Federal Court Upholds Decision Regarding Copyright Infringement and Fair Dealing

In Stross v Trend Hunter Inc., 2021 FC 955, the Federal Court (the “Court”) dismissed an appeal from a decision of Prothonotary Furlanetto, in which she awarded damages for copyright infringement arising out of the unauthorized use of photographs in a website post. 

The Plaintiff, Alexander Stross, photographed a housing project in Texas and registered copyright in the photographs with the United States Copyright Office. 

The Defendant, a market research firm called Trend Hunter Inc (“Trend Hunter”), reproduced six of the photographs in an article published on its website, without obtaining Mr. Stross’s permission. 

Mr. Stross successfully brought a simplified action against Trend Hunter for copyright infringement, obtaining $3,983.40 in damages and $9,493.94 in costs. Trend Hunter appealed the decision under Rule 51 of the Federal Court Rules [FCR]. 

On appeal, the Court considered whether Prothonotary Furlanetto made any errors in concluding that:

Mr. Stross held, and was entitled to enforce, copyright in the photographs;

Trend Hunter’s dealing in the photographs did not fall under the “news reporting” exception under s. 29.2 of the Copyright Act [“the Act”];

Trend Hunter did not satisfy the test for “fair dealing” under s. 29 and 29.2 of the Act; and 

Mr. Stross was entitled to costs. 

The Court found no evidence to contradict the finding that Mr. Stross held copyright in the photographs and that he was entitled to bring the copyright infringement claim.  The Court agreed with Prothonotary Furlanetto that there was insufficient evidence concerning the scope of the agreement Mr. Stross entered into with a U.S. copyright enforcement agency and that the agreement did not constitute an assignment of his copyright.    

The Court found that Prothonotary Furlanetto made a palpable error in determining that the fair dealing exception for “news reporting” set out in s. 29.2 of the Act did not apply. The Court found that the error was not overriding, however, since Trend Hunter’s use of hyperlinks to sources crediting Mr. Stross did not satisfy the second requirement under s. 29.2 to mention the name of the author in the article. 

The Court found that Prothonotary Furlanetto did not make any errors in her articulation and application of the two-part test for fair dealing set out in CCH Canadian Ltd v Law Society of Upper Canada, 2004 SCC 13. 

First, Prothonotary Furlanetto properly exercised her discretion in finding that Trend Hunter used the photographs for the purpose of research under s. 29 of the Act. 

Second, in determining whether Trend Hunter’s use of the photographs was ‘fair’ in the research context, Prothonotary Furlanetto properly considered the public interest, and adequately balanced the following six relevant factors in concluding that there was no broader public interest in Trend Hunter’s use of the photographs beyond its commercial interests:

Finally, the Court found no reason to interfere with the decision to award costs to Mr. Stross in the amount of $9,493.94. 

 Prothonotary Furlanetto had discretion to award costs under FCR Rule 400 and the costs award was commensurate with the overall success of Mr. Stross.