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Emily Prieur is an IPilogue Writer and a 3L JD Candidate at Queen’s University Faculty of Law

In May 2021, a phenomenal by Keir Strickland-Murphy (Osgoode Law ‘22) touched on the recent boom of Non- fungible Tokens. In this piece, I will recapitulate Strickland- Murphy’s exploration of IP ownership of Non-fungible Tokens and expand on recent developments since May.

What are non-fungible tokens?

Non-Fungible tokens (“NFTs”) are unique digital assets that as a certificate of authenticity for an object, be it physical or virtual. Blockchain acts as a ledger to secure these assets. Blockchains are often relied upon for their security, so much so that certain universities have begun through them. As described in their name, NFTs have unique properties and are not interchangeable. As such, any digital asset can be tokenized through the “minting process”, much like a refrigerator, car, or computer is given a serial number. Unique identification is a valuable tool for the many and auction houses that have started using the blockchain to sell or . The sale of an NFT also includes a smart contract.

Strickland-Murphy noted that and were early adopters of the NFT craze. Since then, public fascination has only grown since then, with celebrities like Jimmy Fallon and Emily Ratajkowski jumping on board. In May 2021, Emily Ratajkowski sold an NFT called “. The NFT came in the form of a digital-only photograph featuring the model. Ratajkowski explained the impetus for its creation in her essay “Buying Myself Back”, where she shares that the photo she shared on Instagram had been hanging in the Gagosian as part of Richard Prince’s “New Portraits” art show. Prince had been putting other people’s photos from Instagram on canvas and re-selling them for $90,000. Given this situation, Ratajkowski’s NFT auction was, as Ratajkowski explains it, an opportunity to reclaim ownership over her photo.

Recent celebrity obsession with the Bored Ape NFTs has further fueled the NFT buzz. A bundle of 101 Bored Ape Yacht Club NFTs recently . The funky cartoon images have caught the attention of . The interest in Bored Ape is almost palpable as the release of the Yacht Club NFTs can be connected to nearly a in the sale of the NFT Ethereum.

If an image is attached to an NFT, does that mean I own the copyright for that image?

Where an NFT buyer has purchased an image, they do not necessarily receive the copyright associated with that image. If we refer to the computer serial number example, just because you own one version of a computer does not mean you own the patent for the underlying software in the computer. In this case, the software would still belong to the software engineers that invented it. Similarly, if you purchase a painting, you do not assume the copyright over that painting once you have purchased it.

In Canada, an is necessary to transfer copyright from an artist to a purchaser. Therefore, the purchaser of an NFT will only receive the underlying copyright when the smart contract accompanying the NFT expresses this. Of course, unless waived by the artist, the moral rights associated with the artistic work remain with the artist. ensure the integrity of the work, and, when reasonable, the artist’s right to association with their work by name or pseudonym.

What about copyright infringement?

The images associated with NFTs have caused some confusion. An NFT seller must hold a copyright in the image associated with the NFT they are selling. To “mint” an image as an NFT, it is crucial that a seller holds the copyright or a license. However, as long as the seller is the copyright holder, several NFTs can be associated with the same image. In short, NFT sellers can sell as many NFT’s associated with a particular image as they wish, so long as they hold the copyright to that image. If they do not own the copyright to an image, they cannot tokenize it into an NFT and lawfully sell it.

Although NFT’s are a relatively recent addition to the investment scene, numerous lawsuits involving their associated copyrights have already emerged. Rapper Jay-Z Damon Dash, co-founder and shareholder of his record label RAF Inc., for attempting to mint one of his music albums, Reasonable Doubt, as an NFT. The court held that Dash does not own a copyright to the album simply by being a minority shareholder in the record label that owns it. As such, he cannot, in the court’s words,.

Quentin Tarantino is at an impasse with his efforts to profit off the booming NFT industry. Tarantino is embroiled in a legal dispute with the film production company Miramax after announcing that he would be auctioning off excerpts of his original Pulp Fiction screenplay, which he touts include “secrets” about his creative process. that Tarantino does not own the rights to the screenplay and, therefore, selling these secrets through an NFT would constitute copyright infringement.

Old Laws Protect New Trends

Despite the law’s reputation as conservative and , in the case of NFTs, old copyright laws have proven to be tremendously practical. Although the world of blockchain is exciting, it is at this junction that potential NFT sellers should take a moment of pause amongst the excitement to contemplate the legal implications of selling NFTs with legally protected works. When infringing a copyrightable work through the minting process, one must balance the cost of copyright infringement versus the value of the NFT itself.

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Natalie Bravo is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

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Anita Baker is a legendary soul and R&B singer-songwriter who rose to fame in the 1980s. The iconic singer has won and various notable awards for her popular and timeless ballads. Earlier this year during Grammy season, Baker requested that fans not . Through Twitter, she expressed that she had outlived all her recording contracts and that her master recordings should legally belong to her. On September 3, Baker in her masters fight and gave fans the go-ahead to listen to her music once more.

Baker’s tweets and subsequent support from fans come as no surprise. In recent years, popular artists have spoken out about compensation from and Ownership of masters within the music industry has become a contentious and popular matter, particularly after Taylor Swift’s legal battle resulted in This case is a bit different as it likely relies on a lesser-known section of U.S. copyright law. When Baker described outliving her contracts, she was referring to her , which lets her reclaim her copyright after 35 years. states that authors or their survivors are entitled to “terminate grants of copyright assignments and licenses that were made on or after January 1, 1978 when certain conditions have been met.” It is not clear what the conditions were in this case besides length of time, however Baker advocated for ownership effectively and succeeded.��

Baker was not only upset that she did not own her masters, but also that the current recordings available were of inferior quality. Baker that the songs currently available lacked the original instrumentation, the recordings were sped up, and the vinyl sold today are not from analog masters, but rather re-processed digital copies. She believes her fans deserve better. Fans encouraged her in a dedicated fashion, with some stating that they just so they could enjoy her music without having to stream it.

Between March and September, Baker frequently provided legal updates through short tweets. Notably, she shared that with Warner Music Group (formerly WEA Records) began in May 2021 and that she was making progress. Finally, on September 3, she published a photo of her catalog and announced that all . Her advocacy on Twitter garnered tremendous support from her fellow musicians. Fun fact: Taylor Swift and tweeted following Baker’s success.

In the words of Anita Baker, “.”

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In Solid Oak Sketches, the defendants (video game developer Take-Two Interactive Software and their subsidiary 2K Sports) reproduced life-like depictions of NBA players and their tattoos in three installments of their popular video game franchise “NBA 2K”. The plaintiff (Solid Oak Sketches), having obtained the exclusive licencing rights to five of the tattoos that appear on three of NBA 2K’s playable characters, filed a suit for copyright infringement. The defendants motioned for summary judgement, which was granted by the Court on the basis that the defendants’ infringement was de minimus and that it constituted fair use. Furthermore, the Court determined that an implied non-exclusive licence may be found “.” Based on an assessment of the facts, the Court held that even if Solid Oak were able to establish copyright infringement, their claim must fail because the three NBA players in question received implied licences to use their tattoos as elements of their likenesses when they obtained their tattoos: (i) the Players each requested the creation of the Tattoos, (ii) the tattooists created the Tattoos and delivered them to the players by inking the designs onto their skin, and (iii) the tattooists intended the Players to copy and distribute the Tattoos as elements of their likeness, each knowing that the Players were likely to appear in public, on television, in commercials, or in other forms of media.

Although merely persuasive in Canada, this decision follows years of national discussion with respect to the reproduction of tattoos in television, movies, and video games. Many have been quick to point out that the notion that copyright protection extends to tattoo artists and not their human canvases is consistent with the Canadian , however, with most high-profile cases occurring outside of Canadian jurisdiction, the jury is still out when it comes to binding jurisprudence. When it comes to tattoo ownership, questions remain with respect to and , however, and has even been in relation to tattoo authorship by Mark D. Penner and Olivia McKenzie.

Solid Oak is a noteworthy case that may impact the development of Canadian copyright law. It is wise for courts to consider whether an implied licence exists when assessing claims for copyright infringement concerning the reproduction of tattoos, but there is still work to be done when it comes to qualifying what constitutes a likelihood of reproduction. An implied licence can be easily ascertained when the recipient of a tattoo is a celebrity, but the Court’s decision in Solid Oak Sketches does not lend itself to circumstances where the recipient of a tattoo does not expect to reproduce their likeness but subsequently does so. Parity is an essential�� policy element that should not be taken into consideration when developing the common law. Therefore, it may ideally follow that an implied licence to reproduce a tattoo as an element of one’s likeness is presumed for all individuals who decide to “get inked”, not just celebrities.

Written by Lamont Abramczyk, a second year JD Candidate at Osgoode Hall Law School. Lamont is also a Clinic Fellow at IP Osgoode Innovation Clinic.

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James Bow, released his newest novel, , on September 10th, 2019. The story is about underemployed fantasy characters in Toronto, Canada. Given the story’s setting, Bow decided to include an image of the CN Tower on the . The author did not expect CLCL’s allegation that his image violated the company’s trademark rights. CLCL holds many CN Tower-based trademarks, such as and which are registered for a variety of goods, including photographs and other types of pictures. The company that they held trademark rights over the CN Tower building itself and any published image of the building required the company’s prior approval. They stated that the novel’s unauthorized image may mislead the public into believing that the book is commercially affiliated with the CN Tower. Consequently, CLCL requested that Bow not use the image in future press runs of his novel.

Bow was surprised by CLCL’s allegations. He had anticipated potential copyright claims and worked with his publisher to prevent such issues. This included sourcing the image from a stock photograph that was under a Creative Commons licence and having his publisher clear any rights issues with the artist that modified the image for the cover. Furthermore, s. 32.2(1) of the protected him from infringement claims for photographs of public buildings. However, CLCL’s trademark claim over the building was completely unexpected, with Bow saying that “

Given the unusual situation, the author sought legal counsel to oppose CLCL’s trademark allegation. Bow’s lawyer argues that trademark law is meant to prevent marketplace confusion and it is highly unlikely that such confusion would occur in this situation. CLCL is not in the business of publishing fantasy novels that feature trolls and goblins working in the human world. Therefore, the public should not form a business connection between the author’s work and the company’s building.

Despite being a developing issue, the CN Tower dispute is already a learning opportunity for business owners, by reminding them to be aware of trademark law in their daily practice. This is especially relevant to Canadian business owners, who are dealing with the to the Trademarks Act (TMA) that came into force on June 17, 2019. Among the amendments, Parliament’s addition of non-traditional marks may surprise the unaware business owner.

The recently reformed TMA expanded the of “trademark” to include non-traditional marks, such as sounds, colours, scent, tastes, etc. The possibility of registering new types of marks gives businesses greater flexibility when differentiating their goods and services from their competition. However, including non-traditional marks also adds complexity that may burden Canadian business owners. Business owners have built their company policies to address traditional trademarks and now must update these policies to capture non-traditional marks. Those who are not aware of the legislative changes or have not adequately updated their practice may be caught off guard by these changes and face infringement allegations from competitors.

Thus, the CN Tower dispute serves as a cautionary tale for Canadian business owners, suggesting that they revise their practices in light of the reformed TMA to not only improve their businesses, but to also mitigate potential risks.

Written by Imtiaz Karamat, JD Candidate 2020, enrolled in Professors D’Agostino and Vaver 2019/2020 IP & Technology Law Intensive Program at Osgoode Hall Law School. As part of the course requirements, students were asked to write a blog on a topic of their choice.

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The conflict began not long after Leonard's endorsement deal with Nike ended and he became the face of New Balance’s relaunched basketball program in November. In December, Nike contacted Leonard’s representatives and demanded that he cease all use of the logo on all non-Nike merchandise. In response, Leonard, consisting of and inspired by the logo, requested that Nike rescind its copyright in the logo. However, Nike countered that it owned all intellectual property rights in the logo and demanded that all use of the logo cease immediately.

According to the suit, “as part of an endorsement deal with Nike, Leonard allowed Nike to use on certain merchandise the logo he created while Leonard continued to use the logo on non-Nike goods.” However, the suit goes on to claim that Nike, without Leonard’s knowledge or consent, obtained a copyright registration and claimed ownership of the visual material as a work for hire.

Endorsement deals, such as the one Leonard signed with Nike, do not immediately transfer ownership of previously designed works. For Nike to claim ownership of the work, there would have had to be language somewhere within the agreement between Leonard and Nike that specifies it as a work for hire. While a copy of the agreement between Leonard and Nike has not been made public, the claim does however indicate that Nike referred to the logo as “Kawhi’s logo” in written communications and that the company refused to act on several occasions when third-parties were using the logo without authorization.

Endorsement deals can mean big money for athletes, and no endorsement deal is more significant in the NBA than the one between a player and a sneaker company. For example, the in revenue for Nike in 2017 – $100 million of which went to Michael Jordan himself. Another example is rookie sensation, Zion Williamson, who is likely to reportedly from a shoe deal before he even sets foot on an NBA court.

The timing of the lawsuit makes sense when considering the increasingly competitive battle for endorsers in the basketball footwear market. In 2015, estimates indicated that , but with brands like Puma and New Balance recently reentering the market, and more established brands like Adidas and Under Armour gaining more endorsers, it is likely that Nike’s control over the market is going to shift. In addition, creative source identifiers like Leonard’s “Klaw” logo add value to brands and provide a competitive advantage, but since December, when Nike demanded Leonard cease all use of the logo, he and New Balance have been unable to take advantage of the logo in one of the most exciting playoff runs in recent NBA memory.

As a result, Kawhi Leonard will be looking to clear ownership of his logo this off-season in the hopes to better capitalize on his “Jordan-esque” play in the future.

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.

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[Your ISP] has received a notice from a content owner that alleges an act
of copyright infringement from an Internet Protocol (IP) address assigned to you
at the time of the alleged infringement. We are required by law to let you know
that we have received this notice.

The law in question is the Notice and Notice scheme (). The latter provision, s 41.26, outlines the steps that an ISP must take once it receives a notice of claimed infringement:

1. The ISP forwards electronic notice to the person associated with the IP address alleged to be source of infringement.
2. The ISP keeps records for six months that will allow one to determine who was associated with that IP address.

Now, while you may not realize it, there are entire systems in place to get that notice to you and to further produce your identity to the copyright holder (if the ISP is so ordered by a court). Like most things, getting that system in place and using it costs time and money, and since so many allegations of infringement go out each day (around 5,000 per day from Rogers alone), it turns out to be quite a bit of time and money indeed.[i] In the recent case of [Rogers], the Supreme Court of Canada helped clarify who exactly should foot the bill.

Parliament structured s 41.26 in such a way that ISPs could be reimbursed according to rules at the discretion of the Governor-in-Council. The Cabinet, as is its prerogative under s 41.26(2), decided not to entitle ISPs to any reimbursement for complying with the Notice and Notice regime. One is left, then, with the common law to fill any gaps (notably, actually producing the identity of the alleged infringer is done by application, not by statute).

In Rogers, Justice Brown, writing for eight justices, makes some key observations about this setup. Firstly, he refers to the legislative intent behind ss 41.25 and 41.26 of the .[ii] The background of the 2012 changes to the Copyright Act makes clear that Parliament intended to balance the interests of not only copyright owners and content users, but also of “Internet Intermediaries”.

Secondly, Justice Brown clarifies that the records that must be stored under s 41.26 refer to ones which would allow the ISP to determine who the alleged infringer is.[iii] It does not include the act of translating this information into a means which would be accessible and comprehendible to the copyright owner or the courts. It is this finding which opens the door for ISPs to claim expenses for complying with Norwich orders, separate from compliance with Notice and Notice.

However, according to Justice Brown, it would not be reasonable to reimburse the ISP for work it has already done under the Notice and Notice scheme.[iv] It is this final idea which appears to be the point of contention between Justices Brown and Côté.

Justice Côté agrees with the other justices that “any work required to determine an alleged infringer’s identity and disclose that identity … is not subsumed within the notice and notice regime.”[v] In practical terms, though, the process required to comply with a Norwich order moves beyond verifying pre-existing information obtained by the ISP under Notice and Notice. Instead, it requires ab initio excursions, on the part of the ISP, into figuring out the identity of the alleged infringer.[vi] This is especially the case given the possibility of information changing over the six-month period, and the fact that the statute only requires a ‘static’ record from the time at which notice was received.[vii]

Regardless of their differences, both sides agree that ss 41.25 and 41.26 are not so broad as to exclude the possibility of reasonable reimbursement for ISPs, in contrast to the Federal Court of Appeal. Indeed, both sides also concur in the ultimate result. That is, the matter was remitted to the motion judge for an adequate assessment of the reasonability of Rogers’ process and determination of reasonable costs (although one is sympathetic to Justice Bosworth in that, before the law was clarified on appeal, it wasn’t clear that any fee would have been reasonable, regardless of what process Rogers was using).[viii]

Beyond the reasoning, one is left with the feeling that something is missing from both opinions. The approach seems to be unquestionably one that treats ISPs as a distinctly third party to the issue of the Notice and Notice regime and Norwich orders. Is this really the case? After all, the very acronym stands for internet service provider. The third party in this case provides the alleged infringer access to content for a fee, and is able to pass along those costs to content users.

Is Rogers just about the entitlement of third parties to reasonable costs for complying with Norwich orders? Or might it fit with a broader common law principle that it is up to the holder of copyright to pursue the enforcement of that right? As pointed out in Rogers, the Government of Canada has seen fit to balance the rights of content users and copyright holders by having the third party bear the costs. But when faced with the reality that those costs can be passed on (one way or another) to content users, maybe the ruling in Rogers becomes much more about user rights than statutory interpretation.

Peter Werhun is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

[i] at para 63.

[ii] Ibid. at para 25.

[iii] Ibid. at para 43

[iv] Ibid. at para 52.

[v] Ibid. at para 62.

[vi] Ibid. at paras 63-64.

[vii] Ibid. at para 68.

[viii] Ibid. at paras 56-58, 74-75.

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Among other topics was the discussion surrounding the emergence of Internet of Things (IoT) devices and the subsequent need for collaboration between telecommunication providers and technology firms in order to sustain the rapidly evolving “smart” market. From a consumer perspective, many rightfully expressed concerns over the privacy of user data and residual effects of recent regulations such as the on just how certain data can be collected and used.

However, the same small-to-medium sized enterprises (SME) that reside on the cutting edge of innovation in the emerging internet of things (IoT) and that are tasked with implementing these new data privacy regulations continue to face old challenges. This is especially true in the context of Standard-essential patents (SEPs), where global technology giants have enough capital leverage and industry dominance to undermine any player attempting to access the telecommunication market.

Briefly, a patent that protects technology essential to a standard is called a . In fact, it is virtually impossible to manufacture standard-compliant products such as smartphones without using technologies covered by at least one, if not several, SEPs. For example, more than have been declared essential to network protocols such as GSM and the "3G"or UMTS standards developed by the European Telecommunications Standards Institute (ETSI). This means that each time an inventor seeks to implement a standard, say, allow their phones to communicate over 3G networks, they would inherently have to use an SEP in order to guarantee this functionality. When these patents are held by large multinational corporations, inquiries into anti-competitive measures are raised as this may give companies owning SEPs significant market power. For example, in a phenomenon known as the “”, holders of standard-essential patents sought to ban competitors' products from the market on grounds of SEPs infringement, resulting in what was later dubbed a patent “hold up”. For large corporations, issuing these injunctions reaps no significant consequences, whereas small businesses simply cannot sustain the cost and time associated with SEP litigation, not to mention the potential loss in investment. In these circumstances, the seeking of injunctions can significantly alter licensing negotiations and lead to unfair licensing terms which ultimately creates a negative impact by limiting consumer choice and raising existing prices. Therefore, the task becomes a balancing act between the interests of the corporations seeking to protect and license their SEP technologies and the motivations behind the innovation community who seek to access these technologies.

In order to combat resource-draining SEP litigation, competition bureaus around the world have introduced certain terms of compliance. In Europe, the that in the standardisation context, where the SEPs holders have committed to licence their SEPs and to do so on fair, reasonable, non- discriminatory (FRAND) terms, it is anti-competitive to attempt to exclude competitors from the market by seeking injunctions (on grounds of SEP infringement) so long as the licensee is willing to take a licence on FRAND terms. With respect to IoT innovators, the Commission went one step further and of SMEs to innovative IoT solutions as well as the critical role of standards in “empowering SMEs to compete with industry giants”.

Ultimately, most policy makers and legislators would agree that one of the main goals of this type of competition regulation particularly in the intellectual property field is to protect against business models that engage in licencing extortion, otherwise known as “patent trolls”. Just this month, a , a Canadian-based intellectual property licencing company, $145 million in damages following a patent infringement case against Apple. However, among other allegations made by Apple, the company claimed that WiLAN’s business model “”, a strategy they claim has been used by the defendant on over 275 companies.

Likewise, commitments to a fair and accessible marketplace become even more important in light of recent cross licensing agreements among large corporations. This month, renewed a global patent license agreement on FRAND terms including a cross license that covers patents relating to both companies’ 2G, 3G, and 4G standard-essential patents. Ericsson and LG Electronics are two of the leading contributors to the GSM (2G), UMTS (3G), and LTE (4G) cellular communication standards and both companies are making significant investments in the development of the NR (5G) standard . Although to some this may seem like nothing more than a monopolistic endeavour, some nations have made it clear that the merits behind such industry-leading patent portfolios deserve their respective remuneration.

In Canada, for example, the has expressed caution with tipping the SEP licensing scales in favour of SMEs. The Bureau recognizes that a firm’s commitment to license on fair, reasonable and non-discriminatory ("FRAND") terms does not inherently mean that it is committing to license on a royalty-free basis.��That is, as much as the Bureau seeks to protect newcomers, it also acknowledges that corporations may often make large investments in research and development and accordingly, ought to be permitted to collect appropriate royalties in order to recover the value of their investment. This is not to say that Canada’s commitment to recognizing the value of innovation through SMEs have been overlooked; in fact, the National Research Council of Canada (NRC) is now able to invest in SME innovation projects for up to

Nonetheless, the fact remains that an alignment of efforts to balance the playing field between the wide range of innovators and corporate technology providers both in Europe and in Canada,��is necessary to support international mandates of a balanced SEP licensing ecosystem that is safeguarded by a meaningful FRAND commitment.

Andrei Mesesan is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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Academics from all over Europe give a final warning against the ill-conceived plans for the introduction of a new intellectual property right in news. Read the full letter here in��, or below.

Statement from EU Academics on Proposed Press Publishers’ Right

We, the����169 scholars [of whom 100 are full professors] working in the fields of intellectual property, internet law, human rights law and journalism studies at universities all over Europe write to oppose the proposed press publishers’ right.

Article 11 of the proposal for a Directive on Copyright in the Digital Single Market, as it currently�� following negotiations in the EU Council and Parliament, is a bad piece of legislation.

��Why?

• The proposal would likely impede the free flow of information that is of vital importance to democracy. This is because it would create��very broad rights of ownership in news��and other information. These rights would be territorial ­­– there would be one for each Member State. The rights would be owned by established institutional producers of news. And in each Member State, the new right would sit on top of all the other property rights that such publishers of news already enjoy: copyrights, database rights, broadcast rights and other related rights.
• This proliferation of different rights for established players would make it more expensive for other people to use news content.��Transaction costs��would be greatly increased, as permissions would need to be sought for virtually any use. Even using the smallest part of a press publication (except perhaps for strictly private use) would mean payment would be due to an institutional news publisher.
• That means, the proposal would be��likely to harm journalists, photographers, citizen journalists and many other non-institutional creators and producers of news, especially the growing number of freelancers.
• The people most likely to benefit would be the big established news institutions. If they should benefit, this is likely to��exacerbate existing power asymmetries in media markets��that already suffer from worrying levels of concentration in many Member States.
  That said, it is not clear that even these big news institutions would benefit. Similar rights introduced in Germany and Spain were not effective.
• The proposed right would provide no protection��against ‘fake news’.
• There is��no sound economic case��for the introduction of such a right. An additional intellectual property right would not change the fundamental problems that news institutions face. They would still have to compete with many other actors for consumer attention, advertisers and hence revenue.

Problems with the Initial EC Proposal

The academic community is virtually unanimous in its opposition to the European Commission’s proposal for a press publishers right. We commend to you the previous critical interventions from Bently��et al, Danbury, the European Copyright Society, Geiger��et al, the Max Planck Institute, Peukert, van Eechoud, and the Study conducted by Bently, Kretschmer��et al��for the JURI Committee in September 2017.

We agree with the supporters of this right about one thing:��journalism matters, and quality journalism matters even more.��As public watchdog and forum for public debate, the traditional print press plays a vital role in democratic societies, but so do newer online media. All actors in the media ecosystem enjoy freedom of expression, as guaranteed under the European Convention on Human Rights and the Charter of Fundamental Rights of the EU. ��This proposal will do nothing to help journalism, but seriously risks doing disproportionate harm to media creators, to smaller publishers, to SMEs seeking to innovate with online media services, to citizens and to society at large. Inventing new rights is not the solution.

In order to appreciate why the balance is so clearly against this proposal, it is important to understand that��press publishers already have very significant rights in their publications. They own enforceable rights in much of the material in a publication by virtue of assigned copyright (or exclusive licences), through national rules on employer ownership or collective works, and through the EU wide��sui generis��right in databases (a term broad enough to cover all newspapers). This is already a formidable arsenal. Even without the introduction of the proposed right, it is unlawful (and when done knowingly and with a view to profit, often criminal) for third parties without licence (or a defence) to reproduce or make available copyright-protected material. The reproduction or making available of small parts of such material may also be unlawful, where those parts are themselves creative. The EU’s��sui generis��right in databases not only gives investors in collections of material the right to prevent wholesale copying, but also to prevent the systematic extraction of insubstantial parts.

While press publishers are very well protected already, the Commission did identify particular problems for German press publishers in relying upon authors’ rights in articles and photographs. As a result of German rules and procedure, it is administratively cumbersome and time-consuming for press publishers to rely on such rights. Documentation is required from authors in respect of the rights in each and every item in a publication. However, a German procedural problem deserves a German solution, not one at a European Union level. That is exactly what has occurred with the one year��Leistungsschutzrecht��introduced in Germany. There is no need for the other 27 Member States to swallow the German medicine, the efficacy of which is so far wholly unproven.

The proposed right would not improve the economic position of press publishers elsewhere. There is no basis for the suggestion that an “EU wide right” (in fact, separate rights for each MS) would improve the bargaining position of press publishers vis- á-vis platforms: they already have authors’ rights and the EU’s��sui generis��right in databases. If it has any effect, the recognition of a press publishers right would strengthen their bargaining position with respect to authors and creators, a relationship which is hardly one of economic equivalence as it stands. However, such a right may well exacerbate existing media concentration problems, not least because media outlets would themselves have to seek permission from one another for the use of publications (and parts of publications), thus placing SMEs at a bargaining disadvantage.

There is also no basis for thinking this proposal will tackle “fake news”: indeed, the opposite seems likely. If certain users of platforms such as Twitter are prohibited from circulating the links posted by subscribers to online, publicly accessible, quality news, the chances are that such users will circulate information derived from other sources. The creation of rights so as to restrict further the circulation of quality news would simply play into the hands of producers of “fake news”. This will not, as Mr Voss’s amendment to recital 32 implies “guarantee the availability of [re]liable information” so much as guarantee the dominance of fake news.

In contrast, one thing is clear: the proposed right will be harmful. Adding yet another layer of protection will create uncertainty, both as to coverage and as to scope. The proposed right is not subject to a requirement of investment (by contrast with the existing protection or databases) or an originality threshold (as applies to copyright). As a consequence, the proposed protection would extend to virtually any use, even of the smallest part of a news item or other content. It has been suggested that the right will prevent the re-use of snippets from, and hyperlinks[1]��to, publicly available websites. If these claims turn out to be true, the new right will also harm freedom of expression and freedom of art, and impede innovation. Even if they turn out to be unfounded, the duplication of protection will create congestion and make clearances more complicated. These harms are further exacerbated by the prospect that the new right would last for a full twenty years, that is, long after the publication has any value as ‘news.’

Rapporteur Voss’s Proposed Amendments Will Make Matters Even Worse

As the legislative process reaches a crucial stage, various amendments have been tabled that make the proposed right even more harmful. In particular, the proposals of the JURI rapporteur, Axel Voss, are positively dangerous. These would:

• Extend the right to “news agencies”;
• Extend the rights conferred beyond reproduction and making available to encompass rental, lending and other forms of distribution to the public (Articles 3 and 9 of Directive 2006/115/EEC);
• Create an unwaivable right for the benefit of press publishers to fair and equitable remuneration as a result of all uses of their publications – even licensed ones.

If it had not come from such an influential source, we would not take these three suggestions seriously.

The first proposal is fundamentally misconceived, because press agencies do not produce press publications (the subject of the rights recognised in Article 11(1)). If the effect of the proposal is to give rights in any item included within a press publication to both press publishers and news agencies, the result will be yet another layer of licensing. For example, even if a press publisher were to permit re-use of a publication, any content within the publication deriving from a news agency would need a distinct licence.

The second proposed change, which extends the press publishers’ rights to cover public lending, rental and distribution to the public, would seem to be designed to capture for press publishers a share of funds available for ‘e-lending’ by public libraries (following the��VOB��decision of the CJEU). This extension would either require the allocated funds to be increased to remunerate press publishers, or would inevitably leave authors and book publishers with a smaller slice of the cake.

The third Voss amendment would give press publishers unwaivable rights that European Union law does not even recognise for individual authors, photographers or journalists (Indeed, Article 15 of the proposed Directive would not create anything close to this, only allowing authors to claim “appropriate” remuneration where their contractually-agreed remuneration was “disproportionately low”). It is absurd to suppose that press institutions are less able to look after their own bargaining interests than individual authors. If press publishers license their rights cheaply, it is not the legislature’s task to save them from their own bargains. Indeed, it may well be in press publishers’ best interests to license their rights for nothing, relying on other business models to profit from their investments. It is not for the EU legislature to dictate particular business models to economic entities. Indeed, the Spanish precursor of Mr Voss’s initiative attracted widespread criticism on this basis.

However, Mr Voss does propose two useful amendments. First, the suggestion that the right “shall not prevent legitimate private and non-commercial use of press publications by individual users” is welcome because it is the first recognition that,��if there is to be a new EU right, there is no reason why exceptions to that right should not also be mandatory. That said, like his other amendments, the proposal is flawed. In particular, the addition of the term “legitimate” to “private and non-commercial” leaves users with no certainty as to where they stand. Moreover, there is no sense as to how this “exception” relates to the optional private copying exceptions in Article 5(2) of Directive 2001/29. Second, Mr Voss’s proposal��that journalists should receive a share of any remuneration raised��is consistent with the goals of article 15 of the proposed Directive, though it will be virtually impossible in practice to identify (i) whether remuneration results from rights in the content (for which the author has already received contractual remuneration) or from the rights in the press publication itself, and (ii) the “appropriate share” of any additional revenue.

Conclusion

We call on all MEPs to oppose the Commission proposal, and with yet more determination, Mr Voss’s amendments. It is time to reject, once and for all, this misguided legislative reform.

[1]��Of note, the usefulness of a ‘naked’ link (mere URL) on the web, or in other applications like ftp, is very limited as it offers the reader little useful information on the resource to which the link directs. Hence, it is customary to use link descriptors, snippets or thumbnails to assist the user in determining whether the resource linked to is worth consulting. For example, without some additional information a user will not know that <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016PC0593> directs to the EC proposal on Copyright in the Digital Single Market,�� COM/2016/0593 final.

Professor Marco Ricolfi
Chair of Intellectual Property, Turin Law School, Italy

Professor Raquel Xalabarder
Chair on Intellectual Property, Universitat Oberta de Catalunya, Barcelona, Spain.

Professor Mireille van Eechoud
Professor of Information Law, University of Amsterdam, The Netherlands

The full list of signatories to this Statement is available .

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The plaintiffs, the Chapniks, own an architect-designed, multi-million dollar home in the Forest Hill neighbourhood of Toronto. In 2013, the defendants bought a house nearby and promptly began renovations. According to the plaintiffs, the renovated house looked “strikingly similar” to their home and the Chapniks commenced an infringement action.

Architectural works may be protected by copyright as an “artistic work”.[2] However, in asserting infringement claims regarding housing designs, homeowners (Chapniks included), face two significant obstacles. They are required to prove: (1) ownership in the copyright; and (2) that the defendants reproduced a substantial part of the expression.

Ownership

In order to succeed in an infringement action, the plaintiff must be the owner of the copyright. In Canada, the author of the work is the first owner.[3] With respect to architectural works, it is usually the architect who is the first owner of the copyright that subsists in the design of a house.[4] In the case of Hay v Sloan, the court stated, “[f]or copyright purposes, the owner of the architectural work of art is the author of the plans … [n]or does copyright pass to the owner of the building.”[5]

Similarly, in Chancellor v Oasis, the court concluded that it was the architect who was the owner of the copyright and not the owner of the building. The owner’s contribution was “limited to suggesting certain design elements in a general way”, while it was the architectural firm that implemented these suggestions into the design.[6]

Therefore, had the Chapniks’ case gone to trial, unless the architect assigned to them the copyright, it seems unlikely that the Chapniks could have succeeded since they are not the owners.

Reproducing a Substantial Part

Copyright provides the owner with the sole right to reproduce the work in a substantial part.[7] Copying is not necessarily infringement if what has been copied is not a substantial part of the original work.[8]

The Chapniks would likely have established copying. According to the Article, the trim, stonework and the shape of door were similar. Also, the defendants’ contractors allegedly were instructed to copy the architectural work. Finally, there is a causal connection with the original work since the two homes are located only 850 metres apart.[9]

The more difficult aspect of the claim is proving that the defendants reproduced a substantial part of the expression. It is trite law that copyright protects only expression and not ideas. However, when answering the question of whether copying is substantial, the assessor must take a holistic approach having regard to the quality and quantity of what was copied.[10] Excluding unprotectable ideas at the outset prevents this holistic approach.[11]

Upon the facts and photos provided in the Article, it is difficult to come to a firm conclusion on whether a substantial part of the expression was copied. When considering the alleged similarities between the two houses, it seems that some aspects are very common elements of architecture such as the trim colour and stonework. In Rains v Molea, the Court considered whether a painting of a crumpled piece of paper was infringed by a different artist also painting crumpled paper. The court found that although there were many similarities, these were common techniques used by artists and not capable of copyright protection.[12]

Several friends of the Chapniks had allegedly called to inform them of the copycat house. This would have bolstered their claim since when considering substantiality, “the perspective of a lay person in the intended audience for the works at issue is a useful one”.[13] Similarly, even though there are many differences between the houses, differences in the number of rooms and areas may not be enough to prevent judges from concluding that the substance of the architectural work has been copied.[14]

Conclusion

A homeowner asserting copyright in the design of their house as an architectural work will face difficulties due to issues of ownership and substantial reproduction. This appears to be a laudable result since approximately 84% of the Article’s readers believe that copyright should not subsist in the “look of your house”.[15]

William Chalmers��is a JD Candidate at Osgoode Hall Law School and was 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.

[1] Vjosa Isai, “This Forest Hill couple sued their neighbours for $2.5 million over a house they claim was renovated to look like theirs”, The Toronto Star (October 5, 2017), online: < > [Article].

[2] Copyright Act, RSC 1985, c C-42, s 2 [Copyright Act].

[3] Copyright Act, supra note 1, s 13(1).

[4] David Vaver, Intellectual Property Law: Copyright, Patents, Trade-marks (Toronto: Irwin Law Inc., 2011) at 138.

[5] Hay v Sloan (1957), 12 DLR (2d) 397 at para 7.

[6] Chancellor Management Inc. v Oasis Homes Ltd, 2002 ABQB 500 at para 65.

[7] Copyright Act, supra note 1, s 3(1).

[8] Ladbroke (Football), Ltd. v William Hill (Football), Ltd., [1964] 1 All ER 465 at 481,��per��Lord Pearce (HL).

[9] Gondos v Hardy (1982), 38 OR (2d) 555 at para 33 (ONSC).

[10] Cinar Corporation v Robinson, 2013 SCC 73 at para 26 [Cinar].

[11] Cinar, supra note 10 at para 36.

[12] Rains v Molea, 2013 ONSC 5016 at para 30.

[13] Cinar, supra note 10 at para 50.

[14] Kaffka v Mountain Side Developments Ltd. (1982), 62 CPR (2d) 157 at para 15 (BCSC).

[15] Article, supra note 1.

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MOVA was first developed in the early 2000’s by Rearden. The head of the incubator, Steve Perlman, put his long-time friend Greg LaSalle in charge of the project. LaSalle formed his own company, MO2, and transferred MOVA to it before selling the software to Digital Domain Holdings (DDH), a US visual effects studio. MOVA was transferred to DDH’s Chinese subsidiary, Shenzhenshi Haitiecheng Science and Technology (SHST).

��𲹰�����’s over the ownership of MOVA was with SHST in 2016. SHST initiated the proceedings, but Rearden argued that LaSalle had no right to sell MOVA to SHST in the first place. A federal court in San Francisco issued an injunction against SHST and all of their licencees (including DDH’s US subsidiary, Digital Domain 3.0 or DD3) for distributing and using MOVA.

In August 2017, the that Rearden officially owned MOVA, not DDH. Rearden is now going after the movie studios Disney, Fox, and Paramount for using the copies of MOVA that were illegitimately licensed to DD3. The studios have filed a ��𲹰�����’s suit, which was by Rearden.

One of ��𲹰�����’s arguments is that they own the copyright in the studio’s CG characters because 1) they own the output of their software, and 2) this output was incorporated into the films, thus making the films derivative works.

For output ownership, Rearden relies on two video game cases ( and ) where the courts ruled that the audiovisual output of computer programs is afforded copyright protection, even if the end user contributes to this output.

This is a questionable comparison to the current case because the nature of audiovisual output in a video game is significantly different from the output of a graphics design program. With interactive entertainment, the output is not intended to have any further use. Even when video game footage is used in subsequent works (like s), it is done so under licence. The content creator only owns the copyright in their footage and commentary, not the game. This is unlike the output of MOVA, where the 3D render output is intended to be used in further works.

Rearden also claims that they own MOVA’s output because the software does a “lion’s share” of the work required to produce the output. They rely on a US case, , in which the court ruled that the plaintiff software maker owned the output of their software because the end user only contributed single words or phrases, and this was considered “marginal” input.

Deciding who does the “lion’s share” of the work when producing a CG character is a difficult issue. To briefly explain the process of creating a CG character using MOVA, an actor wearing special makeup is filmed. This 2D recording is passed through MOVA, which synthesizes a 3D rendering of the face and head. This 3D model is then used as a template onto which animators add features like hair, colour, and wrinkles. Once this is complete, the 3D model is removed, leaving just the animated shell that we see in the movies.

So, it becomes a chicken-and-egg problem: without the software, there is no output, but without the acting and direction, there is no input to make the output. The analogy that the movie studios draw to Adobe Photoshop is quite apt because there is a clear distinction between the contribution of the artist and the contribution of the software, and in that case, it can hardly be said that the artist contributes “marginal” input. The software used in Torah was much simpler and may not offer the best comparison to the present case.

It will be interesting to see how the court decides the issue of derivative works. The movie studios argue that their CG characters and movies are not derivative works because they do not “substantially incorporate protected material from [a] pre-existing work” (quoting ). Rearden, on the other hand, argues that the CG characters and movies do incorporate their works (i.e., the output of their software). Even though the 3D template and related coding are taken out during the production process and do not appear in the movie, Rearden argues that because the facial motion is transferred from the 3D template to the CG character with “sub-millimeter precision,” the CG character is similar enough to constitute a derivative work. But how would that weigh against the fact that the CG character is also “substantially similar” to the original actor’s face and performance, which the studio owns?

Another important point is the substantial relief that Rearden is requesting. They want all infringing copies of MOVA output and the movies that contain them to be destroyed. Logistically, it is difficult to imagine what this would entail. There is no a guarantee that every copy of Guardians of the Galaxy can or will be destroyed. There is also the question of what will happen to clips of the movies that are being used by third parties. Would those have to be destroyed as well?

The Rearden case brings up some complex copyright issues, and it will be interesting to see whether the courts decide in favour of Rearden or the movie studios. A ruling for Rearden could have major implications on the way end users manage their copyright when using computer programs.

Alexandria Chun is a JD Candidate at Osgoode Hall Law School and was 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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