IP issues when working with contractor or on contract

Companies engage with contractors/consultants all the time to perform services or carry out engagements. It is therefore important for both companies and contractors/consultants to understand the IP issues around these engagements.

From the company perspective, the company should ensure that it retains ownership and control of all IP developed during the engagement. If the consultant/contractor is a company, then the services or engagement agreement should specify that the consultant/contractor is responsible for ensuring that each of the consultant/contractor’s employees performing work on the project has either agreed or agrees in writing to assign all IP rights. The company will then have a cause of action against the consultant/contractor if it fails to obtain the assignments.

Express language should be included in the services/engagement agreement as evidence of contractor/consultant agreement that it will not retain any rights in the developed IP. For example, if a company hires a contractor/consultant to develop a logo or website, the contractor/consultant will own any copyrights to the logo or website unless those rights are expressly transferred to the company in writing. In addition, moral rights such as the right of integrity of work and the right to attribution also attach to the copyrighted works. These moral rights may prevent the company from modifying the logo or website after the fact. To avoid issues, the company should secure IP assignments from consultants/contractors that address these issues and ask the consultants/contractors to waive their moral rights. The service/engagement agreement should also require the consultant/contractor to: Identify any sub-contractors used and obtain assignment and waiver of all IP rights from all sub-contractors used.

From the point of view of the contractor/consultant, the contractor/consultant should look to retain ownership of any pre-existing or background IP that it is likely to utilize to perform the engagement. This can be achieved by:

  • Clearly defining the consultant/contractor’s pre-existing IP that is likely to be used in performing the services within the services or engagement agreement.
  • Notifying the company if pre-existing IP is incorporated into the IP developed in the course of the engagement.

If the pre-existing IP is further developed during the engagement, and the consultant/contractor wishes to practice the developed IP, then the consultant/contractor should look to obtain a license to ensure that the consultant/contractor has freedom to practise the developed IP. Ideally, the service agreement should grant a license to the consultant/contractor to allow use of IP developed during the course of the engagement.

During the term of the engagement, the consultant/contractor may independently develop IP that is not related to the scope of work under the agreement. Then the consultant/contractor that develops the IP will retain the ownership rights in the IP and the service agreement will typically exclude such IP from any grant of rights to the other party.

In most cases, the company will retain ownership of all IP developed during the engagement, and the service agreement usually requires that the contractor/consultant takes every possible effort to ensure proper assignment of all IP rights to the company. If the contractor/consultant is a company with employees, then the contractor/consultant should ensure that each of its employees working on the project agrees in writing to assign all IP rights. This may include, for example, ensuring that all documents necessary for such assignments be executed by its employees.

If the consultant/contractor works with a sub-contractor during the course of the engagement, then the sub-contracting agreement should clearly specify that all IP developed during the course of the engagement will be assigned to the consultant/contractor. Furthermore, there should also be language to require the sub-contractor to identify any further sub-contractors used. The subcontractor should also agree in writing to obtain assignment and waiver of all IP rights from all further sub-contractors used.

Author: Ramesh Rajaduray & Margot Davis

Please note this piece does not constitute legal advice.

 

A Potential Canada-Wide Orphan Drug Policy? Why Canada Should Implement This and What It Should Include.

The federal election is around the corner. Political parties are campaigning and making new promises. With this in mind, the Liberal Party, today, promised to implement an orphan drug policy if re-elected. Canada is currently one of the few developed jurisdictions without a nation-wide orphan drug strategy. Below, this piece will discuss why Canada should adopt a national orphan drug policy and what it should include.

Firstly, one needs to define what is an orphan drug. Orphan drugs are drugs that treat rare diseases. Rare diseases are disease or conditions that affect small amounts of the population. Exact definitions differ jurisdiction to jurisdiction. For example, the European Union requires that a disease must have a prevalence rate of less than 5 per 10 000 people or it be particularly “debilitating” to be classified as “rare”.[1]

Despite being called “rare diseases”, their impact is significant. If all the people who had rare diseases lived in one country, it would be the third most populous nation in the world.[2] Rare diseases often strongly affect the family and caregivers of individuals with such conditions.[3] Therefore, it is vital to help individuals with such rare diseases.

While it is important to help such people, unfortunately pharmaceutical companies might not find it economically viable to produce orphan drugs. Orphan drugs are meant for a small segment of the market. The production of orphan drugs needs to be encouraged. This is why sui-generis orphan drug legislation is important.  For example, after the USA introduced the 1983 Orphan Drug Act, which provided tax credits for testing orphan drugs, grants for producing said drugs and afforded seven years exclusivity for such drugs, the FDA approved more than three hundred orphan drug applications.[4] In contrast, it approved ten orphan drug applications from 1973 to 1983.[5]

Related to how federal orphan drug policies have been associated with an increase in orphan drug applications, a lack of a national orphan drug strategy has led to comparative disadvantages for Canadians with rare diseases.  Compared to EU citizens, Americans or Japanese citizens, Canadians wait six years longer for orphan drugs and only sixty percent of orphan drugs make it into Canada.[6] Therefore, it crucial to have a Canada-wide orphan drug strategy. It could remedy this situation.

While Canada is a relative latecomer to adopting a federal orphan drug policy, that provides an unique benefit. Canada can avoid the mistakes of other jurisdictions.  For example, Canada can implement exclusivity periods that are contingent upon “fair pricing”.[7] Due to the quasi-monopoly status of exclusivity, some corporations charge excessive prices for orphan drugs.[8] Various activists argue that only permitting exclusivity periods if a corporation promises to ensure prices are fair is a potential antidote to this problem.[9]

Similarly, Canada can also avoid prevalence-based definitions of “rare diseases”. Researchers note that some orphan drug treatments are profitable and can cost anywhere from $100 000 to $200 000. [10]  The public might not be happy subsidizing the cost of profitable drugs which could result in general hostility towards the entire program.  Additionally, prevalence-based definitions have led to “salami slicing” where corporations down an entire drug market into “smaller components” by setting specific parameters.[11] This permits drugs that treat relatively common diseases to qualify for the advantages afforded to orphan drugs and again this could annoy some.[12] A possible alternative to prevalence-based definitions are “disease pathways”-rooted definitions.[13]

To conclude, all Canadians and political parties should get behind an orphan drug policy. Our framework could be evidence-based incorporating what works and avoiding what does not.  As a country we owe it to our fellow Canadians with rare diseases.

Author: Margot Mary Davis

This piece does not constitute legal advice.

References

[1]Commission Regulation (EC) 847/2000 of 27 April 2000 laying down the provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product and definitions of the concepts ‘similar medicinal product’ and ‘clinical superiority’, [2000] OJ, L 103/5 at 2(1)(a) [Commission Regulation (EC) 847/2000].

[2] Medunik Canada Inc, “What is a Rare Disease?” (2016), Medunik Canada Inc (website), online:< https://www.medunikcanada.com/en/rare-diseases-community/what-is-a-rare-disease> [Medunik Canada Inc.].

[3] Ibid.

[4] An Act to amend the Federal Food, Drug, and Cosmetic Act to facilitate the development of drugs for rare diseases and conditions, and for other purposes, 96 Stat ⸹ 2049 at 1(b)(1) (1983) [Orphan Drug Act]; Enrique Seoane-Vazquez et al, “Incentives for Orphan Drug Research and Development in the United States”(2008) 3:33 Orphanet Journal of Rare Diseases 1 [Enrique Seoane-Vazquez et al].

[5] Enrique Seoane-Vazquez et al, ibid.

[6] Medunik Canada Inc., supra note 2.

[7] Eve Roberts, Matthew Herder, & Aidan Hollis, “Fair Pricing of “Old” Orphan Drugs: Considerations for Canada’s Orphan Drug Policy” (2015) 187:6 CMAJ 422 at 424 [Eve Roberts, Matthew Herder & Aidan Hollis].

[8] Sarah Jane Tribble, “Drugs for Rare Diseases have become Uncommonly Rich Monopolies”, National Public Radio (17 January 2017), online:< http://www.npr.org/sections/health-shots/2017/01/17/509506836/drugs-for-rare-diseases-have-become-uncommonly-rich-monopolies&gt;.

[9] Eve Roberts, Matthew Herder & Aidan Hollis, supra note 7.

[10] Matthew Herder, “What is the Purpose of the Orphan Drug Act?” (2017) 14:1 PLoS 1 at 2 [Herder].

[11] Herder, supra note 10 at 1; Yvette Leung, “Funding Orphan Drugs: Pitfalls of the Orphan Drug Act”, Harvard College Global Health Review (19 October 2012), online:< https://www.hcs.harvard.edu/hghr/print/student/orphan-drug-act/&gt;.

[12] Herder, supra note 10 at 2.

[13] Ibid.

Copyright Ownership and the Australian Aboriginal Flag

Copyright disputes are often linked to larger policy questions and a recent Australian copyright dispute is not a stranger to this trend. In late 2018, Harold Thomas, the copyright owner of the Australian Aboriginal flag, entered into licensing agreement with Wam Clothing, which is not Indigenous owned. Recently, Wam Clothing has sent cease-and-desist letters to an Aboriginal health group, Spark Health, over their use of the Aboriginal flag. Spark Health has asked for legal advice.

This case is indicative of the broader question about how to protect Aboriginal Traditional Knowledge (ATK) and Aboriginal art. Some argue currently existing intellectual property mechanisms are enough. For example, Canadian law permits certification marks to certify the “class of workers”.  The Inuit Art Foundation uses the “igloo mark” to certify authentic Inuit art.

Conversely, others suggest traditional IP laws are not enough because of intellectual property’s demand for originality and individuality, they have argued for sui generis protection for ATK. Others suggest mandatory consultation with Native communities.

Pertaining to this specific conflict, activists and politicians have offered various solutions. One Member of Parliament, Bob Katter, suggested that the Australian government should claim copyright ownership of the Aboriginal flag. Similarly, Fionna Phillips, an Australian copyright lawyer, has suggested that the Australian government should buy the rights from Thomas on “public policy grounds”. However, others contest this deprives Thomas the right to profit from his design. A Labour Party spokesperson said it was important that the flag remains “the property of the First Nations people.”

It will be interesting to see how the dispute unfolds. Will public opinion play a role in this dispute? In 2006 after public outrage, Aveda decided not to trademark the term “Indigenous”. Will this dispute be settled out of court? If heard by a court, will there be interventions by various activist groups? Finally, will Parliament enact any new laws in response to this situation?

Author: Margot Mary Davis

 

Searching for Trust: An Examination of the Google Antitrust Investigation.

Recently, the Federal Trade Commission stated they would commence an investigation into Google for potentially violating US antitrust laws. The alleged violations of antitrust law relate to its search policies.

In the past, Google has remained relatively unmaimed by US antitrust investigations. For example, a 2013 FTC antitrust investigation into Google was closed. This contrasts to other jurisdictions, like the European Union. The EU Commission has fined Google three separate times since July 2017. The most recent fine, from March 2019, amounted to 1.49 billion euros. US antitrust investigators may have closed antitrust investigations because of the relatively high threshold required to prove such violations. Some behaviours only violate US antitrust law when they harm consumers.

While Google has remained relatively unmaimed in the past, that trend might not continue. This investigation into Google comes at a time of significant criticism, from various sources, of Google and other large tech companies’ practices. For example, some 2020 presidential candidates have expressed their desire to break up big tech companies. Criticism of large tech companies has not only been limited to statements. In February 2019, the FTC’s Bureau of Competition created a “Technology Task Force” to specifically combat anti-competitive practices in the tech industry. US Senator Klobuchar introduced a bill, in winter 2019, to strengthen US antitrust laws. A court recently ruled that Qualcomm violated antitrust law for their pricing policy.

All this considered, it will be interesting to see the outcome of this investigation. While it be a result that please advocates of stronger antitrust laws or an outcome that favours larger tech companies?

Author: Margot Mary Davis

Roses or Rosé? Trademark Fame and Trademark Infringement

Recently, the band Guns N’ Roses filed a trademark lawsuit against Oskar Blues Brewery, a Colorado- based brewery for alleged trademark infringement. The lawsuit alleges that the defendant’s “Guns N’ Rosé” ale and associated merchandise, “intentionally trade on the GNR’s goodwill, prestige, and fame without GNR’s approval, license, or consent”. Guns N’ Roses seeks damages and legal costs.

Particularly interesting is the lawsuit’s mention of the mark’s fame. American case law has repeatedly highlighted fame’s importance in determining the existence of trademark confusion. In the Application of E.I. Dupont De Nemours & Co, 476 F. 2d 1357 (CCPA 1973), the Federal Circuit Court of Appeals specifically stated the “fame of the prior mark” must be considered when “testing for the likelihood of confusion”. The United States Court of Appeal, Federal Circuit, in Palm Bay Imports Inc. v Veuve Clicquot Ponsardin Maison Fondee En 1972, ruled that famous marks “enjoy a wide latitude of legal protection”. Particularly relevant for this lawsuit, Starbucks U.S. Brands, LLC & Starbucks Corporation v. Marshall S. Ruben says that “As the fame of the mark increases, the degree of similarity between the marks necessary to support a conclusion of likely confusion declines.”

With a US trademark infringement lawsuit relying heavily on the mark’s fame, one might wonder how Canadian law addresses famous trade-marks. The answer is somewhat differently.

In Mattel, Inc. v 3894207 Canada Inc., the Supreme Court of Canada ruled that BARBIE, to distinguish restaurant and catering services, was not confusing with Mattel’s registered trade-mark “BARBIE” for BARBIE dolls. The Supreme Court of Canada stated that a “trade-mark’s fame is capable of carrying the mark across product lines where lesser marks would be circumscribed to their traditional wares or services” but fame “does not deliver the knockout blow.” Related, the Supreme Court of Canada, in Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, says that “Fame does not provide absolute protection for a trade-mark” and “It is one factor that must be assessed with all the others.” Therefore, a Canadian trade-mark infringement’s lawsuit that focused heavily on a trade-mark’s fame might be less successful than an American trademark infringement lawsuit relying on a mark’s fame.

These different approaches, again, highlight intellectual property’s jurisdiction-specific nature. Additionally, it will be interesting to see what results from this lawsuit.

Authored by Margot Mary Davis

Please note this piece does not constitute legal advice.

Are You Registered? An Examination of Fourth Estate Public Benefit Corp. v. Wallstreet.com, LLC, et al.

In the United States, a copyright holder of a US work can sue for infringement only upon registration. Title 17 U.S.C §411(a) explicitly states that

“Except for an action brought for a violation of the rights of the author under section 106A(a), and subject to the provisions of subsection (b),[1] no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.”

While this provision seems straightforward, some questions might arise. Most would agree that the Code does not protect an owner who has not commenced an application. * Many would also agree that someone with a certificate of registration would be entitled to bring an action for infringement. However, where people might differ is whether this provision permits parties, who have only applied for a copyright registration, to commence an action for infringement.

Relevant prior case law has produced somewhat divergent results on the exact meaning of §411(a). Seeming to support a “registration approach” the US Court of Appeals, Tenth Circuit, in the 2005 case of La Resolana Architects PA v. Clay Realtors Angel Fire, ruled that an owner of a US-based work can only sue for infringement when their copyright is registered. Slightly differently, the US Supreme Court ruled, in the 2010 case of Reed Elsevier, Inc., et al., Petitioners v. Irvin Muchnick et al., while registration is a “precondition to filing a claim, that does not restrict a federal court’s subject matter jurisdiction.”

The March 2019 case of Fourth Estate Public Benefit Corp. v. Wallstreet.com, LLC, et al. pertained to this very issue.  Fourth Estate licensed news stories to Wallstreet.com and Wallstreet.com was supposed to delete the stories when the licensing agreement ended. However, Wallstreet.com continued to display these news stories on their website after the agreement had ended. Fourth Estate brought a copyright infringement suit against Wallstreet.com. However, the Court of Appeals for the Eleventh Circuit ruled against Fourth Estate because they had only had copyright applications for the stories. Fourth Estate was granted a petition for certiorari. In the petition, Fourth Estate argued that the Copyright Act of 1976 used passive language which suggested that registration occurs upon application.

However, the US Supreme Court unanimously affirmed the decision of the Circuit Court and stated registration occurred when “the Register has registered a copyright after examining a properly filed application.” Speaking for the majority, Ginsburg stated Fourth Estate misunderstood the Copyright Act and the 1976 Congressional amendments to copyright law supported the view that registration must precede an infringement suit. She noted that at various times, Congress has opposed eliminating this registration requirement. This decision has confirmed that registration is a prerequisite for a copyright infringement suit. What is quite interesting is this significantly differs from Canada’s copyright infringement policies. While a copyright registration would make it easier to argue copyright infringement in Canada, it is not necessary.

It will be interesting to examine the effects of Fourth Estate Public Benefit Corp. v. Wallstreet.com, LLC et al. on the field of American copyright. Potentially there could be an increased number of parties seeking registration earlier. There might be a decrease in copyright litigation, in the next several years, because the Supreme Court has confirmed parties would have to wait for a certificate of registration. On the other hand, there could be an increase in owners of foreign works commencing copyright infringement lawsuits because they are not bound by the registration requirement.

Public reaction to this case will also be interesting to gauge. By confirming the need for registration, some might argue this case prevents the abusive use of copyright infringement. In contrast, others may argue this case makes it more difficult for copyright owners to protect their work.  Due to this case, some copyright applicants might argue the time it takes to register a copyright, which is approximately seven months, will have to be shortened.

While one cannot be sure of the exact impact of Fourth Estate Public Benefit Corp. v. Wallstreet.com, LLC et al., it will most likely have a strong impact on the American copyright landscape.

Authored by Margot Mary Davis

*Preregistration is available for works, like movies, where there is a high risk of “predistribution infringement”.

 

 

 

 

 

New USPTO Patent Guidelines and Important Considerations for Software Patent Applications

When one is trying to patent an invention, there are various criteria to consider. Is the invention novel? Is the invention useful and perhaps most importantly, is the subject matter patentable?

In the United States, four categories of invention, processes, machines, manufactures and composition of matter, are patentable. Abstract ideas, laws of nature and natural phenomena are exceptions to patentability. While most would agree that abstract ideas should not patentable, controversy and confusion might arise when attempting to define what constitutes a law of nature or an abstract idea. For example, is an application of an abstract idea patentable?

Recent case law has attempted to answer such questions. In the 2014 decision, Alice v CLS, which heavily cited Mayo Collaborative Services v Prometheus Laboratories, Inc., the United States Supreme Court ruled that a computerized scheme to “mitigate settlement risk” was not patentable. The Court viewed the computerized scheme as an “abstract idea” “merely requiring generic computer implementation”.  For an invention, whose claims are “directed towards a patent-ineligible concept”, to be patent-eligible, the court must determine “whether the claims, considered both individually and as an ordered combination transform the nature of the claim into a patent-eligible application”.

Many scholars have felt the Alice/Mayo framework is confusing, did not adequately address what constituted “transformation” and has produced inconsistent results. These shortcomings have impacted the software industry strongly. The United States Patent and Trademark Office (USPTO) has been issuing subject matter eligibility guidance updates to reduce uncertainty. However uncertainty still abounds, which may have impeded innovation.

The new eligibility guidance

Under new director Andrei Iancu, the USPTO addressed these concerns by issuing new subject matter eligibility guidance. Specifically, the USPTO included a new two-prong inquiry:

Prong One

In prong one, “examiners should evaluate whether the claims recite a judicial exception” to patentability using a two-step process:

1)    Identifying specific claim limitations that the examiner believes recites an abstract idea.

2)    Determining if the identified limitations fall within subject matter groups (a) – (c) below:

(a)   Mathematical concepts – mathematical relationships, mathematical formulas or equations, mathematical calculations;

(b)   Certain methods of organizing human activity, including

  1. Fundamental economic principles or practices,
  2. Commercial or legal interactions, and
  3. Managing personal behaviour, relationships or interactions between people; and

(c)   Mental processes which are concepts performed in the human mind such as observation, evaluation, judgment, and opinions.

Prong Two

If in prong one the examiner decides that the claim does “recite a judicial exception”, then in prong two the examiner must “evaluate whether the judicial exception is integrated into a practical application” based on:

1)    Identifying presence of additional elements in the claim beyond the judicial exception, and

2)    Evaluating the additional elements individually and in combination to determine whether the additional elements integrated the exception into a practical application.

Importantly, under the new guidelines, step (2) excludes consideration of whether the additional elements represent well-understood, routine, conventional activity. A claim that includes conventional elements may still integrate an exception into a practical application. Indications of integration of the exception into a practical application include the following:

1)    The additional elements reflect an improvement in the functioning of a computer, or an improvement to other technology or technical field;

2)    The additional elements apply or use a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition;

3)    The additional elements implement a judicial exception with, or use a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim; and

4)    The additional elements effect a transformation or reduction of a particular article to a different state or thing.

Best practices for software patent applications under the new eligibility guidelines

In light of these new guidelines, some best practices for software patent applications are:

  1. Describe the interoperation of the software with hardware in the specification and claims, and use non-generic terms to describe the hardware in the specification and claims. This may help facilitate the “particular machine or manufacture integral to the claim” argument.
  2. Explain clearly in the specification how the claimed invention improves the operation of the underlying computer or technology over the prior art.
  3. Explain clearly in the specification why the claimed invention cannot be performed mentally and therefore requires software. For example:
    1. Operations with complexity exceeding human capability need to be performed.
    2. There is a need to process very large input data sets.
    3. Processing speeds beyond human capability are needed.
  4. Direct claims towards particular solutions, or particular ways to achieve a desired outcome, to facilitate the “particular machine or manufacture integral to the claim” argument.
  5. If possible, show how an article is transformed or reduced to a different state or thing.
  6. Use non-mathematical claim elements instead of mathematical equations or formulas.
  7. File continuations to obtain better claims in the future as the legal environment evolves.

The new developments are likely to please software patent applicants and inventors due to increased certainty. In contrast, concerns about patent trolls may arise as “practical application” could be loosely defined. Finally, it will be interesting to see what the future impact on the number and types of US patent filings is.

Co-authored: Ramesh Rajaduray, for Raja Technologies Inc. & Margot Davis, INNOVATE LLP

2018: An Intellectual Property Year in Review

While it feels like it just began, 2018 is nearing its end. The year 2018 was not an uneventful year and the field of intellectual property was no exception. From Canada agreeing to USMCA, which significantly strengthens some of Canada’s intellectual property laws, to China creating an intellectual property appeal court, 2018 was full of intellectual property landmarks. Below, we will discuss some of them.

January 2018

Someone has something to smile about. In January 2018, Grumpy Cat Limited won $700 000 in damages for copyright and trade-mark infringement by Grenade, a coffee company. The two parties had entered into a licensing agreement where Grenade would use Grumpy Cat’s image on an iced coffee line. However, without permission, they used the image on a roast coffee line.

 February 2018

Canada and Taiwan announced plans to create a temporary Patent Prosecution Highway (PPH) pilot arrangement. If TIPO or CIPO approve an applicant’s claim, the applicant can ask the other office to process their respective claim faster. This arrangement was particularly interesting because Taiwan has usually been isolated from the international community with respect to intellectual property agreements. They are not signatory to the Madrid Protocol or the Berne Convention. It also occurred when Canada had expressed interest in expanding its influence in East Asia.

March 2018

Mexico made significant amends to its trade-mark policies. For trade-marks registered after August 10, 2018, a “declaration of actual and effective use” must be filed after 3 years and 3 months of registration, smell marks are now protected, and bad faith registration could be grounds for invalidation.

April 2018

China granted a patent to MilliporeSigma for its “chromosomal integration” CRISPR technology. CRISPR is a particularly promising, easy-to-use gene-editing technology. It also potentially can reverse organ damage or increase crop yield. This grant also came at a time when China had expressed an interest in importing foreign “innovative” drugs. Such a patent might be reflective of this goal.

May 2018

For some, Big Brother might be watching. The USA granted Apple a patent for a vein recognition method. Vein recognition has a higher success rate than other forms of biometric recognition. However, some argue that biometric identification threatens people’s civil liberties and they might view vein recognition as particularly invasive. Like many other debates, important goals, like security and civil liberties, might be in conflict.

June 2018

After a long legal battle over Samsung’s patent infringement of Apple’s smartphones, the two parties finally settle. The settlement amount was kept confidential.

July 2018

A California circuit judge overrules the state’s “droite de suite” laws. In California, an entity was required to pay an artist 5% of the price of a resale for any work over $1000. The court overturned this law saying that it conflicted with federal law. Now, no state has “droite de suite” laws. It will be interesting to see the effect of this change on auction houses.

August 2018

Canada says it will join the Madrid System in early 2019. The Madrid System states that when an “entitled party” files a trade-mark with one contracting state, they can then file a registration with the International Bureau of the World Intellectual Property Organization. With the goal of complying with the Madrid Protocol, Canada has proposed significant amendments to the Trade-marks Act. Trade-mark owners will be able to protect sounds, positions and personal names. Distinguishing guises and the “declaration of use” requirement will be abolished. Some might argue joining the System will allow for business growth. Others might argue it opens the door to trade-mark squatters.

October 2018

On the first day of the month, Canada, the USA and Mexico agree to USMCA, an updated version of NAFTA. Among many other things, this trade agreement contained intellectual property provisions. To comply with USMCA, Canada agreed to extend its copyright protection to 70 years plus the author’s life, from the current 50 years plus the author’s life. A seventy-year copyright lifespan is more common in most industrialized nations. This proposed change is another example of how Canada is re-aligning its intellectual property laws to be more consistent with international norms. In 2017, the Supreme Court ruled Canada’s unique promise doctrine obsolete.

November 2018

Hopefully, no one finds this cheesy. The European Court of Justice ruled that a cheese spread was not protected by copyright. In favour of this position, they noted that taste was subjective.

December 2018

The European Union launches its first “Counterfeit and Piracy Watchlist”. This list records websites that infringe intellectual property.

There you have it! These events were just some of the important intellectual property milestones in 2018. With Canada set to implement the Madrid Protocol in 2019, it will be interesting to see what else 2019 has in store.

 

Countering Copycats: Examining Australia’s Copyright Amendment (Online Infringement) Bill 2018

With the growth of the Internet, it is easier to share one’s opinions, pictures and ideas online. However, sometimes it is not one’s own opinions, pictures are ideas that are being shared.

Online intellectual property infringement is a major concern. Frequently, it is tricky to use intellectual property legislation to fight online IP infringement. Such infringement might be occurring overseas and territoriality constrains intellectual property legislation. With this in mind, various jurisdictions have amended intellectual property legislation to combat such infringement. One recent example is Australia’s proposed Copyright Amendment (Online Infringement) Bill 2018.

The proposed amendment would permit copyright holders to seek injunctions against search engine providers that carry infringing websites, permit injunctions against websites who have the “primary purpose” or “primary effect” of “facilitating the infringement” or “infringing” a copyright and includes a “rebuttable presumption” that websites are located outside Australia. In short, copyright holders can require search engines to remove infringing websites.

What is particularly interesting is while attempting to bolster copyright laws, the Copyright Amendment (Online Infringement) Bill 2018 still grants the courts significant leeway in choosing whether or not to grant an injunction. Critics frequently blast laws that address online intellectual property infringement as threatening freedom of expression and the free-flow of ideas. The proposed amendment seeks to soothe this fear by including factors that the Federal Court can consider in deciding to grant an injunction, and explicitly mentioning the importance of freedom of expression within the amendment. Some considerations include the “flagrancy of the infringement”, “the percentage of the infringing content” to “legitimate content”, the “public interest” and “the impact on any persons likely to be affected by the grant of an injunction.”

Additionally interesting, is the differing approach Australia has taken to Canada, a fellow common law country. Article 31.1(1) of the Canadian Copyright Act states that a “person” who provides a “digital network” or “Internet services” that provides the means for “reproducing” or communicating a “work” does not “solely by reason of providing these services” infringe copyright. This highlights how ad-hoc intellectual property policies can be even in relatively similar jurisdictions.

While this legislation has not yet passed, it will be interesting to see its impact on the Australian copyright landscape.

Turning Over a New Leaf: Intellectual Property and Legal Cannabis

Introduction

Cannabis legalization is around the corner. On October 17, 2018, the Cannabis Act comes into effect and possession of 30 grams or less of dried cannabis will be permitted.[1] Cannabis is a lucrative business and many entrepreneurs are probably looking to profit from this industry.[2]

Like any business owner, cannabis entrepreneurs would want to protect their products and intellectual property might help here. For example, a holder of a cannabis licence could register a trade-mark for their good.[3] Currently, there are over 100 trade-mark applications for cannabis and cannabis-related goods.[4] Other forms of intellectual property protection, like patents, might also be relevant. At the same time though, the Cannabis Act places significant restrictions on promoting cannabis and this could limit available intellectual property.[5]

With this in mind, we will discuss relevant considerations for cannabis entrepreneurs in the below sections.

Intellectual Property Protection: Not Just Helpful For Licence Holders   

  • The most obvious people to benefit from intellectual property protection would be licence holders. However, they are not the only ones.
  • Law enforcement will need an effective way to test potentially cannabis-impaired drivers. Canada plans to use the Drager DrugTest 5000 which relies on a saliva sample.[6] However, this test resulted in false positives in approximately fourteen percent of cases and it is especially error-prone in colder climates.[7]
  • Cannabis smokers and the general public would want a more accurate test for cannabis-impairment.
  • An individual could create an improved testing device and potentially patent this product. This device would have to be new, useful and inventive to be patentable.[8]

Trade-mark Protection: Know Your Limits

  • The Trade-marks Act bars trade-marking certain marks. Some marks include “obscene words”, the term “Royal Canadian Mounted Police”, and the Royal Arms.[9]
  • Trade-mark applications for cannabis, “cannabis accessories” and a “service related to cannabis” will be subject to additional restrictions.[10] The Cannabis Act states the brand elements, related to marijuana, cannot evoke emotions about “a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.”[11] Brand elements include trade-marks.[12]
  • Conflicts might arise about what constitutes a trade-mark that evokes a “way of life” that includes excitement, risk or glamour.[13] An entrepreneur might not view their trade-mark application as evoking “recreation” but the Registrar of Trade-marks might feel differently. [14]
  • A cannabis entrepreneur has to consider this reality when brainstorming potential names for their products and services.

 Statements of Opposition: Special Considerations for Cannabis

  • Related to the stricter constraints on trade-marking terms for cannabis, “cannabis accessories” and a “service related to cannabis”, it would be easier to oppose such trade-mark applications.[15]
  • Within two months of a trade-mark application’s advertisement, anybody can submit a statement of opposition, regarding the application, to the Canadian Intellectual Property Office.[16] One permitted ground of opposition is that the application is “not registrable”. [17] Prohibited marks are barred from registration.[18]
  • An opponent could argue a trade-mark application for cannabis that evokes a glamourous “way of life” is a prohibited mark and should not be registered.[19] In contrast, a party could not argue that a trade-mark for a soda brand is a prohibited because it invokes a glamourous lifestyle.
  • Trade-mark opposition proceedings can be long and complex. They would require additional time, resources and attention from already busy business owners.
  • The greater possibility, compared to other industries, of facing a time-consuming trade-mark opposition is something cannabis entrepreneurs should strongly consider.

Industrial Designs: A Potential Friend

  • When one hears the term “intellectual property”, the first words that come to mind are probably patents, trade-marks and copyright. An often overlooked type of intellectual property is an industrial design.
  • Industrial designs protect the “features of shape, configuration, pattern or ornament and any combination of those features that, in a finished article, appeal to and are judged solely by the eye.”[20]
  • Industrial designs could protect cannabis accessories. Such examples include obtaining industrial designs for colourful patterns on rolling paper or uniquely-shaped bongs.[21]
  • What is especially interesting is that the Cannabis Act does not explicitly mention industrial designs in the definition of “brand elements”.[22] At the same time though, they do mention related terms like graphic designs or “graphic arrangements”.[23]

Conclusion

Like any entrepreneur, intellectual property protection may benefit cannabis entrepreneurs. Intellectual property, like trade-marks and industrial designs, could protect both cannabis accessories and cannabis. Additionally, intellectual property’s advantages are not just limited to licence holders. Legal cannabis will require effective drug-impairment testing devices and the inventors of such products could potentially obtain patents.

At the same time, cannabis entrepreneurs might also face unique challenges. A term that would be acceptable to trade-mark for a restaurant, might not be acceptable to trade-mark for a cannabis accessory. Like entrepreneurs more generally, cannabis entrepreneurs, who are interested in IP, would be wise to seek out the advice of an intellectual property lawyer or licensed trade-mark agent.

If cannabis entrepreneurs approach intellectual property protection smartly and cognizant of their limits, they may get the chance to experience many highs.

Please note this piece is for informational purposes only and should not be construed as legal advice.

References

[1]Cannabis Act, SC 2018, c 16, s 8(1)(a).

[2]Sophia Harris, “Pot companies on hiring spree ahead of lucrative legal market”, CBC News (24 June 2018), online:< https://www.cbc.ca/news/business/pot-cannabis-marijuana-jobs-canopy-growth-medreleaf-1.4718771> [http://archive.is/YPJ4f]. Some projections say Canadians will spend approximately $4.34 billion on marijuana in 2019.

[3]“Cannabis Licensing Application Guide: Application Requirements and Process to Become a Licence Holder under the Cannabis Act and its Regulations” (last modified 11 July 2018), online: Government of Canada < https://www.canada.ca/en/health-canada/services/publications/drugs-health-products/cannabis-licensing-guide.html#2 > [http://archive.is/qCEEz]. One needs a licence to cultivate or process marijuana. Provinces will regulate the sale of marijuana.

[4]“Canada Trade-marks Database, Search: Cannabis” (last modified 9 October 10), online: Government of Canada < https://www.ic.gc.ca/app/opic-cipo/trdmrks/srch/home > [http://archive.is/INtZ1].

[5]Supra note 1 at ss 17 & 21.

[6]Oliver Moore “Company demonstrates roadside cannabis testing device amid reports of machine’s failing” “Company demonstrates roadside cannabis testing device amid reports of machine’s failings”, The Globe and Mail (11 September 2018) <https://www.theglobeandmail.com/cannabis/article-company-touts-reliability-of-roadside-cannabis-testing-device-amid/%3E/&gt; [http://archive.is/xSru5].

[7]Ibid.

[8]Canadian Intellectual Property Office, “A Guide to Patents” (last modified 26 September 2018), online: Government of Canada, <https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr03652.html#marketingLicensingPatent > [http://archive.is/QT58B].

[9]Trade-marks Act, RSC 1985, c T-13, s 9(1). The above examples are not exhaustive.

[10]Supra note 1 at s 2(1).

[11]Ibid at s 17(1)(e).

[12]Ibid at s 2(1).

[13]Supra note 1 at s 17(1)(e).

[14]Ibid.

[15]Ibid at s 2(1).

[16]Supra note 9 at s 38(1).

[17]Ibid at s 38(2)(b).

[18]Ibid at s 12(1).

[19]Supra note 1 at 17(1)(e).

[20]Industrial Design Act, RSC 1985, c I-9, s 2.

[21]Ibid at s 5.1(a). Utilitarian features are not protected.

[22]Supra note 1 at s 2(1)

[23]Ibid.