Judgments

Decision Information

Decision Content

T-1758-89
Titan Sports Inc. and Titan Promotions (Canada) Inc. (Applicants)
v.
Mansion House (Toronto) Limited carrying on business as Cabaret East, 445204 Ontario Limited carrying on business as Queensbury Arms Tavern, Tempworld Limited carrying on business as Chez Paree II, 558560 Ontario Limited carrying on business as Chez Paree II Place de Royale, Zack's Emporium & Eatery [1111 Finch Avenue West, 2787 Eglinton Avenue East and 1625 Military Trail, Toronto], Scoozi's in the New Yorkdale Inn, Caddy's, O'Tooles Roadhouse Restaurants [ 1747 Albion Road, 355 Rexdale Boulevard and 1891 Kennedy Road, Toronto], 620712 Ontario Inc. carrying on business as Alexander's Tavern, 710639 Ontario Inc. carrying on business as Alex- ander's Tavern, Wizards, Flamingo Road Cabaret Inc., John Doe, Jane Doe and Other Persons Who Are Not Authorized By the Applicants and Who Intend to Perform or Exhibit the Wrestling Match Known as "SummerSlam" (Respondents)
INDEXED AS: TITAN SPORTS INC. v. MANSION HOUSE (TORONTO) LTD. (T.D.)
Trial Division, MacKay J.—Ottawa, August 25 and September 6, 1989.
Copyright — Injunctions — Ex parte application for interim injunction to prevent infringement of applicants' copy right in television production of wrestling event — Program disseminated by scrambled coded signal to limited private' audiences at authorized venues — Unauthorized venues using illegally modified electronic equipment to receive and display applicants' program — Also seeking "Anton Piller" order authorizing entry of respondents' premises and for delivery up of illegally modified equipment — Applications allowed — Criteria for interlocutory or interim relief — Requirements for Anton Piller order — Order also requiring respondents to disclose details of source and supplier of unauthorized equip ment — Necessary to control pirating — Precluding respon dents from discussing order except with solicitors to prevent avoidance of service — Students-at-law employed by appli cants included among authorized persons — Inclusion of Jane and John Doe and other persons not named in style of cause explained.
This was an ex parte motion for interim and interlocutory injunctions prohibiting the respondents from infringing the applicants' copyright in the television production of a major wrestling event. The applicants also sought "Anton Piller" orders authorizing entry of the respondents' premises and directing the delivery up of electronic equipment which had been illegally modified to receive and display the applicants' closed circuit performance. The applicants' program was to be disseminated by scrambled coded signal via satellite for closed circuit television broadcast to limited private audiences at authorized venues. The applicants adopted measures to protect their copyright, including the use of a sophisticated scrambling system to limit access to the performance, licensing selected venues, advertising warnings against unauthorized exhibition of the telecast as copyright infringement, and notifying owners of those venues indicating an intention to show the telecast with out authorization, of their intention to protect their interests. Similar steps had proven insufficient to deter a large number of unauthorized venues from showing an earlier program, and although legal action has been commenced, the applicants believe that they will be unable to collect damages in some cases. The illegally modified equipment used by unauthorized venues was acquired from an unauthorized supplier. The appli cants alleged that the unauthorized showings will result in confusion as to which venues are authorized and this could lead to loss of reputation as some of the unauthorized venues may not meet the applicants' standards. Furthermore, the applicants could be exposed to civil actions by exclusive licensees for lost revenues from ticket and concession sales. Finally, the appli cants' opportunities to establish a major business activity might be lost.
Held, the application should be allowed.
The copyright claim was well founded and the unauthorized showing of the television program would constitute infringe ment. The potential financial losses, the loss of reputation to the applicants and the threats to their long-term interests in the industry in Canada, resulting from the operations of unauthor ized venues, constituted serious and irreparable prejudice and harm. Any remedy in damages against unauthorized users would be extremely difficult to calculate and the potential to recover tenuous because of the nature of the operations of unauthorized venues, such as clubs and bars, which may not be well funded or of long standing. Weighing the balance of convenience between the parties, the applicants' interests should be protected by injunctive relief. They had good reason to believe that their copyright interests would be infringed unless steps were taken to prevent that, and that if steps were not taken they would suffer irreparable harm. In an application without notice, Rule 469(2) limits relief to an interim injunc tion for no more than ten days.
The applicants have established the three requirements for the issue of an "Anton Piller order": namely a very strong
prima facie case for an injunction, very serious damage, and a real possibility that the defendant will destroy incriminating documents if there is advance notice of the order. In requiring the respondents to permit entry to their premises and the inspection and detention of unscrambling devices, the order sought was within the normal terms of an Anton Piller order. The application was, however, unusual in that it sought com plete details about the source and supplier of the unauthorized unscramblers. Although there exists conflicting case law as to whether relief of this nature should be granted, the requested provision would be included in the order made herein because of the widespread practice of pirating of the applicants' pro gram on a previous occasion and the expectation that the same would happen again. Control of pirating can only be achieved if those seeking to protect their interests in their copyright can solidify their positions with each successive event by gaining information about sources of distribution of unauthorized unscramblers. The second unusual aspect of the order sought was that it would preclude the respondents from discussing the order with anyone other than their solicitors following service upon them, in order to avoid informing other unauthorized venues of the applicants' efforts to serve the order and to seek unauthorized descrambling devices. The venues in question were widespread and could not all be visited at the same time. This term should be included in the order but could be ques tioned upon 24-hours' notice. While unusual, such "gag orders" are not unknown.
Two procedural matters were to be disposed of as follows: First, as students-at-law are treated for some purposes as officers of the court in Ontario, those employed on behalf of the applicants might be included among authorized persons. The services of these students were required to assist the lawyers in serving the order on the substantial number of venues. Second, wherever names of a corporation or person operating any of the venues were known, they were designated as parties, carrying on business in the name of the venue. The inclusion of Jane and John Doe and other persons not named in the style of cause was appropriate both in relation to designated venues whose owners were unknown at the time the order was issued and in relation to operators of premises now unknown that might be brought to the attention of the applicants as likely to be unauthorized venues for display of the program.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Copyright Act, R.S.C., 1985, c. C-42, ss. 3(1),(1.1) (as am. by S.C. 1988, c. 65, s. 2), 5, 13, 27(l),(5). Federal Court Rules, C.R.C., c. 663, R. 469(2).
CASES JUDICIALLY CONSIDERED
APPLIED:
American Cyanamid Co y Ethicon Ltd, [1975] 1 All ER
504 (H.L.); Turbo Resources Limited v. Petro Canada Inc., [1989] 2 F.C. 451; (1989), 91 N.R. 341 (C.A.); Universal City Studios, Inc. v. Zellers Inc., [ 1984] 1 F.C. 49; (1983), 73 C.P.R. (2d) 1 (T.D.); Anton Piller KG v. Manufacturing Processes Ltd., [ 1976] Ch. 55 (C.A.); All Canada Sports Promotions Ltd. and B.C.L. Entertain ment Corp. v. Sun Lite Systems, Tom Kelly, et al., judgment dated November 7, 1988, Supreme Court of Ontario, 32891/88, not yet reported.
NOT FOLLOWED:
Chin-Can Communication Corporation et al. v. Chinese Video Centre Ltd. et al. (1983), 70 C.P.R. (2d) 184 (F.C.T.D.).
REFERRED TO:
Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189; (1982), 69 C.P.R. (2d) 122 (C.A.); Culinar Foods Inc. v. Mario's Food Products Ltée, [1987] 2 F.C. 53; (1986), 12 C.P.R. (3d) 420 (T.D.).
AUTHORS CITED
Ough, Richard N. The Mareva Injunction and Anton Piller Order, London: Butterworths, 1987.
COUNSEL:
Gordon J. Zimmerman and Gayle Pinheiro for applicants.
SOLICITORS:
Borden & Elliot, Toronto, for applicants.
The following are the reasons for order ren dered in English by
MACKAY J.: This was a motion made ex parte for interim . and interlocutory injunction orders prohibiting respondents from certain described activities that would infringe copyright interests of the applicants in a scheduled performance of a major wrestling event, not yet performed, planned to be distributed through authorized venues with authorized access to satellite broadcast facilities for closed circuit television. In addition, the appli cants sought orders in the nature of "Anton Piller orders" to direct entry to premises of the respon dents, to deliver up electronic equipment used for reception and display of closed circuit or encrypted television signals, which equipment has been modi fied, without authorization of the applicants, so as to be activated by the scrambled signal transmit-
ted by the applicants containing their closed cir cuit copyright performance, and certain terms of the order sought would go further in support of protecting the applicants' interests.
The application was heard at a special hearing on Friday, August 25, 1989 with the televised performance, the wrestling event known as "Sum- merSlam" to take place on the following Monday, August 28, 1989 from 8:00 p.m. to 11:00 p.m. and from 11:00 p.m. that date to 2:00 a.m. on August 29, 1989, (all times being Eastern Daylight Time).
The applicant Titan Sports Inc. is a corporation organized and subsisting under the laws of the State of Delaware in the United States of Ameri- ca. The other applicant, Titan Promotions (Canada) Inc. is a corporation organized and sub sisting under the laws of Canada. The applicants are affiliated corporations which share common officers and shareholders.
The applicant Titan Sports Inc. claims a reputa tion for the creation, promotion, production, performance and distribution of professional wres tling exhibitions under a registered service mark, World Wrestling Federation ("WWF"). Four major performances are mounted each year under the names Royal Rumble, Wrestlemania, Sum- merSlam, Survivor Series. These are disseminated by scrambled coded signal, via satellite, for televi sion production of professional wrestling exhibi tions to limited private audiences at authorized venues across Canada and the United States. During telecasts of these major wrestling events, including SummerSlam, the applicant Titan Sports Inc. consistently displays the several trade marks that it holds. It claims exclusive ownership of all rights in the closed circuit telecasts of the SummerSlam event to be distributed in Canada at the times and on the dates specified. It claims this as the producer, through employees and independ ent contractors who have assigned their rights in production to the applicant in the original work which is the television broadcast. That broadcast involves significant planning, skill and effort on the part of employees and independent contractors employed by Titan Sports Inc., and considerable costs on behalf of the corporation. The production
is said to incorporate in a unique manner musical arrangements and compositions to which Titan Sports Inc. is the owner or has secured rights for performance.
In conjunction with the process of delivering the signal containing the SummerSlam performance from the corporation's production centre, via satel lite for transmission to and reception at selected sites, the applicant Titan Sports Inc. will make a simultaneous video recording of the work, thereby simultaneously fixing the work in a material form.
The claim of the applicant Titan Sports Inc. to copyright in the performance, and the exclusive rights flowing therefrom, would seem to be well founded in light of the Copyright Act, R.S.C., 1985, c. C-42, sections 3(1) and (1.1) [as am. by S.C. 1988, c. 65, s. 2], 5 and 13, as amended.
The applicant Titan Promotions (Canada) Inc. is engaged in and claims a reputation for promo tion, production, performance and distribution of professional wrestling exhibitions in Canada. By agreement with Titan Sports Inc. the applicant Titan Promotions (Canada) Inc. has been granted the exclusive licence to distribute the closed circuit telecast of SummerSlam in Canada. In turn, Titan Promotions (Canada) Inc. has granted exclusive closed circuit distributorships to exhibit the tele cast at selected venues in Canada to certain closed circuit distributors.
The applicants have taken the following steps to protect copyright interests in the SummerSlam closed circuit telecast.
1) Titan Sports will cause the signal to be trans mitted via satellite utilising the "VideoCipher II" system, a scrambling technology used to encode and decode television signals so as to restrict and control access to performances transmitted by scrambled signals for closed circuit television.
2) The applicants do not intend to have the work performed for the general public, rather it is to be available only to selected venues authorized by a closed circuit distributor granted exclusive rights in certain geographic areas by licence to exhibit the SummerSlam closed circuit telecast. Author ized venues are provided by the applicants with authorized "VideoCipher II" equipment which facilitates unscrambling for closed loop transmis sion to large television screens for viewing by patrons at authorized venues who will have paid a fee for admission.
3) The applicants have undertaken considerable advertising and promotion of the SummerSlam telecast through regional newspapers across Canada, including advertisements specifying copy right ownership and warning against any unau thorized exhibition or rebroadcast of the telecast as an infringement of copyright interests.
4) The applicants have also served notice by letter from their solicitors of their copyright interest and have warned owners or operators of all venues that have come to their attention as having advertised or otherwise indicated an intention to show the SummerSlam telecast without authorization from the applicants that they intend to protect their interests.
Similar steps were taken by the applicants to warn against unauthorized display of the perform ance as a violation of copyright interests in connec tion with an earlier program, Wrestlemania V, telecast on April 2, 1989. Nevertheless, at a large number of unauthorized venues the program was shown in violation of the applicants' rights and to their detriment. Action has been commenced against operators of venues who were warned but ignored the warnings and provided this earlier program to their patrons without authorization. The applicants are concerned that if they are vindicated by judgment in that action, damages awarded are unlikely to be met by at least some of those sued. At least one of those involved on the earlier occasion has since gone out of business leaving the applicants without any effective
remedy in damages or for an accounting profits against that party.
Unauthorized venues apparently have access to the television signal carrying the applicants' performance by satellite transmission through the acquisition, from an unauthorized supplier of elec tronic equipment, of an unscrambler box which has been wired to contain an unauthorized silicone chip specially programmed, without authority of the owners, to provide access to the signal. While the VideoCipher II technology seems highly sophisticated and effective for the purposes of scrambling and descrambling television signals, its function can apparently be duplicated relatively easily by so-called "pirates".
It seems clear that if there be unauthorized showing of the television program to which the applicants have copyright, this would constitute an infringement under subsections 27(1) and (5), that is the doing of something that only the owner of copyright may do or authorize, or permitting the performance in public of a work without the con sent of the owner of the copyright for private profit.
The applicants allege, inter alia, that:
1) the display of the program at unauthorized venues inevitably will lead to confusion over which venues are authorized, particularly since all will have displayed during the course of the program the trade-marks of Titan Sports Inc., and this confusion is compounded with advertising by unauthorized venues;
2) loss of reputation will result from confusion where unauthorized venues are not up to the standards for facilities or equipment normally required by the applicants for authorized venues and loss of reputation will also result through inability to control unauthorized access to their closed circuit scrambled telecasts;
3) the operation of unauthorized venues will expose the applicants to possible civil actions by those to whom exclusive licences for venues have been granted, as a result of lost revenues in ticket sales and concession sales they may experience
from the unauthorized operations, or the value of the applicants' program will be undermined;
4) in the long term, unless unauthorized venues are prevented from operating, the applicants' opportunities to establish a major business activity may be lost; moreover, the establishment of an effective closed circuit television industry in Canada may be undermined.
In all, the potential financial losses, the loss of reputation to the applicants and the threats to their long-term interests in the industry in Canada, through the operations of unauthorized venues, constitute serious and irreparable prejudice and harm. Moreover, any remedy in damages against unauthorized users would be extremely difficult to calculate and potential to recover is tenuous because of the nature of the operations of unau thorized venues, many of which are pubs, clubs, bars and places of similar nature for general public entertainment which may not be well funded or of long standing.
The applicants here seek interim and interlocu tory injunction orders, without yet having initiated an action in this matter. Affidavit evidence was presented from a senior officer of Titan Sports Inc., from the Director of Security for the corpora tion responsible for VideoCipher II technology for scrambling and descrambling satellite television communications, and from the corporation with exclusive rights as closed circuit exhibitor for the SummerSlam program in Ontario who was able to identify unauthorized venues, the operators of which had advertised or otherwise indicated that they would, without authority of the applicants, show the SummerSlam program when broadcast. From these affidavits I conclude that the appli cants have good reason to believe that their exclu sive copyright interests will be infringed unless steps are taken to prevent that, that if steps are not taken then they will suffer irreparable harm and that in the weighing of the balance of convenience between the parties, the applicants' interests deserve to be protected by injunctive relief. The test for interlocutory or interim relief is established by American Cyanamid Co y Ethicon Ltd, [1975] 1 All ER 504 (H.L.); Turbo Resources Limited v.
Petro Canada Inc., [1989] 2 F.C. 451; (1989), 91 N.R. 341 (C.A.); and Universal City Studios, Inc. v. Zellers Inc., [1984] 1 F.C. 49; (1983), 73 C.P.R. (2d) 1 (T.D.). In my opinion, the require ments for such relief have been met by the appli cants. Moreover, they give undertaking to meet any damages that might arise to the respondents by the grant of an injunction at this stage of the proceedings and counsel undertakes that action will be commenced as soon as may be done after August 28, 1989.
In light of Rule 469(2) of the Federal Court Rules [C.R.C., c. 663], which limits relief in the case of an application without notice, as this one is, to an interim injunction for a period not exceed ing ten days, any order to which the applicants are entitled in this matter would be an interim order returnable on September 5, 1989, at Ottawa, Ontario, or as soon thereafter as may be heard by the Court.
In addition, the applicants here seek certain terms in an order which terms are in the nature of "an Anton Piller order", so-called after the order issued in Anton Piller KG v. Manufacturing Pro cesses Ltd., [1976] Ch. 55 (C.A.). The three-fold test enunciated in that case has come to be accept ed as the basis on which these extraordinary orders may issue, that is, where there is a very strong prima facie case for an injunction, where the damage likely to be caused to the applicant would be very serious, and where there is a real possibili ty that the defendant will destroy or secrete incriminating documents or things if there is advance notice of the order.
There seems to me no doubt that this is a strong prima facie case and the damage to the applicants will be very serious if their copyright interests, which will come into being simultaneously with their broadcast of the scrambled television signal for the SummerSlam program, are not protected by means appropriate to preclude use of unauthor ized decoding or descrambling devices. Counsel assure me that such devices can be surrendered without effect upon the respondents' rights through other equipment they have to have access
to other television programs broadcast by satellite. Finally, I am satisfied on the basis of affidavits relating experience, especially of the Director of Security for the corporation responsible for VideoCipher II technology that the respondents will secrete or destroy incriminating apparatus or docuinents if they have notice of the order here sought. In summary, I am satisfied in the circum stances here that the applicants make out a case for an Anton Piller type order.
The applicants point to a somewhat similar sit uation where Mr. Justice Henry in the Supreme Court of Ontario granted an order of the sort here sought, in All Canada Sports Promotions Ltd. and B.C.L. Entertainment Corp. v. Sun Lite Systems, Tom Kelly, et al., Court File No: 32891/88, November 7, 1988, where relief was sought and granted against certain venues which it was anticipated would, without authority of the owners, present the program of a major boxing event telecast as a live performance in November 1988 for closed circuit television and authorized venues only. In a later similar situation, not referred to by counsel, Mr. Justice Strayer of this Court granted an order to restrain unauthorized presentation of another major boxing event tele cast for closed circuit television. See All Canada Sports Promotions Ltd. v. Unauthorized Receivers of Leonard vs. Hearns Telecast, June 9, 1989, Court File No. T-1141-89.
In so far as the order sought would order the respondents, upon being served, to permit entry to the designated premises by persons authorized by the order, and the inspection of and detention of unscrambling devices and things, I am satisfied that the order is within the normal terms of Anton Piller orders. See: Anton Piller, supra; Nintendo of America, Inc. v. Coinex Video Games Inc., [1983] 2 F.C. 189; (1982), 69 C.P.R. (2d) 122 (C.A.); Culinar Foods Inc. v. Mario's Food Products Ltée, [1987] 2 F.C. 53; (1986), 12 C.P.R. (3d) 420 (T.D.).
In two other aspects the order sought might be considered unusual. First, the applicants seek an order that the respondents not only deliver up electronic equipment identified as an unauthorized unscrambler, but also "provide complete details as to its purchase or rental, from whom it was obtained and the names and addresses of any person who assisted in the delivery of the unau thorized descrambler". I note the serious reserva tions expressed by Addy J. in Chin-Can Com munication Corporation et al. v. Chinese Video Centre Ltd. et al. (1983), 70 C.P.R. (2d) 184 (F.C.T.D.), at pages 188-189 about similar terms of an order there sought, and his refusal to agree to such terms. Yet this term, requiring information about the source and supplier of the unscrambler, is consistent with the terms of the orders issued in both All Canada Sports Promotions Ltd. et al. and Sun Lite Systems et al., supra; and All Canada Sports Promotions Ltd. et al. v. Persons, Names Unknown, who are Unauthorized Receivers of the Ray Charles Leonard vs. Thomas Hearns Telecast at Various Locations Across Canada, supra. Despite reservations, in this case I agreed to an order of the nature sought, in view of the apparent widespread practice of unauthorized access and presentation of the applicants' copy right program on a previous occasion and its expectations that the same would now be repeated. Moreover, control of unauthorized pirating of pro grams broadcast infrequently for closed circuit television may only be accomplished if those seek ing to protect their interests in their copyright can solidify their positions to do so with each succes sive event by gaining information about sources of distribution of unauthorized unscramblers or decoders.
Finally, I also agreed to an unusual provision in the order which would preclude the respondents from discussing the order with anyone other than their solicitors following service upon them, the purpose of which was to avoid information about the applicants' efforts to serve the order and to seek unauthorized descrambling devices from venues that are widespread and could not all be
visited at the same time. Again, I had serious reservations about such terms but included them on this occasion which relates to the broadcast twice in one night of a program in which the applicants have copyright and which, in view of their interests ought to be available only to those whom they authorize. This term was included on condition that the order sought also be modified to permit questioning of any aspect of it, or any matters arising from it, by any of the respondents, or the applicants, upon 24-hours' notice rather than proposed notice of two days. It may be worth noting that terms of this sort, requiring informa tion and directing a "gag order" against communi cation, while unusual are not unknown. See: Ough, The Mareva Injunction and Anton Piller Order, London: Butterworths, 1987, especially at pages 120 ff., Precedent of Anton Piller order.
Two procedural matters of concern in connec tion with the application were disposed of as follows:
1) The applicants requested the inclusion among authorized persons of students-at-law in addition to solicitors employed on behalf of the applicants. They did so because of their concern to serve and seek enforcement of the order on a substantial number of venues with a limited force of solicitors. Upon assurance of counsel that students-at-law in Ontario, the province of principal concern for unauthorized venues, were treated at least for some purposes as officers of the court, I agreed that they be included.
2) The identification of the parties as respondents (defendants) was in issue since as originally pro posed, the draft order would have included, as in the style of cause originally drafted in this matter, only certain venues designated by their operating names as establishments and John Doe, Jane Doe, and other persons who intend without authoriza tion from the applicants to perform or exhibit the SummerSlam program. Counsel agreed that wher ever names of a corporation or person operating any of the venues was now known, they would be designated as parties, carrying on business as in
the name of the venue. On this understanding and with this change the order was approved so that in final form the Order included certain legal persons as respondents, other designated venues by the names under which these are operated, and John Doe and Jane Doe and other persons etc. The inclusion as respondents of John Doe, Jane Doe and other persons not named seemed appropriate in this case both in relation to venues designated in the style of cause, the owners of which were unknown at the time the order was issued, and in relation to operators of premises now unknown that might be brought to the attention of the applicants within the next few days as likely to be unauthorized venues for presentation or display of the program SummerSlam and upon whom the applicants would then serve a copy of the order issued.
The style of cause is henceforth as approved in the Order issued herein, with respondents (defen- dants) including names of persons or corporations carrying on businesses as designated, certain other venues designated by the names under which these are operated, and finally John Doe, Jane Doe and other persons intending without authorization to exhibit the program SummerSlam.
In the result, with some modification the order sought by the applicants was granted, with costs.
For the record, and for possible future reference by counsel contemplating an application for an Anton Piller order, the monograph by Ough, cited above, may be of interest. In particular, the terms suggested in the precedent for such an order, at pages 120 ff. seem to be worth serious consider ation.
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