By Richard Stobbe

The CBC, like all television broadcasters, makes copies of various works – such as music and other content – in the course of preparing programs for broadcast. So-called “synchronization copies” are used to add musical works to a program. Then a “master copy” is made, when the music synchronization is complete. The master copy of the completed program is loaded for broadcast, and various internal copies are made of the master copy. These copies are called “broadcast‑incidental copies”. In a nutshell, these are copies made in the process of production of a program, as distinct from the broadcast of the program.

In one of the more esoteric copyright topics to make it to the Supreme Court, the decision in Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), examined whether these “broadcast‑incidental copies” require a separate license because they would constitute an infringement of copyright if made without consent of the copyright owner. Or, rather, are they caught within the standard broadcast license that CBC would have negotiated with rightsholders, such as SODRAC, and thus they wouldn’t require a separate license… Still with me?

The Court decided that “broadcast‑incidental copying” engages the reproduction right in Section 3 of the Copyright Act. These so-called “ephemeral copies” are not exempted by ss. 30.8 and 30.9 of the Act. The Court noted that “While balance between user and right‑holder interests and technological neutrality are central to Canadian copyright law, they cannot change the express terms of the Act.” Importantly, the Court also cautioned that “The principle of technological neutrality recognizes that, absent parliamentary intent to the contrary, the Act should not be interpreted or applied to favour or discriminate against any particular form of technology.”

In the end the decision was sent back down to the Copyright Board for reconsideration of valuation of the license in accordance with the principles of technological neutrality and the balance between balance between user and right‑holder interests.

Calgary – 07:00 MT

By Richard Stobbe

The Monkey Selfie Caper apparently has legs, as they say in the news business. Long legs with opposable toes. (For background, see our earlier post: Monkey See, Monkey Do… However Monkey Does Not Enjoy Copyright Protection )

On September 21, PETA announced that it had filed a copyright infringement lawsuit in U.S. federal court in San Francisco. PETA is suing “the owner of the camera, photographer David J. Slater and his company, Wildlife Personalities Ltd., which both claim copyright ownership of the photos that Naruto indisputably took. Also named as a defendant is the San Francisco–based publishing company Blurb, Inc., which published a collection of Slater’s photographs, including two selfies taken by Naruto. The lawsuit seeks to have Naruto declared the “author” and owner of his photograph. … U.S. copyright law doesn’t prohibit an animal from owning a copyright, and since Naruto took the photo, he owns the copyright, as any human would.”

Yes, you heard that right, the crested macaque is the plaintiff in a copyright infringement lawsuit. April 1st is still 5 months away, but with luck the federal court will have ruled on some preliminary motions by then.

Stay tuned.

Calgary – 07:00 MT

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By Richard Stobbe

What if a competitor copied the metatags on your website and you watched web traffic bleed from your own site while the competitor’s site enjoyed a bump in hits? Are metatags subject to copyright or trademark protection? The recent Federal Court decision in Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca), 2015 FC 19 (CanLII), dealt with just such a dispute when Red Label sued its competitor 411 Travel for copying the title tags, meta descriptions and meta keywords on 48 pages of the 411 Travel website.

The court reviewed the facts and past metatag decisions and decided that, on balance, the metatags that were copied did not qualify for copyright protection. “In this case there is little evidence of any sufficient degree of skill and judgement in creating these metatags…or for the originality required in compiling data or other compilations… While in some cases there may be sufficient originality in metatags to attract copyright protection when viewed as a whole, the substance of the metatags asserted by the Plaintiff in this case does not meet the threshold required to acquire copyright protection in Canada.” (Emphasis added) There was copying, but without copyright, there can be no infringement.

As for the trademark claims, the court reviewed the role of the “searcher” (i.e. the potential customer who enters certain search terms into a Google search) in ultimately deciding whether or not trademark infringement had occurred. “Even if a searcher is looking for the website connected with a particular trade name or trademark, once that person reaches the website, there must be confusion as to the source of the entity or person providing the services or goods. If there is no likelihood of confusion with respect to the source of the goods or services on the website, there is no support for finding this prong of the test for passing off. Accordingly, use of a competitor’s trademark or trade name in metatags does not, by itself, constitute a basis for a likelihood of confusion, because the consumer is still free to choose and purchase the goods or services from the website he or she initially searched for.” In this case, there was no use of any of the Plaintiff’s trademarks on the visible portion of the 411 Travel website. Thus, the court dismisses the trademark infringement claims.

Interestingly, the role of the searcher was also reviewed in a case between Vancouver Community College and Vancouver Career College. Vancouver Community College sued for trademark infringement, on the basis of the rival college using “VCC” as part of a search-engine optimization and keyword advertising strategy. While this recent decision (Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2015 BCSC 1470 (CanLII)) didn’t deal directly with metatags, it dealt with the use of trademarks in Google AdWords, and the court noted: “The authorities on passing off provide that it is the ‘first impression’ of the searcher at which the potential for confusion arises which may lead to liability. In my opinion, the ‘first impression’ cannot arise on a Google AdWords search at an earlier time than when the searcher reaches a website.”

In other words, it is the point at which a searcher reaches the website when this “first impression” is gauged. Where the website is clearly identified without the use of any of the competitor’s trademarks, then there will be no confusion.

This helps clarify the laws around the use of metatags and Google AdWords; it also leaves open the possibility that metatags, in other circumstances, could qualify for copyright protection.

Calgary – 07:00 MT

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By Richard Stobbe

Let’s say you provide web-based software in a SaaS subscription model. What if your reseller or strategic business partner works against you to redesign and reverse engineer your software so they can launch a competing product?

This is what happened to Warehouse Solutions (WSI) in the recent U.S. case Warehouse Solutions, Inc. v. Integrated Logistics, LLC (May 8, 2015, Fed. CA 11th Cir.). WSI developed and sold a web-based software product known as “Intelligent Audit” which interfaced with UPS and FedEx tracking systems to allow companies to track and manage packages. Integrated acted as a reseller of “Intelligent Audit”, but was also a competitor to WSI, in the sense that Integrated sold its own package-tracking software. The reseller relationship between WSI and Integrated, however, was never documented in a written agreement. The parties had verbal discussions about the confidential and proprietary nature of the “Intelligent Audit” software.

Although Integrated never had access to the source code for “Intelligent Audit”, it had high level administrator access rights to the software, and therefore had much broader insight into the features, functionality and structure of the software, compared to the typical end-user.

On the side, unknown to WSI, Integrated developed its own web-based package-tracking software product that was visually and functionally similar to “Intelligent Audit”. Integrated even went so far as to give its own software developer access to “Intelligent Audit”. Eventually, Integrated dropped “Intelligent Audit” and began selling its own competing product under the ShipLink brand name.

WSI then sued Integrated for reverse engineering and copying its software, and through various court proceedings, the claims came down to the issue of trade secrets. The court drew a distinction between a software program’s underlying source code, which may be a trade secret, and the program’s “look and feel” and “functionality,” which cannot be protected as a trade secret, since these features are readily apparent to any user. Since WSI did not enter into a written confidentiality agreement with Integrated, the trade secret claim failed, and WSI’s claim was dismissed.

Lessons for business?

1. It’s worth noting that this case turns largely on U.S. concepts of “trade secret” protection under the Trade Secrets Act, and there is no equivalent legislation in Canada. Canadian software vendors are frequently bound by local U.S. laws in their dealings with American customers, resellers and strategic partners, so this case is an important one for Canadian SaaS providers, even though it involves U.S. law.

2. There are situations – such as in AirWatch, LLC v. Mobile Iron, Inc., (Unpublished) No. 1:12-cv-3571 (N.D. Ga. Sept. 4, 2013) – where a software licensor can protect its software as a trade secret, where it uses written agreements to clearly preserve the secrecy of the program’s functions and specifications.

3. Overall, the message for software vendors and SaaS providers is that clear written agreements will always be preferable to handshake deals and verbal warnings about confidentiality.

Calgary – 07:00 MDT

By Richard Stobbe

As we noted in our earlier post (See: this link) the bill known as Economic Action Plan 2015 Act, No. 1 was tabled in the House of Commons on May 7, 2015. It passed Second Reading in the House of Commons on May 25th and is now with the House of Commons Standing Committee on Finance.

The bill proposes to amend the Copyright Act to extend the term of copyright protection for sound recordings and performances fixed in sound recordings.

Copyright in a sound recording currently subsists until the end of 50 years after the end of the calendar year in which the first fixation of the sound recording occurs. However, if the sound recording is published before the copyright expires, then copyright protection would be extended to the earlier of the end of 70 years after the end of the calendar year in which the first publication of the sound recording occurs and the end of 100 years after the end of the calendar year in which that first fixation occurs.

The bill is expected to pass. Stay tuned.

Calgary – 07:00 MDT

By Richard Stobbe

As a follow-up to our earlier post about Copyright in House Plans, an class action case is proceeding in Ontario on the subject of ownership of copyright in survey plans (See:  Ontario land surveyors can sue land registry managers for copyright infringement, court says).

In the course of their work, land surveyors in Ontario prepare a survey document, and that document is routinely scanned into the province’s land registry database. Copies of survey documents can be ordered from the registry for a fee. The Ontario Court of Appeal has certified a class action which permits the province’s land surveyors to continue their copyright lawsuit against Teranet Inc., the manager of the land registry system. The case is Keatley Surveying Ltd. v. Teranet (Case No. cv-10-414169).

Calgary – 07:00 MST

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By Richard Stobbe

When a copyright owner suspects online infringement, but lacks evidence of the identity of the alleged infringers, it can seek an order to disclose those details. Canadian law is clear that “A court order is required in every case as a condition precedent to the release of subscriber information.”

A Norwich order is a “litigation tool requiring non-parties to a litigation to be subject to discovery or being compelled to provide information.” In a recent case, Voltage Pictures LLC v. John Doe, 2014 FC 161, a decision released in February, 2015, this tool was used by the Plaintiff (Voltage) to obtain the names and addresses of some 2,000 subscribers of an ISP known TekSavvy Solutions Inc.

Teksavvy said it would only disclose subscriber information if Voltage obtained a court order compelling disclosure. Voltage did obtain its so-called Norwich order, and Teksavvy was compelled to release subscriber information to Voltage, with some controls.

Then Voltage and Teksavvy argued about who should bear the costs for correlating and compiling the subscriber info. The resulting court opinion in Voltage Pictures LLC v. Teksavvy Solutions Inc. 2015 FC 339, makes for interesting reading (if you’re into this sort of thing) regarding best practices for copyright owners and ISPs to manage costs:

• The copyright owner should first ascertain, in advance “with clarity and precision”, the method used by the ISP to correlate IP addresses with subscriber information, and the investment in time and costs based on a hypothetical number of IP addresses. In other words, the copyright owner should ask the ISP: “What methods do you use, how long would it take and how much would it cost if we wanted you to correlate 100 or 1000 IP addresses?”
• Next, the copyright owner and ISP should agree on these timelines and costs in advance (in writing if possible) before the copyright owner files and serves its motion for a Norwich order.
• For smaller ISPs, the copyright owner should not make the assumption that the smaller ISP will handle IP address and subscriber info in the same way as larger ISPs, where such processes are likely automated.

 

Calgary – 07:00 MST

 

By Richard Stobbe

For software vendors, open source software (OSS) should be treated like a compliance issue – in the same way that corporate, securities or environmental compliance is a concern for many companies. The failure to manage compliance can be costly - just like it would be if a company ignored its environmental or securities compliance obligations. An environmental remediation order or a cease-trade order might result from compliance failures in those other areas.

What does it look like in the case of OSS compliance failures?

We need look no further than the Versata litigation which has spawned no less than 5 cases in the US:

1. Versata Software Inc. f/k/a Trilogy Software, Inc. and Versata Development Group Inc. f/k/a Trilogy Development Group Inc. v. Ameriprise Financial Inc., Ameriprise Financial Services, Inc. and American Enterprise Investment Services, Inc., Case No. D-1-GN-12-003588; 53rd Judicial District Court of Travis County, Texas
2. Versata Software Inc. v. Infosys, Case No. 1:10cv792, U.S. District Court, Western District of Texas
3. Versata Software Inc. v. Ameriprise Financial Services Inc. et al., Case No. 1:14-cv-12, U.S. District Court, Western District of Texas, Case No. 1:14-cv-12, U.S. District Court, Western District of Texas
4. XimpleWare Corp. v. Versata Software Inc., Trilogy Development Group, Inc., Ameriprise Financial, Inc., Ameriprise Financial Services, Inc., Aurea Software, Inc., Case No. 3:13cv5160, U.S. District Court, Northern District of California
5. XimpleWare Corp. v. Versata Software Inc., Aurea Software Inc., Trilogy Development Group, Inc., Ameriprise Financial Services, Inc., Ameriprise Financial, Inc., United HealthCare Services, Inc., Waddell & Reed, Inc., Aviva USA Corporation, Metropolitan Life Insurance Company, Pacific Life Insurance Company, The Prudential Insurance Company of America, Inc., Wellmark, Inc., Case No. 5:13cv5161, U.S. District Court, Northern District of California (San Jose).

In a nutshell, the lawsuits centre around the use of an open source component in Versata’s Distribution Channel Management (DCM) software. Versata originally sued Ameriprise for breach of a software license agreement for the use of the DCM software. In the course of that litigation between Versata and Ameriprise, it became clear that there were significant underlying issues related to an XML-parsing component called VTD-XML, distributed by XimpleWare

While XimpleWare does offer VTD-XML under a “closed” commercial license, Versata had not obtained a commercial license for the component, and thus the component was governed by GPLv2, an open source license.  This in turn laid bare the gaps in Versata’s OSS compliance and raised questions of whether the DCM was a derivative, making the whole of Versata’s proprietary code subject to the GPLv2. XimpleWare, for its part sued Versata, Ameriprise and all of Versata’s DCM customers based on breach of the GPLv2 and patent infringement.

We will be watching whether any judicial guidance comes out of this US litigation. In the meantime, it serves as a cautionary tale for software vendors: OSS compliance must be addressed with the same attention and diligence as a regulatory compliance issue.

Our group can assist with compliance and risk mitigation, leaving software vendors to focus on their business.

Related Reading: Lawsuit threatens to break new ground on the GPL and software licensing issues 

Calgary – 07:00 MST

 

 

 

By Richard Stobbe

A couple, the Ecklunds, approached Oakcraft Homes, a custom home-builder. Based on their discussions, Oakcraft prepared a house plan and gave a copy of the plan to the Ecklunds. The couple later took that plan to a rival home builder, Toscana Developments. Toscana used Oakcraft’s house plan without confirming whether the Ecklunds had the rights to that plan.

When Oakcraft discovered that Toscana had copied and modified the original plan, it sued both Toscana and the Ecklunds.

The law of copyright in Canada is evolving to deal with changes in technology, but there are still some cases where copyright intersects with the age-old professions of architecture and house-building. In the recent case of Oakcraft Homes Inc v. Ecklund, 2013 CanLII 41981 (ON SCSM), an Ontario court addressed the question of who owns a house plan for copyright purposes.

Copyright is, at its most basic, simply the right of an author to make copies of his or her original work. The Copyright Act tells us that copyright subsists in every original literary, dramatic, musical and artistic work. The term “artistic work” includes paintings, drawings, maps, charts, plans, photographs, engravings, sculptures, works of artistic craftsmanship, and architectural works. The term “architectural works” also has a specific meaning in the Act: it means “any building or structure or any model of a building or a structure.” So we can be confident that, in general, a house plan is subject to copyright protection in Canada.

I say “in general” because copyright law is clear that in order to be subject to copyright protection, the house plan must be original. “Originality” forms the foundation of copyright. In order to engage copyright protection, a house plan need not be unique in the sense that the design elements are new to the world. But the design must be the product of skill (what the court describes as “aptitude, proficiency, know-how, knowledge, and practical experience”) and judgment (described as “wisdom, ability to assess or compare various possibilities in order to choose from them”). In other words, the design cannot be a purely mechanical exercise.

From this case, we can take away some important practical points about copyright in house plans, and (perhaps more importantly) the risk of infringement of copyright:

• The court noted that: “Today, that art has become a science by the use of computer aided design (CAD). Can it be said that the use of CAD thereby converts ownership in the original work to the computer software technician operating the machine or the computer software programmer who programmed the CAD software? The answer is obvious….NO!” Just because a house plan is rendered with software, that does not defeat copyright that may subsist in the plan.
• What about marking the word “Copyright” or use of the © symbol on the plan itself? Does that make a difference? The court was clear that: “The failure to mark ownership on the plan does not … defeat the right to copyright.”
• In this case, Toscana said they were not aware that the plans were subject to copyright. They had, apparently, not inquired in any detail, and were, in the court’s words “wilfully blind to determining where the plans came from and who authored them. They chose not to ask knowing that their potential customer was not the author.” Innocent infringement is still infringement and according to the court: “The fact that a defendant may have no knowledge that copyright subsists in a work or that the work was unmarked does not constitute a valid defence.”
• As a result, the builder and the couple were jointly and severally liable for the damages awarded for copyright infringement.

Calgary – 11:00 MST

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By Richard Stobbe 

They say the internet never forgets. From time to time, someone wants to challenge that dictum.

In our earlier posts, we discussed the so-called “right to be forgotten” in connection with a Canadian trade-secret misappropriation and passing-off case and an EU privacy case. In a brief ruling in October, the Federal Court reviewed a copyright claim that fits into this same category. In Davydiuk v. Internet Archive Canada, 2014 FC 944 (CanLII), the plaintiff sought to remove certain pornographic films that were filmed and posted online years earlier. By 2009, the plaintiff had successfully pulled down the content from the original sites on which the content had been hosted. However, the plaintiff discovered that the Internet Archive’s “Wayback Machine” had crawled and retained copies of the content as part of its archive.

If you’re not familiar with the Wayback Machine, here is the court’s description: “The ‘Wayback Machine’ is a collection of websites accessible through the websites ‘archive.org’ and ‘web.archive.org’. The collection is created by software programs known as crawlers, which surf the internet and store copies of websites, preserving them as they existed at the time they were visited. According to Internet Archive, users of the Wayback Machine can view more than 240 billion pages stored in its archive that are hosted on servers located in the United States. The Wayback Machine has six staff to keep it running and is operated from San Francisco, California at Internet Archive’s office. None of the computers used by Internet Archive are located in Canada.”

The plaintiff used copyright claims to seek the removal of this content from the Internet Archive servers, and these efforts included DMCA notices in the US. Ultimately unsatisfied with the results, the plaintiff commenced an action in Federal Court in Canada based on copyrights. The Internet Archive disputed that Canada was the proper forum: it argued that California was more appropriate since all of the servers in question were located in the US and Internet Archive was a California entity.

Since Internet Archive raised a doctrine known as “forum non conveniens”, it had to convince the court that the alternative forum (California) was “clearly more appropriate” than the Canadian court. It is not good enough to simply that there is an appropriate forum elsewhere, rather the party making this argument has to show that clearly the other forum is more appropriate, fairer and more efficient. The Federal Court was not convinced, and it concluded that there was a real and substantial connection to Canada. The case will remain in Canadian Federal Court. A few interesting points come out of this decision:

1. This is not a privacy case. It turns upon copyright claims, since the plaintiff in this case had acquired the copyrights to the original content. Nevertheless, the principles in this case (to determine which court is the proper place to hear the case) could be applied to any number of situations, including privacy, copyright or personality rights.
2. Interestingly, the fact that the plaintiff had used American DMCA notices did not, by itself, convince the court that the US was the best forum for this case.
3. The court looked to a recent trademark decision (Homeaway.com Inc. v. Hrdlicka) to show that a trademark simply appearing on the computer screen in Canada constituted use and advertising in Canada for trademark law purposes. Here, accessing the content in Canada from servers located in the US constituted access in Canada for copyright purposes.
4. While some factors favoured California, and some favoured Canada, the court concluded that California was not clearly more appropriate. This shows there is a first-mover advantage in commencing the action in the preferred jurisdiction.  

Get advice on internet copyright claims by contacting our Intellectual Property & Technology Group.

Calgary – 07:00 MST

 

By Richard Stobbe

The made-in-Canada notice-and-notice provisions are coming in January, 2015. 

You may recall that in June 2012 the Copyright Modernization Act was passed by Parliament. Portions of the new copyright law came into force in November 2012, while the so-called notice-and-notice procedures were held back, to give the government time to consider regulations. (See: New Copyright Act Becomes Law… In Part) Through an Order in Council, the government has elected to proceed without regulations.

The new provisons legally require Internet intermediaries, such as ISPs and website hosts, to take certain actions upon receiving a notice of alleged infringement from a copyright owner.

Specifically, ISPs and hosts are required to forward notices, sent by copyright owners, to users whose Internet address has been identified as being the source of possible infringement. The intermediary must also inform the copyright owner once the notice has been sent.

The Copyright Modernization Act sets clear rules on the content of these notices. Specifically, they must be in writing and state the claimant’s name and address, identify the material allegedly being infringed and the claimant’s right to it, as well as specify the infringing activity, the date and time of the alleged activity, and the electronic address associated with the incident.

Related Reading: Government Backgrounder

Calgary – 07:00 MST

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By Richard Stobbe

While our last post dealt with the creation of photographs and other works of authorship by primates, robots and divine beings, this story is a little more grounded in facts that you might see in the average work day.

When an employee takes a photograph, who owns copyright in the image?

In Mejia v. LaSalle College International Vancouver Inc., 2014 BCSC 1559, a BC court reviewed this question in the context of an employment-related complaint (there were other issues including wrongful dismissal and defamation which we won’t go into). Here, an instructor at LaSalle College in Vancouver took a photograph, and later alleged that the college infringed his copyright in the picture after he discovered that it was being used on LaSalle’s Facebook page.

The main issue was whether the picture was taken in the course of employment. The instructor argued that the photograph was taken during his personal time, on his own camera. He tendered evidence from camera metadata to establish the details of the camera, time and date. He argued that s. 13(3) of the Copyright Act did not apply because he was not employed to take photos. He sought $20,000 in statutory damages. The college argued that the photo was taken of students in the classroom and was within the scope of employment, and copyright would properly belong to the college as the employer, under s. 13(3) of the Act.

The court, after reviewing all of this, decided that the instructor was not hired as a photographer. While an instructor could engage in a wide variety of activities during his employment activities, the court decided that “the taking of photographs was not an activity that was generally considered to be within the duties of the plaintiff instructor, and there was no contractual agreement that he do so.” It was, in short, not connected with the instructor’s employment. In the end, the photograph was not made in the course of employment. Therefore, under s. 13(1) of the Copyright Act, the instructor was the first owner of copyright, and the college was found to have infringed copyright by posting it to Facebook.

Calgary – 07:00 MST

By Richard Stobbe

I know this story crested a few weeks ago, but who can resist it? A famous 1998 Molson Canadian ad posed a Canadian version of the infinite monkey theorem. The cheeky ad, showing a seemingly endless array of monkeys on typewriters, sidestepped the more important question about whether the monkeys as authors would enjoy copyright protection over the works they created.

A wildlife photographer’s dispute with Wikimedia over ownership of photographs taken by primates in Indonesia has brought international attention to this pressing issue. The “Compendium of U.S. Copyright Office Practices, Third Edition” now explicitly states that photographs by monkeys are not eligible for copyright protection. Nor are elephant-paintings deserving of copyright. “Likewise,” the Compendium notes dryly, “the Office cannot register a work purportedly created by divine or supernatural beings.” Robots are also out of luck.

There is no word on whether Canada is directly addressing this question.

Calgary – 09:00 MST

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By Richard Stobbe

Two software companies wanted to integrate their software products. The relationship soured and one of the parties – McHenry – purported to terminate the Software Licensing and Development Agreement and then launched a lawsuit in the Federal Court in the US, claiming copyright infringement and breach of contract. The other party – ARAS – countered by invoking the mandatory arbitration clause in the software agreement. The US court compelled the parties to resolve their dispute through arbitration in Vancouver. After the arbitration, the arbitrator’s decision was appealed in the BC Supreme Court. In that appeal, McHenry sought a “sealing order” asking the BC court, in effect, to order confidentiality over the March 26, 2014 Arbitration Award itself. This is because ARAS, who prevailed at arbitration, circulated the arbitration award to others.

In the recent decision (McHenry Software Inc. v. ARAS 360 Incorporated, 2014 BCSC 1485 (CanLII)) the BC Supreme Court considered the law of “sealing orders” and confidentiality in the context of a dispute between two software companies.

The essence of McHenry’s complaint was that the arbitrator’s award should be treated confidentially, since it contained confidential and sensitive information about the dispute, which could harm or disadvantage McHenry in its negotiations with future software development partners.

The court reviewed the legal principles governing sealing orders. A “sealing order” is simply court-ordered confidentiality over court records or evidence. While there is a presumption in favour of public access in the Canadian justice system, there are times when it is appropriate to deny access to certain records to prevent a “serious risk to an important interest” as long as “the public interest in confidentiality outweighs the public interest in openness”. (To dig deeper on this, see: Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41 (CanLII), 2002 SCC 41.)

If you were hoping for a handy three-part test, you’re in luck:

1. First, the risk in question must be real and substantial, and must pose a “serious threat” to the commercial interest in question.
2. The interest must be tied to a public interest in confidentiality. The SCC said: “a private company could not argue simply that the existence of a particular contract should not be made public because to do so would cause the company to lose business, thus harming its commercial interests.” Courts must remember that a confidentiality order involves an infringement on freedom of expression, so it should not be undertaken to satisfy purely commercial interests.
3. Third, the court must consider whether there are any reasonable alternatives to a confidentiality order, or look for ways to restrict the scope of the order as much as possible in the context.

Ultimately, the BC Court was not sympathetic to McHenry’s arguments for a sealing order. If McHenry was so concerned about the confidentiality of these proceedings, the court argued, then McHenry would not have launched a lawsuit against ARAS in the US Federal Court, where there is no confidentiality. In pursuing litigation, McHenry filed numerous documents in the public record, including its Arbitration Notice, its Statement of Claim in the Arbitration and its petition in the BC Court proceedings, some of which contained potentially sensitive information.

“Moreover,” the court continued, “there is no general principle that the confidentiality of arbitration proceedings carries over to court proceedings when the arbitration is appealed. On the contrary, such court proceedings are generally public.”

This case serves as a reminder of the confidentiality issues that can arise in the conext of a dispute between software companies, both in arbitration proceedings and in the litigation context. Make sure you seek experienced counsel when handling the complex issues of confidentiality, sealing orders and licensing disputes.

Calgary – 07:00

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By Richard Stobbe

An American photojournalist, Ms. Leuthold, was on the scene in New York City on September 11, 2001. She licensed a number of still photographs to the CBC for use in a documentary about the 9/11 attacks. The photos were included in 2 versions of the documentary, and the documentary was aired a number of times betwen 2002 and 2004. We originally wrote about this in an earlier post: Copyright Infringement & Licensing Pitfalls. The court found that the CBC had infringed copyright in the photographs in six broadcasts which were not covered by the licenses. Though Leuthold claimed damages of over $20 million, only $20,000 was awarded as damages by the court.

In Leuthold v. Canadian Broadcasting Corporation, 2014 FCA 174, the Federal Court of Appeal upheld an award of double costs against Leuthold. Early in the litigation process, the CBC had formally offered to settle for $37,500 plus costs. Ms. Leuthold did not accept the CBC’s offer and went to trial where she was awarded $20,000. Ms. Leuthold’s total recovery was substantially less that the amount of the CBC’s offer. When this happens, a plaintiff can be liable under Rule 420 for double costs, which was awarded in this case. Double costs amounted to approximately $80,000 in these circumstances, which means Ms. Leuthold is liable for about 4 times the amount of the damage award. Although Ms. Leuthold objected that such a disproportionate costs award was “punitive”, the court concluded:

“The sad fact of the matter is that litigation produces winners and losers; that is why it is such a blunt tool in the administration of justice. But justice is not served by allowing persons who have imposed costs on others by pursuing or defending a claim which lacks merit to avoid the consequences of their behaviour. Such a policy would be more likely to bring the administration of justice into disrepute than the result in this case.”

For copyright litigation and licensing advice, contact the Field Law Intellectual Property & Technology Group.

Calgary – 07:00 MST

By Richard Stobbe

Okay, so maybe it’s neither as romantic as Gershwin’s “An American in Paris“, nor as historical as Mark Twain’s “A Connecticut Yankee in King Arthur’s Court,” but many US lawyers do find themselves facing legal issues in Canada. US practitioners who deal with Canadian legal matters must take note of a few common pitfalls. In this series, we review some of the most common misconceptions and flag a number of important tips in the area of cross-border intellectual property law:

• Copyright Law – both countries are party to the Berne Convention for the Protection of Literary and Artistic Works and both copyright regimes cover the same basic categories of protection. In Canada, the Copyright Act protects original literary works, dramatic works (including choreographic works), musical and artistic works, computer programs, performances, sound recordings and communication signals. The scope of protection the USA is roughly the same.

.       A few tips on copyright:

• The term of protection in Canada the life of the author plus 50 years. In the US, the term of copyright is based on the author’s life plus 70 years. There are variations that will impact the duration of protection, but that important distinction is worth noting.
• If a work is protected by copyright in Canada, it can benefit from protection in the US under the Berne Convention, and vice versa.
• Under the American DMCA, a notice-and-takedown system was implemented for the treatment of copyright infringement claims online. In recent amendments to the Canadian Copyright Act, a so-called notice-and-notice regime has been created. While these provisions are not in force, they are expected to be in force in January 2015.  Once implemented, a notice of online infringement would trigger an obligation to pass along notice of infringement, but not necessarily an obligation to takedown the allegedly infringing material. Under this system, there are penalties for failure to forward the notice of infringement.
• The concept of “works made for hire” does not appear in the Canadian Copyright Act. Employers in Canada, or US employers of Canadian employees, can rely on a provision (Section 13(3)) which stipulates ownership of works that are created in the course of employment are owned by the employer.
• Joint ownership of copyright is handled differently in Canada and the US – let’s use software as an example. In Canada, generally speaking, a co-owner of copyright cannot license the rights to the software without the consent of the other co-owner, whereas in the US, a co-owner can license without consent.

For advice on cross-border intellectual property issues, contact Canadian counsel at Field Law.

Calgary – 07:00 MST

 
By Richard Stobbe

The basic question “are APIs eligible for copyright protection?” has consumed much analysis (and legal fees) during the lawsuit between Oracle and Google, which started in 2010. (For more reading on our long-running coverage of the long-running Oracle vs. Google patent and copyright litigation, see below.)

The basic premise of Oracle’s complaint against Google is that the wildly popular Android operating system copied 37 Java API packages verbatim, and inserted the code from those APIs into the Android software. This copying was done without a license from Oracle. Therefore, says Oracle, copyright infringement has occurred. In a 2012 decision, the district court decided that the Java APIs were not subject to copyright protection. Therefore, said the lower court, there was no infringement. The US Federal Court of Appeals has reversed that finding.

In a 69-page decision released on May 9, 2014, the appeal court has decided that these Java APIs are subject to copyright protection, and concluded as follows: “Because we conclude that the declaring code and the structure , sequence, and organization of the API packages are entitled to copyright protection, we reverse the district court’s copyrightability determination with instructions to reinstate the jury’s infringement finding as to the 37 Java packages . Because the jury deadlocked on fair use, we remand for further consideration of Google’s fair use defense in light of this decision.”In short, Google has infringed Oracle’s copyright, and the question to be determined now is whether Google has a “fair use” defense to that infringement.

The EFF has called the decision dangerous since it exposes software developers to copyright infringement lawsuits. However, for software vendors, it may help strengthen the controls they place on developers to maintain standards and cross-compatibility through licensing. After all, that was (in theory) one of the complaints raised by Oracle – that its “write once, run anywhere” Java principle was violated when Google mis-used the Java APIs to essentially bring Android out of compatibility with the Java platform.
Related Reading:

• API Copyright Update: Oracle & Google …and Harry Potter
• Update on Oracle vs. Google
• Copyright: Apps and APIs
• Copyright Protection for APIs
• SDKs and APIs: Do they have copyright protection?

Calgary – 07:00 MDT

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Copyright in Canada is a function of the Copyright Act – without that law, there would be no copyright. How does Canadian copyright law interact with the copyright law in other countries?

In Active Operations Management (AOM) NA Inc. et al v. Reveal Group, 2013 ONSC 8014 (CanLII) (a law-school-exam-question of a case if ever there was one),  the court dealt with a claim by an Ontario company of infringement within Canada of UK copyright, by another Ontario company controlled by an Australian resident, Mr. Crouch.

The claim by AOM reads like a software vendor’s nightmare. AOM is the Canadian distributor of certain software developed in the UK. According to the allegations by AOM, Mr. Crouch copied elements of the software and a business method when he worked for an Australian licensee of the UK software. Mr. Crouch started a company in Canada and then allegedly used that as a vehicle to market a replica version of the UK software and the corresponding method in Canada.  With this (Canadian) copied version of the (UK) software , Mr. Crouch allegedly lured customers away from AOM. AOM filed a lawsuit alleging breach of copyright, misappropriation of trade secrets, interference with contractual relations, unjust enrichment and misappropriation of goodwill.

Remember, AOM was not the owner of the (UK) copyright – it was merely a distributor. The question for the court was whether AOM could maintain a copyright infringement lawsuit in Canada. To complicate matters, the “software” and the “method” were owned by two different (UK) owners. AOM added these owners to the lawsuit, but did not make the specifics clear in their claim.

As the court put it: “Copyright is a very specific right attaching to a ‘work’… Copyright cannot attach to an idea such as a method.  It can of course attach to the manuals or other material in which the method is described.  Similarly with computer software, copyright can attach to source code, to a graphic user interface, to manuals and to other material as defined in the Act.  Copyright cannot attach simply to what a computer program does.  The plaintiff must specify what it is that is covered by copyright and what it alleges has been done that gives rise to the statutory remedies.”

The lessons for business?

• Software vendors from outside Canada should know that, by virtue of international copyright conventions and treaties, international copyright can be enforced under Canadian copyright law;
• The Canadian Copyright Act permits someone other than the copyright owner to sue for infringement of copyright – as long as that person has appropriate rights (such as a local distributor, as in this case). Here, AOM appeared to have rights to maintain the copyright infringement lawsuit, but did not specify its rights with enough clarity in the claim. Ensure that the chain-of-title is clear in the claim itself;
• Regarding the additional claims – in particular, the trade-secret misappropriation – the court had this guidance: “It would be ludicrous …to compel a plaintiff to set out a trade secret with precision in the pleading.  To do so would destroy the secret itself. A trade secret is valuable precisely because it is secret.  It may be that information will have to be provided at the production and discovery stage but at that point the proprietor of the secret may seek confidentiality orders and to the extent that those details must be put into evidence may seek a sealing order.”

Calgary – 07:00 MT

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The very popular US grocery retailer Trader Joe’s has a following among Canadian consumers. Capitalizing on this popularity north of the border, a Vancouver entrepreneur has made it his business to buy genuine Trader Joe’s-branded merchandise in the US, and re-sell the products in a retail location in Vancouver under the banner  Pirate Joe’s. Citing Lanham Act trademark infringement, TJs sued the Canadian businessman in Washington State (appealed that decision  to the US Federal Circuit Court of Appeals.

While this appeal will run its course under US legal principles, it is worth noting the law on “parallel importation” in Canada.

Parallel importation or “grey marketing” is the importation into Canada of genuine products, which fall outside the brand owner’s established channels. These are not knock-offs or counterfeits, but rather legitimate products imported through a channel “parallel” to the brand owner’s preferred distribution routes (or, in the case of Trader Joe’s, where the brand owner has no established trading network in Canada at all).

There are two main intellectual property tools to attack parallel importation, and unfortunately for brand owners, both of them can be problematic in Canada:

1. Trade-marks: Brand owners sometimes try to rely on their trade-mark rights in Canada (Trader Joe’s may have some reputation in Canada through spill-over advertising). In parallel import cases, any claim of trade-mark infringement in Canada is likely to face challenges in light of decisions like Coca-Cola Ltd. vs. Pardhan, which dealt with the export of genuine Coca-Cola products (I wrote a case commentary on this decision for Canadian International Lawyer, June 2000);
2. Copyright: In the Euro Excellence case (Euro Excellence Inc. vs. Kraft Canada Inc.), the brand owner attempted to employ copyright law to stop parallel imports of genuine Toblerone-branded chocolate bars into Canada. On appeal, the Supreme Court of Canada ruled that the Copyright Act could not be used to block the parallel imports.

Stay-tuned to see where this case leads in the US appeal.

Calgary – 07:00 MST

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Earlier this week, the government introduced an unprecedented five international intellectual property treaties in the House of Commons on the same day. The five tabled treaties, introduced for ratification and implementation, are:

• the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks,
• the Singapore Treaty on the Law of Trademarks,
• the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks,
• the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs, and
• the Patent Law Treaty.

If you follow these sorts of things – and who doesn’t? – you will know that these treaties have been the subject of debate in Canada for years. For example, here is a 2001 article reviewing the merits of the Madrid Protocol. Why does the government have a sudden interest in pushing these treaties forward now?  It’s because the government is in the process of negotiating a Canada-EU free trade deal  as well as the Trans-Pacific Partnership. According to reports, implementation of these legal reforms is a condition for Canada to finalize treaty negotiations with other countries.

Implementation of all these treaties will result in so many interconnecting changes to Canadian IP law that it will take some time to sort out how this impacts Canadian business in a practical sense. Stay tuned for further updates and guidance on these developments.

Calgary – 07:00 MST