By Richard Stobbe

A couple, the Ecklunds, approached Oakcraft Homes, a custom home-builder. Based on their discussions, Oakcraft prepared a house plan and gave a copy of the plan to the Ecklunds. The couple later took that plan to a rival home builder, Toscana Developments. Toscana used Oakcraft’s house plan without confirming whether the Ecklunds had the rights to that plan.

When Oakcraft discovered that Toscana had copied and modified the original plan, it sued both Toscana and the Ecklunds.

The law of copyright in Canada is evolving to deal with changes in technology, but there are still some cases where copyright intersects with the age-old professions of architecture and house-building. In the recent case of Oakcraft Homes Inc v. Ecklund, 2013 CanLII 41981 (ON SCSM), an Ontario court addressed the question of who owns a house plan for copyright purposes.

Copyright is, at its most basic, simply the right of an author to make copies of his or her original work. The Copyright Act tells us that copyright subsists in every original literary, dramatic, musical and artistic work. The term “artistic work” includes paintings, drawings, maps, charts, plans, photographs, engravings, sculptures, works of artistic craftsmanship, and architectural works. The term “architectural works” also has a specific meaning in the Act: it means “any building or structure or any model of a building or a structure.” So we can be confident that, in general, a house plan is subject to copyright protection in Canada.

I say “in general” because copyright law is clear that in order to be subject to copyright protection, the house plan must be original. “Originality” forms the foundation of copyright. In order to engage copyright protection, a house plan need not be unique in the sense that the design elements are new to the world. But the design must be the product of skill (what the court describes as “aptitude, proficiency, know-how, knowledge, and practical experience”) and judgment (described as “wisdom, ability to assess or compare various possibilities in order to choose from them”). In other words, the design cannot be a purely mechanical exercise.

From this case, we can take away some important practical points about copyright in house plans, and (perhaps more importantly) the risk of infringement of copyright:

• The court noted that: “Today, that art has become a science by the use of computer aided design (CAD). Can it be said that the use of CAD thereby converts ownership in the original work to the computer software technician operating the machine or the computer software programmer who programmed the CAD software? The answer is obvious….NO!” Just because a house plan is rendered with software, that does not defeat copyright that may subsist in the plan.
• What about marking the word “Copyright” or use of the © symbol on the plan itself? Does that make a difference? The court was clear that: “The failure to mark ownership on the plan does not … defeat the right to copyright.”
• In this case, Toscana said they were not aware that the plans were subject to copyright. They had, apparently, not inquired in any detail, and were, in the court’s words “wilfully blind to determining where the plans came from and who authored them. They chose not to ask knowing that their potential customer was not the author.” Innocent infringement is still infringement and according to the court: “The fact that a defendant may have no knowledge that copyright subsists in a work or that the work was unmarked does not constitute a valid defence.”
• As a result, the builder and the couple were jointly and severally liable for the damages awarded for copyright infringement.

Calgary – 11:00 MST

By Richard Stobbe

What is eligible to be patented in the US? This week the U.S. Patent and Trademark Office (USPTO) released Interim Eligibility Guidance on patent subject matter eligibility. In this document, the USPTO summarizes the instructions for examiners on the following categories which are exceptions to patent eligibility:

• abstract idea,
• natural phenomena, and
• product of nature.

This guidance is intended to synthesize the latest Supreme Court decisions in Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013), Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012) and Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014). According to the document, it supercedes prior instructions issued by the USPTO on this topic and “offers a comprehensive view of subject matter eligibility in line with Alice Corp, Myriad, Mayo, and the related body of case law, and is responsive to the public comments received pertaining to the March 2014 Procedure and the June 2014 Preliminary Instructions.”

This Interim Eligibility Guidance is effective on December 16, 2014, and applies to all applications filed before, on or after December 16, 2014. The USPTO is seeking public comment on this Interim Eligibility Guidance – comments must be received by March 16, 2015.

 

Calgary – 07:00 MST

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By Richard Stobbe 

They say the internet never forgets. From time to time, someone wants to challenge that dictum.

In our earlier posts, we discussed the so-called “right to be forgotten” in connection with a Canadian trade-secret misappropriation and passing-off case and an EU privacy case. In a brief ruling in October, the Federal Court reviewed a copyright claim that fits into this same category. In Davydiuk v. Internet Archive Canada, 2014 FC 944 (CanLII), the plaintiff sought to remove certain pornographic films that were filmed and posted online years earlier. By 2009, the plaintiff had successfully pulled down the content from the original sites on which the content had been hosted. However, the plaintiff discovered that the Internet Archive’s “Wayback Machine” had crawled and retained copies of the content as part of its archive.

If you’re not familiar with the Wayback Machine, here is the court’s description: “The ‘Wayback Machine’ is a collection of websites accessible through the websites ‘archive.org’ and ‘web.archive.org’. The collection is created by software programs known as crawlers, which surf the internet and store copies of websites, preserving them as they existed at the time they were visited. According to Internet Archive, users of the Wayback Machine can view more than 240 billion pages stored in its archive that are hosted on servers located in the United States. The Wayback Machine has six staff to keep it running and is operated from San Francisco, California at Internet Archive’s office. None of the computers used by Internet Archive are located in Canada.”

The plaintiff used copyright claims to seek the removal of this content from the Internet Archive servers, and these efforts included DMCA notices in the US. Ultimately unsatisfied with the results, the plaintiff commenced an action in Federal Court in Canada based on copyrights. The Internet Archive disputed that Canada was the proper forum: it argued that California was more appropriate since all of the servers in question were located in the US and Internet Archive was a California entity.

Since Internet Archive raised a doctrine known as “forum non conveniens”, it had to convince the court that the alternative forum (California) was “clearly more appropriate” than the Canadian court. It is not good enough to simply that there is an appropriate forum elsewhere, rather the party making this argument has to show that clearly the other forum is more appropriate, fairer and more efficient. The Federal Court was not convinced, and it concluded that there was a real and substantial connection to Canada. The case will remain in Canadian Federal Court. A few interesting points come out of this decision:

1. This is not a privacy case. It turns upon copyright claims, since the plaintiff in this case had acquired the copyrights to the original content. Nevertheless, the principles in this case (to determine which court is the proper place to hear the case) could be applied to any number of situations, including privacy, copyright or personality rights.
2. Interestingly, the fact that the plaintiff had used American DMCA notices did not, by itself, convince the court that the US was the best forum for this case.
3. The court looked to a recent trademark decision (Homeaway.com Inc. v. Hrdlicka) to show that a trademark simply appearing on the computer screen in Canada constituted use and advertising in Canada for trademark law purposes. Here, accessing the content in Canada from servers located in the US constituted access in Canada for copyright purposes.
4. While some factors favoured California, and some favoured Canada, the court concluded that California was not clearly more appropriate. This shows there is a first-mover advantage in commencing the action in the preferred jurisdiction.  

Get advice on internet copyright claims by contacting our Intellectual Property & Technology Group.

Calgary – 07:00 MST

 

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By Richard Stobbe

In Part 1, we looked at three important steps in starting an intellectual asset management process within your organization. “Intellectual assets” can include the know-how and intellectual capital within your organization together with registered and unregistered intellectual property (IP), inventions, trade-secrets, patents, copyright-protected works, trademarks, industrial designs, and other forms of IP.

As we reviewed in Part 1, intellectual asset management starts with (i) an internal IP audit, coupled with (ii) internal education about the strategic importance of intellectual property within the organization; and (iii) the organization should establish a screening process, to weigh the various factors that influence how to innovate through “make versus buy” decisions.

In Part 2, we take a deeper dive. An organization can be innovative without being commercially successful. In other words, there is often a gap between the creative process of innovating, and the successful commercialization of those innovations. By implementing the steps in Part 1, an organization becomes more sophisticated in its treatment and analysis of intellectual assets, and an organization will develop a culture in which IP is understood and valued. That helps close that gap. However, this does not necessarily mean that intellectual assets will become an engine of economic value. That requires the development of additional skills and competencies within the organization. Consider the following “next steps”:

1. Strategic Alignment: Let’s be clear. IP should not drive the organization. Rather, the strategic goals of the organization should inform the intellectual asset management strategy. Ensure that IP policies are aligned with the strategic goals of the organization. Consider the organization in question: is this a university? A government research lab? A medium-sized for-profit business, or maybe it’s a growing business with markets in multiple jurisdictions.
   • How is success measured for this organization?
   • Are there immediate goals of raising capital?
   • Entering a new international market?
   • Attracting investors?
   • Making a strategic alliance or partnership?
   • Should the IP policy reflect a defensive or offensive position?

   All of these organizations will have different strategic goals and must ensure that their intellectual asset management strategy reflects and supports the overarching goals of the organization. IP is only one piece of the puzzle.

2. Gap Analysis: An IP audit is focussed primarily on taking an inventory of the organization’s intellectual assets. A ‘gap analysis’ is the next step: it’s an assessment of what’s missing from the organization’s IP toolbox. What does the organization need in order to achieve its goals? And how can the gaps in the organization’s IP inventory be filled, considering the strategic goals involved. This internal analysis can lead to an external, “outward looking” review. What is available in the marketplace, either through acquisition, in-licensing or strategic partnership? See also the “make versus buy decisions” discussed in Part 1. In connection with the analysis of “gaps” in the IP portfolio, look at any gaps in the paper: How do employment agreements and consultant agreements deal with IP ownership issues and confidentiality? Do vendor or supplier agreements need to be bolstered to address IP issues? Perhaps standard-form end-user licenses or service agreements need to be reviewed to ensure that the treatment of IP is in alignment with the organization’s overall intellectual asset management policies.
3. IP Exploitation: As mentioned above, an organization may be adept at innovating, and it may have a sophisticated process of cataloguing internal IP, and even assessing the gaps in that portfolio. IP commercialization and exploitation is the process by which an organization extracts value from its intellectual assets. This can be from product sales, or from out-licensing of IP-protected services and processes, as well as licensing relationships and franchise agreements, joint ventures and cross-licensing. An organization must understand the steps to market, whether through its own sales channels, or through distributorships or resellers. And the process of bringing innovations to market will be supported by a well-designed intellectual asset management system.

Richard Stobbe is an IP lawyer, trademark agent and Certified Licensing Professional. To discuss the importance of intellectual assets within your organization, contact Richard Stobbe in our Intellectual Property and Technology Group.