In a recent decision, Layette Minimôme Inc. v.
Jarrar 2013 QCCS 6084, the Superior Court of Quebec ("the
Court") awarded damages to a Canadian company whose goods were
being copied, on the grounds that the infringing party did not
respect its obligation of good faith under the Civil Code of Quebec
("CCQ"). However the Court did not award any remedies for
copyright infringement under the Copyright Act ("the
Act") because the violation took place overseas.
The plaintiff, Layette Minimôme Inc., designs and sells
clothing for children. The defendants, Canadian Fashion Designs
Inc. and its representative M. Jarrar, acted as a broker between
Layette and Babyshop, a clothing chain with stores across the
Middle East. Under the agreement between Babyshop and Layette,
Babyshop selected items from Layette's collection and a
pre-approved manufacturer in China copied the clothes which were
sold under a Babyshop brand. Babyshop paid Layette the cost of
manufacturing plus 25 percent and Layette returned 5 percent of the
commission to Jarrar. In 2008, following manufacturing delays,
Babyshop terminated its contract with Layette. Shortly after,
Layette discovered a collaboration between Jarrar and Babyshop in
which Jarrar provided samples of the Layette collection to Babyshop
and an unauthorized manufacturer in China made copies of the
The plaintiff presented to the Court a substantial body of
Babyshop tried to convince the plaintiff to end its
relationship with Jarrar to reduce costs. The plaintiff refused,
based on its loyalty to the defendants.
The reasons behind the rupture of the contract between Babyshop
and the plaintiff were rather nebulous.
The economic importance of the contractual relationship between
the defendant and Babyshop.
As a sales representative for Layette, Jarrar borrowed samples
from the Layette collection but was reluctant to return them to
Jarrar admitted to giving samples of the Layette collection to
Babyshop even though Layette had explicitly asked him to keep an
eye on possible counterfeiting.
A Chinese manufacturer with whom Layette had no business
relationship claimed he was making clothes for Layette.
The plaintiff found copies of Layette clothing on
Babyshop's website and in Babyshop stores in Dubai.
Babyshop received samples of clothing from the Layette
collection before the clothes were made available to the
Jarrar's testimony was vague and lacked credibility.
The preponderance of evidence was sufficient to convince the
Court that there was a presumption of copyright infringement of
Layette's clothing, that the defendants were involved in the
infringement, and that they violated their obligation of good faith
pursuant to articles 6, 7 and 1375 CCQ.
Interestingly, the Court dismissed the copyright action.
Even though the garments created by Layette were distinctive and
original works that may be protected by copyright, the Court found
that the Act does not apply to the circumstances at hand because it
does not have an extraterritorial reach. The copies were
manufactured in China at the request of a resident of Dubai and
sold in the United Arab Emirates.
Also noteworthy, the defendants alleged that the plaintiff could
not claim copyright because each garment was a design applied to a
useful article and the garments were reproduced in a quantity of
over 50 (section 64(2) of the Act). Layette argued the exceptions
to this rule under section 64(3) of the Act which states that the
non-infringement rule does not apply where: the work is a graphic
or photographic representation applied to the surface of an
article; the material has a woven or knitted pattern; or the work
is a representation of a real or fictitious being, event or place.
As the plaintiff is presumed to be the owner of the copyright
pursuant to section 34.1(1) of the Act – a presumption that
the defendants made no effort to overturn – had it not been
for the extraterritorial aspect in this case, the Act would have
been applicable and the Defendants' argument under section
64(2) of the Act would have failed.
Despite refusing to apply the Act, the Court did allow the
motion in part and awarded Layette damages for loss of profits from
the sales due to the defendants' violation of their obligation
of good faith. Jarrar's liability was extracontractual under
article 1457 CCQ since only Canadian Fashion Designs had contracted
with Layette. The Court found that Jarrar failed to display a
behavior equal to that which Layette could have expected and that
his behavior was disloyal and wrongful. The defendants were
required to pay $144,050.96 in damages to Layette.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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