COPYRIGHT - Remedies - Damages - Compensatory - Punitive or exemplary

Law360 Canada (June 10, 2022, 5:45 AM EDT) -- Appeal from an order awarding reduced amount of statutory damages to the respondent RallySport Direct LLC (RallySport) under s. 38.1 of the Copyright Act and from an award of exemplary and punitive damages. RallySport was an American corporation that sold aftermarket specialized automotive components and accessories via the internet. 2424508 Ontario Limited (242) had, prior to being placed into bankruptcy, carried on business as an aftermarket internet dealer in specialized automotive components and accessories, selling the same parts as RallySport. Following the bankruptcy of 242, the business was carried on by 2590579 Ontario Limited (259). RallySport had photographs for over 2,000 automotive components and accessories displayed on its website. The photographs were taken during the period from 2009 to 2017. In 2016, 242 was an authorized wholesaler for RallySport. During that time, Sylvain Cayer on behalf of 242 directed third-party contractors to copy the images that RallySport was using on its website and display those same images on the website that was being used by 242. RallySport commenced an action against 242, 259 and their directors and officers, alleging that they infringed the copyright of RallySport in the photographs and product descriptions. The Federal Court found copyright infringement in 1,430 photographs and 3 product descriptions. The trial judge awarded damages of $357,500 to RallySport. The judge found that punitive damages were warranted because of the appellants’ actions and their attempts to avoid liability by creating a new company, 259, and transferring the photographs to it, after RallySport had commenced its infringement action against 242. Punitive damages were awarded in the amount of $50,000. The appellants claimed that the amounts awarded as statutory damages and punitive damages were grossly out of proportion to the infringement and excessive....
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