Federal Court of Canada Fines a Company Close to One Million Dollars as Penalty for Failing to Pay Copyright Levy

On March 3, in Canadian Private Copying Collective v 9087-0718 Québec Inc, the Federal Court of Canada held that 9087-0718 Québec Inc (Numbered Company) was subject to penalty under section 88(2) of the Copyright Act (Act) for failing to pay the private copying levy under Part VIII of the Act in the amount of $900,123.77. The Numbered Company imported and sold blank recordable compact discs (CD-R) and re-writeable compact discs (CD-RW), which were subject to the private copying levy. The Court found that the Numbered Company had followed a strategy of avoiding payment of the levy, hoping a constitutional attack on the levy being conducted by third parties would succeed. Even after the constitutionality of the Act was determined, the outstanding levy was not paid, nor was a reserve set aside for the outstanding levy obligation. The total liability of the Numbered Company for levies arising from the importation and sale of CD-Rs and CD-RWs was $1,651,739.70. The Court found that the Numbered Company's conduct was "inexcusable". Recognizing the need to send a clear signal to deter such conduct in the future by others, the Court granted the request of the Canadian Private Copying Collective (CPCC) for a penalty in the amount of $900,123.77, which represented the amount that should have been remitted on the date of the first demand letter from the CPCC notifying the Numbered Company of its levy obligations under the Act, and calling upon it to submit outstanding reports and make levy payments. In addition, the Court ordered payment of the outstanding levies and interest. For a copy of the decision, visit: http://decisions.fct-cf.gc.ca/fct/2006/2006fc283.shtml For a copy of the CPCC press release, visit: http://tinyurl.com/hhyba Summary by: Nick Wong