New Anti-Spam Legislation dealing with Email and Internet Commerce

Everyone who has an email account, has received unsolicited email from someone who is selling something, whether it be investments, insurance, office space, retail space, a vacation property, etc. If you are one of those people who has been promoting yourself through such email solicitations, this will serve as a warning that the rules relating to email are about to change. On July 1, 2014 the new Federal Anti-spam legislation takes effect. This legislation makes it an offence to send a commercial electronic message to an electronic address (which includes, but is not limited to, email, instant messaging and texting), unless you have “consent”, either express or implied. It should be noted that the legislation also prohibits sending communications in which you “request consent” to send your commercial message. If you go the “express” consent route, there are some content requirements. You must set forth in the consent: the purpose for which consent is being sought, provide information about yourself and your business, provide contact information which must remain valid for a minimum of 60 days and provide a functional “unsubscribe” mechanism. Express consent can be obtained over the internet, but it must not be a default setting; the consumer must actively check a box or otherwise take an active step to indicate consent. Consent is “implied” for people with whom you already have a business relationship. To appreciate the effect upon, for example, a life insurance salesman; the life insurance salesman, can send his commercial communications to existing clientele as consent is “implied”, but must get “express” consent from new prospective clients. “Express” consent need not always be in writing, under certain circumstances it may be given orally. It is to be noted that referrals from existing clients are exempt. This will likely lead to more requests for referrals out of your existing customer base. The maximum penalties are high enough that it is dangerous to ignore the legislation. There is a maximum penalty of 1 million dollars for an individual and 10 million dollars for a corporation. An officer, director or business owner can be found liable for the activities of their employees or agents. In order not to disrupt “legitimate” email activity, a series of “exemptions” are provided. It is, of course, acceptable to send an inquiry to a person engaged in a commercial activity with whom you have no previous relationship, if the inquiry is with respect to such commercial activity. If you have a commercial website and your website downloads a “computer program” onto a customer’s computer, this will serve as a warning that the rules regarding computer program downloads are also about to change. On January 15, 2015 a further provision takes effect that prohibits installation of computer programs without consent, either express or implied. In order not to disrupt “legitimate” internet commerce, Cookies, HTML code, Java Scripts, operating systems, and any other program that supports the use of a primary computer program are permitted, where the customer has expressly consented to installation of the primary computer program. The foregoing has been an abbreviated summary which “hits a few highlights”. If you believe that your activities may be caught by the new Anti-Spam legislation, seek professional legal assistance, so that your activities can be considered with reference to the many provisions and exemptions set forth in the legislation.

Ownership Rights vs. Public Domain and User Rights

This article is intended to be a brief outline of aspects of Canadian law relating to intellectual property and the public domain.  When intellectual-property ownership rights exist in a product, a purchaser of the product will generally only obtain limited “user rights”.  In contrast, when something is in the “public domain” there are no ownership rights and it is available for any member of the public to use without permission and without limitation.  As an intellectual-property lawyer, a general failure by members of the public to understand this distinction and how ownership rights are created or lost, keeps me busy.
When an inventor creates a patentable invention, the invention enters the public domain 12 months after public disclosure, unless an application is filed with the Patent Office within that period.  A patent gives the inventor ownership rights, subject to payment of an annual fee, for a period of 20 years from the filing date of the application; after which the invention will enter the “public domain”.   For example, Alexander Graham Bell’s patents relating to the telephone are all public domain.
When a person creates an attractive design for a functional object, such as a chair; the design enters the public domain 12 months after public disclosure unless an application is filed with the Industrial Design Office within that period.  An industrial design registration gives the designer ownership rights in the design, subject to a 5 year renewal fee, for a period of 10 years; after which the design will enter the “public domain”.   For example, when one sees the same chair made by numerous companies, it is a strong indication that the design is in the public domain.
When a user purchases an article that is protected by a patent or industrial design registration, the user acquires a “user right” to use that article without paying further payments to the inventor.  The user also acquires a “user right” to conduct normal maintenance to keep the article in good condition.  However, the “user right” does not include the right to reconstruct major components of the article.
Regrettably, inventors and designers attending our office to seek protection are often shocked to discover that they have missed their time period and that their creations are now public domain.
Another form of intellectual property, copyright, relates to written works, recordings, software, music etc. Unlike patents and industrial designs, copyright arises automatically upon the  creation of a suitable work; registration is merely an optional public notification that need not take place within a specified time period.  The usual term of copyright is the life of the author plus 50 years; once copyright in a work has expired, the work enters the public domain.  For example, the works of  Shakespeare, Jane Austen and Charles Dickens are all in the public domain.  The rules concerning photographs are slightly different; the photographer acquires rights for a period of 50 years from the date the photograph was taken.  “User rights” in the copyright area are primarily limited to personal use, the user may not distribute or make a commercial use of the literary work, although the law has carved out special exceptions, such as: news reporting, persons with disabilities (e.g., audio books for the blind), libraries, and education.  The most common legal issues in this area relate to users using text or photographs for commercial purposes, such as on a commercial website.
In your personal and business dealings you will encounter some items or materials that are clearly public domain, some that clearly have limited user rights and some that you are uncertain into which category they fall.  If in doubt, I urge you to seek legal advice and avoid potential legal problems.

Why You Should Care About Copyright

Copyright is a type of intellectual property that applies to literary works (deemed to include software), artistic works (e.g., graphic designs and web designs), musical works and dramatic works. Copyright protects the form of expression rather than the idea or content expressed.  For example, copyright protects the words of a novel (the expression), but not the plot or themes (the idea or content).

Businesses are routinely involved in the creation of  works subject to copyright, but often fail to consider ownership of copyright.  Unless there is an agreement to the contrary: a)  if an employee creates a work subject to copyright in the normal course of his employment, the copyright belongs to the employer; and b) if a contractor creates a work subject to copyright in the performance of a contract, the contractor owns the copyright and the customer has an implied licence to use the work for the purpose for which it was created.

The presumption of employer ownership in the employer-employee situation, makes sense to most people.  However, the presumption of contractor ownership in the contractor-customer situation  may come as an unpleasant surprise to the customer.

For example, if a business retains a graphic design firm to create a brochure for a run of 1,000 and their agreement says nothing about ownership of copyright, then the design firm owns copyright in the brochure and the business has an implied licence (that is, permission to do something implied by operation of law), to a run of 1,000.  If the  business were to later have 10,000 copies printed without the design firm’s permission, the design firm would be legally entitled to compensation for copyright infringement.

Another example is where a business retains a programmer to create some custom enterprise software for use by the business.  Again, absent an agreement to the contrary, the programmer owns copyright in the software and the business has an implied licence to use if for the purpose for which it was created (that is, in its business operations).  This means that, although the business paid the development costs for the software, the programmer, not the business, is entitled to sell copies of the software to others.

Thus, in a customer-contractor situation that may give rise to a work subject to copyright, it is important for the parties to have a clear and documented understanding about who will own the copyright.  It is usually possible to reach agreement on this issue as either party may be willing to give up ownership of copyright for an adjustment in price or other consideration (e.g., the right to make more copies of a brochure at a low or no charge).

Border Enforcement of IP Rights by Customs Officers

Businesses can obtain assistance from the United States government to prevent the importation of counterfeit goods into the United States (19 CFR 133).  On March 1, 2013 first reading was given to a proposed Canadian law (Bill C-56) which would give Canadian businesses a similar right to obtain assistance from the Canadian government to prevent importation of counterfeit goods into Canada.  The proposed law sets forth a procedure for Canadian businesses to follow and protects government officials from liability for steps that they may take in intercepting shipments and holding them for a period of time.  This law is long overdue and I hope for speedy passage.

Proposed Use For Organizations Setting Standards

There is a class of Trademarks in Canada known as “Certification” Trademarks. They differ from normal Trademarks, in that the owner does not directly sell any product or service. Certification marks indicate that the quality of goods or services made by others meet specified standards. For example “Senior Friendly” could be obtained as a Certification Mark by a seniors organization who wishes to set standards for businesses to meet regarding conducting business with elderly persons. For example “Green Shores” could be obtained as a Certification Mark by an environmental organization wishing to set standards for proposed shoreline development. At this time, most Canadian Trademarks can be filed based upon “Proposed Use”, Certification Trademarks cannot. On March 1, 2013 first reading was given to a proposed Canadian law (Bill C-56) which will allow Certification Trademarks to be filed based upon “proposed use”. This will simplify the process for any service organization seeking to establish standards for businesses.

New Canadian Patent Guidelines on Computer Implemented Inventions

All patent offices are wrestling with setting rules as to when a “method” should be patentable.  A method that has a series of computer implemented steps has been considered to be good subject matter for invention.  On March 8, 2013, the Canadian Intellectual Property Office (CIPO) issued guidelines as to when a computer implemented invention is patentable.  The guidelines require the Examiner to differentiate between inventions relating to “computers” as opposed to solutions to problems that use computers but are not “computer problems”.  If the invention is intended to solve a problem that is not relating to the operation of a computer, the Examiner is to determine whether the use of the computer is essential or simply a convenience.  The computer is not essential if the same result could be obtained (albeit more slowly) with pen and paper calculations.

World Wide Web – When Do You Cross the line?

World Wide Web – When Do You Cross the line?

In this article we will discuss two recent cases that may of interest to businesses and individuals regarding the World Wide Web.  There is a great deal of information on the web that is useful to business.  Recently the Supreme Court of British Columbia was asked to consider what use companies can make of information taken from competitor’s websites, in the case Century 21 Canada Limited Partnership et al v. Zoocasa Inc.  Zoocasa was using information taken from the Century 21 website.  The lawyer for Zoocasa argued that information made available on the internet must be available for use by everyone through indexing, linking and otherwise, without contractual restrictions.  It was suggested that this was required for the proper functioning of the web.  The lawyer for Century 21 argued that Zoocasa had breached the contractual terms accepted by users of the Century 21 website.  Mr. Justice Punnett decided that although the manner of contracting had changed, traditional contract law still applied to the web.  The Century 21 website had Terms of Use associated with the website; Zoocasa had actual notice of those Terms of Use, had accepted them and were bound by them.   In addition, Century 21 had copyright in the pictures and articles on the website.  In taking the pictures and articles, Zoocasa had infringed the copyright of Century 21.  The lesson to be taken from this case for website owners, is to establish Terms of Use and ensure that users of your website have notice of those Terms of Use and accept them to create an enforceable contract.

In this world of GOOGLE, FACEBOOK, and LINKEDIN, there is also a great deal of information on the web regarding individuals.  In most cases, it is completely proper to access this information.  For example, I had to examine a witness under oath a few months ago and availed myself of information that was on his FACEBOOK page to assist me.  Recently the Ontario Court of Appeal was asked to consider where the line should be drawn with respect to intrusions into one’s privacy in the case of Jones v. Tsige.  Winnie Tsige was the common law partner of the former husband of Sandra Jones.  Ms Tsige was also a bank employee.  Ms. Tsige used her position at the bank to repeatedly access online records that are not accessible to members of the public and inspect Sandra Jones private banking records.  Presumably, this information was being passed along to Mr. Jones for use in a dispute with Mrs. Jones.  The Court found this intrusion to have crossed a line.  This is an unusual situation of an abuse of bank databases by a bank employee and may not have had much application to the rest of us, were it not for the fact that the Ontario Court of Appeal had to create a new cause of action of intrusion of privacy to give Sandra Jones a remedy.  That remedy is now a precedent.  The boundaries of the remedy will be set by future cases.  It will likely be relied upon by celebrities against overly aggressive paparazzi.  Should you be so unfortunate as to experience some intrusion into your privacy that is excessive, unwarranted and deserving of sanction, you should speak to your lawyer.