Leuthold v CBC: Damages for Copyright Infringement

The facts in the recent Federal Court decision of Leuthold v CBC (2012 FC 748) are relatively straight-forward, if somewhat peculiar.  The CBC commissioned a documentary entitled As the Towers Fell, about the September 11, 2001 terrorist attacks on New York City’s World Trade Center.  Four different versions of the documentary were aired multiple times on the CBC main network and on the CBC Newsworld channel (since re-branded as CBC News Network).  In most of the versions which were aired, still photographs which had been taken by and which were owned by the plaintiff appeared on-screen for a total of 18 seconds.

Efforts had been made by CBC employees to “clear” (i.e., obtain permission to use) the photographs in the documentary – which is where the dispute arose.  The plaintiff originally faxed a short letter indicating authorization to use the photos – but the parties disagreed on the scope of the authorization and whether any conditions attached to it.  Eventually, following further discussions between the plaintiff and various CBC representatives, a license agreement was signed by the plaintiff.  Critically, the documentary had been broadcast on a number of occasions throughout the discussion/negotiation process (including at least one broadcast which occurred before the first faxed authorization had been received from the plaintiff).  Of relevance to the plaintiff’s position, the broadcasts took place on both the CBC main network and the Newsworld channel and was broadcast in all Canadian time zones, at the applicable local time, directly by the CBC or through affiliated stations.

The plaintiff’s position can be (imperfectly) summarized as follows: (1) some broadcasts were never authorized, (2) the authorizations she did extend were limited to “one broadcast” on the CBC main network and did not extend to (a) multiple separate broadcasts on different dates, (b) Newsworld, other CBC affiliates or other broadcasting undertakings, or (c) multiple broadcasts on the same day in different time zones, and therefore (3) she was entitled to approximately $21.5 million dollars in compensatory damages, $25,000 in exemplary damages, an accounting of profits and an injunction prohibiting further airings of the program.  In other words, the plaintiff’s position was roughly that each single “communication” of the documentary by a television station was a separate act of infringement – when “the CBC” broadcast the film on September 10, 2002 at 8pm, there was not a single act of infringement, but dozens of separate acts of infringement as the CBC main network, its regional stations and local affiliates each “re-broadcast” the film, and they were each jointly and severally liable for the infringing acts of others in the chain of distribution.  Needless to say, the defendants took a slightly different view of how many unauthorized communications of the photographs had occurred (the plaintiff said hundreds, the defendants said six) and how damages should be calculated.

The decision goes into great detail about the various negotiations and conflicting understandings of the parties – potentially interesting in their own right but of limited application beyond the bounds of these particular disputants.  Of more interest is how the court determines that damages should be calculated.  As the court notes at para. 128:

“On six separate occasions her Photographs were viewed by Canadians for a duration of 18 seconds without her authorization.  The Court … cannot accept the principle that compensation must be awarded on the basis of each technical act of infringement because applying such a method runs counter to our reading of the Broadcasting Act with the Copyright Act. … The technical means used to relay the infringing work has no bearing on the amount of compensation owed [to the plaintiff].  What is important in this Court’s opinion is to adequately compensate a copyright owner for the damage suffered.  The number of potential viewers bears some significance in terms of the value to be assigned to a license.”

In pivoting away from a highly-technical approach to calculating damages (the court approvingly cites Dimock’s statement that damages can be calculated using “common sense” [see paras. 131 and 138] and indicates that even if statutory damages had been elected by the plaintiff, the court would have declined to award at the high end of the scale), the court looks to the license fee which had actually been agreed to by the parties ($2,500 for limited usage) was the appropriate basis from which to start calculating damages.  The court concluded that $3,200 for each of the six unauthorized broadcasts was a suitable measure of damages.  The court also declined to grant an accounting of profits, stating that “there exists no causal link between the fee paid by Newsworld subscribers and the six unauthorized communications to the public that infringed on Miss Leuthold’s rights”. [para. 147] (I should note that the judgment is somewhat confusing on the point of an accounting for profits: though the court initially indicates that no accounting of profits is called for, the final “judgment” (i.e., after para. 177) includes an order to pay $168.74 on account of “revenue received”).  The court also declined to award exemplary damages because the infringements arose from “an honest mistake”, and declined an injunction because the production was no longer being aired (and seems, in any event, to have been edited to remove the plaintiff’s photos).  The final amount the CBC was ordered to pay: US$19,200.

Bob Tarantino

About Bob Tarantino

Bob Tarantino is Counsel at Dentons Canada LLP and focuses his practice on the interface between the entertainment industries and intellectual property law, with an emphasis on film and television production, financing, licensing, distribution, and IP acquisition and protection. His clients range from artists and independent producers to Canadian distributors and foreign studios and financiers at every stage of the creative process, from development to delivery and exploitation.

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