Sunday, May 29, 2011

Shaw shakes things up: New high bandwidth packages may put the squeeze on other providers

Shaw Communications, one of Canada’s major internet and cable providers took a step forward in announcing a host of new internet service plans with markedly higher download speeds and bandwidth caps. 
This move by the provider is evidently a direct response to the popular “internet rebellion” taking place among Canadian consumers. This move by Shaw lends credibility to critics who say that usage based billing is nothing more than a revenue stream. To quote prof. Michal Geist’s blog: “it is not about network congestion nor about paying for what you use. Rather, UBB in Canada is simply a cash grab by network providers with sufficient market power to demand it.”

Image by gsagri04
The move by Shaw came after customer consultations held by the company where customers had the opportunity to air their grievances with the company.  According to an attendee of a March 28th consultation, Shaw representatives essentially admitted that their UBB pricing scheme is a blunder and that they “were open to considering anything”.  

The sincerity of these statements is not the topic of discussion of this article. The numbers on the other hand do merit mention.  According to prof. Geist, for $69.00, Shaw is offering 500GB of bandwidth with 100Mbps download speed. For the same $69.00, Rogers offers 125GB and 25Mbps download speed. Bell’s fastest commercially available plan (Fiber 25) only offers 25Mbps download speed with 100GB of bandwidth for $55-$58 (depending on what Province you reside in). 

From one perspective this move by Shaw is truly a breath of fresh air.  I have commented before that there are two ways to resolve the internet situation in Canada.  One is through stricter regulation on what is and is not acceptable by the CRTC; the other is to allow the market to self-correct this issue through healthy competition.  The CRTC does not set prices precluding the first option. As for the second, it was previously believed that there simply weren’t enough players in Canada (unlike the United States) to instigate a real change in pricing.  

Shaw has, to some extent, debunked this notion.  The question now becomes how impactful this move by Shaw (particularly for those outside its service area who cannot opt for one of these new plans) really is.
Some say people outside the Shaw service will be wholly unaffected by this change.  Others may say that even a regional shift in pricing can have a national effect.  If Bell lowers its rates to compete with Shaw in one market but leaves its prices at the current level in other markets, surely consumer outrage would follow.  Or perhaps a massive and unjustified inequality like this will boot the CRTC into action as this shifts from a price setting issue to a national price uniformity issue.  

Regardless, this move by Shaw represents the first step (be it a large or small one) in the direction of eliminating the oppressive bandwidth caps plaguing Canadian consumers.

Thursday, May 26, 2011

The Arrival Of The .XXX Domain: ICANN Approves

The long awaited arrival of the .xxx suffix is upon us.  Later this year for the first time, registrants will be able to register websites with this controversial web suffix.  

.xxx is a "sponsored top level domain" (sTLD) which means that unlike "generic top level domains" (gTLD) like .com, .net or .org, it requires sponsorship by an organization representing a specific community or industry.  Existing examples include “.museum” (sponsored by the Museum Domain Management Association) or “.travel” (Tralliance Corporation).  .xxx is sponsored by the International Foundation for Online Responsibility.

photo by mikeleeorg
The Internet Corporation for Assigned Names and Numbers (ICANN) extended preliminary approval to .xxx in 2005.  Even before then it had been met with heavy opposition from both right wing and religious groups and- quite surprisingly- the pornography industry. The latter felt that .xxx may lead to the facilitation of censorship by search engines.  They also feared that the hype and noise about the domain may elicit an unwanted legislative response from American Congress or other governments. 

The Governmental Advisory Committee (GAC) has also made its opposition known.  In one of its submissions to ICANN regarding the approval process, the GAC hinted that this decision “might lead to steps taken by some governments to prohibit access to this TLD”.  This however did not stop ICANN from finally approving the application by ICM Registry LLC (the registry that operates the .xxx domain).

This presents a puzzling picture.  The oposers of .xxx are not just the conservative/religious “usual suspects”. The pornography industry itself is, in large part, against the move.  Why then is ICANN going ahead with the domain if it is opposed by the very community it is intended for?

Well, it seems that ICANN is under the impression that the application complies with all of the policy concerns outlined in the GAC communiqué such as     “taking appropriate action to restrict access to illegal and offensive content” and to “ensure the protection of intellectual property and trademark rights, personal names, country names...” The ICANN Board gives reasons for its decisions here

ICANN also doesn’t hesitate to point out its vast discretionary power vested by the California Corporations Code.  Section 309 of the aforementioned law states that a director of a corporation is obliged to act:

 “in good faith, in a manner such director believes to be in the best interests of the corporation and its shareholders and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.”

The ICANN Board believes that its actions are consistent with this standard and until challenged, this remains the presumption.  This law however, presents a rather high threshold in that proving bad faith on the part of the Board represents no small task. 

Otherwise, it would have to be shown that ICANN’s decision was counter to what a “normal person” would do in the same circumstances. There are loud voices on both sides of the fence on this issue. That fact alone shows that the “best interest” in this case is hotly and contentiously debated and would render any decision made by ICANN (excluding one made in bad faith) consistent with this law.

As for the divergence of opinion within the adult entertainment industry itself, ICANN chose to hide behind the 2005 decision of the Independent Review Panel (IRP) stating that it will not revisit the decision already rendered.  I suppose this can be chalked up to the “discretionary power” of ICANN. Still, it is a rather unconvincing response considering the circumstances. 

Finally, what of businesses and trademark owners outside the adult entertainment industry who wish to prevent their marks from being registered with a .xxx suffix?  ICM Registry will implement a pre-launch protection mechanism called “Sunrise B”.  In the month of September, for a period of approximately 30 days, businesses and trademark owners will be able to pre-emptively opt-out (for a fee- between $200-$300 USD) thereby protecting their trademark form being registered with a .xxx suffix.

ICANN admits that a decision like this one comports both positive and negative impacts.  It is quite sure however, that the good will outweigh the bad in this case.  They say that the negative impact will concern people opposed to the .xxx domain in the first place.  ICANN’s position is that unanimity in the community is unrealistic and waiting for such unanimity would present a barrier to progress- not an altogether unconvincing argument.

It will be interesting to see how this situation plays out.  Will the Sunrise B program be an effective deterrent to what would otherwise be an impending flood of trademark litigation? Will governments go so far as to enact legislation restricting or prohibiting access to the .xxx domain? One thing is certain. The internet is about to undergo an image change that may render its appearance far less wholesome; even if adult content is already as pervasive as ever without .xxx.

Monday, May 23, 2011

Showdown Between Dental Associations at the Trademark Opposition Board

When I read the summary of this TMOB case I just knew I had to write about it. This is a perfect example of the absurdity that can result from time to time in the IP world.  

In a decision dated January 24th 2011, the trademark opposition board ruled in favour of the Canadian Dental Hygienists’ Association in their effort to foil the Canadian Dental Associations attempt to register a trademark for “NATIONAL DENTAL HEALTH MONTH/MOIS NATIONAL DE LA SANTÉ DENTAIRE”.

The Board member ruled that the mark was invalid on two grounds: 

First, The CDHA (opponent) was successful in convincing the board that the CDA’s (applicant) marks was confusing with their own: “NATIONAL DENTAL HYGIENE WEEK/SEMAINE NATIONALE DE L’HYGIÈNE DENTAIRE”.  It was found that the marks were very similar in appearance and that the nature of the trade or service undertaken by the parties was- though not identical- quite similar.  That coupled with the Board’s conclusion that CDA did not provide any evidence of use of the mark was sufficient to cause confusion in the eyes of the average consumer. 

Second, the Board found that the mark was descriptive of the service and therefore not eligible for registration under the trademark act. The CDA disclaimed all the individual words in the mark claiming benefit of protection on the whole phrase only.  The Board found that the phrase in English and its French translation were both descriptive in the respective language.  

The CDA argued for a narrow interpretation of section 12(1)(b) TMA which says that a mark is may not be registered when:

(b) Whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language (emphasis added).

They argued that the mark is only invalid if it is descriptive or deceptively misdescriptive in English OR French and not when it is descriptive in both languages at the same time.  

In the past, the TMOB has interpreted this section to mean that a mark composed of words in both English and French can escape the fate of invalidity even though the individual words may be purely descriptive in either language. For example, in Coca-Cola Co. v. Cliffstar Corp (1993), 49 C.P.R. (3d) 358 (T.M.O.B.), the Board allowed the registration of “LE JUICE” even though each word on its own would not be eligible for protection nor would the mark if both words were in either English or French (“THE JUICE” or “LE JUS”).
In this case however, the Board member found that argument unconvincing. Including a mere translation of a descriptive phrase does not make the mark as a whole any less descriptive. The English version is descriptive in English and the French version is descriptive in French. Allowing the mark in this case would be a misinterpretation of parliament’s intentions in enacting the measure. 

Ironically, the Board member mentioned in passing that it was not her place in the course of this matter to comment on the descriptive nature of the opponents mark.  In claiming that the CDA’s mark is confusing with their own and then claiming that the mark is descriptive they essentially labeled their own mark as descriptive.  One can’t help but laugh at this instance of pot and kettle.

Though I completely agree with the ruling of the Board in this case, I think it represents somewhat of a low point in the world of trademarks.  After all, these are two non-profit entities whose common mission is the promotion of dental health and hygiene in Canada.  The fact that these two bodies are registering and opposing trademarks of this nature is kind of sad.  The fact that tax payer dollars are going into settling these matters is both sad and frustrating. 

But hey, at least internet is affordab…forget it.

Sunday, May 22, 2011

Is ‘App Store’ an Apple trademark?

For decades, owners of trademarks on celebrated brands such as “Band-aid” and “Ziploc” have fought vigorously to keep those marks from becoming generic.  A generic trademark is one that, through common use, has come to symbolize an entire category of products or services rather than the specific offering of the company that originally employed the mark.  

Famous examples of marks that have been canceled because they were found to be generic include Aspirin, Thermos, Zipper, Escalator, Philips-head screwdriver and Heroin (originally owned by Bayer AG).  At one time these marks were owned by large firms.  Now, through the very dominance they gained in the marketplace, these marks have become generic and therefore no longer the exclusive intellectual property of the registrant. 

Apple is currently facing such a situation with its trademark application for “App Store”.  Apple applied for a mark on “App Store” in 2008.  Recently, Microsoft has opposed the registration claiming that the term has become generic.

The only real way to prevent a mark form becoming generic is to litigate against anyone who employs it.  Fortunately for them, Apple seems to have no problem litigating.  That’s probably why they just filed an injunction against Amazon in an effort to prevent them from launching their new online “App Store” under that name.

Some might argue that they’re too late.  In their filing, Microsoft points out the widespread use of the term App Store in the news media and common vernacular. They also cite an instance where Steve Jobs himself referred to the competition’s “App Stores” in a speech. We have yet to see if the US Patent and Trademark Office will find this convincing enough proof to conclude the generic nature of the term. 

I am of the opinion that Microsoft’s council, Mr. William O. Ferron Jr. Of Seed IP Law Group PLLC, should have argued alternatively that “App Store” is merely descriptive of the service being offered. 
Both The New Oxford Dictionary and Merriam-Webster Online define “app” as short for “application”.  In the trademark application, Apple disclaims the word store.  We wouldn’t feel tempted to award a trademark on “shoe store” or “toy store” if an establishment sold shoes or toys.  Why should an app store that sells apps be treated any differently? 

It should be interesting to see how this plays out considering other companies like Shopify and DirectTV (to name just two of many) have their own App Stores.  I suppose it isn’t surprising that a case involving Apple, Amazon and Microsoft would be watched with bated breath by the tech community at large.