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  • 1. Barry B. Sookman [email_address] 416-601-7949 McTet2 #3703278 v. 2 Recent Computer and Internet Law Developments in IP

2. Intellectual Property - Trends

  • Kirkbi AG v. Ritvik Holdings Inc ., [2005] 3 S.C.R. 245. per Lebel J.
    • The vast and expanding domain of the law of intellectual property is going through a period of major and rapid changes. The pressures of globalization and technological change challenge its institutions, its classifications and sometimes settled doctrines
    • Jurisprudence attempts to address sometimes with difficulty the consequences of these broad social and economic trends.
    • The economic value of intellectual property rights arouses the imagination and litigiousness of rights holders in their search for continuing protection of what they view as their rightful property.Such a search carries with it the risk of discarding basic and necessary distinctions between different forms of intellectual property and their legal and economic functions.

3. Influence of Foreign Laws

  • The Supreme Court of Canada increasingly looks to the laws of other countries in intellectual property cases.
    • Kirkbi AG v. Ritvik Holdings Inc ., [2005] 3 S.C.R. 245 (In considering the functionality doctrine in trade-mark law)
    • Veuve Clicquot Ponsardin v. Boutiques Clicquot2006, S.C.C. 23 (Contrasting depreciation of the value of the goodwill under theTrade-marks Actwith the United States cause of action for dilution)
    • Harvard College v. Canada (Commissioner of Patents),[2002] 4 S.C.R. 45 (Determining patentability of life forms)
    • SOCAN v CanadianAssn. of Internet Providers , 2004 SCC 45 [Tariff 22]( Extra-territoriality of Copyright Act )

4. Importance of IP

  • Gowers Review of Intellectual Property(London, Nov. 2006)http://www.hm-treasury.gov.uk/media/53F/C8/pbr06_gowers_report_755.pdf
    • The Intellectual Property (IP) system provides an essential framework both to promote and protect the innovation and creativity of industry and artists.
    • Innovative ideas create value, whether they are improved products, new brands or creative expressions. As a result, IP rights the means by which these assets are owned have become a cornerstone of economic activity.
    • However, while global and technical changes have given IP a greater prominence in developed economies, they have also brought challenges. Ideas are expensive to make, but cheap to copy. Ideas are becoming even cheaper to copy and distribute as digital technology and the Internet reduce the marginal cost of reproduction and distribution towards zero. As a result, the UKs music and film industries lose around twenty per cent of their annual turnover through pirated CDs and illegal online file sharing. Furthermore, global markets must contend with rights that remain largely national in scope.

5. Patent Issues 6. Reforming Patent System

  • Council on Foreign Relations, Reforming U.S. Patent PolicyCSR No. 19, Nov, 19, 2006.
    • The BlackBerry case and Microsofts calls for reform symbolize an American patent system that is increasingly inefficient and costly for innovative firms.Its numerous structural problems are rooted in two fundamental misconceptions:
      • The view predominant in Congress and the courts that patents are like tangible property and that owners of such property have the basic right to sell and license it (or not) as they wish; and
      • The virtually unchallenged view that more patent protection necessarily provides greater incentives for innovation and commercialization of technologies.
    • Failure to rein in the patent regime could have global repercussions.To hinder innovation is to hinder the dynamic competitiveness of U.S. companies.While some aspects of the IPR system (such as copyrights) for American firms largely remain sound, significant problems with patents put the U.S. system at a disadvantage vis--vis more balanced and less costly foreign ones.

7. Reforming Patent System(contd)

  • Aerotel Ltd. v Telco Holdings Ltd & Ors[2006] EWCA Civ 1371
    • there is pressure from would-be patentees on patent offices. People are applying for what are, or arguably are, business method and computer program patents in significant numbers
    • This pressure in part stems from the fact that, followingState Street(business methods) andAlappat(computer programs) people have been getting patents for these subject-matters in the USA. Since they can get them there, they must as a commercial necessity apply for them everywhere. If your competitors are getting or trying to get the weapons of business method or computer program patents you must too. An arms race in which the weapons are patents has set in. The race has naturally spread worldwide
    • Thirdly it by no means follows that because of pressure from applicants, the grant of patents for excluded categories should be allowed or that the excluded categories (particularly business methods and computer programs) should be construed narrowly. Just as with arms, merely because people want them is not sufficient reason for giving them.

8. Reforming Patent System(contd)

  • Aerotel Ltd. v Telco Holdings Ltd & Ors[2006] EWCA Civ 1371
    • The patent system is there to provide a research and investment incentive but it has a price. That price (what economists call "transaction costs") is paid in a host of ways: the costs of patenting, the impediment to competition, the compliance cost of ensuring non-infringement, the cost of uncertainty, litigation costs and so on. There is, so far as we know, no really hard empirical data showing that the liberalisation of what is patentable in the USA has resulted in agreaterrate of innovation or investment in the excluded categories. Innovation in computer programs, for instance, proceeded at an immense speed for years before anyone thought of granting patents for them as such. There is evidence, in the shape of the mass of US litigation about the excluded categories, that they have produced much uncertainty. If the encouragement of patenting and of patent litigation as industries in themselves were a purpose of the patent system, then the case for construing the categories narrowly (and indeed for removing them) is made out. But not otherwise.

9. Injunctions

  • EBAY INC. etal. v. MERCEXCHANGE, L. L. C.(U.S. Sup. Ct. May 15, 2006)
    • And as in our decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed.
  • PerJustices Kennedy ,Stevens, Souter,andBreyer
    • In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases. An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees
    • For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent
    • When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest.
    • In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.
    • The equitable discretion over injunctions, granted by the Patent Act, is well suited to allow courts to adapt to the rapid technological and legal developments in the patent system. For these reasons it should be recognized that district courts must determine whether past practice fits the circumstances of the cases before them

10. CopyrightIssues 11.

  • Robertson v. Thomson Corp. , [2006] 2 S.C.R. 363
    • Section 2 of theCopyright Act , as noted above, defines a compilation as an original work that is created as a result of selection or arrangementWe note that the use of the disjunctive or in s. 2 is significant. TheCopyright Actdoes not require originality in both the selection and arrangement. Similarly, and with all due respect to Weiler J.A.s contrary finding, we agree with the Publishers that a reproduction of a compilation or a collective work need not preserveboththe selection and arrangement of the original work to be consistent with the Publishers reproduction rights.

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