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

 

 

Join us on March 1, 2012, (see our Events page) for the upcoming meeting of the Licensing Executives Society (LES) on The Alberta Innovation System. Technology commercialization has its challenges. However, resources and funding programs are available to support technology development for small and medium sized enterprises (SMEs) in Alberta. Within Alberta, the “innovation system” has undergone reorganization over the past 2 years. In Calgary, Calgary Technologies Inc., (CTI), and University Technologies International, (UTI) have amalgamated to form Innovate Calgary. Across the province, Alberta Ingenuity, Alberta Research Council, iCORE and nanoAlberta have merged into Alberta Innovates – Technology Futures (AITF).

How does this impact licensing professionals, counsel, advisors, SMEs and entrepreneurs? What do you need to know about commercialization support within Alberta? Attend the LES Alberta Innovation System luncheon with our panel: Darren Massey Senior VP, Innovate Calgary, David Reese, Vice President, Licensing, Innovate Calgary and Scott Bass, Alberta Innovates – Technology Futures.  

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

 

 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

 

Trade-marks traditionally protect visible brands – a design, word or slogan. The brand that is visible on packaging or advertising is like a tool to assist consumers so they know, when they consider a purchase, who stands behind the product or service. So why can’t these indicators or “tools” be non-visible? Scent marks have been registered or applied-for in other countries:

• The EU: The EU permits scent marks as long as they can be described or depicted graphically.  OHIM, the office that handles registration of Community Trade Marks (CTM), has accepted the smell of fresh cut grass for tennis balls as an “olfactory mark” (Link to Decision (PDF)).
• USA: Scent marks are capable of being registered, and there is no requirement to sumbit a drawing or graphical depiction of the mark.  The USPTO has accepted the scent of Plumeria blossoms for sewing thread and embroidery yarn, and apple cider scent or fragrance in association with office supplies.
• Australia: Scent marks are registrable, though there is a requirement that a mark must be graphically depicted.  This can be satisfied with a written description of the scent and how it’s applied. In Australia, only one scent mark has been successfully registered: a eucalyptus scent for golf tees.
• Canada: If you try to search for “scent marks in Canada”, you will find articles about woodchucks and timber wolves marking their territory. Currently scent marks are not registrable in Canada, due to the requirement that marks must be depicted visually. To get around this legal conceptual barrier to scent marks, an amendment to the Trade-marks Act would be required, which is not likely in the near future.

There are several problems associated with scent marks. First, they must (in many countries, including Canada) overcome the hurdle of visual or graphical depiction in the trade-mark application. Next, the scent mark must not reflect the natural scent or aroma of the product itself – for example, the scent of fresh-baked bread should not be registrable for bread products. And perhaps most importantly, scent marks suffer from an inherent subjectivity that is difficult to overcome: “fresh-cut grass” means something different to different people, even if you can get over the other legal hurdles of adequately depicting or describing the scent for the purposes of the application. How can the problem of trade-mark confusion be solved in light of this subjectivity, where, for example two brands of tennis balls have similar cut-grass scents applied to them?

In Canada at least, this is one frontier that we will watch from the sidelines.

Related Reading: Holograms & Other Nontraditional Trade-marks in Canada

Also, see this good overview of: Nontraditional Trade-Marks in Canada

Calgary – 07:00

 

Richard Stobbe was interviewed by The Lawyers Weekly for Luigi Benetton’s article reviewing some of the top tech cases from 2011 (link to the article)

Calgary – 07:00 MST

 

Sound familiar at Christmas time? ‘Tis the season when trade-marks play a critical role in millions of buying choices of millions of consumers. So where is the line between two marks that appear similar, for similar products? With all due respect, the Supreme Court of Canada is not known for being succinct, but I have to admit this quote from the top court does capture the issue, and in this context the term “provenance” refers to source, or which company the products come from:

• “Trade-marks in Canada are an important tool to assist consumers and businesses. In the marketplace, a business marks its wares or services as an indication of provenance. This allows consumers to know, when they are considering a purchase, who stands behind those goods or services. In this way, trade-marks provide a “shortcut to get consumers to where they want to go” […]  Where the trade-marks of different businesses are similar, a consumer may be unable to discern which company stands behind the wares or services. Confusion between trade-marks impairs the objective of providing consumers with a reliable indication of the expected source of wares or services. […] “

That is the essence of trade-mark law in Canada.

A recent case from the Federal Court (MÖVENPICK HOLDING AG v. EXXON MOBIL CORPORATION, 2011 FC 1397) has reiterated this concept, in a battle between the marks Marché Express for fast-food items sold at a convenience store, and Marché for restaurant services. The court stated that “The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the [mark], at a time when he or she has no more than an imperfect recollection of the [prior] trade-marks …” Ultimately, the court decided that there was no confusion, partly since the term “Marché” was commonly used in this industry, indicating that consumers are accustomed to seeing the word and will use relatively small differences to distinguish between trade-marks.

ipblog.ca will be taking a break until January… So, for all those casual consumers somewhat in a hurry, slow down and have a great holiday!

Calgary – 07:00 MST

 

A simmering IP infringement case between Oracle and Google raises some fascinating copyright issues for software: what scope of protection is given to functional elements in an SDK (software development kit) or an API (application programming interface)? The case of ORACLE AMERICA, INC. v. GOOGLE INC. (Case No. 3:10-cv-03561-WHA) is in pre-trial contortions, with the trial currently slated for 2012. None of this has been decided in court, it merely focusses attention on a very narrow issue of copyright protection for certain elements of software code (there is a patent infringement claim on the table as well).  Oracle alleges that Google infringed copyright in Java code when it built the Android software platform. Specifically, Oracle complains that Google copied design specifications of some 37 APIs for Java libraries, as well as Java source code, object code and comments in 12 software files. In its defence, Google claims that the APIs are purely functional elements and are not eligible for copyright protection. Will this threaten Android ? Likely not. Google has articulated a compelling argument that there is no copyright in the Java APIs (see here (PDF)), but if the court disagrees and finds either copyright or patent infringement, it will merely trigger a damages calculations, and millions of dollars in royalty payments, not a death-knell for Android.

In Canada, the law is clear (see Delrina Corporation v. Triolet Systems Inc., a 2002 Ontario Court of Appeal decision) computer programming that is dictated by the operating system or reflects common programming practices is not original expression and will not receive copyright protection.  In the meantime, we will watch the Oracle vs. Google case to see if it goes to trial before the parties can reach settlement.

Further Reading including Google and Oracle Trial Briefs.

Calgary – 07:00 MST

 

I attended and spoke at the 3rd Cloud Computing conference today, and here are a few points to take-home:

• Pay attention to governing law clauses (which law applies) and dispute resolution procedures (how do we resolve disputes), particularly for cloud service providers whose customers are worldwide;
• Limitations of liability in the context of the “public cloud” are critical. These clauses can be upheld if drafted clearly and carefully, but they will be struck down if they are unclear, or if there are overriding public policy reasons. 
• If you are a cloud-service user, and your use of cloud services involves the hosting of personal information (for example, information of your own end-customers), consider this: if one of those customers withdraws consent to the use of his or her personal information, do you have a protocol in place to track that withdrawal back through the cloud service provider, to the host who may be holding the data?

 

For a copy of my paper, please email me.

Calgary – 12:30 MDT

 

 

 You’re in good company. Even the late Steve Jobs had his complaints about this. In a biography of the Apple founder, Mr. Jobs complains that Android was “grand theft”, and he vowed to fight back. Is Android a rip-off of the iPhone? It certainly followed Apple.  The iPhone was launched in 2007, Android was launched in October, 2008. Apple introduced its App Store in July, 2008. Android Market came out a few months later. Even though it entered the marketplace later, by 2010, Android captured 44% of all mobile app downloads in Q2 2011, passing Apple’s 31% stake (see CNET report) The numbers are hard to crunch (remember, iOS is on multiple hardware devices made by one manufacturer, and Android sits on over 40 smartphones made by six manufacturers), and Apple’s system comes out on top by some measures, but by August 2011, some estimates put Android at a leading 48% of the smartphone market share.

So there is no doubt that Android has stormed from behind as a credible alternative to Apple’s ecosystem, but does that make it a “stolen idea”? Not from the perspective of intellectual property law, since there is no protection in the overall idea of a mobile platform that can run third-party apps. The real question is whether Google copied iOS code (there’s been no suggestion of that), used Apple’s trade-marks (nope), or infringed any of Apple’s patents (see this story for one of the many Apple vs. Android patent fights). 

In any event, there is a fine line between infringement and inspiration. Legend has it that Mr. Jobs was “inspired” by the mouse he originally saw at a Xerox research facility. Neither did Mr. Jobs invent the MP3 player or the idea of a mobile device running third-party apps. My Palm Treo was doing that years before the iPhone was launched.

Calgary – 07:00 MDT

 

A reminder: next week on November 1 & 2, 2011, the 3rd Cloud Computing Law conference will be held in Calgary, hosted by Federated Press. Richard Stobbe will be presenting on the topic of risk-allocation in cloud-based services such as iCloud and other enterprise cloud computing contracts, including warranties, indemnification and limitation of liability clauses.  

IT lawyers and in-house counsel from top companies will review:

• the risks & legal pitfalls of cloud computing
• legal and compliance issues 
• the implications of virtual storage on legal jurisdiction questions
• key issues that need to be addressed when negotiating and drafting a cloud computing agreement  

For registration details: Cloud Computing Law Conference (Calgary) 

Readers of ipblog.ca are eligible for a 15% discount – use this code when registering: CCL1111/PR 

Calgary – 07:00 MDT

 

Here are two recent U.S. software decisions to note. Both decisions strengthen the hand of software vendors:

1. In a follow-up to our earlier post (Software License Upheld), the Ninth Circuit Court of Appeals decision in Vernor v. Autodesk Inc. has been denied leave to appeal, meaning the US Supreme Court has elected not to review the decision. This case dealt with resales by Vernor of used copies of AutoCAD software. Vernor claimed the resales were permitted under the “first sale doctrine”. The decision stands for the proposition that a software license is an important exception to the “first sale” defence. This is because the court found that Autodesk had not sold copies but merely licensed copies of the copyrighted work. 
2. In another Ninth Circuit decision ( Apple Inc. v. Psystar Corp., 9th Cir. Cal. Sept. 28, 2011), a small computer reseller operated a business re-selling Mac OS X pre-installed into non-Apple computers.  Apple complained that this was an infringement of copyright and a breach of the Mac OS X license agreement. Specifically, Apple’s software license agreement requires Mac OS X users to run their copies only on Apple computers. Psystar raised the defence that this was restrictive and constituted “copyright misuse”. The court sided with Apple, pointing out that to demonstrate “copyright misuse”, the license agreement would have to restrict creativity or restrict competition. In this case, the Mac OS X license agreement did neither. Apple’s license does not restrict a competitor’s ability to develop its own software, nor does it prohibit customers from using non-Apple components with Apple computers. Instead, Apple’s license merely restricts the use of Apple’s own software to its own hardware.

Calgary – 07:00 MDT

The Globe and Mail carries an interesting article penned by John Manley on intellectual property protection for software and IT companies and the trouble with patent trolls: Intellectual property: A new kind of arms race, with patents as ammo.

Calgary – 07:00 MDT 

On October 27, 2011 the Calgary Chapter of the Licensing Executives Society will be meeting on the topic of: Finding and Analyzing Royalty Rates: A Practical Guide, with David Jarczyk of ktMINE, including a review of the “25% Rule” in technology and patent licensing. For details and registration, please see the linked invitation. Calgary – 07:00 MDT

To follow on our earlier post (US Patent Update), the America Invents Act (the US patent reform bill) has passed and was signed into law by President Obama on September 16th. Among the changes:

• Adopting a “first to file” system (from the previous “first to invent” system), which bring U.S. patent law into line with many international patent laws; a one-year grace period is built into the legislation to allow for the transition;
• Changing some aspects of the test for patentability and the assessment of prior art;
• The rules regarding confidential sales have been amended – such sales prior to filing of a patent application will not be considered a bar to patentability.

Calgary – 07:00 MDT

 

Save the date: On November 1 & 2, 2011, the 3rd Cloud Computing Law conference will be held in Calgary, hosted by Federated Press.

Richard Stobbe will be presenting on the topic of risk-allocation in cloud-based services such as iCloud and other enterprise cloud computing contracts, including warranties, indemnification and limitation of liability clauses.  

IT lawyers and in-house counsel from top companies will review:

• the risks & legal pitfalls of cloud computing
• legal and compliance issues 
• the implications of virtual storage on legal jurisdiction questions
• key issues that need to be addressed when negotiating and drafting a cloud computing agreement  

For registration details: Cloud Computing Law Conference (Calgary) 

Readers of ipblog.ca are eligible for a 15% discount – use this code when registering: CCL1111/PR

Calgary – 07:00 MDT

 

If you followed the headlines regarding the ongoing battles between Apple and Samsung this summer, you will have noticed that Apple succeeded in shutting down sales of the Samsung Galaxy Tab in the EU, based on its allegation that Samsung’s Galaxy Tab 10.1 infringed Apple’s industrial design (See: Industrial Design in Canada & US). Samsung succeeded in limiting that court order. That is a battle over the design of the iPad (part of the appeal of Apple’s designs are that they are minimalist and functional, which raises the question of what exactly is protectable… but we’ll leave aside for the moment).

Designs and trademarks are both useful intellectual property tools to ward off competitors. Canadian companies can register their industrial designs in the EU, as well as their trademarks across the EU (through a Community Trade Mark or CTM). In the recent case of DHL Express France SAS v Chronopost SA, Case C-235/09, 12 April 2011, the EU Court of Justice ruled that injunctions to prevent infringement of a CTM can be enforced across the EU. The scope of an injunction against infringement of a CTM extends to all 27 countries of the European Union.

Related Reading: Apple’s worldwide court battles against Samsung: where they stand and what they mean 

For assistance with your international brand protection, including in the US and EU, contact us at Field Law. 

Calgary – 07:00

 

The Banff Venture Forum is in one month: October 6 and 7, with streams focussing on information technology, cleantech and life sciences. This is a well-attended networking event that serves as a showcase for emerging technology companies from across North America. Also see the  Road to Banff Pitch Competition (Alberta).

Calgary – 10:30 MDT 

 

Are you a Canadian app-developer? One of the most common concerns I hear from my app-developer clients is this: how do you comply with laws around the world when your app is published on the App Store? Not an easy question to answer as these stories show. Here are a few updates from the wonderful world of app-related disputes and litigation:

• This story notes the importance of reviewing app-related privacy issues: a recent US Federal Trade Commission (FTC) settlement with app-developer W3 Innovations shows that the FTC will be scrutinizing the mobile app market for privacy violations, particularly violation of children’s privacy.  In the US, the Children’s Online Privacy Protection Act (COPPA) is specific privacy legislation that does not have an equivalent in Canada.
• The Lodsys patent infringement attack against iOS app developers has expanded to target Android developers and (reportedly at least one) BlackBerry app developer (updates here), as well as established game developers, including EA and Atari. Apple has sought to intervene in the case, to argue that their license agreement with Lodsys should shield iOS developers from patent infringement. Google may feel compelled to go to bat for Android developers. Which means Lodsys is locking horns with Apple, Google, RIM and EA.  

Related Reading: When an iPhone App Infringes a Patent 

Calgary – 07:00 MDT