Well, it didn’t take long.  Yesterday, Apple unveiled its iPhone.  ipblog.ca questioned how Apple intended to brand its new device considering the trademark was already registered by Cisco and applied for by several other companies. 

Today Cisco announced that it has sued Apple in the United States District Court for the Northern District of California “seeking to prevent Apple from infringing upon and deliberately copying and using Cisco’s registered iPhone trademark.”  

Calgary - 16:39 MST

Apple unveiled yet another iconic product at MacWorld today: the iPhone, a sleek, multifunction device with a full touch-screen which solves the design problem of packing a number pad and a QWERTY keyboard onto a device meant to slide into your shirtpocket.

The iPhone seems destined to follow in the iPod’s footsteps as a consumer favourite. However, trade-mark lawyers must raise the question: what do they plan to call the thing? Apple’s application for the trademark “iPhone” is being opposed in Canada by Comwave Telecom Inc. which claims rights dating from 2004 in association with local and long distance telephone services, and VOIP telephone services. In the US, the “iPhone” mark is claimed by no less than four companies: Teledex LLC, XTREME Mobile LLC, Ocean Telecom Services LLC, and CISCO Technology, Inc. the last of which has a trademark registration. Apple hasn’t even applied for the trademark in the US. Apple must have a plan of some kind and let’s hope it will be another example of creative thinking. Otherwise this branding exercise will hit a brick wall.

Calgary - 22:15 MST

Last Friday another court case wrapped up in Canada. This case raised the difficult question of inventorship over a wildly successful product, based on an original idea, which made the four co-inventors millionaires several times over.

The product was Trivial Pursuit, and the co-inventors were Chris Haney and his friend Scott Abbott, brother John Haney and Ed Werner. David Wall, a Nova Scotia man, claims he was the source of the idea and relayed it to Chris Haney in 1979. The Trivial Pursuit game was a classic overnight success story – 22 million copies of it were sold in 1984 alone. Intellectual property questions like this are front-and-centre for every inventor, author or creator: how to protect original ideas and get credit when the paycheques are cut.

This case is reminiscent of the Neudorf vs. Nettwerk case in which Darryl Neudorf sued Sarah McLachlan and her record company for a declaration of co-ownership of copyright in several songs. That case was dismissed when the court found that the test for joint-authorship was never satisfied and that there was no intent to co-author the songs. Will Mr. Wall get a slice of the pie or will he go away empty handed? The court will hand down its decision in the next few months.

Calgary – 14:40 MST

No comments

CIRA will release the next batch of gently used .CA domain names on January 10, 2007.  There are about 2100 names on the list, including a number of trade-marks (for example, MGMStudio.ca, Nokiaringtones.ca and xboxnews.ca), a number of typosquatting domain names (wwfutureshop.ca, wwmsn.ca, wwshaw.ca, wwticketmaster.ca and wwwalmart.ca) and about 130 domain names which double as downtown Vancouver street addresses. 

Calgary – 10:52 MST

A recent decision out of a federal court in Texas (Live Nation Motor Sports Inc. f/k/a SFX Motor Sports Inc. v. Davis d/b/a TripleClamps) has ruled that a webcast of a live sporting event is protectable by copyright.  This in itself is not particularly ground-breaking.  Original content such as a webcast is expected to be the subject of copyright protection, much like a television broadcast would be.    

However, the decision has attracted attention because the court ordered the defendant to take down its link to the protected webcast.  This means that, in this case, an unauthorized hyperlink amounted to copyright infringement.  There has been much legal debate about when links should be considered copyright infringement, since links go to the heart of the functioning of the internet.  

Unfortunately, the court did not provide much guidance on the difference between merely displaying a link to the page on which the audio webcast was posted (much like the “deep linking” cases such as Ticketmaster vs. Tickets.com), as opposed to providing direct unauthorized streaming of the protected webcast.  The defendant in this case appears to have been engaged in unauthorized streaming, but the court order only dealt with the defendant’s link to the webcast. 

If you read the decision, two lessons will emerge:

1.  The plaintiff prepared its case well, made strong economic arguments to support its claim for protection, and ensured that it had adequately warned the defendant to cease and desist;

2.  By contrast, the defendant appeared disorganized, contradictory and made a baseless counterclaim for trade-mark infringement.  At one point, the defendant compared the plaintiff to Ghengis Khan.  All of which helped the plaintiff win.

Calgary - 09:46 MST

Let’s start the new year on a positive note: how to resolve differences peacefully when two identical or similar brands start overlapping in the marketplace.  You have taken steps to ensure your brand is unique in your own country.  But what happens when that brand becomes successful elsewhere in the world, and suddenly you’ve got a potential dispute brewing with a foreign trade-mark owner? 

Do you litigate or negotiate? 

In the case of Apple vs. Apple, the answer is a bit of both.  Apple Computers with its stylized apple symbol, and Apple Records , with its granny-smith apple logo, have been in and out of court rooms and the lawyers’ boardrooms for more than twenty years, trying to navigate through the trade-mark minefield.  A 1981 arrangement ended up in court in 1989, resulting in a coexistence agreement in 1991 .  This lasted until 2003, when the success of Apple’s iTunes service ignited another lawsuit.  In 2006, Apple Computer was cleared of the allegations of breaching the coexistence agreement in a decision of the High Court of England.

Another recent case illustrates an alternative approach.  Tsubi, the successful Australian jeans designer bumped up against Tsubo, an American shoe company.  Rather than fight a trade-mark infringement battle, Tsubi and Tsubo reached a settlement in which Tsubi will retain its trade-mark in Australia, but will be re-branded as Ksubi in the rest of the world.  The Australian company now faces the challenging task of educating its customers and migrating them over to the new brand.  A little creativity and flexibility means that they will be spending their money on marketing instead of litigation.   

Calgary – 11:06 MST

Internet Trends

User-generated content (not only from blogs and YouTube, but also from Reuters and the BBC) is on the rise. 

As users continue to mash-up their own content with content borrowed from elsewhere, the intellectual property fur will continue to fly.  Expect copyright battles, trade-mark skirmishes and technological protection measures to make headlines as ordinary citizens test the boundaries of  “user-rights” vs. copyright.

Trade-marks 

There are not too many areas of the economy where branding and corporate identity are not a critical issue.  The Supreme Court of Canada weighed in on two significant trade-mark cases in 2006: the court reviewed “famous marks” in the Barbie case (Mattel Inc. v. 3894207 Canada Inc), and in the case of Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltee.  Trade-marks will continue to overlap with internet law and inter-jurisdictional issues, as we have seen in cross-border disputes such as the Pro-Swing vs. Elta case.

Domain Names 

Trade-mark owners can’t rest as domain name battles become a full-time occupation.  Some developments are helpful: WIPO issued its Overview of Panel Views which serves as a useful guide for those engaged in UDRP disputes.  Other developments are less encouraging: consider how the click-through ad-revenue system favours cybersquatters who can turn a quick profit from domain names which capitalize on the reputation of brand owners.  Microsoft’s battle with these cybersquatters will be interesting to watch as the law continues to play catch-up with technology.

 

Thanks to all of our readers in 2006.  We will continue posting in 2007.

Calgary - 09:25 MST

Lawyers are known for looking back, but we prefer to look ahead.  Here are some themes and developments in the rapidly evolving world of intellectual property and internet law. 

Copyright 

The courts were busy in 2006 in the copyright arena.  We can expect a few more important decisions (such as the appeal of the Toblerone copyright case) to go to the Supreme Court of Canada in early 2007.  One important theme in copyright is the attempt to use copyright to protect areas which aren’t the traditional domain of copyright: in the Toblerone case, the copyright holder succeeded. In the case of Plews v. Pausch 2006 ABQB 607, an Alberta graduate student attempted to use copyright to protect mere ideas and theories, and lost.

Privacy

Privacy is not within the realm of intellectual property but it almost always overlaps with technology issues.  Besides the regular reports of missing laptops and hacked data, consider two cases: One, the infamous Sony Rootkit case, in which Sony CDs embedded hidden software on the hard-drives of customers as part of the company’s copyright protection strategy.  The strategy landed Sony in a hornet’s nest of privacy issues.  Class action settlements were finalized in 2006. 

Second, consider the Alberta case of Doctor Dave Computer Remedies.  In that case, the Alberta Information and Privacy Commissioner found that Doctor Dave Computer Remedies used and disclosed the Complainants’ personal information (including names, email addresses, mailing addresses and phone numbers) contrary to the Alberta Personal Information Protection Act by posting that information on websites. 

Privacy issues will continue to be front and centre in 2007 as Parliament continues its review of PIPEDA, while other technologies, such as RFID tags, continue to raise privacy concerns.

IP Litigation

In 2006, the courts helped clarify enforcement issues for IP litigators.   In decisions such as Celanese Canada Inc. v. Murray Demolition Corp., an industrial espionage case, the courts helped clarify the boundaries for the use of Anton Piller orders in civil cases where evidence is being seized.  The cases of Pro Swing Inc. v. Elta Golf Inc. and Disney Enterprises Inc. v. Click Enterprises Inc, dealt with the enforcement of foreign judgements in Canada.

Calgary – 13:17 MST

As our market-driven society evolves, branding will present an ever-growing challenge.  How do you distinguish yourself from a field of competitors and navigate through the minefield of existing trade-marks?  

Samsung tried to do that in early December when it launched its new BlackJack, a “smart” phone with email capability and QWERTY keyboard.  Competitors noticed.  In particular, one little Canadian company that makes a “smart” phone with email capability and QWERTY keyboard that you may have heard of: BlackBerry.  Last week, RIM sued Samsung for trade-mark infringement. BlackJack and BlackBerry.  Confusingly similar?  A California court will decide.  The lesson for business?  You better have a high degree of confidence in your trade-mark before you spend millions launching that next product.

 

In August 2006, Microsoft launched a series of lawsuits in the U.S. against alleged cybersquatters.  This in itself is not necessarily newsworthy, considering the number of battles Microsoft and other famous trade-mark owners have to fight on an ongoing basis to protect their trade-marks online.  In this case however, the sheer volume of registrations was noteworthy. The cybersquatters had registered hundreds of domain names which were variations and common misspellings of Microsoft’s trade-marks, such as microsoftnewssource.com, msninfoonline.com, freewindowslive.com and msnblog.com. 

This brand of cybersquatting might be called “next generation” since it doesn’t rely on the traditional method for profiteering.  Instead of making money by selling the infringing domain name back to the rightful owner, or to a competitor, the domains have value because of their ability to generate per-click ad revenue.  The infrining domains are parked at a generic page which lists ads, all of which will generate revenue when misdirected visitors click through in the search for the legitimate site or page they were looking for.  Multiply this by hundreds of domain names and bingo, you’ve got yourself a profitable side-line, all based on ad-revenue. 

The ad-driven frenzy is reflected in “domain kiting“.  Domain kiting or domain tasting is the practice of registering a domain name speculatively and testing the ability of that domain name to generate traffic (and ad revenue) during an initial registration period.  Most registrars offer a refund if a domain registration is cancelled during this initial period.  Cybersquatters are using this period to register thousands of domain names, test drive them, and return them if the profitability potential doesn’t justify the registration cost. 

Microsoft, like other trade-mark owners, is using all legal means available in the battle against online trade-mark infringement, including UDRP complaints, and lawsuits based on trade-mark infringement and the US Anti-Cybersquatting Consumer Protection Act .  In Canada, there is no corresponding statute, so trade-mark owners must decide between the Trade-marks Act and the CDRP .  Microsoft lost one battle under the CDRP involving a .CA domain name. The domain name msnsearch.ca was registered by Canadian company Microscience Corp.  Microsoft alleged the domain name was confusingly similar to its MSN family of trade-marks.  Microscience fought back.  In the decision the panel agreed that there was confusing similarity, Microsoft lost on the grounds that there was no “bad faith” on the part of Microscience since it was not a competitor of Microsoft and the registration did not prevent Microsoft from registering its own trade-marks as a domain name.

The lessons?  Cybersquatters move fast and trade-mark owners have to educate themselves on the legal tools available to play hardball in these domain name games.  The tools include arbitration under the applicable dispute resolution policy, and litigation using trade-mark laws in the country having jursidiction over the infringer. 

Calgary – 13:02 MST

In the holiday spirit, we can’t resist analyzing the intellectual property rights in the Grinch. How did a grouchy green cave-dweller become a multimillion dollar IP asset? 

Copyright

The original book “How the Grinch Stole Christmas” was written in 1957 by Theodor S. Geisel under the pseudonym Dr. Seuss. The copyright in the character and the related trade-marks is owned by Dr. Seuss Enterprises L.P., a California limited partnership created after the author’s death to handle licensing of the Dr. Seuss empire. The copyright in the original book is owned by the publisher, Random House Inc. 

An animated television special was created in 1966 by Metro-Goldwyn-Mayer, Inc., now part of the Time Warner empire; the copyright in the television production is now owned by Turner Entertainment Co.  The copyright in the music in the television production (based on the book) was originally owned by Metro-Goldwyn-Mayer, Inc. as employer for hire of Theodor S. Geisel and Albert Hague. RCA Records published a compilation of songs from the television production. 

In 2000, the movie rights were acquired by Universal and the copyright in the movie “Dr. Seuss’ How the Grinch Stole Christmas!”, directed by Ron Howard, is owned by Luni Productions, a Universal production company. A novelization of the movie (based on the original book) was written by Louise Gikow and copyright is owned by Universal Studios Licensing Inc.

Inevitably, someone decided that the story was fit for a musical production: “Dr. Seuss’ How the Grinch Stole Christmas! The Musical” opened in San Diego in 1998 and moved this year to Broadway.  The copyright in the musical (lyrics and music) is owned by Timothy Mason and Mel Marvin.

All under license of course.

Trade-marks 

The word GRINCH is a registered trade-mark of Dr. Seuss Enterprises L.P. in Canada.  In the US, the GRINCH trademark was registered by Dr. Seuss Enterprises LP in 2000 for T-shirts, shirts, tops, sweaters, hats, headwear, aprons, sweatshirts and any other merchandising category you could think of. Interestingly, an individual by the name of John Christopher Chlebowski, Jr. obtained the first trademark registration for the word GRINCH, claiming a date of first use in 1991 for “entertainment, namely, live performances by a musical band.”

Domain Names

The domain name grinched.com  is owned by Universal Studios for use with its movie-related website, under license from Dr. Seuss Enterprises.  The domain name howthegrinchstolechristmas.com is registered by an unknown registrant and currently resolves to a “domain for sale” site (which would make a good case for “bad faith” registration under the Uniform Dispute Resolution Policy arbitration procedure).

Patents

The Grinch is mentioned in several U.S. patent applications, although no-one has yet found a way to make the character himself the subject of a patent.  For example, United States Patent No. 6,982,780 (filed by inventors Steven Morley, et al.) which issued on January 3, 2006, claims patent rights in a method for creating a playlist for a digital cinema system.  The work “How the Grinch Stole Christmas” is mentioned in the claims description as an example of the use of the invention.

Licensing

Dr. Seuss Enterprises L.P. with Audrey Geisel at the helm, appears to control all trade-mark and copyright licensing of the original Grinch character and related paraphernalia as well as the entire Dr. Seuss line of products, and has licensing deals for countless spin-off products.  The movie licensing is handled by Universal Studios Licensing, Inc., which is itself originally under license from Dr. Seuss Enterprises L.P.   Although Dr. Seuss died in 1991, he has consistently made the Forbes list of top-earning deceased celebrities due to the marketing engine of Dr. Seuss Enterprises L.P. It generated $10 million last year.  For the movie version of the Grinch, the licensing company took 4 percent of the box-office gross, 50 percent of the merchandising revenue and music-related material, and 70 percent of the income from book tie-ins.  We haven’t even touched on the licensing for Universal’s theme-park.

Infringement

Alas, we have uncovered no Grinch lawsuits, although few literary characters would be more suitable as a plaintiff.  It seems to us that Mr. Chlebowski, armed with a trademark registration for the word GRINCH in association with “entertainment, namely, live performances by a musical band” would have a claim against the producers of the live musical version of the Grinch story, but we have seen no effort on the part of Mr. Chlebowski to pursue that action. Perhaps the prospect of shutting down a family Broadway musical during the Christmas season is a bit too unpalatable, even for a GRINCH trademark owner.

Calgary - 23:11 MST

The Canadian trade-mark RIDENT for golf clubs is confusingly similar to the US trade-mark TRIDENT for golf clubs.  That’s the easy part.  Now, how do you confine a Canadian company from selling its RIDENT brand golf clubs over the internet to US consumers who may be familiar with the rival TRIDENT brand?  We’ve got e-commerce, intellectual property rights and court orders.  Just the thing to take to the Supreme Court of Canada.

In Pro Swing Inc. v. Elta Golf Inc. 2006 SCC 52, the Supreme Court of Canada (SCC) tackled this problem on a number of levels.  Pro Swing, owner of the TRIDENT trade-mark in the US, initially obtained an order from a US court, stipulating that the Canadian company, Elta Golf, should cease sales of RIDENT brand golf clubs into the US.  But in practical terms, the court order was only enforceable in the US and Elta Golf was an Ontario-based company.  Pro Swing commenced a lawsuit in Canada to enforce its US judgement. 

Traditionally, foreign judgements can be enforced in Canada where they are a final order to pay a defined sum of money.  Or put another way, where compliance is relatively easy to enforce and monitor: either the money has been paid, or it hasn’t.  In the Pro Swing case, the US order was a “foreign non-monetary judgment”.  In other words, it carried with it a number of non-monetary orders and stipulations.  The SCC has now clarified that these types of orders can be enforced in Canada. Unfortunately, the court was split on when they should be enforced. Here are some of the factors the Canadian court will take into consideration:

●       are the terms of the foreign order clear enough?

●       is the foreign order sufficiently limited in scope?

●       is it a final order?

●       is enforcement of the order a justifiable use of Canadian judicial resources? 

In the end Pro Swing’s US judgement was not enforced by the court. The lessons for business?  First, foreign litigants seeking to enforce their foreign judgements in Canada now have a greater range of options available to them; they are not confined to monetary orders alone.  Secondly, because of the thicket of issues which a Canadian court will consider, it is wise for US counsel to seek advice from Canadian counsel prior to drawing up the terms of the US order to ensure it stands the greatest chance of enforcement in Canada.  Third, in practical terms, the world of e-commerce just got a little cozier: cross-border business and internet sales mean that Canadian and US companies will continue to come into conflict and this decision effectively shrinks the gap between foreign and Canadian courts.

Calgary - 09:59 MST

Early in November, Universal Music Group announced an innovative deal with Microsoft.  As part of the negotiations leading up to the launch of Zune (Microsoft’s competitor to the iPod), Universal cut a deal to get a royalty payment for every Zune player sold by Microsoft.  This is separate from the royalties generated by the sale of downloaded music from Universal’s catalogue. 

How did Universal negotiate this and why did Microsoft agree to share its (probably slim) margins on the device?  Let’s call it an alignment of interests.  Microsoft needs the big music catalogues on side if its Zune is going to put a dent in Apple’s mighty iPod.  Secondly, the Zune is marketed by Microsoft as a “social” vehicle: the wireless capability of the Zune player allows users to share their music with other Zune owners.  In legal terms, this means that content subject to copyright can be distributed to unnamed users who have not directly acquired any rights to the music.  Sound like a recipe for a copyright lawsuit?  Not if you cut a deal that aligns interests.  If Universal enjoys a cut of sales of the device, then it has a vested interest in having as many Zune owners as possible.  To answer any fears that one Zune owner can distribute music infinitely, the technical protection measures kick in.  The device can only share with other Zune devices within range, and the shared music actually times out after three days.  Music sharing?  It’s more like a short-term loan. 

For its part, Universal had two other motivators: one, the Diamond Rio case in the U.S. made it clear that MP3 players were not subject to the type of copyright levy applied to blank CDs and other digital recording media.  In Canada, the Federal Court of Appeal came to the same decision in 2004. So iPods and Zunes are not generating tariffs for copyright owners the way blank CDs are.   Second, Universal also has its eye on upcoming negotiations for the renewal of its contract with Apple. With the Microsoft deal in its back pocket, Universal will very likely look to Apple for a cut of iPod sales.  Unfortunately for Universal, it does not have the upper hand in that round of negotiations.  Apple’s iTunes accounts for the lion’s share of the legal download market and any threat by Universal of pulling its catalogue from iTunes would be akin to shooting the goose that’s laying the golden eggs. 

Instead of positioning themselves for a future battle over copyright, Universal and Microsoft used a little creative thinking to align business interests.  It will be interesting and instructive for business owners to watch as the deal-making unfolds.  

Calgary - 08:38 MST

The use of copyright as a tool to control distribution channels and protect product lines is not new. Neither is it confined to the traditional fields of music or software. Take for example the 2005 case of Euro Excellence, Inc. v. Kraft Canada Inc., 2005 FCA 427, where the Federal Court of Appeal upheld an injunction against an unauthorized distributor of “gray market” Toblerone chocolate bars, based on a claim of copyright infringement. Gray marketing refers to the distribution of genuine goods by a distributor who is outside the manufacturer’s official supply channel.

Manufacturers of all stripes seem to be employing copyright as a way to control unauthorized uses of their product. Take for example Viacom’s well-drafted copyright license terms on the back of its “Dora the Explorer” branded stickers: “This product is intended solely for non-commercial home use. No license has been granted to apply this product to decorate articles which will thereafter be sold. Any such use is an infringement of copyright in the characters portrayed and is specifically prohibited.” Viacom’s Dora figure is big business. In 2005, Viacom’s revenues in Canada alone were $214 million, generated in part from licensing and merchandising of branded products such as Dora stickers. Copyright can be a very useful tool which should be considered when developing a strategy for product distribution.

Just don’t let your pre-schoolers put any Dora stickers on the cups at their sidewalk lemonade stand.

Calgary – 16:04 MST

Can a director be personally liable for trade-mark infringement?  We raised this issue in our October 25th post. A recent Federal Court decision has re-examined this question.  Generally, directors and shareholders are considered to be legally separate from their corporation and are not personally on the hook for the debts or liabilities of that corporation.  If the corporation breaches its contractual obligations, defaults on a loan or infringes someone else’s intellectual property rights, then it is the corporation, not the individual, who is liable.

In the case of Petrillo v. Allmax Nutrition Inc., 2006 FC 1199 (CanLII), the plaintiff brought an allegation of trade-mark infringement against both the corporation and Richard Glover and Michael Kichuk, the directors of that corporation.  The individual defendants brought a motion to have the lawsuit dismissed against them personally.  They succeeded.  In coming to its decision, the court made several important points:

One, even though a small company may be controlled by one or two individuals who may function as shareholders, directors and officers, the authorization required for personal liability will not be inferred merely from the fact that a company is closely controlled.  Secondly, the court said that “it is not enough for a Plaintiff to assert personal liability on the part of an officer or director of a company in a statement of claim, in the hope that evidence to support the allegation will be uncovered during the discovery process.  A lawsuit is not a fishing expedition.” (at para. 36)

In the end, no evidence was brought forward to implicate the directors personally and so the lawsuit against them was dismissed. 

Calgary - 14:02 MST

In the ongoing copyright wars, some of the most memorable battles were fought by Sony BMG and Universal against upstarts like Napster and Grokster.   Napster and Grokster were ahead of their time.  Alas, like many pioneers, they were effectively litigated out of existence.  Today, dozens of industry-sanctioned sites like iTunes and Puretracks are flourishing. 

With the upsurge in video file-sharing sites, are we going to see a new round of battles, this time over copyright in video and movie content?  The answer to this question will lie in the degree to which the industry becomes successfully enmeshed in the success of video-sharing.  Yes, we are already seeing copyright lawsuits against YouTube and MySpace.  However, the difference is that these popular video-sharing sites aren’t operated by rogue individualists.  They are part of well-established corporate empires: Google bought YouTube; MySpace is owned by News Corp., the parent company of Fox Interactive.  YouTube has already negotiated deals with CBS, Universal, Sony BMG, Warner Music and NBC.  The content industry is enmeshed.  If industry can generate profit through these distribution models, the battles will be between competing empires over who has the most successful distribution model and the most effective copyright protection measures. 

For Canadian video content producers, the questions remain the same as always: can content be distributed profitably or will profits leak out through copyright infringement?  If copyright infringement is occurring, can it be stopped and at what cost?  We’ll continue watching the latest YouTube and MySpace lawsuits to find some of the answers.

Calgary – 12:16 MST

The world of trade-marks is regulated by several underlying concepts. One such concept is that two similar or even identical marks can coexist as long as they are in different channels of trade.  This permits the trade-mark DELTA to be used by an airline, a water faucet manufacturer and a hotel chain without any confusion.  

In the recent decision in Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 2006 WL 3182468 (E.D. Va. 2006), this concept was put to the test in the internet context.  Are online sales a “channel of trade” for the purpose of determining whether two similar marks can coexist?  The famous hand-bag company sued a manufacturer of pet accessories (such as dog beds and chew toys) for trade-mark infringement.  Louis Vuitton alleged that the use of the mark CHEWY VUITON  infringed its LOUIS VUITTON mark.  Essentially, the court disagreed.  The fact that the sales of both the plaintiff’s and defendant’s products were made online was not, by itself, determinative of the issue.  The court looked at a number of other factors to determine whether the two marks were used in the same channel of trade.  

Trade-mark owners should police their marks and take steps to prevent infringers from trading on their reputation.  This U.S. case provides some guidance for Canadian businesses who are trading into the U.S. particularly in the ever-expanding internet and e-commerce context.  

 

 

Many companies want some basic guidance on copyright. This discussion provides some practical tips and information on copyright in Canada.

Q. What is copyright?

Copyright is at its most basic level the “right to make copies”. It was originally developed to give writers and artists a measure of control over who can rightfully copy their works.  Copyright protects original creations such as books, music, images, photographs, and has evolved to provide protection for software, layout and design of websites, broadcasts and performances.  Copyright is a function of the law set out in the Copyright Act and in the court decisions which interpret that Act.

Q. How is copyright created?

Someone who creates an original work automatically enjoys copyright protection in that work by virtue of the Copyright Act.  For copyright to subsist, the work must be original and it must be reduced to a fixed form (for example, copyright does not protect mere ideas which are not expressed in writing). 

Q. Do I need to register copyright and if so, how do I do that?

Technically, you do not need to register copyright in order to enjoy the protections under the Copyright Act.  However, you can benefit from registration because a registration entitles the copyright owner to the benefit of certain presumptions.  In other words, you are presumed to be the owner of a work in which you have a copyright registration without having to prove that you were the author of the work.  Whereas, without a registration, you would have to prove authorship and ownership of that work in the event of any dispute.  Copyright registration is easy to do (relative to patents or trade-marks, for example).  The Canadian Intellectual Property Office provides more detailed guidance on that process.

Q. What can I do if someone else uses my copyrighted works without my permission? 

When someone else uses works in which you enjoy copyright protection and they don’t have your permission, this is what we call copyright infringement.  There are a number of exceptions in the Copyright Act which permit copying under certain circumstances, but if those exceptions are inapplicable, then you may be able to sue the infringer to prevent the unauthorized copying.  The Copyright Act permits copyright holders to collect statutory damages of up to $20,000 in certain cases where infringement can be shown.

Internet Service Providers (ISPs) are often on the front lines of the battles taking place in internet law.  In the BMG case (BMG Canada Inc v. John Doe) (which was referred to in our October 30th post), it was the ISP community which took the brunt of the recording industry’s efforts to stop online peer-to-peer file-sharing. In that decision, the court denied the request by copyright holders to force ISPs to disclose their customers’ identities where copyright infringement was alleged.  ISPs fought to for the right to protect their client’s identities (or framed in a business context, they fought for the right to avoid expensive disclosure obligations) and won.

The Modernization of Investigative Techniques Act , a proposed federal law which was first introduced in 2005 by the Liberal government, would impose stricter obligations on ISPs to permit “lawful interception of communications by law enforcement agencies and the Canadian Security Intelligence Service.”  This bill died before being passed into law, but it is certainly cause for concern for ISPs who are navigating the line between privacy rights, legitimate concerns over illegal activity, the interests of copyright holders… and the dictates of profitability in a competitive marketplace.

In a recent case in Ontario [see story link] the quick response of an ISP led to the disclosure of the identity of a subscriber and a speedy arrest by investigators.  That case (involving sexual assault) highlights the issue but does not provide much guidance for ISPs in the more nuanced area of alleged intellectual property infringement.  We will be monitoring developments to see whether the Conservative government will introduce legislation in this thorny area.

Last week (November 3, 2006) the Supreme Court of Canada (SCC) issued a decison in the battle between AstraZeneca and Apotex on the issue of “evergreening” the protection available for pharmaceutical products. The decision cane be found at AstraZeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49

The Patented Medicines (Notice Of Compliance) Regulations govern patented pharmaceutical products in Canada and provide brand-name drug companies with some extra tools in their competition against generic drug manufacturers. Here’s how it works in a nutshell:  a generic drug manufacturer cannot enter the market without a Notice of Compliance (NOC) and no NOC will be issued if the proposed product is the subject of a competitor’s patent.  However, a generic can challenge that patent’s validity or applicability to its own product by issuing a notice of allegation.  The brand name drug company (which owns the patent) may respond by issuing its own application for a prohibition of the NOC.  This response results in an automatic 24‑month “statutory freeze” on the issuance of the NOC to the generic drug manufacturer.  Even after a patent expires, by applying for new improvement patents of “marginal significance” to the expired patent, the brand-name drug company can obtain an indefinite series of 24‑month statutory freezes, which can effectively shut the generic out of the market for that product.  There has been much criticism of this tactic.  This decision helps clarify the rules and warns against the use of the “evergreening” tactic by patent holders.