Be sure to question candidates on copyright reform

Update: The Harper Government fell in a non-confidence vote on March 25, 2011 at 2:20pm.

Later this week, the 40th Parliament will be dissolved and an election will be called.  Opposition parties are anxious to bring down the Conservative minority government, whether by voting against the budget or by a non-confidence vote for being in contempt of Parliament.

When Parliament is dissolved, every bill that has yet to be passed, including the current copyright reform bill C-32, An Act to amend the Copyright Act, will “die on the order paper”.  It will be up to the next Parliament to introduce a copyright reform bill, if they choose to do so.

This also means that copyright should become an election issue.  Whether or not you’re satisfied with bill C-32, now is the time to exercise your democratic muscle and express any concerns you may have with your (soon to be campaigning) Member of Parliament.  Be sure to question all of the candidates who are running in your riding about their views on copyright reform, digital locks and fair dealing, and compare their responses.  If you’re not satisfied with their answer, don’t vote for them.

(Interestingly, this also marks the third time that a copyright reform bill has died because of an election being called: Bill C-61 died in 2008 under the Harper minority government, and Bill C-60 died in 2005 under the Martin minority government).

Federal Privacy Commissioner outlines proposed changes to PIPEDA

In a previous post I outlined some of the priorities of Federal Privacy Commissioner Jennifer Stoddart as she enters her new 3 year term.

One of her priorities is to strengthen PIPEDA, the Personal Information Protection and Electronic Documents Act, when it faces a mandatory review by Parliament later this year.

The main items that Stoddart has hinted she’ll push for include increased enforcement powers for the Federal Privacy Commissioner and tougher penalties for companies found to have failed to comply with PIPEDA, including publicly naming violators.

With regards to enforcement and penalties, Commissioner Stoddart notes that Canada has “become one of the few major countries where the data protection regulator lacks the ability to issue orders and impose fines.”  In contrast, “the CRTC has the power to to impose fines for violations of the do-not-call rules (and recently slapped Bell Canada with a record-setting $1.3-million penalty).”  In addition, “there are significant fines – $10 million for businesses – provided for in the new anti-spam law.”  Furthermore, privacy regulators like the UK Information Commissioner and the Spanish Data Protection Agent all use their enforcement powers to successfully signal that privacy violations will be met with financial penalties.

Finally, Commissioner Stoddart candidly admitted that there is a growing discomfort with the secretive nature of privacy investigations under PIPEDA:

It seems to me that not naming names is robbing the Canadian public of much of the educational value of our investigative findings.

Who is paying your maintenance fees?

In Canada, an applicant applying for a patent must pay maintenance fees to the government, even when no patent has yet been granted. The first maintenance fee is due 2 years after the patent application is filed, and continues for the life of the patent and/or patent application.

However, just because maintenance fees are due to the government does not mean that anyone can pay them. In Unicorp v. Canada, 2011 FCA 55, a law firm tried to pay the maintenance fee for an patent, but as it was not the appointed agent for patent in question, the payments were refunded and were not applied to the patent. The patent was subsequently deemed to be irrevocably abandoned due to a failure to pay the required maintenance fee. The Federal Court of Appeal affirmed that the patent was irrevocably abandoned due to a failure to pay fees.

It’s thus important to remember that while remembering to pay maintenance fees are important, it is just as important to ensure that the person or entity paying the maintenance fee is the appointed agent, or is otherwise an authorized correspondent to the patent or patent application in question. In patent law, having money and paying it to the government isn’t enough; who pays the money is just as important.

Kik’s defence to RIM’s infringement lawsuit

Late last year, RIM sued Kik Interactive Inc., the maker of the popular cross-platform instant messaging client Kik Messenger, alleging breach of confidentiality, trademark infringement, and patent infringement.  At the same time, RIM also removed Kik Messenger from BlackBerry App World.

It’s been a long time coming, as we were expecting Kik’s statement of defence to be filed with the court at the end of December. Finally, on Monday Feb 7, 2011 (well after the 30 day deadline for Canadian defendants), Kik filed their defence and counterclaim after the Court granted them an extension of time.

I had a look at Kik’s Statement of Defence and Counterclaim today (available here, 7MB PDF).

Kik denies that it was developing a cross-platform instant messaging client in secret or had access to RIM’s BBM confidential documents, denies that it’s infringing on RIM’s trademarks or patents, and found prior art (EP093213, JP10013881, Outlook 2000, and a whole list of documents in Schedules A & B) which Kik alleges makes RIM’s asserted patents invalid.

Kik theorizes that as a result of the “overnight success of Kik Messenger”, “senior executives at RIM caused RIM to embark on a campaign to destroy or seriously harm Kik, including unilaterally terminating the various agreements between Kik and RIM, suspending and then removing Kik Messenger from BlackBerry App World and commencing this lawsuit, including a meritless patent infringement claim which RIM knew had no realistic chance of success.”

Kik portrays the suit as a classic case of Goliath picking on the poor small startup: “RIM employed a ‘bully’ like strategy, while Kik attempted to appease RIM…”.

Interestingly, in the statement of defence Kik asserted that Ted, the CEO of Kik, did not have access to the BlackBerry Messenger (BBM) source code while he worked at RIM’s BBM team as a Project Coordinator.  Kik also denies that Ted had access to RIM’s development plans, market research, and other internal reports related to BBM while working as part of RIM’s BBM team, as RIM had alleged in its statement of claim.  It’ll be very interesting to see exactly what documents Ted had access to or potentially had access to while working as part of RIM’s BBM team, and whether any of them led to his decision to develop a cross-platform instant messaging client in late 2009.

As with most lawsuits, the truth will come out during discovery and at trial, and will probably fall somewhere in between the allegations made in RIM’s statement of claim and Kik’s statement of defence.

Privacy law up for review this year

Parliament recently approved Federal Privacy Commissioner Jennifer Stoddart’s re-appointment for an additional three-year term. In a speech at the University of Ottawa, she outlined some of her priorities for her new term: 1) ensuring social networking and online dating sites respect privacy, 2) educating Canadians to better understand their privacy rights and to make well-informed choices, and 3) ensuring privacy complaints made to her office are dealt with in a timely manner.

Stoddart also indicated that she wants to strengthen PIPEDA, the Personal Information Protection and Electronic Documents Act.  With PIPEDA facing a mandatory review by Parliament this year, it is likely that at least some legislative change will take place.  In a future post I’ll explore some of the possible changes to PIPEDA.

The meaning of “sold in Canada” – statutory interpretation

Statutory interpretation – figuring out what a piece of legislation (a law) means – is a complex issue.  As the following case shows, even a simple word like “sold” may have different meanings even within the same piece of legislation.

Yesterday, the Supreme Court of Canada released Celgene Corp. v. Canada, 2011 SCC 1 and clarified the law on the scope of the Patented Medicine Prices Review Board’s price‑regulating and remedial authority. At issue is the meaning of the phrase “sold in any market in Canada”.

Celgene owns a Canadian patent on the drug Thalomid and distributes it in Canada under the Special Access Programme (“SAP”).  Under ordinary commercial law definitions as used in other patent cases relating to infringement (such as Dole Refrigerating and Domco Industries), Thalomid would be considered “sold” in the US: the medicine is packed in the US and shipped Free on Board (“FOB”) to the requesting doctor in Canada, the invoice was prepared in the US and mailed to Canada, payment is in U.S. dollars and is mailed to Celgene in the US, no Canadian taxes are paid, and the drug is never redistributed in Canada.

However, the Patented Medicine Prices Review Board concluded that Celgene’s Thalomid sales to Canadians pursuant to SAP were “sold in any market in Canada” and fell within both its authority for price investigation and its related remedial powers.

In siding with the Board and rejecting the technical commercial law definition advanced by Celgene, the Supreme Court recognized that the mandate of the Board includes balancing the monopoly power held by the patentee of a medicine with the interests of the purchasers of those medicines.  In order to comply with that mandate, sales “in any market in Canada” were interpreted to include sales of medicines that are regulated by the public laws of Canada, that will be delivered in Canada, to be dispensed in Canada, and where, in particular, the cost of the medicine will be borne by Canadians — patients or taxpayers, as the case may be.  In this case, Celgene’s Thalomid SAP sales met that criteria and thus falls within the Board’s authority.

As this case shows, defining the meaning of a word in a piece of legislation is a complex issue – even a simple word like “sold” may have different meanings even within the same piece of legislation.  If you are reading a piece of legislation concerning an issue that is important to your business, be sure to consult a lawyer for advice.

Why patents are such a hassle to obtain – the public policy for patents

Many first-time inventors are surprised at the costs and time involved in obtaining a patent.  “Why is a patent so expensive to obtain and takes so many years to issue?”, they ask.

Because all patents applications must be carefully prepared by a qualified professional and must then go through a rigorous examination process. 

At its core, patents are a bargain between an inventor and society (in this case the people of Canada).

In return for a 20 year legal monopoly on his invention, the inventor agrees to teach society a new and non-obvious invention, one that the world has never before seen or contemplated. No mere idea, the inventor also teaches society how to make and use his invention in the best way the inventor knows how.

The patent application is the vehicle through which the inventor teaches his invention to society. This is one of the reasons why patents are published publicly, and are even available on Google.  Once a patent’s monopoly term expires, anyone in the society can take advantage of the invention.

This bargain is also why a patent application must be examined by the Canadian Intellectual Property Office (CIPO) before the patent application can be approved as an issued patent. Among other things, CIPO searches the state of the art to ensure that the invention as taught is truly new and non-obvious – thus ensuring the integrity of the bargain.  This examination process is rigorous and patent applications typically require amendments before the CIPO is satisfied that the invention is new and non-obvious.

And that’s why a patent can cost thousands of dollars and take a few years to issue.

Operating a business together

You and a buddy want to operate a business, and both of you want to save some money. You’re both informal people eager to get on with business, so both of you simply start selling stuff. 

You’ve just entered into a partnership with your buddy.  As partners, each of you is liable to the full extent of your personal assets for the debts and other liabilities of the partnership business.

That sounds scary, but a partnership is not automatically a bad thing.  Depending on the particular circumstances, a partnership may be the best way to do business because the law may not allow you to incorporate.  For example, many investment funds operate as a partnership, and some law firms operate a special form of partnership as well.

What is important is that both of you know that you’ve created a partnership, and that both of you wanted it to be that way. 

A partnership may be created even without an express partnership agreement.  Whether a partnership exists is determined objectively by a court.

In fact, an express provision in a written agreement denying that the you and your buddy are NOT partners may not be conclusive proof in showing that a partnership does not exist.

The best way to show that you’re not in a partnership?  Incorporate.

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