Archive for the 'Trade Secrets / Confidentiality' Category

COSIA Licensing

Field Law is proud to host the Spring 2013 meeting of the Calgary Chapter of the Licensing Executives Society on May 16, 2013 on the topic of licensing negotiations between members of Canada’s Oil Sands Innovation Alliance (COSIA).

Calgary – 07:00 MDT

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Privacy: “Get Over It”?

Not so fast. In 1999, the CEO of Sun Microsystems famously said: “You have zero privacy anyway. Get over it.”  The Supreme Court of Canada apparently disagrees.

The Supreme Court of Canada (SCC) released their decision in R. v. Cole last week. While this does stray from our usual review of intellectual property law, it is an important decision impacting the overlapping areas of privacy and technology. The SCC has decided that it’s reasonable for Canadians to expect privacy in the information contained on computers used for personal purposes “at least where personal use is permitted or reasonably expected.” In this analysis, ownership of the computer or laptop (or tablet, smartphone, etc.) factors into the decision of what’s reasonable, but is not conclusive. Similarly, an employer’s policies may be taken into consideration, but won’t be determinative. In other words, regardless of who owns the hardware or what the policy says, courts will consider “the totality of the circumstances in order to determine whether privacy is a reasonable expectation in the particular situation.”

Even where the laptop is owned by the employer and the workplace policy informs employees that their use will be monitored – these factors may result in a lower expectation of privacy but the expectation of privacy, according to the SCC, does not disappear as easily as you might think.

Lessons for business? Employers must tread carefully and get advice when monitoring or accessing the personal information of employees on workplace computers, laptops, tablets, smartphones and virtual systems.

Related Reading: Our earlier post: Privacy in a workplace laptop, reviewing the Ontario Court of Appeal decision in R. v. Cole, 2011 ONCA 218.

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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IP for the Oil Patch – June 6, 2012

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Join the Field Law IP & Technology Group for a breakfast seminar on June 6, 2012, in Nisku, Alberta, on the following subjects:

  • patents for oilfield service companies;
  • intellectual property issues;
  • non-disclosure and confidential information in the oil patch;
  • copyright and trade-marks, brand protection.

Registration details: RSVP to rsvpEdmonton@fieldlaw.com or (403) 260-8502.

Calgary – 10:30 MDT

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Copyright Protection for APIs

 

As a follow-up to our earlier article (SDKs and APIs: Do they have copyright protection?), the jury in the Oracle v. Google lawsuit issued a decision last week that Google’s Android software infringed copyright in the overall structure, sequence and organization of Oracle’s Java code. However, the jury failed to return a decision on Google’s “fair use” defence. Oracle’s main complaint was that Google’s Android software used Java code – in particular, 37 Java APIs (application programming interfaces) – that was not properly licensed from Oracle. Google has maintained that the use of any Java APIs in Android is protected by a “fair use” defence.

You’d think a jury decision would be a step forward. However, the issue of copyright protection of APIs remains unsettled, since the jury merely assumed copyright protection for the purposes of this issue, without a clear decision by the court on that point. The failure to decide on the “fair use” defence also leaves the issue open. The jury was deadlocked on that question, potentially leading to a mistrial. Indeed, Google filed for a new trial last week.

This jury decision is really just a way-station on the road… a very long road. The next phase of the lawsuit will deal with Oracle’s patent infringement claims; which will be followed by a further hearing to determine any damages. Stay tuned.

Related Reading: Copyrightability of Java APIs would be consistent with law and practice, not a ‘substantial departure’ for industry (FOSS Patents)

Calgary – 07:00

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IP Issues in Corporate-Commercial Transactions

 

My article on “Intellectual Property Issues in Corporate-Commercial Transactions” is published in the Field Law newsletter The Medium.

Calgary – 07:00 MDT

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The Cloud: What goes up must come down

 

A recent Gmail outage reminds us that the cloud is not always up. What goes up must come down. Servers crash. Companies go bankrupt. When a cloud service provider fails or the technology falters, what happens to the servers that house the data?  Think of where your cloud-based data is hosted… and then try to imagine what it would take to get that data back. In these cases, questions of jurisdiction and bankruptcy law quickly come to the fore.

In the ongoing case involving Megaupload, a court battle is being fought over the servers: who will take conduct of them and what’s to be done with the data on those servers?

The Canadian case of Stanford International Bank Ltd. (Syndic de), 2009 QCCS 4106 (CanLII), also involved a dispute over servers of a bankrupt company. In the Stanford International case, the bankrupt company was offshore. A liquidator acting for receivers based in Antigua sought an order from a Canadian court to confirm the winding-up order. However, the court objected when it discovered that the servers, located in Canada, had been erased by the Antiguan receivers, the data had been copied, and the copies were stored in Antigua. Essentially, the Antiguan receivers removed all the electronic data from the Canadian servers to Antigua, thus removing the data from the jurisdiction of Canadian courts and regulatory authorities.

The number of servers in that case was small enough to permit copying; compare that to the Megaupload case which involves some 1100 servers. No-one wants to incur the cost to house and maintain such a large number of servers, so they are in legal limbo until the court makes a ruling.  

In some cases, the data sits on identifiable servers – you could in theory (if you know where the server farm is located) point to a box and say, that’s where my data is stored. In other cases, such as Amazon’s “Elastic Compute Cloud” Service, high levels of redundancy mean the same data may appear in multiple instances across multiple servers, located in multiple geographical areas. It would be impossible even in theory to determine where the data is physically located. When negotiating mission-critical cloud-computing agreements, take time to consider the issues of what happens when the cloud comes down, and get proper advice for a soft landing.

Calgary – 07:00 MDT

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The Frontier of IP (Part 5)

 

In the last in our series about the frontier of intellectual property law, we look at the use of copyright law (roughly 300 years old) to protect yoga poses (roughly 2300 years old). An enterprising yoga instructor – Bikram Choudry – managed to obtain copyright registration for certain poses as part of an intellectual property portfolio that includes protection for “posture sequences”, trade-marks and instructor-certification agreements.

In a lawsuit against another licensed studio (Bikram’s Yoga College of India L.P. v. Yoga to the People, Inc.), the studios are in a pitched battle (cue the “warrior pose”) over the right to use the styles and postures that are allegedly the property of Bikram. The US Copyright Office recently weighed in, saying that exercise poses “do not constitute the subject matter that Congress intended to protect as choreography. We will not register such exercises (including yoga movements), whether described as exercises or as selection and ordering of movements.” This case illustrates an interesting twist on the “future” of IP, by protecting (some would argue ancient) postures through the tools offered by copyright and trade-mark law.

In Canada, the case of Pastor v. Chen, 2002 BCPC 169 (CanLII) addressed a dispute over choreographed dance moves and the court’s review of confidentiality and copyright protection. Although the reasoning in that decision is somewhat inconsistent (protection affforded by copyright should not depend on whether the material qualifies as “confidential information”), the Court in the end did agree that the choreography was eligible for copyright protection. 

Calgary – 07:00 MST

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App Law: Copyright and Trade Secrets

 

A company approaches you to engage in a “partner” agreement – maybe a joint venture, a licensing deal, a software integration or a reseller arrangement. During negotiations, the other company reviews your technology. Negotiations breakdown when you realize that the other company has launched a competitive knock-off product that looks shockingly similar to your own beta version that you disclosed to them. Now what do you do?

According to app developer Spry Fox this is what happened in their negotiations with app developer LOLapps. LOLapps abruptly broke off negotiations and launched their own app, “Yeti Town” which has similar design elements. In its complaint Spry Fox claims that “Yeti Town is a virtual duplicate of the Triple Town game,” and the lawsuit alleges copyright infringement. Lessons for business?

  • Ensure that you have a well-drafted non-disclosure agreement (NDA) covering your negotiations. This agreement can address issues of confidentiality, and it may be appropriate to also deal with non-use, non-competition and non-solicitation issues. Not all NDAs are created equal!
  • Be aware that “ideas” alone are very difficult to protect. While copyright protection exists for the software code, the basic concept may not be protectable by copyright (see this App Law Round-Up for an example). That’s where the NDA comes in, since it imposes contractual obligations to maintain the confidentiality of trade secrets, even where there may be no copyright protection for the concepts.  
  • Exceptions that are commonly built into NDAs may provide an “out” for your competitor. In any event, even the best NDA cannot prevent a determined competitor from poaching your concept – the question then is whether the competitor’s conduct runs afoul of the law of copyright (as is alleged in the Spry Fox case), or constitutes a breach of the terms of the NDA, or both.

Related Reading: Someone Stole Your Brilliant Business Idea?

Calgary – 07:00 MST

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Alberta’s Innovation System

 

 

Join us on March 1, 2012, (see our Events page) for the upcoming meeting of the Licensing Executives Society (LES) on The Alberta Innovation System. Technology commercialization has its challenges. However, resources and funding programs are available to support technology development for small and medium sized enterprises (SMEs) in Alberta. Within Alberta, the “innovation system” has undergone reorganization over the past 2 years. In Calgary, Calgary Technologies Inc., (CTI), and University Technologies International, (UTI) have amalgamated to form Innovate Calgary. Across the province, Alberta Ingenuity, Alberta Research Council, iCORE and nanoAlberta have merged into Alberta Innovates – Technology Futures (AITF).

How does this impact licensing professionals, counsel, advisors, SMEs and entrepreneurs? What do you need to know about commercialization support within Alberta? Attend the LES Alberta Innovation System luncheon with our panel: Darren Massey Senior VP, Innovate Calgary, David Reese, Vice President, Licensing, Innovate Calgary and Scott Bass, Alberta Innovates – Technology Futures.  

Calgary 07:00 MST   

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The Frontier of IP (Part 3)

 

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Who owns the IP rights to a Twitter account?  We associate such accounts with social media tools such as Facebook, which are deeply personal in nature. But is it really any different from any online account that you would use in the course of employment, such as a workplace subscription to a data library, or a collaboration tool such as Salesforce.com? An employer based in South Carolina puts their ex-employee’s Twitter account into this category, (Link to Article) claiming that when he left the job, the employee should have left behind the login, the Twitter account, and the account’s 17,000 followers.  In its lawsuit against the former employee (Update: Phonedog v. Kravitz – Amended Complaint), Phonedog has valued the account at $340,000 ($2.50 per follower per month).  

In Eagle v. Morgan the defendant employer claims that a former employee misappropriated (among other things) a LinkedIn account and its connections.

The law is not clear in this interesting area, which overlaps with IP law, employment law, and the law of trade secrets. One of the problems with a trade secrets claim is that Twitter followers and LinkedIn connections are not secret, and it’s questionable whether competitors could derive any value from knowing the information even if it was secret. Followers and connections are just that, they aren’t paying customers. US litigation should provide some clarity on these issues as this emerges more regularly. To date, there do not appear to be any Canadian cases that consider this point.

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

Calgary – 07:00 MST

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Confidential Information and Ex-Employees

 

An employer shares confidential information with an employee. When the employee departs, what obligation does that ex-employee have with respect to the employer’s confidential info?

In part 3 of our 3-part employment law series, we look at an issue critical for many technology-based businesses: trade-secrets and confidentiality. Courts in Canada have made it clear that departing employees owe certain duties to their employer. Many of these duties expire when the employment relationship ends. Any attempt to bind the employee after employment must be limited by time and geography. Put another way, non-competition and non-solicitation obligations must be limited by time and space if they are to hold up; otherwise, courts will strike them down as being an unreasonable restraint on the employee’s ability to earn a living. However, those time-and-space limitations do not apply to wrongful disclosure of “truly confidential or proprietary information” by former employees. Simply put, employees cannot disclose their employer’s secrets. Those obligations continue until the information is no longer confidential or proprietary, or limitation periods have passed.  As the court stated in a recent Alberta decision, Evans v. The Sports Corporation, 2011 ABQB 244 (CanLII) (http://canlii.ca/t/fl0b3): “It is illogical to suggest that an employer must, to validly protect its confidences and proprietary information, specify a reasonable date after which a former employee is free to use the information for his own benefit and to the detriment of the former employer.”

Lessons for business: Check your employment agreements to verify that this is covered.

Related Reading: Executives Depart with Secrets and IP

Calgary – 07:00 MST    

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Who Owns Social Media Contacts: Employers or Employees?

 

This post is the first in our 3-part employment law series.  Recent cases have again focused the spotlight on this vexing issue: when an employee leaves, do they take their social media contacts with them, or check them at the door?  Once upon a time, social media was something that employers asked you not to do while on the job. Now, Facebook, LinkedIn, Twitter, YouTube and Instagram feeds are not just idle time-burners, they might be part of your job description. In the UK case of Hays Specialist Recruitment (Holdings) Ltd. v. Ions, an employee was ordered to disclose his LinkedIn contacts when he left his employer, and a 2011 case in the US (PhoneDog v. Kravitz, 2011 WL 5415612 (N.D. Ca.; Nov. 8, 2011)) is grappling with this issue, where an employer claims $340,000 in damages from an ex-employee.  Lessons for business?

  • Check your own employment policies to see whether this is covered, and if not, consider introducing effective policies to manage social media issues;
  • Employees who are hired specifically for social media marketing are the obvious ones to look at, but salespeople, managers or executives should also be considered;
  • Theft of trade-secrets is often claimed, but commonly fails on the grounds that the social media contacts are often available for all to see.

Calgary – 07:00 MST

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Someone Stole Your Brilliant Business Idea?

 

 

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 You’re in good company. Even the late Steve Jobs had his complaints about this. In a biography of the Apple founder, Mr. Jobs complains that Android was “grand theft”, and he vowed to fight back. Is Android a rip-off of the iPhone? It certainly followed Apple.  The iPhone was launched in 2007, Android was launched in October, 2008. Apple introduced its App Store in July, 2008. Android Market came out a few months later. Even though it entered the marketplace later, by 2010, Android captured 44% of all mobile app downloads in Q2 2011, passing Apple’s 31% stake (see CNET report) The numbers are hard to crunch (remember, iOS is on multiple hardware devices made by one manufacturer, and Android sits on over 40 smartphones made by six manufacturers), and Apple’s system comes out on top by some measures, but by August 2011, some estimates put Android at a leading 48% of the smartphone market share.

So there is no doubt that Android has stormed from behind as a credible alternative to Apple’s ecosystem, but does that make it a “stolen idea”? Not from the perspective of intellectual property law, since there is no protection in the overall idea of a mobile platform that can run third-party apps. The real question is whether Google copied iOS code (there’s been no suggestion of that), used Apple’s trade-marks (nope), or infringed any of Apple’s patents (see this story for one of the many Apple vs. Android patent fights). 

In any event, there is a fine line between infringement and inspiration. Legend has it that Mr. Jobs was “inspired” by the mouse he originally saw at a Xerox research facility. Neither did Mr. Jobs invent the MP3 player or the idea of a mobile device running third-party apps. My Palm Treo was doing that years before the iPhone was launched.

Calgary – 07:00 MDT

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App Law Round-Up

 

If the health of an industry is measured by the litigation it spawns, then the app and gaming economy is going strong:

  • Courtesy of Fantasy FlightCopyright: Fantasy Flight Publishing has sued a European app-developer, Puffin Software, for alleged infringement of copyright in a medieval-themed game (Fantasy Flight Publishing, Inc. v. Puffin Software et al. U.S. District Court, District of Minnesota Case No. 11-cv-01928, Filed July 15, 2011). Fantasy Flight claims that Puffin’s iPad title “Viking Lords” is an infringement of copyright in the board game BattleLore owned by Fantasy Flight. In the claim, Puffin allegedly approached Fantasy Flight to pitch an iPad version of BattleLore, and when there was no uptake, Puffin decided to go ahead and publish the game under its own title.  The case will involve an analysis of the elements of each game, and a breakdown of functional and original elements, as in the Sony case (below).
  • Patent: App-developer Zynga has been sued in Segan LLC v. Zyna Inc. for alleged infringement of Segan’s U.S. Patent No. 7,054,928, which was issued for a system for accessing “enhancement content” on the internet. The claim alleges that Zynga titles such as FarmVille, PetVille, and FrontierVille infringe the patent.
  • g3_gowlogo.gifCopyright: In Dath v. Sony Computer Entertainment America Inc., 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. The plaintiffs could not show actual copying, so they had to rely on the US concept of access and substantial similarity. Remember, copyright does not protect ideas, but merely the form and expression of ideas. In this case, there was no substantial similarity of expression of ideas. In this analysis, the court reviewed elements of expression such as plot, themes, dialogue, mood, settings and characters, and concluded that the works were not similar and no infringement occurred. 

Calgary – 07:00 MDT

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Myriad Issues: Patentability of Isolated DNA (Part 2)

 

In our earlier post (Myriad Issues: Patentability of Isolated DNA), we reviewed the US decision which causes ripples through the life sciences world by deciding that isolated DNA sequences were not patentable subject matter since they were “products of nature”. Myriad’s invention covers two isolated human genes, BRCA1 and BRCA2, and mutations in these genes are associated with a predisposition to breast and ovarian cancers. The recent decision by the US Federal Circuit Court of Appeals in The Association For Molecular Pathology v. USPTO & Myriad has reversed the lower court’s finding. The appeals court held last week that isolated DNA can be proper subject matter for patentability, provided the invention meets other criteria such as novelty and non-obviousness. Here, the inventors had isolated the DNA sequences and in doing so had changed the DNA through inherently transformative steps, thus bringing the invention into patent-eligible subject matter. 

Calgary – 07:00 MDT

 

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US Patent Update

 

In the US, a few updates on the patent front:

  • The House version of the patent reform legislation passed (the Leahy-Smith America Invents Act ) in late June, with broad support. You may recall that the US Senate passed its own version of the patent reform bill in March. The House and Senate bills must now be reconciled, with another vote on compromise legislation before it becomes law.
  • In a recent US decision, a court found that “induced infringement” can be established without showing actual knowledge of the infringed patent.  “Induced infringement” under US patent law traditionally requires that a party actually knows that the infringed patent exists.  In Global-Tech Appliances, Inc. v. SEB S.A. (PDF), the US Supreme Court decided that wilful blindness will be enough to establish induced infringement. Canadian inventors should be aware that actively ignoring information or taking deliberate actions to avoid learning of a competitors patent will not help in avoiding a finding of induced infringement, and thorough patent searching is required when developing patentable inventions.

Related Reading: Willful Blindness of a Patent Is Sufficient to Show Knowledge of That Patent for Purposes of Induced Infringement (Licensing Executives Society)

Calgary – 07:00 MT

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Intellectual Property & Agriculture: Obvious Inventions

 

In our earlier post – Intellectual Property & Agriculture – we reviewed the issues around patented herbicide-resistant seeds. A recent Federal Court of Appeal decision deals with patented machinery in the agriculture industry. To be patentable, an invention cannot be obvious to someone who is skilled in that industry. In other words, the invention must be “non-obvious”. In Bridgeview Manufacturing Inc. v. Central Alberta Hay Centre 2010 FCA 188, the court reviewed the question of whether a particular bale processor infringed the patent owned by Bridgeview. The alleged infringer fought back by saying the patent was invalid due to obviousness.  In Canada, the court uses a four-part test to determine whether a patent is invalid for obviousness:

  1. Identify the hypothetical “person skilled in the art” and the relevant common general knowledge of that person. 
  2. Identify the “inventive concept” of the patented claim .
  3. Are there any differences between the “state of the art” and the “inventive concept” of the claim in the patent?
  4. Viewed without any knowledge of the alleged invention as claimed, would those differences be obvious to the “person skilled in the art” or do they require any degree of invention?

By this analysis, the court found that the patent was not invalid for obviousness and the appeal was allowed on that point.

Calgary – 07:00 MT 

 

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Privacy in a workplace laptop?

 

In recent privacy decision from the Ontario Court of Appeal (R. v. Cole, 2011 ONCA 218), the court recognized a core right to privacy of personal information which extends into the workplace – in this case, an employer’s laptop that was used by the employee in the course of employment.  The question was whether the employee had a “reasonable expectation of privacy” in the contents of the laptop. The court decided that the circumstances of this case, the employee did enjoy privacy in the contents of the laptop.

 Calgary – 07:00 MDT

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Intellectual Property & Jail Time

 

Can intellectual property theft or infringement lead to jail time?

  • An employee can walk out the door with all kinds of interesting information. Customer lists, business methods, intellectual property of all descriptions. Last week a US jury convicted an ex-employee of Goldman Sachs of trade-secret violations arising out of his theft of software code.  Mr. Aleynikov, a computer programmer, violated the employer’s confidentiality policy when he purloined portions of the company’s code and then quit to join a rival firm. The algorithms in such code provides a critical edge in such a competitive industry as high-frequency stock trading. The charges flow from the Economic Espionage Act dealing with trade-secret protection, a US law that doesn’t have an exact equivalent in Canada. Mr. Aleyniko faces up to 10 years in prison when he is sentenced in March, 2011.
  • In Canada, we don’t have trade-secret protection legislation, and jail-time is extremely rare for white-collar theft of trade secrets or intellectual property. Under the criminal remedies section of the Copyright Act (Section 42), imprisonment is a possible punishment, but is rarely used in practice.  In R. v. Borg, [2007] O.J. No. 3287, a company was convicted of eight offences under the Copyright Act relating to importation and sale of forged copies of software.  The person who operated the company was convicted of two offences and the individual was sentenced to 60 days in jail.  However, that sentence was deleted on appeal.
  • In the recent case of R. v. Hirani (2010), 2010 BCPC 205 (B.C. Prov. Ct.), the Canadian Border Services Agency intercepted shipping containers which contained knock-offs of Chanel, Prada and Gucci bags. Undercover officers later attended at the store to which the goods were destined and nabbed the perpetrator.  The accused pled guilty and was fined $4,000, but avoided anything more serious. Jail time was technically part of the sentence, but was served in the community.

Related Reading:

Calgary – 08:00

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