Section 16 of the Trade-marks Act provides three bases for registration of a trademark in Canada:  use in Canada, registration and use abroad, and proposed use. The law regarding trademark applications based on registration and use abroad, under s. 16(2), has recently received attention from the Federal Court in The Thymes LLC v Reitmans Canada Limited, 2013 FC 127 (The Thymes), casting some doubt on widespread trademark practices in Canada.

Prior to The Thymes, trademark applicants in Canada have commonly amended trademark applications to include a s. 16(2) use and registration abroad basis once such use has begun anywhere else in the world. These amendments would occur after the filing date of the application, but before advertisement of the application, in accordance with the Trade-marks Regulations and the practice of the Canadian Intellectual Property Office (CIPO). The Trade-marks Act, Trade-marks Regulations, and CIPO guidelines are silent on when use abroad must have commenced.

The Thymes dealt with an application that was filed claiming use and registration in the United States as a basis for registration under s. 16(2). The application was opposed, and the initial decision by the CIPO’s Trademark Opposition Board refusing the trademark application was appealed to the Federal Court. On appeal, Justice Manson of the Federal Court affirmed the Opposition Board’s decision to refuse the trademark application on the basis that there had not been any use of the trademark in the United States as claimed at the time of filing the application. However, Justice Manson also stated that the requirements for filing under s. 16(2) “must exist and be reviewed as at the date of filing of the application” and that the foreign use of the trademark must occur in the applicant’s country of origin.

These statements have been met with some surprise among trademark practitioners in Canada, and are subject to potentially differing interpretations. With respect to the timing of foreign use of a trademark, it is possible that Justice Manson was merely reaffirming the status quo by requiring use abroad on the date that a s. 16(2) basis is introduced into the application – i.e. the trademark must be used abroad as of the Canadian filing date if the application is filed claiming use and registration abroad (as was the case with The Thymes). Under this interpretation, The Thymes might not adversely affect trademark applications that are amended after the filing date to include a s. 16(2) basis for registration claiming foreign use occurring after the Canadian filing date, and the case could be distinguished on the basis that use in the foreign country had occurred as of the date of amendment to add a s. 16(2) basis.

However, The Thymes can also be interpreted to hold that a s. 16(2) use and registration abroad basis can only be relied upon if the use abroad occurred prior to the Canadian filing date, even if the application is amended to include that basis after the filing date once such use abroad has commenced. This possibility introduces uncertainty into what has been a longstanding trademark practice in Canada.

In addition to the outstanding questions regarding the timing of foreign use for the purposes of s. 16(2), The Thymes also introduces some potential uncertainty where the use abroad is not in the applicant’s “country of origin”. While Justice Manson’s comment in The Thymes would suggest that use abroad must be in the applicant’s country of origin, the Trade-marks Act states only that the applicant must provide the name of “a country” in which the trade-mark has been used, and the CIPO’s longstanding practice is to allow any country (not just the applicant’s country of origin) to be named as the country of use when establishing a foreign use and registration basis. In practice, foreign use is overwhelmingly claimed in the applicant’s country of origin, but trademark practitioners are still well-advised to carefully consider the location of the foreign use that is being claimed, particularly in trademark applications which do not claim an alternative statutory basis for registration (such as use in Canada or proposed use).

The full impact of The Thymes may eventually become more clear as the courts have a chance to interpret the decision and provide guidance to trademark practitioners and applicants. However, we may have to wait some time for clarification – an application for review of The Thymes decision to the Federal Court of Appeal was cancelled, as the parties have settled their dispute.

By Christopher C. Scott

Last November, the Supreme Court of Canada (SCC) declared Pfizer’s Canadian patent for the drug Viagra™ to be invalid for failing to provide full disclosure of the invention in the patent application. Since then, a Federal Court decision has followed the SCC’s lead, and Pfizer has been named in two class action lawsuits filed in British Columbia seeking redress for alleged overcharging for Viagra.

The successful challenge against the Viagra patent was brought by generic drug manufacturer Teva Canada.  Teva initiated its challenge back in 2006, when it first applied to Canadian regulatory authorities to manufacture its own generic version of Viagra.  Teva announced the launch of its generic drug on the date the SCC issued its decision.  This forced Pfizer to promptly lower the price of Viagra to remain competitive with generic versions including the one launched by Teva.  Unfortunately for Pfizer, its troubles did not end there.

Pfizer sought a motion to have the SCC amend its remedy, on the grounds that the SCC  inadvertently exceeded its jurisdiction by declaring the Viagra patent to be invalid.  Pfizer’s reasoning was that the proceeding before the SCC was not a formal invalidity proceeding but was merely an administrative proceeding where the validity of the Viagra patent was not directly at issue.  After hearing the motion, the SCC issued an order which varied its previous ruling by clarifying that Teva had established, for the purposes of the administrative notice of compliance proceedings, its allegation that the Viagra patent was invalid (but the SCC stopped short of declaring the patent to be invalid). However, the revision of the original SCC ruling may be moot since it came only after a decision had issued on a separate Federal Court impeachment proceeding (brought by Apotex, another generic drug manufacturer) in which the Viagra patent was declared invalid on the basis of the original SCC decision.  Pfizer has appealed the Federal Court impeachment decision to the Federal Court of Appeal.

Next, Pfizer has been named in two class action lawsuits filed in British Columbia seeking redress for alleged overcharging for Viagra.  The class action plaintiffs adopted language from the SCC decision, alleging that Pfizer “gamed” the patent system in order to obtain exclusive monopoly rights.  The class action plaintiffs allege that, as a result of its unlawfully obtained monopoly, Pfizer was able to overcharge them for Viagra as compared to the price Pfizer could have charged for Viagra in the presence of generic competition from 2006 (when Teva applied for approval of its generic version of Viagra) to 2012.  The specific causes of action pled in the class actions include claims of “unconscionable and deceptive acts” under British Columbia’s consumer protection legislation and “unlawful enrichment” and “unlawful interference with economic relations” under tort law.  Punitive damages against Pfizer are also being sought.  This is believed to be the first time that class action lawsuits of this nature have been attempted in Canada, and will likely be followed with interest by many.

Last year, the Federal Court of Appeal issued a decision on the patentability of Amazon’s “one-click” online shopping patent, in which the Court criticized the practices of Canadian Patent Examiners in the context of examining computer-implemented inventions. In the wake of that decision, the Canadian Intellectual Property Office (CIPO) has released two new practice notices to guide examiners in construing claims and determining whether computer-implemented inventions are directed at patent-eligible subject matter.

The guidelines relate to “Purposive Construction” and “Computer-Implemented Inventions”. The new guidelines embrace a form of purposive claim construction that brings CIPO’s practices closer to established case law. Under the new guidelines, examiners are encouraged to “determine what the inventor has actually invented” when assessing eligibility of subject matter, novelty, and obviousness. To do so, examiners are instructed to identify the practical problem that the invention is attempting to solve and the solution that the inventors offer. Under the guidelines, the claimed invention must be an operable solution to that problem, and any elements not essential to the identified solution may be stripped from the claim for the purpose of analysis.

This approach, which applies to all subject matter before CIPO, has attracted some criticism for being a more stringent test for essentiality than is applied by the courts. Notwithstanding those complaints, Canadian patent practitioners will need to adapt to CIPO’s new guidelines to avoid drawn-out prosecutions and costly appeals.

CIPO has provided additional guidance for examiners in the context of computer-implemented inventions. The guidelines instruct examiners to determine whether the problem is a “computer problem” (i.e. a problem with the operation of a computer) as opposed to a non-computer problem (i.e. a problem whose solution may be implemented using a computer). An invention directed toward a computer problem is likely to be statutory subject matter. According to the guidelines, one indication that an invention is directed toward a computer problem is that the application devotes significant detail to describing technical details, such as the algorithms or logic performed by the computer.

While CIPO has historically rejected “business methods” or methods that can be performed by a human instead of a computer (e.g. software is often considered a business method if the computer that executes the software is not claimed or is considered non-essential), the new guidelines do not mention business methods by name, following the Federal Court of Appeal’s instruction to CIPO in the Amazon decision to operate “with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim.” The new guidelines may nevertheless provide an avenue for examiners to reject claims that might previously have fallen prey to the business method exclusion, by allowing examiners to find computers recited in claims to be non-essential and thereafter finding the remaining elements to be a mere scheme or set of rules.

However, the new guidelines offer applicants new means to demonstrate to an examiner that a computer-implemented invention is directed to patent-eligible subject matter. For example, although applicants are not required to expressly state a problem toward which the invention is directed, the guidelines indicate that an express statement of the problem should be accepted by an examiner unless doing so would be “unreasonable on an informed reading of the application in light of the common general knowledge.” Accordingly, it may be advantageous in appropriate cases to expressly indicate that an application is directed toward a problem with the operation of a computer. Similarly, express statements that a computer recited in the claims is essential may be advantageous in some cases, despite a longstanding view in the profession that express statements of essentiality are best avoided. Any potential risk arising from such express statements made during prosecution of a patent application may be tempered by the fact that Canada has not evolved a doctrine of file wrapper estoppel comparable to that encountered in US practice—generally, statements made during prosecution of an application have limited admissibility in Canadian patent litigation.

The new guidelines provide many improvements over CIPO’s former approach. They reject the heavily-criticized “contribution” approach to determining patentability and recognize that prior art is not relevant to determining essentiality. The guidelines are also likely to reduce examiners’ reliance on the “technological solution to a technological problem” test (now reframed as a “technical solution to a technical problem”). Although the guidelines may deviate in some places from the case law, overall they are a promising revision of CIPO’s practices.

By Christopher C. Scott and Amy M. Fong

The controversial doctrine of the “promise” of the patent has received a great deal of attention recently with some unfavourable decisions for Canadian patent holders.  The promise doctrine essentially states that in order to constitute a useful (and therefore patentable) invention, an invention must not only be useful for some purpose, but it must also deliver any utility promised in the patent specification.  Continue reading “Promises, Promises…An Old Legal Doctrine Poses Difficulty for Canadian Patentees” →

A lot happened in the world of Canadian copyright law in the last year. We have already written about the Supreme Court of Canada’s so-called pentalogy of copyright cases, but the legal upheavals did not stop there. The Copyright Modernization Act added a slew of new rights and restrictions to the Copyright Act after nearly a decade of winding its way through Parliament in various forms. This article will cover some of the highlights.

Some of the most hotly-anticipated additions to the Copyright Act were the new fair dealing provisions under s. 29. Copyright aficionados have long bemoaned Canada’s limited fair dealing exceptions to copyright infringement, which are narrower than the United States’ doctrine of fair use. The list of uses of copyrighted material that may be protected by the fair dealing exception has been expanded to include education, parody and satire. The education exception is accompanied by a host of new provisions for educational institutions (ss. 30.01 – 30.04) and amendments to some existing, related provisions (ss. 29.4 – 29.9) that shield schools from claims of copyright infringement in certain circumstances.

In addition to expanding the fair dealing exception, the Copyright Act has gained new exceptions for private copying activities including time-shifting (the so-called “TiVo exception” under s. 29.23), format-shifting (s. 29.22), and making backup copies (s. 29.24). These exceptions protect people from claims of infringement for the now-commonplace activities of copying materials for later viewing, copying materials from one device to another, and backing materials up. However, for these exceptions to apply, the material being copied must have been acquired legally, the user must not have broken a digital lock, and the user cannot give the copy away. Other restrictions may also apply – for example, the time-shifting exception does not apply to on-demand content.

A new exception for a particular kind of non-private copying has also been introduced. The user-generated content exception (s. 29.21, better-known as the “mash-up exception” or the “YouTube exception”) allows people to take copyrighted content and use it in new works without a license. For this exception to apply, the new work must be used for solely non-commercial purposes, the source of content being used must be mentioned in the new work (along with the author, performer, maker or broadcaster of the content, if listed in the source), the creator of the new work must have reasonable grounds to believe that the content being copied did not itself infringe copyright, and the new work must not have a substantial adverse effect on the original work. The aim of this provision is to enable Internet-savvy Canadians to use existing content to create new content and share it with others (e.g. via social media) without fearing claims of copyright infringement.

The above exceptions are all directed at limiting the cases in which individuals and educational institutions can be found liable for copyright infringement, but there are also new provisions protecting individuals who are found liable for copyright infringement. Previously, copyright owners could obtain statutory damages of $500 to $20,000 per infringement without having to prove that they had suffered actual damage. Now, under s. 38.1(b), copyright owners may only seek statutory damages of $100 to $5000 for all of a person’s non-commercial infringements (not per infringement). Commercial infringements are still subject to the old statutory damages scheme.

Not every addition to the Copyright Act is aimed at shielding consumers from potential liability for infringing copyright. Perhaps the most controversial additions to Canadian copyright law are the new anti-circumvention provisions (ss. 41 – 41.22). A person who circumvents a “technological protection measure” (TPM) that controls access to a work may now be liable as if they had infringed copyright, with the important caveat that no statutory damages may be awarded if the infringement was for an individual’s private purposes (s. 41.1). Persons who provide services or devices that enable other people to circumvent TPMs are similarly liable, although they are not shielded from statutory damages. Knowingly circumventing TPMs for commercial purposes also carries criminal liability of up to $1 million and up to 5 years in prison under s. 42(3.1).

A TPM is any technology, device or component that controls access to a work or prevents certain uses of a work; examples include passwords, encryption (like that found on most DVDs and in some digital media such as music or e-books) and product keys. Although there are many exceptions to the prohibition against circumventing TPMs, including exceptions for law enforcement, encryption researchers, broadcasters, unlocking mobile phones, personal privacy concerns, and persons with perceptual disabilities, there is no general exception covering circumventions for private or personal use. Regulations promulgated under s. 41.21 may add additional exceptions to the anti-circumvention provisions.

These are just some of the most high-profile amendments. The Copyright Modernization Act introduces many other changes to the Copyright Act, including new protections for internet service providers, implementation of international copyright treaties, new rules for ownership of copyright in photographs, the creation of moral rights for performers, new “making available” and distribution rights for rights-holders, and more.

By Jennifer A. Marles and Christopher C. Scott

An application for registration of a trademark in Canada typically does not include a colour claim.  A trademark registration without a colour claim generally confers on the trademark owner the right to use the trademark in any colour or colour combinations.  There are some circumstances, however, where it is desirable to include a colour claim. This article reviews the requirements for asserting a colour claim in a Canadian trademark application.

A colour claim is generally considered a limitation on a trademark, as it tends to narrow the scope of protection for the trademark. However, an applicant may wish to claim colour as a distinctive feature of the trademark where the applicant considers the colour of the trademark to be important or where the Canadian trademark application is based on a trademark registered and used abroad and the corresponding foreign registration includes a colour claim.

Currently, the Canadian Intellectual Property Office (CIPO) does not publish a trademark in a regular Canadian trademark application in colour. Therefore, when an applicant claims colour as a feature of the trademark, the colour of the trademark must be described in words.

Rule 28 of the Trade-marks Regulations states that where the applicant claims a colour as a feature of the trademark, the colour must be described, and if the description is not clear, the Registrar may require the applicant to file a drawing lined for colour in accordance with a prescribed colour chart. The colour chart includes the following colours: red, pink, brown, black, gray, silver, violet, purple, blue, green, yellow, gold, and orange.

According to a CIPO practice notice, where the colour claim is for a colour not found in the prescribed colour chart, the applicant may be required to include a clear description of the colour. The applicant may refer to an internationally recognized colour reference system for each colour claimed. For example, the colour turquoise may be described as: “the colour turquoise (PANTONE 15-5519)* is claimed as a feature of the mark. *PANTONE is a registered trade-mark”. In practice, the CIPO does not insist on the use of a colour reference system, and accepts descriptions of colours such as “light red”, “dark red”, etc.

If passed, the currently proposed amendments to the Trade-marks Regulations would repeal the requirement to provide a drawing lined for colour under Rule 28. According to the proposed amendments, if the applicant wishes to claim colour as a distinctive feature of the trademark, the applicant must submit a colour drawing of the trademark and, for each colour, indicate the name of the colour claimed and the principal parts of the trademark which are in that colour. The application may refer to an internationally recognized colour system.

By Edmund Y. Xie