Thursday, June 25, 2015

Bill C-59 Modifies Canada’s IP Laws: Solicitor-client Privilege to Cover Trademark and Patent Agents and Copyright Term for Sound Recordings Extended

Bill C-59, which received royal assent this week, will require patent agents and trademark agents to treat communications with clients as privileged. The provisions to be inserted into the Patent Act and Trade-marks Act are identical. 

The requirement applies to “individuals whose name is entered on the register of (patent/trade-mark) agents”. The requirement also extends to foreign patent and trade-mark agents and their clients vis-à-vis their Canadian patent and trademark applications provided that a duty of confidentiality exists in their home jurisdiction as well. 

The Bill also puts into effect the controversial copyright term extension for sound recordings. Now, a sound recording that is published will be protected until the earlier of the two following periods: 70 years from the publication; or 100 years from the date of fixation. This is increased form 50 years from fixation (s.23(1.1)).

Monday, June 1, 2015

Federal Court Weighs In On Copyright and Trademarks Rights in Metatags

In Red Label Vacations Inc. ( v. 411 Travel Buys Limited (, the Federal Court had occasion to consider whether using metatags could constitute copyright infringement, trademark infringement, passing off or depreciation of goodwill. Justice Manson dismissed all of these claims. This decision is of particular interest since the reasons (partly) extend beyond the facts of the case and make a broader legal statement on the status of metatags as IP in Canada.

A metatag is a piece of information contained in a webpage’s code. Its purpose is to describe the contents of the page to help search engines place the page in search results based on the search terms used. In this case, the Defendant used metatags that were either identical or very similar to the Plaintiff’s registered trademarks. It also evidently copied these metatags from the source code on the Plaintiff’s website. 

On the copyright claim, the Court had to determine whether the Defendant’s metatags met the originality requirement and, if so, whether a substantial part of the Plaintiff’s ‘work’ was copied. Justice Manson surveyed some cases that have addressed metatags. He cited Justice Hughes in Netbored Inc v Avery Holdings Inc in which, without speaking determinatively on the issue, Justice Hughes casted doubt onto whether metatags were protected by copyright.       
Justice Manson did not pronounce definitively on whether metatags were susceptible to being protected by copyright in general. Rather, he found that there was no copyright infringement because of a lack of originality on the facts of the case. The metatags used by the Plaintiff were largely copied from a Google keyword list. There was therefore insufficient skill and judgement exercised for the Plaintiff’s metatags to merit copyright protection. 

Even if the Plaintiff’s metatags did benefit from copyright protection, the Court found that the Defendant did not copy a substantial part of the overall work. The record showed that the Defendant copied the metatags on 48 individual pages of the 180,000 pages that make up the Plaintiff’s website. While recognizing that substantiality in copyright law is a qualitative and not quantitative measure, the Court refused to find infringement based on the small number of words copied even though they were identical to the metatags found on the Plaintiff’s site. 

On the passing-off and trademark infringement claims, the Court found that there was no likelihood of confusion. Even though using the metatags may have caused consumers to be presented with the option of navigating to the Defendant’s website, the website itself did not masquerade as the Plaintiff’s. This makes it unlikely that a user would be confused into thinking the Defendant was actually the Plaintiff. This reasoning applies more broadly to any instance in which a defendant, though using the plaintiff’s trademarks as metatags, does not represent itself as the plaintiff on its actual website. 

The Court refused to import the so called “initial interest confusion” doctrine applied by some United States courts. Under this theory, an infringement may be found when a potential customer’s initial interest is drawn away from the plaintiff’s offering and towards those of the defendant through use of the plaintiff’s trademark. The Court noted that even if it were disposed to consider initial interest confusion, the doctrine did not apply in the present case. This is because there must ultimately still be confusion as to the source of the goods. Once a person navigates to the Defendant’s website, it is immediately apparent that the site is not affiliated with the Plaintiff’s business. 

The claim for depreciation of goodwill under Section 22 of the Trade-marks Act was also rejected. Citing Veuve Clicquot Ponsardin v Boutiques Cliquot Ltée., the Court found that the Plaintiff’s trademarks were not being used as registered and that the claim under Section 22 must fail on that basis.

Whether metatags should be copyrightable is an open question. Some may say that they should be in principle, so long as they are original either in content or in their organization. For my part, I am doubtful as to whether they should qualify as a work. While it is settled law that a work need not be in a human readable format to attract copyright protection, the metatags are never really viewed in any format. They do not appear as an image or colour or effect on a website; they exist solely as a tool to help search engines index webpages.

Consider a fishing analogy: the website (the actual work) is the fish. The search engine is like a sonar fish finder and the metatags are sonar reflections that give away the positions of the fish. The sonar reflections are not the fish themselves. Likewise, the website is the protected work, not the metatags which simply help one find the website. 

While this is an interesting point of debate, I think the implications on trademark law are far more important. This decision demonstrates how the current trademark legal regime is ill-equipped to address an unfair business practice relating to the use of trademarks. 

I am not certain that it should. At the heart of trademark law is the effort to eliminate consumer confusion and allow consumers to be reasonably certain as to the origin of the goods and services they purchase. As the Court found here, that goal is not served by rending use of a trademark as a metatag infringement. While some may consider it a dubious business practice, the absence of confusion takes this scenario out of the realm of trademark law and into the realm of unfair competition. As the Federal Government has learned, it must be careful in how it attempts to address those issues under the Trade-marks Act lest the provision be struck down on constitutional grounds like Section 7(e).

Arguably the Court’s decision on the Section 22 claim was fact specific and leaves the door open to claims of depreciation when the trademark is used by the Defendant exactly as registered. In the absence of a claim in passing-off or trademark infringement, trademark owners may yet be able to avail themselves of that remedy when their competitors use their trademarks as metatags.

Sunday, January 25, 2015

Labrecque c. Trudel – The Tale of a Copyright Infringement Action Gone Wrong

In Canada, a copyright infringement action may be brought before either the Federal Court or the Superior Court of a province. The Federal Court is generally favoured by litigants given its experience with copyright law. The Superior Court of Quebec’s decision in Labrecque (O Sauna) c. Trudel (Centre Bellaza, s.e.n.c.) exemplifies why that is, and also why it is prudent to assure that your lawyer is up on his or her copyright law. 

One of the photos in question
Plaintiff, a sauna manufacturer and distributer, entered into negotiations with Defendant who was seeking to purchase a sauna for a beauty/wellness center (which ultimately never opened). The deal went sour and resulted in litigation. Defendant had registered a domain name where it posted images of saunas belonging to Plaintiff; Plaintiff was posing in the photos (pictured to the left). Defendant found the images in a Google image search.

Plaintiff sued Defendant asking for $1,500 in compensatory damages and $5,500 in punitive damages. The claim was based on provisions of the Quebec Charter of Human Rights and Freedoms (Quebec Charter) and Civil Code of Quebec (C.c.Q.) dealing with the right to privacy:

Article 5 – Quebec Charter

 “Every person has a right to respect for his private life”

Article 35 C.c.Q.
Every person has a right to the respect of his reputation and privacy.
No one may invade the privacy of a person without the consent of the person unless authorized
by law.

Article 36 C.c.Q.
 The following acts, in particular, may be considered as invasions of the privacy of a person: 

(5) Using his name, image, likeness or voice for a purpose other than the legitimate information of the public.”

Gervais J. did not accept Plaintiff’s arguments based on these provisions. He found that since Plaintiff posted the images online herself, they could hardly be considered “private”. The Court did find that Defendant infringed Plaintiff’s copyright. 

In addition to more minor errors, such as equivocating between a domain name registrar and internet service provider (para. 22), or imputing a Canadian citizenship requirement for an author’s work to be protected in Canada (para. 44), the Court conflated the legal analysis for calculating damages and accounting of profits. Of course, none of this mattered in the end as the Court decided to, seemingly arbitrarily, award Plaintiff $400 in damages without justifying that calculation. The Court also cited repealed provisions of the Copyright Act (“Act”) to determine whether Plaintiff actually owned rights in the photographs, though Gervais J. did acknowledge his awareness that the provisions had been repealed. 

Since Defendant never launched a business, Plaintiff was unable to prove that it suffered losses resulting from the infringement. This would have been a perfect occasion for Plaintiff to take advantage of the Act’s new statutory damage provisions. Since these were arguably “commercial” infringements, Plaintiff would have been awarded $500-$20,000 per image, at the court’s discretion (s. 38.1(1)(a)). Electing statutory damages would also not have prevented Plaintiff from seeking punitive damages (s. 38.1(7)), though none appear to be merited in this case. 

Counsel for Plaintiff also curiously failed to ask the Court for an injunction forcing Respondent to remove the images from the website. This would have been appropriate given that Plaintiff only found out about the images from other customers asking whether Plaintiff was affiliated with the website. Plaintiff has an interest in ending that confusion.

This appears to be a case in which nearly everything that could go wrong did. While the Court rightly found that Defendant infringed Plaintiff’s copyright, the $400 damage award was entirely baseless. Gervais J. noted that Plaintiff did not prove that it suffered any damages or that Defendant made any profits. However, he states that even though he could find no quantifiable harm, the jurisprudence gives judges broad discretion on whether and how much to award a successful party in a copyright claim. Gervais J. fails to cite any authority for this statement. Upon a finding of infringement, the court does not have any discretion to refuse proven damages. Accounting of profits is an equitable remedy and it is therefore at the court’s discretion whether it should be granted; but once the court decides to allow an accounting, the manner in which the accounts are calculated should not be seen as discretionary. 

Counsel for Plaintiff’s reliance on Article 5 of the Quebec Charter and Articles 35-36 C.c.Q. was misguided. As Gervais J. rightly pointed out, the right to privacy under Article 35 C.c.Q. and Article 5 of the Quebec Charter cannot be engaged when the information (or in this case image) is already in the public domain. This is consistent with the Supreme Court of Canada’s 2004 decision in Gilles E. Néron Communication Marketing Inc. v. Chambre des notaires du Québec.

The Court found as a matter of fact that Defendant had no malicious intent in using Plaintiff’s images and that they were not trade competitors. The claim for punitive damages was therefore rightly recognized by the Court as unwarranted. 

Failing to ask for statutory damages was a major oversight. It was obvious that no real injury occurred. Since Defendant never launched a business, it is debatable whether it was truly a “commercial infringer”. In any event, Plaintiff would have been entitled to damages under s. 38.1(1) of the Act. 

By far the funniest paragraph in the decision (para. 22) is where Gervais J. relays Defendant’s testimony regarding its domain name registration. Defendant testified that since it signed a three-year contract with the “internet service provider”, it could not remove the content before that time was up. Such a counter-factual argument did not, however, noticeably diminish Defendant’s credibility with the Court considering Gervais J.’s low damage award.