Copyright Infringers Beware – Prison Sentences are a Possibility
Updated: May 19
The Federal Court confirmed that a director of a corporation can be imprisoned and fined for copyright infringement, specifically when the company ignores a court ordered injunction against committing copyright infringement. Although this is an extreme case, it does reinforce the legal system’s ferocity in protecting copyright owners when necessary.
Overview of the Case
Knight Co is an owner/operator business that has a sole director and officer, Mr. Knight. Knight Co published its own version of a code, which it had copied from the Canadian Standards Association (“CSA”). CSA is an organization that develops standards in various industries. Knight Co sold its version of the CSA code at a discounted price to that of CSA. In 2016, CSA was awarded a judgment against Knight Co for copyright infringement. As part of the judgment, an injunction was issued against Knight Co and its directors, officer and employees. The judgment was further confirmed by the Federal Court of Appeal. In 2020, Mr. Knight continued to sell infringing copies of CSA’s code, in violation of the judgment. CSA sued Knight Co and Mr Knight for contempt proceedings.
Contempt of court can be brought in instances where there is a need to safeguard the administration of justice. A plaintiff must demonstrate beyond a reasonable doubt that:
The order was clear and unequivocal;
The defendant had actual or inferred knowledge;
The defendant knowingly conducted the offending conduct.
CSA was able to satisfy the test and Mr. Knight was sentenced to a minimum of 6 months in jail, as well as a $100,000 fine, plus court costs. He was required to stay in jail until the fine was paid in full (to a maximum of 5 years).
First, do not infringe third party copyrights. Second, do not violate judgments made against you. Third, understand that as an intellectual property owner, you can enforce your rights with significant teeth. When you’re in the creative industry, copyright laws can be used as business tools to protect your creative ingenuity. Do not discount the power that a well structure intellectual property strategy can have for the viability of your business.
If you would like strategies on how to best maintain and protect your copyrights, reach out to us at Froese Law.