Archive for December, 2019

Canadian Site-Blocking Decision

By Richard Stobbe

A streaming service known as “GoldTV” was in the business of rebroadcasting television programing through online broadcasting or streaming services to Canadian consumers. This had the effect of eating into the core business model of traditional Canadian broadcasters such as Bell Media and Rogers. Can a broadcast company fight back against this type of streaming service by seeking a site-blocking order?

Based on copyright infringement allegations, the broadcasters took GoldTV to court and obtained interim court orders.  Despite the issuance of the interim and interlocutory injunctions directly against GoldTV, some of the offending services remained accessible, and the alleged infringement continued. Basically, GoldTV remained anonymous and (practically speaking) beyond the reach of the Canadian courts.  Bell Media and Rogers then sought an order to compel Canadian ISPs to block access to GoldTV’s sites.

We know that, under Canadian law, non-party actors can be ordered by a Canadian court to take certain steps. In Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 (CanLII), the Supreme Court of Canada approved a court order that required Google to globally de-index the websites of a company in breach of several court orders.  The Court affirmed that injunctions can be issued against someone who is not a party to the underlying litigation.

In this recent decision, Bell Media Inc. v. GoldTV.Biz, 2019 FC 1432 (CanLII),  the court confirmed that it can order ISPs, such as Bell Canada, Fido, Telus and Shaw, to block the offending GoldTV sites. Although there are obvious analogies to the Equustek case, the court in GoldTV indicated an order of this nature has not previously issued in Canada but has in other jurisdictions, including the United Kingdom. Equustek involved de-indexing from a search engine, whereas the GoldTV case involves site-blocking. The court issued the site-blocking order, with a 2-year sunset clause.

Teksavvy Solutions (one of the ISPs bound by the order) has appealed this decision to the Federal Court of Appeal (PDF).

Stay tuned.

 

Calgary – 07:00 MST

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Copyright Fight: Hollywood versus a Film School Project

By Richard Stobbe

In the interesting case of Pourshian v. Walt Disney Company, 2019 ONSC 5916 (CanLII), plaintiff Mr. Pourshian says that in 1998, while in high school, he conceived the idea of a film in which a character’s internal organs (Heart, Stomach, Colon, Bladder and Brain), were portrayed as personified characters.  In 2000, while a film school student in Ontario, he wrote a screenplay and produced a short film called Inside Out based on this idea.  He is now a director and cinematographer based in Toronto.

In 2015 Pixar, Disney’s animation company, released INSIDE OUT, a feature-length animated film featuring a character whose emotions of Joy, Sadness, Anger, Fear and Disgust take the form of personified characters.  Did Pixar’s 2015 production infringe the copyright in the film school project from fifteen years earlier? That’s what Mr. Pourshian  alleges, claiming that he is the owner of copyright in his original screenplay, live theatrical production, and short film, each of which are titled “Inside Out“, and that Pixar infringed those copyrights “by production, reproduction, distribution and communication to the public by telecommunication of the film INSIDE OUT”.

This case is more akin to  Cinar Corporation v. Robinson, 2013 SCC 73 (CanLII), where the infringement claim did not involve direct cut-and-paste copying, but rather was based on an assessment of the cumulative effect of the features copied from the original work, to determine whether those features amount to a substantial part of the skill and judgment of the original author, expressed in the original work as a whole. This involves a review of whether there is substantial copying of elements like particular visual elements of setting and character, content, theme and pace. Compare this one with Sullivan v. Northwood Media Inc. (Anne with a © : Copyright infringement and the setting of a Netflix series).

The Pourshian case was a preliminary motion about whether the claim can proceed in Canada, or whether it should be heard in the US. The Court found that there was a real and substantial connection in relation to the claims and Ontario, and the case will be permitted to continue against Pixar Animation Studios, Walt Disney Pictures Inc. and Disney Shopping Inc.

If this case proceeds to trial, it will be fascinating to watch.

Mr. Pourshian did pursue a separate claim in California (Pourshian v. Disney, Case No. 5:18-cv-3624), which was voluntarily withdrawn in 2018.

 

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Privacy Update: Transborder Data Flow

By Richard Stobbe

In our post earlier this year (Privacy Update: Will Consent be Required for Outsourcing Canadian Data?) we reviewed the changes proposed by the Office of the Privacy Commissioner of Canada. These changes would have changed the way the Commissioner viewed transborder flows of personal information. Transfer across a border would have been considered a “disclosure”, mandating a new consent, as opposed to a “use” which could be covered by the initial consent at the time of collection. 

In September, after the consultation period ended, the OPC confirmed it will hold to its 2009 Guidelines for Processing Personal Data Across Borders.

This is good news for any Canadian business who uses a service provider outside of the country to process data – such as the use of Gmail for corporate email, or Amazon Web Services (AWS) for data hosting, or the use of a UK company for CRM data processing services.  If your company is compliant with the 2009 guidelines, then no change is required.

For advice on cross-border transfers of personal data, please contact us.

Related Reading: OPC Reaffirms 2009 Consent Standard for Cross-Border Data Processing

 

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Infringing Trademarks Cannot Remain on the Register

By Richard Stobbe

In a battle between the suitcase makers, the Federal Court of Appeal found that Travelway Group International Ltd. (Travelway), had infringed the trademarks owned by Wenger, and had passed off its own goods as Wenger’s. The Court granted Wenger a declaration of trademark infringement, ordered a permanent injunction prohibiting Travelway from using its infringing marks, and ordered Travelway to destroy or deliver up all wares, packages, labels and advertising material.

Basically, this was a complete victory for the well-known Swiss-cross style Wenger brand, depicted below.

travelway

However, the Federal Court of Appeal decision resulted in an anomaly: at the time of the trademark infringement lawsuit in 2013, the trademarks of both Wenger and Travelway were registered in Canada. In the appeal decision, the Court concluded, ultimately, that “each of the Travelway marks is confusing with each of the Wenger marks”, but the Court left the registrations in place, with the result that infringing, invalid trademarks were nevertheless maintained on the register in Canada.

The court in Wenger SA v. Travelway Group International Inc., 2019 FC 1104 (CanLII), corrected this, expunging the Travelway marks.

It’s also worth noting that the Travelway registrations were not found to be void ab initio, and thus benefited from the protection granted by section 19 of the Trademarks Act, which indicates that a registration is a defence to infringement. The court appears to have accepted Travelway’s argument that the protection of section 19 should extend to the variants of the Travelway marks, given that the Federal Court of Appeal found them to be permissible variants.

 

Related Reading: CANADA: Infringing Trademark Registrations Must Be Expunged, Court Finds

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Copyright and Code: Can a Software Developer Take a Shortcut?

 
By Richard Stobbe

Let’s say an employee is hired as a software engineer to develop an application for the employer.  The employee completes the project, and the software program is launched as a commercial product. Copyright is registered in the software, showing the employee as author, and the employer as owner.  So far so good.

The employee leaves, and her company launches its own software product, which seems to compete directly with the software that was created for her former employer. Ok, now we have a problem.

Or do we?  These are the basic facts in the interesting case of Knowmadics v. Cinnamon and LDX Inc., 2019 ONSC 6549 (CanLII), where an ex-employee left her employment in 2017, and within two months of signing a Non-Disclosure Agreement, her company LDX was offering software products that seemed to contain similar features and competed directly with Knowmadics, the former employer.

Knowmadics sued its former employee, claiming that the LDX software infringed the copyright of Knowmadics. The claim also alleged breach of the Employment Agreement, a Subcontractor Agreement, and a Non-Disclosure Agreement.

An analysis of the code showed that there were similarities and overlap between the software written for Knowmadics, the former employer, and the software sold by Ms. Cinnamon, the former employee through her company LDX.  However, Ms. Cinnamon raised a defence that makes perfect sense in light of the way that many software projects evolve: any similarities, the employee argued, were due to the simple fact that she used her own prior code in developing the program for Knowmadics, during her employment, and that same code was incorporated into a database that she wrote for an earlier client, and the same code was subsequently incorporated into the software she wrote for her own company, LDX. So of course it has similar features, it’s all from the code originally authored by the same developer.

To borrow from the court’s analysis: “The relevant issue as far as the database goes is a legal one for the Court to determine at trial: once Ms. Cinnamon delivered SilverEye to Knowmadics incorporating that prior database without identifying that she was doing so, and Knowmadics copyrighted SilverEye with that database code and schema, was Ms. Cinnamon then permitted under copyright law or her agreements with Knowmadics to take a shortcut and use the same code and schema to create a competing software with the same functionalities?  This is a serious issue to be determined at trial…”

The reported decision dealt with a pre-trial injunction application. The order granted by the court simply maintained the status quo pending trial, so the merits of this case are still to be decided. If it does proceed to trial, this case will engage some very interesting issues around copyright, software, originality and licensing of code.

Stay tuned.

 

Calgary – 07:00 MT

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