Last week, the Canadian Radio-television and Telecommunications Commission (CRTC) released its decision on differential pricing by Internet service providers (ISPs). The practice of differential pricing, commonly known as zero-rating, is where an ISP does not count the data used by certain Internet applications against a user’s data usage. Consumer advocates argue zero-rating violates net-neutrality by preferring certain applications and making competing applications more expensive for users. Zero-rating therefore allows ISPs to unfairly prefer certain applications, which stifles competition and alternatives to those preferred applications. ISPs argue that zero-rating encourages innovation, and lowers costs for consumers.

The CRTC found that Quebec based Videotron’s zero-rating of various music apps violated sub-section 27(2) of the Telecommunications Act.  That sub-section provides that “No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.”

In its finding, the Commission applied the framework for determining if an ISP’s practice violates the Act, in particular:

• the degree to which the treatment of data is agnostic (i.e. data is treated equally regardless of its source or nature);
• whether the offering is exclusive to certain customers or certain content providers;
• the impact on Internet openness and innovation; and
• whether there is financial compensation involved.

While not precluding every practice of zero-rating, the CRTC’s framework provides strong protections for net-neutrality in Canada. Read the full CRTC decision here

The ‘Fearless Girl’ statue popped up near Wall Street last month on the eve of International Women’s Day.  The girl, staring down a bull with her hands planted on her hips, is intended to draw attention to the role of women in the workplace.  However, the sculptor of the ‘Charging Bull’ statue alleges that the girl changes the creative dynamic of his work and thereby infringes his copyright.  The iconic bull has inhabited the financial district of New York City since 1989.

This case bears some facial similarities to the Canadian copyright case Snow v. The Eaton Centre Ltd. (1982), 70 C.P.R. (2d) 105 where the Ontario High Court of Justice affirmed an artist’s right to the integrity of their work.  The operator of the Eaton Centre in Toronto was found to have violated the artist’s moral rights by putting Christmas bows on the artist’s ‘Flightstop’ sculpture consisting of a flock of Canada geese in flight.

While the United States is typically viewed as providing weak protection for the integrity of an artist’s work, moral rights are protected in Canada under the Copyright Act, R.S.C., 1985, c. C-42 and include an author’s right to maintain the integrity of the work and the right to be cited as its author.  The difficult road ahead for the ‘Charging Bull’ artist is discussed here.

The Canadian Intellectual Property Office (the “CIPO”) has released an updated online Canadian Trademarks Database. In updating the online Canadian Trademarks Database, the CIPO has sought to enhance the user experience by optimizing the database’s accessibility and usability, while presenting a contemporary look and feel. The updated online Canadian Trademarks Database can be accessed here.

Vancouver Career College has applied for leave to appeal to the Supreme Court of Canada a decision of the British Columbia Court of Appeal on a case of passing off brought by Vancouver Community College. The case involved Vancouver Career College’s use of the domain name “VCCollege.ca” and Google advertising keywords “VCC” and “Vancouver Community College”. The British Columbia Court of Appeal’s decision, which overturned the trial court’s decision and found in favour of Vancouver Community College, is discussed here.

NAFTA’s arbitration tribunal has issued a decision in favour of the Government of Canada in response to a challenge against it by Eli Lilly and Company under the dispute settlement provisions of NAFTA Chapter 11. Eli Lilly had alleged that the interpretation of the term “useful” in Canada’s Patent Act by the Canadian courts in invalidating Eli Lilly’s Zyprexa and Strattera patents violated Canada’s obligations under NAFTA on the basis that such interpretation was arbitrary and discriminatory. The tribunal agreed with Canada’s position that Eli Lilly’s claims could not form the basis for a challenge under NAFTA Chapter 11 and in any event were without merit.

Read the NAFTA Arbitration Tribunal’s decision in full.

WIPO reports that China’s ZTE Corporation has overtaken Huawei Technologies as the largest filer of PCT applications in 2016.  US company Qualcomm Inc. takes the bronze as the third largest patent filer through the PCT system.  US companies are still the largest users of the PCT system, filing 24.3% of the 233,000 PCT applications filed in 2016, followed by companies from Japan (19.4%) and China (18.5%).  Based on relative rates of growth, WIPO estimates that China could overtake the US as the largest filer of PCT applications within two years.

PCT applications filed by Canadian companies fell a troubling 17.3% in 2016 compared to 2015, which WIPO attributes to declining patent application filings by former tech heavyweights Research in Motion/Blackberry and Nortel.

WIPO’s press release is available here.

In Nintendo of America Inc v Jeramie Douglas King and Go Cyber Shopping (2005) Ltd, 2017 FC 246, Campbell J. of the Federal Court awarded Nintendo $11.7 million in statutory damages and $1 million in punitive damages against Go Cyber Shopping (2005) Ltd. in respect of copyright infringement and the circumvention of technological protection measures (“TPMs”).  This decision is the first to consider ss. 41, 41.1, and 41.12 of the Copyright Act on the merits.

Sections 41 and 41.1 were added to the Copyright Act in 2012 to prohibit circumventing TPMs and trafficking in circumvention devices. TPMs are any effective technology, device or component that controls access to copyrighted works or restricts acts of copyright infringement. Section 41.12 offers an affirmative defence to the prohibited activities under s. 41.1, allowing a person who lawfully has permission to use a computer program to circumvent a TPM for the sole purpose of obtaining information that would allow that person to make the program and any other computer program interoperable.

Circumvention of Nintendo’s TPMs
To protect its copyrighted video games, Nintendo relied upon multiple TMPs on its DS, 3DS, and Wii consoles. These TPMs included the physical configuration of game cards, boot up security checks, encryption and scrambling technology, unique data format, and copy protection code. 

Since 2013, Go Cyber had advertised and offered for sale ten different models of game copiers. A game copier is inserted into the game card slot in the DS or 3DS console to enable users to play infringing copies of Nintendo’s copyrighted video games. These game copiers mimic Nintendo’s game cards to circumvent the TMPs employed on the DS or 3DS consoles.

Additionally, Go Cyber had offered for sale eleven different models of mod chips and mod chip installation services. Mod chips operate by modifying the disc drive of Nintendo’s Wii console or disabling certain security routines. They are usually installed as an after-market component and the installation may involve disassembling the console. Mod chips also allow users to play unauthorized copies of Wii video games.

Justice Campbell held that Go Cyber’s game copier and mod chips circumvented Nintendo’s TPMs and therefore Go Cyber had violated Nintendo’s rights to legal protection for its TPMs. Further, Campbell J. held that Go Cyber had trafficked in circumvention devices and provided services primarily for the purpose of circumventing TPMs by installing mod chips.

Go Cyber’s Interoperability Defence
Go Cyber raised the interoperability exception as a defence. Go Cyber argued that the sale of its devices and the mod chip installation services were for the purpose of making Nintendo’s game consoles “interoperable” with “homebrew” software. Homebrew software is designed for use on Nintendo consoles but is not  owned or licensed by Nintendo.

Justice Campbell found Go Cyber’s argument to be unfounded. He held that the primary purpose of Go Cyber’s devices was to enable users to play unauthorized copies of Nintendo video games. Further, Campbell J. noted that the only mention of “homebrew” on Go Cyber’s website was “no homebrew at the moment”, indicating that homebrew was not actually available.

Concluding Remarks
This decision recognizes the importance of TPMs in the digital age. Sections 41 and 41.1 are likely to be of significance to copyright owners as they offer additional legal tools to protect copyrighted works and pursue those who facilitate copyright infringement.

Pre-trial injunctive relief is rarely granted in Canadian trademark cases, as the harm caused by the alleged infringing activity is generally not considered irreparable in nature.  However, Justice Kane of the Federal Court recently granted an interlocutory injunction restraining Sears from using the phrase “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE ELSE” or any other phrase or mark confusingly similar to Sleep Country Canada’s “WHY BUY A MATTRESS ANYWHERE ELSE” trademark.

To obtain an interlocutory injunction, the applicant must prove each element of a three part test.  The elements include: (i) that a serious issue is raised; (ii) that the applicant will suffer irreparable harm if the injunction is not granted; and (iii) that the balance of convenience favours the applicant.

Sears conceded for the purpose of this motion that a serious issue had been raised.  The Court found that confusion and a loss of distinctiveness were likely.  The Court considered that the loss of distinctiveness would damage Sleep Country Canada’s goodwill in its slogan that was not possible to calculate.  Given the short period of time that Sears had used the impugned slogan in contrast with Sleep Country Canada’s 22 year period of use, the Court found that the balance of convenience favoured Sleep Country Canada.  The interlocutory injunction was granted pending a final determination of Sleep Country Canada’s action for trademark infringement.

This decision makes it clear that proving irreparable harm is necessary and difficult, but not impossible.  To succeed, more than a bare assertion that quantifying damages is impossible is needed.  The applicant needs to demonstrate why quantifying damages is indeed not possible.

An interesting twist to note is that another judge had dismissed Sleep Country’s earlier motion seeking an interim injunction against Sears on the basis of of its use of the allegedly infringing slogan on the basis that Sleep Country had not established irreparable harm. In this decision, Justice Kane distinguished this earlier decision based on the amount of evidence presented and the different time period relevant for assessment.

An appeal of this decision was filed with the Federal Court of Appeal on 20 February 2017.

See full decision Sears and Sleep Country – Why Buy a Mattress Anywhere Else decision