Canada: Appeal Dismissed: Dispute Over Ownership, Alleged Copyright Infringement Of Software Programs, Scope Of A License, And The Revocation Of A Certificate Of Registration (Intellectual Property Weekly Abstracts Bulletin – Week of August 4th, 2014)

Last Updated: August 7 2014

Edited by Chantal Saunders and Beverley Moore , Adrian Howard and Ryan Steeves

Copyright Cases

Appeal Dismissed: Dispute over Ownership, Alleged Copyright Infringement of Software Programs, Scope of a License, and the Revocation of a Certificate of Registration

Planification-Organisation-Publications Systèmes (POPS) Ltée v. 9054-8181 Québec Inc., 2014 FCA 185

This was an appeal from a judgment of the Federal Court (decision here, summary here) dismissing the action for damages of Elizabeth Posada ("Posada") and the company incorporated by Posada, Planification-Organisation-Publications Systèmes (POPS) Ltée ("POPS"), and for infringement of their copyright on software.

By way of background, Posada used a computer program developed by a third-party to build an interface so that the software could be used on microcomputers. This was called "Ceres". Posada and the two individual defendants used Ceres as part of their duties as professors at the Université du Québec à Montreal (UQAM). The two named defendants purchased licenses to use Ceres on behalf of UQAM. There was a business relationship between POPS and the corporate defendant, 9054-8181 Québec Inc. ("IDP"). Posada became a paid employee of IDP, to develop adaptations of Ceres, such as Omega, Comex and Epsilon. Following Posada's departure from IDP, Posada (and POPS) demanded that IDP cease using Ceres, Epsilon and Comex. The appellants, POPS and Posada, commenced the proceeding in the Federal Court and, after the proceeding was filed, obtained a Certificate of Registration of Copyright in respect of Omega and Epsilon.

The trial judge held that POPS was the copyright owner in Ceres. The Court then found that Posada was hired by IDP to develop Omega, Comex and Epsilon, and as a result, that Posada granted IDP at least an implied non-exclusive license to use Ceres and its adaptations, including Omega, Epsilon and Comex. Finally, the trial judge struck the Certificate of Registration in respect of the adaptations Epsilon and Comex, which identified Posada as the sole author and POPS as the sole owner.

The first issue on appeal was whether the judge erred in his interpretation of the rights granted by POPS or Posada to IDP. POPS and Posada argued that IDP only had a license on software products that existed before the collaboration between IDP and Posada ended. POPS and Posada further argued that the judge acted ultra petita because the Respondents had only requested a license to use the products in question (i.e. they never requested to have access to the source code or to have the right to modify the products). The Court of Appeal held that the judge nor the Court of Appeal can award more than what was sought in the proceeding by the Respondents. As such, the Court of Appeal chose not to limit the scope of the license to the use of all versions of Ceres, Omega, Epsilon and Comex existing at the end of the collaboration between Posada and IDP.

The second issue on appeal was with respect to the trial judge's determination that the user license was non-revocable. POPS and Posada argued that the term was neither reasonable nor equitable since the Respondents no longer collaborate with Posada and there is therefore no consideration. The Court of Appeal disagreed and found that the judge construed the true intention of the parties and terms of the implicit license correctly.

On the issue of copyright infringement, the Court of Appeal agreed with the trial judge that there was no infringement of POPS or Posada's copyright because IDP did not use the various programs that are subject of the appeal without POPS or Posada's consent.

Finally, the Court of Appeal upheld the judge's decision to strike the Certificate of Registration of Copyright identifying Posada as the sole author and POPS as the sole owner of the rights in respect of the Epsilon and Comex works. POPS and Posada argued that the work covered by the Registration was a compilation in which only POPS could claim to be the owner. However, the trial judge merely concluded that POPS was one of the owners. The Court of Appeal was not satisfied that the Registration related to a compilation. Posada was working for IDP when the lines of source code referred to in the Registration were written. Therefore, pursuant to subsection 13(3) of the Copyright Act, IDP (the employer) was the first owner of the copyright. Therefore, neither Posada nor POPS could claim to be the sole owners of the copyright in the absence of a specific agreement to that effect with IDP, which was not found to exist. The Court of Appeal found that due to the erroneous or incomplete information contained in the Epsilon Registration, it was open to the trial judge to strike it even if it was considered to be a compilation.

Therefore, the appeal was dismissed, except for that part of the judgment relating to the scope of the license, which was reformulated by the Court of Appeal not to include reference to "any future adaptations" of the software products developed by or on behalf of IDP.

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