First application of the parody exception in Canadian law - long live Deckmyn!

Readers will remember that back in 2012 Canada introduced a parody exception into its own law. Yet, until now the scope of the exception was not entirely clear, lacking judicial application.

From IPKat friend and parody expert Sabine Jacques (University of East Anglia) comes the news that a Canadian court has just interpreted s29 of the Canadian Copyright Act, and also considered the case of trade mark parodies.

Here’s what Sabine writes:

“Canada experienced a major reform of its copyright legislation which took nearly 7 years to complete. Following a tumultuous birth, the parody exception came into force on 7 November 2012, leaving to the Canadian courts the task to determine the scope and outer boundaries to the exception.

Long-awaited, a case decided a few days ago represents the first application of the parody exception under Canadian copyright law, as well as tackling the place of parodies under Canadian trade mark legislation. As further explained below, the decision of the Federal Court in United Airlines, Inc. v. Jeremy Cooperstock (available here) provides an interesting illustration of the treatment of commercial parodies under both trade mark and copyright regimes.

The dispute

The case relates to an action brought by United Airlines, a commercial airline, against Dr Jeremy Cooperstock, McGill engineering professor, for the operation of a consumer criticism website (www.untied.com) commenting on the failings of the plaintiff. What was originally a personal vendetta for the poor treatment received following official complaints made by Dr Cooperstock to the airline company then became a digital space for thousands of unhappy customers to voice their complaints over the course of 20 years.

In addition to playing around with the word ‘United’, the defendant altered the plaintiff’s logo by changing the colours of the ‘T’ and the ‘I’ in the ‘Untied’ logo from blue to red and added a red frown on the globe design.

In order to ensure the absence of confusion, the defendant also added a pop-up dialogue box to indicate users that the website was not the plaintiff’s website. This disclaimer also features on the banner in the top left corner of the website.

Nevertheless, the Federal Court found that the defendant’s uses infringed both trade mark and copyright. In relation to the application of a possible parody defence, the Court held that the use was unfair even though it was for the purpose of parody (paras 19 & 149).

Is there a place for trade mark parodies in Canada?

Under section 20(1)(a) Trade-Marks Act (RSC 1985, c T-13) (TM Act), trade mark infringement requires a valid trade mark registration, a ‘use’ in the sense of the Act (sale, distribution or advertisement), a confusing sign in relation to any goods and services in a commercial context without entitlement or authorisation.

While there was no argument as to the validity of the plaintiff’s trade marks registrations, there was some discussion as to whether the defendant’s website qualified as a ‘service’ under the TM Act. Adopting a broad interpretation, the Federal Court answered in the affirmative (para 33). Therefore, providing information as to the services provided by the plaintiff’s business though Untied.com constitutes a service under section 20 despite any monetary or commercial element. The important factor being that the activities of the defendant benefited the public in some way.

Having qualified as a service, the Court moved on to analyse whether the defendant used a protected sign in a way contemplated by the statute. To do so, the defendant must have used the protected sign as intended under section 4 TM Act and this use must affect the function of origin of the trade mark (para 35). By purposefully mimicking the overall feel of the plaintiff’s website, the Court was easily satisfied that the two requirements were met here.

This led the Court to determine whether marks are confusing or likely to induce confusion in the consumer’s mind. Pursuant to sections 2 and 6 of the TM Act, confusion must be considered ‘from the perspective of the first impression of the “casual consumer somewhat in a hurry”’ (para 45, citing Veuve Clicquot Ponsardin v Boutiques Cliquot Ltee, [2006] 1 SCR 824, para 20). This must be balanced with the inherent distinctiveness of the protected sign. Here while the sign ‘United’ acquired distinctiveness through time, it is not particularly distinctive. Yet, because of the extensive use of the sign in marketing and advertising, the Court was convinced that that consumers would associate the ‘United’ mark with the plaintiff’s activities (para 47). The Court also sided with the plaintiff in relation to the nature of the services offered (i.e. both provide information to prospective travellers as well as complaints procedure with United). Furthermore, both the plaintiff’s and the defendant’s services were provided through the Internet, adding to the likelihood of confusion induced by the way in which users would reach the respective websites (para 52).

Moving onto assessing the similarity between the two marks, the Court was convinced that this factor weighed heavily against the defendant as the alleged infringing website mimicked the plaintiff’s website on purpose. The differences lying in the flipping the order of the ‘I’ and the ‘T’, changes in colours from blue to red and the addition of a freehand frown on the United logo.

United has been recently
at the centre of attention ...
and internet creativity

On the question of trade mark infringement, there was no doubt that the defendant’s website aimed at evoking the plaintiff’s website. However, as noted in Source Perrier SA v Fira-Less Marketing Co, [1983] 2 FC 18, para 10, in order to create a spoof, some uses may be meant to cause confusion. This is clearly the case here. By reproducing the trade mark, the defendant intended for the users to associate ‘Untied.com’ with ‘United.com’ (para 57). Having an imperfect recollection, the Court held that average consumer is likely to be confused (paras 59&62-65). As no parody exception currently exists under Canadian trade mark law, the defendant’s use constitute a TM infringement and passing off (para 83). This was supported by Source Perrier SA v Fira-Less Marketing Co, [1983] 2 FC 18, para 20 and Green v Schwarz, (1986) 12 CPR (3d) 84, paras 4-5. Here, both decisions support that by creating a spoof of a registered sign, the defendant inherently takes advantage of the goodwill associated to the plaintiff’s trade mark in addition to depreciating it (para 102).

How did the Canadian Federal Court interpret and applied the copyright parody exception?

Before turning to the application of a defence, infringement must be established. Here, the plaintiff (and rightholder) must establish that the protected work is original, that the defendant reproduced a substantial part of this work and that the defendant accessed the original work. As originality and access had been admitted by the defendant himself, the Court was easily convinced that these two requirements were met (para 103). The question of substantiality must be appreciated qualitatively and not quantitatively (Cie générale des établissements Michelin-Michelin & Cie v CAW-Canada (1996), [1997] 2 FC 306, para 23). Based on the facts of this case, this substantial copying was evident (para 105) and therefore, infringement was established.

Can the use be rendered lawful by the application of the parody exception? Enshrined in section 29 of the Copyright Act 1985 (R.S.C., 1985, c. C-42), the Canadian parody exception reads: ‘fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright’.

According to the Supreme Court in CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13, [2004] 1 SCR 339, para 50, fair dealing requires a two-step test: (1) the dealing must be for one of the purpose set out in the Act; (2) the dealing must be fair. Fairness is assessed via a ‘holistic’ approach based upon six variables applied to the facts of the case. Hence, courts must consider the purpose and character of the dealing, the amount copied, whether the alleged infringer had alternatives to the dealing, the nature of the copied work, and the effect of the dealing on the work. Contrastingly with the EU’s principle of strict interpretation applicable to copyright exceptions, the Canadian Supreme Court held that copyright exceptions constitute ‘users’ rights’. As such, copyright exceptions cannot be interpreted restrictively (CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13, [2004] 1 SCR 339, para 48 confirmed in Socan v Bell Canada, 2012 SCC 36, [2012] 2 SCR 326, para 11).

In relation to the purpose of the dealing, the use must be for the purpose of parody. However, as other jurisdictions which adopted a parody exception, the legislator remained silent as to the meaning of the terms ‘parody’ and ‘satire’. In the absence of any legal definitions, the general rules of statutory interpretation are applicable. Consequently, the ordinary meaning of the terms will be considered and insight will also be derived from judicial attempts to define parody prior to the introduction of a specific parody exception. It is therefore naturally that the Federal Court referred to Avanti Ciné-Vidéo Inc c Favreau, (1999) 177 DLR (4th) 568, a case concerning a pornographic parody of the TV situation comedy show, La Petite Vie where the Court of Appeal constructed its own definition of parody, as: ‘normally [involving] the humorous imitation of the work of another writer, often exaggerated, for purposes of criticism or comment’ (para 575). This definition was rejected in the case at hand as the defendant did not aim to derive a commercial benefit from the use (para 115).

Turning to definitions adopted in other juridisctions, the Federal Court confirmed its intention to reject the US definitions as it saw no reason to adopt either the definitions or a fair use defence from another legal regime, based upon different jurisprudence (already noted in Compagnie Générales des Établissements Michelin-Michelin & Cie v. National Automobile, Aerospace, Transportation and General Workers Union of Canada (1996) 71 C.P.R. (3d) 348, paras 61-67). The Court went further and considered the EU definition of parody as established in Johan Deckmyn and Vrijheidsfonds VZW v Helena Vandersteen and Others (C-201/13) ECLI:EU:C:2014:2132 [2014]. Here, the Court of Justice of the European Union identified a work as a ‘parody’ by its satisfaction of two requirements: firstly, it must ‘evoke an existing work while being noticeably different from it,’ and secondly, it must ‘constitute an expression of humour or mockery’ (para 20). Finding this definition consistent with the ordinary meaning of the terms, the Canadian judge decided to adopt the two EU requirements which weighed in favour of the defendant.

Finally, in determining whether the dealing was fair, the Court held that the use was not for the purpose of a parody as users are likely to be confused and that the defendant’s intent was not humorous but aimed at embarrassing or punishing the plaintiff (para 124). The character of the dealing (para 127), amount reproduced (para 129), alternatives to the dealing (para 133) and effect of the dealing on the market for the original (para 140) all weighed against the finding of fairness.

It remains to be seen whether Dr Cooperstock will appeal the decision or not.

The works at stake in the Deckmyn case

Comment

The Federal Court’s outcome regarding the trade mark infringements was expected. In the absence of a specific parody exception under trade mark legislation, courts have struggled to recognise lawful uses in trade mark parodies. This case demonstrates the strong protection granted to trade mark owners to protect their marks, bringing to the fore a possible real risk that trade mark protection becomes absolute without adequate legislative limitations applicable in some circumstances.

The Court’s reasoning regarding the application of the parody exception under copyright law (discussed by the IPKat here, here and here and by EU Law Analysis here and here) is both interesting and surprising. Firstly, this contributor agrees that the judge was right in parting from the definition established in Favreau prior to the introduction of a specific exception given its very limited scope. Indeed, it seems restricted to works of literature and ‘parody of’, in which the parodist’s message is to comment upon the underlying work. Secondly, the judge adopted the parody definition from Deckmyn. In its interpretation, the judge seems to allocate less importance the intent behind the use than the effect resulting from it. This is perhaps not appropriate given that a parody’s effect generally hinges upon external factors, outside the defendant’s control. Furthermore, the judge opines that the second requirement of ‘the evocation of an existing work while exhibiting noticeable differences’ only necessitates ‘some differences’. This leads to a very low threshold which is likely to be met by any derivative use.

Later, when looking at the question of fairness of the dealing, the judge decided that the use was not for the purpose of parody even though the two main requirements had been met in this case. This outcome was reached on the basis that the defendant’s use was held as confusing and that the intent behind the expression was less about humour but more about embarrassing or punishing the airline company for their wrongdoings.  While it is arguable that the judge wrongly applied the two requirements established in Deckmyn, this decision also demonstrates some of the difficulties which UK courts might run into when applying the parody exception. Does Deckmyn mean that courts should apply the fairness factors in order to assess whether the two core requirements are satisfied or whether, the fairness factors represent an additional step? After all, the CJEU expressly excluded other specific requirements adopted in Belgian law such as originality and attribution. Therefore, the application of fairness factors after the assessment of the two main requirements seems rather counter-productive. Here, a correct understanding and application of the Deckmyn requirements might have led to the same outcome without the appearance of a contradiction between the definition of what constitutes a parody under the Act and the application of the first fairness factor.”