Standing is an essential element of a claim for copyright infringement. The Federal Court's recent decision in McQuaig v. Enbridge Gas Inc. serves as a reminder that a plaintiff must be able to demonstrate copyright ownership or a valid assignment, or risk having their claim struck for lack of standing.
Background of the claim
The plaintiff, Mr. McQuaig, commenced an action against Enbridge Gas Inc. ("Enbridge") alleging copyright infringement in a computer software program known as the "EVC Prover". The action was originally brought by both Mr. McQuaig and his company ("108 Canada"), but after 108 Canada discontinued its claim, Mr. McQuaig proceeded as the sole plaintiff, representing himself.
Enbridge moved to strike the Statement of Claim in its entirety under Rule 221(1)(a) of the Federal Courts Rules on the basis that it disclosed no reasonable cause of action as Mr. McQuaig lacked standing. Associate Judge Cotter granted Enbridge's motion, struck the claim without leave to amend, and dismissed the action with costs in the amount of $1,000 payable to Enbridge.
Court's analysis of copyright ownership
The Court found that standing is an essential element of a copyright infringement claim and, assuming the pleaded facts to be true, analyzed the chain of title to the software.
The Court noted that Mr. McQuaig was the sole author of the original EVC Prover software but had assigned all copyright to 108 Canada after its incorporation. Any new features added between November 2019 and June 2021 were developed pursuant to a service contract naming 108 Canada as the supplier, and there were no facts to suggest that Mr. McQuaig was acting in any capacity other than as an employee of 108 Canada.
Modifications made between June 2021 and May 2023 were created while Mr. McQuaig was an employee of Enbridge, making Enbridge the first owner of copyright in those enhancements by operation of the Copyright Act. As a result, Mr. McQuaig no longer owned any copyright in any version of the software and lacked standing to sue.
No cure for lack of standing
In his responding materials, Mr. McQuaig sought leave to reinstate 108 Canada as a plaintiff. The Court held that adding a new party would not cure the fatal defect, as Mr. McQuaig's own lack of standing was incurable. As such, the Court refused leave to amend and dismissed the action.
The Court's decision is a cautionary tale for plaintiffs: without standing, even a well-pleaded copyright claim cannot survive. Ensuring proper ownership or assignment of rights is essential before commencing litigation.
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