Archive for June, 2009

Google AdWords Update

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

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

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

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

Calgary – 15:00 MST

 

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Update: Business Method Patents

In both Canada and the US, the business method patent is, at the moment, on the run (see our previous post: Business Method Patents Under Review). Business method and software patents have been the subject of fierce debate in the intellectual property community. Last October, the US Court of Appeals for the Federal Circuit ruled in the Bilski decision that a process for managing risk in commodities markets did not deserve a patent, because it was not tied to a machine, did not result in a “physical transformation”, and therefore did not meet patentability requirements.   

In Canada, business method patents are not automatically unpatentable – they are assessed according to the usual patentability criteria and CIPO’s Manual of Patent Office Practices. But a recent ruling by the Canadian Patent Appeal Board has denied Amazon’s “one-click” patent, throwing doubt on the patentability of business methods in Canada. Essentially, the CPAB found that, as in the Bilski case, there was no “physical transformation” so the application did not meet Canadian patentability requirements. (For further discussion, see: Amazon’s One-Click Patent Application Gets Bilski’d.)

Now,  the US Supreme Court has decided to weigh in by agreeing to review the Bilski decision. The decision may finally determine whether business methods are patentable. 

 

Calgary – 9:45 MST

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Non-Competition & Injunctions

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

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

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

The lessons for business?

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

Calgary – 09:00 MST  

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Whisky Trade-mark Appeal

In our previous post on The Whisky Caper: Scotch Whisky Association vs. Glenora Distillers, we noted that a Canadian distiller won the right to use the word GLEN in its trade-mark for Canadian whisky, against the objections of the Scotch Whisky Association.  The Association has now announced  that it will appeal the decision up to the Supreme Court of Canada (SCC).  Even if the SCC agrees to hear the case, a decision won’t be expected for several years.

Calgary – 11:45 MST

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Green With Envy: Trade-marking Colours in Canada

item_3224.jpgWant to trade-mark the colour green? Just ask the makers of painter’s tape for some pointers.

They applied (several times) to register the colour GREEN as a trade-mark for their well-known green painter’s tape, based on use in Canada since 1993. 3M and others opposed the latest application, arguing that the trade-mark was not distinctive since many competitors also sold green tape products.

In the recent decision in 3M Company v. Tape Specialities Limited, 70 C.P.R. (4th) 138 (T.M.O.B.), the Canadian Trade-marks Opposition Board decided that the colour green was not distinctive of the applicant, and the application was refused (Trademark: COLOUR GREEN #3, Refused – Section 38(8), 1062931 )

Colour can be the subject of a trade-mark registration in Canada, but contrary to popular misconceptions, it does not provide the owner with a monopoly over the colour itself, just the colour as applied to a particular product – for example, Wedgwood was able to register the colour blue (specifically Pantone #658), as applied to boxes containing clocks (Trademark: Colour Blue design, Registered, 1166661, TMA689472 ). They claim use in Canada since 1800, making this arguably one of Canada’s oldest colour trade-marks (though I question whether Pantone #658 was around in the year 1800… but only lawyers quibble about such details.)

Calgary – 11:45 MST

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Canadian iPhone App Dispute

A Montreal company has been hit with a cease-and-desist letter over its launch of an iPhone app that helps users find the city’s “Bixi bikes”. Bixi is the public-use bicycle system in downtown Montreal. Bixi (contrary to some reports) is not a registered trade-mark, though an application for registration has been filed.

There are many iPhone apps which permit users to schedule or locate public services, such as STM mobile (designed for the Montreal transit system), not to mention similar public transit apps for cities all over the world. Apps which locate private companies are also common, such as apps which pinpoint Starbucks, Tim Horton’s and TD bank locations.

It would be interesting to hear the court’s view on whether the use of Bixi in this form constitutes trade-mark infringement, but the letter appears to have worked. The app site now contains a French-language notice that says “We understand that it was an error (made in good faith) to use the trade-mark Bixi. We hope to work with Stationnement de Montréal and Bixi to find a solution that will respond to your needs.”
Calgary – 13:45 MST

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Law & Technology: The Facebook Factor

Call it the “Facebook Factor”.  The way people use the internet and social media is colliding with litigation in ways that couldn’t have been foreseen even a few years ago:

  • In a recent Nova Scotia case, a judge considered evidence of a plaintiff’s Facebook page in a personal injury lawsuit, and the evidence contradicted the plaintiff’s claim;
  • In Murphy v Perger [2007] OJ No. 5511 (QL), a defence lawyer successfully forced production of post-accident Facebook pictures showing the plaintiff engaging in various social activities – pictures that were located on a private portion of the Facebook site;
  • In Leduc v. Roman, 2009 CanLII 6838 (ON S.C.), the court permitted cross-examination of the plaintiff on the content he posted on his Facebook profile;
  • In Australia and New Zealand, the courts have approved service of documents via a Facebook account (story: here and here);
  • In the US, there have been a rash of similar cases (see links herehere, and here) leading to a mistrial in a drug-trafficking case (when jurors admitted that they researched the case via their iPhones and BlackBerrys), chaos in the federal corruption trial of a former state senator (jurors had posted updates on the case on Twitter and Facebook), and problems in a criminal case (a juror tried to “Friend” one of the witnesses).

Related content: free online webcast summit on “Copyright War,” June 9, 2009, including “Online Legal Issues: Facebook, MySpace, Twitter, YouTube, Blogs” 

Calgary – 10:30 MST

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