Slide to Unlock: Apple’s Trade Secrets


Courtesy of Apple

The Apple rumour mill – which usually spins at an alarming rate even on a slow day – has been at risk of popping a gasket over the past few months with speculation over Apple’s latest product release: a tablet-like device which is expected to do to the handheld tablet category what the iPod did for MP3s.  The iPad product was released today.

The new product was described in great detail by those who had no idea what it looked like, what it was called or what functionality or interface it might have. This attests to two things: the marketing power of consumer expectations, and the strength of Apple’s trade secret and intellectual-property protection program.  Several years ago Apple sued a journalist who posted information about one of Apple’s forthcoming software products (in O’Grady v. Superior Court, 139 Cal.App.4th 1423 (Cal.App. 2006)). Apple sought an order forcing the journalist to disclose his sources. In the most recent round of speculation, the company’s lawyers fired a letter at a Silicon Valley gossip site when the site offered a $100,000 bounty for any photos of the tablet. Ultimately Apple lost its legal battle with the journalist, but the practical message was clear: that it takes its confidential information very seriously.

Calgary – 07:00 MST 

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Intellectual Property & Agriculture

In the 1990s, researchers at the University of Saskatchewan developed a transgenic variety of flax known as CDC Triffid, which was genetically designed to be herbicide-resistant. The crop received regulatory approval in the mid-1990s, but was never adopted by Canadian farmers for commercial use, because of fears that its use would close export markets such as the European Union, which has a zero-tolerance for GMO foods.

Those fears have now materialized. The flax industry is scrambling to discover why CDC Triffid seeds appear to have propogated in Western Canadian flax fields, despite having been “decommissioned” fifteen years ago.  This story has all the makings of a science-fiction tale (indeed, the name of the crop comes from a sci-fi novel about carnivorous plants).  The intellectual property issues are also interesting, since the original research would have produced an invention subject to intellectual property rights – likely patentable in the same way that the transgenic crops developed by Monsanto and others have been patented (though there is no indication that CDC Triffid was ever the subject of a patent).

The most recent case where Monsanto enforced its patent rights over a farmer was in the 2009 case of Monsanto Canada Inc. v. Rivett, 2009 FC 317 (CanLII), where a farmer was hit with a damage award for his unauthorized use of Monsanto’s patented canola seeds.  In that case, the court reviewed the concept of the “innocent user” who finds a patented higher life form has “escaped” and started growing on his land. As noted in Infringement of Patent on Higher Life Form “Life forms have a way of getting up and moving around: seeds propagate and blow away, creatures crawl, viruses replicate and invade.”  The Triffid case is a perfect illustration.

Calgary – 07:00 MST

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CleanTech Funding Opportunities

Clean technologies continue to be a significant source of investment capital in 2010. Provincial governments in Canada are looking for ways to attract and retain both the investment dollars as well as the technical and business expertise that flows from those investments.

The Alberta government is accepting applications in the field of bio-energy infrastructure development in connection with a $239 million fund it has established for biorefining. Industry Canada’s database of funding opportunities is listed here.

Contact us for strategic advice on financing, corporate services, and intellectual property protection.

Calgary – 09:00 MST

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Ambush Marketing: The Names That Cannot Be Spoken… (Part 2)

quatchi.jpgWith a few weeks to go before the Winter Olympics, VANOC’s anxiety about official marks (what you might call “brand-wringing”) continues.  The list of protected terms was expanded in December (curiously, this order managed to pass before Parliament was shut down) to include the mascots like Quatchi, at right, and various other symbols of the events. 

Companies of all stripes – from small retailers of cheap knock-off T-shirts, to independent app-developers, to major financial institutions – are scrutinized by VANOC to see if their efforts run afoul of the rules.  It has become clear that the Olympic and Paralympic Marks Act has cut both ways.  VANOC has a powerful enforcement tool to use against infringers and pretenders.  On the other hand, the legislation is like a handbook for companies who are not official sponsors to determine exactly where the line is. For example, Scotiabank’s recent “Show Your Colours” campaign, and the new “International Collection” by Roots, both make use of carefully crafted, non-infringing design elements that evoke the excitement and energy of the Games, while scrupulously avoiding any offense under the Act. 

VANOC’s anxiety is understandable – sponsors have paid handsomely and expect protection.  But you can’t provide a handbook, then complain when people read it and follow it. 

Related reading: Ambush Marketing: The Names That Cannot Be Spoken… (Part 1)

Calgary – 09:00 MST

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CIPO Updates: Patents & Trade-marks

There a few recent updates from the Canadian Intellectual Property Office (CIPO):

  1. Trade-marks: Is Canada finally going to join the Madrid Protocol? CIPO has just a opened a consultation on a Proposal to amend the Trade-marks Act. The proposed amendments focus on  “new business practices and improved international standards”. This may re-ignite the debate about whether Canada should ratify the Madrid Protocol. 
  2. Patents: CIPO launched three new two-year Patent Prosecution Highway pilot projects with Japan, Denmark, and Korea, which supplements the ongoing project with USPTO.  The procedures of the Canada-US PPH pilot project will be harmonized with the newly-introduced programs.
  3. Patents: There is a new Chapter 12 of the MOPOP on Subject-Matter & Utility and a revised Chapter 13 of the MOPOP on Examination of Applications.  Note that the subject of business-method and software patents (covered by Chapter 16, Computer-Implemented Inventions) is being revised by the Patent Office and proposed revisions are expected by Spring 2010.

Calgary – 11:00 MST

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Another Microsoft Appeal in i4i Case

The court injunction preventing infringing sales of Microsoft Word (see: Microsoft Loses Patent Appeal) went into effect on Monday. While the company says it is complying with the court order, MS has submitted another appeal in the patent infringement case, asking a panel of 11 judges of the US Federal Circuit Court of Appeals to review the case and quash the original judgment.

Typically, appeals are heard by a three-member panel.  Microsoft already tried that and lost in December, 2009.  Any review of a decision of the US Federal Court of Appeals should properly be made to the US Supreme Court, but Microsoft’s latest tactic is referred to as an “en banc rehearing”, a type of review at the Federal Court of Appeals level which can be permitted for “precedent-setting questions of exceptional importance”.  The court will decide if this question qualifies for such a rehearing, and if not, then Microsoft will likely take the appeal up to the Supreme Court.

Calgary – 9:00 MST

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Ambush Marketing: The Names That Cannot Be Spoken… (Part 1)

2010. Winter. Games.   As the 2010 Olympics reach a frenzied pitch in Vancouver, the contests on the ice and snow will be matched by brand battles on billboards and posters.  You will recall that in Beijing, the “Brand Police”  (see: Olympics and the Trade-Mark Police) covered up offending trade-marks with duct tape. Not just in Olympic venues, but throughout the city.  Such practices have now come to Canada, where Olympic volunteers risk having their shoes and t-shirts swaddled in duct tape to cover up the brands of companies who are not official sponsors. 

Some retailers have danced close to the line (such as Lululemon’s famous dig at Olympic brand-control), and some knock-offs have been caught when they stepped over the line.

When VANOC assesses whether a product or advertisement offends the Olympic brand they look at the following factors. Essentially, they will be looking to see if the use of the Olympic marks falsely creates the impression of a business association with the Olympics.

  • Factually accurate use: When the Olympic brand is used, is it used accurately and without distortion or modification?
  • Relevant use: VANOC is less likely to object if the use is relevant to a larger storyline and isn’t so gratuitous or disproportionate that it creates the impression of a business association with the Olympics. 
  • Commercially neutral: VANOC is less likely to object if the brand is used in a commercially-neutral manner that does not create the impression of a business association with the Olympics. 
  • Undue prominence: How much prominence is given to the brand?  
  • Use of Olympic or Paralympic visuals: Use of Olympic visuals in connection with a business  – logos, archival Games images, team uniforms or Olympic medals – is a red-flag for VANOC.
  • Unauthorized association: This is a catch-all category – VANOC will look at surrounding circumstances such as the timing and strategic placement of the advertising in question.

Companies wishing to publish last-minute advertisements in the lead-up to the 2010 Games are encouraged to seek advice before they go to print with ads, signage or product packaging.  It is worth noting that Lululemon, though they were publicly scolded by VANOC, has not been met with any other threats or cease-and-desist letters. So they appear to have found the line, and stayed on the right side of it.

Related Reading: Olympic Lawsuits, Our Trademark Anthem

Calgary – 09:00 MST

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Licensing Apps

A mobile app is just like any other software application and should be properly licensed to end-users.  Even for free versions, the app developer is not giving it away, but merely making a copy available to the user under certain conditions. 

Recent updates to the iTunes Store software have made it possible for app developers to make full-text end-user license agreements (EULA) available to purchasers. Not many app sellers take advantage of this, though sophsticated game developers such as Electronic Arts have lost no time in using the improved tools to post full versions of their EULAs.  Developers who sell their apps through other channels – such as titles in Blackberry App World – will have to tailor their EULAs to each channel.

Developers should get advice on licensing their apps to protect their intellectual property rights. The default end-user license that is embedded in Apple’s SDK Agreement is generic and limited and developers should consider the benefits of inserting their own tailor-made license.

Calgary – 09:35 MST

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Google, Apple, Nokia… Let the Litigation Begin!

nexus.jpgApple launches a cellphone. Nokia releases a laptop. Apple buys an online advertising division and Google moves aggressively into software and hardware. With the release today of Google’s nexus one phone, which positions itself as an iPhone competitor, the ongoing battle for the smartphone market heats up another few degrees. 

Nokia and Apple are already locked in patent litigation with each claiming the other has infringed its portfolio of patents.  Nokia raised the stakes when it broadened its legal attack to include all of Apple’s popular iMac desktops as well as the iPhone.  Meanwhile, with the release of Google’s branded nexus one phone (manufactured by HTC), the search-engine titan elbows into the cellphone market with its own Android-based device. Android apps will compete head-to-head with iPhone apps. In the midst of all this market positioning, intellectual property litigation is one more tool; it is reminiscent of the battle in the late 1980s when Motorola effectively declared war on upstart Nokia and used patent infringement as its main weapon. It also recalls the use of copyright in the turf wars between Apple and Microsoft in the 1990s. 

The lessons for business? Don’t ignore the value of intellectual property protection as both an offensive and defensive tool.  If you don’t know where to start, then obtain an intellectual property audit and come up with a budget and a list of priorities.

Calgary – 15:35 MST

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IP and Internet Law in 2010

2009 was a fascinating year in the world of intellectual property and internet law. Here are a few issues to watch in 2010:

Olympic Marks:  The next few months will focus attention on the uses and abuses of both Olympic marks, as well as the Olympic and Paralympic Marks Act. 

Canadian Copyright Reform and Anti-Spam Law: The Canadian copyright reform process has stalled yet again. The government undertook a public consultation process in the fall but any prospect of movement on this issue has again died in the wake of Parliament’s prorogation.  This also applies to proposed anti-spam legislation that died on the order paper. Political pundits are speculating about a fall 2010 election, and if that happens, we won’t see any developments in copyright reform or anti-spam laws until 2011 at the earliest.

US Patent Reform: As we predicted in IP & Internet Law in 2009, a proposed patent reform bill was introduced early in 2009, but since then, the patent reform process in the US is stalled. House and Senate bills are inching through Congress.

The Development of App Law: The surprise of 2009 was the rapid development of app law – the law of mobile applications. This trend can be expected to continue as legal disputes help clarify the law in this growing area.

Copyright Class Action: Though this lawsuit was commenced in 2008, it has the potential to become headline news in 2010 if it proceeds through the courts – it’s the ghost of Chet Baker vs the Recording Industry in a copyright claim for unpaid royalties (see: Canadian Copyright Class Action… Against the Recording Industry).

Business Method Patents: In both Canada and the US, the patentability of business methods is being contested, and a decision in the Bilski case (in the US), as well as an appeal of the rejection of the Amazon 1-click patent (in Canada) should come in 2010.  We can finally expect to get some clarity in this area.

Calgary – 11:45 MST


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