Royal Conservatory of Music v. Macintosh (Novus Via Music Group Inc.)

Royal Conservatory of Music v. Macintosh (Novus Via Music Group Inc.)
Court (s) Database
Federal Court Decisions
Date
2016-08-12
Neutral citation
2016 FC 929
File numbers
T-172-15
Decision Content
Date: 20160812
Docket: T-172-15
Citation: 2016 FC 929
Ottawa, Ontario, August 12, 2016
PRESENT: The Honourable Mr. Justice Diner
BETWEEN:
ROYAL CONSERVATORY OF MUSIC
AND THE FREDERICK HARRIS MUSIC CO., LIMITED
Applicants
and
CLARKE MACINTOSH DOING BUSINESS AS NOVUS VIA MUSIC GROUP INC.
AND CONSERVATORY CANADA
Respondents
JUDGMENT AND REASONS
I. Nature of the Matter [1] This is an application brought under the summary judgment proceedings provision in paragraph 34(4)(a) of the Copyright Act, RSC 1985, c C-42 [the Act] and pursuant to Rule 300(b) of the Federal Court Rules, SOR/98-106. The Applicants allege that they own or control the copyright to 21 musical works and the Respondents have published those works without permission. The Applicants also assert the Respondents made a number of changes to the look of their publications to make those publications confusingly similar to those of the Applicants, improperly passing off their wares.
[2] The Respondents deny both claims and allege that this application was brought with an ulterior motive.
[3] For the reasons below, I agree with the Applicants that the Respondents have infringed their copyright. I do not agree, however, that there has been any passing off.
II. Facts [4] The Royal Conservatory of Music [the Royal Conservatory] is a registered charity under the Income Tax Act, RSC 1985, c 1 (5th Supp), with its principal place of business in Toronto. It was originally incorporated in 1886 as the Toronto Conservatory of Music, and assumed its current form as an independent legal entity in 1991 by a special act of the Ontario legislature (Royal Conservatory of Music Act, 1991, SO 1991, c Pr17, as amended by Royal Conservatory of Music Act, 2013, SO 2013, c Pr4). The Royal Conservatory is one of the largest music education institutions in the world; among several other activities, it publishes various series of graduated instructional music books for a variety of instruments. The Royal Conservatory has overall revenues of approximately $35 to $40 million per year.
[5] Frederick Harris Music Co., Limited [Frederick Harris] is a non-profit Ontario corporation, first incorporated in 1940. The Royal Conservatory is Frederick Harris’s sole registered shareholder, and Frederick Harris is the Royal Conservatory’s exclusive publisher for its series of instructional music books.
[6] Clarke MacIntosh is the former President and CEO of Frederick Harris. Mr. MacIntosh began working for Frederick Harris in 1992 as Director of Marketing. He was promoted to Vice President in 1999 and then President and CEO from 2002 to 2006.
[7] While Mr. MacIntosh was at Frederick Harris, the Applicants developed a colour-coded system for their graduated music books. Mr. MacIntosh, however, states that he was not directly involved with this process. He left the company on February 28, 2006, and on September 1, 2006, incorporated Novus Via Music Group Inc. [Novus].
[8] Not long thereafter, Frederick Harris brought suit against Mr. MacIntosh and Novus, alleging that Mr. MacIntosh had breached his contractual and fiduciary obligations to Frederick Harris in publishing a series of level-based piano books that were similar to another series developed, but never published, by Frederick Harris during his tenure there. That suit was ultimately discontinued on July 26, 2007.
[9] Novus was dissolved on June 30, 2014, for failure to file corporate tax returns. Nonetheless, Mr. MacIntosh continues to carry on business under the name. He alleges that the current proceedings have prevented him from reinstating Novus’s corporate status.
[10] Conservatory Canada is a registered charity and a not-for-profit corporation incorporated under the Canada Not-for-Profit Corporations Act, SC 2009, c 23. Conservatory Canada’s first predecessor organization, the London Conservatory, was founded in 1891, and Conservatory Canada assumed its current form in 1997.
[11] Conservatory Canada, like the Royal Conservatory, is a musical education institution that, among other things, develops series of graduated instructional music books. Unlike the Royal Conservatory, Conservatory Canada is a small institution, with only three administrative staff, a Board of Directors composed of volunteers, and annual revenues of just over $500,000. Conservatory Canada, in developing musical study programs, compiles syllabi and materials and then finds a publisher to manage those materials. It does not have a dedicated publisher like Frederick Harris.
[12] In 1999, Conservatory Canada published an eleven-level series of graduated musical books for the piano under the name “The New Millennium Series” [the Series]. It chose Waterloo Music Company Ltd [Waterloo] to be the publisher of the Series. As will be explained, over time, other publishers became involved in the printing of the series, and two subsequent editions of the series were published – one in 2012, and one in 2014.
[13] The Series consists of approximately 450 musical pieces. Twenty-one of these pieces – about 5% of the total – were licensed from Frederick Harris, pieces for which Frederick Harris had either obtained an assignment of the copyright or retained the exclusive publishing rights in Canada. These works, which form the basis of this litigation, and their composers, are appended as Schedule B to these Reasons.
[14] Negotiation for the permission to publish these 21 pieces took place between Mr. MacIntosh, who was at the time employed by Frederick Harris, and Waterloo, Conservatory Canada’s publisher at the time. The Respondents allege that Waterloo undertook these negotiations on behalf of Conservatory Canada, but unfortunately, neither the Applicants nor the Respondents were able to locate a physical copy of this agreement [the 1999 Agreement] which was therefore not in evidence before the Court.
[15] Included in the record, on the other hand, are certain royalty reports and payments to Frederick Harris from Waterloo, for the publication of the works. The last one of these payments was made by Waterloo for $1,405.81 in April 2006 for the 2005 calendar year. Under cross-examination, Debbie Morrissey, the controller responsible for accounting and financial records for both Royal Conservatory and Frederick Harris admitted that the Applicants were aware that they had not been paid royalties for the works since 2006, but did not act to collect further royalties owing.
[16] According to Patricia Frehlich, Chair of Conservatory Canada’s Board of Directors, Waterloo was acquired by St. John’s Music Ltd. [St. John’s], another music publisher, in or around 2004. St. John’s continued to publish the Series on Conservatory Canada’s behalf until 2007, when Mayfair Music Publications [Mayfair] became Conservatory Canada’s publisher. Mayfair continued to publish the Series until 2014, when Novus took over. As with the original 1999 Agreement, the Respondents have been unable to locate any agreement between Conservatory Canada and Mayfair.
[17] In 2011, Conservatory Canada began planning for a “120th Anniversary Edition” of the Series [the Anniversary Edition]. Conservatory Canada decided to change the cover of the Series from the original 1999 design, which had featured a black border, an open grand piano, and a colour surrounding the piano, corresponding to particular grade levels. The new covers featured a reference to Conservatory Canada’s 120th anniversary and replaced the black border cover with a fully coloured one, corresponding to different grades.
[18] The Anniversary Edition, published by Mayfair, was released for sale in 2012. Like the first edition of the Series published in 1999, the Anniversary Edition also contained the 21 musical works.
[19] By the spring of 2014, Conservatory Canada and Mayfair were on strained terms. Conservatory Canada took the position that it was owed a considerable amount in unpaid royalties.
[20] On May 20, 2014, Steven Loweth, General Manager of Mayfair, acknowledging “that there is an outstanding debt of royalties owed to Conservatory Canada”, put forward a proposal to maintain the publishing relationship, offering, among other measures, to assign to Conservatory Canada “all rights for Conservatory Canada related books currently copyrighted under Waterloo Publications”.
[21] Conservatory Canada rejected this offer, stating in a reply letter that “Conservatory Canada is the author of said publications, and through moral rights, authors always have the claim to their creations. Mayfair Music Publications was our publisher, but is in breach of contract for failure to pay royalties. When a publisher fails to pay royalties for any protracted period, rights typically revert to the author”.
[22] In April 2014, Mr. MacIntosh became a “special advisor” to Conservatory Canada’s Board and a member of its Executive Committee. In July 2014, after the relationship between Conservatory Canada and Mayfair disintegrated, Novus, Mr. MacIntosh’s company, became Conservatory Canada’s publisher. Novus then published a new 2014 edition of the Series [the 2014 Edition]. The Respondents assert that the 2014 Edition is unchanged from the 2012 Anniversary Edition, because it simply comprises a digitized scan of the earlier 2012 Edition with very minor, non-material changes.
[23] In August 2014, the Applicants learned that Conservatory Canada’s Series was going to be published by Novus. On November 17, 2014, Elaine Rusk, Vice President of the Royal Conservatory and Publisher of Frederick Harris, emailed Victoria Warwick, Executive Director of Conservatory Canada, to advise her that Frederick Harris had not been contacted to reproduce the 21 works in the most recent edition, stating as follows:
Are the contents the same as previous edition? If so, you should know we have not yet been contacted regarding permission to reprint FHMC [Frederick Harris] copyrights that appear in the series.
[24] Ms. Rusk received no response from Ms. Warwick or Conservatory Canada. She wrote to Ms. Warwick again on December 9, 2014, forwarding a copy of her earlier November 17 email. In this December 9 follow-up email, Ms. Rusk added:
Just so you know, nobody has contacted us regarding permission to reprint Frederick Harris copyrighted pieces in the Millenium [sic] Series to be published by Novus Via.
[25] On December 10, 2014, Derek Oger, the new Executive Director of Conservatory Canada, stated that he would investigate and provide clarification to Frederick Harris, explaining the situation as follows in his email reply to Ms. Rusk:
My name is Derek Oger and I have taken over as Executive Director of Conservatory Canada. Victoria [Warwick] is no longer with us. I will take this up with our new publisher and get back to you as soon as I get clarification on what needs to happen here.
[26] There were no further communications between the parties regarding the matter, until the Applicants filed this application on February 5, 2015.
A. The Missing 1999 Agreement [27] As noted above, none of the parties were able to locate a copy of the 1999 Agreement between Frederick Harris and Waterloo. Without this key document, the Court has been left to reconstruct, on the best available evidence, the financial and contractual arrangements that took place between the parties.
[28] Mr. MacIntosh, who was involved in the negotiations at the time as an employee of Frederick Harris, asserts that Waterloo negotiated the 1999 Agreement on behalf of Conservatory Canada. In his affidavit before this Court, he asserts that there is a distinction in the music publishing industry between “compilers” and “publishers”: Conservatory Canada is a compiler, which he states typically retains the grant or permission for the copyrighted work, while the publisher (Waterloo at the relevant time) typically negotiates and administers the various rights involved in publishing the compiler’s works, but, unlike the “compiler”, does not acquire rights in the work(s).
[29] Mr. MacIntosh also asserts that the 1999 Agreement was for the life of the publication on a pro-rata royalty basis. He interprets this to mean that “as long as a publisher maintains a reasonable inventory of the publication for sale, it is considered to be ‘in print’, it is considered to be ‘alive’ for the purposes of any contract commitments”.
[30] The Respondents note that the last royalty payment that Waterloo sent to Frederick Harris was a “Pro-rata royalty for 2005” and contend that this confirms Mr. MacIntosh’s interpretation of the contract.
[31] The Applicants, by contrast, draw the Court’s attention to a 1999 permission agreement between Waterloo and a composer, Beverly Porter [the Porter Agreement], in which Ms. Porter granted Waterloo, the then-publisher, the right to publish and use her piece ‘Chromatic Rag’, “in all editions of [the Series] repertoire currently in production”. The Porter Agreement makes no mention of Conservatory Canada and states that “[c]opyright owners will receive an equal share of a pro-rata royalty based on the annual sales of the series over a period of 10 years”.
B. The Passing Off Claim [32] In 1987, the Royal Conservatory began publishing an instructional series for piano, the “Celebration Series Perspectives” [the Celebration Series]. The Celebration Series has eleven levels of increasing difficulty. Each level is composed of repertoire books and technical (studies) books. The covers of those books are designed so that each level is associated with a specific colour.
[33] The colour-code system for the 4th edition of the Celebration Series, from Preparatory to Level 10, is as follows: yellow (0), orange (1), red (2), light purple (3), light blue (4), green (5), navy (6), dark red (7), dark purple (8), light brown (9), and dark green (10). This colour-coding system was developed in 2001 by Frederick Harris’s marketing team, which was, at that time, led by Mr. MacIntosh, and has since been applied to other Royal Conservatory series and publications. Ms. Rusk (of Frederick Harris) states that this colour scheme is distinctive to the Royal Conservatory and “makes it easy for teachers and students to simply look for the colour they want and easily select all the necessary books for a particular level”.
III. Parties’ Positions [34] As will be explained in greater detail below, the Applicants raise two issues in this application, claiming that (i) the Respondents did not have permission to publish the 21 works controlled by Frederick Harris in the 2014 Edition; and (ii) the Edition infringes Royal Conservatory’s rights per subsection 7(b) of the Trade-marks Act, RSC 1985, c T-13 [the Trade-marks Act] on the basis of passing off. The Respondents reject both of these claims. They raise an additional issue, namely that this application was brought with an ulterior motive, and is abusive.
A. The Applicants [35] The Applicants contend that there is no legal basis to conclude that the permission granted to Waterloo under the 1999 Agreement could apply to the 2014 Edition for the following reasons.
[36] First, the Applicants argue that each of the 1999, Anniversary, and 2014 Editions of the Series required separate permission.
[37] Second, they submit that the original permission in the 1999 Agreement was granted to Waterloo and not to Conservatory Canada. Waterloo then passed those rights to St. John’s Music, which then passed them to Mayfair, and when Conservatory Canada terminated its relationship with Mayfair in 2014, the chain of permission connecting Conservatory Canada and the Applicants was broken.
[38] Either way, the bottom line for the Applicants is that all Waterloo acquired in 1999 was permission to publish the 21 works in the 1999 Edition of the Series, and since Frederick Harris granted permission to Waterloo, and not Conservatory Canada, Conservatory Canada acquired nothing. The Porter Agreement, the Applicants assert, is consistent with this position. They contend that it is the “one and only piece of physical evidence we have that gives us an idea what the permission might have looked like” (Hearing Transcript at 25 [Transcript]) and that the 1999 Agreement would have contained exactly the same terms of permission (Transcript at 28).
[39] The Applicants also argue that the Respondents were aware that they lacked the necessary permission to publish the 2014 Edition. When they realized they were owed money from Mayfair but that they lacked any documentation of the Mayfair publishing agreement, they should have realized that they did not have the authorization to publish the new edition. Beyond that, Conservatory Canada was formally put on notice by Ms. Rusk’s emails of November and December 2014 that they had neither sought, nor secured, permission to reproduce the 21 impugned works in the 2014 Edition.
[40] As for the claim under subsection 7(b) of the Trade-marks Act, the Applicants allege that Conservatory Canada adopted the Celebration Series colour-coding scheme for the 2014 Edition of the Series. They also note that their books are staple-bound and that Conservatory Canada shifted from spiral binding in the 1999 Edition of the Series to staple binding when the Anniversary Edition was published. The Applicants cite Iona Appliances Inc v Hoover Canada Inc (1988), 32 CPR (3d) 304 for the proposition that the changes to the appearance of the Anniversary Edition make it so similar to the 2008 Edition of the Celebration Series that it is reasonable to infer the intent was to deceive and that it leads to a likelihood of confusion.
[41] As for remedies, the Applicants claim statutory damages under subsection 38.1(a) of the Act. They assert that the copying of their 21 musical works was for commercial purposes and thus they should receive somewhere between $500 and $20,000 in damages for each of the pieces. In justifying their request, they note that the Respondents, despite notice that they lacked the requisite permission to publish, nonetheless continued to market and promote the works anyway. They drew the Court’s attention in particular to Mr. MacIntosh’s attendance at the March 2015 Music Teachers National Association [MTNA] Conference in Las Vegas, where, shortly after these proceedings were commenced, he marketed the 2014 Series.
[42] In addition to statutory damages, the Applicants seek the following:
A. A declaration that the Respondents have directed public attention to the Series in such a way as to cause or be likely to cause confusion between their wares and the wares of the Applicants;
B. A declaration that the Respondents have infringed their copyright in each of the 21 works;
C. An injunction restraining the Respondents from passing off;
D. Delivery up of any copies of the 2014 Edition of the Series;
E. Prejudgment interest on the requested statutory damages; and
F. Costs for bringing this application.
B. The Respondents [43] The Respondents offer various arguments as to why this application should be denied, including three procedural objections: (i) this claim is barred by the three-year limitation period set out in subsection 43.1(1) of the Act; (ii) the Applicants lack the standing to sue for at least 5 of the 21 works at issue; and (iii) this Court lacks the jurisdiction to hear this matter since this case is in reality about an unintentional breach of contract.
[44] As for their substantive arguments, the Respondents contend that the Applicants have not validly revoked their permission and are thus estopped from doing so. Because there was consideration for the permission, it cannot be revoked unilaterally. Revocation would have had to have been explicit and with reasonable notice, and neither were provided.
[45] The Respondents deny the passing off claim and object to the Applicants’ submission of actual copies of the Celebration Series books at issue as evidence, arguing that parties cannot adduce physical evidence in an application.
[46] On remedies, the Respondents assert that if there is any merit to the infringement claim, it is worth at most $1,405.81 – the amount listed in the last royalty payment from Waterloo to Frederick Harris in 2006.
[47] Finally, the Respondents submit that that this application is abusive, in that it was brought for ulterior motives relating to residual hostility towards Mr. MacIntosh. The Respondents assert that it was only after the Applicants learned that Mr. MacIntosh was associated with Conservatory Canada that they took issue with the 2014 Edition of the Series. The Respondents also argue that the decision to litigate against Conservatory Canada was made in mid-January to cause maximum disruption at Conservatory Canada’s offices. They contend that the combined effects of the ulterior motive, the high quantum of damages sought, and the lack of due diligence, militate in favour of a significant costs award to them.
IV. Analysis A. Procedural objections (1) Can this Court accept physical evidence if this is an application? [48] The Applicants requested leave from the Court to introduce certain hard copies of the 2008 Edition of the Celebration Series and hard copies of the 1999 and Anniversary Editions of the Series. They contended that these physical books would assist the Court in its deliberations.
[49] The Respondents objected to this request, arguing that (a) the books were not provided with the documentation that was properly and timely filed, and (b) since this is an application, not an action, there are no witnesses through whom to introduce the various books as exhibits.
[50] The Court granted the Applicants’ request to introduce the materials at the hearing, rather than simply rely on the photocopies of the books that had been earlier provided in the Record. The Court so ruled for three reasons.
[51] First, the Federal Court Rules, SOR/98-106 [the Rules] make clear that bringing physical exhibits is entirely possible. Rule 309(2)(g), for example, states that “[a]n applicant’s record shall contain, on consecutively numbered pages and in the following order… a description of any physical exhibits to be used by the applicant at the hearing”.
[52] While the Applicants did not technically comply with Rule 309(2)(g), the Rules also permit this Court to identify such errors and rectify them. Rule 60 states that “[a]t any time before judgment is given in a proceeding, the Court may draw the attention of a party to any gap in the proof of its case or to any non-compliance with these Rules and permit the party to remedy it on such conditions as the Court considers just”.
[53] Second, the Applicants had already adduced photocopies of all the books they wished to present to the Court in hardcopy in advance of the hearing. Submitting the books as separate evidence therefore did not fundamentally change the Court record in any way.
[54] Finally, it is in the interests of all parties that the Court examines physical copies of the books to acquire an accurate sense of the degree of similarity between the works at issue. Since the colours of the covers of the books are directly at issue for the passing off claim, I see no reason to rely on potentially unfaithful printouts.
(2) Do the Applicants have standing to bring this application for all of the works? [55] The Respondents submit that, with respect to at least 5 of the 21 pieces at issue – “Bozo’s Flippity-Flop”, “Butterflies”, “Peacock”, “Masquerade”, and “Sneaky” (see Schedule B to these Reasons) – the Applicants were never assigned an interest in the copyright but only a grant of an exclusive licence. They thus lack the standing to bring an infringement claim under subsection 41.23(1) of the Act.
[56] I also disagree with the Respondents about this procedural objection. The language of each of the agreements for those five pieces states that “[b]y this letter you grant and assign to us exclusively the right to publish (i.e. print, publish and sell) the Work throughout the world”. While this language is different from the language in the agreements for the other 16 works (see Schedule B), the agreements at issue nonetheless convey the necessary interest to bring this application: subsection 13(7) of the Act makes it clear that “a grant of an exclusive licence in a copyright constitutes the grant of an interest in the copyright by licence”.
[57] Furthermore, per subsection 13(5) of the Act, “[w]here, under any partial assignment of copyright, the assignee becomes entitled to any right comprised in copyright, the assignee, with respect to the rights so assigned, and the assignor, with respect to the rights not assigned, shall be treated for the purposes of this Act as the owner of the copyright, and this Act has effect accordingly”.
[58] The Applicants therefore (i) have standing to bring this application for all 21 pieces, and (ii) having received at least partial assignment of copyright, are considered “owners” for the purpose of publishing due to their assigned rights. They need not have added any other parties to properly bring the claims against the five pieces. In having negotiated exclusive licenses (i.e. grants of an interest from the copyright holder), the Applicants had more than simply obtained permission to publish. As the Supreme Court held in Robertson v Thomson Corp, 2006 SCC 43 at para 56, quoting with approval the Ontario Superior Court in Ritchie v Sawmill Creek Golf & Country Club Ltd (2004), 35 CPR (4th) 163:
The “grant of an interest” referred to in s. 13(4) is the transfer of a property right as opposed to a permission to do a certain thing. The former gives the licensee the capacity to sue in his own name for infringement, the latter provides only a defence to claims of infringement. To the extent there was any uncertainty as to the meaning of “grant of an interest” and whether this section applied to non-exclusive licences, the issue was resolved in 1997 when the Copyright Act was amended to include s. 13(7).
(3) Jurisdiction of this Court [59] The Respondents suggest that since what is ultimately at issue is a “purely contractually based permission whereby whoever was the third party publisher at the time would make required permission payments to Frederick Harris”, this Court lacks the jurisdiction to hear that element of this dispute. The Respondents rely on Netbored Inc v Avery Holdings Inc, 2005 FC 490 at para 24 [Netbored], where Justice Gibson upheld a prothonotary’s order striking a number of provisions in the plaintiff’s Statement of Claim for the following reasons:
This is an action for infringement of the plaintiff's copyright. The plaintiff's allegations in the impugned paragraphs of the Statement of Claim relating to breach of contract and breach of fiduciary duty and the like are not advanced for the purpose of establishing infringement. Rather, they are advanced for the purpose of obtaining relief in respect of those breaches themselves. As such, this Court lacks jurisdiction to entertain them.
[60] As Justice Gibson noted in para 12 of Netbored, however, subsection 20(2) of the Federal Courts Act, RSC 1985, c F-7 is clear that:
The Federal Court has concurrent jurisdiction in all cases, other than those mentioned in subsection (1), in which a remedy is sought under the authority of an Act of Parliament or at law or in equity respecting any patent of invention, copyright, trade-mark, industrial design or topography referred to in paragraph (1)(a).
[61] The Applicants are seeking statutory damages under section 38.1 of the Act, as well as remedies listed in subsection 34(1). They are seeking these damages because they allege that their copyright over the 21 works has been infringed. They are not claiming that the Respondents breached the terms of the 1999 Agreement in publishing the Anniversary Edition (i.e. that the pieces were published and that they are, per the terms of the 1999 Agreement, owed compensation). Rather, they are claiming that the publication of the Anniversary Edition took place without their permission – in other words, that there was no contract in place to be breached in the first place.
[62] I consequently find that this Court has the jurisdiction to hear the copyright infringement claim.
[63] Having dispensed with all three procedural objections, I now turn to the substantive merits of the application.
B. Copyright Infringement [64] Copyright is the sole right to produce or reproduce a work or any substantial part of it (section 3 of the Act). A copyright holder may assign the copyright entirely to someone else, or grant an interest in it and retain the copyright. Either way, the Act requires that the grant or assignment be made in writing (subsection 13(4) of the Act). As stated in subsection 27(1), “[i]t is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.”
[65] With respect to the 21 works in question, Frederick Harris either owns the copyright to, or has an exclusive licence to publish, each of the pieces in issue. Thus, for the purposes of the Act, Frederick Harris owns their copyright, insofar as publication is concerned. Per the Act, then, Frederick Harris’ consent was necessary for another entity – whether that was Waterloo, St. John’s, Mayfair, Novus, Mr. MacIntosh, or Conservatory Canada itself – to publish the works in question. To do otherwise constituted an infringement.
[66] It is accepted by all parties that, in the 1999 Agreement, the Applicants gave their consent to publish those works in the Series. Beyond that, there is no consensus. Since neither the Applicants nor the Respondents could find a copy of the 1999 Agreement, each offered the Court their interpretation of what that Agreement most likely said.
[67] The Applicants contend that it is reasonable to assume that the 1999 Agreement contained equivalent terms to those in the Porter Agreement – a grant of permission to publish for 10 years, and an annual royalty payment.
[68] The Applicants also argue that there is no suggestion that the 1999 Agreement was negotiated on behalf of Conservatory Canada. Instead, the permission was granted to Waterloo, transferred to St. John’s Music, and then transferred again to Mayfair. At no point did Conservatory Canada, Mr. MacIntosh, or Novus have any rights over the work.
[69] The Respondents, by contrast, rely on Mr. MacIntosh’s recollections of the 1999 Agreement’s contents. Mr. MacIntosh states that the 1999 Agreement was a grant of permission for “the life of the publication” on a “pro-rata royalty basis”, explaining that:
[…] as long as a publisher maintains a reasonable inventory of the publication for sale, it is considered to be “in print”. As long as a publication is “in print”, it is considered to be “alive” for the purposes of any contract commitments.
[70] Since the Respondents assert that all three Editions –1999, 2012 and 2014 – constitute one continuous publication of the Series, and that that publication has been for sale from 1999 until today, the permission granted in the original 1999 Agreement remains alive and active.
[71] As for the Porter Agreement, the Respondents interpret that document as a grant for “all editions of the New Millennium Series of piano repertoire currently in production”, meaning that the grant extends to cover the entire series, regardless of which edition is in production. Since the 1999, 2012, and 2014 printings of the Series have identical content, the permission thus remained in force.
[72] The Respondents also argue that the 1999 Agreement was a grant to Conservatory Canada, negotiated on its behalf by Waterloo. Consequently, the grant extended from Conservatory Canada to any publisher it may have been working with for any given printing of the Series, rather than to Waterloo specifically.
[73] Mr. MacIntosh states that while it is typically the responsibility of the author/compiler to obtain the necessary permissions, the publisher will assist with the administrative work involved in that task:
[Conservatory Canada] has changed its publisher three times since 1999. It is not uncommon for an author to use multiple publishers, sometimes splitting their catalogue of works across several publishers, sometimes moving everything they’re authored from one to another. In or around 2004, the publisher of [Conservatory Canada] materials changed from Waterloo Music to St. John’s Music. In or around 2007, the publisher of [Conservatory Canada] materials changed again, this time from St. John’s Music to Mayfair Music. Most recently, in August 2014, the publisher of [Conservatory Canada] materials changed from Mayfair Music to [Novus]. There is nothing unusual or inappropriate in this. All permissions to use copyrighted works in the New Millennium Series for piano were granted to [Conservatory Canada], as the compiler. And as negotiated by Waterloo Music, [Conservatory Canada] retains those permissions for the life of the publication, irrespective of the publisher they choose to do business with to print, distribute and sell their materials.
[74] The Respondents also point out that Ms. Rusk of the Royal Conservatory, in cross-examination, testified on three occasions that the 1999 and 2014 Editions are “identical”, in that they have the same content.
[75] Finally, Conservatory Canada asserts that it, rather than any of the four publishers, held copyright through the compiling of the works in the Series.
[76] Assessing both the Applicants’ and Respondents’ interpretations of the 1999 Agreement and in the absence of any physical evidence of this central document, I find the Applicant’s interpretation – that the grant was to Waterloo, and not Conservatory Canada – to be more persuasive for three reasons.
[77] First, the copyright notices throughout all three editions of the Series list Waterloo, and not Conservatory Canada, as the copyright owner.
[78] Second, Ms. Porter’s agreement with Waterloo makes no mention whatsoever of Conservatory Canada. Rather, the Porter Agreement purports to grant to Waterloo permission to reprint her work (Chromatic Rag) for a period of 10 years in the New Millennium Series, a permission through which Copyright owners will receive an equal share of a pro-rata royalty rate based on the annual sales of the series over a period of 10 years, covering the territory of Canada. It seems entirely plausible – and there is nothing before me to suggest otherwise – that these terms would naturally also appear in the 1999 Agreement between Waterloo and Frederick Harris.
[79] Third, when the relationship between Mayfair and Conservatory Canada began to deteriorate, Mayfair made it clear that it, and not Conservatory Canada, retained the grant to publish the works. See, for example, its 2014 proposal to Conservatory Canada, where Mayfair suggested that it would transfer “all rights for Conservatory Canada related books currently copyrighted under Waterloo Publications” if Conservatory Canada would continue to use Mayfair as its publisher. This is entirely in keeping with the Applicants interpretation of what the 1999 Agreement said – that the rights went to Waterloo, and not to Conservatory Canada: by the time of the publication of the 120th Anniversary Edition, the 1999 Agreement had lapsed.
[80] Even if the 10 year validity presumption is incorrect, as explained above, the 1999 Agreement was between Frederick Harris and Waterloo. The grant outlined in the 1999 Agreement then moved from Waterloo to St. John’s to Mayfair. As such, Conservatory Canada’s decision to terminate their publishing relationship with Mayfair terminated any contractual link between them and Frederick Harris and its works. Conservatory Canada thus had no right to negotiate with Mr. MacIntosh and/or Novus to publish the works, and neither Mr. MacIntosh nor Novus had any right to publish them.
[81] Indeed, I assign low probative value to Mr. MacIntosh’s recollections of the contents of the 1999 Agreement. As the Respondents have noted several times in their submissions, Frederick Harris and the Royal Conservatory had significant yearly revenues of which the income from this contract would play only a miniscule role. It is not clear how Mr. MacIntosh, who was employed by Frederick Harris at the relevant time, could remember so specifically the terms of an agreement negotiated approximately 18 years ago for a sum of money his employer at the time clearly did not think was particularly important.
[82] Furthermore, The Respondents contend that the Applicants were aware that they had not been paid by Waterloo since 2006 and that their decision not to take action and demand payment amounts to an “implied permission” to the Respondents to continue publishing.
[83] I do not find this to be the case. As noted above, the 1999 Agreement was between Waterloo and Frederick Harris. If there were any implied permission resulting from the Applicants’ inaction, it would have accrued to the benefit of Waterloo (or its successors) and not the Respondents.
[84] The Respondents also argue that there is ample evidence to suggest that it was Mayfair’s responsibility to pay these royalties, not Conservatory Canada’s. Further, the Respondents point out that the Applicants continued to conduct business with Mayfair throughout the eight and a half years of default, paying Mayfair on other unrelated permissions issues. The Respondents suggest that, since the Applicants were aware of the default, they could have set off the unpaid annual royalties from the Series from the amounts they owed Mayfair.
[85] However, it is important to note that the Applicants, in this proceeding, do not take issue with the unpaid royalties. Their claim lies in the publication of the works without permission – not any contractual breach that may have occurred in relation to the 1999 Agreement.
[86] Finally, the Respondents argue that there is no evidence that the permission granted in the 1999 Agreement has ever been revoked. The November and December 2014 emails sent by Ms. Rusk to Victoria Warwick, and subsequently to Derek Oger, merely state that she had not been contacted “regarding permission” – not that the permission had been denied.
[87] I find it difficult to interpret Ms. Rusk’s email statements as the Respondents would like. Why would Ms. Rusk contact Conservatory Canada regarding permission if she believed nonetheless that permission had been granted? It seems unreasonable to require that she say something to the effect of “I revoke Conservatory Canada’s permission to the works in question” if she did not believe there was any underlying grant in the first place. The emails, in my view, are quite clear that no permission exists for the printing: Ms. Rusk, on behalf of the Royal Conservatory, did not approve of the status quo.
(1) Limitation period [88] The Respondents submit that the last royalty payment was made by Waterloo in 2006 and that, while the Applicants were aware that they were owed payments for the series, made no effort to address this issue until 2014. As such, if the infringing act giving rise to the remedy at issue is the continued publication of the works without the Applicants’ permission, then the Applicants should have pursued this litigation by 2009 at the very latest, pursuant to paragraph 43.1(1)(b) of the Act.
[89] The Applicants, by contrast, reiterate that this application concerns only the 2014 Edition, and since each edition constitutes a new publication, the limitation period does not apply.
[90] I do not, however, need to decide whether each edition constitutes a new publication for the purposes of paragraph 43.1(1)(b), because as explained in Wall v Horn Abbott Ltd, 2007 NSSC 197 at para 474:
[A]lthough claims relating to breaches that