Jan 2018 Charity & NFP Law Update
On October 31, 2017, the Federal Court released its decision in 907687 Ontario Inc. (International Institute of Travel) v 1472359 Ontario Ltd (IBT College of Business Travel & Tourism Technology). In this case, International Institute of Travel (“IIT”), a private career college, alleged that IBT College of Business Travel & Tourism Technology (“IBT”), another private career college, had improperly used its course material. As a result, on January 15, 2013, IIT commenced a copyright infringement action against IBT.
Although the Federal Court held that IIT had not met its burden of proving that IBT had infringed its copyright, the court held that the infringement action was time-barred as it was not commenced within the three year limitation period provided for in the Copyright Act. In this regard, s. 43.1(1) of the Copyright Act provides that a copyright infringement action must be commenced within three years. However, there are subtle important nuances to when this three year period begins. If the copyright owner knew or could reasonably have been expected to know of the infringement, then the three year limitation period begins from the time at which the copyright owner knew or was reasonably expected to have known of the infringement. On the other hand, in situations where the copyright owner did not know and could not be reasonably expected to know, then the three year limitation period begins at the time when the copyright owner first knew or could have been reasonably expected to know of the infringement.
In this case, the court held that although IIT did not have actual knowledge of the alleged infringement until 2011, a demand letter sent by IIT’s legal counsel to IBT in 2002 established that the infringement was discoverable with reasonable diligence in 2002, and as a result, the action was statute-barred.
Charities and not-for-profits should beware that where a limitations defence in a copyright infringement action is raised, the copyright owner is required to prove that the three year limitation period has not lapsed. Charities and not-for-profits must therefore take reasonable steps to determine if copyright is being infringed and be vigilant in policing unlawful use of their copyright to ensure a copyright infringement action is not time-barred. Further, a demand or cease and desist letter sent can be deemed by courts as evidence that an infringement was known by the copyright owner and would therefore mark the beginning of the three year period, unless there is evidence that the copyright owner had earlier knowledge of the infringement. As such, charities and not-for-profits that know of or even suspect copyright infringement should act immediately to enforce their rights before the limitation period expires.