The Estate of Vivian Maier v. Stephen M. Bulger

Maier Estate v. Bulger
Court (s) Database
Federal Court Decisions
Date
2024-08-15
Neutral citation
2024 FC 1267
File numbers
T-953-17
Decision Content
Date: 20240815
Docket: T-953-17
Citation: 2024 FC 1267
Ottawa, Ontario, August 15, 2024
PRESENT: The Honourable Madam Justice Furlanetto
BETWEEN:
THE ESTATE OF VIVIAN MAIER
Plaintiff
and
STEPHEN M. BULGER AND STEPHEN M. BULGER PHOTOGRAPHY GALLERY INC.
Defendants
JUDGMENT AND REASONS
I. Overview [1] This is an action for copyright infringement arising from photographs taken by the late Vivian Maier [Maier]; an unknown photographer during her lifetime, whose works acquired fame posthumously.
[2] The Estate of Vivian Maier [Estate] is the Plaintiff in the present action and as admitted by the Defendants, is the owner of copyright in a variety of original works made by Maier, including those embodied in a collection of 15,172 black and white negatives [B&W Negatives] and 1,471 colour slides and transparencies [Colour Negatives].
[3] The individual Defendant, Stephen M. Bulger [Bulger], is a resident of Ontario and is the sole director of the corporate Defendant, Stephen M. Bulger Photography Gallery Inc. [Gallery], a Toronto-based art gallery.
[4] The Estate alleges that the Defendants have infringed copyright by commissioning, exhibiting, offering for sale, and/or selling prints made from the B&W Negatives; offering for sale, selling and/or exporting a hard drive made of scans of the positive images from the B&W Negatives to a Swiss company, Fine Art Invest Group AG [FAIG]; authorizing infringement through the sale and exportation of the B&W Negatives and the hard drive to FAIG; and making a copy of the hard drive and exporting the copy to FAIG for the purpose of offering for sale and selling the original hard drive. Although subject to a pleadings objection, the Estate also asserts infringement of copyright embodied in the Colour Negatives.
[5] The Estate seeks statutory damages of $10-15 million CAD, punitive damages, and alleges personal liability against Bulger.
[6] Bulger denies any personal liability. The Defendants further deny authorization and knowledge to commit any of the secondary acts of infringement. In defence to certain of the allegations of infringement, they also assert fair dealing, copyright misuse, and legitimate sale leading to copyright exhaustion. The Gallery admits liability and infringement with respect to commissioning prints made from 40 unique works embodied in the B&W Negatives.
[7] While I do not agree that the facts support a finding of personal liability against Bulger or an award of punitive damages, for the reasons set out below, it is my view that infringement by the Gallery has been established for 97 unique works such that statutory damages in the amount of $194,000 CAD should be awarded.
II. Background [8] The background facts can largely be taken from the Agreed Statement of Facts of the parties.
[9] Maier was born in New York City in 1926. She was a citizen of the United States of America [USA] who worked as a nanny in the Chicago, Illinois area. She was also a photographer who took many thousands of film photographs, the vast majority of which were not printed during her lifetime. Maier stored the negatives from her photographs in five storage lockers located in Chicago, Illinois.
[10] In 2007, a Chicago auctioneer purchased photographic negatives and other photographic works made by Maier [Maier Works] from a storage company that had repossessed the materials for outstanding locker rental payments.
[11] The purchased works were subsequently divided into several lots and auctioned off to several individuals, including John Maloof [Maloof], a real estate agent and president of a local Chicago neighbourhood historical society [Maloof Collection]. Another portion of the Maier Works was subsequently acquired by Jeffrey Goldstein [Goldstein], an artist and art collector [Goldstein Collection].
[12] Maier died intestate on April 21, 2009 in Cook County, Illinois, USA and remained relatively unknown until after her death when her photographs rose to critical acclaim and international fame.
[13] By about mid-2009, Maloof began producing, exhibiting, and selling prints made from Maier’s photographic negatives, including on the website VivianMaier.com. He also edited and published a hardcover book in 2011, and wrote, directed, and produced the Oscar-nominated documentary, “Finding Vivian Maier”, which had its world premiere in 2013.
[14] By about early 2011, Goldstein began producing, exhibiting, and selling prints made from Maier’s photographic negatives at public exhibitions throughout the USA through a business, called Vivian Maier Prints Inc. Goldstein was also involved in the publication of a separate hardcover book in 2012.
[15] Goldstein also collaborated with the Gallery in an effort to publicize Maier’s works. In co-ordination with Goldstein, the Gallery hosted an exhibition in Toronto called Photographs of Children that ran from July 17, 2014 through September 13, 2014 in which prints made by Goldstein from the B&W Negatives were exhibited, offered for sale, and subsequently sold until January 16, 2015.
[16] In December 2014, the Gallery entered into an agreement with Goldstein and his wife [Goldstein Agreement] and purchased the B&W Negatives and the hard drive, which was made by Goldstein and contained positive scans of the B&W Negatives [Goldstein HD]. The purchase price of the sale was $5,000 USD.
[17] Subsequent to the purchase, in May 2016, the Gallery commissioned a printer, Bob Carnie/The Silver Shack Inc., to make prints from the B&W Negatives [Carnie Prints] which were exhibited between June 23, 2016 and September 10, 2016 (but not offered for sale, or sold) at an exhibition, titled Meaning Without Context.
[18] On or about June 9, 2016, the Gallery entered into an agreement with FAIG [FAIG Agreement]. The “Assets” conveyed included the B&W Negatives and the Goldstein HD. A second hard drive that was a watermarked, lower resolution copy of the Goldstein HD [Watermarked HD] was also made and sent to FAIG prior to the purchase as a preview. The purchase price of the sale was $1.6 million USD.
[19] Both the Goldstein Agreement and the FAIG Agreement expressly excluded any transfer or assignment of copyright.
[20] In late October 2016, the Gallery exhibited and offered for sale prints made by FAIG [FAIG Prints] using the B&W Negatives at an art fair (Art Toronto). Carnie Prints and FAIG Prints were subsequently sold until mid-May 2017.
[21] Pursuant to a July 1, 2014 Order issued by the Circuit Court of Cook County (Probate Division), the Estate was opened and the Public Administrator for Cook County was appointed as the Supervised Administrator. The Supervised Administrator is responsible for the identification of an heir to the Estate and is empowered to bring legal action to enforce and protect the assets of the Estate, including any copyright interests. As of January 25, 2024, the Public Administrator for Cook County has not identified an heir entitled to the benefit of the Estate. The Estate remains the copyright owner of the Maier Works until an heir is identified.
III. Issues [22] A detailed joint statement of issues [JSI] was provided by the parties and can be summarized as follows:
a)Have the Defendants infringed the copyright embodied in the B&W Negatives by:
Exhibiting, offering for sale, and selling prints at the Photographs of Children exhibition?
Commissioning the Carnie Prints, and exhibiting the prints at the Meaning Without Context exhibition?
Importing prints made by FAIG and exhibiting, offering for sale, and selling those prints and the Carnie Prints including at Art Toronto?
b)Have the Defendants infringed copyright through the following activities relating to the Goldstein HD:
Offering for sale, selling and/or exporting to FAIG the Goldstein HD. Does legitimate sale/copyright exhaustion apply?
Making a copy of the Goldstein HD (i.e., the Watermarked HD) and exporting the copy to FAIG for the purpose of offering for sale and selling the Goldstein HD. Does the fair dealing defence apply?
c)Have the Defendants authorized infringement by selling and exporting the B&W Negatives and the Goldstein HD to FAIG for the purpose of permitting others to infringe copyright?
d)Has the Plaintiff properly pleaded infringement relating to the Colour Negatives and if so, have the Defendants infringed copyright through reproduction of the images on the Colour Negatives and exporting this content? Does the fair dealing defence apply?
e)Is copyright misuse a viable defence to the non-admitted infringing acts?
f)Is Bulger personally liable for the actions of the Gallery?
g)What is the appropriate quantum of statutory damages that should be awarded?
h)Should punitive damages be awarded?
i)Which party is entitled to costs and on what scale?
IV. Witnesses [23] The Plaintiff provided evidence from three expert witnesses and one fact witness.
[24] On agreement of the parties, expert reports were tendered from A. Charles Kogut, a lawyer from the firm Kogut & Associates and member of the Illinois bar, and Dr. Marshall A. Leaffer, a professor of intellectual property law at Indiana University. Mr. Kogut provided an overview of probate estate administration in Illinois, including the administrator’s duty to collect the decedent’s assets, determine the decedent’s heirship, and distribute the decedent’s assets. Dr. Leaffer opined on the scope of 17 USC §§201 and 202 of the United States Copyright Act and the application of those sections to the copyright embodied in the B&W Negatives after the auction and sale of the B&W Negatives during Vivian Maier’s lifetime and upon her death. Neither Mr. Kogut nor Dr. Leaffer were cross-examined on their reports and the contents of their reports remained uncontested and largely immaterial in view of the admission by the Defendants before trial as to the Estate’s ownership of the copyright in the Maier Works and its acceptance that a legitimate heir had not yet been identified under Illinois probate law.
[25] The Plaintiff’s third expert, Christopher Gaillard, is a fine art appraiser with over 30 years experience. He was admitted as an expert in appraising, buying and selling fine art works, specializing in the field of 20th century fine art, including fine art photography. Mr. Gaillard provided two expert reports, neither of which were ultimately relied upon by the Plaintiff. The Defendants raised significant objections to Mr. Gaillard’s reports, primarily as he opined on areas outside his expertise and mandate. His reports were accordingly of limited assistance to the Court.
[26] A single fact witness, Leah Jakubowski [Jakubowski], General Counsel for the Public Administrator for Cook County gave evidence on behalf of the Estate. She provided background regarding the Estate’s formation and the role of the Estate in preserving its assets for the ultimate heir. She also testified as to the correspondence between the Estate and the Gallery and the arrangement between the Estate and Maloof. Jakubowski confirmed that the Estate makes no claim to the B&W Negatives themselves.
[27] The Defendants provided evidence from two expert witnesses (Ann Thomas and Kelly Juhasz) and four fact witnesses (Maloof, Bulger, Robyn Zolnai and Scott Poborsa).
[28] Ann Thomas [Thomas] is the former Senior Curator of Photographs for the National Gallery of Canada. She has over 30 years experience in the fine art photography market. Her expertise includes the history of photography from its pre-history up to its contemporary expression; technical processes used by photographers from 1839 onward; photograph acquisition, including due diligence and provenance determinations; curation of exhibitions relating to photography; and the international and Canadian (primary and secondary) markets for photographs, including factors impacting the price of photographic works and the role of dealers in the market.
[29] Thomas gave evidence as to the factors that can influence the selling price of photographic works. She also sought to provide character evidence relating to the Gallery and Bulger. While I have no doubt that her interactions with the Gallery were positive, I afford limited weight to her opinions as to how the Gallery is perceived within Canada and more broadly, as such views were not substantiated within her report nor during her testimony.
[30] Kelly Juhasz [Juhasz] is a professional appraiser of fine art and archival collections, including photography. She is an Accredited Member of the International Society of Appraisers. Her expertise includes appraising photographic items, including vintage prints, limited editioned prints, and prints produced in various formats, sizes and conditions; appraising related photographic items, including negatives and digital images; and professional experience related to the sale of photographic works and items. I found her evidence to be straight-forward and direct. While the evidence given was limited, I found it useful for understanding how the Goldstein HD and Watermarked HD would be used in industry.
[31] Maloof provided background regarding the acquisition of the Maloof Collection and his activities relating to that collection. He also testified as to the steps taken to try to identify an heir to the Estate and to obtain copyright. He also gave evidence regarding his current arrangement with the Estate regarding the Maloof Collection.
[32] Stephen Bulger is the sole director of the Gallery. He testified as to the history of the Gallery, as well as its present operations and practices. He provided evidence about the activities of the Gallery relating to the Maier Works and the profits made, the Gallery’s understanding of the copyright involving the Maier Works, and its interactions with the Estate. He also testified as to the impact of the litigation on the Gallery and on himself personally.
[33] Robyn Zolnai [Zolnai] is the Director of the Gallery and has been employed by the Gallery since 2012. Zolnai spoke to her responsibilities and gave evidence regarding the Gallery’s standard practice for selling works of art, including invoicing. She testified that the Gallery exhibited, and/or sold prints made from 98 unique works.
[34] Scott Poborsa [Poborsa] was employed by the Gallery from 2014 to 2023. He started off as the Preparator, with his role evolving to Operations Manager by 2022. His responsibilities included packing, framing, shipping and installing artwork, as well as assisting the Gallery with their information technology [IT] needs. Poborsa testified about the Gallery’s practices with respect to its IT systems. He gave evidence about the export of the Goldstein HD, the preparation of the Watermarked HD, and the facts around the receipt and return of the Colour Negatives.
V. Analysis
A. General Legal Principles [35] Subsection 27(1) of the Copyright Act, RSC 1985, c C-42 [Act] describes what is known as “primary infringement” (Euro-Excellence Inc v Kraft Canada Inc, 2007 SCC 37 [Euro-Excellence] at para 17) or “direct infringement” of copyright. Primary infringement occurs when any person, without consent of the copyright owner, does anything that only the copyright owner has the right to do under the Act. Subsection 3(1) of the Act sets out the rights that a copyright owner possesses under the Act, which includes the right to produce or reproduce, perform, or publish the work. It also grants the sole right to authorize any such acts.
[36] Subsection 27(2) of the Act describes what is known as “secondary infringement” or “indirect infringement” of copyright. Pursuant to subsection 27(2):
Secondary infringement
Violation à une étape ultérieure
(2) It is an infringement of copyright for any person to
(2) Constitue une violation du droit d’auteur l’accomplissement de tout acte ci-après en ce qui a trait à l’exemplaire d’une oeuvre, d’une fixation d’une prestation, d’un enregistrement sonore ou d’une fixation d’un signal de communication alors que la personne qui accomplit l’acte sait ou devrait savoir que la production de l’exemplaire constitue une violation de ce droit, ou en constituerait une si l’exemplaire avait été produit au Canada par la personne qui l’a produit :
(a) sell or rent out,
(a) la vente ou la location;
(b) distribute to such an extent as to affect prejudicially the owner of the copyright,
(b) la mise en circulation de façon à porter préjudice au titulaire du droit d’auteur;
(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public,
(c) la mise en circulation, la mise ou l’offre en vente ou en location, ou l’exposition en public, dans un but commercial;
(d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or
(d) la possession en vue de l’un ou l’autre des actes visés aux alinéas (a) à (c);
(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),
(e) l’importation au Canada en vue de l’un ou l’autre des actes visés aux alinéas (a) à (c).
a copy of a work, sound recording or fixation of a performer’s performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.
[37] Subsection 27(2.11) of the Act addresses secondary infringement by exportation and provides that:
(2.11) It is an infringement of copyright for any person, for the purpose of doing anything referred to in paragraphs (2)(a) to (c), to export or attempt to export a copy − of a work, sound recording or fixation of a performer’s performance or of a communication signal — that the person knows or should have known was made without the consent of the owner of the copyright in the country where the copy was made.
(2.11) Constitue une violation du droit d’auteur l’exportation ou la tentative d’exportation, en vue de l’un ou l’autre des actes visés aux alinéas (2)(a) à (c), de l’exemplaire d’une oeuvre, d’une fixation d’une prestation, d’un enregistrement sonore ou d’une fixation d’un signal de communication alors que la personne qui exporte ou tente d’exporter l’exemplaire sait ou devrait savoir que celui-ci a été produit sans le consentement du titulaire du droit d’auteur dans le pays où il a été produit.
[38] To establish secondary infringement, three elements must be satisfied: (i) the copy in question must be the product of primary infringement; (ii) the secondary infringer must, or should have known, that they were dealing with a product of infringement; and (iii) the secondary infringer must have sold, distributed, or exposed for sale the infringing good: Salna v Voltage Pictures, LLC, 2021 FCA 176 [Salna] at para 87; CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13 [CCH] at para 81; Euro-Excellence at para 19.
[39] Contrary to primary infringement, secondary infringement requires knowledge, on the part of the alleged infringer. The burden of proving such knowledge rests upon the plaintiff. This burden does not require proof that actual knowledge exists: R v Jorgensen, [1995] 4 SCR 55 [Jorgensen] at para 100; Microsoft Corporation v 9038-3746 Quebec Inc, 2006 FC 1509 [Microsoft] at para 78. Rather, knowledge may be established when the conduct of the defendant amounts to wilful blindness through a deliberate choice not to know something, despite being given reason to make further inquiry: Jorgensen at paras 100-103.
[40] As described in Microsoft at paragraphs 79-80, with reference in part to Jorgensen:
[79] The knowledge requirement can also be made out when the conduct of the defendants amounts to wilful blindness. In R. v. Laurier Office Mart Inc. (1994), 58 C.P.R. (3d) 403 (Ont. Ct. (Prov. Div.)), aff’d (1995), 63 C.P.R. (3d) 229 (Ont. Ct. (Gen. Div.)), a copyright infringement case regarding a photocopying service, the provincial court described wilful blindness as follows at page 412:
Wilful blindness arises when a person who has become aware of the need for inquiry, declines to make the inquiry because he does not wish to know the truth and would prefer to remain ignorant. In such a situation, he is fixed with knowledge and his belief in another state of facts is irrelevant. (See R. v. Sansregret, [1985] 1 S.C.R. 570; 58 N.R. 123; 35 Man. R. (2d) 1; 18 C.C.C. (3d) 223.)
[80] The above sentiment was echoed by the Supreme Court of Canada in R. v. Jorgensen, [1995] 4 S.C.R. 55, where Mr. Justice Sopinka stated, at paragraph 102, that “[d]eliberately choosing not to know something when given reason to believe further inquiry is necessary can satisfy the mental element of the offence.” It should be kept in mind that that was a criminal case with a higher standard of proof than the case at bar.
B. Have the Defendants infringed the copyright embodied in the B&W Negatives? [41] The Plaintiff asserts that the Defendants have infringed the copyright embodied in the B&W Negatives through the exhibition, offering for sale and sale of prints at the Photographs of Children exhibition; commissioning prints to be made and exhibiting those prints at the Meaning Without Context exhibition; and importing, exhibiting, offering for sale and selling prints at Art Toronto and thereafter (issues 1a, 1b and 1f of the JSI).
[42] With respect to the Photographs of Children exhibition, the prints in issue were provided by Goldstein. Prints from a total of 44 unique works were exhibited, offered for sale or sold between July 15, 2014 and January 16, 2015 – prints from 40 unique works were exhibited between July 17, 2014 and September 13, 2014 and prints from 19 works were sold between July 15, 2014 and January 16, 2015. The Plaintiff asserts infringement for the prints exhibited under paragraph 27(2)(c) of the Act and for the prints sold under paragraph 27(2)(a) of the Act.
[43] For the Meaning Without Context exhibition, 40 unique works were printed by Bob Carnie and exhibited between June 23, 2016 and September 10, 2016, with prints from 6 of the works previously exhibited or sold at the Photographs of Children exhibition. The Plaintiff asserts primary infringement (under section 3 and subsection 27(1) of the Act) with respect to the prints themselves and secondary infringement under paragraph 27(2)(c) of the Act with respect to the exhibition of the prints.
[44] At Art Toronto, which ran between October 28 and 31, 2016, FAIG Prints were imported for the show, exhibited and offered for sale. Sales ran from October 30, 2016 to May 18, 2017 and included the FAIG Prints and Carnie Prints. Prints from a total of 59 unique works were imported, exhibited, offered for sale or sold, with prints from 5 of the works also exhibited and sold at the Photographs of Children exhibition. Thirty-one of the works were printed by Carnie and exhibited at the Meaning Without Context exhibition, and prints from 3 of the works were exhibited at both the Photographs of Children and Meaning Without Context exhibitions. The Plaintiff asserts infringement for the prints exhibited under paragraph 27(2)(c) of the Act, for the prints sold under paragraph 27(2)(a) of the Act, and for the prints imported under subsection 27(2)(e) of the Act.
[45] In total, the parties agree that the allegations cover 98 unique works for all three exhibitions/time periods.
[46] As set out earlier, the Gallery admits that it directly infringed copyright in the B&W Negatives by making the Carnie Prints and that there is liability associated with 40 unique works. As such, I agree with the Plaintiff, I need not go on to consider the secondary infringement allegations with respect to those same prints at the Meaning Without Context exhibition.
[47] For the Photographs of Children exhibition and Art Toronto, the Defendants do not deny that the prints made are unauthorized reproductions, but assert that at the time of the alleged infringing activities, they did not have an honestly held belief of infringement.
[48] As a preliminary matter, the Plaintiff asserts that counsel for the Defendants made an admission in her opening statement, which is sufficient to establish the knowledge requirement for secondary infringement under paragraph 27(2)(a) of the Act. The impugned statement and its context reads as follows (TT, 39:11-19):
You will also hear from Mr. Bulger that he believed at the time that the gallery was permitted to exhibit and sell these prints. But now, having dealt with this litigation for the last seven years, he understands that the gallery did not have the requisite rights to do all that it did. The gallery, therefore, does admit liability relating to the sale of prints between July 2014 to May 2017.
[Emphasis added]
[49] As argued by the Plaintiff, this statement constitutes a formal admission of selling prints between July 2014 and May 2017 that the Defendants knew were infringing and to which liability should attach. As a consequence, the Plaintiff argues this is an admission of secondary infringement under paragraph 27(2)(a) of the Act with respect to the works embodied in those prints.
[50] The Defendants argue that the Estate has mischaracterized counsel’s statement as an admission of knowledge, when it was not intended in this manner. Rather, they assert that the full passage characterizes Bulger’s belief at the time as to his permissibility to do things that he now understands he was not entitled to do. As knowledge is only relevant at the time of the infringement, the Defendants assert that the knowledge requirement for subsection 27(2) of the Act has not been satisfied. The Defendants assert that if there was any doubt as to its intention with respect to the impugned statement this was clarified through a letter that was sent to counsel for the Plaintiff immediately after the first day of trial which confirmed that no formal admission as to secondary infringement was made.
[51] I agree with the Plaintiff that counsel for the Defendants’ stated admission of liability with respect to the prints sold satisfies the evidentiary requirements for a formal admission (Sopinka et al, The Law of Evidence in Canada, 3rd ed (Markham: LexisNexis, 2009) [Sopinka] §19.2; Marchand v The Public General Hospital Society of Chatham, 2000 CanLII 16946 (ONCA) at para 77; Apotex Inc v Astrazeneca Canada Inc, 2012 FC 559 [Astrazeneca] at para 19, aff’d 2013 FCA 77), particularly when the statement is considered with further statements made by counsel during her opening that the number of unique works that should be considered for calculation of statutory damages is the number of unique works sold, which is 31 (TT, 39:27‑40:6; TT, 50:7-10).
[52] As a formal admission, it can only be withdrawn with leave of the court or by consent of the party in whose favour it was made.
[53] The Plaintiff has not consented to the withdrawal of the admission. The question for the Court is therefore whether leave should be granted.
[54] As set out in Sopinka at §19.2 (see also Astrazeneca at para 19), in determining whether leave should be granted, consideration must be given to whether the admission was made clearly without authority, by mistake or under duress; there exists a triable issue concerning the admitted fact; and there will be no prejudice to the party in whose favour it was made. An inadvertent statement of fact by counsel in opening may be withdrawn if retracted before it has been acted upon.
[55] Although leave should not be granted lightly, in this case it is my view that upon consideration of all the surrounding circumstances, it should be granted. First, the admission is inconsistent with the first sentence of the quoted passage cited above, and the position otherwise taken by counsel for the Defendants and Bulger at trial that Bulger believed at the time that the Gallery was permitted to exhibit and sell the prints that were sold. Second, although the clarifying correspondence was not provided to the Court, counsel for the Plaintiff did not dispute the assertion by counsel for the Defendants that they wrote to the Plaintiff immediately following the first day of trial to clarify that they were not admitting to any acts of secondary infringement. Thus, there is no evidence of prejudice to the Plaintiff nor is there any evidence of positions taken by the Plaintiff because of the perceived admission.
[56] As set out further below, even without the admission, I agree with the Plaintiff that the requisite knowledge has been established to satisfy the test for secondary infringement for the majority of the alleged actions.
(1) Activities relating to the Photographs of Children exhibition [57] As set out earlier, the Photographs of Children exhibition began on July 17, 2014. As acknowledged by the Estate, when the Photographs of Children exhibition began, the Gallery believed they were authorized to exhibit and sell the prints made for the exhibition.
[58] Indeed, prior to the Photographs of Children exhibition, in May 2013, the Gallery entered into a consignment contract with Vivian Maier Prints Inc. relating to another exhibition (“Out of the Shadows”). The contract included as one of its terms a warranty from Vivian Maier Prints Inc. to the Gallery that Vivian Maier Prints Inc. was the “sole and exclusive owner of all rights” to the artwork (prints) that would be displayed and that the artwork “[did] not, in whole or in part, infringe upon any copyright.” Bulger testified to the Gallery’s agreement with Goldstein that the terms of the consignment contract carried over to the Photographs of Children exhibition such that when that exhibition began, there was a continued belief that there was no issue of copyright infringement.
[59] The Estate asserts, however, that this understanding should have reasonably changed shortly thereafter in view of correspondence sent to the Gallery by the Estate and the events that followed.
[60] The Plaintiff points to an August 19, 2014 “litigation hold” letter from counsel for the Estate to the Gallery sent shortly after the Estate was formed, in which the Estate advised the Gallery that they were “investigating the potential misuse and infringement of copyrighted works whose rights are held by the Estate” and indicated that the Gallery might “have documents or information … relevant to [the] investigation with regard to third parties who could be liable to the [E]state.” The letter advised the Gallery of its obligation to preserve and retain documents that might be relevant to the investigation, while clarifying that it was “not the desire or anticipation” of the Estate to engage in any conflict with the Gallery.
[61] The Estate contends that this is akin to the situation that was before Justice Nadon in Nell Wing v Ellie Van Velthuizen, 2000 CarswellNat 2873, [2000] FCJ No 1940 (FCTD) [Nell Wing], and argues that any assertion by the Gallery that it did not understand the potential for infringement as of August 19, 2014 amounts to wilful blindness. As stated by Justice Nadon at paragraphs 64-66 of Nell Wing:
[64] Moreover, the Respondent has admitted in her letter to the Applicants’ counsel reproduced as Exhibit I to the Giuliani Affidavit that she has offered for sale and sold copies of the Diary. Consequently, although it might be possible for her to argue that she did not know of the infringement in the beginning, since there was no indication of the copyright on the unpublished Diary, it remains that the Respondent cannot claim that she had no knowledge of the infringement after receiving a letter dated March 1, 1999 to that effect from the Applicants’ counsel (reproduced as Exhibit G to the Giuliani Affidavit) and after responding to that letter on March 31, 1999 (Exhibit H) and April 29, 1999 (Exhibit I). I should also add that the Respondent does not deny selling the remaining stock of the Diary in her possession to the Recovery Website after being put on notice by the Applicants’ solicitor.
[65] In Roy Export Co. Establishment v. Gauthier, [1973] F.C.J. No. 401 (T.D.), the plaintiff had written to the defendant explaining that his actions constituted copyright infringement. The defendant responded, but continued to infringe the copyright. Walsh J. held, at para. 6, that:
It is apparent that while [the] defendant was in good faith when he purchased and first distributed the films in question in Canada he could not, following receipt of the letter of plaintiff’s counsel dated January 24, 1972, claim ignorance that it was contended that this constituted an infringement of [the] plaintiff's copyright in Canada.
[66] Similarly, in my view, the Respondent in the case at bar cannot claim that she did not know that she might be infringing an existing copyright. Consequently, it is my opinion that the Respondent has infringed the Applicants’ copyright pursuant to paragraphs 27(2)(a) and (c) of the Act.
[62] In my view, however, there are additional factors that must be considered in the context of this case.
[63] First, as highlighted by the Defendants the August 19, 2014 letter is not a cease and desist letter. Rather, the letter is a litigation hold letter that asked the Gallery to preserve documents, but does not point to any proposed infringement by the Gallery. Instead, it spoke to concerns of infringement by third parties and a desire not to engage in any conflict with the Gallery.
[64] Second, in and around this time, Bulger had also been advised by Goldstein of Maloof’s efforts to locate Maier’s closest living heir through searches conducted by genealogists and researchers. These efforts led to the identification of an individual in France, Sylvain Jaussaud, believed to be Vivian Maier’s distant cousin and closest heir. On August 18, 2013, Maloof obtained what he believed was a valid assignment of copyright to all of the Maier Works from which he then assigned copyright to Goldstein for the Goldstein Collection. Bulger gave evidence that he relied on these efforts by Maloof and the assurances of Goldstein because he felt they had gone “above and beyond” what was required to ensure that the prints that had been provided for the Photographs of Children exhibition could be exhibited and sold.
[65] Within this context, and in light of the language of the letter itself, it is my view that as of August 19, 2014 at least, it was not unreasonable for the Gallery to have had a good faith belief that there was no infringement. However, by early September 2014, the landscape had changed such that knowledge of the possibility of infringement through continuation of the Photographs of Children exhibition and subsequent sale of prints should reasonably have been understood.
[66] On September 6, 2014, the Gallery received an email message from Goldstein advising that he was shutting down the Vivian Maier Prints Inc. office space over concerns relating to the copyright in the Maier Works. The message referenced a New York Times article that reported on efforts by a commercial photographer and lawyer, David Deal, to petition the Estate and claim heirship. The article referred to the August 19, 2014 letter sent to the Gallery and the request of the Estate that the Gallery preserve all documents relating to the Maier Works and its sale. It also referenced a telephone interview in which Maloof stated that “he and those he works with to sell [Maier’s] work … are now in limbo, waiting for the advice of lawyers about whether they can continue to sell it or provide it to museums and publishers.” The article stated that Goldstein had terminated his agreement with galleries selling prints of Maier’s works and that they would stop selling.
[67] Bulger testified to his understanding at the time that “…there was an investigation about misuse of copyright” and that Goldstein had told the Gallery they could wait until the exhibition was over, but as soon as it closed, he needed to return the prints (TT, 388:17-27).
[68] Consistent with an understanding that heirship had not yet been determined, on October 14, 2014, following the Photographs of Children exhibition, but prior to finalizing all print sales from the exhibition, the Gallery sent an email to clients that had purchased Maier prints from the Gallery to update them on information that was circulating and set out its perspective on the status of events. The letter referred to a statement posted by Vivian Maier Prints Inc. to their website on September 12, 2014 regarding “legal action with the State of Illinois” that would “ultimately determine the legal heirs of Vivian Maier.”
[69] Thus, while the Gallery began the Photographs of Children exhibition with a good faith belief that there was no infringement of copyright, before the exhibition closed and prior to the completion of its sales, when it received the September 6, 2014 email from Goldstein, the Gallery could no longer claim ignorance to the possibility of infringement. At that point, even with the earlier consignment agreement, the Gallery knew that the views of Goldstein had changed and that he had concerns about copyright and the heirship to the Estate. The actions of Goldstein, including his efforts to ensure that no further Maier reproductions would be made, along with the earlier statement by the Estate of it “investigating the potential misuse and infringement of copyrighted works whose rights are held by the Estate” [emphasis added], should have raised concern with the Gallery about infringement and continuing with the Photographs of Children exhibition and any related sales.
[70] As such, it is my view that the Gallery should not have continued with the exhibition after September 6, 2014. Once it did so, it became liable for infringement for the prints the Gallery continued to exhibit and all sales made after September 6, 2014. This included 43 unique works, excluding only one that was sold exclusively before September 6, 2014.
(2) Activities relating to Art Toronto [71] As set out earlier, the Gallery sold the B&W Negatives to FAIG in June 2016. During the negotiations for the sale, the Gallery told FAIG that it was no longer making use of the B&W Negatives to make and sell prints. At the time, the Gallery knew it did not have copyright. Not only was copyright expressly excluded from the terms of the original Goldstein Agreement from 2014, but Bulger had publically made statements in the media and to galleries (e.g., the Howard Greenberg Gallery) demonstrating his knowledge that any prints made from the B&W Negatives would be infringing and that any further steps would require the permission of the Estate (Cook County), who was the copyright owner (Exhibit 19, readins, items 77, 78, BUL-287).
[72] The FAIG Agreement also included express representations from the Gallery that it did not have intellectual property rights relating to the B&W Negatives and that the agreement did not grant or convey to FAIG any intellectual property rights in, or relating to, the B&W Negatives.
[73] Despite knowing at the time of the FAIG Agreement (June 9, 2016) that FAIG did not have the right to make commercial use of the B&W Negatives or to give a license to the Gallery to exhibit and sell prints for a commission, the Defendants assert that from the autumn of 2016 to the summer 2017, the Gallery maintained a good faith belief that FAIG had at that point secured the rights necessary to do so. They assert that this good faith belief arose through two means. First, from representations made by FAIG at the time of negotiations that they would be able to deal with the copyright issue easily based on their resources and knowledge. Second, they refer to conversations with FAIG representatives regarding available options to secure copyright, including title insurance, to purchasing the Maloof Collection and working under his copyright agreement, and/or to the suggestion that FAIG would be looking into the differences between American and European co