Service: Copyrights

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

Posted on by Debbie Malek

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 the associated costs incurred by Rogers in compliance with a Norwich order was not recoverable.

As a result of 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 of 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.

If you have any intellectual property questions, please feel free to reach out to MBM for a free consultation.
T: 613-567-0762
E: general@mbm.com

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

 

Intellectual Property Considerations in the New CPTPP & NAFTA Negotiations

Posted on by Debbie Malek

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.

 

For more information, please contact:

Randy Marusyk, Co-Managing Partner
T: 613-801-1088
E: rmarusyk@mbm.com

Co-Author: Robert Di Battista

 

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.

 

[1] https://globalnews.ca/news/3989224/commentary-tpp-deal-a-win-for-trudeau-and-a-win-for-canada/

[2] http://www.macleans.ca/politics/ottawa/canada-tpp-members-agree-to-revised-deal-without-the-u-s/

[3] http://dfat.gov.au/trade/agreements/tpp/news/Documents/annex-2.pdf

[4] http://www.michaelgeist.ca/2018/01/dont-make-tpp-mistake-canada-needs-maintain-progressive-approach-ip-nafta

Intellectual Property Licensing: A Win-Win Agreement

Posted on by Debbie Malek

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.

 

For more information, please contact:

T: 613-567-0762
E: trademarks@mbm.com

Author: David Lotimer, Associate

 

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.

 

[1] ‘Licensing of Intellectual Property Rights; a Vital Component of the Business Strategy of Your SME’, World Intellectual Property Organization, http://www.wipo.int/sme/en/ip_business/licensing/licensing.htm.

[2]‘Fact Sheet – Commercialising Intellectual Property: License Agreements’, European IPR Helpdesk, www.iprhelpdesk.eu, November 2015.

 

Lifting the Cloak of Anonymity of Copyright Infringers Online

Posted on by Debbie Malek

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. 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.

If you have any intellectual property questions, please feel free to reach out to MBM for a free consultation.
T: 613-567-0762
E: general@mbm.com 

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

 

[1] Copyright Act, R.S.C. 1985, c. C-42, ss. 41.25-27 (added by the Copyright Modernization Act, S.C. 2012, c. 20, s. 47).

[2] Voltage Pictures LLC v John Doe, 2017 FCA 97 at para 27.

[3] Ibid at para 40.

[4] Ibid at para 61.

[5] Ibid at para 52.

[6] Ibid at para 76.

4 Important Areas of Focus in IP Protection for Early-stage Startups

Posted on by Debbie Malek

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 endeavours. 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 your employees about IP and its importance

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 to your business as possible, while also considering the strength of IP protection available in each jurisdiction

Look for opportunities to fund IP:

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 strategic 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!

If you have any intellectual property questions, please feel free to reach out to MBM for a free consultation.
T: 613-567-0762
E: general@mbm.com

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.

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