Insights on Canadian Technology and Intellectual Property Law

Misguided Policy: CASL’s Private Right of Action for Competition Act Reviewable Conduct

Posted in Anti-Spam
Donald HoustonJonathan Bitran

While much has been written about the impending CASL private rights of action, less has been said about the new private right of action CASL will tack on to the Competition Act for misrepresentations in electronic messages. ‎

The new CASL private right of action for reviewable conduct under section 74.011 of the Competition Act is an aberration, which will be inconsistent with and offensive to the current regime by which the Competition Act addresses deceptive marketing practices.  It will make misrepresentations in electronic messages the only such reviewable conduct which will be subject to private damage claims, and it will expose legitimate advertisers to potentially significant damage claims for immaterial misrepresentations that cause no harm.  We urge the relevant decision-makers to reconsider this very bad idea before it comes into force on July 1, 2017. Continue Reading

Website operator jailed for distributing copyright infringing copies of musical works: R v Evans

Posted in Copyright, Intellectual Property, Litigation
Barry Sookman

Is operating a website that provides links to torrent websites which facilitates unauthorized downloading of musical works a criminal offence? If so, can the operator of such sites expect jail time as punishment for this crime? In a recent decision of the English and Wales Court of Appeal in Evans, R. v [2017] EWCA Crim 139 (14 February 201), the accused, Mr Evans, was convicted of two offences of distributing infringing copies of musical works and was sentenced to 12 months in prison for these crimes. Continue Reading

Blockchain applications may be caught by Ontario’s securities law

Posted in Fintech, Regulatory Compliance
Shane C. D'SouzaRene Sorell

The Ontario Securities Commission (OSC) has issued a press release advising stakeholders that Ontario securities law may apply to any use of distributed ledger technologies (DLT), such as blockchain, as part of financial products or service offerings.

The OSC emphasized that it is keen to support the innovative potential of DLT because, among other things, DLT has the potential to increase transparency and efficiencies in the capital markets. However, because of DLT’s novelty, the OSC encourages business to speak to the OSC about securities law and investor protection requirements that may apply.

The OSC has cautioned that “[p]roducts or other assets that are tracked and traded as part of a distributed ledger may be securities, even if they do not represent shares of a company or ownership of an entity.” In other words, Ontario’s securities law may apply to initial coin or token offerings and DLT-based virtual currencies.

If you are considering capital market applications of DLT/blockchain, please contact the authors of this post to discuss whether Ontario’s securities law may apply.

This post appeared previously on the Canadian Securities Regulatory Monitor.

For more information about our firm’s Fintech expertise, please see our Fintech group’s page.

TPMs Are Alive and Well: Canada’s Federal Court Awards Nintendo $12.7-million in Damages

Posted in Copyright, Intellectual Property, Litigation
Barry SookmanDaniel G.C. Glover

Five years ago, Canada enacted legal protection for technological protection measures (TPMs) as part of the Copyright Modernization Act. The Federal Court has now  rendered the first decision  interpreting  these important rights. In short, the court  made it clear that legal protection for TPMs were meant to foster innovation in the creative industries and that businesses blatantly engaging in industrial scale TPM circumvention activities will be dealt with harshly by the courts.

In Nintendo of America Inc. v. King & Go Cyber Shopping (2005) Ltd., 2017 FC 246 (docket here; decision available soon on the Federal Court website and CanLII), Mr. Justice Campbell of the Federal Court rendered a decision awarding Nintendo $12.7-million in statutory and punitive damages plus costs and interest against the second respondent, Go Cyber Shopping (2005) Ltd. Continue Reading

Initiatives des Autorités canadiennes en valeurs mobilières sur les Fintech : bac à sable réglementaire et coopération

Posted in Fintech, Regulatory Compliance
Charles MorganLaure Fouin

Le 23 février 2017, les Autorités canadiennes en valeurs mobilières (ACVM) ont annoncé le lancement d’un bac à sable réglementaire. L’objectif du bac à sable réglementaire est d’appuyer les Fintech en leur permettant de faire une demande à l’organisme de réglementation compétent afin de bénéficier d’une approche plus adaptée en matière de réglementation. Cette approche doit faciliter l’utilisation d’applications, de produits et de services novateurs chez les entreprises au Canada, tout en protégeant adéquatement les investisseurs. Continue Reading

Federal Court of Appeal allows $6.5 million lump sum cost consequence

Posted in Litigation
Kaitlin SoyeDavid Tait

In a recent appeal (2017 FCA 25) relating to the issue of costs following a patent infringement trial, the Federal Court of Appeal commented that lump sum awards have found increasing favour with courts, and for good reason as they save the parties time and money. Lump sum costs awards further the objective of the Federal Courts Rules of securing “the just, most expeditious and least expensive determination” of proceedings (Rule 3). When a court can award costs on a lump sum basis, granular analyses are avoided and the costs hearing does not become an exercise in accounting. Furthermore, this case demonstrates that there are circumstances in which costs generated even at the high end of Column V of Tariff B bear little relationship to the objective of making a reasonable contribution to the costs of litigation. As a note of caution, however, the Court states that an increased costs award cannot be justified solely on the basis that a successful party’s actual fees are significantly higher than the Tariff amount. As a matter of good practice, the Federal Court of Appeal notes that requests for lump sum awards should generally be accompanied by a Bill of Costs and an affidavit in respect of disbursements that are outside the knowledge of the solicitor.

Accordingly, the Federal Court of Appeal dismissed the appeal of a $6.5 million for lump sum cost consequence to the patentee’s success in an action for patent infringement (2014 FC 844, affirmed 2016 FCA 216). At trial (2016 FC 91), the patentee (Dow) asked for costs above the amounts provided by Tariff B of the Federal Courts Rules. It sought a lump sum award of $6.5 million: $2.9 million in legal fees (which represented 30% of its actual legal fees of $9.6 million) plus $3.6 million in disbursements. In the alternative, Dow asked for a lump sum between $4.7 million and $6.5 million, the former amount including the same disbursements, but with the amount for legal fees based on Column V of Tariff B. In awarding the $6.5 million lump sum, the trial judge described the infringement trial as “an extremely complex patent case involving much expert testimony,” noting 22 allegations of invalidity, 33 days of discovery, 32 days of trial, written submission exceeding 700 pages, and the closing argument lasting three days. Based on these considerations, the trial judge concluded that an increased award of costs was justified, and awarded legal fees under Column V of Tariff B, noting that the information provided by Dow (specifically the Bill of Costs and the attached schedules) was sufficient to allow him to determine the reasonableness of the amount.

Availability of non-infringing product is relevant in determining profit recovery for infringing activities

Posted in Intellectual Property, Patents
Kaitlin SoyeDavid Tait

In a recent decision (Apotex Inc. v. ADIR, 2017 FCA 23), the Federal Court of Appeal determined that the Federal Court erred in law by rejecting the relevance at law of any available non-infringing product and failed to adequately consider the evidence adduced as to the ability and willingness of three suppliers to provide non-infringing product. According to the Court of Appeal:

  • To the extent the Federal Court rejected the relevance of non-infringing perindopril because the defendant sold perindopril, this conclusion was inconsistent with Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34 where the Roundup Ready Canola sold by the defendant Schmeiser consisted entirely of the patented genes and the differential profit approach was nonetheless applied.
  • While Apotex Inc. v. Merck & Co. Inc., 2015 FCA 171 considered a claim for compensatory damages for patent infringement, the comments had equal application to an accounting for profits. In any event, the policy reasons noted by the Federal Court could not trump the requirement that an infringer’s disgorged profit must be only the profit which is causally attributable to the invention.
  • The Federal Court’s rejection of arguments advanced in Wellcome Foundation Ltd v. Apotex Inc., (1998) 151 FTR 250 could not stand for the reason that it is contrary to the application of the differential profit approach applied by the Supreme Court in Schmeiser.

In light of the factually complex evidentiary record before the Federal Court and the need to assess the credibility of the evidence, this issue was remitted to the Federal Court.

This decisions follows an original finding, in 2008, that Canadian Patent No. 1,341,196 (the “196 Patent”), which claims the drug perindopril, was valid and infringed by the defendant, Apotex (2008 FC 825, aff’d 2009 FCA 222). This liability judgment permitted the patentee to elect to claim either an accounting of the defendants’ profits or all of the damages sustained as a result of the defendants’ activities which infringed the 196 Patent. The patentee elected to recover the profits earned by reason of the infringing activities. After a long trial, the Federal Court determined the amount of the defendant’s profits which were attributable to the infringing activity (2015 FC 721).

Canadian Securities Administrators Fintech Initiatives: Regulatory Sandbox and Co-Operation

Posted in Fintech, Regulatory Compliance
Ana BadourLaure Fouin

On February 23, 2017, the Canadian Securities Administrators (CSA) announced the launch of a regulatory sandbox. A regulatory sandbox aims at supporting Fintech businesses by allowing them to apply to the regulator to benefit from a more tailored approach to regulation that balances the need to facilitate the use of innovative products, services and applications all across Canada with appropriate investor protection.

As a result, the CSA will assess the merits of each business model, on a case-by-case basis, and allow innovative businesses to register or grant them relief from certain requirements to permit them to test their products and services throughout the Canadian market. Continue Reading

Partnerships between Banks and Fintech Companies: A Continuing Trend for 2017

Posted in Fintech
Ana BadourD.J. LyndeJessica Firestone

Fintech companies are offering game-changing products and services in the financial services sector, responding to customer demand for frictionless technology. Canadian banks are likewise increasingly seeking to offer innovative products and services. In addition to developing such products and services in-house, banks have been partnering with Fintech companies, seeking to leverage their technological know-how and cost-effective offerings.  Fintech companies in turn seek to leverage banks’ customer relationships, their reach and experience and their expertise in compliance and risk management.  Partnerships between Canadian banks and Fintech companies increased in late 2015 and 2016, and this trend is expected to continue. Some recent examples include: Continue Reading