Leuthold v. Canadian Broadcasting Corporation

Leuthold v. Canadian Broadcasting Corporation
Court (s) Database
Federal Court Decisions
Date
2012-06-14
Neutral citation
2012 FC 748
File numbers
T-299-05
Decision Content
Federal Court
Cour fédérale
Date: 20120614
Docket: T-299-05
Citation: 2012 FC 748
Ottawa, Ontario, June 14, 2012
PRESENT: The Honourable Mr. Justice Scott
BETWEEN:
CATHERINE LEUTHOLD
Plaintiff
and
CANADIAN BROADCASTING CORPORATION
and
JERRY MCINTOSH
Defendants
REASONS FOR JUDGMENT AND JUDGMENT
I. INTRODUCTION
[1] Catherine Leuthold (Miss Leuthold), a professional photo journalist, is claiming an amount of $21, 554,954.25 against the defendants the Canadian Broadcasting Corporation [CBC] and Jerry Mc Intosh (the Defendants), for copyright infringement.
II. FACTS
A. The Parties
[2] The Plaintiff, Miss Catherine Leuthold is a professional photo-journalist. On September 11, 2001 she was residing in New York City.
[3] The Defendant, the CBC, is a corporation continued under the Broadcasting Act, SC 1991, c 11, [Broadcasting Act], carrying on business as a Canadian broadcaster with a principal place of business at 250 Front Street West, Toronto, Ontario, M5W 1E6.
[4] The Defendant, Mr. Jerry Mc Intosh, was the Director of Independent Documentaries for News, Current Affairs and Newsworld referred to as CBC news and an employee of the CBC at the time of the alleged infringements.
B. The Production and the Copyrighted Works
[5] In the months that followed the terrorist attacks on the World Trade Center [WTC], a documentary film entitled “As the Towers Fell” (the Production), was commissioned by the CBC from Newsco Productions Inc. The Production was directed by Desmond Smith.
[6] The Production was meant to portray how the attacks on the WTC unfolded through the eyes and reaction of journalists, cameramen and photographers who were on the scene on September 11, 2001.
[7] The original plan called for a 30 minute Production. As shooting progressed the Production’s duration evolved from 30 to 60 minutes and then to 90 minutes. It also became obvious that Newsco was incapable of handling the work and the CBC had to assign staff to, amongst others, clear the rights and assist in the editing of the Production (see transcript, testimony of Jerry Mc Intosh, February 9, 2012, page 7, lines 10 to 25 and page 8, lines 1 to 3; transcript, testimony of Rose Torriero, February 8, 2012, page 139, lines 12 to 17; transcript, testimony of Kathy Markou, February 8, 2012, page 201, lines 17 to 25 and page 202, lines 1 to 5; and Joint Book of Documents, Newsco contracts, tabs 18 to 20 inclusively).
[8] Four versions of the Production were actually made and presented at various times on both the CBC main network and the Newsworld channel (Newsworld) (Joint Book of Documents, volume II, exhibit D-9):
Date and time of
presentation
Time of
diffusion
Duration of
documentary
Starting airing
time of
photographs
Number of
seconds
photographs
are presented
Network
March 17, 2002
10:00 a.m.
60 min
N/A
18
Main
network
March 17, 2002
(Tape C)
7:00 p.m.
60 min
19:14:45
19:14:53
19:16:16
19:22:03
19:22:11
18
Newsworld
September 10, 2002
(Tape C, 1 of 2)
8:00 p.m.
90 min
20:21:08
20:21:15
20:24:10
20:25:28
18
Main
network and
Newsworld
September 11, 2002
(Tape A)
1:00 a.m.
90 min
01:21:07
01:21:13
01:24:09
01:25:26
18
Newsworld
September 7, 2003
(Tape C)
10:00 p.m.
120 min
22:28:12
22:28:19
22:31:14
22:32:31
18
Newsworld
September 8, 2003
(Tape A)
1:00 a.m.
120 min
01:29:06
01:29:12
01:32:07
01:33:25
18
Newsworld
September 14, 2003
(Tape B)
12:00 p.m.
60
N/A
0
Newsworld
September 14, 2003
(Tape C)
7:00 p.m.
60 min
N/A
0
Newsworld
September 11, 2004
(Tape C)
10:00 p.m.
120 min
22:28:45
22:28:52
22:31:47
22:33:05
18
Newsworld
September 12, 2004
(Tape A)
1:00 a.m.
120 min
01:27:59
01:28:05
01:31:00
01:32:18
18
Newsworld
September 12, 2004
4:00 a.m.
120 min
N/A
18
Newsworld
[9] Included in tapes A and C of the Production were a number of Stills Photographs (the Photographs) of the terrorist attacks on the WTC on September 11, 2001, taken by Miss Leuthold. Miss Leuthold also appears in the Production.
[10] Miss Leuthold is the owner of the copyright in the Photographs.
[11] At all material times, the Defendants were aware that copyright subsisted in the Photographs.
[12] At all material times, the Defendants had no reason to believe that Miss Leuthold did not own the copyright in the Photographs.
C. The Broadcasts of the Production and the Copyrighted Works
[13] On March 19, 2002, Miss Leuthold sent a fax (the first license) permitting the CBC to incorporate her Photographs of the 9/11 events in the Production and to broadcast the said Photographs on Canadian television on the condition that they be used for the 9/11 Documentary only (see Joint Book of Documents, volume I, tab 8, page 357). It reads:
To: Douglas Arrowsmith
From: Catherine Leuthold
Douglas
Got your email
CBC may use my photographs of the WTC Disaster. Said Photographs used for 9.11 Documentary only. If the photographs are used for advertising said Documentary, I, the photographer must be financially compensated per prior mutual agreement.
Sincerely
“Catherine Leuthold”
Signed
[14] The parties disagree on the scope and conditions of this first License.
[15] The Production was first broadcast on March 17, 2002, on the CBC Main Channel at 10:00 a.m. and the same day, on CBC’s specialty service Newsworld at 7:00 p.m.
[16] CBC’s Newsworld is part of a programming undertaking which is wholly owned by the CBC. Its operations result in the communication of works, newscasts and documentaries or other subject matter to the Canadian public 24 hours continually.
[17] In the ensuing days, employees of the CBC communicated with Miss Leuthold to obtain her signature on a waiver.
[18] The waiver was not signed and on June 20, 2002, Rose Torriero, a CBC employee, sent an email to Miss Leuthold enquiring about the waiver (see Joint Book of Documents, volume I, tab 4, page 23).
[19] Over the following months Miss Leuthold negotiated with different persons working at the CBC and Newsco (see Email chain, Joint Book of documents, volume I, tab 4, pages 10 to 91; transcript, testimony of Catherine Leuthold, February 6, 2012, pages 78 and 79; transcript, testimony of Rose Torriero, February 8, 2012, pages 117 and 118; and transcript, testimony of Kathy Markou, February 8, 2012, page 201, lines 23 to 25, and page 202, lines 1 to 5).
[20] On September 5, 2002, Miss Leuthold, after a series of exchanges with Jerry McIntosh, Desmond Smith and Rose Torriero, reached an understanding whereby the CBC agreed to pay her the sum of $2,500.00 US for the usage of five photographs in a forthcoming broadcast.
[21] On October 7, 2002, Miss Leuthold and the CBC signed the second License (the Stills License), which reflected the agreement reached on September 5, 2002, permitting the CBC to incorporate five photographs in the Production and to broadcast these on Canadian television for one broadcast on CBC’s Network & Regional TV stations, in return for compensation of $ 2,500.00 in US currency (see Joint Book of Documents, volume I, tab 2).
[22] The Production was broadcast on September 10, 2002, on CBC’s Main Channel and on the same date on Newsworld at 8:00 p.m. (see Joint Book of Documents, volume II, exhibit D-9).
[23] The Defendant, the CBC, transmitted the Production over its Newsworld cable channel on the dates and times and for the duration, that appear in the above referenced table (see Joint Book of Documents, volume II, exhibit D-9).
[24] For each of the transmissions referred to in exhibit D-9, Newsworld transmitted the Production by telecommunication to all Canadian distribution undertakings that carried the Newsworld service on these respective dates.
[25] The Defendants admit they had no authorization from Miss Leuthold for the six broadcasts on Newsworld referred to in exhibit D-9 but claim they were authorized to broadcast on Newsworld on March 17 and September 10, 2002.
[26] The Defendants transmitted to all the Canadian distribution undertakings that have the right to carry the Newsworld service, the Production, which contained the Photographs belonging to Miss Leuthold; they, in turn, transmitted the Production to their respective subscribers.
[27] Each transmission of the Production by the Defendant, the CBC, over its main channel was broadcasted in all Canadian time zones (5 in total), at their respective local time, directly or through the CBC’s affiliated stations.
III. ISSUES
[28] The parties have listed 6 issues to be determined by the Court:
1. Did the Defendants infringe the Plaintiff’s (Miss Leuthold’s) copyright on March 17, 2002, September 10 and 11, 2002, September 7 and 8, 2003 and September 11, and 12, 2004?
2. In respect of each CBC broadcast and Newsworld transmission, did each participating affiliated station and Broadcasting Distribution Undertaking [BDU], as the case may be, infringe the Plaintiff’s (Miss Leuthold’s) copyright each time the Production was communicated to the public?
3. If so, is the Defendant, the CBC, liable for such infringement by the affiliated stations and the BDUs?
4. If there was copyright infringement by the Defendants, the affiliated stations or the BDUs, what remedies should be awarded to the Plaintiff (Miss Leuthold) in terms of damages, profits, injunctive relief, and delivery up?
5. Is the Defendant Jerry McIntosh independently liable for any infringement of the Plaintiff’s (Miss Leuthold’s) copyright and, if so, what remedies should be awarded?
6. Regardless of the Court’s finding on liability, what measures of costs should be awarded given the conduct of the parties and outstanding offers to settle?
IV. LEGISLATION
[29] The applicable sections of the Broadcasting Act and the Copyright Act, RCS, 1985, c C-42, [the Copyright Act], are appended to this decision.
V. ANALYSIS
1. Did the Defendants infringe the Plaintiff’s (Miss Leuthold’s) copyright on March 17, 2002, September 10 and 11, 2002, September 7 and 8, 2003 and September 11, and 12, 2004?
A. Miss Leuthold’s Position
[30] Miss Leuthold claims that artistic work is defined in the Copyright Act, and it includes photographs. The Defendants have admitted that she holds the copyright on the Photographs. Pursuant to subsection 3(1) of the Copyright Act, Miss Leuthold asserts that she is the sole owner of the rights to reproduce the Photographs and publicly present them as part of any cinematographic work, to communicate them to the public by telecommunication, and to authorize any of the foregoing.
[31] Miss Leuthold also relies on the definition of “telecommunication” that is found in the Copyright Act, which specifies that “any transmission of signs, signals, writing, images or sounds or intelligence of any nature by wire, radio, visual, optical or other electromagnetic system” is a telecommunication”.
[32] Of particular importance, according to Miss Leuthold, is paragraph 2.4(1) (c) of the Copyright Act. That paragraph clearly states that “for the purposes of communication to the public by telecommunication, […] (c) where a person as part of (i) a network, within the meaning of the Broadcasting Act, whose operations result in the communication of works or other subject-matter to the public, or (ii) any programming undertaking whose operations result in the communication of works or other subject-matter to the public, transmits by telecommunication a work or other subject-matter that is communicated to the public by another person who is not a retransmitter of a signal within the meaning of subsection 31(1), the transmission and communication of that work or other subject-matter by those persons constitute a single communication to the public for which those persons are jointly and severally liable.”
[33] Miss Leuthold claims that the Defendants reproduced the Photographs without her consent and in a manner that is not permitted by the Copyright Act. The Defendants publicly presented the Photographs, as part of a cinematographic work, communicated them to the public by telecommunication and authorized the foregoing without her consent.
[34] Miss Leuthold underlines the fact that the CBC had completed several broadcasts of the Production prior to signing the Licenses, although both Licenses authorized only a single broadcast.
[35] Pursuant to subsection 27(2) of the Copyright Act, it is an act of infringement for any person to:
(a) sell or rent out, (b) distribute to such an extent as to affect prejudicially the owner of the copyright, (c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public, (d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or (e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (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.
[36] By reason of the aforesaid acts of the Defendants, Miss Leuthold claims to have suffered substantial damages, and would have continued to suffer damages if the Defendants had not ceased their infringing activities.
B. Position of the Defendants
[37] The Defendants admit that the CBC did infringe Miss Leuthold’s copyright in the Photographs but dispute the number of infringing communications to the public and the amount of damages claimed.
[38] The Defendants contend that Miss Leuthold gave her permission to the CBC to use the Photographs for the initial broadcast of the Production on March 17, 2002. Said permission according to the Defendants, included Newsworld and all broadcasts in all time zones.
[39] In September 2002, to commemorate the one-year anniversary of 9/11, the CBC did broadcast the Production.
[40] On October 7, 2002, the Stills License which permitted the CBC’s use of the Photographs in the September 2002 broadcast on CBC’s Network and Regional TV stations was signed. It provided for the payment of $2,500.00 US to Miss Leuthold.
[41] Another implicit term of this License, according to the Defendants, included the right to broadcast the Production in different time zones, being the time zones in which the various CBC Regional TV stations were located and on Newsworld.
[42] Defendants further claim that the CBC’s conduct, throughout its relationship and dealings with Miss Leuthold, has been in accordance with accepted business practices and was by no means highhanded, reprehensible or oppressive.
[43] Finally, the CBC alleges to have acted in good faith with respect to the exercise of its rights.
C. Analysis
[44] The parties hold different interpretations of the scope of the Licenses that govern their relationship. The Court must therefore determine the exact scope of the Licenses in order to properly assess the extent of the infringements, the damages and the compensation to which Miss Leuthold is entitled.
[45] The Defendants submit that the March 17 and September 10, 2002 communications to the public, by means of broadcasts, were authorized under the two licenses that were executed and that Miss Leuthold was fairly compensated for these.
The March 17, 2002 Broadcast
[46] Miss Leuthold is claiming damages for the March 17, 2002 broadcasts based on her interpretation of the first license. She claims that the license was restricted to one broadcast in one time zone, on the CBC’s main channel, which excluded regional stations, affiliates and Newsworld.
[47] During her testimony she referred the Court to the email she forwarded to Desmond Smith after having received a draft waiver from Rose Torriero, a CBC employee entrusted to clear the rights she held in the Photographs. In that email she reminds Desmond Smith that this is not what she agreed to. That email is dated Monday March 25, 2002 (see transcript, testimony of Catherine Leuthold, February 6, 2012, page 79, line 11 to 25 and page 80, lines 1 to 25). She also referred the Court to Miss Torriero’s response dated March 25, 2002 and the subsequent exchanges of emails in which she specified one broadcast (see Email chain, Joint Book of documents, volume I, tab 4).
[48] Miss Leuthold testified never to have been aware of the existence of the CBC’s distribution network (see transcript, testimony of Catherine Leuthold, page 90, lines 12 to 16). She cannot state for certain if she knew that the documentary had already aired when she was approached by the CBC in March of 2002 (see transcript, testimony of Catherine Leuthold, page 89, lines 2 to 25 and page 90, lines 1 to 10).
[49] The Defendants affirm that Miss Leuthold gave her permission to use the Photographs for the initial broadcast of March 17, 2002. This, they claim, is apparent from the fax sent to Douglas Arrowsmith on March 19, 2002. They also claim that Miss Leuthold admitted that no compensation was due for the March 17, 2002 broadcast since she wrote in an email to Jerry Mc Intosh on September 4, 2002: “so you did get them for free the first go round, so its in your court” [emphasis added].
[50] It is clear from the March 19 fax sent by Catherine Leuthold that the CBC‘s broadcast of March 17 was authorized by Catherine Leuthold, even though her permission was granted after the fact. As the Court reviews the term of that authorization there are no limits of any kind imposed upon the CBC except that “if the photographs are to be used for advertising said Documentary, I, the photographer must be financially compensated per prior mutual agreement.” The Court cannot accept terms that are not written, there is no financial compensation to be paid unless the photographs are used to advertise the Documentary. Since they were not used to advertise the Production, there is no payment owed to Miss Leuthold for the March 17, 2002 broadcast by the CBC.
[51] Furthemore, the concept of a one-time use or one broadcast first appears in the March 25, 2002 email from Catherine Leuthold to Rose Torriero (see Joint Book of Documents, tab 4, page 16). It is impossible for the Court to accept that this condition applied to the March 17th broadcast since there is no evidence on the record to establish that this restriction limiting the rights of the Defendant, the CBC, to one broadcast was discussed or even mentioned prior to that date or to the March 19, 2012 authorization.
Is the March 17 Newsworld broadcast covered by the March 19, 2002 authorization?
[52] Miss Leuthold testified that to her the CBC “was a regular network like NBC, CBS, you know just regular T.V.”; that Newsworld meant nothing to her at that time and that it was only much later that she understood what Newsworld meant (see transcript, testimony of Catherine Leuthold, February 6, 2012, page 92, lines 2 to 20). On the other hand, witnesses for the CBC testified that when clearing rights, the waivers or licenses always benefited Newsworld (see transcript, testimony of Rose Torriero, February 8, 2012, page 144, lines 1 to 18); and transcript, testimony of Kathy Markou, February 8, 2012, page 203, lines 6 to 25 and page 208, lines 6 to 21).
[53] The Court weighs the evidence adduced as follows: Newsworld is included in the first license because Miss Leuthold did not impose any restrictions when she retroactively granted permission on March 19, 2002.
[54] The same reasoning applies with respect to time zones and CBC affiliates and regional stations in regards to the scope of the first license.
The September 10 broadcasts and the Stills License
[55] The Defendants submit that the reproduction of the Photographs that appear in the September 10, 2002 broadcasts were covered by the Stills License.
[56] The Court must determine the scope of the reproduction rights that were granted by Miss Leuthold when she executed the Stills License in October 2002. That determination calls for a simultaneous examination of certain provisions of the Copyright Act and the terms of the License between the parties.
[57] For the interpretation of that License, the Court must turn to subsection 13(4) of the Copyright Act, which provides that:
13 (4) The owner of the copyright in any work may assign the right, either wholly or partially, and either generally or subject to limitations relating to territory, medium or sector of the market or other limitations relating to the scope of the assignment, and either for the whole term of the copyright or for any other part thereof, and may grant any interest in the right by licence, but no assignment or grant is valid unless it is in writing signed by the owner of the right in respect of which the assignment or grant is made, or by the owner’s duly authorized agent.
[58] Miss Leuthold granted the Defendants the right to reproduce the Photographs in the Production. By executing the License, which was transmitted and drafted in part by the CBC, Miss Leuthold did not grant any interest to the Defendants in her copyright. She gave the Defendants the right to make one broadcast of the Production, which included her Photographs. The meaning of the term “one broadcast”, in the Stills License, is ambiguous, and the parties differ on its significance.
[59] The Court believes that it is important to reproduce the relevant paragraphs of the License.
Stills License
The Canadian Broadcasting Corporation (hereinafter referred to as the “CBC” wishes to include the 5 photographs of 911 created by Catherine J. Leuthold (hereinafter referred to as the “Stills” in the CBC Documentary “As the Towers Fell” (hereinafter referred to as the “Production”).
Catherine J. Leuthold, 300 East 70th Street, New York, N.Y. 10021, (hereinafter referred to as “Licensor”) hereby grants to CBC the non-exclusive and limited right to incorporate the Stills in the Production. CBC shall have the right (but not the obligation) to broadcast the Stills on Canadian television for one broadcast on CBC’s Network & Regional TV stations which it did on the anniversary of 9.11.02 [the remarks in bold were added by Miss Leuthold in her handwriting]
In consideration of the rights conferred herein, CBC agrees to pay Licensor a total fee of $2500.00US (two thousand and five hundred dollars in American currency), such fee payable upon full execution of both copies of this license.
Licensor is not a registered Canadian company for the Goods & Services Tax; therefore GST will not be paid in addition to the amount specified herein.
Licensor is the sole party entitled of the copyright and ownership of the Stills licensed herein and incorporated into the Production.
CBC shall be the sole copyright holder in the Production and in this capacity shall have the right to edit the Production as is required to accommodate broadcast.
Licensor warrants that it is fully empowered to grant the rights herein granted, and that there is no contract with any other person firm, or corporation which could in any way interfere with CBC’s rights under this Licence. Licensor further warrants and represents that it has obtained and/or retained all consents and rights, including copyright, necessary to license the rights specified herein to CBC, without any limitations or restrictions under the one-time usage fee
[the remarks in bold were added by Miss Leuthold in her handwriting]
Licensor shall indemnify CBC and hold it harmless from and against any and all loss, damages or expenses, including legal fees and disbursements which CBC may suffer or incur as a result of any claim, action or proceeding arising from a breach of any of the warranties or representations made by the Licensor in this Licence.
This Licence embodies the entire agreement between the parties with regard to the matters dealt with herein and no understandings or agreements, oral or written, exist between the parties except as herein expressly set out. No modifications of this Licence shall be valid without the written consent of the parties hereto.
This Licence shall be governed by the laws of the Province of Ontario and of Canada and the parties hereto attorn to the exclusive jurisdiction of the courts of said province and country.
Acceptance of the terms and conditions of this Licence shall be attested to by the signatures of the parties of this Licence, and shall constitute a binding agreement between them.
Canadian Broadcasting Corporation:
“Kathy Markou”______________________
Kathy Markou, Manager of Program Rights
Business Affairs
Date: Oct 7/02
Licensor:
“Catherine Leuthold”
Catherine Leuthold
Preliminary motion
[60] The Court must first deal with the motion presented by the Defendants to deny recognition of Mr. Jay Thompson to testify as an expert on behalf of Miss Leuthold. The Defendants, after a thorough cross-examination of Mr. Thompson, claim that he has no expertise in the clearing of rights existing pursuant to the Copyright Act but has expertise on the regulatory environment. According to the Defendants, the issue being the interpretation of a License granted under the Copyright Act, the expertise of Mr. Thompson cannot assist the Court in the interpretation of the Stills License because it is not relevant. Miss Leuthold, on the other hand, claims that Mr. Thompson’s knowledge of the regulatory environment can assist the Court in determining what the terms used in the License generally mean in the industry.
[61] The Court allowed Mr. Thompson to testify subject to ruling on the Defendant’s motion in this judgment. Having weighed the arguments of both parties the Court recognizes Mr. Thompson as an expert qualified to assist the Court in the interpretation of the meaning “to broadcast the Stills on Canadian television for one broadcast on the CBC’s Network and Regional TV stations” because his knowledge of the licensing of broadcasters can possibly have some relevance in the final interpretation of the disputed phrase in the Stills License.
What is the meaning of one broadcast?
[62] Miss Leuthold claims that one broadcast essentially means one transmission in one time zone which started in Atlantic Canada (see transcript, final arguments, February 13, 2012, page 21, lines 18 to 25 and page 22). Therefore only the six regional stations located in Atlantic Canada were entitled to broadcast the Production, one time under the authorized “one time usage” as defined by Miss Leuthold.
[63] Her interpretation is fundamentally based on her claim that she always insisted on one time usage in all the contracts she signed related to all her photographic work.
[64] According to the Defendants, the phrase “to broadcast the Stills on Canadian television for one broadcast on the CBC’s Network and Regional stations” is more encompassing and it includes all the CBC affiliates in all time zones and Newsworld.
[65] Defendants argue that it was impossible for Miss Leuthold to exclude Newsworld since she admitted not having known of its existence when she negotiated the Stills License (see transcript, testimony of Catherine Leuthold, February 6, 2012, page 168, lines 2 to 10).
[66] They also contend that it was irrelevant to Miss Leuthold whether the Production was broadcasted over the air or by cable because she testified not having such preoccupation at the time she negotiated the Stills License, but only in 2003 when she negotiated terms for a broadcast on channel 5 in New York (see transcript, testimony of Catherine Leuthold, February 6, 2012, page 163, lines 12 to 23).
[67] Miss Leuthold alleges that the Stills License covered one broadcast, for one time only, on the CBC network, which does not include the CBC Newsworld and the CBC’s affiliated stations.
[68] It is recognized that “other than in specific situations, which are subject to imperative provisions found in other statutes . . . there is a complete freedom [for the parties] to conclude any form of agreement, subject only to the general principles of the Act, as well as respect of fundamental rights and freedoms and public order” (see Normand Tamaro, The 2012 Annotated Copyright Act, Toronto, Carswell, 2012, at page 412 [Tamaro Annotated Copyright Act]). To put it in context, parties had complete freedom to negotiate the terms of the Stills License.
[69] The Ontario Court of Appeal held in SimEx Inc v IMAX Corp, [2005] OJ No 5389, at para 23, that:
[23] To summarize, while the court strives to interpret a contract in a manner consistent with the intent of the parties, the parties are presumed to have intended the legal consequences of their words. The court will consider the context or factual matrix in which the contract was drafted, including commercial reasonableness, to understand what the parties intended. The court will not adopt an interpretation that is "clearly" commercially absurd. The court must also consider the contract as a whole. The various provisions "should be read, not as standing alone, but in light of the agreement as a whole and other provisions thereof": Scanlon v Castlepoint Development Corp (1992), 99 D.L.R. (4th) 153 (Ont CA) at 179. Where the contract is unambiguous, extrinsic evidence is inadmissible…
Analysis time zones
[70] The Court rejects Miss Leuthold’s interpretation that one broadcast in only one time zone is allowed by the Stills License because there is no specific term to that effect in the Stills License and more importantly, Miss Leuthold’s own expert stated that each regional station broadcasts in its respective time zone (see transcript, testimony of Jay Thompson, February 7, 2012, page 160, lines 24 and 25 page 161, lines 1 to 18).
[71] Miss Leuthold has failed to adduce any evidence to support her interpretation that only one time zone is covered by the Stills License. Two other witnesses also stated that it was common understanding in the industry that a Canadian broadcast, when it relates to a Canadian network, includes all time zones (see transcript, testimony of Rose Torriero, February 8, 2012, page 136, lines 1to 4; transcript, testimony of Kathy Markou, February 8, 2012, page 188, lines 8 to 23).
Is Newsworld covered by the Stills License?
[72] Mr. Jay Thompson prepared an expert report for Miss Leuthold to provide his opinion with respect to the interpretation of the sentence “to broadcast the Stills on Canadian television for one broadcast on CBC’s Network and Regional TV stations” in the Stills License. Mr. Thompson also opined on whether the reference to the CBC’s Network could reasonably be interpreted to include the CBC specialty television programming service Newsworld.
[73] Mr. Thompson found that different categories of broadcasting services are regulated in different ways and are subject to different regulatory privileges and that the CBC must use the appropriate terminology according to the widely-accepted and understood regulatory meaning.
[74] In Mr. Thompson’s view, “the CBC is licensed by the CRTC to operate, amongst other broadcasting services, both English and French language television networks as well as various specialty programming undertakings such as CBC Newsworld. Specialty programming undertakings are not “networks” and, unless the term “Network” is used in their branded name, it would be wrong, inaccurate and confusing from a legal standpoint to refer to them as such” (see Mr. Jay Thompson’s Expert Report, Tab 5 of the Trial record at page 121, paragraph 7).
[75] Newsworld is included in the definition of Specialty Programming Undertakings (SPU) which is defined as “an undertaking for the transmission of programs, either directly by radio waves or other means of telecommunications or indirectly through a distribution undertaking, for reception by the public by means of broadcasting receiving apparatus” (see Mr. Jay Thompson’s Expert Report, Tab 5 of the Trial record at page 121). In other words, the SPU are more like program originators and they are issued programming undertaking licenses. Consequently, he finds that Newsworld is not a network or part of the CBC’s network.
[76] It is clear, from Mr. Thompson’s perspective, that “the CBC Television Network – which the Stills Licence refers to as “CBC’s Network” – is a separate and distinct entity from CBC Newsworld, and that the latter is not included as part of the former” (see Mr. Jay Thompson’s Expert Report, tab 5 of the trial record, page 122 at paragraph 12).
[77] The sentence, in the Stills License, “to broadcast the Stills on Canadian television for one broadcast on CBC’s Network and Regional TV stations” would mean that Newsworld as a Specialty Programming Undertaking [SPU] is not included in the License and therefore, would have infringed the Plaintiff’s copyright in the Stills for the 2002, 2003 and 2004 broadcasts.
[78] In a decision dated January 6, 2000, the CRTC wrote, in paragraph 3, that:
. . .
Though their operations are based on commercial revenues and subscriber fees rather than primarily on public funding, and though Newsworld and RDI report to the Commission as distinct and separately licensed entities, there exists a healthy symbiosis between core and specialty services on both the French and English sides of the CBC. They cooperate and share personnel and equipment in an effort to maximize every production dollar available for the benefit of their viewers (see CRTC 2000-3 decision, expert Jay Thompson’s Book of Authorities, volume I, tab 10).
[79] RDI and Newsworld also keep separate accounting “to ensure that specialty services funded largely through subscriber fees, are not underwritten by the CBC’s parliamentary grants; tax dollars intended to fund the over-the-air radio and television services. This rationale is still valid and the Commission has re-imposed these conditions” (see CRTC 2000-3 decision, expert Jay Thompson’s Book of Authorities, volume I, tab 10, paragraph 25).
[80] Even though the License does not prohibit Newsworld from sharing its content with the main services, the CRTC clearly distinguishes Newsworld and the CBC from each other as they are subject to different regulations. The sharing of resources does not mean that the CRTC considers the CBC and Newsworld as one entity. The CRTC, in its decision, underlined that “in the conditions of licence imposed herein, the Commission clarifies that while RDI and Newsworld may simulcast each other's programming, they may not simultaneously broadcast regular programming with other CBC services regardless of whether or not the programming is originated by them or by another CBC service” (CRTC 2000-3 decision, expert Jay Thompson’s Book of Authorities, volume I, tab 10at paragraph 35). This, according to Mr. Thompson, shows that Newsworld, as a SPU, is completely different from the CBC main-channel, and its content must be differentiated.
[81] The Court notes that the prohibition applies only to a simultaneous broadcasting of regular programming with other CBC services. Even if the September 10 broadcasts aired at 8:00 pm the Court notes that they were not regular programming as evidenced in D-9.
[82] The Defendants, on their part, rely on the testimony of Rose Torriero, Kathy Markou and Jane Ward to substantiate their claim that Newsworld is covered by the Stills License (see transcript, testimony of Rose Torriero, February 8, 2012, page 135, lines 1 to 18; transcript, testimony of Kathy Markou, February 8, 2012, page 187, lines 9 to 21; and transcript, Janice Ward, February 7, 2012, page 65, lines 19 to 25 and page 66, line 1).
[83] The parties have produced three (3) copies of contracts between the CBC and Newsco for the production of the documentary film on the 9/11 events (see Joint Book of Documents, volume II, tabs 18-20). The document produced under tab 19 indicates that Newsworld was part of the agreement and that Desmond Smith, the producer and Newsco’s representative, knew that Newsworld would necessarily be entitled to broadcast the Production. In the course of his negotiations with Miss Leuthold and subsequent interventions on her behalf, was Miss Leuthold apprised of the fact that Newsworld would broadcast the production? There is no evidence to that effect save one email.
[84] Desmond Smith sent an email to Miss Leuthold on the 2nd day of September 2002, prior to the agreement reached by Miss Leuthold with the CBC on September 5th, and wrote the following: “the 85 minute, commercial free program entitled “As the Towers Fell: Minute by Minute with the Journalists” will be broadcast in Canada on September 8th on the CBC Network at 8 p.m. and will be seen in the USA wherever Newsworld International is carried” [emphasis added] (see Joint Book of documents, volume I, tab 4, page 33). It appears, from that email, that Miss Leuthold would have been informed at least minimally of some form of Newsworld involvement and did not take any steps to exclude Newsworld.
[85] The program aired on September 10 based on an email sent by Miss Leuthold to Rose Torriero on September 5, 2002. It reads:
Subject: re New York Photos.
Ok Rose that’s fine just make sure its one time usage and my credit is under each picture and its not for World Wide right. Thanks for your kind words and I appreciate it please send me info who to Bill and where to fax it to.
Catherine Leuthold
[86] The exact terms of the Still License were not finalized until October 2, 2002 and then signed by Kathy Markou on October 7, 2002.
[87] Counsel for Miss Leuthold argues that, in this case, the Stills License should be interpreted in her favor based on the contra proferentem doctrine because the contract was drafted by the CBC. He alleges that the onus was on the corporation to clearly indicate the scope of the License since Miss Leuthold is the weaker party. According to Miss Leuthold, that license clearly meant one usage, one transmission that was all. It was CBC’s choice to make better use or not of that one transmission. It chose to use it on the main channel in Atlantic Canada according to Miss Leuthold. Therefore all other transmissions were excluded from the License and infringed on her rights.
[88] Counsel for the Defendants respond that the evidence adduced clearly shows that the intent of the parties prior to the broadcast was quite broad and that, in essence, it can be summed up as: “One time usage for Canadian broadcast”. More importantly, three witnesses testified that Newsworld was always included when rights were cleared by the CBC (see transcript, testimony of Rose Torriero, February 8, 2012, page 134, lines 22 to 25 and page 135, lines 1 to 18; transcript, testimony of Kathy Markou, February 8, 2012, page 187, lines 9 to 21; and transcript, testimony of Janice Ward, February 7, 2012, page 65, lines 19 to 25 and page 66, line 1).
[89] The Court concludes that Newsworld is included in the expression for “One broadcast on CBC’s Network & Regional TV stations” for the following reasons:
· Firstly, the evidence adduced by the Defendants clearly establishes that when clearing rights, the CBC always included Newsworld.
· Secondly, the only evidence to the contrary came from Mr. Thompson who based his opinion on the distinction the CRTC makes between the CBC and Newsworld. To this Court, that distinction may be correct, from a strict regulatory perspective, but it cannot apply to the clearing of rights. In fact, Mr. Thompson admitted in his testimony that in the industry, Newsworld is sometimes referred to as a Network, though inappropriately from a regulatory perspective. This admission contradicts in part his conclusion (see transcript, testimony of Jay Thompson, February 7, 2012, page 186, lines 14 to 25 and page 187, lines 1 to 23).
· It is trite law that when interpreting an ambiguous provision in a contract the Court may turn to industry usage. In this case, the evidence as to industry usage clearly favors the Defendants. Furthermore, in considering what is commercially sensible, the Court cannot accept Miss Leuthold’s interpretation whereby the CBC would have agreed to terms that ran against t