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Bookmark ipblog.ca on your iPhone, iPad, Android tablet or mobile device for updates and developments in Canadian intellectual property law, including practical information and commentary on intellectual property business issues, technology commercialization and developments in the law, copyright and patent questions, trade-mark law, software and IT outsourcing, and related areas including privacy and cleantech licensing.

ipblog has been published since 2006.  In 2009, we added applaw.ca to our site, covering legal developments in the growing mobile application industry.

We have surpassed 1 million page-views from readers around the world. It’s hard to compete against YouTube cats… but we try.

Thanks to all of our readers. We’ll be taking a break during the month of August, and will resume in September, 2012.

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In late June, Apple won one of the many battles that it is waging against one of its fiercest rivals - South Korea’s Samsung, manufacturer of the Galaxy line of smartphones and tablets. Riding the wave of Google’s Android platform, Samsung has emerged as the world’s biggest handset maker, and arguably Apple’s biggest rival. Apple and Samsung are entagled in more ways than one, since Samsung also manufactures the A5 chipset that powers the latest models of iPad and iPhone. As the saying goes “Keep your friends close and keep your enemies closer.”

Apple’s latest win resulted in an injunction barring sales of Samsung’s Galaxy Tab in the US. That decision is being appealed. Meanwhile in the UK, Apple was ordered to publish a notice that Samsung did not copy the iPad. That decision is being appealed too. All of this is part of a global war (including Australia, Germany and the Netherlands) that stems from Apple’s claims that Samsung copied the design of the iPad. This is one of the most interesting aspects of the case - that worldwide IP infringement claims can be based on the design of a consumer product, not its function. And it’s a design that is successful precisely because of its clean, minimalist simplicity that eschews ornamental features of any kind. Check out this design patent (PDF) (Apple’s D504,889 design patent), filed in 2004, upon which the US injunction is based, in part. The two companies are currently headed to a jury trial in the US.

Lessons for business?

• Don’t forget to review relatively simple forms of intellectual property in your IP strategy. In this case, a simple industrial design (or in the US, a “design patent”) has provided ammunition in a battle between two of the most sophisticated technology companies on the planet.

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In October, I will be presenting at the 5th Cloud Computing Law Conference in Calgary, Alberta (October 9 and 10, 2012). Check out the brochure for a full description, including the topic “ALLOCATING IP RISKS IN THE CLOUD”: Service providers often seek to impose standard form contracts for the provision of cloud computing services containing standards of services that are often on an “as-is” basis. This session will explore the process of negotiating warranties, indemnification and limitation of liability clauses to satisfactorily allocate risks, including: scope of warranties; service vs. product warranties; remedies available for breach of warranties; and scope of customary indemnification obligations.

Readers of ipblog.ca are eligible for a 15% discount (Email me for the registration discount code).

Relating Reading: ipblog’s Cloud Computing library of articles, including “The Cloud: What goes up must come down” and “Online Agreements: Click-Through Upheld“.

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Our earlier post (Domain Name is “Personal Property”) related to the decision in Tucows.Com Co. v. Lojas Renner S.A., 2011 ONCA 548, where an Ontario court had to decide if the domain name renner.com was intangible personal property “located in Ontario”. This was an important issue in the case, since a finding that the domain name was property located in Ontario would permit the court to take jurisdiction and the lawsuit to proceed. The court decided that there is an emerging consensus among other courts that domain names are a form of property, and found that domain names, for the purposes of Ontario law, can be considered intangible personal property. This case was denied leave to appeal to the Supreme Court of Canada in Lojas Renner S.A. v. Tucows.Com Co., 2012 CanLII 28261 (SCC).

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Apps are not just for Angry Birds anymore. The licensing of mobile apps is becoming more common for business-to-business software vendors who are extending the reach of their enterprise applications to take advantage of opportunities in mobile and cloud computing. If you are a vendor of enterprise software and you want to add mobile functionality, here are a few of the most important legal issues to consider:

1. Check the EULA:

Compared to the full suite of desktop functionality, the mobile app may represent a small piece of your overall software product. But even a mobile app needs an end-user license agreement (EULA). Cloud computing service providers may have service terms that are designed for web access to their software, and they may not perceive the need for a “traditional” EULA, but in the case of a mobile app, remember that this is a “traditional” license where a copy of the application resides on the user’s device and system. So point number 1 is to check the EULA.

Software vendors should understand that apps launched on the iOS platform will come with a “ready-made” EULA courtesy of Apple. Other platforms will come with other license terms. Software vendors should consider developing a custom EULA if there are good reasons for doing so after a risk assessment. A few other points to note: If you prepare your own EULA on the iOS platform, take note of Apple’s “mandatory terms” that must be included in every license. Under the Android Market Developer Distribution Agreement, the default terms grant a “non-exclusive, worldwide, and perpetual license”. If you don’t want to grant such a broad license, then consider a custom-made EULA.

2. Review Privacy:

App developers should get legal advice on privacy issues. The privacy problem with apps has been percolating for some time and several high-profile reports have brought attention to this issue. In several cases, app developers have (intentionally or otherwise) harvested private details about app users by dipping into address books and location-data. In Canada, the privacy landscape is complex, but is underpinned by private-sector privacy laws that apply to “personal information” across all industries, at both the federal and provincial level.

In the US, the California Attorney General recently entered into an agreement with mobile app platform vendors - Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion - to improve privacy protections for app users. This arrangement implements certain “privacy principles” and requires app developers to have a privacy policy, something that would bring app developers in line with Canadian law. If you don’t have a privacy policy, then consider developing one along with the launch of your mobile app. It can be a useful exercise to determine what information is being collected, from whom, for what purpose.

3. Check the Data:

Ownership and control of data is a critical issue for end-users. In the case of mobile apps that are an add-on for broader enterprise or cloud-based software offerings, the data issue is even more complicated. Who owns it? Who is responsible for it? Where does the data reside? On the device, on customer’s server, on the vendor’s server, or with a third-party host in the cloud? These issues can be addressed within the app EULA, or it may be possible to cover them within the EULA for the enterprise software application. Data escrow may also be appropriate in some cases.

4. Distribution:

Consider where and how the mobile app will be distributed? For example, in some cases, mobile apps can be contained within a “closed” system, which permits distribution within a company. However, if you are a vendor wishing to distribute your mobile app to all of your customers, the easiest method of distribution may be, for example, through Apple’s App Store. This means the app will be available to users in over 60 jurisdictions around the world. Consider the jurisdictional issues – for example, one app developer realized that its marketing materials offended advertising rules of the Federal Trade Commission in the United States, which triggered an FTC complaint and ultimately a fine.

5. Integration:

It goes without saying that your mobile app should be integrated with the other services or software products (whether these are desktop, virtualised or web-based services). But consider this both from a technical perspective as well as a legal perspective. Does the app EULA dovetail with the EULA for your enterprise software applications? What promises, warranties or limitations are available under each document? Does one agreement pick “Alberta law” while the other one falls under “California law”? Consider the situation where the enterprise EULA makes promises or guarantees that user-generated data will be archived by the licensor and provided in a particular format to the customer on request. If that data is collected through the mobile app, and resides on devices of users, then this promise may be difficult or impossible to perform.

6. Brands and Trade-marks:

Lastly, the marketing of mobile apps deserves particular attention. You may have secured trade-mark rights for your enterprise software, but you should also consider trade-mark rights for the app itself. Apple’s App Store is still something of a wild-west when it comes to trade-mark rights. Consider treating the mobile app just like you would any other product – branding and brand protection should be considered in the most important jurisdictions where your customers will be downloading and using the app.

This article was initially published on Corporate LiveWire.

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For copyright fans, today kicks off a frenzy of reading Supreme Court decisions. Judgments in the 5 copyright cases which were heard last December were released today:

1. ESAC v. SOCAN
2. Rogers v. SOCAN
3. SOCAN v. Bell
4. Alberta v. Access Copyright
5. Re:Sound

IPOsgoode’s exellent summary appears here. Michael Geist’s review appears here. Further coverage to follow.

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We have reviewed a few decisions relating to arbitration clauses in intellectual property license agreements (see here ). Courts in the US have shown that they are willing to uphold arbitrator’s decisions. What is the law in Alberta?

The court in TheraVitae Ltd. v. Kwalata Trading Limited, 2011 ABQB 626 (CanLII) dealt with alleged breaches of stem cell therapy licencing agreements.  The licensing agreements contained arbitration clauses and a dispute arose between the parties, which was referred to arbitration.

Under the Arbitration Act (Alberta), a party must demonstrate that they are entitled to appeal an arbitrator’s decision. If the arbitration agreement includes the right of appeal to court, then either party can appeal the arbitrator’s decision on a question of law, on a question of fact or on a question of mixed law and fact. If the arbitration agreement is silent on the topic of appeal, then Section 44(2) of the Act allows for appeals on questions of law, provided certain criteria are met. Those criteria are:

1. the importance to the parties of the matters at stake in the arbitration justifies an appeal, and
2. whether the determination of the question of law at issue will significantly affect the rights of the parties.

In those two situations, a court may review the arbitrator’s decision. However, Section 44(3) prohibits a court from granting leave where the question being appealed was specifically referred to the arbitral tribunal for decision. In other words, where the arbitrator was asked to rule on a particular question of law, the decision of the arbitrator will not be reviewed by the court. In the TheraVitae decision, the court decided that the question was specifically referred to the arbitrator, so the decision was not reviewable by the court.

Lessons for business?

• Arbitrator’s decisions will be given deference, so if you want to refer your disputes to binding arbitration, be aware that there may be no right of appeal to the courts if you are not happy with that decision.
• Arbitration clauses and agreements must be reviewed carefully to ensure that the parties are aware of the scope of the arbitrator’s authority, and the rights of appeal that may be available.

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Many intellectual property license agreements refer disputes to arbitration under an arbitration clause. After the arbitrator renders a decision, can that decision be appealed to court? Or is it final and binding on the parties?

This issue was addressed in Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc.  , 660 F.3d 281, 285 (7th Cir. 2011) a decision of the Seventh Circuit Court of Appeals in the US. In that case, the court dealt with an appeal from an arbitrator’s decision under a license agreement. The court was clear that it had no interest in vacating or overturning the arbitrator’s award, unless the award is reviewable under one of the 4 circumstances in Section 10 of the Federal Arbitration Act (US):

1. if the award was procured by “corruption, fraud, or undue means”;
2. in the case of “partiality or corruption in the arbitrators”;
3. where the arbitrators were “guilty of misconduct” or misbehavior by which the rights of any party have been prejudiced; or
4. where the arbitrators exceeded the scope of their powers, or so imperfectly executed them that “a mutual, final, and definite award upon the subject matter submitted was not made.”

According to this decision, if it doesn’t fall into one of these 4 categories, then the court will not interfere with the arbitrator’s decision.

Other appeal-level courts in the US are split on this issue, and some have reviewed arbitration decisions based on an independent category, known as “manifest disregard of the law.” Since that is not a specified ground for appeal in Section 10, it was not accepted by the Seventh Circuit in the Affymax decision. The lessons for business? In the US, arbitrator’s decisions will not be subject to review by the courts unless the review falls into one of these 4 narrow grounds.

What about the law in Alberta? Watch for Part 3.

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Bill C-11, the long-awaited and long-debated Copyright Modernization Act has received Royal Assent… but is not yet in force. For an overview of the Act, see the government’s legislative summary.

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