Thompson Cooper LLP likes to publicize the Kickstarter campaigns on our clients. Below is a link that will give you some further information regarding our client’s Kickstarter campaign.
Thompson Cooper LLP likes to publicize the Kickstarter campaigns on our clients. Below is a link that will give you some further information regarding our client’s Kickstarter campaign.
One of my software developer clients recently sent me a promotional article written by a legal firm. This article urged software developers to file for patent protection. I felt the article was misleading, as it did not discuss current problems with protecting software.
If you have created a “system” which includes sensor input or other specialized hardware and a software component, you still have a reasonable chance of obtaining patent protection under patent rules regarding new, useful and non-obvious inventions. However, if you have only created software that can run on any computer and does not form part of a “system”, your chances of obtaining patent protection are greatly diminished. A Patent Examiner will consider that you are merely implementing an “abstract idea” with a computer. “Abstract ideas” are considered to merely be mental exercises that could be implemented manually, the use of a computer is not considered to be an essential.
In the 2014 Alice Corporation decision in the United States, the US Supreme Court indicated that you must have more than an “abstract idea”. The provision of algorithms has been held to be insufficient to constitute more than an “abstract idea”. Clients of mine have conducted searches and discovered similar U.S. patents. However, a patent granted for generally similar software in 2012, is not an indication that you could obtain a patent for the same type of software today. Since the Alice Corporation decision, there have been hundreds of software patents invalidated. In 80% of U.S. Court cases involving software patents since the Alice Corporation decision, the patents have been invalidated.
Software developers have not done much better in the Canadian Intellectual Property Office. An Applicant recently appealed to the Patent Appeal Board a decision of a Canadian Patent Examiner denying the majority of claims for Canadian Patent Application 2,529,210. The Canadian Patent Examiner had allowed claims 31, 34, and 37-44. The Applicant did not get the desired result, as the Patent Appeal Board denied all claims as being “abstract ideas”, even those claims the Canadian Patent Examiner had previously allowed.
There is no benefit to a software developer to fully disclose his or her invention when applying for patent protection, only to have that patent application refused. Software developers should, therefore, only apply for patent protection when their patent agent can give them reasonable assurance of success. This would normally be in situations in which a computer or other hardware is an essential part of the invention, for example if the process implemented on a computer could not be done manually as an outcome is required in a fraction of a second.
A recent inquiry from a client caused me to examine the topic of liability on the internet. My client has a website with associated YouTube channel where persons can post articles and videos. My client’s potential liability with respect to the persons who post the articles and videos can easily be controlled by contract. Prior to posting, a user can be required to “accept” the “terms of service” which has all the desired provisions. However, this does not address my client’s potential liability to third parties. In the context of my client’s inquiry, he was most concerned about someone posting content that is defamatory of a third party.
Most of this client’s internet traffic originates from the United States. In the United States the applicable law is section 230 (c) (1) of the Communications Decency Act. This section indicates that no provider of an “interactive computer service” shall be treated as publisher or speaker of any information provided by another. If the applicable law were U.S. law, the client would have some protection from liability pursuant to the provisions of the Communications Decency Act. A defamed third party’s only remedy would be against the user who posted the defamatory content.
Canada does not have the equivalent of the Communications Decency Act. This means that a party who operates a website, such as my client, potentially has equal liability with the user who actually posts the defamatory material. Canadian Law recognizes freedom of expression under section 2(b) of the Canadian Charter of Rights and Freedoms. However, the law of defamation, which protects a person’s reputation from unjustified assault, is one of the limitations on freedom of expression.
In cases dealing with defamatory statements on the internet, the first consideration of Canadian Courts is whether, when the defamatory subject matter was brought to the attention of the defendant, the offending material was promptly taken down. Taking down defamatory material limits liability of the party who operates the website.
If the defamatory content is not taken down promptly, the Canadian Courts get into an analysis of the elements of defamation:
1. Were the comments defamatory, in the sense that they would tend to lower the plaintiff’s reputation in the eyes of a reasonable person?
2. Was it clear that the comments referred to the plaintiff?
3. Were the comments “published”?
If the basic elements of defamation are proven, the onus shifts to the Defendant to establish that a defence of “fair comment” is available. The element of the defence of fair comment are:
1. Was the comment on a matter of public interest?
2. Was the comment based upon fact?
3. Is the comment recognizable as an expression of an opinion and not a statement of a fact?
4. Could a person honestly express that opinion based upon the proven facts?
It is important that the facts be sufficiently stated or otherwise known to the intended audience, so that they are able to make up their own minds on the merits of the comment. There must be a relationship between the comment and the underlying facts. If the factual basis for the comment is unstated or unknown, or turns out to be false, the fair comment defence fails. Even if the facts are known and related to the comment, the defence of “fair comment” can be defeated if the Defendant in making the comment was actuated by express malice against the Plaintiff.
The writer’s advice to person who operate in Canada and are, therefore, subject to the jurisdiction of Canadian Courts, is to put in place the following:
1. Have provisions in your “Terms of Service” that enable you to arbitrarily take down content alleged to be defamatory.
2. Have a clear “Take Down” notification system, so that third parties can alert you to content that is defamatory.
3. Error on the side of caution by quickly taking down content when you receive notification that a third party considers content to be defamatory.
In the article posted July 18, 2017 we described a ground breaking decision of the Supreme Court of Canada upholding a lower court order that required Google to de-index D’s website from search results worldwide. The Supreme Court of Canada stated:
“Where it is necessary to ensure the injunction’s effectiveness, a court can grant an injunction enjoining conduct anywhere in the world. The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. If the injunction were restricted to Canada alone or to google.ca, the remedy would be deprived of its intended ability to prevent irreparable harm, since purchasers outside Canada could easily continue purchasing from D’s websites, and Canadian purchasers could find D’s websites even if those websites were de‑indexed on google.ca.”
“Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction, is theoretical. If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly.”
To bring you up to date, Google has since filed an action before the United States Courts seeking a declaratory judgment that the Canadian order is not enforceable in the United States. Most recently, a motion for a preliminary injunction was heard that enjoined the enforcement of the Canadian order in the United States pending the result of the action seeking a declaratory judgement. This motion merely preserves the “status quo” pending a decision of the United States Courts. The results of the United States action will have important ramifications. Stay tuned for future updates.
I am back from my duties at the Annual Convention of the Intellectual Property Institute of Canada, which took place October 11 through 13 in Niagara Falls. I have always indicated that what is happening in the profession is reflected in the topics dealt with at the conference. The following topics were addressed at the conference, listed by title and followed with a brief explanation:
IP and Innovation – A fireside Chat with Innovation Science and Economic Development Parliamentary Secretary David Lametti
This session discussed the Liberal Government’s Innovation Strategy
The College and Professional Ethics: What it means for IP Professionals.
This session discussed the creation of the equivalent of the Law Society for the IP Profession, in order to maintain high standards.
The Law of Utility in Canada – Where are we now and where are we going?
This session discussed the recent Supreme Court of Canada AstraZeneca Canada Inc. v. Apotex Inc. decision which discredited a previous line of cases that invalidated patents for useful inventions that did not deliver everything “promised”.
Post-Final Practice – Understanding your options at the end of the line.
This session discussed options when a patent application is met with a “Final” rejection.
Who’s Offended? – A review of the Laws on Obscene, Scandalous, and Immoral Marks in Canada, the U.S. and the EU.
This session discussed the balance between the protection of the public, freedom of commercial speech and property rights, in light of recent U.S. developments with the Slants Case and the Washington Redskins Case.
Sounds, Scents, Flavours, – an Update on Non-Traditional Marks in Canada, the US and EU.
This session discussed new ways in which businesses are distinguishing their products in the market place.
Updating Your Toolkit for Fighting Obviousness Issues Post-Sanofi
This session discussed ways of countering a rejection by a Patent Examiner that an invention is “obvious”.
Use it or Lose it: Non-Use Cancellation Proceedings
This session discussed ways of removing from the Register Trademarks that are no longer in use and the evidence that must be filed to retain a Trademark on the Register when a notice to prove continuing use is received.
Trademarks, Copyright and VQA: Branding and Marketing Issues for Wineries in Canada
The Niagara region has a number of significant wineries. This session provided an opportunity to place industry representatives on a panel for an in-depth discussion of the Intellectual Property Issues faced by wineries.
Women in IP Networking Group Reception
This reception was intended as a networking session for women involve in Intellectual Property, men were invited.
Canadian Intellectual Property Office Update
An address with a question and answer session was presented by the Commissioner of Patents, Registrar of Trademarks and Chief Executive Officer of the Canadian Intellectual Property Office, Johanne Belisle.
Keep it or Share it: Confidential and Proprietary Information in Joint Ventures
This session discussed the area of trade secrets, and issues around divulging trade secrets in commercial negotiations.
Canada’s Innovation Strategy
This session dealt in much greater depth with the Government’s Innovation Strategy and the public consultations that were held to get public input on the Innovation Strategy.
Copyright: Fair Dealing and Technological Protection Measures
This session discussed fair dealing as an exception to copyright infringement and the prohibition against circumventing technological protection measures.
Updates from the Patent Branch
This was an address with a question and answer session by Agnes Lajoie, the Director General of the Patent Branch and Assistant Commissioner of Patents.
Updates from the Trademarks Branch
This was an address with a question and answer session by Mesmin Pierre, the Director General of the Trademark Branch. The profession was updated on a number of changes that are scheduled to take effect in 2019.
Talking to Your Client – The New Conversation
Corporate executives who hire Intellectual Property Professionals gave their views on how the IP profession can communicate better with their clients.
Top Intellectual Property Cases of the Year
This session dealt with the 10 top cases in each of the areas of Patents, Trademarks and Copyright/Design.
A recent decision of the US District Court for the Southern District of New York regarding a dispute between “YouTubers” is getting a fair amount of comment, as it is one of the first cases of its kind regarding the use of YouTube video clips. Ethan and Hila Klein who operate the YouTube channel H3H3 posted a video that criticized a video posted by fellow YouTuber Matt Hosseinzadeh. The H3H3 video featured clips from the Hosseinzadeh video and Hosseinzadeh took exception to both the use of the clips and the comments that were made. Hosseinzadeh sued the Kleins for copyright infringement and defamation.
U.S. copyright law contains “fair use” provisions. Criticism is one of the exceptions to copyright infringement that is considered to be “fair use”. There was no question that the use constituted “criticism”, and the District Court Judge focused upon whether the use was “fair”, so as to fall within the “fair use” exception. Large portions of the Hosseinzadeh video were used by H3H3. However, the Judge was satisfied that this was necessary in order for H3H3 to comment and critique the Hosseinzadeh video. The effect of the H3H3 use on the potential market for the Hosseinzadeh video was examined. The Judge was satisfied that the H3H3 video was not a substitute or replacement of the Hosseinzadeh video. In the end result, the Judge decided that the use by H3H3 was “fair use” and that, although critical, the comments H3H3 video contained were not defamatory, but merely “non-actionable opinions”. It is to be noted that the fact the Hosseinzadeh video was a scripted and fictional creative work played a role in the Judge’s characterization of the critical comments as “non-actionable opinions”. The critical comments focused upon the fictional creative work and could not be construed as a personal attack upon Hosseinzadeh.
The question then becomes what is the comparable situation in Canada. In Canada “fair dealing” is analogous to the U.S. concept of “fair use”. Section 29.1 of the Canadian Copyright Act contains a provision expressly contemplating “fair dealing for the purpose of criticism or review” as an exception to copyright infringement.
29.1 Fair dealing for the purpose of criticism or review does not infringe copyright if the following are mentioned:
(a) the source; and
(b) if given in the source, the name of the
(i) author, in the case of a work,
(ii) performer, in the case of a performer’s performance,
(iii) maker, in the case of a sound recording, or
(iv) broadcaster, in the case of a communication signal.
It would appear to the writer that, as long as section 29.1 is complied with, the Canadian Courts would view these issues much as the U.S. Courts have done. In this context, it is no different than a television movie reviewer reviewing a move about to open in the theatres. However, the Court will look at the quantity of video material taken to determine whether the resulting work is intended as or could be used as a “substitute” for the original work. The Court will also look at whether the critical comments are “non-actionable opinions” on a creative work or constitute a defamatory personal attack.
In the writer’s opinion, even greater care must be taken if the video clips are not of a “creative” work, but rather of a serious video post expressing an opinion. In such cases, taking too much of the serious video, could be viewed as a substitute for viewing the serious video. Conversely, taking too little of the serious video could leave the opinion without support and out of context, thereby subjecting the person who posted the serious video to ridicule. Also care must be taken to criticize the opinions presented and not include extraneous comments that could be construed as a personal attack. With the number of bloggers on the internet, one can expect more of these kind of conflicts to arise in future. One way to gain followers will be to post commentary on video material posted by persons who may have more followers than you. For example, many persons are presently becoming known on the internet by posting criticism of Donald Trump.
On June 12, 2017 Judgement was rendered in the case of Diageo Canada Inc vs. Heaven Hill Distilleries Inc. This case has come to be known as the “Captain Morgan Case”. It is noteworthy because it is one of the few recent cases on “distinguishing guise”. As defined is the Trademark Act a “distinguishing guise” means
(a) a shaping of goods or their containers, or
(b) a mode of wrapping or packaging goods
the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish goods or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others;
The facts are that Diageo Canada is the owner of the highly successful “Captain Morgan” brand of rum. Heaven Hill launched their Admiral Nelson brand in an attempt to compete with the Captain Morgan brand. The gist of the dispute can be understood from the following excerpts taken from the Judgement:
“ I agree with Diageo that there is no requirement that a distinguishing guise must be registered under the Act in order to be a valid trademark enforceable as against Heaven Hill.”
“Diageo’s trade dress or distinguishing guise is embodied in the bottles of Original Spiced Rum, 100, Silver Spiced Rum, Gold, Dark, and White varieties of CAPTAIN MORGAN rum which bear a fanciful depiction of Sir Henry Morgan located generally at the center of the label, the CAPTAIN MORGAN brand name above the CAPTAIN MORGAN character with the rum variety below it, a classic sailing ship in the background, the bottle caps, the collar labels bearing the CAPTAIN MORGAN brand, and the colour scheme and design of the main label. All of these elements constitute the distinguishing guise of the CAPTAIN MORGAN rum products within the definition of a distinguishing guise under the Act and, accordingly, are a valid and enforceable trademark under the Act.”
“Diageo must establish goodwill in respect of the distinctiveness of its CAPTAIN MORGAN rum products. Although goodwill is not defined in the Act, the Supreme Court of Canada has described the goodwill associated with a trademark as being: “the positive association that attracts customers towards its owner’s wares or services rather than those of its competitors”). The evidence adduced by Diageo at trial shows there is considerable goodwill associated with the CAPTAIN MORGAN brand and the current manifestation of its associated trade dress. This is most evident by the quantity of sales of CAPTAIN MORGAN rum products, especially in relation to other rum producers and their rum products in Canada. Mr. Kourtis’ testimony was that approximately 200 million bottles of CAPTAIN MORGAN rum have been sold in Canada since 1994, with retail sales of roughly $5 billion, and that about 20% to 23% of Diageo’s total sales of spirits are attributable to CAPTAIN MORGAN. Mr. Kourtis further testified that: approximately 12 million bottles of CAPTAIN MORGAN rum and over 7 million bottles of CAPTAIN MORGAN Original Spiced Rum are sold annually in Canada; this is roughly equivalent to $320 million in retail sales annually in Canada, of which approximately $220 million is attributable to sales of CAPTAIN MORGAN Original Spiced Rum; CAPTAIN MORGAN was the best-selling rum in Canada in 2016, with some 32% share of the market for rum products, ahead of other well-known brands of rum such as BACARDI, LAMB’S and APPLETON ESTATE; and that, approximately 71.9% of the spiced rum market share in Canada is held by CAPTAIN MORGAN spiced rums. The goodwill associated with the CAPTAIN MORGAN brand is also evident by the extensive promotion, marketing, and advertising of CAPTAIN MORGAN. In the last 15 years or so, Diageo has spent about $150 million for promoting, marketing, and advertising its CAPTAIN MORGAN rum products, and within the last year roughly $17 million was expended.”
“As to the second element of a passing-off claim, namely the deception of the public due to a misrepresentation, it bears repetition to note here that the misrepresentation creating confusion in the public may be willful, negligent, or careless. Although Diageo pointed to some evidence and argued at trial that Heaven Hill intentionally or deliberately set out to mimic or copycat the trade dress of the CAPTAIN MORGAN rum products when it refreshed the ADMIRAL NELSON’S packaging, I find this evidence does not clearly or cumulatively establish any such intention on the part of Heaven Hill. The occasional references to CAPTAIN MORGAN in the documentation surrounding the redesign of the ADMIRAL NELSON’S bottle and labels and the testimony at trial, notably that of Hanna Venhoff, Heaven Hill’s Senior Brand Manager for its rum portfolio, do not, in my view, establish on a balance of probabilities that Heaven Hill intentionally or willfully set out to mimic or copycat the trade dress of the CAPTAIN MORGAN rum products. As the Court in Mr Submarine Ltd v Emma Foods Ltd,  OJ No 806 at para 6, 34 CPR (2d) 177 (Ont H Ct J), remarked, citing Baker et al v Master Printers Union of New Jersey (1940), 47 USPQ 69 at 72: “Of course, few would be stupid enough to make exact copies of another’s mark or symbol. It has been well said that the most successful form of copying is to employ enough points of similarity to confuse the public with enough points of differences to confuse the courts.”
“What the evidence does show, however, on a balance of probabilities, is that a casual or ordinary purchaser of rum products would likely be confused as to the source of ADMIRAL NELSON’S rum products as currently packaged and sold in Canada. At trial, Diageo tendered the expert report of Dr. Ruth Corbin who designed and oversaw the implementation of a consumer survey of 629 Canadian adults of legal drinking age, residing in four Canadian cities, who had recently purchased a bottle of rum. The survey’s mandate was two-fold: one, to assess general impressions of ADMIRAL NELSON’S Premium Spiced Rum; and two, to measure the extent, if any, to which purchasers of rum mistakenly infer that a bottle of ADMIRAL NELSON’S Premium Spiced Rum originates from the same source as CAPTAIN MORGAN rum. The in-person mall-intercept survey was conducted during July and August, 2016, in shopping malls in Moncton, Montreal, Toronto, and Edmonton, cities chosen to provide geographical coverage across Canada as well as to allow for a comparison between cities where ADMIRAL NELSON’S Premium Spiced Rum is available for sale (i.e., Moncton and Edmonton) and cities where it is not (i.e., Montreal and Toronto). A total of 629 persons participated in the study; 413 participants were shown a bottle of ADMIRAL NELSON’S Premium Spiced Rum (the Test Group), a picture of which is shown below, while 216 were shown a bottle of SAILOR JERRY Spiced Rum (the Control Group) which is also shown below:
Upon review and analysis of the survey results, Dr. Corbin concluded and testified at trial that there is statistically significant evidence that CAPTAIN MORGAN rum is spontaneously and almost exclusively brought to mind by the ADMIRAL NELSON’S Premium Spiced Rum bottle. Among the ADMIRAL NELSON’S Test Group, 21% noted similarity between ADMIRAL NELSON’S Premium Spiced Rum and CAPTAIN MORGAN rum (but did not reference the two brands as coming from the same source elsewhere in the survey). Dr. Corbin further concluded and testified that there is statistically significant evidence of misapprehension of source, meaning that rum purchasers are likely to mistakenly infer that a bottle of ADMIRAL NELSON’S Premium Spiced Rum originates from the same source as CAPTAIN MORGAN rum. In total, 23% of the 413 participants in the Test Group had a misapprehension as to source (whereas only 7% of the 216 participants in the Control Group mistakenly inferred that SAILOR JERRY Spiced Rum originates from the same source as CAPTAIN MORGAN). The most frequent reason given by the Test Group participants for inferring the same source as CAPTAIN MORGAN was the character displayed on the label. However, Dr. Corbin also noted during her testimony that more than just the character on the bottle was a source of confusion, testifying that:
…one can conclude with 95 per cent confidence that the inference of a same source between these two bottles, Admiral Nelson and Captain Morgan, arises from some elements on the Admiral Nelson’s bottle as opposed to the things we have controlled for, the placebo elements we have controlled for, random guessing or other irrelevant elements.
In short, the evidence adduced by Diageo at trial, notably the Corbin survey report, supports a finding that there is, on a balance of probabilities, confusion or deception of the public due to Heaven Hill’s misrepresentation as to the source of its ADMIRAL NELSON’S Spiced Rum. This finding also extends to each of the other varieties of ADMIRAL NELSON’S rum products, namely, Premium Dark, Premium Silver, Premium Gold, and Premium Coconut, because, save for some of the words on and the colouring of the ADMIRAL NELSON’S labels and the colour of the rum inside the bottles, each variety utilizes the same Admiral Nelson character with a ship behind the character and the same shaped bottle. Accordingly, I conclude that there would likely be confusion in a consumer’s mind as to the source of the ADMIRAL NELSON’S rum products. It is readily conceivable in this case that an ordinary or casual purchaser of rum products, somewhat in a hurry, could be caught off guard when reaching for what he or she perceives to be a bottle of CAPTAIN MORGAN rum but which is in fact a bottle of ADMIRAL NELSON’S rum.
If you had looked only at the brand names and asked a Trademark lawyer whether the Trademark Admiral Nelson would be considered confusing with the Trademark Captain Morgan, you would likely have been advised that the Trademarks are not confusing. However, as can be seen from the foregoing, when the “distinguish guise” with all surrounding circumstances were placed before the Court, the Court reached the conclusion that a case for confusion had been made out. Clearly the value of a distinguishing guise cannot be underestimated with well-known national brands.
Sometimes Intellectual Property protection available to software developers appears to be inadequate. Legal professionals serving the software industry are forced to work within confines set by the “traditional” forms of Intellectual Property protection of Patents, Designs, Copyright and Trademark. The problem has become more acute since the Alice Corporation decision in the United States limited those instances in which patent protection is available.
However, software developers and legal professionals serving the software industry, such as myself, can learn new tricks by watching what industry leaders Apple Corporation (hereinafter Apple) and Samsung Corporation (hereinafter Samsung) are doing. Apple has filed 531 Design applications in Canada. Samsung has filed 227 Design application in Canada.
Under the Canadian Industrial Design Act, “design or industrial design means features of shape, configuration, pattern or ornament and any combination of those features that, in a finished article, appeal to and are judged solely by the eye. Similarly, the US Patent Act refers to, “any new, original, and ornamental design for an article of manufacture…”
Design protection traditionally has been used to protect the ornamental shape and appearance of chairs, lamps, telephones and various consumer objects. In the past few years, Apple, Samsung and others have expanded the use of Design protection to protect not only the physical shape of their products but also their software development and implementation. Among the Design applications filed by Apple and Samsung one can find applications with titles like:
“Display Screen with Font”
“Display Screen with Icon”
“Display Screen with Graphical User Interface and Electronic Icon”
“Display Screen with Graphical User Interface”.
The reader will note that Apple and Samsung are using Design law to protect Graphical User Interfaces, fonts and icons. Each Design reflects what a viewer would see on their screen.
The Federal Court decision by Mr. Justice Phelan on June 23, 2017 in the case of United Airlines, Inc v. Jeremy Cooperstock provides some guidance to persons considering establishing complaint websites.
Cooperstock operated a complaint website under the domain name UNTIED.com, which he registered and launched on or about April 24, 1997. Cooperstock chose the domain name UNTIED.com as a play on the word “United”, so as to highlight the disconnection and disorganization that he perceived in the company. UNTIED.com operated as a consumer criticism website where visitors could find information on United, submit complaints about United, and read complaints about United dating back to 1998 in the database of complaints.
Following a redesign of UNTIED.com in September 2011, United became aware of a strong resemblance between UNTIED.com and the United Website. UNTIED.com was updated again in June 2012 to mirror the United Website design launched in March 2012. United contacted Cooperstock, and Cooperstock made certain alterations to UNTIED.com. He changed the colour of the T and I in the Untied Logo to red (from blue) and changed a frown on the Frowning Globe Design to red (from blue). He also added a disclaimer and a pop-up dialogue box to the website indicating that this was not the website of United. The disclaimer, stating “(This is not the website of United Airlines)”, was placed at the top of the website in small black type – next to a graphic identifying “Untied” as “An Evil Alliance Member”.
Justice Phelan noted that parody and satire are not defences to trademark infringement. Justice Phelan quoted from the Green v Schwarz case, “notwithstanding that the Defendant is obviously spoofing the Plaintiff’s trade mark, he is also cashing in on the goodwill that the Plaintiff has obtained for its trade mark”. A Trademark confusion analysis was then performed.
“ Cooperstock’s obvious imitation of the United Marks and the United Website is meant to cause visitors to associate UNTIED.com with the United. The small details differentiating the marks are less important than the general appearance of the marks and of the websites. Cooperstock attempted to differentiate the two Globe Design marks by “zooming in” on the image to show that his globe mark included a red frown. This would not be the approach of the hurried consumer with an imperfect recollection. Further, consumers would not be engaging in a side-by-side comparison of the two marks, particularly if they are unaware that there is any need to be diligent in this regard (i.e., if they are not aware that a “spoof” website exists). I find that there was ample evidence adduced to support a finding that there is a likelihood of confusion. The changes that Cooperstock made to the United Marks were small and were designed to maintain his core purpose: identification of his website with United.”
Justice Phelan noted that although parody is not a defence to trademark infringement. parody may be a defence to copyright infringement in that parody is now an allowable purpose under s 29 of the Copyright Act, which reads:
29 Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright. (emphasis added)
Mr. Justice Phelan held that the alterations to United’s copyright materials constituted parody:
“Parody should be understood as having two basic elements: the evocation of an existing work while exhibiting noticeable differences and the expression of mockery or humour. In my view, UNTIED.com falls within the definition of parody described above: it evokes existing works (the United Website, the United Logo, and the Globe Design) while showing some differences (such as content and disclaimers), and it expresses mockery (and criticism) of the United.”
Justice Phelan then considered whether the use of parody in this context was “fair dealing”; as Cooperstock was required to prove that his dealing with the work of United had been fair in order to obtain the protection of s. 29 of the Copyright Act.
“It is unclear why substantial copying of the United Website or the other copyrighted works was necessary in order to meet the parodic goal of humorously criticizing the United; as discussed above, parody requires humour, whereas Cooperstock’s website was simply mean-spirited. The minimal use of certain parodic elements in the past (i.e., “fly the unfriendly skies” and the wordplay between “united” and “untied”) present an example of an alternative to the current dealing. Indeed, if the Cooperstock truly wished the best outcome for the United’s passengers, it is unclear why he would run any risk of confusing passengers. In my view, it is the substantial copying of the United’s copyrighted material that is having a harmful impact, not the criticism contained on UNTIED.com. Negative commentary regarding the United abounds on the internet. United is not so much concerned with the informational aspect of UNTIED.com (which may lead customers to purchase tickets with other airlines) as it is with the potential that customers will believe they are interacting with the United when they are actually interacting with UNTIED.com (which may, in turn, cause customers to believe that the United is unprofessional or that it does not respond to complaints).”
In his reasons for Judgement, Justice Phelan summarized Mr. Cooperstock’s position as follows:
“Parody is not simply a defence to copyright infringement – it is also an aspect of free speech. However, like all free speech, it is not unrestricted. Cooperstock’s website meets the first step of the CCH test, as it is for the allowable purpose of parody, but it does not meet the second step of the test. The questionable purpose of the dealing, amount of the dealing, and effect of the dealing all weigh in favour of the conclusion that this dealing is not fair.”
“in this case, Cooperstock sailed too close to the wind – and he was put up on the rocks”.
The Canadian Internet Registration Authority (CIRA) has a mechanism for resolving domain name disputes. This domain name dispute resolution mechanism is available to all Trademark owners. A CIRA panel hearing a domain name dispute has the power to order the transfer of a domain name from an offending party to a complainant.
It is important to note that once a CIRA panel has made a ruling in a first proceeding, there is nothing in the rules of CIRA that prevents a second proceeding from being initiated relating to the same domain name issue involving the same two parties. This is exactly what happened concerning the Trademark PicMonkey. A first CIRA panel ruled against the complainant, as there was inadequate evidence on two keys issues. The first issue was a lack of evidence that the complainant had used the Trademark in Canada prior to the offending party registering their domain name. The second issue was a lack of evidence that would tend to show “bad faith” on the part of the offending party.
The complainant consulted a legal firm familiar with domain name disputes. It was determined that there was sufficient evidence on those two key issues. Prior to the domain name being registered by the offending party, the complainant’s PicMonkey site had been accessed over 41,000 times by Canadian IP addresses. There was also evidence that the offending party was a “cyber-squatter” who tied up domain names to a number of well-known third party brands. A second proceeding was launched and a second CIRA panel ruled in the complainant’s favour ordering the offending party to transfer the domain name to the complainant.
There are a number of lessons to be learned from the PicMonkey experience. The first lesson is that it is critical that a Trademark owner place before any CIRA panel the best possible evidence. A CIRA panel will only order the transfer of a domain name when the evidence is clear. The second lesson is that, if you are a complainant who has handled a first CIRA proceeding yourself and messed up, it is possible to retain competent legal counsel and launch a second proceeding with better evidence.