As a follow-up to our earlier post (Can BlackBerry Patent a Keyboard?), a US court on Friday issued a preliminary injunction in a dispute between the BlackBerry maker and start-up Typo Products LLC which sells a snap-on keyboard for the iPhone.

The preliminary court order prohibits Typo from the sale of its keyboard products in the US, pending outcome of the case at trial. Typo Products has indicated it will appeal. A preliminary injunction is not determinative but certainly provides an early advantage to BlackBerry as the patent holder.

Stay tuned.

Calgary – 08:00

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Where a technology license carries with it an obligation to pay royalties based on revenues, how does the licensor determine if the revenues are accurately reported? The sales are known to the licensee, but the licensor has no way of determining what those sales are. Many license agreements impose reporting obligations on the licensee, so that monthly or quarterly sales are reported to the licensor, to enable accurate royalties to be calculated.  In the recent decision in XY, LLC v. Zhu , 2013 BCCA 352 (CanLII), the BC Court of Appeal dealt with a licensee who breached the terms of the technology license agreement, and committed the “tort of deceit” (that’s how lawyers say “they lied”).

In this case, the licensee did not only underreport or withhold information, they actively falsified records and thus substantially underpaid the royalties owed to the licensor. The tort of deceit is made up of these elements:

1. a false representation or statement made by the defendant,
2. the statement was knowingly false,
3. the statement was made with the intention to deceive the plaintiff, and
4. the statement materially induced the plaintiff to act, resulting in damage.

A damage award of over $8 million was awarded by the court, as an assessment of the amount would put the licensor in the position it would have been in, if the licensee had performed its obligations and paid the propert amount of royalties.

One interesting twist on appeal was whether the employees of the licensee should be personally liable. Employees are not generally held responsible for the wrongs committed by the employer. After reviewing the law, the Court of Appeal decided that the claims of deceit should be available against certain employees, and those employees were not shielded merely because they were employees acting in the course of their duties. Since these employees were actively devising ways to deceive the other side, they were acting outside the scope of regular duties, and the “just following orders” defence was not accepted by the court.

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

Can there be a better way to start 2014 than with a patent infringement story with a Canadian twist? BlackBerry has filed a patent infringement lawsuit  against Typo Products LLC. If you are a believer in the maxim that “the only thing worse than bad press is no press” then you would see this as a boon for Typo, which has garnered attention just in time for CES 2014. A Google search for “BlackBerry keyboard patent” now displays pictures of a smiling Ryan Seacrest, a co-founder of Typo.  Typo sells a slide-on physical keyboard for the iPhone 5, and the layout does looks suspiciously similar to a BlackBerry keyboard.

The question from an IP law perspective is whether BlackBerry can claim patent protection for a keyboard. Isn’t a keyboard just a keyboard? After all, the QWERTY keyboard has been around since it was invented by Christopher Sholes in the late 1800s (the design at right). In fact there are hundreds of keyboard patents, and BlackBerry owns a number of issued patents for keyboard design, for both utility and design patents, including the US patent “Ramped-key keyboard for a handheld mobile communication device” US8449208 (image at left). A new improvement on the basic QWERTY design can indeed be protectable, either through a utility or design patent. Whether this particular patent infringement case proceeds, or is settled, it illustrates the uses of patent  and industrial design to protect incremental improvements to existing technology. Stay tuned.

Calgary – 11:00 MST

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Canadian patent and trade-mark applicants take note: the  USPTO has indicated that it will remain open despite the pending shutdown of US government offices and agencies. Therefore, prosecution of US patent and trade-mark applications should be uninterrupted by the current political drama in Washington.

Calgary – 12:00 MDT

Update: October 4, 2013

As the shutdown drags towards the end of week 1, the USPTO maintains that it has reserves to continue operations and accept new applications. As of October 3, 2013, the U.S. Copyright Office has shut down.

Calgary – 9:45 MDT

Thinking of patenting, but waiting for some customers first? Tread carefully. By merely offering your invention for sale, even if the invention has not even been manufactured, you may lose patent rights.

The recent US case of Hamilton Beach v. Sunbeam Products Inc. (Case No. 11-CV-0345, Decided: August 14, 2013) dealt with a challenge to Hamilton Beach’s patent for a slow-cooker design. The critical event was a transaction between Hamilton Beach and a foreign supplier in early 2005.  The offer occurred before the patent filing date – to be specific, it occurred more than 1 year before the filing date. This offer by Hamilton Beach was considered by the court to be an offer for sale of a product that anticipated the asserted claims and the court found that the invention was ready for patenting prior to the relevant date. The court noted that “An actual sale is not required for the activity to be an invalidating commercial offer for sale… An attempt to sell is sufficient so long as it is ‘sufficiently definite that another party could make a binding contract by simple acceptance.'”

As a result, the patent was held to be invalid.

Remember:

• If such a sale or even an offer for sale is made when the invention is ready for patenting, that will start the 1 year clock running for patent filing in Canada and the US. The inventor would have 1-year from that date in which to file a patent.
• This may result in a loss of patent rights outside Canada and the US, for countries in which there is no 1-year grace period.
• An invention is “ready for patenting” when prior to the critical date:
• The invention is reduced to practice; or
• The invention is depicted in drawings or described in writings of sufficient nature to enable a person of ordinary skill in the art to practice the invention.
• In Canada, the courts have come to similar conclusions – consider this case  dealing with a device that was manufactured and rented to a third party for use in drilling an oil well in Texas prior to the relevant date of the Canadian patent. This earlier device invalidated the patent, since it constituted an “enabling disclosure” of the invention more than 12 months prior to filing of the patent application.

Calgary – 07:00 MDT

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Agreements which contain non-disclosure obligations (also known as a confidentiality agreements, CAs, NDAs or confidential disclosure agreements) are common in many industries – from licensing deals to franchise agreements, from manufacturing to retail industries. Confidential information may be disclosed during early-stage negotiations, even before a formal contractual relationship is concluded. Or it may be disclosed in the course of an ongoing contract, for example, a licensing or manufacturing agreement. In all of these cases, the exact definition of “Confidential Information” may be critical.

In CONVOLVE, INC. AND MASSACHUSETTS INSTITUTE OF TECHNOLOGY v. COMPAQ COMPUTER CORPORATION and SEAGATE TECHNOLOGY, LLC, the US Federal Circuit Court of Appeals dealt with a claim for misappropriation of trade-secrets and breach of confidence, arising out of a certain Non-Disclosure Agreement (NDA) signed between the parties.

The Court noted that: “The NDA states that, to trigger either party’s obligations, the disclosed information must be: (1) marked as confidential at the time of disclosure; or (2) unmarked, but treated as confidential at the time of disclosure, and later designated confidential in a written memorandum summarizing and identifying the confidential information.” This definition of confidential information meant that certain disclosures by Convolve which failed to include a written designation or notification of confidentiality were not considered to be confidential. The failure to mark that information as “confidential” meant that the information was not caught by the agreement. The Court also decided that Convolve’s remedies under the California Uniform Trade Secrets Act (CUTSA) were pre-empted by this NDA, leaving Convolve (the disclosing party) without any remedy for misappropriation of this information by the other side.

Lessons for business?

• While this decision turns, in part, upon an interpretation of US law (remember there is no equivalent of the Uniform Trade Secrets Act in Canada), the take-away is the same: NDAs are not just “boilerplate”. They protect the secrets of your organization, the information that gives you an advantage over the competition.
• The definition of “Confidential Information” is important, and following the definition of “Confidential Information” is just as important. The first may be easy to focus on while the agreement is being negotiated and vetted by legal. The second is more difficult to remember as the parties engage in fast-paced negotiations, and information is disclosed by personnel within the organization who may never actually see the written NDA.

Calgary – 07:00 MDT

Self-replicating technologies present intellectual property law with some unique challenges.

In the case of Bowman v. Monsanto Company (May 13, 2013), the US Supreme Court has weighed into this thorny field, and on Monday it delivered a unanimous judgment upholding the rights in Monsanto’s patented soybeans. (See our earlier post: Self-Replicating Technologies (Patents in the Field, Part 2).)

Monsanto sells its patented seeds under a license agreement. Farmers are permitted to plant the beans in one, and only one, growing season. Collection and replanting is prohibited under the terms of the license. Bowman bought seeds from a local grain elevantor, planted, harvested, collected and replanted those seeds in successive years. In this way, he was able to take advantage of the “Round-Up Ready” qualities of the genetically modified beans, without paying the usual fee that would be owed to Monsanto as the patent owner. In the court’s view, this deprived Monsanto of the reward that patent law provides for the sale of each patented article. The court was clear that “Patent exhaustion provides no haven for that conduct.”

According to the court: “…we think that blame-the-bean defense tough to credit. Bowman was not a passive observer of his soybeans’ multiplication; or put another way,the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops. …Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium. He purchased beans from a grain elevator anticipating that many would be Roundup Ready, applied a glyphosate-based herbicide in a way that culled any plants without the patented trait, and saved beans from the rest for the next season.”

The US Supreme Court sided with Monsanto and upheld the Federal Circuit Court of Appeals decision.

Calgary – 07:00 MDT

Ever wondered if you would infringe a patent but wanted to know before any infringement occurred?

Honeywell International, Inc. and Arkema Inc. are competitors in the field of automotive air-conditioning systems. Honeywell owns certain United States patents covering refrigerant inventions – in this case, innovations for a cooling system with low global warming potential. Arkema was about to enter into certain long-term supply contracts but before doing so, it wanted an advance ruling from the court, to determine whether such conduct would infringe the Honeywell patents. To achieve this, Arkema sought a declaratory judgment under the (US) Declaratory Judgment Act that by entering into contracts with automobile manufacturers, it would not incur liability as an “indirect infringer” of the Honeywell patents.

According to this latest decision, the US Federal Circuit Court of Appeals has ruled that this situation created a controversy that was “sufficiently immediate” to access the relief under the (US) Declaratory Judgment Act.

Read this article from LES: Suppliers May Ask Courts to Rule that They Do Not Indirectly Infringe Patents when They Have Agreed to Supply an Allegedly Infringing Product Even Before Their Customers Have Had an Opportunity to Directly Infringe the Patents.

Thanks to Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. who have posted a link to the decision here.

Calgary – 07:00 MDT

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

Calgary – 07:00 MDT

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The Canadian Intellectual Property Office has released guidance on “Computer-Implemented Inventions” as planned, in the wake of the Federal Court of Appeal decision in Amazon.  While “software” is technically not patentable, a “computer-implemented invention” is.  Such an invention could fall into one of several categories: a method (art, process or method of manufacture), machine (generally, a device that relies on a computer for its operation), or product (an article of manufacture). As before, computer programs, data structures and computer-generated signals alone are not patent-eligible.

Calgary – 07:00 MDT

 

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As mentioned in our previous post, industrial designs protect the visual features of a product (shape, configuration, pattern or ornament). Functional, utilitarian or useful elements are not eligible for protection. This was illustrated in Bodum USA, Inc. v. Trudeau Corporation, 2012 FC 1128 (CanLII), where the court found that Bodum’s double-walled drinking glass design was not infringed, since the competing product was not substantially similar in light of the many variations of double-walled glasses in the marketplace. The designs would have had to be virtually identical to support a finding of infringement.

A second interesting element to this case is the counterclaim by Trudeau Corp., who sued for a declaration that the Bodum design was invalid due to the prior art on the register. The court in Bodum confirmed that to be registrable, an industrial design must be substantially different from prior art. A simple variation is not enough. For a design to be considered original, there must be some “substantial difference” between the new design and what came before. “A slight change of outline or configuration, or an unsubstantial variation is not sufficient to enable the author to obtain registration.” In this case, the Court reviewed a number of other existing designs for double-walled glasses – one of which was designed in 1897 – and decided that Bodum’s design was not original. To come to this conclusion, the Court set aside the utilitarian functions, the materials used, and colours applied, and looked merely at the visual or ornamental features.

In the end, Bodum’s design did not satisfy the requirement of “substantial originality”, and the registration was expunged.

Calgary – 07:00 MST

Industrial designs are like the shy cousins of much sexier patents and copyright. Sure, patents and copyright get all the attention, but industrial design can be a very reliable, useful tool in the intellectual property toolbox.  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, utilitarian or useful elements cannot be protected. Industrial design protection expires after 10 years, so it does not extend as long as patents or copyrights, but can provide protection for articles that are not eligible for either copyright or patent protection.

In Bodum USA, Inc. v. Trudeau Corporation, 2012 FC 1128 (CanLII), the court considered two competing double-walled drinking glasses, one of which (the design owned by Bodum) was registered as an industrial design. The double-wall configuration itself serves a utilitarian function: it keeps hot drinks hot and cold drinks cold. Thus, the double-walled feature could not be assessed in the infringement analysis. As described in the judgement: “The court has to decide only whether the alleged infringement has the same shape or pattern, and must eliminate the question of the identity of function, as another design may have parts fulfilling the same functions without being an infringement. Similarly, in judging the question of infringement the court will ignore similarities or even identities between the registered design and the alleged infringement which arise from functional matters included within the design.”

According to the Court, the competing product must be characterized as “substantially the same” for there to be infringement. This question must be analyzed by the Court from the point of view of how the informed consumer would see things. In the end, the Court decided that there was no infringement between Bodum’s design and the competing product.

Related Reading:

Industrial Design in Canada & US

Calgary – 07:00 MST

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

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

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

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

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

Calgary – 13:00 MST

As NHL cancellations are pushed through Nov. 30th, hockey fans must resort to other means of entertainment. Try patent cases.

In Easton Sports Canada Inc. v. Bauer Hockey Corp. , 2011 FCA 83 (CanLII), the court reviewed allegations that Easton infringed Bauer’s Patent No. 2302935 (the ‘953 Patent). The ‘953 Patent was originally granted on November 20, 2001 and expires on September 4, 2018. One of the issues on appeal was whether the invention was disclosed during on-ice tests of the prototype skate.

A patent is invalid if the invention was disclosed by the inventor more than one year before the filing date of the patent. In this case, Easton attacked the validity of the ‘593 Patent by arguing that Bauer revealed the invention at a test event – a hockey game between Bauer employees, where the prototype skates were worn. The test event was open to the public and Easton argued that a spectator could have observed the skates and made out the essential elements of the invention. At trial and on appeal, the court rejected this argument.  Although the skates could be observed, they were not available for close inspection or dismantling by spectators, and merely observing the players wearing the skates during a game did not, in this case, “disclose or enable” the invention.

Lessons for business?

• Disclosure of your invention prior to filing a patent application can be fatal to patentability.
• Confidentiality agreements can be a useful tool to ensure that invention disclosure is not public – but these agreements should not be seen as a complete one-size-fits-all solution.
• Any testing of the product – particularly field testing in a location where the public may have access – must be handled very carefully.
• In Canada and the US, there is a 1-year grace period in which to file a patent application after the first disclosure, but that grace period is not available in all countries, and disclosure result in loss of patent rights in critical overseas markets.

Get advice from experienced patent counsel on patentability and the risks of early disclosure.

Calgary 07:00 MST

The Medium is a publication discussing current intellectual property and technology issues. This edition includes: Apple vs. Samsung: Intellectual Property Injunctions as a Strategic Tool, as well as “New Copyright Act (The Top 10 List)“.

Calgary – 07:00 MDT

In our earlier post - Patents in the Field (Part 1) – we reviewed the topic of patent exhaustion in a patent infringement case in which Monsanto sued a farmer who was collecting and replanting seed that contained Monsanto’s patented genetically-modified genes.

In Bowman v. Monsanto Company the US Supreme Court has decided to hear the appeal of the 2011 decision. In the earlier decision of the Federal Circuit Court of Appeals, Monsanto sued, claiming the second crop and the saved seeds infringed on its patent, because its patented technology existed somewhere in that crop. The farmer defended by claiming the defence of “patent exhaustion” – that any patent rights in the second crop of seeds were exhausted, and further use or sale of those seeds would not infringe Monsanto’s patent. The Federal Circuit appeals court rejected this defence, reasoning that by planting the commodity seeds containing the “Roundup Ready” patented technology, the farmer created an infringing article (i.e. the plant grown from the next generation of seeds). This replication of the patented article constituted an infringement, which was not excused by the “patent exhaustion” doctrine.

The US Supreme Court case of Bowman v. Monsanto will be closely watched and the final decision could be a milestone case in the area of self-replicating technologies and intellectual property in the agricultural industry.

Related Reading:

• Intellectual Property and Agriculture
• Infringement of a Patent on Higher Life Form

Calgary – 07:00 MDT

Can a prior disclosure of an invention be fatal to a patent? And if so, what constitutes “disclosure” of the invention.

One of the central pillars of patentability is “novelty” – the invention must be new, the first of its kind in the world. If it’s not new, the patent application will fail or (if discovered after the patent has issued) the patent itself can be invalidated. Wenzel Downhole Tools Ltd. v. National-Oilwell Canada Ltd., 2011 FC 1323 (CanLII) is an interesting judgement dealing with a device that was manufactured and rented to a third party for use in drilling an oil well in Texas prior to the relevant date of the Canadian patent. This earlier device invalidated the patent, since it constituted an “enabling disclosure” of the invention more than 12 months prior to filing of the patent application. In this case, to prove when the earlier device was invented and disclosed, an expert was called in to examine the metadata for the design drawings, to verify when the drawings were created.

The business lessons?

• Remember that a prior disclosure of an invention can be fatal to a patent. For the purposes of patent law, a “disclosure” of the invention can be as simple as using the invention or a prototype for a customer. For example, putting a single device into the hands of a customer without restrictions or confidentiality obligations has been held to constitute prior use which invalidated the patent.
• Experimental use of the invention may be permitted in certain circumstances. True experimentation will not be considered a “disclosure” for these purposes. However, a use will only be experimental if it is so in the mind of the user.
• If disclosure of the patented device was made on a confidential basis, it will not be considered a “disclosure” for these purposes, if handled properly. Therefore, confidentiality (and a properly drafted non-disclosure agreement) is critical.

Related Event: Interested in learning more? Join us on September 26, 2012 – Field Law is hosting a meeting of The Licensing Executives Society  (Calgary Chapter) on the topic of: The Perils of Disclosure: Invention Disclosure and Patent Grace Periods presented by Roseann Caldwell, Bennett Jones LLP. See link for details and registration.

Calgary – 07:00 MDT

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Last week, the ruling in Apple’s patent infringement lawsuit was released. Once upon a time the public was captivated by things like sensational celebrity trials. Now we have live-blogging of patent infringement verdicts. Oh, for simpler times!

In case you missed it, in a landmark decision that is certain to be appealed, Samsung was ordered to pay damages of over $1 billion for multiple infringements of Apple’s design and utility patents for smartphones and tablets. The infringement ruling covers trade-dress, design patents and utility patents including user-interface functions such as the now familiar pinch-and-zoom gesture, and the “rubberbanding” effect at screen margins.

What does this ruling mean? Here are a few thoughts:

• Experts have estimated that the average smartphone relies on 250,000 patented technologies that are in-licensed from various device and technology manufacturers around the world. While many patents are at issue in this lawsuit, Apple’s ‘915 patent (Patent No. US 7,844,915, Filing date: 7 Jan 2007)  for pinch-and-zoom and related scrolling gestures was central to Apple’s infringement claims. Pinch-and-zoom has become such an intuitive gesture that I’ve seen kids try and perform it on the screens of portable DVD players and seat-back TVs. This particular ruling will impact smartphone and tablet makers who rely on Android. But it’s important to remember that this is not an appeal-level decision, nor does it extend beyond the US, so time will tell how other smartphone makers respond in Canada or globally.
• The Android operating system would not offend Apple’s design and trade-dress rights (which cover the shape or appearance of the hardware), and Android has designed around the rubberbanding effect, so Android would not offend those claims of Apple’s patents. However, there is no doubt that Android smartphones and tablets all use pinch-and-zoom. The options are for Android (read: Google) to take a license from Apple, or design around with some alternate gesture. Invalidating the ‘915 patent would be another logical avenue. However, if that tactic had a good chance of success, Samsung would have succeeded by now.
• The jury form was so complex (have a look for yourself: Jury Form , courtesy of Groklaw) that observers were surprised at how quickly the jury returned a verdict. The jury’s findings and instructions will very likely be the subject of the appeal process.
• For a patent-by-patent, device-by-device breakdown of the verdict in this case, see this excellent review (courtesy of NDTV).
• Interestingly, the jury found that Samsung’s devices did NOT infringe Apple’s ‘889 design patent (see our earlier post: Apple and Samsung: The Design Patent Wars Continue).

Calgary – 07:00 MDT
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Bookmark ipblog.ca on your iPhone, iPad, Android tablet or mobile device for updates and developments in Canadian intellectual property law, including practical information and commentary on intellectual property business issues, technology commercialization and developments in the law, copyright and patent questions, trade-mark law, software and IT outsourcing, and related areas including privacy and cleantech licensing.

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

Calgary – 07:00 MDT