Startups

BC court confirms website terms of use enforceable as legal contracts

In Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, the BC Court held that Rogers infringed Century 21’s copyright and terms of use by scraping Century 21’s real estate listings from its website and incorporating the listings into the real estate search engine Zoocasa.

Starting in 2008, Zoocasa copied photos, property listings, and pricing from Century 21’s website and provided hyperlinks that directed a user to specific pages of the Century 21 Website that contained the property listings.  Despite letters from Century 21, Zoocasa chose not to stop scraping until early 2010, nearly 2 and a half years after Century 21 first advised Zoocasa they did not consent to Zoocasa’s activities and advised them of the Century 21 Terms of Use and Zoocasa’s breach of these terms.

The court considered the enforceability of website terms of use as a contract, and explored various analogous software licences and contracts created over the Internet such as shrink wrap agreements, click wrap agreements, and browse wrap agreements.  The court confirms that website terms of use are enforceable as legal contracts at para 119:

The act of browsing past the initial page of the website or searching the site is conduct indicating agreement with the Terms of Use if those terms are provided with sufficient notice, are available for review prior to acceptance, and clearly state that proceeding further is acceptance of the terms.

In addition, the court confirms that liability is not avoided by automating the website scraping as the scraping program must initially be set up manually.

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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