The Canadian government has introduced the next version of its long-awaited and much-debated copyright reform bill (Bill C-32, the Copyright Modernization Act). Here are a few interesting highlights:

• Format & Time Shifting: (Sections 29.22 and 29.23) The new law would allow consumers to “format shift” music from commercial CDs to hard-drives, iPods or other devices. It would also permit “time shifting” of TV programs. However, this right does not override the anti-circumvention restrictions. Put another way, if you have to crack a digital lock in order to make the shift, then you can’t legally shift. 
• Back-Ups:  (Section 29.24) The proposed law allows users to make backup copies, but again, this right is subject to the anti-circumvention restrictions. It’s hard to find a commercial DVD now that doesn’t have digital locks, which means that in practical terms, any back-ups of personal DVDs would have to break a lock, would violate the anti-circumvention restrictions, and would thus be prohibited under the new law.
• Software Interoperability: (Sections 30.61 and 41.12) Interestingly, the anti-circumvention rules do not apply if you want to circumvent a digital lock on software, “for the sole purpose of obtaining information that would allow the person to make the program and any other computer program interoperable”.  This need not be for personal use… so does this mean that competitors can legally hack each other’s code for the sake of interoperability?
• The YouTube Exception: (Section 29.21) There is an interesting exception for “Non-commercial User-generated Content”. Basically, if you construct a mash-up using bits of copyright-protected material, then this kind of creation will not infringe copyright, as long as it is for personal use and doesn’t have a “substantial adverse effect, financial or otherwise, on the exploitation or potential exploitation of the existing work”.   
• ISP Liability? (Section 27(2.3)) This new section might be called the Anti-Napster provision since it makes clear that copyright will be infringed by anyone who provides an Internet service that is designed “primarily to enable acts of copyright infringement”.  This raises the question of the liability of Internet Service Providers, though some language has been sprinkled in to provide comfort to ISPs. 

Before it becomes law, it must pass through Parliament and withstand any lobbying efforts by industry and consumers.

Calgary – 14:30 MT

When can an internet user remain anonymous?  It depends….

As an update to our recent post about Mosher v. Coast Publishing Ltd., 2010 NSSC 153 (where the identity of anonymous comment-writers was ordered to be disclosed), the recent decision in Warman v. Wilkins-Fournier, [2010] ONSC 2126 (S.C.J.), took an opposite view. 

The recent Wilkins-Fournier decision was an appeal of an earlier decision (See: Online Defamation Update) in which the court ordered the disclosure of all personal information, including name, email and IP address, of eight anonymous posters in a defamation case.  In this new decision, the court reviewed privacy rights and freedom of expression issues, and overturned the disclosure order.  The court indicated that disclosure should not be automatic, and the plaintiff must first demonstrate a prima facie case of defamation before the disclosure of personal identities is ordered.  Interestingly, the court compared this situation to the one in BMG Canada Inc. v. John Doe, where the recording industry sought the disclosure of anonymous alleged copyright infringers. 

Calgary – 09:00 MT

 

You may have seen our recent post on the subject of Apple’s robust trade-secret protection program. Apple grabbed headlines again when a prototype iPhone made its way into the hands of a blogger at Gizmodo, who promptly posted a review of it. It didn’t take long for Apple to flex its trade-secret enforcement tools.  The “Rapid Enforcement Allied Computer Team” (a uniquely Californian computer-crime task force) descended on the blogger and reportedly seized a number of items including a laptop, hard-drive and other personal effects.  The message is unmistakeable: technology companies will go to extraordinary lengths to protect trade-secrets.

Could this happen in Canada?  Search warrants are typically used where a criminal investigation is under way.  In civil cases, a technology company could use an “Anton Piller Order”, which is a form of civil search warrant enabling representatives of a plaintiff to search the defendant’s premises and seize relevant documents and other evidence pertinent to the lawsuit.  It comes from a trade-secret lawsuit from the 1970’s, where a technology company convinced the court to permit a search-and-seizure at the defendant’s premises.  Such an order can only be granted where:

• there is a strong case for the plaintiff and the potential for “very serious” damage to the plaintiff;
• there is convincing evidence that the defendant has “incriminating documents or things”; and
• there is a real possibility that the defendant might destroy the incriminating evidence.

These orders can be set aside, as in this recent Federal Court case involving a copyright infringement claim: Vinod Chopra Films Private Limited v. John Doe, 2010 FC 387 (CanLII).

Calgary – 08:00 MST

 

What does an international treaty have to do with ripping songs to your iPod?  You may not have heard much about the Anti-Counterfeiting Trade Agreement (ACTA), but this international treaty may have significant impacts on the domestic copyright reform process in Canada. ACTA is an international round of trade negotiations that addresses counterfeiting, which in turn deals directly with copyright infringement. The draft text of the agreement was released last week. 

Copyright infringement – what it means, when it occurs, who is responsible, and what penalties should be levied – is central to the anticipated reform of Canada’s Copyright Act.  The government has again hinted that it will introduce a copyright reform bill  in this session of Parliament.  The related debate about iPod levies should also be addressed in the reform process.   

There is little doubt that ACTA will play an important role in influencing domestic copyright policy. In this environment of international pressures, intense lobbying, proposed levies, and heightened public awareness of copyright issues, the government will have a hard time pleasing everyone as it navigates this intellectual property minefield.  Even if proposed legislation is introduced this spring, the bill will die if there is a fall election. 

Federal elections? That’s one little detail that ACTA need not worry about, and the treaty is expected to be finalized by the end of 2010.

Calgary – 08:00 MST

Regardless of what you are distributing – shrink-wrapped CDs, online applications or smartphone apps – software licensing takes on an added layer of complexity when open source software issues are part of the mix.  The law in the US has been clarified thanks to the Jacobsen v. Katzer case, which was finally dismissed last month after the parties reached a settlement. As part of the settlement, a permanent injunction was entered, stipulating that Katzer must refrain from “reproducing …modifying … or distributing” the open source material.  (See our previous post: Open Source Update: Cisco Sued & New Ruling in Jacobsen vs Katzer).

To avoid GPL violations, make sure you get good advice on an OSS policy for your organization, and avoid the fate of Best Buy, Samsung, Westinghouse, and JVC – all of whom were named in a copyright infringement lawsuit filed by the Software Freedom Law Center (SFLC) in December 2009.

Richard Stobbe will be speaking at a conference in Calgary on April 9 on the subject of Open Source Licensing: Copyright & Beyond

Calgary – 09:00 MST

A popular Chinese night market in a suburb of Vancouver became the arena for an intellectual property infringement case involving trade-marks and copyright. 

In a recent Federal Court decision (Target Event Production Ltd. v. Cheung and Lions Communications Inc., 2010 FC 27), Target, the original operator of the Richmond night market, sued a rival event operator for infringing on the registered mark RICHMOND NIGHT MARKET (in English and Chinese), as well as infringing copyright in the layout and site plans for the night market.  One important element in the decision relates to the distinctiveness of the marks. 

The Court acknowledged that the marks including RICHMOND NIGHT MARKET were “originally merely descriptive” but over time they became “valid trademarks because they enjoyed substantial goodwill and had acquired distinctiveness…”  But the judge went on to say that “this acquired distinctiveness was not, in my view, durable. Once Raymond Cheung and Target failed to open a night market in 2009, it is my view that Target’s Names, which were inherently weak, lost their distinctiveness and the associated goodwill.”

The lessons for business? 

1. Weak, descriptive marks can acquire distinctiveness over time through advertising and use, but that distinctiveness can easily be lost.  Unique, distinctive marks will always be much stronger and easier to protect.
2. Remember: directors can be liable for infringement.  In this case, the director of the defendant company was personally liable for the infringement since he was aware of the copyright and still went ahead with the unauthorized copying. As described in the well-known case Mentmore Manufacturing Co. v. National Merchandise Manufacturing Co., a director will be liable where there is “deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or … an indifference to the risk of it.”

Calgary – 10:00 MST

Does a US judge have jurisdiction over a website operated in Canada?  The answer is found in a recent US court decision involving a Canadian website operator  (Columbia Pictures Industries Inc. v. Fung ). 

In that case, the Motion Pictures Association of America sued Gary Fung, operator of IsoHunt (a popular BitTorrent site). Mr. Fung’s web sites were all hosted in Canada but the US court had no trouble establishing it could extend its ruling to cover Mr. Fung and his activities. The MPAA convinced the court that infringement had taken place within the US.  From there, it wasn’t a leap to tag Mr. Fung with liability under the US theories of “inducement, material contribution, and vicarious infringement”, even though Mr. Fung’s conduct occurred outside the US.

The court said that “United States copyright law does not require that both parties be located in the United States. … Plaintiffs need only show that United States users either uploaded or downloaded copyrighted works; Plaintiffs need not show that a particular file was both uploaded and downloaded entirely within the United States.”

Last year, Mr. Fung, through his company isoHunt Web Technologies Inc., attempted to launch a pre-emptive strike against the recording industry by seeking a declaration that its operations did not violate the Copyright Act.  No final ruling has been issued in that case.

Related Reading: Canadian P2P Copyright Battle Continues

 

Calgary – 09:00 MST

 

A game developer incorporates martial arts moves into a new video game. Is the choreography of those moves protectable by copyright?   The answer is, apparently, yes. 

The 1997 decision in Ahn v. Midway Manufacturing Co., 965 F. Supp. 1134 (N.D. Ill. 1997) decided that under US law, certain martial arts routines fell within the subject matter of copyright.  In that case, a software developer hired dancers to create moves which were later incorporated into the well-known game “Mortal Kombat”. A dispute arose about the ownership of the routines, but the dancers had assigned their rights to the software developer under a written contract, so they could not maintain a claim for joint ownership.  The 2005 US decision in Open Source Yoga Unity v. Choudhury, 2005 WL 756558 (N.D. Cal. Apr. 1, 2005) suggests that yoga moves can be eligible for copyright protection.

Does this apply in Canada as well?  Yes, in Pastor v. Chen, 2002 BCPC 169 (CanLII), the court reviewed a dispute about dance routines, and decided that the “uniquely choreographed moves and dance styles” were properly covered by copyright.  Game developers should take care to get advice whenever incorporating choreographed elements into their applications.  And the next time you’re on the dance floor, just be sure not to infringe the copyright in anyone’s new dance moves.

Calgary – 09:00 MST

Copyright protects a range of creative works – photographs, images, software, books and music, to name a few.  And copyright law is considered to be “territorial” – this means that Canadian copyright law deals with protection and enforcement within Canada.  So what happens when works are published online, or transferred across borders?  Do the traditional territorial concepts break down in an environment where borders are technologically nonexistent?

Two recent cases illustrate how the law adapts to these issues: 

1. In Moberg v. 33T LLC et al., 2009 WL 3182606 (D. N.J. Oct. 6, 2009), a US court considered the publication of images online in Germany. The case turned on a technicality of whether a work published on a website in Germany (or anywhere outside the US) should be considered for legal purposes to have been simultaneously published in the US. The court decided that the images were not “United States works” leaving the author free to make a copyright infringement claim in the US, without first registering copyright in the US.  This helps clarify the rights of Canadian authors who may wish to sue in the US, even though copyright in their works is not registered there.
2. The Canadian decision in Thumbnail Creative Group Inc. v. Blu, 2009 BCSC 1833 (CanLII) dealt with a transfer of images across the Canada / US border. In this case, a BC company alleged that certain Canadian defendants provided images to the US defendants in violation of the author’s copyright and moral rights.  The court analyzed the situation and found that if copyright infringement occurred anywhere, it was in the US, not Canada. Since Canadian copyright law is territorial, it cannot be infringed by any act which occurs outside Canada. The court dismissed the claim, indicating that a US court was more appropriate to decide the matter.

Calgary – 14:00 MST 

The irony of this one won’t be lost on consumers.  After years of lecturing and lawsuits by the recording industry about the sins of copyright infringement, the tables are turned in this class-action lawsuit. 

The estate of jazz musician Chet Baker has sued the major record labels – Sony BMG Music, EMI Music, Universal and Warner Music – for copyright infringement claims that, if proven, may add up to significant damages. [Link to story and PDF of the claim] The claim alleges that the record industry has a backlog list of hundreds of thousands of songs which were published but for which copyright royalties were never negotiated or paid.  Using the metrics of statutory damages, each instance of infringement may attract a flat $20,000 liability for the recording industry, which means 300,000 songs create a potential $6 billion damage award.

This one will be closely watched in 2010.

Calgary – 10:00 MST

Where an infringer carries on with the infringing activity after the copyright owner has sent notice, damages can be higher.  This is the finding of a Federal Court judge in Microsoft Corporation v. 1276916 Ontario Ltd. (2009 FC 849)(Sept. 17, 2009).  In that case, Smart Buy, a computer retailer in Ontario, was selling PCs loaded with pirated copies of Microsoft software.  Smart Buy continued its infringing activities not only after warnings from Microsoft, but even after the lawsuit commenced in Court.  The court awarded statutory damages of $80,000 and punitive damages of $50,000.  The individual business owner was found personally liable.

Other recent copyright infringement cases have resulted in similar damage awards in Canada:

a)        $200,000 in punitive damages, $100,000 statutory damages against the individual defendant and $100,000 against the corporate defendants (Microsoft v. 9038-3746 Quebec Inc.)

b)        $100,000 in punitive damages and statutory damages of $20,000 per infringement (Louis Vuitton Malletier S.A. v. Yang)

c)        $300,000 in punitive damages comprised $200,000 against the individual business owner, and $100,000 against the other defendants (Louis Vuitton Malletier S.A. v. 486353, B.C. Ltd.)

d)        $50,000 in punitive damages against all of the defendants jointly and severally (Microsoft v. PC Village Co. Ltd.)

Calgary – 10:00 MST

Putting a lime in your beer is nothing new. But branding it apparently is. US brewing giant Anheuser-Busch Companies Inc. and Canadian Brick Brewing Co. Ltd. are locked in an intellectual property dispute over their labels for lime-flavoured beer. The makers of “Bud Light Lime” complain that Brick’s “Red Baron Lime” is an infringement of copyright and trade-mark rights in the label.  Have a look and decide.  This dispute leaves aside the more important question of why beer needs to come pre-packaged with lime in the first place.

This isn’t the first brand battle for Brick.  Earlier this year, Brick agreed to change its Red Baron labels in the face of a lawsuit by Labatt.

Calgary – 9:45 MST

IsoHunt, a British Columbia-based service that indexes BitTorrents for peer-to-peer file sharing, attempted a pre-emptive strike against the Canadian Recording Industry Association (see our previous post), by asking the Court to declare that its activities were legal under Canadian copyright law.  Isohunt lost that bid in March, when a BC Court decided that the issues were too complex to be dealt with summarily, and that a full trial would be required. 

IsoHunt appealed that decision, and in late July, the BC Court of Appeal dismissed isoHunt’s appeal.  This means that the matter is unresolved, and will go ahead to a full trial – something that favours the recording industry, since the issues will be more complex and legal costs will escalate.  The stakes are high for both sides, and the resulting decision (if it does go through to trial) could be a landmark case for Canadian copyright law.

Related reading: isoHunt’s original petition (PDF courtesy of Torrent Freak).

Calgary – 09:45 MST

The Canadian government has launched another attempt at reforming the Canadian Copyright Act, to bring it in line with the digital age. The last major overhaul of the legislation occured more than 10 years ago, and since then several attempts to introduce revised legislation were stymied, either by public opposition, or more often, intervening elections (Canada has held federal elections in 2000, 2004, 2006 and 2008, and commentators are watching for another in the fall of 2009). The current public consultation process runs from July 20 to September 13, 2009.  It is hoped that this process will permit Canadians to weigh-in (again) on copyright issues such as user rights, ISP-liability, file-sharing, piracy and downloading. The process also serves a useful political function: it permits the government to neutralize the copyright issue in the event of a snap fall election.

Calgary – 13:30 MST

 

Call it the “Facebook Factor”.  The way people use the internet and social media is colliding with litigation in ways that couldn’t have been foreseen even a few years ago:

• In a recent Nova Scotia case, a judge considered evidence of a plaintiff’s Facebook page in a personal injury lawsuit, and the evidence contradicted the plaintiff’s claim;
• In Murphy v Perger [2007] OJ No. 5511 (QL), a defence lawyer successfully forced production of post-accident Facebook pictures showing the plaintiff engaging in various social activities – pictures that were located on a private portion of the Facebook site;
• In Leduc v. Roman, 2009 CanLII 6838 (ON S.C.), the court permitted cross-examination of the plaintiff on the content he posted on his Facebook profile;
• In Australia and New Zealand, the courts have approved service of documents via a Facebook account (story: here and here);
• In the US, there have been a rash of similar cases (see links here, here, and here) leading to a mistrial in a drug-trafficking case (when jurors admitted that they researched the case via their iPhones and BlackBerrys), chaos in the federal corruption trial of a former state senator (jurors had posted updates on the case on Twitter and Facebook), and problems in a criminal case (a juror tried to “Friend” one of the witnesses).

Related content: free online webcast summit on “Copyright War,” June 9, 2009, including “Online Legal Issues: Facebook, MySpace, Twitter, YouTube, Blogs” 

Calgary – 10:30 MST

In the long-running IP battle between Mattel Inc., the makers of Barbie dolls, and MGA Entertainment Inc., the makers of rival Bratz dolls, a California federal court has issued a decision this week that appears to put a nail in the Bratz coffin.  The court dismissed MGA’s application to reduce the $100 million damage award granted to Mattel Inc. and went further. The court also implemented the order which bars MGA from making or selling the Bratz dolls.  A temporary receiver was also appointed to oversee MGA’s business.  The end of the battle appears to be near, through Bratz may still have some fight left.  The dispute arose after a designer, while he was under contract with Mattel, designed the Bratz concept, then secretly sold the concept to MGA.  The dispute centred on copyright and intellectual property claims that ultimately put the Bratz designs back into the possession of Mattel.

The lessons for business?  MGA obviously knew what it was doing, but to avoid the risk of inadvertently importing intellectual property belonging to a competitor, consider special clauses in employment and contractor agreements that can help mitigate the risks of hiring employees or contractors who bring trade secrets or IP with them when they join your company.

Calgary – 11:45 MST

It was another long battle for Microsoft, this time against a retail chain in Toronto trading under the banner “PC Village”.  In April, a Federal Court judge in Microsoft Corporation v. PC Village Co. Ltd. (2009 FC 401) awarded damages of $10,000 per copyright violation for a total of $150,000; plus $50,000 in punitive damages against all defendants jointly and severally; and a lump sum of $50,000 for solicitor/client costs and disbursements.  This means both the corporations and the individual employees are liable for the total award of $250,000.00 in damages.  The defendants initially resisted the allegations, retained a lawyer and appeared to mount a defence.  Then their defence collapsed, the defence lawyer resigned, and Microsoft won the case.

Microsoft appears to be continuing its piecemeal strategy of battling software piracy one pirate at a time. (See: Microsoft Scores Software Piracy Win and Copyright Infringer Hit with Fine )

Calgary – 15:30 MST

A Quebec Superior Court judge has approved a class action in the case of Electronic-Rights Defence Committee ERDC c. Southam Inc. 2009 QCCS 1473 (search for ERDC in Superior Court judgements), a copyright case dealing with the inclusion of freelance articles in online databases, which could prove to be as important as the 2006 Supreme Court of Canada decision in Robertson v. Thomson Corp., 2006 SCC 43 [See: New Copyright Decision Released], the copyright battle pitting freelance writer Heather Robertson against the publishers of the Globe and Mail.

The impact on business? Just because you think you own the copyright in a particular work, don’t assume that right includes the right to reproduce the work in any and all media. We have been advising clients to include contractual language to clarify the rights of reproduction to include digital media.

Calgary – 18:20 MST

The Government has issued a Request For Information on open source software to assist it in developing guidelines related to the “planning, acquisition, use and disposal of No Charge Licensed Software (NCLS).”  The term NCLS is apparently intended to include all forms of software which is available without charge – from “true” open source software, freeware, shareware, to free proporietary downloads such as Adobe readers, iTunes, Google toolbars, etc.  The RFI closes February 19, 2009.

This obviously reflects the growing use of open source software within the public sector, and the need for consistent guidelines.  The guidelines, once developed, will likely be of interest to both public sector and private sector organizations.

Calgary –  09:30 MST

In a recent story that made national newspapers here, it was suggested that McGill University’s new advertising campaign had somehow stepped on the toes of American Larry Smith, editor of an online magazine.  Mr. Smith raised an allegation that somehow the idea of a six-word summary was protectable under intellectual property laws – trade-marks, or copyright, or something.  Such an idea is certainly not protectable, so McGill has nothing to worry about and Mr. Smith is off-base. 

Calgary – 15:00 MST