What is the procedure for an American citizen to take a Canadian
incorporated business to court?
Is there a small claims and large claims court in Canada?
Does the procedure take place in Canada where they are located?
Is it costlier than say suing someone locally?

While you await a real Researcher try to find out:
If the incorporated business is a federal registered or provincial
registered corporation.
If provincial, specify which of the ten provinces.
e.g.  123456 Ont Ltd is a numbered Ontario corp.

I believe small claims court is limited to 10 000 canadian dollars (~US$8 300)

- I am not a Researcher -

Must you sue them in Canada?  Have you inquired to see if a US court
perhaps has jurisdiction over them?

They are a photography business located in Toronto Ontario - They are
incorporated. It likely wont go this far but I found it very difficult
find any info on line.

I'm not sure if you can sue someone from another country from within the US?

Sure.  You can ~sue~ anybody anywhere for anything.  The issue,
though, is whether the court in which you sue has jurisdiction over
the defendant.  The other issue is whether, assuming the court in
which you sue has jurisdiction over them, the defendant has any assets
within that court's jurisdiction so that you can satisfy whatever
judgment you may obtain.

Let's play this out:  you sue them in the US and properly serve them
with a copy of the complaint.  They must either appear and move to
dismiss for lack of jurisdiction or you will get a default judgment. 
If you get a default judgment, you can satisfy that judgment with any
assets owned by the defendant and located within the jurisdction of
the court in which you got the judgment.  Or, you could send the
judgment to a Toronto court and ask them to enforce it.  Many
countries have treaties with the US that permit reciprocal
enforceability of judgments.

It depends.

If the Canadian Business did significant enough stuff in the US, then
they can be sued in the US where they did significant enough stuff. 
(I'm being as specific as the facts allow.)

If the Canadian Business only did stuff in Canada, then US courts
almost certainly will not have jurisdiction and you'll have to sue in
Canada and I don't know the specific procedures in Canada though they
may vary by province.

alex101,

With all due respect, why not sue them in the US, serve them, and then
let the judge determine if there's jurisdiction?  I disagree that
christopherj must make a determination if there's jurisdcition, and if
not then he "cannot" sue them in the US.  Of course he can sue them in
the US.

ipfan

I may try to see what happens but alex101's point does make a lot of
sense. Otherwise we could force people from all over the world to fly
to the US at great expense to defend themselves - or not show up and
lose. Maybe that does happen?

This incident actually happened over the internet. Our website design
was completely copied by a Canadian company.

Even if we won how would we determine damages? I guess it would be
best to see a lawyer.

christopherj,

I am glad you posted more facts.  Can you find out where the
infringing site is hosted, its "service provider?"  If it's in the US,
you can send the service provider a take-down notice under the Digital
Millennium Copyright Act [17 USC Section 512(c)(3)] and not have to
worry about suing.

And yes, that's exactly what happens every day.  People sue foreign
nationals in US courts and get judgments when they do not show up. 
That is EXACTLY what happens.  But remember, if the foreign defendant
has no US assets, most times they simply do not care if a US judgment
is entered against them.

If the service provider is in Canada and for some reason you do not
want to sue them in the US, then yes, you will need to talk to a
lawyer in Canada about suing for copyright infringement.  A good IP
lawyer in Toronto is Peter Choe at 416-369-7200.

<<<Otherwise we could force people from all over the world to fly
to the US at great expense to defend themselves - or not show up and
lose. Maybe that does happen?>>>

I cannot speak about international lawsuits, but this happens all the
time within the U.S. A person from one state sues a person from
another state. The one being sued must attend court in the state of
the person suing...or loose the case.

Kriswrite