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Factual background
Dassault Systèmes SolidWorks Corporation develops and licenses SolidWorks, a leading 3D computer-aided design (CAD) software used to model complex components and assemblies. Dassault commercialises SolidWorks through a licensing scheme built around a one-time Primary Licence Charge (PLC), which grants a perpetual right to use the then-current version, and an Annual Licence Charge (ALC), also called “maintenance”, which is payable yearly for upgrades, updates, support and online training. Add-ons such as “Simulation” and “Plastics” are priced separately, each with their own PLC and ALC, and prices vary by product mode (Standard, Professional, Premium). To protect against piracy, Dassault embeds a security system known as Phone Home Technology (PHT). The software is activated with an alphanumeric licence key; PHT contacts Dassault’s servers to validate the key and, if an invalid or fake key is used, flags the installation as “pirated” or “cracked”, transmits details such as IP address, MAC address, version used and fake serial numbers, and logs repeated illicit use on specific machines. SolidWorks is central to the business of Les Industries Show Canada inc. (Show Canada), a Quebec-based manufacturer that designs, fabricates and installs complex stage and architectural elements for major projects, often abroad. SolidWorks is the primary design tool used on the vast majority of Show Canada’s revenue-generating projects, and the company began acquiring legitimate SolidWorks licences in 2006, eventually holding 22 licences by 2015, with maintenance paid through 2016. In 2013, however, Dassault’s systems had already detected earlier use of pirated copies by Show Canada, which was resolved at the time through the purchase of additional licences.
Emergence of the dispute and criminal proceedings
From 2014 onwards, Dassault’s PHT started generating alerts indicating that Show Canada was running unlicensed versions of newer SolidWorks releases, particularly the 2017 version (V25), on many machines despite holding only licences that entitled it to use the 2016 version. The PHT logs also indicated that “cracked” versions had been activated, bypassing Dassault’s licence-key verification. In early 2018, the volume of alerts rose sharply. Dassault’s Licence Compliance team wrote to Show Canada’s president and CEO, Jean Labadie, in April 2018, formally alleging unlicensed SolidWorks use and warning of significant legal consequences, then followed up via LinkedIn and again by email in October 2018. These communications went unanswered. Dassault’s representatives personally visited Show Canada’s Laval offices on 9 October 2018, left a copy of the earlier legal notice and stressed the urgency of addressing the piracy concerns, but they still received no meaningful response from management. The next day, Dassault filed a criminal complaint with the Laval municipal police (SPVL) alleging copyright infringement. On 21 November 2018, the police executed a search warrant at Show Canada’s premises, seizing 35 company computers. Show Canada was subsequently charged with an offence under s. 42(2.1)(a) of the federal Copyright Act for knowingly circulating infringing copies of software; in September 2022 it pled guilty. The court imposed a CAD 50,000 fine and ordered CAD 50,000 in compensation payable to Dassault as part of the criminal disposition. Parallel to the criminal matter, Show Canada regularised its licensing position in February 2019 by purchasing 23 additional SolidWorks licences and paying related ALCs for 28 months, but Dassault proceeded with a separate civil claim for damages and profits under the Copyright Act.
Civil claim and procedural issues
In June 2019, Dassault sued Show Canada and three related corporations—Les Technologies Show Canada inc., Les Industries Show Canada (US) inc. and Show Canada International inc.—in the Quebec Superior Court, Civil Division. Dassault sought compensatory damages for lost licence revenue, punitive damages and restitution of profits allegedly earned by Show Canada on projects executed with pirated SolidWorks. Show Canada counterclaimed for CAD 255,000 in alleged losses tied to the 2018 police search, arguing that Dassault had committed a civil fault by making the complaint that led to the seizure of its computers. On the eve of trial in April 2025, Dassault sought to amend its claim to significantly increase both its compensatory damages and its profits claim, and it tendered new exhibits detailing licence pricing and PHT data. The court applied Quebec procedural law on amendments and late-filed evidence, allowing the amendments and admitting the new documents. It held that Dassault’s revised damage calculations were not barred by any judicial admission, since the earlier “definitive” figures were the product of calculations rather than admissions of fact, and that admitting the additional pricing and PHT tables caused no real prejudice to Show Canada, especially as they tended to show that Dassault’s original monetary demands were overstated.
Copyright infringement and circumvention of technological protection measures
On the merits, the court first confirmed that computer programs are “literary works” under the Copyright Act and that the parties had formally admitted that Dassault holds the copyright in SolidWorks for the relevant versions. Installation of SolidWorks without a valid licence key constitutes reproduction of the work and therefore copyright infringement, unless authorised by Dassault. Separately, the Act’s anti-circumvention provisions prohibit bypassing technological protection measures such as Dassault’s PHT-based licensing mechanism, and a rights-holder can pursue the same remedies for circumvention as for direct infringement. Dassault’s PHT logs showed that version 2017 of SolidWorks (V25) had been activated and used on dozens of Show Canada computers that were not covered by corresponding licences, and that pirated copies had been enabled through fake serial numbers and activation files. Two opposing forensic IT experts examined the seized machines. Dassault’s expert, Gilles Létourneau, found SolidWorks installation directories on 33 of the 35 computers, “crack” utilities attributed to a piracy group known as “Solid Squad” on 28 machines, activation files on 30 machines, and Solid Squad-generated fake licence keys in the Windows registry on 29 machines, along with tens of thousands of SolidWorks part-files (SLDPRT) modified in 2017–2018. He concluded that pirated SolidWorks software had been used extensively at Show Canada. Mapping MAC addresses in the PHT data to the seized computers, he confirmed that PHT alerts corresponded closely to actual machines with cracked installations, supporting the reliability of Dassault’s technical monitoring. Show Canada’s own corporate officer, Pierre Marchand, ultimately conceded in testimony that “cracked” SolidWorks versions had been installed on company computers, even though management claimed not to know who had done so. In addition, Show Canada’s 2022 criminal guilty plea under s. 42(1)(c) of the Copyright Act was treated as a juridical fact carrying a presumption of truth, which Show Canada did not rebut. The court held that, on the civil standard of proof, Dassault had clearly established that Show Canada had both infringed its copyright by unauthorised reproductions and circumvented a technological protection measure by using crack utilities to bypass the licence-key system.
Quantifying compensatory damages: licence pricing, scope of use and limitation
Dassault’s compensatory damages theory was to recover the value of the licences Show Canada should have bought to use SolidWorks lawfully. This aligns with established Canadian copyright jurisprudence permitting damages measured by the hypothetical licence fee that would have been paid in a lawful scenario. To compute this amount, Dassault combined the PHT data (identifying machines, versions and, where present, add-ons and duration of use) with its internal 2018 price list. It initially assumed that 44 distinct Show Canada computers had run pirated SolidWorks versions based on unique MAC addresses, and it priced each as if Show Canada had purchased the highest-end Premium mode plus any add-ons detected, using the higher “Customer RRP” prices (direct-to-customer pricing) rather than the lower “VAR” prices paid by resellers. The court accepted the overall methodology but adjusted key assumptions to reflect Dassault’s true economic loss under Quebec civil law. First, Show Canada historically had purchased licences exclusively via an authorised reseller, SolidXperts, and evidence showed that Dassault’s income in such transactions is the VAR-column price, not the retail customer price. Since Dassault sought to recover the gain it was deprived of rather than to impose a penalty, the court held that damages must be calculated using VAR prices, representing the amounts Dassault likely would have received had Show Canada lawfully bought licences through a reseller. Second, Dassault had priced all licences as Premium mode on the theory that PHT does not reveal the specific mode in use. However, Mr. Létourneau’s supplemental forensic report, based on virtual booting of the seized machines, showed that while the 2013 version (V21) was indeed run in Premium mode across the relevant computers, the 2017 version (V25) was most often run in Professional mode, with only about 36% of machines demonstrating Premium. The court therefore allowed Premium pricing for all V21 installations but apportioned V25 installations 36% Premium and 64% Professional for damages purposes. Third, the court applied the federal Copyright Act’s three-year limitation period. Because Dassault filed its civil action on 21 June 2019 and had been receiving PHT alerts about some machines since 2014, portions of the claim relating to uses first signalled more than three years before filing were time-barred, except where the infringing conduct continued into the limitation period as an ongoing course of infringement. After reviewing the PHT logs, the court found certain machines entirely prescribed and certain others partially prescribed, trimming the number and duration of chargeable infringing installations. Show Canada argued that Dassault had failed to mitigate its loss by not seeking urgent injunctive relief, such as an Anton Piller order, when PHT alerts spiked in early 2018. The court rejected this, holding that Dassault acted reasonably by issuing a timely cease-and-desist letter, repeatedly attempting to contact management and visiting the premises before resorting to police involvement, satisfying its duty of reasonable mitigation under art. 1479 C.c.Q. The court then prepared its own adjusted damages table, effectively revising Dassault’s schedule (P-3B) to use VAR pricing, Premium vs Professional breakdowns, and limitation-period cuts. Converting the resulting totals from US dollars to Canadian dollars at the rate selected by Dassault and proven in evidence (1.4376), the court fixed compensatory damages for lost licence revenues at CAD 412,087.39.
Restitution of profits: revenues, cost allocation and economic reality
In addition to compensatory damages, Dassault sought restitution of profits under s. 35(1) of the Copyright Act, initially estimating Show Canada’s profits on SolidWorks-related projects at CAD 14.7 million for a multi-year period and pleading CAD 1 million “sauf à parfaire”. On the strength of an expert report from Deloitte, Dassault later amended its claim to seek CAD 9,670,911 in profits for 2018 alone, the year in which Deloitte calculated gross profits on SolidWorks-related contracts of that amount. Show Canada countered with its own forensic accounting report from Richter, which concluded that, once all relevant costs were attributed, Show Canada actually suffered a loss of roughly CAD 120,000 on projects involving SolidWorks in 2018. The gulf between the two positions turned primarily on two issues: which projects were properly considered “SolidWorks projects” and how to treat fixed and semi-variable costs when calculating profits attributable to the infringement. On project selection, Deloitte had relied on a Show Canada-provided list of projects said to have been performed using SolidWorks. Richter excluded large “MGM” projects from that list on the basis of Show Canada’s later assertion that they had been designed with AutoCAD instead. However, those MGM projects appeared on the original list produced by Show Canada in response to an undertaking during discovery, and forensic analysis of the seized computers revealed a significant number of SolidWorks part files whose directory paths included “MGM”. In light of this objective electronic evidence, the court rejected Mr. Labadie’s testimony to the contrary and held that the MGM projects were indeed SolidWorks-based. That yielded SolidWorks-related revenues of CAD 28,802,726 for 2018, representing about 85.2% of Show Canada’s total revenues that year. The more complex dispute concerned cost allocation. Deloitte’s approach was to deduct only direct project costs identified in the audit working papers (CAD 19,131,815), ignoring broader fixed and semi-variable costs such as overhead, R&D, administrative and selling expenses, and thereby deriving nearly CAD 9.7 million in profits from SolidWorks projects alone—far exceeding Show Canada’s total pre-tax profit of around CAD 3.4 million for 2018. Deloitte reasoned that fixed costs would have been incurred regardless of the pirated software and therefore should not reduce the profit figure tied to infringement. Richter’s report took the opposite approach, contending that given the dominance of SolidWorks projects in Show Canada’s business, the vast majority of fixed and semi-variable costs existed to support those projects and therefore had to be proportionately attributed to them. Citing professional guidance on “value-added” approaches to profit measurement, Richter proposed allocating fixed and semi-variable costs to SolidWorks projects according to their share of total revenues, which it originally pegged at 78.7% but which the court recalculated at 85.2% after including MGM revenues. The court found Deloitte’s profit calculation economically unrealistic and inconsistent with Show Canada’s global financial statements, and it rejected the notion that none of the company’s overheads were incurred in support of the infringing projects. It accepted Richter’s methodology of proportional allocation by revenue share as appropriate in the circumstances, emphasising that Show Canada operated essentially as a “SolidWorks enterprise” in which nearly all core design and execution activity depended on the software. On the evidentiary burden, the court held that Show Canada had satisfied its obligation under s. 35(2) of the Copyright Act to prove its costs, relying on its audited financial statements and RCGT working papers—documents already in evidence through Dassault’s own proof of revenues. It rejected Dassault’s contention that detailed invoices, contracts and payment records were necessary, holding that the same level of accounting evidence used to establish revenues was sufficient to establish the corresponding cost structure. Applying the accepted methodology, the court started from SolidWorks-project revenues of CAD 28,802,726, deducted direct costs of CAD 19,131,815, then subtracted 85.2% of other cost-of-sales and 85.2% of adjusted operating expenses (selling, R&D and administrative, net of certain exceptional items tied to an old lawsuit and asset dispositions). This produced a net profit figure of CAD 1,470,387 for 2018, which the court ordered Show Canada to disgorge to Dassault in full. Show Canada argued that only a portion of these profits should be considered causally linked to the copyright infringement, suggesting via its expert a “rule of thumb” allocation of 25% to the infringement and 75% to Show Canada’s own value-added contributions. The court rejected this unsubstantiated split. While it recognised that, in principle, profits can be apportioned between infringing and non-infringing contributions, Show Canada bore the burden of proving any such division, and its generalised 25% proposal lacked factual grounding. Because accounting records did not allow a finer phase-by-phase breakdown (e.g., design vs fabrication vs installation) and SolidWorks was embedded throughout project execution, the court found the profits in question inextricably connected to the infringing use of the software.
Punitive damages and Charter-based analysis
Beyond compensatory damages and profits, Dassault claimed punitive damages under Quebec law. The court noted that copyright infringement constitutes an interference with the holder’s property right to peaceful enjoyment and free disposition of its assets as protected by art. 6 of the Quebec Charter of human rights and freedoms. Where such an interference is both unlawful and intentional, art. 49 of the Charter authorises punitive damages, and the Copyright Act expressly preserves the right to seek punitive or exemplary damages in addition to ordinary remedies. The court characterised Show Canada’s conduct as both illicit and clearly intentional. Use of Solid Squad cracks to defeat SolidWorks’ licence-key system could not be accidental, and repeated installation of cracked versions over many years showed deliberate disregard for Dassault’s rights. Although the individuals who actually deployed the cracks were not identified, their intent could be imputed to Show Canada itself. Senior management, including Mr. Labadie, became unequivocally aware of the allegations at least by the 10 April 2018 cease-and-desist letter, yet did nothing to investigate or halt the use of pirated software until forced to confront the issue by a police search more than seven months later. The court viewed this prolonged inaction in the face of clear notice as the company effectively sharing the intentional mindset of those who had installed the cracks. In calibrating the amount of punitive damages under art. 1621 C.c.Q., the court weighed several factors. Show Canada’s financial position remained fragile in 2017–2018 despite a one-time profit spike; its audited statements raised doubts about its ability to continue as a going concern. Show Canada was already facing heavy financial consequences through the large restitution and compensatory awards in this civil case and the separate criminal fine and restitution order. Against that, the court stressed the seriousness of the infringement: Show Canada had previously been warned about unlicensed SolidWorks use in 2013, had regularised its position at that time, and yet again reverted to systemic piracy within a year. The infringements were widespread and long-lasting, and management’s attitude at trial—particularly Mr. Labadie’s refusal to acknowledge the wrongfulness of the conduct and his criticism of Dassault’s enforcement efforts—suggested a need for a clear deterrent. Balancing these factors, the court fixed punitive damages at CAD 50,000, concluding that this amount was sufficient to fulfil the preventive and denunciatory functions of punitive awards without being excessive in light of the other sanctions already imposed on Show Canada. Interest on the punitive damages would run only from the date of judgment, in line with Quebec appellate authority.
Rejection of solidarity and liability of related corporations
Dassault had sued Show Canada together with three affiliated corporations and sought to have any monetary judgment declared solidary among them. The court refused both to pierce the corporate veil and to impose solidarity under Quebec civil law. Evidence showed that only Les Industries Show Canada inc. was an operating company performing projects; the other entities had no staff or practical operations and functioned essentially as transaction or licensing vehicles (for example, to hold U.S. contractor licences and workers’ compensation coverage). They neither performed design or fabrication work nor used the SolidWorks software. Because there was no evidence that the affiliates had themselves committed copyright violations or participated in a collective civil fault, and because solidarity cannot be presumed or extended to punitive damages or profit restitution under current Quebec law, the court dismissed Dassault’s claims against the three non-operating defendants, with costs in their favour. Only Les Industries Show Canada inc. was held liable for the damages, profits and punitive amounts awarded.
Counterclaim over the police search
Show Canada’s counterclaim alleged that Dassault had committed a civil fault by filing the police complaint that triggered the November 2018 search and seizure, seeking compensation for disruption and hardware replacement expenses. The court reiterated that any person who believes an offence has been committed is entitled to lodge a complaint with law-enforcement authorities; the mere act of filing such a complaint does not, in itself, amount to civil fault. In this case, Dassault had a strong factual basis for approaching the SPVL, as confirmed by Show Canada’s subsequent guilty plea to violating the Copyright Act. Moreover, once a complaint is accepted, it is up to police to conduct the investigation and execute any warrants, and Dassault cannot be held responsible for how the SPVL carried out the search. Show Canada also failed to prove and quantify any compensable loss; the only alleged damage was the cost of purchasing replacement computers, but no adequate evidence was adduced on actual amounts incurred. The court therefore dismissed the counterclaim in its entirety, with costs in favour of Dassault.
Overall outcome and monetary consequences
The court partly upheld Dassault’s civil action only against Les Industries Show Canada inc., awarding three distinct heads of relief: (i) CAD 412,087.39 in compensatory damages representing the licence revenues Dassault would likely have earned from a lawful reseller-based licensing path; (ii) CAD 1,470,387 in restitution of Show Canada’s net profits on projects executed in 2018 using pirated SolidWorks installations; and (iii) CAD 50,000 in punitive damages to denounce and deter intentional copyright piracy and disregard of Dassault’s property rights. All three amounts attract interest and the additional indemnity under art. 1619 C.c.Q. from specified dates (for compensatory damages and profits from 1 April 2025, and for punitive damages from the date of judgment). The claims against the three related corporate defendants were dismissed with costs, and Show Canada’s counterclaim over the police search was also rejected with costs. Taking the three civil heads of recovery together, Dassault Systèmes SolidWorks Corporation emerged as the successful party, obtaining a total monetary judgment of CAD 1,932,474.39 against Les Industries Show Canada inc., exclusive of accruing interest and indemnity, in addition to the separate CAD 50,000 restitution ordered in its favour in the prior criminal proceeding.
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Plaintiff
Defendant
Court
Quebec Superior CourtCase Number
540-17-013697-197Practice Area
Intellectual propertyAmount
$ 1,932,474Winner
PlaintiffTrial Start Date