The Canadian Internet Registration Authority (CIRA) has announced a new CDRP Policy and Rules, which will take effect August 22, 2011. Under the new dispute resolution procedure, the online filing system has been streamlined and some concepts have been updated to bring them in line with the UDRP. Among the other changes are:

1. Test for what is “Confusingly Similar” The Policy uses a test of “narrow resemblance” to determine whether one domain name is confusingly similar to a trade-mark. This moves the test away from Canadian trademark law concepts, and implements a uniform standard to be used by all arbitrators.
2. “Commercial Gain” is now a factor to determine “bad faith”.
3. Generic Domain Names. Previously, panelists had imposed a requirement to use generic domain names in order to establish a legitimate interest. This has been removed.

CIRA’s summary of the changes can be found here  

Related Reading: Domain Names in Canada: Don’t Mess with the UFC

Calgary - 07:00 MDT

In a recent US decision (Murphy v. Millenium Radio, 2011 WL 2315128 (June 14, 2011)), the Third Circuit Court of Appeals decided that removing the name of a photographer from a photo constitutes a violation of the DMCA. In this case, a photographer took pictures of two local radio personalities for publication in a magazine. The photo was later scanned and uploaded by the radio station, but in the scanning process, the photographer’s name was cropped out, without the artist’s authorization. The court found that this breached § 1202 of the DMCA which deals with ”Integrity of copyright management information”.

In Canada, this would be covered by Section 14.1 of the Copyright Act, which addresses “moral rights”. Under this heading, an author or creator of a work has the right to be associated with the work as its author by name, or under a pseudonym, or the right to remain anonymous. Tampering with the right of a photographer to be associated with the work would infringe moral rights in Canada.

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There is an ongoing brand battle between the large American retailer Target and Canadian retailer Target Apparel over the Canadian rights to the TARGET trade-mark.  This is one of those disputes that is becoming more well-known than the brands themselves. Of the first dozen hits in a Google search for “Target Apparel”, 10 of them are related to the lawsuit rather than the actual products. In the case of Target Brands Inc. v. Fairweather Ltd. the US retailer applied to a Canadian court to block all use of the TARGET APPAREL brand in Canada pending the outcome of the lawsuit. In a recent decision in Canadian Federal Court, the court refused to grant the interim injuction against the Canadian retailer, saying the US company failed to prove that it will suffer “irreparable harm” if the Canadian company continues to use the TARGET APPAREL mark.  So the Canadian company will continue to use the mark while the matter goes to trial… or is settled.

One interesting element that came out of this decision was Target’s practice of licensing the little guys. Possibly in preparation for litigation, the US retailer went around to other small Canadian retailers who were using “Target” as part of their business name. Some of these users were confronted by Target and entered into license agreements where they acknowledged Target’s ownership of the TARGET mark, and were given a licence to continue using the name. This applied, for example, to Target Food Stores & Gas Ltd., which operates two small convenience stores now licensed by Target Brands Inc.  While this wasn’t conclusive in the injunction application, the court noted that Target’s practice of licensing small businesses using the TARGET mark did undercut its argument that it was harmed by the perception that Target Apparel stores were somehow linked with Target.

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In Louis Vuitton Malletier S.A. et al. and Singga Enterprises (Canada) Inc., the Federal Court sent a strong message to counterfeiters. This is a case of infringement of copyright and trade-mark rights, arising from the sale of counterfeit copies of Louis Vuitton and Burberry handbags through online sales and operations in Vancouver, Calgary and Edmonton. The Trade-marks Act provides for an award of damages or profits in relation to the sale of infringing goods. The Copyright Act provides for an award of both damages and profits from the sale of infringing goods, or statutory damages between $500 to $20,000 per infringed work. In this case, the Federal Court awarded Louis Vuitton and Burberry a total of over $2.4 million in damages against the defendants, catching both the corporate and personal defendants in the award.  

Related Reading: Retail Therapy for Brand Owners: Counterfeit Goods & Director Liability 

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In the US, a few updates on the patent front:

• The House version of the patent reform legislation passed (the Leahy-Smith America Invents Act ) in late June, with broad support. You may recall that the US Senate passed its own version of the patent reform bill in March. The House and Senate bills must now be reconciled, with another vote on compromise legislation before it becomes law.
• In a recent US decision, a court found that “induced infringement” can be established without showing actual knowledge of the infringed patent.  “Induced infringement” under US patent law traditionally requires that a party actually knows that the infringed patent exists.  In Global-Tech Appliances, Inc. v. SEB S.A. (PDF), the US Supreme Court decided that wilful blindness will be enough to establish induced infringement. Canadian inventors should be aware that actively ignoring information or taking deliberate actions to avoid learning of a competitors patent will not help in avoiding a finding of induced infringement, and thorough patent searching is required when developing patentable inventions.

Related Reading: Willful Blindness of a Patent Is Sufficient to Show Knowledge of That Patent for Purposes of Induced Infringement (Licensing Executives Society)

Calgary - 07:00 MT

What constitutes “use” of a trade-mark in Canada? Under Canadian trade-mark law, a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services. 

The Federal Court of Canada decision in TSA Stores Inc. v. Registrar of Trade-marks (2011 FC 273) adopts a liberal definition of “use”. 

TSA owns the registered mark THE SPORTS AUTHORITY in association with retail-store services in Canada. It operated six stores in Canada, but the stores were closed in 2000. It tried to maintain the validity of its mark by relying on display of the mark on a website that was accessible from Canada. In this case, TSA was able to show “use” of the mark through the operation of an information website through which US online sales were possible, but which did not permit Canadian sales. The court reasoned that “services” is a broad term and as long as some consumers or purchasers receive a benefit from an activity, then it qualifies as a “service” for the purpose of showing use of a mark. In other words, for services, use of a mark need not involve any sales or advertising, and could be established by any incidental activity by which some members of the Canadian consuming public receive a benefit.

What happens if we couple this with the decision in Masterpiece. Does this mean that any website on the internet which is accessible in Canada from which some Canadians derive some benefit, may establish trade-mark “use” in Canada? And is such use sufficient to invalidate a registered mark in Canada if it pre-dated the date-of-first-use of the registered mark?  Arguably, this would only apply in the case of services, but it certainly appears to lower the bar to establishing use in Canada and makes it difficult for trade-mark owners to assess the risks when filing a trade-mark application. This seems to raise more questions that it settles, and further clarity is required from the courts on this question.

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A patent owner, VS Technologies LLC, claims that Twitter has infringed its patent, and the company sued Twitter in the State of Virginia.

When Twitter users sign-on, they agree to certain Terms of Service. These Terms of Service specify that any claims by a user must be litigated in California. The inventor of the patent signed-on as a Twitter user, so Twitter claimed that the patent infringement suit should be moved from Virginia to Twitter’s home jurisdiction of California, based on the forum selection clause in the Terms of Service.

A recent US decision VS Technologies LLC v. Twitter Inc. has blocked this transfer request, reasoning that these Terms of Service do not govern patent infringement claims, that VS Technologies never assented to the Terms of Service, and that the patent owner is not seeking to enforce the Terms of Service. The court also made it clear that it did not want to establish a precedent that would apply to all social networking patent infringement claims.  

Business lessons? Online service-providers, social-networking sites and cloud-computing services should take note that forum-selection clauses do not necessarily provide blanket coverage. Forum-selection clauses have been upheld for other purposes - for example, if the claim arises in connection with a complaint over some part of the service itself - but this type of clause should not be relied upon as a defence against patent claims.

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This is the last in our series on the recent landmark SCC decision in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27. There is one point that is worth emphasizing from this decision, and that relates to the question of when an earlier common-law or unregistered mark can trump a later registered mark. 

Bear with me as we get into the thickets of the Canadian Trade-marks Act. The SCC decision to expunge a registered mark rested in part on the analysis that prior “use” under Section 16(a) of the Act was sufficient to displace the later registration. To put this another way, use since 2007 of the trade-mark XYZ (No. 1) for shoes can be used to challenge and cancel a registration for the trade-mark XYZ (No. 2) for shoes, when that later registration of XYZ (No. 2) was based on use since 2009. With me so far? This comes straight out of the reference in the decision: “Because Masterpiece Inc.’s use preceded Alavida’s proposed use, Alavida was not entitled under s. 16(3) to registration of its trade-mark.” The ambit of Section 16(3) includes not only a mark that has been used in Canada, but also a mark that has been made known in Canada; and it includes any trade-name that had been previously used in Canada. The term “made known” has a special meaning. A mark is “made known” only if it is used outside Canada and (1) the associated products are distributed in Canada, or (2) the associated products or services are advertised in print or through “radio broadcasts ordinarily received in Canada”, and it has become well known in Canada by reason of the distribution or advertising. So this test has to be met in order for an earlier mark that is simply “made known” to trump a later registration.

It’s also worth noting that previous use or making known of a confusing trade-mark will not invalidate a registration if that mark or trade-name has been abandoned, and it’s up to the owner of the earlier mark to establish that he had not abandoned the confusing trade-mark or trade-name. 

Lessons for business?

• Full trade-mark clearance searches are an essential step before you apply to register your mark. However, to be effective these searches must include common-law sources that can catch marks that are used or “made known”. Even then, it’s important to understand that a search cannot necessarily reveal whether such a mark would meet the test described above, and further research may be required.

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