What the IP Profession is talking about

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.

“Distinguishing Guise” – The Captain Morgan Case

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, [1976] 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.

Complaint Websites use of Parody

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”.

.CA Domain Name Disputes

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.

Supreme Court of Canada Decisions regarding Intellectual Property

It used to be that decades would go by without any Intellectual Property cases being considered by the Supreme Court of Canada (SCC).   The fact that there have been two significant SCC decisions on Intellectual Property within a period of 3 days at the end of June, is indicative of the importance of Intellectual Property in the new economy.

It is difficult to “police” the internet, due to the fact that the internet is worldwide and Court orders are unenforceable outside of the nation that granted them. On June 28, 2017 the SCC decided the Google Inc v. Equustek Solutions Inc. case.  In that case, Equustek (E) obtained an interim injunction prohibiting an infringer, D, from selling infringing products. D disappeared and, in a blatant breach of the injunction, continued sales over the internet.  A lower Court ordered that Google de-index the website of D from the search results on Google.  Google immediately complied, de-indexing the website of D from the Canadian search results available to Canadians through the Canadian default website, google.ca.   However, D continued its infringing activities and the website of D continued to be available on Google, except for google.ca.  E sought a Court order directing Google to de-index D’s websites from ALL Google search results worldwide and not just the Canadian search results.  Google resisted on the basis that the Canadian Court Order should not be given effect outside of Canada. The matter was appealed first to the British Columbia Court of Appeal and then to the SCC.

The SCC upheld the lower court order that required Google to de-index D’s website from search results worldwide, stating as follows:
“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.”

A number of patents have been found to be “invalid” by lower Courts based on the so-called “Promise Doctrine”.   The Promise Doctrine created a higher threshold for utility based on the “promises” in the patent. Under the Promise Doctrine, where the specification of a patent does not promise a specific result, a “mere scintilla” of utility is sufficient; but where the specification sets out an explicit “promise,” utility will be measured against that promise. On June 30, 2017 the SCC decided the AstraZeneca Canada v. Apotex case.  A lower Court held that the AstraZeneca patent was invalid for lack of utility under the Promise Doctrine, as it promised more than it could provide. The matter was appealed to the Federal Court of Appeal and then to the SCC. AstraZeneca argued its patent was improperly invalidated on the basis of the Promise Doctrine.

In the result, the SCC found the Promise Doctrine to be unsound and characterized it as an interpretation of the utility requirement that is incongruent with both the words and the scheme of the Patent Act. The SCC held that the Promise Doctrine is excessively onerous in two ways: (1) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and (2) where there are multiple expressed promises of utility, it requires that all be fulfilled for a patent to be valid.  To determine whether a patent discloses an invention with sufficient utility, courts must first identify the subject matter of the invention. Second, courts must then ask whether that subject matter is useful, that is, whether it is capable of a practical purpose. The Act does not prescribe the degree of usefulness required, or that every potential use be realized. Therefore, a single use related to the nature of the subject matter is sufficient, and that utility must be established by either demonstration or sound prediction as of the filing date.

These decisions by the SCC are most welcome by the patent profession.  A patent holder no longer has to be concerned about an attack on the validity of the patent based upon the Promise Doctrine.  Should an infringer ignore a Court injunction obtained by the patent holder, steps can be taken to have companies that control search engines, such as Google, de-index the infringer’s website so that they no longer appear in the search results.

CAT CHASES DOG (DANGERS ASSOCIATED WITH PUBLICLY ACCUSING A COMPETITOR OF INFRINGEMENT)

A client called me the other day to discuss some steps he wished to take against a competitor who was infringing his patent.    The client wanted to write letters to some major companies that were purchasing product from the competitor, to make them aware of the infringement and advise them that he would be forced to sue them if they continued to purchase the competitor’s product.  The second step he wished to take was to place an advertisement in a magazine widely read in the industry, to inform companies in the industry of the alleged infringing activity by the competitor.  I advised my client that there were some practical reasons why taking these steps might end in disaster.   Firstly, when you threaten companies with legal action, they are not inclined to do business with you.  In other words, it is bad for business to sue customers.  Secondly, when you make statements tending to discredit the business of a competitor you are “potentially” breaching section 7 (a) of the Trademarks Act which reads:
“No person shall make a false or misleading statement tending to discredit the business, wares or services of a competitor.”
My client protested that everything he was going to place in the letters and the advertisement was absolutely true.    In the recent Federal Court case of Excalibre Oil Tools V. Advantage Products, a businessman with the same attitude as my client found out the hard way the risks of making statements about a competitor that turned out to be false.   Advantage sent letters to customers of Excalibre alleging infringement of three patents. However, when the patent infringement action subsequently proceeded to Court, Advantage Products lost; the Court found key claims to be invalid and the remaining valid claims not to be infringed by Excalibre.  The case is presently proceeding to the “damages” phase to determine the amount Advantage Products is going to have to pay as compensation to Excalibre for making false and misleading statements that discredited the business of Excalibre.   Why give your competitor grounds to counter-claim?  If you believe your competitor is infringing, communicate directly with the competitor and, if the matter remains unresolved, sue.

Breaking News for Online Businesses

There have been some recent court decisions that will be of interest to online businesses. Once an “online” business is successful, it is just a matter of time before competitors try to divert traffic intended for the successful business to their own competing websites.  One way of diverting traffic is through the use of websites with similar names.  With the rapid rise of social media, such as FACEBOOK, aggressive competitors are also establishing social media accounts with similar names.   Another way, a more legitimate way, is through the acquisition of “sponsored” links, such as GOOGLE ads.   These sponsored links appear in the search results whenever keywords associated with the successful business are entered into the search engine.

The old news is that in the case Michaels v. Michaels Stores Procurement Co, decided March 15, 2016, Canada’s Federal Court of Appeal stated that the Federal Court had jurisdiction to order the transfer of a confusing domain name.  The new development is that in the case of Thoi Bao Inc v. 1913075 Ontario Ltd, decided December 7, 2016, Madam Justice McDonald of the Federal Court went a step further and ordered the defendant to transfer to the plaintiff his FACEBOOK account, his TWITTER account and “any other social media accounts under his ownership or control” that were confusing with the business of the plaintiff.   In light of this decision, a successful business now has a remedy to use against competitors who are diverting traffic through the use of confusingly similar social media account names.

The other development relates to “passing off”, the court-created protection against trade misrepresentations.  In order to be successful in an action for “passing off”, among other things, the plaintiff must show that there has been misrepresentation creating confusion in the public.  The old news is that purchasing sponsored links, in and of itself, does not constitute “passing off”.   This was established in the Federal Court decision in Vancouver Community College v. Vancouver Career College (Burnaby) Inc., in which the Trial Judge held that the time frame for determining whether there was confusion was when the consumer reached and viewed the defendant’s website.   The Trial Judge found that there was nothing confusing at the defendant’s website and thus that any confusion was not sufficient to meet the requirements for “passing off”.  The new development is that on January 26, 2017 the Federal Court of Appeal reviewed the Trial Judge’s decision.  The Appeal Court determined that the Trial Judge had erred and that the correct time to assess confusion was when the consumer viewed the search engine results page.  The Court of Appeal noted that the sponsored link merely indicated VCCollege.ca, without any content that would distinguish the defendant’s business from that of the plaintiff.  In the circumstances, the sponsored link was confusing and constituted passing off.  If your successful business has been the target of intentionally confusing sponsored links, you now have a remedy.  Conversely, if your business pays for sponsored links, you must ensure that your sponsored links identify your business and are not confusing.

Copyright, Design and Trademark – A Cautionary Tale

There is a relationship between copyright, design and trademark as they apply to physical products.  Copyright protects “works of artistic craftsmanship”.   Design protection can be obtained for features of shape, configuration, pattern or ornament of useful articles.  Trademark rights may extend to the shaping of wares (products) with such unique shapes being referred to as “distinguishing guises”.  (The old-style glass bottle used by Coca Cola is a good example of a distinguishing guise trademark; the consumer knows what the product is merely from the container.)   It is possible for a product to be subject to all three, copyright, design and trademark at some time during the product’s life cycle.  However, copyright, design and trademark each have their limitations.

When an entrepreneur launches a new product, he or she does not know how successful the product may become.  Sometimes public apathy toward a new product is deflating.  At other times, the response exceeds even the entrepreneur’s expectations.  For that reason, it is not unusual for an entrepreneur to introduce a product into the marketplace and to wait and see how the product sells before seeking protection.

The Court decision rendered on December 14, 2016 in the case of Corocord Raumnetz v. Dynamo Industries is a cautionary tale that helps explain aspects of the relationship between copyright, design and trademark.  Corocord is a manufacturer of playground equipment. Some years ago, Corocord introduced into the market a new playground structure.  Under Canadian law, the playground structure was protected by copyright as a work of artistic craftsmanship at the time of introduction into the marketplace.  Copyright protection does not require any active steps to file paperwork with a government office, although there are advantages in doing so.

Fast forward ahead several years.  By that time, Corocord’s playground structure had become quite successful.  The law suit against Dynamo Industries was triggered when Dynamo introduced a similar product into the marketplace and they ended up bidding against each other on a contract for a playground installation. Corocord sued Dynamo.

Corocord tried to enforce their copyright against Dynamo.  Unfortunately for Corocord, copyright is only intended to protect “works of artistic craftsmanship” that are sold in limited quantities.  The right to sue Dynamo under copyright law was lost, due to the fact that the playground structure had been reproduced in quantities exceeding fifty (50).  Corocord had been too successful to continue to rely upon copyright.  Corocord could have sued Dynamo under design law.  Unfortunately for Corocord, an application must be filed with the Canadian Intellectual Property Office for design protection within 12 months of the playground structure being introduced into the marketplace.  The time had passed, Corocord had waited too long. Corocord tried to sue Dynamo under trademark law, which does not have a time deadline. In order to succeed Corocord had to establish that their playground structures had become so well known that the relevant market would automatically associate the distinctive shape of the playground structure with Corocord.  Unfortunately for Corocord, they had not, as yet, become successful to the extent that the distinctive shape of the playground structure was associated with them.

What could have or should have Corocord done?  It was okay for Corocord to rely upon copyright in the beginning.  Within 12 months Corocord knew that their playground structure was achieving success in the marketplace.  It was a fatal error of Corocord to not apply for design protection before the 12 months deadline for doing so expired.  With design protection, Corocord could have stopped similar products from entering the market.  Subsequently, when design protection was about to expire, they could have applied for trademark protection  in the hope of extending their protection indefinitely on the basis that the distinctive shape of the playground structure had become well know and is associated solely with Corocord.  However, now their ability to obtain trademark protection in future is doubtful.  The distinctive shape of the playground structure will no longer be associated solely with Corocord.  Dynamo is in the market providing playground structures with the same distinctive shape and other competitors may soon follow.

Nagoya Protocol

The other day I was asked a question about the Nagoya Protocol.  In order to answer the question, I had to review the text of the Protocol.  Although the Protocol has been around since 2011, it has recently received attention due to the announcement that the Trudeau Liberal government intends to move forward to implement the Protocol.  The Protocol has as its focus the use of biological systems and living organisms to make products and processes for use.  The Protocol seeks to promote a “fair and equitable” sharing of the benefits arising from utilization of genetic resources.  It also seeks to provide funding for the conservation of biological diversity.  An example of the need for conservation of biological diversity is the rapid rate of destruction of the rain forests and conversion to farmland.   It is hoped that funding can be secured that will provide financial incentives to preserve the rainforests.  The knowledge of genetic resources is often held by indigenous and local communities as “traditional knowledge”, and the Protocol contemplates domestic legislation to establish rights of indigenous and local communities over such genetic resources.  The Canadian government will be seeking prior and informed approval and involvement of our indigenous peoples to the use of their traditional knowledge upon mutually agreed terms that will see the indigenous peoples compensated.  The Nagoya Protocol goes hand in hand with the United Nations Declaration on the Rights of Indigenous Peoples (DRIP).  Article 24 of DRIP provides “Indigenous peoples have the right to their traditional medicines and to maintain their health practices, including the conservation of their vital medicinal plants, animals and minerals. Indigenous individuals also have the right to access, without any discrimination, to all social and health services”. Article 31 of DRIP provides “Indigenous peoples have the right to maintain, control, protect and develop their cultural heritage, traditional knowledge and traditional cultural expressions, as well as the manifestations of their sciences, technologies and cultures, including human and genetic resources, seeds, medicines, knowledge of the properties of fauna and flora, oral traditions, literatures, designs, sports and traditional games and visual and performing arts. They also have the right to maintain, control, protect and develop their intellectual property over such cultural heritage, traditional knowledge, and traditional cultural expressions”.  The passing of a law to implement the Nagoya Protocol in Canada should be relatively straightforward.  Other Countries have already adopted the Protocol and a review of their law should be of assistance in preparing equivalent Canadian legislation.  What may be interesting is the negotiations with our indigenous peoples that will follow the passing of the Canadian legislation into law.  Once a spotlight is placed on the rights of indigenous peoples, there may also have to be put in place protection of the “traditional cultural expressions” of the indigenous peoples as contemplated by Article 31 of DRIP.  I suspect we will discover there are many “traditional cultural expressions” that we have come to take for granted, such as the Cowichan blanket.

Myths that drive IP Lawyers Crazy

Clients often have misconceptions about patents and trademarks. For example, a client contacted me the other day and asked that I make every effort to expedite his patent application. He wanted it granted as soon as possible, and pressed me for a best case scenario about how quickly I could obtain his patent. The client was frantic because a competitor was threatening to sue him for infringement of a patent the competitor had obtained. The client thought that obtaining a patent would make him safe from the threatened legal action. Unfortunately, it is a myth that your patent will save you from being sued by a competitor. You can obtain a patent and still be sued for infringing a patent owned by a competitor. For example, it is possible to obtain a patent for an improvement to an existing product or method, if the improvement is new and unobvious. However, if the improvement relates to something that is patented, and if in order to use the improvement it is necessary to use the subject matter of the original patent, then use of the improvement would infringe the original patent unless the owner of the original patent gave permission for such use. Thus, it is possible to obtain a patent for an invention but to be unable to work the patent without the permission of the owner of a patent for some underlying technology. When there is an allegation of patent infringement, you must either negotiate your way out of the problem (perhaps by cross-licensing) or “design around” the problem. Fortunately for my client, the client’s product is in the early stage of development and the allegation of infringement came up at the first tradeshow where the product was displayed. The client is now considering what changes can be made to the product to avoid the competitor’s patent. If the “design around” attempt is not successful or will take too long, the client has patents on some other technologies that can be used as bargaining chips in a negotiation. That same day, one of our Trademark Agents, Laura Duckett, came into my office to discuss two Trademarks a client had asked us to apply for two years previously. The Trademarks had been allowed by the Trademark Office. The problem was that, in the intervening period, the client had changed the Trademarks. With respect to one of the Trademarks, the client had asked us to apply for a Trademark consisting of two words. However, he had dropped one of the words and was now using a single word. To make matters worse, the single word was a “generic” term for the product that we will be unable to register. With respect to another of the Trademarks, the client had also asked us to apply for a Trademark consisting of two words. However, in the intervening period, he had made a substitution replacing one of the words with another word he liked better. Unfortunately (or fortunately depending upon your point of view), the Trademark Office grants you protection for the Trademark you apply for. It is a myth that the Trademark office will accommodate changes should your Trademark “evolve”. If you make material changes to your Trademark, you have to start the Trademark registration process all over again. When you get involved with Intellectual Property issues, instead of relying upon myths communicated to you by well meaning friends, seek the assistance of a Registered Patent Agent or Registered Trademark Agent in your area. A list of licensed agents is maintained on the Canadian Intellectual Property Office website at cipo.gc.ca.