Social media is not just a marketing novelty – it has become the essential tool for running a promotional contest. Have a look at any big brand contest and you’re hard pressed to find one without a social media component. Many Canadian businesses also seek to extend their reach into the US market through promotional contests.

If you are in that category, take note of this recent FTC action against shoe-maker Cole Haan. At the conclusion of their investigation, the FTC warned that the structure of the contest was misleading to consumers since it employed contestants to create Pinterest boards using the #wanderingsole tag, which turned these pins into endorsements for Cole Haan products (…which was the whole point of the contest…). However, FTC rules are clear that the connection between endorsers and marketers should be made clear. While no penalty was levied against Cole Haan, this letter has served as notice to the rest of the industry that the FTC will be watching such contests to ensure that these endorsements are made sufficiently clear.

In Canada, the Competition Bureau oversees false and misleading advertisements, including the apparent endorsement of products by paid endorsers.

The business lessons are clear: a successful social media contest can back-fire if you get more publicity from an FTC or Competition Bureau investigation than from the contest. Not to mention potential penalties. Get advice on your social media policy and contest rules before you launch the next campaign.

Calgary – 07:00 MDT

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Are you a Canadian software vendor with customers in the USA? Let’s say your US end-user customer is sued for patent infringement in the US based on use of your software, but the lawsuit avoids naming your company. In other words, your customers are sued, but you are not.

Ok, so you avoided a lawsuit. However, for business reasons you may want to be “in the ring” to assist your end-user customers to defend the infringement claims. One of the defences to infringement is to challenge the validity of the patent in question. But if your company is not named, how do you raise that defence? In order to seek a “declaratory judgment” that the patent is invalid, you need something called “standing” – a right to make your case in court. If you are defending an infringement allegation (if you are named in the lawsuit), you have that standing as a defendant. But if not, you have to ask the court for standing… sound complicated?

This is what happened to Microsoft, when its end-users were sued for patent infringement by Datatern. Datatern, not wanting to lock horns with Microsoft (for obvious reasons) just named the software end-users in the patent infringement lawsuit. In Microsoft Corporation v. Datatern, Inc. (Fed. Cir. 2014), Microsoft sought standing to have the patents declared invalid.

The Federal Circuit Court of Appeals in the US said that Microsoft does not have the “right to bring the declaratory judgment action solely because their customers have been sued for direct infringement”. To bring an invalidity declaratory judgment action against DataTern, Microsoft needed something more. The court indicated that:

• Microsoft would need to show a controversy between Microsoft and the patent holder as to Microsoft’s liability for:
• induced infringement, or
• contributory infringement,

based on the alleged acts of direct infringement by the end-user customers; or

• Microsoft would have standing if it had a contractual obligation to indemnify its customers against the infringement claim. In this case, there was no indemnity obligation.

The use of Microsoft-provided documentation by Datatern in the patent infringement lawsuit was enough to establish standing for Microsoft, since this implied that Microsoft encouraged (or “induced”) the infringing use. However, this only applied to some of the patents in question.

Wherever Datatern used third-party (non-Microsoft) documentation to evidence the alleged infringement, Microsoft was too far removed from the controversy and there was no implied assertion that Microsoft induced the infringement. Microsoft could not establish the necessary controversy between it and Datatern, the patent holder. In connection with that particular patent, Microsoft lacked standing and its declaratory judgment action to challenge the validity of the patent could not proceed.

Remember this is a US case, but Canadian software vendors should review these patent infringement issues with counsel (including the costs and benefits of IP infringement indemnity clauses) to ensure that their end-user license agreements manage the risks in light of this decision.

Calgary – 07:00 MDT

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Consumers wonder what exactly has changed when they are confronted with a new set of online terms, in a cloud-based service, website terms or software license. We reviewed this issue in an earlier post, which looked at changes to online terms in the middle of the product lifecycle. Amendments are often introduced due to changes in the law or changes in product functionality.

Instagram amended its terms of use in early 2013. In Rodriguez v. Instagram , CGC-13-532875 (San Francisco Sup. Ct. Feb 28, 2014), a US court reviewed a complaint alleging that Instagram’s new terms consituted a breach of good faith and fair dealing. The court noted that: “The New Terms modified the original terms in three allegedly material respects:

1. in the Original Terms, Instagram disclaimed any ownership rights in content users post on Instagram, whereas in the New Terms Instagram disclaimed ownership of content users post on Instagram;
2. in the Original Terms, Instagram was afforded a non-exclusive limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce, and translate content users posted on Instagram, whereas under the New Terms Instagram has a transferable and sub-licensable license to use the content users post, with the two allegedly material aspects being (i) the addition of sublicensing authority; and (ii) removal of any limitations on the scope of the license; and
3. the New Terms add a liability waiver.”

The New Terms were structured so that users accepted the terms by continuing to use Instagram after the effective date. A user could decline acceptance by ceasing all use of Instagram. The plaintiff in this case did continue use of Instagram after the New Terms were introduced. This opened up the argument for Instagram that this user consented to be bound by the New Terms. The lack of a click-through was not fatal to Instagram’s case. As a result, this decision seems like a bright spot for cloud service providers and software licensors – after all, it seems to permit unilateral amendment clauses in online terms without forcing users into a mandatory click-through screen. The court also seems to accept that the new terms can apply retroactively to user-generated content that pre-dates the New Terms. However, a note of caution should be sounded for cloud computing providers and software vendors:

• unilateral amendments to online terms should always be handled carefully;
• consider in advance whether amendments are permitted under the current terms before imposing new terms;
• due to the facts of this particular plaintiff, the court did not address the question of what would be done with user content if the user had ceased use of the service – i.e. if the user had not impliedly consented by continued use;
• consider how to log or track user consent (either active consent or implied “continued-use” consent) by users.

Calgary – 07:00 MDT

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The article “Software Licenses & Indemnities: What Obligations Are You Taking On?“ was published in the February 2014 edition of The Licensing Journal.

Calgary – 07:00 MDT

As a follow-up to our earlier post (Can BlackBerry Patent a Keyboard?), a US court on Friday issued a preliminary injunction in a dispute between the BlackBerry maker and start-up Typo Products LLC which sells a snap-on keyboard for the iPhone.

The preliminary court order prohibits Typo from the sale of its keyboard products in the US, pending outcome of the case at trial. Typo Products has indicated it will appeal. A preliminary injunction is not determinative but certainly provides an early advantage to BlackBerry as the patent holder.

Stay tuned.

Calgary – 08:00

BIG BITE vs. BIT BITE.

These two marks were assessed in the recent case of 7-Eleven, Inc v BitBite Foods Inc. , 2014 TMOB 16 (CanLII), for snack food products. BitBite Foods filed an application to register the BIT BITE design at right in connection with a variety of food products. 7-11 opposed the application on the basis of their family of BIG BITE marks, including BIG BITE (TMA728,674), 1/3 LB. BIGGEST BIG BITE (TMA593,755), SMOKIE BIG BITE (TMA393,436), and SUPER BIG BITS (TMA602,497), also in association with food products. The 7-11 marks included the BIG BITE Design (TMA405,449) at left.

Essentially, both marks were associated with food products, both marks featured a stylized “bite” design element, and the marks were virtually identical except for a single letter. 7-11 argued that their marks were all registered and had been used in Canada since the 1990s. The BIT BITE mark by comparison was applied for on the basis of “proposed use” meaning it has not yet been used in Canada.

How did the board decide this case?

The test for trade-mark confusion in Canada is one of “first impression and imperfect recollection.”  The Trade-marks Act is clear that confusion will result if two trade-marks are used in the same area and would lead a consumer to infer that the products sold under the two marks are manufactured or sold by the same company. Courts in Canada will assess a number of factors when judging two marks:

• the distinctiveness of the two marks
• the length of time each mark has been in use
• the nature of the products or business
• the nature of the trade
• the degree of resemblance between the two trade-marks in appearance and sound or in the connotations.

It is important to note that these factors are not an exhaustive list, and courts are not obliged to give each factor equal weight. The Trade-marks Opposition Board in this case assessed these factors and also weighed the state of the Register and the state of the relevant marketplace.

After assessing all of these factors, the board concluded that marks do share similarities in appearance and when sounded, but the board “found a significant difference between the parties’ marks as a whole, in ideas suggested; a difference, given the simplistic nature of the word components of the parties’ marks, that is readily apparent to the average consumer. “… and the 7-11 “BIG BITE marks are not inherently strong and that the evidence clearly demonstrates that the words BIG and BITE are commonly used in the trade” …therefore “the differences between the parties’ marks [are] sufficient to distinguish them.”

7-11’s opposition was dismissed. One letter was enough of a difference in this case.

Calgary – 07:00 MDT

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Copyright in Canada is a function of the Copyright Act – without that law, there would be no copyright. How does Canadian copyright law interact with the copyright law in other countries?

In Active Operations Management (AOM) NA Inc. et al v. Reveal Group, 2013 ONSC 8014 (CanLII) (a law-school-exam-question of a case if ever there was one),  the court dealt with a claim by an Ontario company of infringement within Canada of UK copyright, by another Ontario company controlled by an Australian resident, Mr. Crouch.

The claim by AOM reads like a software vendor’s nightmare. AOM is the Canadian distributor of certain software developed in the UK. According to the allegations by AOM, Mr. Crouch copied elements of the software and a business method when he worked for an Australian licensee of the UK software. Mr. Crouch started a company in Canada and then allegedly used that as a vehicle to market a replica version of the UK software and the corresponding method in Canada.  With this (Canadian) copied version of the (UK) software , Mr. Crouch allegedly lured customers away from AOM. AOM filed a lawsuit alleging breach of copyright, misappropriation of trade secrets, interference with contractual relations, unjust enrichment and misappropriation of goodwill.

Remember, AOM was not the owner of the (UK) copyright – it was merely a distributor. The question for the court was whether AOM could maintain a copyright infringement lawsuit in Canada. To complicate matters, the “software” and the “method” were owned by two different (UK) owners. AOM added these owners to the lawsuit, but did not make the specifics clear in their claim.

As the court put it: “Copyright is a very specific right attaching to a ‘work’… Copyright cannot attach to an idea such as a method.  It can of course attach to the manuals or other material in which the method is described.  Similarly with computer software, copyright can attach to source code, to a graphic user interface, to manuals and to other material as defined in the Act.  Copyright cannot attach simply to what a computer program does.  The plaintiff must specify what it is that is covered by copyright and what it alleges has been done that gives rise to the statutory remedies.”

The lessons for business?

• Software vendors from outside Canada should know that, by virtue of international copyright conventions and treaties, international copyright can be enforced under Canadian copyright law;
• The Canadian Copyright Act permits someone other than the copyright owner to sue for infringement of copyright – as long as that person has appropriate rights (such as a local distributor, as in this case). Here, AOM appeared to have rights to maintain the copyright infringement lawsuit, but did not specify its rights with enough clarity in the claim. Ensure that the chain-of-title is clear in the claim itself;
• Regarding the additional claims – in particular, the trade-secret misappropriation – the court had this guidance: “It would be ludicrous …to compel a plaintiff to set out a trade secret with precision in the pleading.  To do so would destroy the secret itself. A trade secret is valuable precisely because it is secret.  It may be that information will have to be provided at the production and discovery stage but at that point the proprietor of the secret may seek confidentiality orders and to the extent that those details must be put into evidence may seek a sealing order.”

Calgary – 07:00 MT

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The very popular US grocery retailer Trader Joe’s has a following among Canadian consumers. Capitalizing on this popularity north of the border, a Vancouver entrepreneur has made it his business to buy genuine Trader Joe’s-branded merchandise in the US, and re-sell the products in a retail location in Vancouver under the banner  Pirate Joe’s. Citing Lanham Act trademark infringement, TJs sued the Canadian businessman in Washington State (appealed that decision  to the US Federal Circuit Court of Appeals.

While this appeal will run its course under US legal principles, it is worth noting the law on “parallel importation” in Canada.

Parallel importation or “grey marketing” is the importation into Canada of genuine products, which fall outside the brand owner’s established channels. These are not knock-offs or counterfeits, but rather legitimate products imported through a channel “parallel” to the brand owner’s preferred distribution routes (or, in the case of Trader Joe’s, where the brand owner has no established trading network in Canada at all).

There are two main intellectual property tools to attack parallel importation, and unfortunately for brand owners, both of them can be problematic in Canada:

1. Trade-marks: Brand owners sometimes try to rely on their trade-mark rights in Canada (Trader Joe’s may have some reputation in Canada through spill-over advertising). In parallel import cases, any claim of trade-mark infringement in Canada is likely to face challenges in light of decisions like Coca-Cola Ltd. vs. Pardhan, which dealt with the export of genuine Coca-Cola products (I wrote a case commentary on this decision for Canadian International Lawyer, June 2000);
2. Copyright: In the Euro Excellence case (Euro Excellence Inc. vs. Kraft Canada Inc.), the brand owner attempted to employ copyright law to stop parallel imports of genuine Toblerone-branded chocolate bars into Canada. On appeal, the Supreme Court of Canada ruled that the Copyright Act could not be used to block the parallel imports.

Stay-tuned to see where this case leads in the US appeal.

Calgary – 07:00 MST

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Most Canadian businesses will have heard of the incoming Canadian Anti-Spam Law (referred to as CASL, which joins the Canadian pantheon of legislative acronyms like PIPEDA and PIPA). The consent requirements for sending commercial electronic messages (CEMs) is covered elsewhere (See here, and see this upcoming event on March 18 and 20, 2014). Those requirements come into effect July 1, 2014.

The software-related regulations are getting less press. Why? Possibly because CASL is being implemented in phases, and the software-related rules are not expected to be in full force until January 15, 2015. And possibly because the software-related regs are complicated and at times confusing.

This element of CASL is designed to control surreptitious installation of software, particularly “invasive software”. Generally, express, clear consent is required. Installation of invasive software imposes additional requirements. Implied consent (or “deemed express consent”) may be relied upon in other cases:

• cookies, HTML code, Java scripts;
• upgrades for telecom network security;
• “reasonable” installs – where it is reasonable to expect that the user would consent.

Software vendors should take note of these incoming obligations, to assess and plan for any updates that will be required for CASL compliance. Get advice on how these regulations apply to your software products.

Calgary – 07:00 MST

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Where a technology license carries with it an obligation to pay royalties based on revenues, how does the licensor determine if the revenues are accurately reported? The sales are known to the licensee, but the licensor has no way of determining what those sales are. Many license agreements impose reporting obligations on the licensee, so that monthly or quarterly sales are reported to the licensor, to enable accurate royalties to be calculated.  In the recent decision in XY, LLC v. Zhu , 2013 BCCA 352 (CanLII), the BC Court of Appeal dealt with a licensee who breached the terms of the technology license agreement, and committed the “tort of deceit” (that’s how lawyers say “they lied”).

In this case, the licensee did not only underreport or withhold information, they actively falsified records and thus substantially underpaid the royalties owed to the licensor. The tort of deceit is made up of these elements:

1. a false representation or statement made by the defendant,
2. the statement was knowingly false,
3. the statement was made with the intention to deceive the plaintiff, and
4. the statement materially induced the plaintiff to act, resulting in damage.

A damage award of over $8 million was awarded by the court, as an assessment of the amount would put the licensor in the position it would have been in, if the licensee had performed its obligations and paid the propert amount of royalties.

One interesting twist on appeal was whether the employees of the licensee should be personally liable. Employees are not generally held responsible for the wrongs committed by the employer. After reviewing the law, the Court of Appeal decided that the claims of deceit should be available against certain employees, and those employees were not shielded merely because they were employees acting in the course of their duties. Since these employees were actively devising ways to deceive the other side, they were acting outside the scope of regular duties, and the “just following orders” defence was not accepted by the court.

Calgary – 07:00 MST

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Earlier this week, the government introduced an unprecedented five international intellectual property treaties in the House of Commons on the same day. The five tabled treaties, introduced for ratification and implementation, are:

• the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks,
• the Singapore Treaty on the Law of Trademarks,
• the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks,
• the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs, and
• the Patent Law Treaty.

If you follow these sorts of things – and who doesn’t? – you will know that these treaties have been the subject of debate in Canada for years. For example, here is a 2001 article reviewing the merits of the Madrid Protocol. Why does the government have a sudden interest in pushing these treaties forward now?  It’s because the government is in the process of negotiating a Canada-EU free trade deal  as well as the Trans-Pacific Partnership. According to reports, implementation of these legal reforms is a condition for Canada to finalize treaty negotiations with other countries.

Implementation of all these treaties will result in so many interconnecting changes to Canadian IP law that it will take some time to sort out how this impacts Canadian business in a practical sense. Stay tuned for further updates and guidance on these developments.

Calgary – 07:00 MST

Business people are sometimes seen to roll their eyes when they ask their lawyer a straighforward question, and the lawyer pauses and replies “Well… it depends…”

In our earlier post (here and here), we reviewed the Canadian decision in Tucows.Com Co. v. Lojas Renner S.A., 2011 ONCA 548, which stands for the proposition that a domain name is intangible personal property. The court pointed to an emerging consensus among other courts that domain names are a form of property. This decision was denied leave to appeal to the Supreme Court of Canada in Lojas Renner S.A. v. Tucows.Com Co., 2012 CanLII 28261 (SCC) which seems to settle the matter.

In the United States, courts have also come to the same conclusion that a domain name is personal property, for example in (Bosh v. Zavala (C.D. Cal. Sept. 24, 2009) and Kremen v. Cohen, 325 F. 3d 1035 (US Ninth Circuit Court of Appeals).

A recent US decision out of Virginia (In re Alexandria Surveys Int’l, LLC, 13-CV-00891 (E.D. Va. Nov. 7, 2013)) has come to a different conclusion in a bankruptcy matter. In this case, the court decided that “a domain name registrant acquires the contractual right to use a unique domain name for a specified period of time . . . a domain name is not personal property but rather ‘the product of a contract for services.’” [Emphasis added]

Many Canadian companies have intangible assets like domain names on both sides of the border, particularly in cases where branch offices or subsidiaries carry on business in both countries. While Canadian law appears to have some clarity on this topic, the Alexandria Surveys decision in the US does raise questions – questions that are compounded in light of the fact that intangible assets like domain names are designed to be used without regard to any particular country or jurisdiction.

Calgary – 07:00 MST

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In a recent decision released by the Canadian Privacy Commissioner (PIPEDA Report of Findings #2014-001), the commissioner investigated a complaint that Google pitched ads to an individual based on medical information that he disclosed while surfing various health-related websites. The commissioner’s office took the position that “meaningful consent” is required for the delivery of this kind of targeted advertising. Implied consent might be acceptable in certain circumstances, where the information is limited to “non-sensitive“ information (which would avoid medical, financial or health information).

In this case, the individual who initiated the complaint was using Google to search for information related to a medical device used to treat a specific medical condition. Google used this sensitive personal health information (as the commissioner described it, the “online activities and viewing history of health related websites”) to target ads to that individual. When Google relied on implied consent for the use of this sensitive personal health information, it contravened Principles 4.3 and 4.3.6 of the Act. Express consent is required for use of this kind of sensitive personal information.

Calgary – 07:00 MST

Let’s say you pitch a story idea to a TV production company – and not just an idea, but a complete set of storyboards, characters and scripts. You would be surprised if one day you saw that story idea come to life in a TV production that gave no credit to you as the orginal creator of the materials. That’s what happened to Claude Robinson and his idea for a children’s TV program inspired by Robinson Crusoe.

One of the most important copyright decisions in 2013 was issued by the Supreme Court of Canada (SCC) in late December: In Cinar Corporation v. Robinson, 2013 SCC 73, the court reviewed Mr. Robinson’s claim that Cinar Corp. infringed copyright in his original story materials by copying a substantial part of those materials in the new TV production called “Robinson Sucroë”.

I am often asked when or why someone can copy the ideas of someone else. Ideas themselves are not protected by copyright law. Many features of a TV show or a movie are simply non-protectable, including ideas, elements drawn from the public domain or generic components of a story, like heroes, villains, conflict and resolution. However, in this case, the idea was articulated and expressed in a set of original written materials which resulted from the skill and judgement of the author.

The court framed this fascinating issue in this way: “The need to strike an appropriate balance between giving protection to the skill and judgement exercised by authors in the expression of their ideas, on the one hand, and leaving ideas and elements from the public domain free for all to draw upon, on the other, forms the background against which the arguments of the parties must be considered.”

In the end, the court rejected the notion that the two works must be compared piecemeal to determine if protectable elements of the original work were similar to the copy. Instead, the court reviewed the “cumulative effect” of the features copied from the original, to determine if those features amount to a substantial part of the original work as a whole. Thus the court approved a “qualitative and holistic assessment of the similarities between the works”, rather than dissecting both works to compare individual features in isolation.

This decision will be applied in other copyright infringement situations in Canada, including art, media, music and software.

Calgary – 05:00 MST

In a recent default judgment granted to Twentieth Century Fox, a Canadian Federal Court recently issued an injunction and a damage award in Twentieth Century Fox Film Corp. v. Hernandez et al (T-1618-13) for copyright infringement based on copying and rebroadcasting The Simpsons and Family Guy programs through the defendant’s websites “Watch The Simpsons Online” and “Watch Family Guy Online”.

As the court noted: “Statutory damages, elected by Twentieth Century Fox in this case, would be insufficient to achieve the goal of punishment and deterrence of the offense of copyright infringement in this case. Hernandez’s repeated, unauthorized, blatant, high-handed and intentional misconduct, and his callous disregard for the Plaintiff’s copyright rights, is deserving of the penalty of punitive damages.”

The court went on to issue a damage award of $10 million in statutory damages under 38.1 of the Copyright Act, as wel as $500,000 in punitive damages, costs of $78,000, plus interest

Hat tip to Alan Macek at Dimock Stratton for a link to the decision.

Calgary – 07:00 MST

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In our earlier post (Are Non-Competition Restrictions Enforceable?), we reviewed “restrictive covenants” - these are clauses under which employees are bound by restrictions such as non-competition restrictions, non-solicitation obligations, and other controls on the employee’s behaviour which bind the employee after termination.

In Eagle Professional Resources v. MacMullin, 2013 ONSC 2501, the court considered a dispute between two competitors - Eagle and Maplesoft.

Eagle alleged that its ex-employees took confidential information from Eagle, and began soliciting clients, employees, and contractors of Eagle to work for Maplesoft. The defendant ex-employees argued that they did not use any confidential information to solicit business. They asserted that any contact information that they used was already publicly available through LinkedIn or Facebook accounts.

When reviewing the enforceability of restrictive covenants in the employment context, the court reiterated a three-part test (when in doubt, there is always a handy three-part test ): ï‚·

• Does the employer have a proprietary interest entitled to protection? ï‚·
• Are the temporal and spatial features of the restrictive covenant too broad? (Put another way, are there reasonable limits in time and geographic space?)ï‚·
• Is the covenant unenforceable as being against competition generally, as opposed to a more limited covenant against solicitation of former clients?

The court concluded that “there is no evidence from Eagle, other than a very bald assertion, that it had any proprietary interest entitled to protection. According to the Defendants, the information that they learned at Eagle was all publicly available and obtained from such sources as social media websites.” There are a few take-aways from this decision:

1. When drafting restrictive covenants in the employment context, non-solicitation and confidentiality clauses are more likely to stand up, whereas non-competition clauses are likely to be struck down as unenforceable, as in this case. Make sure to have your agreements reviewed;
2. If a “confidential customer list” is virtually the same as the employee’s LinkedIn or Facebook contacts, then there will be no proprietary interest to protect, since the information will be publicly visible to anyone.
3. The court will assume that the employer will lead with its strongest evidence. Compelling evidence of specific cases of solicitation or competition is critical for success in an application by the employer – as the court quipped “Lead with trump or risk losing”. In this case, the evidence was ambiguous or it fell outside the non-competition period.

Calgary – 7:00 MST

Can there be a better way to start 2014 than with a patent infringement story with a Canadian twist? BlackBerry has filed a patent infringement lawsuit  against Typo Products LLC. If you are a believer in the maxim that “the only thing worse than bad press is no press” then you would see this as a boon for Typo, which has garnered attention just in time for CES 2014. A Google search for “BlackBerry keyboard patent” now displays pictures of a smiling Ryan Seacrest, a co-founder of Typo.  Typo sells a slide-on physical keyboard for the iPhone 5, and the layout does looks suspiciously similar to a BlackBerry keyboard.

The question from an IP law perspective is whether BlackBerry can claim patent protection for a keyboard. Isn’t a keyboard just a keyboard? After all, the QWERTY keyboard has been around since it was invented by Christopher Sholes in the late 1800s (the design at right). In fact there are hundreds of keyboard patents, and BlackBerry owns a number of issued patents for keyboard design, for both utility and design patents, including the US patent “Ramped-key keyboard for a handheld mobile communication device” US8449208 (image at left). A new improvement on the basic QWERTY design can indeed be protectable, either through a utility or design patent. Whether this particular patent infringement case proceeds, or is settled, it illustrates the uses of patent  and industrial design to protect incremental improvements to existing technology. Stay tuned.

Calgary – 11:00 MST

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In this blog, we typically review forum-selection cases in the context of internet-related contracts and software licenses. A recent decision out of the US Supreme Court squarely addressed the issue of forum-selection clauses in a construction contract. While this is not an intellectual property case, it is instructive for Canadian companies entering into any contract in the US.

To review, a “forum-selection clause” is a provision in a contract which picks a particular country or province or state for the resolution of disputes – put another way, it’s the place where litigation would be started in the event of a dispute.

In Atlantic Marine Construction Co., Inc. v. U.S. District Court For The Western District of Texas, [Link to Decision] the US Supreme Court indicated that where the parties have elected to include a forum-selection clause in their contract, that clause “represents [their] agreement as to the most proper forum,” and should be “given controlling weight in all but the most exceptional cases.”.

The Court went on to say that:

• First, if one party defies the forum-selection clause by commencing a lawsuit in another jurisdiction, that party has the burden of convincing the court that the case shouldn’t be transferred to the forum named in the agreement.
• Second, “the court should not consider the parties’ private interests aside from those embodied in the forum-selection clause; it may consider only public interests.” Public-interest factors will not typically override the forum-selection clauseexcept in very unusual cases.
• Lastly, if a party is bound by a forum-selection clause and they choose to flout those contractual obligations by filing a lawsuit in a different forum, then they don’t get the benefit of applying the choice-of-law rules in the jurisdiction in which they filed. In other words, they can’t improve their chances of success by filing in a state with favourable choice-of-law rules. They will be bound by the choice-of-law rules of the forum named in the forum-selection clause.

The US Supreme Court has confirmed that forum-selection clauses should be upheld in the US.

Calgary – 07:00 MST

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It is rare for a case to combine energy drinks, copyright law, DJs, rap and snowboarding in Canada. The court’s decision in Beastie Boys v. Monster Energy Co. is such a case.

In this recent decision of the United States District Court (S.D. New York), Monster Energy defended a copyright infringement claim brought by the rap-group Beastie Boys. The Beastie Boys allegations centred around Monster’s use of a remix track, known as Megamix, originally created by the DJ known as Z-Trip. The remix of well-known Beastie Boys hits was created by Z-Trip with the permission of the band – in fact they had invited the DJ to mix the track in 2011 in order to promote a Beastie Boys album.

At a Canadian snowboarding event in 2012, an executive from Monster approached the DJ to get permission to use the remix for Monster’s promotional video of the event. It was these discussions that became the focus of the Court’s analysis of Monster’s defence that it had obtained a license from the DJ for the use of the remix. After producing the video with the remix included, Monster sent a copy to the DJ who responded “Dope!”, as DJs will. Monster took this exclamation as an affirmation of the terms of a license granting permission to use the song for Monster’s promotional purposes. The DJ testified that this term merely expressed approval for how cool he looked in the video. The Court concluded that no reasonable person would consider the term “Dope!” to constitute “clear, unambiguous and unequivocal” acceptance of license terms for the use of the remix. As a result, there was no valid consent or license granted.

Calgary – 07:00 MST

We recently reported on a case out of New York State, which dealt with the question of sales tax liability in the case of online sales. That decision (in Overstock.com v. New York Taxation Dept. and the companion case of Amazon.com v. New York Taxation Dept.) decided that internet retailers are required to collect sales taxes on purchases by New York residents even if the retailers have no physical presence in the state.

The U.S. Supreme Court has decided to let this decision stand (without offering any reasons). Congress is currently considering a legislative response to this issue through the proposed Marketplace Fairness Act. Large retailers such as Amazon have the means to negotiate a solution with tax authorities on a state by state basis, but smaller companies simply do not have that leverage.

Canadian online retailers selling into the U.S. will want to seek advice on sales tax issues to ensure their tax collection and remittance policies are compliant in the United States.

Calgary – 07:00 MST