On 3 May 2021, the Canadian Intellectual Property Office (CIPO) published two new Practice Notices aiming to address its unexamined application backlog. There is currently a significant examination backlog consisting of over 161,000 applications having filing dates stretching back to April of 2018. CIPO is receiving new applications at the rate of about 6,000 applications per month, but is only issuing about 4,000 examination reports per month.[1] It is critical to address the backlog to avert a total collapse of the Canadian trademark system. CIPO’s new Practice Notices (1) Requests for expedited examination and (2) Measures to improve timeliness in examination are welcome, some might argue overdue, initiatives to promote timely grant of quality trademark rights.

Request for Expedited Examination

Effective immediately, CIPO will begin accepting requests for expedited examination of trademark application. This is in addition to the expedited examination available to trademark applications pertaining to COVID-19-related medical goods or services, which became effective on 14 December 2020.

Requests for expedited examination may be accepted if any one of the following four requirements is met:

1. A court action is expected or underway in Canada with respect to the applicant’s trademark in association with the goods or services listed in the application;
2. The applicant is in the process of combating counterfeit products at the Canadian border with respect to the applicant’s trademark in association with the goods or services listed in the application;
3. The applicant requires registration of its trademark in order to protect its intellectual property rights from being severely disadvantaged on online marketplaces; or
4. The applicant requires registration of its trademark in order to preserve its claim to priority within a defined deadline and following a request by a foreign intellectual property office.

Requirements 1, 2 and 4 seem relatively straightforward, although in certain fact-specific situations, it may be difficult to assess what specific circumstances and reasons would be sufficient to show that: (i) a court action is “expected” or (ii) the applicant is “in the process” of combating counterfeit products.

As to requirement 3, the expression “severely disadvantaged on online marketplaces” is novel, so it remains to be seen what circumstances CIPO will accept as sufficient to grant such requests.  Possibly, an applicant’s inability to enroll in the Amazon Brand Registry without a Canadian trademark registration might be accepted as being “severely disadvantaged on online marketplaces”.

It might be helpful for the CIPO to provide further guidance and/or examples to illustrate how the CIPO would evaluate requests for expedited examination. The hope is that CIPO will set the bar fairly low, since expedited examination requests are made ex parte and since CIPO must significantly reduce the backlog if it is to get back to business as usual—the pandemic notwithstanding.

It should be noted that the request must be supported by evidence in the form of an affidavit or statutory declaration by a person having knowledge of the facts, setting out the specific circumstances and reasons for the request. There is no government fee associated with a request for expedited examination.

Measures to Improve Timeliness in Examination

Effective immediately, the CIPO will:

• not provide examples of acceptable goods or services in the examiner’s first report, unless the amendments to the statement of goods or services can be made by way of a telephone amendment;
• examine applications with statements of goods or services selected from the pre-approved list more quickly than those that did not use the pre-approved list option; and
• reduce the number of reports issued prior to refusal.

These measures will likely help to reduce CIPO’s unexamined application backlog. However, the measure to reduce the number of reports prior to refusal may be draconian. Refusals have been rare in Canadian trademark practice.  The examination process can involve many back-and-forth exchanges between applicants and examiners until an acceptable compromise is reached. Now, examiners will only be required to address a particular submission or argument once. The practice notice recommends that “the applicant should make every effort to ensure that it provides a complete argument so that any submissions to the Registrar following an examiner’s first report are not provided in a piecemeal manner.” That is good advice because in the event of a refusal the applicant’s only recourse will be an appeal to the Federal Court of Canada—an expensive proposition.  Applicants must therefore work with qualified trademark counsel to properly address any examiners’ objections.

The two new Practice Notices suggest that CIPO appreciates the dire state of its unexamined application backlog and aims to improve timeliness in issuing trademark rights. These Practice Notices are likely to be welcomed by brand owners and trademark counsel as the Practice Notices may make it faster for brand owners to obtain registered trademark protection, especially where such protection is needed for certain important commercial activities.

 **This article was originally published by The Lawyer’s Daily a division of LexisNexis Canada Inc.

[1] The backlog problem may have been exacerbated by the accession of Canada to the Madrid Protocol in 2019. There are now two separate ways in which a trademark can be registered in Canada: (1) via a national filing mechanism; or (2) via an international filing mechanism, i.e. the Madrid Protocol System. The Madrid Protocol System imposes certain deadlines on CIPO, including that CIPO must issue a provisional refusal (a.k.a. an examiner’s report) before the end of 18 months after CIPO is notified of the designation. To meet the new deadlines, CIPO has had to prioritize the examination of Madrid Protocol applications over non-Madrid Protocol applications. For a data-driven analysis of the backlog see Blake Wiggs’ post CIPO’s examination backlog—the Madrid effect on his Canadian Trademark Intelligence blog.

The U.S. Supreme Court released a much-anticipated ruling in Google LLC v. Oracle America, Inc., 593 U.S. ____ (2021) on 5 April 2021, ending the decade-long copyright battle between Google and Oracle, two of Silicon Valley’s technology powerhouses. This ruling represents the first time that the Court tackled the fair use doctrine in the context of modern computer software. By a 6-2 vote, the Court sided with Google and held that Google’s copying of Oracle’s code was a permissible “fair use” under U.S. law.

Justice Breyer wrote the majority opinion, joined by Chief Justice Roberts and Justices Sotomayor, Kagan, Gorsuch and Kavanaugh. Justice Thomas wrote the dissenting opinion, joined by Justice Alito. Justice Barrett, who was not yet confirmed when the case was heard in October 2020, did not participate.

The Decade-Long Copyright Battle

This decade-long copyright battle is complicated to say the least. It mixes tough legal concepts with difficult technological details. Some of the relevant difficult details include:

• an application programming interface (API) – “a tool that allows programmers to use prewritten code to build certain functions into their own programs, rather than write their own code to perform those functions from scratch”;
• implementing code that “tells the computer how to execute the particular task [that] you have asked it to perform”;
• a method call – “a command that corresponds to the specific task [written in implementing code] and calls it up”; and
• declaring code  – a link between a method call and its corresponding implementing code – “without that declaring code, the method calls entered by the programmer would not call up the implementing code”.

In 2005, Google began negotiations with Sun Microsystems, i.e. Oracle’s predecessor, about the possibility of incorporating Sun Microsystems’ Java platform, including the APIs, into Google’s Android operating system. The negotiations were unsuccessful and Google decided to build its own platform. Google wrote millions of lines of new code but also copied roughly 11,500 lines of Sun Microsystems’ declaring code and arranged that code in exactly the same manner as Sun Microsystems had done. The copying was motivated by Google’s desire to have millions of programmers, familiar with Java, be able to easily work with Google’s platform. In 2010, Oracle bought Sun Microsystems and sued Google for copyright infringement. Google countered that the copied code relates to methods of operations and functions and could not be protected by copyright.

Two key questions arise:

• whether the declaring code and organization of Oracle’s API are copyrightable; and
• if so, whether Google’s copying of Oracle’s API was a permissible “fair use”.

Copyright Subject-matter – a Question for Another Day

Instead of deciding fundamentally about copyrightable subject-matter, the majority assumed, “but purely for argument’s sake, that the entire Sun Java API falls within the definition of that which can be copyrighted.” The majority said that “Given the rapidly changing technological, economic, and business-related circumstances, we believe we should not answer more than is necessary to resolve the parties’ dispute.”

The dissenting opinion criticized the majority for skipping over the question of copyrightable subject-matter. “The Court wrongly sidesteps the principal question that we were asked to answer: Is declaring code protected by copyright? I would hold that it is.” The dissenting opinion added at the end that “The majority purports to save for another day the question whether declaring code is copyrightable. The only apparent reason for doing so is because the majority cannot square its fundamentally flawed fair-use analysis with a finding that declaring code is copyrightable.”

This aspect of the ruling may come as a disappointment to copyright lawyers who were hoping for a more sweeping ruling on the extent to which software should be afforded copyright protection in the first place.

Fair Use – “the purpose and character of Google’s copying was transformative”

Similar to Canada’ fair dealing analysis, the U.S. fair use analysis involves the consideration of several factors. The four factors set forth in the fair use statute include: (i) the nature of the copyrighted work, (ii) the purpose and character of the use, (iii) the amount and substantiality of the portion used, and (iv) market effects.

When conducting the fair use analysis, the majority acknowledged that “The fact that computer programs are primarily functional makes it difficult to apply traditional copyright concepts in that technological world.” Applying the principles of the precedents and Congress’ codification of the fair use doctrine, the majority concluded that “where Google reimplemented a user interface, taking only what was needed to allow users to put their accrued talents to work in a new and transformative program, Google’s copying of [Oracle’s] Java API was a fair use of that material as a matter of law.”

The dissenting opinion suggested that “the majority wrongly conflates transformative use with derivative use” and “transforms the definition of ‘transformative’ [to mean] – at least for computer code – a use that will help others ‘create new products’”. The dissenting opinion cautioned that the new definition of “transformative” may “eviscerate Congress’ considered policy judgment.”

Potential Effect on Software Innovation

This ruling will likely have a significant effect on software innovation. Google views this ruling as a victory for the software industry as a whole. Its senior vice president for global affairs said in a  that “[the] Supreme Court decision in Google v. Oracle is a big win for innovation, interoperability & computing.” This is an exciting time for software innovation and we eagerly wait to see how this ruling may practically change how software innovation will be developed.

Implications in the Canadian Context

It is interesting to consider how this case might have been decided had it been brought in Canada instead of in the U.S. The fair dealing exception under the Canadian Copyright Act is applicable to a closed list of specific activities: research, private study, education, parody, satire, criticism or review, and news reporting. If an activity does not fall within this specific list, it cannot qualify as fair dealing. Here, Google’s activity in copying the declaring code was not for any of these specifically enumerated purposes but rather was for the purpose of making a competitive software product. As such, Google likely would not be able to rely on the fair dealing exception to avoid copyright infringement in Canada.

This means that in a Canadian context, the evaluation of whether or not the code copied by Google was copyrightable would likely be determinative of the outcome of the case.  In that regard, the Canadian courts would be likely to find the analysis of the dissenting opinion persuasive in analysing whether the copied code was copyrightable subject-matter. Similar to the U.S., the Canadian Copyright Act expressly includes “computer programs” within the scope of literary works protected by copyright. Additionally, the Canadian courts are careful to protect the skill and judgment of programmers in the development of the specific language used to develop their code, even though the code may carry out certain functional activities.  So this case might have reached an opposite outcome had the action been brought in Canada.

**This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca) a division of LexisNexis Canada Inc.