E-TIPS® Year in Review 2012

Our New Year’s Gift to Readers: The 2012 Year in Review
As in previous years, the E-TIPS® writers at Deeth Williams Wall LLP are pleased to present our readers with a reminder of the most important technology and intellectual property law stories of the preceding year. This 2012 Year in Review has been prepared by Lauren Lodenquai and Darren Hall.

In addition, you will find on the Deeth Williams Wall web site an easy-to-use archive of all E-TIPS® articles published since the inception of the service in 2002 (searchable chronologically by publication date, or by words and phrases). Simply click here to access the concordance to that database.

Also, there are two other database resources you may want to consult, and these relate to two sub-categories of information found within the E-TIPS® service that have been very popular with our readers: the Canadian Inventions and Inventors Series (compiled by Richard Murphy) and the Canadian Designs and Designers Series (compiled by Jennifer Jannuska). Your feedback has told us that many readers have found these mini-articles both entertaining and educational. If you want to refresh your memory about them (or challenge your friends and colleagues about the amazing facts contained in them), just click on the two links in this paragraph under the titles of the two series, and then follow the links. (You can also find links to these mini-articles at the foot of this newsletter).

Throughout 2012 our goal will continue to be this: to highlight for our readers the significant issues and events involving E-commerce, Technology and Intellectual Property (E-TIPS®), from the perspective of practitioners located in Canada, but with an international perspective.

January – The Ontario Court of Appeal confirmed, for the first time in Canada, the existence of a common-law privacy tort for intrusion upon seclusion. In Jones v Tsige, (2012 ONCA 32), the defendant bank employee (Tsige) accessed the plaintiff’s (Jones’) banking records without authorization over a four-year period. The Court awarded Jones $10,000 in damages, and set the upper limit for ordinary damages at $20,000 (E-TIPS® Vol 10, No 14, January 25, 2012).

We also reported on the abandonment of the proposed US Stop Online Privacy Act (SOPA) and Protect IP Act (PIPA) legislation, which would have allowed the US Attorney General and copyright holders to block infringing web sites. The abandonment followed a protest against the legislation in which thousands of web sites, including Wikipedia, shut down for 24 hours (E-TIPS® Vol 10, No 14, January 25, 2012).

February – We noted the US Supreme Court decision in United States v Jones, in which the Court held that the act of police in attaching a GPS device to an individual’s vehicle and continuously monitoring its movements on public streets without a warrant violated that individual’s rights under the Fourth Amendment to the US Constitution (E-TIPS® Vol 10, No 15, February 8, 2012).

The Supreme Court of Canada clarified the extent to which information in a third party’s new drug submission will be exempt from disclosure under the Access to Information Act. In Merck Frosst Canada Ltd v Minister of Health, (2012 SCC 3), the Court described when notice should be provided prior to disclosure of information and outlined the scope of statutory exemptions to disclosure in the context of new drug submissions (E-TIPS® Vol 10, No 16, February 22, 2012).

In Reference re Broadcasting Act, (2012 SCC 4), the Supreme Court of Canada ruled that ISPs are not subject to the Broadcasting Act in providing access to television programs over the Internet, so long as they merely provide the mode of transmission and take no part in the selection, origination and packaging of content (E-TIPS® Vol 10, No 16, February 22, 2012).

March – In Celgene Inc v Canada (Minister of Health), (2012 FC 154), the Federal Court of Canada granted data protection to Celgene’s THALIDOMID, although the medicinal ingredient in that drug had been previously approved in Canada (E-TIPS® Vol 10, No 17, March 8, 2012).

In Richard v Time et al, (2012 SCC 8), the Supreme Court of Canada ruled that the question whether advertising is misleading under the Québec Consumer Protection Act should be answered from the perspective of a “credulous and inexperienced consumer”, and that this perspective was similar to the perspective of the “ordinary hurried purchaser” in determining whether a trade-mark is confusing under the Trade-marks Act (E-TIPS® Vol 10, No 17, March 8, 2012).

Also in March, the UK High Court ruled that the host of a blogging site which displayed defamatory content posted by third parties will not be found liable for defamation. In Tamiz v Google et al, [2012] EWHC 449 (QB), the Court found that Google, the defendant blog host, was not liable as a publisher because it did not have effective control over the blog’s publication activities (E-TIPS® Vol 10, No 18, March 21, 2012).

We reported the case of USA v Flores-Lopez, in which the US Court of Appeals for the Seventh Circuit held that law enforcement agents are authorized to search a suspected drug trafficker’s cell phone without a warrant, if the search is limited to obtaining the cell phone’s number (E-TIPS® Vol 10, No 18, March 21, 2012).

April – We reported a ruling of the Federal Court of Canada in which the validity of a sound mark was recognized for the first time in Canada. In Metro-Goldwyn-Mayer Lion Corp v Canada (A-G), the Federal Court directed the Registrar of Trade-marks to approve the registration of Metro-Goldwyn-Mayer’s trade-mark consisting of the sound of its signature lion’s roar, which has been featured in its films since 1928 (E-TIPS® Vol 10, No 19, April 4, 2012).

In a related development, the Registrar of Trademarks published proposed amendments to the Trade-marks Regulations allowing for the registration of non-traditional trade-marks including holograms, sound and motion marks (E-TIPS® Vol 10, No 19, April 4, 2012).

Also in April, we reported the case of Mayo Collaborative Services v Prometheus Laboratories Inc in which the US Supreme Court rejected two patents for the administration and use of thiopurine drugs to treat auto-immune diseases on the basis that the patents claimed laws of nature. The Court held that the claimed processes merely embodied the natural correlation between the patient’s metabolic rate and dosage amount, and did not set forth an inventive concept transforming the natural law into a patentable invention (E-TIPS® Vol 10, No 19, April 4, 2012).

May – We noted the case of Roadshow Films Pty Ltd v iiNet Limited ([2012] HCA 16), in which the High Court of Australia held that an ISP was not liable for authorizing copyright infringement by failing to stop its subscribers from illegally downloading copyrighted material using the BitTorrent protocol (E-TIPS® Vol 10, No 21, May 2, 2012).

We also noted the German case of GEMA v YouTube (310 0 461/10), in which GEMA, a German copyright collective society, sued YouTube for copyright infringement. In that case, the Hamburg District Court found YouTube liable for allowing users to post infringing content, and ordered YouTube to install software to block uploads of content subject to a prior copyright violation (E-TIPS® Vol 10, No 21, May 2, 2012).

In Druet v Girouard (2012 NBCA 40), the New Brunswick Court of Appeal ruled that, in principle, an exchange of e-mails can result in a binding contract for the sale of land. The Court relied on the “joinder” principle, declaring that e-mails exchanged referring to one another by fair and reasonable inference, though not doing so explicitly, still form a valid contract (E-TIPS® Vol 10, No 22, May 16, 2012).

Also in May, we noted Parliament’s amendment of the Telecommunications Act permitting foreign ownership of Advanced Wireless Services Entrants (AWSEs), telecommunications carriers having less than 10% share of the Canadian market by revenue (E-TIPS® Vol 10, No 22, May 16, 2012).

June – We noted five Federal Court of Canada decisions on damages under section 8 of the Patented Medicines (Notice of Compliance) Regulations (Section 8). The decisions addressed a party’s entitlement to Section 8 damages, quantification of Section 8 damages, and the availability of defences to Section 8 damage claims. The decisions further affirmed the validity of section 8 and shed light on how damages are to be quantified (E-TIPS® Vol 10, No 24, June 13, 2012).

We reported on the Office of the Privacy Commissioner of Canada’s acceptance of online behavioural advertising, provided that certain safeguards are present to ensure informed consent and protection of personal information (E-TIPS® Vol 10, No 25, June 27, 2012).

In addition, we reported on the defamation case of Baglow v Smith, (2012 ONCA 407), in which the Ontario Court of Appeal ruled that a trial was necessary to fully appreciate statements posted on a political blogging site and to properly address issues involving defamation on a political blog (E-TIPS® Vol 10, No 25, June 27, 2012).

July – We reported on the European Parliament’s rejection of the Anti-Counterfeiting Trade Agreement (ACTA), an international treaty targeting counterfeiting and unauthorized copying and communication of protected works over the Internet, among other activities. ACTA’s rejection apparently resulted from a lack of public consultation in its development and concerns regarding its impact on consumer privacy and civil liberties (E-TIPS® Vol 11, No 1, July 11, 2012).

Also in July, we reported the five copyright decisions handed down by the Supreme Court of Canada (SCC or Court). The decisions clarified the scope of user rights and owner’s rights under the Copyright Act (E-TIPS® Vol 11, No 2, July 25, 2012).

In Entertainment Software Association v SOCAN, (2012 SCC 34), in a 5-4 split decision, the SCC held that the act of downloading a video game containing a protected musical work over the Internet is a reproduction and not a communication of the work to the public by telecommunication. The Court also explained that the copyright owner’s communication right is not an independent right, but is merely one example of the owner’s reproduction, performance, or publication rights.

In Rogers Communications Inc v SOCAN, (2012 SCC 35), the SCC unanimously held that the act of streaming a protected musical work over the Internet is a communication of the work to the public by telecommunication. In arriving at the conclusion that work had been communicated “to the public”, the Court had regard to the true nature of the activity, the principle of technological neutrality and the business context in which the communication was made.

In SOCAN v Bell Canada, (2012 SCC 36), the SCC unanimously held that offering 30-to-90-second streamed previews of protected musical works over the Internet was fair dealing, and therefore exempt from infringement. The Court held that the allowable purpose of “research” should be interpreted liberally and from the perspective of the user.

In Alberta (Education) v Canadian Copyright Licensing Agency, (2012 SCC 37), the Court held, in a 5-4 ruling, that a teacher’s act of providing short excerpts of textbooks to students was fair dealing and therefore exempt from infringement.

In Re: Sound v Motion Picture Theatre Associations of Canada, (2012 SCC 38), the SCC unanimously held that a “pre-existing sound recording” is part of the soundtrack of a cinematographic work (film and television) and therefore is not a “sound recording” as defined in the Act. On that basis, the Court went on to deny a tariff compensating copyright holders for the use of pre-existing recordings in film and television.

August – In Repligen Corporation v Canada (Attorney General) 2012 FC 931, the Federal Court of Canada ordered the Commissioner of Patents to reconsider its refusal to correct a clerical error in circumstances where an agent of Repligen Corporation made a transposition error and paid a maintenance fee to a patent owned by Rolls-Royce, causing Repligen Corporation’s patent to lapse. The Court ruled that the Commissioner’s exercise of discretion should reasonably reflect the interests of Repligen and Rolls-Royce, as both attempted to comply with maintenance fee provisions. In November, the Patent Office entered the correction (E-TIPS® Vol 11, No 3, August 8, 2012).

In Imperial Tobacco Canada Limited v Philip Morris Products SA, the Canadian Federal Court of Appeal overturned a judgment of the Federal Court and ruled that no-name packages (red, gold and silver version) used by Philip Morris infringed Imperial Tobacco’s rights in the registered trade-mark MARLBORO. The Supreme Court of Canada has not yet ruled on Philip Morris’ application for leave to appeal (E-TIPS® Vol 11, No 3, August 8, 2012).

Also in August, we reported that the US District Court for the Eastern District of Missouri found DuPont liable for infringing Monsanto’s Roundup Ready® soybean patent. Although DuPont experimented with the technology but never commercialized or generated profit, damages were awarded to Monsanto in the extraordinary amount of $1 billion. DuPont indicated an intention to appeal (E-TIPS® Vol 11, No 4, August 22, 2012).

September – We reported in April that the US Supreme Court ordered reconsideration of a ruling of the US Court of Appeals for the Federal Circuit allowing Myriad Genetics Inc to patent the BRCA1 and BRCA2 genes linked to breast and ovarian cancers in light of the US Supreme Court decision in Mayo Collaborative Services v Prometheus Laboratories (E-TIPS® Vol 10, No 19, April 4, 2012). In Association for Molecular Pathology v Myriad Genetics, Inc the US Court of Appeals for the Federal Circuit affirmed the patentability of isolated DNA on the basis these molecules are “markedly different” from DNA in the human body (E-TIPS® Vol 11, No 5, September 5, 2012).

In Akamai Tech v Limelight Networks, the Court of Appeals for the Federal Circuit found that liability for induced patent infringement may be found even where no single actor performs, or controls the performance of, every step in a method claim (E-TIPS® Vol 11, No 6, September 19, 2012).

In Christian Louboutin SA v Yves Saint Laurent Am Holding Inc, the US Court of Appeals for the Second Circuit ruled that fashion-designer Christian Louboutin’s women’s high-heeled shoe design with a red-lacquered outsole was entitled to trade-mark protection, but only so far as the outsole contrasts with the upper portion of the shoe (E-TIPS® Vol 11, No 6, September 19, 2012).

October – In AB v Bragg Communications Inc, the Supreme Court of Canada ruled that an underage victim of a cyber-bullying attack may sue the perpetrator anonymously and obtain a publication ban on information identifying the victim (E-TIPS® Vol 11, No 7, October 3, 2012).

After reconsideration of the matter as ordered by the Supreme Court of Canada in July 2012, the Copyright Board of Canada ruled that the photocopying of textbooks for classroom instruction was made under the “research or private study” fair dealing exception and is not subject to royalties (E-TIPS® Vol 11, No 7, October 3, 2012).

Also in October, we reported that the US Patent and Trademark Office introduced a new series of post-grant patent review mechanisms to be used by the new Patent and Trials Appeals Board under the Leahy-Smith America Invents Act that are designed to improve the quality of issued patents and shorten the re-examination process. Two such mechanisms are the Post-Grant Review (PGR) and Inter-Partes Review (IPR), which offer third parties different ways to challenge the validity of issued and reissued patents (E-TIPS® Vol 11, No 7, October 3, 2012).

The Ontario Court of Appeal upheld a conviction for possessing and accessing child pornography based on the release of information by an ISP to police. The Court noted that anonymity, to some degree at least, is a feature of much Internet activity, and in some circumstances an Internet user’s anonymity may enjoy constitutional protection. However, in this case, considering the totality of the circumstances, this expectation was not objectively reasonable (E-TIPS® Vol 11, No 8, October 17, 2012).

In Weller v Reliance Home Comfort Limited Partnership, the Ontario Court of Appeal ruled that suppliers must strictly adhere to the requirements in the Ontario Consumer Protection Act (Act) and its regulations for amending, renewing or extending a “remote agreement” (a consumer agreement entered into when the consumer and supplier are not present together). Section 42(2) of Regulation 17/05 under the Act requires that a supplier’s proposal to amend, renew or extend a remote agreement give the consumer an option to either terminate the agreement or retain the existing agreement unchanged. (E-TIPS® Vol 11, No 8, October 17, 2012).

Also in October, we reported the release of guidelines by the Canadian Radio-television and Telecommunications Commission to assist businesses in complying with Canada’s anti-spam legislation, namely, Guidelines on the use of toggling as a means of obtaining express consent under Canada’s anti-spam legislation and Guidelines on the interpretation of the Electronic Commerce Protection Regulations (E-TIPS® Vol 11, No 8, October 17, 2012).

In R v Cole, the Supreme Court of Canada confirmed that employees have a reasonable expectation of privacy in the information contained on work computers provided that personal use on the computers is permitted or reasonably expected (E-TIPS® Vol 11, No 9, October 31, 2012).

In Bodum USA, Inc v Trudeau Corporation, the Federal Court of Canada found that Trudeau Corporation did not infringe either of two Bodum USA industrial designs registered for double-wall glasses, and also found that both registrations were invalid. Bodum USA has filed an appeal (E-TIPS® Vol 11, No 9, October 31, 2012).

November – In Teva Canada Ltd v Pfizer Canada Inc, the Supreme Court of Canada ruled that Pfizer Canada Inc’s (Pfizer) Canadian Patent No 2,163,446 for sildenafil (the active ingredient in VIAGRA) is invalid and void because it fails to satisfy the disclosure requirements of the Patent Act. However, a declaration that the disputed patent is void is not typically available as a remedy in proceedings under the PM(NOC) Regulations where the issue is whether the generic’s allegation of invalidity is justified (E-TIPS® Vol 11, No 10, November 14, 2012). Pfizer has brought a motion to amend the judgment or for a re-hearing of the appeal on the basis that the SCC “accidently and inadvertently granted the remedy in this appeal that exceeds its jurisdiction” (E-TIPS® Vol 11, No 12, December 12, 2012).

Collectively, the Privacy Commissioner of Canada and the Information and Privacy Commissioners of Alberta and British Columbia released a guidance document to help mobile app developers understand their obligations under Canada’s privacy laws, and how to comply with them in the design and development of apps (E-TIPS® Vol 11, No 10, November 14, 2012).

We also reported that major amendments to Canada’s Copyright Act came into force on November 7, 2012. The changes include fair dealing provisions to include parody, satire and educational uses; anti-circumvention provisions for technological protection measures; a new “making available” right for performers; photographs harmonization provisions; protection for certain non-commercial uses; exemptions for educational institutions; exemptions for certain technical reproductions, such as for security and encryption research; and amendments to the statutory damages scheme to separate commercial and non-commercial infringing uses (E-TIPS® Vol 11, No 11, November 28, 2012).

December – Eli Lilly & Co (Lilly) has filed a Notice of Intent to Submit a Claim to Arbitration under NAFTA Chapter Eleven, in which it seeks consultations to have the Government of Canada rectify certain patent laws that Lilly asserts violate Canada’s obligations under NAFTA. Lilly argues that invalidating patents for lacking utility based on the “promise doctrine” is unique to Canada and is inconsistent with Canada’s commitments under the NAFTA and TRIPS treaties.

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