If you have received a demand letter from the business software
alliance, here is something you should know.
In our experience, the BSA | The Software Alliance (BSA) has
referred to the Appletree case in 2012 (Adobe Systems Incorporated v. Dale Thompson DBA
Appletree Solutions), to try to convince people
that resisting the BSA’s demands can be a costly mistake.
This was a case in which almost $340,000 in
damages were awarded to the BSA because of software
In our opinion, the Appletree case should not be
feared. The reality is that there were a very specific set of facts
at play in the case, which likely do not apply to your situation.
If you are not actively pirating and distributing software; if you
are, like most of our clients under scrutiny from the BSA, simply
someone who may have been less diligent in policing their software
purchases or use; and if you retain a lawyer who is present at the
hearing, then the outcome in Appletree is extremely
unlikely to happen to you. The courts in Canada do not always side
with software corporations. In fact, the opposite is more likely
The law provides the judges with discretion in awarding
penalties for copyright violations. While the BSA will tell you
that you could be liable for up to $20,000 per infringement, the
truth is that the penalty assessed could also be as low as $200 per
infringement. For example, Section 38.1(2) of the Copyright Act
If… the defendant
satisfies the court that the defendant was not aware [that it
infringed copyright], the court may reduce the [statutory penalty]
to less than $500, but not less than $200.
In Appletree, the BSA was dealing with, if you will
pardon the pun, a real bad apple. The Court knew it and threw the
book at them. But in law, one rotten apple does not spoil the
barrel. In every case, the court will look at what you have done,
why you did it, and whether or not the BSA is being reasonable in
its approach. Indeed, the ability of the BSA to be successful will
be limited if the Court feels they are being too heavy-handed or
unfair in their approach.
Section 38.1 (5) of the Copyright Act says:
In exercising its discretion [to
award a statutory penalty] court shall consider…
b) the conduct of the parties before and during the
In other words, if the BSA (one of the “parties”)
does not act reasonably in its approach, the court may decide to
reward little to no damages.
What does this mean to you? It means that despite their strong
approach, a negotiated settlement is a much more likely outcome.
With competent counsel, there is always a better a deal to be had.
We know, because we have done it.
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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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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