court recognized that, in some cases, lay evidence may be preferable because the substantial part analysis will remain "grounded in the works themselves, rather than in esoteric theories about the works." In other cases, however, it may be necessary to call upon an expert so that the trial judge is afforded the perspective of someone well versed in the particular art or technology at issue. The Court concluded that, in Robinson, the test for establishing the admissibility of expert evidence was satisfied because the testimony was necessary, relevant, did not offend any exclusionary rule and involved a properly qualified expert.
In discussing the necessity of expert testimony, the Court focused on (among other things) the intended audience of both shows: five-year-old children. The Court noted that requiring a focus on laypeople as the intended audience would restrict the Court's ability to properly assess the work because it would focus on whether copying would be apparent to a five-year-old. Furthermore, the Court noted that the unfinished nature of Robinson's work rendered a side-by-side comparison difficult, which contributed to the justification for expert evidence.
At trial, the judge awarded compensatory damages (including non-pecuniary damages), as well as 50% of the profits made by the infringers on a solidary (i.e. joint and several) basis. The total award amounted to $5,224,293. The Court of Appeal reduced this award to approximately $2,032,626. The Supreme Court of Canada reinstated most of the trial judge's original award, ordering that Robinson be paid just over $4 million.
At trial, Robinson had been awarded $604, 489 in compensatory damages for pecuniary losses; $1,716,804 in disgorgement of profits; $400,000 for psychological harm; $1,000,000 in punitive damages; and $1,500,000 in costs. The Court of Appeal upheld the trial judge's award for compensatory damages (subject to a minor mathematical correction) but took issue with the trial judge's award of profits as well as the non-pecuniary and punitive damages. It made the following adjustments:
- It excluded $1,117,816 in profits resulting from Robinson Sucroë's soundtrack because, according to the Court of Appeal, there was no causal link between the infringement and the soundtrack;
- It excluded a payment of $684,000 from Ravensburger to France Animation on the basis that the trial judge improperly characterized this as revenue;
- It found that the payment of $1,111,201 made by Cinar to a partnership called Jaffa Road should have been characterized as an expense and deducted from the calculation of profits;
- It found that only the corporate defendants should have been ordered to disgorge profits; and
- It reduced the non-pecuniary damage award from $400,000 to $121,350.
All of those adjustments were challenged before the Supreme Court.
Disgorgement of Profits
The Supreme Court concluded that the Court of Appeal erred in deducting the profits earned from the Robinson Sucroë soundtrack. The Court emphasized that the soundtrack had no standalone value: even though the soundtrack was a result of the appellants' independent creation, and was therefore not copied, it was only commercialized because it was part of Robinson Sucroë, which was itself copied from Robinson's work. The Court also determined that the trial judge was correct in including the payment of $1,111,201 allegedly made by Cinar to Jaffa Road. The trial judge found that the appellants had not proved that this payment was actually made, and the Court determined that the trial judge was entitled to take the lack of evidence into account in determining that this alleged payment did not constitute an expense that could be deducted from the award.
The Court agreed with the Court of Appeal, however, that the Ravensburger amount was improperly characterized as revenue and should have been deducted from the award for profits. It agreed as well that the trial judge erred in requiring disgorgement on a solidary basis, i.e., by the directors and officers of the corporate defendants as well as by the corporations themselves. Under the Copyright Act, a defendant can only be made to disgorge profits that it actually made. As such, where corporations - and not individuals - earn profits as a result of the infringement, directors cannot be required to contribute to an award made on this basis. The Court found that the profits from Robinson Sucroë were retained by corporations that acted as co-producers and, as such, the directors and officers of these corporations are not personally liable to disgorge profits (notwithstanding that some of these directors and officers were held personally liable for copyright infringement).
The Court of Appeal concluded that Robinson's symptoms of shock and depression stemmed from bodily harm, and therefore applied a $100,000 cap as had been established by the Supreme Court of Canada in the Andrews trilogy. This cap applies to losses that can be recovered from catastrophic bodily injury. The Supreme Court of Canada found, however, that the psychological harm Robinson endured was a material injury, analogous to defamation, and not bodily harm. As such, the $100,000 cap should not have applied and the trial judge's award of $400,000 should stand.
The trial judge awarded $1,000,000 in punitive damages, apportioned jointly against the appellants, on the basis of their persistently dishonest behaviour. The Court of Appeal reduced the award to $250,000 but only apportioned this amount amongst select defendants concluding that not all of the defendants had deliberately violated Robinson's rights.
The Court upheld the Court of Appeal's apportionment of liability and discussed the jurisprudence against awarding punitive damages on a solidary basis: punitive damages "must be individually tailored to each defendant against whom they are ordered." However, the Court ultimately concluded that while the Court of Appeal was right to reduce the award, it gave too little weight to the gravity of the appellants' conduct. As such, the Court increased the appellate court's award from $250, 000 to $500,000.
Some may find the Court's much-anticipated discussion of what constitutes a substantial part of a work slightly disappointing. Canadian copyright law is still left wanting for concrete factors that courts should consider to ensure that the substantial part analysis is not simply a matter of impression that ultimately depends on the particular idiosyncrasies of the court judging the two works. However, this kind of factor-based analysis might lend itself too easily to the reductive approach that the Court chastised in this decision. In the end, it may be that all that can be expected of this nuanced and complex area of copyright law are case-by-case analyses that accumulate like puzzle pieces to continually fill out the picture of what constitutes a substantial part of a work.
Of special interest to copyright and entertainment lawyers, and their clients, will be the computation of damages and disgorgement of profits. If a perception once existed that only relatively little compensation is available for copyright infringement in Canada, Robinson responds decisively to that notion. The relatively generous approach taken to non-pecuniary and punitive damages in a copyright case will come as a particular surprise to many observers.
With no fewer than seven Supreme Court decisions on copyright in the last 18 months, and with the Copyright Modernization Act coming into force last year, copyright law in Canada has rarely been more dynamic. The addition of the Robinson cases to the Supreme Court's repertoire has further shaped the Canadian copyright landscape and will continue to serve as a backdrop against which fundamental copyright questions are asked and answered.
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