and worldwide have continued to express deep concerns about Big Tech firms and their extensive collection of personal digital data, which affects how markets operate and compete. In a I coauthored with Professor Kean Birch of 91ŃÇÉ«, we dove into these policy materials, using to explore recurring themes in across various regions. Published by the , our work also sheds light on how the collection of personal data is portrayed in the latest review of competition laws, policies, and regulations, and the implications for evolving competition policy

Why Competition Policy Matters

Big Tech firms are powerful political-economic actors within the economy, especially when it comes to the mass collection and use of digital personal data. As , in a data-driven digital economy, they can therefore shape and dominate markets by structurally and strategically undermining competition through their constructed platforms—data-driven ecosystems that appear separate from the market. This capacity gives Big Tech firms structural and techno-economic power over their competitors, making it more important than ever for competition law to step up its game. Through a thematic policy analysis, our research reveals a series of key issues that policymakers around the world are identifying as important structural and techno-economic implications of Big Tech for competition.

Structural and Techno-economic Dimensions of Big Tech’s Market Power

A significant part of Big Tech firms’ market power lies in economies of scale, which can create tough barriers for new competitors to break through. For example, as points out, the high costs needed to start a business can be a genuine hurdle for newcomers, while established companies can handle regulatory costs much more comfortably. Additionally, the costs involved in switching from one provider to another can make users hesitant to change. As highlighted by , the digital economy has sped up the impact of these economies of scale, in part because personal data complicates how we understand market definitions in competition policy. The basic assumptions that guide competition policy often use price theory to define markets and identify anti-competitive behaviour. These competition frameworks therefore struggle to address situations involving seemingly ‘free’ goods (like search engines) or the trade of these free goods and services for personal data. , ).

Meanwhile, the techno-economic side of the power held by these Big Tech firms includes both the strategic and responsive growth of relationships involving technology and political-economics. This growth is aimed at connecting a range of stakeholders, including governments, businesses, users, and academia, with the infrastructures and platforms created by Big Tech.

Structural Implications of Big Tech for Competition

Scholars such as have highlighted the significance of the network effect as a key structural implication of Big Tech for competition policy. These companies have established themselves as intermediaries in building multi-sided market platforms. Network effects result from how the number of users in a network (e.g., social media platforms, search engines) increases the usefulness of the network to its users, thereby raising its attractiveness for new users. Consequently, as the noted in 2020, network effects lead to a self-reinforcing cycle in which users migrate to the fastest-growing network. With this network effect, Big Tech companies are amassing a startling amount of data, providing them with an enormous competitive advantage, creating barriers to rivals entering or thriving in relevant markets, and allowing the incumbent digital platform providers to expand into adjacent markets.

The second structural effect is connected to but distinct from the first: investments made by Big Tech firms mean they can scale up with lower-than-usual costs. As the UK's 2019  put it, ‘Both the scale and the data that the platforms possess on consumers make it hard for other players, including publishers, to compete.’ Economies of scale have provided significant benefits for Big Tech firms as they have grown quickly to dominate their markets. This is clearly becoming a cause for concern amongst policymakers worldwide (as seen in, e.g., , , , OECD 2022). The main negative effect of such economies of scale is the loss of market contestability: there are significant barriers to entry into digital markets because Big Tech incumbents benefit from first-mover technology advantages; there are also significant disparities in market information; and then there are disparities in the capacity to adjust prices because incumbents benefit from greater information (e.g., data collection) and higher processing capacity (e.g., computing infrastructure). 

The third structural issue identified in our paper is the gatekeeping role of these Big Tech companies in our societies and economies. Policymakers have thus noted that a few digital gatekeepers hold the keys to the crucial digital infrastructure that impacts our everyday lives—whether it's staying in touch with friends, finding job opportunities, or accessing information. Gatekeepers can control access to the users and their data, which can hold significant value for other firms wishing to connect with consumers. The fact that this vital digital infrastructure, including personal data, is largely provided by Big Tech, makes it tough for startups and competitors to enter the market.

Techno-economic implications of Big Tech for competition

The first techno-economic issue we identify is the capacity of Big Tech to enter adjacent markets through data collection. As the  pointed out in 2019, ‘The extensive amount of data available to Google and Facebook provide these platforms with a competitive advantage and assist with entry into related markets.’ Data-driven business models enable Big Tech to enter adjacent markets through the modular extension of technical standards and terms and conditions (e.g., APIs, SDKs, plugins).

The second techno-economic issue concerns the spread of market power through the creation of digital ecosystems as ‘walled gardens.’ An ecosystem is more than a platform: it is the configuration of technical devices, applications and software, platforms, users and developers, payment systems, terms and conditions, and other legal rights and claims and standards (see: Autoriteit Consument & Markt, 2019). As explained by the , through this ecosystem, end-users get locked in, reducing the opportunity for competition, even when products and services (e.g., Gmail, Facebook) are notionally ‘free.’

The third techno-economic issue follows the second: Big Tech reinforces its market power by creating ‘enclaves’ in which they govern economic activities. These enclaves are distinct from markets; they sit inside wider markets, , but gatekeepers can also establish the internal ‘rules of the game’ and control market information. Policymakers have highlighted various relevant business strategies and practices—including the setting of defaults, cross-selling, and self-preferencing—that reduce competition within these techno-economic enclaves.

Challenges of digital personal data for competition and competition policy

The mass collection and use of personal data by Big Tech therefore has structural and techno-economic implications for competition policy—implications with which policymakers around the world are now grappling.

A key consideration in these policy materials is the techno-economic dimension of data-driven leverage. Policymakers repeatedly observe that Big Tech enjoys a competitive edge, primarily because of its vast personal data reserves and its ability to limit other companies' access to this valuable information. Although any digital firm can gather personal data, having substantial data holdings boosts innovation potential and offers a notable business advantage. This concern has been underscored by the.

Already concentrated digital markets are likely to concentrate further without concerted action to change competition policy. Our paper demonstrates the growing awareness among policymakers of the important effects of Big Tech and personal data collection on competition and market power. Of course, there's also a looming concern that the winner-takes-all dynamics fuelled by data control could influence the future development of important technologies like artificial intelligence, which significantly depend on large training datasets.

'Damola Adediji is a Visiting Researcher with IP Osgoode and a Doctoral Candidate with the Centre for Law, Technology & Society at the University of Ottawa.

The post Identifying the implications of Big Tech and digital personal data for competition policy appeared first on IPOsgoode.

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Meena Alnajar is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

In March 2021, Rogers Communication Inc. announced an upcoming to buy Shaw Communications Inc for a US$26 billion takeover. If successful, Rogers will become Canada’s -largest cellular and cable company operator. Canada would resultingly have wireless providers to choose from instead of four. This deal is now facing opposition from some of Canada’s key regulatory powers. On March 3 2022, Canada’s of Innovation, Science and Economic Development Francois-Phillippe Champagne stated that “The wholesale transfer of Shaw’s wireless licenses to Rogers is fundamentally incompatible with our government’s policies for spectrum and mobile service competition, and I will simply not permit it.” But why should Canada prevent industries from extremely profitable mergers and acquisitions?

Ottawa’s main concern with this deal is the monopolization of essential services like cell phones and Internet. With a monopoly, Rogers is free to raise prices because no other competitor could offer a better price matching Rogers’ breadth of services. Many are concerned that they will not be able to compete with Rogers, and consumers worry they will suffer higher cell phone prices without other options. Rogers gave an assurance that it would not raise prices until at least years after the deal’s closing. But that assurance may not be enough to stop Rogers from continuing to competitors in the future, leaving fewer choices for Canadian consumers. Financial analysts acknowledge that while the government may try to reject the deal, the government’s statements are not necessarily fatal. predict that the deal will close, but, to maintain competition in the industry, Rogers will not be able to buy all of Shaw’s wireless business.

The Rogers-Shaw deal is likely moving ahead. On March 24, the Canadian Radio-television and Telecommunications Commission (“CRTC”) Rogers’ acquisition. The CRTC stated that, subject to modifications, Rogers’ proposal would not unduly affect Canada’s competitive landscape. The CRTC made stipulations to its approval that could once again balance Rogers’ acquisition and fair competition in the wireless service marketplace. Rogers will contribute towards various initiatives promoting local news and independent projects. Rogers must also create an news team with journalists in all provinces to provide news content to First Nations, MĂ©tis, and Inuit communities. These stipulations could help stimulate local journalism and production companies, addressing concerns regarding the survival of local wireless services after this big merger.

While Canadian government officials seek to discourage anti-competitive behaviours, Canada’s Competition Act was last reviewed in . Since then, Internet giants like Google, Facebook, and Amazon have often participated in anti-competitive practices online to dominate the marketplace. In Canada, Google and Facebook pocket of online advertising revenues, yet no laws have come in to stop them. Minister Francois-Phillippe Champagne announced on , to modernize competition law through legislative reform of the Competition Act. Through a broad review, the Competition Bureau has suggested changing the in the current competition law. This defence saves mergers that harm competition so long as the deal creates cost savings or other efficiency gains. Rogers may rely on this defence to keep the deal moving forward. Though not yet rejected, the Rogers-Shaw deal may be a catalyst for Minister Francois-Phillippe Champagne to implement changes to competitive practices.

The post The Wi-Fi is A, B, or C—the Rogers-Shaw Deal: Limiting choice in a wireless marketplace? appeared first on IPOsgoode.

Photo by Ann H ()

Meena Alnajar is anÌęIPilogueÌęWriter, IP Innovation Clinic Fellow,Ìęand a 2L JD Candidate atÌęOsgoodeÌęHall Law School

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On February 11, 2022, a class action lawsuit against for double ticketing settled for $6 million dollars. People who used Airbnb for the first time since October 2015 may be eligible for up to $45 in credit. Vancouver resident filed the class action in 2017 on the basis that Airbnb appeared to charge Lin $122 a night for what he booked as a $108 night on the app. The act of charging a consumer the higher of two or more prices is known as and it is a criminal offence in Canada under Section 54 of the Competition Act. This class action signified that parties can be found guilty of double ticketing even in online spaces.

Double ticketing in Canadian law is described as charging a consumer the of two or more prices when it is expressed in the following ways: on a product (its wrapper or container), on anything attached to the product including anything on which the product is mounted for display or sale, on an in-store or other point-of-purchase display or advertisement. Online spaces, such as applications, are not explicitly included in that list as this section was first enacted in . The Section intends to prevent consumers from being by the prices they are charged. Interestingly, prices that are not in-store or at the point of purchase, such as newspaper ads, . This exclusion could give way to online sellers having different prices listed online, as these online prices appear to be neither in-store nor definitively at a point-of-purchase. The Airbnb class action helps clarify how courts may contemplate a Section 54 offence for online retailers.

In its initial arguments, claimed that double ticketing did not apply because the two prices for a single accommodation are the price of two different products. The first price reflects the actual accommodation offered by hosts to guests and the higher price is the listing service. found this pleading to be a mischaracterization of Airbnb’s own products and that it was not plain and obvious that these are two prices for two different products. Airbnb was found guilty of double ticketing, then the decision. On appeal in federal court, the parties reached a of $6 million dollars and Airbnb avoided admitting liability. Person(s) guilty of a Section 54 can face a maximum fine of up to $10,000 and/or a year’s imprisonment.

Justice Gascon also indicated that the class action’s Section 54 claim is and stretches Section 54’s potential interpretation. However, this class action is not the first Section 54 class action against online sales. On it was reported that a class action against WestJet for double ticketing was approved. In that action, the plaintiff argued that WestJet claimed in its published tariff that the would be free yet proceeded to charge passengers anyways. Businesses can take advantage of online sales by posting one price, then adding non-optional fees in the final checkout. The current provision, Section 54 of the Competition Act has not developed to include online price differences in the list of double ticketing offences. These emerging class actions demonstrate how case law can help adapt statutes to changing sale environments and serve as an expensive warning to retailers that hide fees to better market products online.

The post Double Trouble: Airbnb Class Action for Double Ticketing Settles at $6M appeared first on IPOsgoode.

As previously mentioned, esports share many of the common elements found in traditional sports. There are professional leagues, teams, sponsorships, media deals, agents, and fans. However, unlike traditional sports, esports differ most significantly in the proprietary nature of the activity. Major League Baseball does not own baseball, the National Hockey League does not own hockey, the National Basketball Association does not own basketball, but in the Overwatch League (OWL), someone does own Overwatch. Overwatch is, therefore, eligible for copyright protection as an audiovisual work. In Canada, the does not identify video games as a specific category of work. However, the courts have recognized  video games to be protected by copyright, both as a whole and in its individual elements such as the soundtrack, voice acting, character design, and level design. For the most part, the owner of the copyright in a video game is the game’s producer.

Similarly to most copyright owners, game producers assert their exclusive rights by controlling reproductions, distributions, public performances, and creations of derivative works that involve or stem from their copyright-protected work. In esports, these exclusive rights provide game producers with significant power over the direction of the industry. Game producers possess the ability to dictate not only the use of their games in tournaments, but also the way the tournaments will function, and even who can participate in the tournaments. Game company Activision Blizzard’s recent decision to switch from a merit-based league to a franchised league for its game Call of Duty is one recent example of a producer exercising this control. This decision was ultimately met with criticism after the iconic Call of Duty World League (CWL) team backed out of the estimated $25 million franchise fee required to join the new franchise league. Their decision effectively concluded their participation in the game Call of Duty for the time being.

Given that tournament organizers, teams, players, broadcasters, spectators, and advertisers all rely on access to a publisher’s IP to participate in esports markets, there is a concern that a publisher’s behaviour could constitute anticompetitive IP exploitation. As one , a game publisher’s IP in a game effectively grants them a permissible monopoly, and publishers will rationally seek to minimize competitive pressure from other entities in the market through vertical integration of the downstream market. However, the issue of whether a single videogame could constitute a relevant market under competition law is unclear. Currently, there are many different esports leagues, numerous publishers, and countless current and emerging games, as opposed to just a single league with monopoly power. Moreover, it would be difficult for any would-be plaintiff to demonstrate that a publisher’s actions were anything not otherwise already afforded to them through federal IP protection. While it’s unlikely there would be any clear violations of competition law, those within the esports industry need to be cognizant of these issues, particularly in an era in which publishers are demanding franchise fees in the tens of millions of dollars for games yet to be released.

While publishers will often flex their IP muscle at the expense of tournament organizers, leagues, teams, advertisers, and broadcasters, there is one particular area where publishers typically turn a blind eye – streaming. When a user purchases a game, what they are buying, in addition to the physical copy, is a copyright licence to make use of the game subject to certain terms and conditions. Generally, streamers receive a “carte blanche” from publishers when it comes to streaming on services such as YouTube and Twitch because it makes commercial sense given the promotional value that streamers provide to the game.

The recent launch of the game Apex Legends is a testament to the influence that streamers have on the industry. Much of the game’s early success can be attributed to clever marketing on behalf of the publisher. s indicate that the game’s publisher, Electronic Arts Inc (EA), paid a number of streamers, including a reported $1 million to top streamer Tyler (Ninja) Blevins, to play the game for the week. The game was an instant success, the game generated over 25 million players, with nearly 64 million hours of live viewership on the streaming site Twitch. All this success occurred even though the game was not announced to the public until a day before it was actually released!

While the gaming community is certainly capable of giving a game life, it also possesses the power to take it away. In 2017, fans organized a of EA’s Star Wars Battlefront II to protest the game’s unfair use of “”. As a consequence of the boycott, EA failed to meet sales targets by roughly one million copies, their stock price fell, and their reputation was permanently damaged. Needless to say, the gaming community plays a significant role in this emerging industry, acting as a type of de-facto regulator in a mostly unregulated industry. 

From an outsider’s perspective, there often appears to be unbridled control on the part of game producers in the esports industry. Still, it should not be forgotten that a game’s real success depends on its reception in the gaming community. If a game producer chooses to deploy exploitative IP strategies, copystrike its players, or engage in manipulative profit-maximization, the community will be aware, and a game publisher will suffer.

Written by Alexandre Dumais, IPilogue Editor and JD Candidate at Osgoode Hall Law School. Alexandre is also the Director of Sports, Osgoode Entertainment and Sports Law Association.

The post In Too Deep: Exclusive Rights of Game Producers in the Esports Industry appeared first on IPOsgoode.

The Supreme Court of Canada dealt a strong blow to the so-called promise doctrine and made international precedent when it ordered Google to de-index infringing websites across the global Internet. These and the other developments noted below pave the way for an IP-busy 2018 as we await the release of the National IP Strategy, which will hopefully set the stage for Canadian advancements and benefits from emerging technologies and business practices. Here at IP Osgoode, we are set to examine the promise and challenges associated with one of these important technology areas: artificial intelligence (AI). On February 2, 2018, our AI conference, “Bracing for Impact: The Artificial Intelligence Challenge”, will feature internationally renowned AI experts from Canada and abroad. For more information and registration, visit .

We hope you can take part in our AI conference as well as our regular suite of exciting activities and initiatives as 2018 gets further underway!

PATENTS

The patent law landscape experienced incremental changes and some profound shifts that seemed to mimic the changes of the seasons here in Canada during 2017.

It’s All About the Money

The year kicked off with a chilling warning to Non-Practicing Entities (NPEs) seeking to protect patent rights through litigation. NPEs commencing patent infringement actions “without a clear theory of infringement” may be sanctioned with for disregarding the “serious cost consequences [following from] allegations shown to be unwarranted”. In , the Federal Court of Canada was satisfied that the defendant’s activities were non-infringing; and because the plaintiffs “should have known that Bell did not infringe”, they were ordered to pay solicitor-client costs.

The Federal Court of Appeal reminded us in February that in “an extremely complex patent case involving [...] 22 allegations of invalidity, 33 days of discovery, 32 days of trial, written submission exceeding 700 pages, and the closing argument lasting three days”.

The Federal Court of Appeal also decided on profit recovery for infringing activities. In , the Court highlighted that the differential profit approach of recovery is to “ensure that a patentee only receives that portion of the infringer’s profit that is causally attributable to the invention”. Accordingly, the Court asserted that it is as the actual value of the “patent lies in the ability of the patentee to exclude competitors and competition” .

The Season of New Life and Law

In the UK, the beginning of spring was marked with a UK Patent Court decision on the interplay between IP and Competition Law. In , the court tackled issues involving standard-essential patents (SEPs), as well as the (FRAND) principles applicable to licensing agreements between patentees and licensees. In particular, the UK Court explained that the requirement to commit to FRAND terms in a SEP licence serves the public interest insofar as it spurs “the best and most up-to-date technical” standards to be set and inventors to “obtain a fair reward for their invention”. While Canadian jurisprudence is yet to develop on what negotiations are FRAND and what are not, the guidelines forecast issues that industries might face on this matter.

Shortly after, the Federal Court of Canada released its , which aimed at developing efficient, expedient, and proportional use of court time. A rundown of the particularly noteworthy protocols to streamline trials and court’s resources is available .

The spring also ushered in a as the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union received Royal Assent on the 16^th of May []. It is important to note that CETA listed the ICSID tribunal as the main recourse for disputes. on how this may affect the IP environment domestically suggests that the ICSID’s unappealable decisions could be a new problem for Canada, absent the requirement of certification in domestic courts. So, in addition to CETA’s implications toward patent term restoration, appeals under NOC regulations, and the potential end of dual litigation — see general outline and significance for pharmaceutical patent protection — further developments stemming from the tribunal jurisdiction are anticipated for the new year.

The last development of the season provided an important lesson from a business perspective regarding IP transfer agreements. In , poor management of IP rights and poorly conceived transfer agreements proved to be a hindrance to enforceability. The Federal Court also delivered an important lesson around patent infringement when it announced the Public Judgement and Reasons in , awarding Dow Chemical the largest patent infringement monetary award in Canadian history: $644,623,550 and pre-judgement interest.

Utility, Enforceability, and NOCs

Two hot-button issues from the Supreme Court of Canada heated up the start of the summer. One involved the decision that did away with the Promise Doctrine, and the other pertained to a global takedown order imposed on an online intermediary (Google) that may change the future of IP enforcement.

In the first, , the Court effectively abolished the Promise Doctrine on utility. , all explicit promises of utility made by a patentee had to be fulfilled for the patent to be valid. The Court nonetheless deemed this requirement “unsound” and “not good law”. For the Court, “depriv[ing] such an invention of patent protection if even one ‘promised’ use is not soundly predicted or demonstrated is punitive and has no basis in the Act”. So, in bringing the common-law more into accord with the requirements for patentability, the Court revamped , requiring that the patentees demonstrate, essentially, what the subject-matter of the invention is, and how it is useful in serving a practical purpose.

The second case, , played an important role in increasing IP enforcement outreach in the Internet era. It provides the courts with a more effective measure to protect IP rights. Specifically, the precedent allows an IP owner to obtain a court order against search engines — such as Google in this case — for the removal, on a global scale, of search results (websites) that facilitate infringement of IP rights. It will be interesting to observe whether or not this decision affecting online intermediaries such as Google will to address the problem of unreachable wrongdoers, or will conversely be deemed a to non-infringing actors that are a .

The end of summer featured the ’s proposed amendments to the Notice of Compliance (NOC) Regulations. The amendments seek to update the pharmaceutical patent litigation regime in Canada, enabling Canada to . A discussion of the most significant changes to Canada’s NOC Regulations can be found . The changes will apply to proceedings in which Notices of Allegation (NOAs) were served on or after September 21, 2017 — the date of the NOC Regulations.

Promptly after, the Federal Court released its for actions under the amended NOC Regulations to promote efficiency in light of the strict timelines — 24-month timeframe for a proceeding to be completed and a decision rendered — imposed by the . The guidelines set out procedural rules to be observed for proceedings under the amended NOC Regulations. Some key points worthwhile to look at were outlined .

A Not-So-Obvious Future

Lastly, the winter months saw an of the Canadian law of obviousness. In , the Federal Court of Appeal deemed the “inventive concept” set out in the case an “unnecessary satellite debate” in the analysis of obviousness. After being over the years — see , — the current test for obviousness seems to place emphasis on the as a , at least until a clearer definition of the “inventive concept” is developed by the Supreme Court.

TRADEMARKS

2017 saw a number of notable Canadian court decisions in the realm of trademark law. Outside of the courts, other developments will also shape the IP landscape going forward.

Consumer Criticism Gets a Bit Riskier

In a case dealing with consumer criticism of a brand - - the Federal Court returned a decision favourable to brand-owners. The plaintiff, United Airlines, sued the defendant, Jeremy Cooperstock, for trademark and copyright infringement, depreciation of goodwill, and passing off, over his “gripe site” . The court characterized the website as a “consumer criticism website where visitors can find information on the Plaintiff, submit complaints about the Plaintiff, and read complaints about the Plaintiff dating back to 1998 in the database of complaints.” The website included an .

Justice Phelan held that Cooperstock provided “services” through the website and that the marks were “being used or displayed in the advertising or performance of services pursuant to s 4(2) of the Trade-marks Act.” He also found that there was a likelihood of confusion. As a result, the defendant was found to have infringed s. 20(1)(a).

The defendant was also found liable for passing off: the court found significant goodwill attached to the United marks, that there was confusion and the likelihood of confusion, and that the plaintiffÌę suffered damages or was likely to suffer potential damages.

The court held that Cooperstock “intentionally attempted to attract the Plaintiff’s online consumers to his own website for notoriety” and therefore depreciated the goodwill associated with the United marks, contrary to s. 22. Of note, the Defendant was also found to have infringed copyright in the marks and Justice Phelan dismissed the fair dealing defence of parody.

Whereas previous decisions such as Michelin v. Canadian Auto Workers andÌęBCAA et al. v. Office and Professional Employees’ Int. Union et al., had held that trademark owners’ rights to control the use of their mark in the context of criticism were limited, the United case demonstrates that brand critics must be careful in their use of brands’ logos and trademarks. While , “[i]n this case, the Defendant sailed too close to the wind – and he was put up on the rocks.”

Why Seek an Injunction Anywhere Else?

In , the plaintiff Sleep Country was successful in its motion for an interlocutory injunction. Sleep Country sought to restrain Sears from using the slogan “THERE IS NO REASON TO BUY A MATTRESS ANYWHERE ELSE”, which it argued was confusing with its own slogan “WHY BUY A MATTRESS ANYWHERE ELSE?” Sleep Country alleged that Sears’ use of the slogan was causing harm to Sleep Country as “a result of confusion between the two slogans, as well as depreciation of the goodwill and loss of distinctiveness of Sleep Country's registered trade-marks.”

The court considered the tripartite RJR-MacDonald test for issuing such an injunction: a serious issue has been raised, the party seeking the injunction will suffer irreparable harm if the injunction is not granted, and the balance of convenience favours the seeking party. The key issue on the motion was irreparable harm, which the court found was established by Sleep Country’s “concrete and non-speculative evidence.” Justice Kane held that lost sales, loss of distinctiveness, and depreciation of value of the slogan would lead to irreparable harm, and that the harm could not easily be quantified. The balance of convenience was also found to favour Sleep Country.

It has traditionally been quite difficult for trademark owners to obtain interlocutory injunctions. The Sleep Country case indicates that the courts may be relaxing the onus on trademark owners to prove irreparable harm, particularly in cases where confusion is quite apparent.

Notably, the Quebec Superior Court in denied the plaintiff a similar injunction because “the Court cannot come to the conclusion that it is clear that the use by Cascades new Fluff trademark will cause confusion with the Royale trademarks.” Irving dealt with the allegation that Cascades’ fluffy bunny was confusing with Irving’s furry Royale kittens. The court concluded that “the use of white furry animals is not unique to the packaging for living's products” and that any harm would be quantifiable. Contrasted with Sleep Country, in which it was held that any harm would be too difficult to quantify, Irving shows that it may still be difficult for trademark owners to obtain interlocutory injunctions.

Injunctions Go Global

In a case that dealt with trade secrets and passing off, , the Supreme Court affirmed the effectiveness of an extra-territorial injunction granted by the lower courts. The issue on appeal was “whether Google can be ordered, pending a trial, to globally de-index the websites of a company which, in breach of several court orders, is using those websites to unlawfully sell the intellectual property of another company.”

The court concluded that the injunction was the only way to mitigate the harm to Equustek pending the resolution of the underlying litigation. The case therefore stands for the availability of an extra-territorial injunction as an equitable remedy in Canadian courts: “Where it is necessary to ensure the injunction’s effectiveness, a court can grant an injunction enjoining conduct anywhere in the world.”

Among the other trademark cases decided by Canadian courts this year, and are of particular interest.Ìę In Travelway, the Federal Court of Appeal held that owning a registered mark is not a complete defence to infringement – the respondent’s registered mark was held to infringe that of the applicant’s. In Diageo, the Federal Court held that Heaven Hill’s Admiral Nelson rum products infringed Diageo’s registered Captain Morgan marks. The court considered the plaintiff and defendant’s trade dress and found the Captain Morgan trade dress to be a distinguishing guise and therefore enforceable under the Trade-marks Act. The court also found that the goodwill associated with the Captain Morgan mark had been depreciated.

Other Changes to Trademark Law

Canada’s updated Trademarks Act is set to come into force in early 2019. In June 2017, the the first draft of the new Trademark Regulations. Comments were accepted until July 21, 2017 and will be taken into consideration when revising the draft regulations. Among the notable changes coming in 2019 are Canada’s accession to the Madrid Protocol, the Singapore Treaty, and the Nice Agreement and its classification system. Also significant will be the removal of the use requirement at the time of registration.

COPYRIGHT

2017 continued many of the debates and cases started from the previous year. While some decisions received accolades, others received outright criticism. As was the case in 2016, fair dealing questions came to the fore and hit close to home at 91ŃÇÉ«.

Fear Dealing and Post-Secondary Education

In a much anticipated decision, the Federal Court ruled against 91ŃÇÉ« in and directed the university to pay an interim tariff to Access Copyright. In 2011, 91ŃÇÉ« opted out of the Access Copyright licence due to increasing tariffs and implemented its own copyright guidelines. Crucially, the 91ŃÇÉ« guidelines allowed students enrolled in a class or course to receive a single copy through a coursepack or via a posting on an online learning management system if the copying was done in accordance with “fair dealing”. However, the Federal Court held that 91ŃÇÉ« did not have any right to opt-out of tariffs and that the university’s guidelines were arbitrary and not compliant with section 29 of the . Among other things, the guidelines operated under the assumption that the use of 10% of a copyright-protected work was “fair dealing” but did not provide an explanation. Quantitatively, this threshold might seem to restrict copying of an entire text. But, as , qualitatively, the parts copied may constitute the “core” of the work, making such use “unfair,” and conceivably allow for the reproduction of the entirety of a work if multiple sections are used across courses and faculties. Further, the court emphasised the school’s failure to comply with the guidelines and therefore, enforced the interim tariff. the inclusion of “education” as a fair dealing purpose played little role in this decision. While much attention on the case framed the important issues with respect to fair dealing, note that the case was not about copyright infringement, but rather whether tariffs imposed by the Copyright Board of Canada are mandatory for post-secondary institutions that use copyright-protected material licensed by Access Copyright. 91ŃÇÉ« indicates it will the decision so these questions will continue in 2018 and beyond.

Anti-Circumvention and Technological Protection Measures

Setting precedent in 2017, in the Federal Court applied substantive rules on the anti-circumvention of technological protection measures (TPMs), which were introduced in the Copyright Act 2012. The Federal Court expressed its willingness to enforce the TPMs and protect against circumvention in the digital age. The case involved a corporation named Go Cyber shopping (2005) Ltd., which sold and installed circumventing devices enabling users to play potentially hundreds The Federal Court in the suit filed by Nintendo, awarded $12.7 Million as damages and held that Go Cyber “authorized” copying by providing instructions to download header data without the consent of Nintendo constituting infringement. suggests that by adopting “a broad interpretation of a technological protection measure”, the court confirmed Canadian copyright law’s tough stance on copyright piracy.

Obligations of Internet Service Providers

The ongoing conflict between reached the Supreme Court after the decision of the Federal Court of Appeal (FCA) in 2017. Rogers filed before the Supreme Court to consider the scope of the Internet service provider’s (ISP) obligations under the notice and notice system. The FCA ruled that ISPs can disclose the alleged offender’s identity for free. The decision surprised the industry because it would be easier for copyright holders to that they come to financial settlements.

Data protections

Affirming the trial court’s ruling on the copyright protection of seismic data, the appeal in the Alberta case of was dismissed and appeal by GSI to the Supreme Court was denied. On Appeal, GSI argued that Section 101 of should be interpreted properly. , “The correct interpretation of "disclose" also confers on these Boards the legal right to grant to others both access and opportunity to copy and re-copy all materials acquired from GSI and collected under the Regulatory Regime”.

This decision will ensure copyright protection of seismic data by simultaneously providing a framework to access it.

Canadian content and Copyright-related Reviews

In 2017, the Federal Government also adopted initiatives to protect Canadian creators and introduced a policy framework to extend Canadian content worldwide. On September 28, MĂ©lanie Joly, Minister of Canadian Heritage, announced Later in the year, on December 13, the Government officially announced the Parliamentary Review of the Copyright Act, as mandated by the 2012 Copyright Modernization Act.Ìę The government also to reform Copyright Board of Canada in August.

U.S. Developments

In the U.S., perhaps the biggest copyright case of 2017 was The case dealt with the issue of whether copyright could subsist in the “pictorial, graphic, or sculptural features” of a “design of a useful article” – in this case, cheerleading uniforms. Ultimately, the U.S. Supreme Court held that such design features as the arrangement of lines and shapes on cheerleading uniforms were eligible for copyright protection, so long as they were separable from the useful article in question. In other words, if the impugned designs were imagined in abstraction – say for example if they appeared on a canvass – and thus eligible for copyright protection, then they would be equally eligible for copyright protection as part of a useful article. Therefore, while copyright cannot protect the shape, cut, or dimensions of cheerleading uniform, those design features that are separable from the functional object may be eligible for copyright protection. And while such a holding is not entirely novel, the Star Athletica decision likely sets a valuable precedent for lower courts that have struggled with the extent to which copyright protects the design features of a functional object.

Fair use was also a hot topic in U.S. courts in 2017, with a variety of interesting outcomes in cases across creative media. In , a raunchy parody of the Dr. Seuss classic “How the Grinch Stole Christmas” was held to be the kind of transformative work that qualifies as fair use. Meanwhile, in , a U.S. district court judge held that unauthorized children’s versions – or “KinderGuides” – of classic books by Hemmingway, Kerouac, and the like did not constitute fair use, but rather infringing use. In music, Drake’s use of a spoken word sample from jazz artist James Oscar Smith was held to be fair use in , and in film, a Star Trek fan-fiction movie was held to be a derivative work and not fair use in .

Copyright Around the World

Internationally, toymaker Lego was successful for the first time in a against manufacturers in China of some near-identical toys. 2017 also saw China clearly establish its growing importance on the international copyright stage, with deals in the book industry and increasing pressure on to meet international standards with respect to copyright licensing. Meanwhile in the E.U., courts held that if they perform an essential role in facilitating piracy of copyright-protected material, and that the may constitute copyright infringement.

IP OSGOODE

In 2017, IP Osgoode celebrated one of our very own, , who has been a guiding force in the Canadian intellectual property (IP) landscape for the past 40 years.Ìę IP Osgoode and Osgoode Hall Law School hosted a special symposium entitled, “” in celebration of Prof. Vaver’s in recognition of “his leadership in intellectual property law as a scholar and mentor”.

The symposium included a distinguished set of participants drawn from Prof. Vaver’s network of former students, colleagues and research collaborators, and highlighted four main themes of Prof. Vaver’s extensive scholarship: overlap and redundancy in the IP system, legislation and reform, users’ rights, and the importance of history. The luncheon keynote speaker, The , CC,QC (Supreme Court of Canada, 2006 to 2015),Ìę who was introduced by The , QC (Federal Court of Canada, 2001 to 2016), provided a heartwarming speech that gave the audience a glimpse into Prof. Vaver’s early life and career.

To mark the yearÌęProf. VaverÌęreceived theÌęOrder of Canada, IP Osgoode medal. The medal will be awarded yearly to an Osgoode student in the graduating class who merits special recognition for outstanding achievements in the area of intellectual property law. The student’s achievements extend beyond academic excellence, and can include significant contributions to research in intellectual property and related areas or exceptional commitment and enthusiasm through their participation in intellectual property-related extra-curricular activities.

Following the previous year’s successful partnership with Norton Rose Fulbright LLP, the IP Osgoode Innovation Clinic continued to grow in 2017. On behalf of IP Osgoode, Professor D’Agostino entered into an exciting with the International Law Research Program at the Centre for International Governance Innovation (CIGI) to support the Innovation Clinic. The IP Osgoode-CIGI partnership stems from a mutual desire to facilitate the discovery, dissemination and application of new knowledge concerning practical IP law training of law students and the desire the to facilitate the provision of basic IP legal services to early stage innovators and start-ups. IP Osgoode hired Dr. as the first full-time Innovation Clinic Coordinator. The addition of a full time coordinator has allowed for a substantial increase of the Clinic’s carriage of client files and expanded the Innovation Clinic’s outreach beyond the 91ŃÇÉ« and Osgoode Hall communities as well as the Toronto and 91ŃÇÉ« Regions into the Waterloo Region and throughout Ontario.

The partnership also supports Prof. D’Agostino’s research project, which consists of a critical evaluation of the Innovation Clinic model as well as clinic models elsewhere, and identifying potential opportunities for developing a sustainable network of clinics in Canada and beyond. The research and report will further dialogues between industry, law schools, law societies, the Canadian Intellectual Property Office (CIPO), levels of government, and other relevant stakeholders regarding the creation of a network of IP law clinics across Canada. This work will be published in 2018 and help inform and support CIPO and federal government initiatives to increase IP awareness, accessibility, and education in Canada.

Top 10 most read 2017 IPilogue articles

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 Stephen Cooley (IPilogue Editor & Osgoode JD Candidate) and Haramrit Kaur (IPilogue Editor and Osgoode Professional Development LLM (Canadian Common Law) Candidate) on Copyright, Sebastian Beck-Watt (IPilogue Senior Editor & Osgoode Graduate) on Trademarks, and Bruna Kalinoski (IPilogue Editor & Osgoode LLM Graduate) on Patents.

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The Bureau recently that Phase 2 of the IPEGs update could address anti-competitive activity surrounding standard essential patents (SEPs). SEPs are patents that are considered essential to implement an industry standard and are common within the technology industry. The European Commission (EC) that competition concerns arise from SEP holders gaining market power once a standard has been adopted by competing rivals. This makes ensuring fair, reasonable and non-discriminatory (FRAND) licensing commitments particularly important. Google/Motorola and Apple’s recent SEP litigation coupled with the corresponding enforcement by the EC and the United States Federal Trade Commission (FTC) raises questions as to how the Bureau will position the pendulum toward SEP activity.

The Competition Bureau’s Current Approach to Anti-Competitive SEP Activity

While not directly addressed, the Bureau’s note one example in which the Bureau would target anti-competitive SEP activity through of the Competition Act. Section 32 allows the Federal Court, on the advice of the Attorney General, to issue an order that remedies an anti-competitive act occurring from the mere use of an IP right. The IPEGs imply that the Bureau must first establish that the SEP holder dominates the relevant market and that refusing to licence the SEP prevents other firms from effectively competing in the relevant market. Second, the Bureau must establish that invoking section 32 against the SEP holder would not adversely affect the incentives to invest in research and development.

Section 32’s procedurally cumbersome requirements partially explain why it hasn’t been used for decades. The section requires the Attorney General to apply to the Federal Court. The Commissioner is also required to meet the “undue lessening” standard that was from other Competition Act provisions due to its outdated language.

Potential New Approaches to Target Anti-Competitive SEP Activity

The Bureau might characterize anti-competitive SEP activity as an abuse of dominance. The EC recently that Motorola’s efforts to seek injunctive relief against Apple’s use of a smartphone SEP constituted an illegal abuse of dominance pursuant to . The Bureau could argue that similar conduct is an abuse of dominance under of the Competition Act. However, unlike Article 102, explicitly exempts “an act engaged in pursuant only to the exercise of any right
under the
Patent Act”. The Competition Tribunal held in that the refusal to licence an IP right falls under the section 79(5) exemption. Therefore, the Bureau might refrain from characterizing the activity as an abuse of dominance unless it argued that the SEP holder’s breach of its FRAND commitments was something more than a mere refusal to licence.

The Bureau might instead choose to characterize anti-competitive SEP activity as an unfair trade practice. The United States FTC recently Google/Motorola’s FRAND commitment breach through of the FTC Act, which prohibits unfair deceptive acts involving commerce. There currently does not seem to be a provision in the Competition Act synonymous with section 5 of the FTC Act. The Bureau could instead argue that such conduct constitutes an illegal refusal to deal pursuant to of the Competition Act, which might allow the Tribunal to order the supplier of a product (the SEP) to sell to a party within usual trade terms (the FRAND commitment). However, the Tribunal held in that the term “product” in section 75 was not intended for licences of intellectual property, making it much less likely that the Bureau could use section 75 to target breaches of FRAND commitments.

Finally, a uniquely Canadian solution would entail amending section 32’s procedural obstacles outlined above to target SEP activity. Amending these obstacles, which isÌęÌęby the former head of the Bureau,Ìęcould improve the provision’s functionality while ensuring common ground with the EC and FTC’s competitive analyses by preserving the IPEGs’ mandated balancing of competitive effects. Overall, the Bureau has some significant provisions with which to target SEP activity. Whichever route they take, however, evidence suggests that the pendulum will continue moving toward antitrust enforcement.


Peter Neufeld is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

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Summary of the Preliminary Guidelines

The guidelines provide information to the pharmaceutical industry regarding when pharmaceutical patent litigation settlements will draw the scrutiny of either the criminal or civil enforcement provisions of the (“the Act”).

Criminal Enforcement Provisions

The guidelines state that the Bureau will likely “pursue” the settlement under the criminal enforcement provisions of the Act (s. 45) if any of the following conditions are met:

1. The settlement includes conduct that goes beyond the scope of the patent (eg. fixing a generic entry date beyond the patent term); or

2. The Bureau finds evidence that the settlement is a vehicle for “naked restraint” on competition or motivated by factors external to the litigation.

Notably, the Bureau also set out that even if a settlement agreement does not satisfy either of the above two criteria, it can still can be reviewed under the criminal enforcement provisions of the Act.

Civil Enforcement Provisions

If the Bureau decides not to review the settlement under the criminal enforcement provisions, the agreement can be examined under the “civil” enforcement provisions of the Act (s. 90.1 and 79). ÌęGenerally, agreements that will draw scrutiny under these provisions must have the effect of causing a “substantial prevention or lessening of competition” (“SPLC”). An agreement may be found to be causing an SPLC if, but for the settlement, the parties would have been likely to compete through the exercise of market power in a way that would lead to lower cost alternatives for consumers. One particular factor that was highlighted by the Bureau as important was a determination if the value transfer given to a generic company as part of a settlement is larger than the patentee’s litigation costs and potential liability for “section 8 damages” under the . If this is found to be the case, the agreement is more likely to cause a SPLC and draw scrutiny under the Act.

The Bureau’s Guidelines – Are They Feasible in Canada?

Various commentators have put forth and regarding the Bureau’s apparent willingness to expansively consider these settlement agreements as per se criminal. This approach has to be very different than the more holistic “rule of reason” evaluation of pharmaceutical patent litigation settlement agreements that was established by the US Supreme Court in (). An unfairly harsh or uncertain competition law framework is certainly a valid concern and an undesirable output for the Bureau.

In addition, one could argue that the Bureau’s intention to evaluate section 8 damages as part of their consideration of settlement agreements is impractical given that the quantification of these damages is still a for even the most experienced Federal Courts. Therefore, it is a valid question if the Bureau would be able to appropriately evaluate settlement agreements on this metric, and it may even be the case that this exercise is simply beyond their competence as an administrative body. This is another valid concern that stems from the current form of the guidelines.

Although these concerns exist, their presence should not stop the Bureau’s commendable efforts to prevent anti-competitive practices in order to curb . However, it must be recognized that an impractical, unpredictable, or overzealous scrutiny of settlement agreements in this sector may lead to the discouragement of litigation settlement which has the . Although certainly having great intentions, the Bureau must continue to refine its approach to creating a feasible and effective competition law enforcement framework in this area. On this very complex issue, like many of its kind, it is certainly not the thought that counts.

Ìę

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As was discussed in theÌęIPilogue by Nicholas Arruda, Friday’s ruling stems from aÌę Ìęfiled by former UCLA basketball star Ed O’Bannon. O’Bannon and nineteen others sued the NCAA, claiming that the organization violated the Ìębecause of its rules that prohibit student-athletes from receiving a share of the revenue earned by the NCAA and its schools from selling Ìęlicenses to use the names, images, and likenesses of its athletes in footage like live game telecasts, commemorative DVDs, and video games. NCAA regulations only allow its players to receive money for attending school and through scholarships, arguing that their restrictions on compensation for student-athletes are necessary “to uphold its educational mission and to protect the popularity of collegiate sports.”

U.S. District Judge Claudia Wilken did not agree with the NCAA, and at the end of her ninety-nine page Ìęshe issued an injunction prohibiting the NCAA from continuing on in its ways. Taking effect at the start of the next Bowl Subdivision Football and Division I Basketball recruiting cycle, student-athletes will now receive a share of the revenue generated from the use of their likenesses. The funds will be held in a trust until the student leaves school or is no longer able to compete. The injunction allows the NCAA to set a cap on how much they give to its athletes, however it does “prohibit the NCAA from setting a cap of less than five thousand dollars (in 2014 dollars) for every year that the student-athlete remains academically eligible to compete.” Schools also have the option to offer a lower amount, but only if the schools do not illegally conspire with each other when setting the number.

Those on team NCAA are not exactly happy with the loss, and have already reportedlyÌęÌęan intention to appeal the decision. Those on the opposite side of the court to O’Bannon Ìęthat paying players and moving away from amateurism (where “players participate for the love of the game”) would cause a drop in the number of college sport spectators and would create an imbalance among schools and conferences. NCAA witnesses further contended that the education athletes receive is in fact payment for their services.

Several players however testified that they viewed being an athlete and not a student as their main job while at college.Ìę According to O’Bannon testified: “I was an athlete masquerading as a student...I was there strictly to play basketball. I did basically the minimum to make sure I kept my eligibility academically so I could continue to play.” Co-lead counsel for the plaintiffs Bill Isaacson to the media that he was pleased with the verdict, calling it a “major step towards decency for college athletes.” Furthermore, Rutgers law professor Michael Carrier, who specializes in antitrust and IP law, reportedly the outcome may not actually be that scary since payouts may not be huge and will only come to the athlete after their career is over.Ìę In a statement to USA Today, Carrier does however Ìęthat the decisionÌęis a huge loss for the NCAA because their prized defences of amateurism and competitive balance Ìęare no longer persuasive in the face of an argument of fairness. As O’Bannon reportedly :Ìę“It is only fair that your own name, image and likeness belong to you, regardless of your definition of amateurism. Judge Wilken’s ruling ensures that basic principle shall apply to all participants in college athletics.”

So what now? In a very opinionated about the decisionÌęCBS Sports’ senior college football columnist Dennis Dodd said that “a seal has been broken. Players can be paid, and we can’t turn back from here.” And since the ruling is limited to male football and basketball players surely the cause will also be taken up by female athletes and those in other sports. The future implications of the decision, from its impact on the structure of American college sports, the potential influence it will have on athletes in other jurisdictions, and to the financial consequences for major sport colleges, speaks to just how important IP law issues are in all realms, whether it be business, sport, or education. The fact is, you have a right to you - it does not matter if you work in an office tower or run drills in a gym. Your name, image, and likeness are yours and, as confirmed by Justice Wilken, they are not for someone else to benefit from for free.

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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As , partner with McCarthy TĂ©trault in the Toronto office and a Member of the IPOsgoode Advisory Board, , “Patent law is based upon the social and economic rationale of balancing encouraging innovation and the avoidance of monopolies which can stifle competition.” In general, these principles have been extended into the realm of software as a means of rewarding and protecting the fruits of the inventor's labour in the hopes of stimulating and fostering further advances and discoveries through public disclosure mechanisms. Patents, and software patents, are, therefore key elements of the contemporary economic system.

However, while software may be generally similar to other types of inventions, the nature of software industries and software itself make the application of existing patent laws somewhat problematic. Economist and former Non-Resident Fellow at the Brookings Institute argues, in , that there are three dissimilarities that must be recognized when dealing with software: 1) detailed descriptions of a software often constitute the program itself, making it hard to distinguish between ‘ideas’ and ‘implementation’; 2) software are pieces of mathematics, which courts agree are not patentable; and, 3) software is written and produced by vast categories of users and programmers, making restrictions to competition problematic (at pp. 4-5).

These three issues entail disproportionate levels of competitive and monopolistic advantage to whoever acquires a patent right first. For example, a patent holder is able to extract burdensome rents from a competitor who wishes to build off of the works of others or create interoperable technologies based on previously existing patented discoveries.

In the SCOTUS was tasked with determining whether the patents at issue in the case, held by Alice Corps', were eligible for patent protection or whether they were simply ‘abstract ideas’.

The case centered around a computerized process for limiting “settlement risk” during financial exchanges between two parties by employing a computer system as a third-party intermediary. This 'third-party' creates and tracks digital account ledgers that mirror the balances that the exchanging parties hold in their ‘real-world’ accounts in order to determine whether or not a given transaction can be processed and supported by the parties' assets. As states, "In sum, the patents in suit claim (1) the foregoing method for exchanging obligations (the method claims), (2) a computer system configured to carry out the method for exchanging obligations (the system claims), and (3) a computer-readable medium containing program code for performing the method of exchanging obligations (the media claims)".

In 2007, CLS Bank filed suit against Alice Corps in the hopes of obtaining a declaratory judgment that the patents at issueÌęwere invalid and, therefore, not infringed by CLS Bank’s use of a similar business practice. Following a SCOTUS decision in 2010, (561 US 593), the parties filed cross-motions for summary judgments on whether the patents were eligible under the .

Section 101 of the Patent Act defines patents as eligible for: “whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title” (). However, since 1972, the SCOTUS has held that "abstract intellectual concepts are not patentable” (, 409 U. S. 63, 67). As recently as 2011, in , the Court has upheld this principle out of concern that “patent law not inhibit further discovery by improperly tying up the future use of laws of nature” (Mayo, 566 US 16).

Using the two-part test set out in Mayo, the Court found that “because petitioner’s system and media claims add nothing of substance to the underlying abstract idea, we hold that they too are patent ineligible under §101” (Alice Corp., 573 US 17). In the concurring statement Justice Sotomayor, joined with Justices Gisburg and Breyer, agreed that “any claim that merely describes a method of doing business does not qualify as a ‘process’ under §101’” (Alice Corp., 573 US 1). The Court found that “there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of ‘abstract ideas’ as we have used that term” (Alice Corp., 573 US 10).

The decision in is careful not to extend this principle too far, which would run the risk of making all software patents ineligible. The Court recognizes that “an invention is not rendered ineligible for patent simply because it involves an abstract concept” (Alice Corp., 573 US 6). Applications of abstract ideas that are “to a new and useful end” (Alice Corp., 573 US 6) remain eligible for patent protection.

The SCOTUS decision in this case represents another step in the evolution of American intellectual property laws, in commercial contexts, in adapting to new technological and social circumstances. The Court has not defined what types of software and business practices are eligible for patent protection. Instead, it has reaffirmed long-standing principles about what types are not: those that monopolize the building blocks of human knowledge and invention, such as abstract ideas, and prevent further innovation.

In doing so, the decision in is another precedent in favour of competitive markets and the avoidance of the deleterious affects of excessive rent-seeking by patent holders that make overly broad claims on the tools necessary for human development and innovative creations.

Joseph F. Turcotte is an IPilogue Editor, a PhD Candidate and SSHRC Doctoral Fellow in the Communication & Culture Program (Politics & Policy) at 91ŃÇÉ«, and a Nathanson Graduate Fellow at the Jack & Mae Nathanson Centre on Transnational Human Rights, Crime and Security at Osgoode Hall Law School.

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"Dumb Starbucks" quickly garnered the attention of coffee lovers, intellectual property lawyers and even Starbucks themselves. As one spokesperson for the Starbucks brand , "we appreciate the humor, but they cannot use our name, which is a protected trademark."

The owners of "Dumb Starbucks" wholeheartedly disagree, taking the position that their use of the Starbucks registered trade-mark is permissible. The owners of the new coffee shop that they are operating legally, as a form of parody art - functioning as an art gallery and distributingÌęfree coffee as the "art". While "Dumb Starbucks" has since been by the Los Angeles Health Department for operating without a permit, the legal buzz it created during its brief existence will not be forgotten.

Despite its comedic intention, "Dumb Starbucks" raised serious debate about the scope and extent of parody protection in the context of trade-mark law. The heart of the matter rests on the following questions. Is "Dumb Starbucks" considered a parody? If so, would it be successful in avoiding liability under current trade-mark law?

Trade-mark Infringement and Parody

Under , infringement does not occur unless there is a likelihood of source confusion. The use of a parody argument against a claim of trade-mark infringement advances the proposition that there was no infringement in the first instance as the was improbable. Unlike the doctrine of "" in US copyright law, parody is not technically considered a defence under trade-mark law. The owners of “Dumb Starbucks” may deny a claim of infringement entirely by suggesting that by placing the word “Dumb” in front of the mark “Starbucks” they are obviously engaging in an act of parody, and are expressing their views in a form of critical social commentary.

A trade-mark infringement may nonetheless be found to occur if the public could not distinguish between the parody and the original trade-mark, or the public believes that a is associated with both the parody and the original mark. In the case at hand, it seems rather unlikely that the public would confuse the “Dumb Starbucks” establishment as originating from the same owner of the international chain of Starbucks coffee shops. For one thing, the word “Dumb” is prominently placed in front of the word “Starbucks” and is depicted in the same font, shape and size as the rest of the mark. A StarbucksÌęspokesperson confirmed the lack of confusion between the original and “Dumb Starbucks” by stating to a member of the press that it's “” There was no evidence that the public was duped either, thousands of tweeted about the joke and even uploaded their own pictures with novelty items from the parody coffee shop. A novelty "Dumb Starbucks" cup recently to the tune of $200 (without any "dumb coffee" in it, of course).

Weak Coffee: Does “Dumb Starbucks” Dilute the Original Trade-mark?

Considering the earlier analysis, if we assume that it would be difficult to prove trade-mark infringement, Starbucks may nonetheless decide to commence legal action based on a claim for trade-mark dilution.ÌęUnder the USÌę,Ìędilution refers to a situation whereby the owner of aÌęfamous mark may prevent others from using their mark in a manner that would diminish its distinctiveness or reputation. The potential harm to the reputation of their trade-markÌęleaves the door open for Starbucks toÌępursue an actionÌęon the basis ofÌędilution by tarnishment, even without proof of actual economic harm.

In the case at hand, the parody not only explicitly associates Starbucks with being "Dumb", but it also potentially associates the original markÌęwith low-quality products, depending on what was being served in-store. By connecting Starbucks to products of inferior quality and byÌędepicting the Starbucks brand in a negative light, “Dumb Starbucks” might be liable for tarnishing Starbuck’s reputation as a brand.

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