In the good old days, the boss overheard you complain at the pub after work.  Now, employees have more sophisticated methods of dishing the dirt. And employers must walk a careful line when navigating the issue of employee privacy.  

• In Pietrylo v. Hillstone Restaurant Group, Docket No. 2:06-cv-05754 (D.N.J. 2008), a US court decided that employees enjoyed a certain amount of privacy over a gripe-page they created on MySpace.  The pages were designed to be accessed by invitation-only, and provided a place for employees of the Houston’s restaurant chain to rant about their employment. Management heard about it, and asked one of the employees for the password to the site. The employer then promptly fired the 2 employees who had established the site.  When the employees sued their former employer, the court found in favour of the employees, on the basis of invasion of privacy and ordered payment of back-pay.
• While there has been no similar case yet in Canada, the issues were discussed in University of British Columbia (Re), 2007 CanLII 42407 (BC I.P.C.) where the employer secretly installed spyware on an employee’s workplace desktop to monitor his internet use. The Information and Privacy Commissioner investigated and found that the employer was in breach of public-sector privacy rules by surreptitiously monitoring its employee when it had “less intrusive means to manage the complainant’s employment.”

Related reading: Our post on workplace surveillance cases 

Calgary – 15:30 MST

There have been a rash of new lawsuits against Google’s AdWords program including 2 major class-action claims:

• FPX, LLC v. Google, Inc., 2:2009cv00142 (E.D. Tex. complaint filed May 11, 2009) (Class action);
• Soaring Helmet Corp. v. Bill Me Inc., 2:2009cv00789 (W.D. Wash. complaint filed June 9, 2009);
• John Beck Amazing Profits, LLC v. Google Inc. 2:2009cv00151 (E.D. Tex. complaint filed May 14, 2009). (Class action);
• Stratton Faxon v. Google;
• And the ongoing Rescuecom case.

What are the issues for Canadian TM owners in connection with the US class actions? First, the US class actions have yet to be certified, meaning the US lawsuits may not be eligible to proceed as class actions, but if they do, then they could attempt to settle the issue for trade-mark owners across the US (those who do not opt out). Canadian class-actions may also be commenced, if the US class actions are certified, or if the US actions appear to be making headway against Google.  Many trade-mark owners will likely opt out since they won’t want to be tied into litigation over which they have no control.  But there will still be plenty of class members who will happily join a class action against Google in the hopes of getting a portion of the any settlement or damage award.  For trademark owners who opt in, the lawsuit is trying to peg Google with liability and damages and any damages (more likely a settlement of some kind) would be split between the class members. For those who opt in, there is also a risk that they would be bound if the Court finds that Google is not liable, and they would then be stopped from suing Google on their own separate actions against Google or the other defendants based on trade-marks infringement in in keyword advertising.

However, let’s face it: if the class action lawsuit fails, then the chances of anyone suing Google on this issue decrease substantially. Companies who benefit from AdWords and are buyers of TM keywords in their AdWords advertising, are likely to want to opt out of the class. These companies also face the possibility of being sued in future TM infringement litigation if the class actions succeed against Google.

For its part, Google doesn’t seem to be showing signs of backing down – they recently announced that they will allow a group of “special” advertisers to use competitors’ trade-marks to appear right in the ad copy, even if the trade-mark owner objects.

Calgary – 15:00 MST

 

When you buy a business, it is common for the seller to agree to non-competition restrictions. In other words, the seller agrees not to compete against you for a certain period of time afterwards. These clauses are standard, but can be tricky to enforce, as shown in the recent decision in Belron Canada Incorporated v. TCG International Inc., 2009 BCSC 596 (CanLII). 

In 2005, Belron bought the Speedy Auto Glass business in Canada from TCG for about $53 million, a deal which included the trade-marks, franchise agreements and proprietary glass repair technology.  For this price, Belron expected that TCG would refrain from competing against Belron in the auto-glass repair business in Canada for seven years.

When TCG launched a website at www.windshields.com that seemed to target Canadian customers, Belron sued for breach of the non-competition promises, and sought an injunction to restrain TCG from operating the site in Canada. In this case, the court wasn’t convinced that the injunction should be issued, so the case will go to trial for a final decision on whether the site constitutes a breach of the non-competition obligations.  The Belron decision applied the recent Supreme Court of Canada decision in Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, a case which debated the meaning of the phrase “Metropolitan City of Vancouver” in a non-competition clause. The Shafron decision also illustrates the importance of taking care in drafting clear non-competition clases.

The lessons for business?

• In any business acquisition, it is important for both sides to get advice on non-competition, non-solicitation and non-interference clauses to ensure the clauses are clear and enforceable;
• Where intellectual property assets are involved (as in the Belron case), special care must be taken to also review post-closing confidentiality and trade-secret obligations;
• “Injunctive Relief” clauses, which state that one party is automatically entitled to an injunction, are not necessarily enforceable. Belron had such a clause in its contract with TCG, but the court still did not issue the injunction order.

Calgary – 09:00 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

Maclean’s magazine (macleans.ca) interviewed Richard Stobbe, lawyer with the Technology & IP Group, for an article on defamation and internet law. The article takes a look at the “dark side” of anonymity on the internet and the state of the law in Canada.

Calgary – 9:45 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

Last Friday, the Supreme Court of Canada upheld the decision in Fromm v. Warman, to award $30,000 in damages for internet defamation. The judgment of the Court of Appeal for Ontario, 2008 ONCA 842, handed down in December, 2008 [Link to Court of Appeal Decision] was upheld. Warman brought an action against Fromm for defamatory postings on various internet websites. Fromm took the position that the comments were “fair comment” on matters of public interest. The court upheld the finding that the postings were defamatory.

Calgary – 09:30 MST

On Friday, the federal government introduced long-overdue draft anti-spam legislation, the Electronic Commerce Protection Act. The law would allow civil lawsuits against spammers, and is designed to target email spam, as well as spam directed to cellphones and mobile devices. The proposed law would be enforced by the Privacy Commissioner, the Competition Bureau, and the CRTC, which raises questions about effective coordination of enforcement across multiple branches of government and quasi-government bodies. The law contemplates fines of up to $1 million for individuals and $10 million for corporate offenders.

Calgary – 20:45 MST

A US appeals court has permitted an attack against Google’s (in)famous AdWords program by allowing a trade-mark infringement lawsuit to proceed.  The lawsuit was brought against Google by Rescuecom Corp., a computer service and support company.  Rescuecom alleged that Google’s AdWords program (its practice of selling the Rescuecom trade-mark to other advertisers, thereby triggering the appearance of a competitor’s advertisements and links when a Google user launched a search of Rescuecom’s trade-marks) was a violation of trade-mark rights.

On April 3, the US Second Circuit Court of Appeals ruled that Rescuecom’s lawsuit could proceed.  The outcome of this suit will be closely watched.

Related Reading: Trademark Infringement and Google AdWords  

Calgary – 14:00 MST

A few weeks ago, Facebook attempted to revise its Terms of Service – the online contract that governs the relationship with Facebook users.  Revising a contract can be tricky at the best of times, let alone an online contract with 175 million users from around the world. 

When word leaked that someone had actually read the fine print, and the fine print extended Facebook’s rights to user content, there was a groundswell of protest, and a quick retreat by Facebook.  Yesterday the company reverted to its old Terms of Service, and users claimed victory.  However, the fine print, even in the old Terms of Service, still permits Facebook to use your photos, profiles (including name, image, and likeness), messages, notes, text, information etc. “for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof...”  This expires when you remove your content, but millions of users have still granted Facebook extremely broad rights to their personal information and images, so it is interesting that these terms are being considered a triumph. (What was that one about the frog in boiling water?)

Under Canadian and US law, a company must be very careful to ensure that amendments to online contracts are enforceable (see: Online Contract Amendment Not Binding).

Calgary – 10:35 MST

Lawyers are often criticized for arguing over semi-colons and prepositions. Here is one case where the word “of” and “in” were debated up to the Ninth Circuit Court of Appeal.

In the recent decision in Doe 1 v. AOL LLC, 2009 WL 103657 (9th Cir. Jan. 16, 2009), AOL was sued in California in a class-action suit.  AOL tried to deflect the California lawsuit based on the “venue selection clause” in its online member agreement.  That clause stipulated that lawsuits had to be brought in the State of Virginia. However, the court refused to uphold the agreement because Virginia state courts do not permit class action lawsuits.  The phrase in the agreement referred to “the courts of Virginia”, which the court interpreted as meaning state court – the equivalent of our provincial courts. If it had referred to “the courts in Virginia” then the court may have agreed with AOL’s argument that this would include both state and federal courts.  In that situation, the agreement would have been upheld, since federal courts permit class action lawsuits. 

The Canadian case of Desjean v. Intermix Media Inc. [2007] 4 F.C.R. 151 (F.C.), also deals with the issue of jurisdiction.  In that case, a Canadian internet user tried to launch a class-action lawsuit against Intermix Media Inc., a California-based company.  The  complaint alleged that spyware and adware were bundled with free software downloaded from the Intermix site.  Intermix did have an online license agreement and defended by arguing that the Canadian Federal Court lacked jurisdiction over Intermix and that the license agreement chose California law. In other words, Intermix argued that there was no “real and substantial connection” between Canada and Intermix. Specifically, the American company had no offices, employees, servers or bank accounts in Canada, and conducted no marketing or advertising in Canada.  The Federal Court agreed with Intermix and the Federal Court of Appeal upheld this decision. 

One more e-commerce case: in Mehmet v. Paypal, Inc., 2008 WL 3495541 (N.D. Cal. Aug. 12, 2008). the court upheld the consequential damages waiver in PayPal’s user agreement. 

The business lessons:

• ensure your online agreements are enforceable; 
• in Canada, laws in Ontario and Quebec deal with online agreements and the right to institute class-action proceedings, so special care should be taken where online customers are located in those jurisdictions;
• the venue selection clauses in online agreements may have to be reviewed in light of the AOL decision;
• even for free downloads, an online license should be put in place to address jurisdiction issues.

Calgary – 11:15 MST

Can an exchange of email form a contract? To create an enforceable contract, the parties have to intend to be bound by their agreement at the moment the contract is formed. This can happen in different ways, including via email.  In the recent decision in  Basis Technology Corporation v. Amazon.com, Inc. 71 Mass. App. Ct. 29, the court ruled that email communications between the parties’ lawyers constituted a sufficiently complete and unambiguous agreement, and that both parties intended to be bound by that communication of terms.

The court will not look at whether the parties think they have agreed, but what an “objective reasonable bystander would conclude based on all of the material facts.”  If that objective analysis shows that the parties intended to form a contract and the essential terms of that contract can be determined with a reasonable degree of certainty, then the contract will be enforceable.

In Leoppky v. Meston, 2008 ABQB 45 (CanLII), a recent Alberta case, the court concluded that there was an agreement between the parties, formed by a string of emails.

In another interesting twist to this concept, many companies (including internet service providers) reserve the right to amend their “terms of service” by sending the amended terms to customers via email. Last month, AT&T in the U.S. sent out an email notice to its customers, advising of amendments to the standard terms of service.  However, for some customers, AT&T’s own filter identified the email as spam and diverted it into the junk folder.  Depending on the terms, the company might have trouble enforceing the change if challenged in court.

Related Reading: E-Commerce Update

Calgary – 11:45 MST

 

When are domain names so descriptive or generic that they can’t function as a trade-mark? 

A Montreal lawyer registered and used the domain name canadavisa.com for immigration law services.  He then challenged the owner of canadavisa.ca claiming that the use of the dot-ca domain name for similar services would constitute bad faith contrary to the dispute resolution policy.  In a recent arbitration decision Cohen v. 3824152 Canada Inc. the panel decided that CANADA VISA cannot function as a trade-mark for services related to obtaining visas for Canada, since under trade-mark law both CANADA and VISA would have to be disclaimed as being purely descriptive of the services.  Since the domain name could not function as a “mark” under the rules, the complaint failed. 

Compare this with the recent complaint by a Toronto realtor who used yourcommunityrealty.com.  The realtor complained about the registration of yourcommunityrealty.ca, which was directed to a page featuring ads for competing realtors.  Is YOUR COMMUNITY REALTY generic for real estate services?   In the decision Risi v. Fattahi, the panel relied on the complainant’s Canadian trade-mark registrations for YOUR COMMUNITY REALTY.  Because she had chosen a slightly more distinctive mark, and had taken the step of registering trade-mark rights several years before, the complainant avoided the problem of proving distinctiveness or acquisition of secondary meaning (the problem which foiled the complaint in the Canada Visa case).  The complaint was successful.

In the recent Trade-mark Opposition Board decision in London Drugs v. Total Care Pharmacy (April 28, 2008), the board refused to permit the registration of the proposed mark CROSSBORDERPHARMACY.COM for an online pharmacy because the mark was clearly descriptive.   

There are several lessons for business:

1. A domain name does not need to be distinctive to be successful as a website address (canadavisa.com reportedly enjoyed popularity as a site), but without a distinctive element, the domain name cannot function as a trade-mark and this will always limit enforcement options in the case of infringement or domain name disputes;
2. Trade-mark registration can be a very useful tool – in the Community Realty case, the complainant could likely have pursued a trade-mark infringement case, but the domain name arbitration was cheaper and quicker, and the trade-mark registration proved critical for success in that venue;
3. Defensive domain name registrations are also good practice: if the owner of canadavisa.com had registered the dot-ca and other variations as a defensive measure, then the lack of distinctiveness would be irrelevant.

Related post: Update: Generic Trade-marks 

Calgary – 11:00 MST

We have previously commented on the series of defamation lawsuits  commenced by Wayne Crookes.  These lawsuits are resulting in court judgements which have established some guidance in this emerging area.  The latest decision, Crookes v. Wikimedia Foundation Inc., 2008 BCSC 1424 has established that linking to defamatory content does not, in itself, amount to publication of that content.  In other words, the publisher of an article which links to the defamatory content, without reproducing it, is not liable for the defamation. The court stated that “the mere creation of a hyperlink in a website does not lead to a presumption that persons read the contents of the website and used the hyperlink to access the defamatory words.”  And the court went on to say that “reference to an article containing defamatory content without repetition of the comment itself should not be found to be a republication of such defamatory content”.

The court’s analysis refers to evidence of whether anyone linked to and read the defamatory content, leaving open the question of whether different facts would have resulted in a different conclusion.  Liability may arise where there is ample evidence that numerous readers used the link to access the defamatory content, or in a situation where the linked content is used to refer directly to the defamed person.  The court speculated that if an article states “the truth about [the defamed person] is found here” and “here” is hyperlinked to the specific defamatory words, then the publisher of the article may be liable.

There was also a recent defamation decision in Ontario, giving rise to $50,000 in damages for online defamation.

A third decision, in Manson v. Moffat, [2008] O.J. No. 1697, resulted in a damage award of $20,000 for internet libel, and an injunction was issued against the U.S. defendant.  The case arose from false statements posted online relating to the plaintiff’s patent.

Calgary – 10:00 MST

With the announcement yesterday that Parliament is dissolved, and Canada is heading into a Federal election set for October 14th, the government’s copyright reform bill (Bill C-61) dies on the order paper.  Canadians will have to wait until the dust settles after the election to see what will happen to the copyright debate.  In the meantime, the copyright battles continue, and the latest salvo comes courtesy of isoHunt, a torrent site which has announced a pre-emptive lawsuit against the CRIA , seeking a declaratory judgement that isoHunt’s activities do not infringe copyright.

 

Calgary – 11:30 MST

 

In the current copyright battle between Viacom and Google, the users (including you, if you’ve ever watched a YouTube video) are caught in the cross-fire. 

Viacom and other broadcasters launched a lawsuit against Google last year, alleging $1-billion in damages. The lawsuit claims that thousands of clips of Viacom television programming are available on Google’s YouTube. In the latest salvo, Viacom won a federal court ruling in the US, in which Google was ordered to deliver up its database of records associated with every YouTube clip that users have viewed.  Whenever a YouTube clip is viewed, YouTube’s database apparently collects information about those who viewed it: including log-in names (for users with YouTube accounts), and IP addresses (for viewers without accounts).

Predictably, there was an outcry; even Ontario’s Privacy Commissioner weighed in with an open letter to Google citing the privacy risks for Canadian users. Ultimately, the parties were able to come to an agreement to anonymize certain data elements to make it more difficult to identify individual users.

Two points are worth raising:

• In today’s borderless culture, the jurisdiction of US courts over Canadian personal information is not an academic question. It’s an unavoidable reality – Canadians leave their personal digital fingerprints all over the US whenever they use the internet;
• Secondly, someone should be asking… why is YouTube collecting all this data in the first place? 

Calgary – 13:45 MST

A few notes from the internet and domain name world:

• CIRA’s revised WHOIS policy has been criticized by Michael Geist  and others for its “backdoor access for special interests”.  I have to disagree with Prof. Geist on this one.  The ability of trade-mark owners to be able to defend against cybersquatters and trade-mark infringement is a business reality, no different from the ability of someone to see a business license at a store, or to conduct corporate records searches to see who owns a company.  The criticism of the new WHOIS policy is misplaced. The policy strikes a balanced approach between the interests of registrants and brand owners (who are made up of both small local businesses and multinational corporations);
• I don’t often put in a plug for summer sales, but reliable Canadian Registrar webnames.ca is offering new domain name registrations for 50% off , until August 31, 2008.  The promotion applies to all domain extensions: .CA, .COM, .ORG, .MOBI, .NET, .INFO, .BIZ, .US, .CN and .ASIA.  This provides an opportunity for trade-mark owners to buy up variations of their core marks, to fence in their online brand and pre-empt cybersquatting disputes;
• Lastly, the new dot-tel top-level domain is due to be launched at the end of this year, with the Sunrise Period commencing December 3, 2008.  Full particulars of the new domain and the launch schedule can be found here.

 

Calgary – 12:30 MST

 

The U.S. Customs and Border Protection Office recently announced that the value of counterfeit and pirated products seized at the border had increased in 2008, up to $113.2 million. Of course, that’s just the stuff they seized, and countless other counterfeits and knock-offs are flowing in.

In Canada, the recent case of Louis Vuitton Malletier SA v. 486353 B.C. Ltd. 2008 BCSC 799, illustrates how one brand owner tackled the problem. Louis Vuitton’s investigations showed that counterfeit Louis Vuitton handbags were being sold at various retails locations throughout suburban Vancouver, all operated by one proprietor. The lawyers pounced, seized the counterfeit evidence, but avoided litigation by entering into a settlement agreement with the proprietors in 2006. This included a slap-on-the-wrist payment of $6,000 to Louis Vuitton. After monitoring the stores throughout 2007, it became apparent that the settlement agreement had been breached, and Louis Vuitton brought a second lawsuit, this time pushing it through trial to arrive at a significant damage award of close to $1 million, when all the trade-mark and copyright damages were added up. The court also made it clear that the directors would not avoid personal liability:

“A corporation cannot be used to shield an officer or director or a principal employee, when that individual’s actions amount to a deliberate, willful and knowing pursuit of a course of conduct which was likely to constitute infringement or at least where those actions reflect an indifference to the risk of an infringement.”

The battle against counterfeits has spilled over into eBay where various luxury-goods brand owners such as Tiffany have complained that eBay had become a clearing house for counterfeits. A US judge recently decided that eBay was not liable for the providing the means of selling counterfeit goods, and the key to eBay’s win was its set of policies and procedures to respond to complaints of trade-mark infringement.

The take-home message is that brand owners must police their own brands both online and offline. Online venues such as eBay cannot be pressed into service as trademark watchdogs – though they must be prepared to react if notified of an infringement. Just as brand owners must be prepared to investigate and act decisively in maintaining their brand’s integrity.
Calgary – 22:00 MST

What happens when a resident of B.C. posts defamatory comments on a usenet group about a resident of Australia?

In this case, two men were engaged in a protracted and ugly name-calling session in the usenet group “alt.suicide.holiday”, described as a discussion forum for persons who were feeling depressed and suicidal. In Griffin v. Sullivan, 2008 BCSC 827, a BC court has reviewed the issues around online defamation and breach of privacy.  The decision resulted in an award of damages for defamation of $150,000 and an award of $25,000 in damages for breach of privacy as well as a permanent injunction against the B.C. man.

The claim for breach of privacy arose when the B.C. man published the name and address of the plaintiff Australian man.  Names and addresses are often considered public information; however, the court found that the disclosure constituted breach of privacy (under the very seldom-used B.C. Privacy Act) since the Australian man had previously maintained his anonymity in the usenet group, and group members often shared sensitive information about themselves.

The other interesting element of the decision is that the court did not review the fundamental question of whether anyone in B.C. (or anywhere else in Canada) actually read the defamatory postings.   In Crookes v. Yahoo, 2008 BCCA 165, the Court of Appeal made it clear that merely alleging that something has been posted on the internet is not, on its own, sufficient to show that publication can be presumed, as we reported earlier.

Names can never hurt you… but they can result in significant damage awards.

Calgary – 14:30 MST

The Quebec Torrent case (past stories here and here ) appears to have ended with the recording industry claiming victory.  Last week a Quebec court issued a permanent injunction against the operators of the P2P site, effectively shutting down the site and turning off the exchange of music files, television shows and other content.  The order prevents the site’s operators from using “any technology allowing the download of any work protected by copyright.” 

A victory? That part is questionable. This order was not a result of a full trial that would have canvassed the issues in court.  The defendant essentially capitulated at the eleventh hour, consenting to the order in exchange for an agreement by the recording industry to drop a $200,000 damages claim.  And remember the P2P site managed to defeat the recording industry’s application for a preliminary injunction earlier in the case.  So this order is by no means a definitive ruling by the court.

Canada is still waiting for its first direct decision on peer-to-peer file sharing.  Meanwhile, the recording industry is expected to use this order as a way of trying to shut down other P2P sites.  If you operate such a site, you can expect a letter containing a copy of the order in the near future if you haven’t received one already.

Calgary – 10:35 MST