IP Year in Review 2014 – The Perpetual Motion of IP Law

Giuseppina D’Agostino is the Founder and Director of IP Osgoode, the IP Intensive Program, and the IP Osgoode 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.

 

2014 was another exciting year in intellectual property (IP) law. The dominant theme was one of reaction, where legislators and courts were either responding to new industry challenges posed by technology or updating existing laws to reflect already established practices.

 

Canada in particular saw exciting developments across all three major areas of IP, with a significant legislative update to the Trademarks Act, attempts at judicial balancing of copyright interests between users and creators, and high profile patent litigation over pharmaceuticals.

Trademarks

Trademark law saw various legislative changes and newsworthy headlines shaking up an area of IP that is typically known for its stability.

 

The most significant developments in Canadian trademark law this past year were brought in by the 2014 federal budget. Bill C-31, an act to implement certain measures of the budget, received royal assent in July and altered the Trademarks Act in ways big and small. One of the changes involved updating the Act’s terminology, with “trademark” no longer hyphenated and “wares” to be referred to as “goods”. The word “trademark” also got a wider definition, encompassing a sign or combination of signs, including: holograms, sound, scent, and 3-D shapes. The trademark registration process was also simplified, and the term of registration was reduced from fifteen to ten years.

 

Some of the budget’s additions to the Act were far more significant in their impact on the practice of trademark law in Canada. One of the bigger changes was the adoption of the Nice Classification system. Used in numerous countries, the system aims to fit goods or services into specific classes such as “clothing, footwear, headgear” (Class 25). While the system will not have a practical use in Canada, it will make the country’s trademark system more internationally consistent.

 

The most controversial development, was the move away from a use-based system of trademark registration. As a result of Bill C-31, there is no longer a requirement to demonstrate the “use” of a trademark in Canada prior to obtaining registration. The result is a significant questioning of a foundational doctrine in Canadian trademark law. For example, the element of use in the “confusion test” will likely need to be re-evaluated. Another concern is that the new law will encourage the registering and subsequent “sitting” on marks without use, a practice that might attract litigation. We will, however, have to give it time for the consequences of Bill C-31 to be felt. Assuaging some fears is the fact trademarks can still be expunged if they have not been used for three years, meaning that a trademark registrant must continue using the mark or risk losing it.

 

A second legislative change affecting trademark law in Canada this year occurred towards the end of 2014. On December 9, Bill C-8 received royal assent , the Combating Counterfeit Productions Act. This law was created with the intention of providing rights holders and the government, with new tools and remedies in the fight against the trafficking of counterfeit goods. Some of these new mechanisms for rights enforcement include the creation of civil and criminal offences for possessing, distributing, creating, or trafficking counterfeit items for commercial purposes, and enhanced powers for customs officials.

 

The major trademark news stories this past year took place south of our border. In early 2014 video game and app developer King was granted a U.S. trademark for the common word “candy” in association with its extremely popular app Candy Crush Saga. Consequently, concerns were raised about the impact the registration would have on further attempts to extend trademark protections over individual, ordinary words. King experienced a significant wave of public backlash in regards to the registration, and, in a strange turn of events, voluntarily abandoned its claim to the trademark. Despite the value the registration would have had for King legally, the “Saga” demonstrated how important other elements, like public relations, are to IP law and business decisions.

 

Another headline-grabber was the brief but very public life of “Dumb Starbucks” in California. Shut down by the Los Angeles Health Department, the establishment proved to be a stunt by comedian Nathan Fielder. Although no litigation commenced, the opening of “Dumb Starbucks” under the justification of “parody art” sparked many conversations in the legal community (probably over a cup of coffee too).

 

Finally, a very public discussion about racism and trademarks was incited by the June decision of Blackhorse v Pro Football, Inc. The US Patent and Trademark Office in the case made a very clear statement against culturally insensitive trademarks with the cancellation of six registrations for the name “Washington Redskins” for being “disparaging to Native Americans.” Although the actual legal and financial implications for the Washington football team were not necessarily punishing, the case launched an important discussion about the importance of moral victories and the role of public opinion and negative publicity to the value of a brand or trademark.

 

The important trademark cases of 2014 demonstrated the very public nature of trademark law and its inability to be isolated within the legal sphere.

 

Copyright

As our world becomes more dependent on technology, new copyright law issues reveal themselves in ways that can be equal parts fascinating and frustrating. 2014 was no exception, as growth and innovation in Canadian creative industries created unique disputes between the various parties in the copyright system.

 

Copyright trolling was a popular topic of debate in early 2014, with the court in Voltage Pictures LLC v John Doe holding that ISPs may be ordered to provide subscriber information to assist in copyright infringement proceedings. Voltage has been described as transforming Canada into potentially hostile territory for copyright trolls, as liability caps and numerous safeguards may have the effect of dissuading litigation. Consequently, it will be interesting to see how this decision intersects with the newly enacted “Notice and Notice” regime that requires ISPs and other internet intermediaries to send notices of alleged copyright infringement to their customers.

 

The Copyright Board rendered two tariff decisions that will have wide-ranging impact on the future right to collect money for downloaded works and webcasts. In May, the Copyright Board certified Re: Sound Tariff 8, a decision which arguably set low royalty rates for webcasting services in Canada. In July, the Copyright Board certified two more tariffs from SOCAN: Tariff 22.D.1 – Audiovisual webcasts; and Tariff 22.D.2 – Audiovisual user-generated content for the years 2007 to 2013. These tariffs will allow royalties to be collected for the performance of musical works embedded in other audiovisual works distributed via the internet. Both certifications were met with significant objection.

 

In a similar vein, the US Supreme Court, in the landmark American Broadcasting Companies Inc v Aereo Inc, decision, ruled that retransmission constituted infringement of the public performance right. By capturing broadcast signals on miniature antennas and delivering them to subscribers, Aereo was attempting to architect its television retransmission processes in order to elude copyright royalties or licences fees. Objections to the decision describe the ruling as having limited scope and numerous shortcomings with regard to copyright’s relationship with technology and innovation.

 

One of the most talked-about topics in copyright law this year was the principle of technological neutrality. One case that touched on this issue was Canadian Broadcasting Corporation v Sodrac 2003 Inc, which concerned the requirement for broadcasters to pay to use incidental copies of musical works. In that case, the CBC argued that it should not have to pay for copies of a work that it creates out of technological necessity and that to rule otherwise would impede innovation and go against the principles of technological neutrality. The Federal Court of Appeal disagreed with the broadcaster, deciding that royalties would attach to the additional copies. The Supreme Court’s willingness to hear an appeal on this issue indicates that the CBC’s argument may have legs. In March, a Quebec Court ruled in Labrecque (O Sauna) c Trudel (Centre Bellaza, s.e.n.c) that use of a Google image search to retrieve a photo can constitute copyright infringement. This case is one out of many over the past few years which aims to ensure that digital images are just as protected as physical ones. In Leuthold v Canadian Broadcasting Corporation, the Federal Court of Appeal ruled on the alleged infringement by CBC of five images taken during the September 11 terrorist attack on the World Trade Center by the plaintiff. The issue involved determining how many acts of infringement occurred, and how to appropriately measure damages. The court noted that a “reading of paragraph 2.4(1)(c) of the Act moves in the direction of technological neutrality in that the number of infringing acts does not vary according to the number of intermediaries in the transmission chain. This is consistent with the goal of technological neutrality which the Supreme Court articulated in Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada.” These cases (and any subsequent appeals) showcase the struggle of the law to keep up with technological advancements, and interpret questions of infringement.

 

Patents

In the past year the unsettled area of patent subject matter eligibility moved into the spotlight both in Canada and other jurisdictions. In the US, 2014 saw the United States Patent and Trademark Office (“USPTO”) issue three sets of proposed guidelines for determining patentable subject matter eligibility of claims involving laws of nature, natural phenomena, and natural products. While the Guidelines were supposed to be a response to the US Supreme Court’s Mayo Collaborative Services v Prometheus Laboratories [2012] and Association for Molecular Pathology v Myriad Genetics [2013] decisions, the first draft released in March was met with much criticism for purported misinterpretation of these two landmark decisions.

 

In June 2014, the US Supreme Court was presented with another opportunity to address subject matter eligibility in Alice Corp v CLS Bank International. In Alice, the Court held that using a computer to implement abstract ideas “fails to transform” these ideas into a “patent-eligible invention”. The Court extended the two-part approach enumerated in Mayo to patentability of an abstract idea. As such, when patentable subject matter is at issue one must: (1) determine whether the claim is directed to a patent-ineligible concept, and if so, then (2) decide whether there is any element in the claim that is sufficient to transform the nature of the claim into a patent-eligible application. The most recent iteration of the Guidelines, released on December 16, reflects the approach adopted in Alice and intends to provide consistency across technologies for determination of patent subject matter eligibility.

 

Just a few days after the December guidelines release, the US Court of Appeals for the Federal Circuit rendered another decision in the breast cancer gene patent saga. Following the Supreme Court’s 2013 Myriad decision which invalidated Myriad’s human BRCA gene patents, Ambry introduced a competing breast cancer diagnostic test. Myriad brought a motion for a preliminary injunction against Ambry on the basis of patent claims that were not captured by the 2013 decision. The Court of Appeals for the Federal Circuit upheld the District Court’s decision to deny the injunction. Furthermore, it held that the compositions of matter claims were not patent-eligible and claims pertaining to methods of screening were also not patent-eligible as not passing the Alice test. Litigation concerning the BRCA gene patents was also prevalent in Australia. Most recently, the Federal Court of Australia held that isolated nucleic acids are different from their natural counterparts, and thus patentable. The issue of patentable subject matter and gene patenting was also present in the Canadian courts in 2014. In November, Children’s Hospital of Eastern Ontario (“CHEO”) commenced a patent proceeding against the patent holders for genes involved in Long QT syndrome, a cardiac disorder. In their statement of claim, CHEO sought a declaration of non-infringement and invalidity of patents which claim isolated nucleic acids and testing methods of diagnosing and assessing a risk of Long QT. Should this case go to trial, the decision could have strong implications not only in subject matter eligibility, but the biotech industry as a whole.

 

The past year also saw further developments in the contentious arena of the promise of the patent doctrine in Canada. Eli Lilly continued with its $500 million NAFTA challenge against the Government of Canada and filed its claimant’s memorial before an arbitration panel. In AstraZeneca Canada Inc v Apotex Inc, the Federal Court held that sound prediction of utility in fulfilling the promise does not require heightened disclosure of underlying facts and sound line of reasoning for inventions, unless it is in the context of a new use for a known compound. Also, the Federal Court of Appeal heard Mylan Pharmaceuticals’ and Apotex Inc.’s consolidated appeal with respect to Pfizer’s drug Celebrex. In its decision, the Court outlined that the promise doctrine holds the inventor to an elevated standard where a clear and unambiguous promise has been made. However, a single promise may not apply to each claim. Regrettably for many observers, the case that was set to bring clarity to the interpretation of the promise doctrine did not happen in 2014. The much anticipated appeal of Sanofi-Aventis v Apotex Inc to the Supreme Court of Canada with respect to Sanofi’s blood thinner Plavix, was discontinued on the eve of the trial.

 

Canada also sported a rare patent infringement case involving a biologic drug (pharmaceutical product derived from an organism) in 2014. At the beginning of the year, the Federal Court released its AbbVie Co v Janssen Inc decision, holding that Janssen’s antibody drug Stelara infringed AbbVie’s patent. AbbVie was granted an injunction but later in the year the Federal Court of Appeal set aside both the infringement decision and the injunction. The matter was sent back to trial before another judge. If the case is to continue, its potential precedential value should not be underestimated since pharmaceutical innovation has been shifting towards biological agents in recent years.

 

On the legislative front, the Government of Canada released the finalized text of the Comprehensive Economic and Trade Agreement between Canada and Europe (“CETA”). The Canadian government also passed Bill C-43, an omnibus budget bill, amending the Patent Act to be consistent with the Patent Law Treaty.

 

IP Osgoode in 2014

2014 was another busy year for IP Osgoode on all fronts.

 

We featured a star cast of guest speakers for the IP Osgoode Speaks Series. First up was Prof. Graeme Dinwoodie, who discussed the territoriality of trademarks in a post-national era. This event was followed by Dr. Emily Hudson who spoke on her empirical and qualitative research of user experiences with copyright law and user-rights exceptions. We also heard from Prof. Jane Ginsburg, who analyzed the US Supreme Court’s Aereo decision and the US’s international obligation to implement the ‘making available right’. The series ended in a most privileged fashion with the Honourable Justice Marshall Rothstein of the Supreme Court of Canada who spoke on the impacts of recent IP related cases. We recorded all of our events and if you missed any of them be sure to catch them on the site (Prof. Graeme Dinwoodie, Dr. Emily Hudson, Prof. Jane Ginsburg).

 

On October 23 to 24, 2014 IP Osgoode, along with its partners and collaborators, Lassonde School of Engineering, Stanford University’s d.school, and the Canadian Intellectual Property Office, hosted the first ever legal hackathon of its kind at Osgoode Hall Law School. The focus of the hackathon was to deconstruct the unnecessarily complex status quo patent system and discuss ways to make the patenting process more navigable and user friendly. At the end of the two day IP hackathon, the four teams of hackers developed four sets of different user-friendly prototypes with high potential for real life applications. The IP Hackathon was also the result of my research funded by the Social Sciences and Humanities Research Council of Canada (SSHRC).

 

Osgoode’s flagship IP Intensive program offered two new placements for the fall 2014 term, AstraZeneca Canada Inc. and Cineplex Entertainment. We look forward to the fall of 2015, when we will welcome Adjunct Professors Bob Tarantino and Dan Ciraco as Acting Directors for the IP Intensive, and a new group of enthusiastic students.

 

Now in its fourth year of operation, IP Osgoode’s Innovation Clinic continues to expand its pro bono services and clientele base through more collaborations and partnerships within York University, namely, the Lassonde School of Engineering’s BEST Program and Innovation York.

 

2015 already promises to be another exciting and busy year for IP Osgoode. Stay tuned for an announcement of another IP hackathon event as we plan to build upon the successes of our first IP Hackathon and host another one in the very near future to tackle other aspects of IP commercialization. Preliminary plans for the next line up of stellar guest speakers for the next IP Osgoode Speaks Series are already underway. We will continue to provide up to date coverage of IP news and events, as well as an announcement of all our events activities on the IPilogue so please check out our website iposgoode.ca, subscribe to our weekly enewsletter, the IPIGRAM, follow us on Twitter (@IPilogue), and connect with us on Facebook and LinkedIn.

 

Of course, should you have any ideas on any projects you would like us to tackle, posts you would like us to blog on or wish to work with any of us at IP Osgoode please do get in touch as we would be delighted to hear from you.

 

Top 10 most read IPilogue articles of 2014

1. 2013 IP Year in Review: To Go Where No One Has Gone Before

2. Music and Copyright: How the Supreme Court Struck the Right Note in Robinson (Even if its Timing was a Little Off)!

3. The Case that the ValiantChaos Hackers Will Never Get to Make

4. No Beer and No TV Makes Judge Levy $10M fine for Simpsons, Family Guy Streaming

5. Garcia v Google Inc.: Copyright Ownership, ISP Liability and the Future of Freedom of Expression

6. Fundamental Change to Trade-mark Law Opposed by Business and Trade-mark Professionals

7. Has the Supreme Court Delivered a Knock-Out Blow to the Entertainment Industry?

8. UGC Exception: For the Love of Amateur and the Profit of Everyone Else

9. Apotex Successfully Invalidates Patent on Nexium

10. China’s Bitter Medicine for Gilead: SIPO Cancels Viread Patent

With contributions from Jaimie Franks on Trademarks, Jordan Fine on Copyright, and Anastassia Trifonova on Patents.