T-2332-85
Iscar Limited and Iscar Tools Inc. (Plaintiffs)
v.
Karl Hertel GmbH, Karl Hertel GmbH Verkaufs
KG and Hertel Carbide Canada, Inc. (Defendants)
INDEXED AS: ISCAR LTD. V. KARL HERTEL GMBH
Trial Division, Giles A.S.P.—Toronto, September
21 and November 3, 1987.
Practice — Stay of proceedings — Copyright infringement
action — Defendants arguing pending legislation (Bill C-60)
retroactively removing cause of action — Effect of pending
legislation on pending litigation — Bill C-60 not specifically
applying to pending actions — Strict construction of retroac
tive and retrospective legislation removing vested rights, where
silent or ambiguous on extent of retrospectivity or retroactivity
— Legislation not clearly intending to benefit persons who, but
for commencement of litigation, would have benefitted —
Purpose of Bill C-60 to benefit future defendants in infringe
ment actions — Motion dismissed.
Construction of statutes — Motion to stay copyright
infringement action — Defendants arguing pending legislation
retroactively removing cause of action — Strict construction of
retroactive and retrospective legislation where silent or ambig
uous on extent of retrospectivity or retroactivity — Legislation
not clearly intending to benefit persons who, but for com
mencement of litigation would have benefitted — Purpose of
pending legislation to benefit future litigants — Motion
dismissed.
Copyright — Infringement — Motion to stay copyright
infringement action on ground pending legislation removing
cause of action — Effect of pending legislation on pending
litigation — Motion dismissed — Bill not clearly intending to
benefit persons who, but for commencement of litigation would
have benefitted.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Bill C-60, An Act to amend the Copyright Act and to
amend other Acts in consequence thereof, 2nd Sess.,
33rd Parl., 35-36 Eliz. II, 1986-87, ss. 11, 24.
Copyright Act, R.S.C. 1970, c. C-30, s. 46.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
National Real Estate and Finance Co., Ld. v. Hassan,
[1939] 2 K.B. 61 (C.A.); Hutchinson v. Jauncey, [1950]
1 K.B. 574 (C.A.); Remon v. City of London Real
Property Co., [1921] 1 K.B. 49 (C.A.).
AUTHORS CITED
Driedger, Elmer A. Construction of Statutes, 2nd ed.
Toronto: Butterworths, 1983.
Craies on Statute Law, 7th ed. S. G. G. Edgar, London:
Sweet & Maxwell Limited, 1971.
Maxwell - on The Interpretation of Statutes, 12th ed. P.
St. J. Langan, London: Sweet & Maxwell Limited,
1969.
COUNSEL:
Gunars Gaikis for plaintiffs.
Roger T. Hughes, Q.C. for defendants.
SOLICITORS:
Smart & Biggar, Toronto, for plaintiffs.
Sim, Hughes, Dimock, Toronto, for defen
dants.
The following are the reasons for order ren
dered in English by
GILES A.S.P.: By their motion, the defendants
seek a stay in this action for infringement of
copyright on the ground that a Bill, C-60, is before
the House of Commons which, if proclaimed, will
retroactively remove any right to enforce a copy
right of the nature of the copyright alleged to have
been infringed.
Counsel for the defendants argues that proceed
ing with expensive discoveries and possibly a trial,
will result in a lot of time and expense which will
be wasted if the Bill is passed in its present form
because the legislation is, by virtue of section 24 of
the proposed Bill, retroactive or retrospective or
both. He argues further that the action has pro
ceeded in a leisurely manner and that the preju
dice to the plaintiffs of any delay will be minimal.
Counsel for the plaintiffs does not concede the Bill
would have the effect alleged by the defendants,
but alleges the plaintiffs' claim is considerably
wider than an infringement action of the type
which might be affected by the Bill. Furthermore,
he alleges, that far from not suffering undue in
convenience, his clients' existing rights would be
completely cut off should their action be stayed
until after the Bill is proclaimed, if it is, and if it,
in fact, affects his clients rights.
Both counsel directed my attention to cases
concerning the granting of a stay, none of which
dealt with the granting of a stay to await disposi
tion of a Bill before a legislature. In my view, the
first matter to be determined is whether passage of
the legislation would affect the plaintiffs' right to
the relief sought.
Section 11 of the Bill repeals section 46 of the
Copyright Act [R.S.C. 1970, c. C-30] and substi
tutes the following:
46. (1) In this section and section 46.1,
"article" means any thing that is made by hand, tool or
machine;
"design" means features of shape, configuration, pattern or
ornament and any combination of those features that, in a
finished article, appeal to and are judged solely by the eye;
"useful article" means an article that has a utilitarian function
and includes a model of any such article;
"utilitarian function", in respect of an article, means a function
other than merely serving as a substrate or carrier for artistic
or literary matter.
(2) Where copyright subsists in a design applied to a useful
article or in a work from which the design is derived and, by or
under the authority of any person who owns the copyright in
Canada or who owns the copyright elsewhere,
(a) the article is reproduced in a quantity of more than fifty,
(b) where, in respect of a non-handmade article that has a
repeated pattern applied thereto, the article is severed into
lengths or pieces suitable for textile piece goods, a surface
covering or making wearing apparel, or
(c) where the article is a plate, engraving or cast, the article
is used for producing more than fifty useful articles, it shall
not thereafter be an infringement of the copyright for anyone
(d) to reproduce the design of the article or a design not
differing substantially from the design of the article by
(i) making the article, or
(ii) making a drawing or other reproduction in any ma
terial form of the article, or
(e) to do with an article, drawing or reproduction that is
made as described in paragraph (d) anything that the owner
of the copyright has the sole right to do with the design or
work in which the copyright subsists.
(3) Subsection (2) does not apply in respect of any copyright
in an artistic work that is used as or for
(a) a card, poster, game board, calendar, stamp, transfer or
any other printed matter primarily of an artistic or literary
character;
(b) a trade mark or label;
(c) an artistic work applied to the covering of or container
for an included article or product;
(d) an architectural work of art; or
(e) such other work or article as may be prescribed by
regulations of the Governor in Council.
46.1 The following acts do not constitute an infringement of
copyright in a work:
(a) applying to a useful article features that are dictated
solely by a utilitarian function of the article;
(b) by reference solely to a useful article, making a drawing
or other reproduction in any material form of any features of
the article that are dictated solely by a utilitarian function of
the article;
(c) doing with a useful article having only features described
in paragraph (a) or doing with a drawing or reproduction
that is made as described in paragraph (b) anything that the
owner of the copyright has the sole right to do with the work;
or
(d) using any method or principle of manufacture or
construction.
Section 24 of the Bill reads as follows:
24. Subsection 46(1) and section 46.1 of the Copyright Act,
as enacted by section 11, apply in respect of any alleged
infringement of copyright occurring prior to, on or after the day
on which section 11 comes into force.
It will be observed that there is nothing in
section 24 which specifically applies to pending
actions. Retroactive and retrospective legislation
which takes away vested rights has been strictly
construed by the courts on those occasions where
the legislation has been silent or ambiguous on the
extent to which it is to be retrospective or retroac
tive. Assuming that the statute by, in effect, rede
fining the word infringement for the purposes of
the Copyright Act would in fact deny a non-liti
gant person in the position of the plaintiffs a right
of action for infringement, what is the effect of the
statute on pending litigation?
For the purpose of determining this point, I have
necessarily referred to a number of authorities not
referred to by counsel. There are a very large
number of cases in which the effect of retrospec
tive and retroactive statutes have been considered.
Many of these are referred to in Craies on Statute
Law, 7th edition, by S. G. G. Edgar, Sweet &
Maxwell Limited, London, 1971 (principally in
chapter 16—COMMENCEMENT AND DURATION
OF EFFECT OF STATUTES) and in the many works
on the subject by Professor Elmer A. Driedger.
His continuing research into this subject appears
to be most recently consolidated in the 2nd edition
of his Construction of Statutes, Butterworths,
Toronto, 1983. The cases and authors' comments
on them, not only do not establish a hard and fast
rule but seem to indicate that the more recent
cases are but the start of a new treatment of
retroactive and retrospective legislation. There are
comparatively few cases which deal specifically
with the interpretation of apparently retroactive or
retrospective statutes when dealing with pending
litigation. At pages 220-221 of Maxwell on The
Interpretation of Statutes, 12th Edition, P. St. J.
Langan, Sweet & Maxwell, London, 1969 the
following statement appears:
In general, when the substantive law is altered during the
pendency of an action, the rights of the parties are decided
according to the law as it existed when the action was begun,
unless the new statute shows a clear intention to vary such
rights.
On page 221, the reason for including the quali
fying words becomes plain because of the follow
ing sentence:
But if the necessary intendment of a statute is to affect the
rights of parties to pending actions, the court must give effect
to the intention of the legislature and apply the law as it stands
at the time of the judgment even though there is no express
reference to pending actions.
In the cases cited by Maxwell, National Real
Estate and Finance Co., Ld. v. Hassan, [1939] 2
K.B. 61 (C.A.) and Hutchinson v. Jauncey, [1950]
1 K.B. 574 (C.A.) and Remon v. City of London
Real Property Co., [1921] 1 K.B. 49 (C.A.)
referred to in the latter, the legislation under
consideration was intended to benefit a named
type of person, namely persons who were occupy
ing premises and were or had been tenants. The
fact that a person occupying premises was no
longer a tenant because the tenancy agreement
had been terminated prior to the coming into force
of the Act did not affect his right to be protected
by the legislation because he was clearly within the
class of persons the legislation was intended to
benefit. In this case, there is no clear indication
that the intention of the legislation is to benefit
persons who but for the happening of an event,
namely, the commencement of litigation, would
have been benefitted. The purpose of the amend
ment to the Copyright Act appears to be to benefit
persons who in the future may be potential defen
dants in infringement actions. I therefore find that
the Bill, if proclaimed, will not affect the liability
of the defendants with respect to damages for
alleged past infringement. The Bill, if proclaimed,
might affect the injunctive relief available to the
plaintiffs. That is a matter which will have to be
decided by the trial judge if the plaintiffs are
successful at trial. Because the Bill as now drafted,
if proclaimed, would not completely extinguish the
rights of the plaintiffs and might only affect the
right to injunctive relief, I do not see any reason to
stay this action pending disposition of the Bill.
I will leave the matter of costs of this motion to
be determined by the trial judge.
ORDER
Motion dismissed. Costs to be determined by the
trial judge.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.