THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO, ROBERT GAZZALE, LISA KRAMER v. AI TANIGUCHI, 2024 FC 205

Date: 20240208 Docket: T-948-22 Citation: 2024 FC 205 Toronto, Ontario, February 8, 2024 PRESENT: Case Management Judge John C. Cotter BETWEEN: THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO, ROBERT GAZZALE, LISA KRAMER AND AI TANIGUCHI Plaintiffs/ Defendants by Counterclaim and EASY GROUP INC. D/B/A EASY EDUCATION, EASY 4 EDUCATION CANADA INC., EASY 4.0 EDUCATION INC., EASY 4.0 EDUCATION UTSC INC. Defendants/ Plaintiffs by Counterclaim ORDER AND REASONS [ 1 ] The plaintiffs and the defendants each brought motions in connection with questions refused on examinations for discovery.

The defendants also sought certain other relief. The pending motions were discussed at a case management conference held on November 9, 2023. As the parties estimated two days would be required for the hearing of the motions, and with a view to efficiency, minimizing the amount of time required, and providing the parties with an opportunity to resolve disputed questions, it was determined that the hearing of the motions would proceed in two stages. [ 2 ] For the first stage the parties would identify certain topics and questions they wished the Court to address.

Following a decision on those points the parties would then have an opportunity to attempt to resolve the various questions in issue and to the extent they are unable to do so, the second stage of the motions will proceed. [ 3 ] This Order and Reasons concerns the first stage of the plaintiffs’ motion. The first stage of the defendants’ motion is dealt with by separate Order and Reasons ( see 2024 FC 206 ). [ 4 ] As noted above, the parties were to select the topics and questions they wished to have addressed in this first stage.

As the moving parties’ motion records had already been served and filed prior to the case management conference, and the responding parties’ motion records had not, the topics and questions to be addressed in this stage were to be identified in the responding written representations on each motion after discussions among counsel. [ 5 ] For this first stage of the plaintiffs’ motion, the parties identified the following topic to be addressed: “Category 2 – The Scope of Easy’s Unauthorized Activities”. [ 6 ] At the hearing of the motion the parties presented arguments on the topic category.

There was insufficient time to present arguments on individual questions. As a result, this Order and Reasons deal with the above-noted topic category. To the extent the parties are unable to resolve how the individual questions in this topic category will be dealt with, they will be addressed in the second stage of this motion. I.

General Principles – Scope of Examination [ 7 ] Rule 240 of the Federal Courts Rules (“Rules”) addresses the scope of examination and provides that: " Scope of examination " " " " Étendue de l’interrogatoire " " 240 A person being examined for discovery shall answer, to the best of the person’s knowledge, information and belief, any question that " " " " 240 " " La personne soumise à un interrogatoire préalable répond, au mieux de sa connaissance et de sa croyance, à toute question qui : "

" (

a) is relevant to any unadmitted allegation of fact in a pleading filed by the party being examined or by the examining party; or " " " " a) " " soit se rapporte à un fait allégué et non admis dans un acte de procédure déposé par la

partie soumise à l’interrogatoire préalable ou par la

partie qui interroge; " " " " (

b) concerns the name or address of any person, other than an expert witness, who might reasonably be expected to have knowledge relating to a matter in question in the action. " " " " b) " " soit concerne le nom ou l’adresse d’une personne, autre qu’un témoin expert, dont il est raisonnable de croire qu’elle a une connaissance d’une question en litige dans l’action.

" [ 8 ] Other pertinent Rules regarding examinations of discovery include Rules 241 and 242 which provide as follows: " Obligation to inform self " " L’obligation de se renseigner " " " " 241 Subject to paragraph 242(1)(d), a person who is to be examined for discovery, other than a person examined under rule 238, shall, before the examination, become informed by making inquiries of any present or former officer, servant, agent or employee of the party, including any who are outside Canada, who might be expected to have knowledge relating to any matter in question in the action. " " 241 " "

Sous réserve de l’alinéa 242(1)d), la personne soumise à un interrogatoire préalable, autre que celle interrogée aux termes de la règle 238, se renseigne, avant celui-ci, auprès des dirigeants, fonctionnaires, agents ou employés actuels ou antérieurs de la partie, y compris ceux qui se trouvent à l’extérieur du Canada, dont il est raisonnable de croire qu’ils pourraient détenir des renseignements au sujet de toute question en litige dans l’action. " " " " Objections permitted " " Objection permise " " " " 242

(1) A person may object to a question asked in an examination for discovery on the ground that " " 242 (1) " " Une personne peut soulever une objection au sujet de toute question posée lors d’un interrogatoire préalable au motif que, selon le cas : " " " " (

a) the answer is privileged; " " a) " " la réponse est protégée par un privilège de non-divulgation; " " " " (

b) the question is not relevant to any unadmitted allegation of fact in a pleading filed by the party being examined or by the examining party; " " b) " " la question ne se rapporte pas à un fait allégué et non admis dans un acte de procédure déposé par la

partie soumise à l’interrogatoire ou par la

partie qui l’interroge; " " " " (

c) the question is unreasonable or unnecessary; or " " " " c) " " la question est déraisonnable ou inutile; " " " " (

d) it would be unduly onerous to require the person to make the inquiries referred to in rule 241. " " " " d) " " il serait trop onéreux de se renseigner auprès d’une personne visée à la règle 241. " " " " Objections not permitted " " Objection interdite " " " "

(2) A person other than a person examined under rule 238 may not object to a question asked in an examination for discovery on the ground that " " (2) " " À l’exception d’une personne interrogée aux termes de la règle 238, nul ne peut s’opposer à une question posée lors d’un interrogatoire préalable au motif que, selon le cas : " " "

" (

a) the answer would be evidence or hearsay; " " a) " " la réponse constituerait un élément de preuve ou du ouï-dire; " " " " (

b) the question constitutes cross- examination. " " b) " " la question constitue un contre- interrogatoire. " " " [ 9 ] The general principles that " apply " on a motion to compel answers to questions refused on an examination for discovery are summarized in Bard Peripheral Vascular, Inc v W.L.

Gore & Associates, Inc , 2015 FC 1176 (“ Bard Peripheral ”): " [18] As reaffirmed by the Federal Court of Appeal in Canada v Lehigh Cement Limited , " " 2011 FCA 120 " " , at paragraph " " 30 " " [ Lehigh Cement ] " " , the general purpose of discovery “is to render the trial fairer and more efficient by allowing each party to inform itself fully prior to trial of the precise nature of all other parties’ positions so as to define fully the issues between them.” This calls for a liberal approach to the scope of questioning on discovery ( " " Lehigh Cement " " , at para " " 30 " " ; Sanofi-Aventis , above at para 19).

" " [19] Examinations on discovery in proceedings before this Court are governed by Rules 234 to 248. Rules 240 and 242(1) are of particular relevance to the present case. Rule 240 provides for the scope of the examination for discovery. It states that a person examined for discovery is required to answer, inter alia, any questions relevant to any unadmitted allegation of fact disclosed in the pleadings.

" " In " " Lehigh Cement " " , above, the Federal Court of Appeal reiterated that a question is relevant “when there is a reasonable likelihood that it might elicit information which may directly or indirectly enable the party seeking the answer to advance its case or to damage the case of its adversary, or which fairly might lead to a train of inquiry that may either advance the questioning party’s case or damage the case of its adversary” ( " " Lehigh Cement " " , at para " " 34 " " ). " " [20] For its part, Rule 242(1) establishes permissible objections during an examination for discovery.

It provides that a person may object to a question when, for example, the answer is not relevant, is unreasonable, is unnecessary, or would be unduly onerous to answer. The following types of questions have generally been found not to be proper subject matters for discovery : (

i) questions seeking expert opinion, (ii) questions seeking the witness to testify as to questions of law, (iii) questions seeking law or argument, as opposed to facts, and (iv) questions where the witness is being asked: “upon what facts do you rely for paragraph x of your pleading” ( Apotex Inc. v Pharmascience Inc. , " " 2004 FC 1198 " " , " " 260 FTR 254 " " , at para " " 19 " " ; AstraZeneca Canada , above at para 14). " " [21] There is more to it. The simple fact that a question is “relevant” does not mean that it must inevitably be answered and cannot, as a result, be objected to.

In AstraZeneca Canada , above, the Court held that relevance is always subject to the overriding discretion of a Prothonotary to control abuses of the discovery process: [quotation omitted] " " [22] Relevance must therefore be weighed against matters such as the degree of relevance, how onerous it is to provide an answer, or if the answer requires fact or opinion or law. This is how the Court protects against abuses so as to secure, as required by Rule 3, the just, most expeditious and least expensive resolution of every proceeding on its merits.

As the Court reiterated in AstraZeneca Canada , above at paragraph 7, Rule 3 - the Rules’ “procedural foundation” - is to be followed in all matters before the Court, including discovery. " [ 10 ] In addition, the concept of proportionality is now specifically provided for in Rule 3: " General principle " " " " Principe général " " 3 These Rules shall be interpreted and applied " " " " 3 " " Les présentes règles sont interprétées et appliquées : " " (

a) so as to secure the just, most expeditious and least expensive outcome of every proceeding; and " " " " a) " " de façon à permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible; " " " " (

b) with consideration being given to the principle of proportionality, including consideration of the proceeding’s complexity, the importance of the issues involved and the amount in dispute. " " " " b) " " compte tenu du principe de proportionnalité, notamment de la complexité de l’instance ainsi que de l’importance des questions et de la somme en litige. " [ 11 ] On proportionality, the Federal Court of Appeal stated the following in Hospira Healthcare Corporation v Kennedy Trust for Rheumatology Research , 2020 FCA 177 .

This was decided before proportionality was specifically provided for in Rule 3, and continues to be applicable: [8] Although not formally codified in the Federal Courts Rules , as it has in some jurisdictions ( Rules of Civil Procedure , R.R.O. 1990, Reg. 194, s. 29.2.03 ), the proportionality principle has a long antecedence in the jurisprudence of the Federal Courts. As early as 2003 in Apotex Inc. v. Merck & Co. , 2003 FCA 438 this Court recognized that merely showing a question

is relevant does not mean that it must be answered. There is a second hurdle. The answer must also be proportionate (see also Apotex Inc. v. Wellcome Foundation Limited , 2008 FCA 131 ). [9] Proportionality takes into account the fact that evidence has degrees of significance and connection to the case. It also takes into account the burden required to obtain the information, the scope of the request and the availability of information from other sources, to mention but some of the considerations. II. Background [ 12 ] This is an action for copyright infringement.

According to the statement of claim (“Claim”), the three individual plaintiffs (“Professors”) are professors and full-time employees of the plaintiff, The Governing Council of The University of Toronto (“University”); and the University is degree-granting post-secondary institution with campuses located in Toronto, Scarborough, and Mississauga, Ontario (Claim, paragraphs 2 to 5).

The Professors are alleged to be the sole authors of their respective “University Course Materials” (the definition of “University Course Materials” is discussed below) and the first owners of copyright in those works (Claim, paragraphs 26 and 28). Two of the three Professors are alleged to have assigned the copyright in certain of their University Course Materials to the University (Claim, paragraph 29).

As a result, the University and the Professors are alleged to be the owners of the copyright in the University Course Materials. [ 13 ] The defendants are alleged to be a group of related companies that offer tutoring services and packages to students of university institutions throughout Canada, including the University (Claim, paragraph 10).

Further, that the defendants systematically misappropriate University Course Materials for commercial gain; that the infringement of the plaintiffs’ rights in the University Course Materials has instrumental to the defendants’ sales of tutoring services and packages and the growth of its business; and have infringed the plaintiffs’ copyright in those materials (Claim, including paragraphs 11, 12, and 32 to 45). [ 14 ] The defendants, in addition to defending the action on various bases, including fair dealing, have asserted a counterclaim.

In the counterclaim they seek, among other things, a declaration of non-infringement, and have asserted claims under sections 7(

a) and 53.2(1) of the Trademarks Act and sections 52(1) and 36(1) (

a) of the Competition Act . III. Plaintiffs’ Motion - “Category 2 – The Scope of Easy’s Unauthorized Activities” [ 15 ] As noted above, for the plaintiffs’ motion one topic was identified: “Category 2 – The Scope of Easy’s Unauthorized Activities”, with “Easy” referring to the defendants. The identification of this topic be seen at paragraph 14 of the “Defendants’ Written Representations (Plaintiffs’ Motion to Compel, Initial Return December 19, 2023)” dated December 8, 2023.

Details on “Category 2 – The Scope of Easy’s Unauthorized Activities” are found at pages 628 to 642 of the “Motion Record of the Plaintiffs (Plaintiffs’ Motion to Compel Answers to Undertakings and Refusals from Defendants’ Examination for Discovery)” dated November 3, 2023. [ 16 ] The defendants argue that the issue is the scope of the alleged infringement in this litigation, and therefore the scope of permissible discovery.

On the scope of the alleged infringement, the defendants argue that the plaintiffs are limited to certain 2020 and 2021 tutoring packages for three courses, specifically the “ECO101 Course Materials”, “MGT330 Course Materials”, and “LIN204 Course Materials” (as defined in the Claim at paragraphs 17, 20 and 23). In other words, that the plaintiffs are limited only to the acts of infringement specifically alleged at paragraphs 40 and 41 of the Claim (those paragraphs are reproduced below). [ 17 ] The plaintiffs on the other hand argue that they are not so limited.

They argue that the above-noted activities of the defendants in connection with materials from the three courses in 2020 and 2021 are examples of the alleged infringing activities, and that they also plead that: A. " “the full extent of Easy EDU’s unauthorized use of University Course Materials is unknown to them but is known to Easy EDU” " ( Claim, paragraph 45 ); and B.

" “since the statement of claim was issued, Easy has continued to infringe their copyrights” " ( reply and defence to counterclaim, at paragraph 28) . [ 18 ] The plaintiffs’ position is that they are entitled to discovery on any use by the defendants of “University Course Materials”.

University Course Materials are defined in paragraph 1.a. of the Claim as: various original course materials, including PowerPoint presentations, lecture slides, course syllabuses, lecture notes, tests, examinations, and other literary, artistic, dramatic, and cinematographic works, and original compilations of such course materials, owned by the University or the Professors [the Professors are defined in paragraph 1 of the statement of claim as the three individual plaintiffs] [ 19 ] As the definition of University Course Materials is limited to materials “owned by the University or the Professors”, paragraph 1.a. should be read with other allegations in the Claim, including paragraphs 28 and 29 which, generally stated, allege that the Professors, not the University, are the first owners of the copyright; and that two of the three Professors assigned the copyright in certain specific works associated with two of the courses (Claim, paragraphs 29).

As a result, University Course Materials are those course materials described in paragraph 1.a. for which one of the three Professors is the author, and either one of the Professors or the University is the owner of copyright. Notably, it is not all course materials for all courses offered at the University.

[ 20 ] In addition to the unadmitted allegations in the Claim, and the plaintiffs’ reply and defence to counterclaim, it is important to consider the unadmitted allegations of the defendants in their amended statement of defence and counterclaim (“Defence and Counterclaim”). I will first address the allegations in the plaintiffs’ pleadings and the defendants’ arguments in that regard. I will then turn to the allegations in the defendants’ pleading. A. Plaintiffs’ Allegations [ 21 ] The allegations in the Claim include the following: 11.

In order to prepare, market, and sell tutoring services and packages to students, Easy EDU systematically misappropriates University Course Materials for commercial gain. The infringement of the plaintiffs’ rights in University Course Materials has been instrumental to Easy EDU’s sales of tutoring services and packages and the growth of its business. Easy EDU has undertaken these unauthorized activities knowingly and deliberately and has persisted in its conduct despite the plaintiffs’ demands that it stop. […] 39.

Among the courses for which Easy EDU has offered “Weekly Course” tutoring packages for sale are the Gazzale ECO101 Course, the Kramer MGT330 Course, and the Taniguchi LIN204 Course, as well as for other courses. As described below, each of those tutoring packages infringes the plaintiffs’ copyright. 40. In particular, and among other things: a. In the Fall of 2020 and the Fall of 2021, Easy EDU offered for sale tutoring packages that reproduced the ECO101 Course Materials, in whole or substantial part, without authorization.

Among other things, Easy EDU reproduced in whole or substantial part “Term Tests” created by Professor Gazzale for the years 2017, 2018, and 2019. b. In the Fall of 2020, Easy EDU offered for sale tutoring packages that reproduced the MGT330 Course Materials, in whole or substantial part, without authorization. Among other things, Easy EDU reproduced in whole or substantial part a “Term Test” created by Professor Kramer for the year 2018. c. In the Fall of 2021, Easy EDU offered for sale tutoring packages that reproduced the LIN204 Course Materials, in whole or substantial part, without authorization.

Among other things, Easy EDU reproduced in whole or substantial

part lecture slides and course notes created by Professor Taniguchi, as well as Professor Taniguchi’s lectures. 41. In each of those cases, Easy EDU made the infringing tutoring packages, and the University Course Materials they contain, available to the public by telecommunication in a way that allowed a member of the public to have access to them from a place and at a time individually chosen by that member of the public, and thus communicated those University Course Materials to the public by telecommunication. 42.

Easy EDU has infringed the plaintiffs’ exclusive rights by a. reproducing University Course Materials, in whole or in substantial part, b. producing, reproducing, and publishing translations of University Course Materials, in whole or in substantial part, c. making contrivances by means of which University Course Materials, in whole or in substantial part, may be mechanically reproduced, i.e., master copies from which Easy EDU’s customers may make and download copies of their own, d. communicating University Course Materials, in whole or in substantial part, to the public by telecommunication, in whole or substantial part, to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public, and e. authorizing others to carry out such activities, all without authorization by the plaintiffs. 43.

Easy EDU has also infringed the plaintiffs’ exclusive rights by a. selling, b. distributing to such an extent as to affect prejudicially the owner of the copyright, c. distributing, exposing or offering for sale by way of trade, and d. possessing, for these purposes, copies of University Course Materials that Easy EDU knew or should have known infringe copyright or would infringe copyright if they had been made in Canada by the person who made them. […] 45. The full extent of Easy EDU’s unauthorized use of University Course Materials is unknown to them but is known to Easy EDU.

The University and the Professors plead and rely on each and every other infringing use of any work owned by the University or the Professors that may be discovered through this proceeding and the trial of the action. 46. Easy EDU’s infringement of the plaintiffs’ exclusive rights is persistent and ongoing despite repeated demands to cease and desist.

[…] 51. In an email dated December 16, 2020, Mr. Kang [of Easy EDU] stated that: “We will also be undertaking a robust review of our tutoring materials over the coming winter break. We will ensure there is absolutely no copyright infringement. We understand the importance of following the guidelines set out by the University of Toronto in order to uphold the highest standards of academic integrity.” 52. However, Easy EDU has continued to create and sell tutoring packages that infringe University Course Material and compilations of University Course Materials. […] 55.

Easy EDU continued and continues to exploit University Course Materials. [ 22 ] In addition, in their reply and defence to counterclaim the plaintiffs allege that: 28. The University and the Professors deny that Easy Edu has made good faith efforts to address their concerns or that it has made any efforts whatsoever to address academic offences and student misconduct arising from its infringing business operations.

For example, despite having undertaken to ensure that its tutoring packages would include “absolutely no copyright infringement,” Easy Edu continued to infringe the plaintiffs’ copyright in the University Course Materials.

It made no changes whatsoever to its policies or practices, including the practices of its tutors, and persists to this day in its ongoing pattern of systematic infringement of the plaintiffs’ rights. [ 23 ] As the above extracts from the plaintiffs’ pleadings illustrate, the infringing activities alleged by the plaintiffs in their pleadings are not limited to certain 2020 and 2021 tutoring packages for the three courses ( ECO101 Course Materials, MGT330 Course Materials, and LIN204 Course Materials) .

The allegations of infringement are broader and relate to the use by the defendants of the University Course Materials (which as noted above are all such materials authored by any one of the three Professors , and for which either one of the Professors or the University is the owner of copyright) . [ 24 ] The defendants argue that if the plaintiffs’ allegations are this broad they should be struck, arguing that (see defendants’ responding written representations, paragraphs 28 and 29): 28. Plaintiffs must clearly plead the material facts upon which they rely. All of “who, when, where, how and what” are required.

A plaintiff is not entitled to rely on the possibility of new facts that may turn up as the case progresses. Nor are they entitled to use bald pleas to force production, discovery, and attempt to “bootstrap” their case. 29.

If parties were not held to the requirement to plead (and therefore limit their discovery to) allegations of material fact, they “would be able to make the broadest, most sweeping allegations without evidence and embark upon a fishing expedition”. [footnotes omitted] [ 25 ] In support of that argument they rely on a number of cases dealing with motions to strike, and one dealing with a motion to certify a class action which considered whether the pleadings disclosed a reasonable cause of action. However, this is not a pleadings motion.

In any event, even if case law on a motion to strike was applicable in the present context, an important decision to consider is Emerson Electric Co v Canadian Tire Corporation, Limited , 2016 FC 308 (“ Emerson Electric ”), which the Federal Court of Appeal stated in another case was " “well decided” " (see LeddarTech Inc v Phantom intelligence Inc, 2017 FCA 224 , at para 5 ). Emerson Electric was a patent infringement case.

In dismissing a motion to strike portions of the statement of claim, Justice Annis stated the following: [21] Emerson relies upon the decision of Justice Walsh in Superseal Corp. v Glaverbel-Mecaniver et al (1975), 20 C.P.R. (2d) 77 [ Superseal ] . This decision is helpful because Justice Walsh provides a

summary of the ratio of Dow Chemical , which I set out below with my emphasis, as well as a reference in square brackets to the specific products referred to in Dow Chemical : This judgment is also authority for the proposition that a plaintiff cannot give particulars respecting one particular breach [Kayson Impact Polystyrene product] of which he complains and then add allegations of a vague nature [rubber reinforced styrene polymers] respecting other breaches which he suspects but of which he is not definitely aware. [Emphasis added] [22] Justice Walsh distinguishes Dow Chemical based on the facts in Superseal by finding that there was sufficient disclosure of “an arguable case,” as follows: The present case is a very clear example of a situation where the defendants know far better than plaintiff can hope to what infringements, if any, of plaintiff’s patents or copyright they have committed and cannot claim that they will be taken by surprise by anything in plaintiff’s pleadings.

While the burden of proof is, of course, always on a plaintiff to establish its cause of action and the damages resulting to it from any alleged breaches by defendants of its patents or copyright, I nevertheless find in the present case that the amended declaration discloses sufficient information to give plaintiff an arguable case and that information as to further infringements “of the same type” if any such exist can readily be obtained on discovery. [Emphasis added] [23] In Superseal , the defendants complained “that only one specific sale is given as an example of the infringement of the

first patent for double glazed windows and two examples of the alleged infringement of the second patent relating to doubleglazed sliding doors, together with general allegations of other infringements of which the plaintiff cannot give details atpresent…”. [24] As I understand Superseal, Justice Walsh concluded that sufficient material facts were provided to describe an arguablecase when the plaintiff provided specific examples of infringements of its products that allowed for claims of similarinfringements based on the same characteristics of unknown products, which were known only to the defendant. [25] I find that the facts in this matter are similar, and moreover by their greater particularization align more forcefully withthe conclusion reached in Superseal.

In that matter, the particulars of the nexus between the defined infringing product andother products claimed but unknown, were not defined beyond their being similar to the characteristics of double glazedwindows and doors. I conclude that Justice Walsh considered this sufficient because the characteristics of double glazing donot lend themselves to much confusion. [Emphasis in Original] [26] Even if cases dealing with the sufficiency of pleadings on a motion to strike were applicable on a refusals motion, it would not assistthe defendants in this particular case.

The plaintiffs’ allegations in this case regarding the allegedly infringing activities are similar innature to those in the case of Emmerson Electric, and also Superseal Corp. v Glaverbel-Mecaniver (1975), 20 C.P.R. (2d) 77. In addition,it is significant in this case that, as per the pleadings, the defendants’ “Tutoring Materials” (defined in paragraph 13 of the Defence andCounterclaim, reproduced below) are not available to the public.

Rather, such materials are only available to students enrolled in one ofthe defendants’ tutoring sessions, and only for a limited time, and only for courses they are enrolled in at the University (Defence andCounterclaim, paragraphs 26, 35 and 36). The way in which the defendants have structured their affairs (whether innocent or not) impairsthe ability of the plaintiffs’ to plead the type of particulars that the defendants argue are required.

The infringing activities alleged by theplaintiffs are sufficiently pleaded. [27] The defendants also argue that the plaintiffs are engaged in a fishing expedition and rely on Monarch Marking Systems, Inc. v.Esselte Meto Ltd., (FC), [1984] 1 FC 641. That decision illustrates the potential intersection of the principles on amotion to strike and a refusals motion. That case was a refusals motion in a patent infringement case. As in the present case, thedefendants relied on decisions on motions to strike.

The Court stated (page 645): “it appears, had the defendants moved to strike thereferences to “other similar or related models” in the statement of claim, the motions would likely have succeeded”. However, the Courtwent on to conclude that “on the present state of the pleadings, the questions are proper”. The Court then considered whether the plaintiffwas engaged in a fishing expedition and concluded that (page 645): I agree with the defendants.

Notwithstanding the present state of the pleadings and that Rule 465(15), taken literally, isbroad enough to encompass the questions of Category 1, those questions are, in substance, a fishing expedition. They neednot be answered. A similar approach was taken in Intel Corp. v 3395383 Canada Inc., 2004 FC 218 (see paragraphs 22-27, 33). [28] As noted above, the infringing activities alleged by the plaintiffs in their pleadings are not limited to certain 2020 and 2021 tutoringpackages for three courses.

The allegations of infringement are broader and relate to the use by the defendants of the University CourseMaterials. As a result, questions relating to any use by the defendants of such materials are relevant based on the plaintiffs’ pleadings. Asto whether such questions are a fishing expedition, in the circumstances of this case, I conclude that they are not.

As discussed above, asper the pleadings, the defendants’ “Tutoring Materials” are not available to the public, and instead, are only available to students enrolledin one of the defendants’ tutoring sessions, and only for a limited time, and only for courses they are enrolled in at the University. This isan important consideration in this case in concluding that the plaintiffs are not engaging in a fishing expedition on this topic.

This is alsosupported by the evidence of, Tianze Guo, the defendants’ representative on the examinations for discovery (see questions 655 to 659,666 and 667, transcript of the examination for discovery of Tianze Guo held on April 19, 2023). While discovery evidence is not used todetermine relevance on a refusals motion, it can assist on the question of whether the plaintiffs are engaged in a fishing expedition. B. Defendants’ Allegations [29] In addition to the plaintiffs’ allegations in the Claim, it is important to consider the allegations of the defendants in their Defence andCounterclaim.

Regardless of the allegations in the Claim, the defendants’ use of University Course Materials is clearly relevant based onthe allegations in the defendants’ pleading. [30] The defendants’ allegations include the following: general allegations regarding the University Course Materials and their use ofthem, as well as the defendants’ “Tutoring Materials”; the defence of fair dealing; and claims under sections 7(1) and 53.2(1) of theTrademarks Act and 52.01(2) of the Competition Act.

Each of these three topics is discussed below, and each puts in issue thedefendants’ use of University Course Materials generally, and is not limited to the defendants’ use of certain 2020 and 2021 tutoringpackages for three courses (“ECO101 Course Materials”, “MGT330 Course Materials”, and “LIN204 Course Materials”). [31] Dealing first with the topic of University Course Materials and the defendants’ use of them, as well as the defendants’ “TutoringMaterials”, the defendants’ allegations include the following: 13.

Easy Edu companies provide group tutoring sessions, practice materials, and learning resources, as well as mentorship informats that help students master the university courses they are taking. Easy Edu contracts tutors to prepare their owntutoring content, which consists of, among other things, lectures (in-person or remote), slide decks, notes, video recordings,and practice questions (“Tutoring Materials”). […]

25. The plaintiffs appear to fundamentally misunderstand Easy Edu’s business and services. Easy Edu’s services are not predicated on wholesale or substantial copying of professors’ course content. The Tutoring Materials, including the lectures and written materials, are original works created by Easy Edu tutors and, depending on the case, entirely or mainly prepared in Mandarin and written Chinese. To further facilitate learning, tutors also use Chinese cultural references and context in delivering educational material, for instance when the tutor provides examples or question content. 26.

Students who enroll in Easy Edu’s tutoring sessions access the Tutoring Materials through Easy Edu’s web portal. Students subscribe to a course package (i.e., a set of weekly tutorial sessions), which will grant the student permission to, as applicable, attend live tutorial sessions (in person or online), access and/or watch video recordings of tutorial sessions, or download the Tutoring Materials. 27. The Tutoring Materials are not reproductions of University Course Materials and do not include substantial reproductions of such purported works.

They are not mere copies or mere translations of the plaintiffs' purported works, nor are they colourable imitations thereof. Rather, the Tutoring Materials are new, original, and lawfully used works created and compiled by Easy Edu tutors. For example, the Tutoring Materials do not substantially copy any lecture slides, course notes, or PowerPoint presentations owned by the plaintiffs and alleged to be University Course Materials. […] 42.

If this Honourable Court finds that copyright subsists in any purported University Course Materials, which is denied, Easy Edu’s activities were performed within the scope of one or more licences or consents from the plaintiffs implied by the circumstances. […] 59. […] Easy Edu was not aware and had no reasonable grounds to believe that it had infringed any copyright in the purported University Course Materials. Instead, Easy Edu has cooperated with the University at all material times to ensure that its activities do not infringe any purported copyright in the University Course Materials.

Contrary to the plaintiffs’ allegations at paragraphs 46, 50, and 53 of the Claim, Easy Edu was only notified that the University was investigating its wares and services for potentially infringing activities. The details of Easy Edu’s good faith cooperation with the University, as well as Easy Edu’s lack of awareness of the University’s written notice to “cease-and-desist” from allegedly infringing activities, are set out at paragraphs 63 to 70 below. […] 62. With respect to paragraphs 67 to 70 of the Claim, the plaintiffs are not entitled to punitive or exemplary damages.

Easy Edu has not knowingly, wilfully, or maliciously engaged in any infringement of the plaintiffs’ rights. Rather, as set out at paragraphs 63 to 70 below, Easy Edu has attempted to engage and cooperate with the plaintiffs with respect to both intellectual property-related issues and, though beyond the proper scope of this action, academic offenses committed by students at the University of Toronto. Any such award would result in a chilling effect upon lawful user rights and upon tutorial services, including but not limited to those of the defendants, that serve the unmet needs of international students. […] 67.

In follow-up correspondence on or around December 1, 2020, Mr. Kang reiterated to Ms. Russell that Easy Edu had no intention of infringing copyright, stating, “We absolutely do not want to infringe on the copyright held by the university or individual professors.” [ 32 ] As the above-extracts from the Defence and Counterclaim illustrate, the defendants’ “Tutoring Materials” are broadly defined, and the defendants make broad allegations regarding both their Tutoring Materials, and their use of University Course Materials.

As a result, questions concerning use by the defendants of University Course Materials are relevant to those allegations. [ 33 ] Turning now to fair dealing, the defendants allegations include: 31. If this Honourable Court finds that copyright subsists in any purported University Course Materials and that Easy Edu has carried out any Allegedly Infringing Activities, which is denied, Easy Edu’s activities constitute fair dealing pursuant to sections 29 and 29.1 of the Copyright Act . 32.

The activities of Easy Edu, its tutors, and its students, including any Allegedly Infringing Activities (which are denied), fall squarely within one or more of the explicitly enumerated permissible purposes in sections 29 and 29.1 of the Copyright Act — education, research, private study, criticism, and review.[…] 33. To the extent Easy Edu has used any purported University Course Materials for the purposes of criticism or review, Easy Edu mentions the source and author of the purported originating work. […] 37. To the extent that any purported University Course Materials are included in whole or in

part in Easy Edu’s tutoring materials, Easy Edu, its tutors, and its students copy and use only such amount as required to aid, support, and enable the students’ academic success in the University’s courses. [ 34 ] The fair dealing defence alleged by the defendants makes relevant their copying practices, including any use of any works in which the plaintiffs’ assert copyright. As stated by the Supreme Court of Canada in York University v. Canadian Copyright Licensing Agency (Access Copyright) , 2021 SCC 32 :

[ 99 ] In the educational context, instructors are facilitating the education of each of their individual students who have fair dealing rights ( Alberta (Education) , at paras. 22-23 ). However, courts are not required to completely ignore the institutional nature of a university’s copying practices and adopt the fiction that copies are only made for individual isolated users.

When an institution is defending its copying practices, its aggregate copying is necessarily relevant , for example, to the character of the dealing and the effect of the dealing on the work (see, e.g., CCH , at paras. 55 and 72; SOCAN , at para. 42; Alberta (Education) , at paras. 30 and 33 ). [Emphasis added] [ 35 ] Although the defendants are not a university, the above applies equally in the present context.

As a result, questions relating to any use by the defendants of University Course Materials are relevant to the fair dealing defence alleged by the defendants. [ 36 ] The defendants’ counterclaim also puts in issue the defendants’ use of University Course Materials and the defendants’ copying practices generally. The counterclaim asserted by the defendants includes the following: 79. The defendants/plaintiffs by Counterclaim, Easy Edu, claim: […] b. damages in an amount to be determined at trial under sections 7(

a) and 53.2(1) of the Trademarks Act for making false or misleading statements tending to discredit the business, goods, or services of Easy EDU; c. a mandatory order compelling the University to remove and retract any false or misleading statements tending to discredit the business, goods, or services of Easy EDU, and to publish and disseminate a retraction in the same manner as such statements were originally published; d. damages in an amount to be determined at trial under sections 52(1) and 36(1) (

a) of the Competition Act for knowingly or recklessly making a representation to the public that is false or misleading in a material respect for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, the plaintiffs’ business interests; e. damages in an amount to be determined at trial under sections 52.01(2) of and 36(1)(

a) the Competition Act for knowingly or recklessly making a representation in an electronic message that is false or misleading in a material respect for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, the plaintiffs’ business interests; f. interim and interlocutory injunctions prohibiting the University from making any statements, orally or in writing, to customers or potential customers of Easy Edu that Easy Edu’s parents, subsidiaries, affiliates, or each of their respective agents, employees, officers, or directors are infringing any copyright; […] 81.

On or around May 11, 2022, the University issued an online, public press release entitled “U of T sues Easy Edu tutoring company” (the “Press Release”), which includes comments from the Professors. The University disseminated the Press Release, including through its official news website, which is widely read throughout Canada and elsewhere, and through its The Bulletin Brief digest email. The University also shared the story on Twitter to approximately 106,000 followers through its “@UofT” Twitter account and further via other University Twitter accounts. 82.

The following false or misleading statements were included in the Press Release: a. "The University of Toronto and three of its professors have launched a lawsuit against a tutoring business alleging it routinely copies, without authorization, lecture slides, course syllabuses, tests and exams and sells them in “coursepacks” to post-secondary students on its website in violation of Canada’s Copyright Act ." b. “"I have devoted years to preparing materials for my students. To have a company profit from the unauthorized use of my intellectual property is incredibly wrong. It is theft," said Gazzale.

"I am also saddened that tutoring companies are pushing the approach of trying to game the system, as opposed to trying to help students learn the material."” […] (the “Unlawful Statements”) 84. The Unlawful Statements tend to discredit the business, goods, and services of Easy Edu.

The University and the Professors have and continue to convey the message that Easy Edu has intentionally and persistently committed copyright infringement and has no regard for the rights of authors. [ 37 ] The defendants argued that since the Press Release (as defined in paragraph 81 of the Defence and Claim) is alleged to refer to the lawsuit commenced by the plaintiffs, the allegations regarding the Press Release are limited by the scope of the plaintiffs’ claims.

However, whether or not that is the case, the following allegation in paragraph 84 of the Defence and Counterclaim - “[t]he University and the Professors have and continue to convey the message that Easy Edu has intentionally and persistently committed copyright infringement and has no regard for the rights of authors” - is very broad and puts in issue the defendants copying activities and practices generally. IV. Conclusion - “Category 2 – The Scope of Easy’s

Unauthorized Activities” [ 38 ] The allegations of infringement in issue (i.e., unadmitted allegations) are not limited to the acts of infringement alleged at paragraphs 40 and 41 of the Claim. Rather, the allegations of infringement that are in issue are broader and relate to the use by the defendants of the University Course Materials, which are all such materials for which one of the three Professors is the author, and either one of the Professors or the University is the owner of copyright.

Accordingly, questions relating to the defendants’ use of such materials are relevant and as such, are proper questions on that topic and should be answered unless there is some other valid ground for objecting. [ 39 ] To the extent that the defendants’ objection was that specific questions have been answered, or that the information or documents sought have already been provided, or the questions were objected to on the basis that the effort required to answer a particular question is disproportionate and unduly burdensome, or some other valid basis, " " the applicable questions can be addressed on the second stage of these motions.

V. Costs [ 40 ] As this decision relates to the first stage of the plaintiffs’ motion, the issue of costs will be deferred and dealt with on the disposition of the second stage of the motion. However, if the second stage of the motion becomes unnecessary because the parties are able to resolve all outstanding questions, the parties may seek directions from the Court as to the filing of written submissions on costs. ORDER in T-948-22 THIS COURT ORDERS that: 1 .

Proper questions asked on the examination for discovery of the defendants’ representative relating to any use by the defendants of University Course Materials are relevant questions. 2 .

For any such questions, to the extent that the defendants’ objection was that specific questions have been answered, or that the information or documents sought have already been provided, or the questions were objected to on the basis that the effort required to answer a particular question is disproportionate and unduly burdensome, or some other valid basis, the applicable questions can be addressed on the second stage of the plaintiffs’ motion. 3 . Costs of this first stage of the plaintiffs’ motion are deferred and shall be dealt with on the disposition of the second stage of the motion. blank "John C.

Cotter" blank Case Management Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-948-22 STYLE OF CAUSE: THE GOVERNING COUNCIL OF THE UNIVERSITY OF TORONTO, ROBERT GAZZALE, LISA KRAMER AND, AI TANIGUCHI v EASY GROUP INC. D/B/A EASY EDUCATION, EASY 4 EDUCATION CANADA INC., EASY 4.0 EDUCATION INC., EASY 4.0 EDUCATION UTSC INC. PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: DECEMBER 19, 2023 ORDER AND REASONS: COTTER A.J.

DATED: February 8, 2024 APPEARANCES : Jessica Zagar Sebastian Beck-Watt For The Plaintiffs/ Defendants by Counterclaim Thomas Dumigan Paul Banwatt For The Defendants/ Plaintiffs by Counterclaim SOLICITORS OF RECORD : Cassels Brock & Blackwell LLP Barristers and Solicitors Toronto, Ontario For The Plaintiffs/ Defendants by Counterclaim Gilbert's LLP Barristers and Solicitors Toronto, Ontario For The Defendants/ Plaintiffs by Counterclaim