By Richard Stobbe

A dispute between suburban neighbours escalated and spilled over into social media when one of the neighbours vented on Facebook. The Facebook posts suggested that the plaintiff was a “nutter” and a “creep” who deployed a system of cameras and mirrors to keep the defendant’s backyard and young children under 24-hour surveillance. There was no evidence of any such system. Once the initial comments were posted, they were widely disseminated among the defendant’s 2,000 Facebook “friends” and potentially viewed by any Facebook users due to the “public” settings on the defendant’s Facebook account.

This in turn prompted other comments from the defendant’s Facebook “friends” such as a “pedo”, “#creeper”, “nutter”, “freak” (and more). After about 27 hours, the posts were deleted from the defendant’s account, but by then the same posts had propagated through other Facebook pages ; the court noted dryly that “The phrase ‘gone viral’ would seem to be an apt description.”

The plaintiff, a middle school teacher, was obviously concerned that the posts, as published, could cause him among other things to lose his job or face disciplinary action at his place of employment.

In Pritchard v. Van Nes, 2016 BCSC 686 (CanLII), the court noted that the social media posts constituted attacks on the plaintiff’s character which “were completely false and unjustified. [The plaintiff] has, as a consequence of the defendant’s thoughtless, reckless actions, suffered serious damage to his reputation, and for the reasons set out herein he is entitled to a substantial award of damages.”

The court awarded general damages for defamation of $50,000 and additional punitive damages of $15,000, plus costs.

(See our Defamation Archive)

Calgary – 07:00 MST

 
By Richard Stobbe

Can a binding contract be formed merely with a link to another set of terms? (For background on this topic, check out our earlier post What, exactly, is a browsewrap? which reviews browsewraps, clickwraps, clickthroughs, terms of use, terms of service and EULAs).

The answer is clearly… it depends. Consider the American case of Holdbrook Pediatric Dental, LLC, v. Pro Computer Service, LLC (PCS), a New Jersey decision which considered the enforceability of a set of terms which were linked from a paper hard-copy version of the contract. In this case, PCS sent a contract to its customer electronically. The customer printed out the paper version and signed it in hard copy. A hyperlink appeared near the signature line, pointing to a separate set of Terms and Conditions in HTML code. Of course on the paper copy these terms cannot be hyperlinked.

PCS asserted that these separate terms were incorporated into the signed paper contract, since they function as a clickable hyperlink in the electronic version.  The court disagreed: “In order for there to be a proper and enforceable incorporation by reference of a separate document . . . the party to be bound by the terms must have had ‘knowledge of and assented to the incorporated terms.’”  Here, there was no independent assent to the additional Terms and Conditions, and the mixed media nature of the contracting process worked against PCS. In addition to the fact that the separate terms were not easily accessible by the customer, the text was not clear. It merely said “Download Terms and Conditions”, without providing reasonable notice to the customer that assent to the main contract included assent to these additional terms. The additional terms were not binding on the customer.

Lessons for business? Get legal advice!

Calgary – 07:00 MST

By Richard Stobbe

The Vancouver Aquarium brought an injunction application to stop the online publication of a critical video entitled “Vancouver Aquarium Uncovered”, which used the Aquarium’s copyright-protected materials in a “derogatory manner”, according to the Aquarium.

In the fascinating case of Vancouver Aquarium Marine Science Centre v. Charbonneau, 2016 BCSC 625 (CanLII), the court weighed the Aquarium’s effort to prevent the unauthorized use of their copyright-protected video clips, against the movie producer’s argument that the exposé is on a topic of public interest and shouldn’t be silenced.

This represents the first judicial review of Section 29.21 of the Copyright Act, first introduced in 2012, which covers “non-commercial user-generated content”. In the injunction application the court skimmed over this issue, preferring to leave it to trial. However, the court made passing comments about the availability of a defence which relies on showing that the copyright-protected content was used “solely for non-commercial purposes”. In this case, there was evidence before the court that the movie had recently been screened in Vancouver where attendees had been charged a $10 entry fee. The court also made reference to an Indiegogo fundraising campaign related to the movie production.

Ultimately, the court restricted publication of 15 images and video clips – about 4 minutes worth of content - which the Aquarium claimed to own. The injunction stopped short of attempting to enjoin publication of the whole video, but rather ordered that the defendants remove the 15 contested segments from the video.

If it proceeds to trial, this will be one to watch.

Calgary – 07:00 MST

By Richard Stobbe

A class action case against Facebook (see our previous posts for more background) is heading to the Supreme Court of Canada.

The BC Court of Appeal in Douez v. Facebook, Inc., 2015 BCCA 279 (CanLII)  had reviewed the question of whether the Facebook terms (which apply California law) should be enforced in Canada or whether they should give way to local B.C. law. The appeal court reversed the trail judge and decided that the Facebook’s forum selection clause should be enforced.

Facebook now joins Google, whose own internet jurisdiction is also going up to the Supreme Court of Canada this year.

These are two cases to watch.

Calgary – 07:00 MT

By Richard Stobbe

This is a story of what “use” really means. In the internet context, a trademark can be displayed on a website by a Canadian company, and that website can be accessed anywhere in the world. Similarly, a foreign company can display its mark on a website which can be accessed by Canadian consumers. Is the foreign company’s mark being “used” in Canada for trademark purposes, merely by being displayed online to Canadian consumers?

If you follow this kind of thing… and who doesn’t?… you would say that this issue was settled in the 2012 case HomeAway.com, Inc. v Hrdlicka, [2012] FCJ No 1665 where Justice Hughes said clearly: “a trade-mark which appears on a computer screen website in Canada, regardless where the information may have originated from or be stored, constitutes for Trade-Marks Act purposes, use and advertising in Canada.”

Not so fast.

In Supershuttle International, Inc. v. Fetherstonhaugh & Co., 2015 FC 1259 (CanLII), the court reviewed  a challenge to the SUPERSHUTTLE trademark, which was registered in connection with “airport passenger ground transportation services”. The SUPERSHUTTLE mark was displayed to Canadian consumers who could reserve airport shuttle transportation in the United States. The mark was registered in Canada and displayed in Canada, but no shuttle services were actually performed in Canada. The court concluded that: “While the observation of a trademark by individuals on computers in Canada may demonstrate use of a mark, the registered services must still be offered in Canada.” (Emphasis added)

Non-Canadian trademark owners should take note: merely displaying a mark in Canada via the internet may not be enough for “use” of that mark in Canada. The services or products which are listed in the registration must be available in Canada. Make sure you get experienced advice regarding registration of marks in Canada.

Calgary – 07:00 MT

By Richard Stobbe

Most of us have had to pass through a CAPTCHA screen in order to log in or use a web-based service. This often involves deciphering and typing in one or two garbled words.  One of the more popular screens is operated by Google and known as reCAPTCHA.

When Google recruits your human brain to decode text in the reCAPTCHA screen, it is doing two things: it is providing a service that protects websites from bots, automated spam and abuse, “while letting real people pass through with ease.”  Second, it is deciphering text that stumps OCR technology, all the while teaching its own robots, through machine learning, to improve their predictive analysis of human text. (We can have a philosophical discussion about how being “tough on bots” is actually teaching the bots to read like humans… but that’s a topic for another day).

Put another way, “Google is ‘crowd sourcing’ the transcription of words that a computer cannot decipher.” In a fascinating decision (GABRIELA ROJAS-LOZANO, v. GOOGLE, INC.),  a California court has dismissed a class action claim that users deserved some compensation for the service they were providing to Google.  To paraphrase, the lawsuit alleged that Google failed to disclose that the second reCAPTCHA word was used for transcription services (from which Google profits) rather than for website security purposes.

However, according to the judge, profit by Google does not translate into a loss for the user who performs this micro-task, which takes each user only a few seconds.  Plaintiff could not cite any case that supports the theory that a non-employee transcribing a single word is owed compensation.  Since this is such a small amount of time, and there was no loss, damages or reliance on the part of the user, and no actionable misrepresentation or unjust enrichment on the part of Google, the court concluded that the class action should be dismissed.

Hat tip to Professor Eric Goldman, who calls this “one of the most interesting Internet law rulings so far in 2016.”

Calgary – 07:00 MT

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By Richard Stobbe

As reviewed in Part 1, since July 1, 2014, Canada’s Anti-Spam Law (or CASL) has been in effect, and the software-related provisions have been in force since January 15, 2015.

In January, 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) executed a search warrant at business locations in Ontario in the course of an ongoing investigation relating to the installation of malicious software (malware) (See: CRTC executes warrant in malicious malware investigation). The allegations also involve alteration of transmission data (such as an email’s address, date, time, origin) contrary to CASL. This represents one of the first enforcement actions under the computer-program provisions of CASL.

The first publicized case came in December, 2015, when the CRTC announced that it took down a “command-and-control server” located in Toronto as part of a coordinated international effort, working together with Federal Bureau of Investigation, Europol, Interpol, and the RCMP. This is perhaps the closest the CRTC gets to international criminal drama. (See: CRTC serves its first-ever warrant under CASL in botnet takedown).

Given the proliferation of malware, two actions in the span of a year cannot be described as aggressive enforcement, but it is very likely that this represents the visible tip of the iceberg of ongoing investigations.

Calgary – 07:00 MT

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By Richard Stobbe

Since July 1, 2014, Canada’s Anti-Spam Law (or CASL) has been in effect, and the software-related rules have been in force since January 15, 2015.

With the benefit of hindsight, we can see a few patterns emerge from the efforts by the enforcement trifecta: the Privacy Commissioner of Canada, the CRTC and the Competition Bureau. (For background, see our earlier posts) What follows is a round-up of some of the most interesting and instructive enforcement actions:

This certainly points to the more technical risks of poorly implemented unsubscribe features, rather than underlying gaps in consent. Perhaps this is because heavy enforcement action related directly to consent is still to come. Implied consent can be relied upon during a three-year transitional period. After that window closes, expect enforcement to focus on failures of consent.

To put this all in perspective, consider enforcement of other laws within the CRTC mandate: in 2014 the CRTC did not issue any notices of violation of CASL, but issued 10 notices of violation related to the Unsolicited Telecommunications Rules and the National Do Not Call List (DNCL); in 2015 the CRTC issued 1 notice of violation of CASL and about 20 related to the Do Not Call List.

Calgary – 07:00 MT

By Richard Stobbe

There has been much speculation about the impact of 3D printing on the enforcement of IP rights. But very few decisions. Now, finally, a case you can sink your teeth into: ClearCorrect v. ITC, 2014-1527 deals squarely with a patent infringement allegation which focuses on 3D-printing technology.

This case relates to the production of orthodontic appliances known as teeth aligners. According to patents owned by Align Technology, their aligners “are configured to be placed successively on the patient’s teeth and to incrementally reposition the teeth from an initial tooth arrangement, through a plurality of intermediate tooth arrangements, and to a final tooth arrangement…” as listed in the ’880 patent. (As soon as you see the word “plurality”, you just know you’re reading a good patent.)

ClearCorrect, a competitor of Align Technology, produced aligners by means of 3D-printed digital models of aligners. ClearCorrect electronically transmitted digital files to its subsidiary ClearCorrect Pakistan (thus skirting the US patent rights) where digital models of the aligners were created and configured. ClearCorrect Pakistan then electronically transmitted these digital models back to ClearCorrect US, where the digital models were 3D-printed into physical models. From there, aligners were manufactured using the physical models.

The patent owner alleged that the transmission of these digital three-dimensional models should be stopped at the border, just like any infringing “article” would be stopped. Typically, an owner of US patent rights can employ the resources of the ITC to stop and seize articles – take for example, a piece of equipment or a consumer product – which infringes a US patent. This prevents the infringing articles from being imported into the US, even if they are manufactured overseas. In this case, the court had to decide if digital three-dimensional files constituted “articles” for these purposes.

In the end, the court considered articles to be “material things” and decided that the 3D-printable digital files were not “articles”. Thus, the ITC lacked jurisdiction to prevent the entry of these files into the US. (Exactly how it could prevent the transmission of the files is another matter entirely.)

Something to chew on while we wait to see if the decision will be appealed.

Calgary – 07:00 MT

By Richard Stobbe

Copyright attempts to balance the rights of authors with the rights of users. It’s this tension – copyrights vs. user rights – that makes copyright so fascinating (…to some people).

In 2012, Parliament enacted some changes to Canadian copyright law, which included a number of so-called “user rights” or exceptions to infringement, some of which were conditional on rules dealing with the circumvention of technological protection measures. I’ll give you an example: under section 29.23, recording a TV program for time shifting on your PVR is not an infringement of copyright as long as you did not circumvent a technological protection measure (or “TPM”). So circumvention of a TPM can take you outside the benefit of the exception, with the result that the recording would constitute an infringement.

No court has had a chance to review the rules around TPMs… until the decision in 1395804 Ontario Limited (Blacklock’s Reporter) v Canadian Vintners Association (CVA), 2015 CanLII 65885 (ON SCSM), an Ontario decision which interprets circumvention of a TPM.

A “technological protection measure” is, according to the Copyright Act any “effective technology, device or component” that controls access to a work and whose use is authorized by the copyright owner. It is deliberately broad. The Blacklock’s case dealt with a subscription-based online newsletter published by Blacklock’s. When their CEO was mentioned in a Blacklock’s article, the CVA bypassed the subscriber paywall to access the article. Did the CVA hack into the system and then scrape and republish the Blacklock’s content? No (although such conduct might have justified the $13,000 in copyright infringement damages that were awarded by the judge). The CVA obtained a copy of the article via email, from a colleague who did have a subscription.

According to this case, circumventing a technological protection measure includes obtaining a copy of an article by email, where the article sits behind a paywall. The good news is that no hacking skills are required!

Since this case will not be appealed, it stands as the leading case, although it has been called controversial, bizarre and an extraordinary misreading of copyright law. Since it is the decision of an Ontario small-claims court, it is not binding on other courts in Canada. And since Blacklock’s is pursuing copyright infringement claims against others – there are 10 claims currently filed in the Federal Court – this issue should be canvassed at the Federal Court where further clarification may emerge. Stay tuned.

Calgary – 07:00 MT

By Richard Stobbe

The Google and Equustek Saga has garnered attention across Canada and even among US commentators (something rare for Canadian decisions). In September, 2015, Google Inc. filed an application for leave to appeal the decision to the Supreme Court of Canada (SCC), and as of January, 2016, the leave application materials have been submitted to the court. With luck, the SCC will take up the case, and we’ll see a decision in late 2016.

If the case does proceed, you can expect the intervenors to line up for a place at the table.

The Electronic Frontier Foundation (EFF), for example, unsuccessfully argued against the “dangerous ruling” at the BC Court of Appeal level, and they can be expected to advance their arguments at the SCC. Their position is that “a worldwide injunction would set a dangerous precedent that could later be used to limit the legal and equitable rights of others to receive speech.” The EFF raised US free speech arguments – okay, so the US Constitution may not be persuasive at the Canadian court, but worth a try. They maintain that “No single country should have veto power over Internet speech.”

Further reading: Is Google “Feeling Lucky” at the Supreme Court?

Stay tuned for more updates – this is one to watch.

Calgary – 07:00 MT

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By Richard Stobbe

This is a case that became something of a lightning rod in the storm of subscriber privacy rights vs. copyright. As we wrote in our earlier post, a copyright owner can only enforce its rights against online infringement if it knows the identity of the infringer. It can seek a court order (called a Norwich order) to disclose the identity of those alleged infringers. Canadian law is clear that “A court order is required in every case as a condition precedent to the release of subscriber information.”

Such an order was used by Voltage Pictures to obtain the names and addresses of some 2,000 subscribers of an ISP known TekSavvy Solutions Inc. TekSavvy sought reimbursement of its costs for complying with the order: TekSavvy claimed recovery of a total of $346,480.68. Voltage offered to pay $884.00. The lower court concluded that Voltage should pay $21,557.50 to cover TekSavvy’s legal costs, administrative costs, and disbursements of abiding with the Order.

TekSavvy appealed that order.

In Voltage Pictures LLC v. John Doe, 2015 FC 1364 (CanLII), the court awarded TekSavvy an additional amount of $11,822.50. A win? Not really, considering how much they claimed, and what it would have cost to run the appeal.

The court also wagged a finger at TekSavvy. Since TekSavvy was only obliged to deliver the subscriber info after payment of its costs, the payment issue resulted in a significant delay in the supply of the subscriber names. The court complained that “…Voltage has not been able to obtain the information that it was lawfully entitled to for more than two years after Prothonotary Aalto’s Order. The failure to provide this information, on all accounts, appears to be due to TekSavvy’s unwarranted and excessive cost claims in the amount now of $350,000…”

It went on to note that “…the background circumstantial results do not sit well with the Court. They confirm that the policy in these types of motions should normally be to facilitate the plaintiff’s legitimate efforts to obtain the information from ISPs on the prima facie illegal activities of its subscribers. In my view, courts should be careful not to allow the ISP’s intervention to unduly interfere in the copyright holder’s efforts to pursue the subscribers, except where a good case is made out to do so. While it may be a practice to require prepayment of the ISP’s costs of the motion, the court must not let this issue delay unnecessarily the execution of the order to the extent possible. Reasonable security for costs may be preferable in some cases.” [Emphasis added]

As with the earlier decision, this case serves as guidance to copyright holders who are seeking the information of anonymous infringers, and to ISPs who must balance the privacy rights of subscribers.

Calgary – 07:00 MT

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By Richard Stobbe

What if a competitor cut and paste the metatags from your website and used them on the competitor’s site? Is there a remedy under Canadian law? Are metatags subject to trademark protection? The answer is… it depends.

Red Label Vacations (redtag.ca) sued its rival 411 Travel Buys for use of metatags, including “Red Tag Vacations” in the 411 Travel Buys website. The Federal Court dismissed the trademark and copyright claims of Red Label Vacations (see: No copyright or trademark protection for metatags). Red Label Vacations appealed.

In Red Label Vacations Inc. v. 411 Travel Buys Limited, 2015 FCA 290, the Federal Court of Appeal dismissed the appeal, and upheld the lower court decision.

The court agreed that 411 Travel Buys had copied the metatags from Red Label’s site, but noted that none of the metatags appeared in the visible portion of the 411 Travel Buys website. Therefore, consumers did not see any of the metatags. In that sense, there was no “use” of the metatags as trademarks for the purposes of determining infringement.

Interestingly, there was one instance where the metatags were visible, and that was in the Google search result, where the words “Book Online with Red Tag Vacations & Pay Less Guaranteed” appeared in connection with the 411 Travel Buys site. The court considered that this would have the effect of sending consumers to Red Label’s site.

The court did leave the door ajar for other metatag trademark infringement cases, noting “in some situations, inserting a registered trade-mark (or a trade-mark that is confusing with a registered trade-mark) in a metatag may constitute advertising of services that would give rise to a claim for infringement…” [Emphasis added]

Calgary – 07:00 MT

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By Richard Stobbe

A U.S. court recently decided that it would take jurisdiction over a seller who sold allegedly infringing products through online retailers such as Amazon.com. PetEdge Inc. a Massachusetts-based manufacturer, owns a patent and certain trademarks for its folding steps to enable pets to climb onto a bed.

Alleging patent and trademark infringement, PetEdge wanted to sue rival Fortress Secure Solutions, based in Washington State, a company with no operations, personnel or offices in Massachusetts.

To justify its lawsuit in Massachusetts district court, PetEdge argued – and the court agreed – that Fortress purposefully directed its sales to Massachusetts residents by making its sales through Amazon.com, and the infringement claims arose from those activities. Thus, the court took jurisdiction over the out-of-state defendant.

Lessons for business?

Canadian retailers should take note that if they use national retailers such as Amazon.com to sell products into the U.S., the use of this distribution channel could result in a local state court taking jurisdiction over the Canadian seller, under the same analysis applied to Fortress.

Thanks to Finnegan LLP for their link to the decision: PetEdge, Inc. v. Fortress Secure Solutions, LLC

Calgary – 07:00 MT

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By Richard Stobbe

Defamatory content on the internet?? Throw a metaphorical rock into the ether and you’ll hit something that meets the definition of defamatory content. In order to establish a claim for defamation, a plaintiff must establish that:
(a) the words are defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a “reasonable person”;
(b) the words refer to the plaintiff; and
(c) the words were published, in the sense that they were communicated to at least one person other than the plaintiff.

In Canada, this is the same basic test whether the medium is an old-school print newspaper, a neighbourhood newsletter, a personal blog, or an online comments section. While defamation can be difficult to establish, the law appears to have settled on a few rules around linking to allegedly defamatory content. Two recent U.S. cases addressed this issue, and U.S. commentators have even pointed back for guidance to a watershed Canadian case from 2011 (which we wrote about here).

In Life Designs Ranch Inc. v. Sommer the court reaffirmed that linking to defamatory content does not, by itself, constitute a publication of that content: “…a URL is not qualitatively different from a mere reference. Therefore, we hold Mr. Sommer did not republish allegedly defamatory material when he posted on his website: ‘For more info click or cut and paste the link ….’ ”

Going one step further, what if the link is more than just a link? The court in Slozer and Donches v Slattery reviewed a situation where the defamatory content was linked in a post, and then that post was “Liked” on Facebook by the defendant. The court said: “…by providing a link to the challenged posting, without reiterating the content of that posting did not initiate a republication. Her motivations and her designation of the link with a “like” as alleged by Appellants, is not equivalent to a reiteration of the defamatory content as to constitute republication.”

Calgary – 10:00 MT

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By Richard Stobbe

Let’s consider that contract you’re about to sign. Does it contain a limitation of liability? And if so, are those even enforceable? It’s been several years since we last wrote about limitations of liability and exclusion clauses (See: Limitations of Liability: Do they work?) and it’s time for another look.

A limitation of liability seeks to reduce or cap one party’s liability to a certain dollar amount – usually a nominal amount. An exclusion clause is a bit different – the exclusion clause seeks to preclude any contractual claim whatsoever.

To understand the current state of the law, we have to look at the decision in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII), 315 D.L.R. (4th) 385, where the Supreme Court of Canada laid down a three-part framework. This test requires the court to determine:

(a) whether, as a matter of interpretation, the exclusion clause applies to the circumstances established in the evidence;

(b) if the exclusion clause applies, whether the clause was unconscionable and therefore invalid, at the time the contract was made; and

(c) if the clause is held to be valid under (b), whether the Court should nevertheless refuse to enforce the exclusion clause, because of an “overriding public policy, proof of which lies on the other party seeking to avoid enforcement of the clause, that outweighs the very strong public interest in the enforcement of contracts”.

We can illustrate this if we apply these concepts to a recent Alberta case. In this case, the court considered a limitation of liability in the context of a standard form industry contract, the terms of which were negotiated between the Canadian Association of Oilwell Drilling Contractors and the Canadian Association of Petroleum Producers. Anyone doing business in the Alberta oilpatch will have seen one of these agreements, or something similar.

The court describes this agreement as a bilateral no-fault contract, where one party takes responsibility for damage or loss of its own equipment, regardless of how that damage or loss was caused. Precision Drilling Canada Limited Partnership v Yangarra Resources Ltd., 2015 ABQB 433 (CanLII) dealt with a situation where one of Precision’s employees caused damage to Yangarra’s well. In the end Yangarra lost $300,000 worth of equipment down the well, which was abandoned. Add the cost of fishing operations to retrieve the lost equipment (about $720,000), and add the cost of drilling a relief well (about $2.5 million). All of this could be traced to the conduct of one of Precision’s employees – ouch.

Despite all of this, the court decided that the bilateral risk allocation (exclusion of liability) clauses in the contract between Yangarra and Precision applied to allocate these costs to Yangarra, regardless of who caused the losses. The court decided that enforcing this limitation of liability clause was neither unconscionable nor contrary to public policy. The clause was upheld, and Precision escaped liability.

Calgary – 07:00

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By Richard Stobbe

I don’t think I’m going out on a limb by speculating that someone, somewhere is preparing a class-action suit based on the recently disclosed hack of Apple’s app ecosystem.

How did it happen? In a nutshell, hackers were able to infect a version of Apple’s Xcode software package for iOS app developers. A number of iOS developers – primarily in China, according to recent reports – downloaded this corrupted version of Xcode, then used it to compile their apps. This corrupted version was not the “official” Apple version; it was accessed from a third-party file-sharing site. Apps compiled with this version of Xcode were infected with malware known as XcodeGhost. These corrupted apps were uploaded and distributed through Apple’s Chinese App Store. In this way the XcodeGhost malware snuck past Apple’s own code review protocols and, through the wonder of app store downloads, it infected millions of iOS devices around the world.

The malware does a number of nasty things – including fishing for a user’s iCloud password.

This case provides a good case study for how risk is allocated in license agreements and terms of service. What do Apple’s terms say about this kind of thing? In Canada, the App Store Terms and Conditions govern a user’s contractual relationship with Apple for the use of the App Store. On the face of it, these terms disclaim liability for any “…LOSS, CORRUPTION, ATTACK, VIRUSES, INTERFERENCE, HACKING, OR OTHER SECURITY INTRUSION, AND APPLE CANADA DISCLAIMS ANY LIABILITY RELATING THERETO.”

Apple could be expected to argue that this clause deflects liability. And if Apple is found liable, then it would seek the cover of its limitation of liability clause. In the current version of the terms, Apple claims an overall limit of liability of $50. Let’s not forget that “hundreds of millions of users” are potentially affected.

As a preliminary step however, Apple would be expected to argue that the law of the State of California governs the contract, and Apple would be arguing that any remedy must be sought in a California court (see our post the other day: Forum Selection in Online Terms).

Will this limit of liability and forum-selection clause hold up to the scrutiny of Canadian courts if there is a claim against Apple?

Calgary – 07:00 MT

By Richard Stobbe

Let’s say you’re a Canadian company doing business with a US supplier – which law should govern the contract? ‘Forum selection’ and ‘governing law’ refer to the practice of choosing the applicable law and venue for resolving disputes in a contract.

Software vendors and cloud service providers often include these clauses in their standard-form contracts as a means of ensuring that they enjoy home-turf advantage in the event of disputes. This is very common in consumer-facing contracts, such as Facebook’s Terms of Service. That contract says: “e laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions.”

In our earlier post (Two Privacy Class Actions: Facebook and Apple), we looked at a BC decision which reviewed the question of whether the Facebook terms (which apply California law) should be enforced in Canada or whether they should give way to local law. The lower court accepted that, on its face, the Terms of Service were valid, clear and enforceable and the lower court went on to decide that Facebook’s Forum Selection Clause should be set aside in this case, and the claim should proceed in a B.C. court.

Facebook appealed that decision: Douez v. Facebook, Inc., 2015 BCCA 279 (CanLII), (See this link to the Court of Appeal decision). The appeal court reversed and decided that the Forum Selection Clause should be enforced.

Interestingly, the court said “As a matter of B.C. law, no state (including B.C.) may unilaterally arrogate exclusive adjudicative jurisdiction for itself by purporting to apply its jurisdictional rules extraterritorially.” (See the debate regarding the Google and Equustek decision for a different perspective on the extraterritorial reach of B.C. courts.)

The Douez decision was fundamentally a class-action breach of privacy claim, and that claim was stopped through the Forum Selection Clause.

Calgary – 07:00 MT

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By Richard Stobbe

What if a competitor copied the metatags on your website and you watched web traffic bleed from your own site while the competitor’s site enjoyed a bump in hits? Are metatags subject to copyright or trademark protection? The recent Federal Court decision in Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca), 2015 FC 19 (CanLII), dealt with just such a dispute when Red Label sued its competitor 411 Travel for copying the title tags, meta descriptions and meta keywords on 48 pages of the 411 Travel website.

The court reviewed the facts and past metatag decisions and decided that, on balance, the metatags that were copied did not qualify for copyright protection. “In this case there is little evidence of any sufficient degree of skill and judgement in creating these metatags…or for the originality required in compiling data or other compilations… While in some cases there may be sufficient originality in metatags to attract copyright protection when viewed as a whole, the substance of the metatags asserted by the Plaintiff in this case does not meet the threshold required to acquire copyright protection in Canada.” (Emphasis added) There was copying, but without copyright, there can be no infringement.

As for the trademark claims, the court reviewed the role of the “searcher” (i.e. the potential customer who enters certain search terms into a Google search) in ultimately deciding whether or not trademark infringement had occurred. “Even if a searcher is looking for the website connected with a particular trade name or trademark, once that person reaches the website, there must be confusion as to the source of the entity or person providing the services or goods. If there is no likelihood of confusion with respect to the source of the goods or services on the website, there is no support for finding this prong of the test for passing off. Accordingly, use of a competitor’s trademark or trade name in metatags does not, by itself, constitute a basis for a likelihood of confusion, because the consumer is still free to choose and purchase the goods or services from the website he or she initially searched for.” In this case, there was no use of any of the Plaintiff’s trademarks on the visible portion of the 411 Travel website. Thus, the court dismisses the trademark infringement claims.

Interestingly, the role of the searcher was also reviewed in a case between Vancouver Community College and Vancouver Career College. Vancouver Community College sued for trademark infringement, on the basis of the rival college using “VCC” as part of a search-engine optimization and keyword advertising strategy. While this recent decision (Vancouver Community College v. Vancouver Career College (Burnaby) Inc., 2015 BCSC 1470 (CanLII)) didn’t deal directly with metatags, it dealt with the use of trademarks in Google AdWords, and the court noted: “The authorities on passing off provide that it is the ‘first impression’ of the searcher at which the potential for confusion arises which may lead to liability. In my opinion, the ‘first impression’ cannot arise on a Google AdWords search at an earlier time than when the searcher reaches a website.”

In other words, it is the point at which a searcher reaches the website when this “first impression” is gauged. Where the website is clearly identified without the use of any of the competitor’s trademarks, then there will be no confusion.

This helps clarify the laws around the use of metatags and Google AdWords; it also leaves open the possibility that metatags, in other circumstances, could qualify for copyright protection.

Calgary – 07:00 MT

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By Richard Stobbe

Apparently Google does not appreciate being ordered by a Canadian court to remove worldwide search results. In Update on Injunction Against Google (Equustek Solutions Inc. v. Google Inc.) we reviewed a 2014 decision in which Google was ordered to de-index certain offending websites which were selling goods that were the subject of an intellectual property (IP) infringement claim (that decision was Equustek Solutions Inc. v. Jack, 2014 BCSC 1063 (CanLII)). Google appealed that decision to the B.C. Court of Appeal.

Last week, in Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265, the B.C. Court of Appeal upheld the original order.

In the underlying action, Equustek alleged that Mr. Jack and Datalink Technologies designed and sold product which infringed the IP rights of Equustek. The original lawsuit was based on trademark infringement and misappropriation of trade secrets. Equustek successfully obtained injunctions prohibiting this original infringement. The infringement, however, continued through a variety of websites, and relying on search engines (such as Google) to attract customers. Equustek obtained another injunction prohibiting Google (“the world’s most popular search engine” – those are the court’s words) from delivering search results which directed customers to the offending websites.

Google appealed, arguing that this injunction was overreaching since it was beyond the Canadian court’s jurisdiction. After all, Google has no employees, business offices, or servers within British Columbia. The appeal court observed that Google’s “activities in gathering data through web crawling software, in distributing targeted advertising to users in British Columbia, and in selling advertising to British Columbia businesses are sufficient to uphold the chambers judge’s finding that it does business in the Province.” The court, therefore, was entitled to assert jurisdiction over Google even though it was not a party to the underlying litigation. Put another way, “the underlying litigation clearly has a “real and substantial connection” to British Columbia. Equally, Google’s services, which provide a link between the defendant’s products and potential customers, are substantially connected to the substance of the lawsuit.”

The court drew a parallel with a recent English case, Cartier International AG v. British Sky Broadcasting Limited, [2014] EWHC 3354 (Ch.), where Cartier sought an injunction against a number of ISPs in the UK in order to block access to the offending websites which sold counterfeit Cartier products. The court granted the order in that case.

The B.C. court rejected a creative free-speech argument (the argument that the injunction may have the effect of stifling freedom of expression from the blocked websites). (“There is no evidence that the websites in question have ever been used for lawful purposes, nor is there any reason to believe that the domain names are in any way uniquely suitable for any sort of expression other than the marketing of the illegal product.”)

The court also gave short shrift to the argument that the injunction should be restricted to “Canadian” results from google.ca as opposed to an injunction with worldwide effect (“…an order limited to the google.ca search site would not be effective.”)

If Google successfully appeals this decision, it will undoubtedly attract even more intervenors and will provide an opportunity for Canada’s top court to clarify the law in this area.

Need assistance with intellectual property disputes and internet law? Get advice from experienced counsel.

Calgary – 07:00 MDT