It’s playoff season in Canada, and some hockey fans cheer when the players brawl. The good folks at UFC have simplified things by doing away with the hockey and all the other distractions, and just giving the fans what they want: big guys hitting each other. 

A Kelowna, BC, man registered the domain name ULTIMATEFIGHTINGCHAMPIONSHIPS.CA and seven other variations using the .US, .INFO and .BIZ extensions.  Zuffa LLC, the company that owns the UFC trade-marks, approached the registrant with an offer to settle. When the man refused, Zuffa filed a complaint under the CDRP - the dot-ca dispute resolution procedure. In the recent decision in Zuffa LLC v David Bruce [PDF], the panelist had to decide if the domain name had been registered “in bad faith” which is typically one of the more difficult elements to prove. 

In this case, the registrant had admitted in email correspondence with Zuffa that he hoped to make a great deal of money from the registrations, that he was well aware of the UFC brand, and he had registered other offending domain names. The panelist had no trouble concluding that this qualified as “bad faith”.  The domain name was ordered transferred to the trade-mark owner.  That’s one down, seven to go. 

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Quick, which is Apple’s iPhone and which one is the Samsung Galaxy phone?In a recent lawsuit Apple Inc. v. Samsung Electronics Co. Ltd., (11-1846 U.S. District Court, ND Cal.) Apple complains that Samsung’s line of Galaxy phones and tablets infringes the “look-and-feel” of the Apple iPhone and iPad. Besides patent and trade-mark infringement, this is an interesting trade-dress infringement claim, which alleges that Apple owns rights in the way their phones and tablets appear - the screen layout, product design elements, user interface, the appearance of icons and packaging. Can this kind of intellectual property be protected?

In Canada, the law will protect “trade dress” that distinguishes the product - such as colour schemes, signage, the layout of packaging and product design.  Industrial design law can also protect the ornamental (non-functional) elements of a product including product shape and size. In Eli Lilly and Co. v. Novopharm Ltd., [2001] 2 F.C. 502, a drug-maker complained that the distinctive shape, size and colour of its drug (in this case, Prozac) was being unfairly copied by generic competitors. This leads to a claim for “passing off” - where the knock-off product is passed off as the genuine original by copying the distinctive trade-dress of the original.

The three necessary components of a passing-off action are:

1. the distinctive trade-dress must have a reputation in the mind of consumers;
2. misrepresentation and deception that leads consumers to believe that the knock-offs are actually the genuine original; and
3. actual or potential damage to the original brand owner.

Apple’s recent lawsuit is one more battleground in the fierce war for consumers in the highly competitive mobile computing marketplace.

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There seems to be a run on litigation by co-founders of Facebook. So if you’re one of them, get in line. As John F. Kennedy observed “Victory has a thousand fathers, but defeat is an orphan.” The many technology business ventures that have died and withered away had parents who are now too busy with other things to dig through seven-year old emails or back-of-napkin agreements. However, for the Facebooks of the world, there will always be co-founders to contend with. 

Made famous in the popular movie The Social Network, the Winklevoss brothers recently settled (or were told to accept settlement for) their “zombie lawsuit” against Facebook for roughly $65 million. Eduardo Saverin settled his own claim. Next in line is Paul Ceglia, a man who recently stunned observers when he retained a high-powered law firm, refiled his claim for 50% of Facebook and produced evidence - including seven-year old emails and a back-of-napkin agreement - to support the allegations.  In the lawsuit Ceglia claims that, under a 2003 contract between him and Mark Zuckerberg, he owns at least 50% and up to 84% of Facebook. Facebook was founded in 2004 and now has a market capitalization of $50 billion+ and more than half a billion active users. [See: Ceglia v. Zuckerberg and Facebook, Inc., No. 10-CV-569A, United States District Court, W.D. New York, in which Facebook won a preliminary skirmish over jurisdiction.]  The lessons for business?

• The term “get it in writing” can cut both ways. A written contract can breathe life into an otherwise unlikely claim such as Mr. Ceglia’s. Depending on its content, it can also protect a start-up company when intellectual property ownership claims come out of the woodwork. Start-up technology companies should ensure their critical intellectual property does not become encumbered with early-stage promises about joint ownership or perpetual revenue sharing.
• The “paper trail” should be analyzed and cleared in the course of various early-stage investments and transactions. When an early-stage company is an acquisition target, or it receives a substantial investment, it is common for all of these ownership issues to be flushed out and addressed in the course of the transaction.

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Two decisions just in time for spring cleaning and barbeque season. 

• Someone tried to trade-mark the term PEAMEAL BACON BACON for peameal-style bacon. A competitor, D & S Meat Products Ltd., opposed that application. The application disclaimed the right to the words “PEAMEAL BACON” and “BACON” (leaving open the question of what’s left to be protected). In making its argument to the Trade-Marks Opposition Board (TMOB), the applicant used the PIZZA PIZZA argument - namely, that the repetition of the word BACON qualified as a “unique linguistic construction” that consumers would recognize as a brand. In the famous decision of Pizza Pizza Ltd. v. Registrar of Trade Marks (1992), 67 C.P.R. (2d) 202 (F.C.T.D.) (famous for trade-mark agents, that is) the court allowed the mark PIZZA PIZZA for pizza, but that case was based on about 10 years of use of the mark in which time the owner created a “distinguishable identity” in the marketplace. The mere use of repetition cannot, on its own, defeat a claim that a mark is clearly descriptive. Decision: D & S Meat Products Ltd. v. Peameal Bacon of Canada Ltd.

• The second case opens up the competitive world of garage-door openers. The TMOB originally decided that there was no likelihood of confusion between an existing brand LIFTMASTER and newcomer LYNXMASTER, both for garage door openers. The court reviewed this decision and pointed out that the marks should be considered in their totality, without dissecting the marks and considering the word LIFT with LYNX in the absence of the rest of the trade-marks. The court decided that the two marks would be confusing with each other, and denied the application for registration of the LYNXMASTER marks. Decision: The Chamberlain Group, Inc. v. Links Industries Inc. 2010 F.C. 1287

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As a follow-up to our earlier post (To hack or not to hack…), here’s a reason NOT to hack. Evony LLC, a maker of multi-player online games, has successfully sued Philip Holland, a “botter” who had developed a task automator for one of Evony’s games. By circumventing the copy protection measures in one of Evony’s titles, Mr. Holland developed a bot that automatically completed tasks and effectively played the game for players.

In Evony, LLC v. Holland, Dist. Court, WD Pennsylvania 2011  the company obtained a permanent injunction, an order for impoundment and destruction of copies of the game and bots, as well as damages of $300,000, plus lawyers’ fees, costs and interest.  The judgement came so swiftly (they only filed their claim in January 2011) because Mr. Holland failed to file a defence. The case was based, in part, on breach of Evony’s Terms of Use.

Related Reading: our post on a World of Warcraft botter: Apps, Bots and Workarounds - Part 1

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For Canadians who are following the copyright reform story, here are are a few updates:

• Bill C-32 (the hotly debated proposal for amendments to the Copyright Act) has now died on the vine. When the government was defeated and Parliament was dissolved, all pending legislation fell off the order paper, including Bill C-32. The next Parliament is likely to take this issue up, but the timing and approach will depend on who forms government. 
• While legislative reform idles, the Supreme Court of Canada (SCC) is carrying on.  The SCC has agreed to hear several major cases that will impact copyright law in Canada.
• First the appeal in Entertainment Software Association (ESAC) et al. v. Society of Composers and Authors and Music Publishers of Canada (SOCAN) will address the use of music in video games. SOCAN (the organization responsible for collecting copyright royalties) asserts that royalties should apply to video games that incorporate copyright-protected music
• Another SOCAN case is Rogers Communications Inc. v. SOCAN, and will also deal with royalties applicable to online music sales. 
• A third SOCAN case (SOCAN v. Bell Canada ) will also be heard, dealing with the interpretation of the word “research” and whether 30-second song previews qualify as “fair dealing” for the purpose of the research and private study exception under the Copyright Act.

Related Event: Copyright Reform is Dead…. Long Live Copyright Reform!! For details and registration, please see the invitation.

Photo Credit: Renjith Krishnan

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