Enforcing IP Judgements in Canada

by Field Law
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US companies seeking to enforce intellectual property rights against Canadians face certain challenges. First, a US company would commence a lawsuit in a US court, and must serve the Canadian person or entity in Canada. A US plaintiff would serve a Canadian under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (known as the “Hague Convention”). Under this Convention, there is a Central Authority designated federally and for each province and territory. In Alberta, this is done through Alberta Justice, Office of the Sheriff (Civil Enforcement) in Edmonton or Calgary. The normal procedure for service in Canada is personal service, and in Alberta this is through a ”process server”. Once served, the Canadian then has to decide whether to respond to the US lawsuit.

In some case, the Canadian decides to ignore the US lawsuit. This happened in Blizzard v. Simpson, 2012 ONSC 4312 (CanLII), where Blizzard Entertainment sued Michael Simpson, a developer who was alleged to have authored and sold a “maphack” for Blizzard’s popular multiplayer game known as StarCraft II – Wings of Liberty. Mr. Simpson was served in Canada but failed to file any defence to the California lawsuit. As a result, Blizzard took default judgement in which Mr. Simpson was ordered to pay statutory damages of $150,000 legal fees and costs of $45,000. A permanent injunction was also ordered to prevent further infringement of Blizzard’s StarCraft II copyright or violation of the StarCraft II End User License Agreement (”EULA”) and Battle.net terms of use (”TOU”), among other things.

Blizzard then came to Canada to enforce their US judgement against Mr. Simpson. This required a second lawsuit (in Ontario, where Mr. Simpson resided). A Canadian court assesses the jurisdiction of the original court (by applying Canadian conflict of laws rules), and verifies that there are no defences of fraud, breach of natural justice, or public policy, which would cause the Canadian court to refuse to enforce the US judgement.

In this case, Mr. Simpson elected to defend the lawsuit in Canada. But by that time it was too late, since the court was not considering the merits of the copyright infringement case, but rather was reviewing the enforcement of a foreign judgement that had already been granted. Mr. Simpson attempted a novel defence by alleging that it was Blizzard who breached the terms of Mr. Simpson’s own website (terms that prohibited access by employees or lawyers of Blizzard). The court found this argument “untenable”, and concluded by entering the California judgement as a judgement of the Ontario court.

It is worth noting that defences to the copyright infringement claim may have been available in the California lawsuit - it is clear in both Canadian and US law that a breach of the terms of use does not (by itself) infringe copyright. It is not clear whether any copyright infringement actually occurred, but Blizzard won that argument by default.

Related Reading: Apps, Bots and Workarounds

Lessons for Canadian business: don’t ignore US lawsuits!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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