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Cracking Down on Copycats: China’s New Intellectual Property Policy

On September 18, 2017, China announced a tough crackdown on intellectual property infringement. With the Chinese government assigning various bodies specific roles, the crackdown aims to fight knock-offs, combat copyright infringement and fight trade secret theft.

Like many new policies, this policy is probably related to larger economic and geopolitical trends. China is concerned about declining foreign investment because foreign investment in China dropped by six percent. The South China Morning Post notes one oft-cited reason for declining investment is foreign investors’ fear that their intellectual property will not be protected.

Additionally, various governments have expressed concern about China’s approach to intellectual property. While Canada is contemplating signing a free trade agreement with China, Canada has expressed concerns about China’s protection of intellectual property. More stridently, American President Donald Trump has ordered a trade investigation into China. Since Trump will probably be visiting China this year, this move may be an attempt to soften Trump’s stance.

What is particularly interesting is some foreign companies’ responses to this crackdown. The day after China announced their crackdown, Hitachi Metals, a Japanese company, stated a Chinese company violated their intellectual property. Will these changes result in more cases like Hitachi Metals? Only time will tell.

 

Welcome Margot!

Innovate LLP is pleased to welcome Margot Davis as an articling student. With a strong background in science, Margot’s past work experience includes volunteering at a psychology laboratory and she obtained an Honours Bachelor of Science with Distinction from the University of Toronto. She regularly volunteers with “Lawyers Feed the Hungry”. We are excited she will be a member of our team!

Welcome Don!

Innovate LLP is pleased to welcome Don Bocchinfuso. Before joining our firm, Don articled at a large firm in downtown Toronto. Don focuses on patent rights and was the top intellectual property law student at Western University in his graduating year. With an academic background in molecular genetics, he keeps informed about scientific discoveries. We are excited he will be a member of our team!

Welcome Mario!

Innovate LLP is pleased to welcome Mario Theriault. Mario is a registered patent agent in Canada and the USA. Prior to becoming a patent agent, Mario worked in the mechanical and electrical engineering fields. Having filed patents in 10 countries, Mario’s intellectual property experience spans the globe. We are excited he is a member of our team!

Where’s the Trust? Intel and Anti-Trust Decisions.

Recently, the European Court of Justice sent a fine against Intel, for anti-trust violations, back to the lower courts to review. In 2009, a lower court ruled that Intel blocked competition by giving rebates to certain other technology companies and fined Intel for $1.3 billion.

This decision is a break from many recent anti-trust decisions and the more general political atmosphere. In June 2017, an EU anti-trust chief slapped Google with a $2.7 billion fine for manipulating search results. China alleged that Qualcomm violated anti-trust policies and they settled for a $975 million fine. Both President Trump and a sizable number of Democrats have stated harsher anti-monopoly policies should apply to technology giants. However, this decision does not stand alone and there have been some other recent events where there was a break away from antitrust initiatives. Kaspersky filed and subsequently withdrew a statement alleging Google’s anti-virus policies created a monopoly.

Anti-trust cases are reflective of larger questions like how should the law regulate technology giants. People’s political philosophies frequently impact their answers. Some argue anti-trust laws can stifle business and entrepreneurship. They state that digital giants are different from the lumber or oil monopolies of yesteryear. Others contest that technology companies are huge, international companies that possess people’s personal data. They are prime candidates for regulation.

Whatever the lower courts decide, anti-trust laws and its application to technology giants are not an issue that will be disappearing anytime soon.

 

Back to School? Be Cautious of a New Copyright Decision

With the start of the school year around the corner, university students are probably looking to save money on textbooks.  One way students could save money was photocopying ten percent or less of textbooks.  Under the concept of “fair dealing”, Canadian universities allowed this behaviour. As long as a person copies a work for “private”,  “educational” or “research” purposes, and there are no alternatives to copying, fair dealing permits an individual to legally reproduce a certain portion of a copyrighted work. However with a recent Federal Court case, this 10% exception is no longer available to students.

In Canadian Copyright Licensing Agency v. York University, the Federal Court ruled, among other things, that York University’s 10% exception was “arbitrary” and “not based on principle”. The court stated the 10% exception could permit individuals to photocopy whole stories in anthologies but bar people from photocopying the same story standing alone.

With the court determining 10% to be “arbitrary”, it will be interesting to see what guidelines various Canadian universities adapt. Will universities set a a lower blanket exception, like 5%, or adjust the exception based on the source materials? Would Canadian courts accept these exceptions as complying with the “fair dealing” test?

Will it is uncertain what types of guidelines universities will adapt, it is certain students will be feeling the effects of this decision come this September.

 

 

Thailand Joins the Madrid System

Recently, Thailand joined the Madrid System. If an entrepreneur files a trade-mark in a jurisdiction signatory to the Madrid System, that trade-mark will receive legal protection in other member states. Currently, there are 99 members of the Madrid System.

Thailand is one of several recent entities to join the Madrid System. Mexico became party in February 2013, New Zealand joined in December 2012 and the African Intellectual Property Office became party in March 2015. Closer to home, Canada plans to accede to the Madrid System and Bill C-31 has amended Canada’s trade-marks legislation to conform more closely to international standards.  There seems to be an effort to somewhat harmonize intellectual property policies.

Changes in intellectual property legislation are usually related to broader issues and this appears to be the case here. In May 2017, the Thai government said they would like to increase foreign investment in Eastern Thailand and make it a technology zone. An entrepreneur might be more likely to file a trade-mark in a jurisdiction that is party to a system that offers protection in multiple jurisdictions.

In the next coming years, it will be interesting to see the effect of Thailand becoming party to the Madrid System. Will it lead to economic growth? Will it lead to more patents filed in Thailand? Only time will tell.

 

The Grey Zone: How Various Countries Permit or Restrict Parallel Imports

Australia recently rejected a proposal to permit parallel imports of vehicles. Industry regulatory groups hailed this decision but various stakeholders were not happy.

Parallel importation refers to corporations that import non-counterfeit goods but these corporations are not the trade-mark or copyright owners. As one can imagine, this is a controversial practice. Some argue that parallel importation increases competition and reduces prices. However, critics argue parallel imports are risky and untrustworthy. The World Trade Organization takes no position on parallel imports.

Like Canada, Australia is a common law jurisdiction. How does Canada react to parallel imports? The Canadian government takes a slightly different approach to parallel imports than Australia. Parallel importation of books constitutes a violation of Canada’s Copyright Act but the Canada Border Services Agency will not enforce requests for assistance, which are used to fight counterfeit goods, against parallel imports. In Euro-Excellence Inc. v Kraft Canada Inc., the Supreme Court of Canada ambiguously ruled that a licensee of a copyright could not claim secondary infringement against chocolate bars that were parallel imports.

Canada and Australia’s differences highlight intellectual property law’s jurisdiction-specific nature. While there has been increased international harmonization of intellectual property standards, differences between countries remain.

Accessibility to Medicine or Intellectual Property Protection? Do we have to choose?

Recently, India granted Pfizer a patent for its anti-pneumonia drug, Prevenar 13. Most importantly and controversially, this patent will bar companies from producing generic versions.

Some activists, like Doctors without Borders, are dismayed by this decision. They argue it will threaten accessibility to inexpensive drugs within India and globally.  Currently, India is a large exporter of generic drugs and pneumonia continues to be a large killer in India. According to The Economic Times, India has the highest number of pneumonia-related child deaths, globally. However, supporters of the decision believe these worries are exaggerated. They argue that India has a free vaccination program so competition and accessibility issues will not be engaged.

Like many intellectual property decisions, this cases touches upon broader themes. One such theme is how to balance the right of an owner to profit from their creation and the public’s right to access necessary goods. Various state and non-state actors have attempted to balance these potentially competing ideals. For example, GlaxoSmithKline does not file patents in developing countries and the Marrakesh Treaty exempts Braille books from copyright. The World Trade Organization permits exceptions to trade policy that ensure accessibility to health-related products. The Doha Declaration allows compulsory licensing where a non-owner is legally permitted to manufacture a patented drug.

With this in mind, where will this decision fit in?

Renegotiating NAFTA. It’s not just about softwood lumber.

Criticisms of NAFTA permeated the 2016 American election. Trump declared it the “worst trade deal ever” and Hillary Clinton stated she would “adjust” the free trade deal. With Trump’s success, it is not surprising that politicians will renegotiate NAFTA in mid-August.

While there are many concerns about NAFTA, ranging from dairy to softwood lumber, pundits should not be overlooking intellectual property. A draft piece of American demands, stated NAFTA should build upon international intellectual property norms. This has particular implications for Canada because Canada is somewhat of an intellectual property outlier. Canada permits a copyright exception for user-generated content (e.g. a Youtube video of children dancing to a popular song) created for non-commercial purposes and has shorter copyright protection lifespans.

These NAFTA demands are indicative of a larger trend; how should Canada address free trade agreements’ proposed intellectual property standards. Should Canada alter its laws or express a reservation? It will be interesting what the NAFTA renegotiations lead to.