 Date: October 16, 1984  Supreme Court of British Columbia  Judge: The Honorable Mr. J. McLachlan

Law  Copyright Law: These rights arise automatically upon the creation of an original work. Copyright does NOT extend to ideas, or facts. Copyright Law gives the owner the sole right to produce, reproduce, perform or publish a work. Terms  Punitive/Exemplary Damages: Punitive damages are used to punish the defendant or to set an example of him or her because of his or her outrageous or intentional conduct and often serve as a deterrent from preventing that conduct in the future.

 The Copyright Law recognizes 4 categories of works:  1. Literacy works 2. Musical works  3. Artistic works  4. Dramatic works

Plaintiff: Slumber-Magic Adjustable Bed Co. Ltd. Mr. Barker Defendant: Sleep-King Adjustable Bed Co. Ltd. Mr. Gerald

 Both are in the business of selling adjustable beds  They are competitors  Plaintiff brings an action for injunction and damages against the defendants for breach of copyright on the ground that the defendant copied an advertising brochure which the plaintiff had created  The defendants by their counterclaim sue for the value of services which they allege they performed for the plaintiff

1. Did the plaintiff have copyright in the material copied? 2. Did the defendants copy the plaintiff's material 3. If yes to 1 & 2, have the defendants raised a valid defense? a) Was the defendant Gerald Todd the co-author of the plaintiff s brochure? b) Did the plaintiff give the defendants its consent to copy its materials? c) Have the defendants a defense to the claim for damages under s. 22 of the Copyright Act, on the ground that they neither knew nor had reasonable grounds of suspecting that copyright subsisted in the brochure? 4. If entitlement is established, what are the plaintiff's remedies? a) To what sum of damages are they entitled? b) Are they entitled to punitive/exemplary damages? c) Is there an action for damages against Mr. Todd personal in view of the contention he was at all times working on behalf the corporate defendant? 5. Have the defendants established their counterclaim?

 Plaintiff developed this brochure with the assistance of an advertising agency and at considerable expense and effort  Brochure was critical to sales, as there was no store for customers to come to  Defendants suggest that there is no copyright in the brochure because it used ideas and elements which are also found in the brochures of other competitors  That does not defeat a claim for copyright It is not the several components that are the subject of the copyright, but the overall arrangement of them which the plaintiff through his industry has produced The basis of copyright is the originality of the work in question. So long as work, taste and discretion have entered into the composition, that originality is established.  J. McLachlan concluded, the fact that elements of its brochure were similar to elements of other brochures does not negate the fact that it has copyright in the arrangement of ideas, original or otherwise, which was solely the product of its own work, skill and judgment.

 The defendants produced a brochure which is identical to the plaintiff's brochure except for a few, relatively minor, variations The photograph is an altered copy of the photograph taken at the plaintiff's premises in which the plaintiff had copyright The word "daily" is substituted for "repeatable" before "relief" on the reverse side The word "B.C." is substituted for "Canadian" in describing the ownership  The only other change was the substitution of Sleep-King's name for that of the plaintiff  The arrangement is the same for the slogans, pictures, and diagrams, as well as the type for the slogans.  J. Mclachlin concluded that the defendant substantially copied the arrangement of materials in the brochure in which the plaintiff held copyright. They thereby wrongfully appropriated to themselves what the plaintiff by its work, skill and judgment had made its own property.

a) Was the Defendant Gerald Todd a Co-Author of the Brochure Copied? Only suggestion that Mr. Todd contributed anything to the creation of the plaintiffs brochure was his mention of the slogan "Once a Dream... Now a Reality" in a casual conversation with the plaintiff's president, Mr. Barker. Insufficient to establish co-authorship or give him any claim to copyright in the brochure. b) Did the Plaintiff Give the Defendants its Consent to Copy its Materials? Defendant had been an employee of the plaintiff prior to establishing his own business selling adjustable beds While having dinner at Mr. Barkers with his wife, Mr. Todd told Mr. Barker he was thinking of leaving the plaintiffs employ and starting his own operation He says, Mr. Barker wished him well and told him that he was welcome to use any of the plaintiff's material, which is supported by Mr. Todd’s wife Mr. Todd adamantly denies that he told Mr. Todd that he could use the plaintiff's material

b) Did the Plaintiff Give the Defendants its Consent to Copy its Materials? a) The brochure which the defendant copied had not been made at the date of this conversation b) Defendants must establish not only that Mr. Barker gave his consent to the use of materials then in existence, but to the use of all materials which the plaintiff might in the future develop c) The defendants did not contend that Mr. Barker said that they could use all material which the plaintiff produced in the future. d) J. McLachlan found that consent by the plaintiff to the use of its material was not established.

c) Have the Defendants Established a Defense to the Claim for Damages on the Basis of the Copyright Act, s. 22? Section 22 of the Copyright Act states that in an action for infringement of an unregistered copyright,  "... the plaintiff is not entitled to any remedy other than an injunction in respect of the infringement if the defendant proves, that at the date of the infringement he was not aware, and had no reasonable ground for suspecting that copyright subsisted in the work...“ Mr. Todd testified that he did not know the plaintiffs had copyright in their brochure at the time he copied it  Inconsistent with his contention that he was relying on the consent of the plaintiff when he copied its material Also they must establish as well that they had no reasonable grounds for suspecting that copyright subsisted in the work in order to avail themselves of s. 22.  The defendants say that everyone in the adjustable bed business, including the plaintiff, used everyone else's material.  Such a practice, even if established, would not constitute reasonable grounds for concluding that there was no copyright in the plaintiff's material. J. McLachlan concludes that the defendants cannot avail themselves of s. 22 of the Copyright Act.

 J. McLachlan concluded that the defendants breached the plaintiff's copyright, and that no valid defense had been established.  On top of a permanent injunction a) Damages for Loss Caused by the Infringement under s. 20(4) of the Copyright Act  "(4) Where any person infringes the copyright in any work that is protected under this Act, such person is liable to pay such damages to the owner of the right infringed as he may have suffered due to the infringement, and in addition thereto such part of the profits that the infringer has made from such infringement as the court may decide to be just and proper…"  Sales were approximately $65,000 less than they had been in the previous year for the same period, and $37,000 less than they were for the following year  Not unreasonable to conclude that a significant factor in the discrepancy is the fact that the defendant, using the copied brochure, had taken a portion of the market.  Plaintiff is entitled to Damages for Loss caused by the Infringement b) Exemplary damages  Can be awarded in an action for breach of copyright  Circumstances in the case at bar do not justify an award of exemplary damages  Defendants have abided by the interim injunction made in these proceedings

c) Damages Against the Personal Defendant  Mr. Todd testified that he was acting on behalf of the corporate defendant when he infringed the plaintiff's copyright.  His counsel submitted that therefore he should not be personally liable.  First, it appears not to have been taken on the pleadings  Secondly, if Mr. Todd infringed the copyright, he remains liable for damages to the plaintiff under the Copyright Act, regardless of his purpose.

 Defendant claims recompense for training certain salesmen while he was employed by the plaintiff  J. McLachlan not satisfied that any contract to pay the defendant for this is established  Quantum meruit is not pleaded If it were, the claim would fail, since no reasonable expectation of payment for the services rendered is established on the evidence.  J. McLachlan concludes that the counterclaim has no grounds, dismisses it

 Judgement for plaintiff; counterclaim dismissed.  The plaintiff is entitled to a permanent injunction against the use of the brochure copied by the defendant.  In addition, the plaintiff will have judgment in the sum of $20,000.  The counter­claim is dismissed as well.

 Deals with Copyright Law  Case is easy to understand  Everybody likes beds

 Do you believe the plaintiff deserved exemplary damages? i.e., was Mr. Todd calculatingly fraudulent in his copyright infringement?  Should the plaintiff have been awarded more in damages considering their losses?  Do you believe a person should be able to copyright something that isn’t totally theirs? (i.e., plaintiff used ideas and elements which are also found in the brochures of other competitors)