Introduction - LSA - AEDlsa.mcgill.ca/pubdocs/files/IntellectualandIndustrial... · Web viewWord ‘artistic’ identifies phrase “artistic work” and is used to qualify artistic

Fall 2002 – Intellectual & Industrial Property – Prof. Gold

TABLE OF CONTENTS

INTRODUCTION: THINKING ABOUT PRIVATE SPACE.......................................................................3

JUSTIFIYING PROPERTY.................................................................................................................................3OVERVIEW: COPYRIGHT...........................................................................................................................3OVERVIEW: PASSING OFF........................................................................................................................6OVERVIEW: TRADEMARKS ™..................................................................................................................7OVERVIEW: TRADE SECRETS...................................................................................................................9OVERVIEW: PATENTS.............................................................................................................................10

CONCEPTUALIZING THE NATURE OF RELATIONSHIPS IN IP SPACE....................................12

THE RELATIONASHIP B/T IP & PROPERTY..................................................................................................12Moore v. The Regents of the University of California, 793 P. 2d 479 (Cal. S.C. 1990)........................12Gould Estate v. Stoddart Publishing, (1996) 30 O.R. (3d) 520 (Ont. Ct. Gen. Div.).............................13

CONTRACT..................................................................................................................................................15ProCD, Inc. v. Zeidenberg, 86 F. 3d 1447 (7th Cir. 1996)....................................................................15Spitzer v. Network Associates Inc. Memorandum of Law in Support of A-G NYSC..............................18

TORTS.........................................................................................................................................................19Calabresi & Melamed, “Property Rules, Liability Rules and Inalienability: One view of the Cathedral”..............................................................................................................................................19

SUI GENERIS.................................................................................................................................................22Cadbury Schweppes v. FBI Foods, [1999] 1 S.C.R. 142.......................................................................22

A CASE STUDY IN COPYRIGHT....................................................................................................................23Alain Strowel, “Droit d’auteur and Copyright: Between History and Nature”...................................23Théberge v. Galerie d’Art du Petit Champlain, 2002 SCC 34...............................................................24

REGULATING CREATIVE ACTIVITY..................................................................................................25

ORIGINS OF PRESENT IP REGIMES....................................................................................................26

COPYRIGHT.............................................................................................................................................26Delrina Corp. v. Triolet Systems(2002), 58 O.R. (3d) 339 (C.A.)..........................................................26Gilliam v. American Broadcasting Companies, 538 F. 2d 14 (2d Cir. 1976)........................................27Donaldson v. Beckett, (1774), 2 Bro. 129, 1 E.R. 837 (H.L.).................................................................28

PATENTS AND TRADEMARKS............................................................................................................30“The Third Part of the Institutes of the Laws of England” - Edward Coke (1797)...............................30Diamond v. Diehr, 450 U.S. 175 (1981)................................................................................................31Parker v. Flook, 437 U.S. 584 (1978)...................................................................................................32President & Fellows of Harvard College v. Canada (Commissioner of Patents), [2000] F.C.(C.A.). 32Schumberger Canada Ltd v. Canada (Commissioner of Patents), [2000] 4 F.C. 528 (C.A.)..............34Tennessee Eastman Co. v. Canada (Commissioner of Patents), [1974] S.C.R. 111............................35Institut National des Appellations d’Origine des Vins et Eaux-de-Vie v. Andres Wines Ltd., (1987)O.R...............................................................................................................................................35

JUSTIFICATION FOR IP SPACE............................................................................................................36

ECONOMIC/EFFICIENCY/UTILITARIAN........................................................................................................36Free World Trust (app) v. Electro-Santé (resp) (SCC)..........................................................................37

DISTRIBUTIVE JUSTICE/FAIRNESS...............................................................................................................39PERSONHOOD..............................................................................................................................................39LABOUR/DESERT.........................................................................................................................................44

MODALITIES FOR THE ORDERING OF IP SPACE...........................................................................46

PATENTS AND TRADE SECRETS..................................................................................................................46Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 (F.C.A.)....................................................46Kewanee Oil v, Bicron Corp., 416 U.S. 470 (1974)...............................................................................47Diamond v. Chakrabarty, 447 U.S. 303 (1980).....................................................................................49

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COPYRIGHT.............................................................................................................................................50Apple Computer v. Mackintosh Computers, [1990] 2 S.C.R. 209..........................................................50Feist Publications v. Rural Telephone Service, 499 U.S. 340 (1991.....................................................50Tele-Direct (Publications) v. American Business Information, [1998] 2 F.C. 22 (C.A.)......................51CCH Canadian Ltd. v. Law Society of Upper Canada, [2002] F.C.J No. 690, 2002 FCA 187............52University of New South Wales v. Moorhouse (1975), 133 C.L.R. 1 (Austl. H.C.)................................54Nichols v. Universal Pictures Corp., 45 F.2d 119 (2d Cir. 1930).........................................................55Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir. 1978)..................................................56Rogers v.Koons, 960 F.2d 302 (2d Cir. 1992).......................................................................................57

TRADEMARK...........................................................................................................................................60Reckitt & Colman Products Ltd. v. Borden Inc., [1990] 1 All E.R. 873 (H.L.), p. 171.........................60Linoleum Manufacturing v. Nairn (1878), 7 Ch.D. 834 (Ch.D.), p. 184...............................................61B.C. Automobile Association v. Office & Professional Employees’ International Union, Local 378, [2001] B.C.J. No. 151, 2001 BCSC 156, p. 200.....................................................................................61

ALTERNATIVES TO IP REGIMES.........................................................................................................66

FORMAL REGULATION.........................................................................................................................66Volkswagen Canada v. Access International Automotive, [2001] 3 F.C. 311 (C.A.), p. 266................70

INFORMAL REGULATION....................................................................................................................71LAC Minerals v. International Corona Resources, [1989] 2 S.C.R. 574, p. 290...................................75Sallen v. Corinthians Licenciamentos Ltda., 273 F.3d 14 (1st Cir. 2001), p. 298..................................77

TRANSNATIONAL ASPECTS OF IP GOVERNANCE.........................................................................78

JURISDICTIONAL PROBLEMS........................................................................................................................78World Wide Fund for Nature (Fund) v. World Wrestling Federation Entertainment (Fed) (2002 CA,UK....................................................................................................................................................82Yahoo!, Inc. (Y) v. Ligue contre le racisme et l’antisematisme (L)(N.D. Cali. 2001) P.370.................83Pro-C Ltd. (P) V. Computer City (CC) (2001) O.R. P.379....................................................................84

LIMITS TO UNIVERSALITY...........................................................................................................................85Harvard/Oncomouse (1990) O.J. EPO Bd. Of Appeal P.394................................................................86

REGULATORY INSTITUTIONS..............................................................................................................87

INTERACTION OF INTERNATIONAL AND DOMESTIC LAW IN GLOBAL REGULATION IP........................................................................................................................................................................96

Braintech , Inc. v. Kostiuk (1999) (BCCA) (Vol 2, p. 445.)..................................................................96

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INTRODUCTION: Thinking About Private Space Justifiying PropertyGamma/ X-Rays/ U.V./ Visible/ Infrared/ Micro/ TV/ ShortOn what basis can you use the waves for cell phone use? Efficiency in economics approach, utilitarian approach (Jeremy Bentham- maximizing efficiency

and social welfare based on economic principles); Deserving because you were the first to find it/ labour theory based on the Lockian theory Distributive justice, it doesn’t matter how rich you are- you just have to be a member of the

community and you have an equal chance to use the waves for cell phone use, lottery Personhood analysis: a person who needs it for a personal reason has a right to use it.What mechanisms are available to limit the use of the property and allocate property rights? We can allocate property rights via regulatory agencies (CRTC): the State can give what amounts

to a property right that comes either directly from the State (patent) or through a regulatory agency; via the market: we can sell it; via inheritance; via prizes for the best ideas for its use; via tax regimes; via state funding.

Whatever theory it is based on, we can allocate property distribution in many ways. See below. We can impose regulatory rules and policies The Constitution could address certain fundamental rights to use of property according to

distributive justice and social welfare principles. Ks between a limited number of players who have the right to use this frequency, i.e. between the

government and a company. A pay as you go regime based on a compensation/ tort-like model that compensates the people

who cannot use the space while it is in use.

National v. International Regulation of cell phone frequenciesAll of this assumes that there is someone facilitating the distribution of the property right. It is not appropriate for the provincial or federal governments to facilitate the distribution of this type of property right. An international body is the most appropriate facilitator because you need to be able to use your cell phone in another country under another network. Theoretically, this can be done at the federal level, but there would be far too many negotiations to work out.

We will need to ask ourselves how industrial and intellectual property is distributed, at which level of government this distribution should take place and which tools are available for the allocation of these property rights. We are going to talk about the implications of choosing some tools over other tools in determining the allocation of property rights.

OVERVIEW: CopyrightCR gives you the right to prevent others from producing or reproducing, performing, publishing work, as well as the right to prevent them from engaging or authorizing the above.

Expression v. Content Recipe: Which activities can you prevent? You cannot prevent a person from following the recipe for

chocolate mousse and making their own chocolate mousse. What is protected is the expression of the idea of the recipe - the expression of the recipe cannot be reproduced, but the recipe itself can. The content of the recipe is not under copyright .

Lectures: If I convey Prof. Gold’s ideas in my own way, I am not infringing on his CR, but if I publish his ideas in his words, then I am infringing upon his CR.

COPYRIGHT PROTECTS EXPRESSION ONLY – NOT IDEAS.

Originality: What is worth copying is prima facie worth protecting. It must be original in sense that the work originated with the author.

Fixation v. Corporeality Work must be fixed but work need not be physical.

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Fixed = must somehow be recorded. Ex. If I say something funny while walking down the street beside you, what I said is not fixed. The expression is intangible but must pass through a tangible object at some point must be recorded in a tangible form (ex. the writing in a book).

Reproduction CR means the sole right to produce or reproduce the work or any substantial part thereof in any

material form whatever § 3(1) of the Copyright Act. CR holder can prevent not only literal copying, but non-literal copying as well. Degree of similarity between words is key but hard to measure. “Nobody has ever been able to fix that boundary, and nobody ever can.” (Learned Hand J. in Nichols v. Universal Pictures Corporation). The line is blurred, but generally, it is the degree to which the court attributes creativity to a work, which determines the extent to which the CR was infringed.

Substantial Copying: Even if portion copied is quantitatively small, may be qualitatively significant. Must assess work as a whole & determine importance of elements that are similar . Use of stock elements does not contribute to CR.

Limits on Copyright Fair Dealing does not infringe CR when used for the purpose of: [Canadian CR Act]

- Research or private study (§29)- Criticism or review (§29.1)- News reporting (§29.2)

Fair Use: In the U.S. & UK, there is a fair use doctrine- Fair use is wider more open and flexible.- Balance of interests of CR holder against those of the public. - Almost any commercial use is presumptively unfair.- Non-commercial use only unfair if strong evidence of likely future harm

What does CR Protect? Definitions found in §2 of the Copyright Act Must be original, fixed, appropriately connected to Canada or to a WTO, Berne or Universal

Copyright Convention member state. Novelty or non-obviousness in the sense of patent law is not required.

The more exact a copy, the less likely it will have copyright

Artistic Works: Includes paintings, drawings, maps, charts, plans, photographs, engravings, sculpture, works of artistic craftsmanship, architectural work, compilations - & 2.1. Must work be artistic? Word ‘artistic’ identifies phrase “artistic work” and is used to qualify artistic craftsmanship. Does the use of the word in the phrase import any requirements of artistic-ness on the object? Not necessarily. For non-specified work to qualify as artistic, one Crt insisted that it had to be a work intended to have an appeal to the aesthetic senses and not just an incidental appeal. Artistic work = general description of works which find expression in a visual medium. Drawings, Plans, Paintings: Photographs; does not include fleeting images seen on computer or TV or film

frames (last one protected under dramatic works) Engraving and Sculpture: Machine parts and the moulds used to stamp them have been denied protection: the

technique has to do with marking, cutting or working the surface of an object rather than shaping the object by cutting.

Artistic Craftsmanship: Product, typically handmade, of a craftsperson; not clothing, coloured rods for teaching math or mass produced toys.

Architecture: Any building or structure or any model of a building or structure Industrial Design: Applied artwork to a finished useful article. CR removed if more than 50 copies made.

Cannot copy or photograph sketches or patterns themselves (these are merely “carriers for artistic or literary matter” and are not useful articles). Designs for mass produced (ex. cars, etc.) useful articles protected under Industrial Designs Act (must be accepted by CIPO). All WTO members may apply, runs for 10 years from registration against copiers and independent creators alike. Design must be original, not copied, result from spark of inspiration, differ from earlier designs. Designers of mass produced cloth receive full copyright but designers of mass produced clothing do not: arbitrariness of the policy of separating industrial designs from copyright.

Literary Works: Includes tables, computer programs, compilations. “Literary” means pertaining to the use of words rather than to literature. Covers almost everything except short combinations of words. Does not protect spontaneous speech and signing. E-mail (maybe); instant messaging perhaps a hybrid (literary in

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form-oral in substance). Computer program, if complex and made up of smaller programs, might qualify as a compilation; the code or menu structure look like CR material, but the substance looks more like patent material.Titles: Work includes the title thereof when such title is original and distinctive. 2 ways to protect title: (1) as part of overall work, (2) separate when original and distinctive (i.e. fancy graphics, periodicals may be protected under TMs & P-O)

Computer Programs: Computer program means a set of instructions or statements, expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result.

Dramatic Works: Includes (a) any piece for recitation, choreographic work or mime, the scenic arrangement or acting form of which is fixed in writing or otherwise; (b) any cinematographic work;(c) any compilation. Protection extends to structure and expression but historical characters or events cannot be monopolized (form over ideas). Unpredictable sports are not considered dramatic works by virtue of their unpredictability. Game shows lack certainty and recently a British TV game show was denied CR while a show with no story line but a format structured around the concept of a place where information on the top songs was gathered qualified as a dramatic work: distinction seems arbitrary

Musical works: Any work of music or musical composition, with or without words and includes any compilation thereof . Can have a single CR in combined music and lyrics to a song. Performer has limited CR in his/her performance, distinct from any CR in the work performedElements of a musical work: What are the various parts of a musical work? Melody, harmonic structure, hook, lyrics.Sound Recordings: Have their own copyright separate from lyrics and music recorded and may be protected even through what it records is not (spontaneous conversation). Film tracks excluded because they come under film copyright. Bill C-32 allows record companies to collect money from public performances and broadcasts of their records and also blank audiotape royalties.

Performances: Performers from WTO states are able to prevent recording and broadcasts of their performances and Bill C-32 allows them to collect money from the rental, public performance or broadcast of records containing their performances as well as blank-tape royalties.Broadcasts: Live event protected as cinematograph work. Bill C-32 gives WTO state broadcasters and Rome Convention state broadcasters copyright over unauthorized recording or reproduction of their transmissions.

Compilations and databases: A work resulting from the selection or arrangement of literary, dramatic, musical or artistic works or parts thereof or a work resulting from the selection or arrangement of data. I cannot sue someone that copies a poem from my compilation of different poems, but I can sue someone that copies the form of my compilation. Just gathering data and sorting them in an obvious way may not result in a protectable compilation (ex. white pages phone directories in the USA are not protected).

Assignment v. Licence Assignment changes ownership of underlying CR (in whole or in part). Assignment means I can

transfer my rights by selling them. Licence involves contractual relations only: Ex. Students have a licence to use the chairs in the class-

rms. The school can prevent us from using the chairs because they have the property right. Because we have paid tuition, the school has allowed us to use the chairs.

Moral Rights: “The author of a work has…the right to the integrity of the work and in connection with an act

mentioned in §3, the right where reasonable in the circumstances, to be associated with the work as its author by name or under a pseudonym and the right to remain anonymous.” §14.1(1)

“Moral rights may not be assigned but may be waived in whole or in part.” §14.1(2).

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Effect of Waiver: “Where a waiver of any moral right is made in favour of an owner or a licensee of CR, it may be invoked by any person authorized by the owner or licensee to use the work, unless there is an indication to the contrary in the work.” §14.1(4)

I can say that I will not sue you. How open-ended the licence I give you is, is questionable and nobody knows the definition of this. The waiver’s benefit can be transferred.

Attribution: “The author of a work has… the right to…be associated with the work as its author by name or under a pseudonym and the right to remain anonymous.” §14.1(1) How is that right exercised?

Integrity of the work: “The author’s right to the integrity of a work is infringed only if the work is, to the prejudice of the honour or reputation of the author, (a) distorted, mutilated or otherwise modified or (b) used in association with a product, service, cause or institution §28.2(1). Does a right extend to a copy of a work? It could probably, but this is arguable.

Deemed prejudice: “In the case of a painting, sculpture or engraving, the prejudice referred to in subsection (1) shall be deemed to have occurred as a result of any distortion, mutilation, or other modification of the work.” §28.2(2) Why is painting etc. singled out?

Prejudice to the honour/reputation: How do we apply this test to works that are not paintings etc.? Must distortion mutilation, modification or association be objectively prejudicial? Does test depend on why we protect moral rights, or must I be only subjectively prejudicial?

Obtaining Copyright CR protection in Canada is automatic on the creation of the work. Nevertheless, can register CR w/

the Canadian Intellectual Property Office to obtain a presumption of validity “The Register of Copyrights is evidence of the particulars entered in it…” §53(1) Term of protection: “The term for which copyright shall subsist shall, except as otherwise expressly

provided by this Act, be the life of the author from the remainder of the calendar year in which the author dies and a period of fifty years following the end of that calendar year .” §6

Exceptions to term- For anonymous works: lesser of 50 years from fate of publication and 75 years from the

making of the work- For posthumous works: 50 years from publication- Joint authorship: 50 years from the end of the year in which last author dies.

International Copyright Berne Convention for the Protection of Literary and Artistic Works, 1886 up to Paris

Revision of 1971: Universal protection in all member states - National treatment. Absence of formalities - Term of protection

Universal Copyright Convention: For non signatories pf the Berne - States entitled to retain certain formalities -Term of protection defined by reference to term of years - Less detailed than Berne Convention

TRIPS under the WTO: Agreement on Trade Related Aspects of IP rights under WTO agreements - Requires compliance with Berne - National treatment - Most favours nation treatment - Protection of computer programs and compilations of data - Protection of performers and broadcasting. (You don’t even have to put © after publications now because by virtue of being a member of the WTO, all countries are bound by the Berne)

Obtaining International Copyright Protection For Berne members (including all WTO members), once obtain Crt in Canada, obtain copyright in all

other member countries according to their CR laws Our fair dealing defence does not include satire in Canada , but this would be possible in the US . For non-Berne but UCC members, may have to register to obtain CR in that member state.

OVERVIEW: Passing Off§7(b) of the Trade-marks Act: No person shall (b) direct public attention to his wares, services, or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commences so to direct attention to them, between his wares, services or business and the wares, services of business of

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another”. The law of P-O is similar to the law of CR. If it says TM after it, it is not a registered trademark. If it has an ® after it, it is a registered trademark.

P-O needs to be in the Trademark ActWhy? P-O is part of the jurisdiction of the provinces under civil rights, so why is it federal? Trademarks are sometimes found to be invalid, so it is convenient to be able to argue under 2 diff headings: trademark infringement or P-O. P-O is based on actual use.

Purpose of P-O law Allows the TM owner the right to prevent other people from using the name or the get-up to compete. Prevents the dilution of distinctiveness of name

Remedies(1) Damages: lost profits, loss of trade, damage to reputation, harmful association, loss of opportunity to licence, inability to expand; (2) accounting of profits (if you gained something based on something that I developed, I have recourse); (3) injunction

Elements of passing off1. Must have goodwill or reputation attached to goods and services2. There must have been misrepresentation by defendant to the public leading or likely to lead to

conclusion that goods or services are those of plaintiff3. There must have been a resulting or likely damage from belief engendered by misrepresentation

Origin: Need not prove that the reputation in goods derives from its origins in a particular supplier but simply that goods have the same origin even if unknown. Do you assume that these 2 goods with the same name came from the same place? That is the important question.

Distinctiveness v. Descriptiveness Normally, descriptive word cannot be protected but where word acquires a secondary meaning

distinguishing one’s goods or services from that of others, can obtain protection. When used to distinguish rather than functionally, can give rise to passing off action. If name used too broadly, loses distinctiveness.

→Ex. Caledonia Springs: no protection if the water came from Caledonia but if the word is used over a period of time & people come to associate Caledonia Spring with a particular manufacturer, the terms, although descriptive, takes on a secondary meaning, then there can be a P-O action. If the get-up is too similar and is not functionally useful, then a P-O action may be possible.

Who must be confused for a P-O action? Ex.: Going to pharmacy w/ illegible prescription. The SCC (1992) ruled that the consumer/the

public must be confused because ultimately it is the consumer that knows whether the blue or green pills helped last time. It would have to be in the same terms and the same get up in order for the pharmacist to be confused.

OVERVIEW: Trademarks ™ A mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or

services manufactured, sold, leased, hired, or performed by him from those manufactured, sold, leased, hired, or performed by others, (b) a certification mark, (c) a distinguishing guise, (d) a proposed mark

Use§4: “Use” in relation to a TM means any use that is deemed to be a use in association with wares or services. §. 4(1) A TM is deemed to be used in association w/ wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.

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§4(2) “A trademark is deemed to be used in association with services if it is used of displayed in the performance of advertising of those services”

License to use a TM §50(1): “For the purposes of this Act, if an entity is licensed by or with the authority of the owner of

the TM to use the TM in a country and the owner has, under the license, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the TM in that country as or in a TM, TM or otherwise by that entity has, and is deemed always to have had the same effect as such a use, advertisement or display of the TM in that country by the owner”

The license agreement must have some quality control by the owner of the TM b/c the characteristics of the TM must be preserved. When the consumer sues, he sues the manufacturer. The US parent can bring an action in a Cdn crt against the L’ee. If you didn’t care about your TM and you just let anyone sell your product, it would no longer be distinctive. The TM no longer carries the function of distinguishing your product from that of others.

Infringement of TM Where a crt is satisfied on application of any interested person that any act has been done contrary to

the TM Act, the crt may make any order that is considers appropriate in the circumstances, including an order providing for relief by way of injunction and the recovery of damages or profits and for the destruction, exportation or other disposition of any offending wares, packages, labels and advertising material. The mere use of the mark that gives me a right of action. The test of P-O: part 2 of the P-O test is automatically satisfied (i.e. Don’t have to prove misrepresentation.)

Non-Literal Use: Like CR, do not need literal copying. Test: likelihood of confusion. (s.6 for def) Depreciation: Reduction of esteem in which mark held or through direct persuasion and enticement

of customers. Is there value in comparisons between products? Positive/Negative comparison: If I’m trying to say that my product is as good as another product, that

is ‘+’comparison. If I’m trying to lure away customers, I cannot depreciate the value of another product. I can do negative comparisons but not positive ones.

Grey marketing What is grey marketing? How important are difference in ingredients between products?Ownership v.

licensing of TM to affiliated companies It is not quite illegal. It involves someone who legitimately has the mark, just not in that country. Ex.

If I buy Heinz ketchup in the US and sell it in Canada, then I’m going against the Canadian Licensee. Does the Canadian Licensee have the only right to sell Heinz ketchup in Canada? When the US licensee has the US license, they only have the right to sell in the US and not in Canada. If there are two separate owners, then grey marketing can be prevented. If the parent company was the same and there is one single entity in control, then grey marketing can go on without judicial intervention.

Names and Surnames: 12(1) subject to §13 – TM is registrable if it is not (a) a word that is primarily merely the name or the surname of an individual who is living or has died within the preceding 30yrs. In the public’s mind, is this a surname? If the word ‘Fior’ is not primarily merely a surname, then it can be used. ‘Macdonald’ is not primarily merely a surname, it has a secondary meaning.

Descriptive or Misdescriptive: 12(1) Subject to s.13 – TM is registrable if it is not whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services… (If it is French used in France and not in Quebec, it is still descriptive.)

Distinguishing Guises “Distinguishing guise” means (a) a shaping of wares or their containers, or (b) a mode of wrapping

or packaging wares the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others (§2).

S.13(1) A distinguishing guise is registrable only if (a) it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application …; and (b)

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the exclusive use by the applicant of the distinguishing guise in association with the wares or services with which it has been used is not likely unreasonably to limit the development of any art or industry.

S.32(1) An applicant who claims that his trade-mark is registrable under §13 shall furnish the Registrar with evidence establishing the extent to which and the time during which the trade-mark has been used in Canada

S.32(2) The Registrar shall restrict the registration to the wares or services in association with which the TM is shown to have been so used as to have become distinctive and to the defined territorial area in Canada in which the TM is shown to have become distinctive.

Certification marks §2: “Certification mark” = a mark that is used for the purpose of distinguishing or so as to distinguish

wares or services that are of a defined standard with respect to (a) the character or quality of the wares or services … (d) the area within which the wares have been produced or the services performed, from wares or services that are not of that defined standard.

Symbol VQA. W/ this, would I be able to provide consulting services to the wine industry? Yes, as long as I don’t use my power in one capacity for the other. A certification mark may be adopted and registered only by a person who is not engaged in the manufacture, sale leasing or hiring of wares or the performance of the products bearing it.

Famous Marks: The appellant seeks to profit financially from the goodwill associated with the respondent’s trade name. The appellant anticipates that the average consumer will associate its products with the name Pink Panther and be more apt to buy them (United Artists –Macdonald J.)

Official Marks: §.9(1)(n) – No Person shall adopt in connection with a business, as a TM or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, any badge, crest, emblem or mark adopted and used by any public authority, in Canada as an official mark for wares and services. The public has been served notice of the use of such marks by the Registrar of TM.

Non-use of a TM: §45(3): If a registered TM has not been used in Canada at any time during the 3yr period immediately preceding the date of the notice and that the absence of use has not been due to special circumstances that excuse the absence of use, the registration of the TM is liable to be expunged or amend accordingly.

Becoming Generic: S.18(1) The registration of a TM is invalid If (b) the TM is not distinctive at the time proceedings bringing the validity of the registration into question are commenced.

Abandonment: The registration of a TM is invalid if (c) the TM has been abandoned…(§18(1) ). The practical test to be applied is order to resolve a case of this nature is to compare the TM as registered with the TM as used & determine whether the diffs b/t the 2 marks are so unimportant that an unaware purchaser would be likely to infer that both, in spite of their differences identify goods having the same origin (Pratte J in Honeywell Bull)

OVERVIEW: Trade Secrets Trade Secrets (Civil Law): A trade secret is information, that is not generally known in the industry or

easily accessible, with commercial value, in respect of which the owner takes precaution to maintain its secrecy.

Trade Secrets (Common Law): Confidential information – cannot be completely in public domain although can be application of though to information available to the public. It was communicated in circumstances indicating its confidential nature (Lac Minerals). The receiver may not misuse the information – it can only be used for purposes for which it was conveyed.

Remedies if violated: damages, injunction, accounting of profits, restitutionary award

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OVERVIEW: PatentsThe Patent Act: Rights, Terms, Fees 42: A patent grants to the patentee and the P’ee’s legal representative for the term of the patent, from

the granting of the patent, the exclusive right privilege and liberty of making, constructing and using the invention and selling it to other to be used

44 subject to §46: the term limited for the duration of the patent is 20yrs from the filing date. Fees: 46(1) A P’ee shall, to maintain the rights according by the patent, pay to the Commissioner

prescribed fees. (2) If P’ee deos not pay the fees w/in the time provided, the term limited for the duration of the patent shall be deemed to have expired at the end of that time.

Obtaining a Patent File an application with Commissioner of Patents (§27). The application must contain: a specification correctly and fully describing the invention and its

operation or use §27(3). Claims defining distinctly and in explicit terms the subject-matter of the invention §27(4).

Steps(very $$): Review of Patent Application, File application with CIPO, Full application, Provisional application, Examination of patent, Issuance of patent, but that is not the end of the game: the Courts make the final decision

International Protection Through Paris Convention, entitled to apply for patent in member state within 12 months of first filing Through Patent Cooperation Treaty (PCT), can apply for int’l search & examination In the end, Ps are granted on a country-by-country basis, so you may have a different set of rights in

Canada and a different set of rights in another country

Scope- Literal v. Non-Literal Purposive approach in Canada: what people are trying to get at and reading the patent appropriately Doctrine of equivalents in the US (patent prosecution estoppel): dissect the claim into component

parts and ask if the thing infringing your patent so similar that it is the same or are there component differences.

German approach: what is the real invention?

Patent Criteria To obtain a patent, an invention must satisfy all of the following criteria: The invention must be new,

non-obvious and useful.

Failure to satisfy criteria §. 48.1(1) Any person may request a re-examination of any claim of a patent (prior art) §.59 The def, in any action for infringement of a patent, may plead as matter of defence any fact or

default which by this Act or by law renders the patent void … §60(1) A patent or any claim in patent may be declared invalid or void by the Federal Court at the

instance of the Attorney General of Canada or at the instance of any interested person.

Novelty 28.2(1): The subject-matter defined by a claim in an application for a patent in Canada must not have

been disclosed more than one year before the filing date by the applicant or by a person who obtained knowledge, directly or indirectly, from the applicant, in such a manner that the subject-matter became available to the public in Canada or elsewhere…

What is an anticipated claim? What must be disclosed in a prior art? Test in Reeves Brothers: What constitutes publicly available prior art? Display of invention; Lecture

at conference; Installed at home where others can see it

Concept of Obviousness Similar to purpose to novelty: Should not be able to obtain monopoly over knowledge that is already

in the public domain. Unlike novelty, permitted to “mosaic” prior art: Was invention practicably within the grasp of others skilled in the art?

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Statutory Provisions: s. 28.3 The subject-matter defined by a claim in an application for a patent in Canada must be subject-matter that would not have been obvious on the claim date to a person skilled in the art or science to which it pertains, having regard to information disclosed more than 1yr b/f the filing date by the applicant, or by a person who obtained knowledge, directly or indirectly, from the application in such a manner that the information became available to the public in Canada or elsewhere; and information disclosed before the claim date by a person not mentioned in paragraph (a) in such a manner that the information became available to the public in Canada or elsewhere.

Test for Non-Obviousness – Modified Cripp’s question: Would the skilled unimaginative worker, in light of his/ her common general knowledge and armed with the available prior art be led “directly and without difficulty to the invention”?

Meaning of Prior Art Cannot determine what constitutes prior art with hindsight only. Would the researcher have found the

prior art after a diligent search? Prior art must be sufficiently disseminated and accepted within the art Prior art includes written documents such as patents (or published patent applications), sci/tech’l

articles, and prior use Secondary Characteristics: Indicia of prior art includes commercial success, long-felt need, attempts

by others to solve problem, acceptance by relevant public, contemporaneous development.

European approach to inventive step: Problem & solution approach: ID the technical problem to be solved. Is the technical solution to this problem obvious to unimaginative skilled person? Problem of invention of purely scientific interest.

Utility Statutory Basis for utility Requirement: “Invention” means any new and useful art, process, machine,

manufacture/composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter” (s. 2)

Canadian standard of utility – actual and ultimate utility;

Utility in the US US standard – specific, substantial and credible utility Specific utility: specific to what makes the invention inventive Substantial utility: not a throw away utility but a real substantive use Credible utility: credible given the state of knowledge the in the art. Brenner v. Manson: patent application claimed specific utility in fighting tumours. The patent was

rejected for lack of evidence. Process is useful b/c it results in intended product. Process resulted in chemical that subject to serious investigation. “But a patent is not a hunting licence…”

Industrial application in Europe EU utility standard – can be made or used in industry European Patent Convention requires that the invention have an industrial application Euro Patent Office has signalled that it may add requirement that someone would actually want to use

the invention.

Description Statutory Requirement for Disclosure: s. 27(3) “The specification of an invention must correctly and

fully describe the invention and its operation or use as contemplated by the inventor” Description of the invention must be complete . No need, however, to explicitly describe how the

invention is useful. Adopt the point of view of someone with ordinary skill in the art. Cannot require any knowledge other than obvious steps falling within common knowledge of someone skilled in the art

Would such a person understand the description to describe all instantiations of the claimed invention? If not, claim is over-broad

If there is evidence that some instantiations of the invention do not work – claim rejected. This flows from utility requirement (See Minerals Separation)

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Would this person understand that all instantiations of the invention would likely work? “If it is possible for the patentee to make a sound prediction and to frame a claim which does not go

beyond the limits within which the prediction remains sound, then he is entitled to do so.” (Pigeon J. in Monsanto v. Canada citing Graham J. in Olin Mathieson Corporation v. Biorex Laboratories Ltd.)

Best Mode: Must disclose the “best mode” of using a machine in the specifications Biological Materials: “Where a specification refers to a deposit of biological material and the deposit

is in accordance w/ the regulations, the deposit shall be considered part of the specification &, to the extent that subsection 27(3) cannot otherwise reasonably be complied w/, the deposit shall be taken into consideration in determining whether the specification complies with that subsection.” §. 38.1(1)

US Description RequirementThe specification must satisfy two requirements: Description: specification must describe how to make and use the invention. Does the description

given in the specification include all claimed instantiations of the invention? If not, invention is not fully described

Enablement: specification must give instructions to someone skilled in the art on how to make and use the invention. If not all instantiations of the invention work then the invention is not enabled. Cannot require undue experimentation. Apply a reasonableness standard

Invalidity §53(1) “A patent is void if any material allegation in the petition of the applicant in respect of the

patent is untrue, or if the specification and drawings contain more or less than is necessary for obtaining the end for which they purport to be made, and the omission/addition is willfully made for the purpose of misleading.”

Fail to identify inventors In Canada, the failure to list all inventors does not lead to invalidity: not a material allegation (Apotex

v. Wellcome Foundation) In US, failure to name an inventor leads to invalidity unless innocent error (See 35 U.S.C. § 256)

Conceptualizing the Nature of Relationships in IP Space The Relationaship b/t IP & PropertyRights just exist. Just because the final product is protected by an IP right doesn’t mean that there are no other rights to consider. You’ll see that the courts prefer to read down common or civil law property in order to ensure that there aren’t too many rights. As the IP schemes grow, the courts tend to limit the common and civil law rights.

Moore v. The Regents of the University of California , 793 P. 2d 479 (Cal. S.C. 1990) Patient alleges in a statement of claim that physician failed to disclose that prior to obtaining patient’s consent to surgical removal of patient’s spleen, physician made arrangements to obtain portions of spleen in connection with physician’s desire to have regular and continuous access to patient’s unique and rare blood and bodily substances for research purposes. Patient brought action against doctor, alleging conversion and breach of physician’s disclosure obligations. Superior Court of L.A. found for the defendants; The Court of Appeal reversed the decision with directions.

Issues: 1. Was there a breach of fiduciary duty and a lack of informed consent? Yes 2. Does a patient retain property rights over cells or other parts of his body once these parts have been medically removed? No

Decision: Affirmed in part (doctor held liable for breach of fiduciary duty), reversed in part and remanded

Reasoning: [Arabian J. concurring, Broussard J. concurring and dissenting, Mosk J. dissenting]1. A physician must disclose personal interests unrelated to the patient’s health, whether research or

economic, that may affect the physician’s professional judgement; and a physician’s failure to disclose

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such interests may give rise to a cause of action for performing medical procedures without informed consent, or breach of fiduciary duty.

2. A fair balancing of the relevant policy considerations counsels against extending the tort of conversion. Problems in this area are better suited to legislative resolution. The tort of conversion is not necessary to protect patient’s rights. Statutory law drastically limited patient’s control over excised cells and patented cell line was both factually and legally distinct from cells taken from patient’s body and thus, cell line was not patient’s property.

Ratio: Patient whose extracted cells were utilised in research program to manufacture patented cell line did not have cause of action under theory of conversion; patient did not retain ownership interest in cells following their removal.

Comments: The Regents…– not physicians; none stood in a fiduciary duty to obtain Moore’s informed consent. Arabian J.: cells should not be treated as a fungible article of commerce. Only legislature has the

authority to decide on such issues. Broussard J.: Pl may recover the economic value of the right to control the use of his body part (before

it was removed because after it was removed, it no longer belonged to him). Mosk J. (dissent): 1. That the cell line is distinct from the cells themselves, we do not know if their

abnormality has any bearing on their capacity to produce proteins. It is in the commercial exploitation of that capacity, not simply in their number of chromosomes that Moore seeks to assert an interest. 2. No defence in that Moore cannot seek compensation b/c of a patent, as their unauthorized use of the body tissues was before the defendants patented their cell line. 3. The public policy reason given, that the courts should not restrict the advancement of medical research, cannot be given credence because this cell line has been made available only to a limited number of investigators.

Class Notes Assuming Moore had a property right in the extracted cells: Moore claims that but for those cells,

there would be no patent. (p. 48) Crt: distinction b/t claim to the patent and the claim to the cells. Why? I make a mouse trap that uses cheese and you make one that doesn’t. I have a veto to prevent

anyone from using a mouse trap that uses cheese. You have a veto to prevent anyone from using a mouse trap that doesn’t. I have a veto over your activity because you only added something to my mouse trap to create your own. Their mere addition of invention doesn’t mean that I don’t have some proprietary interest in your patent. This is distinguishable from Moore’s claim.

Please note that the trial motions judge’s decision comes before the Court of Appeal’s decision in this summaryGould Estate v. Stoddart Publishing, (1996) 30 O.R. (3d) 520 (Ont. Ct. Gen. Div.) Respondent, Stoddart Publishing Co. published book in1995 without consent of or compensation to appellants, The Estate of Glenn Gould and Glenn Gould Ltd. Book contains photos taken in 1956 by the late Jock Carroll with captions and an interview from 1956 with Carroll.

Issues: 1. Did Gould in fact have any proprietary rights in his image, likeness or personality which have

been appropriated by the publication of the photographs in the book? 2. Did Gould have copyright in the oral conversations, which occurred between himself and Carroll

and form the essence of the book in question.

Decision: There is no basis in law for either the photograph action or the words action.

Reasoning: Lederman J.1. It would seem open to the court to conclude that the tort of appropriation of personality is

restricted to endorsement type situations but is mindful of public interest. The danger of extending the law of torts to cover every such exposure in public not expressly authorized is obvious. Crts have drawn a sales v. subject distinction. Sales constitute commercial exploitation & invoke the tort of appropriation of personality [the identity of the celebrity is being used in some fashion but the activity cannot be said to be about the celebrity]. This is in contrast to situations in which the celebrity is the

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actual subject of the work or enterprise [ex. bios]. Note: The right of publicity, which protects the commercial value of a person’s celebrity status, should descend to a celebrity’s heirs under §2 of the Succession Law Reform Act.

2. For CR to subsist in a work, it must be expressed in material form and having a more or less permanent endurance. Thus, a person’s oral statements in a speech, interview or conversation are not recognized in that form as literary creations and do not attract copyright protection. The nature of the interview here was intended to be casual and to catch the spontaneity of Gould. This is not the kind of discourse that the Copyright Act intended to protect.

Ratio: 1. There is a public interest in knowing more about Gould; as such, the book falls into the protected

category. There cannot be said to be any right of personality in Gould, which has been unlawfully appropriated by the defendants.

2. The Copyright Act does not protect spontaneous conversation. ▫▫▫▫▫▫▫▫

(1998), 39 O.R. (3d) 545 (C.A.) Issue: Whether the respondent Carroll was entitled, for his own exclusive benefit , to later exploit commercially the photos he took of Gould in 1956 and to use his notes and tapes of his interviews at that time to write other articles on Gould notwithstanding that such later use of the photos and interviews had never been discussed with or agreed to by Gould or his successors or assigns.

Decision: I agree with the motions judge’s ultimate disposition and accordingly would dismiss the appeal.

Reasoning: Finlayson, J.A. Address the proprietary rights Carroll had in the photos and other material created by Carroll in 1956

& 1995 [as opposed to the G’s right to privacy & exploitation of his own image]. Gould clearly consented to the photographs being taken and to the continuing interviews by Carroll. No K b/t them. The only issue is whether Gould or his agent imposed any limitation on that consent (G did not).

In 1995 Carroll was the owner of the CR in all 400 photos taken in 1956 & in the photo captions & the accompanying text in the book. Accordingly, prior to entering into publishing arrangements with the respondent Stoddart Publishing, Carroll had exclusive proprietary rights in the photographs by virtue of being the author. Thus, the onus is on G’s side to show that G retained the CRs or that Carroll’s CRs expired once the article in question was published in Weekend Magazine.

Under the Copyright Act, §10(2) copyright subsists in a photograph for 50 years from the end of the year of the first making of the original negative (or photograph if there is no negative) from which the photograph was directly or indirectly derived. The owner of the original negative or photograph as the case may be, is deemed to be the author and the first owner of the copyright. In no sense can Gould be said to have commissioned the photographs of himself.

Ratio: Carroll, as the author of the text and captions in the book, was the owner of the unrestricted copyright in written material. It was Carroll alone who was the owner of all relevant copyright and he was the only person entitled to publish the book.Class NotesGlen Gould’s estate was unsuccessful in trying to stop the use of photographs of the pianist in the bio. A claim that Gould’s personality had been misappropriated failed: the shots had been taken with Gould’s consent during an interview and were used on an occasion of public interest, not merely to exploit Gould’s personality to sell products. The estate of Glen Gould sued and the court said that the right of personality was not violated. The Court of Appeal (p.68) said that once Carroll had a property right in the photographs and the other material, there was no cause of action: copyright was not violated.

Comparing Moore to Gould: Moore no longer has an interest in his cells, but Gould’s estate does have an interest in his

photographs. Moore: Even though it was necessary for the cells to be extracted for the cell line to be made, there

were other factors necessary for the patent creation. Imagine if someone wants to create a lot of these

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cell lines, they need to buy the cell line and the cells. In terms of separating the patent right from the cells, the court was right.

If applied to Gould, then the right of personality is not extinguished. All property rights are negative rights, so Carroll had a veto over the photos. To the extent that Gould had a negative right over this personality, Gould’s estate had a veto power. The Court of Appeal was wrong and Lederman J.’s account in the lower court was the correct one. He understood where the Court of Appeal did not: the right of personality continued.

How appropriate is it to think of these things in terms of property? In both cases, there seem to be an unwillingness to think about the objects in question in terms of a

property regime. Do you think it is appropriate for the court not to think of these things in terms of property? Lederman

J. was trying not to commodify all aspects of a public persona; (p.60) the right of personality exists in respect of sales, but does not exist with respect to subject. Sales to him: you’re just using the persona to sell the subject; you’re already treating it as a commodity. Before this case, rights of personality were quite vague.

The previous decision in Krouse v. Chrysler Canada Ltd. was the total opposite of this decision. Unless the Court of Appeal was trying to overturn that decision, it made Krouse totally irrelevant and wrongly so.

Authorship We could see Moore and Gould as authors. What was the reason for saying that Gould did not have a

copyright in what he was saying? It was a fixation argument and Gould’s estate argued that Gould did not intend his words to be fixed. The courts are more concerned about the lack of a creative intervention in Moore and Gould’s case. The value of Carroll’s work came partly from Gould’s persona and partly from Carroll’s work; the value of the patented cell line came from Moore’s cells: why do we only protect the last step (the fixation)?

ContractProCD, Inc. v. Zeidenberg , 86 F. 3d 1447 (7th Cir. 1996) ProCD sells a version of the database called SelectPhone with information from more than 3000 phone directories (not copyrightable). Application to access database is copyrighted. ProCD uses price discrimination and charges more to commercial users than to the general public; otherwise, all consumers would lose out according to economic principles. ProCD used contract to impose restrictions on purchasers buying for consumption purposes. Zeidenberg purchased a consumer package of SelectPhone and two additional packages, each containing a License Agreement that he ignored. He formed Silken Mountain Web Services Inc., and he made the information in the SelectPhone database available online for a price through his corporation. When ProCD filed suit for an injunction against further dissemination exceeding rights specified in license, the district court held the licenses ineffectual because their terms did not appear on the outside of their packages. The district court also held that the second and third license agreements stood no different from the first (though identical) because a purchaser cannot be bound by terms that were secret at the time of purchase.

Issue: Must buyers of computer software obey the terms of shrinkwrap licenses? Yes

Reasoning: Easterbrook J. Transactions in which the exchange of money precedes the communication of detailed terms are

common. Consumer goods work the same way as insurance policies: Inside the box is a leaflet containing some terms, the most important of which usually is the warranty, read for the 1st time at home. For Z, the warranty in the box is irrelevant; if Z is right, the purchaser need not read the package insert b/c it is not part of the contract.

Much software is ordered over the internet by purchasers who have never seen a box: there is only a stream of electrons, a collection of information that includes data, an application program, instructions, many limitations and the terms of sale. These unboxed sales are unfettered by terms so the seller has almost unlimited liability.

The UCC §2-204(1): “A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” A

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vendor, as master of the offer, may invite acceptance by conduct, and may propose limitations on the kind of conduct that constitutes acceptance. ProCD proposed a contract that a buyer would accept by using the software after having an opportunity to read the license at leisure. Z had no choice but to do this b/c the software splashed the license on the screen and would not let him proceed without indicating acceptance. A buyer accepts goods under §2-606(1)(b) when, after an opportunity to inspect, he fails to make an effective rejection under §2-602(1). ProCD extended an opportunity to reject and Z did not.

The district crt held that though Wisconsin treats shrinkwrap licenses as contracts, §. 301(a) of the Copyright Act prevents their enforcement by pre-empting any “legal or equitable rights [under state law] that are equivalent to any of the exclusive rights within the general scope of copyright as specified by §106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by §102 and §103.” The district court held that ProCD’s software and data are within the subject matter of copyright.

One function of §301(a) is to prevent states from giving special protection to works of authorship that Congress (federal under Copyright Act for instance) has decided should be in the public domain. A CR is a right against the world whereas a contract only affects its parties, so a person who finds a copy of SelectPhone on the street would not be affected by the shrinkwrap license, but would be prevented from copying because of federal copyright laws. Just as §301(a) does not itself interfere with private transactions in intellectual property, so it does not prevent states from respecting those transactions. Some applications of the law of contract could interfere with the attainment of national objectives and therefore come within the domain of §301(a), but the general enforcement of shrinkwrap licenses of the kind before us does not create such interference.

Ratio: Shrinkwrap licenses are enforceable unless their terms are objectionable on grounds applicable to contracts in general. (I.e. they don’t violate a rule of positive law &/ are not unconscionable). Whether a 2-party L is generous or restrictive, a simple 2-party contract is not equivalent to any of the exclusive rights within the general scope of copyright and therefore may be enforced.Class Notes: Property law makes no sense in the absence of contract law. If all we’ve studied is property law,

we have missed a good deal about the practicality of IP law. This is a case about buying software and licensing agreements. Easterbrook J. thought the idea of

licensing is a good thing and made it easy in that case to have contracts of adhesion. When you purchase a box, the agreement is inside. Instead of viewing this relationship as a relationship of property, he thinks its better to be able to govern what you can and cannot do in IP space, through contract. He wants there to be transactional lawyers rather than IP lawyers.

Raymond T. Nimmer, “ Breaking Barriers: The Relation between Contract and Intellectual Property ” Politicians argue that by bringing contract to the context of information transactions, contracts will be

used to stifle free speech or to block access to materials that are otherwise in the public domain. The fundamental premise is of this view is flawed: K & IP law have always co-existed peacefully and in interaction between mutually supportive fields.

“When one speaks about an existing balance in the property rights sector, it is futile to focus solely on the statutory provisions of the copyright, patent or trademark laws. One must, of necessity, understand and incorporate into the analysis the fact that the policy choice has always assumed that property rights are routinely transferred, waived, released, and licensed. Contracts provide the means for the development and commercial exploitation of information assets.” The underlying property rights are often relatively unimportant in the bargaining process. They tend to be treated as ‘default rules;’ those rules that state a legal position that exists between the contracting parties unless the parties otherwise agree. Contract law provides other default rules.

The relationship/ symbiotic conjunction of contract and property law All of the relationships and distribution choices involved in commercialization of information

assets involve contracts. The second method through which information and information assets are created and exploited involves situations in which the information if given away and any rights in it

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relinquished in whole or in part (non-contractual, open forum use of information: involves giving away information and a willingness not to assert rights, at least to some extent under some conditions).

Commercialization use (e.g. contracting for) informational assets is one of two primary means by which information is distributed. It represents that portion of the matrix that yields financial and similar incentives for the creation of new, and the distribution of existing, information assets. In that sense, the so-called IP bargain does not exist in the absence of contract law and practice.

How contract and property interrelate : the 2 bodies of law differ in how they regulate a party’s conduct; the impact of a property right in a marketplace shaped by K’al relationships is most often indirect, with the rules of property being filtered and adapted through contractual and other relationships; in this marketplace setting, IP law provides ‘default rules’ for K’al relationships. These are default rules in that by their own terms, the effect of the rule can ordinarily be altered by contract.

Contract Law is a party choice regime, emphasizing with few exceptions the ability of the parties to define their own relationship. In contrast, IP law (with the possible exception of trade secret law) is a vested rights regime. It defines the relationship of persons to an identified corpus of information in the absence of a contractual relationship altering that established or vested right.

K law does not mandate outcomes in a contract relationship. It has three primary functions: (a) it established when an agreement becomes enforceable in law between the parties; (b) it provides background or default rules which indicate what the terms of the relationship are in the event that the parties do not otherwise agree; and, (c) in limited situations, it provides that particular terms may be unenforceable on the grounds for example that the term is unconscionable.

K law relies on the premise that parties, rather than laws, create (or decline to create) a relationship. Negotiation over the terms seldom occurs in either a mass market or a commercial marketplace. One party (the vendor or the purchaser) proposes terms and the other party assents or refuses. (ex. DuPont offers cleaning product to janitorial company at specific price with disclaimer of warranties. If janitorial company is willing to purchase the product, the terms are fully enforceable.)

W/ few exceptions, standard form contract terms are enforceable (consistent w/ K theory). The decision to market (or offer to purchase) is the vendor’s and in the seller-dominant scenario, the buyer chooses to accept the product and terms or to reject them and purchase something else or nothing at all. The phrase most commonly associated with standard form contracts is “contract of adhesion”. These are routinely enforced.

A common but not completely accurate image of property or vested rights law is that the rules define a party’s relationship to a corpus (the “property”) in terms independent of any relationship between the rights owner and a third party. These form, in effect, a starting point for fashioning the transaction.

Crt in Bonito Boats Inc. v. Thunder Craft Boats Inc. invalidated a state law on grounds of pre-emption. The law purported to grant the distributor of boats a right to prevent others from duplicating the design of the boat hull through use of a particular technology. The Court argued that this state law purported to create rights that federal copyright and patent law denied. The underlying factual premise was that there was no contractual or other relationship between the original designer-manufacturer and the person duplicating the hull design. In effect the state law created an enforceable right in the absence of a relationship that federal law denied.

Limited role of property interests in determining the contours of contractual relationships. From a K law standpoint, setting out background principles is the primary function of property

law. The CR Act recognizes that the copyright owner can separately transfer (or withhold) any of the exclusive rights. As a result, a contract (“license”) that gives the grantee the rights to reproduce and distribute copies does not give the grantee a license to use the other exclusive rights held by the copyright owner (e.g. the rights of public performance or display or to make derivative works from the original).

Class Notes:Nimmer takes a slightly different approach as compared to Easterbrook J. in ProCD. He does not tell us that property is irrelevant; rather, that the only way IP rights work is by contracting them through licensing or by selling them altogether. Contract law is what is going to define what can and cannot be done in IP space to a much greater degree than property law. His view is that property sets out a starting point, but contract fills up IP space. He would praise Easterbrook J. for making it easier to have L’ing agreements.

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Spitzer v. Network Associates Inc. Memorandum of Law in Support of A-G NYSC Network Associates tells consumers, either in form License Agreements or on the face of the software

diskette that 1) “Rules and regulations” prohibit customers from “disclosing the results of any benchmark test” (i.e. products test), absent “written approval” and 2) Those “rules and regulations” also prohibit them publishing review of this product absent “prior consent” [Censorship clause].

This Censorship is unenforceable, illegal and deceptive . It is an illegal restrictive covenant that violates public policy and thus Executive Law §63(12). It restricts important rights of free speech and fair use without a legitimate purpose (e.g. trade secrets or confidential material) and restricts consumer and the media from reviewing the software or disclosing important design or product flaws.

It misinforms consumers that the company’s prohibition against publication of reviews or benchmark tests reflects existing “rules and regulations.” It conflicts with the License Agreement contained with the company’s boxed software, which omits the Censorship Clause. The Censorship clause is on the download page of the company’s website. The License Agreement precludes the company’s enforcement of the Censorship Clause: “This Agreement supersedes any other communication with respect to the Software and Documentation.”

Network Associates has reinforced the Censorship Clause with follow-up letters aimed at silencing specific critics such as the online magazine, Network World. Network Associates may have intimidated other specific critics into silence by threatening to enforce the Censorship Clause. The company has not complied fully with the Attorney General’s requests for such documentation: the company failed to produce even the Network World correspondence and has instead misrepresented in writing that no such documents exist. Counsel for Network Associates conveyed “assurance that it no longer imposes the regulations that have been at issue” and stated that it did not plan to resurrect those regulations at any time in the future. This is inaccurate: the License Agreement on the download page for VirusScan software still states “You shall not disclose the results of any benchmark test that you make of the Software to any third parties without McAfee’s prior consent.”

To be upheld, the restrictive covenant not only must protect a company’s “legitimate business interests,” but it must be “reasonable” in the “degree of hardship” it imposes. The Censorship Clause fails even the most threshold test for restrictive covenants as it serves no “legitimate business interests” of Network Associates protecting neither confidences nor intellectual property. It chills free speech and when real or potential critics such as Network World are threatened, the public’s right to communicate and learn about products they own and operate is endangered. Such disclosure is particularly vital in the case of security software like VirusScan and Gauntlet, on which consumers rely to protect computers from viruses, hackers and cyber-terrorists.

Accordingly, Network Associates has engaged in unlawful, fraudulent and deceptive acts in violation of NY GBL §349 and Executive Law §63(12) and should be enjoined from continuing to do so. This case is about ownership: who “owns” the right to share public ideas regarding a mass marketed product. A consumer’s or reviewer’s right to criticize cannot be subject to a manufacturer’s prior restraint.

J.H. Reichman & J. Franklin, “ Privately Legislated Intellectual Property Rights: Reconciling Freedom of Contract with Public Good Uses of Information ” There is a need for a uniform set of default rules to validate non-negotiable licenses as a

mechanism for minimizing transaction costs. However, routine validation of non-negotiable constraints on users would likely convert standard form licenses (contracts of adhesion) into the functional equivalent of privately legislated IP rights. This would ignore the balance between incentives to create and free competition recognized in IP laws.

The purpose of this article is to formulate and develop minimalist doctrinal tools to limit the misuse of adhesion contracts that might adversely affect the preexisting balance of private and public interests.

R & F propose a set of countervailing doctrinal tools, collected under a “public interest unconscionability” rubric that courts could apply case-by-case rather than invoking the pre-emption doctrine (see ProCD) from IP law or the public policy exception from standard contract law.

They advocate public interest checks on standardized access contracts and on non-negotiable terms and conditions affecting users. They try to preserve the maximum degree of freedom of contract: (a) All mass-market contracts, non-negotiable access contracts, and contracts imposing non-

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negotiable restrictions on uses of compeuterized information goods must be made on fair and reasonable terms and conditions, with due regard for the public interest in education, science, research, technological innovation, freedom of speech, and the preservation of competition…Affirmatively negotiated terms falling into above-mentioned categories shall enjoy a presumption of validity.

This presumption may be rebutted whenever the cumulative harm to the public interest from use, including repeated use, of the term or terms in question seem likely to outweigh the private and public benefits flowing from the specific transaction.”

By allowing licensors wide leeway in the name of freedom of contract, we remain confident that market forces will generate an abundance of information goods and drive them to their highest values. However, mindlessly tolerating abuses of that freedom to contract under a model of formation that dispenses with the requirement of mutual assent could produce unprecedented anticompetitive effects detrimental to the public interest.

Class Notes: R & F see the relationship between contract and property quite differently from the Easterbrook J. and

Nimmer. R & F = property law is the ideal. Property law is the state saying who ought to have what. The

statutory schemes are designed to endure that we allow some commodification so that people can profit from it but has inherent limitations on it such as fair dealing. K law virtually ignores this balance between incentive and access. The information holder extends the reach through contract and tries to get more than what copyright law would give them by making the consumer into the licensee. All contracts are to be evaluated against the private interest to make money and the public interest to gain access (see the statement of claim dealing with the anti-virus software on each of our computers).

One of the contract terms in the Network Associates case is that you cannot publish a review of the software. The terms undermine free speech and the market. The case has not been heard, but this is where the battle lines are in terms of this question under dispute by the authors discussed. All of this assumes the centrality of contract. It is not the IP right that matters; it’s how you use it (//you shouldn’t regulate pollution, but what should matter is the consumption of water). The property right defines when you can use a right and what rights you have and the contract depends on the property rights. Property law comes first in order to set up the initial distribution but then contract law comes in to formalize the rules.

TortsCalabresi & Melamed , “Property Rules, Liability Rules and Inalienability: One view of the Cathedral” “Entitlements”: whenever a state is presented with the conflicting interests of two or more people, or two or more groups of people, it must decide which side to favour; the fundamental thing that law does is to decide which of the conflicting parties will be entitled to prevail. Decide re the manner in which entitlements are protected and whether they may be sold or traded

Three types of entitlements:1) entitlement protected by property rule: s/o who wishes to remove the entitlement from its holder must buy it from him/her in a voluntary transaction in which the value of the entitlement is agreed upon by the seller. State intervenes only to determine to whom the entitlement will go. Least amount of state intervention. 2) entitlement protected by liability rule: s/o may destroy the initial entitlement if he/she is willing to pay an objectively determined value for it. Additional stage of state intervention; value is determined by state, not by parties3) inalienable entitlements: transfer is not permitted between willing buyer and seller. State intervenes to determine who is entitled, the compensation if the entitlement is taken or destroyed and to forbid its sale under some or all circumstances.

Entitlements are set for reasons of1) Economic efficiency: simplest reason for granting a particular entitlement: minimizing administrative costs of

enforcement. Not used by itself, for this is the same as might makes right, leave the costs where they

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fall. Occurs when reasons are indifferent between conflicting entitlements, and one is cheaper to enforce than others.

*****Pareto optimality: economic efficiency asks that we choose the set of entitlements which would lead to that allocation of resources which could not be improved in the sense that a further change would not so improve the condition of those who lost from it and still be better off than before. Increase the benefits of a group (i.e., increase the value attached to its entitlements); no matter what the distribution is within the group; as long as those who are better off could theoretically compensate the less-favoured, then Pareto optimality has been reached****

It is argued that, if there are “no transaction costs,” i.e., perfect knowledge and the absence of any impediments or costs of negotiating (no freeloaders, etc.), then Pareto optimality will occur regardless of initial entitlement; (Based on assumption that people are able to set a value on the good and have the money to pay for it; so: the optimal situation has been reached even if A has $0 and lives on the street, as long as B lives on top of the mountain in a mansion with lots of capital.)

But, an economically efficient situation will vary with the starting distribution of wealth Distribution of wealth may affect a society’s choice of entitlements In field of accident law:

a) econ efficiency alone dictates the entitlements that favour choices between social benefits and social costs of obtaining them, and the social costs of avoiding them;

b) when the worth of a benefit to society is in doubt, the cost of the activity should be put on the party best-located to make a cost-benefit analysis,

c) in accidents or pollution, the costs should therefore be put on the party most cheaply avoid them,

d) when unclear who that party is, cost should be put on the party which can act in the market to correct an error in entitlement with the lowest transaction costs, and induce the party who can avoid social costs most cheaply to do so,

e) there are transactions costs, t/f must make decision about whether market transactions or collective fiat will be more econ efficient

2) Distributional concerns: 2 types (1) distribution of wealth and (2) distribution of (merit) goods all societies have wealth distribution preferences; can be based on the arbitrary or on morality or

on efficiency or on worthiness or some other organising principle cannot be equality for that is impossible: not enough to start everyone off with the same amount of

money; other entitlements will make some richer than others (silence is preferred, so silence lovers will be richer than noise makers)

how to compensate for all the differences and the various individual valuations of various things (how much is silence worth to Mr. A? to Mr. B? tax people with brains and give to those who haven’t got?)

“a society which prefers people to have silence, or own property, or have bodily integrity, but which does not hold the grounds for its preference to be sufficiently strong to justify overriding contrary preferences by individuals, will give such entitlements according tot he collective preference, even though it will allow them to be sold thereafter” (p. 127 cb 1, 1101)

3) Other justice reasons: relative worthiness of certain over others? Apparent consistency of the choice with other entitlements in society? but how to choose who is worthy? Not just a choice between 2 individuals, are effects on others,

and many external effects on the decision treating like cases alike? Choose silence lovers because we choose people who are not violent and

there are good distributional reasons for this; simplifies task of obedience justice reasons are ultimately all the reasons; economic efficiency and distributional reasons are a

kind of justice

Property and liability rules: Liability rules exist because often the cost of establishing the value of an initial entitlement by

negotiation is so great that even though a transfer of the entitlement would benefit all concerned, such

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a transfer will not occur. If a collective determination of the value were available instead, the transfer would occur.

Ex., Guildacres. A tract of lad owned by 1000 owners in 1000 parcels would benefit a neighbouring town. Each of the 100 000 citizens of the town would be willing pt pay $100 to get it. Transaction would be econ efficient if owners of land valued it at less than $1000 a tract (what they would get at above price). But even then, if some of the owners hold out for more b/c they think the buyers will pay more, they will not get it and transaction will not happen. Sellers will have an incentive to hide their true valuation and the market will not succeed in establishing it

Or, maybe buyers cannot raise enough b/c some are freeloading, expecting others to make up for what they won’t pay. Will lie and hope others will value it more and be willing to pay more. Market will not cause people to express their true valuations again, t/f desirable results cannot be achieved.

Liability rule allows society to decide the value collectively and impose it: no more holdouts. Also, can charge benefits tax on collective valuation of each citizen’s desire to have a park: no more freeloader.

Are also problems with liability rules: may be lying when we say what value s/t has for us. “objective” liability rules may result in over or under compensation. Benefits tax: value of an entitlement to each individual cannot be determined accurately

Nevertheless: “the most common [reason] for employing a liability rule rather than a property rule to protect an entitlement is that market valuation of the entitlement is deemed inefficient, that is, it is either unavailable or too expensive compared to a collective valuation.” (p. 131 cb 1, 1110)

Efficiency not the only reason: “may allow us to accomplish a measure of redistribution that could only be attained at a prohibitive sacrifice of efficiency if we employed a corresponding property rule.”

Inalienable entitlements: also efficiency and distributional goals underlying use Limitations on right to engage in transactions may serve efficiency when there would be a high

cost to 3rd parties Ex. in cases of sale of land to polluters: neighbour doesn’t want me to sell land to polluter, pays

me. But if there are many neighbours, freeloader and information costs make this practically impossible. State could protect neighbours and let land be sold by letting neighbours prevent sale to polluter by employing liability rule. But costs could be high: eg. Excise tax on all sales of land to polluters equal to the estimate of the external cost to the neighbours of the sale. Barring sale is most efficient: avoiding pollution is cheaper than paying its costs.

Or external costs can’t be measured in acceptable way. Such costs are called moralisms. One person can’t be allowed to sell himself into slavery b/c of the cost to the other members of

society. Can’t be valued in monetary terms. Other reasons for forbidding sale: self paternalism and true paternalism

- Self paternalism : decision of individual (or group) to not engage in economic activity; based on notion that no one knows better than the individual what is best for him or her. May require certain conditions to exist before allowing a sale, or may explain inalienability, like invalidity of K’s entered into when drunk or under coercion.

- True paternalism : activities of minors. Others know better than the individual what is good for the individual.

Distributional goals also play role: e.g. “prohibiting exculpatory clauses in product sales makes richer those who were injured by a product defect and poorer those who were not injured and who paid more for the product because the exculpatory clause was forbidden. Favouring the specific group that has benefited may or may not have been the reason for the prohibition on bargaining. What is important is that, regardless of the reason for barring a contract, a group did gain from the prohibition.” E.g. 2, Prohibiting the selling of babies.

Pollution rules: balancing of costs and values can achieve econ efficiency; but often transaction costs are too high and the market place cannot adjust the balance

t/f likely to use liability rules when we are uncertain whether the polluter or the pollutees can most cheaply avoid the cost of pollution.

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inalienability could be used in such cases: moralisms against pollution: expectations of future generations, etc. This ground for inalienabilty could be strengthened by self-paternalism. State could also restrict pollution on paternalistic grounds.

Why criminal liability for theft? Why not liability rule? Because society needs to keep all property rules from being changed at will into liability rules. “We impose criminal sanctions as a means of deterring future attempts to convert property rules into liability rules.”

Comments Presumption that property rules are the most efficient way of enforcing claim; Property requires no state role; it is up to the person with the entitlement to say how valuable it is; state

would set an arbitrary value, either under- or over-valuing If, however, property is inefficient (too difficult, expensive, etc.) move to liability rule If this is inefficient b/c it affect the interests of too many others (if morally problematic) move to

inalienability rule Above article does not address initial distribution of entitlements; assumes initial entitlements are

there; Also ignores moral weight of the protection of an invention ; there is no right or wrong; if leg’re

decided to change © protection to 5 years, they would have no opinion. Dessert/Lockean view of asserting personal o’ship: makes no sense in C & M context

Public interest in IP Protection by liability rule: E.g. © on music: royalties: thru leg’n, © societies exist to which a musician

belongs. Radio can play their songs for a fixed tariff, and funnel the money for royalties to the relevant society; avoids transaction costs of negotiating; musician gives up veto right

Or: Compulsory licensing: can’t prevent people from copying medications; product can be manufactured on payment of r’ble royalty to patent owner

© or patent right to reproduce can also be protected by a property rule: injunction moral rights are also inalienable rights in IP; in Canada, they are not assignable although they can be

waived (inalienable right combined with liability rule)

Sui generisCadbury Schweppes v. FBI Foods, [1999] 1 S.C.R. 142 The appellants manufactured Clamato juice at plants in Vancouver and eastern Ontario under license from the respondents. Respondents terminated the license, but thereafter the appellants misused confidential information related to the Clamato juice recipe obtained during the license period to continue to manufacture a rival tomato-based drink, Caesar Cocktail.

Issues: Was there a fiduciary relation? What should the remedy be for breach of confidence in a commercial context? Appeal allowed.

Reasoning: Binnie J. The respondents’ reliance on IP law ignores the bargain that lies at the heart of patent protection.

A patent is a statutory monopoly given in exchange for a full and complete disclosure by the patentee of his or her invention. The disclosure is the essence of the bargain between the patentee and the public.

Thus, at least one of the policy objectives underlying the statutory remedies available to a patent owner is to make disclosure more attractive and hasten the availability of useful knowledge in the public sphere. If the court were to award compensation to the respondents on principles analogous to those applicable in case of patent infringement, the respondent would be obtaining the benefit of patent remedies without establishing that their invention meets the statutory criteria for the issuance of a patent, or paying the price of public disclosure of their secret. There was breach of confidentiality but a proprietary remedy would be inappropriate, as it would add confusion to the task of weighing policy objectives and furthermore, the trial judge considered the confidential information to be nothing very special.

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The policy objectives in both equity and tort would support restoration of the plaintiff to the position it would have occupied “but for” the breach. However, in contrast to other tort cases, the loss measured in this case according to common law principles would produce the same result as the loss measured in equity. The use of the confidential information may have been an actionable wrong but it did not cause any monetary loss to the respondents.

Class Notes: In Cadbury there was agreement that the secret information (the Clamato recipe) was improperly used.

Binnie J. says that in order to determine the remedy, you have to determine what kind of right this is. He reaches the conclusion that it is not a property, tort or unjust enrichment claim. What would he have had to do had he reached a different conclusion? He was avoiding the imposition of a great amount of damages. The value of the remedy would have been too high. By calling this a sui generis right, we can avoid making the defendant pay too high a cost.

The entitlement here was control over a formula. Enforced as a property rule would allow for damages or an injunction. The court gave an objective value to the information that was not too high. Binnie J. could have achieved the same result through property and torts. It seems despite what Binnie J. said, that this is a property right.

A Case study in CopyrightAlain Strowel , “Droit d’auteur and Copyright: Between History and Nature” Droit d’auteur is often tied into natural law while copyright is considered a positive right created by the legislator. The aim of this paper is to examine this juxtaposition considering three factors said to distinguish droit d’auteur from copyright (See below). Thesis: In spite of similarities between these two, a fundamental difference separates the two: the interpretative framework within which the rights are posited.

DROIT D’AUTEUR COPYRIGHTTHE CHARACTERIZATION OF DROIT D’AUTEUR AS A RIGHT OF PROPERTY COMPARED WITH THE MONOPOLY BASIS OF COPYRIGHT

French revolution swept away privilege system and sanctified concept of property (Le Chapelier’s contention: “the most sacred, the most inviolable and, if I might venture, the most personal of all forms of property is the work, the fruit of a writer’s thoughts.”). Given the value accorded to property, it is not surprising that Revolutionary legislators and their commentators should have invoked the authority of the natural right to property in order to legitimize the rights of authors.The right of destination (droit de destination), a construct of droit d’auteur gives the author power of control over the use, which third parties may make of copies of the work circulating on the market. It is considered to be based on the right of reproduction and unquestionably flows from the fundamental control that authors have over the distribution of their work. This reinforces the idea that authors are reflected in their work and are bound to it. The idea of property, combined with the invocation of natural right, has often served in the history of droit d’auteur as the basis for arguments seeking to expand the sphere of rights. Such was the case when the Paris booksellers invented “the author as proprietor” and the case with the doctrine of the right of destination.

Because the monopolistic position of the copyright holder does not rest on actual market power but derives from the attribution of a right, copyright is said to be a legal monopoly. In the Betamax case, the Supreme Court of California held that the sale of video recorders could not be seen as a violation of copyright in television programmes because monopoly privileges are limited in scope.

DROIT D’AUTEUR AS A NATURAL LAW SYSTEM IN CONTRAST TO THE POSITIVISTIC COPYRIGHT SYSTEM (the

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distinction is not as hard and fast as commentators would have us believe. However in cases of uncertainty the differences are noticeable and can be explained by fundamental divergences between civil and common law).It is not the law which gives rise to this right; through the mere creation of the work, droit d’auteur arises in the person of the author. Two factors call into question the natural law basis of droit d’auteur: 1) There was a contradiction which endured in France for over fifty years between the recognition of droit d’auteur as the most sacred of all properties and the restriction of the right to French citizens and resident foreigners. The territorial character of the law affected the position of foreigners, thereby contradicting the natural law character of droit d’auteur. 2) Natural law only provides a partial explanation. We cannot explain why a given prerogative was introduced, why a particular time limit was chosen and why a particular exception was made. These are best explained by utilitarian and pragmatic considerations.

The statute creates the right. In Donaldson v. Becket, the House of Lords held that at common law, the author held the exclusive right to the publication of his/her works, but as soon as the work was published, copyright ceased to apply and the author could bring an action only under the conditions of statutory copyright established by the Statute of Anne. This had the effect of removing copyright from the sphere of natural rights and from the outset, copyright could be said to be a statutory concept and not one of common law, which allowed a positivist conception to come to the forefront.

Although early American copyright law has traces of both natural and positive conceptions of copyright, the decision in Wheaton v. Peters that drew a distinction between statutory copyright and common law copyright contributed to the isolation of the former from its natural law foundation. The Court held that copyright was not an innate right, but that a common law right exists for non-published works because of the labour of the author. From then on, copyright legislation seems to have departed drastically from natural rights concepts except perhaps if we accept Goldstein’s view that there is a natural law influence in the Copyright Act of 1976 and Reichman’s view that the long period of protection after the death of an author demonstrates a similar logic and the view that the US subscription to the Berne convention is more in line with the natural law vision that the traditional positivist conception.

THE SYNTHETIC AND OPEN NATURE OF DROIT D’AUTEUR AS DISTINCT FROM THE CLOSED SYSTEM OF COPYRIGHT (the nature of each is largely determined by the framework of interpretation in which they are situated)This is an open and synthetic system: legislators express themselves in broad terms, allowing case-law to fill in the gaps (much like the style of the Code Civil). Judges (non-elected) thus have a lot of power to correct uncertainty. French law is content to enunciate absolute and fundamental principles.

This is a relatively closed system with rights set out in a catalogue and a precise manner. The British text is replete with qualifications, provisos, exceptions, limitations.

Théberge v. Galerie d’Art du Petit Champlain, 2002 SCC 34 Théberge, a well-established Quebec painter, entered into a K with a company called E.G.I. and under that K he gave them the right to make 10,000 posters. There is some debate as to whether this was a license or assignment. One of the consumers is an art gallery. They put a resin on the poster and take the paper off but leave the ink attached to the resin. They then take the resin and attach it to a canvas. They sell the canvas at a significantly higher price. He seeks to stop the appellants from transferring authorized reproductions of his artistic works from a paper substrate to a canvas substrate for purposes of resale. T arranged to have the bailiff seize canvas-backed reproductions from the appellants without ever satisfying a judge that the appellants had violated the Copyright Act.

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Issues: What is the extent to which an artist, utilizing the statutory rights and remedies provided by the Copyright Act, can control the eventual use or display of an unauthorized reproduction of his or her work in the hands of a third party purchaser? Appeal allowed

Reasoning: Binnie J.If modification of these posters were to give rise to any legitimate objection on the part of the artist, it must be as a result of a violation of his “moral” right to the integrity of his work. The Copyright Act provides the respondent with both economic and “moral” rights to his work. The distinction between the two types of rights and their respective statutory remedies is crucial. Canadian CR law has traditionally been more concerned with economic than moral rights. The respondent must establish breach by the appellants of §3(1) of the Copyright Act, which he has not, as there was no reproduction in substantial part. If the respondent’s claim is successful, then the present balance between the economic interest of the CR holder and the proprietary interest of the purchasing public will be significantly altered to the public’s detriment. Legislation distinguishes between moral rights and economic rights and recognizing the respondent’s claim would undermine this distinction, thereby introducing a droit de destination (See Strowel reading) into our law without any basis in the Copyright Act or precedent from other comparable jurisdictions.

Ratio: The appellants did not copy the respondent’s artistic works. They purchased lawfully reproduced posters (which lawfully incorporated the copyrighted expression. No new reproduction of the respondent’s works were brought into existence. There was no production or reproduction of a new artistic work “in any material form” within the meaning of §. 3(1) of the Copyright Act. Class Notes: We do not need to worry about E.G.I.’s role because it did nothing wrong in making the posters and

selling them. The judges agreed that what was left on the canvas was not a violation of moral rights. Binnie J. (the ComL judge on IPRs) writes the decision for the majority and Gonthier writes the

dissent. There are three levels of analysis in this particular case: §3(1)(a)- creation of new material copies, not

just literal, physical, but also metaphysical (transformation to another medium, e.g. books to film). Here, the pattern of ink on the paper surface did not change and was not reproduced. It was maintained from the original poster and transferred to the canvas. The same paint was transferred. If you count the number of objects before and the number of objects after, the number is the same. If we had a slightly different process and for a split second had the old and the new existing simultaneously, then we would have copyright reproduction.

Gonthier J. thinks reproduction doesn’t mean new things. He cites Ch2. Art 3 of the French Civil Code and calls it the expressive idea. The idea was once materialized and materialized again on the canvas and this constitutes reproduction. This materialization has a higher value but why that has anything to do with reproduction is unclear. Gonthier J. is much more concerned about the artist.

Binnie J. starts off with a discussion of policy: (p. 169) he uses the terms “expansive reading” and “economics”. He says we have to maintain a balance between protecting artists and purchasers. The proper way to conceive of CR is a balance of interests. Going too far or giving too much right to the artists throws off the balance.

For Gonthier J., CR is an entitlement to the expressions tied to one’s personality. It is an entitlement to control all uses of that expression. Compare the words droit d’auteur to the word copyright. One appears to be a positive right and the other a negative right. In the French Civil Code, the author appears to be mystified. In the German Copyright Act, similar rights are accorded to the author.

Calabresi & Melamed, what is the entitlement of the public according to Gonthier J.? The public has an inalienable right to enjoy the work. What if the person with the copyright interfered with the inalienable right of the public to access the material: would the court likely limit the rights of the copyright holder? (See what Reichman is asking for as part of the law). If all we care about is the most efficient distribution of property according to C&M, we are adhering to an enlightenment perspective, but the French Civil Code seems to have been drafted to protect the work of the people that motivated these ideas.

REGULATING CREATIVE ACTIVITY “PROSPECTS FOR CIVIL JUSTICE” - R.A. Macdonald

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Debate regarding the appropriate social institutions that are appropriate to our modern market economy

Some scholars believe that different social institutions serve specific roles; thus some institutions are better equipped to handle certain issues - i.e. belief that courts shouldn’t be given authority over what are essentially policy concerns

On the other hand, perhaps it is not so much about the institution, but rather the process of social ordering - i.e. what type of process (be it adjudication, mediation, elections etc) is the most suitable response to certain social problems.

Traditional belief that adjudication is not an effective decision making process when the dispute in question is based on policy considerations rather than on the application of pre-existing rules

Focusing on process rather than institutional analysis is a better approach since it diminishes the false dichotomy regarding specific tasks that institutions are supposed to practice (i.e. the false belief that Legislature is responsible for policy and Courts are responsible for strict rule application). Even the legislature recognizes expressly that Courts play a policy making role

Additionally, focussing on process brings to light the fact that institutional competence results from the way legislature chooses to formulate civil disputes. Process analysis illustrates that civil disputes should be formulated to take maximum advantage of the institutional features of the judicial process

Macdonald advances that a process analysis approach can guide legislatures in thinking about allocational decisions, in particular, the third party managerial process, by which many acknowledge that the ultimate decision will be responsible to policy considerations

It is increasingly frequent for legislatures to transform legal entitlements. Previously, the disputes were cast in the manner of claims of right

Furthermore, Macdonald claims that a legal process approach will permit the identification of claims and entitlements currently allocate to the courts for decision that do not correspond to the fundamental logic of adjudication; thus, we will be led to think about whether particular disputes should continue to be addressed by the ordinary judicial process. Conversely this approach will also help us see what disputes that ARE NOT allocated to the judicial process, but should be (i.e. Are disputes regarding IP best addressed by the judicial process?)

However, the approach DOES NOT guide the legislature in deciding whether certain disputes should be allocated to a particular dispute resolution institution

ORIGINS OF PRESENT IP REGIMES COPYRIGHTDelrina Corp. v. Triolet Systems (2002), 58 O.R. (3d) 339 (C.A.) Carolian is a business that alleges that Triolet System’s software, Assess, infringes Carolian’s copyright in its program, Sysview. An employee, Duncombe, was employed by Carolian, and rewrote the Sysview system for the company. Duncombe then began to design Assess after leaving Carolian. Assess was designed to be functionally similar to Carolian’s Sysview so that Assess could compete directly with Sysview for the same customers.

Issue: Does the creation of Assess constitute an infringement on the copyright of Carolian’s software?Held: No. Appeal dismissed (trial judge did not commit an error in judgment)

Reasoning: -Copying includes copying from memory or subconscious memory; however, the features common to both programs are not capable of copyright protection. The trial judge’s essential finding were not base on the vie that copying fr memory could not be a basis of copyright infringement-Functional similarities are not necessarily evidence of copying. A program designed to be functionally similar to another doesn’t necessarily entail copyright infringement. Furthermore, one person being the author of competing programs does not necessary imply copyright infringement-Copying for CR infringement purposes requires an analysis of the quality rather than the quantity. -The reproduction of a part which by itself has NO originality will not normally be a substantial part of the CR and will thus not be protected. There is no CR in some unoriginal part of a whole that has CR.

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-The proper methodology in assessing a CR framework in this respect is to determine whether the object is entitled to CR as a whole, then to determine whether the allegedly infringing product is equivalent to a substantial part of the good which holds CR. (abstraction → filtration → comparison method)-The reproduction of a particular arrangement of elements that are not themselves protectable can constitute copyright infringement if that arrangement is original. The alleged similarities b/w Sysview and Assess, including the arrangement of elements, were dictated by functional considerations, which are not protectable by copyright. Comments:-CR in Britain, Cda, and U.S. only protects the original expression and NOT the ideas underlying the expression-in the U.S. the idea/expression dichotomy is applied more strictly, and enlarges the idea aspect of the work while narrowing the expression aspect. This results in the narrowing of the scope of CR protectionComments:Abstraction → Filtration → Comparison method1. Abstraction - Go through both computer programs. Don’t look at the literal code but the abstraction i.e. the general construction blocks2. Filtration - Filter parts of it out. Determine how many ways the programming can be done3. Comparison - Take the abstraction level, see what’s left and compare the programs**If the 2 programs are substantially similar, then there is CR. If they aren’t substantially similar, no CR

2 doctrines have emerged with regard to Copyright:1. Doctrine of Merger

When the idea and expression are merged we do not give CR protection. In other words, if there is only 1 way to say something, form and expression are the same, and this does not warrant CR protection. i.e. Yelling “fire” can only be done in very few ways - this act doesn’t deserve CR protection

Thus, there are very few ways to copy codes for the purpose of creating a computer program in an original manner since the form and expression are often merged.

2. Doctrine of things in the public domain Can sue when you copy the whole work but not just parts of the work. It is OK for you to copy

parts, but not the whole. If you copy parts and put together in a new or original way, this deserves CR.

There aren’t many copyrightable elements in computer programming since programming originates in a code that is usually publicly available. If you copy something that already is in the public domain (i.e. if I redo Hamlet in my handwriting), this doesn’t merit CR protection, since it is already in the public domain.

We give CR protection in a work in so far as it reflects originalityIf you take these two elements away, there isn’t much left subject to copyright in computer programming.

Gilliam v. American Broadcasting Companies, 538 F. 2d 14 (2d Cir. 1976) Monty Python holds copyright in its works and has an agreement with the BBC regarding the airing of its script. The agreement states that the BBC may license the transmission of recording of the television programs in any overseas territories. Time-Life films acquired the right to distribute in the U.S. certain BBC programs, including the Monty Python series. Time Life was permitted to edit the programs for insertion of commercials, applicable censorship or governmental rules and regulations. Monty Python viewed the changes after the program was aired and were displeased by the editing done by Time-Life, alleging that Time-Life had ruined the integrity of the work.

Issue: Did ABC’s editing of a program after recording and without consultation of Monty Python exceed the scope of any license BBC was entitled to grant, thus infringing copyright? Yes.

Reasoning:

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-CR in the underlying script survives intact despite the incorporation of that work into a derivative work. One who uses the script, even with the permission of the owner of the original work may infringe the underlying CR-If the owner of the derivative work is licensed by the owner of the CR in the underlying work, to vend or distribute the derivative work to the 3rd parties, those parties will suffer no liability; HOWEVER, the claim is that the revisions to the underlying work (the script), could only be made after consultation with Monty Python, and that this act exceeded the scope of the granted license.-The ability of the CR holder to control his work remains paramount in CR law. Unauthorized editing of the underlying work, if proven, would constitute an infringement of the CR in that work similar to any other use of a work that exceeded the license granted by the owner of the CR-Although Courts recognize that licensees are entitled to some small degree of latitude in presenting a work to the public consistent with the licensee’s style and standards, the degree to which the presentation was altered in the present case constitutes an infringement

Comments:-Lumbard J. states: “CR law should be used to recognize the important role of the artist in our society and the need to encourage production and dissemination of artistic works by providing adequate legal protection for one who submits his work to the public”. -The artist generally has the right to his work attributed to him in the form in which he created it. Although American CR law doesn’t recognize moral rights (the foundation is economic incentive for artistic and intellectual creation), American CR law cannot be reconciled with the inability of artists to obtain relief for mutilation or misrepresentation of their work to the public on which the artists are financially dependent. Thus, Ct’s have relied on regimes outside the statutory law of CR, such as contract lawConclusion A comparison of Delrina and Gilliam demonstrate that the inherent value of a work is considered The two cases demonstrate that we are willing to apply different levels of the CR test to different

types of work depending on the creativity of the work and due to economic considerations If we value the creativity of a work we may accord to it better protection - see Gilliam If we want to encourage competition, a higher level of scrutiny to meet CR will be created (i.e.

computer programming - see Delrina or sports events)

Donaldson v. Beckett , (1774), 2 Bro. 129, 1 E.R. 837 (H.L.) Andrew Millar purchased works by the author James Thomson. Another, John Millan owned poems by Thomson to which he had the sole right of printing and publishing. Millar contracted with Millan to purchase these as well. Millar was thus entitled to all profits arising from the printing and publishing of the poems and to all the sole and exclusive property and right of printing copies of them. Millar died in 1768, and the copyright of the writings were sold to the respondents (Beckett) at an auction. After the purchase the appellants published and sold several thousand copies of some of the writings. Beckett seeks to restrain the appellants from publishing or selling the writings (based on a natural right argument to copy rights).

Issues: Does Beckett have a natural (or perpetual) copyright? No

Reasoning:-The Statute of Queen Ann objective was to secure temporary literary property by penalties from privacy and invasion. It is meant to encourage learning-The Act provides the right of sole printing to the author and his assignee or assigns 14 years starting from the day of first publishing. After the term, the sole right of printing returns to the authors if they are still living for another term of 14 years. -Although an author has natural copyright at common law, this is supplanted by the Statute of Ann-An author does not have the sole right to publish a work in perpetuity by the Common Law pursuant to this statute. The statute does not grant perpetual privilege and monopoly over literary works.

Comments:The questions put to the judges were:

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1. Does an author who has the sole right of first printing and publishing for sale have the right to bring an action against any person who printed, published, and sold the work w/o his consent?2. If the author has that right, does the law take away that right upon printing and publishing the work, thus leaving it open for subsequent people to print and publish the work for his own benefit against the will of the author?3. If the author has that right, does the statute 8th Ann preclude every remedy except for what is named in the statute?4. Does an author of a work have the sole right of printing and publishing the work in perpetuity by the Common Law?5. Is this right (in question 4) impeached or restrained by the statute 8th Ann?-The case lost on the question in that the author does not have the right to publish and print the work for perpetuity in the COL by virtue of the Statute of Anne**This case stands for CR as an economic right, and not a fundamental rightClass Discussion: Donaldson v. Beckett demonstrates the classic debate in CR: perpetual rights pursuant to a natural

right/justice approach v. the publisher’s rights on the basis of public utility. Public utility arguments assert that production of the mind should be diffused as widely as

possible, the right to copy is an economic right and no more, there is nothing “natural” about it Public utility asserts that a perpetual natural right would be counter productive to authors The public utility argument won and nobody has since argued that CR is anything but that.

“ Critical Perspective on the History & Philophy of Copyright ” – R. Bettig, 1996 Copyright is linked to the dev’t of capitalism and the dev’t of the printing pressPre-history of IP rights Belief that IP first appears in Athens, 6th c B.C. - where we see a new sense of individual self

emerging At this time we see the first recorded claims to literary and artistic creativity However, the attribution to individual authors grew more out a concern for accuracy and authority

of the oral record rather than a concern for copy right Many societies with oral culture (India, China, Aboriginal peoples) have a history based on

peoples rather than individuals where “who said what” was not as important as “what was said” Different cultural attitude may explain why CR emerged in Europe and not Asia In medieval Europe, there was no conception of literary property - it too was primarily an oral

culture. There used to be a literary commons from which everyone could draw Scribal culture also worked against CR since this mode of communication lacked the power to

preserve individual contributions to art, literature and inventions It is also argued that the structural position of artistic creativity, meaning the Christian paternalist

ethic whereby the Divine spoke through the artist who is the medium of supernatural expression, mitigated against the conception of literary property

Bettig argues that relations of production based on collective forms of creativity and consumption is another reason why literary property wasn’t advanced in the medieval ages

The Origins of CR The needs of Europe’s culture savante including the clergy and nobility led to the

development of a European communications system at the advent of the Central Middle ages (1000-1400 A.D.)

Correspondence and books were 2 important means of communication w/i this system Book trade organized around universities was based on the reproduction of works of religious

authorities and classical authors - this system forbade exclusivity. For a fee a stationer would reproduce texts by hand on behalf of buyers -- they worked under university regulation, whose authorities checked the works for textual correctness, controlled prices and insisted that books be loaned to anyone wishing to make copies

A growing reading public allowed some stationers to break free from university and guild control

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In Venice the printing press was introduced by John of Speyer. He was given exclusive printing privileges for 5 yrs by the Venetian Collegio. This type of privilege was given by the city government to encourage the importation of new industrial techniques and stimulate the growth of local industry and commerce. Government regulation took form in patent monopolies, which granted an exclusive right to operate in a particular industry or to produce a certain type of commodity. Governments thus began to define what belonged in the public domain and what could be appropriated for private use and profit. Patent and CR laws supported the expansion of the realm of creative human activities that could be commodified. CR reflected the existence of newly developed print technology that allowed the fixing of literary works in tangible medium. CR and Patent laws legitimized the concentrating of o’ship of inventions, art, and literature in the hands of the expanding capitalist class

In Britain print technology was introduced in 1476. Government regulation enticed printers and booksellers to come to England and encourage the development of a book trade. Licensing of printing presses and printing patents for titles and classes of books and censorship were other forms of gov’t regulations. In 1557 the Stationer’s Company was incorporated, giving it a monopoly over printing and publishing in England. It kept a registry of member printers and publishers listed the titles of their publications, to which they had exclusive rights to copy. Only members of the company could register titles and secure CR’s. Publishers paid for the best originals that authors could produce since these commanded higher value in the market place. Thus, payment to authors was due to economic incentives rather than on legal or moral grounds. As competition in the market place increasingly determined who could make a living producing art and literature, progressive individualism grew and was apparent in the attitude of writers to their work.

John Locke justified the practice of CR on natural rights, stating that an author has a natural right in his work since he has expended his own labour in creating it. This builds on Hobbes’ possessive individualism, but contains some traditional moral law, which was more appealing to the rising capitalist class. Locke further argued that when one removes something out of the state of nature and mixes his labour with it, it becomes his property. Inherent to the property is the right to exclude others from using it.

Bettig argues that Locke’s never truly articulated a theory for an author’s natural right to his work. Milton was more explicit in his belief in the natural proprietary right in the copy of a work

In sum, by the late 17th c, the basic principles of English copyright included an author’s perpetual right to his copy under common law

The First Modern CR Law The publishing monopoly argued that since author’s have a natural copyright in their works,

the transfer of the right to copy a work gave the publisher a license in perpetuity The Statute of Anne is often cited as the first modern CR law. It granted CR protection; however

it wasn’t clear whether the work would go into the public domain when the statutory protection periods were over or whether perpetual rights were retained at common law

The Act concerned the right to copy and no more. Nothing in the statute addressed the creative or moral rights of the author. Thus the right protected was a property right. In Donaldson v. Beckett, the HL recognized the author’s natural CR at ComL but stated that once the work is published it becomes subject to the statutory law. Thus there is no perpetual right to copy

Origins and Development of US CR law US CR law demonstrates the role fo the state in advancing hte interests of capital and aligned

elites Campaigns for literary property rights focused on protectionism and the national dev’t of literature When CR laws were passed the goals fo the statutes were to:

1. Secure the author;s right2. Promote learning3. Provide order in the book trade4. Prevent monopoly

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The underlying assumption in these statutes is that human beings require economic reward to be intellectually or artistically creative. Thus economic rationale is seen as a natural human trait.

PATENTS AND TRADEMARKS“The Third Part of the Institutes of the Laws of England” - Edward Coke (1797) Monopolies are contrary to “the ancient and fundamental laws”, and are punishable by law Recognition that a balance must be struck in rewarding privileges to inventor/new manufacturer

(so that the inventiveness may be rewarded and so to encourage others to be inventive) and the public (so that the public can benefit from the invention)

The protective period should not be too long to protect the private privilege Coke lists 7 terms for the manufacturer to comply with in order to obtain a patent: If any of these

are missing, the patent will be declared void pursuant to the Act Against Monopolies 1. Must be for 21 years or under2. It must be granted to the first and the true inventor3. It cannot be an invention which is already protected by patent4. The privilege cannot be contrary to law. This means it must be a new invention. One cannot

obtain a patent for a mere improvement or addition to a patented invention. The invention must be completely new.

5. The invention cannot be harmful to consumers. (Prof. Gold states this is usually never enforced)6. The invention cannot be harmful to the trade7. The invention cannot be inconvenient. This means, it cannot put people out of work

Comments:-challenges to legislation have appeared in 3 forms:1. From the chemical industry2. Computer technology (as seen in Diamond v. Deihr and Parker)3. Biotechnology - there has been much difficulty describing biotechnological inventions (President and Fellow of Harvard College)

Diamond v. Diehr, 450 U.S. 175 (1981) Diamond claims that they have contributed to the production of moulding articles by developing a process whereby the temperature inside the mould is constantly regulated and processed by computer to recalculate cure time. The patent examiner rejected the claim, stating that the steps carried out by computer constituted non-statutory subject matter. Furthermore, the installation of rubber in the press and closing of the press were conventional and necessary to the process, making them unpatentable. The Patent and Trademark Office Board of Appeals agreed with this analysis, but the Court of Customs and Patent Appeals reversed. The latter stated that a claim drawn to subject matter otherwise statutory does not become nonstatutory b/c a computer is involved.

Issue: Is a process for curing synthetic rubber, which includes the use of mathematical formula and a programmed digital computer patentable subject matter? Yes.

Reasoning:-A process is patentable. A process is a mode of treatment of certain materials to produce a result, which, if new and useful, is patentable. The machinery used to perform the process may not be new or patentable, but the process and product may be new. The claim falls within the §101 categories of possibly patentable subject matter -This conclusion is not altered by the fact that the process involves using a mathematical equation and a programmed digital computer. Although a mathematical equation in isolation is not patentable, when it is used in a process which incorporates a formula, the process is not barred at the threshold of §101. The claimant do not seek to patent a mathematical formula, but rather to foreclose others from using the equation in conjunction w/ all the other steps in the process to produce their product.

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Comments:-excluded from statutory patent protection are laws of nature (established in Gottwchalk v. Benson), natural phenomena, and abstract ideas. A mathematical formula is not patentable since it is equivalent to a law of nature**the dissent claims that the holding misunderstands the applicant’s claimed invention and failure to recognize the difference b/w discovery requirement in §101and the “novelty” requirement in §102

-proper analysis begins with what the inventor claims to have discovered**See Parker which states that a process is not patentable -§101 addresses subject matter patentability; §§102 & 103 address inventiveness and novelty-does this case demonstrate an error in reasoning?

Parker v. Flook, 437 U.S. 584 (1978) Flook applied for a patent for a method of updating alarms in which the novel feature claimed is the application of a mathematical formula. The patent application was rejected.

Issue: Does the discovery of the use of a mathematical formula make an otherwise convention method eligible for patent protection? No.

Reasoning: **post solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. If there is to be a patentable claim, it must come from a novel application of the formula to a new and useful end-The rules that the discovery of a law of nature cannot be patented rests on the understanding that they are not the kind of discoveries that the statute was enacted to protect**The obligation to determine what type of discovery is sought to be patented (§101 analysis) must precede the determination of whether that discovery is new or obvious (§§102 & 103 requirement)-The respondent’s claim contains no patentable invention, only a new and presumably better method for calculating alarm limit values

Comments:-quoted from MacKay Radio & Telegraph Co v. Radio Corp of America: “While a scientific truth, or mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be”-also “if there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end”-Question: How do you determine this? Where do you draw the line? (When a mode of applying a well known formula or law of nature is invented?)-the Ct stresses the importance of NOT extending patent rights into areas unforeseen by congressClass Discussion: Note that the inventions in the Diamond and Parker cases are very similar; YET the responses

are different WHY?

1. There is the obvious reason of the change in the US Supreme Court’s composition. Those that were the minority in Parker, became the majority in Diamond.

2. The way in which the invention was characterized was different. In Parker, the Ct said that all that was new was the addition of an extra step. An existing process was taken and a few elements were added. Thus, the invention was analyzed in isolation. In Diamond, the invention was characterized as a process, even though the only thing new was a computer Algorithm.

3. We could also argue that the difference relates to a difference in the underlying justifications forgiving/denying the patent. The reasoning of the Ct in Diamond seems to comply more with the historical emphasis of the economic rationale for IP rights. Diamond seems to place heavier faith in the market. The Ct seems to say that everything should be patentable unless there is good reason not to.

4. In Parker, the Ct seems to think the invention is not that useful to society. Thus in order to earn a

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patent, the invention must do some good. Prof. Gold believes the debate in these cases is about utilitarianism v. libertarianism. Whereas

the Ct in Parker places more emphasis on utilitarian justifications, the Ct in Diamond relies on an economic justification

President & Fellows of Harvard College v. Canada (Commissioner of Patents), [2000] F.C.(C.A.) The patent being claimed is a biotechnological development of the oncomouse, a cancer prone mouse. The patent application states that the objective is to produce animals susceptible to cancer to conduct carcinogenic studies. The appellants seek to protect the product of the process, or the founder mammal and the offspring whose cells are affected by the oncogene.

Issue: Does the oncomouse fit within the scope of the Patent Act? Yes.

Reasoning:-The purpose of the specified period in the Patent Act is to enable the inventor to exploit the invention free from competition for that period. This will permit the recover of research and development investment necessary to produce the invention and a return on the investment of the investor, commensurate with the value purchasers place on the invention. It is meant to provide an incentive for the creation processes or products which are new, useful, and unobvious. In return for the protection period, the patentee is required to make full disclosure of the invention.-The Patent Act contains no provisions relating directly to biotechnological inventions and new forms of life in particular. However, the language of the statue is broad and is to be given a wide scope, especially since inventions are necessarily unanticipated and unforeseeable-The mouse fits within the definition of “composition of matter” found in s. 2 of the Act. This term does NOT apply to natural phenomena, scientific principles, and abstract theorems-The definition of “invention” does not exclude discoveries that follow the laws of nature-The oncomouse is a result of ingenuity and the laws of nature. The ingenuity is in the introduction of genetic material into the mouse by artificial means and to the makeup of the critical oncogene itself.-Additionally, the mouse is patentable wince the mouse described in the patent claim would not exist in nature. Thus the mouse is not something that already exists in nature, a thing that has merely been discovered or recreated

Comments:-Policy arguments supporting the patent is that consistency demands that Cda should patent the mouse (US and Europe have done so)-Policy arguments against the patent are based on human health, environmental and other concerns**However, the Ct states that all that is at issue is whether the interpretation of the Patent Act permits the invention to be patented. The Ct states that it is their duty to take the statute as they find it, and that they cannot expand the interpretation of the Act beyond Parliament’s intention as expressed by the language in the statute. Thus, policy questions should be addressed by Parliament and not the Ct-The Ct further states that a patent does NOT give a positive right to develop or use an invention but rather only a right to excluded other from using or reproducing the invention for a limited period of time-Note that the Ct draws on Chakrabarty for the definition of “composition of matter”Discussion: Prof. Gold believes the SCC will overturn this decision. The decision is looking at a threshold issue

1. How to we define what is an invention?2. How do we apply the criteria of non-obviousness and utility, and public policy?

Most states have a clause that addresses public policy, but not in Anglo-American patent law

SCC Decision on the Harvard Mouse case:L'Heureux-Dubé, Gonthier, Iacobucci, Bastarache and LeBel JJ.: This appeal raises the issue of the patentability of higher life forms within the context of the Patent Act.

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McLachlin C.J. and Major, Binnie and Arbour JJ. dissenting: The appeal should be allowed. A higher life form is not patentable because it is not a "manufacture" or "composition of matter" within the meaning of "invention" in s. 2 of the Patent Act. It was decided that Cdn law prohibits animals from being patented. The oncomouse does not fit the

definition of an invention under the Cdn Patent Act. Bastarache J:

- “Patenting higher life forms would involve a radical departure from the trad’l patent regime.” The patenatbility of such life forms is a “highly contentious matter that raises a number of extremely complex issues. If higher life forms are to be patentable, it must be under the clear & unequivocal direction of Parliament.”

- FC is said to have over simplified the matter & that lawmakers should deal w/ the “increasingly blurred line b/t human beings & other higher life forms.”

- ‘Manufacture’ denotes a non-living, mechanistic product or process. Composition of matter can apply to lesser forms of life (ex. yeast) but not higher ones.

SCC refused to define a human & whether its ban includes human fetuses & human organs. There was also an express concern that patents on higher life forms could lead to eventual patents on human beings.

Binnie J (dissent): Dismissed this prospect - Cdn Charter would prohibit ownership of human beings for commercial purposes. - The Patent Act was designed to protect such invention/discovery: “While Parliament did not

contemplate the oncomouse in 1869 when it enacted the definition of invention, it did not contemplate moon rockets, antibiotics, telephones, e-mail, or hand-held computers, either.”

- Biotech research is going to continue w/ or w/o this sort of patented ‘technology.’ - The issue for the dissent was whether the Harvard will benefit from its discovery & whether

research capital will avoid Cda & migrate to more hospitable countries: “The legal issue is a narrow one & does not provide a proper platform on which to engage in a debate over animal rights, or religion or the arrogance of the human race.”

- The profound cellular changes in the mouse render it a ‘composition of matter.’ This was a defeat for biotech – all the patent application of plants & animals are not going to

be accepted. It is departure for Cda from the int’l trend. The US, Japan, Australia & some Euro countries have llowed the oncomouse to be patented.→Reciprocity is huge in biotech – this decision means that Cda will have exclusivity on our markets, but we are not going to give it back to you [world].”

This was a victory for religious & enviro grps

Reaction in Biotech industry Dr Berstein (Cdn Institutes of Health Research): the decision creates a level playing field –

no researcher will have to worry about cost of L’ing fees to use certain transgenetic creatures in their work – already exempted from fees for oncomouse use unless they commercialize a product derived from it

Prof Gold: Cdn industry has survived & flourished all this time w/o out patent protection on higher life forms. 100s of genetically altered organisms w/ patents pending in Cda while the Harvard mouse was wending its way thru the crst for the past 17yrs. In the meantime, companies have been free as they still will be to patent individual genes, other DNA sequences & cell lines.

Nexia Biotech (in Mtl) genetically engineering goats to produce spider-silk proteins in their milk – never applied for a patent for the goats anywhere – Turner states that “we are not in this to sell our animals, but the product we get from the animals. Holds 14 patents on spider-silk making genes that have been inserted into the goats DNA.

G Adams (CEO of Innovatiosn Foundation – UofT office responsible fro commercializing the uni’s research): Bleak day for biotech – “If you can’t patent, you can’t make a company out of it, you just have to dump it into the public domain & you can’t get investment.” Research will go elsewhere.

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Schumberger Canada Ltd v. Canada (Commissioner of Patents), [2000] 4 F.C. 528 (C.A.) The purpose of the invention is to facilitate the exploration of oil and gas. The invention discloses a process whereby the measurements obtained from drilling boreholes are recorded, transmitted to a computer program according to a mathematical formulae set out in the specifications and converted by the computer into useful information produced in human readable form. The Commissioner rejected the application.

Issue: Is this invention patentable? No.

Reasoning:-The Patent Act contains no provision specifying or implying a limitation of the meaning of the word invention in section 2 so as to exclude inventions involving computers. -In order to determine if the invention is patentable it is necessary to determine what has been discovered. In this case, the various calculations to be made and the mathematical formula to be used in making those calculations had been discovered. -However, mathematical formulae are not patentable. The fact that a computer has been used to implement the discovery does not change the nature of the discovery. -The discovery that by making certain calculations according to certain formulae useful information could be extracted from certain measurements is not an invention w/i the meaning of s. 2.

Tennessee Eastman Co. v. Canada (Commissioner of Patents), [1974] S.C.R. 111 The claim regards a patent for a surgical method for joining of bond in surfaces of incisions or wounds in living animal tissue. Although the particular compounds used were old and well-known, their use as a bonding tool for human tissue is a novel discovery. The examiner’s report states that medical and surgical processes are not involved in trade or commerce or industry and are thus outside the scope of Section 2(d) of the Patent Act.

Issue: Can a new use for a known substance for surgical purposes be claimed as an invention? No.

Reasoning:-S. 41(1) of the Patent Act limits the patentability of inventions related to medicine or food to exclude claims for the substance itself. -Although the claim is not for the substance itself, but for a new application of the substance, the invention here cannot be claimed part from the substance itself. It does not make sense to allow the new application to be patentable, while not allowing a substance to be patented. Allowing this to occur would provide an easy way out of the restriction in s. 41(1).

Comments:-there is likely underlying public policy concerns here. If surgical methods were eligible for patent protection, then that would counter the desirability of making the treatment available and affordable to the entire public Discussion: s. 41 of the Act no longer exists. Patent law in Cda is going through a transformation Surgical methods rely on skills of the physician and is uncontrollable , thus we can’t patent this.

The same policy perspective limiting patent applications in s. 41 is found in this argument. The reasoning is just different.

Institut National des Appellations d’Origine des Vins et Eaux-de-Vie v. Andres Wines Ltd., (1987)O.R. The Pf’s seek to restrain the Df’s from using the name “Champagne” in the manufacture and sale of their products, as well as damages for loss of sales, diminution of their market and depreciation of goodwill resulting from the Df’s use of the name “champagne”.Issue: Are the Df’s liable for the tort of passing off pursuant to the use of the name “Champagne” on their product? No.Reasoning:-Each plaintiff has a vested shared interest in the goodwill associated with the name champagne.

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-The Pf’s must establish that the Df’s (3 elemenst of P-O at ComL):1. misrepresented their products as being sparkling wines known as champagne and produced in France2. That the misrepresentation is calculated or likely to deceive the public into thinking the Cdn product is champagne, and3. that the conduct has or will likely injure the goodwill of the Pf’s business-Likelihood of deception does not need to be established, only a likelihood of it is enough. What is important is that misrepresentation of some kind must occur. Misrepresentation necessarily occurs if the making of some false representation resulting in confusion or deception of the public from the two products, whether or not the Df has no such intention-A viable Cdn champagne industry has existed in ON alongside the French champagne imports to ON since the 1920’s. Yet the concurrent sales have not resulted in a decline in the French product’s sales-Although the term “champagne” has acquired generic attributes that is associated generally with wine of a sparkling or bubbly variety, it has not yet denigrated to the extent that it refers merely to a class or genus of products. It has not yet fallen into complete generic use-Nevertheless, there has been no reliable direct evidence of confusion between the products. If the marketing of Cdn champagne is deceptive or reasonable capable of leading to confusion, it is reasonable to expect that the introduction of the Pf’s product would have evidence of some confusion. Additionally, Cda has been selling their product for many years, clearly marked as Cdn in compliance with gov’t directives to avoid confusion with products from French champagnes. The Cdn product does not misrepresent their product as originating fr the Champagne district of France

Comments:-Features of a shared goodwill claim are:1. That the element in the goodwill of each of the individual plaintiffs was not exclusive but rather shared with every other shipper 2. The class of traders were capable of continuing expansion since it might be joined by any future shipper who was able to satisfy the condition

JUSTIFICATION FOR IP SPACE

Economic/Efficiency/UtilitarianUtilitarianism Generally- In philosophy: the ethical view (developed by English philosopher and law reformer Jeremy

Bentham, and perfected by his disciple, philosopher and political theorist John Stuart Mill) that moral actions are those that maximize goodness. For Bentham, goodness is pleasure and badness is pain, and moral judgment is akin to calculative reasoning. Mill has a more subtle view of what goodness is.

- Problem 1: the notion of ‘goodness’ is not very well defined. - Problem 2: utilitarianism’s view of moral reasoning is unsatisfying (is a moral person just

someone good at calculating the consequences of his/her actions? What about one’s reasons for acting: are they worthless? And should everything be subjected to the calculus, like the right to life and liberty, personal emotional attachments, or torturing little babies for fun? If not, can limits be explained using only utilitarian premises?)

- Nevertheless, an elegant, powerful and tremendously influential theory, not only in philosophy, but also in sociology, public policy… and economics

Economic/Efficiency-Based Utilitarianism- The view that, all things equal, a wealthier society is better off than a poorer one- Value is assessed in terms of money- Things have a money value because they’re scarce (an unlimited resource would be free)- People have unlimited needs- People are rational, i.e. they are motivated to maximize their economic welfare (e.g., all things

equal, you’re better off with $100 than with $50. Therefore a rational agent will choose the option with $100 outcome rather than the option with $50 outcome)

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- Total value is increased either by creating new things or adding value to existing things (thru improvement, innovation, exchange (see below), etc.)

- Property rights and contract are the tools of value maximization. Property creates incentives for better resource use and protection, and rewards the best value-maximizers by giving them more value to enjoy. Contract allows for value maximization through exchange by making both parties better off after the exchange (i.e. when I contract with you, I get something I value more in exchange for something I value less, and so do you)

- To work, this system requires good property and contract systems. (By the way, these happen to be the most developed areas of private law. Coincidence?)

- Problem #1: like #2 above. It’s not at all clear we actually think like that—the “rationality-as-maximization” premise has no solid empirical basis

- Problem #2: (related) it’s definitely not clear we should think like that about everything (notions like the expected return of playing foosball with your friends make no sense) but the purely economic reasons why we should not

- Nevertheless, once again, elegant, powerful and tremendously influential theory

Economic/Efficiency-Based Utilitarianism and Intellectual Property- The most widely-held justificatory framework for intellectual property rights is

economic/utilitarian.- 3 ways to implement intellectual property

1. Reward by monopoly: give the intellectual property holder a monopoly. The market will determine how much the discovery is worth

2. Monopoly profit: the collective social goal is to provide an incentive for people to create more. Creativity is encouraged thru the grant of a monopoly

3. The “exchange for secrets” argument: it is socially and economically desirable to incite people to disseminate their ideas. Mere production of new ideas is not sufficient.

- Different results are reached depending on the justification employed. Some of these results may be inconsistent Not also that courts are not clear on what they are trying to achieve

Free World Trust (app) v. Electro-Santé (resp) (SCC) Appellant owns two patents issued in 1981 and 1983 re electromagnetic apparatus for medical purposes. Respondent developed similar apparatus with slightly different technology—a copycat—and also claims patent. Patents are granted to both. Appellant acknowledges the difference, but argues its patent monopoly was infringed upon because the end result is identical. At trial the patents were found not to have met the anticipation standard and struck them down. The Federal Court of Appeal reversed on invalidity, but held defendant was not infringing on appellant’s patent.

I: are the patents valid/infringing? Appeal dismissed

R (Binnie J): Court in patent claims disputes has to separate and distinguish the essential from the inessential and to

grant protection only on what is essential in the patent claim. In this case, the claimed invention was “ingenious” not an aggregation of previously known components, and it was not anticipated. The big question is how to resolve the tension between "literal infringement" and "substantive infringement".

The objective of the Patent Act of promoting research and development will be undermined if competitors fear to “go near” an existing patent just because its scope is imprecise. With the “purposive interpretation” the claims made in a patent are first listed and then separated into essential and non-essential (substitutable) based on the standard of a hypothetical “worker skilled in the relevant art”.

There is no infringement if an essential element is different or omitted in the allegedly infringing device, but there may still be infringement if non-essential elements are substituted or omitted. In this case, the respondents' device does not infringe, because they simply show a different way of reaching the result reached by the appellants. And claims can’t be stretched to allow a patent holder to monopolize anything that achieves the desirable result. The scope of the patents granted would be too

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wide and there would be no incentive to improve on existing patents. There is in this case enough difference between the respondent’s and appellants’ devices to be different claims.

o Note 1: this case shows how economic justifications play a role in the judge’s reasoning. The judge writes that the whole point of having patents is to encourage research & development, something that is economically beneficial to society as a whole. The judge also writes that this system if incentives must be finely tuned so that patent holders cannot make wide claims that will impede r&d and economic development (through, e.g. cheaper substitutes)

o Note 2: the US approach is different. - List all the claims made in the patent- List all the claims made in the copycat- Consider each element in the copycat application. Is it identical, and if it is not identical

is it substantially similar, to an element in the original application?- If all claims are identical or substantially similar, then the copycat is infringing- Therefore burden on defendant is light

o Note 3: both in the US and in Canada, there are economic justifications at work for patent litigation: getting clearer on patents, by whatever reasonable means, protects future inventions (and inventors)

Couter & Ulen, Law & Economics o A property right to the author/creator of an idea helps her to appropriate its value. This

comes to the cost of exclusiveness. There is therefore a tradeoff between the breadth of the scope of the right granted and its duration. The greater the breadth, the greater the incentive on creators, but the higher the costs on society

o Patents: broad or narrow? The big question in patents is what is the optimal combination of breadth and

duration Broad patents encourage fast, duplicative research (by definition a single patent

can cover several different claims) Narrow patents encourage slower but complementary research The question of what breadth is the more efficient makes the incorrect

assumption that all patents are similar. But some patents are for pioneering inventions while others are for commercial applications. And both depend on fundamental research (e.g. no good math no good engineering no better engines no better cars)

A further complication is that the stand-alone value of a pioneering invention may fluctuate. But a pioneering invention with little stand-alone value might eventually have great commercial value. There is therefore an incentive problem for pioneering inventions with little stand-alone value.

Therefore, patent protection for pioneering inventions with little stand-alone value should be broader than patent protection for pioneering inventions with large stand-alone value.

o Patents: duration As time goes by, the benefits of granting an intellectual property monopoly for a

new product will decrease while the costs will increase. The ideal duration is that which stops when the costs equal the benefits. Any longer will result in a decrease in aggregated value. This means the current uniform 20-year duration is inefficient. While it is impractical to grant a different patent life for each invention, the market can approximate the result: in Germany for instance, patent holders must pay to maintain their patents, and the fee goes up as time goes by.

o Copyright: There is no reason in principle to limit the duration of a copyright. What limits it are the costs of tracing the copyright holder

o TM TM are inherently good They reduce the cost of searching

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They also encourage companies to keep quality high, because a TM is as good as the market goodwill that supports it

Therefore there are no real reasons to limit TM.

Gold’s Criticisms This kind of analysis presupposes that intellectual property creators are in it for

$, which isn’t true (that’s the part where he wondered out loud how much he’d make now if he hadn’t left the technology group at Torys)

Presumes these various rights are independent while they may not

Landes and Posner: “ TM Law: An Economic Perspective ” o Decreases search costs by promoting easy identificationo Encourages spending on quality to guarantee uniformity and encourage repeat purchases

by consumers, which in turns decreases the costs of saleso Therefore TM have a self-enforcing nature that is economically beneficialo TM also encourages the use of short phrases and generally benefits the “economy of

language” by creating new termso Further, the costs of enforcing TM are generally small, unless a TM is in danger of

becoming generic (although it now appears sufficient to add “brand” after the endangered TM as in “Post-It Brand”

Merges, “ Intellectual property rights and the New Institutional Economics ” o Criticizes the assumption that there is a one-to-one mapping between property rights and

marketso Intellectual property rights in a given object can overlap, and they often are not in the

hands of a single holder. This is especially true of patents, which can be expensive to develop and end up being produced by small r&d firms that don’t have the $ to be vertically integrated (=able to take a product from fundamental research all the way to marketing). Therefore coordination is required. This means tackling transaction costs issues. The issue is important because the proportion of innovations due to patents is increasing.

o One potential coordination problem is the “anticommons”, where lack of cooperation by one party results in the under-exploitation of the resource (e.g. the product that doesn’t get made because various patent holders couldn’t come to a rights sharing agreement)

o One way to resolve it is thru joint ventures (contracts)o Another involves voluntary transactional institutions like patent poolso How they develop is not merely the result of market forces. Economics and policy-

making are related, if only because intellectual property rights exist because of governments. The influence of the judicial process, sometimes viewed as correcting legislative initiative that may be too (or not sufficiently) favorable to an industry, is also appreciable.

o Merges calls the rigorous analysis of institutional actors like firms, institutions and government “political economy”

o Political economy is still developing, but it doesn’t mean that economic analysis is out. Instead, more subtle tools are necessary to give a more accurate picture.

James Boyd White, “The Language and Culture of Economics” in Justice as Translation o Doesn’t like economic analysis in particular because of its cultural consequenceso In North America, economic language is often the basis of decisions re intellectual

property. The dominant view seems to be that use of economic analysis and language will yield the best intellectual property regimes.

o But at the center of economic analysis is the idea that things are convertible into money, and widespread economic talk conveys in the culture the belief that everything is fungible.

o Economists retort that notions like “self-interest” or “rich” are only analytical tools with technical meanings, but such talk only reinforces ordinary selfishness and greed.

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o Also problematic is the idea that values are reducible to agent preferences, thereby suggesting that moral choices are sheer matters of taste and just as disposable or subject to change. In fact, the very value-neutrality claimed by economics is in itself problematic, because all the greatest questions and the greatest human endeavors are value-driven.

o Further, economics claims to be fair because it presumes democracy, equality and freedom of choice. But real people are not equally free in their capacity to make choices, and democracy is based on the equality of individual rights, not on the equal purchase value of a dollar.

o Even as an economic tool, economics doesn’t have much to say. Economists are interested in the exchange of value, but value can change thru the influence of non-economic factors like culture. The non-economic background is not stable.

o Further, the end of life is not exchange. Exchange is merely a way to accomplish those ends.

Distributive Justice/Fairness- This section is about the distributive consequences of allocating intellectual property rights. In

other words, what are the effects on the public of those property rights?- Both authors we looked at (Boyle and Litman) observe that the protection of intellectual property

rights is increasing (e.g. computer programs were originally not protected, then they got protected by copyright, and now they are protected by patents, patents are granted on biological material, etc.). The prevalent discourse appears to be that increasing the privatization of intellectual property space means better protection. Both authors criticize the prevalent discourse.

Jessica Litman, “ The public domain ” o The idea that the public domain in copyright comprises what is not protected is

incomplete. The bigger part of the public domain also includes those aspects of copyrighted works copyright doesn’t protect.

o She thinks public domain is best understood as a “zone of freedom” that exists to preserve the integrity of intellectual property rights.

o The public domain does that because copyright law is meant to encourage authorship more than to protect individual authors.

o Since authorship always relies on previous works (and hence that nothing ever is absolutely original), it is essential to protect the public domain for the sake of protecting authorship.

o Otherwise protecting more will leave nothing to create from.

Boyle, “ The second enclosure movement and the Construction of the public domain ” o Complains of the “anti-commons effect” of increasing the allocation of intellectual

property rights. Intellectual property gets developed thru collaboration and sharing, and granting more property rights increases the chance

o Boyle argues that monopolies are a restraint on innovation because of the “anti-commons” problem. The public domain needs to be there and needs protection and growth. It should be mandatory for creators to contribute to the public domain so that the innovation that allows for intellectual property to flourish can continue

o Boyle views the public domain as a zone of controlled freedom rather than as a free-for-all. The public domain also needs to be controlled—“systemic” measures must be in place—so as to ensure that the public domain is perpetuated and the freedom that sustains it is maintained

o Therefore, the public domain is not a mere left-over, a kind of ‘vacant space’ that is there to support the existing intellectual property system. The notion of “public domain” is something that must be ‘created’ to bring together disparate interests and people that otherwise would not speak to one another because there would be no way of avoiding the “anti-commons” problem. Boyle likens “public domain” to the notion of “environment”, which he says is a construct that helps addressing disjointed issues that would otherwise remain disjointed in an increasingly coherent way. Just as “the environment” creates a space for new discourse, so public domain brings about a space that would not otherwise exist

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o Regulation of this space does not have to come from granting property rights. It is fine to make ideas available freely, as long as the “public domain” space that offers these free ideas has a means of avoiding free-riding problems

o Boyle’s example is that of the open-source software movement (LINUX). Working code is available for free, however if you make changes to the code and produce some kind of new software or an improvement on existing software, your licensing agreement requires that you put it back on-line with the changes you made. The cost to you of everybody else’s free code is making your own new code available to others for free.

o Because, Boyle argues, the open-source movement is successful, it shows that intellectual goods production can be fostered without granting property rights and their anti-commons effect. This is what he calls “positive property rights”

o Boyle also cites the internet as an example of a “space” where innovation happens without there being monopolistic property rights, and where the quality of innovation comes very close to what big corporations do—without, once again, the externalities of a property system

o In the long run, intellectual property rights may slow down innovation, because too much insistence on property rights interferes with the production of those property rights. Instead of granting away more and more property rights in a manner that is both self-reinforcing and detrimental, it would be better advised to control the public domain

o Boyle is therefore committed to the claim that failing to provide positive and self-reinforcing protective measures of the public domain will limiting the opportunities technology is giving us

o Further, and as evidenced by the success of the open-source movement, it is wrong to assume that people are only motivated to produce intellectual property goods for economic reasons. Like White (see section on economic rights), Boyle thinks that people are motivated by a number of non-economic reasons (like fame or the sheer pleasure of solving difficult problems), and that those reasons are not taken into account by an economics-based model.

o Therefore, creation doesn’t necessarily need economic incentives. What matters is that people’s own reasons for creating receive some measure of outside protection so that people keep creating. Licensing is one way to do it—at any rate it works well in the open source movement

o Therefore, the more we encourage this organized ‘sharing’ the more development will occur, the better the public domain will be protected (that’s the “positive reinforcement effect” mentioned above) and the more new opportunities will be created

Some problems with these arguments:o Boyle doesn’t identify the source of injustice behind the property system.o He also doesn’t provide a unifying principle guiding public domain generally.o Further, we know that intellectual property rights help intellectual property

creation; we also know that they hinder intellectual property creation. What we don’t know is on which side the scale falls. There is no cost-benefit analysis. In that sense Boyle’s argument falls short of showing what he wants to show. We can buy everything he says about the value of such a controlled public domain and still resist the conclusion that it must be implemented

o So we haven’t made any progress—we don’t know what’s going on and we don’t have a grounded policy reason to go either way

o Further, neither Boyle nor Litman give us a context. They do not provide us with the theory of justice that ground their views. Posner is a free-market libertarian: for him a well-functioning market will ensure that people get what they deserve. Boyle says this is wrong. On the other hand, White claims people’s attitudes towards a certain thing are affected by whether the thing is commodified/fungible or not. Boyle doesn’t agree with that. So Boyle is in between Posner and White, but since these are basically opposite views, it’s not possible to guess what Boyle stands for.

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PersonhoodJustin HUGHES, “ The Philosophy of Intellectual Property ” (1988) Ideas about property come to include atypical forms of property, such as IP, and jurisprudence of IP is

growing in volume and importance. For Hughes, the ‘personality theory’ for justifying property stands as the main alternative to the

labour theory of justification. Existing law support the credibility of different theories and these theories, in turn, support the validity

of existing laws. Hughes believes that property can be justified on either the labour or personality theories and in

fact should be justified with both.

WHAT COUNTS AS INTELLECTUAL PROPERTY Generally, property makes the property owner risk-averse, avoiding decisions that might diminish his

property. It is a conservative concept which stabilizes society. Persons with property are protected from non-propertied people of greater natural ability or talent.

Intellectual property, however, is far more egalitarian, in that it is of limited duration and obtainable by anyone. It shifts power/prop rights to those with more natural ability and talent.

However, much IP is produced only after considerable financial investment (labs, technology, education).

While IP shares its origins with other types of property, it is more neutral in that its limited scope and duration tend to prevent the accumulation of wealth inherent with other types of property (Hughes says those we think of as big profiteers are actually the exception to the rule).

Practically, IP is property created by regimes of patent, copyright, and trademark (duh!), but also other peripheral legal regimes.

Different IP legal systems in different nations are more representative of countervailing social policy than a different conception of IP.

Universal definition: IP is nonphysical property which stems from, is identified as, and whose value is based upon some idea or ideas, with some additional element of novelty. (‘idea’ being shorthand for the unique product of cognitive effort).

IP, like all property, is an amorphous bundle of rights. IP rights are subject to limitations, such as fair use (copyright), and judicially created exceptions for

patent. Limitations serve the primary purpose of IP, which is to promote the progress of the science and

useful arts. The greatest difference between rights in IP and rights in other property is that IP always has a self-

defined expiration.

A HEGELIAN JUSTIFICATION & HEGELIAN IP The personality justification sees property as a mechanism for (a) self-actualization, (b) personal

expression, (c) dignity and recognition as an individual person. Margaret Radin posits that to develop as a person, we need some sort of control over resources in the

external environment – property rights fulfill this need for control. In IP, the personality justification best applies to the arts.

general philosophy For Hegel, the individual’s will is at the core of his existence, constantly seeking actuality and

effectiveness, and thus will is at the top of Hegel’s hierarchy of elements in an individual’s mental make-up.

Personality is identified with the will’s struggle to actualize itself. “personality is that which struggles to lift itself above this restriction of being only subjective and to

give itself reality, or in other words to claim that external world as it’s own” Freedom is increasingly realized as the individual unites with and is expressed through a higher

objective order – freedom grows with higher degrees of realized self-determination. This is contrary to the classical liberal notion of freedom (freedom form restraint). In terms of IP discussion, however, Hegel’s ‘freedom’ is much closer to liberal notion (immediate

freedom of the individual), but still involves positive freedom to act.

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the person/property connection Since will is at the top of the hierarchy, the other elements of the mental make up are held by the will

as if they property. Thus, parts of one’s person are property. Similarly, then, the concept personality can extend to include

physical objects deemed property. The barriers in both directions are abandoned. The will interacts with the external world. For Hegel, the true purpose of property to allow the will

to seek to appropriate the external world, and impose itself upon it. This is the first step in a person’s self-actualization. Self-actualization is manifested in enduring objects, not just fleeting acts. Thus, property rights allow

us to freely seek the self-actualization of our personality, insofar as our property (expression of our will) is protected.

Respect for property allows us to pursue self-actualization in non-property areas, or to use the property in a manner that helps us become the person we wish to be.

It is not enough to impose our will on the physical world – society must acknowledge our property claims based on some objective social will.

For Hegel, abandonment occurs easily because the relationship b/n person and property lasts only as long as the person’s will manifests itself in the object. Absent constant reaffirmation, the right is lost. Also, the will can be actively withdrawn by the individual (alienability).

Labour is often a means by which the will occupies an object, but labour is not necessary. [Hughes gives the example of a souvenir rock from a beach – the will occupies the object without use or labour].

There are objective indicia of the will’s occupation. A non-exhaustive list includes (1) physically seizing the object, (2) imposing a form upon it, and (3) marking it. For example, using an object in a manner which preserves it could count as ‘marking it’, as it indicates a desire for continues utilization and enjoyment of the object.

Much of Hegel’s theory, however, seems to depend on the more subjective relationship between the holder and the object.

This subjectivity may cause unhealthy identifications with property that should not legitimately be claimed. The identification is unhealthy when it prevents the individual form maximizing self-actualization from other sources, such as lovers, friends, peers, careers.

Radin’s theory also recognizes the potential detrimental effects of property on self-actualization, with a focus on people other than the holder. She distinguishes between ‘personal’ property, which increases self-actualization, and merely ‘fungible’ property. The principle is: property fungible to X should be denied to X if giving that property to X would deny personal (that is, self-actualizing) property to Y.

For Radin, ‘healthy’ appropriation is that which does not deny others their self-actualization. Hegel implicitly agrees in his argument for equality as to the possibility of obtaining property. [also resembles Locke’s ‘enough and as good’ condition].

The fungible/personal distinction also suffers from the subjectivity dilemma, in that what is considered fungible or personal may differ from person to person. An assessment of when property actualizes the self will necessarily be either artificially constrained or entirely subjective.

Intellectual Property under Hegel IP does not need to be analogized to physical property. In fact, IP avoids the problem of having to

materialize the personality traits Hegel says are inherent in all property. You cannot alienate yourself from IP because an intellectual/artistic product is a ‘universal element

of one’s self’, thus unalienable. You can, however, alienate yourself from copies of that product because a copy represents the

copyist’s own mental and technical ability. (???) Hegel admits that IP is ‘the purely negative, though primary, means of advancing the sciences and

arts’. It is a ‘capital asset’ in that it that it provides some economic security.

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Problems in Applying the Personality Justification to Intellectual Property. The main problem with the idea that property protects personality is that it is difficult to tell when

someone has a particular ‘personality stake’ in a given object. Also, if such a stake is recognized, to what degree does the object manifest the personality of the individual.

Does more personality warrant more property protection? Do certain categories of works warrant more protection because they are more ‘personal’?

varying degrees of personality in IP The personality justification seems to offer little protection to intellectual products which reflect

little or no personality from their creator. Poems, sculptures, paintings, novels, etc. are what Hughes calls ‘receptacles for personality’ – the

personality stake in such objects is obvious. The same can be said of the legal concept of an individual’s ‘persona’ or public image. If the persona

is property (Hughes notes that the labour theory might conclude it isn’t), it is also easily justifiable with the personality principle, even more so than artistic works.

The problems for the personality justification arise when dealing with intellectual objects which are not the individual’s personal reaction to nature.

Copyrights, for example, protect more than just personality-rich objects. Maps and atlases are a good example, although they may still have some artistic content.

The problem is more difficult with objects such as computer software, or other more technical areas of intellectual property. We think of these items more as utilitarian solutions to specific needs or manifestations of generic insight, not as manifestations of someone’s personality.

Even the most technical products may involve some aesthetic vision, albeit minimal. If there are ten ways to write a computer efficiently, for example, making the choice could demonstrate personality and thus property rights are justifiable.

Thus, no one genre of intellectual property is devoid of personality. Rather, constraints such as economy, efficiency, and physical environment, which can exist in every genre, limit personal expression.

The more a creative process is subject to external constraints, the less apparent personality is in the creation. The personality justification lends itself better to processes which are less limited by such constraints.

Some subtle manifestations of personality may be difficult to identify to one who is not knowledgeable in the field.

The object expresses personality, but also the association people make between object and creator is an expression of the personality – it creates a persona. (i.e. Edison = light bulb, the association expresses Edison’s persona more than the physical light bulb). Hughes calls this externalization.

Problem: you can’t just say you want to be associated with an object – there has to be internal connection to claim property.

alienation and the personality justification Logically, for Hegel, alienation occurs when the individual ‘removes’ his will from an object. It is

equivalent to abandonment. We abandon X for Y when we feel that Y better expresses our personality, thus increasing actualization.

This concept is weakened by a fragile money economy, in that future investment does not guarantee further actualization, because a profitable return is no certainty.

A further problem with alienation is that, in most cases, alienation involves some degree of determining the object’s future, even though the personal link to the object is no more. I can choose to sell my rare hockey card to a collector or to a sports bar, thus affecting its future. It is difficult under the personality justification to justify my right to dictate the future of the object, which is theoretically no longer a manifestation of my personality.

Hughes calls this the paradox of alienation under the personality model of property. The subtle control of the object’s future does not jibe with foreseen future denial of the personality stake.

One way to explain the paradox is to say that the personality justification is powerful for property protection, but that it fails to explain property exchange. The justification for protection disappears

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when an external source offers a value higher than our internal value; or, as Radin would put it, when something moves from ‘personal’ to ‘fungible’.

It is similarly difficult to justify placing restrictions on property we alienate, such as selling land on the condition no trees are cut. The new owner is unable to maximize his personal expression, while the old owner maintains an unjustifiable stake.

Alienation of intellectual property can take on two forms: (1) entire alienation [selling all rights at one time], and (2) complete alienation of copies of the property [with limitations on how those copies may be used].

The first presents the same paradox as with physical property. Hughes asks: If a person genuinely has no personality stake in a work, why should she determine who publishes it, who markets it, or who dramatizes it? The very act of alienation denies the personality stake necessary to justify property rights.

The paradox is more acute with IP because it is difficult to conceive abandonment of creative expression with no tangible res. Abandonment of an idea is arguably alienation of personality, which Hegel’s system prohibits.

We must ask: does the created work exist independent of the creator?, does it exist beyond the individual’s expression? This is the battle between creators (playwrights/composers) and interpreters (actors/conductors).

Interpreters believe the intellectual property can be, and usually is, abandoned. Hegel disagrees. He considers complete alienation of IP to be morally wrong, like slavery,

because it is the surrender of a ‘universal’ aspect of the self. This makes sense when we consider that an artist may oppose certain uses for his art (political poster, i.e.).

Hegel feels you can alienate yourself from copies of your work, however, while maintaining the ‘whole’ of the property and yourself, because you retain some rights.

This further justified by the fact it creates economic well-being for the creator. Payments offer recognition of the creator as a person because they acknowledge the individual’s claim over property, and, of course, property = personality.

Also, income allows further expression, and alienation of copies allows further exposure to one’s ideas, which leads to non-economic recognition (honor, respect, admiration).

Two conditions are essential. (1) the creator of the work must receive public identification. (2) the work must receive protection against any changes unintended or unapproved by the creator.

The Personality Justification in U.S. Law. The 2 conditioned mentioned above are recognized in some IP regimes as ‘moral rights’. Both

copyright and patent owners have the right to be identified with their creations, and copyright owners are further allowed to guard the integrity of their works.

There are no such provisions in American law. However, the personality justification has subtly affected American copyright doctrine.

The property interest in IP is not dependent on any external measure of artistic, cultural, or social worth. Even bad poems are protected.

In the 1903 case of Bleistein v. Donaldson Lithographing Co., the Supreme Court established a “very modest grade of art” standard, thus casting a wide net of copyright protection for any expression of individual personality. [note: Hughes claims this is the only S.C. case on IP which refers explicitly to ‘personality’.

This case stands for a shift in focus from societal judgement of worth to a subjective personal judgement of worth.

The courts, although not explicitly, seem to apply the Bleistein standard of ‘modest grade of art’ to trademark law. While courts claim to be protecting consumers’ right to full information, Hughes argues this could easily be done with truth-in-advertising or misrepresentation laws. Rather, trademark decisions seem to protect a right of expression and recognition for the manufacturer.

The same cannot be said of U.S. Patent law, where courts will be unsatisfied with minor advances which could be accomplished by the ‘average practitioner’. Subjective expression will not get you a patent.

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Civil Rights Support for a Personality Justification People often try to bridge U.S. Law with IP protection through defamation claims, such as a

playwright suing a director who ‘degrades’ the play. Hughes posits that civil rights approaches are a better way to protect IP, and elaborates on 2 of

them.

the privacy right argument right to privacy should allow people to prevent publication of private documents, even when a would-

be publisher is recipient (letter, for example) Even when part of a work is in the public arena, the creator should be allowed to keep the rest private.

If an author produces a final edited version, the omitted material should remain private. Dicta in many cases has suggested that dissemination of a work under an author’s name against the

author’s wishes may infringe privacy rights. It follows that those who wish to remain anonymous or prevent publications of intimate details

about themselves should have that right.

the freedom of expression argument First Amendment freedom of expression is often portrayed as the enemy of IP rights, in that free

speech is often used, for example, as a reason for limiting copyright. However, freedom of expression is meaningless without assurances that the expression will

remain unadulterated. If IP is expression, we need those assurances. Free speech demands that speech be guaranteed some integrity – a guarantee that the speech will not be divorced from the intention of the speaker.

The speaker’s expression must therefore be protected from distortion. Often, speaker has means to counter the distortion, such as a politician whose statements may get

distorted, but who has access to the media and can rectify the distortion. When the speaker is powerless vis-à-vis the distortion, such as a novelist upset with a publisher’s

version, the legal system can establish protective mechanisms to deal with possible frustration of the speaker’s intent.

Thus, increased property rights such as copyright protection can be justified on the basis that a speaker’s expression should not be distorted.

This goes to the importance of preserving cultural heritage. We need a system where even dissident or different voices survive.

There is a wider social interest in protecting the integrity, or ‘personality’ of expressions.

Labour/Desert

Lawrence C. BECKER, “ Deserving to Own Intellectual Property ” (1993) The article examines the notion that people might deserve to own products of their intellectual

labour in a stronger way than they deserve to own products of non-intellectual labour. Attention to the desert-for-intellectual-labour arguments has two results: (1) These arguments seem

especially powerful for intellectual property, but (2) they yield results that seem to be a bad fit with those reached by economic or utilitarian arguments.

The Issue All standard justifications for property (utilitarian, personality, labour) can apply to intangible

products. Surely, if people ‘deserve’ property in tangible objects they improve with their labour, they

deserve property in the intellectual objects they create. Focussing on IP forces us to face the issue of desert directly, because IP depends less on

environmental/societal factors which affect other types of property rights and how we obtain them (family, wealth). IP forces us to ask ourselves what we think people truly deserve or merit for their efforts.

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Reflections on the Nature of Intellectual Products Becker suggests we narrow the discussion to the sort of labour which constitutes authorship.

Something has an author when it satisfies tree conditions: (1) it’s causal history is traceable to the intellectual states of agent or agents, (2) those agents, in the process of making their causal contribution to producing the thing, are also creating or realizing their mental representations of it, and (3) those representations constitute the thing (i.e. idea) or play a substantial causal role in its production. Condition 1 rules out natural objects, 2 and 3 rule out happy accidents and mere physical labour.

Some intellectual products are identified in part by reference to their authors. Most of the value of paintings by masters, for example, depend on this author-identification.

Originality here means simply that the product originates in the agent’s labour – that its causal explanation is in some important sense traceable to the agent but not beyond. Non-original intellectual labour is not creative, but merely productive. Original intellectual labour is the source, the beginning of the causal account of the product. Non-original labour does not give rise to any special claim to the product.

Intellectual products are often not subject to natural scarcity, because the mental element can be possessed by many people if it can be ‘known’ in sufficient detail. Once created, intellectual products can be replicated. Property rights sustain an artificial scarcity to benefit owners. It is scarcity-by artifice that needs justification.

IP is singular, in that it springs from a singular intellectual effort. This occurs because the work is pure genius, or it is defined by an intricate fine structure (note-for-note, word-for-word) rather than a coarse structure (themes, plot lines). Problem: how fine is fine? How coarse is coarse?

Becker says IP products are given unjustified weight due to temporal primacy (being the first or oldest known). This is a red herring, as originality and singularity are what is relevant.

Desert

social practice Virtually all societies recognize the strength of possessory claims to ‘personal’ things such as: (a)

things created by one’s own effort, and (b) things held for personal use, especially when they are identified with the person.

Deserving to own[NOTE: This is the part of this article that GOLD really spent time on in class] Property rights can grant a person much power over the liberty of others. Becker asks: under what

circumstances to I deserve to have such powers over you by virtue of my labour? What sort of labour could do that? He identifies three possibilities: (1) justifiable public response to special excellence, (2) justifiable reciprocal exchange, and (3) justifiable social response to special human needs.

Excellence The argument is that some intellectual labour exemplifies human excellence, and is thus worthy of

special admiration. Admiration should be our reaction, not envy, indifference, or malice. If we admire the intellectual labour, we should admire the laborer(s), which helps sustain them. A

public expression through social institutions is appropriate. Giving people property rights helps sustain them, thus it is an appropriate public expression of

admiration. It is something they deserve. The problem with this argument is that there are many plausible alternatives for expressing

admiration publicly, such as medals, honour rolls, awards. Thus, the argument from excellence gives only equivocal support.

GOLD asks: why reward with property? Becker also says that there can be many original authors for IP, so there is a principle of non-

preclusion which must exist with the excellence argument, in that the IP rights are subject to revision when it is discovered others also deserve admiration.

GOLD asks: who decides what is excellent?

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Reciprocal benefits A second argument is based on the idea that laborers are entitled to prop. Rights in the value they

create through there work. Producing public benefit by morally permissible but unrequited means deserves a fitting and

proportional benefit from the public. If the act produces public burden, however, the person deserves fitting and proportional burden.

Fitting implies a genuine benefit (or burden) for the one receiving it. Proportional is limited by the equal sacrifice principle (sacrifice, not benefit, must be equal for the creator and the public).

Property rights, then, would represent a fitting and proportional benefit. Once again, however, there are many plausible alternatives which would constitute a benefit for the

creator. Plus, they are still vulnerable to revision due to non-preclusion (as with excellence) Also, this argument forces us to assess the social benefits/costs of every creative activity. GOLD asks:

What if it benefits some and is a burden to (harms) others?

Need The argument here is that someone who labours on something becomes dependent on his

creation because they identify with it, and have a personal attachment to it. This identity-dependence means that the welfare of the product is related to his integrity or welfare as a person.

Thus there is a need for the welfare of the product. If this need is created and sustained by social norms (i.e. identifying human distinction with authorship or originality), than society should give help to fulfill that need, in this case with property rights.

There is a troubling problem of subjectivity with this argument. Basically, labourers who are tough-minded or psychologically secure are at a disadvantage because they don’t have that need, whereas possessive insecure types do.

GOLD also asks: wouldn’t having your name associated with the product logically be enough to fulfill this need? Why do you need property rights?

Results and Remainders Property rights ought not to follow directly from only desert arguments, for there are many other

factors to consider when making rational policy recommendations. However, desert must factor in somehow because it can be linked to important elements of fairness and

justice in IP law. We need a careful classification system for IP (what products correlate best with prop. Rights?), as

well as careful analysis of how products are defined (recall: fine vs. coarse).

MODALITIES for the ORDERING of IP SPACE

Patents and Trade Secrets There are some theoretical justifications behind these systems and how to use them. The questions here

deal with the institutional organisation of IP. We look at the parameters of the different IP systems, its limits and how far it is meant to extend and how it goes about extending into new areas

Criteria #1: Criteria allowing you into an IP regime The three criteria necessary to qualify for a patent are utility, non-obviousness and novelty.

Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 (F.C.A.) Quebec case: some complex device for manufacturing newsprint. What was strange in this case was that two different patents were issued for the same thing. The case is about how to make a choice between the patents:

Issue: Whether either or both patents are invalid since they cannot both be good.

Reasoning:They challenge the patent on 3 bases:Novelty:

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Supposed to prevent patenting something that already exists. We must find the invention claim had a single source: there had to be one place that describes everything that is required to produce the invention. It cannot be scattered over several sources. You have to be able to apply inventive skill to it. You need to do creative work to it. That way, it is still novel.

Anticipation asserts that the invention has been made known to the public prior to the relevant time. ‘Anticipation must be found in a specific patent or publication; it is not enough to pick bits and pieces from

a variety of prior publication and to meld them together so as to come up with the claimed invention. One must, in effect, be able to look at a prior, single publication and find in it all the information which, for practical purposes, is needed to produce the claimed invention without the exercise of any inventive skill.’(p.11)

Ex: if I take a horizontal platform with 3 legs, it was anticipated by the stool. It does not take inventiveness to see it is a stool. The fact someone has patented a stool before does not prevent you from inventing a stool.

Novelty: the prior invention must be clear enough so that person reading it would not be mislead. Non-obviousness: The court said that we have to imagine someone with broad knowledge in the field Q: whether this skilled person would, in the light state if the art and of common general knowledge as at

the claimed date of invention, have come directly and w/o difficulty to the solution taught by the patent.’ Imagine that person reading multiple sources, would they have come up with the invention or is there a

minimal amount of creativity involved? Would the skilled imaginative worker be directed to invent the same thing?

Misrepresentation Despite the appeal judge’s assertions that these two tests are highly restrictive, it seems that very little will

be knocked out by these two criteria. Discussion:According to Hegelian ideas, would these 2 criteria be valid? It would seem that you should get a proportional amount of protection for the creativity you are putting in. It seems difficult to reconcile these two tests on the basis of Locke or Hegel.

Why do we have such low standards for patenting an invention? Practically speaking: it would be impossible to measure the qualities that make work valuable under the

Lockian and Hegelian schemes. The way these tests were put together, courts can actually measure invention. It would be impossible to measure invention according to Locke/Hegelian principles. We could allow the market to make these determinations, but this would still be hard to do.

Economic justifications: we do not care about the creativity, we care about the commercial aspects, protecting the economic value of the invention, and these two tests allow us to make these measurements.

Utility: it does not matter if the invention is of a benefit to society. It is sufficient to have utility if it provides a cheaper alternative. Imagine a patent that includes a whole class of substances. It has to be something that works, and that someone skilled in the art would see as working. Its purpose need not provide any kind of public benefit. If you put these three criteria together (utility, novelty and non-obviousness) almost anything can be patented.

Why these three criteria? Utilitarian arguments: monopoly as reward for incentive, reward for invention, to encourage you to

disclose. These criteria is not based on a coherent theoretical system but rather it is based on pragmatism. Steroid case: it had anti-cancer effects and was patented. Another group of steroids was discovered,

and they tried to patent it but the court refused to allow the patent because they had not contributed to knowledge and the utility that it might be eventually useful was not enough of a criterion.

The invention has to do something even if it is not hugely useful.

Step #2 The Link b/t Patent & Trade Secret ProtectionKewanee Oil v, Bicron Corp., 416 U.S. 470 (1974) Harsaw became Kewanee Oil. While it was H, specialised in the production of a synthetic crystal that is useful in the detection of ionizing radiation. They had dev’ed many processes, procedures &

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manufacturing techniques in the purification of raw materials and the growth and encapsulation of the crystals which enabled it to accomplish this feat. Some of these processes, H considers to be trade secrets. Bicron was formed by several former H EEs. While they had worked at H they had signed confidentiality agreements re info they obtained while working at H.

Issue: Whether state trade secret protection is pre-empted by the operation of Federal patent law.

Held: The Ohio State law regarding Trade Secret is not in conflict with the Federal IP laws.

Reasoning: The case illustrates how the system of trade secrets and patent philosophy works with regards to the

protection of innovation. Issue #1: Whether a state can make their own IP laws? Yes as long as they do not conflict with

Congress’ laws. Issue #2: Is there anything about Ohio’s laws that make it so that their law stands as an obstacle to the

accomplishment and execution of the full purposes and objectives of Congress? Purpose of Congress’ IP laws: To legislate in the area of intellectual property in order to promote the

Progress of Science and useful Arts. Patent laws provide for a right of exclusion for a limited period as an incentive to inventors to risk the

enormous costs of research and development. In return, for the right of exclusion, patent laws impose upon the inventor a requirement of disclosure.

Goals of T-S laws: Maintenance of standards of commercial ethics and the encouragement of invention. While a

discovery may not be patentable that does not ‘destroy the value of the discovery to one who makes it, or advantage the competitor who by unfair means, or as beneficiary of a broken faith, obtains the desired knowledge without himself paying the price in labour, money, or machines expended by the discovery.’

Interaction of the 2 systems to see if and under what circumstances the latter might constitute ‘too great an encroachment on the federal patent system to be tolerated.’

Since the 2 systems have similar goals, they do not conflict. The patent policy of encouraging invention is not disturbed by the existence of another form of incentive to invention.

Distinctions the CA made w/ regards to T-S; 3 situations that might be faced by someone who has decided to place their invention under trade secret law protection:

1. Invention is clearly unpatentable: no conflict as the innovator would never have been able to take advantage of the system and be forced to disclose. Where patent law does not reach, trade secret law encourages innovation

2. Invention is dubiously patentable: in patents, no conflict here between the two IP regimes. 3. Innovations that are clearly patentable: If an inventor chose the protection of the T-S law regime

over the patent regime, then there would be a conflict of laws. If it turned out the trade secret system deterred people from issuing a patent system, then trade secret would conflict with the priority of disclosure. Crt concluded that there would be very few that would opt for the trade secret regime over the patent regime.

Even in these situations, it would not be likely to occur often enough to create a conflict with the patent regime, largely b/c the trade secret law provides far weaker protection than patent law. Thus, trade secret law would never act as a replacement for patent law.

Trade secret protection does not forbid others from trying to decipher your secret recipes, and using them once they are discovered. The trade secret protection seeker also runs the substantial risk that the secret will be passed on to his competitors. Where patent law functions as a barrier, trade secret law functions relatively as a sieve.

Conclusion: The extension of trade secret protection to clearly patentable inventions does not conflict with the patent policy of disclosure. Discussion: This accords with the labour theory: matches with trade secret. As long as you did not copy someone

else’s work, you can use it. There is no novelty requirement here.

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Trade secrets function as a power for someone to use the invention and if they do not want to use it than they can license it out to someone else. Trade secret protection encourages dissemination despite the fact it requires a secret to be kept.

Patent: incentive to encourage people to endure the costs of making and researching an invention. By encouraging the production of new products, it will lead to more jobs. Disclosure is good because it encourages innovation by other people. This innovation leads to a better economy. Both systems have a similar goal: improving society.

The ideal combination of IPRs is the maximum protection with the least amount of disclosure. This often involves a blending of different kinds of IP. Some things are easy to process and make, so patent those because others will eventually find out how to do it themselves and trade secret will prove to be not enough.

If you want to protect a process, it would be easier to do so under trade secret because it will be hard to prove that someone copied your process if they make the same product as you if you only have patent protection.

Why should the state be in charge in controlling what becomes a patent and what does not? Holmes: if we did not have patent system, it would be foolhardy to create one-but since we have one, we might as well use it because that does not cause harm either.

Diamond v. Chakrabarty, 447 U.S. 303 (1980) Chakrabarty claims he invented a bacterium that can digest oil and might be useful in the cleaning up of oil spills, etc. The Patent office rejected his application for the bacterium on the basis that the micro-organisms were products of nature and that as living things they were not patentable subject matter under State law.

Issue: Is the micro-organism patentable? Yes, the language of the statute embraces the resp’s invention.

Statutory interpretation of section 101Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title. Specifically, what must be determined is whether the respondent’s micro-organism constitutes a ‘manufacture’ or ‘composition of matter’ within the meaning of the statute.

Reasoning: Crt emphasises how these words have been widely construed by other crts and that the relevant

legislative history also supports such a broad construction. There are limits to the legislation that include natural processes, physical phenomenon: none of these

things can be patented.The court distinguishes between these unpatentable materials; such as Einstein’s formula for relativity, or meteors that fall from the earth, etc.

Judged in this light, the respondent’s micro-organism plainly qualifies as patentable subject matter. His claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter-a product of human ingenuity.

The bacterium produced has markedly different characteristics from any found in nature and one having the potential for significant utility. The discovery is not nature’s handwork but that of his own.

The petitioners offer two other arguments why the organism should not be patented both are rejected.1. That organisms were never included in the Plant Patent Act and certain asexually reproducing

plants were protected under the act, which meant that in some circumstances, Congress had recognised when ‘manufacture’ and ‘composition of matter’ did not cover living things.

2. Micro-organisms cannot qualify as patentable subject matter until Congress expressly authorises such protection. This position rests on the fact that genetic technology was unforeseen when Congress enacted s. 101-so this decision should be left up to Congress: to decide whether or not an organism is patentable.

Discussion:Chakrabarty should patent law be able to expand what comes under its protection? The presumption was that it is patentable unless reasons are found that it should not be.

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Dangers of Patenting New lifeforms: Flood gates: the patenting of genetically altered organisms will lead to the patenting of other life

forms, possibly even human products. It also encourages people to research in this area. It is argued that genetic research may pose a serious threat to the human race or that the dangers are far too substantial to permit such research to proceed at this pace.

Crt takes the stance that the legislation is meant to be flexible enough to cover these kinds of inventions but ‘the grant/denial of patents on micro-organisms is not likely to put an end to genetic research or to its attendant risks.’

The evidence on this point is inconclusive: If crts are to make such a decision in light of policy issues, they would be over stepping their bounds. The choice was not one that should be determined by the court: they ignore the policy questions behind it. In the eyes of the court, this is legislative territory.

Article 53 of the European Patent convention: Patents not granted for things that, if patented, would be in conflict with morality/public order. Even if

an invention meets these three criteria, the patent office is entitled not to grant a patent if there is a threat to the environment or other moral concerns.

The following are unpatentable: humans and their body parts, modification of the genetic line of humans, fetuses for use in genetic testing and genetic testing on animals that may cause them harm.

The patent office might withhold patents that, if commercialised, will cause a lot of damage.

COPYRIGHT

Originality determines whether or not you can enter the system. A decision is made by the person (artist, writer, etc) not a body like the patent office: there is no intermediate decision maker.

Apple Computer v. Mackintosh Computers, [1990] 2 S.C.R. 209. Apple Computer- the respondents-manufactured computers and related products. The appellants are manufacturers and vendors of Apple II+ clones. Respondent owns CR on Autostart ROM and Applesoft, which are operating systems for the Apple II+. W/o them, the computers cannot be run. The appellants obtained copies of the programs by burning them. The respondents sued them for copyright infringement, seeking an injunction, accounting of profits and delivery up of the infringing materials.

Issue: Whether a computer program, originating in copyrightable written form, continues to be protected by copyright when it is replicated in the circuitry of a silicon chip.

Held: The computer chip is protected by the Copyright Act.

Reasoning: The programs embedded in the silicon chip are a reproduction of the programs in assembly language

and as such are protected by copyright under s. 3(1). These programs constitute a form of expression that is conceptually and functionally unique and cannot be regarded as a merger of idea and expression.

The appropriate approach is to view the silicon chip program as embodying a set of instructions in machine code, which are designed to move information and perform other specified tasks.

Feist Publications v. Rural Telephone Service, 499 U.S. 340 (1991 Rural provides telephone service to several communities in Northeast Kansas. They have to provide an updates phone book annually for Kansas. Feist is in the business of making a white pages & wanted to provide a bk that would serve a wider base of people than Rural’s. F asked other companies if they could copy the numbers from their directories in return for a fee (most said okay) but Rural refused. The omission would leave Feist w/ a huge gap in their phone book. So, Feist copied the numbers from Rural’s books. Anti-competitive behaviour? Previous crt battle b/t the 2 over yellow pages. There, crt found that the refusal was motivated by an unlawful purpose ‘to extend its monopoly in telephone service to a monopoly in yellow pages advertising’.

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Issues: 1. Was this a copyright violation? Yes (in area of criteria)2. Did they meet the minimum requirement for originality? No

Holding: Since Rural’s white pages lack the requisite originality for copyright, Feist was not infringing when it took the numbers it did from Rural’s listings.

Reasoning: Onus is on Rural to show that they satisfy the requirements for copyright protection. Tension between two well-established propositions in this case: the first is that facts are not

copyrightable; the other, that compilations of fact generally are. There is a tension between these two propositions as many compilations consist of nothing but raw

data. Common sense tells us that 100 uncopyrightable facts do not magically change their status when gathered together in one place. Yet copyright law seems to contemplate that compilations that consist exclusively of facts are potentially within its scope.

The court says the key to understanding this is to understand why it is that facts are not copyrightable. Facts are not copyrightable because they do not pass the essential CR test of originality.

Original in copyright means only that the work is independently created by the author and that it possesses at least some minimal degree of creativity.

The mere fact that the work is copyrightable does not necessarily mean that every element of the work is may be protected. Copyright only extends to those portions of the work that are original.

This inevitably means that copyright in a compilation is thin because a subsequent compiler remains free to use the facts contained in another’s publication to aid in preparing a competing work, so long as the competing work does not feature the same selection and arrangement.

A factual compilation is eligible for copyright if it features an original selection or arrangement of facts but the copyright is limited to the particular section or arrangement.

The sweat of the brow theory (i.e. rewarding artists for their labour) has numerous flaws. It extended copyright protection in a compilations beyond selection & arrangement-the compiler’s original contributions-to the facts themselves. But, eventually the originality requirement prevailed.

Def of ‘compilation’ in the CR Act is meant to reinforce this idea that collections of facts are not copyrightable. In order to be considered copyrightable, a compilation must have three elements:

1. It must be a collection and assembly of pre-existing material, facts, or data2. The selection, coordination, or arrangement of those materials3. The creation, by virtue of the particular selection, coordination or arrangement, of an original

work of authorship. Even if a copyrightable compilation, it receives only limited protection. It is clear that CR is not a tool

by which a compilation author may keep others from using the facts or data he or she has collected.

Application to the case:In order to establish infringement, Rural needs to establish:1. Ownership of a valid copyright – not an issue in this case2. Copying of constituent elements of the work that are original. The court finds that Rural’s selection and arrangement of names did not satisfy the minimum

requirements for creativity under the act. In fact, Rural’s selection too obvious. Rural was required to do select the names in its directory by the Kansas Corporation authority. There is nothing remotely creative about arranging names alphabetically in a while pages directory. The names, towns and telephone numbers copied by Feist were not original to Rural and therefore

were not protected by the copyright in Rural’s combined yellow and white pages directory. Copyright only protects those constituent elements of a work that possess more than a de minimis quantum of creativity.

Because Rural’s white pages lack the requisite originality, Feist’s use of the listings cannot constitute infringement.

Ratio: If there is no minimal amount of originality, in the selection or arrangement of facts (names, towns, tel#s), there can be no copyright protection. Discussion:

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The court tries to draw the line between fact and expression. The law protects originality, not fact. The facts here are irrelevant because they are not original. The real basis of the decision is the discussion of originality.

The overall view of the court is that the purpose of copyright is to promote the production of useful works. US copyright law is based on utilitarianism, not desert. Phone books are not original.

Tele-Direct (Publications) v. American Business Information , [1998] 2 F.C. 22 (C.A.) Tele-Direct claims copyright in the subscriber information subscriber information received in a disorganised state from Bell Canada and in respect of the collection of additional data such as fax numbers, etc. Trial Judge found that copyright did not subsist in the compilation. She based her findings on the criteria set out by McLachlin J for compilations of material produced by others: that they may be protected by copyright, provided that the arrangement of the elements taken from other sources is the product of the plaintiff’s thought, selection and work. It is not the several components that are subject to protection but the compilation itself. The originality requisite to copyright is a matter of degree depending on the amount of skill, judgment or labour that has been involved in making the compilation. Tele-Direct was seen to have arranged its work in ways that were not subject to copyright according to the commonplace standards of selection in the industry.

Issue: Whether copyright subsists in the compilation of information contained in the Yellow Pages directories published by Tele-Direct (appellant).

Holding: No copyright can be claimed by the appellant, so there is no issue of infringement.

Reasoning: The definition of compilation to be used is: 1. Work resulting from the selection or arrangement of literary, dramatic, musical or artistic works or

of parts thereof;2. work resulting from the selection or arrangement of data The important criteria for measuring whether something is copyrighted is whether it has the elements

of creation of the intellect. So we also use the standard not of sweat of the brow but of creativity.The test of originality: The test threshold is low: for a compilation of data to be original, it must be a work that was

independently created by the author and which displays at least a minimal degree of skill, judgment and labour in its overall selection or arrangement.

While we have the above definition of compilation and the notions of the importance of originality; one should always keep in mind that one of the purposes of the copyright legislation, historically has been to protect and reward the intellectual effort of the author in the work.

Reference to the French phrase for copyright: droit d’auteur. The word author conveys a certain amount of creativity and ingenuity. He distinguishes this from the notion of the ‘sweat of the brow’ doctrine.

Prof. Siebrasse: ‘IP law must strike a balance b/t protecting the new products of inventive labour and allowing these to be freely available so as to form the basis for future progress.’ A compilation cannot be seen as a new product of inventive labour.

American interpretations of copyright: the standard for originality is very low – ‘Originality is not a stringent standard: it does not require that facts be presented in an innovative or surprising way. It is equally true, however, that the selection and arrangement of facts cannot be so mechanical or routine as to require no creativity whatsoever. The standard of originality is low, but it does exist.

Ratio: No CR can be claimed by the Appellant. Since there is no copyright, there is no need to deal with the issue of infringement. Note: Judge from Quebec decided this case. Can see the influence of the civil law in the decision. Idea of originality is paramount.

Discussion: Feist & Teledirect: why did they have this tension between the two standards. For Feist a very high

standard was insisted on and then for Teledirect a very low standard was maintained.

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Why did Teledirect push back the level of creativity? As more and more goods are less of a creative variation, that is more technical in nature, creativity seems to be an improper scale to use to protect them.

The test of originality: For a compilation of data to be original, it must be a work that was independently created by the author and which displays at least a minimal degree of skill, judgment and labour in its overall selection or arrangement. The standard is low.

The Photocopy Cases:CCH Canadian Ltd. v. Law Society of Upper Canada, [2002] F.C.J No. 690, 2002 FCA 187. CCH Canada produces legal materials. The Law Society of Upper Canada is a statutory, non-profit corporation that governs the legal profession in the province of Ontario. The Law Society will provide copies of cases and other legal material as needed from their collection. The Law Society also provides free-standing photocopiers. The publishers were aware of the Great Library’s custom photocopying service but did not object to it until 1993 when, after delivering a cease and desist letter, they commenced this litigation. In essence, the publishers assert that copyright subsists in their material, and that the Law Society infringes those copyrights through its custom photocopying service and by making free-standing copiers available in the Great Library. The Law Society denies all liability. They claim that their activities fell within the fair dealing exceptions and therefore, it does not infringe any copyrights that may subsist in the Publisher’s works. The Law Society also submitted that various public policy and equitable defences should prevent the publisher’s action from succeeding.

Issue: 1. Does copyright subsist in the reported judicial decisions, the head notes, the case summaries and

the topical index? Yes 2. The cross appeal, is the Law Society’s liable of CR infringements? Yes

Holding: The appeal is allowed in part and the cross appeal is denied.

Reasoning: The purposes of Canadian copyright law are:1. To benefit authors by granting them a monopoly for a limited time and to simultaneously

encourage the disclosure of works for the benefit of society at large. 2. Copyright law should recognise the value of disseminating works, in terms of advancing science

and learning, enhancing commercial utility, stimulating entertainment and the arts an promoting other socially desirable ends.

Is imagination/creative spark essential to a finding of originality? Jurisprudence suggests that the creative spark is not required for a finding of originality.

Scope of originality is inherently broad & uses a variety of terms to describe it (incl. work, taste, discretion, skill, judgment, industry and labour)

Original work must be independently produced and not merely copied. Must look at the evidence & not reliance on a particular word or phrase that merely seeks to explain the concept of originality.

Concern for the public interest in the dissemination of works may be a policy reason to impose a high standard of ‘creativity’ as a prerequisite to copyright protection. Concern that overprotection of certain works will thwart social and scientific progress by precluding persons from building upon earlier works.

Crt runs through each of the texts in question in order to decide if they can be classified as original. Reported Judicial Decisions: These constitute literary works & their originality stems from the

Publisher’s selection of the elements of each reported judicial decision. Then the Publisher has added a summation of the facts, decision etc. All of which form part of the originality of the piece. CR’ble

Headnotes, Case Summary, Topical Index and the Monograph: meaningful on their own; information though present in the case could have been presented in any number of ways. All CR’ble.

Now that there works in Q are seemed to be CR’ble – Was there an infringement of CR? The claims of infringement can be separated into 3 categories derived from s. 3(1) of the CR Act:

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1. Reproduction of a whole/of a substantial part of a work: Crt refuses to outline exactly what constitutes a ‘substantial amount’ (can be very braod) → Library did not exceed its limit.

2. Communication to the Public by Telecommunication: On request, Library transmits facsimiles of cases from the journals. Crt accepts that a series of such transmissions, even if made to one person, may constitute communication to the public.

3. Authorisation: Library maintains free-standing machines that may be used to make copies for a fee. The Law Society’s provision of photocopy machines constitutes authorisation. This in combo w/ the limited attempts to control their use (posted signs warning about CR infringements) adds to the authorisation. Crt decides that this is not enough.

The Law Society assumes that its patrons are using the machines in a legal way. → yes but also adds that where evidence suggests otherwise, such an assumption is unreasonable.

Clearly, the patrons of the Great Library will reproduce the Publisher’s works. The Law Society implicitly authorises any such acts by providing both readily available photocopiers and a vast collection of the Publisher’s works together in an environment that they control.

Secondary infringement While Law Society does have the argument of fair dealing, this does not exempt them from liability.

Even though it is a library where various fair dealing things can be done, this is insufficient to absolve the Law Society of responsibility.

Damages: No permanent injunction since it is not clear that every copy made infringes CR. No costs awarded. It may be burdensome on the part of the Publishers to establish that all their

materials are original works. It may also be onerous to prove prima facie infringement every time a work is reproduced by the Law Society.

For the Law Society to prove a patron’s legitimate purpose & fair dealing for each request will require considerable effort and cost on its part.

Problems with notion of creativity: The whole notion of creativity undermined the copyright argument; ‘The fact that an objective and coherent definition of creative is elusive at best and that creativity can sometimes connote qualities that are not required of an original work makes it preferable to avoid such unpredictable labels when assessing originality.’

Importance of Labour and skill: The Court of Appeal felt we should stay away from a creative definition and look towards labour and skill involved in producing a work instead. Look at your arrangement: did you put some thought into it, did it involve choice: but the choice did not have to be creative.

University of New South Wales v. Moorhouse (1975), 133 C.L.R. 1 (Austl. H.C.) Paul Brennan makes an infringing copy of a literary work by use of a photocopying machine in the library of the University of new South Wales. The respondents claim to be the owners of the copyright in the book and in each of the stories that comprise the book. Claimed that the University has infringed the respondents’ copyright by reproducing/authorising the reproduction of part of the book in a material form without the consent of the respondents. Allege that the University has set up photocopying machines w/ no supervision of possible CR violations. Moorhouse, a short-story author, is claiming CR infringement & is seeking an injunction.

Issue: 1. Did the University breach any CRs? No2. XAppeal: By supplying the books & the copiers, did the Library authorize any CR infringement?

Yes

Holding: Both allowed. The library is not liable for CR infringement. A declaration to the effect that the Library did authorise the copyright infringement but the wider declarations that the respondents sought cannot be granted.

Reasoning: The declaration made was too wide in that it was made to cover hypothetical infringement & that it had

not been adequately shown that any copyright infringement had occurred.

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Definition of Copyright Infringement: The copyright in a literary work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, reproduces or authorises the reproduction of the work, or of a substantial part of the work, in material form, unless the reproduction is fair dealing with the work for the purpose of research or private study.

Did the University authorised Brennan’s copying that infringed the respondents’ copyright? Authorisation: any person who has under his control the means by which an infringement of CR may

be committed and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorise any infringement that resulted from its use.

The Library did provide the resources (the books) but the machines were not there solely for the purpose of copying books. They were there to copy lecture notes and other documents as well.

The University adopted a number of methods with which to deal with the problem of possible infringement (ex. library guides accessible to all students). The signs were inadequate – not clear or close to machines. Supervision was also ineffective

Thus, the University did authorise Brennan’s CR infringing act. However, there is no evidence that there was any likelihood that infringements of the respondents’ copyright might take place at the University Library in the future. Moorhouse’s book had not been taken out in a long time. It had not been required reading since 1974. There is no ground for making a declaration on the assumption that the respondents’ copyright might be infringed in the future.

Ratio: Reasonable steps must be taken to prevent CR infringement. Knowledge of any possible likelihood of infringement may be deemed as authorization of the act. Discussion:1. Authorisation and what it means to authorise a copyright. 2. Scope of the right given to the copyright holder including rights to control royalties, and to control

people authorising this activity.

In these two cases, the libraries were passive in providing the means of reproduction. To authorise someone to copy the book, do I have to assume they might reproduce them?

Jacobs: you do not need any specific knowledge. When you are implying permission, you look at the acts of the two parties; you look to the circumstances to determine how the permission was broken up.

If photocopy machines and books are provided in the same area, it is reasonable that people will make copies from the books. Whether or not you know that people will do it, we will hold you responsible by making you provide some sort of preventative measure to prevent copying.

In both cases, it came down to an issue of control, not of creativity. If you control the facilities, you could prevent the copying and do not take action to prevent than you are responsible for the infringement.

The Law Society was not taking the complaints seriously, which is probably why the court decided to punish them, whereas the Library seemed far more responsive and aware of the dangers of copyright.

Nichols v. Universal Pictures Corp ., 45 F.2d 119 (2d Cir. 1930). 2 plays that had superficial similarities: they both centred around two families, one a Jewish family and the other Irish. In both plays, the families disapprove of their children’s choice in mates. Nichol’s play is called Abie’s Irish Rose. Universal’s is called The Cohens and the Kellys.

Issue: Did Universal pictures infringed Nichol’s copyright with respect to his play? No

Reasoning: It is essential to any protection of literary property that the right cannot be limited literally to the text,

else a plagiarist could escape by immaterial changes to the text. Generally, in order to determine CR infringement, must decide if the part taken is substantial and

therefore not a fair use of the CR’ed work

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Not clear when appears that an author may have taken the barest outline of a story & added his own details. Here, the controversy centres chiefly upon the characters & sequence of incident, these being the substance. → The def took no more than the law allowed since the stories are different.

Plot : Play A is of a religious zealot who insists on his child’s marrying no one outside his faith; opposed by another who is in respect just like him-they reconcile over the birth of a first grand child. Play B no zealotry/religion focus – though the two families are Jewish and Irish. Commonalities: a quarrel between a Jewish and an Irish grandfather, the marriage of their children, the birth of a grandchild and subsequent reconciliation.

While the plaintiff’s play is wholly original and new (not the requirements for CR), she cannot insist on a monopoly using those grounds.

Characters : Her characters are not very original →‘It is indeed scarcely credible that she should not have been aware of those stock figures, the low comedy Jew and Irishman.’ Not surprising then that Universal came up with similar characters for their play. Both have 4 characters: the lovers and the fathers. Character development very different & achieved at varying levels of sophistication in each play. Universal play, they are rough stereotypes with poorly developed character sketches. Whereas in the plaintiff’s play they are very thoughtfully developed & described

The plaintiff’s CR did not cover everything in her play and a certain amount of it went into the public domain. The court takes it upon itself to decide how much entered into the public domain. While that line may be arbitrary, that is not a reason to avoid drawing it.

A comedy based upon conflicts between Irish and Jews, into which the marriage of their children enters, is no more susceptible of copyright than the outline of Romeo and Juliet.

Discussion: Could the described characters be subject to independent CR from the play? Can you copyright a

character out of the context of the play? Generally you can describe a play at any level of generality: specific words used, scenes etc compare the two all the way to the conflict between two families etc:

Learned Hand: somewhere along the spectrum we go from a copy to a non-copy even if the line is unclear. Saw this in computer programs: the abstraction, filtration and comparison test.

Here, crt rejects the abstraction, filtration and comparison test: The judge looks at the intertwined aspect: the character is developed in certain ways: develop a character that has enough generality that it should fit within the generality. Characters for both plays are drawn from stereotypes. Language is used to distinguish and develop the characters. The more developed a character is, the easier it is to protect. We will use abstraction to describe the character to decide if there will be conflict.

Walt Disney Productions v. Air Pirates , 581 F.2d 751 (9 th Cir. 1978) Dealing with the standard Disney characters: here, what was produced was an underground comic strip that placed Walt Disney characters into different settings. The goal of Disney was to further and encourage the innocence of youth through their characters. The goal of the depictions of the Disney characters by the defendants was very different, the authors of the comic books ‘placed several well-known Disney cartoon characters in incongruous settings where they engaged in activities clearly antithetical to Disney’s objectives (i.e. bawdy depiction of the Disney characters as active members of a promiscuous & drug ingesting counterculture.)

Issues: Whether the defendants’ copies of the images of Disney’s characters are infringements of Disney’s copyright.1. Are Disney’s characters copyrightable? Yes2. If so, is Disney’s CR infringed? Yes3. Are the defendants’ infringement can be excused by the fair use? No

Reasoning:Copyright Infringement The fact that its characters are not the separate subjects of a CR does not preclude their protection, CR

is meant to extend protection for all the copyrightable component parts of the CR’ed work. The court finds that copyright is too strong a protection for comic book characters, generally, but in

this case, the comic book characters have physical and conceptual qualities that are more likely to contain some unique elements of expression. Because comic book characters therefore are

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distinguishable from literary characters, the Warner Brothers language does not preclude protection of Disney’s characters.

Infringement and Fair Use The defendants do not contend that their admitted copying was not substantial enough to constitute an

infringement, and it is plain that copying a comic book character’s graphic image constitutes copying to an extent sufficient to justify a finding of infringement.

Fair use defense since it purportedly is a parody of Disney’s cartoons. Benny and Berlin Test for infringement: they opt for the latter because it has a wider range of

coverage- which is whether the parodist has appropriated a greater amount of the original work than is necessary to ‘recall or conjure up’ the object of his satire.

To determine which test, the crt has to decide which parts to use for the comparison. No purpose served to separate a cartoon character into its component parts

Under any test, the defendants took more than is allowed in both conceptual and physical senses. In deciding how much should have been retained to bring the original into the mind of the readers, the

following had to be considered:1. Keep in mind how famous the Disney characters are. 2. When the medium chosen is a comic book, a recognisable caricature is not difficult to draw, so

that an alternative that involves less copying is more likely to be available than if a speech is parodied.3. Significant that the essence of this parody did not focus on how the characters looked, but rather

parodied their personalities, their wholesomeness and their innocence. The parody is too close to the appearance of the original Disney characters. Some differentiation has

to be made, otherwise, the copying of the graphic image appears to have no other purpose than to track Disney’s work as a whole as closely as possible.

Defs asserted that in order to make a good parody, they have to copy the characters as closely as possible, so that at first glance, the characters look like the real thing. → Court insists that this interest of creating the best parody has to be balanced with the need to protect the copyrighted material, that is, protect the rights of the artist

There is a rule in the American courts that excessive copying precludes fair use. Discussion: Fair dealing in Canada is far narrower than in the US . These narrowly defined sections include exceptions

for the purpose of studying or research, criticising or review and news reporting. If you do not fall under one of these categories, then you are infringing.

Courts indicate that parody has a special status: it is socially beneficial; crts will allow some sorts of parody that they might not for other copies. If you change a copy so as to further one of those goods, the court will look at the way the work was originally and see if you really made a different object in the end.

Rogers v.Koons, 960 F.2d 302 (2d Cir. 1992) Involves a photographer (Respondent) who took photos of dogs, a man and woman. He sold the rights to a postcard manufacturer. Koons (Appellant) is a sculptor who follows in a tradition in France of realism: banal = art. He found the postcard and decided to commission someone to carve the image in wood: he changed some of the images but everything else was the same, save for the move from two to three dimensions. Purpose of the sculpture was to capture the mundane.

Issue: Was this infringement? Yes

Reasoning: Ownership of Copyright in an Original Work of Art To establish an infringement of copyright, a plaintiff must show (1) ownership of a copyright in an

original work and (2) that def copied the protected material without authorisation. The defendants argue that while the plaintiff had a valid copyright, that the work they are supposed to

have infringed was not an original piece as required under the CR Act. → R’s work was original. It is the product of the plaintiff’s artistic creation. His efforts in posing the group for the photograph and setting up the lighting, etc are all elements of his creative contribution.

Unauthorised Copying by the Defendant

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This case presents the rare scenario where there is direct evidence of copying. Koons admitted to giving a photograph of Puppies to his artists when they were making the sculpture.

The test to see if there has been infringement is not done by comparing detail next to detail-but on the basis of whether the average viewer would recognise it. (similar to the TM test)

K’s allegation that a trial judge uneducated in art is not an appropriate decision-maker → the decision maker need not have any special skills other than to be a reasonable and average lay person.

Had Koons simply used the idea in the photograph that would not have been a problem. The Fair Use Doctrine The defendant argues that the use of the photograph is protected under the claim of a privilege of fair

use. Fair use is an equitable doctrine that permits other people to use copyrighted material w/o the owner’s

consent in a reasonable manner for certain purposes. In some cases, an original work copied for purposes such as criticism or comment may not constitute infringement, but instead may be fair use.

The test to determine fair use involves looking at the following factors:1. The purpose and character of the use: whether this was done in good faith. In this area, the def seen

as exploiting the R’s work. Parody can be considered here but, in this case, it is protected only if it leads to creative work. K’s work cannot be considered a parody of R’s work.

2. The nature of the copyrighted work: the photo is the kind that R makes a living off of.3. The amount and substantiality of the work used: K went b/y the factual setting of the photo &

strove to capture its very essence. 4. The effect of the use on the market value of the original: Balance must be struck here b/t the benefit

gained by the CR owner when the copying is found an unfair use and the benefit gained by the public when the use is held to be fair. The less adverse impact on the owner, the less public benefit need be shown to sustain non-commercial fair use.

A critical factor here is whether K’s work was for profit, which would make the infringement all the more exploitative. There is nothing in the record to support a view that K’s produced ‘String of Puppies’ for anything other than sale as high priced art. Hence, the likelihood of future harm to R’s photograph is presumed, and plaintiff’s market for his work has been prejudiced.

The test is highly dependent on the facts of a case .

Ratio: If an infringement of copyrightable expression could be justified as fair use solely on the basis of the

infringer’s claim to a higher or different artistic use—without insuring public awareness of the original work—there would be no practicable boundary to the fair use doctrine.

By requiring that the copied work be an object of the parody, we merely insist that the audience be aware that underlying the parody there is an original and separate expression, attributable to a different artist. [This is not a clear definition of parody]

Discussion: Difficult to justify the Koons decision: especially since, if the test was applied to Air Pirates, the court

most likely would not have found infringement. Was it an infringement of the original photograph? That is, was it a production or reproduction of

the original work? Argument asserted by Koons: this was a different expression, in that it was in a different form.

Test used in Koons: The average lay observer – Would an average lay observer recognises the piece as a copy, the average person might not know about the movement and might be able to provide a sort of control, basis on which to judge if it could be seen as a copy.

Is the visual impact of his work the same as that felt in the photograph? If this was merely done to copy and sell the same image, this would be a clear violation. The whole artistic move was to make something different.

Parody: The test used in Canada and the US is different for determining whether the use for parody is permissible. In Canada, the test is fair use/substantial part. In the US the test is fair dealing.

Gonthier J: the physical act of copying involves mechanical reproduction into a non-original copy. “Non-original material fixation” But K’s expression was original.

What are the entitlements of the author? There is an economic right, which includes a fair return of the work and all uses of the work (Theberge).

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The public has some entitlement to the use of works to some extent: to create new works or for the purposes of criticism and research.

Alternative decision: the author’s entitlement ends when the use does not fall into the author’s scope .

How do we resolve the competing entitlements of the author/public sphere? Allen Rosen, “Reconsidering the Idea/Expression Dichotomy” (1992) 26 U.B.C.L.Rev. 263. The judge Learned Hand: there is no fixed line to draw distinction –there is an arbitrary line drawn between idea and expression. → Purpose of the idea/expression distinction: that it is meant to protect the two goals of copyright law:

a) To encourage a free flow of ideas for the benefit of the publicb) To ensure sufficient incentives for continued creativity.

Content/Style Contrast Style is a way of explaining an idea=expression: Used by Hettinger to suggest that the idea/expression

distinction means the content of an idea and expression means the style in which an idea is presented. What is protected is not the content of copyright but the style of presentation. The content/style dichotomy fails to explain all aspects of the importance and application of the

idea/expression dichotomy.Fixed/Unfixed: Expression is an idea in fixed form : The contrast between ideas and their expression represents the

difference between ideas that are fixed in a tangible way and those that are not. ‘If the idea, however original, is nothing more than an idea...then there is no such thing as copyright at all.

It is not until it is reduced into writing or into some tangible form that there is any copyright.’ When someone expresses an idea for a story, they cannot be said to have a copyright in that story.

However, if someone overhears the idea and puts it into film or some other enduring form, then they receive the copyright, even if the idea was not their own.

Ideas & Language: The Lockean Story: Disembodied/Embodied: Floating ideas v. a description of ideas. Many courts use this distinction: the dichotomy is connected with

the distinction between ideas as mental objects and the language in which they are expressed. The metaphor here is that ideas become ‘embodied’ in language and then are susceptible to copyright

protection. Disembodied ideas, on the other hand, are not subject to copyright protection. The idea/expression distinction may be expressed as a distinction between embodied and disembodied

ideas.General/Specific Ideas (Learned Hand): It is not a dichotomy but a spectrum that lies between idea and expression. The right place to draw the line

is where we think it is most convenient to achieve the purposes of copyright. ‘Between the initial, very general idea for a creative work and its final development in the completed

material form there is an infinitely large range of possible ideas of ever increasing specificity-which can be overlaid upon the finishing work. Somewhere in this range, Hand believes, there is a point at which the author’s idea is distinguishable from his or her manner of expressing it in a concrete form.’

This is the only distinction that is able to serve the purpose that the idea/expression dichotomy is intended to promote.

We should use pragmatic criteria to distinguish ideas from their expression by employing the contrast between general and specific ideas to promote

Entitlements: The tools of the IP systemAuthor Natural Entitlement: to control all use (the author has dominion). The author is entitled to a copyright: the

revenue that streams from the work and the revenue streaming from any use of the work. Moral Rights: Recognition of authorship Integrity of Work A-C are all like property rights. The courts are schizophrenic about which entitlement they want to use.

There is a trend towards revenue types (not property). The priority has become that of liability above authors’ rights, in the sense that as long as the author is

paid, everybody can use the work.

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Publisher: They have only economic rights-the revenue stream comes from added value of the work and any use of the published work.

Users (other authors) This is the weakest claim to copyright: the use of everything that is not otherwise controlled. Includes the

right to information/ideas; and the right to access to create something new. The tools of the Copyright Regime are: originality, reproduction, expression-idea. Originality: defines the right to ideas/information (creativity, sweat of the brow) Idea/Expression: Types of revenue streams (added value=expression)

If we had to redesign the Copyright Act: Add a more rigorous originality test-like what we have in the patent application. That would protect the

public’s right to information. The harder we make the originality requirement, the more we need enforcement mechanisms, registration, etc.

The Scope of Copyright: a shift is occurring-the S.C.C. is moving away from complete control to the revenue stream right held by authors.

In the last decade, by contrast, the scope has extended to complete control of use-the uncertainty of the system of jurisprudence produced a contractual definition of rights.

Another mechanism that is meant to meet the needs of the uncertain system is the “technological speedbox” building technology that makes it difficult to copy-overrides the Court decision of only revenue entitlements by other mechanisms.

Property law says: here are your initial entitlements, do with them what you want. By moving towards “control of use” authors/publishers cut in their own fingers because they are also users, drawing from ideas. Find the market mechanisms that discourage “Control of Use.”

Fair use: if I use something for private study, it must also be fair. May be fair in the case of a student but definitely not a law firm.

TRADEMARKReckitt & Colman Products Ltd. v. Borden Inc. , [1990] 1 All E.R. 873 (H.L.), p. 171 Similar lemon juice containers competing in the same market Jif had a monopoly & ReaLemon in.

Issue: Was the container a trademark (TM)? Was ReaLemon passing off (P-O)? Yes

Reasoning:Lord Bridge of Hardwicho Jif acquired a de facto monopoly that they have managed to protect over the years. The trial judge

effectively gave the Respondents a de jure monopoly of the container. Consequently, a competitor will never be able to register a plastic lemon TM thus the respondents have achieved indirectly that their container is to be treated as distinctive of their good

Lord Oliver of Aylmertono Law of P-O: “No man may pass off his goods as those of another. There are 3 elements that a plaintiff

needs to prove in order to have a successful claim1. Must establish public the goodwill/reputation attached to the goods/services w/ the

identified ‘get-up’2. Must demonstrate a misrepresentation by the defendant to the public (regardless of

intention) that is likely to or leads to confusion.3. Must demonstrate that the plaintiff has suffered damages from the misrepresentation

that the source of the defendant’s goods/services is the same as the source of those offered by the plaintiff

o Confusion: There is bound to be confusion in the shopper’s minds in relation to the lemon plastic containers b/c none of the 3 marks are sufficiently distinctive from Jif’s.

o There cannot be any proprietary right in an idea nor can a trader claim a monopoly over a non-patented article or in the configuration of the shape of the article’s container. The Respondents want to treat the article itself as its own TM by protecting a claim to monopoly of the mark – “to establishing in the manufacture and sale of the article itself a monopoly” – this is not permitted.

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o A manufactured product is free to be copied in the absence of patent protection. The courts will protect the special sign of insignia used to designate its trade origin. The article itself cannot constitute the special insignia of its own origin but the law will protect “such capricious additions/features as may be attached to the article for the purpose of indicating origin.” Ex. The embossed Jif on the container that has no functional purpose will be protected.

o But what happens when the product sold becomes associated w/ its packaging in the minds of the public mind? Once the packaging is associated w/ the product, is ReaLemon deceiving the public thru its misrepresentation? N.B. Confusion resulting from the lawful right of another to employ as indicative of the nature of his goods term which are common to the trade gives no cause for action.

o To be considered P-O, the descriptive term must be so closely related to his product as to acquire a secondary meaning, not simply of goods of that description but specifically of goods of which and he alone is the source

o Grants the injunction b/c in the minds of the public the plastic lemon bottle is synonymous w/ Jif lemon juice for the past 30yrs. Thus if ReaLemon came into the market, there would be confusion in the market which satisfies the P-O requirements.

Effect: this ruling gives a large scope of protection that prevents anyone from selling lemon juice in similar plastic containers. This decision appears to be tredding into patent territory

Linoleum Manufacturing v. Nairn (1878), 7 Ch.D. 834 (Ch.D.), p. 184 The solidified/oxidized oil substance was registered as linoleum (Mr Walton’s Linoleum). Walton had a monopoly over linoleum floor cloth due to the existence of numerous patents. Plaintiffs claim that they have the TM for ‘linoleum.’ The Defendants are using ‘linoleum’. Lordships are of the opinion that ‘F. Walton’s Patent” was the most conspicuous part of the TM used by the Plaintiffs. The word ‘linoleum’ appears to be used as a description by the Defendants. The Defendants’ TM contained their own name much more conspicuously than ‘linoleum’ & was not the same as the Plaintiffs’ TM.

Issue: Can the name of the product be a TM? Is the use of the word ‘linoleum’ a misrepresentation?Held: No. The name of the subject-matter is not a trade-mark.

Reasoning: Fry J.o Walton invented this solidified/oxidized oil substance & called it linoleum but did not give it any other

name. How are other manufacturers supposed to call it if it does not have another name? “I think that if ‘Linoleum’ means a substance which may be made by the Defendants, the Defendants may sell by the name which that substance bears”

o The name is associated w/ the product & the manufacturer: The primary meaning of the word in solidified oil – its secondary meaning is relates it to the Plaintiffs. There “can be no right acquired by the exclusive use of a name as shewing that the manufacturer of one person is indicated by it and not the manufacture of another.”

o The word ‘linoleum’ did bear the meaning that Mr Walton put upon it – solidified/oxidized oil. If the Defendants make solidified/oxidized oil & want to call it by its name – linoleum – they are at the liberty to do so. If they were attempting to use the name “in connection w/ other parts of a trade-mark, so as to appears that the oxidized oil made by the Defendants was made by the Plaintiffs, of course the case would be entirely different.”

o Braham v. Bustard: The case involved the invention of white soft soap. The inventors named their products ‘Excelsior White Soft Soap’ so that their product could be distinguished from the thing that they manufacture (i.e. they did not just call it White Soft Soap). As such the use of the word ‘Excelsior’ is protected under TM since it was intended to distinguish their subject-matter from other manufacturers who make the same subject-matter.

Comments:o Walton had the patent & for 14yrs he could sell the substance under the patent. When the patent

expired, the name was expropriated since no one knew what it was w/o the nameo Must separate in the mind of the consumers & make your product distinct from others in the market. If

you want to extend your monopoly from patent to TM, must have a name for the product that is separate from the name that you have given the product.

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o If the public starts using the word generically, this can partly be the fault of the manufacturer due to the fact that it presented no alternative name for the substance.

o TM has a lower standard than P-O since you don’t have to show misrepresentation; you just have to actively use the mark to associate the mark w/ the goods.

B.C. Automobile Association v. Office & Professional Employees’ International Union, Local 378 , [2001] B.C.J. No. 151, 2001 BCSC 156, p. 200Employees (EEs) on strike & their union decided to campaign. It registered 3 websites: (1) www.bcaaonstrike, (2) www.picketline, (3) www.bcaabacktowork. In the metatags they had BCAA. On the sites themselves (1) used BCAA logos directly & BCAA ‘offramp’, (2) dropped some stuff, (3) removed all but the meta tags & reference to the BCAA.

Issues: 1. Is this passing off? No (yes for earlier sites).2. Is this a TM infringement? No.3. Has there been a CR infringement? Yes w/ regard to the earlier sites.

Reasoning: Sigurdson J.Passing-off issueo 2 kinds of P-O1. Competitors in the same market – one alleges that another has named/packaged/described its

product/business in a manner likely to lead the public that this entity is that of the plaintiff2. Defendant as promoted his product/business in such a way as to create a false impression that his

product/business is in some way approved/authorized/endorsed by the plaintiff or that there is some kind of business connection b/t the 2 in the def’s hope to cash in on the goodwill of the plaintiff.

o P-O involving a non-commercial competition: The current website (#3) not P-O: there is no confusion or likely confusion in the mind of the public – there is no misrepresentation – no P-O. o Domain names & meta tags: uses other words than BCAA (‘back to work”, “on strike”); not

using identical meta tags any moreo Not competing commercially: attempting to communicate its message to the public about the on-

going labour relations campaign – “similar meta tags or domain names is of less significance in a labour relations or consumer criticism situation, partly b/c there is far less likelihood that there will be confusion.”

o BCAA during the strike “must be able to reach people [lawfully] who are attempting to find an employer’s or producer’s site. Otherwise the Union’s lawful activities of activities of consumer groups would be significantly frustrated.”

o Freedom of expression: “The Union must be free to identify its employer & communicate about its labour dispute.” The website is clear that there is a labour dispute to the re’ble or rushed observer. It is also clear that the site is not endorsed by or the property of the BCAA.

o Charter rights: need a re’ble balance b/t the legitimate protection of a party’s IP & a citizen’s/Union’s right of expression. The BCAA’s property rights cannot excessively infringe on the Union’s right to free expression. In this regard, the law favours the union.

o Disclaimer combined w/ other elements of the current Union site makes it clear that the Union site has no ties w/ or endorsements from BCAA.

o There is no misrepresentation since no one when on the site is thinking that it represents the BCAA S. 22 of the T-M Acto BCAA: (1) must show that it has a valid registered TM; (2) must demonstrate that the Union has used

the registered TM as ‘use’ is in the T-M Act; (3) must establish that such use is likely to have the effect of depreciating the goodwill attached to the TM.

o 3 essential elements required under s. 22: (1) Is there a requirement for a commercial element to allegedly infringing conduct? (2) Are the activities at the Union’s website services which s. 22 of the T-M Act applies? (3) Has the defendant shown depreciation of goodwill?

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http://www.bcaabacktowork/


o Clairol International Corp. v. Thomas Supplies & Equipment Co. (1968): def’s use of TM on package was contrary to s. 22 of the T-M Act but the def’s brochures were not.

o The test for s. 22 is not deception but the likelihood of depreciating the value of the goodwill attaching to the TM.

o Positive comparison: You cannot use the competitor’s TM for the purpose of appealing to your competitor’s customers in an effort to weaken their habit of buying the competition’s products so as to secure the customers for yourself. This is not only calculated to depreciate & destroy the competitor’s goodwill but is using your competition’s TM to accomplish this purpose.

o Does s.22 require a commercial content? Vaver: ‘uses’ in the technical sense dilute a mark. This restriction allows “unions to caricature the marks of firms they are striking, w/o the fear of T-M consequences.”Nothing on the website is being sold – nor is a service being provided in exchange for $

o S. 4 of the T-M Act does not apply either in this case b/c there is no commercial element in the caseo Unlike in Clairol, the Union is not attempting to convince the public that any positive feeling that the

public may feel t/w the BCAA should apply to it. They are attempting to convince the public to not do business w/ BCAA

o There is no depreciation of goodwill here – so there is no breach of the T-M Act.Copyright infringement issue (w/ regard to the 1st 2 websites)o To succeed in breach of CR, BCAA must demonstrate that the Union has reproduced a substantial part

of the BCAA’s work or elements thereof. There must be similarity & a causal connectiono The question is whether on a qualitative, not simply a quantitative basis, there has been substantial

copying (a matter of fact & degree). The Crt must exclude elements that are not subject to CR (i.e. ideas, information, functionality). Note that colour, font, lay-out, etc. (relating to creativity) are subject to CR

o 1st site breached the BCAA’s CR – the similarities b/t the 2 sites make were substantially similar.Passing-off issue for the early union websiteso The website causes confusion in the minds of the public as to who the site actually belongs to based on

the visual similarities – there is passing-off T-M Act, s.22 (1): Depreciation of goodwill – No person shall use a trade-mark registered by another

person in a manner that is likely to have the effect of depreciating the value attaching thereto. This provision can be widely interpreted.

P-O is about protecting the consumer – there is no confusion about selling. However, this can be looked at a different way. The union & the BCAA are competing for public sympathy

Negative Comparisono The union was using the TM but what does ‘use’ mean? Use is association of a mark w/ the sale or

advertising. Using a TM in association w/ a thing/service is not just repeating the symbolo The Union was not using the mark. They were not selling anything o Reference to the mark is an acceptable practice that does not infringe on the rights of the TM ownero Remember that you cannot protect ideas. Ex. Coca-Cola’s TM cannot prevent others from criticizing

Coke. What would be an infringement of TM right was if Pepsi were to make direct & negative reference to Coca-Cola in order to sell their beverage by presenting it as better than Coke’s cola drink.

o Problems arise when a party goes b/y the line. When the commodification of the product occurs. Ex. Nike (√) no longer = Nike product. Rather the product being sold is the symbol – the signifier becomes the signified. See the Litman article below…

Jessica Litman, “Breakfast with Batman: The Public Interest in the Advertising Age” (1999) “In an acquisitive society, the drive for monopoly is a very powerful pressure. Unchecked, it would no doubt patent the wheel, copyright the alphabet, & register the sun & moon as exclusive trade-marks.”

Advertising & the Public Interest: Brown’s argumento Advertising provides the consumer w/ information to help them choose what they want to consume.

Where the law protects/enhances advertising’s informative function, it encourages competition & advances the public interest.

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o Advertising not only informs but it persuades. It serves no public interest to legally protect persuasive elements. It is argued that such protection may be detrimental (higher prices & diminishment of competition.

o Trade symbols: inform & prevent confusion – it is this that the law should protect w/ regard to symbols. This does not include their persuasive function.

o ComL of unfair competition has not gone so far as to accord the owner of the trade symbol the exclusive right to use it in the course of trade.

o Lanham Act: owner of the registered TM have the exclusive right to use in commerce on or in connection w/ goods/services specified in the registration. Crts require a showing of a likelihood of confusion b/f finding infringements under the Act.

o “Trademarks should no be considered freestanding items of property, but instead were only symbols, mere repositories of the goodwill that accumulated around the products that they distinguished.” This may not be accurate. TM do have value that is apart from the goodwill in the products that they represent.

The Expansion of Trade Symbol Lawo Today, the crst tend to be expansive with the concept of confusion. Ex. Use of the pink panther logo

by a gay rights group – Dow & MGM sued the Pink Pather control for TM infringement & won b/c the crt found that confusion was likely. McDonalds prevented a hotel chain from using ‘Mc’ b/c it treatened confusion.

o Crts have “assisted owners of both highly distinctive & less distinctive trade symbols in maintaining exclusive trade use of their symbol by finding some species of confusion likely, even where the confusion about a product’s source seemed improbable.”

o Dilution theory: “the more widely a symbol is used, the less effective it will be for any one user.” American legislation has dealt w/ this in 1995 – symbols that qualify under a statute as ‘famous’ marks no longer need suffer even non-confusing uses of the same of similar marks when the uses cause dilution of the famous marks’ distinctive quality.

o Both the crts’ applications of the loose conception of confusion & dilution remedies for famous marks – protect what Brown called the persuasive function of trade symbols.

o The law “now protects the imaginary values painted by advertising campaigns independent of any features of the products they advertise.”

The New Politics of Merchandisingo 2 trends consequent to the expansion of the law of trade symbols:

1. An evolution in widely held views of the public interest: Productivity is measured by what people are inclined to buy. What consumers are willing to pay had become synonymous w/ value. “Commodification is the pre-eminent engine of progress.” There is an assumption that if value of this nature is places on something, then the law must & should protect it as property.

2. The descriptive proposition that trade symbols have no intrinsic value has come to seem demonstrably inaccurate: The trade symbol has moved from an ad device to an underlying product line to an independent justification for bringing ‘underlying products’ to market. Ex. Elvis’s estate makes more that Elvis did when he was alive just by selling Elvis. Batman brand toys that go w/ the mediocre sequels make up in sales for the films.

o New orthodoxy: marketing = value. “American industry seems to proceed on the assumption that we can make the consumer richer simply by revising a product’s packaging, w/o having to make any changes to the product itself.” (Ex. Ford Taurus/Mercury Sable – same car different ads)

o “Consumers have come to attach enormous value to trade symbols, & it is no longer uncommon to see the symbols valued far in excess of the worth of the underlying products they identify.” Symbols are often times the product

Protection & Competitiono If society is placing a higher value on the persuasive elements of trade symbols (as opposed to the

informational elements), then perhaps these persuasive elements need to be better protected legally.o Value does not tell us whether an item for which protection is sought belongs in the proprietary or the

public pile. Ex. Functional product features are not protected b/c they have such a high value

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whereas, in other instances elements that are recognized as having a high value get protection under the law.

o If the trade symbol is categorized a intellectual property it must be shown that bad things will happen that will outweigh the good if no protection is granted [very utilitarian]. It is hard to argue that harm will come id persuasive elements are not legally protected (or underprotected) – Big corps like Disney, Mattel, WB are doing fine w/o legal assistance. All these corps have trained the consuming public well (ex. We can distinguish b/t a Barbie doll & a fake one or a real Polo shirt of a dud)

o Justifications for protection: - Protecting the public from deception: does not support assigning broad rights to prevent

competitive or diluting use when no confusion seems likely- Incentives: just another justification for IP – does not fit here b/c cannot say that there would

be an undersupply of consumer goods if advertising is not given plenary control over the content of their ads

- Desert: producers have invested a lot into their trade symbols – they have earned them & are entitled to them. But the consumers are also deserving of these symbols b/c they buy into the mystique ($ & collaboration)

o But if these rights to trade symbols became more restrictive and favourable to the creator we would have a bunch of monopolies – competition, the backbone of the system, would be compromised

Rethinking the Law of Trade Symbolso Today, advertising is ‘utterly persuasive’ & consumer rel’ships w/ ads is complex. Ads bombard are

environment & invade our consciousness. They represent an investment on the side of the consumer & that of the producer. Litman goes as far to say that “we [the consumer] are the product.’

o A call for the increase in intellectual property rights for trade symbols is perhaps a manifestation of human greed. Like money, the more one has the more one craves & the more one is convinces that one is entitled to it. The American system has little tolerance for collective ownership – someone has to own the trade symbol.

o Look at the goal: If the goal remains the promotion of competition – classic TM rules work. Is this still the goal of the law of trade symbols?

o “As the realm of protection expands, it necessarily does so at the expense of competition. Competition, though, is the basis for the rationale underlying any protection of trade symbols. If we do not want to encourage producers of different products to compete with one another for consumers’ dollars, then we do not really need to protect trade symbols at all.”

Class comments:o She is arguing against this practice of commodification of TM. It is not good to allow people to

appropriate entire symbols.o The Olympic rings, owned by the IOC, have taken on a meaning b/y the athletics. However, the

cultivation of the meaning is controlled by the IOCo Public domain: the non-use of symbols appropriates them to history

F.I. Schecter, “ The Rational Basis of Trademark Protection ” ( 1927 ) 40 Harv. L. Rev. 813, p. 813, p. 221 o 2 historical sources of TMs: (1) proprietary mark optionally put on products to facilitate illiterate

shopkeepers or to be reclaimed by owners in situations of piracy, (2) regulatory production mark so that defective work can be traced or to prevent/confiscate outside goods smuggled into an area where a guild has a monopoly,

o Function of a TM: “to identify a product as satisfactory & thereby stimulate further purchases.” “To describe a TM merely as a symbol of good will, w/o recognising in it an agency for the actual creation & perpetuation of good will, ignores the most potent aspect of the nature of TM & that phase most in need or protection.”

o The TM is the most effective agent in the CREATION of good will. It imprints on the public’s mind an anonymous & impersonal guaranty of satisfaction & a desire for further satisfaction – the mark sells the good. The more distinct the mark, the more effective the selling power.

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o Crts have allowed the use of same/similar TM for non-competing goods b/c its uses do not confuse the public as to the origin of the goods. The Crts uphold the cardinal principle that “there is no property rights in a TM apart from a business or trade in connection w/ which it is employed.”

o The courts have ignored the fact that the creation & retention of custom, as opposed to the designation of origin, is the primary purpose of TM. A TM’s uniqueness is a paramount importance to its owner.

o Advancement in technology (ex. telephone, high-speed interurban trolleys, etc.) have changed the scene & the crts are not keeping up w/ the times: “the consumer now projects his shopping far from home & comes to rely more & more upon trademarks & tradenames as symbols of quality & guarantees of satisfaction.”

o Once a TM has come to indicate to the public “a constant & uniform source of satisfaction”, its owner should be allowed the broadest scope possible for the ‘natural expansion of his trade’ to other fields or lines of enterprise.

o The law in its most liberal form will prevent misuses of marks only where there is actual confusion created by misuses that result in damage to the owner. However, non-related goods may also injure the owner of the mark even in the absence of confusion.

o The effects of the use of another’s mark outside of the class of goods, is the gradual whittling away or dispersion of the identity & hold upon the public mind of the mark/name by its use by non-competing goods. Example cases are Kodak (cameras & bikes), Vogue (fashion mag & hats), Rolls-Royce (cars & radio parts)

o The more distinctive the mark, the deeper is its impress on the public consciousness, & the greater the need for protection against vitiation from the particular product w/ which it has a connection

Emerging Principles of TM (1927)1. The value of the modern TM lies in its selling power.2. This selling power depends for its psychological hold upon the public, not merely upon the merit

of goods upon which it is used, but equally upon its own uniqueness & singularity.3. Such uniqueness or singularity is vitiated or impaired by its use upon either related or non-related

goods.4. The degree of its protection depends in turn upon the extent to which, through the efforts or

ingenuity of its owner, it is actually unique & different from other marks.

Conclusionso The preservation of the uniqueness of a TM should be the only rational basis for its protectiono Germany has fortified this:

- Supreme Crt, owner of the Kodak mark was not entitled to cancel the registration of the same mark for bath tubs. The Crt held that the public was aware that the bath tubs did not come form Kodak the photo company.

- A similar case was heard at another German crt involving the TM known as ‘Odol.’ The Crt pointed out that when the public hears the word ‘odol’, it thinks of the complainant’s mouth wash, & that an article designated w/ the name ‘Odol” leads the public to assume that the good is of good quality. If the mark is lessened in any way, the job of the complainant of the mark to compete will be all the more difficult. The type of the good as competing or non-competing is not what is important but the quality of the goods being sold under the TM.

Class comments:o Investing in a reputation: you want your new products to further your reputation – taking marketing a

symbol encourages high quality. He argues what is wrong w/ that?o Let people sell Coke & Nike T-shirts b/c it pushes the quality of the products soldo Use the mark to make moneyo There is an assumption that Coke has entitlement to full use of its TM – does the appropriation of the

Coke symbol/name lead to less drink sales? Probably noto TM law is adapting to the changes in the market regarding unfair trading laws & view that TM are

commodities

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Summary of the 4 systems in regard to modalities of ordering IP space:o Each uses tools developed thru old tools (historical context)o Each’s own technological development led to their different manners of useo There is a disjunction b/t tools & entitlementso There are debates on the entitlement sideo There is also substantive debate b/h the tools that we have & what we can & cannot do w/ the tools

ALTERNATIVES TO IP REGIMES FORMAL REGULATIONIntroductionSomeone who is planning a portfolio: each one of these schemes has benefits and disadvantages. You want to come up with the best scheme, one that has maximal benefits.

Corporate framework is flexible, securities looks at how you stop possible abuses in the system. Both types of law work off of the same thing: that is how they regulate the corporate world. You have to understand both in order to understand corporate world.

Patent lawo It is facilitative: allows you to find out how to get your rights, It does not say much about what you are

supposed to do with it. o Sections 65 and 66 of the Patent Act provide certain protections for which the patent system can

provide protections. o The Commissioner of Patents can decide if your patent should be exclusive or not, they decide if your

patent is an abuse of patent: then the Commissioner may decide to impose a licensing scheme on your patent if you are refusing to let others use it.

o Section 65 is rarely used. One case in 1939: it was not enough to supply the Canadian market, you had to supply a wider market. Patent office imposed a license on the foreign patent maker to force the product to be made in Canada. This cannot be done now with the advent of TRIPS and NAFTA. You cannot force someone to make a patent in your market.

o Types of formal requirements: regulatory activity: To interfere with the market analysis: you can manipulate the market to allow for Canadian products for example:

Link between patent and competition lawM. Trebilcock, et al., Competition Policy & Intellectual Property Rights” in The Law & Economics of Canadian Competition Policy (Toronto: University of Toronto Press, 2002) at 573-639, p. 232

3 Principles Guiding Competition Policy w/ Respect to IPo These guidelines acknowledge

- the rights provided by patents, - the benefits to be gained from diffusion, - the potential effects of particular licensing restrictions, and - the possible adverse effects on prices

o They are SILENT on whether competition law should evaluate the impact that L restrictions may have on INCENTIVES to INNOVATION

1. There should be no presumption that an IPR creates market power.- There are a lot of substitutes on the market for products & processes (including those w/

patent protection)- Just b/c a patent may confer some market power – this does not mean that it infringes

competition law2. Competition policy should acknowledge the basic rights granted under patent law.

- For patented innovations, patent law ensures the EXISTENCE of those rights; competition policy restricts the EXERCISE of those rights.

- It is important for competition law to recognize the value of the protection granted to IP holders & to allow the legitimate exercise of IPRs.

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- Competition policy may intervene if an IP holders’ conduct goes b/y that which is inherent in the patent.

3. A licensing restriction should be permitted if it is not anticompetitive relative to the outcome that would result if that licence were proscribed; otherwise an evaluation of potential efficiency effects of the restriction on the pricing & diffusion of the IPR should be made.- Acknowledges the role that competition policy had to play in the promotion of the efficient

diffusion of technology & in pricing of goods that use the technology.- Evaluates the impact of an L (licensing) restriction relative to a benchmark situation in which

the restriction is prohibited. Ex. L-ee & L-or horizontal competitors pre-L, an innovator may choose not to license its competitor where restrictions in the K are prohibited. Here the benchmark against which to compare the L is the situation under no L.

- Where the transfer of technology generates social benefits relative to exclusive exploitation of the patent, this principle permits such restrictions, even when they have anti-competitive effects.

- Licensing may not be socially desirable: concern for ‘sham agreements’ where technology of little value id transferred just to divide the market among competitors, exclusive dealings, cartel patent pooling arrangements. If the L restrictions are not necessary to encourage diffusion, then, as in non-IP cases, the anti-competitive effects would be weighed against possible efficiency benefits to determine the social merits of the restriction.

Distinction b/t IP & tangible property1. IP can be used by many at the same time. The social cost of transferring innovations is 0 – it is

socially efficient for innovation to be freely available. BUT a pantentee (P’ee) may be reluctant to license the competition unless restrictions can be imposed to the use of the innovation. It is a contentious issue whether a P’ee can impose restrictions on the use of the innovation & whether this distinction calls for a different application of competition law to IP

2. W/ reference to principle #3: In many licensing Ks, the rel’ship of the parties in both horizontal & vertical. L’or & L’ee are horizontally related if they would be competitors in the same market w/o the L. They are vertically related if the IP represents an input used in the production of the licensed product.

The Canadian Competition Acto In the Competition Act, we acknowledge that IP played a special role. In early provisions: the mere

practice of IP law did not count as competition law. Competition law helps regulate IP law to some extent.

o General purpose of the act is to prevent abuse of power. This can occur through various ways. There are natural monopolies that exist, or people may have historically had monopolies: it is the exercise and enforcement of these monopolies that the competition law controls. They regulate competitive activity and are meant to control abuse of the market.

o Recent economic views now see IPR as competitive-view is that yes, we are creating monopolies, but they would not have been produced if there was no market for them. The new thinking is that property and competition law are in conjunction in IPR systems, rather than before when IPRs were considered anti-competitive.

Do IPRs increase innovation? o We add something to the market that may not have been there before. If we assume economic

incentives work, then use of intellectual property right creates market power. The use of intellectual property rights to control the market beyond what was narrowly intended by the statute: if you use that exclusivity to go beyond the powers of the statute: that is when competition law comes into play.

o Nimmer: we should allow freedom of contract to extend IP rights. This policy would not work either. Often contracts may go much further than the statute will allow. Using contract law to extend your IP rights: competition law is meant to regulate this extension of power: making sure you do not go beyond.

o Take the general principle that we can extend these laws: Roles of Competition Law1. See competition law as a correction of IP rights.

- Competition law allows one to look at the actual market that IPRs are working in.

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- Competition law allows us to correct the possible excesses of IP law.2. Look at the use of IP to prevent people from innovating-known as the innovation market. 3. Competition law is not meant to deal with innovation.

- What we care about is the sale of the final product. There are some similarities: they are not water-tight compartments.

- Ex: Microsoft and the anti-trust case (below).

Tied Sale & the Extension of IPRso Tie: the supply of a product (tying product) either on the condition that the buyer also takes a 2nd

product (tied product) or on the terms that induce the buyer to take a 2nd product in addition to the 1st.o 2 types of tying restrictions: (a) bundling (grouping patents in a licensing K), and (b) requirements

tying (buyers right to buy one is tied to obli to buy all reqs of a 2nd product exclusively from the same sellor)

o Alternate forms of tying: L’ing a bundle of products or setting royalties on the total sales of Ls, as opposed to the use of the licensed input

o Tying arrangements are not always anticompetitive (i.e. aimed at foreclosing the market): Tying can be welfare enhancing; it can achieve economies of scope & protection of good will. “If the tying product has uncertain value to customers, as in the case of innovation, then charging less for the innovation & tying it to a good whose demand is correlated w/ the revealed value of the innovation can insure consumers against the possibility of an imprudent purchase.” It is hard to tell when tying in anticompetitive & when it serves to enhance welfare.

Microsoft & Anti Trust (mid-late 1990s)o Microsoft had a natural monopoly because they were the main producers of the operating system for

computers.- Tippy market: some product markets are like seesaws: take the first fax machine: one is worth

nothing, value goes up with the number, some markets: the more people in it, the more incentive you have to buy them. Once you hit a certain point in the market, everyone swings to your side b/c they have no reason not to buy your product. It makes it very hard for others to enter into the market.

o Microsoft had captured a part of the market and used their power to insist that people buy all their programs (i.e. every computer had Microsoft programs). They made it very cheap to use Microsoft for all your computers, (as a computer salesperson) it made it cheaper for the sales people to load all their computers with Microsoft. Why buy other operating systems if you can get Microsoft cheaper than any of the others?

o MS started to insist that Explorer popped up automatically w/ Windows, and made it free. That way people did not have to go out and buy the competitor’s product. They were essentially knocking out competitors like Netscape and others. Microsoft got a license for Java and then rewrote it so it would only work with Microsoft; destroying the purpose of Java.

o Bright line between innovation and sale to the retail market. Problem is that there is a gap where things fall in between the cracks – One section of the Competition Act that deals with abuse of IPR and a section of the act dealing with general abuse of power.

Judge Jackson’s test for tying liability1. 2 separate ‘products’ are involved2. The Def affords its consumers no choice but to take the tied product in order to obtain the tying

product3. The arrangement affects a substantial volume of interstate commerce4. The Def has ‘market power’ in the tying product marketo Under the test the judge finds MS liable (under #1 consumers distinguished b/t the operating system &

the net browser as separate). (#2) The consumers had no choice but to take Explorer b/c cannot delete or hide it on the system – could not get the operating system w/o Explorer. (#3) MS is nationwide (worldwide). (#4) Windows dominates the market

o Judge orders breakup of MS but MS appealed & won reversing the finding that MS had attempted to monopolize the browser market b/c the crt failed to define the browser market. The litigation continues (up till Spring 2002)

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IPR & Economic Growth o By the 1980s, IPR came to be viewed as “serving useful, pro-competitive functions in a market

economy, rather than as statutory monopolies conferred by the intellectual property system”o Interface b/t competition policy & IPRs became a focus. IP became a bargaining chip w/ regards to

relationships b/t the developed & developing worlds. o US (& dev’ed world), having the competitive advantage; it wanted to set int’al rules that would protect

their IPR abroad (as much as their laws did at home). o Developing countries where innovation is not a huge part of their economic growth (good copiers)

concerned that an agreement like TRIPS would erode their economic welfare. The WTO/TRIPS agreement & others “reflect the important role IPRs paly in economic growth & the difficulty in balancing the protection of IPRs w/ other social interests (such as assuring healthy competition).”

Section 32 of the Competition Ac t o There are explicit references in the Act that ensure that conduct that goes b/y the exercise of inherent

IPRs falls w/in the Act. There are specific provisions designed to deal with abuse of IPR. There are also other sections that references can be drawn to IPR abuses (ss. 45, 75, 77 as examples)

o Section 32 allows the A-G (attorney-general) to apply to the Fed Crt of Cda (FC) for various remedial orders to address the abuse of IPRs.

o The remedial powers of the FC are broad: revocation of the patent, declaration of the K’ual arrangement as void, imposition of compulsory L’ing

o Provides that where the exclusive rights & privileges conferred by patents, TM, CR have been used to(a) Limit unduly the facilities for transporting, producing, manufacturing, supplying, storing,

or dealing in any article or commodity that my be subject to trade & commerce(b) Restrain or injure unduly trade or commerce in relation to any such article or commodity(c) Prevent, limit, or lessen unduly the manufacture or production of any such article or

commodity or unre’bly enhance the price thereof(d) Prevent or lessen unduly competition in production, manu, purchase, barter, sale,

transport, or supply of any such article of commodity then the FC may:i. Declare void, in whole or part, any agreement, L, arrangement relating to

the use of the IPR in Qii. Restrain any person from carrying/exercising any or all of the

terms/provisions of the agreement, L, or arrangementiii. Direct the grant of licenses under the IPR to persons on terms &

conditions determined by the Crt or if the grant/other remedies is insufficient to prevent such anticompetitive use, revoke the patent

iv. Direct that registration of TM in the register of TMs be expunged or amended

v. Direct that such other acts be done or omitted as the crt deems necessary to prevent anticompetitive use

o Section 32 also has the reprisal that no remedial order shall be made that would be a variance w/ any treaty or arrangement respecting IPRs to which Cda is a party to.

o Want to leave room for IPR to work, to abuse IPR you have to go beyond the bounds of what was awarded to you. Say you have an IPR and you implement it, you need to existence of IPR in your hands to be tainted.

M. Trebilcock’s Conclusion o Competition policy should be based on the efficiency merits of the practice as opposed to whether

licensing generates too much or too little reward for the innovator’s research efforts. The basic exclusive rights provided by the patent grant should be respected at all points of the analysis.

o IP differs from other property in its public goods nature – which leads to a different application of competition law in certain instances. Also consider the horizontal-vertical nature of the rel’ships b/t competitors w/ regard to licensing

o In many cases the application of the law may be the same as in non-patent cases but certain criteria characteristic of innovations (ex. uncertainty & specific investments) may justify the use of restrictive practices. IP cases may get more leniency than non-IP cases when applying the same laws

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o Competition law should not attempt to take on the mandate of patent policy in encouraging innovation. Nor should patent law attempt to rule on anticompetitive practices.

o Competition policy should work w/ patent policy to provide adequate incentives for innovators to share their discoveries w/ others when this is efficient. Patent & competition laws should be complimentary to strike a balance b/t dynamic & allocative efficencies.

Volkswagen Canada v. Access International Automotive , [2001] 3 F.C. 311 (C.A.), p. 266 The 2 companies sell auto parts & accessories. VW Canada is the authorized dealer of VW & Audi products. AIA sells products w/ the VW & Audi logos that originate from sources other than VW Canada – thus they get their product outside the authorized Cdn distribution channels (AIA does not CV Cda’s consent to do this)1996, VW Canada was assigned the Cdn CR for the VW & Audi logos & registered itself as the CR owners for both. Sent notice to AIA to stop dealing in parts & accessories bearing either logo, except for parts that were purchased from VW Cda (directly or indirectly). VW claims that AIA’s activities are an infringement of its CR. VW asking for a number of remedies (incl. permanent injunction, delivery up of all infringing materials, damages & accounting)AIA states that it has authorization from VW AG & that VW Cda has had knowledge of its dealings since 1986. In 1991, VW demanded that AIA stop selling VW products – AIA refused. AIA counterclaims that VW is abusing the CR (s. 32 of the Competition Act).

Issue: Was VW Cda abusing it CR? Yes

Reasoning: Sharlow J.A.o Application of s 32 of the Competition Act: This provision cannot be used as the basis of a

defence/counterclaim in CR infringement action (the act serves to permit the FC to grant remedies for certain uses of CR but only if the result of the CR use is to unduly or prevent competition). AIA relies on Eli Lilly & Co. v. Marzone Chemicals (1976), (patent infringement case) to justify the application of s. 32. The court does not accept AIA’s argument by distinguishing from Eli Lilly b/c the statutory preconditions preclude AIA from claiming a remedy for breach under s. 32. Thus, to permit AIA’s counterclaim to stand would mean that AIA would be benefiting from a statutory remedy (s. 32(2)(b)) w/o adhering to the statutory preconditions.

o BUT: AIA’s equitable defence: in Eli Lilly, Addy J. indicated that the allegations in the statement of defence should not be struck b/c s. 31.1 of the Combines Investigation Act [now replaced by the Competition Act – s. 32] potentially afforded a defence to the infringement claim. Addy J. went on to say that plaintiffs who are seeking equitable relief must come into Crt w/ clean hands. If they are in breach of the statute – “this would constitute a more valid reason for refusing injunctive relief although the allegations might well not constitute a defence to a claim at law.” Thus VW Cda’s [CR holder’s] conduct may form a basis of a defence claim of equitable relief for infringement of CR.

o Clean hands doctrine: An unclean hands defence can only be made out if & only if there is a sufficient connection b/t the subject-matter of the claim & the equitable relief sought. That is, there must be a relationship/connection between the wrongful conduct of the IPR holder & the IPR.

o The assignment of the logos to VW Cda is conduct described in 32(1) of the Competition Act b/c the result of VW Cda obtaining the CR was to unduly limit or prevent competition in authentic VW & Audi parts & accessories. There is a sufficient rel’ship b/t the CR & the unclean hands defence that the equitable remedy may not be granted.

o Allows the appeal except w/ regard to AIA’s counterclaim.

A discussion on Nutrisweeto NS had patent over aspartame; the patent expired in Canada but existed in US. They wanted to

continue their market, so they created the TM; so anyone who bought their product, they licensed them the NS symbol (the swirl). If vendors bought other sweetners, they would lose their license to NS.

o NS entered into these agreements with soft drink companies, insisting that they buy all their fake sugar products from NS. NS had 95% of the market: through years of exclusivity, they were able to force others from producing fake sugar: able to force the entire industry to use their aspartame.

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o NS was deemed to have market power: Coke decided not to accept the license on those terms. They used aspartame and sucrose. Pepsi used just aspartame: and Coke eventually moved right to aspartame only. NS, w/ this market power, figured they could force Pepsi and Coke to buy NS products alone.

o NS used TM to get market power, then they abused that right and were forced to stop.

Closing Class CommentsIs this the appropriate line to draw between IPR and Competition law? Is setting up the game by allocation of rights sufficient to show these different roles? o It would seem that we would require the patent commissioner to be more aggressive in implementing

section 65. o If there was too much overlap, you would start to wonder why we bother with both systems. If the

patent commissioner was to take more of a role in controlling competitive behaviour through use of section 65, then we would wonder why we have competition law.

What about the innovation argument? If someone has an IPR and does not let people use it: what about that situation? o Stem cells : you cannot use them in US unless they are federally funded. If you have a stem cell line

and you do not license it: you are not effecting the licensing market, you are effecting the innovation market. Then you have to turn to the IP system: on what basis can we force you to license it out?

o Could bring in a European compulsory licensing system, but that would result in the patent system acquiring a role that is controlled by competition law: that is taking over what is done by competition law.

o Clearly a black hole here: when it comes to overlap and possible holes of regulation and control. Patent pool gets around these problems: you get a group of people together with different patents and share them. Have to be careful not to lapse into a cartel. Competition law will often regard these as competitive as long as they follow certain rules.

INFORMAL REGULATIONo Patent pools: way of dealing w/ problem of access to technology. Ties contract and Competition law

togethero Enforcement of a fiduciary duty: way of reducing the power of patent holders – filling in the holes left

by IP legislation.o There are a variety of informal routes to either expand the set of rights beyond IP regime or to

constrain the IP regime.

Patent PoolsJeanne Clark, et al., “Patent Pools: A Solution to the Problem of Access to Biotechnology Patents?” U.S. Patent & Trademark Office (5 December 2000), p. 273o The concern regarding the granting of patents to innovations in biotechnology, genetic info in

particular, is the potential lack of re’ble access to technology for the R&D of commercial products & for further basic bio research. A possible solution are PATENT POOLS.

o While research orgs use the patent system to protect their research (& investment), the furthering of this R&D could be blocked by the system itself b/c getting L’s for the use of a patented product is very expensive. This would be of a very serious detriment to publicly funded research like the Human Genome Projects

o There is also a concern for the removal of research resources from the public domain – concern that a patent holder could ‘hold hostage’ further R&D efforts

o Not one company or org has enough genetic info present in an organism. If proprietary info is not freely available or L’ed in an affordable manner, researchers will be precluded from using protected genetic info.

o Cohen & Boyer patents: most profitable patents in biotech field: “By minimizing licensing fees & extending non-exclusive licenses, the potential infringers were inclined to obtain L’s & the technology were therefore broadly distributed. The dominance of these patents did not inhibit further development but instead spurred further innovation while providing profits to the patent owner.”

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Patent Pools & their Historyo The idea of connecting all ideas together is that they are informal mechanisms – unlike the

Competition Act that is implemented on its own initiative; it is a formal mechanism. Dozens of people with patents connected to different aspects of one industry. You bring the people together and then you cross license among the members as well as offering licenses to third parties.

o Patent Pools have a long history in the US. The 1st one was for sewing machines in 1836. Other early examples include movie projectors, fold up beds etc: pooled together and then issued licenses.

o The most important one in the early period was the aircraft industry in the 1917. The Wright Company and the Curtis company as well. Each one blocked the other from making aircraft. FDR negotiated a patent pool between these people for strategic reasons: to end the blocking of airplane manufacture. The government threatened that if the aircraft industry did not get together, they would set up their own compulsory license and make their own planes.

o The radio industry (1924): situation where different companies (ATT, Westinghouse, etc.) held patents and blocked each other from entering the market. This created problems for the military (national security). Eventually the companies got together and created a patent pool (RCA). Creation of patent pools allowed for the development of radios and eventually televisions.

o Video Pool: Mpeg technology; various patents held by various companies and various manufacturers

DVD Technologyo Pioneer and Sony got together and then others developed as well for the DVD market. o Difference b/t patent pools & CR groups:

- Opensource technology and CR societies: Music and record companies giving their rights over to SOCAN: People pool their licenses together and then radio stations can pay a fee and get rights to play music that way.

- Patent pools involve those who are using the technology: so it is different from copyright groups.

o Patent pools bring together the key manufacturers together – looks anti-competitive. o However, attitudes have changed. At the end of 1990’s IP and Competitive laws can co-exist & patent

pools found to be pro-competitive. Throughout the use of a patent pool, we can encourage sales into the market place.

o June 2001: Institute of Science and Technology: concluded they could be pro-competitive. Especially where there is a requirement for a certain standard to be met: like coding your information in a certain way. Ex. I may have a special code, but if I put it into a patent pool then I am not keeping it a secret and allowing others to use it and include it in their good, then I am not being anti-competitive.

o The DVD industry learnt from the video player industry (VHS-BETA war). Patent pools that share technology – gives consumers confidence in the technology that they are developing. This provides consumers w/ an expectation of what will be the standard (so they know what to buy – remember the consumers who lost out b/c the trusted BETA & not VHS – this is what the DVD industry has avoided – now it is just a war b/t VHS & DVD – VHS is losing).

Legal Guidelines for Forming Intellectual Property Poolso US Department of Justice (Antitrust Division) & the FTC5 Factors of a Pro-Competitive Patent Pool1. Where technologies are not competing with one another. Where people are putting in competing

technologies, they are cutting each other off. However, if you are w/in the same industry, i.e. complementary patents, then you will be competitive. Complementary technology is an indication of pro-competition

2. Where negotiations etc do not take up too much time. Reduction of transaction costs. 3. Clears blocking positions: someone who refuses to license out the technology – this is basically

what happened with the airplane industry: each company was holding out against the other; each refused to license out the other.

4. To avoid costly infringement litigation. 5. Promotes the dissemination of technology.

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3 Factors of an Anti-Competitive Patent Pool1. If the patent pool has the effect of shutting people out from the industry.2. The pool participants collectively possess market power in the relevant market.3. The limitations on participation are not reasonably related to the efficient development and

exploitation of the pooled technologies.o Anti-competitive effects may also occur if the pooling arrangement deters/discourages participants

from engaging in R&D which is more likely when the arrangement includes large fraction of R&D in an innovation market.

How to make the determination of the pro/anti competitive nature of a patent pool? o The US Dept of Justice initially had the following additional guidelines

1. The patents in the pool must be valid and not expired. 2. No aggregation of competitive technologies & setting a single price for them3. An independent expert should be used to determine whether a patent is essential to complement

the pool4. The pool agreement must not disadvantage competitors in downstream product markets5. The pool participants must not collude on prices outside the scope of the pool (ex. downstream

products)o The guidelines have since been collapsed into 2 overarching questions:

1. Whether a proposed licensing program is likely to integrate complementary patent rights?2. If so, whether the resulting competitive benefits are likely to be outweighed by competitive harm

posed by other aspects of the program?o The focus pts:

(a) The patents to be licensed: the independent expert determining the essential & the non-essential to complimenting the central tech of the pool

(b) The joint licensing arrangements: collusion is unlikely, access to tech is enhanced

(c) The positive effects on innovation: pool participants are required to license to each other ‘essential’ patents they obtain in the future, less of a chance for future ‘blocking’ patents, newer patents weigh heavier in calculating royalties to patent owners

o Other considerations:- The pool is open to all who want in into the market- The participants in the pools have to pay for licences themselves - The revenues are split b/t the companies- The administration of the pool must be separate from the pool itself

Benefits from the Patent Pooling of Biotechnology Patentso The re-emergence of the formation of patent pools suggests that the social & economic

benefits of such arrangements outweigh their costs. Does this apply to pooling biotech patents?

Benefit #1: Elimination of problems caused by ‘blocking’ patents or ‘staking’ licenses o Illustrated w/ airplane industryo By creating a patent pool of these basic patents, businesses can easily obtain all the

necessary L req’ed to practise that particular tech concurrently from a single entityo Facilitates rapid dev’ment of new tech – opens up the playing field to all members &

L’ees of the poolo Encourages the cooperative efforts needed to realize the true economic & social benefits

of genomic inventionso Members, while benefiting from the work of others, may focus on their core

competencies – spurring innovation at a faster rate

Benefit #2: Potential to significantly reduce several aspects of licensing transaction costs o Reduce/eliminate the need for litigation over patent rights. This saves time & moneyo Allows small businesses to have a better chance of survival & prosper since free from

future legal disputes regarding patent rights.

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o One shot deal & get a bundle of patents whereas w/o the pool companies would have to obtain licenses separately from each holder of the essential patents (this takes time, money, effort) – quickens innovation

o Helps w/ the anticompetitive ‘hold out’ problem since the pool will have most, if not all the essential patents

Benefit #3 : Distribution of risk o Like an insurance policy, a patent pool provides incentives for further innovation b/c the

members share in the risks associated w/ R&Do Allows a company to recover part if not all of the costs for its efforts in R&Do Depending on the structure of the pool, members receive a set income based upon the %

of the pool’s royalties regardless of the ‘economic’ value of their individual patent.

Benefit #4: An institutional exchange of technical information not covered by patents o Fosters line of communication b/t the pool membership – trade secrets become less

prevalento Incentive to avoid overlapping efforts – access to information – more efficient use of infoo This is important in biotech b/c there is a high potential for commercial development –

especially if limited resources are used effectively & efficiently

Anti-Competitive Effects of IP Pools for BiotechnologyAnti-C Effect #1: Patent pools inflate the costs of competitively priced goods o This can be dismissed by looking at the guidelines to establishing a patent pool (above)

Anti-C Effect #2: Patent pools shield invalid patents o Companies that are concerned that their patent application will be invalidated by the crt are eager to

settle by creating a patent pool.o This forces the public to pay royalties on something that would be part of the public domain if the

patent were actually litigated in crt.o This can be avoided if the patents selected for the patent pool are monitored& evaluated by an

independent expert.o The legal guidelines give further assurance that pools will not serve as shields for invalid patents

- Are participants including patents that might be invalid?- If you are, then you might just be using the pool for the continued existence of a dubious

patent. This is an invalid use of the patent pool. - In the alternative, we might agree to uphold patent in order to keep a hold on the market –

anti-competitive. The definition of what is included in the pool is very important. Anti-C Effect #3: Patent pools eliminate competition o Careful evaluation of the patent pool under the legal guidelines should help hereo If the patent pool harms competition & reduces further innovation – members may face antitrust

violations

Additional class comments:o Patents in gene lines owned by many different people: you might need access to different

kinds of information that are held under different people’s patents: like clinical research on types of illnesses

o Research is often so specialised that they will not gain much from patent pools. o There is the danger of putting together possibly competitive industries: the area here is

not regulated well enough. The standard of regulation is not as clearly outlined as it is in the DVD industry.

Clark’s conclusion:o Thinks that patent pool in biotech provide a win-win situation

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o Public’s win: will have ready access w/ streamlined L’ing conditions to a greater amount of proprietary subject matter

o Patent holder’s win: greater access to licensed proprietary subject matter of other patent holders, affordable patent packages can be easily licensed, source of revenue

o Patent pools in biotech can provide a greater innovation, parallel R&D, removal of patent bottlenecks, & faster product dev’ment.

Alternative: Patent Societieso A patent owner puts their patent into a collective/society & people will pay for the patents they want

out of the collective. The holder can pick which society they want to place their patent into whereas w/ a patent pool, the L’ee has to buy into the whole bundle.

o W/ a patent society, you are allowing an agency to contract for your patent. They do it for you and that agent does not need to pick all the patents in the society.

o The patent societies do not have the same challenges as the patent pools: lower transaction costs – not anti-competitive. The L’ee has more choice & control w/ regard to patents & prices

o This area will develop further.

Patent SocietyPatent Pool

Fiduciary ObligationsLAC Minerals v. International Corona Resources, [1989] 2 S.C.R. 574, p. 290 Corona, a junior mining company, identified an area of gold deposits. Their chief geologist came up with a theory as to where the gold was. They wanted to acquire the neighbouring property (Williams property) to extract the gold. They were in contract talks with LAC for processing (needed assistance). Corona talked to and shared their confidential info & theory w/ LAC, identifying the land where the richest gold deposits were. LAC encouraged Corona to go buy it, and then LAC went ahead, bought the land, & mined it w/o telling Corona. Their previous rel’ship broke down at this point. Corona took LAC to court:

Issues:1. Was the information that Corona supplied to LAC confidential? Yes2. Did Corona communicate this info to LAC in circumstances in which an obligation of confidence

arose? Yes3. Did LAC misuse or make unauthorized use of the information? Yes

Reasoning: LaForest J.o Remedy: constructive trust over the property obtained from the misuse of confidential infoBreach of confidence:→TEST: 3 prerequisites for the protection of trade secrets & confidential information (since no legislation)1. The information conveyed is confidential rather than publicly available2. The information was communicated by the owner to the recipient in confidence3. There is a misuse of the trade secret or confidential information by the party to whom it was

communicated to the detriment of the party who communicated it.o Differ w/ Sopinka as to the nature & scope of the breach

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o “The recipient of confidential info in circumstances of confidence establishes a duty not to use that info for any prupose than that for which it was conveyed. If the info is used for such a purpose, & detriment to the confider results, the confider will be entitled to a remedy.”

o “Lac had the option of either pursuing a rel’ship w/ Corona in which Corona would disclose confidential info to Lac so that Lac & Corona could negotiate a jt-venture for the exploration & dev’ment of the area, or Lac could, on the basis of publicly available info, have pursued the property in the area on its own behalf. Lac, however, is not entitled to the best of both worlds.”

o Distinguishes from Coco v. A.N. Clark (Engineering) Ltd.: there is only one property from which Lac is being excluded, & there is only one property that Corona was seeking, the duty of confidence is a duty not to use the info. Lac is not being unre’bly restricted from pursuing the Williams property to negotiate in good faith for the jt-dev’ment of the property.

Dissent: Sopinka J.o Argued in favour of a fiduciary dutyo Allows the appeal & dismisses the cross-appeal. Awards damages.Confidential info issue: o Lord Greene in Saltman Engineering Co. v. Campbell Engineering (1948, UK, CA): Info to be

considered private, apart from K, must not be something which is public property or public knowledge. Can have confidential docs which may be available for the use of everybody – “what makes it confidential is the fact that the maker of the doc has used his[/her] brain & thus produced a result which can only be produced by somebody who goes thru the same process.”

o Lord Denning M.R. in Seager & Copydex [1967]: When information is a mix of private & public, the recipient must take special care to only use material which is in the public domain. Must go to the public source to get the info – s/he “should not get a start over others by using the info which s/he received in confidence.” – at any rate, s/he should not get a start w/o paying for it.

o LAC got a start w/ Corona’s confidencial infoCommunication in confidence issue:o Agrees w/ the trial judge that the info was transmitted w/ the mutual understanding that the parties

were working t/w a jt-venture/other sort of business arrangement – the circumstance gave rise to an obligation of confidence

Misuse of info issue:o There was an informal arrangement for a jt-venture/other business arrangemento LAC’s acquisition of the Williams property to the exclusion of Corona was not an authorized use of

the propertyo Info provided by Corona was the springboard that led LAC to purchase the Williams property.Class Comments:o The case involves fiduciary duty: to elevate it to a higher level to not use the information. As soon as

LAC entered into negotiations, they took on an obligation not to use it against Corona.o Corona was able to claim this information through breach of confidential information and fiduciary

duty. Even if you do not have the protection provided by traditional IP regimes, then you can use other methods of protection-or that rather simulate what IP laws do: like fiduciary duty etc.

ACPA & IP: The Regulation of Domain Nameso Domain names are unique & are to be used by one party to the mutual exclusion of another party.o Corinthians.com cannot be used in the US to post Biblical messages & used in Brazil for the promotion

of a soccer team.o ICANN: not-for-profit corporation that administers the domain name systemo Cybersquatting : individuals register Internet domain names in violation of the rights of TM owners.o Reverse domain name hijacking : TM owners abusively assert their TM rights to strip domain names

from rightful owners. Some TM owners find accusations of cybersquatting a convenient way to bypass legit disputes over TM rights.

Uniform Domain Name Dispute Resolution Policy (UDRP)o Governs allegations by 3rd party TM holders asserting that a registrant has engaged in ‘cybersquatting’

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o Registrant is req’ed to submit mandatory administration proceeding in the event that a 3rd party …asserts, to an ICANN-approved administrative dispute resolution service provider1. The registrant’s domain name is ‘identical or confusingly similar to a TM or service ,ark in which

the complainant has rights’2. The registrant has no rights or legit interests in the domain name3. The registrant’s domain name has been registered & is used in bad faith

o Complainant wins under the UDRP if all 3 aspects listed above are established

Sallen v. Corinthians Licenciamentos Ltda., 273 F.3d 14 (1 st Cir. 2001), p. 298 Dispute b/t Sallen & CL over Sallen’s registration & use of the domain name corinthians.com. 1998: Sallen registered the domain name w/ NSI.1999: Sallen emailed CL. CL responded by sending Sallen a cease & desist letter. Sallen posted some Biblical material on corinthians.com but there is a debate as to when he did this (before or after CL’s letter). He is allegedly not using the domain name in compliance w/ its purpose.May 2000: CL complained to WIPO (World IP Org) that (1) Sallen’s domain name is confusingly similar to its TM, (2) Sallen has no right to the domain name, and (3) Sallen has registered a domain name in bad faith. WIPO panel decided in favour of CL & ordered the transfer of the registered domain name to CL. Sallen did not immediately transfer the domain name which was his K’al obli. Aug 2000: Sallen filed a complaint to the US Fed Crt seeking declaratory relief to establish that his use of the domain name was not unlawful under the ACPA (Antisquatting Consumer Protection Act) & thus he is not req’ed to transfer the domain name over to CL.

Issue: Can Sallen invoke US law to reverse the WIPO decision regarding the use & transfer of his registered domain name? Yes

Notes: Lynch, Circuit Judgeo Should a federal crt declare that Sallen is in compliance w/ the ACPA, that declaration would undercut

the rationale of the WIPO panel discussiono There is a long discussion of US law & subject matter jurisdiction debating whether US law can quash

the WIPO panelo Senator Leahy explains his added amendments to the ACPA: “a domain name registrant whose name

is suspended in an extra-judicial dispute resolution procedure can seek a declaratory judgment that his use of the name was, in fact, lawful under the TM Act. This clarification is consistent w/ other provisions of the reported bill that seek to protect domain name registrants against overreaching TM owners.”

o Hatch-Leahy amendments to ACPA were understood to “balance the rights of TM owners w/ the interests of Internet users” & “to preserve the rights of Internet users to engage in protected expression online & to make lawful uses of others’ TMs in cyberspace.”

o The applicable US law here serves to create a protection for registrants to counteract abusive behaviour by TM holders. Abuses includes administrative dispute resolution proceedings under the UDRP where the proceedings are intended to strip a domain name from a registrant who has lawfully registered & used the domain name.

o District Crt’s decision is reversed & the case is remanded.Class Comments:o The application of the ACPA & other US law went b/y the American TM Act & other IP legislation

but its effects provide IP-like protection.o Created a private IP right: Shows the integration of the ACPA designed to stop people from

registering domain names that remind people of company names.

TRANSNATIONAL ASPECTS OF IP GOVERNANCE

Abbreviation Key:dif: different, t/s: themselves, w/o: without, w/: with, gov’t: government, gov’tal: governmental, gov’d: governed, Amdmt: Amendment, i/s: itself, w/in: within, arg: argument, def’n: definition, mkt: market, btw: between, obl:

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obligation, nhma: non-human mammalian animal, unfsbl: unforeseeable, Q: question, ComL: common law, Cdn: Canadian, ppl: people

Jurisdictional ProblemsJ. Goldsmith, “Regulating of the Internet: Three Persistent Fallacies” (1998) Article looks at three myths that exist about cyberspace in the int’l context and the challenges these pose to national regulationFallacy 1: Cyberspace is a separate placeo Territorial govs should not regulate internet transaction since internet providers cannot control their

information flow in territorial space b/c information on the net appears simultaneously in all national jurisdictions. Problems of spill over contribute to the argument for self-regulation of the internet.

o BUT, the net is NOT a separate place. Real-space communication can cause real-world harms. Moreover, the people harmed by these internet transactions often do not have a voice in the transaction and cannot exit from the private ‘rule-sets’ that facilitate it.

o The efficiency analysis provides no basis for choosing b/t trans-jurisdictional costs produced by the competing regulatory regimes in Minnesota & Antigua (w/ regard to gambling sites) – can only be made by virtue of a indy normative theory. This theory would explain why Minnesota would forgo control & protection of persons w/in its territory to accommodate users in Antigua

Fallacy 2: Territorial governments cannot regulate the non-territorial neto Claim that restrictive CR will be ineffectual when applied to digital goods on the net. Sees that Burk is

underestimating the many ways that nations can regulate the neto Not suggesting that enforcement strategies will eliminate illegal digital imports. Can regulate certain

aspects: the consumers, the providers in the territory. Will not be 100% but all regulation is imperfect.o How much control is acceptable control? Depends on several factors

1. The normative commitment of the regulating gov2. The costs of gov regulation

o Can regulate thru technology: regulate the notion thru national transmission. Can block the signal from coming in – tech gives you a basis to regulate

Fallacy 3: Optimism about cheap, plentiful informationo Some say that the internet will foster tolerance, promote democracy, redistribute wealth, improve

writing skills, destroy trade barriers, & bring world peace! [get real]o Legal harmonization problem is complex. While the internet may promote partial harmonization it is

by far going to establish complete harmonizationo Note that judicial decisions are not made in a vacuum. Thus while some states may join in in creating

a global uniform legal system, national interest will still play a role in judicial decision makingo It will not harmonize customary international law (CIL): it is too complex an changing in nature ever

be harmonized by hundreds of actors – internet has probably made the problem worse not better

Class discussionHow will this apply to pharmaceuticals & biotecho Rule of exhaustion: If buy a car, what allows you to buy it (lots of patents involved). Patent user has

the right to make, use, sell. Once the owner of the right has sold a product and are put into the market, the right of the inventor ends since his/her right exhausted on first sale.

o What about if drive this car in US: Cdn patents exhausted. Depends on the nature of the exhaustion. National exhaustion – buy in another country under a different patent – violating Cdn patent since never given right to use it in Cda. There are exceptions (gray marketing). Importation of the good is illegal, it is not free from owners rights. May be legally purchased in the US & it has a Cdn TM – if buy outside the country use & sale in country is illegal. Undermining the domestic market of that country

o Paris Convention says that for things that are temporarily in another country it is Okay – for hairdyers and whatnot does not apply.

o Regional exhaustion: EU, countries cannot have national exhaustion – if buy product in England okay to take product to Germany – regional exhaustion – if purchased in the EU community

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o International exhaustion: buy the product anywhere deemed to exhaust the rights of the patent holder.o Why international exhaustion: reduce costs, dependence on importation. No incentive to keep prices

high. If want to preserve domestic market, will have national exhaustion to encourage the market. Country can choose what form of exhaustion. UK patent is unenforcible so long as a legit sale. The choice has to be made across the board

Pharmaceutical in the Developing Worldo Roadblock is cost: want a regime that will sell at cost – no oen cares about the effect of the market.

So there should be no worries.o But pharmas are concerned? UK (int’al exhustion) will import legally and sold on the cheap (below

the market price)o If developed countries go for national exhaustion – pharmas will be very pricyo 1. National exhaustion – 2. Labelling differently (the pills – colour etc. catch illegal imports) – These

would be in theory. It would have be done on good will.o The rules adopted in Engl will affect the world market – problem of co-ordination – domestic &

international affecto Trying to keep health costs down (low patent) & promote industry (high patent). How do you resolve?

Add on the international? Where do you sell the stuff? o Developing countries should have a mini standards so they can copy – have protection from US – but

minimal enough so that they can’t come after you BUT at the same time take advantage of the developing countries. Add in the related industries – are we better off?

o Import/Export, market locations – all must be considered when determining the patent regimeso You can take advantage of people who feel a need for high protection you can piggy back onto w/ your

low patentso US gets most patents application – better than Cda in this regard

B. Freedman & R. Deane, “Trade-marks and the Internet: A Canadian Perspective.” (2001) The Internet is removing barriers to mkts, facilitating new business models, and fostering a global

mktplace. For business on the Internet, establishing and maintaining business identity and brand recognition is crucial.

TM law has not kept pace w/ rapid commercialisation & exponential growth of the Net, and the needs of businesses to protect their identities and brands. Traditional TM law is generally ill-suited to the fair resolution of confilicts over Internet domain names and disputes regarding Internet TM use.

Canadian Trade Marks: Cdn TM rights are gov’d by ComL and federal TM Act. TM Act s.19: Gives exclusive right to use mark in association w/ stipulated good or service (only

applies to use of identical TM w/ same good/service). TM Act s.20: owner’s right to exclusive use infringed on if another associates goods/services w/

confusingly similar TM. (likelihood confusion as to source of good/service). Circumstances considered in confusion: (1) inherent distinctiveness of marks and extent to which they

have become known, (2) length of time marks have been in use, (3) nature of wares, services, businesses, (4) nature of trade, and (5) the degree of resemblance btw. marks in appearance or sound or ideas suggested by them. Marks must be considered in their totality, w/ all surrounding circumstances.

TM Act s.22(1): can’t use TM in manner that is likely to depreciate value of goodwill attached to TM (“reduction of esteem”).

ComL tort of passing-off (PO) prevents misappropriation of trade or goodwill that has come to be associated w/ TM to prevent unfair competition. May succeed under PO if Tm is invalid or TM claim otherwise fails. PO in statutory form in TM Act s. 7(b), it applies to registered and unregistered TMs.

Cdn law generally provides no special protection for famous marks, although it may be easier to establish a claim 4 infringement or depreciation of goodwill. Try to balance right of TM owner to have exclusive use of mark w/ right of others in mktplace to compete freely.

USA: famous TMs have special protection through state and federal TM dilution legislation. No such thing in Canada.

TM is generally territorial.

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Internet Challenge to TM and TM Rights: There is a discontinuity and inherent tension btw. the Net domain name system and national TM laws.

TM law is generally territorial and confers local or national rights, not extraterritorial rights, while the Net is trans-jurisdictional.

Concurrent use of the same Net domain name is generally not possible, but concurrent uses of slightly different & confusingly similar domain names are permissible. Domain names, once registered, need not be used. Domain names need not be distinctive, and generic names may be highly valued.

Ex. CANADIAN: beer and airline, but can only have one Canadian.com. Domain name lawsuits mostly about cybersquatting, but cybersquatting rules are ill-suited to resolve

disputes btw. legitimate TM owners. Generic domain name owners can’t rely on TM law for protection against confusingly similar domain

names or marks b/c they lack distinctiveness. In Canada & USA generally apply TM rules for registering domain names as TMs. Requirement of “use” to infringe on a TM right (offending mark must be used as TM for

infringement). Use may be an issues b/c domain names have a dual purpose: (1) surrogates for IP addresses (here not used as TMs), and serve as source-identifying function by providing info (here used as TMs). Registration of a domain name does not per se constitute TM use.

In cases involving cybersquatting US courts easily find unlawful TM use, English courts follow similar approach.

“Initial Interest Confusion”: when ppl guess the name of a site or use a search engine to find a site and are brought elsewhere. US courts divided on how to deal. The concept is a judicial attempt to adapt TM law to unique characteristics of the Net and its domain name system. BUT- a rigid and narrow application of the concept strains fundamental TM principles; it suggests that a finding of confusion may be based upon a comparison of the conflicting mark w/ the domain name in abstract (should look at surrounding circumstances), and leads to view that TM holders have absolute exclusive property rights in their marks.

Passing-Off: registration and use of a deceptive domain name to mislead customers regarding the nature of the website can be dealt w/ tort of passing off. Done so in England to prevent cybersquatting (instead of US TM dilution concept or Internet specific legislation), remedy used was an injunction. Achieved the same result as the US “initial interest confusion” principle w/o the difficulties of applying that principle to domain name registration per se.

Meta tags, hidden web page descriptors, and hidden text may be used by website creators to cause search engines to favourably rank web pages in response to specific queries. US and Cdn take: not always actionable, but may constitute TM infringement and dilution. This is a new form of old-fashioned misleading advertising and unfair competition, but TM-infringement-claims to remedy meta-tag misuse may strain traditional TM principles. Passing-off and misleading advertising and consumer protection may be better suited as remedy.

Linking : allows users to navigate from one website to another. But, may be objectionable if link originate from website w/which liked website doesn’t want to be associated. US court ruled that linking + confusion = unfair competition, but need to have confusion. Has not been considered by Cdn courts.

Framing : technique that divides computer screen into multiple windows, each which can display content from same or dif. websites. It results in apparently seamless integration of 2 or more websites, which the user may think originate in a single source (can be problem). Can also be used to display info around windows displaying content of other websites. US courts have given injunctions out for this.

Typo -squatting: registering domain names identical to popular ones in use except for slight differences that may occur as a result of common keyboard or typing errors to generate extra traffic for misspelled website. US has given injunctions for this.

Context Sensitive Advertising : advertising correlated w/ particular search terms or websites (generates revenue 4 search engine or site). Practice has been challenged in US courts.

Criticism and Parody Websites : TMs may be used in domain names or content to facilitate comment, criticism, or parody. “cybergripping” critical commentary found in websites like [company name]sucks.com. If TM in association w/ critical website results in a likelihood of confusion or misrep, there may be TM infringement. Quebec has given injunctions for this, although BC said that if not

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selling goods, site just giving info, and that doesn’t constitute prohibited commercial use. US law provides significantly more protection. One way to address problem is to pre-emptively register self-critical domain names.

TM Use in Website Content : Our Pro-C case just a couple of pages down is exactly about this! The one we have is the appeal, where Pro-C lost. When it went to Ontario Superior Court, Computer City was deemed to have infringed and Pro-C won.

Global nature of internet presents risk that Net domain names and website content may result in violating foreign laws and foreign TM rights. When those issues arise, jurisdiction issues may be determinative.

Other issues may result from Internet, ex. garnishing domain names as property, in rem actions, domain name registrar liability.

Legislation and Private Ordering: US Anticybersquatting Consumer Protection Act : protects consumers and American business. Protects

famous or distinctive marks by providing civil cause of action. Bad faith registration is determined in light of all surrounding circumstances. Provided for action in rem against a domain name where TM owner is unable to find and serve the domain name owner. Has retrospective effect, applying to all domain names registered before, on, and after its date of enactment. Has broader application than Federal TM Dilution Act. Provides significant benefits for TM owners whose marks have been used in domain names registered by others. Canada has no similar legislation.

ICANN Uniform Domain-Name Dispute Resolution Policy : applies to all domain names in .com, .net, and .org. It is incorporated in domain name registration agr, and contractually binds registrants to mandatory administrative dispute resolution in disputes alleging bad faith registration and use of domain names which are administered by a panel. Panel may order a domain name registration to be cancelled, transferred, or otherwise changed. 3 elements required by the policy are: (1) conflicting marks, (2) no rights and legitimate interest by defendant, and (3) bad faith registration and use by defendant. Failings of Policy: fails to provide guidance regarding the reconciliation of conflicting national TM disputes, the precedential value of prior arbitral decisions, and does not explain intended interaction btw administrative panel decisions and court decisions. Seems that courts do not feel bound by panel’s decisions. Advantage: it provides a quick, inexpensive and informal procedure for resolving certain domain name disputes.

Risk Management… Some measures that can be taken to preserve and protect TMs on the Net and to minimize risk of infringing on rights of others: 1. conduct TM searches and exercise due diligence before using a TM on the Net and before

registering a domain name.2. Register and use domain names as TMs . Register and use TMs as domain names.3. Register domain name w/ local registrar so as not to fall under foreign jurisdiction.4. Monitor Net TM use (ex. by conducting searches to find offending domain names.5. TM owners should declare TM rights on the Net.6. TM owners should ensure their own website content does not use TMs of others

inappropriately & w/o authorisation.7. TM rights must be enforced in reasonable and practical manner, not every similar domain

name or TM use is an infringement.8. Cooperative Use: competing users of legitimate TMs should consider establishing a joint

website front page.

Conclusion: For Internet commerce to flourish, there must be certainty and predictability regarding the rights and liabilities associated w/ the use of TMs on the Net. Achieving that goal will likely require changes in the Internet domain name system and the harmonization of national TM laws as applied to Internet TM use.

Prof. Gold: Different test in different countries with different applications of rules and subtle differences in

interpretation of words can give very different results. Thus there’s a certain amount of forum shopping to take advantage of different existing rules (ex.

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registering TMs in certain countries).o Rules for getting jurisdiction – US has a longer reaching arm. Some general agreement in US&CDA

– if purely passive sight – no attempt to sell in that country (or ability), the courts will not take jurisdiction. US doctrine of wrongful activity directed to that jurisdiction – open the US crts scope of jurisdiction.

World Wide Fund for Nature (Fund) v. World Wrestling Federation Entertainment (Fed) (2002 CA,UK Fund was founded in 1961, its name and the initials WWF are known worldwide. Fed changed its name in 1979 to the World Wrestling Federation & started using initials WWF. 1st legal dispute was in 1989 when Fed applied for a federal TM registration of initials “WWF.” Fund wanted to oppose based on potential confusion w/ its registered mark, but dropped its opposition when Fed agreed that it not use “WWF” in “Times Roman” typeface when the mark was standing alone (ie. when mark w/o Fed’s logo or not in the context of the WWFed Magazine). Int’l conflict emerged when Fed began applying for TMs outside USA. Fund sued Fed in Switzerland, succeeding in getting an injunction against a distributor of the Fed’s Magazine, the order prohibited to use of “WWF” other than to describe the Fund. Then there was a settlement negotiation where Fed undertook to refrain from using the initials in any written or visual form in all countries, withdraw applications for TMs, refrain from using initials orally for promotion of sales, services, encouragement of support or donations for charitable purposes, but can use initials orally only in English during Fed sports entertainment events. Fund undertook to withdraw pending legal action, and to refrain from future legal proceedings based on use of initials orally, Fed’s logo, and the name “World Wrestling Federation” subject to Fed’s compliance w/ agr. There was special permission for USA, where the restrictions do not apply to the oral use of the initials, but does apply to printed, visual and other uses. Fed complied until 1997 when they put up website www.wwf.com, and then began using the initials at will and on an increasing scale. Fed also developed the Scratch Logo, a stylised version of letters “WWF,” which has become synonymous w/ Fed according to Mrs. McMahon

Issue: Was the World Wrestling Federation justified in breaking the terms of the K w/ Fund regarding the use of the WWF mark? Fund winsNote: Wrestling Fed claims that it was justified b/c the relevant terms are void (either at common law as being an unreasonable restraint of trade, or by virtue of article 81 of the Treaty of Rome).

Reasoning: Breach of Contact: Obvious significant breaches, most notably in the form of the website. Also,

scratch logo is clearly a version of the initials in visual form, which is directly w/in the prohibition.Public Policy: Threshold requirement before the restraint of trade doctrine can apply is that the restraint should

obviously overreach the IP right. 3 stage test: (1) restraint posed a real fetter on its trade, (2) the restraint goes beyond any reasonably arguable scope of protection reasonably needed, and (3) restrainor cannot justify the restraint by showing that it provides a protection he reasonably needs.

The public interest represented by the doctrine of restraint of trade must be applied in the factual context of the agreement. The parties, w/ proper legal advice, are the best judges of what is reasonable in their respective trading interests, and agr. btw. them is normally the fairest and most efficient way of drawing the boundaries.

Settlements should be respected: where a claimant has been a party to a settlement of a genuine dispute, designed to define boundaries of his trading rights as against the defendant, he is entitled to expect that to be enforced. It is not for him to prove that it’s reasonable.

Presumption: the restraints, having been agreed to by both parties, represent a reasonable division of their interests.

Injurious Association: Fund complains of dilution of mark WWF and tarnishing its reputation in the name and mark WWF. In the 1989 Swiss Judgment, by Judge Rahm, it was said the average purchaser will not mistake a Fed

magazines for a Fund magazine b/c of their very different natures. BUT- there is an indirect risk of confusion b/c the public may get the wrong impression that the Fund has formed an association w/ Fed. Fund has genuine interest not to be identified w/ Fed (weakening/watering down of TM, damage to reputation b/c of association).

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http://www.wwf.com/


Association is not the same as confusion, and is not protected everywhere: more in the US and Europe, less in England. The applicable rules differ worldwide.

Here court agrees w/ Swiss judgment that there was tarnishing of reputation.Settlement Negotiation: The clear intention and effect of the agreement was to place sever restrictions on Fed’s use of initials

“WWF,” particularly outside USA. Fed should have known better than to establish a worldwide trade based on those initials. Should have

been aware of the risk. Its losses will be entirely attributable to its own decisions (ex. scratch logo and website)

Prof. Gold: Both companies basically carve up the world with the settlement agr., they give up rights they may

have had to reach a compromise. The court does not look at each national dispute. As long as the parties are not trying to get around

Anti-Trust laws, the court encourages them to settle and “harmonize”.

Yahoo!, Inc. (Y) v. Ligue contre le racisme et l’antisematisme (L) (N.D. Cali. 2001) P.370 Y is never part of the sale transactions resulting from its auction site. Y monitors transactions through limited regulation by prohibiting particular items being sold, such as stolen goods, body parts, weapons, goods violating US © law, goods violating Cuban embargo… Y informs auction sellers that they must comply w/ Y’s policies and may not offer items to buyers in jurisdictions in which the sale of such item violates the jurisdiction’s applicable laws. Y’s auction site sold Nazi-related propaganda and Third-Reich memorabilia. French court issues order that this not be available to French citizens (who can access material directly on yahoo.com or through a link on yahoo.fr). Y then posted a warning and prohibited postings of material promoting/glorifying hateful or violent positions or acts, such as Nazis or KKK. Nonetheless, this material can still be found on the site. For the French order to be effective, must be enforceable in USA where Y is based. Y claims it doesn’t have technology to bar only French citizens from accessing the site. Y seeks declaratory order that the French order is unenforceable under 1st Amendment protection of free speech, and b/c a US court would never make that decision and it would thus be inappropriate for a US court to enforce it.

Issue: Is it consistent w/ US Constitution & laws for another county to regulate speech by a US resident w/in the US on the basis that such speech can be accessed by Internet users in that nation? No

Ratio: Foreign judgments respected unless antithetical to US laws or Constitution.

Reasoning: Case not about moral acceptability of the material, nor is it about the right of France, or other

countries, to determine its own laws and social policies.Real and Immediate Threat Fr. order prohibits sale or display of items based on their association w/ a particular political

organization and bans the display of websites based on the author’s viewpoint w/ respect to the Holocaust and anti-Semitism. A US court could not make such an order constitutionally. The 1st Amendment does not permit gov’t to engage in viewpoint-based regulation of speech absent of gov’tal interest, such as clear and present danger of imminent violence.

Fr. order deemed too imprecise for 1st Amdmt scrutiny.Comity: The extent to which the US, or any state, honours judicial decrees of foreign nations is a matter of

choice governed by the “comity of nations.” US generally recognizes foreign judgments & decrees unless enforcement would be prejudicial or

contrary to the country’s interests. Internet allows one to speak in more than one place at the same time. Although Fr. has the right to

regulate what speech is permissible in Fr., a US court cannot enforce an order that violates the protections of the US Constitution by chilling protected speech that occurs simultaneously w/in US borders.

The protection of free speech would be seriously jeopardized by the entry of foreign judgments granted

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pursuant to standards deemed appropriate in another country but considered antithetical to the protections afforded the press in the US Constitution.

Conclusion: Y has shown that the Fr. order is valid under the laws of Fr., and that it may be enforced w/ retroactive

penalties, BUT- its enforcement in the US would chill Y’s 1st Amdmt rights. Y has shown that there is an actual controversy and that the threat to its constitutional rights is real and

immediate.

Prof Gold: Jurisdictional problem: b/c of the seize of the US market and the high # of companies based there, a

large portion of the world would be subsumed under a US-world-order.

Pro-C Ltd. (P) V. Computer City (CC) (2001) O.R. P.379 A Canadian (P) company’s TM “Wingen” covered its software products. It is registered in Canada and USA for “computer programs used to generate programs for Windows.” The TM was adopted by an American (CC) company in association w/ a non-competitive product, personal computers, sold in USA. P used the TM as the name of its website, which P used to sell good and provide service. CC had a passive website (computercity.com) to advertise and provide product info, but did not interact w/ customers. When CC’s American customers sought info they came to P’s website. P alleged that its site was so overwhelmed (over 100,000 hits in a “some” months) that it could not service its own customers and its business was ruined. P’s statement of claim is based solely on infringement of its Canadian TM.

Issue: Does P have a valid claim against CC under P’s Canadian TM? No.Ratio: For CC to have infringed, it would need (1) to “use” the mark (2) in Canada.

Reasoning: TM Act s.19 gives TM owner exclusive use in Canada of TM w/ respect to the goods and services the

TM is for. This clearly refers to the use in Canada of the TM in association w/ the wares or services described in the TM Registration. The computer hardware not sold in Canada. S.19 doesn’t apply.

Infringement under TM Act s. 20(1) is dependant on the word “use.” “Use” is defined in TM Act s.4: (1) when TM displayed in sale/transfer of possession of wares so as to

create an association, (2) when TM is displayed in performance or advertising of services, (3) when it is marked on export goods.

CC’s passive website could not constitute use in association w/ the wares b/c no transfer of ownership was possible through that medium (def’n (1) of “use” applies).

There is no use in Canada by CC of P’s TM, that action for infringement must fail. Actually, the TM is irrelevant to P’s complaint. No wares competed in the mktplace, and the damage

(if damage there was) would have been the same if the name of the website did not have TM protection Court suggests use of tort as a remedy : “if a party intentionally or negligently causes injury and the

ingredients for establishing a tort can be proved, then the new technology of the Internet and websites can be readily accommodated. It is much more sensible to apply tort principles to accommodate new technologies than to distort statutory TM rights.”

Note: This is the appeal judgment. When case went to Ontario Superior Court, Computer City was deemed to have infringed and Pro-C actually won.Limits to universality

Lawrence Lessig (L), “ Copyright’s First Amendment .” (2001) P. 383 Constitutional argument for striking a balance in the protection offered by ©, a balance in protecting the interests of the public and the inventor. Looks at the ideal of “just right” underpinning the Constitution (ex. In the balance of power btw. federal and state authority, ex. In building a federal gov’t that is not too big, not too small, but “just right”) and extends this to ©. Puzzle: how can a constitution protect freedom of speech from the abridgment of congress, and yet

give congress power to grant monopolies over speech?

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© is constrained by the 1st Amendment: so long as © protects expression only, and does not reach to protect ideas, 1st Amdmt interests are satisfied.

System of control established by the Framers (of the Constitution): 1st federal © statute enacted in 1790; it regulated “printing” & “vending” of maps, charts, and books

for an initial term of 14 yrs. © was not automatic, registration was required; most early registration for scientific or instructional texts.

From 1790 to 1799 about 13,000 titles were published in USA, only 556 © registrations were filed. 95% of published work in the public domain.

All foreign work was in public domain, foreign © not protected in USA until 1891. © did not protect derivative works, ex. Translations, adaptions, abridgments, songs. © was essentially protection against pirate presses for Americans only. The great evil in the minds of the Framers was the evil of state-sanctioned monopoly (second only to

great evil of centralized monarchical gov’t). So Congress got limited rights to grant “monopolies” according to specified means and purpose:

Congress was given the power “to promote the Progress of Science” by granting to authors (not to publishers) “exclusive rights” “for limited times.”

System of control today: © expanded from maps, charts & books to practically any creative work reduced to tangible form, ex.

music, performances, architecture, certain design, software (machines written in words) and the Internet (words written on machines).

© also protects broad derivative rights, ex. to adapt to play, make movie, to perform, right to translate some works

© is for life of author + 70 yrs. Expansion may be necessary to preserve the balance intended by the Framers But since 1962 the term of © has been extended 11 times (compared to twice from 1790 to 1962). Ex. Sonny Bono © Term Extension Act of 1998 (aka. The Mickey Mouse Protection Act) aimed at

extending the term of © both prospectively and retrospectively. The test of this statute (& the string of statutes it represents), is whether it is consistent with the values that the Framers constitutionalized.

Core of L’s Claim: (1) the © clause must mean something when it says terms must be limited, and (2) to understand what it means, you must read it in light of its purpose.

The words “limited times” should not be read in the abstract, but must be read in light of the command that Congress must exercise this power to “promote… Progress”.

Best way to assure this power will only promote progress is to exchange it for progress, ie. something that hasn’t been produced yet (no extending retrospectively).

Retrospective extension of © can’t be viewed under the rationale of “restrictions are valid b/c the fuel the engine of free speech.” Ex. no matter the incentive given to Margaret Mitchell (Gone With the Wind) she’s not going to produce anymore. These restrictions are just restrictions, they do nothing for free speech.

We’ve become used to thinking of monopoly rights extended by the state not as privileges granted to authors in exchange for creativity, but as rights; and not as rights balanced by other interests, but as permanent and absolute like natural property rights.

Though the Founders never used the term “intellectual property” & though IP is a creation of lawyers to the 19th century, to us © and patents are clearly property rights that deserve absolute and permanent protection of ordinary property.

The view of the naturalness of IP rights also reflects the view of ordinary people. The ordinary person thinks Mickey Mouse should be Disney’s for time immemorial. This same person doesn’t notice the irony of Disney’s adaptation of The Hunchback of Notre Dame, to the horror of the Victor Hugo Estate.

This modern view is far from that envisioned by the Framers (Protestants of the Enlightenment era who believed enlightenment occurred when culture was not controlled by the church) that ideas and stories and culture should be free, as quickly as the law could set them free.

Despite the SC basing i/s on Nimmer (a pro-balance man), restrictions on Congress’s © power have shrunk. SC held in Harper & Row (1985) that there was no possibility to raise a 1 st Amendment

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challenge as long as © protects expression only (their def’n of a definitional balance btw. 1 st Amdmt and ©).

L’s beef: in Harper & Row SC based i/s on an essay by Nimmer, which understood the definitional balance as applying to particular ©s, not to the statue as a whole.

Then SC refused the 1st Amdmt challenge to the Bono Act (2001) holding that “©s are categorically immune from challenges under the 1st Amdmt.”

So Congress was free in perpetuity to extend the terms of © as long as forever took one step at a time (“perpetual © on an instalment plan”). BUT The Framers had a stopping point in mind, their objective was balance: limited protections, a vibrant public domain. Threat to this vision: the Internet (technology used to share content, to enable others to gain access…)

2 visions of the future: (1) most significant aspects of our culture will remain perpetually in control of a relatively small # of Corporations, or (2) these elements of our culture, after a “short” period fall outside of exclusive control, free for all to take and use as they see fit. L’s message: resist unlimited ©!

Harvard/Oncomouse (1990) O.J. EPO Bd. Of Appeal P.394 Harvard reproduced non-human mammalian animal whose genetic make-up was manipulated through the introduction of a particular oncogene. The application was done on mice, it can’t be concluded that it would work on other mammals (inventive skill would be needed). The essence of the process of invention was to introduce an oncogene into the animal by technical means such as micro-injection. Animals which are genetically manipulated t/s were products essentially of a non biological process, whereas future generations were the product of sexual and thus exclusively biological reproduction.

Issue: Can the oncomouse be considered for patent application in Europe? Yes.

Reasoning: (European decision) Patents not granted for “essentially biological processes.” Appellants submit that it is not the oncogene which is the crucial factor, but what was important was

the skilled person could apply to other animals the teaching set out in the application. The entire process was essentially non-biological. Part of the process involved the micro-injection of

oncogene sequences into the embryo at various stages of development. This technical process is so central to the invention i/s, & to ite effect in descendants of the first genetically manipulated animals, that entire process could not be regarded as “essentially biological.”

The dominant feature of both process and product was genetic manipulation, which was unquestionably technical nature.

Claimed invention refers to all non-human mammalian animals (nhma), whereas the invention described in the examples has been performed only on mice. Examining Division refused the patent application on ground that claims were unreasonably broad. However, the fact that claim is broad isn’t ground for considering the claim as not complying w/ the requirement for sufficient disclosure.

Info in application sufficient to perform invention at least on mice. A biological invention is considered sufficiently disclosed if it clearly indicates at least one way in which a skilled person can carry it out. This case fulfils this requirement, so no reason why application for patent should be refused b/c it involves an extrapolation from mice to nhma in general.

Narrow view of what it means to be an animal/plant variety taken. “Animal varieties” (“races animals”), and not animals as such, are excluded from patent protection

under Art.53(b) EPC (European Patent Convention). Can patent a plant or animal as long as not targeting one specific variety.

European Patent Office interprets the concept of “animal varieties” so as to provide a proper balance btw. the interests of inventors in this field in obtaining reasonable protection for their efforts and society’s interest in excluding certain categories of animals from patent protection.

The patentability bar does not cover microbiological processes or the products thereof. Thus, patents are grantable for animals produced by microbiological processes.

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European morality clause: Art. 53(a) EPC: patents excluded for inventions whose publication or exploitation would be contrary to “ordre publique” (translated as “morality”). Suffering of animal and environmental considerations could lead to exclusion.

Genetic manipulation of mammalian animals is problematic in various respects, particularly where activated oncogenes are inserted to make an animal abnormally sensitive to carcinogenic substances and stimuli and consequently prone to develop tumours, which necessarily cause suffering. There is also a danger that genetically manipulated animals, if released into the environment, might entail unfsbl and irreversible adverse effects.

Balance suffering versus benefit: decision whether Art 53(a) is a bar to patenting the present invention depends on a careful weighing up of the suffering of animals and possible risks to the environment on the one hand, and the invention’s usefulness to mankind on the other.

Gold’s Insights: This case reflects cultural differences. Examining Division later said benefit to human health outweighed suffering of oncomouse.

Greenpeace and other groups filed opposition that delayed patent in Europe for 10 yrs. At appeal patent accepted but was restricted to rodents. Case reaffirms “Ordre publique” in Europe (Japan also has this). Case illustrated division btw. common law and non-common law countries, b/c ComL courts don’t

deal w/ morality issues, legislation does so. Civilians: state does not wants to encourage immoral things, so try to block at patent stage. Ex. Bald mouse by Johnson & Johnson for research on human balding… benefit to humans did not

justify animal suffering. There is high criticism of s.53(a) EPC, no real guideline for when it will come and haunt you. Europe

has a structural problem; an expert body would work better than s.53(a) if well administered. Is patent law just economic, or does grating a patent right give the activity the stamp of approval of the

state? North American approach is too reactive (b/c of high pace of biotech). Canada? Undecided, but SCC may find a morality clause in Patent Act s.40 w/ a overriding public

policy exception. Ex. prima facie patentable, but is against public order, court could then send Q to commissioner who will hand Q to Parliament.

Regulatory Institutions Local (state/province)

trade secrecy is regulated by provincial lawpassing off is also provincial; it is essentially a cause of action at common law (or civil law) although it is also in the TM Actalmost always sue in both passing off and TM at same time, in case TM is invalidK law (licencing)If there is a conflict between local and national: under doctrine of Paramountcy, federal law prevailsFor example, in Quebec, there is an Act that protects performing artists; their services and creation of IP, their skills, etc. But this is dealt with more in a labour relations way, so as not to interfere with federal jurisdiction (jd’n) over ©

National All formal statutory regimes: © Act; Patent Act; TM Act; Industrial Design ActApplication is nation-wide; this has not posed any problems in Cda (although it has in the US, in a 1999 decision)

RegionalRegional patent acts: the European Patent Office , also Asia and Africa EPO does not depend on the European Union (EU) for existence

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A patent granted by the EPO is valid in all EU member states, but each enforces its own national laws; different results in different countries It is geared to overcoming the costs of getting patent protection, especially for smaller countries; it allows for a pooling of costs, especially in terms of review of patentssee Gold’s article on Euro Biotech Directive belowTrade Agreements: NAFTA, probably the FTAA, Treaty of Rome (Europe)Clauses regarding IP in NAFTA are virtually identical to TRIPS; Under NAFTA and TRIPS, Cda is under obligation to act in accordance with international standards

Int’l WIPO: responsible for maintaining the Paris and Berne Conventions, with some changes; includes some protection for traditional knowledge; role is diminishing

WTO/TRIPS : COMPARATIVE ADVANTAGE TRADE-OFF : until 1984 GATT was only trade. US insisted that GATT include IP to protect its computer and biotech industry; used the rhetoric of “theft” by other countries with lower IP protection (but of course it isn’t theft, b/c it was perfectly legal in those countries and served the purpose of that society) There was resistance; developing countries saw US as perpetrating biocolonialism, North/South polarity: resources, traditional knowledge primarily in the South, patenting in the North, and then re-selling to the SouthUS won the debate, but in response to resistance, made it a trade-off: Used the “comparative advantage” trade-off (horse-trading): developing countries good at providing labour and resources, developed countries good at production and use of knowledgeLifted trade barriers and allowed developing countries access to certain of its markets (e.g., textiles) in exchange for signing on to TRIPS (Trade Related Aspects of Intellectual Property Rights)Was in the interests of Also allowed for transition periods: established in 1995: developed countries had 1 year to comply, developing nations had 5 years (until 2000) and least developed had 10 years (until 2005)there is ambiguity in the agreement: terms have no precedent in int’l law; there is lots of room for different countries to interpret it differently; broad compulsory licensing provisions; ordre public and morality clausesthere is also an obligation on developed states to assist developing states to build infrastructure (e.g., patent offices) and to transfer technologies

“ The European Biotech Directive: Past as Prologue ,” E. Richard Gold and Alain Gallochat The Biotech Directive (BD) has the goal of harmonising European Community (EC) member states’ patent laws with respect to (wrt) biotech inventionsIt is the result of a ten-year tug-of-war between the European Parliament on one side (who had important ethical concerns regarding the patenting of biological materials) and the European Council and Commission on the other. So far only a few states have passed leg’n enabling it; there has been resistance due to ethical concerns

History1975: some Euro countries (not all of them member states) created the EPO. It is NOT an institution of the EU, but a creation of the European Patent Convention (EPC). Now all member states + five neighbouring countries are members of the EPC. EPC provides the EPO with the power to examine patent applications filed with it and to grant patents in member states of the EPC selected by the applicantThese patents are subject to national laws within each member state wrt enforcement and validity. Therefore it is not a community wide patent. Grounds for invalidity, however, are set out in the EPC.History of BD began in the 1980s: US was patenting life-forms (beginning with bacterium: Chakrabarty) This ushered in era of competition among US, Japan and Europe; era of hope and naivete regarding biotechOECD and WIPO (World Intellectual Property Organisation) encouraged everybody to adopt patent laws designed to meet the needs of the biotech industry; found that only US and Japan had adequate patent laws, and that Europe should harmonise theirs

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First draft directive: 1988. Justified it by saying it would ‘foster the overall innovatory potential and competitiveness of Community science and industry in this important field of modern technology’Modern biotechnology fit uneasily into patent law; given the natural origin of the biological materials used in biotech innovation, it was uncertain how the traditional patent law concepts of discovery, novelty, industrial applicability, and disclosure would apply Thru harmonisation Commission hoped to help the Euro biotech industry, trade in biotech products and establish a common market. It would lead to investment in Euro R&D by researchers and investors, and would narrow the gap between Europe and US/Japan.Leg’ve basis of BD requires cooperation procedure: means E Commission needs cooperation of E Parliament

Ethical Elements: 1989-1995BD draft brought to the fore ethical and social concerns about biotech, ranging from concern over the safety of genetically engineered products to concerns over whether biotech usurped role of God1989 report of Economic and Social Committee said it favoured the extension of patent rts to living plants and animals (other than plant and animal varieties) but that this could raise ethical concern, for example wrt animal suffering; called for the BD to expressly state the humans are not patentableArticle 53 (a) of the EPC and the laws of all member states held that patents ought to be withheld over inventions the publication or commercialisation of which violated ordre public or moralityHarvard mouse patent application came before Examining Division of EPO which refused to grant the patent on the basis of their interpretation that the EPC excluded animals from patent law. Board of Appeal overturned in 1990; said that EPC contained no blanket protection against animal patenting; instead, EPC only prohibits the patenting of an animal variety. Sent it back b/c the Examining Division had not determined whether it was an “animal variety”Board of Appeal also gave direction to the Examining Division on how to address issue of order public and morality: analyse whether the usefulness of the invention to human beings outweighed the suffering caused to the mice and the risk posed by the mice to the environment. I.e., is the medical benefit of using an animal model for cancer research sufficient to justify the pain and suffering of the mice?Examining Division concluded that the mouse was not an animal variety and was t/f patentable. They also held that since the benefits of the Harvard mouse to medical science outweighed any suffering caused to the mouse and since there was no evident that the mouse would pose an environmental risk, there was no reason to withhold a patent on the basis of ordre public or morality.In discussion under cooperation procedure, E Parliament focussed attention on ethical concerns, proposing amendments to BD that would exclude the possibility of patenting human body and components and processes involving the genetic manipulation of human beings (fear of eugenic applications of biotech)Rather than viewing the draft BD as a technical resolution of uncertainties in a technical area, Parliament saw in the BD all of the public’s worries about biotech, eugenics and dignity. Some of the amendments including the suggested development of a global ethic of research and of the information it generates, go far beyond the scope of patent lawEC did not accept all of Parl’s amendments but did address social and ethical issues: introduced a clause in the BD providing that the following would be unpatentable as a breach of ordre public or morality:

a) the human body or parts of the human body per seb) processes for modifying the genetic identity of the human body for a non-therapeutic purpose which is

contrary to the dignity of manc) processes for modifying the genetic identity of animals which are likely to inflict suffering or physical

handicaps upon them without any benefit to man or animalParliament still rejected itsoon after proposed revisions: France passed a bioethics law, providing that none of the human body, its elements or its products (i.e. excreta) can be the subject-matter of a property right for reasons of ordre public and morality. French gov’t interpreted the provision to mean that human genes are not patentable even if extracted from the human body and even if they would otherwise satisfy patent criteria

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1995-1998by 1995, importance of biotech clear; world market had doubled in 7 yearsEC proposed new BD; more careful; made distinction btw inventions (patentable) and discoveries (not patentable); Inventions: involve technological contribution by the inventor to society. Found thing remains unpatentable discovery. Once technological process is applied to those materials to create something nature cannot, it is patentable. Can even be structurally identical to naturally occurring, but if it exists in an artificial setting, is patentableAlso said: Human body and elements unpatentable in natural state, but if technical means are used to isolate an element from the body or produces the element by artificial means, can be patented. 1996: Europe still far behind US in patent policy; said there was a brain drain to the US. Economic and social committee t/f commended BD to Council and Parliament, but with changes: said the BD should emphasis that nat’l gov’ts should regulate uses that individuals can make of patented inventions. Also said had to clarify meaning of ‘in their natural state’ wrt human body.In 1997, E Parl added a significant number of amendments attempting to clarify distinction btw patentable human bio material and non-patentable material; Also introduced Article 8(a) to comply with the Convention on Biological Diversity’s commitment to ensure that nat’l gov’ts have control over their biological resources. Said inventor had to show that they had obtained fully informed consent for the use of human bio material and where there had gotten it from and that they had removed it from the country in accordance with law.E Commission accepted everything except 8(a). Said went too far. Didn’t say so, but was concerned would violate TRIPS. May 1998, E Parl accepted BD in priciple. June 1998, Council approved it. All member states were in favour except for The Netherlands, Belgium and Italy. July: Parl and Council signed. Published and called for transposition into nati’l law by June 30 2000.

Role and Structure of BDBD establishes detailed set of rules concerning patentability of bio materials. Affects all countries that are member of the EPC and probably EU non-member states who are part of the Euro Free Trade Ass’nIs divided into recitals and articles. Articles are the only directly enforceable components of a directive. But, b/c of difficult leg’ve history, in BD, binding obligations in articles can only be understood when supplemented by the recitals; provide substanceApplies to biotech the general patent principle: only new and non-obvious inventions with an industrial application can be patentedDistinguishes between invention (patentable) and discovery (not)Discovery: found as exists in nature; Invention: would not exist in present state but for human intervention; context, rather than structure, is important; may be the same as exists in nature but if exists in artificial setting, is patentable w/in that setting; Thus: act of isolating biological material from its surroundings or producing it by artificial means is enough to make it an inventionFor inventions of human bio material, inventor must disclose not only invention itself but also its industrial application; for DNA sequences, this means the inventor must disclose the function or technical use of the sequence; if sequence produces proteins, must disclose identity and function of the proteinPlants and animals: plant and animal varieties are not themselves subject to patent protection; invented plants and animals are patentable provided what is revealed by the invention is not confined to a particular plant or animal varietyDefinition of ‘variety’ wrt animals has not yet been established. (plants have)Incorporates ordre public or morality clause; patents are withheld if commercialisation would breach. Also lists certain inventions as breaches: human clones, modification of human germ line identity, use of human embryos for commercial purposes and causing animals to suffer w/out substantial benefit to humansPatent protection flows down to bio material produced thru the propagation of patented material; but are provisions to balance interests of patent holder and farmers

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Non-binding recitals address 2 ethical issues 1) researchers ought to ensure that all human donors of bio materials provide fully informed consent to removal of materials 2) when inventor files a patent application over plant or animal bio material, must disclose geographic origin of animal or plantBD has 2 review mechanisms to ensure conformance w/ ethical considerations: 1) regular Ecommission reports to Ecouncil and Eparl on developments in patent law relating to biotech, effects of failiure or delays in publishing research, relationship btw biotech and human rts conventions 2) expert group of ethicists review ethical aspects of biotech. Only advisory power

Analysis of effects on EC lawAdoption of BD by EPO ensures that patent laws in Europe changed wrt biotech Not clear what its status is in member states that haven’t transposed it yet; only 4 countries actually haveNevertheless, it still applies directly in member states b/c:1) EPO amended reg’ns to conform w/ BD; any patents granted will be done in accordance with BD; any patent issued by EPO is effective in EPC member countries, which include all EU member states2) nat’l cts will probaly apply BD in any case involving patent issued by EPO b/c after the end of the implementation period of the BD, July 30 2000, they are obliged to interpret nat’l law in light of the wording and purpose of BD. Not clear that they will go so far as to ignore the intent and wording of nat’l leg’n that is contradictory to BD, but they have to do it as far as possible in conformity with the BD3) Ecommission or aggrieved person can ask ECJ to impose a penalty on a member state that fails to transpose the BD into nat’l law. So anyone who wants a patent under the BD can do so, even if it is contrary to nat’l law: e.g., French bitoech co’s can apply to EPO for and be granted patents that would not be issued in France, and they would be valid in France despite their bioethics law. French cts would have to enforce them. Could even apply for French patent, and if rejected, appeal and then Fr patent office would be required to comply w/BD

Competence of EU over biotech patentsUsed Art 100A EC (now 95) which says that the Council and Parliament can adopt measures which have as their object establishment and functioning of the internal market. Netherlands said that they needed to use another Article (235 EC now 308 EC) that requires unanimous Council assent, b/c this was more than simply leg’n for the working of the internal market b/c it was imposing laws that had ethical repercussions; wouldn’t have passed b/c Netherlands would have said noBut 100A (now 95 EC) is the right one: it provides legal basis for Community action where the primary intent of the action is to harmonise the laws of the member states to eliminate or prevent distortions in the internal market. (It can’t be used when harmonisation is only the first step to a grander scheme)Original BD was directed at harmonisation of patent law, did not intend to create a new framework in relation to biotech research an innovation; it only directs member states to amend internal leg’n; it did not grant any powers to any Community body or create framework for patents at Community level ; The effect of the BD was to establish a uniform standard thruout the Community wrt the examination of patent application and the scope of patents granted in biotech. It did not create new rts, its primary purpose was to clarify existing patent law. In doing so, it had the effect of including with patentable subject matter certain matter that was patentable in some member states, but not others. But this is not the creation of new rts. It only remedied a distortion in patent law and in the internal market. Later drafts intorduced ethical elements thru the elucidation of morality and ordre public exception, but primary purpose still harmonisation; only addressed ethical issues at emphatic request of ParliamentThe establishment of a Community Patent would necessitate Art 235 EC: would require creation of a new centralised j’cial system; this has met with opposition

Int’l ObligationsFinal draft of BD did not address the fundamental issues regarding its obligations under int’l law wrt trade, environment and human rts. Int’l trade agreements, esp TRIPS, plays important role in dvlpmt of biotech patent policyTRIPS brings IP issues within the ambit of the WTO. Breach of TRIPS subject to dispute resolution under WTO

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Arts 27-34 TIPS spell out WTO members’ obs wrt patent law. Only excludes certain types of biotech inventions at the option of member country. Lays down standard patent rules General rule: countries cannot discriminate btw technologies: difficult to craft patent laws to take into account different ethical concerns that arise out of biotech except extreme cases that come under ordre public exclusionCountries can reg’te biotech outside patent law, but patent law is immune from general ethical and social concerns; this may not be appropriate wrt biotech inventions b/c of economic incentives patents provide and the importance of biotech to health care and agriculture.Countries should not be deprived of the ability to regulate social and ethical issues arising out of biotech directly thru patent law. Important ethical and social differences btw biogtech and other techs. Should examine whether patent law is appropriate for biotech. BD follows lead of US and Japan by providing patent framework, but this is not inevitableShould examine whether sui generis system should protect biotech inventions in the best interests of industry and the publicIn Europe, the foundation for the moral argument is based on Art 53 (a) of the EPO: ordre public and morality exclusions; goes back to the 19th C. (see Coke: patents had to be for public good): Was originally to address 2 problems: 1) people inventing weapons (e.g., Molotov cocktails) for insurrection against the state; not wise to create an incentive for non-“legitimate” arms investors to create bombs, etc. 2) contraceptive devices: for morality reasons, they didn’t want to grant patents for themNow applies to biotech: moral claims are concerned with suffering of animals and the environmentBiotech Directive in Europe picked up morality and ordre public exceptionComL countries (following US and Cda) do not have morality issues in patent statutes. (Europe and Japan do. ) ComL countries usually deal with ethical issues thru leg’nProblem with moral issues being covered by patent law: are patent examiners trained to deal with ethical issues? Maybe just a structural problem: there should be a special board of ethical experts to address these issuesS. 40 of Cdn Patent Act: “in accordance with law” (i.e., overriding public policy/law): Gold predicts that Cdn cts will find a morality clause here

J.H. Reichman, “Compliance with the TRIPS Agreement: Introduction to a Scholarly Debate” (Vol. 2 p. 427)

TRIPS: Nature and Scope: most ambitious IP convention ever attempted; unprecedented breadth of subject matters comprising the IP to which specified minimum standards apply; all WTO member states must guarantees that detailed enforcement procedures as specified in the agreement are available under their national laws.Provisions make it likely that states will lodge actions against other states before duly constituted int’l bodies to vindicate the privately owned IP rts of their citizens against unauthorised uses that occur outside the domestic territorial jdc’ions.Many WTO members lack the legal infrastructure, technical skills, philosophic commitment to make it workWTO IP and Investment Division: article indicates 4 approaches for diplomatic policy:1) emphasis on “transparency” during early implementation stages and transition phases (5 years for developing nations, 11 years for least developed): must report on the state of their leg’ve progress twd full compliancethus makes states avoid non-conforming leg’n; also hopefully means that states w/ big interests in IP protection (like US) will be less confrontational in maintaining momentum2) “enforcement” provisions that member states are supposed to implement in their domestic laws: private enforcement actions by rights holders under domestic laws will relieve the pressure for “top down” administrative action int’ly. Such actions will also provide empirical evidence to inform future. Particular attention to border control measures against counterfeit TM’ed and ©’ed goods.3)technical assistance for developing and least-developed countries; TRIPS will monitor extent to which developed nations fulfil their obligations to assist4) collaboration with WIPO and UNCTAD; try to resolve differences btw states w/out need for formal recourse to dispute settlement

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but still lack of consensus re IP int’lyhas been argued that TRIPS based on no solid theoretical or empirical foundations whatsoevercan any of the theories justify universal standards of patent protection? Irony of US relying on “natural rts” by US trade reps in negotiations, when US doctrine and practice reject it as a foundation in US domestic law; but this theory still important in EU Hard to justify TRIPS standards of patent protection under economic analysisStructural impediments in developing countries: lag behind the newly industrialised countries, usually lack the infrastructure to benefit from local usage of the patent system for the f’ble future. Also, low per-capita GDP, which is usually an obstacle to tech progress. Patent paradigm becomes obsolete and counterproductive in information age when it is too much used to protect small and imcremental applications of knowledge to industry. What the developing countries need for the immediate future is not string, 19thC type patent protection, but rather more appropriate IP regimes to stimulate investment in new techs and in various forms of subpantentable innovation that lie w/in their limited tech reachBut may be advantages for developing countries as their technological prowess improvesAlso: standards may be high for developing countries now, but there was a quid pro quo of trade concessions, which gave these countries greater access to developed country markets, especially in the agricultural and textile sectorsMaybe they gave up a lot, but these trade concessions are valuable; and now that the countries are in TRIPS, they may be able to use it (eventually) to their advantage

Interface with Competition LawDeveloping countries must lessen their dependence on foreign suppliers of technological goods: must be able to learn from the technologies they import to be able to develop their ownBut this flies in the face of policies of developed countries to restrict the flow of technical knowledge Developed countries have relaxed antitrust laws in favour of horizontal collaborative practices, including joint research among natural competitors and pooled licensing agreements. This, with their strong market power and high levels of transnational IP protection make it harder for firms in developing countries to gain access to the most valuable new techsHow can developing countries respond w/out undermining TRIPS? Should there be a new int’l minimum standard of competition law to maintain a balance?Scholars are debating the level of antitrust standards that are appopriateTRIPS contains a rudimentary positive list of measures that states may implement to curb abuse of IP rts; but some argue that it would be very difficult and unwise to write the ruses in advance, given the lack of consensus. Eleanor Fox (scholar) says there should be a “common law” evolutionary approach, with guiding principles, most important being “existing developed systems of antitrust are presumptively legit, even tho’ they may function as a limitation on IP rts.” States should be free to pick and choose among the doctrines in use under the different systems when formulating their own approaches. Developing countries can and should formulate their own jurisprudence of licensing under their domestic law and they should leg’vely impose a K’l rider on transfers of tech that invokes principles of fairness, the preservation of competition, and due regard for the scientific and educational communities in nat’l economic developmentUniversal standards should be limited to 2 norms: 1) to preserve market access and prevent anticompetitive exclusions and 2) to prevent anticompetitive collaborations of competitors designed to raise prices (for example pooling and crosslicensing as a cover for a cartel): Such minimalist internat’l intervention on competition law would give states leeway to formulate own statutes

Impact of TRIPS on Specific DisciplinesPatents:

some (optimistic) scholars say that economic analysis does justify strong int’l minimum standards of patent protectionThey say that universal patent system would benefit the world community by eliminating the free-riders’ disincentives to innovate and would increase the supply of needed inventions that would otherwise not have been made

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Free riders in pharmaceutical industry: hope that leaving the cost of development of new drugs to the developed world will not stunt the development of too many drugs. But it may affect it so much that it backfires. Plus, these countries will not have drugs developed for local diseases.India as example: before TRIPS, took pharmaceuticals out of its patent system and built a tariff wall to protect it. Indian manufacturers of bulk drugs dominate Indian market and fiercely competitive wrt production of generic drugs. But low investment in R&D and local firms developed no new drugsUnder TRIPS will change: rising investment in R&D, and joint research ventures w/ major foreign companies. Stronger norms will allow it to develop robust drug sector, with focuses on diseases of local importance. Some (pessimistic) scholars disagree: Italy as example: well-positioned but has never been able to capitalise on the introduction of strong patent protection for pharmaceuticals in 1978. If Italians can’t make it work, unlikely developing countries will be able toIndeed: India would not have been able to develop its present success( and really low prices) w/out low patent protection, and access to the latest drugs all over the world, which they then re-engineered thru new processes and sold domestically. Successful import substitution. Perhaps now, India can use a stronger patent protection, but they needed a lower one before. Some scholars say that TRIPS can boomerang against even developed nations. Protectionism will have to give way to national treatment requirements and TRIPS treatment that is now int’l law.US implementation of TRIPS has been half-hearted and inadequate b/c patent authorities don’t want to abandon long-standing discriminatory advantages built into the domestic law. Still have some laws that don’t comply with TRIPS. Will this make other countries less likely to comply too?

© law : disagreement btw scholars here too:some favour high-protectionism: driving force behind TRIPS: need to stem losses to publishers in developed countries from free-riding uses of ©’ed works in developing countries. Represent lost jobs and economic growth for US economy, which is already suffering due tot he comparative advantages of the developing countries in a number of manufacturing sectors natural rights philosophy: cannot sacrifice the cause of authors’ rts to the generic category of “users” like Internet users, developing nations, consumers, small competitors and creators of derivative works; maybe some people don’t like the fact of US o’ship of most exported IP, but hey have to get used to it and to the remaking of int’l © law in the US’s image[ but: © law cannot effectively protect computer programs or other forms of industrial property w/out serious anticompetitive results; high protectionsim could lead to tech decline of US and EU ]other scholars: social costs to users of © culture under minimum standards of protection: new US leg’n is a radical transformation of the purposes of © law that undermines its const’l foundations in USUS: © justified only to extent that it stimulated progress in arts and sciences by enriching store that would enter public domain after a time; but now, the “cultural bargain” has given way to trade-driven goal, which seeks to enhance the wealth and overall financial well-being of companies which invest in the production and distribution of ©’ed worksShould be limited: historical emphasis in US on public interest has been eclipsed; need to defend user interests and the public domain; use competition lawUniversalisation of the high standards is a form of cultural imperialismTROPs ignores new info techs, taking into account more the private rather than the public interest; need a “free use zone”: cyberspace parallels to fair use and personal use exceptionsTRIPS is backward looking: drafters were unable (technically and politically) to address the problems facing innovators and investors at work on important new technology

TM and Geographical Indications of OriginLack of controversy, generally: Paris Convention already had well-developed set of int’l minimum standards wrt TMIt is argued: TM protection prevents marketplace confusion that is detrimental to in interests of consumers in every nation. Improves consumer wealth by improving consumer informationfocus on enforcement, especially border controlsgeographical indications, special provisions for wines and spirits: trade-offs US had to make to get European support in other areasdrafters omitted problem of exhaustion. Some defend to import genuine “gray market” goods.

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Future of TRIPStensions generated by TRIPS portend a major realignment of interest that will cross nat’l boundaries and will unlitmately ship the balance btw incentives to create and free competition to the global marketplace and away from the territorial legal and economic jdc’ns“In the past, the US and the EC preached the virtues of competitive markets to developing countries that were mired in command economies. The collapse of these command economies means that the developing countries will now take the developed countries at their word and demand to compete in the world market. The real question is not whether these countries can compete, even in markets for tecnological and information goods, but whether the developed countries still have the stomach for stiff global competition once it becomes a legal and economic reality.”“the logical task of developing countries is to shoulder the pro-competitve mantle abandoned elsewhere when implementing obligations under the TRIPS Agreement in their domestic laws. To the extent that these countries systematically adhere to lower levels of protection than their more developed counterparts, their firms may become ever more competitive wrt those in the developed countries.”Developing world as a bastions of competition? If so, will represent the interests of consumers, users, second-comers, small and medium size entrepreneurs in developed countries too. Transnational commonality of interests.

TRIPS is backward looking: Rts were set in 1994; if one state has taken on a new practice since, it can’t force others to complyIt does not address plants and animals: states couldn’t agree; there will be a review in a few years. Least developed countries have recently been given a longer transitional period. They now have until 2016 to comply.

Mailbox provision: s. 70 ¶8: Products not protected by patent in developing country (under TRIPS had transitional period before compliance)But mailbox provision says that there is a mechanism to accept applications before patent laws in place, and that the application will be granted once the laws come into place. Until then, the company applying will have exclusivity in that country. Patent will happen when laws come into effect, but interim exclusivity time before this will be counted; patent will last the remainder of time left. (E.g., patent lasts 20 years, exclusivity from 2002 to 2005, laws come in, patent until 2022. As though it had been granted at time of application.)Acts as a disincentive to generics, if they know that there will be a patent on the drug, there is no incentive to re-engineer a generic. Pharmaceutical companies pushed the US gov’t to get this provision included. Is now in abeyance and under review

Compulsory licensing : must be done primarily for the nat’l market. This is problem in countries that have to import drugs. Compulsory licensing is useless. It is also now under review. It may become possible to do compulsory licensing for another country.

Under TRIPS: there are only 3 criteria for patentability: 1) industrial application 2) non-obviousness 3) novelty. Patent lasts 20 years.

Interaction of international and domestic law in global regulation IP

Braintech , Inc. v. Kostiuk (1999) (BCCA) (Vol 2, p. 445.) NOT an IP case, but deals w/ cross-jdc’l disputes: Cdn postion

Facts: K., resident of B.C., contributed to an Internet bulletin board, made allegedly defamatory comments about Braintech. B. operated out of BC, but had office in Texas. 10% of shareholders resident in TX. B. sued K in TX (could get treble damages). K didn’t defend, saying they had no jdc’n. TX ct ruled against him for damages of $400G. B. then went to BC to have j’ment enforced.

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Held:1st ct: yes, there is a substantial enough connection btw TX and the case to enforce it.

Court of Appeal (here): No. The connection between the location (TX) and the cause of action is not real and substantial.

In order for BC to accept the TX decision, we must feel that TX cts had jdc’n and we would then in accordance with principles of fairness we would then enforce it. There must be a real and substantial connection btw TX and the alleged injuryK. was not a resident of TX, but of BC.B. is incorporated in Nevada, resident of BC.TX took jdc’n on the basis of the availability of the web site to potential and existing shareholders in TX. Cite from US case Zippo Manufacturing v. Zippo DotCom: 3 pronged test to determine jdc’n over non-resident:“1) defendant must have sufficient minimum contacts with the forum state 2) the claim asserted agains the defendant must arise out of those contacts, and 3) the exercise of jdc’n must be r’ble.”Wrt the Internet: depends on the nature and quality of commercial activity that is conducted over the Internet. Active/passive web sites. “A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jdc’n”Here: the bulletin board is passive, only posting information, accessible only to users who have the maean so gaining access and who exercise that means. “Need more proof that the defendant has entered TX than the mere possiblity that s/o in that jdc’n might have reached out to cyberspace to bring the defamatory to a screen in TX.” No evidence to show anyone in TX actually read it. Was available everywhere. If we allow this, why not suits from everywhere else in the world? Note that this does not change the law of TX. But his assets are in BC, and TX can’t do anything. Push and pull of different jdc’ns. There is potential for unfairness on both sides, either for plaintiffs or defendants.

Wendy A. Adams, “Intellectual Property Infringement in Global Networks: The Implications of Protection Ahead of the Curve” (2002) (Vol. 2, p. 457)

TRIPS sought to harmonise IP norms by imposing universal minimum standards of protection to be implemented w/in the domestic legal systems of WTO member statesTRIPS harmonises, but it does not mandate uniform law. A member state remains free to implement increased levels of protection above the minimum w/in its domestic legal system but cannot compel other member states to rec’ze the heightened levels of protection when goods are exported to other states“protection ahead of the curve” : higher than the minimum standardWTO: institutional design was intended to address rapid advancements in globalisation, meaning an increasing degree of economic integration of financial affairs of actors from different states. Transborder transaction friction remedied by trade liberalisation aimed at free movement of goods. But in context of Internet: now possible to engage in commercial transactions w/in a borderless medium. But trade regulation in relation to IP rts still operating on territorial modelTransactions on Internet: 1st generation: orders for goods delivered by conventional means. 2nd generation: sale of digital products. Geopolitical borders insignificant. States with high IP protection to new technologies will be protected “ahead of the curve”When transaction are conducted in circumstances of jdc’l certainty, higher levels of protection in local markets not affected by other states’ protection.But w/ Internet, more jdc’nl uncertainty.

Territoriality, Universality, Global Trade and the Implications of Protection Ahead of the CurveJustifications for IP: competing ones exist, but in developed countries, the economic case in support of granting a limited term monopoly over intangible goods generally prevailsEconomic rationale: monopoly rts necessary to address public goods problem inherent in intellectual assets: lack of exclusivity and inherent scarcity. A. invested resources in generating good but can’t exclude B from enjoying the benefits. T/f no incentive for A to create, unless A can withhold goods/’benefits from B, or provide them for compensation. Otherwise, couldn’t stop imitation, and the selling of it at lower price (since there would be no recoup cost for R&D)

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Need to strike a balance btw monopoly and competitive market. Protectionism = reduction of free flow of public domain to detriment of users and innovatorsTerritorial nature of IP protection: Historically viewed as subject to territorial jdc’n where rts granted. Rt holder in one state can’t enforce those rts against infringer in another state where it’s not an infringementWhere no transborder transactions, diversity among states doesn’t affect balance. Regulates local actors and prevents imitators in foreign markets from entering domestic market.Comparative advantage in intellectual assets: Int’l trade in intellectual assets reintroduces problem of free-riding. Intangible product protected in home country exported to country where equal IPRs not available may be freely appropriated imitators who will then directly compete with the original innovatorInt’l IP trade agreements justified by limitations of territorial protection in relation to the theory of comparative advantage: a state benefits from trade liberalisation by specialising the production and export of goods in which its comparative advantage is the greatest (in which it can produce the goods more cheaply than its trading partner). Conversely, states should import goods where its comparative disadvantage is the greatest.TRIPS negotiations: developing/least developed states argued that high protection would be bad for them b/c they often lack capacity to produce innovation but consume technology produced in developed countries; high levels of protection would turn them from imitators into infringers. Developed states argued that optimal levels of protection are a fcn of economic and tech levels of development and strengthening protection would result in positive benefit by increasing capactiy thru tech transfer and foreign direct investmentAgreed on core set of minimum standards; quid pro quo deal of increased access to markets for developing statesMimimum standards and protection ahead of the curve: Harmonising, but not implementation of global law. Difficult to enforce IPRs in cyberspace. Not contemplated in TRIPS, which is backward-looking: did not consider new techs. Scope for diversity still exists. Must have minimum standard, but if state wishes, can extend IP protection beyond baseline to protect new techs as required by conditions in local market; can’t make other members do the sameWhen TRIPS promulgated, s/o thought that states would go beyond minimum levels of protection; this would just retrun states w/ superior innovative capacity to pre-Trips enivironmentTRIPS was carefully crafted: to strike a balance btw innovation and imitation AND to address distributive justice issues, i.e., allocation of benefits and burdens of trade liberalisation (fear that developing nations would be burdened by heavy load and US would reap al the benefits) The prescribed standards favour the developing nations: this ensures higher participation rate and is more just; developing nations retained some “wiggle room” to tailor minimum standards to meet their domestic requirementsMinimum standards crystallised the comparative advantages of technically advanced states over less advanced states at the time of promulgation—but will not necessarily continue as countries developMember sates are free to respond to domestic pressure to increase protection for new technologies but there is no guarantee of comparative advantage in new industries.Will be able to suppress competition locally, but not within foreign markets; developing states may gain competitive advantages as their technology improves

Judicial AmbiguityIncrease in online transactions and digital products: no uniform law: t/f rts holders can sue for infringement thru private int’l lawIf case is geographically diverse: domestic cts must apply the laws of one state to the exclusion of all others, even tho’ other states can claim that some portion of the impugned activity took place thereBut doesn’t address “underlying judicial puzzle inherent in internet transactions”: how to localise activity legallyResolving jdc’n: must establish a default rule in favour of either the location of the commercial website (initial server or operator’s place of business) or the location of the person accessing the website (then might be complications of nationality or residence)

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If the rule favours the location of the website: = to ‘universal permission” : operator assumed to be in compliance w/ local reg’n; individual states would then have to apply indirect reg’n (punishing end-users of prohibited products in their jdc’n) to prohibit access in violation of local lawsIf the rule favours the location of the persona accessing the website: = to ‘universal prohibition’: website providers have to determine in advance the states where their products are permitted, and allow residents of these states to opt in, and restrict access from elsewhere(Latter rule: decrease in efficiency of Internet; would lead to Balkanisation)If the website seems to be targeting people in a specific territorial market: there is no need for the default rule; but domestic cts have to justify assuming jdc’n. On a traditional basis?: commercial nexus btwe jdc’n and activity; probably more fair to target the person accessing the infoAny imperfect fit btw online activity and territorial jdc’n could have an adverse effect on levels of compensation; would result in either under- or over-compensation

Patent examplein US, patent protects “online business methods” (ruling in State Street Bank & Trust)Amazon.com: patented their “one-click” method. Server computer stores ID info of buyer, and a copy of the identifier is stored in cookie in client’s computer, and they just have to click once to buy. The patent was not upheld. BUT ASSUME IT WAS: Business methods not protected in Cda. If Barnes & Noble set up in Cda and used the one-click method. Would not be infringing, b/c one-click not protected here. But if purchasers were in the US (and they don’t know where the server is). Where would Amazon sue? Can’t sue in Cda, b/c there is no cause of action.If sue in US: where does the infringement take place? In the server computer in Cda? In the cookie on the buyer’s computer in the US? To breach patent, you must infringe every element: totality of breach would not have occurred in the jdc’n where the patent is valid. Cts will probably say that it is infringement only if all of the activity happens in the US—but we don’t know. US cts will have to decide.If the US cts decide they have jdc’n: the ct will be saying that they don’t care about the laws of other countries where part of the activity is taking place; they would be imposing their higher protection IP regime on people in the other country if they act into the US. OVERCOMPENSATIONIf the US cts decide they don’t have jdc’n: then Amazon would be losing the economic benefit of the patent in the US that the US leg’re had decided was appropriate: UNDER-COMPENSATION

© exampleICrave: took signals off US TV airwaves to broadcast in videostreaming format on computer. Material located on co’s server in Cda, was available to both US and Cdn viewers. They did not negotiate with American networks, relying on exemption for Cdn companies which has a compulsory licensing fee for American broadcast signals. US broadcasters sued. ICrave said that Cdn law should apply and they should get the exemption b/c the website was restricted to Cdn viewers. It was just that the restrictions were easily circumvented: only prrof of residence was provision of a telephone area code. US viewers just had to plug in a Cdn area code. But they had the “intention” to exclude American viewers. Activity was plausibly legal in Cda, since there was compulsory licensing for Cdn broadcasts. But US cts asserted jdc’n b/c iCrave had domain name reg’red in US, and advertising office in Pittsburgh. Ct concluded that the receipt of the transmissions constituted unauthorised public performance in violation of US © law, and ordered the company to stop US broadcastingCdn co., JumpTV.com did the same, but they claimed they had better way to restrict access to only Cdn viewers. US took jdc’n, and ordered the Cdn co, with its activities in Cda, to shut down. Was never brought to the Cdn cts for enforcement, b/c the co shut down in fear that Cdn cts would accept US j’ment. Importation of US laws to Cda. Domestic adjudication (private enforcement) of multi-jdc’nl disputes is not appropriate. Each country had different rules, and where there is an important difference in the level of IP protection, it leads to a tug of war If a country is a net exporter of technology, it is more likely to have higher standards. It will also make it easier for that country to assert jdc’n, which will lead to unfairness and overprotection of IP in other jdc’ns:

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“domestic adjudication cannot reconcile protection ahead of the curve with the minimum standards provided under the terms of the TRIPS Agreement in a manner which preserves but does not enhance TRIPS entitlements.” (495)US test of passive/active: Zippo case: Commercial transactions can be positioned along a continuum of interactivity, based on factors like website design and nature of communications with customers. Greater interactivity indicates commercial intent to attract customers, and justifies liability w/in foreign jdc’n where customers are physically located. But not adequate: difference between targeted activity and passive acquiescence to attentions of foreign consumers difficult to identify.Also presupposes ct will adopt default rule of universal prohibition. Must first decide whether online commercial enterprises have “travelled” or whether customers have “travelled” in principled manner.US cts assuming that internet companies must adjust their behaviour to all the jdc’ns in the world. “The imperative of sovereign equality more readily supports local regulation of online activity specifically directed twds a state’s own residents, than a state’s attempt to apply local reg’n to generic online activity in the interests of its own residents.”Can look at commercial intent to distinguish btw generic online activity and websites targeting a specific jdc’n. But difficult to see difference. See Pro-C case. Passive US based website, but Cdn ct asserted jdc’n based on a “de facto common market” btw US and Cda and the location of harm in Cda. Website gave location of Cdn stores. Plai’s TM could not be purchased thru website or at Cdn stores, but the common market and cross border shopping meant that Cdn consumers could buy impugned product at US location. Was this really commercial intent? “An excess of jdc’n will enforce protection ahead of the curve beyond a state’s territorial jdc’n, establishing a state’s comparative advantage in new technologies w/out the necessity of negotiating formal amendments to the text [of TRIPS]. In contrast, any deficiencies in jdc’n will divert revenue from domestic innovators to foreign imitators, notwithstanding that the TRIPS Agreement expressly permits protection ahead of the curve within domestic markets.” (502)t/f need multilateral approach b/c any jdc’nl solution will be unfair and would violate the understanding of TRIPS. But if dealt with thru WTO process, arbitration is uncertain: no precedent, no guidelines. TRIPS backward looking, and does not deal with new technologies. Provisions are vague, need judicial interpretation. Expansive interpretation would lead to too much harmonisation, and undermine regulatory diversity embedded in TRIPS. Would have negative impact on states that need lower levels of protection. Must go to public int’l law, not private int’l law. There should be amendments to TRIPS;. Would take into account distributive justice concerns, as the initial negotiations did (with the comparative advantage trade-off)negotiations must take into account the “wiggle room” given to developing nations: Art. 8 permits members states to implement public interest exceptions addressing concerns of public health and nutrition and other sectors of vital importance of domestic levels of socioeconomic an technological developmentIf the US (or other developed nation) wants to impose higher standards, developing nations have this bargaining chip. US would have to give something back if they were forced to give it up.

Angela R. Riley, “Recovering Collectivity: Group Rights to Intellectual Property in Indigenous Communities” (2000) (Vol. 2, p. 518)

German group Enigma took recordings of traditional Ami (Taiwanese indigenous group) music and put it in a song. Ami elder is a “messenger” who “works to keep the chants alive” Ami language not written; oral tradition is only way culture is passed down. Had been invited by Ministries of Culture of Taiwan and France to perform in Europe, and was recorded without knowledge or consent. Recordings published later, and Enigma used them, purchasing rts from French Cultural Ministry. No payment to Ami people.Riley says © law gives them no protection. Gold: she’s wrong: singers had automatic © in performance of song. If they had known, they could have sued for compensation. (of course there’s the obstacle of not knowing, and of cost of suit).

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Ami now seek complete rec’n of their rights as a tribe to cultural propertyIndigenous works fail to fulfil individualistic notions of property rts that underlie the structure of Western law; works are t/f omitted from IP regimes. Riley argues for group rts model of o’ship of intangible property. Such works can’t be valid under © law: not original: spark of creativity necessary not fulfilled: not independently created by the author; essence of song is that it is communal in nature (although there is creativity in the song: imagination of storyteller integral to transformation of story to better meet needs of changing community). Author: sole creator. Even a “joint work” in western conception is the product of several individual authors. Here: impossible to identify all the creators who have contributednot fixed in tangible medium. This requirement excludes oral cultures. Places burden on them to abandon their methods of knowledge transmission, which goes to the essence of such knowledge, and write it down. Indigenous knowledge being distorted thru appropriation; removed from context (pop song)Communal rts model: must be able to determine the destiny of their knowledge to keep their integrity as a community, crucial element in self-determinationMust recognise injustice to indigenous peoples by enacting special community IP rights to ensure cultural survival.

Gold: Traditional knowledge: takes the form of knowledge that indigenous populations have regarding uses of plants of animals; pre-scientific knowledge; also includes cultural elements, like songs, stories, etc.E.g.: neem tree or tumeric in India: researchers knew of their value b/c of their use by indig groups; enabled them to hone in on their research targets, saving time and $. Claims for indig community prop rts to counter cultural insensitivity of taking song out of context, no compensation to groupsNote that singer in Ami tribe would have protection over the performance of the song that was recorded; would be individual, atomistic rt, not community rt like the one Riley is asking forSong itself not protected; could have been re-recorded, sung in same way, and would not have been protectedRiley’s claim: problematic: should we protect communtiy IP rts simply b/c the community doesn’t like it when the songs/info are taken out of context? What is the normative basis of the protection? Utilitarian? Natural rights? Attachment of the community to the songs?Public domain arguments apply as much to traditional knowledge as to industrial and technical knowledge. Riley seems to be trying to claim expansive control over all use: but even our own moral rights are circumscribed.Our belief: Knowledge should be open to be used. Our culture develops by incorporating public domain elements and elements from other cultures. © would have solved the problem in this case. But not all cases.Example of Ontario company mass-producing dream-catchers: Cultural appropriation. But is it misappropriation? Is the very act of taking s/t from another culture wrong? Western (and industrialised) cultures do it to each other all the time. Are procedural problems: have been patents granted on actual traditional knowledge (that has not been isolated in artificial setting): patent examiners did not know it was already known and was therefor not new. To address this problem: in India, they are creating a data bank of traditional knowledge for reference; problem here, though, is that the knowledge still can’t be protected for the use of the traditional populations, b/c everyone would have access to it. Groups are forced to share, and some don’t want to. Must reflect on the consequences of labelling everything as IPWhen examining whether IP rt should be granted: 1) Start from background position of value of public domain: general consensus that availability of info to all is better b/c it allows for the development of knowledge2) deviation from this rule: need normative justification: labour? Natural rts? One theoretical justification cannot explain all rts: need mixture, and depends on nature of object

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3) if there is a justification: what entitlement should go with it? should there be a veto over all use? Some uses? Control over revenue stream? Determination should depend on normative justificationMust also look at how the good is used and how it ought to be used (in accordance with the justification for taking it out of the public domain)4) How should the entitlement be protected?

Property rt (absolute veto)?Liability entitlement to damages?Compulsory licensing?Licensing pools (music model)Government grants (research grants, tax credits, etc…)

5) what are the limits on the entitlements? (exceptions to exceptions) And what are the remedies ?e.g., in cases of catastrophic illnesses: AIDS drugs must be made available to all suffererswhat rules?6) Who makes the decisions?

So far, they have largely been made by the cts. In the EU, decisions have been leg’ve.Should they be domestic? International?

No regime is static: changes must be contemplated, but they must be looked at within a coherent policy framework.

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Documents

Introduction - LSA - AEDlsa.mcgill.ca/pubdocs/files/IntellectualandIndustrial... · Web viewWord ‘artistic’ identifies phrase “artistic work” and is used to qualify artistic