In our earlier post we reviewed a recent US lawsuit against (the now-famous) Jammie Thomas involving filesharing and copyright infringement allegations south of the border.  That fight is continuing and lawyers at the Electronic Frontier Foundation have decided to assist on the appeal.    

In Canada, the filesharing site Demonoid closed its doors last month after cease-and-desist letters from the Canadian Recording Industry Association.  Their site now contains the simple greeting: “The CRIA threatened the company renting the servers to us, and because of this it is not possible to keep the site online.”  CRIA succeeded in shutting the site down, but filesharing sites are like prairie dogs – the moment one pops down a hole, another is emerging somewhere else. 

It appears that the real fight is brewing in Quebec over the filesharing site QuebecTorrent.  Last month, 31 members of the recording industry (including Sony BMG Music Canada, Universal Music Canada and EMI Group Canada) launched a lawsuit against the site, seeking a preliminary injunction to shut it down.  QuebecTorrent managed to defeat that application and keep its doors open for the time being. This case may represent the first opportunity in Canada to test — or make — the law in this area, so both sides are preparing for the fight.  At the moment, filesharing is not specifically legal in Canada although no court has had an opportunity to review the specifics of a filesharing case.

This is one to watch.

 

Calgary – 11:22 MST

There have been a string of cases in Canada dealing with defamation in the internet context, providing useful guidance in this area.  It seems that old fashioned defamation in hard-copy newspapers will remain a quaint memory from the last century.  The last case we covered was from British Columbia – the latest decision comes out of Ontario.

In Warman v. Fromm and Canadian Association for Free Expression Inc., (Ontario Superior Court of Justice – Case No. 04-CV-26550SR), the court reviewed a string of defamatory postings and rejected the defence of fair comment.  The court awarded general and aggravated damages totaling $30,000, and ordered the defendants to post full retractions within 10 days.

Calgary – 10:35 MST

The question is whether the trade-mark PERFUMEBAY is confusingly similar to EBAY for online sales of perfume. Yesterday after a lengthy battle, the court came down in eBay’s favour.

eBay Inc. secured broad protection for its famous EBAY mark in the decision released on Monday in Perfumebay.com Inc. v. eBay Inc., (Ninth Circuit Court of Appeals No. CV-04-01358-WDK, November 5, 2007). The decision upholds a permanent injunction against Perfumebay, stopping it from using the marks PERFUMEBAY (and variations such as perfumebay, perfume-bay or PerfumeBay). The injuction did not extend to “non-conjoined variants” (don’t you love lawyers?); in other words, eBay couldn’t prevent the use of “Perfume Bay” as two separate words. This is a minor and largely meaningless concession considering that Perfumebay’s business is all online and “non-conjoined variants” can’t function as domain names. This leaves Perfumebay without an internet storefront.

The Court reiterated the factors to be considered in determining trade-mark confusion in the internet context:

1. the similarity of the marks,
2. the relatedness of the goods and services, and
3. the parties’ simultaneous use of the Web as a marketing channel.

A mark can only enjoy protection within its field of use. Significantly, the Court defined eBay’s field of use as “the sale of products on an internet-based marketplace”. This appears to extend eBay’s trade-mark monopoly to include any mark that contains the suffix “bay” and involves online sales of any kind.
Calgary – 09:22 MST

Rather than becoming a mature, stable industry, the domain name world is still a shifting target. The release of new top-level domains provides fertile ground for domainers and cybersquatters. Trade-mark owners and their lawyers scramble to keep up with the steady stream of developments. If the WIPO dispute resolution statistics are any measure, we’re heading into another period of intense activity, not seen since the days of the 2000 dot-com boom. In 2000 WIPO handled a record 1,857 domain name cases; that record looks like it will be surpassed this year.

On the Canadian front, CIRA is working on its revised WHOIS Privacy Policy, with implementation scheduled for March 2008.

Internationally, the following is the current list of generic top-level domains and their sponsors:

• The .aero domain is reserved for members of the air-transport industry and is sponsored by Société Internationale de Télécommunications Aéronautiques (SITA).
• The .asia domain is restricted to the Pan-Asia and Asia Pacific community and is operated by DotAsia Organisation.
• The .biz domain is restricted to businesses and is operated by NeuLevel, Inc.
• The .cat domain is reserved for the Catalan linguistic and cultural community and is sponsored by Fundació puntCat
• The .com domain is operated by VeriSign Global Registry Services.
• The .coop domain is reserved for cooperative associations and is sponsored by Dot Cooperation LLC.
• The .info domain is operated by Afilias Limited.
• The .jobs domain is reserved for human resource managers and is sponsored by Employ Media LLC.
• The .mobi domain is reserved for consumers and providers of mobile products and services and is sponsored by mTLD Top Level Domain, Ltd.
• The .museum domain is reserved for museums and is sponsored by the Museum Domain Management Association.
• The .name domain is reserved for individuals and is operated by Global Name Registry.
• The .net domain is operated by VeriSign Global Registry Services.
• The .org domain is operated by Public Interest Registry. It is intended to serve the noncommercial community, but all are eligible to register within .org.
• The .pro domain is restricted to credentialed professionals and related entities and is operated by RegistryPro.
• The .tel domain is reserved for businesses and individuals to publish their contact data and is sponsored by Telnic Ltd.
• The .travel domain is reserved for entities whose primary area of activity is in the travel industry and is sponsored by Tralliance Corporation.

The following are reserved for US government uses or international organizations:

• The .gov domain is reserved exclusively for the United States Government. It is operated by the US General Services Administration.
• The .edu domain is reserved for postsecondary institutions accredited by an agency on the U.S. Department of Education’s list of Nationally Recognized Accrediting Agencies and is registered only through Educause.
• The .mil domain is reserved exclusively for the United States Military. It is operated by the US DoD Network Information Center.
• The .int domain is used only for registering organizations established by international treaties between governments. It is operated by the IANA .int Domain Registry.

Calgary – 10:35 MST

Imagine an outraged citizen who sues the government for confiscating his property. Well that’s essentially what Marc Bragg was doing when he launched his lawsuit against Linden Research, the makers of Second Life for seizing his virtual property within Second Life.  In the US case of Marc Bragg vs Linden Research, Inc., No. 06-4925 (ED Pa. May 30, 2007), the court analyzed the Second Life Terms of Service (TOS), which is the online contract governing the relationship between Linden Research and its customers. Linden tried to use the TOS to force Bragg into binding arbitration in San Francisco. The court decided that the mandatory arbitration provision in the TOS were unenforceable against Bragg for the following reasons:

“Taken together, the lack of mutuality, the costs of arbitration, the forum selection clause, and the confidentiality provision that Linden unilaterally imposes through the TOS demonstrate that the arbitration clause is not designed to provide Second Life participants an effective means of resolving disputes with Linden. Rather, it is a one-sided means which tilts unfairly, in almost all situations, in Linden’s favor.”

Ironically, the success of Second Life counted against it: one of the factors that the court pointed to was the lack of any “reasonably available market alternatives” to Second Life, and particularly Linden’s unique policy of permitting customers to retain intellectual property rights in their virtual creations and other virtual assets.

Linden lost this round, but responded by amending their TOS to provide for a clearer, more flexible arbitration process which defused many of the court’s objections.  This should bolster the enforceability of the TOS in future disputes.  

Another lawsuit was filed last week in Federal Court in New York, claiming damages for copyright infringement, trade-mark infringement and passing off – all of which is alleged to be taking place within Second Life. 

For further information in this interesting area, see the following additional resources:

Blog: Our earlier post

Article: Eight questions to ask before doing business in a virtual world

Paper: Intellectual Property Rights In Virtual Environments: Considering The Rights Of Owners, Programmers And Virtual Avatars

 

Calgary – 10:35 MST

Canadians doing business in Asia with registered marks there should not forget about the dot-asia sunrise period. In our earlier post  we refered to the general scope of the roll-out of the dot-asia domain.  The Sunrise 2a period is only open for few more days.  Generally, Sunrise Phase 2 is designed for holders of registered trademarks and/or service marks. Sunrise 2 divided into 3 sub-phases: Sunrise 2a (or “Early Bird Sunrise”), Sunrise 2b (or “General Registered Marks Sunrise”) and Sunrise 2c (for Extended Protection). Sunrise 3 allows registered “juristic entities” based in the DotAsia Community to apply for domain names corresponding to their registered name. Check the guidelines to see whether your organization fits into the definition of “juristic entity” based in Asia for these purposes. The relevant dates are:

· Sunrise 2a: from October 9, 2007 to October 30, 2007

· Sunrise 2b: from November 13, 2007 to January 15, 2008

· Sunrise 2c: from November 13, 2007 to January 15, 2008

· Sunrise 3: from November 13, 2007 to January 15, 2008

International trade-mark owners are queueing up, including Amazon, AOL, Sony Ericsson, Deutsche Telekom, the International Olympic Committee, Yahoo! and others.

More resources:

Detailed Sunrise Guidelines & FAQ (by Deloitte) 

Dot Asia Organization 

 

Calgary – 10:00 MST

In September in the case of National Federation of the Blind v. Target Corp. (N.D. Cal. Sept. 28, 2007), a federal district court in California certified a class action lawsuit on behalf of blind internet users against Target.com, the website of the Target chain of retail stores. The court also ruled that websites such as Target.com qualify as a kind of business establishment, advantage or facility for the purposes of the ADA — something that had previously been reserved for physical places such as bricks-and-mortar stores. The plaintiff is trying to force Target to comply with the World Wide Web Consortium‘s Web Content Accessibility Guidelines or one of the other standards which permit site-reading software to decode the visual content of websites for blind users.

Is this a development that Canadian website operators need to be concerned about? If a Canadian company operates an e-commerce website with significant US sales, it is certainly an issue to review and monitor as this class action proceeds. We’ll have to wait for the ultimate outcome. At this stage, the law in this area is still unclear, particularly as it might impact pure e-commerce companies, who have no bricks-and-mortar presence, and whether Canadian website operators may be caught up to the extent they are engaged in sales to US consumers.  There is no corresponding Canadian case-law in this area.
Calgary – 10:35 MST

The US recording industry finally had its day in court.  After suing thousands of individuals for copyright infringement (most settled out of court), one of the cases finally made its way through trial and resulted in a damage award of $220,000 against Jammie Thomas, a now famous Minnesota woman.  An award of $220,000 for filesharing 24 songs works out to about $9,000 a song.  The verdict on October 4th has generated headlines around the world.  Thomas has indicated she will appeal.

The recording industry wanted to send a message and it definitely achieved that goal. However, it’s a pyrrhic victory: the industry’s legal fees far outstrip any amount recovered; the industry comes away looking like an unreasonable bully; and filesharing continues unabated. 

In Canada, the recording industry has not had the same “success” in court. The first attempt in BMG Canada Inc. v. John Doe (F.C.A.), 2005 FCA 193, [2005] 4 F.C.R. 81 hit a brick wall when the record company failed to obtain the identities of the particular customers alleged to have infringed copyright. 

Even worse for the recording industry, the judge in the BMG case actually said “downloading a song for personal use does not amount to infringement” which has been widely interpreted as judicial blessing for filesharing.  Never mind that this line was challenged by the Federal Court of Appeal ; in some ways the judicial cat is already out of the bag.

Lastly, the Canadian copyright levy on digital media has generated millions for the recording industry, arguably providing a de-facto license for personal copying when using “audio recording medium” as defined by the Copyright Board. 

It will be interesting to see whether this will be a high water mark for the legal adventures of the recording industry, or whether this judgement will simply encourage more enforcement suits.

 

Calgary – 13:30 MST 

 

If you earn your living on eBay, then the tax collector is interested in you.  In another case which raises privacy questions in the world of e-commerce, the Canada Revenue Agency sought and won a Federal Court order forcing eBay to disclose the names, addresses, phone numbers and e-mail addresses of all its high-volume sellers, even though that data resides in servers located in the US.  eBay initially resisted the request on the basis that eBay Canada did not “own” or “possess” any such information in Canada.  The court decided that eBay Canada has access to the information and this was enough to permit the order for disclosure. 

Calgary – 11:50 MST

 

There is something fascinating and unsettling about Street View, a relatively new offering from Google with help from Calgary-based Immersive Media. If you enjoyed finding your own house on Google Earth, then wait until you see yourself strolling down a side-walk on Street View. At the moment, the service is offered for New York, San Francisco and a handful of other US cities. But it doesn’t take long to see the potential for this to be rolled-out in cities around the world.  Reportedly, Vancouver, Calgary, Toronto, Ottawa, Montreal and Quebec City have already been “imaged”.

In anticipation of this coming soon to a street corner in Canada, the Canadian Privacy Commissioner has raised a few questions about the privacy implications of recognizing individuals on the street – in other words, collecting personal information without consent and then selling it.

The law regarding surveillance video will be helpful in the analysis, but this is a new twist on an old problem.  Once again, technology, intellectual property and privacy rights have intersected to stir-up some interesting issues and the law will have to catch-up and sort out the implications. 

Calgary – 10:30 MST

In our earlier post, we highlighted a defamation lawsuit brought against Google, Wikipedia, Yahoo, MySpace and others by a B.C. man who alleged he was defamed by certain online postings.  Multiple lawsuits have been filed. This week in Crookes v. Yahoo, 2007 BCSC 1325, a B.C. court dismissed the case against Yahoo, a California-based company.

The court disposed of the claim by reasoning that there was no evidence that the alleged defamatory material was accessed by someone in B.C.  “Publication is an essential element for an action in defamation,” said the judge. “In this case … [t]here is no evidence anyone read the material in British Columbia.”

As a result, the court did not even consider the other issues about whether California law applied under the terms applicable to the online services, nor about the wider issues relating to liability for online content.

 

Calgary – 13:35 MST

In the US case of Asch Webhosting, Inc. v. Adelphia Business Solutions Inv., LLC, No. 04-2593, 2007 WL 2122044 (D.N.J. July 23, 2007)  (Link to Evan Brown’s Post) the court upheld a limitation of liability clause in a dispute between an internet services provider (ISP) and its customer. 

After the customer was accused of spamming, in violation of the ISP’s acceptable use policy, the ISP decided to terminate service, giving the customer 30 days to find a new provider.  At the end of the 30 days, the ISP cut-off service as threatened, prompting the customer to sue for $1.4 million in consequential damages. 

The court upheld a limitation of liability clause in the service contract, which capped the ISP’s liability at the amount paid by the customer for the services.  The court reviewed several factors in coming to its conclusion:

• This was a business-to-business contract, with equal bargaining power between the parties;
• The customer was given ample warning of the impending cut-off;
• The clause was clear and unambiguous;
• The ISP relied on spamming complaints in good faith and there was no evidence that the ISP’s actions were malicious or in bad faith.

So you mean the fine print is there for a reason after all?? 

 

Calgary – 11:25 MST

Online sales in Canada grew by 40% to $49.9 billion last year.  In the retail sector alone, more than 15% of retailers in Canada made online sales in 2006, up from only 10% the previous year.  A pair of new Supreme Court of Canada decisions has clarified e-commerce law in Canada by upholding mandatory arbitration clauses and class-action waivers. 

1.    Dell:  For a few days in 2003, Dell’s website contained a pricing error where certain handhelds were incorrectly offered at fire-sale prices. Although Dell moved quickly to correct the errors, a number of consumers managed to place online orders at the incorrect prices.  Dell refused to honour those orders.  In response, the consumers tried to institute a class action lawsuit against Dell.  Dell insisted that the matter had to go to arbitration under the terms of the online contract.  Enter the lawyers.

In the resulting case of  Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, the Supreme Court of Canada upheld Dell’s online contract and the case was referred back to arbitration.  Although Dell’s online contract did not appear on the sales page (it was merely referred to via a hyperlink) the Court decided that this was not fatal to the enforceability of the contract.

2.    Rogers:  The case of Rogers Wireless Inc. v. Muroff, 2007 SCC 35 involved a dispute about wireless roaming charges.  In that case, the Court applied the same principles as in Dell and upheld a mandatory arbitration clause in the Rogers service contract. 

As we noted in our earlier post mandatory arbitration clauses and class-action waivers are now ineffective in Ontario and Quebec under consumer protection legislation. 

 

Calgary – 10:45 MST

After Talk America bought AOL’s long distance telephony business, it amended several terms in the service contract, adding an arbitration clause, a class-action waiver and a New York choice-of-laws clause.  Talk America implemented these amendments by posting them to its website.

When a customer tried to sue Talk America, lawyers attempted to deflect the lawsuit, invoking the mandatory arbitration clause and citing the class-action waiver.  However, in this case the customer had originally signed on with AOL, prior to the amendments made by Talk America. 

In Douglas v. U.S. District Court for the Central District of California, No. 06-75424 (9th Cir. July 18, 2007) the Court of Appeals put these amendments to the test.  Generally the court decided that the online postings were not binding on the customer, noting “Parties have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side.” 

In Canada, this issue was considered by the Ontario Superior Court in its 2002 decision in Kanitz v. Rogers Cable Inc. (2002), 58 O.R. (3d) 299.  In Kanitz, Rogers posted the amendments on its customer support webpage and the court decided that Rogers had provided its customers with sufficient notice of the amendments.  Mandatory arbitration provisions and class-action waivers (such as the ones at issue in Kanitz) are now ineffective in Ontario under consumer protection legislation that was introduced in July, 2005 in response to the Kanitz decision.

How does a company amend its service contracts? Very carefully.

Online postings of contract amendments are more likely to be effective when the original contract permits such changes, the customer is provided with sufficient notice of the changes, and the notice provides a clear explanation of the changes.  The changes must comply with local consumer protection legislation.

 

Calgary – 12:30 MST

Law Professor Eric Goldman has picked up on an interesting twist in an otherwise commonplace trade-mark infringement case that went to the US Seventh Circuit Court of Appeals (Central Manufacturing, Inc. v. Brett, 2007 WL 1965673 (7th Cir. July 9, 2007). 

The case involved famous baseball player George Brett and it’s clear that the judge was a serious baseball fan. On page 3 of the decision, Judge Evans recounts a scene from a 1983 Yankees game and indicates that:

“The whole colorful episode is preserved, in all its glory, on YouTube, at http://www.youtube.com/watch?v=4Cu1WXylkto (last visited June 6, 2007).”

If you link there now, you’ll find the standard warning that “This video is no longer available due to a copyright claim by MLB Advanced Media.“  It was taken down after a complaint by the copyright owner.  In other words, the Court of Appeals has encouraged readers to access infringing content, something warned about in the Perfect 10 case.  Applying the analysis regarding contributory infringement, did the Court know of infringing activities and fail to take “reasonable and feasible steps” to refrain from providing access to infringing content? If so, they might be liable for contributory infringement!

This case shows a couple of things:

• Judges and courts are becoming more technologically savvy (imagine a link to a YouTube video in a judgement from 5 years ago);
• Even the most well-meaning links can raise questions about infringement.  Infringing links can usually be taken down if challenged, although this link is now immortalized in a Court of Appeals decision.

 

Calgary – 11:10 MST

The dot-asia top-level domain (for example: www.yourcompany.asia) is the Asian cousin of the dot-eu domain which was launched for Europe in 2006. The new dot-asia domain will be introduced in phases, starting in October 2007. 

According to the preliminary information provided by the registrar, anyone can be a registrant for dot-asia domains.  In order to satisfy the eligibility requirements, one of the associated contacts for the applied domain must be a “legal entity in Asia” which means either a natural person or an organization such as a corporation within the Asia-Pacific region as defined by ICANN.

Trade-mark owners whose trade-marks were applied for in the designated Asia-Pacific region prior to March 16, 2004 will be eligible for advanced registration during the dot-asia sunrise period . Canadian companies with trade-marks in Asia should review their eligibility and consider submitting their applications to take advantage of the sunrise period.  This kind of preventive measure can save significant costs when compared with chasing cybersquatters after the general registration opens.

 

Calgary – 14:35 MST

In previous posts we have reviewed the enforceability of click-through agreements.  The US Tenth Circuit Court of Appeals has recently upheld eBay’s user agreement.  In Nazaruk v. eBay, Inc., 2007 WL 1417287 (10th Cir. May 15, 2007), a lawsuit was brought in Utah, arising out of eBay’s feedback forum.  eBay sought to dismiss the lawsuit, asserting that eBay’s user agreement mandated California as the proper venue. eBay won at the trial level.  The court agreed with eBay that “eBay’s User Agreement, the operative document governing the relationship between Ms. Nazaruk and eBay, contained a forum-selection clause (Santa Clara County, California) that was both enforceable and mandatory.”

The appeal court upheld the enforceability of the user agreement and dismissed the suit. 

 

Calgary – 10:23 MST

On April 10th, we posted an article about Online Defamation.  This week, a very interesting new online defamation lawsuit  was launched in Canada catching two high-profile defendants: Blogspot.com, Google’s free blog-hosting site, and Wikipedia, the online encyclopedia. 

The suit was filed by Wayne Crookes who alleges that he suffered defamation at the hands of anonymous posts to those sites.  The question will be whether the operators of the sites can be held liable for defamatory postings.  As we noted in our earlier post, online content-providers such as Google and Wikipedia cannot take advantage of the traditional protections provided to newspaper publishers or broadcasters.  The law in Canada could use some further clarity in this area, and this case may provide it.

 

Calgary – 09:50 MST   

When I wrote an article about online defamation in 2005, MySpace and YouTube were still relatively unknown.  The prospect of a highschool principal suing former students for defamation would have been remote.  Now, it’s a reality. 

In Canada, the issue of internet defamation came back into the spotlight when Sharman Networks CEO Nikki Hemming filed a libel lawsuit against p2pnet last year.  The suit will be interesting to watch as it may clarify when ISPs and hosts of online discussion forums will be liable for publication of defamatory content. 

In the 2003 case of Bahlieda v. Santa, the Ontario Court of Appeal dealt with a complaint of online defamation.  The lower court initially decided that the online material qualified as a ‘broadcast’ (similar to a television or radio broadcast) for the purposes of the provincial Libel & Slander Act.  Under that law a defendant can deflect a complaint if it is not brought within six weeks.  On appeal, the court overturned this decision, allowing the complaint to proceed.

In Weiss v. Sawyer, a defamatory letter was published in both the hard-copy paper and online version of a newspaper.  Both the paper and the online versions were treated as ‘newspapers’ for the purpose of the provincial libel and slander law, and the time limits applied. The complaints were dismissed because they were brought outside those strict time limits. However, an email transmission of the same material was not considered a ‘newspaper’ or ‘broadcast’ under the legislation. The complaint in connection with the email was allowed to proceed.

ISPs and online content-providers probably can’t take advantage of the protections afforded to newspaper publishers or broadcasters unless the material appears in an online version of a traditional newspaper or broadcast.

 

Calgary – 11:45 MST

In the wake of Dawn’s Place vs. the Queen, a recent (October 2006) decision from the Federal Court of Appeal, website operators who sell digital content to non-residents should be reviewing their system of collecting GST (Goods and Services Tax) on the sales.

The question in Dawn’s Place was whether the Canadian website operator should be collecting GST on subscription fees for access to its website.  Access to the website was previously considered a zero-rated supply for GST purposes.  The term “zero-rated” refers to a specified list of goods and services that are taxable at the rate of 0%. Generally, intellectual and intangible property is covered under the definition as a zero-rated supply and GST is not charged for non-resident customers.

In the decision, the appeal court found that customers had the right to download and retain a copy of copyrighted material accessed on the website.  The appeal court made a distinction between the supply of copyrighted material and the supply of some or all of the bundle of rights that comprise the copyright, and agreed with the government position that the latter was not covered by the definition of a zero-rated supply. 

As a result of this decision, Canadian website operators may be required to charge GST on subscription or access fees charged to non-residents.  Website operators should review their tax collection procedures as well as the terms (including license terms) under which they are supplying intellectual or intangible property to non-resident customers.

 

Calgary – 9:45 MST