There is something fascinating and unsettling about Street View, a relatively new offering from Google with help from Calgary-based Immersive Media. If you enjoyed finding your own house on Google Earth, then wait until you see yourself strolling down a side-walk on Street View. At the moment, the service is offered for New York, San Francisco and a handful of other US cities. But it doesn’t take long to see the potential for this to be rolled-out in cities around the world.  Reportedly, Vancouver, Calgary, Toronto, Ottawa, Montreal and Quebec City have already been “imaged”.

In anticipation of this coming soon to a street corner in Canada, the Canadian Privacy Commissioner has raised a few questions about the privacy implications of recognizing individuals on the street – in other words, collecting personal information without consent and then selling it.

The law regarding surveillance video will be helpful in the analysis, but this is a new twist on an old problem.  Once again, technology, intellectual property and privacy rights have intersected to stir-up some interesting issues and the law will have to catch-up and sort out the implications. 

Calgary – 10:30 MST

For Canadian inventors and patent owners, the US is almost always the first jurisdiction in which patent protection is pursued.  Last Friday the U.S. House of Representatives passed a long-awaited comprehensive Patent Reform bill that will implement sweeping changes to the U.S. Patent system when it becomes law.  The Senate is expected to pass their bill later this year. For a copy of the bill as passed thus far and further discussion, click here.  Highlights include:

• Switch: from first-to-invent system to first-to-file system.
• Damages: damages would be tied to the “economic value [of the invention] properly attributable to the patent’s specific contribution over the prior art”, reducing many damage awards.
• Treble Damages:  the instances where treble damages will be awarded are restricted, reducing damage awards.
• Post-Grant Review: post-grant review proceedings would be available within 12–months of issuance .
• Open Examination: Opening of the system for making submissions of prior art for any patent or pending application.
• Venue and Jurisdiction: Restrictions on venue would likely remove the popular E.D.Texas as a choice for patent infringement lawsuits.

 

The progress of this bill is being closely watched and still hotly debated in the patent and licensing community in the US.
Calgary – 10:15 MST

No comments

In the midst of the dot-com boom, a brilliant bit of ad copy appeared to promote one of the many overnight companies riding the wave of interest in the “New Economy”. It read “Thanks Old Economy, we’ll take it from here…” and it captured the brash, over-confident tenor of the times.  

It has become clear since then that the “Old Economy” still has lots of life in it, and the “New Economy” has survived its growing pains to become slightly more mature. 

KPMG has authored an interesting look at “Enterprise 2.0: Fad or Future?“, the process of applying Web 2.0 technologies to increase efficiency and effectiveness within business.  Many traditional sectors of industry are now adopting new models of transacting business – models that would have appeared revolutionary even to the dot-com boomers in 1999.  And many new companies in the information-media sector are building value in a traditional way, with actual revenue.  In both cases, intellectual property legal issues from copyright to trade-mark to patents are front and centre and require careful management, the old fashioned way.

 

Calgary – 10:17 MST

In our earlier post, we highlighted a defamation lawsuit brought against Google, Wikipedia, Yahoo, MySpace and others by a B.C. man who alleged he was defamed by certain online postings.  Multiple lawsuits have been filed. This week in Crookes v. Yahoo, 2007 BCSC 1325, a B.C. court dismissed the case against Yahoo, a California-based company.

The court disposed of the claim by reasoning that there was no evidence that the alleged defamatory material was accessed by someone in B.C.  “Publication is an essential element for an action in defamation,” said the judge. “In this case … [t]here is no evidence anyone read the material in British Columbia.”

As a result, the court did not even consider the other issues about whether California law applied under the terms applicable to the online services, nor about the wider issues relating to liability for online content.

 

Calgary – 13:35 MST

RIM has dealt with its share of intellectual property infringement claims.

In this latest chapter, iconic video-game maker Atari has accused the Blackberry maker of infringing copyright in two video games: Breakout and Asteroid. Both games first went to market in the 1970s. Atari alleges that the copyright in these games was infringed in the creation of RIM’s games BrickBreaker and Meteor Crusher, both of which were created for bored executives on their handhelds…executives who probably used to play Atari’s Breakout in 1977.

Atari’s lawyers issued a series of threats last year, and RIM decided to take the initiative by suing Atari in Ontario in October 2006. Atari quickly registered copyright in the two games and responded by trying to move the case the US.

In an Ontario decision released earlier this month Research in Motion Limited v. Atari Inc., 2007 CanLII 33987 (ON S.C.) Atari suffered a set-back when the court sided with RIM in this initial skirmish. The case will likely proceed and will be interesting to watch.

Calgary -  23:10 MST

Maybe the journey of a thousand infringements starts with one bottle of “Future Cola”.

The ongoing battle between Groupe Danone and its Chinese joint-venture partner Wahaha is now well documented around the internet.  In recent months, the dispute has spiralled into litigation, arbitration, and competing press-releases. 

In 1996, pursuing a model that is popular with many Western companies, Groupe Danone, the French food-and-beverage giant, decided to jump-start its foray into China by partnering with a well-positioned local player.  Wahaha, a successful Chinese beverage maker, already had a growing business in iced tea, fruit drinks, water and soft drinks.  Its “Future Cola” brand, with red packaging reminiscent of another well-known cola product, is already making inroads into the US market.

The joint venture seemed to be a mutually profitable arrangement until allegations started surfacing this year that Wahaha was producing and selling identical products on its own, outside the scope of the joint-venture, essentially cutting Danone out of these sales and infringing the intellectual property provisions of the JV agreement. Danone does not seem to have faith in the ability of the Chinese legal system to enforce its intellectual property rights, and has opted for a lawsuit in the US and an arbitration claim in Sweden.  Wahaha responded by initiating its own arbitration claim on home turf in China.

Whatever the outcome, the dispute now stands as a cautionary tale for Western companies doing business in China. Make sure you get good local counsel, have a back-up plan for enforcement and be careful who you partner with.  Hot opportunities abound, but beware: even the biggest players can get their fingers burned when playing in China. 

 

Calgary – 10:22 MST

The Canadian Intellectual Property Office has announced a few changes to patent practice this summer. These are a few of the highlights:

• Changes in Title: For changes in ownership that occurred prior to the filing of an application for a patent, applicants now need only provide a declaration (rather than evidence) of the chain of title.
• “Small Entity” Definiton: Small entities pay lower fees for filing. The definition of “small entity” for these purposes is now defined as an entity that employs 50 or fewer employees.  Entities that are controlled directly or indirectly by an entity that employs more than 50 employees are excluded, as are entities that have entered into a license with an entity that has more than 50 employees.  Universities also qualify as small entities by definition.
• Electromagnetic Signals: Claims to electromagnetic and acoustic signals are forms of energy and are not patentable. This does not apply to methods, processes, machines or manufactures involved in the generation, transmission, reception, or processing of such signals.

 

Calgary – 11:10 MST

In our earlier post about open-source software, we made reference to the SCO Litigation, a sprawling nest of lawsuits entangling SCO, IBM, Novell, Red Hat, and licensees of the Unix software system such as DaimlerChrysler. 

The central issue was SCO’s contention that IBM had, without SCO’s authorization, contributed proprietary Unix code to the open-source Linux system.  If Unix was owned by SCO and the code was contributed without SCO’s consent, then this allegation threw doubt on the legal status of Linux and in turn the entire open-source service industry that has grown up around Linux.

Last Friday, a US court ruled that the copyright in the Unix system belongs to Novell, not SCO.  This deflates SCO’s central claims for relief for copyright violations and breach of contract.  The litigation has taken on a life of its own, so I’d be surprised if Friday’s ruling wasn’t appealed.  But it does provide some measure of relief for proponents of open-source.

Calgary – 11:50 MST

In the US case of Asch Webhosting, Inc. v. Adelphia Business Solutions Inv., LLC, No. 04-2593, 2007 WL 2122044 (D.N.J. July 23, 2007)  (Link to Evan Brown’s Post) the court upheld a limitation of liability clause in a dispute between an internet services provider (ISP) and its customer. 

After the customer was accused of spamming, in violation of the ISP’s acceptable use policy, the ISP decided to terminate service, giving the customer 30 days to find a new provider.  At the end of the 30 days, the ISP cut-off service as threatened, prompting the customer to sue for $1.4 million in consequential damages. 

The court upheld a limitation of liability clause in the service contract, which capped the ISP’s liability at the amount paid by the customer for the services.  The court reviewed several factors in coming to its conclusion:

• This was a business-to-business contract, with equal bargaining power between the parties;
• The customer was given ample warning of the impending cut-off;
• The clause was clear and unambiguous;
• The ISP relied on spamming complaints in good faith and there was no evidence that the ISP’s actions were malicious or in bad faith.

So you mean the fine print is there for a reason after all?? 

 

Calgary – 11:25 MST

Online sales in Canada grew by 40% to $49.9 billion last year.  In the retail sector alone, more than 15% of retailers in Canada made online sales in 2006, up from only 10% the previous year.  A pair of new Supreme Court of Canada decisions has clarified e-commerce law in Canada by upholding mandatory arbitration clauses and class-action waivers. 

1.    Dell:  For a few days in 2003, Dell’s website contained a pricing error where certain handhelds were incorrectly offered at fire-sale prices. Although Dell moved quickly to correct the errors, a number of consumers managed to place online orders at the incorrect prices.  Dell refused to honour those orders.  In response, the consumers tried to institute a class action lawsuit against Dell.  Dell insisted that the matter had to go to arbitration under the terms of the online contract.  Enter the lawyers.

In the resulting case of  Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, the Supreme Court of Canada upheld Dell’s online contract and the case was referred back to arbitration.  Although Dell’s online contract did not appear on the sales page (it was merely referred to via a hyperlink) the Court decided that this was not fatal to the enforceability of the contract.

2.    Rogers:  The case of Rogers Wireless Inc. v. Muroff, 2007 SCC 35 involved a dispute about wireless roaming charges.  In that case, the Court applied the same principles as in Dell and upheld a mandatory arbitration clause in the Rogers service contract. 

As we noted in our earlier post mandatory arbitration clauses and class-action waivers are now ineffective in Ontario and Quebec under consumer protection legislation. 

 

Calgary – 10:45 MST

In an earlier post we discussed the use of copyright to control product distribution.  In the 2005 case of Euro Excellence, Inc. v. Kraft Canada Inc., the Federal Court of Appeal upheld an injunction against an unauthorized distributor of “grey market” Toblerone chocolate bars, based on an innovative claim of copyright infringement.  Under that decision, copyright seemed to provide a useful tool against parallel importers, where legitimate products are imported into a territory outside the official manufacturer’s supply chain.  Trade-mark law does not provide any help in this area after the decision in Coca-Cola v. Pardhan, another Federal Court of Appeal decision.  Copyright however seemed suitable to the task.

The case was appealed up to the Supreme Court of Canada and in its convoluted decision (Euro-Excellence Inc. v. Kraft Canada Inc., 2007 SCC 37), the Court now appears to have removed copyright as a tool in parallel importation cases.  The majority agreed that copyright protection should extend to product labels and agreed that if a work is entitled to copyright protection, then it should be protected like any work, without an analysis of whether the work is “incidental” or whether the copyright holder has a “legitimate economic interest”.  But the majority decision also made it clear that copyright is no longer a viable option for manufacturers in parallel import or “grey market” cases in Canada where the local distributor relies on an exclusive license to prevent importation. 

 

Calgary – 12:30 MST

Canada gained two new intellectual property laws in June: the Olympic Marks legislation, (officially Bill C-47, the Olympic and Paralympic Marks Act) which provides a new species of “super-protection” for Olympic trade-marks, and a new anti-camcording law, which amends the Criminal Code to prohibit unauthorized recording of a movie (officially Bill C-59).

Calgary – 11:00 MST 

After Talk America bought AOL’s long distance telephony business, it amended several terms in the service contract, adding an arbitration clause, a class-action waiver and a New York choice-of-laws clause.  Talk America implemented these amendments by posting them to its website.

When a customer tried to sue Talk America, lawyers attempted to deflect the lawsuit, invoking the mandatory arbitration clause and citing the class-action waiver.  However, in this case the customer had originally signed on with AOL, prior to the amendments made by Talk America. 

In Douglas v. U.S. District Court for the Central District of California, No. 06-75424 (9th Cir. July 18, 2007) the Court of Appeals put these amendments to the test.  Generally the court decided that the online postings were not binding on the customer, noting “Parties have no obligation to check the terms on a periodic basis to learn whether they have been changed by the other side.” 

In Canada, this issue was considered by the Ontario Superior Court in its 2002 decision in Kanitz v. Rogers Cable Inc. (2002), 58 O.R. (3d) 299.  In Kanitz, Rogers posted the amendments on its customer support webpage and the court decided that Rogers had provided its customers with sufficient notice of the amendments.  Mandatory arbitration provisions and class-action waivers (such as the ones at issue in Kanitz) are now ineffective in Ontario under consumer protection legislation that was introduced in July, 2005 in response to the Kanitz decision.

How does a company amend its service contracts? Very carefully.

Online postings of contract amendments are more likely to be effective when the original contract permits such changes, the customer is provided with sufficient notice of the changes, and the notice provides a clear explanation of the changes.  The changes must comply with local consumer protection legislation.

 

Calgary – 12:30 MST

Law Professor Eric Goldman has picked up on an interesting twist in an otherwise commonplace trade-mark infringement case that went to the US Seventh Circuit Court of Appeals (Central Manufacturing, Inc. v. Brett, 2007 WL 1965673 (7th Cir. July 9, 2007). 

The case involved famous baseball player George Brett and it’s clear that the judge was a serious baseball fan. On page 3 of the decision, Judge Evans recounts a scene from a 1983 Yankees game and indicates that:

“The whole colorful episode is preserved, in all its glory, on YouTube, at http://www.youtube.com/watch?v=4Cu1WXylkto (last visited June 6, 2007).”

If you link there now, you’ll find the standard warning that “This video is no longer available due to a copyright claim by MLB Advanced Media.“  It was taken down after a complaint by the copyright owner.  In other words, the Court of Appeals has encouraged readers to access infringing content, something warned about in the Perfect 10 case.  Applying the analysis regarding contributory infringement, did the Court know of infringing activities and fail to take “reasonable and feasible steps” to refrain from providing access to infringing content? If so, they might be liable for contributory infringement!

This case shows a couple of things:

• Judges and courts are becoming more technologically savvy (imagine a link to a YouTube video in a judgement from 5 years ago);
• Even the most well-meaning links can raise questions about infringement.  Infringing links can usually be taken down if challenged, although this link is now immortalized in a Court of Appeals decision.

 

Calgary – 11:10 MST

In a recent decision under the CIRA Domain Name Dispute Resolution Policy (CDRP)  (McKee Homes Ltd. vs. Gerlinde Honsek , June 25, 2007), unsatisfied homeowners wanted to set up a customer complaint site directed at the contractor who built their home.   The stated intent of the site was to provide a forum for customers to detail their buying experience “from a customer point of view”. 

The domain name mckeehomes.ca was identical to the contractor’s trade mark MCKEE HOMES and the contractor launched a complaint under the CDRP.  The arbitration panel found that the registrant lacked legitimate interests in the domain name despite the stipulation in the CDRP that legitimate interests can be established if the use is for criticism. 

The panel decided that “The Registrant can achieve her objective of criticism by adopting a domain name that is not identical to Complainant’s mark, or that does not otherwise suggest some type of connection with the Complainant.”  The whole point of a criticism or complaint site is that it does suggest some type of connection to the subject matter of the critique.  How close can a domain name be to the trade-mark and still be able to take advantage of the “criticism” exception in the CDRP?  That is left to future decisions.  

 

Calgary –  10:30 MST

The dot-asia top-level domain (for example: www.yourcompany.asia) is the Asian cousin of the dot-eu domain which was launched for Europe in 2006. The new dot-asia domain will be introduced in phases, starting in October 2007. 

According to the preliminary information provided by the registrar, anyone can be a registrant for dot-asia domains.  In order to satisfy the eligibility requirements, one of the associated contacts for the applied domain must be a “legal entity in Asia” which means either a natural person or an organization such as a corporation within the Asia-Pacific region as defined by ICANN.

Trade-mark owners whose trade-marks were applied for in the designated Asia-Pacific region prior to March 16, 2004 will be eligible for advanced registration during the dot-asia sunrise period . Canadian companies with trade-marks in Asia should review their eligibility and consider submitting their applications to take advantage of the sunrise period.  This kind of preventive measure can save significant costs when compared with chasing cybersquatters after the general registration opens.

 

Calgary – 14:35 MST

In a trade-mark battle between Hyundai and its Canadian auto-parts manufacturer, Hyundai has scored a victory (Cross-Canada Auto Body Supply (Windsor) Limited v. Hyundai Motor America 2007 FC 580 (CanLII)).  Hyundai is the subsidiary of the well-known Korean auto manufacturer, and is engaged in a trade-mark infringement lawsuit with its Canadian auto-parts maker, Cross-Canada Auto Body Supply.  As part of its defence strategy in the infringement lawsuit, Cross-Canada tried to exploit a vulnerability in Hyundai’s Canadian marks.  Cross-Canada used this vulnerability to launch an attack on the validity of five of Hyundai’s trade-marks.  This can be an effective strategy: If Cross-Canada could win an order that the Hyundai marks were invalid, then Hyundai’s infringement lawsuit would fail.  

Ultimately, Hyundai beat back this challenge by tendering expert survey evidence of the public’s perception of the Hyundai marks.  Survey evidence of this type is not cheap, but when a company’s core marks are at stake, this kind of expenditure is necessary.  Hyundai convinced the court with this evidence and upheld the validity of all but one of its marks.

The lessons for business?

• In trade-mark litigation, an effective defence strategy will include all options, including expungement proceedings, and (of course) possible settlement;  
• For the trade-mark owner, expert evidence can be critical to convince the court of the public’s perceptions of the mark.
• Preventive measures (in Hyundai’s case, recording the assignment of the trade-marks earlier could have reduced their vulnerability) are always cheaper than reactive measures.

 

 

Calgary – 12:34 MST

 

 

 

 

Australian software hacker Hew Griffiths was sentenced last week to over 4 years in prison on one count of “conspiracy to commit criminal copyright infringement” ending his long-running battle to avoid extradition and sentencing in the US. This is on top of the nearly three years he spent incarcerated at a detention center in Australia while fighting the US extradition bid.

Seven years jail time for copyright infringement? Seems a bit over the top, but Mr. Griffiths found himself the new poster-boy for the US Department of Justice in their effort to make an example of a notorious code-cracker, and one who made the mistake of boasting that he would never be caught.

Calgary – 19:44 MST

A few weeks ago the Alberta Securities Commission released its review of the Canadian capital markets, comparing Alberta to the markets in Ontario and BC.  The Alberta Capital Market: A Comparative Overview 2007 Report  provides some interesting perspectives on where Alberta stands in different industries in relation to its cousins to the east and west.

While on the topic of capital markets, technology companies are always open to new sources of financing. Here are a few sites which provide some information for entrepreneurs:

• Ask the VC has good content which is generated on a question-and-answer basis. It is US-based, so the tax issues will not apply to Canadian entrepreneurs.
• Canadian Entrepreneur has a Canadian focus and some interesting articles for growing companies such as “Anatomy of a Startup”.

Calgary – 10:35 MST

 

Decide for yourself: if you see these two products on the grocery store shelf, will you be confused and mistakenly buy generic “Sucralose”, thinking it’s brand-name SPLENDA?

 

 

McNeil Nutritionals, the makers of SPLENDA brand artificial sweetener, lost in court (McNeil Nutritionals, LLC v. Heartland Sweeteners LLC, 2007 WL 1520101 (E.D. Pa.)) in its attempt to block the sales of a competitor’s product.  McNeil alleged that the competitor’s brand infringed on the SPLENDA trade dress with its distinctive yellow packaging and graphics.  Heartland makes private-label sweeteners for a number of retailers, including Giant, Stop & Shop, Food Lion, and Safeway.  The private-label packaging is also yellow, with blue font and white coffee-cup graphics.

The court disagreed with McNeil and denied the injunction application.  One of the court’s findings was that health-conscious consumers who purchase sugar alternatives will take care in making buying decisions and therefore won’t be easily confused.  In Canada, the factors considered by the courts are:

• the existence of good-will in the trade dress or trademark;
• deception of the public due to a misrepresentation, and
• actual or potential damage to the plaintiff.

McNeil’s bid to shut-down a competitor demonstrates the importance of brand recognition in a competitive marketplace.

 

 

Calgary – 11:30 MST