IP Osgoode 2011: A Transformative Year for Intellectual Property and Technology

Pauline Wong is the Assistant Director of IP Osgoode. Mekhala Chaubal is a JD candidate at Osgoode Hall Law School.

2011 will be remembered as a year of social movements and political upheavals in many parts of the world. This trend of transformation and development extended to Canadian and international intellectual property law. As a tribute to 2011, here are some of the most important intellectual property issues that IPOsgoode covered in the past year.

Business Methods Patents and the Amazon.com Appeal: The ongoing saga regarding the patentability of Amazon.com’s ‘1-click’ shopping method in Canada was the subject of much debate in 2011. The Federal Court of Appeal (FCA) finally released its decision in November 2011, directing the application back to the Commissioner of Patents, mandating that it be re-examined according to its articulation of the test for patentability, and highlighting that the scientific or technological requirement was subjective and not determinative in granting a patent. The Canadian Patent Office has now allowed the Amazon.com ‘one-click’ patent application. It remains to be seen if an appeal of the FCA decision will reach the Supreme Court of Canada (SCC) in 2012 or beyond.

Across the pond, the European Patent Office (EPO) did not have any trouble finding that the 1-click system was too obvious to be patentable. It ruled that using cookies to simplify the online shopping process neither filled a much-needed void in internet inventions, nor created something new and unobvious to a person skilled in the art of cookie technology. In response to this confusion, the CIPO issued new guidelines for its patent examiners in August 2011, broadening the scope of the term ‘actual invention’, while emphasizing that the categories of patentable subject-matter were to be strictly adhered to. By September, speculation was rife whether the Canadian court would allow itself to be influenced by the EPO and the interesting US decision of Cybersource Corporation v. Retail Decisions Inc., both of which ultimately denied patentability to business methods, for varying reasons.

Patenting of Genes: Both the US and the UK handed out important decisions regarding the patentability of genes in 2011, possibly changing the criteria of what has long been considered non-patentable subject matter. In the Association for Molecular Pathology v. Myriad Genetics, the Court of Appeals for the Federal Circuit decided that two human gene patents that were used as detectors for breast cancer in women were patentable, since these had been isolated and were, hence, ‘markedly different’ from naturally existing DNA. In Human Genome Sciences Inc v. Eli Lilly & Co., the UK Supreme Court (UKSC) extended the industrial applicability requirement to genes and, by extension, to biological material. By doing so, the UK’s stance on gene patenting was brought more in line with that of Europe and the US. If the Canadian courts have a chance to rule on a similar decision soon, it will be interesting to see which jurisdiction, if any at all, will be more influential on them.

Masterpiece Trade-mark Decision by SCC: In May, the SCC released its decision in Masterpiece Inc. v. Alavida Lifestyles Inc. and clarified important legal principles concerning the interrelationship in Canada between common law trade-mark rights and those rights which flow from registration. The Court held that the Canadian Trade-marks Act gives priority to trade-marks based upon first use, not first registration. The Court also held that the registration system grants national monopolies regardless of the geographic scope of the registrant’s operations. In contrast, common law passing off requires proof of a protectable reputation in the same geographic area as the impugned user. The Act altered the common law by requiring a confusion analysis for registered marks with the hypothetical assumption that both marks are used in the same geographic area.

Target Trade-mark Disputes: The legal battle between Target Corporation of the US and Target Apparel of Canada reached a head in 2011, leading to what might best be considered an insufficient compromise for Target Corporation, but one that shows the tendency of Canadian courts to use injunctions sparingly. Target Apparel’s marketing of its clothing using colours, words and symbols that are similar to the American retailer’s, and the subsequent impact this would have on Target Corporation’s reputation, goodwill, and brand once it opens Canadian stores in 2013 were the major points at issue in the case. In dismissing the request for an injunction, the Canadian court’s decision affirmed that the similar branding styles between the two parties could indeed create confusion for consumers, but added that any similarity between the two ended there. Only time will tell if both Targets will be able to coexist in reality, but in the mind of the court, it seems that they definitely will.

Domain Name Developments: 2011 saw three significant changes to the existing policies of the award and management of online domain names in Canada

The Canadian Internet Registration Authority’s (CIRA) domain dispute rules were modified, with a focus on streamlining the policy to eliminate the previously broad test for confusion to a “narrow resemblance” test. Further, a “bad faith factor” was added to help determine whether a domain name is for commercial gain. Finally, the new policy did away with the old requirement for the establishment of a generic domain name before the establishment of a legitimate interest. The aim of these refinements was to ensure ease of process and consistency with the other policies that control domain names in Canadian law.

In August, the Ontario Court of Appeal (OCA) ruled in Tucows v. Renner that domain names could be considered personal property in certain instances. Using the fact that the Ontario Rules of Civil Procedure did not have a specific definition of ‘personal property,’ and building on previous decisions, the OCA held that the “possession and control over a domain name gave an individual rights sufficiently similar to the rights considered to define a property interest at common law,” in addition to considering intangible property as disputable subject matter.

Another fascinating development was the Internet Corporation for Assigned Names and Number’s (ICANN) decision to open up the field of gTLD domain names, by allowing the registration of any word, branded or otherwise. ICANN cited as the chief reason for this move its desire to “unleash innovation and global creativity, which could be restricted by scarcity of domain names and a lack of competition and opportunities,” but critics have argued against its necessity, usefulness, pricing and efficiency. The new system has just come into effect in January 2012.

Hyper-linking and Defamation: In October, the SCC handed down a significant decision in Crookes v. Newton freeing hyper-linkers from defamation liability. The decision was a novel twist from the rules of third-party publication in libel law, and the SCC has been hailed for considering the importance of bringing traditional law up to speed with internet technology. The IPilogue was pleased to publish analysis and commentary from both counsel for the plaintiff and counsel for the respondent.

Historic Copyright Hearings at the SCC: In December, the SCC signed off 2011 in style by hearing 5 key cases on appeal from the Copyright Board of Canada and thereby providing plenty of fodder for thought, debate and discussion over the holiday season. IPOsgoode published first-hand accounts of the proceedings.

The arguments in two of the cases, Rogers v. SOCAN and ESA v. SOCAN, related to the elimination of royalty payments for online music downloads. At issue was whether such activities involved a “communication to the public”. Rogers, for example, submitted that each download was made on a one-on-one basis and, hence, could not be deemed as ‘to the public,’ while ESA focused on the inherently public nature of ‘communication,’ in that it is fundamentally performance-based.

In SOCAN v. Bell, the issue was whether the 30-second previews offered by the Apple iTunes Store constituted fair dealing and whether Apple should be subjected to royalty payments for their use.

Alberta v. Access Copyright dealt with the question of applying a tariff to teacher-initiated copyright in secondary education institutions in Alberta. Both sides referred to the SCC’s decision in CCH Canadian Ltd. (2004), with the appellants characterizing the student’s purpose, along with viewing the teacher as the ‘driver of copying’ at the core of the argument. The respondents distinguished the facts of the two cases.

Finally, in Re: Sound, the appellants argued for the application of a tariff on music played in movies and television, by considering neighbouring rights under the Canadian Copyright Act consistently with the Rome Convention. The respondents on the other hand, denied that the Convention allowed for the application of tariffs, preferring instead to stick to the ‘plain meaning’ of the Act.

Social Media, Privacy Concerns and Access to the Internet: Facebook’s privacy policy, ever a controversial issue, came under fire again in 2011, with its decision to allow third-party developers access to users’ personal information being regarded in direct violation of Canada’s PIPEDA and, more importantly, the integrity and trust users placed in the social media website. Such concerns continued after Facebook’s new privacy policy was unveiled, with workplace firings (as an example) due to the exposure of comments on the site being attributed to access provided by third parties. A further issue also involved cyber-bullying, and where the limits between what constituted alleged criminal harassment and freedom of expression could be drawn.

In June, the United Nations’ declaration that internet access was a fundamental human right served to bring newer forms of communication within the mantle of existing laws, but did not give much direction on how such a right could be protected and fostered.

Super-Injunctions, Personality Rights and Privacy: In 2011, we also saw an increased granting of super-injunctions by the UK courts and the efforts made to counter them. Lord Neuberger’s recommendations against their excessive application to prevent journalists and the media from utilizing and publishing information on famous personalities showed that they posed a threat to open justice and the freedoms of information and expression. While public figures themselves were divided as to their perceptions and necessity, the consensus was that they were a blunt, if useful, form of privacy protection. By June, the ills of the over-application of super-injunctions were becoming obvious, with efforts being made to reverse their impact through non-formal means in the UK legislature.

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