In today’s competitive marketplace, the right to prevent a competitor from replicating a consumer product can be tremendously valuable.
In the recent Federal Court decision in Corocord Raumnetz GmbH and Kompan A/S v. Dynamo Industries Inc., 2016 FC 1369, the Court had the opportunity to consider exclusionary rights in useful articles in the context of the Canadian Trademarks Act and Copyright Act.
The Plaintiffs in this case claimed that they held enforceable copyright and trademark rights in the shaping of non-traditional playground structures that they had designed, and that such rights had been infringed by the Defendant’s reproduction of these structures in Canada.
The Defendant admitted that it had substantially reproduced the playground structures of the Plaintiffs, but relied on the provisions of section 64(2) of the Copyright Act to establish that its actions were non-infringing. Added to the Copyright Act in 1985, section 64(2) provides that where the owner of copyright in a useful article authorizes its reproduction in quantities greater than 50, it is no longer an infringement of copyright for a third party to reproduce the article. Until now, the section had received scarce judicial consideration, and as a result, there existed little insight into the practical application of the section. In particular, it had not been judicially decided whether reproductions of a copyrighted work outside of Canada should factor into the computation of the number of authorized reproductions made by a copyright owner.
The Defendant argued that “[b]y the enactment of ss. 64(2) of the Act, Parliament has decided that the owners of copyright who permit their designs to be applied to useful articles for industrialization on a commercial scale are not entitled to a lengthy, exclusive monopoly under copyright law.” Madame Justice St-Louis, in agreeing with the Defendant, found that it is clear that the section has “an extraterritorial effect with regards to ownership of the copyright.” Given that the Plaintiffs had reproduced the structures in a quantity of more than 50 worldwide, the Defendant’s actions in substantially reproducing the structures thereafter did not constitute an infringement of copyright.
Where more than 50 copies of a useful article have been reproduced worldwide, the Copyright Act provides owners with the opportunity to claw back copyright protection, if it can be established that the copyrighted work has been used as a trademark. In this case, however, the Court found that the Plaintiffs had not established the existence of a trademark in the shaping of the structures, as there was no evidence that the visible external appearance and three dimensional shapes of the structures had been used to market the structures, or that the relevant market had begun to recognize the shape as having a single source of origin.
This decision is significant for its implications across the consumer product industry. Intellectual property is a valuable commodity, and it is clear that the proper protection of exclusionary rights, through the appropriate form of intellectual property – in this case, industrial design – is essential.
The full decision of the Court can be found here.
The Defendant was represented in this action by the litigation team at Shapiro Cohen LLP, in conjunction with Arthur Renaud.
Questions? If you have any questions please call 613-232-5300 to speak to a professional or email us at OwnWhatsYours@aventum.law.
