IP Year in Review 2015: A Look Back on the IP Stories That Will Shape 2016

2015 was an eventful year in intellectual property (IP) law worldwide. Canada in particular saw a lot of activity across all three major areas of IP in both legislation and jurisprudence. Topping the IP news charts was the proposed ratification of the Trans-Pacific Partnership (TPP): a wide-ranging international deal negotiated by twelve nations, including Canada.

 

TRANS-PACIFIC PARTNERSHIP

The TPP has various domestic and global implications for IP, including providing stronger criminal penalties in all three areas of protection. After more than five years of secretive negotiation, the TPP was published on November 5, 2015, and Canada will be signing it on February 4, 2016 in Auckland, N.Z.

Two major copyright obligations are included in the IP chapter: First, Article 18.63 will extend copyright term protection to life of the author + 70 years (from life of the author + 50 years) or to 70 years after publication or creation, in the case of corporate owned works. Second, Article 18.69 compels signatories to escalate digital rights management protection provisions. Patent law may see reform in the shape of term extension, through Articles 18.46 (“Patent Term Adjustment for Patent Office Delays”), and 18.48 (“Patent Term Adjustment for Unreasonable Curtailment”). Possible legislative changes to trademark law include the allowance of scent marks, and provisions that strengthen protection for “well-known” marks.

For Canada, the TPP has not come without controversy. Several comments on the TPP have been vocalized and there seems to be little agreement.

 

COPYRIGHT

2015 was marked by a few—but very important—developments in copyright law, particularly in the music industry.

The 2015 federal budget brought in one of the most significant developments in Canadian copyright law. Just before leaving office, the Conservative government amended the Copyright Act by extending copyright term protection for sound recordings and performances from 50 to 70 years. While the music industry welcomed this extension, some legal experts were left unsatisfied, finding few benefits to the amendment.

Conversely, the “Happy Birthday” ruling surely left at least one music label unsatisfied. On September 4th, U.S. Federal judge George King held that Warner/Chappell does not own copyright over the ubiquitous birthday song, as the copyright registration obtained in 1935 only covered the piano arrangements based on the melody (which entered the public domain in 1949), not the lyrics themselves. A settlement between the parties was later reached on December 9th. Though details have yet to be released, it appears the song will fall into the public domain once the settlement is finalized.

Another controversial development in music-related copyright law this year was the American “Blurred Lines” ruling. The case, opposing the Marvin Gaye estate and Robin Thicke and Pharrell, ended with a federal jury ruling that the song “Blurred Lines” did indeed infringe Gaye’s family copyright in the song “Got to Give It Up” (see IPilogue coverage here). By establishing that a rhythmic feel can comprise the “substantial similarity” criteria, this ruling sets a very important precedent for determining the line between inspiration and copyright infringement in music industry. Many fear the chilling effect it could have on potential creations in pop music and on musical creativity as a whole. Pharrell and Thicke’s legal team have filed an appeal, so this saga is to be continued.

This year, the Supreme Court of Canada (“SCC”) provided some guidance concerning the principle of technological neutrality, applying it to incidental copies made and used to facilitate broadcasting. In the landmark decision Canadian Broadcasting Corp v. SODRAC 2003 Inc., the SCC determined that such copies’ use was irrelevant, and that as long as CBC made copies, it had to pay royalties. Technological neutrality is a topic that for better or for worse has been hotly debated over the last few years and it seems that the SCC’s ruling in SODRAC has set the course for continued controversy over its meaning and application.

On another technological note, the U.S. Second Circuit Court, in Authors Guild v. Google, Inc., ruled that Google Books was indeed legal, re-establishing the limits of fair use. Judge Pierre Leval, who had developed a doctrine of fair use back in 1990, determined that Google Books’ display of limited text was not infringing, stating that the“purpose of the copying is highly transformative.” Judge Leval also reiterated the importance of fair use as a tool designed “to stimulate activity and progress in the arts for the intellectual enrichment of the public.” It is yet unclear what effect this decision will have on fair use and the balance of interests between authors and the public interest. The Authors Guild has officially appealed to the Supreme Court of the United States (“SCOTUS”)

 

PATENTS

Canada

In two separate cases involving Eli Lily and Mylan Pharmaceuticals, the Federal Court applied its reformulated test for finding promises in patents. The contrast in decisions provides guidance as to what constitutes a promise and how important this determination is to patent law. In the first case, the Federal Court emphasized that a promise must be “clear and unambiguous” if it is to be the standard to which the utility of the invention described is to be measured against. A promise will not be found in references to potential advantages and/or avoidance disadvantages resulting from use of the invention. Justice de Montigny determined that Eli Lilly’s patent for the new use of a drug to treat erectile dysfunction promised only a treatment for erectile dysfunction. There was no clear and unambiguous promise for the absence of side effects or benefits of oral treatment to the drug.

A month later in the second case, the Federal Court invalidated the patent in question for non-utility, focusing on “ambitious and explicit statements throughout the Patent”. The patent included the statements which were considered clear promises such as “…the product can be administered with clinically insignificant side effects” and “…the contraindication once believed necessary for a product containing a PDE5 inhibitor is unnecessary…”.

The Federal Court of Appeal released a judgement in July upholding an award of more than C$180 million in damages and interest for Apotex’s infringement of Merck’s Canadian lovastatin patent. In the decision, the Court held that availability of a non-infringing alternative (NIA) is relevant under Canadian law—however, Apotex could not and would not have used such an alternative. The Court determined that since Apotex would have had to move its manufacturing back to Canada from China in order to produce non-infringing lovastatin, a process likely to take several weeks, it would not have been able to replace any of the infringing sales at the time each sale was made. Ultimately, the Court concluded that Apotex did not meet its burden to show it could have and would have replaced the infringing sales with its NIA.

Bill C-59, which includes legislation aimed at improving Canada’s IP framework by protecting confidential communication between inventors and their IP agents, received Royal Assent in June 2015. C-59 includes amendments to the Patent Act which provide clients with a statutory privilege for confidential communications with their patent and trademark agents. The privilege protects against the forced disclosure of these communications during any form of litigation. C-59’s privilege provisions take effect in June 2016. C-59 also includes changes to Patent Act which provide the Canadian Intellectual Property Office (“CIPO”) with the authority to grant extension of time limits in unforeseen circumstances and make regulations respecting the correction of obvious errors.

 

United States

Early in 2015, SCOTUS issued a significant decision about standard of review in Teva Pharmaceuticals v. Sandoz. The court held that when reviewing a district court’s findings of fact made in the construction of patent claims, the appellate court must apply “clear error”, not “de novo”. It will be interesting to see how this case affects Canadian appellate courts which have historically viewed claim construction as a question of law, giving no deference to factual findings of trial judges. This year, the Federal Court of Appeal released its reasoning for a prohibition application involving Bayer and Cobalt which confirmed that under current Canadian jurisprudence, correctness is the proper standard of review for claim construction. The court concluded there were no grounds to set aside the application judge’s construction. The Federal Court of Appeal went further, offering SCOTUS guidance on the proper standard of review for future claim construction cases. It suggested that, since courts typically read a patent through the “eyes of an expert”, it should apply the more deferential standard of palpable and overriding error where claim construction is based on expert evidence.

In Commil v. Cisco Systems, SCOTUS ruled that a defendant’s belief that a patent is invalid is not a defence to an induced infringement claim. The court stated that infringement and validity are separate matters, and although precedent established that liability for induced infringement required knowledge, that knowledge requirement does not extend to patent validity. Justice Kennedy, writing for the majority, stated that permitting a defence of good-faith belief in invalidity “would conflate the issues of infringement and validity.” Since patents are presumed valid, such a defence would significantly weaken the force of that presumption.

In Kimble v. Marvel Enterprises, SCOTUS declared that a contract for post-patent royalties was unlawful because it continued the patent monopoly beyond the 20 year patent period. At the time of patent expiration, an unrestricted right to make and use the article passes to the public. In following theprecedent in Brulotte v. Thys (1964), the Court emphasized the care it has placed on declining to enforce laws and contracts that restrict free public access to expired patents as well as unpatentable inventions.

 

Australia

In October, the High Court of Australia in D’Arcy v. Myriad Genetics, unanimously held that an isolated nucleic acid coding for a BRCA1 protein, having specific variations indicative of susceptibility to breast and ovarian cancer, was not a “patentable invention”. Section 18(1) of Australia’s Patent Act 1990 requires that an invention be “a manner of manufacture” in order to be patentable. The High Court stated that, although the invention was the result of human action, the essential element of the product was the existence of information stored within relevant gene sequences. Allowing this invention to be patentable would extend the concept of manner of manufacture, considered to be inappropriate for judicial determination. The High Court’s ruling is consistent with the 2103 American ruling that isolated DNA was non-patentable subject matter.

 

 

TRADEMARKS

2015 saw a number of significant developments in trademark law, as the field was shaped by both legislative changes, and significant judicial decisions. Bill C-59’s proposed IP changes add a new section to Canada’s Trade-marks Act similar to those proposed for the Patent Act. The proposal makes communications between clients and their trademark agents privileged if such communication is (1) between the client and the agent; (2) intended to be confidential; and (3) made for the purpose of seeking or giving advice.

In 2015 CIPO began accepting trademark applications using the Nice Classification system. Nice Classifications standardize how wares and services are described on trademark applications, streamlining trademark searches on an international level. The adoption of the system will hopefully help Canadian businesses select the appropriate classifications for their goods and services and more easily find potentially confusing marks owned by competitors in their industries in various jurisdictions. However, the system will not become obligatory until the Singapore Treaty and the Madrid Protocol are adopted. There is no known timetable for the ratification of these treaties.

2015 saw several important trademark cases decided in North America and Europe. Significant publicity surrounded the NFL’s Washington Redskins’ trademarks. Six of the Washington team’s trademarks were cancelled by the United States Patent and Trademark Office (USPTO) in June, 2014 because they were deemed disparaging to Native Americans. In July 2015, in Pro-Football, Inc. v. Amanda Blackhorse, et al., a US District Court upheld the earlier USPTO decision, ruling that the trademarks are ineligible for federal trademark protection under the Lanham Act because they are disparaging. The case is not over however, as the football team filed an appeal in October 2015.

A case in the United Kingdom, Société des Produits Nestlé SA v. Cadbury UK Ltd., came down to whether a trademark could be registered for a chocolate-covered wafer. Specifically, the case examined whether a KitKat’s shape could be said to have a distinctive character because, at the relevant date, a significant proportion of the relevant class of persons recognize the trademark and associate it with the applicant’s product. Nestle did not convince the European court that its product had a distinctive character. The case will now go back to a UK court for a final decision.

Closer to home, there were two significant cigarette-related decisions at the Canadian Federal Court level. First, the Federal Court of Appeal upheld the principle that a single colour on a product or its packaging is capable of being a trademark. In Rothmans, Benson & Hedges, Inc. v. Imperial Tobacco Products Limited, Justice Gauthier affirmed the single colour registration of a trademark, and ruled that such a trademark is valid if its application properly depicts how the colour is to be applied to the object. Then, the Federal Court, in Philip Morris Products S.A. and Rothmans, Benson & Hedges Inc. v. Marlboro Canada Limited And Imperial Tobacco Canada Limited, ruled that Imperial Tobacco was entitled to elect an accounting of Philip Morris’ profits related to its infringement of Marlboro’s trademark in Canada. Justice de Montigny held that an accounting of profits is a remedy provided for by the Trade-Marks Act (as are damages).

In Québec, in Magasins Best Buy Ltée v. Québec (Procureur Général), the Québec Court of Appeal upheld the lower court’s decision allowing non-French trademarks to be displayed in signs and advertising (provided no equivalent French trademark is registered). In short, non-French signage does not require an accompanying French descriptor of the business. The case arose initially due to the actions of the Office québécois de la langue française requiring businesses to add French descriptors to their English trademarks.

Other important developments in 2015 include the Federal Court of Appeal decision in Cathay Pacific Airways Limited v Air Miles International Trading B.V. The Court held that the Trade-Marks Act requires a judge to consider fresh evidence on appeals relating to trade-mark applications. As a result, the case was returned to the Federal Court for all of the issues raised on appeal. Finally, in Vancouver Community College v. Vancouver Career College (Burnaby) Inc., the Supreme Court of British Columbia ruled that a passing-off action can only succeed against a person who uses the trade-mark of a competitor as a keyword (in internet searches) where the owner can show that it causes or is likely to cause confusion, as the “first impression” does not arise from the initial keyword.

 

IP OSGOODE IN 2015

Events

2015 was also a busy year for IP Osgoode. As part of our IP Osgoode Speaks series, we were fortunate to have Prof. Matthew Rimmer from Queensland University of Technology, Faculty of Law in Toronto around the time of the conclusion of negotiations on the Trans-Pacific Partnership Agreement (TPP). In a very timely manner, Prof. Matthew Rimmer accepted our invitation to speak at Osgoode just three days after the negotiations were concluded. Prof. Rimmer provided a very engaging and provocative overview of some of the chapters in the highly secretive agreement that he discussed will impact the creative industries and internet freedom.

We also welcomed John Weigelt, National Technology Officer at Microsoft Canada, who dazzled the audience with his presentation on some of the technology megatrends reshaping our world and how these trends have created a new frame of reference for decision makers and the impacts of this transformation from a cybersecurity perspective. This event was a co-hosted by IP Osgoode and the Jack & Mae Nathanson Centre of Transnational Human Rights, Crime and Security, with funding from the Harry Arthurs Collaborative Research Grant.

In anticipation and celebration of the Pan AM/Parapan Am Games 2015 in Toronto, Canada, the IPilogue published a series of blogs focused on some of the IP issues related to big sporting events, such as ambush marketing, broadcasting rights, and disparaging trademarks.

We continued to provide students with first-rate and relevant experiential learning opportunities in IP law and technology through IP Osgoode’s blog, the IPilogue, the Innovation Clinic, and Osgoode’s IP Intensive Program.

 

Coming Soon

The end of 2015 was heralded by our announcement of some of the exciting events taking place at the beginning of 2016. On February 3-5, 2016, IP Osgoode and the Copyright and the International Trade Policy Branch of the Department of Canadian Heritage will host a hackathon. The hackathon will be a multi-day event with teams composed of members from each of the different stakeholder groups such as creators, policy makers, law and computer science students, legal professionals, representatives from archival institutions, collective societies and libraries. The hackathon will use Design Thinking, a user-centric design process pioneered by Stanford’s d.School, to tackle the issues and inefficiencies with the current orphan works licensing regime and generate new solutions for an online orphan works licensing portal that addresses the needs of different stakeholders.

Hot off the heels of the SCC’s decision in CBC v. SODRAC, Osgoode Hall Law School and the University of Toronto, Faculty of Law will co-host a symposium on Februrary 25, 2016 at Osgoode. The symposium entitled “UNPACK SODRAC: Technological Change and Copyright Tariffs after CBC v SODRAC (SCC 2015)”, will feature a keynote speech from The Honourable Mr. Marshall Rothstein, who was newly appointed as a Distinguished Visiting Professor at Osgoode. Leading scholars and practitioners in the field will unpack the SODRAC ruling and its significance for the future of copyright law in Canada.

We will continue to provide up to date coverage of IP news and events, as well as announcement of all our events activities on the IPilogue so please check out our website iposgoode.ca, subscribe to our weekly e-newsletter, the IPIGRAM, follow us on Twitter (@IPilogue), and connect with us on Facebook and LinkedIn.

 

Top 10 most read IPilogue articles of 2015

  1. “Notice and Notice” and Video Streaming – Are You Breaking Bad?
  2. Osgoode Takes Best Factum at the 2015 Fox Moot
  3. IP Year in Review 2014 – The Perpetual Motion of IP Law
  4. Lawyer or Librarian? Who Will Answer Your Copyright Question
  5. Debunking Common Myths about Copyright Term Extension for Sound Recordings and Performances: Why Longer is Better
  6. It is All About the Maize and the Bees as Osgoode Attends the Oxford International IP Moot
  7. CBC v SODRAC Episode III: Oral Arguments Heard at the SCC
  8. On Your Mark, Get Set, Go! Ambush Marketing and the Pan Am/Parapan Am Games 2015
  9. 25 Million Streams of “Summer of ’69” earns Bryan Adams at Least One Six String
  10. Breaking-up Bad: Is Copyright the Best Tool to Fight Revenge Porn?

 

Giuseppina D’Agostino is the Founder & Director of IP Osgoode, the IP Intensive Program, and the Innovation Clinic, the Editor-in-Chief for the IPilogue and the Intellectual Property Journal, and an Associate Professor at Osgoode Hall Law School.

With contributions from Quin Gilbert-Walters, Sebastian Beck-Watt, and Elena Iosef on Trademarks, Aicha Tohry and Jordan Fine on Copyright, and Justin Philpott and Corey McClary on Patents.

Jordan Fine is the IPilogue Content/Publication Editor and a JD Candidate at Osgoode Hall Law School.
Corey McClary is a Senior Editor for the IPilogue and a JD Candidate at Osgoode Hall Law School.
Elena Iosef is a Senior Editor for the IPilogue, an intellectual property lawyer and Osgoode Hall Law School graduate.
Sebastian Beck-Watt is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.
Quin Gilbert-Walters is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.
Justin Philpott is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.
Aicha Tohry is an IPilogue Editor and a JD Candidate at Université de Montréal.
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