Archive for March, 2017

Canadian Copyright & Breach of Technological Protection Measures (TPMs): $12.7 million in Damages

By Richard Stobbe

It’s always exciting when there’s a new decision about an obscure 5-year old subsection of the Copyright Act! Back in 2012, Canada changed its Copyright Act to try and drag it into the 21st century. Among the 2012 changes were provisions to prohibit the circumvention of TPMs. In plain English, this means that breaking digital locks would be a breach of the Copyright Act.

In Nintendo of America Inc. v. King and Go Cyber Shopping (2005) Ltd. the Federal Court reviewed subsections 41 and 41.1 of the Act. In this case, the defendant Go Cyber Shopping was sued for circumvention of the TPMs which protected Nintendo’s well-known handheld video game consoles known as the Nintendo DS and 3DS, and the Wii home video game console.  Specifically, Nintendo’s TPMs were designed to protect the code in Nintendo’s game cards (in the case of DS and 3DS games) and discs (in the case of Wii games).

The defendants were sued for copyright infringement (for the copying of the code and data files in the game cards and discs) and for circumvention of the TPMs. Interestingly (for copyright lawyers), the claim was based on “secondary infringement” which resulted from the authorization of infringing acts when Go Cyber Shopping provided its customers with instructions on how to copy Nintendo’s data.

The Court agreed that Nintendo’s digital locks qualified as “technological protection measures” for the purposes of the Act. The open-ended language of the TPM definition permits copyright owners to protect their business models with “any technological tool at their disposal.” This is an important acknowledgement for copyright owners, as it expands the range of technical possibilities, based on the principle of “technological neutrality” which avoids discrimination against any particular type of technology, device, or component. To put this another way, a copyright owner should be able to fit into the definition of a TPM  fairly easily since there is no specific technical criteria, aside from the general reference to an “effective technology, device or component that, in the ordinary course of its operation, controls access to a work…”

Next, the court agreed with Nintendo that Go Cyber Shopping has engaged in “circumvention” which means “to descramble a scrambled work or decrypt an encrypted work or to otherwise avoid, bypass, remove, deactivate or impair the technological protection measure…”

Lastly, Nintendo sought statutory damages, which avoids the need to show actual damages, and instead relies on automatic damages at a set amount. The court has a range from which to pick.  Nintendo suggested statutory damages between $294,000 to $11,700,000 for TPM circumvention of 585 different Nintendo Games, based on a statutorily mandated range between $500 and $20,000 per work. For copyright infringement, the evidence showed infringement of 3 so-called “Header Data” files. The court was convinced to award damages at the highest level of the range.

In the end the court made an award in favour of Nintendo, setting statutory damages at $11,700,000 for TPM circumvention in respect of its 585 Nintendo Games, and of $60,000 for copyright infringement in respect of the three Header Data works. This shows that TPM circumvention, as a remedy for copyright owners, has real teeth and may, in the right circumstances, easily surpass the damages awarded for copyright infringement. On top of this, the court awarded punitive damages of $1,000,000 in light of the “strong need to deter and denounce such activities.” Total… $12.7 million.

 

Calgary – 07:00 MT

 

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Interim Canadian drone rules launched

By Richard Stobbe

As the recreational and commercial use of drones expands, the calls for a regulatory framework have grown louder. The Canadian federal government has, until last week, taken the simple approach of prohibiting the use of UAVs: “No person shall operate an unmanned air vehicle in flight except in accordance with a special flight operations certificate or an air operator certificate.” Essentially, any commercial use of drones or use of drones that weigh more than 35 kg had to be registered with a Special Flight Operations Certificate (SFOC) through Transport Canada.

So far, the system of regulatory control was simplistic but not exactly scaleable, considering the explosive growth in this area.

Last week, as part of its effort to bring order to the chaos, the Canadian federal government released its Interim Order Respecting the Use of Model Aircraft under the Canadian Aviation Regulations which fall under the Aeronautics Act.

Now, if you fly your drone for recreational purposes and it weighs between 250 g and 35 kg, you don’t need an SFOC from Transport Canada to fly. But wait… there’s more!

This interim order essentially classifies small recreational drones as “model aircraft”, keeps the distinction for “unmanned air vehicles”, and adds some regulatory details.  The old regulations took a broad brush approach to the relatively small population of model aircraft hobbyists (hey guys… don’t fly into a cloud or in a manner that is hazardous to aviation safety). By contrast, the new rules provide a more objective set of criteria. Now, a person must not operate a recreational drone or model aircraft:

  1. at an altitude greater than 300 feet AGL;
  2. at a lateral distance of less than 250 feet (75m) from buildings, structures, vehicles, vessels, animals and the public;
  3. within 9 km of an aerodrome;
  4. unless it is operated within VLOS (visual line-of-sight) at all times during the flight;
  5. at a lateral distance of more than 1640 feet (500 m) from the person’s location;
  6. within controlled airspace;
  7. within restricted airspace;
  8. over or within a forest fire area, or any area that is located within 9 km of a forest fire area;
  9. over or within the security perimeter of a police or first responder emergency operation site;
  10. over or within an open-air assembly of persons;
  11. at night;
  12. in cloud;
  13. while operating another drone or model aircraft;
  14. unless the name, address and telephone number of the owner is clearly made visible on the aircraft.

Sigh… one can’t help a certain nostalgia for any regulation that still uses the word “aerodrome”. Those are just some of the new drone rules. Drones used for commercial or research purposes still require an SFOC.

For breach of the rules applying to recreational use, there are fines of between $3,000 and $15,000.

For our readers in Calgary, check out Taking Off: Drone Law in Canada where our Emerging Technologies Group presents an overview of the legal landscape surrounding drone use and discusses what you need to know to use drones in your business. The seminar will cover topics including:

  • Discussion of the current regulatory approach at the federal, provincial and municipal level
  • Potential privacy, contract and insurance issues
  • Drone-related liability
  • Patent/intellectual property protection

Additional Reading: The Wild West: Drone Laws And Privacy In Canada

Calgary – 07:00 MT

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Experimental Use of an Invention

By Richard Stobbe

Inventors must take care that their invention is “new” for it to be patentable. That means the invention hasn’t been disclosed to the public. Trade show announcements, press releases, publications, offering the invention for sale – all of these can be considered a public disclosure, and if disclosure of the invention occurs before the date of filing of the patent application, this disclosure could defeat patentability, since the invention is no longer “new” for patenting purposes.

In Canada and the U.S. there is a 12-month grace period, so the date of prior disclosure is measured against this 12-month period: put another way, patentability may be lost if the invention was disclosed by the inventor more than one year before the filing date of the patent.

So how does this apply to experimental use? How can an inventor test new inventions and avoid the problems associated with public disclosure?

The recent decision in Bombardier Recreational Products Inc. v. Arctic Cat Inc. is interesting in a number of ways, but in this discussion I want to flag one element of the case. Arctic Cat was sued by Bombardier for infringement of certain snowmobile patents, which related to a particular configuration of rider position and frame construction.  Arctic Cat raised a number of defenses and one of them was “prior public disclosure.” Since Bombardier, the patent-holder, tested its prototypes of the snowmobiles on public trails, Arctic Cat argued that, in and of itself, constituted public disclosure, since “someone could have witnessed the rider’s hips above his knees, and the ankles behind the knees, and the hips behind the ankles.”

Unhappily for Arctic Cat, the court dryly dismissed this defense as “another one of those last-ditch efforts.”

Citing an inventor’s freedom to engage in “reasonable experimentation”, the court went on to say: “Since at least 1904, our law has recognized the need to experiment in order to bring the invention to perfection. …In this case, the evidence is that [Bombardier] was conscious of the need for confidentiality and took steps to ensure it would be protected. The experimentation was necessary in view of the many uses that would be available for that new configuration.”

The court noted that, even if a member of the public could have seen the prototype snowmobile “there is little information that is made available to the public while riding the snowmobile on a trail, even for the person skilled in the art. The necessary information to enable is not made available. The invention disclosed in the Patents is not understood, its parameters are not accessible and it would not be possible to reproduce the invention on the simple basis that a snowmobile has been seen on a trail.”

Applying the well-recognized experimental use exception, the court found that experimental use on a public trail did not constitute prior public disclosure of the inventions. Inventors should take care to handle experimental use very carefully.  Make sure you get advice on this from experienced IP advisors.

Related Reading: A Distinctly Canadian Patent Fight

Calgary – 07:00 MT

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