Proline Pipe Equipment Inc v Provincial Rentals Ltd, 2019 ABQB 983

Court of Queen’s Bench of Alberta Citation: Proline Pipe Equipment Inc v Provincial Rentals Ltd, 2019 ABQB 983 Date: 20191219 Docket: 1403 00692 Registry: Edmonton Between: Proline Pipe Equipment Inc Applicant - and - Provincial Rentals Ltd Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice L.R.A. Ackerl _______________________________________________________ I.

Summary [ 1 ] The Applicant, Proline Pipe Equipment Inc., asks for

summary judgment against the Respondent, Provincial Rentals Ltd. Proline seeks numerous remedies including declarations, a permanent injunction, delivery up of products and design drawings, and an account of profits. [ 2 ] A plaintiff applying for

summary judgment must show that there is no defence to the claim or part of it, or that the only real

issue is the amount to be awarded: Alberta Rules of Court , Alta Reg 124/2010, Rule 7.3 . In the present case, Proline must show that there is no defence to its claim or part of the claim. [ 3 ] The evidence before me falls far short of establishing there is no defence to Proline’s claim, or any part of it.

Even if I accept all of Proline’s evidence – much of which is inadmissible in this application – I am not satisfied that Proline has proven every fact necessary to support its claim that Provincial Rentals engaged in copyright infringement, unlawful conversion, unfair competition, or unlawful interference with Proline’s economic interests. [ 4 ] Accordingly, the application is dismissed. II.

Factual background [ 5 ] The following evidence is found in the affidavit of Ray Smitke, Proline’s president, and the attached exhibits: • Glen Grier, a former employee of Proline, took confidential drawings belonging to Proline without permission. • Jim Harvey, an employee of a manufacturing company called Willbros, made copies of the confidential Proline drawings. • Harvey represented to Bob Shipway, president of Provincial Rentals, that Willbros had the capacity to build pipe bending machines.

Provincial Rentals agreed to purchase two pipe bending machines from Willbros. • Some parts of the pipe bending machines were fabricated and partially assembled at Willbros’s shop using the Proline drawings. • Proline management called Harvey and informed him that they knew what was going on at Willbros.

After this, production of the pipe bending machines ceased at Willbros. • Provincial Rentals paid Willbros for the partially completed machines. • The partially completed pipe bending machines were sent to Heamen, a shop partly owned by Bob Shipway, and completed there. • The completed pipe bending machines were purchased by Provincial Rentals and moved to the Provincial Rentals yard. • Provincial Rentals rented out one of the machines to one or more customers for $12,000. III. Test for

summary judgment [ 6 ] The key considerations in the test for

summary judgment are set out in Weir-Jones Technical Services Inc v Purolator Courier Ltd , 2019 ABCA 49 at para 47 :

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a

summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either "no merit" or "no defence" and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for

summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party's case, by identifying a positive defence, by showing that a fair and just

summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial,

summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. IV. The

summary judgment test has not been met [ 7 ] Even if I accept in its entirety the evidence found in Ray Smitke’s affidavit and the attached exhibits, the facts necessary to support a claim against Provincial Rentals for copyright infringement, unlawful conversion, unfair competition, or unlawful interference with Proline’s economic interests are not proven on a balance of probabilities. A.

Copyright in Drawings [ 8 ] Pursuant to the Copyright Act , RSC 1985, c C-42, sections 3 and 5 , copyright attaches to original artistic works, and confers on the holder “the sole right to produce or reproduce the work or any substantial part thereof in any material form whatsoever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof.” [ 9 ] CCH Canadian Ltd v Law Society of Upper Canada , 2004 SCC 13 , holds that for a work to be an “original” within the meaning of the Copyright Act , it cannot be a mere copy – it must be the product of an exercise of skill and judgment (para 16).

This “skill and judgment” must go beyond a purely mechanical exercise, such as changing the font in an existing document.

[10] Proline alleges that its design drawings – which are marked as “the exclusive property of Proline Pipe Equipment Inc.” – areoriginal artistic works in which it has sole copyright. Proline relies on

section 34.1(1) of the Copyright Act: 34.1

(1) In any civil proceedings taken under this Act in which the defendant puts in issue either the existence of the copyright or the titleof the plaintiff to it, (

a) copyright shall be presumed, unless the contrary is proved, to subsist in the work, performer’s performance, sound recording orcommunication signal, as the case may be. [11] Provincial Rentals counters that the Proline drawings are not subject to copyright because they are merely copies ofpreviously existing designs.

As evidence for this fact, the affidavit of Bob Shipway states that a former Proline employee advised Mr.Shipway that the drawings were simply copied from earlier designs of pipe bending machines manufactured by an American company. [12] Sections 34(4)-(5) of the Copyright Act state that copyright infringement proceedings that are commenced by way ofapplication shall be determined in a

summary way, governed by the civil procedure rules of the court where the proceedings arecommenced. This section, in conjunction with

section 34.1, allows me to determine summarily whether Proline holds copyright in thedrawings at issue in this application. [13] I conclude for the purposes of this proceeding, pursuant to the

section 34.1 presumption, that copyright in the drawingssubsists in Proline. Provincial Rentals has not proven the contrary. The former Proline employee’s statement that the drawings are copiesis inadmissible hearsay, and without this hearsay statement, I have only Mr. Shipway’s bare assertion that the Proline drawings are notoriginal works. Such an assertion is not sufficient to rebut the

section 34.1 presumption. B. Copyright in Machines [14] Proline further alleges that its copyright extends not only to the drawings, but also to the machines produced using thedrawings. For this proposition, Proline relies primarily on section 3(1) of the Copyright Act, which states that “copyright, in relation to awork, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever” (emphasisadded).

Additionally, Proline refers to Lainco Inc c Commission scolaire des Bois-Francs, 2017 FC 825 [Lainco], in which thedefendant was found to have infringed the plaintiff’s copyright by constructing the steel structure of an indoor sports complex using theplaintiff’s structural plans. [15] Proline also offers the case of Schauenburg Industries Ltd v Borowski (1979), (ON SC), 25 OR (2d) 737(HCJ), 1979 CarswellOnt 166 to emphasize that copyright infringement may include copying a work in part, even if the defendant alsoadds original materials to the work (see para 32). [16] I do not accept that copyright in the Proline drawings extends to the pipe bending machines themselves.

The definition of“artistic works” in

section 2 of the Copyright Act” includes “paintings, drawings, maps, charts, plans, photographs, engravings,sculptures, works of artistic craftsmanship, architectural works, and compilations of artistic works.” Industrial machines are not includedin this definition. [17] To “produce or reproduce the work or any substantial part thereof in any material form whatever,” the thing beingproduced/reproduced must be the work – not the idea contained in the work. In this case, the “work” is the drawings themselves.

Anexample of reproducing the work in a different material form would be to create an electronic copy of the paper drawings, or vice versa.Conversely, fabricating the parts or assembling the machines depicted in the drawings is not reproduction of the work. [18] This conclusion is supported by Cuisenaire v South West Imports Ltd (1968), (SCC), [1969] SCR 208,1968 CarswellNat 56. In that case, the alleged copyright infringement was the reproduction by the defendant of two sets of coloured rodsused for the teaching of science and arithmetic, which were described in a book written by the plaintiff.

Ritchie J, writing for aunanimous court, held that the rods themselves were not things in which copyright could be had. In so holding, he quoted with approvalfrom Hollindrake v Truswell, [1894] 3 Chancery 420 at 428, and Moreau v St Vincent, (CA EXC), [1950] Ex CR 198at 203, respectively, at para 8: [O]ne may have copyright in the description of an art; but, having described it, you give it to the public for their use; and there is a cleardistinction between the book which describes it, and the art or mechanical device which is described (emphasis added). ...

It is... an elementary principle of copyright law that an author has no copyright in ideas but only in his expression of them. The law ofcopyright does not give him any monopoly in the use of the ideas with which he deals or any property in them, even if they are original. [19] Furthermore, the Lainco case does not assist Proline. The copyrighted material at issue in that case was an architectural work,not a machine. In respect of architectural works – unlike machines – the Copyright Act provides that the structure itself is subject tocopyright.

The Act stipulates that “architectural work” means “any building or structure or any model of a building or structure,” andpublication of a work includes “the construction of an architectural work” (ss 2, 2.2(1)(a)(ii), emphasis added). [20] Indeed, the fact that the Copyright Act expressly extends copyright protection of architectural works to physical structures, butmakes no such provision for machines, indicates that Parliament had no intention to make physical machines the subject of copyright.

Iam guided here by the expressio unius est exclusio alterius (implied exclusion) maxim – to express one thing is to exclude another.When a statutory provision specifically mentions an item but is silent regarding another comparable item, the silence is presumed to bedeliberate and reflects an intention to exclude the item not mentioned (see Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed(Markham: LexisNexis, 2014) at 248).

[ 21 ] Given that Proline’s copyright in its drawings cannot extend to the machines themselves, the Copyright Act

section 34.1 presumption does not aid Proline with respect to the machines. Copyright is presumed to subsist in a “work, performer’s performance, sound recording or communication signal,” but when the subject matter of the claim is not capable of being the subject of copyright, there can be no presumption of copyright. [ 22 ] It is, of course, possible to protect one’s intellectual property in ideas pertaining to mechanical devices and the physical representations of those devices. This can be achieved with a patent.

However, Proline does not have a patent in its pipe bending machines, and cannot indirectly obtain what amounts to a patent through copyright. C. No Claim Established Against Provincial Rentals [ 23 ] As for the drawings themselves, Proline’s affidavit evidence (even if I accept all of it) does not establish that Provincial Rentals made unauthorized copies, or directed others to make unauthorized copies, or ever possessed the drawings at all, or had knowledge of unauthorized copying of the drawings by others.

Copyright infringement has simply not been made out. [ 24 ] Similarly, Proline’s evidence does not establish that Provincial Rentals converted Proline’s property, unfairly competed with Proline, or unlawfully interfered with Proline’s economic relations. In short, the only wrongs arising on the face of Proline’s evidence are acts committed by other parties, with nothing to sufficiently connect these acts to Provincial Rentals. [ 25 ] This is sufficient to dispose of Proline’s application for

summary dismissal. On its own evidence, it has failed to meet even the threshold burden of proving the facts necessary to support its claim on a balance of probabilities. D. Inadmissible Evidence [ 26 ] As alluded to above, Proline is faced with an additional problem: much of its evidence is inadmissible. [ 27 ] A significant portion of Proline’s evidence comes from the transcripts of

Part 5 questionings of Glen Grier and Jim Harvey. Pursuant to Rule 6.11(1)(c), I can only consider Grier and Harvey’s answers from

Part 5 questioning if those answers may be used under Rule 5.31. [ 28 ] According to Rule 5.31(2), Grier’s answers at questioning can only be used as evidence against Grier; and Harvey’s answers can only be used as evidence against Harvey. In short, their answers at questioning are not admissible in this application as evidence against Rentals. [ 29 ] In oral argument, Proline acknowledged this rule. Proline’s counsel submitted that the transcripts had simply been included as “narrative” to give context to the

summary judgment application, and were not being used “against” Provincial Rentals. [ 30 ] I find this submission unpersuasive. The bulk of Proline’s evidence that its drawings were taken and copied by others is found in Grier and Harvey’s questioning transcripts. Without the transcripts, Proline’s evidence amounts to little more than a bare assertion in Ray Smitke’s affidavit that Grier took the drawings. In light of Rule 5.31(2), it would be inappropriate for me to consider any of the evidence in Grier and Harvey’s questioning transcripts in this

summary judgment application against Provincial Rentals, for “narrative” purposes or otherwise. [ 31 ] For this reason, I find that it would not be possible in any event for me to fairly resolve this dispute in Proline’s favour on a

summary basis, having regard to the state of the record and the issues. Even if I accepted Proline’s

interpretation of copyright law with respect to industrial machines, there is insufficient evidence on the record for me to make the fact findings necessary to grant

summary judgment. V. Conclusion [ 32 ] In the result, the Applicant has failed to meet the test for

summary judgment by a plaintiff. The application is denied. VI. Costs [ 33 ] The Respondent shall have its costs. If the parties are not agreed, costs shall be spoken to within 45 days of the release of this decision. Heard on the 10 th day of December, 2019. Dated at the City of Edmonton, Alberta this 19 th day of December, 2019.

L.R.A. Ackerl J.C.Q.B.A. Appearances: Omolara Oladipo Pablo Retamozo for the Applicant Stephen J. Livingstone for the Respondent