CHAPTER 18 INTELLECTUAL PROPERTY & THE DIGITAL AGE ALW 380

Intellectual Property- intellectual property requires the government and courts to balance the
rights of an inventor or creator to use their creations and profit from their creations and brain
power versus the rights of the public to have access to the creation at a fair price. e.g. doctor
invents one pill that cures cancer and he wants to sell it for $100,000 per pill
- 5 different areas of intellectual property that apply to different creations and have different
rules
1. Copyright Law - applies to original artistic creations e.g. music, films, literature, newspaper
articles, photos, sculptures PLUS computer programs
- you get the copyright the instant you create the work, you do not need to register with the
government, but it’s a good idea to do so to prove the day you created it – Canada has an
agreement with many other countries so you don’t have to register there also but it still is a good
idea to register
- the creator has the exclusive right to use their creation for their lifetime plus 50 years
- the creator can sell their rights or license others to use their creation for a profit (royalties) as is
frequently done e.g. legal copy of CD, copy of Word or a video game are all licensed uses
- you can have a copyright in how an idea is specifically expressed, but not in the overall idea
itself (e.g. can’t own rights to all songs about a heartbreak)
- if you create it while at work it belongs to the company you were working for
- there is a fair dealing exception allowing copies for research, teachers/students, critics- the
amount used is the key issue - it is not a copyright violation if it used for limited preview, mash-
ups and backup copies
-creators have moral rights in their works if the user distorts, degrades or changes the work and it
hurts the creator’s reputation- they can get an injunction to stop that use e.g. Snow – Christmas
ribbons on geese sculptures at Eaton Centre
-Illegal Copying – Remedies -if a work is illegally copied then the creator can sue for the full
civil law remedies: financial losses (pecuniary damages), punitive damages, an injunction to stop
the copying, an accounting of the profits made by the illegal copier and a deliver up order to get
all the illegal copies and the creator can claim the Copyright Act remedies that include a fine of
to $1 million fine and/or up to 5 years jail plus statutory damages instead of pecuniary
damages of $500 -$20,000 per illegal copy in commercial cases - but if it is a private use
infringement (an individual not a company that is doing the illegal copying) the maximum award
is limited to $5,000 in total
- e.g. if a store is selling 100 illegal DVDs of movies the store could be fined up to $20,000 per
movie, but if it a person who illegally downloads a 100 movies on their computer the maximum
damages are $5,000
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-Cases: Microsoft – co. selling illegal copies of Microsoft products as a bus. - $700,000 in
damages
-Hernandez – illegal copying & sales of Simpsons & Family Guy episodes on line - $10 million
statutory damages, $500,000 punitive damages
- Setanta (bar illegally showed pay per view fights - $20,000 damages), Radiopol (sold copies of
Polish TV shows illegally – 2,009 shows X $150 each = $301,350 damages), DiDaDi (bar
illegally playing karaoke music - $105,000 damages), Rundle (illegally copied the govn.
language exams for students - $60,000 damages)
- Lari -a Montreal copy shop owner initially got 6mo. jail & $700,000 damages for illegal
textbook copies
- music industry says in the U.S. it loses $2 billion/year due to illegal downloading, movie
industry claims $6 billion losses from illegal copying and software industry claims $12
billion/year in losses– law is having a hard time keeping up with all the new technology and
balancing creators and users rights – in the U.S. the music and movie companies threaten to sue
people for illegal copies (over 30,000 lawsuits) but most people get frightened and settle out of
court for $3,000- $5,000 – these copyright troll lawsuits have had little success in Canada
2. Patent Law
- applies to inventions of a new, unique and useful product, apparatus, process or drug
- must be new or significantly different from an existing product, show ingenuity, & be useful to
get a patent – AstraZeneca Canada v. Apotex – the patent only fulfilled one of the uses it
promised but since it fulfilled one other use it promised it had satisfied the utility requirement
- only inventor can register to get protection, must register or no patent and no protection, if
different inventors, it goes to the inventor who was the first to file the patent application
- inventor gets a 20 year exclusive right to the invention (inventor can sell or lease the rights to
others) but you must fully disclose how it is made to get the patent- it is a 20 year monopoly -
30,000 applications a year – once application is made, it becomes public 18 months later
- Government approval is slow takes on average 3 years and expensive as need legal help, 90%
get approved – if not full disclosure you can have your patent cancelled (Viagara lost last year of
protection)
- can’t patent a theory or principle, illegal invention, higher life forms e.g. Harvard Oncomouse,
but can patent genetically modified plants and bacteria (Monsanto case)
- now can patent a way of doing bus. - Amazon – 1st registration in Canada for method of doing
business as its one click purchasing method for on line buying was patented
- if you want patent protection in the U.S. then register there – also you can file for international
registration for 43 countries in one application
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- if patent is illegally copied then sue in civil court and seek the civil law remedies: financial
losses and punitive damages and an injunction to stop the copying, an accounting of profits, a
deliver up order
- Merck – got $119 million when generic drug co. copied their patented anti-cholesterol drug
-many fights between drug cos. and generic drug cos. who copy their drugs once the patent
expires, but generic cos. save Canadians over $1 billion/year due to lower priced drugs
- Famous Cases: Polaroid sued Kodak and won $900 mill. on instant photo camera design,
Richard Kearns invented intermittent windshield wipers and won $10.2 mill. from Ford after 12
year battle and then other car companies settled lawsuits with him too

3. Trademark Law - applies to distinctive names, symbols, slogans, logos & unique packaging
- a distinguishing guise is included in TM and it involves a distinctive shape of a product or its
packaging e.g. Toblerone chocolate bar shape, coke bottle, McDonald’s Golden Arches
- you do not need to register to get a trademark, but it’s a good way to prove when you created it
– no international treaties cover it, so you have to register in each country you want to use it - it
is the actual first use that determines who has the trademark, not when it is registered
-the tort of passing off will apply to violations if you don’t register, but in passing off there is are
additional requirements to prove that it causes confusion to an ordinary hurried consumer in the
marketplace and also must prove that it causes reputational damage or losses
- if registered it is valid for 15 years, but you can renew it every 15 year forever if using it
e.g. Nike, Coca Cola their names and their symbols
- the trademark must be distinctive and you can’t own general word e.g. cold, green, bright or an
official govn. symbol, an offensive mark
-you can lose your trademark if a) you have not used a registered trademark for 3 years as others
can say you have abandoned it or b) if the name loses its distinctiveness and becomes a generic
term for the product and others have used the name and you didn’t stop them e.g. escalator,
scotch tape, linoleum, Kleenex, aspirin, thermos, trampoline, bubble wrap, zipper
Cases: Mattel – Barbie doll/ restaurant – other TM cases; Clicquot – champagne/clothing store,
Toblerone shaped chocolate bar, Wrangler jeans/beer, Rolex – even if people knew it was a fake
it still hurt Rolex’s profits and image so it was a TM violation
- domain names are given on a first come basis but can be the basis for a trademark violation
claim – cyber squatting is when you register a domain name in bad faith with the purpose of
selling it to the appropriate owner and it can be taken away from you by ICANN
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- Illegal copying – You can sue under the Trademark Act or if not registered, sue for the tort of
passing off - if successful the civil law remedies: financial losses, punitive damages, injunction,
deliver up order, an accounting of profits made
- e.g. Louis Vuitton 2011- B.C. store selling fake LV and Burberry products in back alley stores
and took orders on line -store liable for trademark & copyright violation - $2.4 million including
$500,000 punitive
- a big problem is not just fake designer clothes or jewelry but also fake prescription drugs, fake
car parts and airline parts which could kill people - some studies say 7% of world trade is
counterfeit goods, about $700 billion industry worldwide per year

4. Industrial Design – applies to the visual appearance of the product a pattern that is
commercially reproduced – it must be a unique pattern or shape
- e.g. pattern on plates, wallpaper, boat hull, weird chair or door handle, computer icon, web
page designs
- Must register within 1 year of creation going public to get protection, it lasts for 10 years but a
fee must be paid after the first 5 years to continue it and if not paid it will expire after the first 5
years
-Trivial Pursuit – a violation when a company selling Sexual Pursuit with same game board
design
- if violated by illegal copies being made, sue in civil court for the civil law remedies

5. Confidential Information and Trade Secrets

- a company often has very valuable confidential information such as formulas, designs, recipes,
data, client lists, business plans & methods, software etc. and it wants it kept confidential
- there are 3 ways that a company’s confidential information or trade secrets may be protected –
either by:
1) a clause in the employment contract that specifically says it cannot be disclosed or a separate
NDA (non-disclosure agreement)
2) sue for the tort of breach of confidential information
3) breach of fiduciary duty - a duty is imposed on certain people not to disclose confidential
information e.g. agent-principal, partners, officers & directors of their corp., business and a
consultant
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- Lac Corona – big Lac took info from little mining company Corona and bought the Hemlo gold
mines worth $1Billion – this was a breach of confidence and breach of confidential information
-Facebook – others claim Mark Zuckerberg stole their bus. plan for Facebook – it settled for $65
million
- 2007 Pepsi – a secretary for Coke’s global brand manager offered to sell Coke’s new formula
to Pepsi for $1.5 million – Pepsi told Coke and she was charged and got 8 years jail
- if there are violations of confidential info. then the civil law remedies apply
PRIVACY- two laws add some level of protection for confidential information of customers:
1) PIPEDA – Personal Info Protection & Electronic Documents Act
- law came in Jan.1, 2004 in Ont. - the purpose of the law is to protect people’s confidential
information - companies collect a lot of personal information on their customers and they cannot
give or sell that information without the customer’s consent nor can they accidentally leak it out
or they can be fined

- if they do the company could be fined up to $100,000 plus damages e.g . Winners – in 2007 it
had bad security hackers got info. on 45.7 million customers and had to pay millions to settle
class actions in U.S.

- Equifax huge data breach in 2017 – key info. on credit ratings – lawsuits now forming

2) CASL- Canada’s Anti Spam Legislation – on July 1, 2014 law came into effect

- CASL aimed at stopping junk mail on the internet and other electronic communication sources

- any CEM (commercial electronic message) trying to sell you goods or services cannot be sent
via text, phone, voice or image, to an electronic address without the consent of the recipient – the
fines are up to $10 million for a company and $1 million for an individual

- there are companies that do email mining trying to trick you into responding to random emails
so it can get your email address so beware – CEMs are only legal if the person has opted in to
receiving it, an unsubscribe icon works within 10 days, subject line is not misleading and
message identifies the sender’s name, business and contact info.

- Compufinder fined $200,000 for no consent to emails

-co. also can be fined if the company has an unsubscribe icon that doesn’t work within 10 days
e.g. Porter Airlines fined $150,000 – Rogers fined $200,000 in similar case
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INTELLECTUAL PROPERTY CHART

AREA OF LAW APPLIES TO REGISTRATION YEARS OF REMEDIES IF

PROTECTION COPIED
ILLEGALLY
COPYRIGHT Artistic Creations: films, music, Not required but Life of Creator Civil law remedies
art, literature, photos & can register plus 50 years and Copyright Act
computer software remedies
PATENT New inventions, machines, Must register or no 20 years Civil law remedies
process, apparatus, drugs protection
TRADEMARK Distinctive names, symbols, Not required but Can renew Civil law remedies
logos, slogans & packaging can register registration
every 15 years
forever
INDUSTRIAL Commercially sold unique Must register or no 5 + one 5 year Civil law remedies
DESIGN pattern or shape of object or protection renewal
design or computer icon
CONFIDENTIAL Trade secrets, formulas, client No registration so it As long as it can Civil law remedies
INFORMATION & lists, business plans, designs will be kept private be kept a secret
TRADE SECRETS

NOTE: The civil law remedies include monetary remedies such as; pecuniary and punitive
damages as well as non-monetary remedies such as an injunction, Anton Piller order, a deliver
up order and an accounting of profits. The Copyright Act gives other remedies in copyright cases
only. Under the Copyright Act there can be fines of up to $1 million and/or up to 5 years jail.
Also instead of pecuniary damages, statutory damages can be awarded of $500-$20,000 per
illegal copy if it is commercial copier. For personal use illegal copiers the maximum statutory
damages are $5,000, though this will rarely be given.