2021 IP Year in Review

Text on sand with wave washing in — Photo by Engin Akyurt (Unsplash)

Prof. Pina D’Agostino is the Founder and Director of IP Osgoode, the IP Intensive Program, and the IP Innovation Clinic, the Founder and Editor-in-Chief of the IPilogue, the Deputy Editor of the Intellectual Property Journal, and an Associate Professor at Osgoode Hall Law School. This article features contributions from Ryan Wong (IP Osgoode & IP Innovation Clinic Alumnus), Sabrina Macklai (IPilogue Senior Editor), Tianchu Gao (IPilogue Writer), and Ashley Moniz (IPilogue Managing Editor).

2021 was an exciting year for the IPilogue. Our hard-working students and community members published more than twice as many articles than in 2020 and the most articles in a calendar year since 2011. This sharp increase helped us stay up to date with some of the biggest topics shaking up intellectual property: from IP Rights in COVID-19 vaccines, to TikTok reshaping how we see copyright; and from growing investments in NFTs and cryptocurrencies, to IP registrars around the world grappling with whether to acknowledge AI as an inventor or artist. This article summarizes the top developments reported on our blog and in patents, trademarks, and copyright law in 2021. For a review of Privacy legislation in Canada, check out Emily Prieur’s article published this week.

Introducing the College of Patent Agents & Trademark Agents

On June 28, 2021, the College of Patent Agents and Trademark Agents Act came into force. The Act established the College of Patent Agents and Trademark Agents (‘College’), an independent public interest regulator of patent and trademark agents in Canada. The purpose of the College is “to enhance the public’s ability to secure the rights provided under the Patent Act and the Trademarks Act.” The College’s responsibilities include maintaining professional competencies and ethics, issuing licences, collecting fees, and administering certification exams. This development marks a key milestone for the profession and for Canada’s Intellectual Property Strategy. Though still in its infancy, the College has been criticized for requiring agents to reside in Canada and its proposed mandatory liability insurance coverage, which may impose an additional fee on lawyer agents. It remains to be seen how influential the College is on the profession as it is expected to be fully operational within the next two years.

Patents

Overbreadth as an Independent Ground of Invalidity

On July 28, 2021, the Federal Court of Appeal confirmed overbreadth as a standalone attack on patent validity: Seedlings Life Science Ventures, LLC v Pfizer Canada ULC. In this case, the appellants argued that there is no statutory basis for overbreadth as a ground for invalidity. The Federal Court of Appeal disagreed and found that overbreadth can be supported by a combination of sections 27(3) and 27(4) of the Patent Act. Case law has often overlapped overbreadth with other grounds of invalidity such as obviousness, anticipation, and inutility.

First Time Interpreting Patent Agent Privilege

Similar to solicitor-client privilege, patent agent privilege was introduced by section 16.1 of the Patent Act on June 24, 2016. The first case on patent agent privilege was decided this year: Janssen Inc. et. al. v Sandoz Canada Inc. In this decision, the Federal Court provided some helpful commentary and analysis on the application and limitations of patent agent privilege.

Patent Prosecution History Now Admissible as Evidence

In 2018, section 53.1 of the Patent Act was added to make patent prosecution history admissible as evidence in patent proceedings. This was a significant development as the Supreme Court of Canada had expressly rejected the idea and stated that admitting patent prosecution history “would undermine the public notice function of the claims, and increase uncertainty as well as fuelling the already overheated engines of patent litigation” (Free World Trust v Électro Santé Inc., 2000 SCC 66 at para. 66). Three subsequent Federal Court of Appeal decisions developed this provision further: CanMar Foods Ltd v TA Foods Ltd.; Western Oilfield Equipment Rentals Ltd. v M-I LLC; and Bauer Hockey Ltd. v Sport Maska Inc. (CCM Hockey).

Continued Debates over AI as an Inventor

Around the world, patent registrars grappled with patent applications that credit artificial intelligence software as the inventor. Dr. Stephen Thaler’s “DABUS” (Device for Autonomous Bootstrapping of Unified Sentience) applied for patents around the world for its interlocking food containers. DABUS was granted patents in Australia and South Africa, with the Federal Court of Australia citing that while only humans can be owners, the definition of “inventor” is more flexible. In line with the European Court and the United Kingdom, the U.S. District Court disagreed, stating that absent express intention from Congress, the term “individual” in their statutory definition of “inventor” can only be read to include humans. The Supreme Court of Canada last considered the definition of “inventor” in 2002, but has yet to consider whether it would include non-human entities.

Trademark Law

Parody in Trademarks is No Joke

In Subway IP LLC v Budway, Cannabis & Wellness Store, the Federal Court reaffirmed that parody is not a defence against trademark violation. Unlike the 2020 decision Toys “R” Us (Canada) Ltd v Herbs “R” Us Wellness Society (Herbs “R” Us), where the Federal Court failed to find the marks confusing, Justice McHaffie held there was a likelihood of confusion and passing off. This was based partly on the similarity of the trademarks and the overlap of the goods (both offering baked goods). However, even if the nature of the parties’ trades differ, trademark owners may still find recourse against spoofed versions of their marks through claiming depreciation of goodwill under section 22 of the Trademarks Act. Here, the Court found goodwill in Subway’s trademarks, which was damaged by the nature of Budway’s products, as contrary to Subway’s “healthy and active” lifestyle promotion. With damages amounting to $40,000, it is clear the courts are unamused by parody in trademarks.

The Road Less Travelled Cannot be Trademarked

Like most countries, Canada bars the registration of “clearly descriptive” trademarks to prevent applicants from monopolizing words that merely describe the goods or services at hand. For this reason, marks consisting of geographic names are typically unregistrable. In Hidden Bench Vineyards & Winery Inc v Locust Lane Estate Winery Corp, the Federal Court clarified when such marks might be protected. Hidden Bench and Locust Lane are two wineries operating on the same little road, “Locust Lane”. Although the Federal Court agreed that Hidden Bench met the threshold for a valid common law trademark over “Locust Lane”, they ultimately held that the mark, as clearly describing the goods and services’ place of origin, lacked both inherent and acquired distinctiveness. Therefore, Hidden Bench could not establish the necessary goodwill for a passing off claim. Only descriptive marks that have acquired a “secondary meaning” through use may warrant protection.

CIPO Addresses the Application Backlog

While filing trademarks is important for brand protection, the examination stage can take upwards of two years to complete. In May, the Canadian Intellectual Property Office (CIPO) announced new measures to address the application backlog. Trademark owners may now file requests to expedite their examination where the registration of their mark is necessary for special circumstances such as if a Canadian court action involving the mark is expected or underway or if the goods or services are aimed at preventing, diagnosing, treating, or curing COVID-19. If accepted, the examination will take place within two weeks. The examination is also automatically expedited by approximately 6-10 months when the goods and services in the application are listed in CIPO’s Goods and Services Manual. Though it is too early to assess the effect of these changes on mitigating the “Madrid Effect”, the backlog of CIPO’s unexamined trademark applications appears to have stabilized as of December 13, 2021.

Push to Register Non-French Trademarks for Use in Quebec

Among the controversies associated with Quebec’s proposed Bill 96, An Act respecting French, the official and common language of Quebec, the bill stipulates new requirements for trademark owners operating in Quebec. Currently, under Quebec’s French-language laws, both registered and unregistered (i.e., common law) trademarks recognized under the Trademarks Act may appear on public signs, posters, and commercial advertising in Quebec, in languages exclusively other than French. If enacted, Bill 96 would permit only registered non-French trademarks to appear on public signage, provided there is no corresponding registered French version of the mark. The Coalition Avenir Quebec government tabled Bill 96 on May 13, 2021, and Quebec’s National Assembly last examined it on December 10. Some iteration of the bill will likely become law by the end of this year. But even if it fails to pass, businesses relying on common law trademarks would be wise to try to register them, given the many benefits that registration provides.

Copyright Law

In 2021, the Federal Court and Federal Court of Appeal heard 57 copyright infringement proceedings, approximately 18% of all IP-related litigations at these levels.

Developments in Fair Dealing

The Copyright Act’s section 29 fair dealing provision, which allows for certain uses of copyright-protected materials, remained a central issue. Stross v Trend Hunter affirmed that fair dealing for the purpose of news reporting (section 29.2 of the Act) must provide attribution, mentioning both the source and the name of the author. An indirect reference to the author accessible through “minimum research” is insufficient. As such, the Federal Court of Appeal rejected Trend Hunter’s argument that hyperlinking to the source article where Stross was credited was sufficient to meet the second requirement. The Court also declined to find fair dealing under s. 29 more broadly, considering that Trend Hunter’s dealing was commercial in nature, reproduced Stross’ work in its entirety, and that alternatives were available.

Fair dealing was once again at issue in Canadian Broadcasting Corporation v Conservative Party of Canada, where the Federal Court held that the Conservative Party’s use of the CBC’s news footage of Liberal Party Leader and Prime Minister Justin Trudeau during their 2019 election campaign did not infringe CBC’s copyright. The court undertook a large and liberal interpretation of fair dealing, finding that the Conservative Party’s use of CBC footage was for the purpose of criticism under s. 29.1. Interestingly, the court emphasized the Conservative Party’s “legitimate political purpose” in finding that the dealing was fair.

York University achieved a major win in the copyright tariff dispute with the Canadian Copyright Licensing Agency (“Access Copyright”) in York University v Access Copyright. In a unanimous decision, the Supreme Court ruled that the interim tariff approved by the Copyright Board is not mandatory. Users can choose whether to accept licences or pursue alternative methods to lawfully copy works. Notably, this marked Justice Rosalie Abella’s final decision before her retirement from the Supreme Court of Canada. Throughout her tenure, Justice Abella greatly influenced Canadian copyright law and her judgement here provided helpful obiter regarding fair dealing as integral to users’ rights.

Even Fake Facts are Not Copyrightable

Winkler v Hendley involves the alleged copyright infringement of the famous true-crime story The Black Donnellys. The book had always been presented and accepted as “the true story of Canada’s most barbaric feud.” The Federal Court ruled that “an author who publishes what is said to be a nonfiction historical account cannot later claim the account is actually fictional to avoid the principle that there is no copyright in facts.” Given today’s popularity of the phrase “based on a true story”, this ruling is a timely reminder that there is no copyright in facts, even if they are later found to be untrue.

Copyright in Evolving Content Transmission

In Bell Canada v L3D Distributing Inc, the Federal Court found the defendant liable for copyright infringement in its provision of pre-loaded set-top boxes and internet protocol television (IPTV) services and awarded the plaintiff nearly $30 million in damages. These services made copyrighted works owned by the plaintiff available to the public without the plaintiff’s permission. This decision marks the first time “the Court applied the inducement test in the context of copyright infringement.” The court dealt with a similar issue in Warner Bros. Entertainment Inc. v White (Beast IPTV). As IPTV is growing increasingly popular across the globe, its regulation poses a challenge in Canada.

Availability of Reverse Class Actions for Copyright Infringement Claims

The first of its kind in Canada, the Federal Court of Appeal in Salna v Voltage Pictures, LLC affirmed that reverse class actions may be pursued in connection with copyright infringement claims. Though the matter was sent back to the Federal Court for further consideration, this judgement may encourage and enable mass copyright enforcement in the future, especially in our digital age where copyright infringement is more commonplace.

As part of the Canada-United States-Mexico Agreement (CUSMA), which came into force on July 1, 2020, Canada has until the end of 2022 to implement numerous changes to their domestic copyright laws; most notably, extending the general term of copyright protection from 50 to 70 years after the life of the author. In light of the upcoming legislative amendments, the Government of Canada hosted three public copyright consultations in 2021:

With the consultations now closed, it will be interesting to see how Canadian copyright laws will change in 2022 to accord not only with international obligations but our ever evolving digital world and public attitudes surrounding copyright laws.

2021, Access Copyright, admissibility, AI, Application backlog, artificial intelligence, Ashley Moniz, CIPO, clearly descriptive, College of Patent Agents and Trademark Agents, content transmission, copyright, Copyright Act, copyright infringement claims, copyrightability, COVID-19, cryptocurrency, CUSMA, DABUS, descriptiveness, evidence, fair dealing, French, Giuseppina D'Agostino, Inventor, IP year in review, NFTs, overbreadth, parody, Patent Act, patent agent privilege, patents, Pina D'Agostino, prosecution history, public consultations, Quebec, registrability, reverse class action, Ryan Wong, Sabrina Macklai, Stephen Thaler, Tianchu Gao, Tiktok, trademarks, Vaccine, Year in Review, York University

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