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

 

Yes, only lawyers ask such questions. But now that the question has been asked…. A recent lawsuit has framed this question in copyright terms. In Canada Post Corporation v. Geolytica Inc. c.o.b. Geocoder.ca (Federal Court, No. T-519-12), Canada Post has sued Geocoder for breach of copyright in postal codes. According to the Statement of Claim, a compilation of Canadian postal codes within a database is the property of Canada Post, and a production or reproduction of that database constitutes an infringement of the copyright held by Canada Post. Geocoder, for its part, has responded by claiming in its Statement of Defence that its “Canadian Postal Code Geocoded Dataset” was independently authored through a “crowdsourcing” effort over several years. “Geolytica created this database without ever accessing or copying any database of postal codes of the Canada Post Corporation.” 

The first question is whether postal codes are even eligible for copyright protection? Second, if they are protectable by copyright, but no direct copying occurred, can there be an infringement? What about indirect copying? Perhaps the closest case on record is Ital-Press Ltd. v. Sicoli, 1999 CanLII 8048 (FC), where the court considered telephone listings and indicated the following: telephone listings that are “…garden-variety white pages director[ies], devoid of even the slightest trace of creativity” cannot be eligible for copyright protection (citing the famous US case of Feist Publications, Inc. v. Rural Telephone Service Co., Inc…. famous for copyright lawyers that is).

The wider issue is one we’ve seen many times over the history of copyright: a traditional business or institution feels threatened by smaller start-ups who innovate to reproduce or replace an established business model. We will monitor developments in this fascinating case.

Calgary – 07:00 MDT

It’s been an interesting week for Canadian copyright. In case you don’t follow the lawyers and politicians…(and why would you)…. the debate over copyright has turned a bit snippy here in Canada. Parliament is debating the current version of the copyright reform bill (Bill C-11), and various lobby and interest groups are fighting to get air time on this topic before the final version of the bill is sent to final reading in the House. So witness the sparring between the following players:

• Last year the Canadian Bar Association (CBA) committee made a submission to Parliament entitled simply Bill C-32 — Copyright Modernization Act Amendments (Bill C-11 is the Bill Formerly Known as Bill C-32);
• Professor Michael Geist posted a December blog entry entitled Clearing Up the Copyright Confusion: Fair Dealing and Bill C-32;
• Then came the January Response to Professor Michael Geist’s Clearing Up the Copyright Confusion;
• Next we saw interesting allegations by a group of Canadian IP lawyers that the CBA committee was a secretive cabal guilty of plagiarism;
• It didn’t take long for the counter-point by the CBA and Professor Geist that no plagiarism occurred: Counterpoint: Music lobby smears CBA paper;
• And finally a response by Dan Glover to Professor Geist’s response.

For Canadian copyright law, it doesn’t get much more exciting. With the possible exception of the isohunt case, a Canadian bit-torrent lawsuit. After all this, the Parliamentary committee has finalized its review of Bill C-11, without making any major changes and the bill will proceed to Third Reading. Stay tuned.
Calgary – 07:00 MDT

 

Patent infringement damage awards often run into the billions. Not to be outdone, a copyright infringement case between Oracle and SAP resulted in a jury award in excess of $1 billion, based on a “hypothetical license“.

In 2007, Oracle sued SAP for copying thousands of documents and programs from Oracle’s “Customer Connection” website. After years of litigation, the remaining issue for decision by the jury was the amount of the damages. In November, 2011, the jury returned a verdict in favour of Oracle for $1.3 billion. SAP challenged this award as “unduly speculative” and sought a new trial or a lower damage award. Oracle had the choice of accepting a lower damage award of $272 million or going into a new trial; it opted for a new trial which has now been set for June, 2012.

In Canada, the Copyright Act (under Section 35) allows for damages and part of the profits that the infringer made from the infringement or an election of “statutory damages” under Section 38.1. The concept of a reasonable royalty (a rate that the infringer would have paid to the owner in a hypothetical license negotiation) is a concept that has been considered in patent cases in Canada – for example, in Jay-Lor International Inc. v. Penta Farm Systems Ltd., 2007 FC 358 (CanLII), the court calculated damages after analysis of a “hypothetical negotiation”.  The court in Oracle vs. SAP has shown that such a calculation must be grounded in objective evidence, and where possible, actual benchmarks to prove market value. Subjective or speculative evidence should not be used for such calculations.

Calgary – 07:00 MST

 

A few updates on copyright in Canada. The concept of “fair dealing” is the one to watch.

• Copyright Reform: Bill C-11 (the copyright reform bill) is currently in Committee in Parliament, meaning the bill has gone through first reading, and second reading, and is being is being further examined and debated. The next stage would be third reading before it becomes law. The digital-lock provisions remain among the most contentious. The proposed law also features expansion of “fair dealing” exceptions.
• SCC: Last December, the Supreme Court of Canada (SCC) heard 6 different copyright appeals, including an analysis of “fair dealing“. The court’s decision is expected sometime in 2012. When it is released, it will be closely scrutinized against the changes proposed in Bill C-11. (Related Article: Copyright Cage Match)
• New Class Action: Last week, a new copyright class action suit was certified (Waldman v. Thomson Reuters Corporation, 2012 ONSC 1138), which will also tackle “fair dealing” issues. This case claims that Thomson Reuters copies court documents that have been authored by lawyers, and sells them through a searchable database. The suit alleges that Thomson Reuters infringes copyright of the authors of those court documents by reproducing them without permission.

  Calgary – 07:00 MST 

 

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

 

My recent article “You Can’t Have Clouds Without a Little Bit of Lightning: Cloud Computing in 2012” is published in The Advisor (PDF) newsletter (Winter 2012).

 

Calgary – 10:00 MST

 

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

 

 

iBooks Author is Mac app  allowing users to develop and publish multitouch digital books. If you author a digital book, you can then submit it to the iBookstore for purchase or free download, or distribute it through iTunes U, or use it with the iPad. It’s being touted as a way to bring digital publishing to the masses – for example, textbooks with embedded videos, audio and rotatable 3-D models that students can pinch and zoom.

Sounds great, but do you own what you create? Let’s have a look at the EULA (End User License Agreement v. 1.0.1).

According to the terms of the EULA (section 2(b)), you own the rights to the content that you create, and you can distribute that content any way you want, as long as it doesn’t include any files in the .ibooks format. (Making files in the .ibooks file format is the whole point of using this app.) If it does include .ibook files, then you can distribute the book by any means as long as you are giving it away for free. If you want to distribute your digital book for a fee, then it must be sold through Apple’s iBookstore, with Apple taking its customary 30% cut.

This does not mean (as some blog posts have suggested) that Apple takes any ownership of the content you have authored. You continue to own that content. The license terms mean that, by agreeing to use their software, templates and publishing tools (and in particular, the .ibooks file format), you agree to sell your iBooks book through Apple’s retail channel.

This isn’t really all that different from an author’s agreement with a traditional publisher, since a publisher will typically insist on exclusivity in handling final editing, packaging, marketing and sales of a book. They take a cut and share the royalties with the author. The author, who remains the copyright owner, is not free to then sell the book through a different distribution channel. They must sell through their publisher.
Calgary – 07:00 MST

 

 

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   

 

 Two of my favourite topics: intellectual property and Lego. The Danish toy-maker has been trying to protect its iconic toy bricks since they were developed in the 1930s and ’40s. Trade-mark law protects the brand (LEGO), and trade-marks can live on and on, as long as the owner (a) uses the mark, and (b) continues to renew the trade-mark registration. The LEGO trade-mark was registered in Canada in 1957 and that registration is still valid.  Last week, Lego’s arch-rival, the Canadian-based toy-maker of Mega Bloks filed and then abruptly withdrew a lawsuit in the US, after threats that Mega Bloks products would be barred from entry into the United States, based on infringement of Lego’s US trade-marks. This reflects the sparring between these two competitors for market share in the building-toy industry.

In Canada, the decision in Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 (CanLII), settled a long-standing feud between Lego and Mega Bloks.  In that case, the court decided that the Lego building blocks themselves are not protectable as trade-marks in Canada, on the grounds that the shape of the blocks is purely functional in nature. This does not apply to the LEGO word, or the various other trade-marks that Lego owns. Lego has suffered similar set-backs in other countries – for example, a 2010 decision in the EU came to the same conclusion that functional elements of a trade-mark are not protectable. So what’s a toy-maker to do?

• Patents – utility patents in Canada will protect the function of the invention, in this case, the improved mechanism of how the plastic bricks snap together. However, patents expire after 20 years. Lego’s patents have all expired.
• Industrial Design –  this category of protection (in the US, known as “design patents”) will protect the visual features of a product (shape, configuration, pattern or ornament). Functional elements cannot be protected. Industrial design protection expires after 10 years. Lego has registered dozens of industrial designs to protect a variety of building bricks and parts.
• Copyright – some products are protectable under copyright law, though toy bricks don’t lend themselves well to this category, which is designed to protect written works, music, images, photos, paintings, that sort of thing. Copyright lasts for 50 years after the death of the author.
• Trade-marks – the LEGO brand is arguably the toy-maker’s strongest asset, and trade-marks, once registered, are renewable indefinitely. Trade-marks protect things such as the word LEGO, the associated logo, and various product lines and slogans, such as DUPLO and BIONICLE.
• Distinguishing Guise – A distinguishing guise is a type of trade-mark that protects a very specific type of “brand”. It applies to the shape of the products or the packaging, such as the shape of a Coca-Cola bottle. Since this is a species of trade-mark, the protection is renewable indefinitely once it’s registered. However, utilitarian features cannot be protected.

Calgary – 07:00 MST

 

What? Wikipedia is off-line? Please cue the other three horsemen of the apocalypse.

It’s amazing what happens when Wikipedia decides to blackout its service to protest “legislation that could fatally damage the free and open Internet…” Suddenly everyone is talking about SOPA (our November post is here) proposed U.S. intellectual property legislation that has raised concerns across the business world. Google, Twitter, Tumblr, Reddit, Mozilla and other internet companies are also in on the protest. That’s remarkable, mainly because these companies all have their own agendas (as any business does) and there are very few circumstances where they will coordinate their protest on a single issue on a specific day. Over to you, U.S. Congress.

Related Reading from slaw.ca: SOPA: What’s All the Fuss About? 

Calgary – 11:30 MST

 

Richard Stobbe was interviewed by The Lawyers Weekly for Luigi Benetton’s article reviewing some of the top tech cases from 2011 (link to the article)

Calgary – 07:00 MST

 

Lawsuits! Infringement! Litigation! Ah, there’s never a dull moment in the wonderful world of intellectual property law, and 2012 will be no exception. Here’s our list of what to watch in the coming year:

Copyright, Copyright, Copyright: For several years running, we have predicted that copyright reform will come to Canada. It might actually happen in 2012. There is good reason for optimism this time: First, the Supreme Court of Canada heard a clutch of copyright cases in December 2011, and their decision is expected in the first half of 2012. Second, the Harper government is promising/threatening (depending on your point of view) to pass Bill C-11, the current iteration of the Copyright Reform Bill. Change will come, one way or another.

Online Terms & Cloud Computing: In one sense, “cloud computing” is just another name for a trend that has been developing for a decade. In another sense, it really does capture a new way of doing business for many IT services. We predict that the law will develop in this area in both Canada and the US, as online terms and cloud-computing contracts are tested in court. Here’s one example of a pending decision: Sony faces a class action in the US over its online terms for the PlayStation Network.

Anti-Spam Law: In 2011, we rashly stated that Canada made “headway” in the anti-spam department, with the passing of the Fighting Internet and Wireless Spam Act. Canada’s anti-spam legislation did receive royal assent on December 15, 2010. However, the law is still not yet in force. Draft regulations are being debated and negotiated, and even if they do come into force in 2012, they will almost certainly be subject to a grace period which will delay implementation until late 2012, or maybe even 2013.

New CDRP Rules: In 2011, CIRA updated the rules governing dot-ca domain name disputes. Watch for our review of the changes, and the first decisions that have been released under the new rules. 

Calgary – 07:00 MST

 

Copyright complaints against apps are now common, and this one frames the issues nicely: In Shanti Deva Korpi v. Apple Inc. , 1:11-cv-00906- LY (U.S. District Court) a photographer who posts her photos to Flikr, has filed a lawsuit against Apple, claiming that two iOS apps – one of which was entitled “Unofficial Guide to Hipstamatic” – engaged in a practice of scraping and republishing her photos, without authorization or attribution. According to the claim, this is a violation of copyright.

In Canada, the recent decision of the B.C. Supreme Court in Century 21 Canada Ltd. Partnership v. Rogers Communications Inc., deals directly with this issue (see my commentary Coming to terms with online copyright published in the November 25, 2011 issue of the Lawyers Weekly). The B.C. case is not an app-related dispute, but the court makes it clear that copyright will be enforceable in situations where content (including images) is scraped off the internet, and is then repackaged and republished without authorization.

Calgary – 07:00 MST

 

For all the IP junkies out there, this is copyright week at the Supreme Court of Canada. Five copyright cases are being heard this week tackling such issues as the copyright in music contained within downloadable games, fair dealing exceptions, and streaming music online. Break out the popcorn, you can even watch the webcast!  

Calgary – 07:00 MST

 

The Stop Online Piracy Act is a controversial U.S. bill now working its way through Congress. The proposed law is designed (in part) to knock-out foreign websites that are suspected of infringing intellectual property rights. By targetting foreign “rogue” websites and establishing new causes of action against website operators for copyright or trademark infringement, the legislation has raised concerns about ISP liability, and about  how it impacts the operation of the domain name system. SOPA permits the U.S. Attorney General to take action against a “foreign infringing site” such as a Canadian site, and obtain a court injunction against the site. Once an injunction is issued, the A.G. can serve a copy on a number of intermediaries, who must then take action within 5 days.

• ISPs can be ordered to block access to the site by preventing DNS resolution.
• Search engines can be ordered to block the site from search results. 
• Payment networks such as PayPal can be ordered to suspend transactions between the site and U.S. customers.
• Even ad networks can be ordered to stop serving ads on the site.

We will be monitoring the progress of this proposed IP law in the US.

Related Reading: Summary of SOPA, Concerns and Implications (PDF)

Calgary – 07:00 MST  

 

My article Coming to terms with online copyright is published in the November 25, 2011 issue of the Lawyers Weekly. It reviews a recent decision of the B.C. Supreme Court in Century 21 Canada Ltd. Partnership v. Rogers Communications Inc. , [2011] B.C.J. No. 1679. The decision reviews the current state of the law in Canada on the topics of online contracting and copyright, and even the question of whether unauthorized access to a website constitutes trespass.

Calgary – 07:00 MST

 

 

 

   

For more, see mimiandeunice.com Calgary – 07:00 MST 

 

A simmering IP infringement case between Oracle and Google raises some fascinating copyright issues for software: what scope of protection is given to functional elements in an SDK (software development kit) or an API (application programming interface)? The case of ORACLE AMERICA, INC. v. GOOGLE INC. (Case No. 3:10-cv-03561-WHA) is in pre-trial contortions, with the trial currently slated for 2012. None of this has been decided in court, it merely focusses attention on a very narrow issue of copyright protection for certain elements of software code (there is a patent infringement claim on the table as well).  Oracle alleges that Google infringed copyright in Java code when it built the Android software platform. Specifically, Oracle complains that Google copied design specifications of some 37 APIs for Java libraries, as well as Java source code, object code and comments in 12 software files. In its defence, Google claims that the APIs are purely functional elements and are not eligible for copyright protection. Will this threaten Android ? Likely not. Google has articulated a compelling argument that there is no copyright in the Java APIs (see here (PDF)), but if the court disagrees and finds either copyright or patent infringement, it will merely trigger a damages calculations, and millions of dollars in royalty payments, not a death-knell for Android.

In Canada, the law is clear (see Delrina Corporation v. Triolet Systems Inc., a 2002 Ontario Court of Appeal decision) computer programming that is dictated by the operating system or reflects common programming practices is not original expression and will not receive copyright protection.  In the meantime, we will watch the Oracle vs. Google case to see if it goes to trial before the parties can reach settlement.

Further Reading including Google and Oracle Trial Briefs.

Calgary – 07:00 MST