This post by my colleague Dan Carroll provides a great review of the many issues in online defamation, including civil and criminal liability. 

Related Reading:

• Online Defamation: Injunctions Against Google in Canada
• SCC Defamation Decision
• Update: Canadian Online Defamation & Hyperlink Case

Calgary – 07:00 MDT

 

The Federal Court of Appeal (FCA) released its decision in Weatherford Canada Ltd. v. Corlac Inc.  (2011 FCA 228) in 2011 on the subject of “good faith” prosecution. Leave to appeal to the Supreme Court of Canada has been refused. See Neil Kathol’s article on the FCA decision.

Calgary – 07:00 MDT   

 

What’s the sound of a trade-marks office changing its tune? The Canadian Intellectual Property Office (CIPO) reversed its long-standing policy against sound marks by abruptly issuing a new practice notice last week, announcing that it will accept sound marks for registration in Canada. As we argued a few years ago (Time for Sound Marks in Canada?), this change has been debated and anticipated for many years, and no trade-mark owner is more aware than MGM, the applicant that has pursued its iconic lion’s roar sound mark since the application was first filed in October, 1992 (Application No. 714314).  MGM’s lawsuit has resulted in a Federal Court order that paved the way for CIPO’s new policy.

The application for the registration of a trade-mark consisting of a sound should:

1. state that the application is for the registration of a sound mark;
2. contain a drawing that graphically represents the sound;
3. contain a description of the sound; and
4. contain an electronic recording of the sound.

Calgary – 09:00 MDT

 

If your kids use Facebook, are they bound by the online terms?

This question was recently reviewed in a US decision in which certain minor children, resident in Illinois, were users of facebook.com. They alleged that Facebook’s practice of misappropriating their names and likenesses for “commercial endorsements” without their consent was a violation of their privacy rights. Facebook resisted by invoking the “forum-selection” clause in its Terms of Service (TOS). That clause effectively punts all disputes into California, Facebook’s home turf. The Illinois court had to decide whether the case could proceed in Illinois, or whether the forum-selection clause dictated that the case must proceed in California.

In E.K.D. v. Facebook, Inc., 3:12-cv-01216-JCS (S.D. Ill. March 8, 2012), the Court concluded that the minors could not avoid the forum-selection clause in Facebook’s TOS. A mandatory forum-selection clause is, under US law, valid on its face, and should be enforced “unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” Canadian law is similar. However, the courts look at a number of factors in determining what they consider “reasonable”, and online vendors or licensors must take care if they want to ensure the clause will be upheld.

Calgary – 07:00 MDT

 

 

Richard Stobbe was interviewed in the March 9th edition of The Lawyers Weekly  on the subject of new gTLDs. Note: The gTLD application period closes April 12, 2012.

Related Reading:The New gTLDs: Who, What and When

Calgary – 07:00 MST

 

Patent infringement damage awards often run into the billions. Not to be outdone, a copyright infringement case between Oracle and SAP resulted in a jury award in excess of $1 billion, based on a “hypothetical license“.

In 2007, Oracle sued SAP for copying thousands of documents and programs from Oracle’s “Customer Connection” website. After years of litigation, the remaining issue for decision by the jury was the amount of the damages. In November, 2011, the jury returned a verdict in favour of Oracle for $1.3 billion. SAP challenged this award as “unduly speculative” and sought a new trial or a lower damage award. Oracle had the choice of accepting a lower damage award of $272 million or going into a new trial; it opted for a new trial which has now been set for June, 2012.

In Canada, the Copyright Act (under Section 35) allows for damages and part of the profits that the infringer made from the infringement or an election of “statutory damages” under Section 38.1. The concept of a reasonable royalty (a rate that the infringer would have paid to the owner in a hypothetical license negotiation) is a concept that has been considered in patent cases in Canada – for example, in Jay-Lor International Inc. v. Penta Farm Systems Ltd., 2007 FC 358 (CanLII), the court calculated damages after analysis of a “hypothetical negotiation”.  The court in Oracle vs. SAP has shown that such a calculation must be grounded in objective evidence, and where possible, actual benchmarks to prove market value. Subjective or speculative evidence should not be used for such calculations.

Calgary – 07:00 MST

 

Snake oil? There’s an app for that. App developers who make baseless health-related claims about their apps may face FTC charges in the US.

In this case, the mobile apps “AcneApp” and “Acne Pwner”, sold in Apple’s iTunes Store and Google’s Android Marketplace, made false health-related claims without scientific evidence. Advertising for the apps claimed to treat acne with colored lights emitted from the phone (“Kill ACNE with this simple, yet powerful tool!”). According to the FTC complaint, almost 15,000 people downloaded the apps. In the FTC settlement, the app developers were fined and were barred from making further unsubstantiated health claims.

Calgary – 07:00 MST  

 

A few updates on copyright in Canada. The concept of “fair dealing” is the one to watch.

• Copyright Reform: Bill C-11 (the copyright reform bill) is currently in Committee in Parliament, meaning the bill has gone through first reading, and second reading, and is being is being further examined and debated. The next stage would be third reading before it becomes law. The digital-lock provisions remain among the most contentious. The proposed law also features expansion of “fair dealing” exceptions.
• SCC: Last December, the Supreme Court of Canada (SCC) heard 6 different copyright appeals, including an analysis of “fair dealing“. The court’s decision is expected sometime in 2012. When it is released, it will be closely scrutinized against the changes proposed in Bill C-11. (Related Article: Copyright Cage Match)
• New Class Action: Last week, a new copyright class action suit was certified (Waldman v. Thomson Reuters Corporation, 2012 ONSC 1138), which will also tackle “fair dealing” issues. This case claims that Thomson Reuters copies court documents that have been authored by lawyers, and sells them through a searchable database. The suit alleges that Thomson Reuters infringes copyright of the authors of those court documents by reproducing them without permission.

  Calgary – 07:00 MST 

 

The privacy problem with apps has been percolating for some time. Several high-profile reports have brought attention to this issue; Path’s embarassing privacy breach is just one of many cases where app developers have (intentionally or otherwise) harvested private details about app users by dipping into address books and location-data. App developers should take note: Get legal advice on privacy before you launch your app.

In the US, a patch-work of industry-specific privacy laws has made this a confusing area of law. In Canada, the landscape is still complex, but is underpinned by private-sector privacy laws that apply to “personal information” across all industries, at both the federal and provincial level.

This month, the California Attorney General has entered into an agreement with mobile app platform vendors – Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion – to improve privacy protections for app users. This arrangement implements certain “privacy principles” and requires app developers to have a privacy policy, something that would bring app developers in line with Canadian law.  This is not new legislation, merely a loose commitment by the mobile app industry, so it cannot be enforced as law. However, it has helped shine a spotlight on this issue. 

Related Reading:

• Copy of the Signed Agreement (PDF)
• App Law: Update on Privacy

Calgary – 07:00 MST

 

In the last in our series about the frontier of intellectual property law, we look at the use of copyright law (roughly 300 years old) to protect yoga poses (roughly 2300 years old). An enterprising yoga instructor – Bikram Choudry - managed to obtain copyright registration for certain poses as part of an intellectual property portfolio that includes protection for “posture sequences”, trade-marks and instructor-certification agreements.

In a lawsuit against another licensed studio (Bikram’s Yoga College of India L.P. v. Yoga to the People, Inc.), the studios are in a pitched battle (cue the “warrior pose”) over the right to use the styles and postures that are allegedly the property of Bikram. The US Copyright Office recently weighed in, saying that exercise poses “do not constitute the subject matter that Congress intended to protect as choreography. We will not register such exercises (including yoga movements), whether described as exercises or as selection and ordering of movements.” This case illustrates an interesting twist on the “future” of IP, by protecting (some would argue ancient) postures through the tools offered by copyright and trade-mark law.

In Canada, the case of Pastor v. Chen, 2002 BCPC 169 (CanLII) addressed a dispute over choreographed dance moves and the court’s review of confidentiality and copyright protection. Although the reasoning in that decision is somewhat inconsistent (protection affforded by copyright should not depend on whether the material qualifies as “confidential information”), the Court in the end did agree that the choreography was eligible for copyright protection. 

Calgary – 07:00 MST

 

My recent article “You Can’t Have Clouds Without a Little Bit of Lightning: Cloud Computing in 2012” is published in The Advisor (PDF) newsletter (Winter 2012).

 

Calgary – 10:00 MST

 

A company approaches you to engage in a “partner” agreement – maybe a joint venture, a licensing deal, a software integration or a reseller arrangement. During negotiations, the other company reviews your technology. Negotiations breakdown when you realize that the other company has launched a competitive knock-off product that looks shockingly similar to your own beta version that you disclosed to them. Now what do you do?

According to app developer Spry Fox this is what happened in their negotiations with app developer LOLapps. LOLapps abruptly broke off negotiations and launched their own app, “Yeti Town” which has similar design elements. In its complaint Spry Fox claims that “Yeti Town is a virtual duplicate of the Triple Town game,” and the lawsuit alleges copyright infringement. Lessons for business?

• Ensure that you have a well-drafted non-disclosure agreement (NDA) covering your negotiations. This agreement can address issues of confidentiality, and it may be appropriate to also deal with non-use, non-competition and non-solicitation issues. Not all NDAs are created equal!
• Be aware that “ideas” alone are very difficult to protect. While copyright protection exists for the software code, the basic concept may not be protectable by copyright (see this App Law Round-Up for an example). That’s where the NDA comes in, since it imposes contractual obligations to maintain the confidentiality of trade secrets, even where there may be no copyright protection for the concepts.  
• Exceptions that are commonly built into NDAs may provide an “out” for your competitor. In any event, even the best NDA cannot prevent a determined competitor from poaching your concept – the question then is whether the competitor’s conduct runs afoul of the law of copyright (as is alleged in the Spry Fox case), or constitutes a breach of the terms of the NDA, or both.

Related Reading: Someone Stole Your Brilliant Business Idea?

Calgary – 07:00 MST

 

ICANN is now implementing its plans to permit the creation of new generic top-level domains (gTLDs). TLDs are everything to the right of the dot. (For example, a new gTLD might be .canada, .newyork, or .mac) Many brand owners are tired of seeing announcements about gTLDs, Sunrise Periods and procedures for rightsholders. Seemingly endless changes – from the launch of new TLDs such as dot-ASIA and dot-XXX, to the introduction of internationalized domain names, to recent dot-CA changes – make this a bewildering area of law for trade-mark owners. Here is a summary of what to expect from ICANN in 2012:

• January 2012  - ICANN started accepting applications for new gTLDs. Who will apply? With a US$185,000 application fee, and significant legal and technical hurdles, the applicants are expected to be limited to large corporations and investor groups with a business plan directed at a specific community or niche. Remember that the list of new gTLDs will likely include non-Latin domains, based on Cyrillic, Chinese or Arabic.
• April 12, 2012  – The application period closes.
• May 1, 2012 is “Reveal Day” at which point the applicants and their proposed TLDs are published. This triggers a seven-month objection period, during which rightsholders can file a complaint based on valid rights to the string of characters that make up the gTLD. For example, trade-mark owners may make an objection to a proposed gTLD on this basis.
• Late 2012 – ICANN has proposed a “Trademark Clearinghouse” which would be a (very cumbersome) database of registered trademarks to support trademark claims and sunrise services. As new gTLDs are launched, ICANN will require that every new gTLD operator uses this Clearinghouse and conducts both a Trademark Claims and a Sunrise Process. 
• Late 2012 – probably sometime in 2013 – The actual launch of new gTLDs, with the usual array of Sunrise and Landrush Periods.

We’ll keep you posted as this develops.

You’ll notice we didn’t cover the question “Why”. Why is there a compelling need for new gTLDs?  If you figure that one out, please let us know.

Calgary – 07:00 MST

 

 

 

iBooks Author is Mac app  allowing users to develop and publish multitouch digital books. If you author a digital book, you can then submit it to the iBookstore for purchase or free download, or distribute it through iTunes U, or use it with the iPad. It’s being touted as a way to bring digital publishing to the masses – for example, textbooks with embedded videos, audio and rotatable 3-D models that students can pinch and zoom.

Sounds great, but do you own what you create? Let’s have a look at the EULA (End User License Agreement v. 1.0.1).

According to the terms of the EULA (section 2(b)), you own the rights to the content that you create, and you can distribute that content any way you want, as long as it doesn’t include any files in the .ibooks format. (Making files in the .ibooks file format is the whole point of using this app.) If it does include .ibook files, then you can distribute the book by any means as long as you are giving it away for free. If you want to distribute your digital book for a fee, then it must be sold through Apple’s iBookstore, with Apple taking its customary 30% cut.

This does not mean (as some blog posts have suggested) that Apple takes any ownership of the content you have authored. You continue to own that content. The license terms mean that, by agreeing to use their software, templates and publishing tools (and in particular, the .ibooks file format), you agree to sell your iBooks book through Apple’s retail channel.

This isn’t really all that different from an author’s agreement with a traditional publisher, since a publisher will typically insist on exclusivity in handling final editing, packaging, marketing and sales of a book. They take a cut and share the royalties with the author. The author, who remains the copyright owner, is not free to then sell the book through a different distribution channel. They must sell through their publisher.
Calgary – 07:00 MST

 

The term “patent exhaustion” does not refer to the feeling you get when an IP lawyer talks for 3 hours about invalidity for lack of obviousness. No, this is the patent law concept that the first authorized, unrestricted sale of a patented item ends, or “exhausts,” the patent-holder’s right to ongoing control of that item, leaving the buyer free to use or resell the patented item without restriction. For example, if you buy a patented mouse-trap from the patent owner, you can resell that mouse-trap to your neighbour without fear of infringing the patent. 

This concept was recently tested in the case of Monsanto Co. v. Vernon Hugh Bowman (PDF) No. 10-1068 (Fed. Cir. Sept. 21, 2011) related to Monsanto’s patented “Roundup Ready” seeds. A farmer planted a first crop from Monsanto seeds, under license, and he did not save any of those seeds for replanting, in accordance with the license. The farmer then bought “commodity seeds” from a local grain elevator. These seeds are a mixture of regular seeds and seeds from “Roundup Ready” plants. Not that you can tell by looking at them. I don’t believe Monsanto has developed a method of displaying the Roundup patent numbers on the seeds themselves. He planted a second crop from these “commodity seeds”. He then saved some of the seeds from this second crop grown from the “commodity seeds”.

Monsanto sued, claiming the second crop and the saved seeds infringed on its patent, because its patented technology existed somewhere in that crop. The farmer defended by claiming the defence of “patent exhaustion” – that any patent rights in the second crop of seeds were exhausted, and further use or sale of those seeds would not infringe Monsanto’s patent. The Court rejected this defence, reasoning that by planting the commodity seeds containing the “Roundup Ready” patented technology, he created an infringing article (i.e. the plant grown from the next generation of seeds).  This replication of the patented article constituted an infringement, which was not excused by the “patent exhaustion” doctrine.  This is because there was no unrestricted sale, since the use of the seeds by the farmer was conditioned upon obtaining a license from Monsanto. The court did not review the question of whether someone else (someone who is not subject to Monsanto’s license agreement) would benefit from the “patent exhaustion” doctrine if they grew and collected “commodity seeds”.

Related Reading: Patent Exhaustion Does Not Bar Claims Against Later Generations of Self-Replicating Technology LES Article.  

Related Reading: Intellectual Property & Agriculture: Obvious Inventions

Calgary – 07:00 MST

 

The Ontario Court of Appeal (Jones v. Tsige, 2012 ONCA 32) has recognized the tort of invasion of privacy or “intrusion upon seclusion,” acknowledging a right in Canada to sue when an individual’s privacy is intentionally invaded by another individual.  This case had to do with one bank employee accessing the bank records of another employee, without permission. Ultimately the claimant was awarded damages in the amount of $10,000 for breach of her privacy rights.

Read the full article here from the Field Privacy Group.

Calgary – 07:00 MST

 

Simple inventions can transform our lives. Consider this: Can we use light bulbs to transmit data wirelessly?

On TEDTalks, an inventor shows how light from a standard LED bulb can transmit data to a mobile device, in effect acting like a wireless router. When you think about it, the invention is not that revolutionary, since WiFi transmissions use standard radio frequencies, which are simply a different set of frequencies than visible light, both of which are part of the spectrum of electromagnetic radiation. This patent  (OPTICAL FREE SPACE DATA TRANSMISSION US 2011/0069958, by the same inventor, Harald Haas) discloses the use of infrared light (another frequency along the same spectrum) for wireless data transmission in an airplane, describing an invention that would enable safe inflight wireless internet. Somebody tell Alec Balwin to invest.

The use of visible light for data transmission is not new. The first use (also claimed to be the first wireless transmission) was sent by (Canadian inventor) Alexander Graham Bell in Washington D.C. in the year 1880. His patented system was called the Photophone.

Calgary – 07:00 MST

Bill C-22 (Mandatory Reporting of Internet Child Pornography by Persons Who Provide an Internet Service) (the “Act”) was passed in March, 2011 and was proclaimed in force as of December 8, 2011. The Act makes it mandatory for providers of Internet services to report incidents of online child pornography. The Act is quite broad, and businesses providing WiFi access, email services or internet content hosting – including ISPs, as well as colleges, universities, public libraries, cafés, hotels, shopping malls – are caught by the Act and could receive a report about child pornography under the Act.

For more details about reporting obligations, see: This Article.

Calgary – 07:00 MST

 

 Two of my favourite topics: intellectual property and Lego. The Danish toy-maker has been trying to protect its iconic toy bricks since they were developed in the 1930s and ’40s. Trade-mark law protects the brand (LEGO), and trade-marks can live on and on, as long as the owner (a) uses the mark, and (b) continues to renew the trade-mark registration. The LEGO trade-mark was registered in Canada in 1957 and that registration is still valid.  Last week, Lego’s arch-rival, the Canadian-based toy-maker of Mega Bloks filed and then abruptly withdrew a lawsuit in the US, after threats that Mega Bloks products would be barred from entry into the United States, based on infringement of Lego’s US trade-marks. This reflects the sparring between these two competitors for market share in the building-toy industry.

In Canada, the decision in Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65 (CanLII), settled a long-standing feud between Lego and Mega Bloks.  In that case, the court decided that the Lego building blocks themselves are not protectable as trade-marks in Canada, on the grounds that the shape of the blocks is purely functional in nature. This does not apply to the LEGO word, or the various other trade-marks that Lego owns. Lego has suffered similar set-backs in other countries – for example, a 2010 decision in the EU came to the same conclusion that functional elements of a trade-mark are not protectable. So what’s a toy-maker to do?

• Patents – utility patents in Canada will protect the function of the invention, in this case, the improved mechanism of how the plastic bricks snap together. However, patents expire after 20 years. Lego’s patents have all expired.
• Industrial Design –  this category of protection (in the US, known as “design patents”) will protect the visual features of a product (shape, configuration, pattern or ornament). Functional elements cannot be protected. Industrial design protection expires after 10 years. Lego has registered dozens of industrial designs to protect a variety of building bricks and parts.
• Copyright – some products are protectable under copyright law, though toy bricks don’t lend themselves well to this category, which is designed to protect written works, music, images, photos, paintings, that sort of thing. Copyright lasts for 50 years after the death of the author.
• Trade-marks – the LEGO brand is arguably the toy-maker’s strongest asset, and trade-marks, once registered, are renewable indefinitely. Trade-marks protect things such as the word LEGO, the associated logo, and various product lines and slogans, such as DUPLO and BIONICLE.
• Distinguishing Guise – A distinguishing guise is a type of trade-mark that protects a very specific type of “brand”. It applies to the shape of the products or the packaging, such as the shape of a Coca-Cola bottle. Since this is a species of trade-mark, the protection is renewable indefinitely once it’s registered. However, utilitarian features cannot be protected.

Calgary – 07:00 MST

 

What? Wikipedia is off-line? Please cue the other three horsemen of the apocalypse.

It’s amazing what happens when Wikipedia decides to blackout its service to protest “legislation that could fatally damage the free and open Internet…” Suddenly everyone is talking about SOPA (our November post is here) proposed U.S. intellectual property legislation that has raised concerns across the business world. Google, Twitter, Tumblr, Reddit, Mozilla and other internet companies are also in on the protest. That’s remarkable, mainly because these companies all have their own agendas (as any business does) and there are very few circumstances where they will coordinate their protest on a single issue on a specific day. Over to you, U.S. Congress.

Related Reading from slaw.ca: SOPA: What’s All the Fuss About? 

Calgary – 11:30 MST