Background
Dr. Reiza Rayman, a Clinical Associate in Cardiac Surgery with advanced degrees in medicine and robotic telesurgery, entered into a consulting agreement with Scholars Learning Centre Inc. (later renamed Red Crayon Inc.) in May 2021 as Director of STEM. Under the agreement, Rayman independently developed six original educational works: five Quick Reference Guides for LEGO education kits and a STEM Connect Program curriculum guide designed for the company’s franchisees and tutors. The Consulting Agreement explicitly stated that it did not transfer intellectual property rights between the parties and that Rayman was an independent contractor.
Red Crayon Inc., an after-school supplementary education franchise, published all six works in its online database called “Scholars IQ,” which franchisees and tutors accessed to download materials for lessons. In November 2023, Red Crayon stopped paying Rayman’s invoices and ignored his subsequent demands and demand letter. Despite this, the company continued to make the works available through Scholars IQ. Rayman filed a copyright infringement action in October 2025; Red Crayon failed to file a defense and did not respond to the lawsuit.
The Court’s Holding
Justice Allyson Whyte Nowak granted Rayman’s renewed motion for default judgment, finding that he had addressed all evidentiary deficiencies previously identified by the court. The judge confirmed that Red Crayon was properly served and in default for failing to respond to the claim within the required time. She found that Rayman owns the copyright in all six works and that Red Crayon infringed that copyright by continuing to make the works available to franchisees and tutors after ceasing payment and after receiving the Statement of Claim.
The court held that the Consulting Agreement did not grant Red Crayon any license or assignment of rights to use the works; its right to use them was contingent solely on payment of fees. Works 1 through 5 are protected as compilations based on Rayman’s creative selection and arrangement of hyperlinked materials and resources. Work 6 is protected as an original work incorporating text, instructional materials, and student activities developed specifically for a STEM camp. Once Red Crayon stopped paying, it had no legal right to continue displaying the works.
In awarding remedies, Justice Whyte Nowak issued a permanent injunction preventing further infringement, ordered delivery up and destruction of all materials containing the works within 10 days, and awarded statutory damages of $13,000 per work for a total of $78,000. While the Copyright Act allows up to $20,000 per work, the judge awarded less because Rayman’s claimed unpaid fees of $75,000.06 covered multiple services beyond creation of the works alone. However, the judge ensured the award reflected the need to prevent Red Crayon from benefiting from infringement, noting that franchisees “regularly use” the works.
Key Takeaways
- Independent contractors retain copyright ownership in works created under consulting agreements unless explicitly assigned by contract; a mere license contingent on payment does not give the company rights to continue using works after payment ceases.
- On default judgment motions, plaintiffs must prove their claims with “sufficiently clear, convincing, and cogent evidence” even when the defendant fails to respond; courts scrutinize such evidence carefully.
- Educational materials, compilations, and lesson guides can be protected by copyright; the selection, arrangement, and sequencing of existing materials (such as LEGO links) may constitute protectable compilations.
- Statutory damages under the Copyright Act are discretionary; courts consider bad faith conduct, failure to respond to demands, continued infringement after notice, and the need for deterrence in setting awards within the permitted range.
- Contract clauses excluding punitive damages remain enforceable in copyright infringement cases and will bar claims for punitive damages even in egregious circumstances.
Why It Matters
This decision reinforces that educational technology companies cannot assume they own intellectual property created by independent contractors merely because those contractors use company infrastructure to deliver their work. The ruling clarifies that a consulting agreement’s silence on intellectual property assignment leaves ownership with the creator, and that a non-exclusive, revocable license terminates when the underlying payment obligation ends. For STEM educators, curriculum developers, and other independent contractors, the decision confirms that carefully drafted consulting agreements protecting IP rights are enforceable even against well-funded corporate defendants.
The decision also demonstrates that courts will enforce copyright infringement claims through default judgment when defendants ignore court processes and fail to respond to claims, provided the plaintiff meets the evidentiary burden. Red Crayon’s continued use of the works after Rayman ceased to be paid and after receiving formal notice constituted particularly bad faith conduct, supporting a substantial statutory damages award aimed at preventing unjust enrichment. The case illustrates that educational franchises must take copyright compliance seriously or face significant liability.
✉️ Get tomorrow’s cases before your first coffee
Daily Case Law is our free morning digest — the most substantive new decisions, filtered to your jurisdictions and topics, each linking back here for the full analysis.