2005
 
MEGA BLOKS WINS PLAYROOM BATTLE WITH LEGO 
On November 17, 2005, the Supreme Court of Canada released its long anticipated decision on the issue of whether or not functional aspects of products can be afforded trade -mark protection in Canada. The answer, according to the full panel of nine Supreme Court Justices in Kirkbi AG and Lego Canada Inc. ("Lego") v. Ritvik Holdings Inc./Gestions Ritvik Inc. (now operating as Mega Bloks Inc.) ("Mega Bloks"), is a resounding No.Lego has for many years manufactured very popular interlocking building blocks for children. The system of interlocking knobs that holds the blocks together was the subject of various patents in Canada, the last of which expired in 1988. Upon expiry of the Lego patents, Mega Bloks began manufacturing similar blocks using the same interlocking method. Faced with the loss of its monopoly granted by patent, Lego attempted to use other forms of intellectual property law to maintain its dominance in the market place. Lego attempted to register the pattern of raised studs on the top of its blocks (the "Lego Indicia") as a trade -mark and was refused registration on the basis that the pattern was primarily or purely functional and was therefore inherently unregistrable.Despite being unable to register the Lego Indicia as a trade -mark, Lego sought to enjoin Mega Bloks from using the Lego Indicia on the basis that it constituted passing off, both at common law and pursuant to section 7(b) of the Trade-marks Act (the "Act"). Section 7(b) of the Act sets out a statutory passing off action.In the Federal Court Trial Division, the Judge found that purely functional features such as the Lego Indicia could not become the basis of a trade -mark, whether registered or unregistered. As a result, Lego’s action based on passing off was dismissed. Lego appealed to the Federal Court of Appeal, where the majority agreed with the Federal Court Trial Division. On further appeal by Lego to the Supreme Court of Canada, Mega Bloks raised a new argument, namely that section 7(b) of the Act was not constitutionally valid, on the basis that it was ultra vires the legislative competence of Parliament.Following a lengthy analysis, the Supreme Court held that section 7(b) of the Act is constitutionally valid but that Lego’s claim of passing off against Mega Bloks, both at common law and under section 7(b), is barred by the doctrine of functionality. This doctrine establishes that a mark that goes to the functional structure of the wares themselves goes beyond distinguishing the wares of its owner and transgresses the legitimate bounds of a trade -mark. The Supreme Court held that the doctrine of functionality applies equally to registered and unregistered marks. As well, the Court held that a purely functional design may not be the basis of a trade-mark, registered or unregistered and that the law of passing off and of trade-marks may not be used to perpetuate monopoly rights enjoyed under now-expired patents.In reviewing the passing off claim, the Supreme Court held that passing off was not made out in any event, since a critical element of the action, namely the existence of goodwill, was not met. The alleged distinctiveness of the product in issue consisted of a process and technique which was now common to the public. With this ruling, the Supreme Court of Canada has definitively settled both the constitutional validity of section 7(b) of the Act and the doctrine of functionality as it applies to trade -marks. In Canada, trade-mark rights will not be granted to a purely functional feature of a product, as that would be tantamount to perpetuating a monopoly on the product itself.For a link to the actual decision, please click here. Please contact any member of our Technology and Intellectual Property Group to discuss any questions you may have related to this decision or trade -marks generally.INTERNET JURISDICTION IN DEFAMATION CASES
Does a Canadian Provincial Court have jurisdiction to hear defamation proceedings brought by a resident of that Province against an out -of-country publisher in respect of material posted on that publisher’s web site? What if the defamed person or entity only became a resident of that Province long after publication of the impugned material?These issues have recently been considered by, in the first instance, the Supreme Court of British Columbia and, in the second instance, the Court of Appeal for Ontario. The Cases (i) Burke v. NYP Holdings, Inc., 2005 BCSC 1287 (CanLII) http://www.canlii.ca/bc/cas/bcsc/2005/2005bcsc1287.html This is a decision of the Supreme Court of British Columbia which involved a defamation claim brought by the ex General Manager of the Vancouver Canucks, Brian Burke, against the New York Post and its columnist, Larry Brooks. The proceedings were brought as a result of an article written by Brooks and posted on the New York Post’s web site suggesting that Burke challenged the Vancouver players to "get" Steve Moore of the Colorado Avalanche in a hockey game which left Moore severely injured as a result of an incident involving Todd Bertuzzi of the Vancouver Canucks. The Court noted that the question of whether an action brought in a jurisdiction should stay in that jurisdiction is a two -part test. Both parts of the test must be met in order for the court to take jurisdiction. The first is whether there is a "real and substantial" connection between the forum and either the defendant or the subject matter of the litigation (i.e., jurisdiction simpliciter). The second is whether the action would be more conveniently heard elsewhere (i.e., forum conveniens). [This paper deals only with the issue of jurisdiction simpliciter which was the primary issue in the cases referenced herein.]In this case, the Court held that jurisdiction simpliciter had been established. The Court cited the following reasons in reaching that conclusion: (a) the tortious act took place in British Columbia, being the place where the words on the web site were downloaded and read; (b) it was reasonably foreseeable that, by publishing the article on the web site, the story would follow the plaintiff to British Columbia given (i) the prominence of the plaintiff in British Columbia, (ii) the level of interest in British Columbia concerning the subject matter of the article and (iii) the standing of the publisher; and (c) the majority of the alleged damage to the plaintiff’s reputation occurred in British Columbia. Burnyeat J. in this case relied heavily on the decision of the High Court of Australia in Dow Jones Company Inc. v. Joseph Gutnick (10 December 2002). That case involved defamation proceedings brought against Dow Jones in respect of an article posted on Dow Jones’ financial news web site suggesting that Gutnick was a "money -launderer". Gutnick filed his defamation claim in his resident State of Victoria. Dow Jones claimed that the appropriate forum was New Jersey in the United States where the server hosting the relevant web site was maintained.On the issue of jurisdiction, the High Court of Australia noted that defamation is located at the place where the reputation is damaged. In the context of the Internet, it occurs at the place where the defamatory material is downloaded. The High Court stated that those who make information accessible on the Internet do so voluntarily for commercial gain and with full knowledge of its "ubiquity, universality and utility". Justice Callinan stated that "if a publisher publishes in a multiplicity of jurisdictions it should understand, and must accept, that it runs the risk of liability in those jurisdictions in which the publication is not lawful and it inflicts damage." Chief Justice Gleeson recognized that while it is important for publishers to be confident in predicting what law will govern their conduct, this does not mean that they must be able to act according to a single legal system. (ii) Bangoura v. Washington Post, 2005 CanLII 32906 (ON C.A.) http://www.canlii.ca/on/cas/onca/2005/2005onca10625.html This decision of the Court of Appeal for Ontario involved defamation proceedings brought by Mr Bangoura against the Washington Post in relation to an allegedly defamatory article published by the Washington Post on its web site in January 1997. At the time of publication of the article, Mr Bangoura was a resident of Kenya and a United Nations employee. The article published by the Washington Post suggested that Mr Bangoura’s former colleagues had accused him of sexual harassment, financial improprieties and nepotism. Mr Bangoura was subsequently suspended from his position and he relocated to Quebec in February 1997. In June 2000, Mr Bangoura relocated to Ontario and in April 2003 he commenced defamation proceedings in Ontario against the Washington Post. The Court of Appeal overturned the decision of the lower court which had assumed jurisdiction. The Court of Appeal held that the motion judge erred in applying the "real and substantial" connection test to the facts of the case. The Court of Appeal noted that where the "connection [between the forum and the claim] is tenuous, Courts should be wary of assuming jurisdiction". In this instance, the Court said that "the connection between the claim and Ontario was minimal at best. In fact, there was no connection until more than 3 years after publication of the article in question." The Court held that it was not reasonably foreseeable that the story would follow Bangoura to Ontario because, at the time of publication of the impugned article, it was not reasonably foreseeable that Bangoura would end up a resident of Ontario. Accordingly, the Court held that jurisdiction simpliciter had not been established. This case may be distinguished on its facts from Burke and Gutnick discussed above as Bangoura was not a resident of the relevant jurisdiction at the time of publication of the article in question and, more importantly, the Court found no evidence that Bangoura had suffered significant damage to his reputation in that jurisdiction. Conclusion Consistent throughout Canadian, Australian and UK case law is the principle that defamation is located where the damage to reputation occurs and the case for assuming jurisdiction is proportional to the degree of damage sustained within that jurisdiction. In the context of Internet defamation, publication of an article on a web site by an out -of-country publisher will constitute publication in the country where that article is downloaded. As to whether a Court will then assume jurisdiction is a question of whether (a) at the time of publication of the impugned article, it was reasonably foreseeable that the story would follow the plaintiff to the jurisdiction in which the claim was filed and (b) there is evidence to suggest that the plaintiff suffered significant damage to his or her reputation in that jurisdiction.In relation to the test in (a) above, critical factors will include the prominence of the individual in the relevant jurisdiction and the level of interest in the jurisdiction with respect to the subject matter of the article. Please contact any member of our Technology and Intellectual Property Group to discuss internet jurisdictional issues.
AMNESTY PERIOD FOR ERRONEOUS SMALL ENTITY PATENT PAYMENTS
Background The Canadian Intellectual Property Office provides a discount on patent fees for applicants that qualify as "small entities". A small entity is any entity: (1) that either (a) employs 50 or fewer employees or else (b) is a university, (2) that has not transferred or licensed any patent right to an entity that isn't a small entity and is not obligated to do so, and (3) that, if it has transferred or license any patent right, has no knowledge of any subsequent transfer or license of any patent right to an entity that isn't a small entity or knowledge of any obligation to do so. Over the past few years, there have been two important developments in Canadian patent law relating to small entity status. First, contrary to accepted practice, courts have ruled that small entity status is to be assessed only once during the life of a patent application/patent -- at the time the application was filed with the Canadian Intellectual Property Office. This original assessment is valid for all fees paid during the lifecycle of the patent application/patent.Second, after a fee payment deadline has expired, the Canadian Intellectual Property Office does not have discretion to accept "top -up payments" when small entity fees were paid but large entity fees were due. In the event of such an erroneous payment, the patent application/patent will become abandoned, in some cases uncorrectably so.Amnesty Period In recognition that abandonment in such circumstances is a harsh result, the Canadian Parliament has amended the Patent Act to provide a one time amnesty period during which "top -up payments" will be sufficient to cure any previous underpayment of fees relating to entity status. The amnesty period will commence on February 1, 2006 and end on February 1, 2007.Although the details about these amnesty payments remain to be settled, it is widely expected that the amnesty will exist during a six -month period in 2006.If you have benefited from the small entity discount but have reason to question whether your patent application/patent qualifies under the small entity test described above, please contact us promptly to review the matter so that you can take advantage of the amnesty period to preserve your patent rights, if necessary. Please contact any member of our Technology and Intellectual Property Group to discuss entity payments or any other related issues.
SEMINAR NOTICE: FROM PATENTS TO PROFITS
On Saturday, February 4, 2006, PATSCAN® (www.patscan.com ) will present From Patents to Profits: Taking Your Innovation to Market at the Greenacres Golf Course Clubhouse in Richmond, BC. This workshop is geared to entrepreneurs , inventors, product developers and investors interested in learning how to assess the market for new products, create competitive advantage with the right intellectual property protection, uncover growth financing opportunities, leverage the value of their inventions with licensing, and plan effectively for successful product development. Clark Wilson’s Michael Roman will be a guest speaker, on the topic of Creating And Protecting Intellectual Property In All Its Forms With A Focus On Patents. For additional information on this seminar, please visit PATSCAN’s website, at www.patscan.com.
UPDATE ON .EU DOMAIN NAMES
EURid, the central registry for the new .eu domain, has announced the launch date for registration of .eu domain names. The launch will be in several phases:
For more further information regarding.eu domain name registration, please contact any member of our Technology and Intellectual Property Group. You may also review our article regarding .eu domain names published in our May 2005 edition of Knowledge Bytes http://www.cwilson.com/newsletters/ip/KB -may05.htm#2.ADD/REMOVE FROM MAILING LIST
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