Canadian Copyright Act draws the line between Rio Tinto and foreign author

GE commenced a copyright infringement action against Canmec, asserting ownership of copyright in 33 manufacturing drawings relating to butterfly valves. GE claimed that Canmec infringed copyright in the drawings while refurbishing a hydroelectric power plant owned by a third party, Rio Tinto. Canmec, in turn, brought a third-party claim against Rio Tinto.

Rio Tinto brought a motion seeking to examine Cyril Chatron, an engineer employed by the French affiliate of GE (GE France), for discovery. Mr. Chatron authored most of the manufacturing drawings that GE claimed were infringed by Canmec. Mr. Chatron had assigned copyright in the drawings to GE France pursuant to an employment agreement. GE France assigned Canadian copyright to GE.

Rio Tinto took the position that Mr. Chatron was an “assignor” within the meaning of Rule 237(4) of the Federal Courts Rules and argued that it had the right to examine him. In the alternative, Rio Tinto sought an order under Rule 238 to examine Mr. Chatron as a non-party.

Rule 237(4) – Examination of Mr. Chatron as an “Assignor”

Rule 237 addresses who may be examined for discovery in an action. Rule 237(4) provides that, where an assignee is a party to an action, the assignor may also be examined for discovery. The purpose of this rule is to allow the examining party to obtain general information about the circumstances of the assignment and the right(s) assigned, and to allow the examining party to impeach the assignor if called as a witness at trial. However, the right to examine an assignor comes with a caveat: evidence given during the examination is only that of the assignor and cannot be used to bind an adverse party unless adopted by them.

GE argued that Mr. Chatron could not be an “assignor” because he did not assign copyright directly to GE. GE France sat between Mr. Chatron and GE in the chain to title. Justice McHaffie rejected this narrow interpretation of Rule 237(4), noting that, in Richter Gedeon Vegyészeti Gyar Rt v. Merck & Co., [1995] 3 FC 330 (CA) at pp 340-343, the Federal Court of Appeal held that the use of the singular term “assignor” covered multiple assignors by application of the Interpretation Act. Rule 237(4) does not preclude examination of assignors earlier in the chain of title than the “direct” assignor who assigned the right to the assignee.

However, Justice McHaffie, applying section 13 of the Copyright Act, held that Mr. Chatron was not an “assignor” because he was never a copyright owner to begin with. Though Mr. Chatron authored the drawings in France as a French national, the existence, scope, and nature of copyright protection in Canada is governed exclusively by the provisions of the Copyright Act without reference to the law of the jurisdiction in which the work was created.By operation of subsection 13(3), where an author created a work in the course of employment, the employer is the first owner of the work absent any agreement to the contrary. Section 13 does include any limitation on the nature of the work or the nationality of the author. Justice McHaffie concluded that subsection 13(3) applied to deem GE France, as Mr. Chatron’s employer, to be the first owner of Canadian copyright in the manufacturing drawings. The employment agreement between Mr. Chatron and GE France did not include an “agreement to the contrary” that displaced the first ownership provisions in s. 13(3).

Rule 238 – Examination of Mr. Chatron as a Non-Party

Rule 238 permits a party to seek leave to examine a non-party “who might have information on an issue in the action”. Under Rule 238(3), the Court may grant leave if satisfied that: 

1. The person may have information on an issue in the action;
2. The party has been unable to obtain the information informally from the person or from another source by any other reasonable means;
3. It would be unfair not to allow the party an opportunity to question the person before trial; and
4. The questioning will not cause undue delay, inconvenience, or expense to the person or to the other parties.

Justice McHaffie concluded that the requirements for an order under Rule 238 were not met as he was not satisfied that Rio Tinto was unable to obtain the information in Mr. Chatron’s possession by “any other reasonable means.” Rio Tinto had the opportunity to seek information from Mr. Chatron through the discovery process, including during initial examinations of GE. Justice McHaffie refused to grant leave to allow a party to “seek information that it could have sought in examination for discovery of an adverse party but neglected to or chose not to.”

Justice McHaffie dismissed Rio Tinto’s motion. A copy of the decision is available here.