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Canadian Jurisdiction Upheld in Marine Software Dispute
(GRI Simulations Inc. v. Oceaneering International Inc., (2005) NLTD 157)
Published in the December 2005 issue of Transportation Notes - View Article
In this case the plaintiff GRI Simulations Inc. is a software development company, incorporated in Newfoundland and Labrador, which develops computer software applications for Remotely Operated Vessels used in the marine sector and in particular in the east coast oil and gas industry. The defendant, Oceaneering International Inc. (“Oceaneering”) is a Delaware corporation with its head office in Houston, Texas. It is also involved in the development of software for the marine sector. Three individual defendants, named Grzetic, Lilly and Griffiths, were employees of GRI who left to join Oceaneering and developed software similar to that owned by GRI, and entered into competition with GRI.
GRI commenced an action in Newfoundland seeking damages and an injunction preventing Oceaneering from marketing its software package on the basis that the individual defendants had breached GRI’s copyright and misappropriated confidential information which was proprietary to GRI.
Six weeks after the commencement of the Newfoundland action, Oceaneering commenced an action in Texas, seeking declaratory relief in respect of the Newfoundland action. GRI moved that the Texas action be dismissed and was successful.
Oceaneering then sought to have the statement of claim as against it set aside on the basis that the Newfoundland court lacked jurisdiction, that Oceaneering was not a necessary or proper party to the action, that there was no real or substantial connection to Newfoundland and that Newfoundland was not a convenient forum in which to adjudicate the dispute.
The Court held that Oceaneering was a necessary and proper party to the action, as it would be vicariously liable for the breaches committed by the three former employees of GRI and could also be found to have breached the Newfoundland Copyright Act.
On the subject of real and substantial connection, the Court reviewed the decision of the Ontario Court of Appeal in Muscutt v. Courcelles (2002) 213 DLR(4th) 577. In that case, Sharpe, JA, reviewed a number of recent Supreme Court of Canada decisions and set out the factors to be considered in determining whether there is a real and substantial connection to the jurisdiction.
After reviewing how these factors apply to this case, the Court ruled that there was a real and substantial connection with Newfoundland. Notably, the Court observed that it should not ignore the fact that there were multiple defendants. When searching for real and substantial connections the existence of multiple parties may distinguish a case from one in which there is a single defendant in the “increasingly complex and interdependent nature of the modern world community”.
The Court also considered the various factors which determine whether or not Newfoundland was a convenient forum for the trial of the action. These include the relative ease and access of proof, the availability of witnesses, the enforceability of a judgment and other practical issues that make the trial of the case easier, more expeditious and inexpensive.
Canadian courts generally agree that unless the balance is strongly in favour of the defendant, taking into consideration all of the above factors, the plaintiff’s choice of forum should prevail.
The Court, after reviewing these various factors, determined that Newfoundland and Labrador was a convenient forum in which to try the action.