Copyright infringement is normally a factual question – it doesn't matter whether one intended to copy a substantial part of someone else's original expression if, in fact, one did so1 – but there are circumstances where the alleged infringer's state of mind does matter. Knowledge is relevant to secondary infringement under s. 27 of the Canadian Copyright Act, or to the assessment of statutory damages under s. 38.1, for example. Willful infringement may also be relevant to the applicable limitation period, to the assessment of costs or punitive damages, or to piercing the corporate veil.
Rights holders often want to put an alleged infringer on notice of the rights that they claim. What does it take for such a notice to establish a state of mind of knowing or willful infringement? A recent decision of the United States Court of Appeals for the Eleventh Circuit, while not directly applicable in Canada, offers some clues.
In Olem Shoe Corporation v. Washington Shoe Corporation, Washington claimed infringement of certain designs for women's boots. Washington had sent a typical "cease-and-desist" letter to the defendant, which included photographs of its boots, but did not identify any copyright registration or specifically identify that the plaintiff claimed rights in the design itself.
Olem's counsel asked for more information. Washington sent a further response identifying a copyright registration number for one design, but not another. Olem apparently canceled a shipment of one style of boots, but continued to sell others. Later, Olem discovered some technical deficiencies in the registration and filed an action for a declaration of non-infringement. Washington counter-claimed.
At first instance, the District Court granted summary judgment in favour of Washington on infringement, but in favour of Olem on whether or not that infringement was "willlful". Washington appealed the judgment and Olem cross-appealed.
The Court of Appeals for the Eleventh Circuit affirmed both findings. The boots were "strikingly similar" and this was enough to lead to an inference of copying, and therefore infringement. But the objective similarity was of no use to establish the state of mind of the infringer:
while striking similarity may be the basis for finding that a work has been copied, it is not evidence that Olem's state of mind was that of reckless disregard of the risk that it was violating copyrights when it purchased and sold the infringing boots. This is because striking similarity can be used as a substitute for actual evidence of copying, but says little about the state of mind of the copier, i.e., that it willfully disregarded the rights of a copyright holder.
Moreover, the notices that Washington had sent provided no evidence that Olem knew it was infringing Washington's copyright:
although Washington Shoe may have claimed that it held the copyrights to the boots' designs, the initial letters, which had no copyright registration numbers, and the follow-up letters, which included registration numbers for claimed patents but no samples of the designs Washington Shoe claimed were infringed, provided nothing from which Olem could have determined that the claim was legitimate.
This case was specifically about assessment of statutory damages under 17 U.S.C. 504 and, of course, the decision is based on U.S. law. However, very similar issues can arise under Canadian law. Under s. 38.1(2) of the Copyright Act, reduced statutory damages may apply if "the defendant was not aware and had no reasonable grounds to believe that the defendant had infringed copyright". Effective notice can prevent an alleged infringer from claiming ignorance.2
So, the practical lesson to rights holders is likely broader than the particular legal context of the Olem decision. To be effective in putting an infringer on notice, and to establish evidence of knowledge or willfulness, a cease-and-desist letter, or a notice under Canada's new Notice and Notice regime, should be specific and accurate. A vague claim, which potentially leaves the recipient guessing about what conduct may be infringing, will be of little value. Ambiguity could undermine a good faith effort by an accidental infringer to resolve a dispute or could create opportunities for a bad actor to shrug and claim ignorance.
1 The defence of independent creation is also a question of fact. "Unconscious" copying can infringe copyright. See e.g. Drolet v. Stiftung Gralsbotschaft,  1 FCR 492, 2009 FC 17.
2 See e.g.Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, para. 418 ("Since the defendants were put on notice in the fall of 2008 that copyright subsisted in the property descriptions and photographs, the defence set out in s. 38.1(2) of the Copyright Act does not assist them."); see also Telewizja Polsat S.A. v. Radiopol Inc., 2006 FC 584, para. 32.
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