Leuthold v. Canadian Broadcasting Corporation, 2014 FCA 173

Ms. Leuthold, a photo-journalist, owned the copyright in several images taken during the terrorist attack on the World Trade Center on September 11, 2001. She later made those photographs available for licensing by news media and others, including the Canadian Broadcasting Corporation (the “CBC”). The CBC commissioned a documentary which made use of 5 of Ms. Leuthold’s images (the “images”). This decision is an appeal of the Federal Court’s decision (here), in which she was awarded damages and other remedies against the CBC as a result of the admitted infringement of her copyright in the images. Ms. Leuthold appealed that decision because she was awarded approximately US $20,000 when her claim was for $22 million. 

There were four issues in this appeal: (1) whether the Newsworld was covered by the “Stills” license entered into between Ms. Leuthold and the CBC; (2) the number of acts of infringement that occurred; (3) the proper measure of damages for the acts of infringement; and (4) whether the Court should order an accounting of profits for the cable companies which were generated by the infringing broadcasts.

The “Stills” license stated that the CBC had the right to broadcast the Stills on Canadian television “for one broadcast on CBC’s Network & Regional TV stations.” It was found that Newsworld is a separate entity from the CBC for regulatory purposes. While the Court of Appeal did not accept the Trial Judge’s reasoning to the extent that conclusions were drawn on the basis of what Ms. Leuthold failed to exclude from the Stills license (i.e. the CBC acquired only those rights which were circumscribed by the Stills license), no rights were acquired by the CBC by virtue of Ms. Leuthold’s failure to exclude Newsworld from the grant of a license. The question, the Court of Appeal noted, was whether Ms. Leuthold included Newsworld in the grant of rights found in the Stills license. The Court of Appeal, while acknowledging the Trial Judge’s error with respect to the interpretation of the Stills license, found the Trial Judge’s conclusion reasonable. As a result, the Court of Appeal held that the broadcast of the images on Newsworld was not an act of infringement of Ms. Leuthold’s copyright.

With respect to the number of acts of infringement, Ms. Leuthold’s calculation of damages was entirely a function of the large number of distinct acts of infringement which she saw in each broadcast of the documentary. While the Court of Appeal noted there was “some basis” for this approach, it ultimately disagreed with her approach and held that “there is one act of infringement whether the work is communicated to the public via one BDU or via hundreds of them.” The Court of Appeal stated that this is consistent with the goal of technological neutrality articulated by the Supreme Court of Canada in ESA v. SOCAN. Therefore, in view of paragraph 2.4(1)(c) of the Copyright Act, the Court of Appeal held that the six transmissions constituted six acts of infringement, as found by the Trial Judge. 

The Trial Judge concluded the starting point for the calculation of damages was the price which would have been asked for broadcast licenses, had they been sought in advance of the infringing broadcasts. The Trial Judge set the quantum of damages for each infringement at US $3,200 for each of the six unauthorized broadcasts, which was accepted and adopted by Ms. Leuthold on appeal. However, since Ms. Leuthold’s calculation of the number of infringing acts failed, the Court of Appeal upheld the Trial Judge’s decision in this regard, and Ms. Leuthold’s argument on the measure and amount of damages also failed. 

On the issue of accounting of profits from the BDUs, the Court of Appeal noted that Ms. Leuthold only asked for an accounting of profits from the CBC, not the BDUs. Further, the Court of Appeal stated that BDUs are not party to this litigation and, as such, it has no jurisdiction to make an order against the BDUs, nor was it open to Ms. Leuthold, on appeal, to seek a remedy which she did not seek in the Federal Court. This ground of appeal also failed.

Therefore, the appeal was dismissed with costs.

At trial, despite the fact that Ms. Leuthold was the successful plaintiff, she was ordered to pay the CBC double costs (approximately $80,000) because she recovered less than the amount of the CBC’s Rule 420 offer to settle. Ms. Leuthold appealed that costs order, which is the subject of the appeal in Leuthold v. Canadian Broadcasting Corporation2014 FCA 174. In that appeal, the Court of Appeal reiterated that the CBC’s offer (which was $37,500, slightly higher than the ultimate damages award of $19,200 at trial) met the formal requirements of Rule 420. The Court of Appeal found that the Trial Judge did not act on a wrong principle, nor was his decision clearly wrong. Therefore, Ms. Leuthold’s appeal as to costs was also dismissed.