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June 12th, 2013

The Canadian Start-Up Visa: A bid to attract entrepreneurs with at least one year of post secondary education

This blog is written by our law summer student Anthony George D’Andrea

In a bid to scoop up the world’s best and brightest entrepreneurs, the Government of Canada has recently introduced the Start-Up Visa Program, the first of its kind in the world. This program is meant to encourage individuals from across the world to live in Canada, plant their innovative ideas, and have them grow with the help of Canadian investors.

However, promising as it may sound, like any other visa application there are certain requirements that must be met in order to be considered eligible for the Start-Up Visa. These requirements differ from your typical visa application and there are two requirements in particular that deserve some attention, however, given the length of this blog, only one will be discussed in greater detail.

Canadian Start-Up Visa Introduced To Attract International Entrepreneurs
One significant requirement is that the applicant is able to show that his or her idea has been invested in by a designated Canadian venture capital fund or angel investor. You will need to have a support letter demonstrating that one of these designated investors is willing to commit the minimum required funding for your idea.

This alone is significant because it appears that the government is allowing the private sector to play a large role in deciding who should be able to enter the country. This requirement alone warrants another blog, but for this entry I want to focus on another requirement for Start-Up Visa applicants.

The other requirement that has caught my attention is that the applicant must have completed at least one year of post-secondary education and present proof that he or she was in good standing during at least one year while attending a post-secondary institution.

There are a couple of reasons why one might find these educational requirements slightly unusual. Firstly, one of the most notable entrepreneurs, Steve Jobs, the co-founder of Apple computers, dropped out of Reed College in Oregon after attending for only one term. Given Jobs’ education, under the requirements of Canada’s new Start-Up Visa application, he would not have been an eligible applicant. Although this is only one example it begs the question whether any time spent at a post-secondary institution should be a requirement as it is not necessarily an indicator of the work ethic of the individual or possible success in the future.

Secondly, what if the applicant’s idea had to do with the tech industry, however, she received one year of post-secondary education focusing on post-World War II American and British Poetry? (I actually took this course and thoroughly enjoyed it) Why would this make her a more qualified applicant than someone with an equally good idea for the tech industry, however, failed to do any post-secondary education? Given this example, if the government wants this education requirement, perhaps the education should in some way be linked to the field in which the entrepreneur wants to pursue.

Because of the potential to exclude bright and promising entrepreneurs due to their lack of post-secondary education, perhaps this requirement can be made more flexible and inclusive. For example, the government might state that if a Start-Up Visa applicant does not have post-secondary education, this requirement can be set aside if the applicant has five years of work experience, or the venture capital fund is willing to risk a substantial sum of money (an amount set by the government), indicating that they are very confident in the abilities of the applicant.

The Canadian Start-Up Visa Introduced To Attract International Entrepreneurs undoubtedly has the potential to bring some of the best and brightest entrepreneurs to our country. Given that this is the first visa of its kind in the world, however, it is understandable that it still may need to work out a few kinks.

For more information on the new Canadian Start-Up Visa Introduced To Attract International Entrepreneurs to live in Canada contact one of the Toronto Immigration Lawyers at Devry Smith Frank LLP or if you need help with any of Intellectual Property issues please contact Intellectual Property lawyers at Devry Smith Frank LLP.

On What Basis Can I Register A Trade-Mark?

May 27th, 2013

Part 1 – Use in Canada

A trade-mark application can be filed in Canada on a number of different bases, which include:

Use in Canada
Proposed use in Canada
Made known in Canada
The mark being subject to a registration or application for registration in another country

When filing on the bases of “use” or “proposed use” it is important to understand what constitutes “use” according to the Trade-marks Act.

The Trade-marks Act provides for two definitions of “use”: one in relation to wares, and one in relation to services.

SubSection 4(1) of the Trade-marks Act specifies that a mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.

SubSection 4(2) of the Trade-marks Act specifies that a mark is deemed to be used in association with services it is used or displayed in the performance or advertising of those service.
This is an important distinction. If a company advertises its services on its website in association with a trade-mark (and can actually provide those services), that may constitute “use”. Advertising its products for sale on the other hand, is not sufficient “use” according to the Trade-marks Act, and an actual sale must first be made.

trade-mark-registration
If your mark is already in use, then filing a trade-mark application right away is generally the safest approach. If your mark is not yet in use, but you intend to begin use of the mark in the near future, then filing on the basis of “proposed use” may be more appropriate. Stay tuned for Part 2 of this blog series to find out more about filing on the basis of “proposed use”. If you wish to read more about other trade mark and IP topics, please visit our Intellectual Property Blog Page.

If you have any questions regarding trade-marks, please do not hesitate to contact a lawyer in the Intellectual Property department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Our law offices are easily located in the Lawrence and Don Mills location of Toronto and we have plenty of free parking.

Or, to browse some others law videos pertaining to Intellectual Property laws, kindly browse through our media page.

When do I need a Non-Disclosure Agreement (NDA)?

April 22nd, 2013

The simplest answer to the question, “When do I need a Non-Disclosure Agreement (“NDA”)?” is: “Before you disclose any confidential information to a third party”.

NDA’s are typically used when one party intends to disclose proprietary information that may have commercial value and is not yet in the public domain to another party; such as a potential customer, partner, investor, or manufacturer. You should consider using an NDA before disclosing or receiving any sensitive information that might be compromised by public disclosure. In general, such types of information relate to competitive advantages, potential business opportunities and intellectual property for which you may intend to file a patent application.

By using an NDA, you can ensure that:

your confidential information remains confidential;
you can still potentially obtain a patent; and
the confidential information can’t be misused for other purposes.

If you provide confidential information to another party without an NDA in place, the information could be used in ways that you don’t want and you may lose the ability to rely on important forms of intellectual property protection (such as patents and trade secrets). Without an NDA in place, disclosure of your invention to a third party is likely to be deemed public disclosure, which can potentially compromise your ability to obtain patent protection. While Canada and the US provide for the ability to file for patent protection within one year of public disclosure, many countries treat any public disclosure as an absolute bar to patentability.

With a well drafted NDA in place, a breach of the NDA will give you a cause of action and potentially allow you to seek injunctive relief (where the court orders the breaching party to cease disclosure and use) and monetary damages.

A well drafted NDA should include:

a description of the information that is to be considered confidential;
under what circumstances the receiving party may use the confidential information; and
the term of the agreement (ideally for the disclosing party, the term of the NDA will never expire).

non-disclosure-agreement-for-Intellectual-Property-Protection-in-Toronto

If you are the receiving party, it is also important that exceptions to the confidentiality provisions are clearly defined in the NDA. For example, information that the receiving party had prior to the disclosure, information in the public domain, information created by the receiving party, etc…

NDA’s often contain provisions confirming that the NDA does not grant the receiving party an explicit or implied license to the disclosed material and that any and all material disclosed shall be returned to the disclosing party upon request.

You should always ask anyone to whom you are disclosing confidential information to sign an NDA. In practice, it is not always easy to get someone to sign an NDA, particularly if you don’t have a previous business relationship with them. Typically, venture capitalists and other financers are reluctant to sign NDA’s given they come across so many inventions. Whether refusal to sign a non-Disclosure Agreement for Intellectual Property Protection is a deal-breaker will depend on your specific situation.

We have been assisting our clients to grow and to prosper since 1964. If you have any questions regarding confidentiality agreements or NDA’s in regards to intellectual property protection, please do not hesitate to contact the Intellectual Property Lawyers or Business and Corporate Services Department at Devry Smith Frank LLP.

Commercial Lending and Intellectual Property: a borrower’s perspective

March 26th, 2013

This is the second of a two part blog on the use of intellectual property in the commercial lending context. The first article highlighted legal issues facing lenders the primary security for a loan is intellectual property. This blog addresses the opposite side of the lender-borrower relationship. How do borrowers with a portfolio of intellectual property obtain financing?

A portfolio of intellectual property assets, in and of itself, does not guarantee financing. The exception is the limited number of cases where the intellectual property portfolio is so unique as to attract commercial lenders and investors. Unfortunately, these are rare cases.

Instead, borrowers with a portfolio of intellectual property typically face at least two hurdles in obtain financing. The first is the accounting treatment of intellectual property. Assets are generally valued at their price in a commercial transaction. Unless intellectual property has been licensed or sold, it is difficult for the accountants to reflect “true” valuations of intangible assets like intellectual property. This puts a borrower holding a portfolio of intellectual property at a disadvantage when approaching a commercial lender.

The second hurdle is that commercial lenders have a more difficult time liquidating security compromised of intellectual property in the event the borrower defaults on a loan. If a lender lends to a pizza store, it can sell the ovens to a competitor of the borrower in default. If the lender lends to a software development company, it may have a much smaller market to sell the source code. A potential lack of liquidity in intellectual property may give a commercial lender pause.

Nonetheless, as the knowledge economy matures, commercial lenders are increasingly more willing to accept intellectual property as security from borrowers. Borrowers do need to keep the following in mind:

Intellectual property is worth something in the eyes of the commercial lender if there is corresponding cash flow or value to it. For example, has the borrower proven to the commercial lender that there are licenses or other income attached to the intellectual property? Even if intellectual property is not commercialized, is it worth something in the competitors’ eyes (for example, the Nortel bankruptcy involved the purchase of patents which its competitors viewed as valuable)? Is a patent for an invention a competitor is using in violation of the borrower’s patent (giving such patent, albeit in litigation, some worth)? Can the borrower demonstrate that the brand has value in the market-place?
Consider undertaking an “IP audit.” An IP audit is a review of all intellectual property assets owned, used or acquired by a business and its value in the industry. IP audits are typically conducted by third parties. They can be costly and may be out of reach of many start-ups. For more mature companies seeking financing, this may be a viable option to show greater value in the intellectual property than otherwise displayed in the financial statements.
Prepare to survive the commercial lender’s due diligence process. We addressed many typical due diligence issues of the commercial lender when it comes to intellectual property in the last post. There are also several other issues to consider:

i. If the intellectual property relies partially on open source code, the borrower will need to quantify the percentage to give assurances to the commercial lender that the borrower maintains substantial and exclusive ownership of the intellectual property.

ii. If the intellectual property was developed while the owners were employees at another organization, the borrower will need to show that the former employer does not have any rights to the intellectual property. If the intellectual property was developed by contractors, has the borrower documented that all right, title and interest has been granted to the borrower?

iii. If the intellectual property has been commercialized, is the grant properly documented by legal agreements? The commercial lender may be particularly interested in the assignability of those contracts in case it has to be sold.

iv. Is the intellectual property so unique that only the borrower can continue to commercialize it? From the lender’s perspective, this is potentially a risk factor given it would be harder to liquidate assets upon default (or the lender may insist on taking out a life insurance policy on the particular individual).

v. Has the intellectual property (especially if commercialized) been registered, defended and not subject to lawsuits? Prepare to document this to commercial lenders.

Commercial lending involving intellectual property is a much more difficult type of loan underwriting to undertake. The borrower needs to understand that it needs to make a business case to the lender and not rely on the unique or “wow” factor of the intellectual property itself. Having said that, lenders are increasingly willing to lend and to take security in an intellectual property portfolio. What used to be a straight “no” by lenders is turning into “yes” or “we need to review.” Lenders and borrowers alike will need to be prepared accordingly as this asset class forms more and more of the value of a business.

If you have any questions regarding commercial lending or Intellectual Property, please do not hesitate to contact the Commercial Lending department at Devry Smith Frank LLP.

Trade-mark clearinghouse for new generic……

March 21st, 2013

If you are a trademark owner, commencing on March 26, 2013, the Trade-Mark Clearing House will begin accepting applications for generic top level domains (gTLDs).

In June 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to dramatically increase the number of Internet domain name endings such as .com, .net and .org. The new domain endings are known as the new generic top level domains (gTLDs), and include such endings as “.accountant”, “.lawyer” and “.WTF”.

With over a 1,000 new gTLDs, soon to be available, ICANN, has implemented a Trade Mark Clearinghouse, which will act as a single database of authenticated registered trademarks to help protect brands and their intellectual property rights.

Any trade-mark owner can submit their trade-mark to the Clearinghouse, and after their information has been verified by ICANN, the trade-mark owner will be able to register its corresponding domain name(s) during a “sunrise” period, before registration is open to the general public. Sunrise Periods are 30-day windows prior to the public launch of each new gTLD during which trade-mark rights holders can reserve domain names corresponding to their trade-marks.

The Trade-mark Clearinghouse will be open to receive applications beginning on March 26, 2013, at a fee of about $150 per trade-mark per year. Marks may be registered for up to five years, which is renewable. When registering a mark in the Trade-mark Clearinghouse, brand owners may also include at no additional cost up to 50 similar domain strings, provided they have not previously been found to be abusively registered in a UDRP proceeding or a court case.

generic-top-level-domains-toronto

Once a trade mark is registered in the Clearinghouse, the registrant will receive a notification when someone applies to register a domain name, within a new gTLD, which is identical to the trade mark registered in the database. The Clearinghouse does not, by itself, create any rights or operate as a bar to the registration of a domain name within a new gTLD. It merely serves to provide advance notice to the trade mark proprietors and new domain name registrants.

Registering your trade-mark in the Clearinghouse is a cost effective way to help protect your trade-marks against Cybersquatting.

If you have any questions regarding trade-mark registration, the Trade-Mark Clearing House or registering the new for generic top level domains (gTLDs), please do not hesitate to contact a Toronto trademark lawyer or trade-mark agent in the Intellectual Property department at Devry Smith Frank LLP.

Benefits of Intellectual Property License Agreement

February 15th, 2013

Properly licensing intellectual property can be an important factor in the success of any business. A license is essentially permission to do something that, without the license, would be an infringement of intellectual property rights. The party granting the license is usually called the licensor, and the party receiving the license is usually called the licensee. (note that there may be more than one licensor or more than one licensee in a license agreement).

benefits-of-intellectual-property

A license grants the licensee permission to use the licensor’s intellectual property subject to specific terms and conditions, which may include the purpose of use, a defined territory and a defined time period. In exchange for the granting of this permission to use, the licensor receives financial compensation, which can be in the form of a guaranteed fee or a royalty on a percentage of sales, or a combination of both.
Licenses are mutually beneficial to both licensees and licensors in that they allow businesses to work together to develop new products and services. Licensing provides a number of benefits to the licensor, including:

increasing brand presence at the retail or distribution level
creating further brand awareness to support its core products or services
supporting and enhancing its reputation and goodwill by associations with the licensee
increasing market penetration into markets (consumer or geographical) which were inaccessible with its own resources or capabilities
generating new revenue streams, without the cost or risk of manufacturing, promoting and selling those products

Licensing is also beneficial to the licensee, as obtaining a license can:

transfer the goodwill and reputation of the licensor’s brand to the licensed product or service
provide added value and differentiate the product or service from competitive offerings
provide additional marketing support or momentum from the ongoing activities of the licensor
appeal to new target markets who have not historically been interested in a licensee’s product or service
give credibility for moving into new market sectors through product extension
reduce costs, but gaining the right to use the IP without the research and development costs and risks
save time by allowing a licensee to get its products or services to market more quickly by acquiring a license to use existing IP, instead of re-inventing the wheel allow a licensee to tap into the expertise of the licensor that the licensee may not have in-house.

Whenever you think about taking or granting a license of any IP the first step should be to assess the needs and objectives of your business and how licensing might help meet them. If you have any questions regarding the drafting or negotiating of a license agreement, please do not hesitate to contact a lawyer in the Intellectual Property department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Commercial Lending and Intellectual Property

January 21st, 2013

This is a two part blog on the use of intellectual property in the commercial lending context. This blog will concentrate mostly from the lender’s perspective. The next blog will review some key considerations from the perspective of borrowers and businesses looking to obtain financing using their portfolio of intellectual property as security.

The knowledge economy provides both opportunities and threats in the commercial lending context. Opportunities abound as “gazelle companies”[1] require a suite of financial institution products and services and, as relative newcomers, are generally free from brand loyalty to a particular lender.

Threats exist in that the nature of the collateral, in the form of copyright, trademarks and patents, create underwriting and enforcement issues. The issues are not insurmountable. However, they require lenders interested in lending to intellectual property concerns to conduct a different type of due diligence from traditional bricks and mortar lending. This post concentrates primarily on enforcement issues relevant to lenders; the next blog will deal with underwriting business and legal issues of corporations with intellectual property assets seeking financing.

The most basic legal issue facing lenders is jurisdictional. The registration of security falls under the provincial sphere while the registration of intellectual property falls under the federal sphere.

This jurisdictional issue is not merely academic. The particular language of the Patent Act[2] and Copyright Act[3] can be read as requiring lenders to register their interests in patents and copyrights; the Trade-marks Act is not as direct in such a requirement.

Given there is no federal equivalent of a personal property registrar should the lender require the borrower to assign the intellectual property to the lender as a condition of financing? Obvious business reasons alone dictate against this condition. From a risk management perspective, the lender would then be potentially liable for intellectual property infringement claims or be obligated to defend the intellectual property. As such, lenders should avoid such drastic measures.

Unfortunately, at the date of writing, there has been no resolution on how to resolve the jurisdictional issues between the requirements of federal statutes to register interest and the provincial personal property regime.

Instead, various best practices have developed to ensure the lender has sufficient security in intellectual property as part of a financing. Well-drafted loan and security agreement may include the following:

1. Representations and warranties on the following:
2. Covenants
3. Reporting requirements:

In instances where the borrower is in special loans, lenders may demand that any royalty or licensing fees be subject to a lock box agreement.

As the above shows, “conventional” lending documentation will need to be amended where the collateral is primarily intellectual property. Commercial lenders should avoid the customary “check the box” due diligence and understand both the nature of the collateral. Borrowers who are borrowing on intellectual property assets should be prepared to answer questions from lenders about the nature of their collateral. Regardless, both lenders and borrowers dealing with intellectual property should be advised to seek qualified legal advice.

If you have any questions regarding commercial lending or intellectual property, please do not hesitate to contact the Commercial Lending department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

[1]Conventionally defined in the entrepreneurial community as a business with at least $1 million in revenue with a growth rate of at least 20% in the last four years.

[2]Section 51

[3]Section 57(3)

You wrote what? Defamation in the internet age

November 8th, 2012

The internet has been described by some as a forum for righteous indignation. Many internet operators monetize their websites by operating rating sites, blogs which allow comments to be left or discussion forums. The ease in which comments may be made raises liability issues for both the writer and the websites on which such comments are made.

Defamation generally describes a communication, whether written or oral, that harms another’s reputation. A defamation of character claim generally exists where: (i) a false statement was made; (ii) the statement caused harm and; (iii) the statement was made without adequate research into the truthfulness of the statement. Various defenses do exist which are not the topic of this blog post.

Even prior to the popularity of social media sites, the Ontario Court of Appeal in Barrick Gold Corporation v. Lopehandia, recognized that defamation on the internet was distinct from traditional mediums. The speed and reach of the internet made any comments defamatory in character more easily distributed and believed.

For the purposes of this blog, we are going to concentrate on two particular issues specific to defamation as it occurs on the internet:

The risk of defending an action in another jurisdiction.

If an Ontario resident reads a defamatory comment about themselves made by someone in Florida, where should they sue? Since 2010, American law states that defamation of character judgments in foreign jurisdictions will not be recognized in American courts if they conflict with the First Amendment (freedom of speech rights). Thus, the Ontario resident would have to travel to Florida to begin an action, lest they sue in Ontario and try unsuccessfully to enforce a foreign judgment in Florida where a First Amendment defense is likely to be raised.

In Ontario, a case such as Bangoura v. Washington Post reinforces the traditional common law approach of courts assuming jurisdiction where there is a real and substantial connection with the province. For example, a defamatory comment made about an Ontario resident by a blogger in Nevada where only 2 of 2,500 readers reside in Ontario may not constitute enough of a connection to commence an action in Ontario.

Publishers Liability

Under “traditional” media, a publisher who publishes a defamatory statement will be held to be equally liable for the statements made by the author of the work as the author herself. People who distribute publications (bookstores and libraries) are generally not held to the same degree of liability. The rationale behind this distinction is that publishers have the opportunity to review the content and can remove defamatory material while distributors may not have the same opportunity. However, do we treat websites as publishers or distributors?

Canadian case law on this matter is sparse at the time of the writing of this blog. The Supreme Court of Canada in Crookes v. Newton ruled that merely hyperlinking to defamatory material does not give rise to a defamation of character claim. Hyperlinking, as a passive reference to something that exists, was differentiated from repeating a defamatory comment. Where the website is actively repeating defamatory material, the website owner would be seen as closer to a publisher than a distributor and bear the same liability as the provider of such content. As such, the Supreme Court of Canada made the distinction between permitted conduct of publishing a hyperlink versus presenting the hyperlink in a manner which repeats the defamatory conduct.

A conversation with our American colleagues indicates that American law takes a similar approach. As we have been informed, American laws will not recognize a defamation of character claim for passively hosted third party content; but the defense is eroded if the website owner takes a more active approach to amending, editing or removing content. In other words, the more the website owner acts like a publisher, the greater its liability.

This has lead to the strange result that doing nothing as a website owner is better than doing something when it comes to defending against defamation claims.

Defamation of character is generally a complex field of law. When coupled with the online component, it becomes even more complex. As such, qualified legal advice should be sought if you are operating a website containing opinionated content.

If you have any questions regarding online defamation, please do not hesitate to contact the Intellectual Property or Business and Corporate Services department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Use it or lose it: some tips to ensure you maintain your trade-mark rights

November 8th, 2012

Under the Trade-marks Act, the owner of a registered trade-mark is granted the exclusive right to the use throughout Canada of the trade-mark. However, in order for a trade-mark owner to maintain that right, the mark must be properly “used”.

Failure to use a registered trade-mark for a period of three years from the date of registration or for an uninterrupted period of three years, provided there are no special circumstances that excuse the absence of use, may result in the trade-mark registration being expunged.

It is important to note that non-use for a three year period does not result in automatic expungement. In order to be expunged for non-use, a written request must be made by a third party for the Registrar to give notice to the registered owner of the trade-mark requiring them to produce evidence of use, prompting what is commonly known as a Section 45 proceeding. Be that as it may, failure to use a trade-mark for a long period of time does place a registered trade-mark owner’s trade-mark rights at risk.

Here are some important issues that the owner of a registered trade-mark should consider in order to ensure their mark remains in “use”:

Affix your trade-mark to your wares or services. In order for trade-mark rights to be created and maintained, a mark must be affixed to a specific product, or used in the provision of a particular service. A mark will not be considered as in use in association with wares unless it is marked on the wares themselves or on the packages in which they are distributed or unless notice of an association with the wares is given to the person receiving the purchased products. For services, the “use” requirement is somewhat more lenient – a trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.
If your services are advertised on a web page, prominence should be given to the mark on the page. Simply including a mark as part of a domain name may not be sufficient evidence of use.
If possible, a trade-mark should always be indicated as such using the ® symbol for registered trade-marks and the ™ symbol if the trade-mark is unregistered. A trade-mark acknowledgement should always be included in advertising, promotional materials and on packaging.
Trade-mark owners should ensure that all third parties, for example licensees, also use the mark correctly. Authorized third-party users of a trade-mark should be licensed, and all licensing agreements should be written carefully, signed, and enforced. The agreement must set standards concerning the licensee’s use of the trade-mark, and the quality of products or services with which the trade-mark will be used.
In the course of a Section 45 proceeding, evidence of use must be shown for each of the wares and services mentioned in the trade-mark registration.

If you have any questions regarding Section 45 proceedings specifically or trade-mark registration in general, please do not hesitate to contact a lawyer or trade-mark agent in the Intellectual Property department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Privacy and the Internet

October 16th, 2012

By Albert Luk

What you need to know about privacy laws and the internet?

The Stop Online Privacy Act introduced by the United States Congress in 2011, though ill-fated, reveals one means law-makers are using to attempt to regulate the internet. Drawing far less attention, although equally as important, are quieter efforts to regulate the internet through privacy laws.

In the social media age, website monetization depends on two primary tactics. The first- “drawing eyeballs” to a website- may require the use of large scale marketing via email. The second- online behavioral marketing – depends on the collecting and organizing visitor and user data.

Canadian regulation of email marketing campaigns and on-line behavioral marketing has been relatively quiet until recently. However, changes are on the way. Anyone engaged in email marketing and online behavioral marketing had best be aware of changing practices.

Canada’s recently passed Anti-Spam Legislation (formerly known as the Fighting Internet and Wireless Spam Act (“FISA”)) regulates communications by Canadian companies including email or texts. One of the fundamental tenants of FISA is that marketers may only send emails to those who opt in to receive them. FISA was passed in 2010 but information bulletins speaking to the practicalities of FISA were only released in October 2012. The anti-spam bulletins can be found here. (DSF blog posts on the topic can also be found here and here ).

In June of this year, the Office of the Privacy Commission of Canada issued its policy position on online behavioural advertising. Unlike FISA, the gathering of information for the purposes of online behavioral advertising can be obtained through an opt-out consent regime under certain conditions.

Read together, FISA and the Office of the Privacy Commission of Canada’s position on online behavioural advertising means that internet marketers can no longer rely on a “standardized” privacy policy since one relies on an opt in regime while the other an opt-out regime. Depending on the purpose of the information sent or collected, customized privacy policies must be developed to address both the solicitation and collection processes.

Overlapping Canada’s regulatory efforts, internet marketers operating in both Canada and the United States must also be aware of the United States’ Federal Trade Commission’s stance on On-line consurmer privacy. Anecdotally speaking, given the larger budget and reach, the FTC has been an assertive regulator of on-line privacy breaches.

Anti-Spam Legislation Update

October 16th, 2012

Further to my earlier blog post on Canada’s Anti-Spam Legislation (A fine line between marketing and spam) it is expected that the Act will come into force later this year, or early 2013. Two sets of related regulations have been issued, one by the CRTC and one by Industry Canada. While the Industry Canada Regulations have not yet been finalized, final regulations were published by the CRTC in March , which include a number of revisions responding to some of the concerns raised by the public in the original draft of the proposed Regulations. The revisions allow for some more flexibility while at the same time providing some clarification on key issues such as what contact information needs to be included in a request for consent, the form consent may take and less restrictive and technology-neutral means of communication.

The final CRTC Regulations include the following changes from those originally proposed:

Flexibility with respect to the type of contact information that must be provided. Senders of commercial electronic messages (“CEMs“), may now provide either a telephone number, an email address or a web address. The original proposal seemed to require the provision of all three, as well as a physical mailing address.
The language has been revised to state that if required information is to be accessible from the “world wide web”, it must be “readily accessible” and that the required unsubscribe mechanism must “be able to be readily performed”. The original proposed Regulations specified these requirements with reference to a maximum number of “clicks”.
The revised Regulations now indicate that consent for the receipt of a CEM may be obtained orally, as well as in writing, as the original proposed regulations provided. In a subsequent Regulatory Policy issued by the CRTC, the Commission further indicates that consent obtained “in writing” includes electronic forms of consent.

The above noted changes provide some certainty to businesses trying to comply with the legislation and also make compliance somewhat less onerous.

The related Industry Canada Regulations are expected to been finalized shortly. One of the primary objections to the draft Industry Canada Regulations has been the definition of a “personal relationship”, in the context of one of the exceptions to the consent and form requirement for a CEM. “Personal relationship”, is defined in the draft Regulations to require that the sender of a CEM and the receiver of a CEM have had an “in-person meeting”, and a “two-way communication” within the previous two years. On its face, this exception currently precludes meetings through, for example, online or social media forums.

Look for an update in this space when the Industry Canada Regulations are finalized. The most significant recommendation we can offer legitimate commercial entities doing business in Canada at this time is to not ignore Bill C-28, as doing so could subject you to severe penalties.

If you have any questions regarding compliance with anti-spam legislation, please do not hesitate to contact the Intellectual Property or Business and Corporate Services department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Domain Names, Trade-Marks and Cybersquatting

October 15th, 2012

Generally speaking, the internet is the media of choice for companies advertising their goods and services. Before venturing into the realm of social media, the first step for most companies is to set up a website. To allow the public to access your website, you must first register a domain name.

Ideally, your domain name will include the name of your brand (whether your “brand” is a product that you sell, a service that you offer or the name of your company) – e.g. www.thisismybrand.ca. In an earlier blog post (http://www.devrylaw.ca/intellectual-property/trade-mark-registration/) I discussed a common misconception that incorporating a business under a specific business name grants you trade-mark rights to that name. A similar misconception exists that registration of a domain name with an internet registration authority grants you special protection or even the right to use the domain name commercially in Canada. In fact, if there is a previously registered trade-mark that is confusingly similar to your domain name, the owner of that trade-mark may force you to give up your domain name. Even an un-registered trade-mark owner can force you to give up your domain name in certain circumstances.

Registration of a domain name does give you an exclusive right to use the domain (but not the brand name itself!) for a fixed period of time, but keep in mind that you never actually own a domain name. Domain names are generally issued on a first-to-apply basis, and an annual fee is required to maintain registration. Assignment of numeric addresses to domain names (e.g. 173.194.75.104 is assigned to www.google.com) is the responsibility of the Internet Corporation for Assigned Names and Numbers (ICANN). There are over 1,000 independent registrars which are accredited by ICANN to sell domain names around the world.

One of the reasons that it is recommended to file a trade-mark to protect your domain name, is to combat “cybersquatters”. Cybersquatting, according to the US federal law known as the Anticybersquatting Consumer Protection Act, is “registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trade-mark belonging to someone else”. While Canada doesn’t have any specific “anti-cybersquatting” legislation, the Canadian Internet Registration Authority (CIRA) requires anyone registering a domain name ending with “.ca” to meet certain “Canadian Presence” requirements – these include Canadian citizenship or residency, Canadian businesses, Aboriginal Peoples and Indian Bands, Canadian trade-mark holders (whether they are themselves Canadian or foreign), Her Majesty the Queen, and foreign businesses with a physical Canadian Presence.

While Canadian presence requirements will inevitably prevent some instance of cybersquatting, trade-mark registration is ultimately the most effective way of protecting your website’s domain name. Cybersquatting is prevalent in other countries as well, and at some point it becomes a business decision as to whether you want to spend the money required to prevent someone in another country from registering a similar brand name with a different top-level domain (TLD) (e.g. .ca, .com, .net). For example, if you are not doing business in India, and have no intention of doing business in India, and have a limited budget, it may not be necessary to register the domain name www.thisismybrand.in. On the other hand it is generally recommended that in addition to registering with the .ca TLD, you also register “.com”, “.net” and “.org” at the outset to prevent those pesky cybersquatters from taking your name.

It is highly recommended that you hire an experienced professional to first conduct a search for your proposed domain name in the trade-marks database as well as a general commercial search before you begin using that name commercially. If there are no similarly confusing names in use, then a trade-mark application should be filed to protect your domain name before you register for the domain name.

If you have any questions regarding trade-mark registration or domain name registration, please do not hesitate to contact a lawyer or trade-mark agent in the Intellectual Property department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Trade-mark registration – key component of a successful marketing plan

August 10th, 2012

Whether you are a new business just starting out, or an existing business looking to expand, developing and promoting your brand is a key component of a successful marketing plan. Registering your trade-marks in the initial stages of your marketing plan is a cost-effective way of developing long-term brand protection.

It is a common misconception that registering your business name, or incorporating your business (either provincially or federally) grants you all-encompassing rights in that name, including trade-mark rights. Unfortunately, this is not the case.

On the other hand, registration of your trade-mark grants you the exclusive right to use the trade-mark across Canada for 15 years (renewable every 15 years). Once your trade-mark is registered, an application by another party to register a confusingly similar mark will be refused. Registered trade-mark owners also have more options available to them to deal with infringers, including the right to sue for depreciation of goodwill, and the right to request a nationwide injunction from the Federal Court of Canada. Trade-mark registration is prima facie evidence of your ownership of the trade-mark, so if there ever is a dispute about your trade-mark, the burden of proof is now on the party challenging your mark. In most cases, registered trade-marks become incontestable after five years. If your long-term business plan includes foreign expansion, a Canadian trade-mark registration will generally make it easier for you to register your mark internationally.

Having a registered mark can often make your business more marketable. A registered trade-mark can be a marketable asset that you can more readily license or sell than an unregistered mark. A registered trade-mark can also be potentially used as security for a business loan.

Your marketing budget likely includes money for signage, packaging, and business cards. Building your company’s reputation is important, and registering your mark early on could avoid wasted time, energy, and money spent on legal disputes in the future.

If you have any questions regarding trade-mark registration, please do not hesitate to contact a lawyer or trade-mark agent in the Intellectual Property department at Devry Smith Frank LLP. We have been assisting our clients grow and prosper since 1964.

Trade-mark registration

July 24th, 2012

Trade-mark registration – a key component of a successful marketing plan

Whether you are a new business just starting out or an existing business looking to expand, developing and promoting your brand is a key component of a successful marketing plan. Registering your trade-marks in the initial stages of your marketing plan is a cost-effective way of developing long-term brand protection.

It is not mandatory to register your business name as a trade-mark. Using a name for a certain period of time establishes your ownership of that name through common law and does give you certain rights to the name. However, these rights are quite limited compared to the rights afforded to a registered trade-mark owner. For example, if your trade-mark is not registered, your rights are limited to the geographic area where the trade-mark has been used, and upholding the rights of an unregistered trade-mark in the courts can be an onerous process.
On the other hand, registration of your trade-mark grants you the exclusive right to use the trade-mark across Canada for 15 years (renewable every 15 years). Once your trade-mark is registered, an application by another party to register a confusingly similar mark will be refused. Registered trade-mark owners also have more options available to them to deal with infringers, including the right to sue for depreciation of goodwill, and the right to request a nationwide injunction from the Federal Court of Canada. Trade-mark registration is prima facie evidence of your ownership of the trade-mark, so if there ever is a dispute about your trade-mark, the burden of proof is now on the party challenging your mark. In most cases, registered trade-marks become incontestable after five years. If your long-term business plan includes foreign expansion, a Canadian trade-mark registration will generally make it easier for you to register your mark internationally.

Sounds about right

April 2nd, 2012

This week the Canadian Trade-Marks Office announced that effective immediately it will begin to accept applications for sound-based trade-marks.

This decision stems from a recent Federal Court decision overturning the Canadian Intellectual Property Office (CIPO)’s refusal to register MGM’s famous “lion’s roar” sound as a trade-mark.

Traditionally, it has been a requirement that trade-marks be easily represented visually, either as a word, phrase or logo. While the Trade-Marks Office will still require an application for a sound mark to include “a drawing that graphically represents the sound” (e.g. as a waveform depiction of the sound), this decision may open the door for CIPO to allow other non-traditional trade-marks in the future, such as moving images, holograms, scents, tastes and textures.

For the time being, new applications for sound marks may only be submitted by way of a paper application, and must include a recording of the sound mark in MP3 or WAVE format, limited to 5 megabytes in size, and recorded on a CD or a DVD.

For more information on registering traditional or non-traditional trade-marks, contact Cory Schneider.

SCC rules hyper-links to defamatory content is not defamation

November 2nd, 2011

Check out this article in the Globe and Mail regarding hyper-links and defamation.