2011 January 20

Destiny Software Productions Inc. v. Musicrypt Inc., 2011 ONSC 470

In this Ontario Superior Court proceeding, the defendant counterclaimed over certain statements made by the plaintiff and its CEO for defamation, injurious falsehood, infringement of the Trade-marks Act and the Competition Act, and unlawful interference with economic relations. These claims concerned statements contained in an electronic press release, an email that discussed the press release, and a newspaper article which reported on the press release. The plaintiff/defendant by counterclaim sent the press release to its customers and potential customers under cover of the impugned email which explained ongoing patent litigation between the plaintiff and the defendant. The Court refused to grant a summary judgment on the defamation counterclaim, holding that the issues raised in the defence to the counterclaim ought to be dealt with in the normal way at a trial with witnesses where the full factual context could be evaluated. “It is well-accepted that determining the defamatory nature of material is a highly contextual analysis. In that light, there is little to be gained by parsing each statement one by one and deciding whether a trial is required to determine the defamatory nature of that particular utterance. The trial judge must still assess each statement in light of its surrounding context, which will include the remaining statements made in each of the three documents.”