Industrial designs are like the shy cousins of much sexier patents and copyright. Sure, patents and copyright get all the attention, but industrial design can be a very reliable, useful tool in the intellectual property toolbox.  This category of protection (in the US, known as “design patents”) will protect the visual features of a product (shape, configuration, pattern or ornament). Functional, utilitarian or useful elements cannot be protected. Industrial design protection expires after 10 years, so it does not extend as long as patents or copyrights, but can provide protection for articles that are not eligible for either copyright or patent protection.

In Bodum USA, Inc. v. Trudeau Corporation, 2012 FC 1128 (CanLII), the court considered two competing double-walled drinking glasses, one of which (the design owned by Bodum) was registered as an industrial design. The double-wall configuration itself serves a utilitarian function: it keeps hot drinks hot and cold drinks cold. Thus, the double-walled feature could not be assessed in the infringement analysis. As described in the judgement: “The court has to decide only whether the alleged infringement has the same shape or pattern, and must eliminate the question of the identity of function, as another design may have parts fulfilling the same functions without being an infringement. Similarly, in judging the question of infringement the court will ignore similarities or even identities between the registered design and the alleged infringement which arise from functional matters included within the design.”

According to the Court, the competing product must be characterized as “substantially the same” for there to be infringement. This question must be analyzed by the Court from the point of view of how the informed consumer would see things. In the end, the Court decided that there was no infringement between Bodum’s design and the competing product.

Related Reading:

Industrial Design in Canada & US

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Infringement! Litigation! Legislation! There is never a dull moment in the wonderful world of intellectual property law, and 2013 will be no exception. Here’s our list of what to watch in the coming year:

Copyright. If you keep making the same predictions year after year, eventually one of them will come true, right? For the last several years, we predicted that copyright reform would finally come to Canada. 2012 did not disappoint as the year of copyright, with the release of five SCC decisions and the passing of the copyright modernization legislation that had been long awaited.  We expect that 2013 will provide some opportunities to test the new law in court.

Anti-Spam. As with copyright, many have predicted that Canada’s “new” anti-spam law would come into effect for several years. Yes, Parliament passed the Fighting Internet and Wireless Spam Act and it did receive royal assent way back in December, 2010. However, Canada’s anti-spam legislation is still not in force. Industry Canada released draft revised anti-spam regulations last week, and it would be surprising if we didn’t see final regulations in the first half of 2013.

App Law. We predicted in 2011 that app law would develop as regulations and laws fight to keep pace with the explosion of the app economy which is expanding in both business and personal life, along with cloud computing. 2012 provided a number of important developments in app law, mostly in the US. 2013 should continue to provide clarity in this growing area of law.

Apple and Samsung. The litigation that brought patent infringement back into the public consciousness like no case since RIM vs NTP may be resolved in 2013. Even Judge Koh has made a plea for “global peace.”

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US companies seeking to enforce intellectual property rights against Canadians face certain challenges. First, a US company would commence a lawsuit in a US court, and must serve the Canadian person or entity in Canada. A US plaintiff would serve a Canadian under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (known as the “Hague Convention”). Under this Convention, there is a Central Authority designated federally and for each province and territory. In Alberta, this is done through Alberta Justice, Office of the Sheriff (Civil Enforcement) in Edmonton or Calgary. The normal procedure for service in Canada is personal service, and in Alberta this is through a ”process server”. Once served, the Canadian then has to decide whether to respond to the US lawsuit.

In some case, the Canadian decides to ignore the US lawsuit. This happened in Blizzard v. Simpson, 2012 ONSC 4312 (CanLII), where Blizzard Entertainment sued Michael Simpson, a developer who was alleged to have authored and sold a “maphack” for Blizzard’s popular multiplayer game known as StarCraft II – Wings of Liberty. Mr. Simpson was served in Canada but failed to file any defence to the California lawsuit. As a result, Blizzard took default judgement in which Mr. Simpson was ordered to pay statutory damages of $150,000 legal fees and costs of $45,000. A permanent injunction was also ordered to prevent further infringement of Blizzard’s StarCraft II copyright or violation of the StarCraft II End User License Agreement (”EULA”) and Battle.net terms of use (”TOU”), among other things.

Blizzard then came to Canada to enforce their US judgement against Mr. Simpson. This required a second lawsuit (in Ontario, where Mr. Simpson resided). A Canadian court assesses the jurisdiction of the original court (by applying Canadian conflict of laws rules), and verifies that there are no defences of fraud, breach of natural justice, or public policy, which would cause the Canadian court to refuse to enforce the US judgement.

In this case, Mr. Simpson elected to defend the lawsuit in Canada. But by that time it was too late, since the court was not considering the merits of the copyright infringement case, but rather was reviewing the enforcement of a foreign judgement that had already been granted. Mr. Simpson attempted a novel defence by alleging that it was Blizzard who breached the terms of Mr. Simpson’s own website (terms that prohibited access by employees or lawyers of Blizzard). The court found this argument “untenable”, and concluded by entering the California judgement as a judgement of the Ontario court.

It is worth noting that defences to the copyright infringement claim may have been available in the California lawsuit - it is clear in both Canadian and US law that a breach of the terms of use does not (by itself) infringe copyright. It is not clear whether any copyright infringement actually occurred, but Blizzard won that argument by default.

Related Reading: Apps, Bots and Workarounds

Lessons for Canadian business: don’t ignore US lawsuits!

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Any well-drafted technology or patent license agreement will contain dispute resolution provisions that may cover a number of things: such as picking a governing law in case of disputes, mandating arbitration or other alternatives to litigation, or even picking the courts or “forum” in which disputes will be heard - known as a “forum selection clause”.

Canadian licensors should take note of the recent US decision in Mitek Systems, Inc. v. U.S. Services Automobile Association, in which the forum selection clause in a technology license chose Delaware as the applicable law, and any “court of competent jurisdiction sitting in the State of Delaware” as the forum in which lawsuits must be filed. Delaware was the home jurisdiction of the licensor, though it carried on business in California, and the licensee was based in Texas.

When a dispute arose, the licensee brought a claim first, in the State of Texas. The licensor filed a second lawsuit in Delaware, claiming that was the proper forum for disputes to be heard.

See this article from the Licensing Executives Society: A Forum-Selection Clause in a License Agreement May Not Necessarily Prevent a Litigation From Being Filed and Permitted to Proceed in a Different Court for a discussion of the decision. Essentially, the court decided that other factors were more important than the forum selection clause, and the case was allowed to proceed in Texas.

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We recently flagged the regulatory risks faced by app developers in Canada and the US. China also presents certain unique challenges for app developers (and Apple itself), as shown by these examples:

• The Encyclopedia of China Publishing House successfully sued Apple Inc for copyright infringement arising out of a Chinese encyclopedia app for iPhone and iPad. A court in Beijing reportedly ordered Apple to pay $80,250 in compensation to the publisher, whose work was allegedly copied by the app developer;
• Apple has also reportedly faced patent infringement allegations in China over its FaceTime app. A Taiwanese inventor claims that the app violates his patent rights in an earlier invention.
• Siri is not exactly an app, but recent complaints about Siri in China illustrate the public relations risks associated with apps in China. Concerns have been raised about Siri providing links to “prostitution places”…. as though a person couldn’t search and find offensive materials on a iPhone or iPad without the aid of Siri. Technology permits people to access all sorts of unsavoury sites online, but these complaints suggest that Siri should engage in some self-censorship to avoid offending users who ask it to search for offensive material.
• This recent article highlights the trade-mark issues for Windows 8 app developers whose popular Windows 7 app names are being reserved by others in China, forcing them to negotiate with the squatters or go through the lengthy process of obtaining registered trade-mark rights in China. Microsoft is reportedly working on a policy to address app name disputes.

The usual array of issues faces app developers in China - including potential trade-mark, copyright and patent disputes. App developers are advised to get advice if their apps are to be directed to the Chinese market.

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The case of Leuthold v. Canadian Broadcasting Corporation , 2012 FC 748 (CanLII) illustrates several common licensing pitfalls.

In this case, a photojournalist who was on the scene in New York City on September 11, 2001, licensed a number of still photographs to the CBC for use in a documentary about the 9/11 attacks.  The photos were included in 2 versions of the documentary, and the documentary was aired a number of times betwen 2002 and 2004. The question was whether all of the broadcasts were within the scope of the licenses granted by Leuthold as the copyright owner. More than one license was granted through various emails, faxes and license agreements between the parties.

Taking this case as a cautionary tale, here some of the common pitfalls to watch for:

• The specific works must be identified - which specific photos or copyright-protected works are included in the license?
• Who are the licensees? - in this case network affliliates did broadcast the works, and CBC was liable for the infringing broadcasts of these regional affiliates or stations.
• The scope of a broadcast license should be clear on whether the rights include one or more broadcasts, in one or more time-zones, and by one or more affiliates. In this case, there was considerable debate about whether CBC Newsworld was included in the license. The court decided that it was included, by looking at the surrounding circumstances, though the terms of the license were not entirely clear.
• The scope of any license should be clear on whether the license is exclusive or non-exclusive.
• Consider whether the license should state the geographic or territorial scope. In this case, the license referred to Canadian broadcast rights, but CBC Newsworld international also broadcasts into the US and internationally.
• Consider the impact of follow-up emails and correspondence which might be used as a de facto license, or to interpret the meaning of the license.

Ultimately, the court found that the CBC had infringed copyright in the photographs in six broadcasts which were not covered by the licenses. Damages of US$19,000 were awarded.

For copyright licenses, get advice from the Field Law Intellectual Property & Technology Group.

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As NHL cancellations are pushed through Nov. 30th, hockey fans must resort to other means of entertainment. Try patent cases.

In Easton Sports Canada Inc. v. Bauer Hockey Corp. , 2011 FCA 83 (CanLII), the court reviewed allegations that Easton infringed Bauer’s Patent No. 2302935 (the ‘953 Patent). The ‘953 Patent was originally granted on November 20, 2001 and expires on September 4, 2018. One of the issues on appeal was whether the invention was disclosed during on-ice tests of the prototype skate.

A patent is invalid if the invention was disclosed by the inventor more than one year before the filing date of the patent. In this case, Easton attacked the validity of the ‘593 Patent by arguing that Bauer revealed the invention at a test event - a hockey game between Bauer employees, where the prototype skates were worn. The test event was open to the public and Easton argued that a spectator could have observed the skates and made out the essential elements of the invention. At trial and on appeal, the court rejected this argument.  Although the skates could be observed, they were not available for close inspection or dismantling by spectators, and merely observing the players wearing the skates during a game did not, in this case, “disclose or enable” the invention.

Lessons for business?

• Dislcosure of your invention prior to filing a patent application can be fatal to patentability.
• Confidentiality agreements can be a useful tool to ensure that invention disclosure is not public - but these agreements should not be seen as a complete one-size-fits-all solution.
• Any testing of the product - particularly field testing in a location where the public may have access - must be handled very carefully.
• In Canada and the US, there is a 1-year grace period in which to file a patent application after the first disclosure, but that grace period is not available in all countries, and disclosure result in loss of patent rights in critical overseas markets.

Get advice from experienced patent counsel on patentability and the risks of early disclosure.

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Canadian app developers must take care to avoid sanction from regulators both in Canada and in other countries - particularly in the U.S. - when launching apps.

California’s Attorney General recently began notifying  dozens of app developers that they run afoul of the California Online Privacy Protection Act by failing to post their privacy policies. Developers were given 30 days to comply or face fines of up to $2,500 for each download of a non-compliant app. In Canada, federal and provincial privacy laws also mandate the disclosure of privacy policies and the use of a privacy officer, though the legislation is broadly applicable to the private sector and is not targetted specifically at mobile app developers.

Today the Washington Post ran a story about the FTC’s crack down on apps that make “flimsy” claims  about the health effects of certain apps which claim to cure various ills through cellphone sound, light from the screen, or phone vibrations. Some app developers have been hit with fines (see related article below). The FDA is reportedly preparing draft regulations to regulate health claims made in mobile apps.

In Canada, another app developer faced the ire of the CRTC  (the Canadian Radio-television and Telecommunications Commission, Canada’s telecommunications regulator). The CRTC’s objection to the TrapCall mobile app was apparently based on privacy concerns and the protection of subscriber data, though it is likely prompted by pressure from telecos. TrapCall circumvents the paid call-blocking products offered by telcos, and disrupts a revenue stream - after all, who will pay for call-blocking if ubiquitous mobile apps can unblock calls? But it reflects a wider issue regarding technological innovation in the mobile app space that is colliding with established industry practices and (at times) an outdated regulatory environment.

Lessons for app developers?

• We’ve said it before: Get advice on privacy before you launch your app.
• Ensure that your claims do not offend regulatory requirements in the countries where your customers reside - whether the requirements are health related, safety regulations, or other advertising /marketing regulations.
• Well-drafted end-user license agreements (EULAs), privacy policies or terms of use can assist in mitigating risk in this area.

Related Reading: When an iPhone App Makes False Claims

Update: Dec. 3: This is another example of regulatory problems, this time for Uber, a popular, well-financed taxi-summoning app.

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In June, the Copyright Modernization Act was passed by Parliament. However, it did not have the force of law yet (See: Copyright Bill Becomes Law). Today, portions of the new copyright law came into force (See: this link). This phased approach is somewhat confusing. The provisions relating to format-shifting, time-shifting, satire, parody - essentially all the provisions directed at education and consumers - are in force.

Those sections dealing with ISPs and the notice-and-notice procedures (subsection 47 [41.25, 41.26, and 41.27(3)]), will be determined through a separate order-in-council process once the regulations are finalized. The provisions which implement certain WIPO treaties (World Intellectual Property Organization Copyright Treaty (WCT) and the World Intellectual Property Organization Performances and Phonograms Treaty (WPPT) are held back, and will come into effect when the treaties are ratified.

I will be speaking tomorrow to the Canadian Bar Association, Technology & IP Subsection, on the subject of copyright updates, and will be reviewing these provisions.

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Copying and selling counterfeit software can be a risky proposition if Microsoft, Adobe and Rosetta Stone team up against you.

A Toronto man sold pirated software on Kijiji and Craigslist and three software vendors combined forces to sue him for copyright infringement by way of summary judgment, a truncated procedure that avoids the need for a full trial. Last month, the Canadian Federal Court found that the man’s conduct was “on the negative side” of “outrageous” and “highly unreasonable”. This conduct added $105,000 to the overall damage award of $445,000 for copyright infringement, made up of statutory damages, punitive damages, costs, plus pre- and post-judgment interest. A few interesting points about this decision:

1. Statutory damages under the Copyright Act range from $500 to $20,000. Here, the judge awarded maximum statutory damages of $20,000 per infringed work.
2. The court reviewed when punitive damages are appropriate: “when a party’s conduct has been malicious, oppressive and high-handed, offends the court’s sense of decency, and represents a marked departure from ordinary standards of decent behaviour”. In this case, the court was convinced that a significant punitive damage award was warranted.

The case is: Adobe Systems Inc. et al v. Dale Thompson dba Appletree Solutions 2012 FC 1219.

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Not so fast. In 1999, the CEO of Sun Microsystems famously said: ”You have zero privacy anyway. Get over it.”  The Supreme Court of Canada apparently disagrees.

The Supreme Court of Canada (SCC) released their decision in R. v. Cole last week. While this does stray from our usual review of intellectual property law, it is an important decision impacting the overlapping areas of privacy and technology. The SCC has decided that it’s reasonable for Canadians to expect privacy in the information contained on computers used for personal purposes “at least where personal use is permitted or reasonably expected.” In this analysis, ownership of the computer or laptop (or tablet, smartphone, etc.) factors into the decision of what’s reasonable, but is not conclusive. Similarly, an employer’s policies may be taken into consideration, but won’t be determinative. In other words, regardless of who owns the hardware or what the policy says, courts will consider “the totality of the circumstances in order to determine whether privacy is a reasonable expectation in the particular situation.”

Even where the laptop is owned by the employer and the workplace policy informs employees that their use will be monitored - these factors may result in a lower expectation of privacy but the expectation of privacy, according to the SCC, does not disappear as easily as you might think.

Lessons for business? Employers must tread carefully and get advice when monitoring or accessing the personal information of employees on workplace computers, laptops, tablets, smartphones and virtual systems.

Related Reading: Our earlier post: Privacy in a workplace laptop, reviewing the Ontario Court of Appeal decision in R. v. Cole, 2011 ONCA 218.

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“Great Fun” is a service offered by a company called Trilegiant. Trilegiant offers certain discounts to Great Fun members based on a monthly membership fee. Problem is, some members didn’t realize they were members until they saw the membership fee on their credit card statement. In Schnabel v. Trilegiant Corporation & Affinion, Inc. , Court of Appeals, 2nd Circuit (September 2012), the court considered whether terms could be considered enforceable if the terms were sent by email after the formation of the online contract.

In this case, there were online terms in the sign-up page, but for a variety of reasons, Trilegiant couldn’t rely on these terms, and was obliged to argue that the emailed terms were binding. Trilegiant asserted that the members assented to an arbitration clause by signing up, and receiving the emailed terms at a later date, and then failing to cancel their membership during the “free trial period”. The Second Ciruit Court of Appeals took a dim view of this approach. In the U.S., a consumer may receive “actual notice” of the online terms, or “inquiry notice”. “Inquiry notice” occurs when the consumer has actual notice of circumstances where a prudent person would be on guard to the existence of terms. It’s a stretch, but can still result in enforceable terms. The court concluded that neither “actual notice” nor “inquiry notice” were provided by means of the emailed terms. The court concluded:

“We do not think that an unsolicited email from an online consumer business puts recipients on inquiry notice of the terms enclosed in that email and those terms’ relationship to a service in which the recipients had already enrolled, and that a failure to act affirmatively to cancel the membership will, alone, constitute assent.”

Lessons for business? Get advice on your online terms and sign-up process for any online contracting: including cloud-computing contracts, software-as-a-service, online products sales, license agreements and terms-of-use.

Related Reading:

• Facebook App: Dispute Resolution Terms Upheld

• Changing Online Terms Midstream

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The Medium is a publication discussing current intellectual property and technology issues. This edition includes: Apple vs. Samsung: Intellectual Property Injunctions as a Strategic Tool, as well as “New Copyright Act (The Top 10 List)“.

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You may recall the announcement that new domains are coming - everything from .AAA to .ZULU. These proposed domains  are inching their way through the ICANN process. We have been monitoring the implementation of new gTLDs and note that the period for filing formal objections against a newly applied-for gTLD began on June 13, 2012 and is scheduled to run until January 2013. If you are interested in filing an objection against a proposed new top-level domain, you should contact trade-mark counsel right away.

Comments are also being solicited on the draft version of the Trademark Clearinghouse Requirements.

See: Reveal Day for New Top-Level-Domains

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In our earlier post - Patents in the Field (Part 1) - we reviewed the topic of patent exhaustion in a patent infringement case in which Monsanto sued a farmer who was collecting and replanting seed that contained Monsanto’s patented genetically-modified genes.

In Bowman v. Monsanto Company the US Supreme Court has decided to hear the appeal of the 2011 decision. In the earlier decision of the Federal Circuit Court of Appeals, 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 Federal Circuit appeals court rejected this defence, reasoning that by planting the commodity seeds containing the “Roundup Ready” patented technology, the farmer 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.

The US Supreme Court case of Bowman v. Monsanto will be closely watched and the final decision could be a milestone case in the area of self-replicating technologies and intellectual property in the agricultural industry.

Related Reading:

• Intellectual Property and Agriculture
• Infringement of a Patent on Higher Life Form

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When is an idea protectable? This question is front-and-centre for many entrepreneurs. When can they discuss their business idea, invention, or brilliant screenplay?

This story relates to the protectability of ideas under the law of copyright. Basically, there is no protection under copyright law for an idea itself, only the particular form and expression of that idea. This was illustrated last week in Elijah Schkeiban v. James Cameron et al (Case No. 2:12-cv-00636, California Central District Court), where the plaintiff claimed that Mr. Cameron’s blockbuster Avatar film infringed copyright in Elijah Schkeiban’s screenplay entitled “Bats and Butterflies”.  In this case, the plaintiff alleged that certain character traits and plot elements were copied by Cameron. These broad elements of a story - good guys vs. bad guys, or flawed protagonists - are precisely the things that are not protectable. The case was dismissed.

It is important to note that courts will review elements of expression such as plot, themes, dialogue, mood, settings and characters, to determine if infringement occurs.

Compare this to earlier decisions that we reviewed here: (Copyright: Apps and APIs; Tetris Holding LLC v. Xio Interactive, Inc.) in which the court decided that the look-alike game Mino did infringe the protectable “look and feel” of Tetris; also see Dath v. Sony Computer Entertainment America Inc., where the US Ninth Circuit Court of Appeals upheld the lower-court decision in a copyright infringement case involving the Sony PS2 and PSP title “God of War”. The plaintiffs alleged that Sony infringed copyright in their written works about war between Sparta and Athens. No infringement was found in that case. (Reviewed in App Law Round-Up.)

Want to know who James Cameron really copied? Go see Fern Gully.

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For our readers in (beautiful) Western Canada, forget about those supposedly “sexy” global smartphone wars - this case is a battle of the brands, Canadian style. A hardware store versus a drug store.

The case of Home Hardware Stores Limited v. London Drugs Limited, 2012 TMOB 107 (CanLII) pits competing brands that use the generic term “HOME”. Some of our readers may not recognize the London Drugs brand, which is a Western Canadian chain of stores that sell a little bit of everything, from housewares to computers along with a pharmacy. Home Hardware, of course is a national chain of hardware stores. When London Drugs applied to register its LONDON HOME trade-mark (at right), Home Hardware opposed, citing its “family” of several dozen HOME marks, including the HOME design (at left), and such marks as HOME WARES, HELP IS CLOSE TO HOME and ALL ROADS LEAD TO HOME. There was certainly overlap in the list of wares, and both are sold through retail channels to similar consumers.

The test for confusion in Canada is one of “first impression and imperfect recollection.” In Canada, one trade-mark causes confusion with another trade-mark if the use of both marks in the same area would lead a consumer to believe that the products associated with those trade-marks are made or sold by the same company. The test for confusion requires an analysis of “all the surrounding circumstances” including:

• the inherent distinctiveness of the trade-marks and the extent to which they have become known;
• the length of time each mark has been in use;
• the nature of the products or business;
• the nature of the trade; and
• the degree of resemblance between the trade-marks in appearance or sound or in the ideas suggested by them.

After looking at these factors, and the fact that are at least 50 other Canadian trade-mark registrations incorporating the word HOME as the dominant element for similar products, the court concluded that consumers are accustomed to seeing multiple HOME trade-marks in association with the these types of products. Therefore, confusion between the two marks was considered unlikely and the opposition was dismissed. London Drugs prevailed in this battle.

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In a Facebook app called “SuperPoke! Pets”, players adopted virtual pets and acquired or purchased virtual currency to buy things for their virtual pets. As one of the first Facebook apps, the game took off in popularity after its launch in 2008. The game was acquired by Google in 2010, but was eventually discontinued at the end of 2011, leaving users without access to their accumulated virtual pets, currency and pet accessories. Users attempted a class-action suit against Google for “elimination of users’ money, goods and property.”

Google defended the class action by citing the dispute resolution clause, which compelled arbitration. In Abreu v. Slide, Inc., 12 0042 WHA (N.D. Cal.; July 12, 2012), the court confirmed that for an arbitration clause to be unenforceable, it must be both “procedurally” and “substantively” unconscionable. Essentially this means that an unenforceable clause would be oppressive due to unequal bargaining power between the parties, or would lead to “overly harsh or one-sided results.” As the court phrased it, the clause must be so one-sided as to “shock the conscience.”

In this case, the clause was upheld, and the dispute was sent to arbitration to be resolved.

Lessons for business?

• When drafting online terms, ensure you get advice on the dispute resolution options.
• An app developer or game publisher may be tempted to stack the “Terms of Use” in their favour, but these terms must be balanced. The inclusion of harsh or shocking terms in the fine-print may put the entire agreement at risk of being declared invalid and unenforceable by the courts.

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Can a prior disclosure of an invention be fatal to a patent? And if so, what constitutes “disclosure” of the invention.

One of the central pillars of patentability is “novelty” - the invention must be new, the first of its kind in the world. If it’s not new, the patent application will fail or (if discovered after the patent has issued) the patent itself can be invalidated. Wenzel Downhole Tools Ltd. v. National-Oilwell Canada Ltd., 2011 FC 1323 (CanLII) is an interesting judgement dealing with a device that was manufactured and rented to a third party for use in drilling an oil well in Texas prior to the relevant date of the Canadian patent. This earlier device invalidated the patent, since it constituted an “enabling disclosure” of the invention more than 12 months prior to filing of the patent application. In this case, to prove when the earlier device was invented and disclosed, an expert was called in to examine the metadata for the design drawings, to verify when the drawings were created.

The business lessons?

• Remember that a prior disclosure of an invention can be fatal to a patent. For the purposes of patent law, a “disclosure” of the invention can be as simple as using the invention or a prototype for a customer. For example, putting a single device into the hands of a customer without restrictions or confidentiality obligations has been held to constitute prior use which invalidated the patent.
• Experimental use of the invention may be permitted in certain circumstances. True experimentation will not be considered a “disclosure” for these purposes. However, a use will only be experimental if it is so in the mind of the user.
• If disclosure of the patented device was made on a confidential basis, it will not be considered a “disclosure” for these purposes, if handled properly. Therefore, confidentiality (and a properly drafted non-disclosure agreement) is critical.

Related Event: Interested in learning more? Join us on September 26, 2012 - Field Law is hosting a meeting of The Licensing Executives Society  (Calgary Chapter) on the topic of: The Perils of Disclosure: Invention Disclosure and Patent Grace Periods presented by Roseann Caldwell, Bennett Jones LLP. See link for details and registration.

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