On 28 November 2024, a group of Canada’s largest news companies commenced a lawsuit against OpenAI, the owner of ChatGPT.

The Toronto Star, Metroland, Postmedia, PNI Maritimes, the Globe and Mail, Canadian Press Enterprises, and the Canadian Broadcasting Corporation (collectively the “News Media Companies”) allege that OpenAI infringed the News Media Companies’ copyright to a large number of works (including news articles), circumvented technological protection measures to access the works, breached the terms of use of the News Media Companies’ websites, and unjustly enriched themselves at the expense of the News Media Companies.

The News Media Companies are seeking damages and/or an accounting of OpenAI’s profits.

The News Media Companies’ claims of copyright infringement are predicated upon the allegation that OpenAI scrapes the News Media Companies’ websites and reproduces the copyrighted works in training datasets and Retrieval-Augmented Generation datasets, all without the consent of the News Media Companies.

Click here to read the statement of claim of the News Media Companies.

The Copyright Act currently has a general prohibition on the circumvention of “Technological Protection Measures” (TPM’s). TPM’s are defined as technologies which, in the ordinary course of their operation, control access to a work or restrict a user from exercising any of the copyright owner’s exclusive rights. An example of a TPM is the encryption of a work (e.g., a movie or software program).

Two new bills that recently received royal ascent will introduce new exceptions to TPM circumvention in Canada. These new exceptions are aimed at supporting the right to repair.

Bill C-244 introduces an exception to the prohibition on TPM circumvention if the circumvention is done “for the sole purpose of maintaining or repairing a product, including any related diagnosing” if the TPM forms part of that product.

Bill C-294 amends an existing exception to the prohibition on TPM circumvention, and permits circumvention of a TPM if it is done to make “[a] program or a device in which it is embedded interoperable with any other computer program, device or component”.

The Federal Court recently overturned a Trademark Opposition Board (TMOB) decision and ruled in favor of Blaze Pizza, LLC (“Blaze”) in its dispute with Carbone Restaurant Group Ltd. (“Carbone”). Blaze had opposed Carbone’s application for the trademark FAST FIRED BY CARBONE & Design, citing its own registration for the trademark FAST FIRE’D BLAZE PIZZA & Design and its use of various similar trademarks. The TMOB found that there was no likelihood of confusion between the trademarks and that Blaze’s evidence of its use of FAST FIRE’D was insufficient. In the appeal before the Federal Court, Blaze introduced new evidence, including evidence of its extensive use of “FAST FIRE’D” in branding, such as its prominent display on pizza boxes.

The Federal Court reviewed the TMOB’s decision on a de novo basis, holding that the new evidence introduced by Blaze would have materially impacted the TMOB’s decision. The Federal Court ultimately ruled that, in view of the evidence, Carbone had not met its onus of establishing that it was entitled to registration or that its trademark was distinctive of Carbone. Accordingly, Carbone’s trademark application was refused.

This decision underscores the importance of evidence in trademark disputes before the TMOB and the Federal Court.

The full case can be found here.

Both the Canadian Intellectual Property Office (CIPO) and the College of Patent and Trademark Agents (CPATA) have issued notices warning of recent fraudulent phishing emails targeting members of the public in North America, including business and trademark owners.

Common characteristics of the phishing emails include that the email:

• comes from an unknown sender, often purporting that the sender is an intellectual property professional;
• references an urgent trademark infringement;
• includes personal information such as the recipient’s name or business name;
• urges the recipient to contact the sender promptly; and/or
• outlines negative consequences if the recipient does not act quickly.

Further, some of the phishing emails have fraudulently used the names of actual registered trademark agents.

Members of the public should be wary of communications from unknown sources, reach out to their trademark agent when such communications are received, and never give personal, business or financial information to strangers.

Read CIPO’s full notice about the phishing emails here and CPATA’s full notice about the phishing emails (including examples) here.

The Federal Court recently issued a decision in Little Brown Box Pizza, LLC v. DJB, 2024 FC 1592.

Little Brown Box Pizza had appealed a decision by the Registrar of Trademarks to expunge its registration for the mark PIEOLOGY. The registration issued on February 19, 2016 and covered, among other services, “restaurant services”.

Little Brown Box Pizza filed a new affidavit in the appeal. The new affidavit asserted that several thousand unique users in Canada had visited the PIEOLOGY website operated by Little Brown Box Pizza and that at least one Canadian downloaded the PIEOLOGY mobile app. Furthermore, the new affidavit provided that the website and mobile app permitted consumers to review menus, look up restaurant locations in the United States, pre‑plan customized pizzas, save favourite pizzas for future ordering, and receive news about product offerings.

The Court was satisfied that the services available via the website and the mobile app constituted ancillary restaurant services that were intended to target Canadian consumers, even though no product could be ordered from the website and no restaurants were operating in Canada. This was sufficient to constitute use of the trademark in Canada in association with “restaurant services.”

However, the Court was not persuaded that there were special circumstances that would excuse non-use of the remaining services in the registration.

As a result, the appeal was allowed in part, and the registration for PIEOLOGY was maintained only in association with “restaurant services.”

In a decision reported as Group III International Ltd v. Travelway Group International, 2024 FC 1195, the Federal Court, acting as a referee for the purpose of quantifying profits made by Travelway Group (“Travelway”), ordered that the parties recalculate the amount to be awarded.

The parties have been involved in protracted litigation concerning trademark infringement and passing off over the use by Travelway of various trademarks reminiscent of Swiss Cross designs in association with luggage. The Federal Court of Appeal had found that trademark infringement and passing off were established and ordered that monetary compensation in the form of an accounting of profits be awarded. The present decision concerns a reference to quantify the amount that is to be awarded to the Plaintiffs.

In a lengthy set of reasons, the Federal Court held, among other items, that:

• 15% of Travelway’s profits from sales of the infringing products could be causally attributed to the use of the infringing marks;
• Travelway was permitted deductions for costs “more likely than not linked with the production, promotion, and sale of the Infringing Products”;
• Travelway was entitled to deduct a percentage of operations and maintenance costs from the revenues generated by the infringing products;
• Travelway was entitled to deduct certain costs related to license royalties for the use of the words SWISS TRAVEL PRODUCTS;
• Travelway could not claim a deduction for professional and consulting fees attributable to other products and brands or related to the litigation between the parties; and
• Travelway was entitled to make deductions related to overall market development, advertising and promotion that were proportionate to the percentage of infringing product revenue from total luggage revenues.

These holdings required that the awarded amount be recalculated, and the Federal Court remitted the matter to the parties to perform the recalculation.

The full decision is reported here.

We previously reported on the significant changes to the Charter of The French Language introduced through Bill 96, enacted in June 2022, and the clarifications for these changes introduced through the Regulation respecting the language of commerce and business.

Since then, OQLF published on its website a guide regarding the new rules for trademarks appearing on products.  The guide provides further clarification for inscriptions on a product, noting that inscriptions in another language must not appear more clearly than those in French and that the consumer should not have to make any additional effort to access information in French.

The guide provides examples of product packaging bearing entire labels registered as trademark and that will be considered compliant with the Charter of the French Language. The examples confirm that any generic or descriptive terms that are part of the label need to be translated, the exception being the name of the product.  The French version may appear on a different side of the product other than the side on which the registered trademark appears.  Also, the French version of the generic or descriptive terms does not have to appear as part of the registered trademark but may instead appear elsewhere on the packaging.

The guide also clarifies that unlike product packaging, a display is considered commercial advertising and “must therefore respect the rule of the clear predominance of French.”  This means that on product displays French must have a much greater visual impact than any other language.

The Supreme Court of Canada (“SCC”) has dismissed an application to appeal the federal court of appeal decision in French v. Royal Canadian Legion (Dominion Command) (“French”). At issue was the sale of poppy patterned puppy toys under allegedly false authorship information.

With this dismissal of leave to appeal, the SCC has declined to weigh in on the Federal Court of Appeal’s interpretation of paragraph 64(2)(d) of the Copyright Act. Consequently Canadians can be content that for the moment the issue of moral rights as applied to designs appears to be settled as stated by the Federal Court of Appeal:

[T]he defence to infringement of moral rights provided for in subsection 64(2), including paragraph 64(2)(d), is intended to cover any infringement of the author’s moral rights. For there to be an infringement of moral rights, it must be in connection with the copyright; if there is no act in connection with copyright, there is no infringement of moral rights.

Our previous reporting on the Federal Court of Appeal decision can be found here.

The SCC’s dismissal of the application for leave to appeal can be found here.

In the recent decision of Munchkin, Inc. v. Angelcare Canada Inc., 2024 FCA 156, the Federal Court of Appeal upheld the Federal Court’s decision finding Munchkin, Inc. and its Canadian subsidiary liable for infringing several patents held by Angelcare Canada Inc. One of the issues in Munchkin’s appeal was whether the U.S.-based parent company could be held liable for actions in Canada despite not having a direct physical presence here. The Court rejected Munchkin’s argument, emphasizing that foreign entities cannot escape liability for patent infringement simply by operating from outside Canada. The Court noted that the parent company designed and marketed the infringing products, demonstrating sufficient participation in the infringement. This ruling reinforces that entities outside of Canada can be found liable when their conduct results in patent infringement in Canada.

Additionally, the Court addressed confidentiality and prior disclosure issues, affirming that there is a presumption of confidentiality when manufacturers receive prototype designs or other information from clients. Munchkin’s argument that no confidentiality existed was dismissed by the Court based on the nature of the relationship and the business practices of the manufacturer in question. The decision highlights the importance of appreciating confidentiality issues in business communications, especially in the intellectual property context.

The decision is reported here.