2016 Annual Meeting of the Intellectual Property Institute of Canada (IPIC)

convention-brochureOne can gain an understanding of issues that the profession is wrestling with by reviewing the titles of the presentations from the 2016 IPIC annual meeting.  Continuing Professional Development: “The Skill Set of the IP Practitioner of the Future – Where will IP be in 20 years?”  Trademarks: “Trademarks in Metatags and Keywords – A summary of the Current State of the Law in Canada as Contrasted with the U.S. and Europe”, “Brand Boot Camp”, “Best Practices before the Trademark Office”.  Patent Issues: “Patent Issues that Keep In-House Counsel Up at Night”, “Patentability:  Dealing with Challenges in IT and Life Sciences”, “Best Practices before the Patent Office”.  Online Issues: “Managing Online Content: Tips, Traps, and Tariffs for IP Practitioners”.  Rights Issues: “Publicity Rights: Guidelines for Giving Clients Practical Risk Assessments”.  Litigation Issues: “Remedies – Quick Results in Trademark Cases: Myth or Reality”, “Top IP Cases of the Year”, “Appellate Advocacy in Specialized Area of the Law”.
Many of the above issues I deal with on a regular basis and have written articles about over the past year.  However, the presentation of “Futurist” Jeremy de Beer was of general application and may be useful to the reader.  Mr. de Beer described an approach to predicting the future using a “grid”.  He creates this grid by placing a first line that represents a trend that one can see today, such as automation (self driving cars, smart homes with remotely controlled appliances).  One end of the line represents the present and the other end of the line represents the future, if the trend continues. He then places a second line crossing the first line at 90 degrees to create his “grid” having four quadrants.  The second line represents a second trend that one can see today, such as the increasing capability of smart phones. Again, one end of the line represents the present and the other end of the line represents the future, if the trend continues.  A first quadrant will predict what happens if neither trend continues, a second quadrant will predict what happens if the first trend continues and the second does not progress, a third quadrant will predict what happens if the second trend continues and the second trend does not progress, a fourth quadrant will predict what happens if both trends progress.  Mr. de Beer indicates when you extrapolate what may happen some of your “predictions” (especially in the fourth quadrant) should appear to be ridiculous.  If this does not occur, you are not pushing the trend far enough. Self driving cars and everyone carrying miniature computers that connect to the internet would have sounded ridiculous 20 years ago. It is not viewed as being ridiculous today.

 

Comment:  I received some comment from Keith Sketchley that I felt should be shared.  He indicated that one should beware of overly simplistic methodologies.  He identified two fundamental flaw, in the futurists approach that he described as follows:

1. Trends do not continue indefinitely, in part because people change behaviours. In technical things that’s called “feedback”.  For example, increasing prices of a product will be met by reduced consumption in response to prices, demand drops, suppliers lower their prices.
2. It is difficult to predict new products and services, and some predictions fall far short. For example, a professor gave a Mr. Smith a C, sneering at his idea that people would pay a premium for assured delivery timing of documents. Mr. Smith went on to start an industry, he called his company “Federal Express

Legal Actions Against Those Who Use Social Media

YELP is an online service that was founded in 2004 to help people find local businesses.  People can establish a YELP account for free.  Similarly, businesses can setup an account for free, post photos and send messages of special offers to their customers. YELP makes money by selling ads to local businesses, such as dentists, pet sitters and moving companies.  A feature of YELP is the ability of a customer to post a review of a business after he or she has used the services or products of the business.  Each review reflects a customer’s personal experience and “tells it like it was”.   This means that some of the reviews are beneficial to the reputation of a business, as they are “glowing” reviews that describe a positive experience.   This also means that some reviews are harmful to the reputation of a business, as they are “critical” reviews that describe a negative experience.  YELP does not permit paying advertisers to change or re-order the reviews they receive. YELP recently advised that some customers have received legal threats from businesses after posting critical reviews.  In some cases legal proceedings have actually been commenced.  One example given was a dentist, who on five different occasions has initiated legal actions against customers (former patients) who posted critical reviews.   Another example given was that of a professional pet sitting company who sued a customer after a critical review suggested that the pet sitter had killed their fish.  Another example given was that of a moving company who sued a customer after a critical review awarded them just one star. The objective of such legal actions is to get the critical reviews taken down.  YELP has expressed concern that the threat of legal action will silence customers who would otherwise post critical reviews.  In order to combat this activity, YELP has tagged certain business accounts with a “Consumer Alert” which is reproduced below:

Consumer Alert: Questionable Legal Threats
This business may be trying to abuse the legal system in an effort to stifle free speech, including issuing questionable legal threats against reviewers.  As a reminder, reviewers who share their experiences have a First Amendment right to express their opinions on YELP.

Freedom of speech is enshrined in United States law as part of the First Amendment to the United States Constitution.  In Canada, our equivalent is “The Canadian Charter of Rights and Freedoms”, which lists “fundamental freedoms, including “freedom of thought, belief, opinion and expression”.  Unlike their American counterparts, Canadian judges have given more weight to the value of personal reputation than to free speech. I recommend that Canadian customers posting critical YELP reviews stick to the facts.  Any embellishment that goes beyond the facts may give the business or an individual from the business an opening to sue under the laws of libel.

Limitations of Non-Disclosure Agreements

Non-Disclosure PhotoI recently read an article entitled “The scope and limitations of Non-Disclosure Agreements”.  The article explained that a non-disclosure agreement is an agreement in which a party receiving information (Receiving Party) agrees to take reasonable precautions to protect from disclosure information received from a party disclosing information (Disclosing Party).   The article then went on to list a series of matters that must be addressed in a well drafted non-disclosure agreement, including: identifying the information that is to be protected, identifying that the information is being disclosed in order to permit the Receiving Party to complete a specified task for the Disclosing Party, setting forth rules regarding disclosure to employees and safe storage of the information while the task is being undertaken and  requiring the destruction or return of the information when the Receiving Party has completed the specified task.  The article also touched upon remedies available to the Disclosing Party in the event of a breach of the agreement.  Although the article was well written, in my opinion, the author neglected to touch upon a significant limitation of non-disclosure agreements.   Most non-disclosure agreements contain the following provision: “The Receiving Party shall have no obligation with respect to such information where the information has become publicly known through no wrongful act of the Receiving Party”.   Entrepreneurs carefully go around and have non-disclosure agreements signed by parties who are assisting them by manufacturing and supplying components.   Non-disclosure agreements are also signed by parties who are assisting in the preparation of business plans, creating brand names and logos, setting up websites, and setting up marketing plans.  Finally, non-disclosure agreements are signed by parties being approached for investment capital and by parties being approached to assist in marketing and wholesale distribution.   Then on the day of the launch of the product or service, all of the Receiving Parties who signed non-disclosure agreements are released from their obligations, as the Disclosing Party has publicly released the information and thus that information has become “publicly known through no wrongful act of the Receiving Party”.     Non-disclosure agreements are fine for having preliminary discussions, but  once the Receiving Party is working with you, a further agreement needs to be put in place that prevents the Receiving Party from competing with you while they are working with you and for a period of time (for example 2 years) after they cease working with you.  As a practical matter, one or more of the parties you are relying upon as a member of your team may have better connections and more resources than you do.  Once they are released from their obligations under the non-disclosure agreement by your public disclosure, they may come to the realization that they are in an excellent position to deliver the product or service and they no longer need you.  Of course, they will delay acting until they have the opportunity to gauge the market response to your new product or service.  Get the additional agreements signed.  After you have taken all the risks and proven there is a market for the product or service, there will be imitators.  Make sure the imitators are not parties who you thought were members of your team.

THE NAME GAME – OBTAINING A TRADEMARK

This is a SLIDESHARE presentation given to the Better Business Bureau at a “Lunch N Learn” on August 17, 2016.    Some names that businesses choose are simply NOT PROTECTABLE.  This presentation is intended to make persons selecting business names aware of the rules used by the Trademarks Office in reviewing and approving Trademarks.  Included is an overview of unregistered and registered Trademarks.  If you are only acting locally and have no internet presence, it is not critical that you register your Trademark.  If you are doing business over the internet, it is critical that you obtain Trademark protect in Canada and in many cases also in the United States. http://www.slideshare.net/ThompsonCooperLLP/the-name-game-protecting-product-or-business-names

New Developments in the Canadian Music Business

SOCAN (the Society of Composers, Authors and Music Publishers of Canada) collects royalties based upon tariffs approved by the Copyright Board of Canada for Canadian performances of songs for Canadian and international songwriters and music publishers. Tariffs have been set for recorded or live music ranging from concerts to restaurants to fitness classes.  Of particular relevance to this article are the tariffs for performance of songs on the internet and on mobile devices. In May of 2016 SOCAN announced that it had acquired Seattle-based MediaNet.  This was followed by an announcement by SOCAN in July of 2016 that it had acquired New York-based Audiam.  As with all performing rights organizations, SOCAN’s main functions are firstly to determine what music is being performed and, secondly, to collect the applicable royalty prescribed by Canadian law.  Collection of royalties relating to the internet and mobile devices create technological challenges.   MediaNet has more than 51 million sound recordings in its database, each containing a unique audio identifier.  By acquiring MediaNet, SOCAN will be able to identify digital performances from around the world in real-time. Audiam similarly, has one of the world’s most complete databases of sound recording and underlying song/composition metadata.  In addition, Audiam has technology to proactively find works that are not licensed and for which royalties have not been paid. With the combined strength of MediaNet and Audiam, SOCAN can identify the use of music on digital services such as Spotify, Apple Music, YouTube, and Google Play.  When songs are performed, in addition to royalties compensating the songwriters and music publishers, there are also royalties compensating the artists who perform the songs and music recording companies.  Prior to acquiring Audiam, SOCAN was not involved in collecting royalties for performing artists and music recording companies.  In contrast, a significant portion of the business of Audiam was the collection of royalties for performing artists and music recording companies.  With the acquisition of Audiam, SOCAN now has the capability to collect songwriter-music publisher royalties and performing artist-music recording companies royalties.  With changes brought on by the internet, songwriters and performing artists had become frustrated by the ineffectiveness of the performing rights organizations in the collection of royalties, resulting in a fracturing, with new performing rights organizations being formed by the disenchanted.  Through its acquisition of MediaNet and Audiam, SOCAN has greatly increased its ability to be effective at identifying uses of music on the internet and collect royalties.   SOCAN’s acquisition of Audiam’s expertise in collecting royalties for performing artists and music labels, has been heralded by some commentators as an important new development that raises the possibility of SOCAN becoming a “one stop shop” on the Canadian music scene.  The fact that MediaNet and Audiam are U.S. based also suggests that SOCAN will become more active in collecting royalties in the United States.

Balancing of Interests under Copyright Law

johnny-automatic-scales-of-justice-300pxCopyright law often includes a consideration of a “balancing the rights”, usually balancing the rights of content users and the rights of content creators.  Some recent court decisions illustrate how this “balancing” takes place and explore some new issues in copyright law. Maltz v. Witterick (a decision issued by the Federal Court of Canada in May 2016) relates to balancing rights as between two competing content creators.  A writer by the name of Jennifer Witterick was “inspired” to write a fictional novel after viewing a documentary produced by Maltz and some others regarding the life of Francizska Halamajowa and her daughter Helena, who hid three Jewish families when the German army occupied Poland during the Second World War.   Upon becoming aware of the novel, Maltz noted a number of factual similarities between the documentary and the novel, and commenced an action for copyright infringement against the author Witterick and the author’s publisher.  By way of background, the Courts have long held that copyright does not apply to historical facts, such as the German occupation of Poland during the Second World War.  The Judge in Maltz v. Witterick noted that the novel was a fictional story aimed at young readers and had a much different “feel” than the documentary.  The only thing that had been taken were some factual underpinnings for the story.  Counsel for Maltz argued that there was a difference between historical facts in which no one can own copyright and “small facts” drawn from diary entries relating to events on a particular date. In  concluding that the writer Witterick’s use of some actual facts from the life of Halamajowa did not amount to infringement, the Judge made a finding that facts are facts and no one owns copyright in them no matter what their relative size or significance.  A second case, Geophysical Services Incorporated v. Encana et al (a decision of the Alberta Court of Queen’s Bench in April 2016) relates to balancing rights as between content creators and public authorities.  Geophysical Services Incorporated (GSI) was in the business of selling seismic data.   This seismic data was filed with a government board pursuant to a regulatory regime established under the Canada Petroleum Resources Act (CPRA).  After a period of 5 years, the seismic data was made available to the public by the board.   GSI commenced a legal action for copyright infringement against Encana and many other companies that were making use of the seismic data without GSI’s permission.  The Judge confirmed that GSI owned copyright in its seismic data, but held that to the extent that the regulatory regime of the CPRA conflicts with the Copyright Act, the CPRA regulatory regime prevails. The wording of the CPRA, properly interpreted, allows for disclosure without restriction after a defined period of time. It is a complete and specific code that applies to all oil and gas information in the offshore and frontier lands, including seismic data. Its provisions supplant any more general pieces of legislation, such as the Copyright Act.  Both of the foregoing decisions have been met with criticism.  The Maltz v. Witterick case is criticized as it allows a party to use intimate details of someone else’s life without compensation. The Geophysical services v. Encana et al case is criticized as amounting to expropriation by the government without compensation.  What do you think?  Please communicate your views to dthompson@tcllp.ca

Video Game Developer’s Worst Nightmare

PlayStation-5You spent over 1200 hours in developing a video game and that video game is now successful.  At some time during development, a friend had some free time and assisted by creating images of a couple of cars, accessory items like fuel cans and trees, and some background scenery.   The “friend”, hearing about the success of the video game, demanded 25% of the profits from the video game for his contribution.  You respond by removing the images from the video game.   This did not satisfy the now former-friend, who sued you claiming there was an express profit sharing agreement, claiming that even in the absence of an express profit sharing agreement his contributions made him a co-author of the video game and thus entitled to a share of the profits, and alternatively, that he was entitled to compensation commensurate with the value of his contribution.  This is the fact scenario from a Quebec case, Seggie v. Roofdog Games Inc, where Seggie, the “friend”, made a claim against a video game developer by the name of Germain and Germain’s company, Roofdog Games Inc.   Under the Canadian Copyright Act, except for some specified exceptions (including making a work subject to copyright in the course of employment) and absent an agreement to the contrary, the author of a work is the first owner of copyright in the work, and joint-authors (also referred to as co-authors) are the first co-owners of copyright.  The Judge in the Seggie case set out the following factors to consider in determining whether video game developers are “co-authors”:  1) each co-author must have made a substantial contribution, 2) the co-authors must work collaboratively toward a common goal, 3) there must be an implication that the co-authors must have intended a jointly-authored work, and 4) the contributions of the co-authors must be blended together and not distinguishable one from the other.  The Judge found the Seggie was not a co-author, as his contributions were minor in comparison to those of Germain, the disparity in contributions and other background evidence did not indicate that they were working toward a common goal or suggest an intention for a jointly-authored work, and Seggie’s contributions remained distinguishable from those of Germain.  However, the Judge found that Seggie owned copyright in the images of cars, fuel cans, trees and background scenery he had provided to Germain.  Since it was unclear that Seggie had permanently renounced his right to compensation for the use of the images, Germain was ordered to pay compensation for the use of the images in the sum of $10,000.  There is a lesson here for video game developers.  You should document in writing the relationship and, if applicable, compensation due anyone who makes even a minor contribution during the development of your video game.

The Copyright Act and Paywalls

Companies or individuals who wish to bypass paywalls should be aware that a Canadian court  recently held an association liable for copyright infringement because it requested and obtained a paywall-protected news article from a third party with a subscription to the news site.

The articles, images, and audio and video files found on the Internet are all works subject to copyright, meaning that some entity (e.g., an individual or company) owns copyright and thus has “the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever.” It is an illegal infringement of copyright to do what the copyright owner has the sole right to do, without the owner’s permission.  These aspect of copyright law are widely understood (though often ignored, e.g., music file sharing).

Less well known is a relatively new aspect of Canada’s copyright law relating to technical protection measures.  Under our Copyright Act: a technical protection measure is defined as any effective technology that in the ordinary course of its operation controls access to a work subject to copyright; and it is illegal to circumvent a technical protection measure.

A paywall is a system that prevents Internet users from accessing webpage content without a paid subscription.  For example, some general readership newspapers have implemented paywalls on their websites to increase their revenue, which has been diminishing due to a decline in print subscriptions and advertising revenue.

The recent court decision, Blacklock’s Reporter v Canadian Vintners Association, dealt with a dispute between a subscription-based paywall-protected electronic daily news service providing detailed information about the Government and courts in Ottawa (Blacklock’s), and an industry association (Canadian Vintners) that did not have a subscription but had requested and obtained a copy of an article relating to the association, from a person with a subscription.  Blacklock’s usually charged $157 for a single-use subscription and $11,470 for an institutional membership.  When Blacklock’s became aware that two individuals at Canadian Vintners had accessed the article, Blacklock’s billed Canadian Vintners for two single-use subscriptions ($314) and requested the name of the person who had provided the copy (who was in breach of the terms and conditions of their subscription).

Canadian Vintners refused to pay or to provide the person’s name, and the dispute led to a lawsuit.  The Ontario Superior Court Small Claims Judge held that the paywall constituted a technical protection measure, and held that requesting and obtaining a copy of a paywall-protected  article from someone with a subscription, constituted the illegal act of circumventing the technical protection measure.  As the copy of the article was obtained illegally, the exceptions to copyright infringement (e.g., “fair dealing for the purpose of research, private study, education,… ”) that may apply in some situations, were not available to Canadian Vintners.

Thus, although Canadian Vintners had not itself made the infringing copy, it was found liable for copyright infringement based on the circumvention of the technical protection measure.  Further, the Judge awarded Blacklock’s damages based on the institutional membership ($11,470) plus $2,000 in punitive damages for Canadian Vintners highhanded behaviour (which included refusing to give the name of the person who provided the copy of the article, until ordered to do so by the Court).

Changes in European Trademark Law

There is one aspect of European Trademark law related to how the European Union Implemented the so-called International Classification system for goods and services, which I have always found objectionable.  There are 34 broadly defined classes of goods and 11 broadly defined classes of services in the International Classification system.   In Canada and the United States, when you apply for Trademark protection you must identify the goods and/or services with which the Trademark is associated.  A very specific list must be presented, using ordinary commercial terminology, for example, “adhesives”.  To be clear, the US has adopted the International Classification system, but still requires a description of the specific goods and/or services.  By contrast, under European Trademark Law, the applicant is able to specify all of the goods and/or services in each of the classes in which any of the applicant’s goods and/or services fall. . For example, an applicant for a European trademark registration having a trademark associated with “adhesives”, would be able to list the general goods description for the class containing “adhesives” (Class 1), as follows:
“Chemicals used in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesives used in industry”.
When the Europeans tie up the entire class, this creates enormous problems for a Trademark Lawyer, such as myself.  My client can have his Trademark refused because someone else has a similar Trademark in the same class.   However, if the actual products were compared, it might be clear that confusion between the marks is unlikely, for example because the products are different, they are sold through different wholesale and retail channels, and they are sold to different customers.  For example, adhesives may be sold by chemical companies to distributors who supply adhesives to the lumber industry where they are used to glue wood chips together to form sheets of fibreboard.  In comparison, manure is sold by agricultural feedlots to suppliers who either sell the manure in bulk to agricultural businesses or in bags to consumer for use as fertilizer.  Just because “adhesive” and “manure” are both in Class 1 does not necessarily mean that the Trademarks will be confusing. Thankfully, we have received notification that changes to this objectionable aspect of European Trademark law came into effect on March 23, 2016.  All European Trademark Owners have been given a deadline to specify  the goods and/or services with which they are using their Trademark and, in future, persons applying for European Trademarks will have to similarly specify the goods and/services.   This is extremely important, due to the treaties we have entered into with the Europeans that permit them to Register their Trademarks in Canada.   It is also important to avoid Canadians being “blocked” when they are trying to protect their Trademarks in Europe.

Authority of the Court to order Transfer of Domain Names

Getting a Court to order the transfer of a domain name has been a problem. Many Judges of the Federal Court have claimed that they are without jurisdiction to order the transfer of a domain name.  Their rationale has been that domain names are “personal property”, which, under the division of powers in the Canadian Constitution, is within the “Property and Civil Rights” jurisdiction of the Provinces.   Unfortunately, many Supreme Court Justices in the Courts of the various Provinces have also claimed that they are without jurisdiction.  The result has been unsatisfactory to Trademark Owners.  I was personally involved in a case in the Supreme Court of British Columbia, in which the presiding Justice hearing the case gave us Judgement but refused to order the transfer of a domain name when the defendant undertook “not to renew” the domain name.  My client was forced to monitor the expiry of the domain name, wait for the reinstatement period to expire and then, potentially, compete with others to acquire the domain name after it expired.  This ridiculous result is not an isolated example.  Until the recent Federal Court of Appeal decision in Michaels v. Michaels Stores Procurement Company, there was a vacuum.  The Federal Court of Appeal found that when a domain name is a “mechanism” used to infringe a Trademark, the domain name became an “instrument of confusion in the marketplace”.  Further, the Court of Appeal held that the jurisdiction to order delivery up of the domain names in question (e.g. michaels.ca) is firmly rooted in section 53.2 of the Trade-marks Act, which gives the Court a wide discretion to grant the remedies it considers necessary to give effect to rights that have been infringed; and in subsection 20(2) of the Federal Courts Act which gives the Court jurisdiction to order any appropriate remedy known to common law or equity.  This decision is good news for Trademark owners and will allow better policing of the internet, at least for .ca domain names under Canadian court jurisdiction.