Federal Appeal

Industrial and Intellectual Property

Appellant entitled to prejudgment interest on statutory damages

Issue on appeal was whether collective society that elected statutory damages under s. 38.1(4) of Copyright Act in respect of royalties owed in British Columbia was entitled to prejudgment interest pursuant to s. 1(1) of Court Order Interest Act (B.C.) from date on which royalties were payable. Appellant SOCAN was collective society which owned or administered right of public performance in Canada, and right to authorize such public performances, in most popular works in current use in Canada. By virtue of tariff approved by Copyright Board (Tariff 3C), SOCAN was entitled to collect royalties from licensees for calendar years 2005 to 2010. In years 2005 to 2010 inclusive, respondent IIC was licensee under Tariff 3C, operating nightclub at which it presented to public performances of recorded music that included works in SOCAN repertoire. IIC paid part of royalties due for 2005, and nothing for subsequent years. SOCAN filed statement of claim seeking judgment against IIC in amount of unpaid royalties. Statutory basis for claim for unpaid royalties was s. 68.2(1) of CA. Statement of claim also gave notice that SOCAN may elect in alternative to claim statutory damages under s. 38.1(4) of CA. IIC was served with statement of claim but did not file notice of appearance. SOCAN filed notice of motion seeking default judgment electing to recover statutory damages pursuant to s. 38.1(4). It claimed statutory damages equal to seven times amount of unpaid royalties, plus prejudgment interest at annual rate of 3%. Prothonotary held that IIC was liable for unpaid royalties in amount claimed, and that SOCAN was entitled to make election under s. 38.1(4). After considering relevant factors, he determined that multiplier of six would be appropriate. Prothonotary declined to award prejudgment interest from date on which cause of action arose. Judge agreed with prothonotary and dismissed appeal. Appeal allowed. CA says nothing about prejudgment interest and no other Act of Parliament could possibly be interpreted to preclude award of prejudgment interest on monetary award made under CA. It followed that in this case, s. 36(1) of Federal Courts Act (Can.) applied. SOCAN’s entitlement to prejudgment interest must be determined by law of British Columbia. SOCAN was entitled in this case to prejudgment interest on statutory damages awarded by prothonotary from date on which cause of action arose. Under s. 1(1) of COIA, court had no discretion to choose any other period for which prejudgment interest was payable.

Society of Composers, Authors and Music Publishers of Canada v. IIC Enterprises Ltd.

(June 14, 2012, F.C.A., Sharlow, Pelletier and Mainville JJ.A., File No. A-499-11) Decision at 207 A.C.W.S. (3d) 220 was reversed. 217 A.C.W.S. (3d) 168 (16 pp.).

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