Not an IP story, dear readers, but worth noting: my firm has established the Field Law Community Fund to give back to the communities in which we work. Field Law, already supports charitable groups and organizations across Alberta and the North. The Field Law Community Fund Program has just been launched in addition to the firm’s current community involvement. The program empowers individuals, organizations, charities and community groups to access funding to bring their ambitious, creative community initiatives to life, such as initiatives focussed on education, healthcare, at-risk youth, homelessness, women’s organizations, sports, community and arts and culture. Check it out and apply!

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The protection of IP rights is a competitive tool in the global economy. A recent report from authored by Dennis Blair, former director of national intelligence in the U.S. and Jon Huntsman Jr. former governor of Utah and U.S. ambassador to China (and probably the most decent of the candidates running for the GOP last year) discuss this in their recent article in the Washington Post. They both work for the Commission on the Theft of American Intellectual Property (The IP Commission).

On Wednesday, the IP Commission released its report: The Report of the Commission on the Theft of American Intellectual Property (PDF). Makes for interesting reading for Canadians.

The Americans have the Economic Espionage Act, the Foreign Economic Espionage Penalty Enhancement Act and the Theft of Trade Secrets Clarification Act.

Is it time for Canadian legislation on the protection of trade secrets?

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When a user dies, who owns the contents of that user’s account?

In Ajemian v. Yahoo Inc.  (May 7, 2013), a Massachusetts court considered this question. Two brothers, who administered their brother John’s estate, brought a lawsuit against Yahoo for access to email messages of their deceased brother, and a declaration that the email account was property of John’s estate. The court considered the Yahoo Terms of Service, which included this clause: “You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted.”

The court looked at the central question of whether these terms – in particular, this “No Right of Survivorship and Non-Transferability” clause described above – was reasonably communicated to the user. The terms were amended before the time of death but the evidence was unclear on whether the deceased user had assented to this particular amendment. Because of the weak evidence on this point, the court decided that Yahoo could not rely on the forum selection clause which would have deflected the case to California.

The court took the view that the deceased user was a Massachusetts resident and courts in that state had a strong interest in the outcome of the case as it related to the assets of a deceased resident, as opposed to the nature of Yahoo’s services. The ultimate decision was remanded to the lower court, but we can take away a few important lessons:

1. The method of implementing Terms of Use and (just as important) amendments to those terms should be carefully reviewed by any Canadian company conducting business online. This includes everything from an email service like Yahoo, to cloud-computing service providers, online retailers, ebook sellers and software vendors.
2. Corporate accounts may not impacted by the death of a user, but anyone making consumer sales should review their online terms to address survivorship issues. And there are many cases where even a “corporate” user is signing up as an individual, without any clarity on what happens to that account as an “asset” of the business after death.

Get advice from our licensing and internet law experts in this complex area.

Related Reading: Is There Life After Death for Your Digital Assets?

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A license can be granted without any written agreement. It happens more often than you might think. For example, a license by verbal agreement and a “course of conduct” was granted by one party in the case of  Planification-Organisation-Publications Systèmes (POPS) Ltée and Elizabeth Posada v. 9054-8181 Québec Inc., 2013 FC 427. In that case, the lack of a written agreement was irrelevant. The court found that there was an “implied” license. The next question was whether that license could be revoked or terminated? The software owner asserted it was entitled to revoke the licence that it had previously granted, because that licence had been granted for no consideration (or “à titre gracieux” – sounds better in French).

The court disagreed. It’s true that a license granted for no value or no consideration can be revoked unilaterally. The B.C. Court of Appeal came to this conclusion in Katz (c.o.b. Michael Katz Associates) v. Cytrynbaum, [1983] B.C.J. No. 2421 (C.A.), where an architect revoked consent to the transfer of copyright where it was given without any consideration. However, in the Planification decision, the court found significant value had been transferred over many years by the licensee, though it was never documented in writing as “consideration” for the grant of a license.  This came in the form of “conceptual contributions” to the software, software testing, compensation for developers, contributions of macros and other inputs for the software.

The lessons for business?

• Be aware that a software license can be granted verbally or through a course of dealing between the licensor and licensee. This results in an “implied” software license.
• Terminating or revoking such a license may be possible if the grant is gratuitous and there is a complete absence of any value flowing back to the licensor. However, consideration can also be implied. In this case, it was pieced together from various sources to make up valid consideration for the grant of the license.
• Any “free” licenses – including licenses between joint-venture partners, or licenses for beta or pre-release versions of software – should be handled carefully to avoid these pitfalls.

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Self-replicating technologies present intellectual property law with some unique challenges.

In the case of Bowman v. Monsanto Company (May 13, 2013), the US Supreme Court has weighed into this thorny field, and on Monday it delivered a unanimous judgment upholding the rights in Monsanto’s patented soybeans. (See our earlier post: Self-Replicating Technologies (Patents in the Field, Part 2).)

Monsanto sells its patented seeds under a license agreement. Farmers are permitted to plant the beans in one, and only one, growing season. Collection and replanting is prohibited under the terms of the license. Bowman bought seeds from a local grain elevantor, planted, harvested, collected and replanted those seeds in successive years. In this way, he was able to take advantage of the “Round-Up Ready” qualities of the genetically modified beans, without paying the usual fee that would be owed to Monsanto as the patent owner. In the court’s view, this deprived Monsanto of the reward that patent law provides for the sale of each patented article. The court was clear that “Patent exhaustion provides no haven for that conduct.”

According to the court: “…we think that blame-the-bean defense tough to credit. Bowman was not a passive observer of his soybeans’ multiplication; or put another way,the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops. …Bowman devised and executed a novel way to harvest crops from Roundup Ready seeds without paying the usual premium. He purchased beans from a grain elevator anticipating that many would be Roundup Ready, applied a glyphosate-based herbicide in a way that culled any plants without the patented trait, and saved beans from the rest for the next season.”

The US Supreme Court sided with Monsanto and upheld the Federal Circuit Court of Appeals decision.

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There was considerable interest in our earlier post (Trade-mark Oppositions: When “Close” becomes “Too Close”) which reviewed the competing marks POMPURE vs. POM WONDERFUL for beverages, and the marks CAMILION vs. CAMÉLÉON & Design, both for software.

In another recent case Reynolds Presto Products Inc. v. P.R.S. Mediterranean Ltd., 2013 FCA 119, the Federal Court of Appeal reviewed the competing marks GEOWEB and NEOWEB, both for “cellular confinement systems”. The owner of the GEOWEB mark sought an order to strike out NEOWEB on the basis of confusion. At trial, the judge sided with the owner of the NEOWEB mark. The owners of GEOWEB appealed.

The Trade-marks Act tells us that in determining whether trade-marks are confusing, the court should consider “all the surrounding circumstances” including:

• the distinctiveness of the trade-marks and the extent to which they have become known;
• the length of time the marks have been in use;
• the type of products, services or business in question;
• the “nature of the trade” which looks at the marketplace, sales and distribution channels; and
• the degree of resemblance between the trade-marks in appearance or sound or in the ideas suggested by them.

In this case, the appeal court overturned the lower court decision. Proper emphasis should have been placed on the fact that both companies were direct competitors, selling the same products into the same market. 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, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks”. The court should not conduct a careful examination of the two marks through a side-by-side comparison.

In the end, the NEOWEB was found to be confusing with GEOWEB and was ordered to be struck from the register.

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In Pelchat v. Zone 3 Inc., 2013 QCCS 78, a Quebec court decision has addressed the dichotomy between the idea for a TV show, and the “form and expression” of ideas, as embodied in a TV show. In this case, the defendant Zone 3 was sued for a claim of copyright infringement related to its makeover TV show called “Métamorphose”. The lawsuit was brought by Mr. Pelchat, who claimed that his own show “Look” (which aired in the late 1980s) was infringed by Zone 3’s show. Mr. Pelchat claimed his infringed work was a “beauty makeover of a woman on TV through hair, makeup and clothes”.  Copyright law is clear that it will only protect original expressions of an idea, not the idea itself. Thus, there is no infringement where the ideas between two shows are similar, but there is no actual copying of protected original expression.

In this case, the court did review the overall expression of the two shows, the structure, dialogue, sets, characters and other elements of expression. It concluded that Zone 3 did not engage in any copyright infringement.

Thanks to the l’Association du Jeune Barreau de Montréal for its case summary and link to the original judgment.

Contact Field Law’s Entertainment Law experts for advice in this area.

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Ever wondered if you would infringe a patent but wanted to know before any infringement occurred?

Honeywell International, Inc. and Arkema Inc. are competitors in the field of automotive air-conditioning systems. Honeywell owns certain United States patents covering refrigerant inventions – in this case, innovations for a cooling system with low global warming potential. Arkema was about to enter into certain long-term supply contracts but before doing so, it wanted an advance ruling from the court, to determine whether such conduct would infringe the Honeywell patents. To achieve this, Arkema sought a declaratory judgment under the (US) Declaratory Judgment Act that by entering into contracts with automobile manufacturers, it would not incur liability as an “indirect infringer” of the Honeywell patents.

According to this latest decision, the US Federal Circuit Court of Appeals has ruled that this situation created a controversy that was “sufficiently immediate” to access the relief under the (US) Declaratory Judgment Act.

Read this article from LES: Suppliers May Ask Courts to Rule that They Do Not Indirectly Infringe Patents when They Have Agreed to Supply an Allegedly Infringing Product Even Before Their Customers Have Had an Opportunity to Directly Infringe the Patents.

Thanks to Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. who have posted a link to the decision here.

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