snIP/ITs

Insights on Canadian Technology and Intellectual Property Law

Canada implements expanded WTO agreement eliminating tariffs on certain high tech products

Posted in Regulatory Compliance
Linda El-Halabi

In December 2015, over 50 WTO members, including Canada, gathered at the Nairobi Ministerial Conference, and agreed to the expansion of the Information Technology Agreement (ITA), a WTO agreement that aims to eliminate tariffs on IT products. The ITA was originally concluded by 29 participants in 1996. It now has over 82 participants, representing around 97 per cent of world trade in IT products.

On July 1, 2016, the expanded ITA finally came into effect, eliminating tariffs on 201 tech and information-related products valued at over $1.3 trillion per year. An expansion of the agreement was necessary given recent technological innovations. The products affected by this expansion include certain parts of smartphones such as touchscreens, as well as MRI machines and video-game consoles. Continue Reading

Chung c. Brandy Melville Canada Ltd.: When Using Photographs Posted on Instagram Can Result in Copyright Infringement

Posted in Copyright
Anaïs GalpinEmily Hutchison

Photographer Edmond Chung’s fashion photos of Brandy Melville Canada Ltd. (“Brandy Melville”) employee Catherine Moisan were destined to be viewed on Instagram and Facebook. However, Brandy Melville’s unauthorized use of one of his photographs led Edmond Chung on a years-long effort to seek redress from the retailer for breach of his copyright. Edmond Chung finally succeeded in his efforts this April 2016 when the Court of Quebec’s Small Claims Division condemned Brandy Melville to pay Edmond Chung $5,000.00 for copyright infringement. [1] This decision is good news for creators seeking to share their work with a larger audience as it attests that copyright persists, even when a protected work is shared over social media. Continue Reading

New IP3 patent purchase program is industry’s latest attempt to combat trolls

Posted in Intellectual Property, Patents
Fiona LegereLinda El-Halabi

In May 2016, the Allied Security Trust, a non-profit industry group, announced the launch of the Industry Patent Purchase Program, otherwise known as IP3. This new initiative brings together technology industry leaders including Facebook, IBM, Microsoft, and Adobe, to establish a patent marketplace in an effort to create an opportunity for patent owners to both protect their intellectual property, and acquire valuable patents.

The IP3 follows the footsteps of previous initiatives by tech industry leaders, including an initiative spearheaded by Google last year, the Patent Purchase Promotion Program, that invited companies and start-ups to sell their patents to Google.

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The LinkedIn Lawyers: The Impact of Article 145 of the Code of Professional Conduct of Lawyers on Social Media Use

Posted in Social Media
Mason GordonAlex Derstenfeld

Unknowingly, many Quebec lawyers may be in breach of ethical obligations regarding Social Media use.

Quebec’s new Code of Professional Conduct of Lawyers (the “Code”) came into force on March 26, 2015 and replaced a previous iteration of the law. Parts of the Code were adapted to the needs of society in an increasingly technological age; however, Article 145, concerning lawyers’ advertising, remained untouched. Article 145 states that: “In his advertising, a lawyer may not use or allow to be used an endorsement or statement of gratitude concerning him.” Its strict application implies that any endorsement, including any posted online, may be in violation of the Code. Continue Reading

“Impairing the Core”: Supreme Court Rules that Municipalities Cannot Interfere with Federal Authority Over Cell-Tower Locations

Posted in Telecommunications
Vivian Ntiri

On June 16 the Supreme Court of Canada handed down its decision in Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23. After reviewing and applying the doctrine of interjurisdictional immunity, the Court reaffirmed the Federal government’s jurisdiction over radiocommunication and allowed Rogers’ appeal.

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Thinking of Buying or Selling a Fintech Target? Due Diligence Issues Unique to Fintech M&A

Posted in Fintech, M&A/Finance, Startups, Virtual Currency
Ana BadourGenevieve PintoJake IrwinHeidi Gordon

Although many of the same considerations related to the acquisition or sale of any technology company apply, regulatory and compliance considerations are key in the fintech space.

Fintech M&A activity, in both the Canadian market and globally, is expected to be on the rise over the next few years. In its 2016 Report, FinTech: Prepare for a Wave of M&A, UK-based investment bank FirstCapital, predicts that fintech M&A deal flow will increase “as financial incumbents look to catch up with widespread innovation from new entrants, the internet majors scale up in financial services and the technology/software majors add new technology to deepen their offerings in this sector”.

Like with the acquisition or sale of any technology company, strategic due diligence is a critical component of the fintech M&A process. However, in addition to the typical focus on issues related to intellectual property and information technology, due diligence in the fintech space requires careful consideration of several unique issues as described below.

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Reining in the Cable Killers: Federal Court Orders Crackdown on TV Set-top Boxes with Copyright-infringing Applications

Posted in Copyright, Intellectual Property
Eriq Yu

On June 1, 2016, the Federal Court granted an interlocutory injunction against retailers of television set-top boxes with pre-loaded applications that permit the unauthorized streaming and downloading of copyrighted content. Recognizing the “emerging phenomenon” of “pre-loaded set-top boxes” in Canada, this injunction comes at a time of rapid growth in the popularity of such devices. Finding for the plaintiff broadcasting companies, the Court’s Order in Bell Canada et al. v 1326030 Ontario Inc. et al., 2016 FC 612 also permitted the plaintiffs to identify and add other retailers of pre-loaded set-top boxes as additional defendants to bring them under the injunction.

As of June 13, 2016, two of the five retailers originally brought under the injunction are now in the process of appealing the order. Continue Reading

Historical Facts and Copyright: the Maltz v. Witterick Case

Posted in Copyright
Cristel Chabot-LapointeCamille Marceau

On May 10, 2016, the Federal Court of Canada rendered its decision in Maltz v. Witterick,[1] denying the Applicants, Judy Maltz, Barbara Bird and Richie Sherman, producers of a documentary called No. 4 Street of our Lady (the “Documentary”), an award in damages for breach of copyright and infringement of moral rights allegedly caused by Jennifer L. Witterick, author of the book My Mother’s Secret (the “Book”).

In re-examining the question of whether a particular set of facts can be subject to copyright protection, this case sheds light on the “substantial taking” test as set out in Cinar Corporation v. Robinson.[2] The Federal Court, mindful not to upset the balance between the  protection of original work and the public’s interest in maximizing the production of intellectual work, seemed reluctant to award copyright protection to a set of specific facts as portrayed in the Documentary.  The case also briefly refers to the issue of infringement of moral rights under s. 14.1 of the Copyright Act.[3] Continue Reading

The year in review: developments in computer, internet and e-commerce law (2015-2016)

Posted in Defamation, E-Commerce, Intellectual Property
Barry Sookman

On June 14, I gave my annual presentation to the Toronto computer Lawyers’ Group on “The year in review in Computer, Internet and E-Commerce Law”. It covered the period from June 2015 to June 2016. The developments included cases from Canada, the U.S. the U.K., and other Commonwealth countries.

The developments were organized into the broad topics of: Technology Contracting, Online Agreements, Privacy, Online/Intermediary Liability/Responsibility, Copyright, and Trade-marks and Domain names.

The cases referred to are listed below. My slides can be viewed after the case listing. These and many other cases will be added to my 7 volume book on Computer, Internet and E-Commerce Law (1988-2015). Continue Reading

New Quebec Regulation Facilitating Contracting With Public Bodies in the Field of Information Technologies

Posted in Regulatory Compliance
Anaïs GalpinMarc-Alexandre Hudon

On June 1st, 2016, the new Regulation respecting contracting by public bodies in the field of information technologies (the “Regulation”), which now allows Quebec public bodies greater flexibility to negotiate complex Information Technologies (“IT”) service agreements, came into force . It supplements the Act respecting contracting by public bodies[1] (the “Act” which establishes the legal framework for contracting with public bodies in Québec, including among others the Québec government and its departments, certain Crown corporations, universities, hospitals, towns and municipalities. It applies to contracts and sub-contracts of a value of $1M or above.

The coming into force of the Regulation is a significant and welcomed development as it will allow for greater flexibility in the negotiation and conclusion of IT contracts with public bodies in Québec, in addition to bringing Quebec closer into line with other Canadian provinces in this regard. It follows the public acknowledgement by the Quebec Treasury Board Secretariat (the “Secretariat”) that news rules specific to IT agreements were required in order to increase competitiveness in the procurement process for IT services, lower costs and shorten delays in the execution of IT contracts[2].

The Regulation generally applies to supply contracts as well as service contracts “which are intended for the acquisition of goods or the provision of services in the field of IT”. The Regulation should apply whenever a significant portion of the value of the contract is to “ensure or enable functions of information processing and communication by electronic means, including the collection, transmission, display and storage of information”.

The highlights of the Regulation are as follows:

  • Ability for public bodies to award a contract following a call for tenders involving a competitive dialogue with suppliers or service providers.[3]. The Regulation opens the possibility for a public body to enter into a dialogue with selected bidders to define solutions which each bidder can then use as the basis for its final tender. It can only take place in calls for tenders involving 2 stages.
  • Introduction of the concept of total cost of acquisition[4]. The Regulation seeks to provide public bodies with better information with respect to the predictability of costs. In this regard, public bodies can now take into account the total costs of the acquisition of goods to determine the lowest price or adjusted price for the awarding of certain contracts. The total of acquisition includes “costs not included in the tendered price that would be borne by the public body during the useful life of the goods acquired”. These costs must be based on “quantifiable and identifiable elements identified in the tender documents”.
  • Adoption of specific rules for task order contracts in the field of IT. The Regulation confirms that public bodies can continue to rely on task order contracts with service providers “when the procurement requirements are recurrent and the number of requests and the rate or frequency at which they are to be performed are uncertain”[5]. The maximum duration for such contracts remain 5 years.
  • Contracts for the acquisition of cloud goods or services by mutual agreement[6]. The Regulation introduces new specific provisions with respect to the acquisition of cloud goods and services by public bodies.
  • Affirmative action program[7]: The Regulation provides that suppliers, service providers and subcontractors in the field of IT which employ more than 100 persons are required “to have made commitment to implement an affirmative action program that complies with the Charter of human rights and freedoms (chapter C-12) and hold an attestation to that effect issued by the Chair of the Conseil du trésor.” This requirement existed already in the previous set of rules that applied to supply contracts and service contracts with public bodies. It continues to apply only to contracts with government departments and a restricted number of other public bodies (i.e. generally, contracts with Crown corporations, schools and universities, among others, are excluded from the application of this requirement).
  • Performance evaluation[8]. Public bodies are required to proceed to a performance evaluation of suppliers and service providers within 60 days of the end of a contract, where such contract has a value of 100,000$ or more. Under the old set of rules applicable to service contracts, such evaluation was required only in where performance had been considered unsatisfactory. In the case of cloud goods or services contracts concluded by mutual agreement, the chief executive officer of the public body must send the performance evaluation to the Centre des services partagés du Québec.
  • Electronic submission of tenders.[9] Suppliers or service providers are now authorized to submit tenders electronically. After May 31, 2019, filing of both a paper and an electronic tender by the same bidder will lead to automatic rejection of the bidder.

[1] CQLR c C-65.1

[2]See:http://www.tresor.gouv.qc.ca/fileadmin/PDF/faire_affaire_avec_etat/loi_reglements_politiques/analyse_impact_reglement_contrats_ti.pdf

[3] At Sections 19-22 of the Regulation.

[4] At Section 15 of the Regulation.

[5] At Section 45 of the Regulation.

[6] At Section 48 of the Regulation.

[7] At Sections 58- 60 of the Regulation.

[8] At Sections 79-82 of the Regulation.

[9] At Section 13 of the Regulation.