To hack or not to hack…


That is the business question for many in the software industry, including Microsoft, Sony and Twitter.

Software companies have to consider whether to embrace the hacking (…or shall we say “custom development”) culture of their customers, or gird for battle against the hackers. Mashable’s interesting article (Xbox Kinect vs. Sony PS3: How 2 Companies Handle Hacking) reviews the different approach taken by Microsoft which is (uncharacteristically) opening up its popular Kinect gaming console, and Sony which is suing customers who hack into PlayStation 3 [Link to Sony’s Complaint against hacker George Hotz is here 1MB PDF ].  Big old multinationals like Microsoft and Sony aren’t the only ones who have to face this question. New technology upstarts like Twitter are also wrestling with the problem: Twitter recently told developers to back off, after complaints of privacy violations and fragmented user experience. Companies offering software of any kind are finding that customers – both individual consumers and corporate users – are accessing the code, unlocking, jaibreaking and building their own functionality, whether or not the vendor has approved this.  My recent article on Software Licensing in 2011 [PDF] reviews the issues for software vendors.

Related Reading: Apps, Bots and Workarounds

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Update: Clean Technology Patents in Canada

The Canadian Intellectual Property Office announced last week that the new clean-tech patent rules are now in force. The new rules officially came into force on March 3, 2011. This will permit applicants to obtain expedited prosecution of applications when the invention is related to green technology. This requires a declaration by the applicant that the technology, when commercialized, would help to “resolve or mitigate environmental impacts or conserve the natural environment and resources”.  For further information, see CIPO’s page on Expedited Examination of Patent Applications Related to Green Technology

Related Reading:
CleanTech & Clean Energy: Innovation vs Patents

CleanTech in Calgary

The National Post interviewed Richard Stobbe for an article on the plan to fast-track cleantech patent applications: “Canada plays catch-up on cleantech patents“

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When a “Substantial Payment” is not enough

In a recent trade-mark dispute, the parties entered into a settlement agreement of sorts. The dispute was over use of the mark GUTTERFILTER and resulted in litigation in both Canada and the US. Under the terms of settlement, one party would cease its use of the mark, and the other party would make a payment – a “substantial payment” no less.

In Gutter Filter Company L.L.C. v. Gutter Filter Canada Inc.,  2011 FC 234, the court had to decide whether this settlement agreement was a binding contract. One side argued that the terms were too vague to be enforceable. In its analysis, the court concluded that: “In light of the malleable meaning of the word “substantial,” the language used in the Settlement Document, “after a substantial payment has been received,” lacks certainty. “Substantial” in the context it was used could arguably mean a wide range of different amounts.”  As a result, there was no binding agreement to settle, and the litigation continued.

Lessons for business?

  • Settlement negotiations are often highly charged and create special circumstances that require additional attention to the specifics of the written document. Parties may want to gloss over the “fine print” but there’s a reason that lawyers want to focus on clarity of language.
  • Settlement may require quick action at or shortly after the meeting. In this case, the parties met and tried to settle, but waited too long before documenting the settlement terms. In the intervening period, their relationship soured again, and the settlement terms were called into question.

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US Patent Reform: Status Update

The US Senate has been grappling with a proposed reform of patent law for many years – hence the various proposed bills such as the Patent Reform Act of 2007, the The Patent Reform Act of 2009 and The Patent Reform Act of 2011. Last week the US Senate passed S.23, the America Invents Act [PDF] with broad bipartisan support. The bill now goes to the U.S. House of Representatives. This Senate bill has not yet become law, and the ultimate outcome depends on the text of the corresponding House bill (which has not yet been unveiled) and the process of reconciling the two bills if there are differences.  However, if it does become law, it would represent the biggest shift in US patent law in half a century.  Among the changes are the switch to patent priority from the present first-to-invent system to a first-to-file system, as we have in Canada.

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Holograms & Other Nontraditional Trade-marks in Canada


The Canadian Intellectual Property Office is expected to announce new guidelines on “nontraditional marks” sometime this year. In their current proposed practice notice, the office would allow motion marks and holograms as two types of nontraditional marks. There is still some debate about how these marks would be depicted visually, since the limitations are not so much technological but rather procedural – the current rules require the mark to be depicted visually in a drawing.

Other nontraditional marks currently permitted in Canada include marks that protect the shape of the product, such as the Life Saver Design (at left) (Reg. No. TMA562616) registered by Kraft Foods for candy. BMW has registered the Mini Distinguishing Guise (Reg. No. TMA789872) for the shape of their iconic MINI cars. This protects the shape of the car as a distinguishing guise. Colour can be part of a trade-mark. Three-dimensional marks are also permitted in Canada.  Sound marks are allowed in the US and other jurisdictions, but Canada has a long way to go.  There are currently no sound marks registered in Canada. The MGM lion’s roar, which was the subject of a Canadian “sound mark” application in October, 1992 (Application No. 714314), is still before the Canadian trade-marks office after almost 20 years, having gone through various extensions, refusals and appeals.  Some other possibilities:

  • Scent marks: a “cherry scent” is registered in the US for “synthetic lubricants.”
  • Tactile marks: a velvet texture and a leather texture are registered in the US, both appearing on the surface of a wine bottle. Germany has permitted registration of the mark UNDERBERG in Braille for beverages.
  • Flavour marks: an application for a trade-mark for an artificial strawberry flavor for “pharmaceutical preparations” was refused in Europe.

Related Reading: Time for Sound Marks in Canada?

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Myriad Issues: Patentability of Isolated DNA

Courtesy of Wikimedia CommonsIn March 2010, a U.S. district court’s ruling that isolated DNA and inventions that use isolated DNA are not eligible for patent protection sent shockwaves through the biotech and life sciences sector in Canada and the US. Association for Molecular Pathology v USPTO, 09 Civ. 4515 (Link courtesy of Genomics Law Report) resulted from a lawsuit against Myriad Genetics, a company that patented the BRAC1 and BRAC2 genes, genes associated with increased risk of breast cancer and ovarian cancer.  The court overturned the patents on the basis that inventions that use isolated DNA are not markedly different from “products of nature”.  The decision is currently under appeal to the US Federal Circuit and a decision is expected in 2011. 

BioBusiness Magazine has interviewed Richard Stobbe on this topic in its current issue: The Myriad Decision: What does the patent dispute mean to Canadian biotech? 

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Online Agreements: Do “Releases” Really Work?


We’ve all agreed to releases and waivers. We do it on paper, before bungee jumping, skiing or attending a kids’ birthday party. Or we agree online, before booking an event, ordering a product or downloading software. This is the fine print that essentially says that the operator or vendor has no liability or limited liability for any injury, damages or loss. Do these hold up in court?

In a recent case (Loychuk v. Cougar Mountain Adventures Ltd., 2011 BCSC 193) the BC Supreme Court had to consider this question in connection with an injury from ziplining. Prior to booking the activity online, the participants were advised on the website that a waiver of liability was required in order to participate in the activity. It was a one-pager entitled “RELEASE OF LIABILITY, WAIVER OF CLAIMS AND ASSUMPTION OF RISK AGREEMENT”. The participants signed a paper copy of the release before ziplining, and an injury occurred. The court dismissed the personal injury lawsuit on the basis of the release, confirming a long line of cases upholding such clauses.

Vendors and operators who wish to make use of such clauses in their online agreements should take care in drafting and implementing the terms. 


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Online Agreements: What does Second Life have in common with the Canadian Wheat Board?


Answer: Forum Selection.  The concept of “forum selection” can be summed up as follows: where 2 parties are entering into a contract and they are located in different jurisdictions (different countries, provinces or states), then they can choose the “forum” or the location where their disputes will be settled. This choice usually covers both law and location – for example, the law of Alberta and the courts located in Calgary. Or the law of B.C. and arbitration in Vancouver. These clauses are also referred to as “mandatory jurisdiction” or “choice of law” clauses. There are subtle differences between them, but generally they all serve the same purpose.  As an online consumer, you may have agreed to be bound by the laws of Washington State (Microsoft), California (Apple) and Ontario (BlackBerry).

In the US, forum selection clauses are respected by the courts: a recent decision (Evans v. Linden Research, Inc., E.D. Pa. Feb. 3, 2011) upheld the provisions of the Second Life online user agreement, confirming California as the proper venue pursuant to the forum selection clause.

In Canada, courts will generally hold the parties to their contract, which includes their choice of law and forum. So these clauses will be upheld, unless there is “strong cause” or convincing evidence to satisfy the court there is a really good reason not to uphold the forum selection clause. Sounds a bit circular – (courts will uphold the clause…unless they won’t) – but this gives Canadian courts the flexibility to weigh the surrounding circumstances. In the recent case of Hudye Farms Inc. V. Canadian Wheat Board, 2011 SKQB 29 (CanLII), an online sign-up process for a Canadian Wheat Board grain-handling contract incorporated certain standard terms. These standard terms specified that disputes would be governed by the courts of Manitoba and the application of Manitoba law.  Although no-one actually signed those terms, the court agreed that they were binding on the parties through a series of agreements and click-through screens.  The clause was upheld, and the lawsuit transferred to Manitoba.

Related Reading: E-Commerce & Internet Jurisdiction

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Copyright in “Art”


google.jpgWhat do you get when you photograph someone else’s photograph? German photographer Michael Wolf received honorable mention in this year’s World Press Photo Contest for a series of images from Google Street View. He scrolled / strolled through Street View in different cities, and photographed scenes that he came upon. Let’s leave aside the question of whether this qualifies as art or photojournalism (maybe it’s both), and look at the copyright issue. Can a photograph of another image be protected by copyright or is it an infringement of the copyright in the original work?

The Quebec Superior Court in Ateliers Tango Argentin Inc. v. Festival d’Espagne et d’Amerique Latine Inc., (1997), 84 C. P. R. (3d) 56, dealt with a staged reproduction of a photo, rather than a photo of a photo. In that case, the defendant reproduced a photograph – same location, same angle, same layout of the same subject matter. The court decided that this infringed the copyright in the original photograph. Applying this reasoning, a photo of a photo could easily be an infringement.

In a 1999 US case, the court considered whether a copy of a photograph of a painting would infringe copyright.  Someone had taken photos that were exact replicas of paintings.  Copyright in the paintings had already expired at the time the photos were taken. The court decided that the photos are not themselves protected by copyright because they lack originality – an essential ingredient of copyright. So, copying those photos was not an infringement of copyright: Bridgeman Art Library v. Corel Corp., 36 F. Supp. 2d 191 (S.D.N.Y. 1999).

The image above? It’s not one of Mr. Wolf’s works – this one is my own image, snapped from Google Street View, right outside Field’s Calgary office. (If you look closely, you can see Google’s copyright notation on Calgary’s summer sky.)

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