To Translate or not to Translate? MBM Provides General Guide for Businesses Operating in the Province of Québec after June 1, 2025

By Scott Miller and Deborah Meltzer, September 21, 2023

If you sell products or have public signage in the Province of Québec, then please consider what changes, if any, will be necessary to the product inscriptions/packaging and signage to ensure compliance with the amendments to the Charter of the French Language, c-11, which will come into force on June 1, 2025.

To assist with your review, MBM has prepared the following flow charts:

MBM has developed creative solutions to minimize product inscriptions/packaging and signage changes and yet still be in compliance with the amendments to the Charter of the French Language, c-11, which will come into force on June 1, 2025. The flow charts are provided only as a general guide based on known amendments to the Charter of the French Language, c-11. Future amendments or regulations may impact the information provided above.

CIPO Fees to Increase by 25% in 2024 and Expansion of the Definition of “Small Entity”

By Randy Marusyk and Alexandra Mazgola, August 22, 2023

The Canadian Intellectual Property Office (“CIPO”) has announced that effective January 1, 2024, most official fees will be increasing by 25%. On the patent side, the increase in the fees will be applicable to standard entity size. At the same time, the definition of “small entity” in the Patent Rules will be broadened from the current 50 employees to fewer than 100 employees, which would mean that more companies can fall into the small entity category and thus utilize the lower official fees. Canada remains an important jurisdiction in North America for IP filings and is further reinforced by rapid population growth, surpassing the 40 million mark in 2023. The above changes are detailed below with some recommendations for saving on official fees.

Significant CIPO Fee Increase

Effective January 1, 2024, a one-time 25% fee increase will be implemented, impacting most patent, industrial design, trademark and copyright fees. With respect to patent matters, this increase will not apply to businesses qualifying as a “small entity” under the Patent Rules. Thus, small entity patent applicants will only experience CIPO’s regular annual fee increase in 2024.

Below are a few examples of changes in CIPO’s fees (rounded up):

A complete listing of fee increases relating to patents, industrial designs, trademarks, copyrights, and other fees can be found on CIPO’s website here.

Expansion of the definition of “Small Entity” under the Patent Rules

Another important change is the broadening of the definition of “small entity” in the Patent Rules. This change is important because entities that meet the definition of small entity and who submit a small entity declaration are entitled to a 50% reduction of some CIPO patent-related fees.

Currently, a “small entity” is defined as a university or an entity that employs 50 or fewer employees at the time the patent application was filed or at the national phrase entry date for an international PCT application, but does not include:

(a) an entity that is controlled directly or indirectly by an entity, other than a university, that has more than 50 employees, or

(b) an entity that has transferred or licensed, or has an obligation other than a contingent obligation to transfer or license, any right or interest in a claimed invention to an entity, other than a university, that has more than 50 employees

The definition of “small entity” will be amended effective January 1, 2024, to increase the maximum number of employees from 50 employees to fewer than 100 employees. Thus, more companies will be able to qualify for the small entity category and, as a result, utilize the lower small entity fees. Please note that small entity status is determined at the time of filing (or at the national phrase entry date) and is only determined once.

This amendment does not entitle newly qualifying small entities to a partial refund of fees paid before January 1, 2024. The amendment is, however, allowing applicants who had more than 50 employees but less than 100 employees at the time of filing (or at the national phrase entry date) to start paying future fees at the small entity rate after January 1, 2024, provided all other small entity conditions were met when the patent was filed, and a small entity declaration is submitted.

Recommendations

1. As a result of these changes, individuals and businesses are encouraged to review their IP portfolios with their IP professional for possible new filings, examination requests and renewal/maintenance fees that can be done before January 1, 2024, to take advantage of the lower 2023 rates before the 25% increase takes effect.

2. Additionally, applicants should also review with their IP professional whether they will qualify as of January 1, 2024, for the expanded small entity status.

Congratulations to our newest partner, Poonam Tauh!

January 13, 2023

With great pleasure, we would like to announce that Dr. Poonam Tauh has been promoted to Partner.

Prior to joining MBM, Poonam earned a Ph.D. in organic chemistry from the University of Ottawa in 2001 and now has over 20 years experience as a Patent Agent.

Poonam moved to Calgary in 2012 to establish MBM’s Calgary office and has subsequently grown the office into a successful and vibrant MBM outpost in Western Canada to better serve our clients in the Alberta region.

“Poonam is an integral part of our MBM team. In addition, to her exceptional technical knowledge, her clients love working with her because of her calm nature and willingness to always go the extra mile. And, no matter how busy she is, her colleagues know they can always count on her for guidance and support. Poonam is a tremendous asset to our firm”, said Randy Marusyk, Co-Managing Partner.

To learn more about Poonam, check out her full bio here.

Poonam Tauh, Ph.D., Partner, Patent Agent
T: 403.800.9018
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MBM Prevails as Federal Court Awards Unprecedented 50% Lump Sum Award of Costs in Trademark Dispute

By Scott Miller and Deborah Meltzer, August 24, 2022

On August 15, 2022, the Federal Court of Canada issued its decision with respect to costs in Dragona Carpet Supplies Missisauga Inc. v Dragona Carpet Supplies Ltd and Flooreno Building Supplies Inc., 2022 FC 1200, ordering one of the highest lump sum costs ever awarded in a trademark dispute, representing 50% of aggregate fees incurred, plus disbursements.

The decision was the culmination of a factually complicated family dispute related to the right to use and own the trademark “DRAGONA” in specified pockets of the GTA. The Defendants/Plaintiffs by Counterclaim were wholly successful in (1) defending against the Plaintiff’s motion for summary trial with respect to its claim of passing off, and (2) their own motion for summary trial with respect to their claim for expungement of three of the Plaintiff’s registered “DRAGONA” trademarks.

Ultimately, the Federal Court preferred the evidence of the Defendants. Although there was disagreement on the majority of the facts presented throughout the proceedings, the parties unequivocally agreed that the Defendant, Dragona Carpet Supplies Ltd., was the first to use the trademark DRAGONA. Based on the evidence, there was no basis for the Plaintiff to argue that it was entitled to the trademark registrations. In granting an exceptional lump sum cost award of 50% to the Defendants, the Court emphasized that in light of the facts, the Plaintiff ought never to have maintained the legitimacy of the trademark registrations, much less, waited until the commencement of the hearing to abandon its position.

This precedent-setting decision not only expanded the law on concurrent-use passing off and care and control in the context of a license, but further substantiates the Federal Court’s recent trend of opting for lump sum cost awards in lieu of the tariff, which represents a more reasonable and realistic recovery of legal fees for the successful party.

New Trademark Laws For Québec – What You Need To Know

By Scott Miller and Grace Wang, June 24, 2022

In approximately three years or less, the Québec Government’s newly adopted Bill 96, An Act respecting French, the official and common language of Québec will go into force. Bill 96 will have a significant impact on the use of English trademarks in the Province of Québec. For example, whereas in the past, both unregistered and registered trademarks did not need to be translated into French, under Bill 96, only registered trademarks will be exempt from translation into French. Currently, it takes approximately two years for a trademark application to mature to registration in Canada. As such, it is imperative businesses review their trademark portfolios and consider which trademarks ought to be filed for registration to ensure continued use in the Province of Québec.    

The Present Rules in Québec:

Promotional Material - Packaging

At present, a “recognized trademark” is exempt from translation requirements in Québec. A recognized trademark includes a registered trademark, an applied-for trademark with a pending application, or a common law trademark. As such, unless the English trademark has been registered in French, it is not necessary to translate the English trademark registered or common law (unregistered) on packaging offered in Québec into French.

Signage

Currently, in Québec, outside signage, inside signage that is seen outside, mall signage and/or signage on a pole/column (with some exceptions) displaying an English registered or common law (unregistered) trademark does not need to be translated into French. However, if the equivalent French trademark is a registered trademark, then the French trademark must be used on the signage. In any event, if there is only an English trademark, unlike packaging or promotional material, the signage must have “sufficient presence” in French and include:[1]

•  A generic term or a description of the products or services;

•  A slogan; or

•  Any other term or indication favouring the display of information pertaining to the products or services to the benefit of consumers or persons frequenting the site (location).

The “sufficient presence” of French means that it should be displayed with permanent visibility and legibility in the same visual field as the non-French mark, although not necessary to be present side-by-side, in the same number, in the same materials or in the same size.[2]

Exception: If the English trademark is displayed on a pole/column and there are more than two trademarks on the pole/column then the signage does not need to disclose the generic term, slogan or other terms in French.  The typical situation would be the external signage of the parking lot entrance for an outdoor mall.[3]

Bill 96 – New Requirements in Québec for French in Trademarks:

When Bill 96 goes into effect, the scope of the “recognized trademark” exemption is greatly reduced.

First, only non-French registered trademarks will be exempt and not need to be translated into French. As such, an unregistered (i.e., applied-for or common law) English trademark will need to be accompanied by its French equivalent on commercial advertising and public signage.

Second, even if a non-French trademark is registered but is used on public signs and posters visible from the outside of a premise, the signage must still have a generic term, slogan or other term in French marked predominately in French.[4] Predominantly means that the space allotted to the French text must be at least twice as large as the space allotted to the non-French text, or the characters used in the French text must be at least twice as large as those used in the non-French text.[5]

Implications of the New Québec Language Laws:

It is expected that the newly adopted Québec language laws will be in force in three years or less.  Currently, it takes approximately two years for a trademark application to mature to registration in Canada. As such, if you offer goods and/or services in Québec and do not want to run afoul of the new Québec language laws, then it is imperative for you to review your trademark portfolios and consider a tailored solution to meet your business goals (for example, filing trademark applications with the Canadian Intellectual Property Office immediately).

Notably, these implications may not only affect English language trademarks but also trademarks using other non-French languages and potentially “coined” words.

For more information please contact:
Scott Miller, Co-Managing Partner, Head of the Litigation Department
T: 613.801.1099
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Important CIPO Update - Date Announced for Amendments to Canadian Patent Rules

By Claire Palmer, June 10, 2022

Canadian Intellectual Property Office (CIPO) just announced that the new amendments to the Canadian Patent Rules to ‘streamline examination', including excess claim fees, will be coming into effect on October 3, 2022. The changes will include a $100/per claim fee for applications with more than 20 claims and a fee for continued examination after three office actions equal to the original examination fee. The amendments also add steps such as 'notice of conditional allowance'.

As a result of these changes, we advise our clients to review their patent portfolios to determine which patents have over 20 claims and request examination for these patents before the October 3, 2022 date to avoid paying the access claim fees, as they would apply at the examination stage after this date.

We will follow up this announcement with more comprehensive coverage of the new changes to Canadian Patent Rules - stay tuned!

For more information please contact:

Claire Palmer, Ph.D., Senior Patent Agent
T: 613.801.0450
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This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Health Canada to Draft New Patented Medicine Prices Review Board Guidelines in the Wake of Pharmaceutical Victories

By Claire Palmer & Carly Horvath, May 17, 2022

Canada’s Patented Medicine Prices Review Board (PMPRB) is a quasi-judicial body that has authority under the Patent Act to protect and inform Canadians “by ensuring that the prices of patented medicines sold in Canada are not excessive and by reporting on pharmaceutical trends”.[1]

Two recent decisions[2] from Canadian appellant courts surrounding the scope of the PMPRB’s authority under the Patent Act represent victories for the pharmaceutical industry, sending a strong signal that the PMPRB does not have the jurisdiction to consider consumer protection or general regulations of drug pricing in its determination of “excessive” pricing.

In response to these recent appellant decisions, the Canadian Minister of Health announced in April that there will be “a new and different set of guidelines” prepared for consultation in the coming months. Notably, these amendments will not include the proposed economic regulatory factors for drug pricing nor the net price disclosure requirements held to be unconstitutional by the Quebec Court of Appeal.[3] The Minister of Health also stated that Health Canada will be implementing the “new basket of comparator countries” as an amendment to the Patented Medicines Regulations, which will come into force on July 1, 2022.[4] This amendment removes the US and Switzerland and adds Japan, Norway, Belgium, Australia, and the Netherlands as comparator countries.[5]

Importantly, while rights holders will need to begin reporting price information in accordance with the new comparator countries beginning on July 1, 2022, there will be a temporary period during which no guidelines will be in effect. During this period, the PMPRB will be holding expedited written consultation on what price tests should be applied, the details of which will be communicated once the new draft guidelines have been published in the Canadian Gazette. Once the new guidelines are finalized, rights holders will be provided with a reasonable period to become compliant.[6] Although the PMPRB is aiming to have these new draft guidelines published in a timely manner, no firm time frame has been established.

This response by the Canadian government should benefit pharmaceutical companies by ensuring that the PMPRB does not exceed its authority by considering consumer protection or general pricing regulations in its determination of “excessive” pricing. In the meantime, we anxiously await the release of the new PMPRB guidelines.

For more information please contact:

Claire Palmer, Ph.D., Senior Patent Agent
T: 613.801.0450
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Carly Horvath, Articling Student
T: 613.801.0456
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This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Conference Posters and Materials: Beware! They Can Constitute Prior Art

By David Fraser, November 15, 2021

In the academic world, it is common for researchers to attend and present their findings at conferences. Papers presented will typically end up as part of conference handouts or available online for future use. PowerPoint slides used in presentations are also sometimes published or distributed. Posters are often set up where attendees may view them. Conversations between researchers happen after presentations, and at numerous coffee breaks and networking events. In the publish or perish world of academia, conferences provide one of the best venues to present your ideas and research and meet with like-minded people.

Similarly, in the corporate world tradeshows are often used to show off products and demonstrate their features and capabilities to potential customers. Trade show booths often include demonstration systems, brochures, and marketing presentations that are only available for the two or three days of the show. Copies of brochures and presentations may be saved or may be destroyed afterwards.

Unfortunately, what is good for the sharing of information is often not good for the patenting of inventions that arise from the research and products presented at these conferences. The subject matter of a patent claim must not have been previously disclosed, and the invention must not be obvious to a person skilled in the art or science to which it pertains[1]. Conference presentations, presentation slides, and posters can all be prior art, whether they come from an inventor or someone else, and can prevent you from patenting your inventions.

Posters are an interesting case in that they may often be displayed for just a few hours, be viewed by passersby, and usually do not become part of the published conference proceedings. They are often untraceable or destroyed later. They often will not contain enough information to prevent an invention from being novel, but nevertheless may form part of the state of the art that must be considered when determining if an invention contains an inventive step.

In Biogen Canada Inc. v. Taro Pharmaceuticals Inc., 2020 FC 621, a poster was presented at a conference in Baltimore in 2002, 18 years previous. The poster was available to the court but had only been presented for a short time at the conference, and in the intervening years could not have been found even with a reasonably diligent search. Nevertheless, expert testimony established that the poster was indeed genuine and therefore its contents formed part of the state of the art in 2002 for determining obviousness of the patent claims in question. The poster, together with information found in other sources of prior art, were enough to find the patent claims in question obvious and invalid. This case is interesting since a poster, only presented for a short time at the conference and thereafter not being available, was used to establish the state of the prior art 18 years ago.

In Mediatube Corp. v. Bell Canada, 2017 FC 6 the plaintiff alleged that the defendant’s Fibe TV service could be modified to infringe its patents. Bell argued that all limitations of the relevant patent claims had been disclosed in a number of sources, including brochures and prototype systems that had been presented at the SuperComm tradeshow in June 1998, 19 years previous. Brochures were available to the court. Mediatube argued that the brochure was only disclosed at the tradeshow and could not be considered to have been available to the public as it could not later be found in a reasonably diligent search by a skilled person. With the help of expert testimony, the court decided that the brochures and presentations of the systems, despite only being available for a short time, were part of the state of the art at the time and could be considered when determining the validity of Mediatube’s patent claims.

On the other hand, in Valence Technology, Inc. v. Phostech Lithium Inc., 2011 FC 174, the defendant was challenging the validity of plaintiff’s patents. Phostech asserted that conference publications, presentations, and posters presented twelve years previous were prior art to at least some of the patent claims. The presenter had also had discussions while at the conference. The poster had since been destroyed and could not be presented to the court. When defining the common general knowledge at the key date the judge decided to exclude the presentations, posters, and any discussions that may have happened. Though not stated, this may have been because the poster had been destroyed and that there were no experts to testify to its contents or importance.

It is difficult to determine in advance if a poster will later be found to form part of the state of the art when considering patent validity. For prior art, such as a poster, that may only be presented for a few hours at a scientific or industry conference, it is uncertain whether it can be considered part of the body of prior art of which a person skilled in the art could be said to possess, especially since it may not be found later even through a reasonably diligent search. Like any disclosure, the best practice is to:

1. Review all public disclosures, even those that are short-lived and will be unavailable later.

2. Be careful what kind of information you put on a poster. Try to use more general information on all conference materials if possible.

3. If you must disclose detailed information, restrict any disclosures to individuals or groups in a non-public space under NDA.

4. File a provisional or utility patent application before the event.

5. Review and document what others present. Smartphones make it easy.

Better to be safe than sorry!

If you are considering filing a patent and worried about your conference/event disclosure, please feel free to contact MBM for a free consultation.

Does Copyright Extend to “facts”? The Federal Court Sets the Story Straight on the Extent of Copyright Protection in Nonfiction Work.

By Scott Miller and Carly Horvath, October 14, 2021

Introduction

In the recent 2021 decision of Winkler v. Hendley, 2021 FC 498 [Winkler], the Federal Court (the “Court”) addressed an unusual issue of copyright protection in a nonfictional work containing descriptions of events with questionable historical accuracy. In its decision, the Court reiterated that copyright protection does not extend to facts. Moreover, when a work is presented as nonfiction, the facts are not subject to copyright protection. This case serves to reinforce the scope of copyright protection and sets an important precedent in Canada for copyright in nonfictional works.

Case Background and Overview of the Dispute

In Winkler, the plaintiffs, John Winkler and the estate of the late author Thomas Kelley (“Mr. Kelley”) sued author, Nate Hendley (“Mr. Hendley”), and his publisher, James Lorimer & Company Ltd., the defendants, for copyright infringement. In 1954, Mr. Kelley published a book called The Black Donnellys, which was published and sold as a nonfictional account of a notorious family from Lucan, Ontario. In 2004, Mr. Hendley wrote and published a book called The Black Donnellys: The Outrageous Tale of Canada’s Deadliest Feud (the “Outrageous Tale”), which cited The Black Donnellys as authority for many of the historical events detailed in the book. Despite The Black Donnellys being published as nonfiction, the plaintiffs argued that some of the events described in the book were actually fictional, or contained embellishments made by the author. It was on the basis of these alleged embellishments and “fictional accounts” that the plaintiffs based their claim of copyright infringement against the defendants under sections 3[1] and 27[2] of the Copyright Act (the “Act”).

Analysis and Decision

In its analysis, the Court began by clarifying that in Canada, copyright subsists “in every original literary work”, regardless of “whether that work is one of fiction or nonfiction”[3]. The Court further reiterated the longstanding principle that there is no copyright protection in facts or ideas, but rather, copyright protects the original expression of those ideas. What is critical for copyright infringement is whether there was a substantial taking of the work in issue, defined as the “part of the work that represents a substantial portion of the authors’ skill and judgment”[4]. Importantly, the historical accuracy of the presented facts in a work is not contemplated by the Act. Therefore, the factual aspects of The Black Donnellys were excluded from the Court’s comparison of passages from The Black Donnellys and the Outrageous Tale in its determination of whether there was copying of a “substantial part” of the originality of The Black Donnellys.

After the facts were excluded, the Court concluded that any similarities between the works were so minimal that they did not amount to a substantial taking. Therefore, the Court held that there was no copyright infringement. Moreover, the Court stressed that an author cannot publish a work as nonfiction and later claim that the facts were actually fiction for the purpose of pursuing a copyright case. There are clear public policy reasons behind this principle; the public should be able to rely upon published facts without the concern that the author will later turn around and sue for copyright infringement at a whim. The Court did leave open the possibility that future cases may arise in which asserted “facts” are so implausible that the work must be interpreted as a fiction; however, this scenario was not applicable in this case.

Importance of Court Decision and Key takeaways

• Winkler is the first Canadian decision addressing a nonfiction work that was later claimed to be fiction.
• The law is similar in other countries; for example, in the United States, the doctrine of copyright estoppel (also known as the “asserted truths” doctrine) protects against copyright holders of a nonfiction work who subsequently seek to claim that the work is fiction as grounds for copyright infringement.
• The Court further affirmed the longstanding principle that there is no copyright protection in facts or ideas but rather the expression of those ideas. Importantly, as a general rule, the accuracy of such facts or ideas is not contemplated for the purposes of copyright protection.

Conclusions

The decision in Winkler is an important consideration for authors who intend to publish and market a book, and highlights the need to look to the future regarding the scope of copyright protection in a published work. Of particular importance is the need to be clear about what is being presented as fact and what is embellished in a nonfictional account. Therefore, prospective authors should also consider consulting with a lawyer experienced in copyright law to discuss how they can best protect their rights in a given literary work.

For expert assistance with any issues pertaining to copyright in a work, please reach out to MBM for a free consultation:

Late Report of Patent Grant leads to Irretrievable Loss of Drug Patent Register Listing Rights

By Claire Palmer & Osman Ismaili, September 14, 2021

Merck Canada Inc. v Canada (Health), 2021 FC 345

The grant of a patent containing a claim that relates to a medicine or use of the medicine approved by Health Canada triggers a 30-day deadline from the date of payment of the final fee to list the patent on the Patent Register maintained by the Therapeutic Products Directorate. A careful review of the timing of the grant after payment of the Final Fee (i.e., Issue Fee) in this case and the Canadian Intellectual Property Office’s service standards offers valuable lessons.

In this decision, the Federal Court (the “FC”) dismissed an application for judicial review brought by Merck Canada Inc. (“Merck”) over the refusal by the Minister of Health (the “Minister”) to add Canadian Patent No. 2,830,806 (the “‘806 Patent”) to the Patent Register pursuant to section 4(6) of the Patented Medicines (Notice of Compliance) Regulations (the “PM(NOC) Regulations”).

Background

Merck markets KEYTRUDA®, a biologic drug for the treatment of certain advanced-stage cancers. The ‘806 Patent was issued on May 12, 2020, and contains claims that are directed to a formulation of the drug KEYTRUDA®.

The issuance of the ‘806 Patent was not reported by the Canadian patent agent retained by Merck’s American parent company (“Merck USA”) until June 15, 2020, more than a month after the patent had issued. Merck USA had however independently learned of the issuance on June 12, 2020 and immediately instructed Merck to take the necessary next steps. Patent lists were submitted the same day, but after the close of business, and were therefore deemed to have been filed on Monday, June 15, 2020.

On June 19, 2020, the Minister informed Merck of the preliminary determination that the patent lists relating to the ‘806 Patent were ineligible for being submitted outside of the 30-day window stipulated in section 4(6) of the PM(NOC) Regulations. Merck replied with written representations and affidavit evidence.

The Minister later confirmed on November 6, 2020 that the patent lists relating to the ‘806 Patent were ineligible for inclusion on the Patent Register holding, among other elements, that the Time Limits and Other Periods Act (COVID-19) (the “Time Limits Act”) does not extend the deadline within which first persons may submit patent lists in accordance with s 4(6) of the PM(NOC) Regulations; and that the 30-day deadline in section 4(6) of the PM(NOC) Regulations is not discretionary.

Analysis

Merck argued that the Minister’s refusal would deprive the patent holder of substantial protections available under the PM(NOC) Regulations. Additionally, Merck said it would suffer prejudice because a subsequent entrant would be able to file a drug submission after the expiry of the six-year “no file” period for KEYTRUDA®, on May 19, 2021.

The issues, in this case, were a) was the Minister’s determination reasonable that the Time Limits Act cannot be applied here and as a result cannot suspend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations? And b) was the Minister’s determination reasonable that she had no discretion to extend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations?

The FC determined that the Minister’s decision would be subject to review against the standard of reasonableness, meaning the FC would only intervene if “there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency.”

With regard to the reasonableness of the Minister’s determination, that the Time Limits Act did not cause suspending of the 30-day time period specified in section 4(6) of the PM(NOC) Regulations, the FC found that the Time Limits Act applied in only three circumstances: limitation or prescription periods for commencing a proceeding before a court; time limits for doing something in a proceeding before a court; and time limits where a party makes an application for leave of a court, either to commence a court proceeding or to do something in relation to a court proceeding. Merck asserted that section 4(6) of the PM(NOC) Regulations functions as a “gateway” to the summary litigation provisions that begin at section 6(1), and therefore Merck argued that the 30-day period specified in section 4(6) of the PM(NOC) Regulations is a “limitation period within a limitation period.” The FC concluded that the listing of a patent on the Patent Register pursuant to section 4(6) of the PM(NOC) Regulations is too remote from the commencement of a court proceeding under section 6(1) to constitute a “limitation period within a limitation period” for the purpose of section 6(1) of the Time Limits Act.

With regard to the Minister’s determination that she had no discretion to extend the 30-day time period specified in section 4(6) of the PM(NOC) Regulations being reasonable, Merck relied on a previous FC decision to argue that the Minister may add a “late” patent list to the Patent Register. The FC was not convinced of this argument though, maintaining that it is well established that the timelines prescribed by the PM(NOC) Regulations are exact. The FC further added that the 2017 amendments to the PM(NOC) Regulations also did not confer any new discretionary powers to the Minister.

The FC concluded that the Minister’s decision was justified, intelligible and transparent, and therefore reasonable. No costs were awarded by agreement of the parties.

Commentary

A patent will only issue in Canada following payment of the Final Fee. The Client Service Standards at CIPO for grant of a patent after payment of the Final Fee is stated as being within 12 weeks (Client Service Standards - Canadian Intellectual Property Office).

The Final Fee for the ‘806 application was paid on March 20, 2020. The ‘806 patent granted 53 days later (about 7½ weeks) well before the 12 weeks service standard. A brief review of recently issued patents in Canada indicates that the quick grant of the ‘806 patent was not an anomaly and that patents are regularly granting within 6 to 8 weeks of payment of the Final Fee.

A key takeaway from this case is that once the Final Fee is paid for applications that are eligible for listing on the Patent Register, the CIPO database should be monitored closely for grant of the patent. To help with that, CIPO now also lists “Forecast Issue Date” on the Administrative Status page for each patent application and further sends a notification by email that the patent has granted. Please note that this is also applicable when filing a divisional application after payment of the Final Fee.

For more information please contact:

Claire Palmer, Ph.D., Senior Patent Agent
T: 613.801.0450
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Osman Ismaili, Patent Agent & Lawyer
T: 613.801.1054
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This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Industrial Designs - Why Should You Protect Your Unique Designs?

By Scott Miller and Grace Wang, June 15, 2021

Industrial designs (“ID”) protect a product’s unique appearance such as shape, configuration, pattern and/or ornamental features. The protection can be obtained for the design of the entire finished article or just a part of it. Examples of industrial designs can be found everywhere, ranging from your cellphone’s overall shape and graphic user interface to the colour patterns of your clothes.

The exclusive right conferred by the Industrial Design Act does not extend to what the design is made of, how it is made, or how it works. These types of considerations are protectable through patents or trade secrets. However, too often, companies focus primarily on patent protection to the exclusion of other intellectual property rights. Simply put, industrial design protection should not be neglected where shape and configuration assist in a product’s marketability. ID protection can be used alone or in conjunction with other forms of intellectual property as a less expensive means to stop infringing activity.

How the Registration System Works in Canada

Canada employs a first-to-file system which means it is not necessarily who designed first that is entitled to an ID registration but rather it is a race of who files it first at the Canadian Intellectual Property Office (“CIPO”). To obtain an ID registration, it is necessary that the design be novel, which means that no identical or substantially similar design has ever been registered or disclosed. Therefore, if designer ‘1’ created a novel design before designer ‘2’ but designer ‘1’ did not file an application or publicly disclose the novel design (i.e., left the design prototype in their garage or computer) and designer ‘2’ independently created a substantially similar design and filed for the design within 12 months from designer ‘2’s’ public disclosure, then designer ‘2’ will be entitled to the industrial design registration. Notably, an applicant (i.e., designer ‘2’) is given a 12-month window (grace period) to file from its public disclosure or the public disclosure by a person who obtained knowledge of the ID directly or indirectly from the applicant (designer ‘2’).

Before filing, you should conduct a thorough search, preferably with professional assistance from an intellectual property lawyer, to ensure your design is novel and has not been previously registered or disclosed.

Applications are kept confidential until the earlier of either the registration date or 30 months after the application filing date or priority date. Therefore, the design disclosed in the application will become available to the public following the expiry of the confidentiality period. As such, if an applicant does not wish to disclose a design prior to a product launch, careful consideration should be given to the approximate time it typically takes from application to registration of an ID (12 to 18 months).

After registration, you only have to pay a one-time maintenance fee at the 5-year mark. The application process for an industrial design is much faster than that of a patent application. The exclusive right granted by the CIPO registration begins on the registration date and ends on the later of the end of 10 years after the registration date or the end of 15 years after the filing date. Therefore, an ID registration exclusivity is anywhere from 10 to 15 years.

Converting an Industrial Design into a “Perpetual” Trademark Right which can be used to Enforce Copyright

Through proactive and strategic planning, ID’s can be used as an effective tool to ultimately result in perpetual protection for a design.

Designs such as three-dimensional shapes can be registered as non-traditional trademarks under the Trademarks Act. However, in order to obtain a shape trademark registration, unlike a regular trademark, it is necessary to provide proof (evidence) of distinctiveness of the trademark at the date of filing of the shape trademark application. To overcome the hurdle of distinctiveness, a meaningful strategy is to first secure an industrial design registration, build up distinctiveness through the monopoly granted by the industrial design registration, and at some point, during the term of the ID registration, file an application for the shape trademark. Once registered, the shape trademark is valid for 10 years and can be renewed indefinitely every 10 years. In other words, a shape trademark can exist in perpetuity with use.

The Canadian Copyright Act permits the reverse engineering of an article if more than 50 articles are made. However, if the article (i.e., shape) is itself a trademark, then it is prohibited to reverse engineer the article without infringing copyright. Therefore, the ID can be used to support a distinctiveness claim for trademark rights and ultimately lead to enforcement through copyright.

International Protection by the Hague System     

To avoid submitting individual applications in each country of interest, the Hague System for the International Registration of Industrial Designs provides an option to register an industrial design in multiple countries by filing a single international application (Hague application) with the International Bureau (IB) of World Intellectual Property Organization (WIPO).

The IB of WIPO verifies compliance with formal requirements only, without any examination for novelty. A Hague application that complies with the formal requirements is recorded in the International Register and published in the International Designs Bulletin, followed by a substantial examination by each country identified in your application under its domestic law.

In respect of Canada, the international registration is valid for the first 5 years from the date of the international registration and may be renewed twice, namely, at the 5-year mark and the 10-year mark.

Summary

A valid ID registration provides the exclusive right to prevent others from making, selling or importing an article that embodies or is substantially similar to the registered ID.

Always try to think outside the box as part of your business strategy as it is important to identify all aspects of your IP assets. For example:

• a unique design may be protected by an ID registration;
• the new, inventive and useful functionality of the product may be covered by a patent;
• the logo of the product may be registered as a trademark;
• the advertising campaign video to promote your product may be protected by copyright.

In conclusion, you should always utilize a combination of IP assets to maximize your IP protection, depending on your budget and your new product development plan.

If you have any intellectual property questions, please feel free to reach out to MBM for a free consultation.

Copyrights in Canada – Process, Timeline, Costs, and the Upcoming Proposed Changes to the Copyright Act

By Daniel Lanfranconi, March 16, 2021

Most people are familiar with patents and trademarks as the most common forms of intellectual property, however, copyrights and their importance as part of your overall portfolio of intellectual property assets are sometimes neglected. This article attempts to broadly cover the subject of copyrights in Canada in terms of process, timeline, costs, as well as the upcoming proposed changes to the Copyright Act.

What rights does a copyright holder have?

Copyright is defined by the Canadian Intellectual Property Office (CIPO) as an exclusive right to produce, reproduce, publish, or perform an original literary, artistic, dramatic, or musical work.

A common misconception is that copyright protects an idea. The truth is that copyright does not protect the idea itself but instead protects the expression of an idea. This expression needs to be “fixed” in a tangible medium (written or recorded) for you to be able to copyright it. For example, copyright gives you the right to control the expression of your original written or recorded speech. As a result, you can charge a fee for allowing another party to express themselves in the same way you expressed yourself in your copyrighted speech as well as your copyrighted literary, artistic, dramatic, and musical works.

How long do copyrights last?

Copyright in Canada currently exists for the author’s lifetime, the remainder of the calendar year in which the author dies, plus 50 years following that calendar year.

However, changes to these current time limits are coming. On February 11, 2021, the Canadian government announced that due to the Canada-United States-Mexico Agreement (CUSMA), Canada has agreed to extend, by the end of 2022, the protection period to a minimum of the author’s lifetime, the remainder of the calendar year in which the author died, plus 70 years following that calendar year.

Why register copyrights?

Copyright is automatic and protects an original work the moment the work is created. Therefore, copyright does not have to be registered for an author to have copyright rights.

However, registering copyright for your work can be very beneficial because going through the official registration process with the Canadian Intellectual Property Office (CIPO) results in a registration certificate. This registration certificate is an official Canadian government document that is proof that you have rights to your work’s expression and provides a date stamp. This registration certificate can be persuasive evidence when suing someone who is infringing your rights.

How long does it take to register a copyright?

Copyright registration can generally be obtained within a few weeks.

How much does it cost to register a copyright?

Copyright registration is relatively inexpensive. The full process from drafting the copyright application, ensuring that the work is categorized correctly, filing it, reviewing the issued certificate of registration, and sending it to the author, is approximately $400, including MBM professional fees and the required government fees.

What are the steps to register a copyright?

The first step is to draft and file a copyright application.

A crucial piece of information required at this step is the date and place of your work’s publication. It is critical to make sure that CIPO correctly records the date and place of publication if in the future you decide to litigate against an infringer and the infringer argues that their work predates your work.

The next step in the process is an examination of the application by CIPO. If the CIPO examiner determines that the application requires changes, amendments to the application will need to be filed to prevent rejection. Once all the objections are satisfied, the application will register, and the registration certificate will be issued.

What are the proposed amendments to the Canadian Copyright Act?

Two Private Member’s Bills C-272 and S-225, may result in changes to the Copyright Act.

Private Member's Bill, C-272 was introduced on February 22, 2021, to add section 41.121 to the Copyright Act to modify the treatment of technological protection measures (TPMs). TMPs reduce copyright infringement by controlling the use of a work. The Copyright Act provides stiff penalties including, imprisonment and/or fines up to $1,000,000 for circumventing TMPs. The proposed amendment can allow a person to circumvent "a technological protection measure that controls access to a computer program if the person does so for the sole purpose of diagnosing, maintaining or repairing a product in which the computer program is embedded". As a result, Bill C-272 will add an additional circumvention exception to the current circumvention exceptions allowed by the Copyright Act. The existing circumvention exceptions include exemptions for law enforcement and national security, reverse engineering for software compatibility, encryption research, verification if a TPM permits the collection or communication of personal information, security testing of computer systems, and accessibility for disabled persons.

Private members bill S-225 was introduced on February 17, 2021, to add a section to the Copyright Act to allow remuneration for journalistic works. This bill was introduced because news stories are easily shared using social media without paying a royalty to the copyright holder. As a result, news publisher’s advertising revenue has decreased significantly while at the same time, social media platforms that facilitate this sharing have significantly increased their advertising revenue. The amendment proposes to add, "[i]f a journalistic work ... is reproduced or published on a digital platform that is owned or controlled by a designated digital platform provider, the Canadian journalism organization that owns the copyright in that journalistic work is entitled to remuneration”.

This article broadly covered the process of copyrights as well as some of the upcoming suggested changes to the Copyright Act. If you have created an original literary, artistic, dramatic, or musical work and you have further questions and would like to understand your rights and file one or more copyrights, please feel free to contact MBM for a free consultation.

For more information please contact:

What Are the Risks of Not Patenting Your Invention?

By David Fraser, March 2, 2021

Companies large and small often think long and hard about whether to patent their products. For small companies and startups, it is often a question of limited time and money. For larger companies, budget is also a concern, but often it is also the time required of inventors to adequately document an invention disclosure and to work with a patent professional. Often, a patent inventor is also a company executive such as the CEO or CTO and their time is limited.

So, what happens if you decide not to patent? What are the possible drawbacks? What are the risks?

A patent can be looked at in several ways:

• It can be viewed as a type of insurance: if someone copies my invention or if someone else tries to patent the same invention or a very similar one.
• It can also be looked at as an investment.
  • It may allow you to gain access to a competitor’s patents by licensing your patents to them in return.
  • Filing a patent might be necessary or very helpful in obtaining financing from investors.
• It also allows you to license your invention to others and collect a royalty fee. Technology licensing can be very important for a small company that may lack the resources to fully benefit from their invention.

One of the first things to consider is whether a competitor or third party can figure out your invention based on seeing your product in use, by simply viewing it, or by reverse engineering it. For some inventions, it is clear what is being done as soon as you see it. For other inventions, it can take a significant amount of analysis to figure it out. The more your invention is successful and popular, the more incentive there is for someone to try to determine how it works. Without patent protection, once someone has figured it out there is nothing stopping them from using it themselves.

Another thing to consider is what happens if someone else patents your invention independently. For certain pressing problems, there may be several different teams looking for a solution simultaneously. If you decide not to patent your solution, someone else may patent theirs first and it may be sufficiently broad to encompass what you are doing as well. Luckily, if you are already practicing your invention before the other patent is filed or published, depending on the jurisdiction, you may continue to do so. However, this can quickly get complicated as you may be called upon to prove that your use of your invention predates your competitor’s patent. Things can also become more complicated if you decide to sell your business or a portion of your business. Can the buyer practice your invention, or can you continue to do so? If your exit plan involves a possible sale of your company, the lack of a patent or the presence of a competing patent could be a real barrier to you realizing your goals.

To make the right decision whether to patent or not, here are some things to consider:

1. Can a competitor easily figure out your invention from your product?

2. Would someone else obtaining a patent that covers your invention overly restrict your business plan and options?

3. Is the cost of a patent reasonable given your investment in product development and predicted sales?

4. Do you require a patent as insurance when working with partners or manufacturers?

If you do decide that filing a patent is the right decision, here are a few steps you should take:

1.Be careful not to disclose your invention or offer it for sale before filing your patent application as it may prevent you from obtaining the patent.

2.Remember that the first to file gets the patent, so don’t delay filing your patent too long or someone else might beat you to it.

3.Take advantage of any government programs that help with funding for patent applications.

No matter what you decide, we recommend that you consult with a patent professional to evaluate the risks and tradeoffs of your patenting decision.

If you are considering patenting your innovation or product, please feel free to reach out to MBM for a free consultation.

For more information please contact:

Foreign Prosecution History: To Admit, Or Not To Admit, That Remains a Puzzle To Canadian Courts

By Osman Ismaili and Grace Wang, February 16, 2021

CanMar Foods Ltd. v. TA Foods Ltd., 2021 FCA 7

Section 53.1 of the Patent Act has brought about a significant shift in the Canadian approach to file wrapper estoppel by enabling the introduction of a patent’s prosecution history during claim construction. Prosecution files are now admissible to rebut a patentee’s representation that attempts to recapture ground conceded during the patent prosecution to avoid prior art.

In a unanimous decision, the Federal Court of Appeal (“FCA”) concluded that the Federal Court (“FC”) should have refrained from considering the prosecution history of the corresponding US Application at the trial level. However, whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act is still unclear.

Background

CanMar Foods Ltd. (“CanMar”) and TA Foods Ltd. (“TA”) are two Saskatchewan corporations competing in the business of manufacturing flax seed products. CanMar alleged that TA infringed its patent (the “376 Patent”) entitled “Methods for Roasting Oil Seed, and Roasted Oil Seed Products.” However, TA argued that its oil seed roasting or cooking process fell outside the claims of the ‘376 Patent. Specifically, TA’s process neither heated oil seed in a “stream of air” nor maintained the oil seed in an “insulated roasting chamber or tower.” Furthermore, these two limitations were added by CanMar during the prosecution of the corresponding US Patent Application (the “405 Application”).

In contrast, TA only used a Micronizer for heating oil seed via infrared radiation. Moreover, it was determined that the hoppers and the cooling tower of the Micronizer were clearly uninsulated. Therefore, TA claimed that no infringement could be found on the essential elements of the ‘376 Patent.

The trial judge considered two issues: first, CanMar expressly acknowledged that the claims of the ‘376 Patent had been amended to be substantially the same as the corresponding claims of the ‘405 Application in the United States; second, CanMar admitted that the amendments had limited the scope of the claims in order to overcome the novelty and obviousness concerns raised before the USPTO.

Therefore, the trial judge concluded that the language of section 53.1 generally should be limited to communications between the patentee and the Canadian Patent Office. However, consideration of foreign prosecution histories may be permissible as part of a purposive construction of the claims of the ‘376 Patent in such “extraordinary circumstances”.

Given that TA’s roasting process did not comprise the two essential elements at issue, the trial judge held that TA did not infringe any claims of the ‘376 Patent.

Analysis

In the appeal decision, the FCA considered the scope of section 53.1 and whether it should cover communications between patentees and foreign patent offices.

The FCA found that the trial judge’s heavy reliance on the US case of Abbott Labs v. Sandoz, 566 F.3d 1282 (2009) [Abbott Labs] was inappropriate. In Abbott Labs, the US patent claimed priority from the application of the foreign patent which necessarily entailed that express reference to the foreign patent was made. Such was not the case here. Another US case, Paice LLC, The Abell Foundation, Inc. v. Ford Motor Company, 881 F.3d. 894 (2018) was found to be more relevant, citing that "[t]o incorporate material by reference, the host document must identify with detailed particularity what specific material it incorporates and clearly indicate where that material is found in the various documents."

However, CanMar only mentioned briefly in a response to the Examiner that “new claims 1-19 correspond substantially to those submitted during prosecution of a related United States application.” The FCA held that it would be a far stretch to say the prosecution of the US Application was incorporated by reference when the specific application was not even cited within the document.

Furthermore, the FCA considered the public policy reasons and held that allowing foreign patent prosecution history into the analysis might lead to overly contentious and expensive litigation. While the global system has become more interconnected, some differences lie in the respective registration processes and the languages of patent claims. For example, a party may disclaim an element in one country that they do not have to disclaim in another, and the potential issues of translation may lead to major problems in the interpretation of the claims as well.

That being said, the FCA also pointed out that one should not underplay the public interest in keeping those previously disclaimed elements from being re-claimed in future infringement cases.

In conclusion, the FCA ruled that the corresponding US prosecution history should not be considered, but wished to express no firm views on the broader issue of whether the prosecution history of a foreign application can ever be considered pursuant to section 53.1 of the Patent Act. As a result, the FCA simply upheld the underlying decision that TA did not infringe the ‘376 Patent at issue and that CanMar’s appeal should be dismissed.

Commentary

Before the introduction of section 53.1 of the Canadian Patent Act, it was very clear that the prosecution history in another jurisdiction was inadmissible for the purpose of claim construction. In this case, section 53.1 of the Patent Act is perceived as a step to better align Canadian law with its UK and US counterparts.

The importance of the trial level decision was significant, as it was the first case in Canada to interpret the purpose of section 53.1 and how it compares to the application of file wrapper estoppel in the UK and the United States. The broader issue of whether the prosecution history of a foreign application can ever be considered will be left to the courts to clarify in future decisions.

If you are dealing with an IP litigation issue, please feel free to reach out to MBM for a free consultation

Taste, Smell, Sound, Touch, and Sight - Appealing to All Five Senses with Non-Traditional Trademarks

By Deborah Meltzer, February 2, 2021

Words and logo designs tend to steal the show when it comes to what many typically associate with the term “trademark”. What is often underrepresented is that trademarks can be used to interact with consumers beyond their two-dimensional, visual components. In June of 2019, the Canadian Trademarks Act was amended and now includes a slew of non-traditional trademarks, such as three-dimensional shapes, colours in abstract, moving images, modes of packaging goods, smells, tastes, sounds, positions, textures, and holograms.

The expansion of the legal definition of a trademark in Canada, in conjunction with the potential perpetual term of protection, offers brand owners significant incentive to employ a multi-pronged approach in the protection of their products and services. Various unique elements of a product or unique features of consumer experience in the performance of a service may be protected as trademarks. By way of illustration, in practice, this can include the unusual shape of a bottle, the exclusive scent of a store, a catchy jingle, or the texture of a handbag. But like all good things, there is a catch. The Trademarks Act includes certain limitations which restrict the availability of non-traditional trademark protection.

Trademark protection cannot be extended to features which are dictated primarily by utilitarian function, in relation to the associated goods and services (s.12(2) of the Trademarks Act), nor can they unreasonably limit the development of any art or industry (s.18.1 Trademarks Act). For instance, it is unlikely that the taste of mint could be trademarked in association with gum, or a flowery scent trademarked in association with perfume, as these features are dictated by the functional aspect of the respective goods and would unreasonably limit the art and/or industry. On the contrary, the taste of mint in association with lipstick, or a flowery scent in association with stationary would likely not contravene the Trademarks Act. These provisions are also largely intended to remove the possibility of extending perpetual trademark protection to features which would otherwise be protected through a patent. In fact, the Lego® brick was famously the subject of this exact dispute before the Supreme Court of Canada.[1]

Moreover, at the examination stage, unlike in the case of a traditional trademark, the Canadian Trademarks Office will typically require evidence of distinctiveness of the applied-for non-traditional trademark. This means that the applicant would need to prove that the trademark has amassed sufficient reputation in Canada, to the point where the average Canadian consumer has been adequately educated as to its trademark status. This is often referred to as a “secondary meaning” since the evidence would need to demonstrate that the trademark’s overwhelming reputation causes consumers to dispense of its primary meaning. A classic example is the Coke® bottle. A bottle containing cola (primary meaning) is not specific to a single source, however the Coke® bottle is instantly identifiable, even when stripped of its label, because of the tremendous consumer recognition of that particular bottle shape belonging to Coca-Cola (secondary meaning). As such, it is advisable that a brand owner has several years of use of their non-traditional trademark and compile detailed evidence of the trademark’s reputation prior to formally applying for its registration with the Canadian Trademarks Office.

In creating marketing strategies, brand owners should consider the proprietary potential in thinking “outside the [traditional] box”. For example, in contemplating protecting a unique shape as a trademark, brand owners should consider taking advantage of the monopoly afforded by an industrial design in order to secure exclusivity and reputation in the shape, prior to filing for trademark protection. All things considered, creative branding strategists should venture beyond the conventional two-dimensional eye candy appeal of words and logos, and contemplate trademarks which can be perceived in three dimensions, felt, smelt, tasted or heard.

Despite the potential challenges with acquiring registrations for non-traditional trademarks, our team is accustomed to developing tailored non-traditional trademark strategies designed to properly position brand owners for success. If you are thinking of protecting a non-traditional branding element as a trademark, we would love to chat. MBM offers initial consultations at no charge.

The Supreme Court of Canada May Hold Your Silence as Dishonesty in Contract Performance

By Osman Ismaili and Grace Wang, January 19, 2021

C.M. Callow Inc. v. Zollinger, 2020 SCC 45

This case is applicable to all types of contracts including those involving Intellectual Property. The duty of honest performance requires that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of a contract.

In a 5-3-1 split decision, the Supreme Court of Canada (the “SCC”) re-affirmed the duty of honest performance in a contract, formulated originally in Bhasin v. Hrynew, 2014 SCC 71. In this case, Callow did not deny the existence of the right of termination but argued for the wrongful manner in which Baycrest had exercised the contractual right to terminate the winter maintenance agreement with Callow.

Background

In 2012, Callow entered into a two-year winter maintenance agreement and a separate one-year summer maintenance agreement with Baycrest. Baycrest was entitled to terminate the winter agreement unilaterally, for any reason, upon giving 10 days’ written notice.

In early 2013, Baycrest decided to terminate the winter agreement but chose not to inform Callow in a timely manner. Throughout the spring and summer of 2013, communications between Callow and Baycrest included discussions about renewing the winter agreement, in which Baycrest created a false impression that a renewal of the winter agreement was likely and that the current winter agreement would not be terminated. As a result of these communications, Callow did not bid on any other winter contract. Callow also offered extra services to Baycrest during the summer, which they hoped would be an incentive for Baycrest to renew the winter contract. Baycrest accepted the free services with silence.

In September 2013, Baycrest terminated the winter agreement by giving the required 10 days’ notice. At this point, it was too late for Callow to secure any alternative winter contract. Callow sued for breach of contract, alleging that Baycrest had acted in bad faith.

Analysis

The trial-level judge found that statements and conduct by Baycrest actively deceived Callow from the time the termination decision was made to September 2013 and awarded damages to Callow in order to place it in the same position as if the breach had not occurred. The Ontario Court of Appeal (“ONCA”) reversed the trial judge’s decision and held that the judge had erred by improperly expanding the duty of honest performance beyond the terms of the winter maintenance agreement.

Callow appealed the ONCA’s decision to the SCC. The SCC looked at two critical issues when considering if Baycrest breached its duty of honest performance:

(1) did Baycrest’s conduct constitutes dishonesty; and

(2) was Baycrest’s dishonesty directly linked to the performance of the contract?

In the majority opinion, it was concluded that by knowingly misleading Callow into believing the winter maintenance agreement would not be terminated, Baycrest had breached its duty of honest performance on a matter directly linked to the performance of the contract, even if the 10-day notice requirement was satisfied, and irrespective of their motive for termination. When awarding damages, the court considered if Baycrest's dishonesty had not deprived Callow of the opportunity to bid on other contracts, then Callow would have made an amount that was at least equal to the profit it lost under the winter maintenance agreement.

In the concurring opinion, 3 judges concluded that the majority's reliance on the civilian doctrine of abuse of a right distorts the analysis in Bhasin v. Hrynew and ignores the distinction between honest performance and good faith in the exercise of contractual discretion.

The only dissenting judge concluded that Baycrest’s conduct may not be laudable, but it does not fall within the category of “active dishonesty” prohibited by the duty of honest performance. The dissenting judge found Baycrest had no obligation to speak when it became aware of Callow’s mistaken belief that the contract would not be terminated unless Baycrest had taken positive action that materially contributed to that belief. The justice further found that absent a duty to disclose, it is far from obvious when exactly one’s silence will knowingly mislead the other contracting party or at what point a permissible silence turns into a non‑permissible silence that may constitute a breach of contract.

Commentary

There are a few key takeaways from this case:

First, your intention may be irrelevant. You may get sued for creating misapprehension or giving false statements, even if you do not intend the counterparty to rely on it. The counterparty may draw conclusions from your conduct as well. For example, when discussing terms of a potential renewal, they may reasonably infer that the contract is likely to be renewed. When you realize that the counterparty has a mistaken belief about the performance of the contract, and only if your conduct has caused that mistaken belief, you should immediately correct them.

Second, a key difference lies between “relevance to the contract” and “relevance to the performance of the contract”. If you fail to disclose matters relevant to the contract itself but irrelevant to the performance of the contract, this does not breach the duty of honest performance, unless there is a separate duty to disclose.

Third, whether or not a party has "knowingly misled" its counterparty is a highly fact-specific determination, and can include lies, half-truths, omissions and even silence. This merely exemplifies that dishonesty or misleading conduct is not confined to direct lies. Therefore, if you doubt whether the exercise of a contractual right or performance of contractual duty constitutes a breach of duty of honest performance, you are strongly advised to seek legal advice to reduce the risk of future litigation.

If you are dealing with Intellectual Property contracts or Intellectual Property contract disputes, please feel free to reach out to MBM for a free initial consultation.

Software and Business Method Patents - How to Improve Your Chances?

By David Fraser, January 5, 2021

Some of the most valuable inventions are software implemented methods. Many software methods are business method patents designed to make business more efficient. These include Artificial Intelligence (AI) / machine learning applications and Financial Technology (Fintech) applications.

Software patents, historically, were not considered patentable. This is because mathematical algorithms (scientific principles and abstract theorems) are generally not patentable in Canada and computer programs were seen as simply an implementation of mathematical algorithms and formulas. As the patent office historically stated, if an invention did not have a physical existence or manifest a discernible physical effect or change, you could not patent it.

This changed in 2010 with the granting of the Amazon 1-click patent. Subsequently, the Canadian Intellectual Property Office (CIPO) updated their Examination practice guidance to say that given a purposive claim construction, if a computer (to execute the software) was found to be an essential element, the combination of the computer and the software, being a tangible device, could be patented.

Purposive claim construction was defined by the Supreme Court of Canada in 2000 and a two-part test was developed to determine if a claim element was essential or non-essential. A claim element is essential if:

• Modifying or substituting the claim element would change the way the invention works
• The inventor intended that the claim element be essential

If a claim element is essential, the patent Examiner must consider it. If a claim element is non-essential, a patent Examiner may ignore it.

Unfortunately, the guidance from CIPO only cited the first part of the test and omitted the second. This meant that many computer-implemented claims were rejected because the Examiner would determine that the computer was non-essential, ignore it, and be left with only the computer algorithm. The remaining algorithm would then be found to be an abstract theorem and be rejected.

This changed at the end of 2020 when the Federal Court ruled that CIPO’s guidance goes against the Supreme Court’s two-part test. Recently, CIPO has issued new guidance so that the full two-part test for determining essential and non-essential claim elements will be used.

This is great news for inventors and companies innovating in the field of software, financial, and business methods. No longer can the patent office so easily ignore the physical aspects of your inventions and reject your patents.

To ensure that your software inventions can be patented there are several steps you can take:

1. Make sure that there are physical elements in your claims that are essential elements. There must be an essential physical aspect of your invention. Your patent professionals can help you with this.

2. Your invention should provide a technical solution to a technical problem. It is best that your invention produces a physical effect or change.

3. If your invention improves the operation or efficiency of the computer itself, this should be highlighted.

4. Describe the physical environment in which the software operates. Don’t just describe the mathematical algorithm; include the computers, the network, servers, and the external world in which it operates.

5. If your system obtains data from external sensors or uses the results to control something in the real world, include these details.

If you have a software invention that you are considering patenting, please feel free to reach out to MBM for a free consultation.

For more information please contact:

Effective Consent Made Easier Under the NOC Regulations

By Jamal Hakimi, December 8th, 2020

Case introduction:

The Patented Medicines (Notice of Compliance) Regulations (“NOC Regulations”) permit the Minister of Health (“Minister”) to issue a notice of compliance (“NOC”) to a generic company where a patentee’s effective consent is obtained. Effective consent under the NOC Regulations requires the patentee’s consent for the making, constructing, using or selling of a drug in Canada (“Activities”). This was at issue in Fresenius Kabi Canada Ltd. v. Canada (Health), 2020 FC 1013 in which the Federal Court of Canada (“Court”) determined that effective consent under the NOC Regulations requires the patentee’s consent for only one of the Activities and not all Activities.

Case background:

Fresenius Kabi Canada Ltd. (“the Applicant”) brought an application for judicial review of the Minister’s refusal to issue a NOC. The Applicant had sought an NOC for its drug adalimumab, IDACIO, which is a biosimilar of the drug, HUMIRA, owned by AbbVie Biotechnology Ltd. (“AbbVie”). AbbVie also owns a number of patents (“Patents”) in respect of HUMIRA. In seeking an NOC, the Applicant had relied on AbbVie’s consent to comply with the NOC Regulations. AbbVie had provided immediate consent to the making and constructing of IDACIO, and a delayed consent, until after February 15, 2021, to the using and selling of IDACIO. The Minister refused to issue a NOC because AbbVie’s consent was only effective after February 15, 2021, when consent to all Activities had been provided.

The Court decision:

The Court found the Minister’s refusal unreasonable partly because the Minister erred in interpreting the word “or” as conjunctive “and” in the NOC Regulations, which recites “consent to the making, constructing, using or selling of the drug in Canada.” The Court reasoned that “the word ‘or’ is presumed to be disjunctive, but inclusive, such that, as in this case, a patent owner could consent to each or a combination of the activities listed - making, constructing, using or selling - to meet the [consent] requirements” of the NOC Regulations. The Court found AbbVie’s consent as unequivocal to all Activities, despite the temporal nature of the consent. The Court overturned the Minister’s decision and ordered the Minister to issue the NOC.

The Court based its reading of the word “or” on the NOC Regulations’ dual purpose, “to balance effective patent enforcement over new and innovative drugs with the timely market entry of their lower-priced generic competitors.” The Court noted that an NOC is essential for the timely launch of a biosimilar product, which is critical for biosimilars to remain competitive and establish their market position.

Key takeaway:

The Court’s interpretation of the word “or”, as disjunctive, but inclusive, clarifies that requirements of consent, under the NOC Regulations, are met so long as the patent owner consents to at least one of the Activities.

Please feel free to reach out to MBM with regards to any Intellectual Property matters in Canada.

Common Patent Misconceptions - Myth #5 - Provisional Applications

By Osman Ismaili, November 24, 2020

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #5: Even if my invention is in an early stage of development, I can still file a “quick and dirty” U.S. provisional application

A U.S. provisional patent application can be filed as a “place holder” to secure an early priority date and allows you to disclose or discuss your invention with potential investors.  A provisional application needs to be converted into a full application by the one-year mark and has to be filed individually in each country you are interested in.

Despite the fact that the formality requirements for U.S. provisional patent applications are fairly relaxed in comparison to non-provisional applications, there are still a number of good practices that inventors should keep in mind. In this article, we will explore some reasons why inventors should NOT cut corners when filing provisional patent applications.

Quality of the Provisional Application Drafted

One often hears that a provisional patent application can be as simple as sending the photograph of an idea scribbled on a napkin to the United States Patent and Trademark Office (“USPTO”). While these may still serve as stopgaps at the USPTO, their robustness and efficacy as patent applications are largely problematic.

It is generally an accepted good practice in the industry to file provisional patent applications to be as much like formal applications as possible. When inventors choose to file their provisional patent applications themselves (oftentimes by submitting presentations or academic papers), they might include language that could limit the invention, or generally set themselves up for obstacles down the road.

Enabling Disclosure in Provisional Applications

Another aspect to keep in mind is the fact that provisional applications must still provide an enabling disclosure. That is, they are held to the same standard as non-provisional applications for being able to adequately teach the invention they protect. This is in fact a key requirement in all jurisdictions. For example, section 27(3) of Canada’s Patent Act states that the “specification of an invention must correctly and fully describe the invention and its operation or use as contemplated by the inventor.”

A provisional application which only spells out an idea, but does not teach how to properly implement it, may run into problems later on, including at the formalization stage. Patent Examiners may also assign later claim dates to concepts that did not appear in the provisional application, and only appeared later in its formalization. This is why it is a good practice to ensure that that provisional application describes the invention as fully as possible.

Conversion to Formal Applications

As the provisional applications must be converted into regular applications before the 12-month time period runs out, another important point to remember is that a very rudimentary provisional patent application may be much more difficult to convert into a full patent application than a provisional application that is well-drafted. The rudimentary provisional will undoubtedly require more time, effort and money than if the starting point was a robust provisional patent application drafted by a patent professional. So while the photograph of a napkin with an idea on it may seem appealing initially, it can end up costing inventors a lot more down the road.

At a very minimum, a provisional patent application should be a robust detailed description of the invention. It should teach those skilled in the relevant art how to implement and practice the invention. The description should also describe the invention as fully as possible so that a meaningful set of claims may be drawn from it at the formalization stage, if not at the provisional stage.

Patents are not cheap, but they can turn out to be your business’s biggest assets, so it is worth investing in them and drafting them properly from the start. It is equally important to remember that patent law isn’t simple. It is one of the most complex areas of the law, with numerous potential pitfalls if you aren’t careful. That’s why hiring a professional from the start, who is trained and experienced in navigating the intricacies of patent law, can end up saving inventors a great deal of time, money and trouble in the long run.

If you have an idea that you are considering patenting, please feel free to reach out to MBM for a free consultation.

The Impact of CIPO’s New Guidance on the Prosecution of Patent Applications Directed to Diagnostic Methods

By Kay Palmer & Claire Palmer, November 10, 2020

The Federal Court in Choueifaty v. Canada (Attorney General), 2020 FC 837 decision found that CIPO’s problem and solution framed “purposive construction” was inconsistent with the principles set forth by the Supreme Court of Canada (for more background information, please see our previous article). The CIPO has now issued examination guidance in light of this decision. The updated guidance will be applied effective immediately to applications currently in prosecution as well as those presently before the Patent Appeal Board.

We believe that the impact of this change in CIPO’s practice with respect to claim construction will positively impact the prosecution of many diagnostic method patent applications. In particular, a number of claims which were found to be directed to non-statutory subject matter when incorrectly construed using the problem solution approach may now be found to be directed to statutory subject matter when construed correctly using purposive construction.

To illustrate this impact, the following claim (from the examples included in CIPO’s notice) has been construed using CIPO’s incorrect problem solution approach and the correct purposive construction approach.

Claim:

1. A method of diagnosing whether a human subject is at risk for developing cancer, comprising:

a. measuring the level of X in a biological sample from the subject; and

b. comparing said level to the level of a non-cancerous reference sample, wherein an increase in the level of X relative to said reference indicates the subject is at risk for cancer.

Under CIPO’s Incorrect Problem-Solution Claim Construction:

The typical problem CIPO would have identified for this type of claim under the problem-solution approach is a data analysis problem (i.e. relating the level of X to cancer risk). The solution to the problem CIPO would likely have identified would have been a correlation between cancer risk and the level of X and accordingly the steps related to measuring the level of X and comparing the level would have been regarded as non-essential. As such, the only element CIPO would have identified as essential would be the correlation between cancer risk. Such a correlation step is a disembodied idea and therefore the CIPO would have found that the claim is directed to non-statutory subject matter.

Under Purposive Construction:

There is no language in the claim indicating that any of the steps are optional. Accordingly, all the steps (including the steps related to measuring X and comparing the level of X) are essential.

As the essential elements are not limited to a disembodied idea, CIPO would find that the claim is directed to statutory subject matter.

Given this change in CIPO’s practice, we recommend reassessing any cases directed to diagnostic methods that were impacted by CIPO’s incorrect problem-solution claim construction methodology.

Please feel free to reach out to MBM if you need help regarding reassessing any cases directed to diagnostic methods.

For more information please contact:

Kay Palmer, Ph.D., Senior Patent Agent
T: 613.801.0452
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Claire Palmer, Ph.D., Senior Patent Agent
T: 613.801.0450
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This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Enforcing Copyright Outside the Courtroom – The New Notice Regimes

By Osman Ismaili and Maxwell Wong, October 27, 2020

With the ever-increasing presence of social media, including websites like YouTube where content can generate income, copyright infringement is escalating at alarming rates. Unfortunately, it is no secret that the cost of enforcing copyright through the courts is expensive. To mitigate these costs, this article will provide some tips on how to enforce copyright outside the courtroom.

Enforcing Copyright

The traditional pre-litigation enforcement tool is a demand letter. However, consideration should also be given to the Copyright Act ‘Notice and Notice Regime’ and where applicable, the social media platform(s) internal notice systems.

Traditional Pre-Litigation Demand Letters

Obviously, the stronger the identity of a right is explained in a demand letter the more likely the letter will have an effect. Fortunately, obtaining a copyright registration is extremely quick and relatively inexpensive. As such, consideration should be given to whether to register a copyright before the delivery of a demand letter.

Pre-Litigation Notice Letters

To avoid litigation, the federal government and social media platforms have created an alternate pathway to enforce copyright and settle disputes.

Notice and Notice Regime

To deal with growing copyright infringement that occurs via intermediaries without initiating litigation, the federal government added section 41.25, to the Copyright Act, which sets up the Notice and Notice Regime.

The Notice and Notice Regime is a voluntary-industry based system in which copyright owners can notify an intermediary, including social media platforms, that they are hosting copyright infringing material. The social media platform would then notify the copyright violator, usually by forwarding the letter they have received. Additionally, intermediaries are obligated to retain records about the alleged copyright infringement for six months after the notice is issued. Intermediaries commonly include internet service providers (ISPs).

Automatic Forwarding

Unfortunately, the original system was subject to abuse as social media platforms tended to forward all copyright notices they received in order to limit their liability. Copyright trolls and other nefarious entities would bulk mail, and email, standardized letters to social media platforms, which they would forward to the alleged infringers. These letters were used to effectively extort settlement money from alleged infringers.

To prevent this abuse, the federal government amended section 41.25 (3) of the Copyright Act to prohibit these notices from containing:

1. An offer to settle the claimed infringement;
2. A request or demand, made in relation to the claimed infringement, for payment or for personal information;
3. A reference, including by way of hyperlink, to such an offer, request or demand; and
4. Any other information that may be prescribed by regulation.

If a notice containing any of the above is sent to an intermediary, they are no longer obligated to forward the notice or maintain any records of it. However, in practice, social media companies often still forward these notices without reviewing them. Therefore, it is important to determine the actual source of the notice and its content.

Internal Notice System

Virtually all social media platforms have developed their own copyright notice systems and policies to deal with and notify alleged copyright violators. However, YouTube and other social media platforms send out many different types of notices. Each different type of notice can result in different consequences. Thus, it is important to identify not only: (a) who is sending the notice (e.g. a lawyer, social media platform or alleged copyright holder); but also (b) what type of notice is being sent. Only after knowing both, who the sender is and what type of notice it is, can a recipient better understand the proper actions to take.

It is important to remember that regardless how far a copyright holder is along the notice path, copyright holders can still initiate legal action separately and independently at any time. The copyright holder always has the option to initiate legal proceedings.

If you are considering sending a cease and desist letter relating to intellectual property infringement, or if you have received such a letter, please feel free to reach out to MBM for a free consultation. Also, stay tuned for a separate article discussing specifically YouTube’s internal controls for IP infringement.

For more information please contact:

High Stakes: Protecting Your Cannabis Intellectual Property

By Poonam Tauh and Carl Farah, October 13, 2020

It has been almost two years since the federal legalization of cannabis, and Canada’s legal cannabis market is quickly blossoming into a massive industry. The market is constantly growing with many US states (e.g., Illinois) and Europe embracing regulatory change. Market research predicts that the global legal cannabis market could reach CAD $100 billion by 2027[1].

While medical cannabis has traditionally been a source of intellectual property (IP), legalization is sure to bring an influx of applications in the coming years. Therefore, understanding and deploying your IP toolbox to its fullest potential is the best means of ensuring strong protection of your IP assets. This article will briefly discuss some of the tools that cannabis businesses should consider when creating a robust IP moat around their products and services.

Patents in the cannabis industry can include novel or modified active ingredients, methods for the isolation of novel cannabinoids, novel formulations of active ingredients, genetically modified cells, and the use of compositions comprising cannabinoids for treatment.

In addition to patents, Plant Breeders Rights (PBRs) are an excellent complement and can be used to protect new cannabis plant varieties. PBRs are a form of intellectual property that specifically protects new plant varieties and offers exclusivity in terms of the sale, production, reproduction, import and export of the variety. This protection can be further extended beyond Canada by filing an international application.

While higher life forms are not patentable subject matter in Canada[2], genetically modified cells and methods of producing such cells are patentable[3]. New plant varieties that have been produced by traditional breeding methods are not patentable and as a result, are only eligible for protection under PBR. As such, businesses should take advantage of both regimes by obtaining a patent to protect genetically modified cells and PBRs to extend protection to the resulting plant variety.

In order to be granted protection under PBRs, the variety must meet the following criteria:

• New: the variety may not have been sold longer than 1 year in Canada and 4 years outside Canada;
• Distinct: the variety must be distinguishable from varieties whose existence was common knowledge on the date of filing;
• Stable: the variety must express a stable set of characteristics throughout propagation; and
• Uniform: the variety must exhibit characteristics that are consistent between plants within the variety.

Industrial designs are another useful tool in your IP arsenal and can be used to protect the three-dimensional features of a shape and configuration, as well as the two-dimensional features (patterns and ornaments) of finished products intended to be sold (e.g., cannabis cigarettes). Once granted, an industrial design offers protection for up to 15 years. Businesses should also be aware that Health Canada has strict regulations surrounding the packaging design for cannabis products.

Trademark registration is another available tool cannabis businesses should employ to protect their brand. It is important to be mindful that, for example, cannabis products or any related service cannot be promoted by depiction of a person, character, or animal, whether real or fictional. For additional information, check out our recent article about how to properly protect your cannabis-related trademarks. Canadian businesses should also be aware that American companies might choose to register their trademarks in Canada due to some difficulty in obtaining a cannabis-related trademark in the US.

Utilizing and deploying the proper tools in your IP toolbox is the best way to maximize the value of your cannabis business. Consult a professional at MBM to discuss how to best protect your IP portfolio.

Federal Court Finds CIPO Examination Practice Out of Line with Supreme Court Precedents

By Claire Palmer & Kay Palmer, September 29, 2020

The Federal Court in a recent decision found a wide-reaching examination practice respecting purposive construction that was introduced by The Canadian Intellectual Property Office (CIPO) 7 years ago, to be against principles of purposive construction set forth by the Supreme Court and damaging to the prosecution of patents in several technology areas.

CIPO issued practice notice PN2013-02 entitled “Examination Practice Respecting Purposive Construction” on March 8, 2013 that instructed Examiners to frame their purposive construction of the claims through a problem and solution lens. In particular, it was CIPO’s position in this practice notice that “identification of the problem and the solution provided by the invention informs the purposive construction of the claims” and that only those elements that solved the identified problem were essential.

A second practice notice (PN2013-03) entitled Examination Practice Respecting Computer-Implemented Inventions was also issued that detailed using the problem and solution framed “purposive construction” for the examination of applications directed to computer implemented methods.

Two subsequent practice notices (PN2015-01 and PN2015-02) were also issued that detailed using the problem and solution framed “purposive construction” for the examination of applications directed to medical uses and medical diagnostic methods.

These CIPO practices significantly and negatively impacted prosecution in many areas of technology including computer implement methods, personalized medicine, diagnostics and biotechnology. In fact, to date, there have been 31 Patent Appeal Board decisions that referenced practice notice PN2013-02, ten of which included statutory subject matter objections. Of these ten, seven were refused outright.

There were also 84 Patent Appeal Board decisions that referenced practice notice PN2013-03 and 8 Patent Appeal Board decisions that reference practice notice PN2015-01.

The Federal Court in the recent Choueifaty v. Canada (Attorney General) decision (2020 FC 837) turned their eyes to CIPO’s practice of using the problem and the solution approach to inform purposive construction of the claims. This decision specifically reviewed Patent Appeal Board decision 1478 that specifically referenced PN 2013-03. Although Choueifaty v. Canada does not specifically reference the practice notices, the Court referenced the Manual of Patent of Practice 13.05.02 which incorporated the content of practice notice PN2013-02. The Court found:

[31] It is evident on a reading of the MOPOP that the Commissioner, notwithstanding stating that the patent claims are to be construed in a purposive manner, does not intend or direct patent examiners to follow the teachings of Free World Trust and Whirlpool. …

[37] The Appellant submits, and I agree, that using the problem-solution approach to claims construction is akin to using the “substance of the invention” approach discredited by the Supreme Court of Canada in Free World Trust at para 46. …

[40] For these reasons, I find that the Commissioner erred in determining the essential elements of the claimed invention by using the problem-solution approach, rather than the approach Whirlpool directs be used. (Emphasis added)

MBM welcomes this decision from the Federal Court that affirms our longstanding position that CIPO’s problem and solution framed “purposive construction” was inconsistent with the principles set forth by the Supreme Court of Canada.

Common Patent Misconceptions - Myth #4 - Disclosures

By Osman Ismaili, September 15, 2020

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #4: Even if I publicly disclose my invention, I can still get a patent application filed by the 12-month mark from the disclosure, without any repercussions.

This myth is only partly true with an important caveat. Yes, Canada, the US, and a few other countries offer a special type of grace period for inventors who have made a public disclosure of their invention. The inventors have until 12 months from the date of their public disclosure to file for patent protection within each of those countries. “Within each of those countries” is very important to remember, which means that if an invention is publicly disclosed anywhere in the world and protection is intended to be sought, for example, in both Canada and the US, then both a Canadian national filing and a US national filing must take place before the 12-month period expires.

Public disclosure is where you have disclosed your invention to anyone who is not bound by a non-disclosure or confidentiality agreement to keep your invention a secret. Does this mean that there is still a risk in publicly disclosing an invention before officially filing your patent? Yes, there is a risk that you might not get your patent in some major jurisdictions that do not offer the one-year grace period from the date of public disclosure.

In fact, while only a handful of jurisdictions allow for this one-year grace period, most other jurisdictions around the world do not, and require “absolute novelty” (which essentially means there must not be any sort of public disclosure before the filing date of the application). “Absolute novelty” requiring countries include Europe and Asia, two massive markets which a company certainly may not want to miss out on, depending on the type of invention and their market expansion goals.

It is also very important to note that the grace period works a little differently in Canada compared to the US, because of US provisional patent applications. In the US, if an invention was publicly disclosed on January 1, 2019, then a US national filing must occur by January 1, 2020 (1 year after). This first US filing could be a provisional application, which is essentially a temporary, informal application. Subsequently, one more year after that, by January 1, 2021, the US provisional application needs to be converted to a regular, full US application.

Meanwhile, in Canada, there is no equivalent to a US provisional application and as a result, only full applications can be filed in Canada and must be filed within the 12-months period from the date of disclosure. This means that, if an invention was disclosed (anywhere in the world) on January 1, 2019, and if a US provisional patent application was filed on December 31, 2019, a full Canadian application must still be filed by January 1, 2020 (only 1 year after disclosure). In Canada, a formal Canadian application is the only national application that can be filed once a public disclosure has been made.

You may be thinking that the US system essentially allows applicants to file a US formal application almost two years after a public disclosure, and the Canadian system provides only one year for a Canadian application – and you are absolutely correct. It is important to remember this significant difference between US and Canadian patent law.

While a US provisional application could still be used as a priority document for a later Canadian filing, the Canadian application must be filed within 12 months from the date of public disclosure.

If you have an idea that you feel may be patentable and you are considering disclosing it in any way, please feel free to reach out to MBM for a free consultation.

Grey Market Goods – Coty and Costco Battle it Out in Québec

By Scott Miller and Carl Farah, September 1st, 2020

The Québec Court refuses to force Costco to disclose where it obtained genuine goods but offers a practical solution to track down the source of the goods.

Grey marketing typically consists of a retailer purchasing genuine branded products abroad for less than offered to them from a local distributor. Grey marketing is generally problematic for international brand owners, who may end up competing against their own products thereby losing control of how the brand is represented to customers.

On June 22, 2020, the Québec Superior Court, in Coty Inc. c. Costco Wholesale Canada Ltd.[1], issued a decision regarding Coty’s request for a Norwich Order asking the Court to compel Costco to disclose the identity of the supplier who sold it genuine Coty cosmetic products.

Norwich Orders are an extraordinary pre-trial discovery measure that allows the holder of a right to compel an innocent third party to disclose the identity of wrongdoers in order to commence legal proceedings against them.

Coty argued that Costco had obtained Coty products from distributors who had breached their exclusive distribution agreements and as such, Costco ought to reveal the identity of these distributors. However, Costco answered that the doctrine of exhaustion should prevail in that the intellectual property rights (trademark/copyright) embodied in a tangible object are “exhausted” after it undergoes its first sale. The Court agreed with Costco and further noted that Costco’s expectation of privacy should be upheld and there was no evidence that Costco had purchased illegal goods.

The Court refused to issue the Norwich Order. Intriguingly, the Court offered a solution to discover the identity of the alleged foreign distributor(s) who were purported to be in violation of selling outside their territorial limits by implementing a tracking system to determine the origin of the products sold by Costco instead of seeking to compel the disclosure of this information.

In conclusion, this decision further exemplifies the degree to which Norwich Orders are extraordinary measures that should only be granted when there is sufficient evidence to substantiate allegations of wrongdoing.

New Federal Court Decision Provides for Greater Protection of Combination Drugs Under CETA

By Poonam Tauh and Carl Farah, August 18, 2020

In 2017, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) came into force. CETA covers virtually all sectors and aspects of trade and aims to increase bilateral trade and investment between Canada and the EU. In order to comply with this agreement, Canada enacted the CETA Implementation Act (CIA) which provided for, among other things, the introduction of the Certificate of Supplementary Protection (CSP) to the Patent Act. CSPs offer up to two years of additional protection to patentees for the medicinal ingredient or the combination of medicinal ingredients in a drug and is meant to compensate for time spent researching and obtaining regulatory approvals. In order to receive a CSP, the drug must be approved by Health Canada via a Notice of Compliance (NOC).

On July 10, 2020, the Federal Court issued a decision in a judicial review on the Minister of Health’s (the “Minister”) refusal to issue a CSP to ViiV Healthcare ULC (“ViiV”) in respect of Canadian Patent No. 2,606,282 (the “282 patent”) and the drug JULUCA^®. JULUCA^® is a combination drug containing medicinal ingredients dolutegravir and rilpivirine. The 282 patent is listed on the Patent register with respect to JULUCA^®. The 282 patent, has claims directed only to dolutegravir, but does not have claims directed at the combination of dolutegravir and rilpivirine.

At issue in this judicial review, was whether the Minister had reasonably interpreted the Patent Act and the CSP Regulations (CSPR) in a manner that was consistent with CETA. The Minister was of the position that a CSP could not be granted because the 282 Patent does not pertain to the combination of the medicinal ingredients contained in JULUCA^®. In taking this position, the Minister relied primarily on the Regulatory Impact Analysis Statement (RIAS) for the CSPR and the CSP’s Guidance Document. ViiV took the position that CETA’s intellectual property provisions were intended to provide protection for single medicinal ingredients or combinations of medicinal ingredients in new drug products. In addition, ViiV contended that the Minister’s interpretation would incentivize drug manufacturer’s to continue to make separate products instead of innovating fixed-dose combination therapies. The Court held that the Minister had unreasonably considered ViiV’s submission since the CIA required that the CSP legislation be interpreted in a manner that was consistent with CETA and that the sole reliance of the Minister on the CSPR RIAS and associated Guidance Document was not adequate, as neither CSPR RIAS nor the Guidance document has legislative force. As such, the Court granted the judicial review and remitted the matter to the Minister for redetermination.

In conclusion, this decision, if not appealed by the Minister would expand the scope of combination drugs eligible for CSP protection. In addition, this decision exemplifies the importance of harmonious interpretation of Canada’s international obligations and the statutory language with respect to IP protection in Canada.

For more information please contact:

Poonam Tauh, Senior Patent Agent

T: 403.800.9018

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Carl Farah, Summer Student

T: 613.801.1072

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This article is general information only and is not to be taken as legal or professional advice. This article does not create a solicitor-client relationship between you and MBM Intellectual Property Law LLP. If you would like more information about intellectual property, please feel free to reach out to MBM for a free consultation.

Almost 2 Years Post-Cannabis Legalization – A Comparative View of the Budding Industry Across Canada

By Osman Ismaili and Carl Farah, August 4th, 2020

For budding cannabis enterprises in Canada, navigating the legal and regulatory regimes pose unique challenges. This article will briefly discuss the federal cannabis framework and delve into the various provincial frameworks adopted across Canada for the recreational sale of cannabis.

The Cannabis Act (the “Act”) came into force on October 17, 2018, and legalized the sale, distribution and consumption of recreational cannabis across Canada. Exactly one year later, the second wave of cannabis legalization introduced Cannabis 2.0 products to the marketplace. Cannabis 2.0 products include edibles, topicals, vape pens and beverages. The Act gives the Canadian federal government the power to regulate the cultivation, processing and sale tracking of cannabis. It sets the minimum age of consumption at 18 years old and allows for the possession of up to 30 g of cannabis per individual. In concert with the provinces, the federal government has the authority to regulate road safety, impaired driving, regulatory compliance and taxation. The federal government is also responsible for establishing regulations surrounding the branding, labelling and marketing of cannabis.

In response to the Act, each province has also adopted its own framework for recreational cannabis. The provinces are permitted to strengthen, but not weaken, the federal legislation and are responsible for regulating the age of consumption, retail sales, possession limits, advertisements and home cultivation, amongst other aspects. Here, we present an overview of the regulatory schemes for recreational cannabis of each province.

The Maritimes

St. John’s, NL will famously be remembered as the location of the first legal sale of recreational cannabis in Canada. The Maritime Provinces have mostly adopted a legislative monopoly for the retail of recreational cannabis with the exception of Newfoundland and Labrador, which has chosen to implement a mixture of the public and private models. New Brunswick has announced that due to disappointing sales numbers, it will accept takeover bids for its retail operations.[1] The province hopes this switch to private retail will energize the private sector and maximize benefits for taxpayers. To order cannabis online in Nova Scotia, consumers must first visit a brick-and-mortar store and obtain an online access code by showing valid proof of age. This age verification measure is intended to prevent minors from browsing the website. In light of the recent illnesses associated with vaping, Nova Scotia has banned the sale of flavored cannabis vaping products.[2] Newfoundland and Labrador has taken a stricter approach to cannabis vaping products by banning their sale entirely.[3]

The Territories

Both the Northwest Territories and Nunavut have implemented a legislative monopoly of the retail sale of recreational cannabis while the Yukon has opted for a mix of the public and private model. The Yukon is in the process of selling its provincially owned physical stores to the private sector but plans to retain online store.[4] The Nunavut crown corporation operates entirely from within the provincial government via a special revolving fund that sees its profits transferred back to the government at the end of each year. This approach ensures that the profits of legalization are directly put to work for the taxpayers. Interestingly, there are no physical stores in Nunavut and customers must rely on two territory approved agents for online purchases.

Ontario

Ontario had initially planned to implement a government monopoly, which would have established online and physical points-of-sale. This plan was abandoned, and it was decided to instead let the private sector run the brick-and-motor stores. These last-minute changes meant that stores were not ready by legalization and customers had to rely exclusively on the online store. The Alcohol and Gaming Commission of Ontario (AGCO) is the regulator in charge of licensing private retailers throughout the province. In response to a slow rollout of retail stores, the province has cancelled its lottery system for awarding licenses and will instead open up applications and issue up to 20 store authorizations per month. Private retailers must apply and obtain a Retail Operator License and a Retail Store Authorization from the AGCO. The Ontario Cannabis Store, which runs the online store, is the exclusive wholesaler to private retailers. As of this article, roughly 500 applications have been submitted to the AGCO.

Quebec

Quebec decided to implement a legislated monopoly on the sale of recreational cannabis. The Cannabis Regulation Act explicitly authorizes the Société Québécoise du cannabis (SQDC), a subsidiary of the Société des alcools du Québec (SAQ), as the sole entity in charge of regulating recreational cannabis sales. It was decided to increase the minimum age of consumption to 21, the highest in the country.[5] Quebec has also banned the home cultivation of cannabis plants for personal use. To protect children from the risk of inadvertent consumption, the Quebec government has decided to ban cannabis chocolates, sweets, and desserts.[6] In the face of a dramatic increase in vaping-associated lung illnesses south of the border, Quebec has banned cannabis vaping products.[7]

The Prairies

Both Manitoba and Saskatchewan have adopted a private model for the recreational sale of cannabis while Alberta opted for a public and private model. To the surprise of many, Alberta has become the poster child of a successful recreational cannabis rollout; boasting nearly 500 licensed retailers.[8] Alberta is also home to Aurora Cannabis which owns and operates an 800,000 square foot growing facility, one of the largest in Canada.[9] Edmonton will soon be home to the largest manufacturing plant in Canada for the production of cannabis gummies.[10] Saskatchewan and Ontario are currently the only two provinces that allow private retailers to deliver cannabis directly to consumers.

British Columbia

British Columbia (BC) has adopted a public and private model for the sale of recreational cannabis whereby the provincially run Crown corporation operates online and physical points of sale and the licensed private retailers operate physical stores. Interestingly, British Columbia was allegedly, Canada’s largest illicit market of recreational cannabis prior to legalization. Commentators who were hoping that BC’s large illicit market would translate into a strong retail presence were surprised when BC posted one of the worst sales records amongst the provinces one year into legalization.[11] Indeed, it appears that a substantial portion of the current dispensaries throughout the province operate without a license.[12] In order to protect the youth from vaping, the province has recently passed new regulations which prohibit nicotine-cannabis vaping products.[13]

Conclusion

Table 1 below provides a quick glance at the differences in the regulatory frameworks adopted by each province. It is still too early to tell which provinces will come out on top and which will have to tweak their regulatory frameworks to reflect emerging trends and public policy. Market stabilization could take many years and while the illicit market will not disappear overnight, it is important that federal and provincial governments apply pressure to squeeze it out. Moving forward, it will be important for the provinces to reflect on whether their chosen regulatory frameworks are actually achieving their intended objectives. Navigating these regulatory regimes can be daunting. Instead of taking this journey alone, we recommend you contact one of the legal professionals at MBM. Interested businesses should also check out our recent article that details how to protect your cannabis related trademark.

Green Tech Patents - How Canadian Government is Helping the Process

By Osman Ismaili, July 21, 2020

With the world beginning to reopen following the COVID-19 pandemic, many of us may be feeling a new mindfulness when it comes to the environment and the effects that our civilization has had on it.

Similarly, with many inventors focusing on technologies that either help resolve or mitigate environmental impacts, or conserve the natural environment and resources that are present, perhaps it is a good time to turn our attention towards the intersection of patent rights and the environment.

Several jurisdictions around the world have implemented special legislative provisions that incentivize the patenting of inventions that are geared to help, or preserve, the natural environment. In this article, we’ll take a look at how Canada has implemented such provisions.

Canada’s Patent Rules provide a mechanism for advancing examination for “green technologies”. Examination is the process by which an application for a patent is scrutinized by an Examiner at a patent office, in order to determine whether the application meets the necessary criteria to issue as a patent. The examination process can typically take 2 to 5 years. In select cases it can be shorter, while in others much longer. Therefore, being able to take advantage of an advanced examination process can allow for inventors or companies to possess the enforceable right much sooner.

Rule 84 (1) of the Patent Rules states:

In respect of an application for a patent that is open to public inspection at the Patent Office, the Commissioner must advance out of its routine order the examination of the application on the request of

(b) the applicant, if the applicant files with the Commissioner a statement indicating that the application relates to technology the commercialization of which would help to resolve or mitigate environmental impacts or to conserve the natural environment or natural resources.

According to the Organization for Economic Co-operation and Development (OECD), Canada saw a 16% increase in the number of environmental technology patents filed between the years 2000 and 2011. While this increase is definitely good news, Canada is still lagging far behind many other countries, such as the UK, which experienced an increase of 63%; Mexico, which experienced an increase of 149%; Brazil, which experienced an increase of 185%; and China, which experienced an increase of a whopping 1040%, all during the same timeframe.

The Canadian Intellectual Property Office (CIPO) states that in order to take advantage of the advanced examination process, applicants need to submit a letter that includes:

1. a request for an advanced examination;

2. a statement indicating that the application relates to technology that if commercialized would help to resolve or mitigate environmental impacts or to conserve the natural environment or natural resources; and

3. an early laid open date (only if the request is made before the application has been opened to public inspection, usually 18 months after the filing date).

Typically, once the request for advanced examination of a green technology is processed, the first office action can be expected within 3 months. It is important to remember however, that if time extensions to reply are requested or if the prosecution process is abandoned, the application will be removed from the expedited process and returned to the regular process.

If you have created or invented something relating to the environment or green technologies which you feel may be patentable, please feel free to reach out to MBM for a free consultation.

Tips For Startups: How To Make Sure Your IP Is Working For You

By David Fraser, July 7th, 2020

Two things that startups never seem to have enough of are: time and money. It can be difficult to carve out enough of both to properly identify, manage, and protect your intellectual property (IP). Your IP, including your patents, industrial designs and trademarks, is at the center of your company’s value. As a result, protecting your IP is crucial and will give your company the boost it needs to succeed in a competitive marketplace. Knowing your IP is essential to identifying your competitive advantage, focusing your R&D efforts, and creating an innovative company culture. IP should be the main component of your business plan and your pitch to customers and investors as it is normally your main selling point.

As a startup, you already have passion for your business, and you are convinced that you will be successful. Now, in order to apply your passion to the right strategy, you should ask yourself a series of questions to help pinpoint and identify what IP you currently possess and if it is valuable:

• What you are doing that is new? What new features have you added, or improvements have you made lately?
• What makes your product better, or faster, or more accurate, or more efficient than your competitor’s products?
• What features of your product do customers value the most when making purchasing decisions?
• Is your company name or logo unique in your industry? Did you check to make sure no one else has it registered as a trademark?
• Have you designed a new product with a distinctive name, product shape, physical design or packaging?
• Once you choose your name and logo, have you been consistently using it on your products, packaging, marketing materials, your website and your social media? Document the date you first used it!

One way to answer these questions is to formally evaluate your IP, you could use an IP law firm to do it, which is always recommended but you could also try to figure it out yourself by doing some market and competitor research.

Ideas born from your IP evaluation can form the basis for the future direction of your R&D, which will eventually turn into more patents, industrial designs, and trademarks that you will want to protect and leverage going forward.

Now that you have defined your “secret sauce” you can use it in several ways:

• File a patent to demonstrate that you have a technological advantage important enough that you are willing to invest in a patent to protect it.
• Gain credibility with financial investors and VCs. Include it in your pitch and highlight it in your business plan.
• Get your sales and marketing people to highlight the IP incorporated into your products when interacting with customers.
• Use your IP to develop and foster a culture of innovation in your company. Celebrate inventors to encourage the generation of new ideas.
• Leverage your IP to form strategic partnerships and alliances to scale up your business or license out your IP for royalty revenue.
• Build and protect your brand by consistently monitoring your trademarks to make sure no competitors are using them, and cause customers to mistake a competitor's product for yours.

Your IP is already there. However, you need to take the time to identify it, protect it, then learn how to artfully articulate it to investors and customers to get the most out of it.

For more information please contact:

Don’t Let Your Trademark Go Up In Smoke: “smoking is cool” Branding Is Prohibited Under Canada’s Cannabis Act

By Deborah Meltzer, June 23th, 2020

In Canada, trademark registration is an important form of intellectual property protection for brand-owners as it confers the right to exclude others from using confusingly similar trademarks across Canada. Having said that, brand-owners in the cannabis space looking to register their name or logo as a trademark face a unique challenge; a trademark registration does not mean the trademark itself can be lawfully used in association with cannabis products, accessories, or services in Canada under the Canadian Cannabis Act, SC 2018, c 16 (“Cannabis Act”).

Branding Restrictions under the Cannabis Act

The Cannabis Act has placed strict regulations surrounding the sale and promotion of cannabis products, accessories, and services for the purposes of protecting Canadians, in particular young persons. Since the legalization of cannabis, many Canadians have become familiar with strict packaging restrictions, similar to those required in the sale of tobacco products. What may be less known is that the Cannabis Act imposes rigorous branding and promotional restrictions which go beyond the actual packaging.

Of particular concern with respect to the selection and use of a trademark, cannabis products or any related service cannot be promoted:

• in a manner that could reasonably be believed to be appealing to young persons;
• by means of the depiction of a person, character or animal, whether real or fictional; or
• by presenting it or any of its brand elements in a manner that associates it or the brand element with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring.

(see section 17 of Canada’s Cannabis Act).

Similarly, each province may also have additional restrictions related to cannabis branding. Quebec, for example, a particularly strict province with respect to cannabis branding, is governed under a similar provision which restricts promotion of cannabis in such a way that associates the use of cannabis with a particular lifestyle (see section 53(3) of Quebec’s Cannabis Regulation Act.)

Cannabis Trademarks should be Chosen Carefully

In light of the above, careful consideration must be taken when selecting the name and/or logo to be used as a trademark in association with cannabis-related products and services in Canada, as non-compliance can result in a fine as high as $5 million or up to 3 years imprisonment. Therefore, savvy cannabis businesses should recognize these limitations and work within these restrictions when developing a commercial strategy in order to distinguish their brand.

Budding cannabis entrepreneurs should also keep in mind that in addition to the Cannabis Act, trademark applications for registration must be in compliance with the regulations imposed by Trademarks Act and Trademarks Regulations. For instance, it remains to be seen whether a cannabis trademark can be restricted under section 9(1)(j) of the Trademarks Act for being scandalous, obscene or immoral in such a way that would offend a significant segment of the Canadian public. Ideally, it is recommended that cannabis brand-owners seek legal counsel before using or applying to register a trademark to ensure that they are set up for commercial success with a brand strategy that falls within the purview of lawful promotion and branding of cannabis.

For more information please contact:

Unauthorized Photographs: The Rights Of The People We Capture

By Deborah Meltzer, June 9th, 2020

We live in the digital age of smartphones and social media, where the large scale capturing and sharing of photographs has become a global run-of-the-mill form of communication and expression. The rights in these photographs are typically subject to the licensing schemes of the various social media platforms to which they are posted. This is because the authors of these works, the photographers, own copyright in the images they create. However, on the other side of the lens, what frequently gets overlooked are the rights of the people in the photographs as opposed to the ones taking it. This is not an unfamiliar concept. For instance, the Duke and Duchess of Sussex have recently made headlines regarding the unauthorized use of their image by various media outlets.

When it comes to celebrities and other public figures, the laws across Canada have established various personality rights to protect these individuals from the exploitation of their image or likeness. That said, the law is less clear as to the particular rights of private citizens who are the subject of an image to which they did not consent. In Canada, the use of an individual’s image can be unlawful where:

(a) an individual’s name, reputation, or likeness is commercially exploited; or

(b) an individual’s right to privacy has been violated

These wrongs are actionable under the tort of appropriation of personality and provincial privacy torts.

Commercial exploitation of an image or likeness

The tort of appropriation of personality most commonly protects the right of a celebrity or other public figure against the use of their image or likeness for a commercial purpose without their consent. This stems from the idea that a person should have the exclusive right to market and/or capitalize on their personality and image. This is of course subject to certain exceptions (e.g., biographies, plays, books, etc.) where the purpose is to provide insight into that individual (see for example Gould Estate v Stoddard Publishing, [1998] O.J. No. 1894 (ONCA)).

The case law has established that to succeed in the tort of appropriation of personality, the following criteria must be met:

1. The use of the image or likeness must be for a commercial purpose (see Athans v Canadian Adventure Camps Ltd. [1977] O.J. No. 2417 (Ontario Supreme Court); and

2. The individual (plaintiff) must be clearly and primarily captured in the image (see Krouse v Chrysler Canada Ltd. et al., 13 C.P.R. (2d) 28 (1973 ONCA))

While this tort is technically available to non-famous people, it is obviously less likely that an image of a person without notoriety would be commercially exploited. That said, with respect to individuals with professional designations, their professional reputation is protected under the right of personality. For instance, in Hay v Platinum Equities Inc. 2012 ABQB 204, an accountant’s signature was unlawfully used to secure financing for a loan and the Court held that professional reputation for commercial exploitation is akin to celebrity name and likeness.

Privacy rights

In Canada, individuals have the right to a reasonable expectation of privacy. There is a distinction between “personality” – the exclusive right to use your likeness for commercial gain, and “privacy” – the rights of seclusion and the protection of personal information. These concepts, although often intertwined, are legally distinct; a breach of privacy causes personal harm while an appropriation of personality causes commercial harm.

With respect to privacy rights, in Jones v Tsige, 2012 ONCA 32 (“Tsige”), the Ontario Court of Appeal recognized that the tort of “intrusion upon seclusion” exists in Ontario. In that case, the defendant had used her access as a bank employee to view the plaintiff’s banking information over 150 times over a 4-year period. The required elements to satisfy the tort were defined as follows:

1. The defendant’s conduct must have been intentional (this includes recklessness);

2. There must be an “intrusion” - the defendant must have invaded, without lawful justification, the plaintiff's private affairs or concerns; and

3. The invasion must be highly offensive to a reasonable person (i.e., causing distress, humiliation, or anguish).

Additionally, the Court stressed that proof of harm to a recognized economic interest is not an element of the cause of action. This means that no actual damage or commercial exploitation is required in establishing intrusion upon seclusion. It is sufficient that the privacy of the plaintiff was egregiously violated.

In relation to control over a person’s image, over 20 years ago in Aubry c. Vice Versa Publishing Inc. [1998] 1 SCR 591 (“Aubry”), the Supreme Court of Canada recognized that the right to one’s own image falls within the right to privacy under section 5 of the Quebec Charter of Human Rights and Freedoms. In this case, the defendant published a picture in a magazine of a woman in a public space, with no defamatory implications in the context of the image or magazine content. However, since the individual was clearly identifiable and her permission was not sought prior to publication, a majority on the Court concluded that the freedom of artistic expression did not justify the infringement of the right to privacy.

Although the civil remedy in Aubry is particular to Quebec in light of the broad scope of the Quebec Charter, the Supreme Court’s determination is nevertheless important because it exemplified that the protection of a person’s image forms part of their personal privacy interest.

In Ontario, in Jane Doe 72511 v Morgan, 2018 ONSC 6607, relying on the reasoning in Tsige, the Ontario Superior Court of Justice adopted the tort of public disclosure of private facts. In that case, the defendant was the ex-boyfriend of the plaintiff, who posted unauthorized intimate/nude photos and videos of the plaintiff on a public website that was viewed over 60,000 times. Paramount to this finding was that the act of publication was highly offensive and not of legitimate concern to the public.

Conclusion

As referenced in Tsige, legal scholars have written of “the pressing need to preserve ‘privacy’ which is being threatened by science and technology to the point of surrender”. The exponential growth of social media platforms and smartphone usage is generating unprecedented privacy concerns which are outpacing current statutory and common law privacy rights. Until Canadian and provincial laws catch-up, photographers and social media users should understand that what they capture, more importantly who they capture, may, one way or another, intrude on someone’s rights. Regardless, when snapping a photo, photographers should exercise best practice and ask for consent of the people they capture.

For more information please contact:

Common Patent Misconceptions - Myth #3

By Osman Ismaili, May 26th, 2020

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #3: My idea is too obvious for patenting.

When assessing whether an invention is patentable, broadly speaking, there are three core aspects that must be considered. These aspects are novelty, nonobviousness and utility. In this article, we’ll focus on the second aspect, nonobviousness, which, in essence, means that the invention must possess some sort of “inventive spark”.

Often times, inventors may believe that an invention they have come up with isn’t really inventive. There can be a number of reasons for this thinking. Maybe the inventors have made an improvement to an existing technology, or maybe the invention combines a few known aspects in a new way. Whatever the case may be, inventors should try to maintain an “inventive until proven obvious” stance when faced with a situation like this.

An example of a success story in relation to this is the Haberman® Feeder. After her daughter was born with a cleft palate, Mandy Haberman invented a special bottle for infants that experience difficulties suckling. Haberman obtained patents for the bottle, which was a huge success, as were many of Haberman’s other products.

A key marker of a successful product is the appearance of infringers, which was the case with Haberman’s products. In court, the infringers argued that the patent in question was invalid for obviousness, a very common tactic exercised by infringers when they are cornered. The court found otherwise though and explained the invention was not obvious for a number of reasons, including that fact that even much larger companies in that space had been unable to address the problem it had solved.

Haberman explained to the World Intellectual Property Organization (WIPO), “Because I had patents, I was able to go to court, defend my idea, enforce my patent rights and that meant that I kept my monopoly in the market. This made me a lot of money; if I had not had the patents, I would not have made anything”. She later also initiated legal proceedings to defend her IP rights in the US and Europe, where the validity of her patents was established. Haberman stated that, “As a result of my US patents being declared valid in court, other companies have since requested licenses”.

A key takeaway from the Haberman story is that patents are powerful tools which may be both used to defend one’s rights, as well as asserted against others offensively. However, neither option would be available to an inventor who did not obtain their patent rights. The mindset that one’s invention is too obvious to even attempt patenting can only result in the inability to counter when copycats eventually arise.

If you have created or invented something which you feel may be patentable, please feel free to reach out to MBM for a free consultation.

Importance of Determining Inventorship Prior to Patent Issuance

By Jamal Hakimi, May 12th, 2020

Determining inventorship, prior to patent issuance, can save an applicant the costly procedural and evidentiary burden required for correcting the named inventors post patent issuance. Since Canadian patent law requires that each patent application list the sole inventor(s) of the claimed invention, divisional applications derived from an application having two or more inventors must list only the inventors that contributed to the claimed invention.

Although a patent may still be issued for an application not listing the sole inventor(s) of the claimed invention, the patentee may be required to correct the records of the Patent Office to reflect the sole inventor(s). However, post patent issuance, to correct the records of the Patent Office, the patentee must bring an application to the Federal Court (“Court”). In doing so, the patentee must follow the evidentiary and procedural requirements for removing a named inventor and/or adding an inventor to the named inventors of the issued patent. This was the case in Inguran LLC dba STgenetics v Commissioner of Patents, 2020 FC 338, for which the patentee, STgenetics, brought an application to the Court for an order to remove six of the twelve named inventors from the records of the Patent Office relating to four issued patents.

To obtain the order for removing named inventors, ST genetics had to meet the test outlined in Imperial Oil Resources Ltd v Canada (Attorney General), 2015 FC 1218. The test asks two questions:

      1. Does it appear that one or more of the named inventors have no part in the invention? and

      2. Has an affidavit been provided to satisfy the Court that the remaining inventors are the sole inventors?

In order to meet the test, STgenetics provided affidavits from both inventors determined to have contributed to the issued patents and from non-inventors incorrectly named as inventors. The determined inventors deposed that they contributed to the issued patents, and the non-inventors deposed that they did not contribute to the issued patents.

Based on STgenetics’ evidence, the Court determined that STgenetics met the procedural and evidentiary burden required for removing the names of the non-inventors. Accordingly, the Court ordered the Commissioner of Patents (“Commissioner”) to vary the records of the Patent Office with respect to the inventorship of the issued patents.

Although STgenetics’ application to the Court was successful, the application and the evidentiary burden to satisfy the Court of the relevant jurisprudential tests and procedural requirements could have been avoided had the inventorship been determined prior to the issuance of the patents. STgenetics, could have simply, prior to receiving the notice of allowance, requested the Commissioner to remove the names of the non-inventors and submitting the affidavits. Had STgenetics done so, it could have saved the time and money spent in pursuing the Court application.

Digital books and ownership rights in the information age

By Osman Ismaili, April 28th, 2020

It is interesting how digital books compare to physical books in this electronic age. The rights users have over physical books have often been likened to the rights we may have over currency. For example, just like we can’t make copies of currency, we can’t make copies of a book protected by copyright – but we can trade a book for something else, loan it to someone, give it away as a gift, or resell it. We can own the physical copy of the book itself, even if we don’t own the right to copy it.

Digital books (aka eBooks) on the other hand seem to present a far more complex set of ownership rights. Not only is it the case that users do not have the ability to do many of the above things with digital content, it may actually be the case that they do not “own” the actual digital book either.

In mid-2019, Microsoft announced that it would cease to provide digital books on the Microsoft Store. In accordance with this move, it also said that it would be deleting user’s existing digital book libraries. While users would be refunded for the purchases they had made, one can’t help but imagine that users would still feel a bit frustrated with this forced sort of refund.

And as history repeats itself, this scenario is no stranger to the law. In 2009 (indeed, a whole decade before the Microsoft matter), Amazon had run into some legal troubles for similarly deleting copies of works by George Orwell from customers’ Kindles. After a teenager sued the company (possibly for having been unable to complete his homework), Amazon settled and promised that it wouldn’t delete content from U.S. users’ devices without their permission.

This blurring of the rights associated with digital content has recently gained even more attention with Macmillan Publishers’ stance on libraries and eBooks. As one of the world’s largest publishing companies, it’s interesting to see Macmillan restricting sales of eBooks libraries in order to prevent them from loaning more than a single copy of a digital book to a single reader at one time. This has resulted in lengthy waiting lists for eBooks at many libraries, something some have called a means to restrict certain classes from obtaining new literature.

The reason Macmillan Publishers is likely able to do this is because digital copies of books actually remain under the ownership of the publishing companies, and are usually only licensed to users, libraries or whoever else. Thus, if a publisher, or even a distributor like Microsoft or Amazon, decides to end the licensing agreement, they can.

As one possible way to circumvent this system, many authors are now choosing to bypass publishing houses altogether, and create exclusively digital content for companies like Amazon directly. This however means that certain works will only be available digitally through certain companies. This may result in people having to obtain a plurality of subscriptions, and has been analogized to requiring subscriptions to Netflix, Hulu, Amazon Prime in order to watch all the shows you love. Perhaps readers will not though, as long as they can still snuggle up at the end of the day to read their favourite works.

If you are wrestling with a digital ownership issue and would like some assistance, please reach out to MBM today and one of our professionals would be happy to assist you.

Common Patent Misconceptions – Myth #2

By Osman Ismaili, April 14th, 2020

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #2: I don’t need a patent because I’m the only one with this technology, no one else will be able to enter the market.

This surprisingly common belief is in some ways related to Patent Myth #1. Having a quick read of that article may help with understanding the connection to this piece.

Many startups and even some SMEs often hold the view that because they were the first to come up with a particular technology that fact will somehow serve as a natural barrier to entry for others. While this may be true in some rare cases, these companies often fail to realize that other, often larger entities have well-established R&D departments that, among other reasons, are there to understand competing technologies and, in some cases, learn to reverse engineer them.

In Patent Myth #1, we touched on the case of Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91 (2011), where the Supreme Court of the United States (“SCOTUS”) found Microsoft to have infringed the patent of a much smaller Toronto-based company. In that case, the Canadian company, i4i was successful first and foremost because it had a patent for its document editing invention. If i4i had instead chosen not to file a patent, there would have been no infringement even if Microsoft used or copied their technology. At the very least i4i would have been gambling with the time and money they invested in developing their software.

This discussion also ties into the law of trade secrets in that a company certainly could choose to maintain its invention as a trade secret, but it may not always be appropriate. The Canadian Intellectual Property Office (“CIPO”) website states: “Trade secrets can be very valuable when you have developed new technology, designed original products, created the perfect recipe, or have a gold mine of customer data. However, it may not be the best choice of intellectual property (IP) protection if your competitors can easily reconstruct your creation.” The last sentence is precisely what companies should be thinking about when considering a patent. Even if you are the first to bring something to market, it is important to keep in mind that someone might still be able to dissect and understand it.

Never forget that maintaining a trade secret as a secret has its own challenges, and even something like a disgruntled former employee can put a trade secret into a risk of being publicized. As CIPO states, “Once a trade secret is made public, it loses its business value and legal remedies are complex.” Even if someone breaches an agreement and has to ultimately pay damages, that trade secret can still never go back to being a secret, so its value is irretrievably lost.

One final note relates to the “on sale bar” in the United States. In January 2019, SCOTUS decided in a landmark decision, Helsinn Healthcare v. Teva Pharma USA, 586 U. S. ____ (2019), that “an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).” This means that even if an invention is sold as a trade secret, it could prevent the inventor from later obtaining a patent for it. Many inventors believe they’ll be able to profit from their invention as a trade secret for some years before they file for patent protection, but this approach may be risky, if not dangerous.

Could someone reverse engineer and/or copy your invention? If you think the answer is yes, then it’s likely you should look into obtaining patent protection. Please feel free to reach out to MBM for a free consultation.

Urgent CIPO update regarding COVID-19: DEADLINE EXTENSION TO May 1, 2020

By Scott Miller and Randy Marusyk, March 31st, 2020

The aftermath of the new Canadian Trademark Legislation

By Kimberly Dunn, March 26th, 2020

On June 17, 2019, Canada’s new Trademarks Act and Trademarks Regulations came into force. The new Act and Regulations introduced significant changes to Canada’s trademark practice. The implementation of the new Act and Regulations has been challenging and a learning experience for everyone, including trademark owners, practitioners and Canadian Examiners.

We dug deeper into some of the more notable changes to give you a little extra insight:

Increased Filing Fees & Nice Classification:

As Canada acceded to the Nice Agreement, Applicants are now required to classify their goods and services according to the Nice Classification system.

The Nice Classification system is an international system, administered by the World Intellectual Property Office (WIPO), for classifying goods and services and is comprised of 45 different classes.

Under Canada’s new trademark regime, trademark filing fees are dependent on the number of classes of goods and services contained in the application.

Applicants must be aware that, unlike in other jurisdictions, a trademark application cannot be filed in multiple classes of goods and services with the intention to re-assess the Nice Classes and associated fees later. The filing fees are based on the number of classes of goods and/or services contained in the application at the time of filing, regardless of whether some of those goods or services are deleted at a later date. For this reason, it is important to carefully assess the goods and services and the Nice classes prior to filing the application to ensure all appropriate fees are paid.

Canada’s new government filing fees are:

• $330 for the first class of goods and/or services; and
• $100 for each additional class of goods and/or services

No “Use” Requirement:

Under the new Act, trademark owners are no longer required to use their trademarks in Canada in order to obtain a registration. In this regard, a “date of first use” is no longer required in an application and applicants do not have to file a Declaration of Use attesting to the fact that use of the trademark has occurred in Canada.

Trademark owners should still be aware that use of a trademark will be an important factor in maintaining protection of the trademark in Canada. If a trademark is not being used in Canada by the third anniversary of the registration date, it can be vulnerable to “non-use cancellation” proceedings.

While the removal of the “use” requirement has simplified the application process, MBM recommends filing for and using your trademark as soon as possible to protect your business and your brand! Trademark owners should also closely monitor the marketplace for any third-party use to proactively safeguard against trademark trolls seeking to register brands that do not belong to them.

Registration Fees:

Under the new Act, trademark owners are no longer required to pay a government registration fee to obtain registration of the trademark. However, trademark owners should be aware that registration fees must still be paid on applications that were filed prior to June 17, 2019.

Renewals:

Under the new Act, a trademark will be valid for a period of 10 years (previously 15 years). Similar to filing fees, the Trademarks Office is now charging renewal fees on a per class basis.

Canada’s new renewal fees are:

• $400 for the first class of goods and/or services; and
• $125 for each additional class of goods and/or services.

In addition to increased renewal fees, there is also now a strict renewal window wherein owners can renew their trademarks. The new renewal window is six-months prior to and six-months after the renewal deadline.

Additionally, trademark owners should be aware that any trademarks registered prior to the coming into force of the new Act will require that the goods and services be classified according to the Nice Classification system.

For any registrations that do not have the goods and services classified according to the Nice Classification system, MBM recommends filing a request to classify the goods and/or services as soon as possible to facilitate the renewal payment process.

If goods and services are not classified prior to paying the renewal fee, the Trademarks Office will issue a notice pursuant to Subsection 44.1(1) of the Act, setting out the requirement to group and class the goods and services and if the request is not filed, the Trademarks Office will issue a second notice stating that the registration may be expunged if the goods and services are not furnished within the set timeframe.

Non-Traditional Trademarks:

Under the new Act, trademark owners can file “non-traditional” trademarks. “Non-traditional” trademarks include: sounds, moving images, holograms, scents, tastes, colour, three-dimensional shapes, textures, modes of packaging goods and positioning of a sign.

Upon a review of the Canadian Trademarks online database, it appears that many brand owners are taking advantage of the ability to file “non-traditional” trademarks, with over 300 “non-traditional” trademarks filed between June 17, 2019 and March 24, 2020.

Dividing and Merging Trademark Applications:

Canada’s new Act allows trademark owners to divide their trademark applications. A divisional application can be filed in order to expedite the registration of the trademark for any goods and services that have not received any objections.

Additionally, owners also now have the ability to merge their trademarks. The new Act states that if a trademark that was previously divided proceeds to registration, this trademark may be merged with the other registration(s) that originated from the initial application.

Inherent Distinctiveness:

Under the new Act, one of the most significant changes to the examination of trademarks is that the Registrar now has the ability to refuse a trademark on the ground that it is not inherently distinctive.

While Section 2 of the Act defines “distinctiveness” in relation to a trademark, there is no statutory definition for “not inherently distinctive”. However, the Canadian Trademarks Examination Manual (TEM) has some guidelines with respect to inherent distinctiveness and when a trademark can be refused because it is not inherently distinctive. Some examples of trademarks listed in the TEM that are considered to be not inherently distinctive include:

• Trademarks which are primarily geographic locations, names, or surnames;
• Trademarks that consist of one- or two-letters or numbers;
• Trademarks that consist of a design common to the trade, unless it is depicted in a special or fanciful manner (i.e. a design of grapes on a vine would not be registrable for use in association with wine);
• Trademarks that are the names of colours in relation to goods that would typically be that colour (i.e. WHITE would not be registrable for use in association with toothpaste);
• Trademarks that are clearly descriptive in English or French (i.e. FURNITURE STORE/MAGASIN DE MEUBLES would not be registrable in association with the retail sale of furniture);
• Trademarks that consist of laudatory words and phrases (i.e. WONDERFUL, WORLD’S BEST, ULTIMATE); and
• Trademarks that serve only to provide general information about the goods or services (i.e. FRAGILE would not be registrable for use in association with labels to be affixed to packages).

Since the new Act came into force, many Examiners are raising objections that, in their preliminary view, trademarks are not inherently distinctive.  The majority of these objections are generally being raised on the basis that the trademark consists of ordinary or generic words and other traders should be able to use these words in the ordinary course of their business.

When issuing a not inherently distinctive objection, Examiners are required to provide evidence to support their objection that the trademark is not inherently distinctive. The evidence provided by the Examiner must be in relation to the goods and services and must be within Canada. In this regard, some issues that are being brought up between practitioners and Examiners is that the trademarks are not always being taken into consideration with the associated goods and services and the Examiner’s evidence is not always within Canada.

Further, while several Examiners are raising objections that trademarks are not inherently distinctive, it may be possible to overcome the objection by either: (1) arguing that the trademark is inherently distinctive (or at least has some degree of inherent distinctiveness); or (2) filing affidavit evidence that the trademark had acquired distinctiveness at the time of filing the application in Canada.

Trademarks can acquire distinctiveness through significant use of the trademark in Canada. When a trademark is said to have acquired distinctiveness it is said to have acquired a secondary meaning and leaves a distinctive impression in the minds of consumers, when considered in association with the goods and/or services. In other words, to establish that the trademark has acquired distinctiveness, the evidence must show that the Canadian public would strongly associate the trademark with the particular goods and services and not any other possible meaning of the word.

At this time, it is difficult to predict when or if an objection that the trademark is not inherently distinctive will be raised, as it appears that this ground of refusal is being interpreted differently. We do note that the Canadian Intellectual Property Office (CIPO) has been in open discussions with trademark practitioners and the Intellectual Property Institute of Canada (IPIC) regarding the frustration and challenges surrounding these objections. Based on the discussions between CIPO, IPIC and trademark practitioners, we anticipate that within the next 1-2 years, there will be some case law, clarification and fine-tuning of the guidelines with respect to these not inherently distinctive objections.

Backlog at Canadian Trademarks Office:

Due to the changes in the Act and many systems at the Canadian Trademarks Office, there is a longer than usual delay in the examination of trademark applications. Currently, it is taking between 17 and 22 months to receive a first action from the Trademarks Office. We understand from the Trademarks Office that they are in the process of hiring several new Examiners and within the next 2-3 years, examination of a trademark application should be more in line with the United States Patent & Trademark Office, approximately 7-10 months to receive a first action.

For more information please contact:

No success for Questor in its quest for an injunction

By Osman Ismaili, March 9th, 2020

Questor Technology Inc v Stagg, 2020 ABQB 3

Despite whatever the clauses in employment agreements may read, an injunction will likely not be granted if it does not seem fair and equitable to do so.

In this decision, while the Court of Queen’s Bench of Alberta (the “ABQB”) declined to issue an injunction in favour of Questor Technology Inc (“Questor”), it did order former employees of Questor (the “Defendants”) to return to Questor any and all confidential information they had taken from Questor in breach of their employment contracts.

Background

Questor, an environmental technology company, is in the business of selling custom incinerators, used primarily in the oil and gas industry for burning waste gasses like methane. The Defendants had designed a low-pressure waste gas combustion solution for Questor, while employed by Questor. However, after departing from Questor, the Defendants launched a company of their own, offering a competing low-pressure waste gas incinerator (the “Competing Technology”).

Questor asserts it is the owner of the Competing Technology by way of either: (i) terms of the employment contracts signed by the Defendants, or (ii) application of the common law. As such, Questor sought an injunction against the Defendants from aspects such as competing in the market against Questor, or infringing Questor’s intellectual property (“IP”) – Questor claimed it owned the IP relating to the Competing Technology.

The sole issue in this decision was determining whether an interim injunction ought to be granted in favour of Questor against the Defendants.

Analysis

The ABQB ran through the test in RJR-MacDonald Inc v Canada (AG), [1994] 1 SCR 311 to determine whether an injunction ought to be granted. The test would require Questor to demonstrate: (a) that there is a serious issue to be tried; (b) that Questor will suffer irreparable harm if the application is refused; and (c) that the balance of convenience weighs in favour of granting the injunction. However, the ABQB found that this case was an exception, where a higher standard would apply for the first element of the test, namely that Questor would need to establish a strong prima facie case.

A detailed analysis of the Defendants actions led the ABQB to determine that Questor had not established a strong prima facie case for the injunction. Similarly, the ABQB was unconvinced that Questor had clearly proven that it would suffer irreparable harm if the injunction were not granted. Finally, the balance of convenience seemed to favour the Defendants, as an injunction would shut down everything they had built, while Questor, a larger, publicly-traded company, would likely be unaffected if the injunction was denied.

The ABQB remarked that as injunctions are an equitable remedy, it would not be fair and just to issue one in those circumstances.

Commentary

Different areas of the law are often much more interconnected than people may believe. Obligations to confidential information, employment agreements and assignments of inventions all affect IP rights. While the ABQB did not answer questions like whether Questor was the rightful owner of the Competing Technology, the questions themselves still played a key role in determining the outcome of the case. Even if relevant IP questions had been answered, it would still likely have been unjust to grant an injunction in this case.

If you are dealing with a legal issue where IP may be involved, please feel free to reach out to MBM for a free consultation.

Absence of a Canadian patent leaves the PMPRB powerless to control the price of Cystadrops

By Osman Ismaili, February 4th, 2020

While the Patented Medicines Prices Review Board (“the PMPRB”) polices the prices of patented medicines in Canada, a recent article in The Globe and Mail suggested that a loophole may exist for drug manufacturers that have chosen not to acquire Canadian patent protection.

Cystadrops, a cysteamine hydrochloride-based eye drops formulation is produced by Recordati Rare Diseases Inc. (“Recordati”), and is used to treat a rare disease known as cystinosis. Cystinosis is characterized by the abnormal accumulation of the amino acid cystine in various organs of the body, including crystal build up in the eyes. While about one hundred Canadians suffer from cystinosis, the cost for a year’s supply of Cystadrops is approximately $111,000 per individual.

This price is largely due to the fact that Cystadrops does not fall within the jurisdiction of the Canadian federal regulatory body for medicines pricing. As Recordati chose not to obtain a Canadian patent for its formulation, any price regulation for Cystadrops by the PMPRB would be ultra vires. Compounding pharmacies in Canada largely stopped making cheaper versions of the drug when Recordati’s version was given the green light by Health Canada.

Another interesting aspect to note is that typically data privacy regimes provide innovative drugs with a data protection period of eight or eight and a half years, during the first 6 of which a (typically generic) manufacturer seeking a Notice of Compliance (“NOC”) will be prevented from filing its drug submission.

A search of the Register of Innovative Drugs has revealed that while there is no active data protection over Cystadrops, a related formulation of cysteamine bitartrate is protected and is associated with another company. Whether any patent or NOC links exist between the two formulations, or another third party for that matter, remains unclear. Furthermore, perhaps the very small market of just one hundred people acts a natural barrier to entry for generics or compounding pharmacies to invest in preparing the formulation.

With drug pricing regulations already being a contentious issue in Canada, it will certainly be of interest to see how this particular situation will develop, or if more information will be brought to light. In any case, as a result of the price of Cystadrops, Ontario became the first province to fund the drug, with other provinces expected to follow suit.

Update to Trademark Practice in Canada

By Kimberly Dunn, January 21st, 2020

On January 17, 2020, the Canadian Trademarks Office issued amendments to several Trademark practices. The amendments affect the following:

• Extensions of time in Examination: The Trademarks Office will no longer grant extensions of time unless the Applicant demonstrates exceptional circumstances that would justify the extension.

• Divisional Applications: The Trademarks Office has not yet set up a dedicated e-service for filing divisional applications. As such, the Office has clarified that to file a divisional, an Applicant may either: (1) file an amended application outlining the goods/services to be included in the divisional application; or (2) file the divisional by way of a paper request.

• Transitional Provisions regarding Nice Classification: The Guide to Transitional Provisions has been amended to reflect that notices under44.1(1) of the Trademarks Act will generally only be sent after the renewal of a registration for which the goods/services have not been properly grouped according to the classes of the Nice Classification system.

• Renewals: The Trademarks Office has provided clarification on the procedure for classifying the goods or services according to the classes of the Nice Classification system when renewing a trademark registration.

• Temporary Appointment of Trademark Agent or Associate Trademark Agent: Trademark owners will now have the ability to appoint a temporary Canadian Trademark Agent for the purposes of grouping the goods or services according to the Nice Classification system.

For more information please contact:

Common Patent Misconceptions – Myth #1

By Osman Ismaili, January 20th, 2020

This article is part of a series on commonly held misconceptions about patents. Many prospective patentees often have unfounded reservations about patenting their inventions. The aim of this series of short articles is to debunk these common myths around patent protection.

Patent Myth #1: Even if I file and register a patent, some giant company could still infringe it and would probably win in court if I sued them.

First and foremost, the likelihood of a patent ending up in court is very low. Economic studies (http://faculty.haas.berkeley.edu/shapiro/patents.pdf) have shown that of the total number of patents that are issued every year, only about 1.5% of them are ever litigated, and that only about 0.1% of them are ever litigated to trial. The association between patents and litigation in the minds of the public is likely a result of the relatively more recent patent troll cases, and the disproportionately high media coverage they have received.

If the statistics aren’t enough, businesses and startups should also keep in mind that the laws and regulations in place will not likely allow a smaller company to be unfairly steamrolled in court by a much larger infringer. A good example of this is the case of Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91 (2011), where the Supreme Court of the United States (“SCOTUS”) unanimously upheld a $290 million award against the tech giant Microsoft in a case brought by a Canadian software startup, i4i Limited Partnership (“i4i”). The Toronto-based i4i had alleged that a version of Microsoft Word had infringed its patented method for editing documents.

While litigation can certainly be expensive, and while Microsoft did have much deeper pockets than i4i, the SCOTUS decision, and indeed the lower courts, agreed that Microsoft had willfully violated i4i’s patent rights and that i4i was due compensation for that infringement.

A key take away from the above example is that the success of i4i would never have been possible had they not acquired patent protection for their invention. Without their patent, Microsoft would have been freely able to use the technology, with any recourse for i4i being highly unlikely.

If you are considering obtaining patent protection or have questions relating to patent protection, please feel free to reach out to MBM for a free consultation

Are you utilizing your IP to obtain financing and grow your business?

By Kay Palmer, January 13th, 2020

Intellectual property (IP), including patents, industrial designs and trademarks, is an under-utilized business tool for small medium enterprises (SMEs).  Regardless of company size, IP may be used to:

• Obtain financing
• Generate revenue through licensing opportunities
• Protect and/or expand market share 

This is highlighted in the 2019 IP Canada Report from the Canadian Intellectual Property Office in the section entitled “[t]he impact of IP on financing and growth of small and medium enterprises” (https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr04682.html). In particular, the 2019 IP Canada Report summarized the results of ISED 2017 Survey on Financing and Growth of Small Medium Enterprises.  The following points are of particular interest:

• While more than half of Canadian SMEs are aware of patents, very few have patents.
• The proportion of Canadian SMEs holding at least one patent increases as size of SMEs increases.  In particular, 3% of SMEs having 20 to 99 employees hold at least one patent while 15% of SMEs having 100 to 499 employees hold at least one patent.
• Canadian SMEs aware of IP or holding formal IP obtained more financing as compared to SMEs not aware or not using IP.
• Canadian SMEs aware of IP or holding formal IP increased domestic and international market expansion as compared to SMEs not aware or not using IP.
• Canadian SMEs aware of IP or holding formal IP increased growth as compared to SMEs not aware or not using IP.

It is important to start a formal conversation about some forms of IP at the outset of your business, even if you don’t have the funds to invest in it right away. A strategy should be devised to plan for it in the future and allocate some budget to properly protect your IP. An intellectual property professional can help you determine what IP is appropriate for your business and how much to budget for it. Intellectual property, especially for start-ups or an SMEs, is considered to be one of its biggest business assets and as such should be treated with extreme care. An IP professional can help you maximize business opportunities out of your intellectual property if the right strategy is in place.

Class action lawsuits may be available for copyright infringement cases in some instances

By Scott Miller and Osman Ismaili, January 7th, 2020

Despite the fact that it didn’t work out in this case, it appears that reverse class action lawsuits may be possible in copyright infringement situations.

In Voltage Pictures, LLC Canada v Salna, 2019 FC 1412, the Federal Court (“FC”) dismissed a motion for certification brought by Voltage Pictures, LLC and six other film production companies (collectively, “Voltage”).

Voltage brought the motion to certify the proceeding as a class action after identifying what it believed to be three possible infringers. Voltage’s classification of infringers included an “Authorizing Infringer,” which is a person, such as an internet subscriber, who has not taken reasonable steps to prevent infringement from occurring on an internet account controlled by them, or who has authorized an unlawful copy of a film.

The FC found that Voltage’s proposed reverse class proceeding should not be certified as it had failed to fulfill all of the requirements in Rule 334.16 of the Federal Courts Rules. Voltage had not met the low threshold requirement that the pleadings disclose a reasonable cause of action with respect to Authorizing Infringers who are internet subscribers, under the Copyright Act. Further, Voltage had failed to the meet the requirement that there be an identifiable class of two or more people, as two of the identified respondents were not internet subscribers at the relevant time.

Press Release - MBM Intellectual Property Law Celebrates Its 25th Anniversary

News provided by MBM Intellectual Property Law

Nov 4th, 2019

Ottawa, ON

For Immediate Release

On November 14^th, 2019, MBM will be celebrating its 25^th anniversary. This boutique intellectual property law firm, headquartered in Ottawa, with offices in Vancouver, Calgary, Toronto, Halifax and Montreal, provides services to clients across Canada and throughout the world.

“We are really excited to celebrate this quarter century milestone and owe it to our phenomenal staff for helping us get here, some of whom have been with the firm since the beginning. As leaders in intellectual property law, we have had the privilege to work with large and small companies around the world, helping them grow their businesses and protect their most important asset, which is their IP. We love being a part of their team and sharing in their success”, said Scott Miller, Co-Managing Partner.

Randy Marusyk, Co-Managing Partner, commented: “When we started out we knew we wanted to create an environment that would draw in the best and the brightest, which resulted in our unique firm culture and morphed into a true MBM family. We never wanted MBM to be a large, impersonal machine. We wanted to truly know our clients and for them to know us and for our staff to be MBMers for life.”

As MBM looks to the future, their goals are clear. Whether it is working with local, national or international clients, we will continue to provide personal service, practical advice and value-added expertise.

About MBM

MBM is an Intellectual Property (IP) law firm with offices across Canada. MBM’s professionals are dedicated solely to IP law, including staff that holds Ph.Ds in a multitude of disciplines including: molecular biology, clinical & organic chemistry, neuroscience, electrical, mechanical and software engineering fields, in addition to highly experienced IP litigators. Their services include obtaining and enforcing all intellectual property rights (patents, trademarks, industrial designs, copyrights, trade secrets), as well as providing strategic IP advice.

For more information please contact:

Evgenia Apelfeld, Director of Marketing & Business Development

T: 613.801.1082

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Review of the Last 100 Decisions of the Canadian Commissioner of Patents

By Claire Palmer, Nov ^4th, 2019

The Canadian Commissioner of Patents with the assistance of the Patent Appeal Board (PAB) review patent applications that were rejected by Examiners during prosecution. The PAB is an advisory body that includes a Chair and several senior officials of the Patent Office with previous experience as patent examiners. The members of the PAB have not participated in the prosecution of the application to ensure that the review is impartial.

We have conducted an informal review of the last 100 Commissioner’s decisions to gain insight into what type of rejections are being appealed to the Commissioner of Patents and what an Applicant’s likelihood of success is. The decisions were issued between March 23, 2016 and August 5, 2019.

Out of 100 decisions:

12 of the applications under review ultimately issued to patent.

• 7 of the 12 cases that ultimately issued to patent, the rejections were not considered justified.
• 5 of the 12 cases that ultimately issued to patent required PAB directed amendments.
• Only 1 of the 12 cases that ultimately issued to patent included a subject matter rejection.
• 7 of the 12 cases that ultimately issued to patent included an obviousness rejection.
• 7 of the 12 cases related to biological or chemical fields.

88 of the applications under review ultimately did not issue to patent.

• In almost half of these cases a statutory subject matter rejection was made.
• In 23 of these cases, the only rejection was the statutory subject matter rejection.
• 17 of these 23 cases included rejections relating to the meaning of art.
• 21 of these 23 cases included rejections that the claims were directed to a mere plan.
• 56 of these cases included an obviousness rejection.

Based on our informal review of the last 100 decisions, we believe that Examiner’s decisions to reject applications are generally in-line with the PAB. We further believe the Patent Office will require clarification from the Federal Court with respect to subject matter rejections.

For more information please contact:

Claire Palmer, Senior Patent Agent

T: 613.801.0450

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Amendments to the Canadian Patent Rules: Key Changes & Their Impact on the Patent Practice in Canada

By Poonam Tauh and Suzanne Hof, October 1st, 2019

Canada has revised its patent regime to implement the Patent Law Treaty. The new Patent Rules along with corresponding amendments to the Patent Act are set to come into force on October 30, 2019. Most of the changes are intended to streamline and harmonize administrative procedures and formalities with other international intellectual property offices.              

Below is a summary of the most noteworthy changes that would require significant practice adjustments and preparation by both the applicants and the agents.

With respect to PCT Applications filed on or after October 30, 2019:

1. Elimination of “Late” national phase entry at 42-months as a matter of right

The current practice allows an applicant to enter CA national phase after the 30-month deadline and up to 42 months from the priority date, as a matter of right, by paying a $200 late entry fee.

Under the new Rules, the “late” entry is only possible by submitting a statement to the Canadian Intellectual Property Office (CIPO) that the failure to enter the national phase at the 30-month deadline was “unintentional”, in addition to the required filing fee and a $200 late entry fee for reinstatement of rights. Canadian Intellectual Property Office (CIPO) still reserves the right to accept or reject this statement.

It is therefore advisable going forward to consider the 30-month national phase entry deadline as a non-extendible deadline under the new Rules.

2.Translation required at the time of national phase entry

Submission of the English or French translation for a foreign language patent application is an absolute requirement in order to submit an application in Canada.

3. Filing fee required at the time of national phase entry

Payment of filing fee is an absolute requirement to enter the national phase in Canada, with an exception that if an attempt to make a fee payment at the time of filing is unsuccessful, then the filing fee can be paid within 2 months from the date of the attempted payment.

4. Certified copies of priority documents required at the time of filing

If the certified copies of the priority application were not filed during the international phase, it will be necessary at the time of national phase entry in Canada to submit a copy to CIPO, or refer to a digital library that is accepted by CIPO.

5. Restoration of priority

CIPO will accept the restoration of priority attained at the International Phase. If priority is not restored at the international phase, then the priority may be restored in the Canadian national phase application by filing a request within one month from date of the national phase entry, along with establishing that restoration is required due to an unintentional error.

With respect to Direct Entry Applications based on Paris Convention filed on or after October 30, 2019:

 1. Filing fee and translation NOT required at the time of filing

The payment of the filing fee can be delayed up to 3 months from the date of the Notice issued by CIPO, along with a $150 late fee.

The submission of the English or French translation for a foreign language patent application can be delayed up to 2 months from the date of the Notice issued by CIPO.

2. Certified copies of priority documents are required within 4 months from the filing or 16 months from the earliest priority date

If certified copies of each priority document are not submitted or made available to CIPO from a digital library within the prescribed time, then CIPO will issue a Notice.

Failure to comply with the requirements by the date set by the Notice would result in the priority claim being considered to have been withdrawn.

3. Restoration of priority

Restoration of priority is available if the Canadian application is filed within 14 months of the priority date, and a request for restoration is filed within 2 months from the Canadian filing date, along with the statement that the error was unintentional.

Abandonment and Reinstatement Options

Under current practice, if a Canadian patent application (National Phase or Direct Entry) is deemed abandoned for failure to comply with a due date established for any of the actions described below, the application can be reinstated within 12 months from the date of abandonment by requesting reinstatement, paying a $200 government fee, and taking the action that was required to avoid abandonment.

Under the new Rules, the date of abandonment and reinstatement procedures vary depending upon the cause for abandonment.

For failure to request examination due on or after October 30, 2019

• CIPO will issue a Notice requiring that the request for examination be filed with payment of the exam fee and a $150 late fee within 2 months of the date of the Notice.
• The application can be maintained in good standing by requesting examination and paying the $150 late fee prior to the due date set by the Notice.
• Failure to comply with the requirements set out in the Notice will result in abandonment of the application. Reinstatement can be requested within the 12 month period after the date of abandonment.
• Within 6 months from the original examination deadline, the application can be reinstated, as a matter of right, by requesting examination, paying the $150 late fee and a $200 reinstatement fee.
• After 6 months from the original examination deadline, the application can only be reinstated if the applicant can also establish to the commissioner’s discretion that the deadline was missed despite the “due care” required by the circumstances was taken.

For failure to pay maintenance fee due on or after October 30, 2019 for a pending application or a patent

• CIPO will issue a Notice requiring that the maintenance fee be paid with a $150 late fee by the later of: either 2 months after the date of the Notice or 6 months after the missed deadline.
• The application can be maintained in good standing by paying the maintenance fee and the $150 late fee prior to the due date set by the Notice.
• oFailure to comply with the requirements set out in the Notice will result in abandonment of the application. Reinstatement can be requested with the 12 month period after the date of abandonment.
• After the abandoned date, the application can only be reinstated if the applicant can establish to the commissioner’s discretion that the deadline was missed despite the “due care” required by the circumstances was taken, and by paying the maintenance fee, the $150 late fee and a $200 reinstatement fee.

For failure to respond to an Office Action mailed on or after October 30, 2019

• If a response is not submitted by the due date of 4 months from the date of the requisition (extendible up to 2 months), the application will be deemed abandoned immediately.
• The reinstatement procedure remains unchanged from current practice, and the application can be reinstated within 12 months of the date of the abandonment, as a matter of right, by submitting the outstanding Office Action response, requesting reinstatement and paying a $200 government fee.

For failure to pay final fee in response to a Notice of Allowance mailed on or after October 30, 2019

• If the final fee is not paid by the due date of 4 months from the date of the Notice of Allowance, the application will be deemed abandoned immediately.
• Reinstatement procedure remains unchanged from current practice, and the application can be reinstated within 12 months of the date of the abandonment, as a matter of right, by paying the final fee, requesting reinstatement and paying a $200 government fee.

Third Party Rights

The new rules introduce the notion of third-party rights to use the invention post-grant, if an applicant fails to pay their maintenance fees and/or to request examination within 6-months from the initial due date (and the due date is after October 30, 2019).

These third-party rights limit the liabilities faced by a third party when a patent application is reinstated or a patent is restored 6 months after the initial due date by paying the maintenance fees and/or if the application is reinstated 6 months after the initial due date for requesting examination.

Given the broad language of these new rules, patent owners will need to consider carefully before delaying the payment of maintenance fee outside the initial 6 months window as they may lose the ability to enforce against third parties that commit, or make serious and effective preparation to commit, an “infringing” act, not only during the window of reinstatement/restoration period but also potentially for the life of the patent.

To emphasize and highlight: In our opinion the two changes that depart most significantly from the current practice are:

1.  the elimination of the option for “Late National Phase Entry” at 42 months from the priority date as a matter of right.

2.  the introduction of third-party rights to use a patented invention because of non-compliance with deadlines relating to payment of maintenance fees and/or request for examination.

For more information please contact:

Poonam Tauh, Senior Patent Agent

T: 403.800.9018

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Suzanne Hof, Senior Patent Agent

T: 613.801.0510

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Planning ahead: how to protect your business when you’ve licensed-in critical IP and the licensor is going under?

By Claire Palmer, September ^23rd, 2019

Starting November 1, 2019, important changes are coming into force to the Canadian Bankruptcy and Insolvency Act (BIA) and the Canadian Companies’ Creditors Arrangement Act (CCAA) that are directly related to intellectual property. These changes will better protect licensees of intellectual property when the licensor becomes insolvent by allowing a licensee in good standing to continue to use the licensed IP, despite licensor’s financial troubles.

In particular, the changes clarify that a licensee that “continues to perform its obligations under the agreement in relation to the use of the intellectual property” can continue to use the IP, including enforcement of the use exclusivity, during the term of the agreement, even if:

• the IP is sold in a BIA restructuring
• the IP is disclaimed or sold in a BIA liquidation
• the IP is disclaimed or sold in a receivership
• the IP is sold in a CCAA restructuring

As a licensee wishing to continue to take advantage of the licensed IP, it is critical that you continue to meet all obligations in the licensing agreement. 

In order to properly plan ahead, it is our recommendation that a licensing agreement always include contingency arrangements in the event of the licensor’s insolvency. Always have the licensing agreement reviewed by an IP lawyer. These contingency arrangements should specify:

• provisions detailing what licensee’s obligations are in the event that a licensor cannot meet their on-going obligations in the event of insolvency.  For example, if a licensor receives payments for on-going support activities, the licensee should specify in the agreement that these payments will be payable only if licensor is able to complete these on-going support activities.
• provisions detailing who will maintain the IP in good standing in the event that the licensor can no longer continue to financially support the IP.

Having appropriate contingency in place in the event of licensor insolvency will help better protect licensee’s business.

For more information please contact:

Claire Palmer, Senior Patent Agent

T: 613.801.0450

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Congratulations Kimberly!

July 10t^h, 2019

MBM’s own, Kimberly Dunn, achieved the highest overall mark across Canada on the Trademark Agent Qualifying Examination in the most recent exam cohort.

As a result, she will be the recipient of the Educational Foundation Award given by the Intellectual Property Institute of Canada (IPIC). The award will be officially presented during the Institute’s Annual Conference in Ottawa-Gatineau, September 25-27, 2019, at the Gala Dinner.

A total of 98 candidates across the country wrote the exam in 2018. Out of those, 32 candidates passed the exam resulting in a passing rate of 33% (13 passed on their first sitting; 15 on the second; 1 on the third; 2 on the fourth; and 1 on the fifth sitting). [1]

Kimberly wrote and passed the exam on her first try and obtained the highest mark of: 154 out of 160 for Part A; 142 out of 150 for Part B; with the highest overall mark of 296 out of 310.

We are so proud and happy for Kimberly and her tremendous achievement and excellence in the trademark profession and want to congratulate her on becoming (in our opinion the best!) registered Canadian Trademark Agent.

A bit more about Kimberly:

Kimberly is an MBM veteran; she started with MBM in 2008 as a paralegal working in both patents and trademarks but decided to focus her career on the trademark practice and becoming a registered Trademark Agent.

In her spare time, Kimberly enjoys reading (especially true crime and murder mystery books), travelling the back roads of Ontario and taking photographs of hidden gems found during her travels. On rainy (and truly Canadian snowy) days, she spends her time indoors completing various arts and crafts projects, including knitting, bead work, scrapbooking and painting. She also has a passion for baseball and is a fan of the Toronto Blue Jays and regularly attends their games.

Kimberly can be reached at:

T: 613.801.1050

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[1] https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04633.html

Canada’s Trademark laws will see major changes in June 2019

By Randy Marusyk and Hyun Woo Choi, November 26t^h, 2018

It has been announced on November 14, 2018 in the Canada Gazette (Part II, Volume 152, Number 23) that amendments to the Canadian Trade-marks Act will be coming into force on June 17, 2019. On the date of this announcement, the new Trademarks Regulations, which also will be coming into force on June 17, 2019, have been published. By virtue of these changes, there will be notable impacts on Canadian trademark regime in many aspects including registration process, and Canadian Trademark law will be in line with major international trademark treaties such as the Singapore Treaty on Law of Trademarks (Singapore Treaty), the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), and the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice Agreement).

Some of the important changes to Canadian Trademarks law are summarized below:

• Expanded definition of “Trademark”: The definition of “Trademark” will be expanded to include “a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign”;

• Increased Government Filing and Renewal Fees: Filing fees and renewal fees will increase and will be charged on a per class basis:
  • The Government filing fee will be $330 for the first class and $100 for each additional class (currently the fee is $250, regardless of how many classes you file in).
  • The Government renewal fees will be $400 for the first class and $125 for each additional class (currently the renewal fee is $350, regardless of how many classes you renew in). For  trademarks with multiple classes, there is a significant cost savings to renew before June 17, 2019, and even for trademarks with only one class of goods and services there is still a small saving of $50.To illustrate with numbers: the cost of renewing a trademark with 6 classes after June 17, 2019 will be: $400 (1^st class) + ($125 x 5 additional classes) = $1,025 in government fees vs. $350 in government fees if renewed before June 17, 2019.

• Adoption of the Nice classification system: Goods and services in a trademark will need to be classified according to the Nice Agreement classification system, as in many other countries;

• Date of first use will no longer be required: Identifying the date of first use of a trademark in Canada will be removed from the application;

• Declarations of use not required for a “proposed use” application: Applicants will no longer be required to file a declaration of use in order for the application to proceed to registration;

• Ability to divide and merge applications: A trademark application can be divided to expedite the registration process, especially when there is opposition to certain goods or services. Divided applications and registrations can be merged later;

• New registration period: The registration period for trademarks will be shortened from 15 years to 10 years and the renewal of a trademark registration will be required every 10 years. Terms for existing trademark registrations will remain 15 years; and

• International filing through a single application: Canada will be joining the Madrid Protocol. As such, will be able to file a trademark application in multiple countries (that are members of the Madrid Protocol) through a single application. 

Recommendation given the new legislation: if you have clients who are considering filing trademarks, especially multi-class applications, there could be significant cost savings if filed before June 17, 2019. As mentioned above the current Government Fee for filing regardless of how many classes you file in is $250, however, after June 17, 2019, the government filing fee will be $330 for the first class and $100 for each additional class. The same is applicable for renewals, it is recommended to renew before June 17, 2019, especially multi-class applications, as renewal fees will be going up, $400 for the first class and $125 for each additional class. Even if you renew now, before June 17 2019, the new term (10 or 15 years) will be calculated from the actual renewal due date NOT when you paid the renewal fee.

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Hyun Woo Choi, Articling Student

T: 604.239.0274

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Another Win for MBM - Increased Cost Awards by the Federal Court - The New Normal?

By Scott Miller and Erin Creber, March 26th, 2018

Successful litigants in Canada’s Federal Court are experiencing a positive shift in the quantum of costs that are awarded by the Court. For years, cost awards have been based on a tariff which typically provides only modest compensation of a party’s actual legal fees. In the past, awards in excess of the standard set by the tariff were considered uncommon.

The recent decision of Weldpro Limited v Weldworld Corp et al (2018 FC 312), where the respondents were successfully represented by Scott Miller and the MBM litigation team, confirms there is an emerging trend by the Federal Court to award costs at a higher level of compensation than the standard level set by the tariff in the right circumstances.

In Weldpro, the applicant made a claim for passing off contrary to paragraphs 7(b) and (c) of the Trade-marks Act. In addition to naming the corporate respondent as a party, the applicant pursued the corporate respondent’s director, Mr. Kocken.

The Court’s decision was entirely in favour of the respondents. In awarding costs to the respondents, the Court took into consideration that there was no shared or split success in the case and that while the issues at play were relatively straightforward, the applicant unnecessarily complicated the proceedings which, on their face demonstrated little chance of success. It was also remarked that the applicant failed to advance the best available evidence and that the allegation of personal misconduct against the corporate respondent’s director was little more than a bald assertion that was not pursued in any fashion in the course of the hearing.

In departing from the standard level of compensation set by the tariff, the Court awarded the respondents a fixed sum amounting to about 23% of the actual legal costs, using the tariff only as a rough guide.

Notably, the award included reimbursement of Mr. Kocken’s travel expenses to attend the hearing. The Court provided that being named as a personal respondent understandably triggered Mr. Kocken’s desire to be present at the hearing.

The Weldpro decision establishes the ongoing opportunity for a winning party to receive an award of increased costs from the Federal Court. Further, litigants should be aware that cost consequences may result from a claim for personal liability against an individual party if such allegations are unfounded and unaddressed at the hearing of the matter.

The Price of Privacy: Canada’s Top Court Rules, ISPs must disclose the identity of illegal downloaders at a “reasonable” cost

By Scott Miller and Laura Crimi, October 29th, 2018

The Supreme Court of Canada sided with Rogers Communications in a recent 9-0 decision ruling that requires companies seeking to pursue copyright violators to remunerate internet service providers (ISPs) for looking up names of subscribers suspected of illegal activity.[1]

The Internet has long protected the identity of users participating in file sharing networks facilitating the rapid sharing of copyrighted content. The Government of Canada enacted the “notice and notice” regime as part of the Copyright Modernization Act in 2012 to deter online copyright infringement while balancing the rights of interested parties. Under the “notice and notice” regime, a rights owner is able to forward notice of alleged infringement to an ISP, the ISP is then obliged to forward the notice of infringement to the alleged wrongdoer. The “notice and notice” regime is “the first step in a process by which rights holders can go after those they allege are infringing… Then the rights holder can use that when they decide to take the alleged infringer to court.”[2] An ISP is not required to disclose the identity of a user who has received a notice of infringement under the “notice and notice” regime. ISPs are only required to disclose the identity of an individual who has received notice of infringement from a rights holder under a Court granted Norwich order, an extraordinary remedy that enables a rights holder to discover the identity of infringers from an internet intermediary like an ISP.

The recent ruling of Canada’s top Court in Rogers Communications Inc. v Voltage Pictures creates a new precedent allowing ISPs to charge rights holders for the costs associated with pursuing copyright violators in compliance with a Norwich order.

Voltage Pictures, the production studio behind I Feel Pretty and Oscar winning films including Dallas Buyers Club and The Hurt Locker, first brought the matter to trial in the Federal Court in 2014.[3] Voltage put forward a reverse class action and moved to compel Rogers Communications to provide the personal information of alleged infringers at no cost.[4] Rogers was originally ordered by the Federal Court to disclose the identity of the alleged infringer to Voltage and Voltage was ordered to pay Rogers $100 per hour, plus HST, for the time spent assembling the information. The decision was appealed to the Federal Court of Appeal, where it was found that Rogers was entitled to reasonable costs of the actual act of disclosure but the remainder of associated costs incurred by Rogers in compliance with a Norwich order was not recoverable.

As a result the recent Supreme Court decision, ISPs can now charge a “reasonable amount” for the efforts associated with looking up subscribers suspected of illegal activity under a Norwich order. However, the steps untaken by an ISP to comply with a Norwich order that overlap with an ISP’s obligations under the “notice and notice” regime may not be recoverable. The determination for what constitutes a “reasonable cost” was sent back to the lower court for a final decision. As a result of this Supreme Court decision, the amount of costs associated with identifying internet users suspected of illegal activity may impact the way in which rights holders pursue infringers. The traditional method of suing many internet users for copyright infringement at once may become cost prohibitive for rights holders like movie production studios upon the determination of what an ISP can reasonably charge for compliance with a Norwich Order.

Intellectual Property Considerations in the New CPTPP & NAFTA Negotiations

By Randy Marusyk and Robert Di Battista, February ^13th, 2018

When the United States pulled out of trade negotiations for the Trans-Pacific Partnership agreement (the “TPP”), many considered the agreement to be dead. However, Canada and the other ten countries originally part of TPP negotiations have managed to breathe new life into the agreement.

At the World Economic forum in January 2018 in Davos, Canadian Prime Minister Trudeau announced that Canada and the other ten TPP countries had reached an agreement on a revised TPP,^[1] now renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the “CPTPP”). Member countries are working towards signing the agreement by early March 2018.^[2] While the new CPTPP will be different in a number of ways, of particular importance are the changes that were made to the agreement’s intellectual property (IP) provisions following the departure of the US from negotiations.

During the original TPP negotiations, the US had insisted for certain IP provisions related to patentable subject matter, patent term adjustment, copyright term of protection and technological protection measures (TPMs), among others, to be strengthened. At the time, many of these provisions were considered one-sided and quite controversial because they would require other TPP member countries to undergo extensive and expensive legislative reforms, including Canada. In agreeing to the reworked CPTPP, Canada has endorsed the suspension of a number of these IP provisions. A list outlining the suspended IP provisions can be found here.[3]

With this new CPTPP as a backdrop, it will be interesting to see how Canada will now approach the negotiation table with the US for a revised NAFTA. It is expected that the US will attempt to negotiate for IP provisions similar to those in the original TPP.[4] Whether Canada will push back against the US for IP provisions more in line with those in the new CPTPP, only time will tell.

The Impact of Changes to Canada’s Trademarks Act on the Pharmaceutical Industry

By Erin Creber, January 29th^{, 2018}

The Canadian trademark regime is set to experience a significant overhaul once major amendments to the Trademarks Act take effect. The amendments are expected to come into force in 2019 and are designed to allow Canada to implement the Nice Agreement, the Singapore Treaty and the Madrid Protocol. While the amendments will have an impact on all Canadian trademark owners and any business seeking trademark protection, they will present unique challenges to the pharmaceutical industry specifically.

Registration Regardless of Use

One of the most significant changes to the Trademarks Act involves removing the requirement that a trademark must be used prior to registration. Under the new practice, a trademark application will automatically proceed to registration upon expiration of the opposition period. Currently, it is possible to file a trademark application on the basis of “proposed use” or “intent to use”. However, an application based on proposed use cannot proceed to registration until the applicant files a declaration attesting to use of the mark in Canada.

Companies seeking to protect a proposed drug name not only have to comply with the trademark registration process, but also have to seek the approval of any proposed drug name from Health Canada as part of drug approval process, in accordance with the Food and Drug Regulations. Health Canada’s assessment of a drug name is performed from a health and safety perspective. Factors considered by Health Canada include the similarity of existing and discontinued drug names and the potential to mistake one drug name for another, resulting in medication errors. There is no guarantee that a drug name used and allowed internationally will be approved for use in Canada.

The Health Canada approval process can be lengthy and there can be no sale of the product - and consequently no use of the drug name - while approval is pending. This means that pharmaceutical applicants are often forced to request multiple extensions of time to file declarations attesting to use of a mark, and may even lose their applications if there is no use of a mark prior to the final deadline to file the declaration.

The new trademark laws will allow owners of pharmaceutical trademarks to obtain registered trademark protection prior to the completion of the drug approval process, thereby eliminating the need to file (or request extensions of time to file) declarations attesting to use. The result is a more rapid and streamlined trademark registration process.

That said, use will remain an important consideration for trademark owners since a registration will be susceptible to a non-use cancellation proceeding beginning three years after the date of registration. If there is no use, and an owner cannot establish “special circumstances” justifying the lack of use, the registration will be cancelled. However, it is possible that non-use due to pending Health Canada approval may be considered a “special circumstance” sufficient to justify maintaining the registration despite no use of the mark in Canada.

Non-Traditional Trademarks

Current Canadian trademark law permits registration of a limited number of non-traditional trademarks such as colour, shape and sound. The amendments to the Trademarks Act will allow applicants to seek trademark protection for a wider variety of non-traditional trademarks including holograms, scents, tastes and textures. However, with the changes will come an additional level of scrutiny as it will be necessary to show distinctiveness of a trademark at the date of filing if the Canadian Trademarks Office does not consider the mark to be inherently distinctive. At present, there is no requirement to prove distinctiveness of marks consisting of colour, shape or sound.

To prove distinctiveness of a mark, an applicant will have to file affidavit evidence and/or survey evidence establishing the reputation and distinctiveness of its trademark across Canada. If proof of distinctiveness is only demonstrated in parts of Canada, the resulting registration will be restricted to those provinces and/or territories in which distinctiveness has been established.

Pharmaceutical companies have historically faced unique challenges when seeking registered trademark protection of colour, shape and sound marks. The recent case Canadian Generic Pharmaceutical Association v Boehringer Ingelheim Pharma Gmbh & Co. KG (2017 TMOB 47) confirms the additional hurdles faced by the pharmaceutical industry in proving distinctiveness of a product having a particular shape and colour. Not only must it be shown that an ordinary consumer associates the trademark (without markings) with a single source of manufacture to a significant degree, but that association must be established for a substantial body of consumers which, for pharmaceutical products, consists of physicians, pharmacists and patients.

Given that there is presently no requirement for proving distinctiveness of colour, shape and sound marks, it is advisable for trademark owners to consider seeking protection now, while the more lenient trademark regime remains in effect.

International Registration of Trademarks

Finally, the amendments to the Trademarks Act will allow Canada to adhere to the Madrid Protocol, an international trademark registration system. The Madrid Protocol simplifies the filing of corresponding trademark applications in foreign countries once an applicant has a home country application or registration.

Currently, Canadian companies seeking to obtain registered trademark protection in various countries outside of Canada must file trademark applications in each jurisdiction. With the implementation of the Madrid Protocol, it will be possible to file corresponding trademark applications in multiple foreign jurisdictions and countries through a single “international” application. Similarly, foreign applicants seeking international trademark protection will have the opportunity to designate Canada under the Madrid Protocol.

Canada’s adoption of the Madrid Protocol will permit trademark owners, including those in the pharmaceutical industry, to realize the advantages of this simplified international filing system. Not only will applicants have easier access to trademark protection in foreign jurisdictions but the more efficient, centralized application process will result in financial savings.

Summary

The upcoming changes to Canadian trademark law, including the implementation of the international treaties, will help to modernize Canada’s trademark system and bring the country in-line with international standards. Trademark owners should ensure that they understand the implications of the new legislation and adjust their trademark protection strategies accordingly. For more information please contact:

The Impact of Expanded Regulations Under CETA on Geographical Indications and Your Brand

By David Lotimer, January 8th^{, 2018}

Trademarks are a part of our everyday life. A trademark protects a combination of letters, words, sounds or designs that distinguishes one’s goods or services from those of another in the marketplace. There are specialized trademark rules, including those relating to Geographical Indications (“GIs”) that have the potential to impact specific industries. For example, recent changes in GI law could significantly alter how a wine, spirit, agricultural product or food producer approaches their branding and marketing efforts.

A GI[1] is an indication that identifies a wine or spirit, or an agricultural product or food, as originating in a specific territory. The GI must also be associated with a particular quality, reputation or other characteristic of the wine or spirit or the agricultural product or food that is attributable to its geographical origin. Essentially a GI can add value to your product as it certifies that the product possesses certain qualities or reputation, because of where the product was created. We are all familiar with some common GIs including Champagne (an alcoholic drink produced from grapes grown in the Champagne region of France); Port (a Portuguese fortified wine produced exclusively in the Douro Valley in the northern provinces of Portugal); and Cognac (a variety of brandy named after the town of Cognac, France, produced in the surrounding region).

Prior to Canada-European Union Comprehensive Economic and Trade Agreement (“CETA”)[2], which came into force on September 21, 2017, GIs were used to protect only wines and spirits. CETA implementation has resulted in amendments to the Canadian Trademarks Act (“Act”) that expanded the protection afforded by the Act to a wider range of products to which GIs (including translations of these GIs) can now apply. Certain agricultural products and foods are now afforded the same protection. The amendments have automatically granted GI status to a number of products including Brie de Meaux, and Huile d'olive de Haute-Provence, providing them with legal recognition, and exempting them from objection and cancellation proceedings.

Certain more commonly used GIs have been afforded a more limited type of protection (such as Feta, and Asiago).[3] Users of these particular marks will be exempt from cancellation proceedings if they have been using the mark for 10 years (starting before October 2013), have previously had indications granted, or currently have an applied-for or used trademark on file. As a producer of these products, there is some risk in relying on this exemption. The specific GI use must qualify as trademark use as defined by the Act, otherwise you will not qualify for the exemption. You will also be able to continue to use the more common GIs if they are accompanied by a qualifying term such as “kind”, “type”, “style” or “imitation”.[4] The geographical origin must also be clearly displayed on the packaging in which it is distributed.

A third category of commonly used GIs such as Parmesan, Black Forest Ham, and Valencia Orange can be adopted, used or registered as a trademark without penalty.[5] Additionally, these GIs can be used in comparative advertising that is not placed on labels or packaging, or in the instance that consent was given by the ‘Responsible Authority’.[6]

The implementation of CETA has also provided the Federal Court with exclusive jurisdiction to order the removal of a GI, a procedure which did not previously exist. Moreover, there is a process by which a ‘Responsible Authority’ can apply to have a new GI added to the GI List[7] and includes the following steps:

1. Filing a request with the Trademark Office;

2. Trademark Office reviewing your request;

3. Trademark Office putting out public notification of the GI;

4. Going through an objection proceeding (if a proceeding is initiated[8]); and

5. Entering the new GI on the Official GI list.

If you reference a GI on any of your products, it is important you understand how these rules can impact your business. Contacting an experienced professional who can help you in this understanding could end up being the difference between protection of your brand, and the loss of it.

CETA agreement and the Canadian patent landscape

By Randy Marusyk and Hyun Woo Choi, October ^16th, 2017

On September 21, 2017, The Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) came into force.

Three areas part of the CETA agreement relating to a range of issues in Canadian patent protection are worth noting:

1. Certificate of Supplementary Protection Regulations

2. Regulations Amending the Patented Medicines (Notice of Compliance)

3. Amendments to the Patent Rules

1. Certificate of Supplementary Protection Regulations: the Certificate of Supplementary Protection Regulations (CSP Regulations) were created to provide additional protection for patent-protected pharmaceutical products. The new Certificate of Supplementary Protection (CSP) regime will provide additional period of patent-like protection for drugs containing a new medicinal ingredient or a new combination of medicinal ingredient. The CSP Regulations provide various timelines, requirements and procedures needed to carry out the regime and are defined in sections 104-134 of the Patent Act. The additional protection term under CSP can be calculated as the difference between the patent filing date and the Notice of Compliance date, reduced by 5 years, up to a maximum of 2 years (i.e. CSP term = [Notice of Compliance date – Patent filing date] – 5 years, with a cap of 2 years). The additional protection period under this regulation will take effect from the patent expiry date.

2. Regulations Amending the Patented Medicines (Notice of Compliance): These amendments were made to address a number of issues described below and to meet Canada’s obligations under CETA:

• to resolve a number of problems by replacing summary prohibition proceedings with full actions to determine patent validity and infringement;
• to expand the scope of the PMNOC Regulations to cover relevant Certificate of Supplementary Protections by providing an additional period of protection for new patented pharmaceutical products;
• to help expedite proceedings by introducing a limited number of procedural rules, while still leaving the Court broad discretion to manage proceedings;
• to address concerns about how damages arising from delayed generic drugs market entry are currently addressed; and
• to remove barriers that may prevent innovators and generics from litigating certain patents outside the PMNOC Regulations prior to generics entering the market.

3.Amendments to the Patent Rules: Based on the recent amendments, section 29 of the Patent Act is being repealed and those provisions under the Patent Rules that refer to appointment of the representative under this section of the act are also being removed. The repealed provisions under the Patent Rules are section 78, clause 94(2)(b)(ii)(I), subparagraph 94(3)(b)(vi) and paragraph 148(1)(d). As a result, information regarding appointment of a representative is no longer required for completion of a patent application or the national phase of a patent application. To reflect the change, Form 1 (Application for Reissue) and Form 3 (Petition for a Grant of Patent) are also replaced to delete references to representative appointment required under section 29 of the Patent Act.

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Hyun Woo Choi, Articling Student

T: 604.239.0274

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

New LCBO Subsidiary to Control Cannabis Sales in Ontario

By Randy Marusyk and Yang Wang, September ^13th, 2017

In response to the imminent legalization of recreational use of cannabis in Canada as proposed by the Parliament in Bill C-45, the Cannabis Act, the Ontario government released a detailed plan on distribution system and usage regulations of recreational marijuana in a document titled “Ontario’s Safe and Sensible Framework to Federal Cannabis Legislation” on September 8, 2017.

The centerpiece of this proposal is to create a subsidiary of the Liquor Control Board of Ontario (LCBO) to hold monopoly over cannabis retail and online sales in Ontario. This approach, as Attorney General Yasir Naqvi said, will focus on ensuring “a safe and sensible transition” to federal legalization. However, the LCBO operated subsidiary will be the single buyer of marijuana producers and the exclusive distributor to consumers. This inevitably puts it at a dominant position to make decisions on market entrance credentials, quality controls, retail prices and geographical accessibility. Private investors will not be allowed to open and operate cannabis retail stores and consumption premises in Ontario for the time being. The monopoly will also make smaller marijuana producers difficult to compete with powerhouses as Aphria Inc. (TSX: APH) and Canopy Growth (TSX: WEED), two of the country’s biggest marijuana producers.

What are the key elements of the proposed framework?

• The LCBO will establish a new subsidiary to exclusively oversee the distribution of cannabis in Ontario through retail stores physically separate from existing LCBO liquor stores and an online order service.
• Approximately 150 retail stores will be opened by 2020, including 40 in July 1, 2018 and another 80 by July 1, 2019. The stores will run similar to tobacco sales as behind-the-counter model and there will be no self-service.
• The locations of these retail stores will be determined in consultation with municipalities. The guideline is to target areas with illegal marijuana dispensaries to crush black market.
• The LCBO operated website for online orders will be available by July 1, 2018. It will make recreational marijuana accessible to residents far away from retail stores.
• Pricing and taxation decisions will come later. The anticipated profits will be modest, especially at the beginning stage with necessary infrastructure and personnel training costs.
• The use of recreational marijuana will only be permitted in private residences. The consumption of any form of recreational cannabis in public places, workplaces or when inside a motor vehicle will be prohibited.
• The Ontario Government will explore the feasibility and implications of introducing designated establishments where recreational cannabis could be consumed.
• Cannabis dispensaries currently operating in Ontario are not and will not be legal retailers. These shops will be shut down through a coordinated and proactive enforcement strategy with municipalities and police forces.
• Ontario will set the minimum age for possessing or consuming recreational cannabis at 19, same as the current alcohol restrictions. The Government of Canada in Bill C-45 proposed the age of 18. Other rules and restrictions for distribution of cannabis will be strictly in keeping with federal rules and regulations.

How will this framework affect cannabis investors, producers and consumers?

• The safety concern is legit and marijuana should still be a tightly controlled substance after its legalization. However, the proposed monopoly model may not benefit interested parties except the Ontario government, LCBO and labour unions. This framework may deter potential investors, hamper smaller producers and drive consumers to black market.
• Private-owned retail stores and cannabis lounges will not be allowed in Ontario according to the proposed framework. For investors, the investment opportunity is limited to marijuana production. Therefore, if some other provinces and territories present less stringent rules and regulations, Ontario would be less attractive to potential investors.
• For marijuana producers, the monopoly model strongly favors giant corporations who have financial resources, lobbying power and business expertise to strike a supply contract with LCBO. Smaller producers may face obstacles to put their products on the shelves of legal retail stores, same as what happened to small craft brewers in Ontario under the current alcohol distribution monopoly.
• The shut down of currentprivate-owned stores selling cannabis and business premises will make many people lose the only source of income. If the new LCBO subsidiary is not able to accommodate these people into the system, many of them may not leave cannabis business and choose to go underground. That, in return, will significantly increase the law enforcement costs and endanger the public.
• For consumers, forty stores at the beginning stage made accessibility a big concern, especially for those who are unable to travel without assistance and having difficulty to put an online order. Furthermore, if the retail prices in legal stores are significantly higher than the black market, many consumers may simply pick the cost-effective way. It is hard for the law enforcement to tell illegal marijuana products from those purchased from legal retail stores

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Yang Wang, Summer Law Student

T: 613.801.1072

E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Intellectual Property Licensing: A Win-Win Agreement

By David Lotimer, September 11th, 2017

There are several benefits associated with protecting your valuable intellectual property (‘IP’) through registration. Owners often view registration of their patents, trademarks, copyright and other IP as a way to prevent third parties from using their proprietary idea, brand name or computer code. This is a valid consideration; however it is not the only benefit to an IP owner.

Licensing IP can be a very valuable additional income source to a business, and can be the conduit by which lucrative partnerships are created.

The World Intellectual Property Organization (‘WIPO’) categorises a licensing agreement as “a partnership between an intellectual property rights owner (licensor) and another party who is authorized to use such rights (licensee) in exchange for an agreed payment (fee or royalty).”[1] In this way, a licensor is able to obtain monetary gain from his or her IP by providing permission to a licensee to use that IP. The specifics of this permission can be particular to suit the needs of the parties.

Some factors to consider include:

Exclusivity – a license to use IP may be exclusive to one licensee. Exclusivity is often viewed favourably by a licensee as it provides surety that other competitors will not be able to use the IP for their own business purposes. Alternatively, the license agreement may stipulate that the license to use the IP is non-exclusive. This may be favourable to the licensor as it provides them with an opportunity to enter into several different licensing relationships using the same IP, potentially deriving multiple income sources for use of the same technology.

Jurisdiction/Territory – a licensing agreement can be jurisdictionally specific, in other words, you may select the specific territory, region, area or country in which the license will be valid. Some companies elect to negotiate a worldwide license allowing the licensee more freedom to use the IP in the jurisdiction of their choice. Others limit the IP use to a specific country in order to prevent the licensee from entering into their own market.

Transferability/Sublicensing – it is possible for a licensor to provide a licensee with the ability to sublicense the IP themselves. The licensor may require that such sublicensing be approved, and structured such that sublicense fees will be paid to the IP owner. The licensor may also elect to provide a non-transferable license, which allows the IP owner to keep complete control of which parties are able to legitimately use the IP.

Term – the term of the licensing agreement can be a defined length, renewable, based upon other conditions (such as licensing fees, production targets, licensor election, etc.), or perpetual. A conditional term can act to motivate a licensee to achieve certain business targets that ultimately provide financial benefit to both the licensee and licensor.

Fees – license fees come in many forms including upfront payments, recurring annual or monthly fees, royalty based, or a combination of these options. It is possible to create a license fee payment structure that mitigates risk and rewards strong performance, or penalizes poor performance. A fee structure (like term structure) can act to motivate a licensee towards success in their own business.

Field of Use –the rights granted to use the IP may be limited to a specifically defined field. In this way the licensee is only able to use the IP for a particular commercial purpose and the licensor will maintain the right to directly exploit or license the same IP in a different field of use.[2]

Type of Licensed IP – the type of IP licensed will also impact how the license agreement is developed. The permitted use and control of a patented technology can be significantly different to the permitted use and control of a trademark, and the obligations on each of the parties to the agreement need to reflect the particular licensed IP.

Ownership of Licensed IP Developments – once a licensee is able to use a licensor’s IP, it is important to consider how developments and improvements to the licensed IP will be controlled, particularly when it comes to ownership. It is possible to impose conditions upon the license that require all developments of the licensed IP to be owned jointly by both parties to ensure the spoils of newly created IP is realized equally.

The benefits of IP licensing are several and apply to all parties involved. A licensor may be able to form partnerships to expand the reach of their own business, or may secure an additional income stream. A licensee may expand their business by utilizing technology they were not previously able to use. There are many other options to further address the factors discussed above, and the specifics can be manipulated to better suit each particular licensing relationship.

When developing an IP License Agreement, consider consulting a trained IP specialist with experience negotiating and formulating these agreements. With his or her help, it is likely both you as an IP owner and the licensee of your IP will find yourselves part of a win-win agreement.

Are you trying to decide whether to register your Industrial Design in Canada?

By Etienne de Villiers, August 22nd, 2017

A Canadian Industrial Design registration protects original visual features of shape, configuration, pattern or ornament, or any combination of these features, applied to a finished product. Industrial designs are commonly used to protect the outside shape and design of a wide variety of mass produced articles from light fixtures to kitchenwares. Industrial Designs do not protect functional features, they only protect a product’s appearance.

When you register your Industrial Design, you gain exclusive, legally enforceable rights in Canada for five years from the date of registration, and extendable to 10 years with payment of a maintenance fee. You may sell your rights or license others to make, use and sell your design.
In Canada there is a one year grace period to file an Industrial Design application after you make your design public anywhere in the world. It is still recommended to file an Industrial Design application as soon as possible since the design must be original and cannot closely resemble another person’s previously released design.

A Canadian Industrial Design application typically includes multiple views of the “finished article” representing the product in an assembled state. The views can be shown in photographs, but more commonly line drawings are used to ensure the design features are clearly captured. While only one view is required, please note that only features of the design included in the views provided are protected. Typically 6 views are recommended: top, bottom, front, back, left side, and right side. In some cases a perspective view is included, and identical views (e.g. identical left and right side views) may be represented by one of the two identical views.

...Outside Canada...

If you also plan to sell your products outside of Canada, then you might consider filing a Design Patent in the United States or a Community Design in the European Union. The first design application may support a priority claim in foreign countries as long as corresponding applications are filed within six months of the filing date of the first design application. For instance, a Design Patent may be filed in the United States, and within six months an Industrial Design application may be filed in Canada and claim the benefit of the earlier U.S. filing date. Using priority filings can simplify the process of filing multiple design applications in different countries.

So Should You Register An Industrial Design?

Registering an Industrial Design in Canada is an investment to help protect the appearance of your products. Obtaining an Industrial Design in Canada is much less expensive and time consuming than obtaining a patent making this an economical and effective form of industrial protection. While Industrial Designs only protect the look of a product, and not its function, in many cases the outer form of a product is part of its identity and marketability.

If you have any questions about Canadian Industrial Designs or are ready to start an Industrial Design application, please do not hesitate to contact us. We are always happy to help. For more information please contact:

Etienne de Villiers, Partner

T: 416.995.8655

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Regaining Trademarks That Were Lost in Translation in China

By Scott Miller and Yang Wang, August 3rd, 2017

In China, international companies and celebrities have often found themselves on the losing side in trademark or name right disputes. One reason is that an English word can be translated in Chinese either phonetically or conceptually, and there are usually multiple Chinese characters with the same pronunciation to choose from. Another reason is that the Chinese trademark system is a first-to-file system same as in Canada, but prior-use is not a reasonable ground to displace a registered trademark.

The original English names (e.g. Jordan) may be hijacked by local companies by using variation forms of the phonetics in English (e.g. Qiaodan) or the translation in Chinese characters (e.g. 乔丹). These variations are difficult to distinguish from the original names by local customers since the majority of the Chinese population does not speak or read English, especially seniors and people living in rural areas. For international companies and celebrities, the Chinese courts need to be convinced that their trademarks and names are recognized as "famous", which is a tremendously difficult threshold to establish.

China has started taking intellectual property rights more seriously because Chinese companies, such as Huawei, Lenovo, and Haier, are becoming powerhouses of valuable intellectual property. In recent trademark cases, we have observed a trend that the Chinese courts are now more willing to consider the brand reputation developed by previous use outside of China. Below are a few notable cases:

Michael Jordan v Qiaodan Sports Co. Ltd.

In China, the retired basketball superstar Michael Jordan is known as “乔丹”, the most common Chinese translation of his last name. In 2001, a local sportswear manufacturer Qiaodan Sports registered a number of trademarks including “乔丹” and “QIAODAN”. Michael Jordan sued for infringement of his name rights after finding that Qiaodan Sports brought in $276 million in revenue in 2012. The trial court ruled that “Jordan” is a common English name which is not uniquely associated with Michael Jordan. Furthermore, the use of one version of the English translation does not necessarily constitute infringement. Michael Jordan later on appealed this decision.

In December 2016, China's Supreme People's Court overturned earlier rulings. The court found that a strong link between “乔丹” and Michael Jordan personally was established in China before Qiaodan Sports had maliciously registered “乔丹”. The company was fully aware of Michael Jordan’s reputation in China and enriched by passing off. Therefore, the Supreme People’s Court invalidated the “乔丹” trademark registration. Meanwhile, the court held that the link between “QIAODAN” and Michael Jordan has not been established, as naturally Michael Jordan would not have used “QIAODAN” in any manner.

New Balance v New Boom, New Barlun, and New Bunren

In 2017, the Suzhou Intermediate People’s Court has ordered five shoe manufacturers using the name New Boom and the signature slanting “N” logo to pay $250,000 in fines to the state and an undetermined amount to New Balance. Another Chinese court had awarded New Balance $550,000 against companies making New Bunren brand shoes. We are still waiting for the outcome of an outstanding case against the brand New Barlun.

Most international companies do register their English brands when entering the Chinese market. However, what’s often forgotten, or deemed less important, is the registration of Chinese translations. This overlooking may cause significant economic losses eventually as a registration for the English words will not automatically extend to the Chinese translations.

Recent court decisions serve as encouraging precedents to international brand owners. The Supreme People’s Court is more willing to consider all relevant circumstances, in particular the fairness and commercial value behind the name or trademark. It also worth to mention that the Chinese Trademark Office has granted preliminary approval for nine Donald Trump trademarks it had previously rejected. The key to success is to present sufficient evidence to establish the link between the original names and Chinese translations, and show bad faith on the part of the trademark squatter. Recent cases emphasize the need for international companies and celebrities to identify and register Chinese translations or transliterations of their trademarks and names as soon as possible, in order to ensure that they are protected against trademark squatters.

Contractors and the Legal Ownership of your Intellectual Property

By David Lotimer, July 25th, 2017

Many entrepreneurs and small business owners exhibit an extraordinarily high level of motivation. They are individuals with the wide-ranging skill set that is necessary to achieve success in their chosen field. One of the most important characteristics of these leaders is the ability to recognize their own deficiencies and to identify a capable person to fill that void within their team. If they’re lucky these individuals will sign on to be a part of the team full time as an employee, however many teams are filled with freelance developers, contractors, consultants and the like. Utilizing these less permanent team members can be cost effective and can help to bolster the capabilities of your company. However it can also create legal issues relating to intellectual property ownership.

It important to protect the legal rights associated with intellectual property developed by you and your team, and to ensure that you are not breaching the legal rights of others. It is also important to ensure that your company legally owns the valuable assets you and your team have created. Clear ownership rights comfortably allow you to use, license and sell the inventions, products, and software developed by your team.

Generally when an employee contributes to work done for the employer in the context of their employment, all work product of that employee will automatically be owned by the employer. However ownership rights are slightly murkier when a non-employee is involved in the creation of work product.

What happens for instance when a contractor creates a website for your company based on a template she produced prior to her engagement? What if a software developer uses source code originally created during his engagement with another company in the creation of a new platform for your business? How will ownership rights in a logo created by a graphic designer be distributed? The relationship between employers and non-employees can bring about these types of work product ownership questions.

But don’t fret – there are many ways to structure a relationship with a non-employee in order to protect your business and to guarantee your ability to use the work product created for your company.

Clear intellectual property ownership clauses within a contractor agreement can provide you with confidence in legal ownership of work product. Disclosure and liability obligations related to third party material used within contractor developed work product can be essential to protect your company from legal attacks. Intellectual property licensing can help define invention contributions and allow your company to legally incorporate previously developed intellectual property into your own creations. These are but a few of the strategies you can utilize to clarify ownership rights with non-employees.

The next time you look to fill out your team with a specialized contractor, consider obtaining the advice of an intellectual property expert. We can help you structure the relationship so that you can confidently work with a non-employee, and allow you to get back to focussing on driving the success of your business.

For more information please contact:

David Lotimer, Associate

T: 613.801.1063

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Supreme Court of Canada Upholds Order for Google to Block Search Results Globally

By Erin Creber, July 12th, 2017

The Supreme Court of Canada recently issued its decision Google v Equustek (2017 SCC 34) upholding the British Columbia Court of Appeal’s decision to grant an interlocutory injunction requiring Google, a non-party to the underlying action, to block certain search results on its Internet search engine on a worldwide basis. In granting the appeal, the Supreme Court of Canada has held it is within the power of Canadian courts to issue injunctions with extraterritorial effect, so long as it is just and equitable to do so. This is an important decision for intellectual property owners, as it provides a new mechanism to combat infringers.

Background

Equustek is a small technology company based in British Columbia that brought an action against its distributor, Datalink. Datalink had re-labelled one of Equustek’s products and was passing it off as its own. Datalink also acquired confidential information and trade secrets belonging to Equustek and was using this information to design and manufacture a competing product.

The Court issued an interlocutory order prohibiting Datalink from selling its inventory and using any of Equustek’s intellectual property. However, Datalink continued to carry on business from an unknown location, and sell its infringing products via the Internet to customers around the world.

To prevent Datalink from continuing its infringing activities, Equustek approached Google, and requested that Google de-index (i.e. block from search results) all of Datalink’s websites promoting the sale of Datalink’s counterfeit goods.

Google initially refused the request, complying only once a Court order was issued. Pursuant to its internal policies, Google voluntarily blocked individual webpages but not entire websites. Further, Google only blocked Canadian search results.

Datalink easily circumvented the measures taken by Google by simply moving the objectionable content to new webpages within its websites. Throughout this time, Datalink webpages remained available on Google’s non-Canadian search engines, e.g. Google.com.

Consequently, Equustek sought, and was awarded, an order requiring Google to block all Datalink websites globally.

The Decision

In a 7-2 decision, the Supreme Court of Canada upheld the British Columbia Court of Appeal’s ruling that Google must block all Datalink websites on a worldwide basis.

In reaching this decision, the Court considered the RJR MacDonald v Canada three-part test for granting an interlocutory injunction. It was held (i) there was a serious issue to be tried, (ii) irreparable harm would result if the injunction was not granted, and (iii) the balance of convenience did favour granting the injunction.

Justice Abella recognized that the infringing activities in this case were occurring globally, as the Internet has no borders. Google was deemed to be a determinative player in allowing harm to occur to Equustek as a result of Datalink’s activities. Upholding the order against Google was deemed necessary to prevent the irreparable harm that flowed from Datalink carrying on business on the Internet, a business which would be commercially impossible without Google’s facilitation.

Regarding the balance of convenience, the Court rejected Google’s arguments that an injunction cannot be directed at a non-party, an injunction with extraterritorial effect would violate comity, and that the injunction in this case was in effect a permanent injunction. In doing so, the Court indicated that it was within Google’s power to seek an order varying the injunction if there was any risk that compliance with the injunction would violate the laws of another jurisdiction.

Conclusion

This decision confirms that Canadian courts have the ability to issue interlocutory injunctions directed against non-parties, and signifies the Supreme Court of Canada supports the broad implementation of such injunctions, provided it is just and equitable to do so.

For more information please contact:

Erin Creber, Associate, Trademark Agent

T: 613.801.0044

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The Supreme Court of Canada Knocked Down the "Promise Doctrine” for Determining Utility

By Suzanne Hof and Poonam Tauh, ^{June 30th}, 2017

Today, the Supreme Court of Canada, in AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36, has determined that the Promise Doctrine is not the correct method of determining whether the utility requirement under s. 2 of the Patent Act is met, and upheld the utility of the appelants’ 2,139,653 patent.

The Promise Doctrine holds that if a patentee’s patent application promises a specific utility, only if that promise is fulfilled, can the invention have the requisite utility, but where no specific utility is promised, a mere scintilla of utility will suffice.

The Court has found that the Promise Doctrine is excessively onerous in two ways: (1) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and (2) where there are multiple expressed promises of utility, it requires that all be fulfilled for a patent to be valid.

First, the Court found that the Promise Doctrine conflates s. 2 of the Act (which requires that an invention be “useful”) and s. 27(3) (which requires disclosure of an invention’s “operation or use”), by inappropriately requiring that to satisfy the utility requirement in s. 2, any disclosed use (by virtue of s. 27(3)) be demonstrated or soundly predicted at the time of filing. If that is not done successfully, the entire patent is invalid, as the pre-condition for patentability — an invention under s. 2 of the Act — has not been fulfilled.

Second, the Court found that the Promise Doctrine runs counter to the words of the Act by requiring that where multiple promised uses are expressed, they all must be satisfied for the patent to meet the utility requirement in s. 2.

The Court established the correct approach to utility as follows:

• [54] To determine whether a patent discloses an invention with sufficient utility under s. 2, courts should undertake the following analysis. First, courts must identify the subject-matter of the invention as claimed in the patent. Second, courts must ask whether that subject-matter is useful — is it capable of a practical purpose (i.e. an actual result)?
• [55] The Act does not prescribe the degree or quantum of usefulness required, or that every potential use be realized — a scintilla of utility will do. A single use related to the nature of the subject-matter is sufficient, and the utility must be established by either demonstration or sound prediction as of the filing date.

With respect to the ‘653 patent, the Court stated that the utility of the optically pure salts of the enantiomer of omeprazole as a proton pump inhibitor to reduce production of gastric acid (the subject matter of the ‘653 patent) was soundly predicted. The ‘653 patent is therefore not invalid for want of utility."

Today’s long-awaited decision places Canada back in-line with international standards, and provides greater certainty to patentees and to patent prosecutors and litigators.

For more information please contact:

Suzanne Hof, Senior Patent Agent

T: 613.801.0510

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Poonam Tauh, Senior Patent Agent

T: 403.800.9018

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Update: CASL Private Right of Action Suspended, But Be Careful, Other CASL Provisions Are Still Alive

By Randy Marusyk and Daniel Lanfranconi, June ^26th, 2017

Since our last CASL updated on March 27^th, the Canadian federal government announced on June 7, 2017, that it is suspending the private right of action provision in Canada’s Anti-Spam Legislation (CASL). This provision was originally scheduled to come into effect on July 1, 2017. The private right of action provision allows anyone to sue individuals and organizations that violate CASL by either their action or omission. Under CASL’s private right of action, Plaintiffs were able to claim compensatory damages as well as statutory damages. Compensatory damages cover the plaintiff for losses or damages that they have suffered, on the other hand, statutory damages, are provided where no actual harm is proven and can be as high as $1 million per day.

Businesses, charities, and not-for-profit organizations raised concerns that a number of class action lawsuits could result from the private right of action provision. As a result, the federal government suspended the private right of action coming into force and will send this provision to parliamentary committee for review to ensure it balances the individual’s rights with the burden businesses and others will bear as a result of compliance. No date was announced when the committee will render the results of this review.

CASL’s intent is to prohibit businesses and individuals from sending commercial emails to Canadians without their consent. When CASL was introduced on July 1, 2014, it provided a 3-year grace period where implied consent, acquired prior to CASL coming into force, was sufficient. This implied consent must meet two criteria to be valid: the sender had an existing business relationship prior to July 1, 2014 and the sender and recipient had communicated through commercial electronic messages (CEMs) as a part of this relationship. These transitional provisions for implied consent come to an end as of July 1, 2017, and even though the federal government has suspended the private right of action, these other CASL provisions remain in force and are subject to enforcement. As a result, businesses and individuals must obtain express consent and provide unsubscribe methods and electronic communication practices and marketing strategies that comply with CASL.

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

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Daniel Lanfranconi, B.Eng., M.A.Sc., P.Eng. (Elec Eng), M.B.A., (J.D. Candidate), Summer Law Student

T: 613.801.0456

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Upcoming Amendments to the Patent Rules, Industrial Design Regulations, and the Trademarks Regulations

By Etienne de Villiers, June 15th, 2017

The Canadian Intellectual Property Office (CIPO) has just announced that it will be conducting a series of consultations on proposed regulatory amendments to the Trademarks Regulations, Industrial Design Regulations and Patent Rules.

The amendments are being proposed to bring Canada’s intellectual property (IP) legal framework in line with international standards. In particular, Canada is in the process of joining five international IP treaties: the Madrid Protocol, the Singapore Treaty, the Nice Agreement, the Hague Agreement, and the Patent Law Treaty.

Amendments to the Trademarks Act, the Industrial Design Act and Patent Act were previously amended to comply with the requirements of these treaties. In order to complete the changes to Canada’s IP legal framework, the accompanying Regulations and Rules must also be amended.

CIPO will be consulting with the IP legal community starting on June 19, 2017 for the Trademarks Regulations and the Industrial Design Regulations. Consultations regarding the Patent Rules are scheduled to start in early August 2017. The proposed amendments will be disclosed during this consultation period, and there will be an opportunity to ask questions and submit questions or comments.

Amending the IP Rules and Regulations is the final step in a major makeover of Canada’s IP legal framework that will bring us closer to the developing international standards. From an IP owner’s point of view, these changes will make it more efficient to obtain patent protection in Canada based on foreign originating applications, and similarly will make it more efficient for Canadians to obtain foreign patent protection based on Canadian originating applications.

For more information please contact:

Etienne de Villiers, Partner

T: 416.995.8655

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Lifting the Cloak of Anonymity of Copyright Infringers Online

By Scott Miller and Yang Wang, May 30t^h, 2017

While internet connects people thousands of miles apart and accelerates knowledge distribution, it also creates a cloak under which anonymous users can illegally download and distribute copyright protected materials, such as movies, songs and novels. Previously, copyright owners were unable to protect and vindicate their rights unless internet service providers (ISPs) were willing to disclose the identity of suspected copyright infringers.

The recently modified copyright regime allows copyright owners to seek a disclosure order that compels an ISP to reveal the identity of the suspected copyright infringers.^[1] The purpose of which is “to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all.” [2] Whether or not copyright owners should reimburse the ISPs for the cost related to a disclosure order was left undecided.

In Voltage Pictures LLC v John Doe, the Federal Court of Appeal reviewed the trial judge’s order that Voltage has to pay a fee of $100 per hour of work plus HST to Rogers, the ISP, before the disclosure of identifying information (see our previous article here). Voltage appealed this order and contested this fee as it was far too high and thus unreasonable.

The Court allowed the appeal and ordered Rogers to disclose identifying information to Voltage without seeking compensation. The concern is if ISPs are allowed to charge a fee without restriction before the release of identifying information, the purposes of the Copyright Act would be frustrated. A large service fee could effectively dissuade copyright owners from obtaining the information they need to protect and vindicate their rights.

The Court held the subsection 41.26(1) of the Copyright Act has imposed an obligation that the ISPs “must maintain records in a manner and form that allows it to identify suspected infringers, to locate the relevant records, to send the notices to the suspected infringers and the copyright owner, to translate the records (if necessary) into a manner and form that allows them both to be disclosed promptly and to be used by the copyright owners and later the court to determine the identity of the suspected infringers, and finally, to keep the record ready for prompt disclosure. ”^[3]

Furthermore, the Court divided the total cost into two categories: (1) the work necessary to assemble, verify and forward the identifying information to copyright owner pursuant to the subsection 41.26(1) of the Copyright Act; and (2) the actual, reasonable, and necessary cost of delivery or electronic transmission of the information.[4]

For the first category, the Court took a position pursuant to the “no regulation and, thus, no fee” default rule in subsection 41.26(2) of the Copyright Act for the subsection 41.26(1) obligations. It held that the decision of leaving the cost of with ISPs can push them to limit the cost of compliance with their obligation “more automatic, more efficient and less expensive.”[5] For the second category, the Court found that the cost does not fall within the subsection 41.26(1) and thus ISPs can charge this fee. However, it is usually negligible (e.g. $0.5 per IP address in 2012). ^[6]

The Court also recognized that ISPs can plead their economic case to the Minister to set up a regulation to allow ISPs charge a fee for performing the subsection 41.26(1) obligations. Until then, ISPs rather than copyright owners should bear the cost of assemble, verify and forward the identifying information pursuant to the Copyright Act and the Copyright Modernization Act.

A balance between confidentiality orders and the open court principle in patent litigation

By Randy Marusyk and Yang Wang, May 2^3rd, 2017

Canadian courts have recently revisited the issue as to whether a confidentiality order in pharmaceutical patent litigation should be granted notwithstanding the open court principle to ensure the public access to court proceedings.

In Teva Canada Ltd. v Janssen Inc., 2017 FC 437, an action was brought by Teva to recover damages from Janssen pursuant to section 8 of the Patented Medicine Regulations. A confidentiality order was originally issued by the Federal Court, allowing both parties to file materials under seal but only for the purpose of motions to compel[1]. However, both parties had misused the confidentiality order to improperly file materials under seal, which is common in pharmaceutical patent litigation. After the Court issued a direction requiring the parties to explain, Teva made a motion to allow the (1) supply contract between Teva and its supplier, and (2) excerpts of Teva’s ANDS (Abbreviated New Drug Submission) to remain under seal. This motion is relying on affidavits submitted by Teva that the Court eventually deemed as incomplete, insufficient, and misleading.[2] Teva claimed that: (1) ANDS filing are treated confidentially by Health Canada; (2) its competitors could obtain an unfair competitive advantage by accessing to the information.

Teva’s motion to maintain the confidentiality of the materials is dismissed. The Registry of the Federal Court should unseal and place on the public record the majority of the parties’ materials except a small portion.

Confidentiality orders inherently comprise the open court principle, and thus should be granted cautiously. A court has to be satisfied that the confidentiality order is necessary to prevent a serious risk of harm to an important interest. The moving party has the onus to establish that the information is actually confidential, rather than bold assertions and subjective belief. [3]

The Court found that the proposed confidential information regarding Teva’s supply chain is on the financial aspect of the agreement, and not on the identity of the supplier.[4] Therefore, the name and location of the supplier should be disclosed. To answer Teva’s first claim, the Court held that “while a pharmaceutical company may assert that the information contained in its ANDS as to the composition and method of manufacture of its products is treated as confidential, this information may lose its confidentiality once the product is publicly sold.”[5] The Court also recognized the fact that regulatory regime in Europe is different from the Canadian regime. Some of the information as to a pharmaceutical product’s supplier is public disclosed in Europe but not required to disclose in Canada. The fact that Teva manufactured and marketed its product in multiple European countries and already disclosed certain information contradicts with its affidavit that “is not merely that the precise identify of the manufacturer if the API that goes into Canadian is not public known, but, sweepingly, that the Teva global group of companies keeps information related to the location or identity of entities that supply their products confidential.” [6]

For Teva’s second claim, the Court found it was speculative and Teva failed to show it would actually suffer serious harm if the identity of its supplier were to be disclosed publicly.[7]

In patent litigation, Canadian courts are inclined to uphold the open court principle to ensure the public access to court proceedings. Unless the moving party for a confidentiality order can establish that it is necessary to prevent a serious risk of harm rather than bold assertions and subjective belief.

A Ticket to Success: Ontario Launches its Scale-Up Vouchers Program for Innovative Technology Companies

By Stephanie White and Yang Wang, May 9th, 2017

Last November, the province of Ontario committed to help small businesses become more globally competitive. In doing so, the Ontario government promised a Scale-Up Vouchers program that would provide high potential SME’s (small and medium-sized enterprises) with access to additional resources to support critical business activities. Ontario has now made good on that promise.

On April 28, 2017, Ontario’s Ministry of Research, Innovation & Science (MRIS) and Ministry of Economic Development and Growth (MEDG) launched the Ontario Scale-Up Vouchers Program, a four-year, $32.4 million initiative. Details of the program can be found at http://www.ontarioscaleupprogram.ca/.

The program is intended to foster the growth of SMEs in Ontario to become sustainable Canadian companies. Although Canada generates world class research, and there are many start-ups based on this research, we continue to lag behind other industrialized nations in successful technology commercialization. Canada spends a lot of public money on R&D, however, to date, resources directed at supporting commercialization of the resulting innovative technologies have been largely ineffective.

In order to address this shortfall, while at the same time maximizing the likelihood of meaningful return on investment, the Ontario government has decided to target the Scale-Up Vouchers program to a subset of Ontario SMEs identified as “high-growth”. More specifically, the program is directed to companies in the high value fields of Information and Communications Technology, Advanced Materials and Manufacturing, Clean Technology, and Life Sciences. In order to be considered “high growth”, and consequently eligible to apply to the program, a company must:

• have an annual revenue of between $1 and 50 million; and
• should already be experiencing a 20% annual growth rate in revenue, sales or employment over the most recent fiscal year; and/or
• have secured private investment of at least $2 million in the previous two years

The program will be delivered by three Ontario Regional Innovation Centres; MaRS, Invest Ottawa and Communitech. Each application will be reviewed and scored by a selection committee to identify those companies considered to have a high potential for exponential growth in Canada and globally.

Companies successful in the application process will be provided access to growth coaches, who are senior executives and professionals with proven expertise in talent management, sales and revenue growth, IP protection and innovation, and/or financing. Successful applicants will also be eligible to work with their coaches to apply for a voucher to offset eligible expenses for supporting growth by:

• increasing sales
• securing and nurturing talent
• developing and protecting intellectual property and/or
• accessing capital

Voucher values correlate to the size of company revenue, as follows:

• $150,000 voucher value – for companies with revenues between $1 million and $5 million (with an expectation for the company to match 33% of the voucher value)
• Up to $250,000 voucher value – for companies with revenues over $5 million (with an expectation for the company to match 50% of the voucher value)

It is important to highlight the value of this program in championing Ontario’s innovative technology companies and, importantly, in recognizing the value of encouraging intellectual property protection of Canadian technologies. Strong intellectual property protection is inextricably linked to access to capital and ongoing commercial success, particularly for early stage companies. We are hopeful that similar programs will become available for pre-revenue, start-up companies with valuable technologies, so that we will continue to see fresh cohorts of applicants over the four year lifetime of this Scale-Up Vouchers Program.

For more information please contact:

Stephanie White, Partner

T: 613.801.1067

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Yang Wang, Summer Law Student

T: 613.801.1082

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Innovative Medicines in Canada: Important Patent Questions to Ask

By Kay Palmer and Claire Palmer, May ^2nd, 2017

THE INTERPLAY OF DATA PROTECTION, PATENT REGISTER & PMPRB IN PATENT PROSECUTION & MAINTENANCE DECISIONS IN CANADA

Patents directed to medicines, and in particular, innovative drugs are impacted by a number of legislative regimes in Canada. The impact of these regimes should be fully considered when decisions are made with respect to obtaining and maintaining patent rights in Canada.

A number of key questions need to be fully considered prior to obtaining or maintaining patent protection relating to innovative drugs in Canada are discussed below. These questions relate to the Canadian patent regime, data protection provided under Canada’s Food and Drug Regulations, Canada’s Patented Medicines Notice of Compliance Regulations and the Health Canada’s Patent Register and the Patented Medicines Price Review Board. Only after answering the questions below should decisions regarding Canadian patent rights covering medicines be made.

FIRST QUESTION: Does the drug in question fall under the definition of an “innovative drug”?

Under the Food and Drug Regulations, an innovative drug is "a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, or polymorph". Innovative drugs are provided eight years of data protection from the issuance of the first drug approval (i.e. Notice of Compliance issued by the Minister of Health) with a pediatric extension for qualifying drugs. This data protection prevents a subsequent manufacturer from relying upon the data in the innovator’s drug submission for the first six years of the eight-year period.

If the answer to the first question is yes, the following question should be answered:

When would data protection for the innovative drug expire? i.e. Does the data protection outlast any patent protection for the drug?

SECOND QUESTION: What are all of the Canadian patents and applications (including PCT applications anticipated to enter Canada) that relate to the innovative drug and how do they relate?

For example, do the claims of the patents or applications directly cover the drug or linked to the drug by the merest slenderest thread.

THIRD QUESTION: When would each of these patents or patents resulting from these applications expire? i.e. Do the patents expire before or after the anticipated end of data protection?

FOURTH QUESTION: Does the patent term end before or after the term of data protection?

As patent applications related to innovative drugs are often filed well before drug approval, the effective patent term can be significantly reduced – some studies suggest that the post-Health Canada approval patent term is ten years or less in Canada. Accordingly, for some innovative drugs the patent term ends prior to data protection.

If the answer is no, the following question should be answered:

Does the patent whose term ends after the end of the term of data protection impact a competitor from entering the Canadian market either in terms of the Patent Register (see below) or Infringement proceedings?

FIFTH QUESTION: Is the patent eligible for listing on Health Canada’s Patent Register?

The PM (NOC) Regulations allow innovative drug manufacturers that have patents listed on Health Canada’s Patent Register to seek an order prohibiting the Minister of Health from issuing a Notice of Compliance (the regulatory safety approval issued by Health Canada) to a second-entry wishing to rely on the innovator’s drug product for regulatory approval, until after the expiration of the patents in question. 

Not all patents that relate to a drug are eligible for listing on Health Canada’s Patent Register. There are specific requirements to list a drug. Accordingly, it is important to determine if each patent related to the drug is eligible for listing on the Health Canada Patent Register.

 SIXTH QUESTION: Does the PMPRB have jurisdiction?

The PMPRB regulates the “factory gate” price for all patented drug products in Canada including those sold by Special Access Programs. The PMPRB does not have jurisdiction if there are no issued patents or the patents have expired. The PMPRB has jurisdictions if the patent has a nexus to the drug by the merest slenderest thread. This is in contrast to Patent Register listing eligibility requirements.

If PMPRB does have jurisdiction, the price at which the drug can be sold will be impacted.

CONCLUDING COMMENTS:

The above questions are simply a sampling of the questions which must be answered when determining the best strategy to protect your innovative drug. Other considerations include for example whether the drug is a biologic. Given the complexity, it is critical to obtain the advice of Canadian council.

For more information please contact:

Kay Palmer, Senior Patent Agent

T: 613.801.0452

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Claire Palmer, Senior Patent Agent

T: 613.801.0450

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In for a penny, in for a pound…

By Stephanie White, April 18th, 2017

I hear it all the time … “I can’t afford to protect my intellectual property.” Let me tell you that the reverse is true for a startup … you can’t afford NOT to protect your intellectual property! If you’ve decided to take the leap and embark on a start-up adventure, then you will want to do everything in your power to succeed.

Early stage companies are typically built on a great idea and a lot of hope. These companies have not yet had the opportunity to acquire tangible assets or to build significant sales revenue (if any!). Consequently, the value in these companies is often in their ideas and their ability to create products/services from those ideas. Potential investors and partners won’t take a second look at a company if those ideas are not protected, or protectable. The assumption is that all new companies have a great idea, however, investors and partners alike need to know that they will have a defensible competitive advantage over other companies before they join in developing and growing such early stage endeavors. It’s all about mitigating risk.

Market exclusivity typically requires strong intellectual property protection. But what does that mean for a start-up, with limited resources and a nascent technology? I have identified below four general areas of focus for valuable IP protection that are important to early stage companies.

Avoid costly complications:

• Know the competitors’ IP so you know where or what the company has freedom to practice without risk of infringement;
• Ensure that employees and contractors assign their IP rights to the company upfront;
• Scrutinize all third party agreements, including so-called “standard” agreements (e.g., confidentiality agreements), to ensure that they do not restrict or damage the company’s IP rights
• Teach employees about IP

Be proactive:

• Create a working environment that fosters innovation
• Identify inventions early and keep quiet until they are protected
• Reassess IP regularly to ensure it remains consistent with the company’s commercial and business plans

Use appropriate IP protection:

• Don’t rely solely on patents: consider trade secret protection and remember the value of brand protection through trademarks
• With respect to patents, invest in quality applications rather than a lot of applications
• Invest in IP protection in as many jurisdictions of commercial relevance as possible, while also considering strength of protection available in each jurisdiction

Look for opportunities to fund IP:

• Government grants for startups that support IP expenditures
• Monetize company IP (e.g., in non-commercial fields of use, or jurisdictions; or IP that has become irrelevant)

Finally, talk to your intellectual property advisor! For early stage companies in particular, it can be beneficial to select an advisor who can act as a virtual in-house professional, with a good understanding of the company’s business goals. This provides both the company and the IP advisor the opportunity to proactively and strategically grow the value of the company’s IP portfolio.

Ultimately, because of their limited resources, early stage companies may need to be even more tactical than large corporations in how they handle their IP. However, investing the time and money to ensure that the company’s IP is properly protected will pay dividends in the long run!

For more information please contact:

Stephanie White, Partner

T: 613.801.1067

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Government Funds to Good Use: Helping Small Businesses with First-Time Patent Costs

By Randy Marusyk and Deborah Meltzer, April ^3rd, 2017

The Quebec government pioneered its “First Patent Program”, which was launched in July 2015, in order to encourage small to mid-size businesses to protect their intellectual property. Under this program, certain businesses will be eligible to have the provincial government subsidize part of the incurred expense from acquiring their first patent. This initiative is extremely promising, particularly in supporting the growth of young corporations. In fact, a US study conducted by the Office of Chief Economist of the USPTO demonstrated a positive economic impact on startup companies that were given an allowance for their first patent. The results included a 52% increase in sales and a 36% increase in employment.

Other provinces have followed; the Government of Ontario intends to finance their new Scale-Up Voucher Program to facilitate the growth of high-impact companies. Notably, one of the possible uses of these vouchers is to fund protection of intellectual property. British Columbia offers an International Business Activity tax refund for International Patent Businesses, but has yet to implement a supporting program that effectively targets first-time corporate patentees.

The Intellectual Property Institute of Canada encouraged the federal government to fund a program similar to that of Quebec. In fact, this was one of the recommendations made in the December 2016 Report of the Standing Committee on Finance. Hopefully small and medium-sized businesses all over Canada will soon be able to benefit from federal intellectual property protection services for first time patentees.

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

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Deborah Meltzer

T: 613.801.1077

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CASL Warning! Private right of action is coming

By Randy Marusyk and Lauren Blaiwais, March ^27th, 2017

In 2014, Canada adopted an anti-spam law based on the opt-in model. Enforcement was predominantly the responsibility of the Canadian Radio-Television and Telecommunications Commission; along with the Competition Bureau and Privacy Commissioner. However, as of July 1^st, 2017, Canada’s Anti-Spam Legislation* (CASL) will enable a private right of action. This means that individuals and organizations that are affected by a violation of sections 6-9 of CASL will have access to commencing an action before the courts. Additionally, claims may be brought for violations of section 74.011 of the Competition Act (false or misleading electronic messages) and sections 7.1(2) and (3) of PIPEDA (e-mail harvesting).

Sections 6 to 9 of CASL stipulate the restrictions for the emission of commercial electronic messages (CEMs). Unsolicited CEMs are prohibited unless the person to whom the message is sent has consented to receive it – consent may be express or implied. The message must comply with the prescribed requirements and must identify who sent the message; provide contact information to readily contact the person who sent the message, and include an unsubscribe mechanism.

The maximum statutory damages that the court may order for a contravention of s.6: $200 for each violation, up to $1 million/day; for ss. 7 and 8: $1 million/day that a contravention occurred; s.9: $1 million/contravention. As such, this is a call to businesses to ensure that your current consents, unsubscribe methods, electronic communication practices and marketing strategies are in order.

taken from: http://www.crtc.gc.ca/eng/internet/infograph.htm

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

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Lauren Blaiwais, Articling Student

T: 613.801.1057

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* An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that dis courage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, SC 2010, c 23.

Learning the Game – A Patent Process and Timeline

By David Lotimer, March 7th, 2017

Applying for and obtaining a Canadian patent is somewhat like learning how to play hockey - it can be a complicated process. Just as it takes years to understand the mechanics of the ice, it may take months to construct a patent draft that properly captures the inventive aspects of your invention. The extensive rules of hockey must be learned, just as there are several procedural formalities that must be followed during the patent filing stage. Finally choosing the right stick may be likened to the practical considerations necessary for an inventor, such as public disclosures, patent search reports, and jurisdictional differences.

Don’t let these complications overwhelm you - many people have learned how to play hockey, and you can learn how to file a patent.

There are three basic steps to filing a patent in Canada: (i) Drafting; (ii) Filing; and (iii) Prosecution.

(i)               Drafting (4 – 16 weeks to complete) –

Drafting a patent may take days, months, or even years to complete. This timeline is highly dependent upon the complexity of the technology and the scope of the protection sought. It is usually an iterative process between the inventor and a patent agent during which several drafts and materials related to the invention are exchanged.

At the end of the process you will be left with a document containing a Background (address the current state of technology and problems to be solved); a Description (a full enabling disclosure, outlining the “best mode” of the invention); Claims (set the bounds of the legal monopoly, essentially outline the fence of what others are restricted from doing); Figures (drawings or graphs or visual aids to help explain the invention); and an Abstract (brief technical description of the invention).

(ii)              Filing (1 day - 1 week) –

After the patent has been drafted, the document must be filed with the Canadian Intellectual Property Office (CIPO). This will involve the submission of administrative information about the inventor or agent (details such as name, address, etc.). Certain government fees must also be paid to CIPO at the time of filing.

Once the application has been submitted, CIPO will process the application and send confirmation of receipt. Upon an examination request, CIPO will commence an extensive examination of the patent to determine if the patent should be granted.

(iii)             Prosecution (12-16 months) –

During the prosecution step, an examiner will decide if your patent application meets the patent requirements under law. For example, he or she will judge if your invention is new, useful and inventive, and whether or not your patent is similar to other patents and technical documents.

The examiner will write and issue a report about their findings, which will include any changes they want you to make within the patent. The report will also contain a response timeframe. Only once you obtain a final approval from the examiner at CIPO will a patent be issued.

As an inventor there are other practical considerations that should be at the forefront of your mind. First of all do NOT publically disclose any inventive concepts related to your invention without safeguards in place. Public disclosure may significantly alter the patent rights you are able to obtain. Non-disclosure agreements can be a good tool to avoid such a disclosure.

Also, you may want to undertake a prior art search to make sure that your inventive idea does not already exist. There are public resources available for searching such as the CIPO Patent Database and Google Patents.

Finally, patent protection is territorial; therefore, an issued patent is only valid throughout the country in which it is issued. If you wish to patent an invention in another country, you may apply separately in each country or through certain regional convention offices, established under international treaties or conventions.

For more information please contact:

David Lotimer, Associate

T: 613.801.1063

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The Benefits of Registering a Patent in Canada

By David Lotimer, February ^22nd, 2017

Although we may not realize it, each day every one of us interacts with patented inventions. Our phones, cars, and computers contain hundreds of patented components. Even your favourite tent or sleeping bags have been protected by patents.

There are many benefits to registering a patent in Canada, and it is in your best interest to know these benefits.

A patent is an exclusive right of making, constructing and using an invention and selling it to others. In exchange for full disclosure on how to use the invention (the patent), the Canadian government allows a patent owner exclusive use of the invention for 20 years. The theory behind granting this limited term monopoly is that it provides the incentive for innovation.

This means a patent holder has 20 years of exclusive use of the invention they patent. For example, if you create and patent a new form of transportation, you will have exclusive rights to use that transportation in the way you so choose for the next 20 years.

This exclusive right to use may be very valuable. You will be able to sell these rights, license the rights or use them as assets to attract funding from investors. The exclusive right also prevents anyone else from from copying, manufacturing, selling or importing your invention without your permission. You are able to prevent other competitors from entering into the market.

Perhaps next time you hop on a chairlift, your mind will turn to the patent protecting the technology that gets you to the top of your favourite ski hill. It is that protection that allowed the chairlift inventor to design, manufacture and sell their invention without fear that they would be put out of business by someone copying their idea.

For more information please contact:

David Lotimer, Associate

T: 613.801.1063

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Buyers of Keywords Beware! Content of Ads May Spell Confusion

By Jonathan Roch and Lauren Blaiwais, February ^8th, 2017

In the British Columbia Supreme Court (“BCSC”) decision of Vancouver Community College v Vancouver Career College (Burnaby) Inc, 2015 BCSC 1470, the Vancouver Community College  alleged that the Vancouver Career College was wrongfully using and passing off its mark, VCC, in both its domain name and keyword advertising. The BCSC ruled that purchasing keywords of a competitor’s trademark is not sufficient to establish passing off and that the relevant time to assess a likelihood of confusion in passing off assessments is once a consumer reaches a website, and not when a consumer reviews search engine results.  

However, on January 26, 2017, the British Columbia Court of Appeal (“BCCA”) overturned the BCSC’s decision (2017 BCCA 41) holding that the claim of passing off had been established. The court found it is a consumer’s “first impression” that is relevant and therefore confusion occurs when a customer reviews search engine results. The BCCA did go on to affirm that purchasing a competitor’s trademark as a keyword is not sufficient in and of itself to establish passing off.

Parties using competitors’ trademarks in keyword advertising will therefore need to be very vigilant with the message of their keyword ads to avoid passing off.

For more information please contact:

Jonathan Roch, Partner

T: 613.801.1059

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Lauren Blaiwais, Articling Student

T: 613.801.1057

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A Word of Caution: File Wrapper Contents Can Come Back to Haunt You

By Jessica R. Sudbury and Claire Palmer, February ^6th, 2017

The Federal Court made a sweeping statement in Justice Locke’s decision released last Friday that submissions made to the Canadian Intellectual Property Office (CIPO) during patent prosecution can re-emerge to haunt litigants and hit them where it hurts: the wallet.

On January 27, 2017, the Federal Court released a new decision for the Pollard Banknote Limited v BABN Technologies Corp[1] matter. Pollard Banknote Ltd., the successful plaintiff from last summer’s patent impeachment trial, was awarded costs elevated by 50% above the usual rate for allowable counsel fees and disbursements under the Federal Courts Rules.[2] Several issues concerning conduct of the defence throughout trial grounded the elevated costs award in the judgment,[3] and Justice Locke specifically denounced the fact that the defendant reversed the previous stance taken on claims construction during prosecution of the patent at issue. Justice Locke noted that “based on jurisprudence that is clearly binding on me, I ignored the position that SG took during prosecution. Instead, I adopted the claim construction position that SG argued at trial. But I observed that it was “breathtaking” to see SG take this position on claim construction without addressing the fact that it reintroduced the problem of obviousness that it had overcome during prosecution by asserting the contrary claim construction position.”[4]

Therefore, patent litigants be forewarned: this latest decision, in combination with the reasons penned by Justice Locke following last summer’s patent impeachment trial, makes it clear that file wrapper contents are not laid to rest in Canada once a patent application goes to grant. This point was also highlighted in last summer’s Federal Court judgment that, in one fell swoop, invalidated the patent at issue and breathed new life into the long-dead issue of patent file wrapper estoppel doctrine applicability in Canada.

The doctrine of patent prosecution history estoppel (commonly known as “file wrapper estoppel”) is in full force in the U.S., where it enables courts engaging in claims construction to consider representations made by inventors to the Patent Office during the patent prosecution process. Because inventors before U.S. courts can become “tied” to previous assertions made to the Patent Office concerning the scope of the monopoly claimed, some argue that operation of the doctrine helps conserve valuable resources by abridging or avoiding drawn-out patent disputes and forcing inventors to carry out more due diligence checks prior to commencing proceedings.

Unlike its U.S. counterpart, the Supreme Court of Canada (SCC) has historically held that representations made during the patent prosecution process constitute extrinsic and inadmissible evidence for claims construction during patent litigation.[5] Judges here are thus expected to interpret claims through a purposive construction lens that ignores all statements from the inventor contained within the patent file wrapper that might otherwise help resolve a drafting ambiguity. The Federal Court’s pronouncements on the Pollard v Babn matter make it clear, however, that inventors and IP practitioners are no longer completely unconstrained to make whatever admissions are necessary to overcome objections by CIPO examiners.

In Justice Locke’s July 28, 2016 reasons, he openly beckoned for a reconsideration of the SCC’s position on the file wrapper estoppel doctrine, noting that “prosecution histories in many jurisdictions (including Canada) are now available on the internet. This raises the question whether it is time to revisit the rule against using extrinsic evidence in claim construction.”[6] In other words, once these documents are placed into the public domain, why then restrict reliance on their contents?

The Court in the Pollard v Babn matter was confronted with a difficult situation because i) the application prosecution history was admitted on grounds other than for the purpose of construing the patent claims, and ii) these documents revealed that the inventor had taken a completely opposite position toward the meaning of a claim as worded during the prosecution process. Justice Locke repeatedly stated that the prosecution history evidence did not bear on his finding that the impugned claim was invalid for obviousness. However, in obiter, Justice Locke noted that “it is breathtaking to see SG now attempt not just to take a different position on the construction of claim 1, but also to argue that, by doing so, it does not reintroduce the problem of obviousness in light of the Camarato Application that it had previously argued was avoided applying its first position.”[7]

Counsel for the Defendants filed a Notice of Appeal at the Federal Court on September 29, 2016 against Justice Locke’s July 28, 2016 decision.

In the wake of the Pollard v Babn matter and pending determination on any related appeals, inventors and IP practitioners would be well-advised to adjust their practices accordingly, bearing the following points in mind:

i) File wrapper estoppel doctrine may yet become revived in Canada. The outcome of appeals related to the Pollard v Babn matter should be carefully monitored.

ii) Even if prosecution history evidence remains buried under Canadian patent law for claim construction purposes, all litigants remain vulnerable to the fact that cases are heard by human beings. Presiding judges nevertheless can become privy to file wrapper contents if admitted for a different stated purpose,[8] and the hearing of such evidence can bear an influence on all determinations made for the same matter.

iii) Litigants are well-advised to meticulously review file wrapper contents prior to commencing proceedings, or risk facing elevated costs awards on the basis of flip-flopped arguments.

For more information please contact:

Jessica R. Sudbury, Articling Student

T: 613.801.0762

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Claire Palmer, Senior Patent Agent

T: 613.801.0450

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A Lesson in Costs: Know your Patent Claims before Asserting Infringement

By Scott Miller and Deborah Meltzer, January ^24th, 2017

MediaTube Corp v Bell Canada, 2017 FC 16 appears to provide a promising Canadian judgement that clarifies the assessment of the validity and infringement of an information technology patent with respect to the telecommunications industry. Unfortunately, the underlying thrust of the litigation quickly departed from claims of validity and infringement to a dispute over costs. The primary issue was that initially the plaintiffs’ did not have a clear claim of infringement, for which they were justifiably penalized with significant costs. In addition, it was concluded that despite their “477 patent” being valid, there was no infringement, and thus no costs were awarded against Bell.

Whether or not this case marks a victory for IT companies warding off so-called “patent-trolls”, is questionable. Canadian jurisprudence is calling for a foundational IT patent case; however, given the weaknesses in the plaintiffs’ infringement allegations, this judgement falls short of the mark of providing any real direction to patent owners with specific arguable claims. At best, it serves as a stepping stone to future patent infringement actions that will effectively guide both patentees as well as mega IT corporations.

For more information please contact:

 
Scott Miller, Partner, Head of the Litigation Department

T: 613.801.1099

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Deborah Meltzer

T: 613.801.1077

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How does CETA affect IP rights in Canada?

By Randy Marusyk and Lauren Blaiwais, January 10t^h, 2017

Canada and the European Union (EU) officially signed the Comprehensive Economic and Trade Agreement (CETA) on October 30, 2016. The following day, Parliament introduced the first reading of Bill C-30, An Act to implement the Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States and to provide for certain other measures. CETA’s principal goal is to reduce the barriers of Canada-EU trade; it addresses tariffs, product standards, professional certification, government procurement and investments.

In order to implement CETA, Canada is required to make changes to several federal acts, including the Patent Act and Trade-marks Act.

Trademarks

Bill C-30 modifies the definition of geographical indications (GIs) in the Trade-marks Act. It enables GI protection for not only wine and spirits, but also agricultural and food products, such as certain cheeses, oils and meats (e.g. feta). The Registrar will be responsible for supervising a list of protected GIs, and will restrict use of certain European GIs to products originating from the European regions that the GIs are typically associated with. Consequently, Bill C-30 allows for a GI opposition procedure for those interested in objecting to the protection of particular geographical indications. Any person interested may file a statement of objection within two months after the Minister makes a statement in respect of a GI published on the CIPO website and the Registrar enters same on the list.

Furthermore, there will be import/export restrictions for geographical indications: wines, spirits agricultural and food products will be banned if they bear the GI and either 1) do not originate in the territory indicated, or 2) do not conform to the laws of the territory indicated. Bill C-30 offers owners of protected GIs the option to file a Request for Assistance with the Canadian Border Services Agency to help prevent the import of counterfeit goods through the Intellectual Property Rights Program.

Patents

CETA will affect the term of pharmaceutical patent protection, as well as patent procedural rights. Pharmaceutical companies often face delays with patents in getting regulatory approval, which lead to lost patent protection due to the protracted development and approval process. The Patent Act does not currently moderate the lost patent protection due to delays; however Bill C-30 will offer a certificate of supplementary protection. This certificate provides patent term restoration for a maximum of two years.

In addition, CETA will provide an innovator right of appeal under the Patented Medicines (Notice of Compliance) Regulations (NOC Regulations). The NOC Regulations link patent protection and regulatory approval for pharmaceutical products. Linkage proceedings provide innovators with an avenue to prevent generic drug manufacturers from obtaining regulatory approval if same would result in patent infringement. Since CETA requires the effective right of appeal to linkage proceedings, the NOC Regulations will require modification, which will be enabled by Bill C-30’s amendments broadening the governor in council’s regulation-making powers.

An overhaul to the NOC Regulations proceedings would be possible with the expansion of regulation-making powers, which would have a significant impact on pharmaceutical patent litigation. For example, duplicate litigation, which stems from summary, non-binding determinations under the current NOC Regulations might see its last days if the NOC Regulations permit full actions and final determinations. This means that innovators will be able to access full appeals like those in regular patent actions.

For more information please contact:

 
Randy Marusyk, Partner

T: 613.801.1088

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Lauren Blaiwais, Articling Student

T: 613.801.1057

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In the Province of Québec Foreign-Language Outdoor Signage to Have "Sufficient Presence" of French

By Scott Miller, November ^22nd, 2016

The Government of Québec has now published the final version of the new Regulation respecting the language of commerce and business. Effective November 24, 2016, all new foreign-language outdoor signage must be accompanied by a “sufficient presence” of French, even when that outdoor signage contains a foreign-language trademark, which were previously exempt from the Québec language laws.

The new French component must be added alongside and in the same visual field as the foreign-language trademark and can take three different forms:

1. a generic term or a description of the products or services concerned;
2. a slogan; or
3. any other term or indication, favouring the display of information pertaining to the products or services to the benefit of consumers or persons frequenting the site.

The requirement only relates to outdoor signage, and not indoor signage, movable products (e.g. automobiles), websites, etc. Businesses have a three-year grace period, to November 24, 2019, to bring existing signs into conformity with the regulations. A French guide entitled Affichage des marques de commerce published by the Office québecoise de la langue française provides examples and can be found here:

For more information please contact:

 
Scott Miller, Partner, Head of the Litigation Department

T: 613.801.1099

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From Filing to Registration: the Canadian Trademark Application Process

By Carrie Kerr, November 15t^h, 2016

Have you decided to register your trademark in Canada?

The application process at the Canadian Intellectual Property Office (“CIPO”) may seem somewhat complex, especially if it is your first time registering a trademark. It isn’t as simple as submitting an application, paying a fee and POOF! - as if by magic - you have a trademark registration. There are various requirements, stages, communications from CIPO and fees involved.

As an introduction to the process, here is what you can expect as your application moves its way through CIPO from the application stage to registration:

Filing

After your application is filed at CIPO it will be assigned a filing date and application number, provided that the application is complete. CIPO will also add your application to the Canadian Trademarks Database and issue you a formal filing acknowledgement and a proof sheet that summarizes the information in your application.

Examination

A trademark Examiner will then review your application. The application is reviewed for various formality requirements, including whether the description of goods and services are sufficiently specific.

The Examiner will also conduct a search of the Trademark Register to determine whether there are any prior applications or registrations that are confusing with your mark.

Lastly, the Examiner will determine whether your trademark is registrable in accordance with the Trade-marks Act. There are certain types of trademarks that are prohibited or are not registrable, including marks that are clearly descriptive or deceptively misdescriptive, are primarily merely the name of a person living or deceased within the past thirty years or are scandalous, obscene or immoral.

If there are any doubts about your application, the Examiner will issue an Examiner’s Report. You will have a chance to respond to the Examiner, and if the objections raised in the report are not overcome, the application will be rejected.

Advertisement

If the Examiner's objections are overcome, the trademark will be approved for advertisement in the Trade-Marks Journal, a weekly publication by CIPO which lists trademark applications being sought for registration.

The purpose of having your application published in the Trade-Marks Journal is to allow for members of the public to have an opportunity to oppose your proposed trademark.

This “opposition period” lasts for two months from the date of advertisement.

Opposition

If your application is opposed by a third party, we suggest contacting a registered trademark agent, who will be able to assist you in this complex process.

Allowance

If your application is not opposed, CIPO will issue a Notice of Allowance, inviting you to pay the Registration Fee.

If your application was filed based on “proposed use” in Canada, before the mark can register, you will need to submit a Declaration of Use, attesting to the fact that you have used your mark in Canada in association with the goods and services in the application. If you have not yet used your trademark in Canada by the time the Notice of Allowance issues, there are extensions of time available to pay the Registration Fee and submit the Declaration of Use which will give you additional time to begin using your trademark.

If your application was filed based on use or making known in Canada, you will only have to pay the registration fee.

Once the Registration Fee and Declaration of Use (if applicable) have been submitted and accepted by CIPO, your trademark application will register. CIPO will then issue an official Certificate of Registration.

If you have any questions about the Canadian trademark application process or would like further information please do not hesitate to contact us. We are always happy to help.    

Benefits of Registering a Trademark in Canada

By Carrie Kerr, October 17t^h, 2016

Are you trying to decide whether to register your trademark in Canada?

Although the application process at the Canadian Intellectual Property Office (CIPO) can be unfamiliar and may be daunting, the time, money and effort you put in to formally register your mark is always worth it in the end.

Here are some of the reasons why you should consider it:

From Coast-to-Coast...

A Canadian Trademark Registration provides you with the exclusive right to use your trademark across Canada in association with the goods and services covered by your registration. Provided that you are actually using your trademark, registering it will protect you throughout Canada, even if your business only operates in a limited geographical area.

This benefit of trademark registration is unlike common law trademark rights. In Canada, as soon as you start using your trademark you begin acquiring what is called “common law” rights to your trademark. This means you are generally entitled to the exclusive use of your trademark in the geographical area in Canada where your mark has gained a reputation.    

By registering your trademark, you would enjoy this exclusive use across the entire country.

...South of the Border...

Owning a registered trademark in Canada can help you get a foot in the door in the United States, even if you have yet to enter the U.S. marketplace.

If you are currently using your trademark in Canada in association with the goods and services covered by your registration, you can rely on that use and registration as a basis for filing in the United States. Once allowed by the United States Patent and Trademark Office (USPTO), your U.S. application can then proceed to registration without having to submit any specimens of use to the USPTO. Without this corresponding Canadian Trademark Registration, you would need to submit evidence to the USPTO showing that you have begun using your mark in the United States before your application could register.

However, you will eventually need to start using your mark in the United States in order to keep your trademark rights in the U.S., specimens of use need to be filed five years after registration; otherwise, you may risk losing your registration.

...and Beyond

When you first file your trademark application in Canada, it sets off a timer of sorts.

Under the Paris Convention, an international intellectual property treaty, if you file a trademark application in Canada and within six months file an application in another member country, your foreign application can claim “priority” back to the earlier-filed Canadian application.

Essentially, the effective filing date in that foreign country will be the date you filed your application in Canada. This might give you an upper hand, in a case of a conflicting mark, as you can claim the earlier Canadian filing date for your registered rights to the trademark in a foreign country.

So Should You Register Your Trademark?

Registering a trademark in Canada is an investment. There is no doubt that the process takes time and money, however, you will find that it is a valuable asset, one that can help assert your rights in Canada, the United States and in other foreign countries.

If you have any questions about Canadian trademarks or are ready to start a trademark application, please do not hesitate to contact us. We are always happy to help.

Humanized Antibodies: CIPO Picks Up the Pace

By Claire Palmer and Jessica Sudbury, September 15t^h, 2016

Keeping pace with science and technology that evolves at lightning speed is a challenge for any government institution. The Canadian Intellectual Property Office (CIPO) has a lot of catching up to do, but is not out of the race just yet. Arcane patent office examination practices grounded in habit can never justifiably replace a proper fact-driven determination of patentability. Commissioner’s Decision 1398 (CD 1398, issued on May 5, 2016)[1] reminds us that CIPO is not completely asleep behind the wheel and shows that the applicant who fights to the bitter end can win it all.

At issue in CD 1398 were a set of dependent claims (5, 10, 15 and 20) in patent application 2,451,493 (published on January 3, 2003)[2] over a genus of humanized murine monoclonal antibodies directed against a human glypican-3 epitope. The epitope sequence was adequately disclosed; however the application did not disclose the corresponding complementarity determining regions (CDRs) for the humanized embodiments, nor any evidence that such humanized embodiments were actually made from the process described. In the Final Action issued by the Examiner on February 4, 2014, these dependent claims were found to be incompliant with section 84 of the Patent Rules for lack of support in the description, and that the specification was in violation of subsection 27(3) of the Patent Act for lack of adequate enablement.

The Examiner largely grounded rejection of these claims based on a previous decision issued by the Commissioner concerning humanized antibodies (CD 1296, Re: Sloan-Kettering Institute for Cancer Research),[3] finding that it created a bright-line rule requiring disclosure of CDR amino acid sequences to fulfill support requirements in the absence of evidence pointing to an actual carrying-out of the invention in the application. This, despite the fact that adequate support for generic monoclonal antibodies has generally been found upon disclosure of a fully characterized antigen capable of binding the antibody claimed (e.g., see the CD 1302 Immunex decision and MOPOP directive 17.08.01b).[4]

Since the CD 1296 Sloan-Kettering decision was issued in 2009, similar reasoning has been repeatedly applied to justify rejections of similarly-supported claims over humanized antibodies by CIPO examiners in disregard of submitted evidence. The Patent Appeal Board noticed this problem when it recommended an upholding of the dependent claims for the humanized genus of anti-glypican-3 antibodies to the Commissioner in CD 1398.

The Board identified several problems with the Examiner’s line of reasoning in the 2014 Final Action. First, it commented that no specific guidance concerning humanized antibodies existed at the time in Canadian jurisprudence (paragraph 23). Secondly, the Board noted that “the enablement requirement of paragraph 27(3)(b) of the Patent Act entails fact-specific determinations that take into account the common general knowledge (CGK) and the ordinary skills possessed by the person of ordinary skill in the art (POSITA) at the publication date of the patent application,” and that the relevant CGK had significantly evolved over the 11 years since (paragraph 35). Nonetheless, the evidence put before the Board was convincing to establish that antibody humanization techniques were “routine” in 2003 (paragraph 42). Thus, the relevant POSITA would have been adequately enabled to carry out the invention as described at the publication date (paragraph 44). Finally, the Board reasoned that the CD 1296 Sloan-Kettering decision “cannot impose a rigid rule” applicable to variable factual situations and that it had limited applicability to the present case (paragraph 39). Accordingly, the Board did not find that disclosure of the CDRs for humanized antibodies was a requirement to comply with the Patent Act.

While the institutional checks and balances on display in the CD 1398 decision may bring comfort to some, the decision may also serve as a reminder to others that baseless CIPO examination practices can present a serious obstacle to inventors seeking otherwise justified ownership rights over rapidly-developing technology. Pushing through these barriers with a well-supported patent application can clearly be worth the trouble and expense, however. Examiners should always bear in mind that the relevant CGK “undergoes continuous evolution and growth” (CD 1398, paragraph 36) and that only the CGK that was available to the relevant POSITA at the publication date can be considered in light of Patent Act requirements. An evidence-driven analysis of application claims in in light of the CGK at time of filing would catch a situation where the relevant POSITA had become practiced enough in brand-new technologies to not require inventiveness in carrying out an invention as described. Considerations, such as the current relevant CGK or previous Commissioner decisions analyzing similar patent applications, have no justifiable bearing on an examiner’s assessment of a patent application.

Thankfully, it appears that CIPO retains self-awareness and recognizes when it is stuck in a rut spinning its wheels. While consistency in examination practices may lead to increased certainty over time to the benefit of the public, our innovation institutions cannot carry out mandates without leaving room for flexibility and growth in internal procedures. Further, unlike courts, tribunals in Canada are not bound by stare decisis. Therefore, CIPO is not held to apply any body of rules except those found within case law, the Patent Act or the Patent Rules. Previous Commissioner’s Decisions are not determinative, and the public is entitled to decisions issued by CIPO that are assessed according to the relevant factual matrix in disregard of existing examination practices. Hopefully, the CD 1398 decision reflects a new lasting habit embarked on by CIPO to continually oversee and make internal adjustments to ensure it stands a fighting chance of keeping pace with our swift innovators.

Voltage Pictures Strikes Again: The Privacy Battle Between ISPs and Copyright Holders

By Scott Miller and Lauren Blaiwais, August 18t^h, 2016

The standards for when an Internet Service Provider (ISP) is required to deliver the names and addresses of individuals suspected of unauthorized downloading of copyright material to copyright holders was set down in the 2014 Federal Court of Canada decision of Voltage Pictures LLC v John Doe and Jane Doe [1] (in this case, the copyright materials were movies). In Voltage, the Court was conscious of both the need to safeguard an individual’s right to privacy, as well as the need to protect the rights of copyright holders (see here).

In July 2016, Voltage Pictures proposed a “reverse” class action alleging copyright infringement and claiming declaratory and injunctive relief against a Respondent whose identity is unknown. This is a unique approach to suing alleged file sharers en masse, a practice resembling that of ‘Copyright Trolls’ (a rights holder that enforces copyright it owns to profit from quick settlements and litigation). It is an opportunistic practice, which Courts generally frown upon.

Voltage, in requesting that the matter be certified as a “reverse” class action, moved to compel Rogers Communications Inc. to disclose “any and all contact and personal information of a Rogers customer associated with an Internet protocol address at the various times and dates” in order to determine who the representative defendant would be.[2] Voltage requested that it not be required to pay any fees and disbursements to Rogers for its compliance with the disclosure order.

Rogers, however, requested reasonable compensation for disclosing the information. Voltage argued that the “notice and notice” provisions of the Copyright Act bar Rogers from receiving any compensation and claimed that, even if Rogers were entitled to compensation, it should only be 50 cents per alleged infringer.

Sections 41.25 and 41.26 of the Copyright Act[3] create the “notice and notice” regime, which is a mechanism by which copyright owners may send a notice of claimed infringement through an ISP to an alleged infringer. Under these provisions, Rogers (the ISP) would be required to forward Voltage’s (the copyright owner) notice of alleged infringement to the Internet protocol address and “retain records to allow the [alleged infringer’s] identity to be determined for a specified time depending on whether the copyright owner has or has not commenced proceedings relating to the claimed infringement.”[4]

Rogers was compelled by the Court to disclose only the name and address of the alleged infringer and Voltage was ordered to pay Rogers $100 per hour, plus HST, for its time spent assembling the information for Voltage. The fee was mandated to be paid in full prior to the disclosure of the contact information. Rogers was also awarded its costs on the motion.

In order to protect the rights of copyright holders while preserving individuals’ privacy rights, the Court instituted certain safeguards. The information released by Rogers can only be used by Voltage in connection with the specific claims in the proceeding, and it must remain confidential and never be disclosed to any other parties or the general public, by making or issuing a statement to the media, until the identity of the alleged infringer becomes part of the public record.

Modern technology has opened up many different means of communication, but it cannot eradicate the personal property rights of individuals. Privacy concerns are important; however, they “must yield to public concerns for the protection of intellectual property rights in situations where infringement threatens to erode those rights.” [5]

For more information please contact:

 
Scott Miller, Partner, Head of the Litigation Department

T: 613.801.1099

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Lauren Blaiwais, Articling Student

T: 613.801.1057

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[1] 2014 FC 161 [Voltage 2014].

[2]Voltage Pictures, LLC et al v John Doe #1 et al, 2016 FC 881, at para 1 [Voltage Pictures 2016].

[3] Copyright Act, RSC 1985, c C-42.

[4] Voltage Pictures, supra note 2 at para 11.

[5] BMG Canada Inc v Doe, 2005 FCA 193.

Canada Just Became a More Attractive Jurisdiction to Litigate (2)

By Scott Miller, June 29th, 2015

On June 24, 2015, the Chief Justice of the Federal Court issued a practice notice outlining new procedures to streamline the time and cost of complex litigation, as outlined below:

1. There will be a “short notice” wait list for earlier trial dates for those who wish to participate;
2. Documentary discovery will be reduced and proportionate to the complexity of the action. A party will only be permitted up to 1 day of oral discovery per week of trial, or portion thereof, to a maximum of 4 days of oral discovery;
3. No questions during discovery will be allowed to be taken under advisement. Questions can only be objected to with significant cost sanctions for unreasonable objections. Moreover, refusal motions will be permitted only until discoveries are completed and will be restricted to 1 hour per day of discovery;
4. Technology primers may be provided before trial to expedite hearings; and
5. All demonstrative evidence must be exchanged at least 60 days before trial;

Canada’s streamlined Federal Court procedural rules may be used as a tool to encourage both Canadian and global settlements. Likewise, if litigation is necessary, Canada’s Federal Court approach provides a speedy and cost effective forum to determine intellectual property rights.

For more information about this topic please contact:

Scott Miller, Partner, Head of the Litigation Department 
T: 613.801.1099
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Important milestone in the Canadian IP law - we finally have privilege!

By Randy Marusyk, July 12th, 2016

On June 24, 2016, an important milestone was achieved in the Canadian IP law due to the enforcement of section 16.1 of the Patent Act and section 51.13 of the Trademarks Act. Going forward, confidential communications between Canadian patent/trademark agents and their clients are protected under the statutory privilege in the same way as the communication between lawyers and clients is privileged. An agent cannot be required to disclose or give testimony on the communication in a civil, criminal or administrative action or proceeding.

The communication between patent/trademark agents and their clients will be privileged if the following requirements are met:

• The communication is between clients (or the client’s behalf) and their registered patent agents, trademark agents, or the registered agents’ behalf.
• The purpose of the communication is seeking or giving advice with respect to any matter relating to the protection of an invention or a trademark (including geographical indication or mark referred to as part of paragraph 9 of the Trademark Act).
• The communication is intended to be confidential.

The client can expressly or implicitly waive the privilege between the agent and himself or herself, and the provisions protects the communications whether agents are lawyers or not. It is also worth noting that the privilege provisions also apply to the communications between clients and their agents who are registered as patent or trademark agents that are privileged under the law of another country and the three requirements above are met.

For more information about privilege provisions in Canada please contact:

Randy Marusyk, Co-managing Partner
T: 613.801.1088
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Leonardo Da Vinci Is Still Alive!

By Scott Miller, February 9th, 2016

Federal Court File Nos. T-1104-15 and T-2125-15

Scott Miller and the litigation team at MBM Intellectual Property Law have successfully joined its Italian wine making client, Dallevigne S.p.A. (Dallevigne), to an appeal of a decision of the Canadian Trademark Office expunging the trademark DA VINCI (TMA303667) for non-use pursuant to s.45 of the Trademarks Act. The party who originally requested the s.45 confirmed it will not participate in the appeal of the trademark office decision to the Federal Court. However, the maintenance of the s.45 decision is relevant to Dallevigne because it had filed a trademark application, CANTINE LEONARDO DA VINCI & Design No. 1561950 (CANTINE) which was refused by the Trademark Opposition Board (TMOB) solely because, at the time of the TMOB decision, the DA VINCI mark was still on the register. Dallevigne has appealed the TMOB decision refusing the registration of the CANTINE trademark.   

The Federal Court correctly found that Dallevigne (1) will be directly affected by the s.45 appeal decision and (2) will suffer prejudice if it was not allowed to be joined to the s.45 appeal because Constellation Brands Quebec Inc., the owner of the DA VINCI registration is continuing to assert the impugned trademark against the CANTINE trademark, without the opportunity for Dallevigne, or any other party,  to challenge the registration being asserted against Dallevigne.  

The Federal Court also correctly stayed the appeal of the CANTINE trademark pending the outcome of the s.45 appeal recognizing that proving irreparable harm is not a pre-condition to the granting of a stay where the Federal Court is effectually enjoining itself as opposed to exercising power over an administrative body. In such situations, a stay will be granted if the Court believes a party will not be unfairly prejudiced and it’s in the interest of justice to treat the request for a stay analogous to a scheduling or an adjournment request.  

In all, it is possible to have a party joined in one proceeding and at the same time stay another proceeding when fairness, common sense and the interest of justice are considered.

For more information about this topic please contact:

Scott Miller, Partner, Head of the Litigation Department 
T: 613.801.1099
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Trademarks in Canada and the Madrid Protocol

By Randy Marusyk, April 30th, 2015

The Madrid Protocol is a trademark treaty that has established a system for the international registration of trademarks, having 92 member countries including the United States and the European Union. It makes it possible to file national trademark applications in one language, and also to simultaneously renew and record assignments or address changes for registrations in multiple jurisdictions. This filing procedure may potentially provide significant cost savings for an applicant who would like to file a global trademark.

Canada has begun implementation of the Madrid Protocol when Bill C-31, the Economic Action Plan 2014, No. 1, which recently received Royal Assent. Although this legislation has been passed, the Trade-mark Regulations will need to be revised and proclaimed into force before the Madrid Protocol becomes law in Canada; it is expected this will happen in late 2015 or early 2016. Other practical implementations such as staff training, IT system updates, and clarification of the Canadian Intellectual Property Office’s (CIPO) role as an ‘Office of Origin’ may affect this timing.

There have been some concerns expressed as to the implementation of the Madrid Protocol in Canada. Practically, it will further burden an over-burdened system which may result in an increase of the prosecution timeline for domestic applications, in order to meet the strict time limits imposed by the protocol. The Courts may also need to adjust to higher volumes of litigation while looking for legal guidance in other jurisdictions. There are also concerns about the overly broad legislative amendments including the removal of trademark ‘use’ requirements at the time of registration. Such a change in the Canadian legislation may result in trademark squatting, that is, the registering of trademarks solely for the purpose of selling them.

For more information about this topic please contact:

Randy Marusyk, Partner 
T: 613.801.1088
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Federal Court of Appeal Confirms Use of Pop Culture to Demonstrate Fame of a Mark

TEQUILA CUERVO, S.A DE C.V. v. EMPRESSA CUBANA DEL TABACO, TRADING ALSO AS CUBATABACO AND CORPORATION HABANOS S.A., 2015 FCA 15

By Jonathan Roch, January 23rd, 2015

On January 21, 2015, the Federal Court of Appeal affirmed the Federal Court's decision of October 4, 2013 which refused Tequila Cuervo’s application for the mark LAZARO COHIBA in association with rum.

Federal Court

The Federal Court refused the trademark application for LAZARO COHIBA in association with the proposed use of rum on the basis that it was confusing with the registered COHIBA marks used in association with cigars and tobacco.  

MBM was able to demonstrate that the COHIBA trademarks are widely known across Canada by relying upon references in widely distributed films (Hotel Rwanda, Bad Boys II and Into the Blue), television shows (Sex in the City and The Simpsons), music (including Jay-Z, Lil Wayne, P. Diddy and Busta Rhymes) and magazines (Cigar Aficionado). 

Expert evidence was adduced to explain that the COHIBA references described above were more than the average product placement.  Rather, the COHIBA references were a means of borrowing the credibility of the brand as a symbol of status, wealth, power, intrigue, luxury and mystery and of reflecting those qualities upon the characters of the pop culture references. Expert evidence also established that smokers are more likely consumers of alcohol products and that in the minds of smokers these products are linked.  Finally, additional evidence further demonstrated an overlap in the alcohol and tobacco/cigar trades (LCBO and SAQ agency stores).

Federal Court of Appeal

In its appeal, Tequila Cuervo asserted, amongst other arguments, that the Federal Court’s determination that the COHIBA marks are iconic and/or famous ignored the Supreme Court principles for dealing with famous marks, adopted a new test to determine fame, and fundamentally changed the test for assessing a likelihood of confusion for famous marks. Moreover, they pleaded that the lower court erroneously treated the fame of the COHIBA marks as an overarching factor in the evaluation of the likelihood of confusion. The Court ruled that no errors had been committed and dismissed the appeal with costs.

This decision is significant as it is a positive acknowledgment by the Federal Court of Appeal that the notoriety of a brand may be established by references to the brand in popular culture.  This case is an example of how trademark practitioners should not be afraid to creatively use the evidence at their disposal to advance their clients’ causes.

For more information please contact Jonathan Roch or Scott Miller

Jonathan Roch, Partner 
T: 613.801.1059
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Scott Miller, Partner 
T: 613.801.1099
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Protecting the Extraction Industry Through Protection of Intellectual Property

By Randy Marusyk, October 8th, 2014

Canada’s abounds with underground riches—the mining, quarrying, oil and gas sectors contributed $124.6 billion to Canada’s economy in 2012, but it faces big competition on the world stage. Staying relevant in the global market will be a key to Canada’s continued economic success. Canada can only stay relevant by continuing to innovate—we must establish ourselves as leaders in cutting edge mining innovation and technology.

The international agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a critical tool in the protection of Canada’s innovation—it’s intellectual property. Through the TRIPS agreement, Canadian inventors can file their patents worldwide, and receive extended periods of protection, dating back to their Canadian filing date. Filing for a patent early gives the innovator protection not only in Canada, but in all of the 160 countries that are party to the TRIPS agreement.

Canada’s Patent Act is the legal instrument that rewards the first person to file for a patent. Innovators may sometimes feel like an idea ‘just isn’t ready yet’, but that should not prevent inventors from filing for a patent. The Patent Act’s three requirements for patentable technology are as follows: 1. the technology must be new; 2. the technology must be useful; 3. the technology cannot be an obvious permutation of an existing technology. Inventions do not have to be sold or even marketed to qualify for patents. Early filing is key to protecting Canada’s innovation.

Of equal importance to seeking early patent protection for mining technology is whether one has freedom to operate a given technology in Canada and abroad. The existence of patents owned by others can block a party from operating until they obtain a license under the patent. Worldwide patent databases are powerful tools that can tell a company if they have freedom to operate in any particular technological area.

Databases provide much more than a list of patent titles and owners. With these databases, intellectual property lawyers can explore, monitor and map the patent space for any given field. Visual maps, such as the one shown below, can display the areas within a sector that are crowded, or becoming crowded with patents. Knowing where patents are encroaching can help an innovator keep the space around hers or his technology covered by their own patents. Databases can also tell innovators and corporations whether their operating space is already patented, and whether they may require licenses from third parties. Finally, these patent mapping tools can help innovators identify the competitors’ presence in any given technological area.

Patent Density Map Showing Major Patents owned by Technology Resources Pty.

For more information about the benefit to your company on early filing and use of patent databases, contact Randy Marusyk, Managing Partner at MBM Intellectual Property Law at:

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Exercise Caution When Choosing a Trademark – MBM Successfully Expunges The Athletic Club & Design Trademark and Prohibits its Use in Canada.

For Immediate Release, July 11, 2014

On July 9, 2014, Mr. Justice Russell of the Federal Court released his decision in Ottawa Athletic Club Inc. v. The Athletic Club Group Inc. (2014 FC 672).

In a proceeding commenced by Notice of Application (a matter where there is no viva voce evidence but rather affidavits and cross-examination occurring outside the Court), Mr. Justice Russell expunged The Athletic Club & Design trademark – registered February 22, 2005 which claimed use from 1997 – and granted a permanent prohibition (injunction) to prevent the use of the trademark and its common law equivalent.

The decision is 150 pages and provides a detailed synopsis of the law and evidence necessary for a determination of:

1. when a composite trademark ( a trademark incorporating words and a design) will be found to be clearly descriptive of the character of the wares/services in association with which it is used;
2. whether a trademark is distinctive;
3. when any trademark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind of any wares/services;
4. when a trademark is the name in any language of any wares/services in connection with which it is used;
5. the effect of a disclaimer on questions relating to clearly descriptive, distinctiveness, and bona fide commercial usage;
6. whether the 5 year limitation period to assert the ground of a confusing trademark in an expungement proceeding should be waived through imputed knowledge through an adverse interest that the person who adopted the registered trademark did so with knowledge of the previously used trademark; and
7. when an affiant must disclose documents in connection with a cross-examination.

In obtaining the judgement MBM relied upon a variety of evidentiary sources including hundreds of newspaper articles, legislation and judicial decision citing the term ‘Athletic Club’, confirmation of third party use of the term ‘Athletic Club’, internet searches, corporate searches, trademark searches, cross examination, etc…

The decision will likely be a leading resource for trademark practitioners and those wanting to understand evidentiary requirements and the law in Canada relating to the subjects described above.

If you would like to learn more about the decision please do not hesitate to contact the lead lawyer on the case, Scott Miller or any other member of the MBM litigation team who assisted including Jonathan Roch or Jahangir Valiani.

Scott Miller
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T: 613.801.1099

Jonathan Roch
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T: 613.801.1059

Jahangir Valiani
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T: 613.801.0451

Disparaging & Racist vs. Political Correctness – You Choose. And the Washington Redskins Thought the Battle on the Football Field Was Tough!

By Scott Miller, June 18, 2014

The National Football League team, the Washington Redskins lost a fight of Super Bowl proportions today before the U.S. Patent and Trademark Office. The team’s host of registered trademarks dating back to the 60’s were cancelled on the ground that they were disparaging on the date they were registered and as such, should never have been registered.

The ruling does not prevent the team from using the trademarks but means the team loses the benefits of a registered trademark including the ability to sue for trademark infringement. Not surprisingly, the team’s lawyers have already indicated that the decision will be appealed.

In Canada, the Washington Redskins trademark has been registered since 1980. Under the Canadian Trade-marks Act, a trademark which is “scandalous, obscene or immoral” at the date of registration may be held invalid. So the obvious question remains, would a disparaging trademark in the US be considered “scandalous, obscene or Immoral” in Canada? If challenged in Canada, would we be less, equally or more offended than our neighbours to the south?

Unlike in the US, if a mark in Canada is held “scandalous, obscene or immoral” it cannot be used in the country. The Trade-marks Act specifically indicates that such offensive marks cannot be ‘adopted’ which would thus prevent their use. This raises an interesting question if the U.S. Patent and Trademark Office decision is overturned on appeal but the same fight is engaged in Canada with the Canadian court’s ruling against the team. Would the NFL not televise games or sell merchandise in Canada? Perhaps those opposed to the Washington Redskins should think about using Canada to advance their fight.    

In all, the appeal(s) in the US will likely dictate the fate of the Washington Redskin trademarks in Canada. However, there is a lesson in this not just for sports franchisees but for all trademark owners – choose your trademark’s carefully because your decisions might come back to haunt you years later.

For more information please contact:

Scott Miller
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T: 613.801.1099

Media Advisory: Crude Solutions Launches Patent Lawsuit Against MEG Energy

FOR IMMEDIATE RELEASE

April 30, 2014 – Crude Solutions Launches Patent Lawsuit Against MEG Energy

Crude Solutions Ltd. (CSL), a research and development firm for the oil and gas industry, has sued
MEG Energy Corp., accusing MEG of infringing CSL’s patent rights.

Crude Solutions Ltd. (CSL), an Edmonton based research and development firm
for the oil and gas industry focusing on steam-assisted gravity drainage (SAGD) extraction
techniques, has sued MEG Energy Corp. (MEG), accusing MEG of infringing CSL’s Canadian
Patent No. 2,800,746 with MEG’s RISER project and eMSAGP process.

The patent infringement lawsuit, filed on Tuesday, April 29, 2014, in the Federal Court of Canada,
states that CSL is the owner of patented technology relating to exploiting pressure gradients in
SAGD oil recovery operations. The lawsuit goes on to allege that MEG had explicit notice of the
proprietary nature of the technology within days of the patent being issued and had constructive
notice as of the publication of the patent in November 2012 and that MEG continues to make use of
its infringing processes in wanton and outrageous disregard of CSL’s rights. MEG’s alleged
infringing eMSAGP process has been and is being implemented in all phases of its Christina Lake
operations and MEG has indicated its intention to implement this process in all of its recovery
operations.

For further information please contact MBM’s litigation team, led by Scott Miller and Paul Sharpe,
who are representing CSL in this patent infringement action.

Scott Miller, Partner

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T: 613.801.1099

Paul Sharpe, Partner

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T: 613.801.1077

PMPRB’S INTERPRETATION OF “PATENTEE” OVERLY BROAD

By Claire & Kay Palmer, May28, 2014

Two recent Federal Court decisions considered the definition of a “patentee” in the context of the mandate of the Patented Medicines Prices Review Board (PMPRB).

Section 2 of the Patent Act states that a “patentee” means the person for the time being entitled to the benefit of a patent.

With respect to Patented Medicines, the English version of Section 79(1) of the Patent Act states that a “patentee”, in respect of an invention pertaining to a medicine, means the person for the time being entitled to the benefit of the patent for that invention and includes, where any other person is entitled to exercise any rights in relation to that patent other than under a licence continued by subsection 11(1) of the Patent Act Amendment Act, 1992, that other person in respect of those rights.

The generic manufacture Sandoz Canada Inc is a wholly-owned subsidiary of Novartis Canada Inc, which in turn is a subsidiary of Novartis AG.  Novartis AG is the owner of a number of relevant patents.  Novartis AG provides authorization for Sandoz to enter the market for specific drugs when Novartis AG loses it’s the market exclusivity – i.e. once other generics have entered the market. 

For more information please contact:

Claire Palmer
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T: 613.801.0450

Kay Palmer
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T: 613.801.0452

LANGUAGE POLITICS AND FRENCH SIGN WARS IN QUEBEC-REVISITED

Canada’s Trademark Law Soon to be Changed – Including Harmonization with International Treaties

By Scott Miller, March ^31st, 2014

On March 28, 2014, the Federal Government of Canada tabled a new Bill, C-31, which has long been anticipated by Trademark practitioners in Canada. It is expected that the trademark provisions of the Bill will ultimately become law in Canada. A summary of Bill C-31:

• The type of registrable trademarks has been widened to include sound, scent, taste and texture which may require evidence of distinctiveness at the date of filing.
• The renewal fee for registered trademarks will be shortened from 15 to 10 years.
• The ability to seek expungement of trademarks on the basis of non-use during the last 3 years can now be instituted by the Trademark Office and not just by an interested third party.
• Canada will implement International Treaties:
  • Madrid Protocol - This treaty paves the way for greater flexibility to file in multiple jurisdictions.
  • Singapore Treaty – Divisional applications will be allowed for (1) those goods/services which are contentious and holding up a potential registration or (2) applications on the basis of proposed use where particular goods/services have yet to be used.
  • Nice Agreement - This agreement ensures that its signatories follow a harmonized system of classification of goods/services.

For more information, please contact:

Scott Miller, Partner

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Illegal Downloaders Beware – You Can Run but You Can’t Hide Behind Your ISP: Balancing Privacy Rights against the Rights of Copyright Holders

By Scott Miller, February 24^th, 2014

The Federal Court of Canada in Voltage Pictures LLC v. John Doe and Jane Doe (2014 FC 161) has set the ground rules for when an Internet Service Provider (ISP) will be required to hand over to copyright holders the names and addresses of individuals suspected of unauthorized downloading of copyright material such as movies and music.

The court ordered the Ontario based ISP TekSavvy to disclose approximately 2000 customer names and addresses to the U.S. production company Voltage Pictures for the alleged unauthorized downloads of such movies as “The Hurt Locker” and “Dallas Buyers Club”.

In Canada, the Copyright Act provides for statutory damages for non-commercial infringement in the range between $100 and $5000. This range was likely implemented to discourage file sharing lawsuits against individuals. However, it is easy to imagine how with the names and addresses of individuals a simple letter to a suspected downloader of, for example, pornography might be embarrassed into paying a settlement without the copyright holder having to file a lawsuit.

To that end the court was extremely sensitive to both the potential rise of the so called ‘Copyright Trolls’ - plaintiffs who file multitude of lawsuits solely to extort quick settlements and the need to safeguard an individual’s right to privacy.

In order to overcome these issues but also balance the right of the copyright holder, the Federal Court instituted the following safeguards before requiring the ISP to deliver the subscriber names and addresses, including:

•         The moving party must demonstrate a bona fide case (a real intend to sue and there is no other improper purpose)
•         Disclosure will be only names and address and not phone numbers or email addresses
•         The information disclosed shall be used exclusively for the purpose of the lawsuit and will not be disclosed to the public/media
•         The letter to the ISP subscribers will include the court order and a statement that ‘no Court has yet found any recipient of the letter liable for infringement’
•          The case will be specially managed and a Case Management Judge will approve the demand letter before it is provided to the individuals
•         The copyright holder shall pay the legal costs of the ISP before the information is provided

The safeguards and limit on damages might still result in some copyright holders bringing lawsuits to deter the public at large from infringing copyright but the economics suggest this will not open the floodgates to litigation before the Federal Court. Likewise, the safeguards do balance the fear against Copyright Trolls and the potential loss of privacy rights.

For more information, please visit CTV National News website to watch Scott Miller’s commentary given during the CTV news coverage of the case.

 
Scott Miller, Partner

T: 613.801.1099

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MBM Intellectual Property Law Has Moved!

When is an Engineer not Engineering in a Trade-mark?

Scott Miller, February 18^th, 2014

In Kelly Properties, LLC v. Canadian Council of Professional Engineers, 2013 FCA 287, the MBM litigation team successfully overturned the Federal Court decision of Canadian Council of Professional Engineers v. Kelly Properties, LLC, 2012 FC 1344 which found the trademark KELLY ENGINEERING RESOURCES unregistrable in association with personnel employment services, namely, providing temporary, temporary to full-time, and full-time employees having specialized technical skills, education and/or training.

The recent Federal Court of Appeal decision is important for two reasons:

1. A trade-mark application based on a foreign registration may register regardless of whether a date of first use claimed in a Canadian trade-mark application is correct; and
2. Just as a trade-mark which is descriptive is registrable if it is not clearly descriptive - A trade-mark which is potentially misdescriptive is registrable if it is not deceptively misdescriptive.
   
   

FOREIGN USE BASIS OF REGISTRATION ALIVE AND STRONG IN CANADA:

The Federal Court of Appeal solidified that where a trade-mark application is based on use in Canada and foreign use and registration, the two are pleaded in the alternative. That is, only one of the basis of the application must be met for the application to be considered for registration. Therefore, if the application is found to be unsupported on one ground, it may still be registered on the basis of the alternate ground for registration.

DECEPTIVELY MISDESCRIPTIVE NOT TO BE DETERMINED BY GUIDELINES

Each of the Provinces and Territories in Canada include legislation that more or less defines the Practice of Engineering to incorporate the professional application of applied science. The engineering legislation also includes a prohibition of the use of the word engineer/engineering in a trademark if the use may lead the public to believe the trademark owner is engaged in the Practice of Engineering.

Kelly Services sought to register the trademark KELLY ENGINEERING RESOURCES in connection with personnel employment services. The Canadian Council of Professional Engineers opposed registration on the basis that only licensed engineers should be able to use the term “engineering” in a trade-mark. The evidence before the Trade-marks Opposition Board (2010 TMOB 224) demonstrated that Kelly Services is a personnel employment company and its KELLY ENGINEERING RESOURCES division employs and places both engineers and non-engineers with technical training (e.g. draftsmen). However, the Trade-marks Officer determined that personnel employment services would not be the type of technical services that one would expect engineers to provide. As such, the Board found the trade-mark neither clearly descriptive nor deceptively misdescriptive.

The Federal Court agreed with the Trade-marks Officer’s decision that KELLY ENGINEERING RESOURCES was not clearly descriptive of personnel employment services, but found the mark deceptively misdescriptive relying heavily on a non-statutory guideline from the Association of Professional Engineers which provided criteria for when human resource or staffing agencies are allegedly engaged in the Practice of Engineering. The guideline was not before the Trade-marks Officer and the Federal Court concluded that the guideline would have materially affected the decision of the Officer. Thus the Federal Court came to its own conclusion without giving deference to the Trade-marks Opposition Board decision.

The Federal Court of Appeal found the guidelines of the Alberta Association that regulates the profession of engineering to be just that, guidelines and not law. The Court accepted MBM’s argument that the guidelines were merely the opinions of the Alberta Engineering Association and its interpretation was irrelevant for the purpose of trade-mark law. Since all statutes to regulate the term “engineer” were before the Trade-marks Opposition Board, the Court found that the trial judge made a palpable and overriding error in admitting evidence that opined on the scope and the interpretation of those statutes.

The Federal Court of Appeal found that the decision of the Trade-marks Opposition Board was reasonable and confirmed that the trade-mark KELLY ENGINEERING RESOURCES is registrable in association with personnel employment services. The Trade-marks Opposition Board correctly considered the mark as a whole, and recognized the family of KELLY marks used in personnel employment services.

The bottom line is even if one presumed that the mark KELLY ENGINEERING RESOURCES was misdescriptive of personnel employment services (which was not the case), it was clearly not deceptively so.

For more information, please contact:

 
Scott Miller, Partner

T: 613.801.1099

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New Powers to Combat Counterfeit Products in Canada Likely Around the Corner

New Powers to Combat Counterfeit Products in Canada Likely Around the Corner

Scott Miller, October 30th, 2013

On October 28, 2013 the Government of Canada introduced bill C-8 (Combating Counterfeit Products Act) which, if passed, will significantly improve the fight against counterfeit products in Canada.  The bill also includes substantial changes to the Canadian Trade-marks Act. This bill was introduced in the previous session of Parliament but did not proceed when Parliament was prorogued. The bill has been fast tracked and it is expected that it will become law in some form.

Proposed Changes to Stop Counterfeiting:

Currently, in order to stop the importation of counterfeit goods into Canada, a right-holder must proactively obtain a Court order directing that the alleged infringing materials be detected and detained.  The process is costly and requires the right-holder have specific information regarding the importation of the alleged infringing materials. 

Under the bill both the Trade-marks Act and Copyright Act will be changed to include provisions where the Canada Boarder Services Agency (CBSA) will have increased power to combat counterfeit goods from entering Canada at markedly less cost to the right-holder.  A right-holder can file for a standing 2 year ‘Request for Assistance’ with the CBSA which would enable the CBSA to provide the right-holder with samples of suspect products.  The right-holder could then use this information to pursue new remedies under the Trade-marks Act or Copyright Act including both indictable and summary convictions with fines upward of $1,000,000 dollars and/or imprisonment of five years.

Proposed Changes to Trade-mark Law:

The proposed definition of a trade-mark is being considerably broadened to include the following: a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape (currently known as a distinguishing guise), a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign.

Under the proposed bill, trade-marks for three-dimensional shapes, a mode of packaging goods, sound, scent, taste, and texture will require evidence of distinctiveness at the date of filing.

Under current Canadian trade-mark law, registration of a proposed use trade-mark application may occur after allowance where a declaration of use is filed for the wares/services actually used. For those wares/services not used, the application dies in association with those unused wares/services.  Under the bill, an applicant can file a divisional application for those goods/services not used at the time of filing the declaration of use and claim priority to the original application.  

For more information, please contact:

Scott Miller, Partner
Voice: 613.801.1099
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Another Win for MBM

Another Win for MBM – Federal Court of Canada Overturns Trademark Opposition Board and Recognizes the Overlap Between Alcohol and Tobacco (Cigars) 

EMPRESSA CUBANA DEL TABACO dba CUBATABACO et al.  v. TEQUILA CUERVO, S.A DE C.V. (2013) FC 1010

Scott Miller and Jonathan Roch, October 8, 2013

Factual Overview

Tequila Cuervo filed a Canadian trade-mark application for the trademark LAZARO COHIBA, disclaiming the word LAZARO.  The application was based on proposed use for “alcoholic beverages, namely rum”. The application was opposed by Cubatabaco on grounds including that LAZARO COHIBA was not registrable based on the likelihood of confusion with the COHIBA registered trademarks for cigars and tobacco.  On September 30, 2008, the Trademark Opposition Board concluded that “in view of the differences between the wares and trades of the parties and the fact that the opponents have not established an extensive reputation for their marks “ that the LAZARO COHIBA trademark was registrable. 

Following the Trademark Opposition Board decision MBM was appointed as counsel to Cubatabaco.  An appeal of the Board’s decision was filed by application to the Federal Court.  The Federal Court overturned the Board’s decision and refused the registration of the LAZARO COHIBA trademark application.

Fame (Extensive Reputation) Demonstrating Without a Survey

MBM was able to demonstrate that the COHIBA trademarks are widely known across Canada by filing new evidence to establish that COHIBA has been referenced in films, television, music and other media, such as print magazines distributed in the United States and Canada.  The fame of the COHIBA trademarks was established not by an expensive survey but by creatively revealing that pop media has used COHIBA cigars to demonstrate social status and wealth. The decision is equally important because it recognizes that for some iconic brands, personal ownership or use of the product is not essential to the awareness of the trademark. Click here to view a copy of the decision. 

Conclusion

There are multiple ways for trademark professionals to establish confusion.  While in some incidents expensive surveys may be necessary that will not always be the case.  

Please contact Scott Miller or Jonathan Roch for more information.

Supreme Court Asked to Reconsider Decision to Invalidate Viagra Patent

By Suzanne Hof - November 16 2012

Pfizer Canada Inc. (Pfizer) has asked the Supreme Court of Canada to reconsider its decision to invalidate their Canadian Patent No. 2,163,446, the patent that provided Pfizer with a monopoly for its multi-million dollar erectile dysfunction drug, Viagra.

Pfizer has taken the position that the Court “accidentally granted a remedy in this appeal that exceeds its jurisdiction.”  The proceedings in question were initiated as an application under the Patented Medicines (Notice of Compliance) Regulations, the outcome of which is typically not to determine invalidity or infringement, but rather to determine whether a notice of compliance should or should not be granted.  

In the present case, the present proceedings were initiated as an application for an order prohibiting Teva Canada Limited from obtaining a notice of compliance for its generic version of Viagra.  Pfizer has therefore taken the position that the Supreme Court was acting outside its jurisdiction in its finding of invalidity.  

In particular, Pfizer has applied for an order to amend the Supreme Court’s recent judgment “by replacing the words ‘and Patent 2,153,446 is declared void’ with the words ‘the application below is dismissed and the Order of the Federal Court dated June 18, 2009, prohibiting the Minister from issuing notice of compliance to the appellant is hereby set aside’.”  In the alternative, Pfizer has applied for a re-hearing on the issue of remedy.

We will, of course, be following these proceedings and posting updates.

The read the previous article on this please visit: If There is No Quid Then There Can Be No Quo - Pfizer's Viagra patent invalidated by Supreme Court of Canada

If you have any questions please contact Suzanne Hof