Twentieth Century Fox Film Corporation (“Fox”) brought an Application before the Federal Court for copyright and trade-mark infringement of its television programs The Simpsons and Family Guy by the Defendants (“Hernandez”). Hernadez did not defend and Justice Campbell awarded default judgment.

The Court had no trouble accepting that Fox owned copyright in both The Simpsons and Family Guy programs (the “Programs”). The Court also had no trouble finding that Hernandez had infringed Fox’s copyright by:

  • copying the Programs from TV broadcasts or from other media;
  • copying the copyrighted content onto a computer system;
  • uploading the unauthorized copies of the Programs onto computer file servers;
  • creating links to the computer file servers containing the unauthorized copies of the Programs;
  • communicating the Programs to the public in Canada and elsewhere through telecommunication; and
  • by way of the Internet, enabling the public to infringe the copyright in the Programs by downloading, streaming, and/or copying the content of the unauthorized copies of the Programs.

Fox claimed statutory damages. Statutory damages are available as a remedy for copyright infringement in lieu of actual damages or an accounting of profits. A plaintiff will often elect statutory damages in cases where actual damages are not significant or where it would be difficult to quantify damages. Often, the threat of a statutory award will deter potential infringers by preventing their unjust enrichment (Telewizja Polsat S.A. v. Radiopol Inc., (2006), 52 C.P.R. (4th) 445). Under subsection 38.1 of the Copyright Act, in awarding statutory damages, the Court may consider all relevant factors, including:

  1. the good faith or bad faith of the defendant;
  2. the conduct of the parties before and during the proceedings; and
  3. the need to deter other infringements of the copyright in question.

The second element of the test is particularly interesting, as a party’s conduct is typically a consideration for the purpose of determining costs awards, not damages.

Justice Campbell fixed Fox’s statutory damages at $10,000,000. While subsection 38.1 of the Copyright Act provides a range of between $500-$20,000 per work infringed, the Judgment does not mention any particulars regarding the Court’s assessment.

Hernandez was found to have received considerable revenue from his infringing activities through the websites WFGO (Watch Family Guy Online) and WTSO (Watch The Simpsons Online), and to have provided the public with the false sense that its activities were lawful. Accordingly, the Court held that the infringement occurred in bad faith and for commercial purposes. Therefore, while Fox elected for statutory damages, the Court held that they would be “insufficient to achieve the goal of punishment and deterrence of the offence of copyright infringement”. Concluding that Hernandez infringement was “repeated, unauthorized, blatant, high-handed” and intentional, Campbell J. added punitive and exemplary damages in the amount of $500,000.

Ultimately, this judgment marks a condemnation by the Federal Court of internet piracy, particularly when copyright is infringed for large-scale commercial gain.