Archive for the 'Gaming & Digital Media' Category

Social Media Law (Part 3: Defamation)

The use of social means to engage in defamation is nothing new. Indeed, defamation requires the very social element of publication. Social media – Facebook pages or posts, tweets, blogs and online comments – merely make defamation easier and more pervasive.

Canadian courts have struggled to balance the interests of free speech with the interests of individuals who wish to challenge and find redress for defamatory statements. A recent Ontario case has framed the issue as follows:

     “There are few things more cowardly and insidious than an anonymous blogger who posts spiteful and defamatory comments about reputable member of the public and then hides behind the electronic curtain provided by the Internet. The Defendant confuses freedom of speech with freedom of defamation. There are, undoubtedly, legitimate anonymous Internet posts: persons critical of autocratic or repressive regimes, for example, or legitimate whistleblowers. The Defendant is not one of those people. The law will afford his posts all the protection that they deserve, which is to say none.”  Manson v. John Doe , 2013 ONSC 628 (CanLII),

The test laid out by the Supreme Court of Canada (Grant v. Torstar Corp., 2009 SCC 61 (CanLII)) is as follows: In order to establish a claim for defamation a plaintiff must establish that:

a)   the impugned words are defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person;

b)   the words in fact refer to the plaintiff; and

c)   the words were published, i.e., that they were communicated to at least one person other than the plaintiff.

In Manson, the court ordered the defendant to pay damages of $100,000 plus aggravated damages of $50,000 and costs. However, the defenant remains anonymous.

Another recent decision in Baglow v. Smith, 2012 ONCA 407 (CanLII), hints at the court’s willingness to permit parties to engage in a heated online political debate, without crossing the line of defamation. In that case, the court observed: “Commentators engaging in the cut and thrust of political discourse in the internet blogosphere can be fervent, if not florid, in the expression of their views.” In the lower court, the statements made in this “cut and thrust” were determined not to constitute defamation. However, on appeal, the court decided the matter was suitable for a full trial and overturned the lower court findings. This is one case to watch.

Related Reading: ipblog’s Defamation Archive

Calgary – 07:00 MST

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Social Media Law (Part 2: Twitter & Copyright)

Here is the next case that illustrates the potential pitfalls when dealing with social media:

This recent US copyright decision involving Agence France Presse (AFP) and photographer Daniel Morel dealt with the rights of a news publisher to publish images posted to Twitter.

Mr. Morel is a photojournalist who took a number of images of the 2010 earthquake in Haiti. He then posted those images to Twitter. Those images were picked up by AFP who “licensed” the images on to Getty Images.

When Morel complained, steps were taken to have the images removed from the AFP / Getty system. But through series of mixups (of the kind that would be familiar to anyone dealing with information technology and complex organizations such as AFP and Getty Images), the pictures were not removed and were picked up and published by The Washington Post under their agreement with AFP/Getty.

The court ultimately had to decide whether Mr. Morel – the photographer – had granted a kind of license to AFP by posting his images to Twitter. This required an analysis of the Twitter Terms of Service. The court decided no, the Twitter Terms of Service do not grant such a license. The court stated that “even if some re-uses of content posted on Twitter may be permissible, this does not necessarily require a general license to use this content as AFP has.” Put another way, a copyright owner who posts content to Twitter is clearly giving up some rights to that content – the right, for example, to re-tweet, which is a fundamental part of Twitter and is contemplated (even encouraged) by Twitter’s Terms of Service. However, merely by posting to Twitter, that copyright owner is not giving others an unrestrained right or license to remove the content, copy it and redistribute it commercially.

The court says “…the Twitter TOS were not intended to confer a benefit on the world-at-large to remove content from Twitter and commercially distribute it…” This is an important reminder.

In the final analysis (and that is 58 pages of analysis if you want to read the judgement) AFP and The Washington Post were liable for copyright infringement for use of Morel’s images.

Lessons for business:

    • This case confirms that any re-use of content from Twitter – and by extension, other social media streams – should be handled carefully.
    • Re-tweets are clearly contemplated as being within the scope of permitted uses, but copying and republishing for commercial purposes clearly is not.
    • Many situations will fall somewhere in the middle between those two ends of the spectrum. Before using or re-using content for commercial purposes, take time to review the specific situation, including the applicable social media terms of service. Before posting your own content to Twitter, be aware that the Twitter terms do contemplate certain re-uses (the scope of which is difficult to define precisely). Once it’s posted, it’s hard to stuff the genie back in the bottle

The case is Agence France Presse v. Morel.

Calgary – 07:00 MST

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Social Media Law (Part 1: The Rogue Employee)

images.jpgSocial media law was not a topic on offer when I went to law school. Now, it’s a subject that’s hard to avoid for any business that has a consumer-facing social media presence. Here are two recent cases that illustrate the potential pitfalls as this area of law becomes more complex and more interesting:

Last week, HMV’s Twitter feed was hijacked by an employee who live-tweeted employee terminations from the company’s official Twitter account. Perhaps “hijacked” isn’t the right word, since the employee apparently had access to the account as part of her employment duties, though that position likely did not involve posting descriptions of firings as “Mass execution of loyal employees”. The next day the ex-employee (“Poppy Rose”) helpfully tweeted a reminder to the company that “you need to go to ‘settings’ and revoke my account access as an admin“. The lessons for business?

    • Many companies are slow to grasp the power of social media. Don’t underestimate the viral nature – both good and bad – of this tool. Though the offending tweets were deleted by the company, this became a national story within a few minutes. From the company’s perspective, it required careful handling to avoid any brand damage.
    • This highlights the need for a Social Media Policy for employees, to deal with the legal pitfalls of social media and particularly those employees who are engaged directly in social media sphere on behalf of the company. The ownership and control of corproate social media accounts is a simple but important element of such a policy.

Related Reading: Who Owns Social Media Contacts: Employers or Employees?

Calgary – 07:00 MST

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Click & Copy: Breach of Online License Agreements & Copyright Infringement

 

My article Click and Copy: Breach of Online License Agreements and Copyright Infringement was published in Canadian Intellectual Property Review in December.  The enforceability of click-through licenses for online software-based services is critical within the information technology industry. Software vendors and cloud-computing service providers require certainty that the licence terms governing these products will be enforceable.

In other words, vendors require certainty that, if there is a breach by a user, the law will provide a remedy, under the law of either contract or copyright, or both. When does a breach of a licence or breach of online terms of use constitute not only a contractual breach but also an infringement of copyright in the software?

The outcome of this question affects whether a vendor or provider would be able to access the infringement remedies under part IV of the Copyright Act, including injunction, damages, accounts, delivery up, and statutory damages. By reviewing some of the recent case law in this area, this article examines the intersection of copyright and contract law in the context of click-through software licences and online terms of use, specifically when a breach of such terms constitutes copyright infringement, giving rise to remedies under the Copyright Act, and when a breach is merely a breach, giving rise to remedies and potential damage awards under contract law.

Calgary – 07:00 MST

 

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App Law & Privacy

Several recent stories have highlighted the concerns over personal information, privacy and the reach of mobile apps.  Once again, the law is labouring to keep up with technology.

  • So-called Cyber-Stalking Apps provide the means to track the location of a phone through an app that is not visible or easily detectable by the phone’s owner. The cloaked app resides on the phone and essentially reports back to the person who installed the app on the user’s whereabouts. In the US, a proposed law has been drafted to make such apps illegal (The Location Protection Privacy Act). This draft legislation moved out of committee and may become law in 2013.
  • A number of mobile apps have been criticized for collecting personal information about kids, and selling that info without parents’ consent. To tackle these problems associated with mobile apps directed at children, privacy advocates have been pushing for changes to the rules under COPPA (Children’s Online Privacy Protection Act). The US Federal Trade Commission (FTC) amended the Children’s Online Privacy Protection Rule in December 2012. The Rule now applies to mobile apps and web-based text messaging programs, and requires app developers to get permission from parents before collecting a child’s photographs, videos and geolocational information. The amended Rules will become effective on July 1, 2013.
  • It is worth noting that these are both developments under US law.  In Canada, app developers who target children’s personal information would be caught by Canada’s broad private-sector privacy laws, such as the Personal Information Protection and Electronic Documents Act (PIPEDA) at the federal level, or one of the provincial-level privacy laws, such as the Personal Information Protection Act in Alberta.  Cloaked “cyber-stalking” apps could constitute an invasion of privacy  contrary to Canadian law. However, that would apply to the person who surreptitiously loaded the stalking app, rather than the app developer.

App developers: Make sure you get advice on a properly-drafted privacy policy, terms of use or end-user license, and that you understand the implications of privacy laws when launching mobile apps.

Calgary – 07:00 MST

Update: January 29, 2013: see comment below regarding WhatsApp privacy issues.

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Intellectual Property in 2013

Infringement! Litigation! Legislation! There is never a dull moment in the wonderful world of intellectual property law, and 2013 will be no exception. Here’s our list of what to watch in the coming year:

Copyright. If you keep making the same predictions year after year, eventually one of them will come true, right? For the last several years, we predicted that copyright reform would finally come to Canada. 2012 did not disappoint as the year of copyright, with the release of five SCC decisions and the passing of the copyright modernization legislation that had been long awaited.  We expect that 2013 will provide some opportunities to test the new law in court.

Anti-Spam. As with copyright, many have predicted that Canada’s “new” anti-spam law would come into effect for several years. Yes, Parliament passed the Fighting Internet and Wireless Spam Act and it did receive royal assent way back in December, 2010. However, Canada’s anti-spam legislation is still not in force. Industry Canada released draft revised anti-spam regulations last week, and it would be surprising if we didn’t see final regulations in the first half of 2013.

App Law. We predicted in 2011 that app law would develop as regulations and laws fight to keep pace with the explosion of the app economy which is expanding in both business and personal life, along with cloud computing. 2012 provided a number of important developments in app law, mostly in the US. 2013 should continue to provide clarity in this growing area of law.

Apple and Samsung. The litigation that brought patent infringement back into the public consciousness like no case since RIM vs NTP may be resolved in 2013. Even Judge Koh has made a plea for “global peace.”

Calgary – 13:00 MST

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Enforcing IP Judgements in Canada

US companies seeking to enforce intellectual property rights against Canadians face certain challenges. First, a US company would commence a lawsuit in a US court, and must serve the Canadian person or entity in Canada. A US plaintiff would serve a Canadian under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (known as the “Hague Convention”). Under this Convention, there is a Central Authority designated federally and for each province and territory. In Alberta, this is done through Alberta Justice, Office of the Sheriff (Civil Enforcement) in Edmonton or Calgary. The normal procedure for service in Canada is personal service, and in Alberta this is through a “process server”. Once served, the Canadian then has to decide whether to respond to the US lawsuit.

In some case, the Canadian decides to ignore the US lawsuit. This happened in Blizzard v. Simpson, 2012 ONSC 4312 (CanLII), where Blizzard Entertainment sued Michael Simpson, a developer who was alleged to have authored and sold a “maphack” for Blizzard’s popular multiplayer game known as StarCraft II – Wings of Liberty. Mr. Simpson was served in Canada but failed to file any defence to the California lawsuit. As a result, Blizzard took default judgement in which Mr. Simpson was ordered to pay statutory damages of $150,000 legal fees and costs of $45,000. A permanent injunction was also ordered to prevent further infringement of Blizzard’s StarCraft II copyright or violation of the StarCraft II End User License Agreement (“EULA”) and Battle.net terms of use (“TOU”), among other things.

Blizzard then came to Canada to enforce their US judgement against Mr. Simpson. This required a second lawsuit (in Ontario, where Mr. Simpson resided). A Canadian court assesses the jurisdiction of the original court (by applying Canadian conflict of laws rules), and verifies that there are no defences of fraud, breach of natural justice, or public policy, which would cause the Canadian court to refuse to enforce the US judgement.

In this case, Mr. Simpson elected to defend the lawsuit in Canada. But by that time it was too late, since the court was not considering the merits of the copyright infringement case, but rather was reviewing the enforcement of a foreign judgement that had already been granted. Mr. Simpson attempted a novel defence by alleging that it was Blizzard who breached the terms of Mr. Simpson’s own website (terms that prohibited access by employees or lawyers of Blizzard). The court found this argument “untenable”, and concluded by entering the California judgement as a judgement of the Ontario court.

It is worth noting that defences to the copyright infringement claim may have been available in the California lawsuit – it is clear in both Canadian and US law that a breach of the terms of use does not (by itself) infringe copyright. It is not clear whether any copyright infringement actually occurred, but Blizzard won that argument by default.

Related Reading: Apps, Bots and Workarounds

Lessons for Canadian business: don’t ignore US lawsuits!

Calgary – 07:00 MST

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App Law in China

We recently flagged the regulatory risks faced by app developers in Canada and the US. China also presents certain unique challenges for app developers (and Apple itself), as shown by these examples:

  • The Encyclopedia of China Publishing House successfully sued Apple Inc for copyright infringement arising out of a Chinese encyclopedia app for iPhone and iPad. A court in Beijing reportedly ordered Apple to pay $80,250 in compensation to the publisher, whose work was allegedly copied by the app developer;
  • Apple has also reportedly faced patent infringement allegations in China over its FaceTime app. A Taiwanese inventor claims that the app violates his patent rights in an earlier invention.
  • Siri is not exactly an app, but recent complaints about Siri in China illustrate the public relations risks associated with apps in China. Concerns have been raised about Siri providing links to “prostitution places”…. as though a person couldn’t search and find offensive materials on a iPhone or iPad without the aid of Siri. Technology permits people to access all sorts of unsavoury sites online, but these complaints suggest that Siri should engage in some self-censorship to avoid offending users who ask it to search for offensive material.
  • This recent article highlights the trade-mark issues for Windows 8 app developers whose popular Windows 7 app names are being reserved by others in China, forcing them to negotiate with the squatters or go through the lengthy process of obtaining registered trade-mark rights in China. Microsoft is reportedly working on a policy to address app name disputes.

The usual array of issues faces app developers in China – including potential trade-mark, copyright and patent disputes. App developers are advised to get advice if their apps are to be directed to the Chinese market.

Calgary – 07:00

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App Law: Regulators Crack Down

Canadian app developers must take care to avoid sanction from regulators both in Canada and in other countries – particularly in the U.S. – when launching apps.

California’s Attorney General recently began notifying  dozens of app developers that they run afoul of the California Online Privacy Protection Act by failing to post their privacy policies. Developers were given 30 days to comply or face fines of up to $2,500 for each download of a non-compliant app. In Canada, federal and provincial privacy laws also mandate the disclosure of privacy policies and the use of a privacy officer, though the legislation is broadly applicable to the private sector and is not targetted specifically at mobile app developers.

Today the Washington Post ran a story about the FTC’s crack down on apps that make “flimsy” claims  about the health effects of certain apps which claim to cure various ills through cellphone sound, light from the screen, or phone vibrations. Some app developers have been hit with fines (see related article below). The FDA is reportedly preparing draft regulations to regulate health claims made in mobile apps.

In Canada, another app developer faced the ire of the CRTC  (the Canadian Radio-television and Telecommunications Commission, Canada’s telecommunications regulator). The CRTC’s objection to the TrapCall mobile app was apparently based on privacy concerns and the protection of subscriber data, though it is likely prompted by pressure from telecos. TrapCall circumvents the paid call-blocking products offered by telcos, and disrupts a revenue stream – after all, who will pay for call-blocking if ubiquitous mobile apps can unblock calls? But it reflects a wider issue regarding technological innovation in the mobile app space that is colliding with established industry practices and (at times) an outdated regulatory environment.

Lessons for app developers?

  • We’ve said it before: Get advice on privacy before you launch your app.
  • Ensure that your claims do not offend regulatory requirements in the countries where your customers reside – whether the requirements are health related, safety regulations, or other advertising /marketing regulations.
  • Well-drafted end-user license agreements (EULAs), privacy policies or terms of use can assist in mitigating risk in this area.

Related Reading: When an iPhone App Makes False Claims

Update: Dec. 3: This is another example of regulatory problems, this time for Uber, a popular, well-financed taxi-summoning app.

Calgary – 07:00 MST

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New Copyright Act Becomes Law… In Part

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In June, the Copyright Modernization Act was passed by Parliament. However, it did not have the force of law yet (See: Copyright Bill Becomes Law). Today, portions of the new copyright law came into force (See: this link). This phased approach is somewhat confusing. The provisions relating to format-shifting, time-shifting, satire, parody – essentially all the provisions directed at education and consumers – are in force.

Those sections dealing with ISPs and the notice-and-notice procedures (subsection 47 [41.25, 41.26, and 41.27(3)]), will be determined through a separate order-in-council process once the regulations are finalized. The provisions which implement certain WIPO treaties (World Intellectual Property Organization Copyright Treaty (WCT) and the World Intellectual Property Organization Performances and Phonograms Treaty (WPPT) are held back, and will come into effect when the treaties are ratified.

I will be speaking tomorrow to the Canadian Bar Association, Technology & IP Subsection, on the subject of copyright updates, and will be reviewing these provisions.

Calgary – 21:00 MST

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Copyright Infringement: On the Negative Side of “Outrageous”

Copying and selling counterfeit software can be a risky proposition if Microsoft, Adobe and Rosetta Stone team up against you.

A Toronto man sold pirated software on Kijiji and Craigslist and three software vendors combined forces to sue him for copyright infringement by way of summary judgment, a truncated procedure that avoids the need for a full trial. Last month, the Canadian Federal Court found that the man’s conduct was “on the negative side” of “outrageous” and “highly unreasonable”. This conduct added $105,000 to the overall damage award of $445,000 for copyright infringement, made up of statutory damages, punitive damages, costs, plus pre- and post-judgment interest. A few interesting points about this decision:

  1. Statutory damages under the Copyright Act range from $500 to $20,000. Here, the judge awarded maximum statutory damages of $20,000 per infringed work.
  2. The court reviewed when punitive damages are appropriate: “when a party’s conduct has been malicious, oppressive and high-handed, offends the court’s sense of decency, and represents a marked departure from ordinary standards of decent behaviour”. In this case, the court was convinced that a significant punitive damage award was warranted.

The case is: Adobe Systems Inc. et al v. Dale Thompson dba Appletree Solutions 2012 FC 1219.

Calgary – 07:00 MDT

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“Great Fun” : Enforceability of Online Terms

“Great Fun” is a service offered by a company called Trilegiant. Trilegiant offers certain discounts to Great Fun members based on a monthly membership fee. Problem is, some members didn’t realize they were members until they saw the membership fee on their credit card statement. In Schnabel v. Trilegiant Corporation & Affinion, Inc. , Court of Appeals, 2nd Circuit (September 2012), the court considered whether terms could be considered enforceable if the terms were sent by email after the formation of the online contract.

In this case, there were online terms in the sign-up page, but for a variety of reasons, Trilegiant couldn’t rely on these terms, and was obliged to argue that the emailed terms were binding. Trilegiant asserted that the members assented to an arbitration clause by signing up, and receiving the emailed terms at a later date, and then failing to cancel their membership during the “free trial period”. The Second Ciruit Court of Appeals took a dim view of this approach. In the U.S., a consumer may receive “actual notice” of the online terms, or “inquiry notice”. “Inquiry notice” occurs when the consumer has actual notice of circumstances where a prudent person would be on guard to the existence of terms. It’s a stretch, but can still result in enforceable terms. The court concluded that neither “actual notice” nor “inquiry notice” were provided by means of the emailed terms. The court concluded:

“We do not think that an unsolicited email from an online consumer business puts recipients on inquiry notice of the terms enclosed in that email and those terms’ relationship to a service in which the recipients had already enrolled, and that a failure to act affirmatively to cancel the membership will, alone, constitute assent.”

Lessons for business? Get advice on your online terms and sign-up process for any online contracting: including cloud-computing contracts, software-as-a-service, online products sales, license agreements and terms-of-use.

Related Reading:

Calgary – 07:00

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Avatar Copyright Fight

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When is an idea protectable? This question is front-and-centre for many entrepreneurs. When can they discuss their business idea, invention, or brilliant screenplay?

This story relates to the protectability of ideas under the law of copyright. Basically, there is no protection under copyright law for an idea itself, only the particular form and expression of that idea. This was illustrated last week in Elijah Schkeiban v. James Cameron et al (Case No. 2:12-cv-00636, California Central District Court), where the plaintiff claimed that Mr. Cameron’s blockbuster Avatar film infringed copyright in Elijah Schkeiban’s screenplay entitled “Bats and Butterflies”.  In this case, the plaintiff alleged that certain character traits and plot elements were copied by Cameron. These broad elements of a story – good guys vs. bad guys, or flawed protagonists – are precisely the things that are not protectable. The case was dismissed.

It is important to note that courts will review elements of expression such as plot, themes, dialogue, mood, settings and characters, to determine if infringement occurs.

Compare this to earlier decisions that we reviewed here: (Copyright: Apps and APIsTetris Holding LLC v. Xio Interactive, Inc.) in which the court decided that the look-alike game Mino did infringe the protectable “look and feel” of Tetris; also see Dath v. Sony Computer Entertainment America Inc., where the US Ninth Circuit Court of Appeals upheld the lower-court decision in a copyright infringement case involving the Sony PS2 and PSP title “God of War”. The plaintiffs alleged that Sony infringed copyright in their written works about war between Sparta and Athens. No infringement was found in that case. (Reviewed in App Law Round-Up.)

Want to know who James Cameron really copied? Go see Fern Gully.

Calgary – 07:00

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Facebook App: Dispute Resolution Terms Upheld

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In a Facebook app called “SuperPoke! Pets”, players adopted virtual pets and acquired or purchased virtual currency to buy things for their virtual pets. As one of the first Facebook apps, the game took off in popularity after its launch in 2008. The game was acquired by Google in 2010, but was eventually discontinued at the end of 2011, leaving users without access to their accumulated virtual pets, currency and pet accessories. Users attempted a class-action suit against Google for “elimination of users’ money, goods and property.”

Google defended the class action by citing the dispute resolution clause, which compelled arbitration. In Abreu v. Slide, Inc., 12 0042 WHA (N.D. Cal.; July 12, 2012), the court confirmed that for an arbitration clause to be unenforceable, it must be both “procedurally” and “substantively” unconscionable. Essentially this means that an unenforceable clause would be oppressive due to unequal bargaining power between the parties, or would lead to “overly harsh or one-sided results.” As the court phrased it, the clause must be so one-sided as to “shock the conscience.”

In this case, the clause was upheld, and the dispute was sent to arbitration to be resolved.

Lessons for business?

  • When drafting online terms, ensure you get advice on the dispute resolution options.
  • An app developer or game publisher may be tempted to stack the “Terms of Use” in their favour, but these terms must be balanced. The inclusion of harsh or shocking terms in the fine-print may put the entire agreement at risk of being declared invalid and unenforceable by the courts.

Calgary – 07:00 MDT

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ipblog.ca & applaw.ca

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Bookmark ipblog.ca on your iPhone, iPad, Android tablet or mobile device for updates and developments in Canadian intellectual property law, including practical information and commentary on intellectual property business issues, technology commercialization and developments in the law, copyright and patent questions, trade-mark law, software and IT outsourcing, and related areas including privacy and cleantech licensing.

ipblog has been published since 2006.  In 2009, we added applaw.ca to our site, covering legal developments in the growing mobile application industry.

We have surpassed 1 million page-views from readers around the world. It’s hard to compete against YouTube cats… but we try.

Thanks to all of our readers. We’ll be taking a break during the month of August, and will resume in September, 2012.

Calgary – 07:00 MDT

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Cloud Computing Law – Allocating IP Risks

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In October, I will be presenting at the 5th Cloud Computing Law Conference in Calgary, Alberta (October 9 and 10, 2012). Check out the brochure for a full description, including the topic “ALLOCATING IP RISKS IN THE CLOUD”: Service providers often seek to impose standard form contracts for the provision of cloud computing services containing standards of services that are often on an “as-is” basis. This session will explore the process of negotiating warranties, indemnification and limitation of liability clauses to satisfactorily allocate risks, including: scope of warranties; service vs. product warranties; remedies available for breach of warranties; and scope of customary indemnification obligations.

Readers of ipblog.ca are eligible for a 15% discount (Email me for the registration discount code).

Relating Reading: ipblog’s Cloud Computing library of articles, including “The Cloud: What goes up must come down” and “Online Agreements: Click-Through Upheld“.

Calgary – 07:00 MDT

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Licensing Mobile Apps: A Checklist

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Apps are not just for Angry Birds anymore. The licensing of mobile apps is becoming more common for business-to-business software vendors who are extending the reach of their enterprise applications to take advantage of opportunities in mobile and cloud computing. If you are a vendor of enterprise software and you want to add mobile functionality, here are a few of the most important legal issues to consider:

1. Check the EULA:

Compared to the full suite of desktop functionality, the mobile app may represent a small piece of your overall software product. But even a mobile app needs an end-user license agreement (EULA). Cloud computing service providers may have service terms that are designed for web access to their software, and they may not perceive the need for a “traditional” EULA, but in the case of a mobile app, remember that this is a “traditional” license where a copy of the application resides on the user’s device and system. So point number 1 is to check the EULA.

Software vendors should understand that apps launched on the iOS platform will come with a “ready-made” EULA courtesy of Apple. Other platforms will come with other license terms. Software vendors should consider developing a custom EULA if there are good reasons for doing so after a risk assessment. A few other points to note: If you prepare your own EULA on the iOS platform, take note of Apple’s “mandatory terms” that must be included in every license. Under the Android Market Developer Distribution Agreement, the default terms grant a “non-exclusive, worldwide, and perpetual license”. If you don’t want to grant such a broad license, then consider a custom-made EULA.

2. Review Privacy:

App developers should get legal advice on privacy issues. The privacy problem with apps has been percolating for some time and several high-profile reports have brought attention to this issue. In several cases, app developers have (intentionally or otherwise) harvested private details about app users by dipping into address books and location-data. In Canada, the privacy landscape is complex, but is underpinned by private-sector privacy laws that apply to “personal information” across all industries, at both the federal and provincial level.

In the US, the California Attorney General recently entered into an agreement with mobile app platform vendors – Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion – to improve privacy protections for app users. This arrangement implements certain “privacy principles” and requires app developers to have a privacy policy, something that would bring app developers in line with Canadian law. If you don’t have a privacy policy, then consider developing one along with the launch of your mobile app. It can be a useful exercise to determine what information is being collected, from whom, for what purpose.

3. Check the Data:

Ownership and control of data is a critical issue for end-users. In the case of mobile apps that are an add-on for broader enterprise or cloud-based software offerings, the data issue is even more complicated. Who owns it? Who is responsible for it? Where does the data reside? On the device, on customer’s server, on the vendor’s server, or with a third-party host in the cloud? These issues can be addressed within the app EULA, or it may be possible to cover them within the EULA for the enterprise software application. Data escrow may also be appropriate in some cases.

4. Distribution:

Consider where and how the mobile app will be distributed? For example, in some cases, mobile apps can be contained within a “closed” system, which permits distribution within a company. However, if you are a vendor wishing to distribute your mobile app to all of your customers, the easiest method of distribution may be, for example, through Apple’s App Store. This means the app will be available to users in over 60 jurisdictions around the world. Consider the jurisdictional issues – for example, one app developer realized that its marketing materials offended advertising rules of the Federal Trade Commission in the United States, which triggered an FTC complaint and ultimately a fine.

5. Integration:

It goes without saying that your mobile app should be integrated with the other services or software products (whether these are desktop, virtualised or web-based services). But consider this both from a technical perspective as well as a legal perspective. Does the app EULA dovetail with the EULA for your enterprise software applications? What promises, warranties or limitations are available under each document? Does one agreement pick “Alberta law” while the other one falls under “California law”? Consider the situation where the enterprise EULA makes promises or guarantees that user-generated data will be archived by the licensor and provided in a particular format to the customer on request. If that data is collected through the mobile app, and resides on devices of users, then this promise may be difficult or impossible to perform.

6. Brands and Trade-marks:

Lastly, the marketing of mobile apps deserves particular attention. You may have secured trade-mark rights for your enterprise software, but you should also consider trade-mark rights for the app itself. Apple’s App Store is still something of a wild-west when it comes to trade-mark rights. Consider treating the mobile app just like you would any other product – branding and brand protection should be considered in the most important jurisdictions where your customers will be downloading and using the app.

This article was initially published on Corporate LiveWire.

Calgary – 07:00 MDT

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Copyright Bill Becomes Law

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Bill C-11, the long-awaited and long-debated Copyright Modernization Act has received Royal Assent… but is not yet in force. For an overview of the Act, see the government’s legislative summary.

Calgary – 11:00 MDT

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Copyright: Apps and APIs

It is a fundamental feature of copyright law that it protects only original expression, not ideas. Applied to software, the law of copyright tells us that certain elements of a computer program are not protectable by copyright. For example, purely functional elements such as the structure of a library, or database, or elements dictated by the operating system, can fall outside the scope of copyright protection, since those elements lack the originality necessary for copyright.

In Tetris Holding LLC v. Xio Interactive, Inc., an app developer was found to have infringed copyright in the famous Tetris game.  The puzzle game Mino was, by the defendant’s own admission, inspired by Tetris. However, the defendant maintained that it only copied unprotected elements, a conclusion that the developer reached after researching copyright law. The court did not agree. After an exhaustive review of the idea-expression dichotomy (40-pages worth of anaylsis, if you want to read more), the court decided that Mino did infringe the protectable “look and feel” of Tetris. According to this case, you shouldn’t assume that expression is unprotectible merely because it is related to a game rule or game function.

UPDATE: In the Oracle v Google case (see our earlier coverage here), the judge decided that APIs in this case were not eligible for copyright protection. This amounts to a complete loss for Oracle in its suit against Google for infringement of the Java APIs used in Google’s Android software. This case is expected to go up to appeal.

Calgary – 07:00 MDT

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Canadian Copyright Update

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The House of Commons has now passed Bill C-11, An Act to Amend the Copyright Act, with only minor amendments at the committee stage. The Bill has been sent up to the Senate where it has passed First Reading. Second Reading could commence as soon as today.

After years of ponderous debate, this quick pace suggests the Bill will progress through the Senate efficiently. However, the Senate rises for the summer at the end of June, leaving little more than a week to push the legislation through. If the Bill does not become law by the end of June, then it will be pushed into the fall calendar. The Senate returns from the summer recess on September 17th … (wish we were all so lucky).

Stay tuned.

Calgary – 2:00 MDT

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