The Ins and Outs of Canadian Copyright: Movies and the real and substantial connection test

A recent decision of the Ontario Superior Court of Justice sheds some light on the application of the “real and substantial connection test” under Canadian copyright law where alleged infringement takes place across geographic borders. In Pourshian v. Walt Disney Company, an Ontario court allowed an action for copyright infringement to proceed against three Walt Disney Company related entities based on a movie distributed through Canadian movie theaters.

The plaintiff, Damon Pourshian, filed a Statement of Claim against a group of companies related to the Walt Disney Company. He alleged that Pixar’s award-winning animated film, “Inside Out”, released in 2015, infringed his copyright in a short film that he created in 1998 also entitled “Inside Out”. In Pourshian’s film, five organs—Heart, Stomach, Colon, Bladder, and Brain—guide the protagonist’s behaviour while in Pixar’s film, five emotions—Joy, Sadness, Anger, Fear, and Disgust—influence the protagonist’s behaviour.

In response, the defendants filed a motion to set aside service of the Statement of Claim and to stay the action on the grounds that the defendants are incorporated and have their principal places of business in the United States, that Pixar’s “Inside Out” was made in California, and as a result Canada’s Copyright Act does not have extraterritorial application. The main issue on the motion. therefore, was whether the Ontario court should assume jurisdiction over Pourshian’s action.

The Court allowed the motion as regards six of these defendants, agreeing with the defendants that there is no real and substantial connection between Pourshian’s claims, these defendants, and Ontario. For the three remaining defendants, however, the Court dismissed the motion  and allowed the action to proceed.

The Court allowed the claims against Pixar Animation Studios and Walt Disney Pictures Inc. to proceed because these companies produced and released the film for distribution to Ontario movie theatres:

“…the production of INSIDE OUT by Pixar and Walt Disney Pictures Inc., in part for the purpose of carrying on business in Ontario, and the release of INSIDE OUT by Walt Disney Pictures Inc. for the distribution to theatres in Canada, do create a good arguable case of a real and substantial connection between the claims against those defendants and Ontario. This conduct on the part of the defendants Pixar and Walt Disney Pictures Inc. would constitute secondary infringement of Pourshian’s copyright in his Inside Out in Ontario, such that the presumptive connecting factors are not rebutted.”

The defendants acknowledged that the claim could proceed against Disney Shopping Inc., which is responsible for the sale of merchandise.

This decision emphasizes that simply distributing a work in a jurisdiction can open up the possibility of litigation. In this case, the copyright owner was able to bring a claim alleging that an entity that merely distributes a work in a jurisdiction, even if the work was created elsewhere and the entity has no other connection to that jurisdiction infringed copyright in that jurisdiction. In a world where works are widely distributed, often by methods that do not differentiate based on geographical borders, creative companies should be conscious that they may attract liability in these jurisdictions.

Of course, Pourshian will now have to prove each of these allegations in order for his claim to succeed. It will be interesting to see whether he is able to substantiate his claim of copyright infringement. We will be following and will be sure to provide updates. 

Stacey Smydo

About Stacey Smydo

Stacey practices copyright litigation and has acted in matters before the Federal Court, Federal Court of Appeal, and the Copyright Board. She also works in government relations on copyright law reform and drafts copyright and entertainment law agreements.