I was listening to the radio the other day and caught the tail end of an interview concerning the Trans Pacific Partnership (TPP). The comment that attracted my attention was a statement that the Intellectual Property provisions of the TPP agreement would cost Canada 57,000 jobs. The same evening the TPP agreement was on the evening television news and the person interviewed indicated that the ability of Canada to change its laws would be hampered. I have now read the Intellectual Property provisions of the TPP agreement, which are found in the 75 pages which comprise Chapter 18 and accompanying schedules. The agreement indicates that countries may change their laws “provided that such measures are consistent with the provisions of this Chapter”. As indicated by the television commentator, Canada would be in breach of the agreement if, after signing, the government chose to pass laws that contradict the provisions of the TPP agreement. Looking for the lost 57,000 jobs, I found that most of the 75 pages are consistent with the laws of Canada as they presently exist. The copyright term has been lengthened, but that change is unlikely to cost any jobs. Canada’s previous copyright term was the life of the author plus 50 years after his or her death. The TPP agreement provides for a copyright term of the life of the author plus 70 years after his or her death. In Canada, there is a government approval process before a company can sell agricultural chemical products, pharmaceuticals, or biologics (complex molecules such as proteins that are isolated from plants, animals or micro-organisms, or made using biotechnology). The TPP agreement provides for a “patent term adjustment”, lengthening the term of a patent when there are delays in the government approval process. This change will give drug companies a few more years of protection and will slow the introduction of generic drugs into the Canadian market. As part of the government approval process, companies must submit test data and, where applicable, data from clinical trials. There is presently no law, prohibiting subsequent applicants for government approval from using test data submitted by an original applicant. The TPP agreement provides that subsequent applicants are prohibited from using the test data submitted by the original applicant for a period of 10 years when seeking government approval for agricultural chemicals, 5 years for pharmaceuticals, and 8 years for biologics. This will also slow the introduction of generic products into the Canadian market, as generic manufacturers are forced to either wait or develop their own test data and conduct their own clinical trials. I have no way of assessing whether 57,000 jobs will be lost. However, it is reasonable to assume that there will be a loss of jobs in the generic drug industry as these provisions begin to affect generic drug manufacturers based in Canada. However there are some answers missing from the dialog, that would help me decide whether or not I am in favour of TPP. How many jobs may be gained in other sectors with the signing of TPP? How many jobs may be lost if we do not sign TPP? We rely upon our exports, being frozen out of TPP may not be good for Canada in the long run.
In Victoria, we love to criticize our local politicians from our safe seats on the sidelines with respect to everything from bridge replacement to sewage treatment. A common complaint is that they don’t “do” anything. I thought I would take some time to comment on an Angel Investor event entitled “A Capital Mission” that took place February 17 – 19. This is an example of local politicians trying to make things happen for the local economy by showcasing our tech community to both local investors and investors from elsewhere in Canada and the United States. The event began the evening of Wednesday February 17 with a welcome reception at which Mayor Lisa Helps assumed the role of gracious host, first by giving a welcoming address and then by inviting Amrik Virk, BC Minister of Technology, Innovation and Citizens’ Services, and United States Consul General Lynne Platt to add their comments. Tim Catlin of Change.org, one of the U.S. based organizations that has invested locally, indicated that with our existing infrastructure and the comparatively low Canadian dollar, Victoria is a very attractive place for a U.S. citizen to invest. There followed a “pitch night” with the following entrepreneurs making pitches to secure capital for their ventures. LlamaZoo produces software that provides anatomy training for veterinarian students. Cooler Heads produces auto-deploying head and face flash fire protection. OrangeDox produces a software that adds greater functionality to Dropbox. Craftt Technology produces a beer keg tracking system for craft brewers. Social Nature promotes peer to peer marketing. Chatter High is a web platform to allow junior high and high school students to explore post-secondary career options in an entertaining way. Industrial Plankton produces low cost algae bioreactors for aquaculture. Vertical Organic Garden produces space-efficient vertical hydroponic systems for in-home use. Plurilock produces biometric security systems that monitor keyboard dynamics. Island Circus Place is seeking to start a circus school. On Thursday, February 18, the Angel Investors were organized in groups and taken on tours that included a number of technology incubators and co-working spaces. In the morning on Friday, February 19, an Investor Education Workshop was held with a presentation by Josh Maher, the author of Startup Wealth: How the Best Angel Investors Make Money in Startups. The assembled Angel Investor were then invited to spend Friday afternoon, at the Discover Tectoria trade show with over 70 exhibits located at the Crystal Gardens. This three day event will have some modest benefits short term, but may lead to some tremendous advances long term. Congratulations to all who had a role in making this event happen including: Mayor Lisa Helps, Victoria City Council, University of Victoria, ViaTec, Tourism Victoria, the Downtown Victoria Business Association, the Capital investment Network and the Urban Development Institute.
A client of our office is launching a Kickstarter campaign at 6pm on March 3 with respect to a family of cable organizers. There is one cable organizer that handles the power cord for a smart phone. There is another cable organizer that handles the earphones that are used with a smart phone. We are happy to help “get the word out” . The Kickstarter campaign will run just over 30 days. We ask that you give this new product a look. https://www.youtube.com/watch?v=XcLyLsXLc1s
I recently had lunch with a banker friend . He related some of his daily struggles in approving loans and summed up by indicating that his bank hired him to fund viable businesses, not “dreams”. The reality of the banking business is that a banker will only grant you a loan to launch an innovative project if you have the pre-existing financial strength to financially back the new business. After the business has being operational for two years or more, the financial performance of the business over that period will clearly indicate whether or not you have a viable business rather than just a “dream”. Persons who do not have such financial strength are forced to seek assistance from investors. The quest for investors usually starts with family members and personal acquaintances who trust and believe in you. There are some investors, referred to as “angel” investors, who invest in projects of complete strangers for fun and profit. The angel investors that I have known are relatively wealthy and have a past history of entrepreneurial success. Their angel investments are like a hobby to them. The number one criterion of the angel investor is that he or she must like you and feel he or she can work with you. If you are difficult to work with, it takes the fun out of the project and the angel investor doesn’t want or need the hassle. The number two criterion is that the angel investor must believe that the project has substantial growth potential and is not merely a “create a job” project. The ultimate object of the investment is to make some money at the end of the project. Ideally, the angel investor has contacts or knowledge that can contribute to the project and help make that happen. The number three criterion is that there must be some logical jumping off point at which the angel investor can cash in on his investment. If you have a good fit with an angel investor, you may well develop a life-long friendship. You will have to do most of the work, but at critical times the angel investor will be there to assist you. The angel investor will give you advice which will help you avoid mistakes you would otherwise have made. As he or she gets to know you, the angel investor will assess your strengths and weaknesses and get others to help cover your weak areas. The angel investor will set and expect you to meet performance milestones. Consider it tough love. It is for your own good. A controlling interest (over 50% of the venture) is not essential to the angel investor, although the angel investor can exercise a measure of control by simply withholding additional funds if he or she does not approve of the way the business is being run. If all goes well, the relationship with the angel investor ends at the planned exit position. On small projects, this is often the sale of the business, at which time you both “cash in”. On large on-going projects, you will progress to the “next stage of financing” in which a venture capitalist steps into the shoes of the angel investor and puts serious money into the business to take it to the next level. I have nothing but respect for angel investors, the ones I have worked with are special people indeed. There are a number of differences between angel investor funding and venture capital funding. Those differences will be explored in a separate article.
Awards are a time to stop our hectic pace and recognize how far we have come (regardless of how far we may yet have to go). I was delighted to hear that the one of our clients, AVI Inc was nominated as a finalist for the LAMP awards (Lighting Architecture Movement Project). I attended the LAMP Awards, which were held in Vancouver on November 12, at the invitation of Matt Kennedy, the President of AVI Inc. I met the other members of the AVI team including accountant Michael Manley, photographer Darryl Bueckert, and SR&ED consultant Ken Bell. The theme of the LAMP Awards for 2015 was “Crystallize”. I urge you to see some of the marvelous entries at www.welovelamp.ca . I have attached a photo of the AVI entry. I would like to thank Darryl Bueckert for allowing me to use this photo. If you like Darryl’s work, check out his website www.darrylbueckert.com. I will post some further material on how you can purchase the products of AVI Inc and about the Crowdfunding campaign of AVI Inc at a later date. Matt Kennedy has been a great guy to work with and I look forward to continuing to work with him in future.
I have just returned from the annual convention of the Intellectual Property Institute of Canada (IPIC). This is two-day event with numerous educational workshops for Patent Agents, Trademark Agents and IP Lawyers. There were plenary sessions that everyone attended and breakout sessions where the audience broke into smaller groups. The plenary sessions included an address in which Mr. Justice George Locke of the Federal Court provided “tips for having a better relationship with your Judge”, an address by the President of the Canadian Bar Association, Janet Fuhrer, concerning the future of the profession entitled “Reimagining the Ways We Practise”, a panel of experts discussing Crowdfunding, and a panel discussing the issues and opportunities which are being created by 3D printing. I find Crowdfunding interesting in its various forms. You can Crowdfund through social media to solicit pre-orders for your product. You can Crowdfund by making an emotional appeal through social media to solicit donations. Subject to legal limitations imposed by securities regulators, you can also use social media to Crowdfund by selling small equity interests in a start-up venture. 3D printing is considered a “disruptive” technology, because it has the potential to dramatically change the way we do things. For example, currently there are numerous people employed in the transportation industry. However, shipping costs can be avoided entirely by simply having a 3D “print shop” in your neighbourhood. Instead of shipping a replacement part for one of your motor vehicles or household appliances, the part can be “printed” for you. As with the current issues related to genuine and “pirate” internet sites for music and videos; there will soon be a problem with genuine and “pirate” internet sites that supply the files necessary to print out these parts. The patent breakout sessions included: a review of key court decisions concerning “the promise of the patent” which have changed the way patents should be prepared; and a session called “Gotcha” which reviewed patent infringement remedies in Canada and the United States. The trademark/copyright breakout sessions included: a review of changes which are coming to Trademark Law as a result of Canada having signed a number of treaties ( Nice, Singapore and Madrid); and several sessions on dealing with copyright and trademark issues in light of the Internet and social media. It was explained that in this age of social media, the old approach of sending a nasty “cease and desist” letter may backfire. An unnecessarily heavy-handed cease and desist letter may well be posted on social media and attract comment. Before one can stop it, the matter may go “viral” with the possibility of substantial negative publicity. An example that was discussed as an alternative approach, was a dispute between the makers of a juice called “Pom Wonderful” and a television host by the name of John Oliver. The humorous (although somewhat off colour) video can be viewed on YouTube a link for which will be provided below. Why am I relating this information to you? I believe that by reviewing issues being discussed by IP professions today, you gain insight as to issues which will be touching our lives tomorrow.
We have seen it many times before. A businessman or businesswoman attends our office outraged that another business is blatantly copying their product. They want action taken and want it taken now. Copyright protection has no time limitation. If we can claim copyright protection on the product, we can take immediate action. However, design protection and patent protection each have a time limitation. If an application for design protection or patent protection has not been filed within 12 months of the first public disclosure of the product, it is no longer possible to obtain design protection or patent protection. Sadly, we must sometimes advise the businessman or businesswoman that they missed their deadline (sometimes by several years) and have no recourse. We cannot over emphasize the importance of taking early action to protect your product. Unfortunately, due to time limitations, a decision must sometimes be made before it is clear whether or not your product has significant commercial potential. Equally important is the name of the business and the name of the product or service. The law recognizes “common law” Trademark rights, if a competitor is using a similar Trademark in a geographical area in which you have worked hard to establish a reputation for your business. However, you cannot rely upon a “common law” Trademark if the use by another business is not in a geographical area in which your business operates and has an established reputation. We were recently consulted by a client who received a “cease and desist” letter from a legal firm. A person, who was aware of our client, took the concept to a different city a few years ago and started using very similar Trademarks. To make matters worse, they subsequently filed and obtained Federal Trademark Registrations. The legal firm is now demanding our client change the name of their service business and Trademarks used in association with the service. In order to deal with this threat, the client is going to have to ask the Federal Court to invalidate the Federal Trademark Registration on the basis that it would never have been granted by the Trademarks Office had the facts been known. Unlike other types of property, such as real estate and automobiles, it is possible to lose control of “Intellectual Property” assets. The title of this article is “taking preventative measures”. The intended message is to caution you to take steps to protect your Intellectual Property assets as soon as you realize that you have created something of value that others may wish to take and use for their own purposes.
There are certain steps that one should automatically take to protect a video game. Early in the development process, the proposed name for the game should be protected by filing a Trademark application in Canada. In Canada, a Trademark can be applied for based upon proposed use and the applicant is given an initial period of 3 years within which to launch. There is a 6 month foreign filing period for Trademarks. Prior to the end of that 6 month period, one should apply for United States Trademark protection claiming priority from the Canadian Trademark application . Claiming priority from the Canadian Trademark application allows you to reach back to your Canadian filing date and also enables you to slow the U.S. Trademark process down so you don’t have to pay extension fees or lose the Trademark if your launch date is delayed. As soon as there is a working copy of the game, copyright protection should be applied for in Canada, as copyright registration simplifies proving ownership. Registering copyright in Canada is a simple process that involves filling out an online form. Most clients do not automatically file for copyright protection in the United States, as the United States requires that a copy of the object code be filed with the Library of Congress. Prior to launch of the video game, unique features should be reviewed to determine whether they are sufficiently important to be considered for patent protection. If you have a unique feature that gives you an edge, patent protection can keep competitors from imitating that aspect of your video game. If you want to see what the video game industry is doing, look at recently issued patents. U.S. Patent 9,095,776 issued August 4, 2015 entitled “Video game extremity control and object interaction” discloses a skateboarding video game in which a skateboarder can grab a skateboard to do a grab trick and change position on the skateboard to do other tricks. U.S. Patent 9,089,778 issued July 28, 2015 entitled “Video game with expedited combat” recites a methodology for determining whether a combatant dies after a single hit or a greater number of hits by setting forth a scheme of “spending” parameters and “recovery units”. U.S. Patent 9,079,097 issued July 14, 2015 entitled “Video game with replaceable tiles having selectable physics”, describes a tile game in which tiles are moveable to fill spaces. The “selectable physics” for the tiles relates to specified direction of movement and speed of movement, and under certain playing conditions, the “selectable physics” of the tiles change. U.S. Patent 9,072,974 issued July 7, 2015 entitled “Game play changes to a video game based upon social network polls”, protects a concept in which a social network of players can influence game play. U.S. Patent 9,039,532 issued May 26, 2015 entitled “Interactive video game with toys having functionality unlocked through game play”; the title accurately describes the focus of this patent.
Canada has a number of collective societies that collect royalties on behalf of rights holders in musical works. These rights holders include composers and music publishers. For recorded music the rights holders also include music companies that produce recordings of songs, along with performers who perform on those recordings. The royalties that the collective societies collect are set by the Copyright Board of Canada. One of my first involvements in Copyright Law involved a client who owned a club at which live music was performed. He had received a letter from one of the collective societies threatening legal action if royalties were not paid. A few years later I received a series of similar calls when the Copyright Board first set a tariff for skating rinks and the collective societies started sending out letters. Today the following tariffs are in place, identified by number and brief description as follows: #1 commercial radio, #2 television, #3 cabarets, cafes, clubs, cocktail bars, dining rooms, lounges, restaurants, roadhouses, taverns, #4 live performances at concert halls and theatres and other places of entertainment, #5 exhibitions and fairs, #6 motion picture theatres, #7 skating rinks, #8 receptions, conventions and fashion shows, #9 sporting events, #10 parks, parades, streets & public areas, #11 circuses, ice shows, light shows, comedy shows, magic shows, #12 theme parks, #13 public conveyances (e.g., airplanes, buses), #14 performance of individual works, #15 background music not covered by 16, #16 background music suppliers (e.g., music on hold), #17 pay television services, #18 recorded music for dancing, #19 fitness activities & dance instruction, #20 karaoke bars, #21 recreational facilities run by municipalities or colleges, #22 internet streaming, #23 hotel or motel in-room service, #24 ringtones, and #25 satellite radio. Upon reflection, you will appreciate how frequently you are involved in an activity for which someone is required to pay a royalty pursuant to these tariffs. The collective societies include the Society of Composers, Authors and Music Publisher (SOCAN), the Canadian Musical Reproduction Rights Agency (CMRRA), the Society for Reproduction Rights of Authors, Composers & Publishers in Canada (SODRAC), Musician Rights Organization (MROC), RE:SOUND, and CONNECT Music Licensing. If you are involved in one of the activities that trigger a royalty, we urge you to alert the organizer to check out the applicable tariff, if they are not already enrolled.
Copyright in a sound recording previously was for a term of 50 years after the end of the calendar year in which the first fixation of the sound recording occurs. A new Canadian law extends that term by providing that, if the sound recording is published before the copyright expires, the copyright continues until the earlier of the end of 70 years after the end of the calendar year in which the first publication of the sound recording occurs and the end of 100 years after the end of the calendar year in which that first fixation occurs. If copyright has already expired, the new law will not have the effect of reviving the expired copyright. All of your favourite sound recording from 1966 that would have become “public domain” at the end of 2016, will now remain protected by copyright by an additional 20 years until 2036. The Sony Bono Copyright Extension Act enacted in the United States in 1998 had similar provisions extending copyright for 120 years after creation or 95 years after publication, whichever endpoint is earlier. It is interesting to note that the sound recording of “Four Strong Winds” by Ian and Sylvia Tyson which hit the billboard charts in 1963 has now entered the public domain, as it had expired prior to the new law coming into effect. However, it is just that particular sound recording that is public domain, as Ian Tyson still holds the rights to the music and lyrics as the author for his life plus 50 years.