A few updates on copyright in Canada. The concept of “fair dealing” is the one to watch.

• Copyright Reform: Bill C-11 (the copyright reform bill) is currently in Committee in Parliament, meaning the bill has gone through first reading, and second reading, and is being is being further examined and debated. The next stage would be third reading before it becomes law. The digital-lock provisions remain among the most contentious. The proposed law also features expansion of “fair dealing” exceptions.
• SCC: Last December, the Supreme Court of Canada (SCC) heard 6 different copyright appeals, including an analysis of “fair dealing“. The court’s decision is expected sometime in 2012. When it is released, it will be closely scrutinized against the changes proposed in Bill C-11. (Related Article: Copyright Cage Match)
• New Class Action: Last week, a new copyright class action suit was certified (Waldman v. Thomson Reuters Corporation, 2012 ONSC 1138), which will also tackle “fair dealing” issues. This case claims that Thomson Reuters copies court documents that have been authored by lawyers, and sells them through a searchable database. The suit alleges that Thomson Reuters infringes copyright of the authors of those court documents by reproducing them without permission.

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The privacy problem with apps has been percolating for some time. Several high-profile reports have brought attention to this issue; Path’s embarassing privacy breach is just one of many cases where app developers have (intentionally or otherwise) harvested private details about app users by dipping into address books and location-data. App developers should take note: Get legal advice on privacy before you launch your app.

In the US, a patch-work of industry-specific privacy laws has made this a confusing area of law. In Canada, the landscape is still complex, but is underpinned by private-sector privacy laws that apply to “personal information” across all industries, at both the federal and provincial level.

This month, the California Attorney General has 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.  This is not new legislation, merely a loose commitment by the mobile app industry, so it cannot be enforced as law. However, it has helped shine a spotlight on this issue. 

Related Reading:

• Copy of the Signed Agreement (PDF)
• App Law: Update on Privacy

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In the last in our series about the frontier of intellectual property law, we look at the use of copyright law (roughly 300 years old) to protect yoga poses (roughly 2300 years old). An enterprising yoga instructor - Bikram Choudry - managed to obtain copyright registration for certain poses as part of an intellectual property portfolio that includes protection for “posture sequences”, trade-marks and instructor-certification agreements.

In a lawsuit against another licensed studio (Bikram’s Yoga College of India L.P. v. Yoga to the People, Inc.), the studios are in a pitched battle (cue the “warrior pose”) over the right to use the styles and postures that are allegedly the property of Bikram. The US Copyright Office recently weighed in, saying that exercise poses “do not constitute the subject matter that Congress intended to protect as choreography. We will not register such exercises (including yoga movements), whether described as exercises or as selection and ordering of movements.” This case illustrates an interesting twist on the “future” of IP, by protecting (some would argue ancient) postures through the tools offered by copyright and trade-mark law.

In Canada, the case of Pastor v. Chen, 2002 BCPC 169 (CanLII) addressed a dispute over choreographed dance moves and the court’s review of confidentiality and copyright protection. Although the reasoning in that decision is somewhat inconsistent (protection affforded by copyright should not depend on whether the material qualifies as “confidential information”), the Court in the end did agree that the choreography was eligible for copyright protection. 

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My recent article “You Can’t Have Clouds Without a Little Bit of Lightning: Cloud Computing in 2012” is published in The Advisor (PDF) newsletter (Winter 2012).

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A company approaches you to engage in a “partner” agreement - maybe a joint venture, a licensing deal, a software integration or a reseller arrangement. During negotiations, the other company reviews your technology. Negotiations breakdown when you realize that the other company has launched a competitive knock-off product that looks shockingly similar to your own beta version that you disclosed to them. Now what do you do?

According to app developer Spry Fox this is what happened in their negotiations with app developer LOLapps. LOLapps abruptly broke off negotiations and launched their own app, “Yeti Town” which has similar design elements. In its complaint Spry Fox claims that “Yeti Town is a virtual duplicate of the Triple Town game,” and the lawsuit alleges copyright infringement. Lessons for business?

• Ensure that you have a well-drafted non-disclosure agreement (NDA) covering your negotiations. This agreement can address issues of confidentiality, and it may be appropriate to also deal with non-use, non-competition and non-solicitation issues. Not all NDAs are created equal!
• Be aware that “ideas” alone are very difficult to protect. While copyright protection exists for the software code, the basic concept may not be protectable by copyright (see this App Law Round-Up for an example). That’s where the NDA comes in, since it imposes contractual obligations to maintain the confidentiality of trade secrets, even where there may be no copyright protection for the concepts.  
• Exceptions that are commonly built into NDAs may provide an “out” for your competitor. In any event, even the best NDA cannot prevent a determined competitor from poaching your concept - the question then is whether the competitor’s conduct runs afoul of the law of copyright (as is alleged in the Spry Fox case), or constitutes a breach of the terms of the NDA, or both.

Related Reading: Someone Stole Your Brilliant Business Idea?

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ICANN is now implementing its plans to permit the creation of new generic top-level domains (gTLDs). TLDs are everything to the right of the dot. (For example, a new gTLD might be .canada, .newyork, or .mac) Many brand owners are tired of seeing announcements about gTLDs, Sunrise Periods and procedures for rightsholders. Seemingly endless changes - from the launch of new TLDs such as dot-ASIA and dot-XXX, to the introduction of internationalized domain names, to recent dot-CA changes - make this a bewildering area of law for trade-mark owners. Here is a summary of what to expect from ICANN in 2012:

• January 2012  - ICANN started accepting applications for new gTLDs. Who will apply? With a US$185,000 application fee, and significant legal and technical hurdles, the applicants are expected to be limited to large corporations and investor groups with a business plan directed at a specific community or niche. Remember that the list of new gTLDs will likely include non-Latin domains, based on Cyrillic, Chinese or Arabic.
• April 12, 2012  - The application period closes.
• May 1, 2012 is “Reveal Day” at which point the applicants and their proposed TLDs are published. This triggers a seven-month objection period, during which rightsholders can file a complaint based on valid rights to the string of characters that make up the gTLD. For example, trade-mark owners may make an objection to a proposed gTLD on this basis.
• Late 2012 - ICANN has proposed a “Trademark Clearinghouse” which would be a (very cumbersome) database of registered trademarks to support trademark claims and sunrise services. As new gTLDs are launched, ICANN will require that every new gTLD operator uses this Clearinghouse and conducts both a Trademark Claims and a Sunrise Process. 
• Late 2012 - probably sometime in 2013 - The actual launch of new gTLDs, with the usual array of Sunrise and Landrush Periods.

We’ll keep you posted as this develops.

You’ll notice we didn’t cover the question “Why”. Why is there a compelling need for new gTLDs?  If you figure that one out, please let us know.

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iBooks Author is Mac app  allowing users to develop and publish multitouch digital books. If you author a digital book, you can then submit it to the iBookstore for purchase or free download, or distribute it through iTunes U, or use it with the iPad. It’s being touted as a way to bring digital publishing to the masses - for example, textbooks with embedded videos, audio and rotatable 3-D models that students can pinch and zoom.

Sounds great, but do you own what you create? Let’s have a look at the EULA (End User License Agreement v. 1.0.1).

According to the terms of the EULA (section 2(b)), you own the rights to the content that you create, and you can distribute that content any way you want, as long as it doesn’t include any files in the .ibooks format. (Making files in the .ibooks file format is the whole point of using this app.) If it does include .ibook files, then you can distribute the book by any means as long as you are giving it away for free. If you want to distribute your digital book for a fee, then it must be sold through Apple’s iBookstore, with Apple taking its customary 30% cut.

This does not mean (as some blog posts have suggested) that Apple takes any ownership of the content you have authored. You continue to own that content. The license terms mean that, by agreeing to use their software, templates and publishing tools (and in particular, the .ibooks file format), you agree to sell your iBooks book through Apple’s retail channel.

This isn’t really all that different from an author’s agreement with a traditional publisher, since a publisher will typically insist on exclusivity in handling final editing, packaging, marketing and sales of a book. They take a cut and share the royalties with the author. The author, who remains the copyright owner, is not free to then sell the book through a different distribution channel. They must sell through their publisher.
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The term “patent exhaustion” does not refer to the feeling you get when an IP lawyer talks for 3 hours about invalidity for lack of obviousness. No, this is the patent law concept that the first authorized, unrestricted sale of a patented item ends, or “exhausts,” the patent-holder’s right to ongoing control of that item, leaving the buyer free to use or resell the patented item without restriction. For example, if you buy a patented mouse-trap from the patent owner, you can resell that mouse-trap to your neighbour without fear of infringing the patent. 

This concept was recently tested in the case of Monsanto Co. v. Vernon Hugh Bowman (PDF) No. 10-1068 (Fed. Cir. Sept. 21, 2011) related to Monsanto’s patented “Roundup Ready” seeds. A farmer planted a first crop from Monsanto seeds, under license, and he did not save any of those seeds for replanting, in accordance with the license. The farmer then bought “commodity seeds” from a local grain elevator. These seeds are a mixture of regular seeds and seeds from “Roundup Ready” plants. Not that you can tell by looking at them. I don’t believe Monsanto has developed a method of displaying the Roundup patent numbers on the seeds themselves. He planted a second crop from these “commodity seeds”. He then saved some of the seeds from this second crop grown from the “commodity seeds”.

Monsanto sued, claiming the second crop and the saved seeds infringed on its patent, because its patented technology existed somewhere in that crop. The farmer defended by claiming the defence of “patent exhaustion” - that any patent rights in the second crop of seeds were exhausted, and further use or sale of those seeds would not infringe Monsanto’s patent. The Court rejected this defence, reasoning that by planting the commodity seeds containing the “Roundup Ready” patented technology, he created an infringing article (i.e. the plant grown from the next generation of seeds).  This replication of the patented article constituted an infringement, which was not excused by the “patent exhaustion” doctrine.  This is because there was no unrestricted sale, since the use of the seeds by the farmer was conditioned upon obtaining a license from Monsanto. The court did not review the question of whether someone else (someone who is not subject to Monsanto’s license agreement) would benefit from the “patent exhaustion” doctrine if they grew and collected “commodity seeds”.

Related Reading: Patent Exhaustion Does Not Bar Claims Against Later Generations of Self-Replicating Technology LES Article.  

Related Reading: Intellectual Property & Agriculture: Obvious Inventions

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The Ontario Court of Appeal (Jones v. Tsige, 2012 ONCA 32) has recognized the tort of invasion of privacy or “intrusion upon seclusion,” acknowledging a right in Canada to sue when an individual’s privacy is intentionally invaded by another individual.  This case had to do with one bank employee accessing the bank records of another employee, without permission. Ultimately the claimant was awarded damages in the amount of $10,000 for breach of her privacy rights.

Read the full article here from the Field Privacy Group.

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