Anita Gogia is a IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

In , the Federal Court of Canada invalided patents for interactive program guide (“IPG”) technology and clarified a reasonable royalty as the appropriate remedy had the patents been found valid and infringed.

Rovi supplies , and Videotron is a telecommunications corporation providing cable services and . IPGs are interactive menus that you may have used to select/search programming listings rather than viewing them on a paper guide.

Rovi’s revenue model is to license a portfolio for a rate without consideration for the number of patents. Videotron did not renew its license which expired in 2016. Videotron claimed they licensed to avoid litigation, and later realized that Rovi’s portfolio is obsolete. Notably, Rovi wanted to double the royalty rate and when Videotron asked Rovi to “.” Rovi did not provide an adequate answer.

Rovi that Videotron infringed four patents, which Videotron were invalid. Rovi’s patents were held due to obviousness and anticipated knowledge in consideration of prior art and knowledge of the skilled person. Rovi’s patents were secured in the 1990s, one of which claims a “”. ��The Court held that it was obvious to the industry that IPGs would be prominent in the future and that 1990s were “.” Therefore, or obvious extensions.

The Court’s for denying the remedy of accounting of profits is significant, as not much caselaw has clarified this equitable remedy. Videotron’s products are classified as “complex products” since the patented technology is a small part of the overall value of the product —- not analogous to a pharmaceutical product. With standard patent cases, patentees can be granted ‘accounting for profits’ as a remedy. The availability of such a remedy is questionable with non-standard cases. The for awarding an ‘accounting for profits’ ��are as follows:

First, the Court did not find undue delay by Rovi in pursuing litigation against Videotron.

However, upon examining Rovi’s conduct, the Court found that Rovi operated in bad faith — that Rovi was using “” and not disclosing the list of infringed patents to Videotron to prevent them from designing around them. The recognition of “hard-ball” as a characteristic of bad faith conduct is a novel interpretation of a traditional equitable ground.

Second, the judge recognized Rovi’s “” into royalty deals and took note of Rovi’s delay in prosecuting patents which results in the problem of “holdup”. Granting an accounting remedy in this case would set an undesirable precedent contrary to the purposes of IPR as it gives patentees leverage in negotiations where the royalty would reflect the .

Third, Rovi that Videotron wilfully infringed their patents, however, the judge concluded that Videotron refusing to renew their agreement was actually based on a “reasonable assessment of the necessity of the patents”.

As the court considered the fourth factor neutral, it moved on to an interesting analysis of the complexity of calculating an accounting of profits — that inventors are entitled to that portion of which is causally attributable to the invention. However, patentees seeking an accounting remedy must provide a sound and reliable way to calculate profits. Here, the Courts found that Rovi’s proposal for calculating Videotron’s profits complex and unreliable, said to be based on “” evidence. The court noted caselaw describing that “.”

Instead, the Court accepted Videotron’s proposal of the appropriate remedy as a “.” It was a safer approach to argue a reasonable royalty cap of $150,000 per feature based on design-around rather than arguing that the royalty was zero, since the non-infringing alternative is to remove the IPGs all together.

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This statutory bar on apportionment harkens back to the nineteenth century, following a United States Supreme Court decision which considered the basis for determining profits or damages for infringement of a carpet design. The court made the following comparison:

...between two carpets of equal cost to make and equal merit as to durability of fabric and fastness of color, each with a pattern pleasing to the taste, one having a design free to be used and��the other a design protected by a patent, the latter may or may not command in the market a price larger than the former. If it does, then the increased price may fairly be��attributed to the design, and there is a solid basis of evidence for profits or damages. But short of this, under the rules established by this Court, there is no such basis. [2]

In the event, there was no difference in market price and the design patentee recovered nothing.

Thus in the world of 1880’s era carpets, damages or profits were not directly attributable to design infringement, making design patents obsolete. To address this, in 1886 Congress amended patent law to afford design patents the same protections afforded trademarks, entitling the design patentee to “all the profit the infringer made on the goods marketed.” [3]

In the intervening years, this has generally been interpreted narrowly by courts to mean that the infringer is liable for all profits made on the final product as sold to the consumer. However, in the case of multi-component articles, such a narrow interpretation can lead to grossly disproportionate awards. Consider the example of a $10 cup holder design incorporated into a $20,000 car; [4] should the infringing car manufacturer be liable for the profits on the entire car?�� The issue of whether the “article of manufacture” must always be the end product sold to the consumer went before the United States Supreme Court in the Apple v Samsung dispute.

History of the Apple v Samsung Suit

In 2011 Apple filed suit in the United States against Samsung for, among other things, infringement of four design patents. [5] Justice Koh of the District Court for the Northern District of California heard the case, and a jury found three of the four design patents to be infringed by at least one of the 28 Samsung smartphones at issue. [6] After the dust settled, the damages award totaled nearly a billion dollars. [7] Of that, $399 million corresponded to the entire profits on 11 smartphones found to infringe one or more design patents.

The Court of Appeal for the Federal Circuit upheld the verdict with respect to both utility and design patent infringement. [8] Samsung appealed the $399 million awarded for design patent infringement to the United States Supreme Court on the basis that the award should have been limited to profits on the infringing “article of manufacture” rather than the entire product sold to consumers.

The US Supreme Court: an “article of manufacture” can be an individual component

In arriving at an award under §289 the Supreme Court identified two steps: 1) identify the “article of manufacture” to which the design has been applied; and 2) calculate the infringer’s total profit made on that article of manufacture. The Court found the threshold matter before it as being the scope of the term “article of manufacture”. The Court concluded that the term encompasses both the end product as sold to the consumer, and the individual components of a multi-component product whether sold separately or not. However, the Court declined to adopt a test for determining the relevant article of manufacture in the absence of adequate briefing from the parties.

The case has been remanded to the District Court where the case began. Justice Koh has now received briefs from both parties and is set to determine whether a new trial is warranted. If so, Justice Koh will have the opportunity to set out a test for determining the relevant “article of manufacture”.

Andrea Uetrecht 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] 35 USC §289.

[2] Dobson v Hartford Carpet Co, 114 U.S. 439 (1885), 5 S. Ct. 945, at 444.

[3] Samsung Electronics Co Ltd v Apple Inc, 580 US��(2016) (Brief of amicus curiae American Intellectual Property Law Association in support of Respondent) at 12, citing S Rep 206, 49th Cong, 1st Sess (Mar. 9, 1886) at 2.

[4] Apple Inc v Samsung Electronics Co Ltd, Court of Appeals for the Federal Circuit, appeal no. 2013-1129, at 26.

[5] Apple Inc v Samsung Electronics Co Ltd, 11-cv-01846-LHK, Document 1, online: https://www.unitedstatescourts.org/federal/cand/239768/1-0.html.

[6] Apple Inc v Samsung Electronics Co Ltd, United States District Court for the Northern District of California, 11- cv-01846-LHK, Document 1341, online: https://www.unitedstatescourts.org/federal/cand/239768/1931-0.html.

[7] The court found that the jury made a legal error in assessing damages for infringement for 14 of the 28 products, upholding $639,403,284 in damages and ordering a partial retrial on the remaining damages. Apple was awarded $290,456,793 in the retrial; see Apple Inc v Samsung Electronics Co Ltd, 11-cv-01846-LHK, Document 2271.

[8] Apple Inc v Samsung Electronics Co Ltd, Court of Appeals for the Federal Circuit, appeal nos. 2014-1335 and 2015-1029.

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The Spokeo decision’s requirement that there be a concrete injury in order to ground privacy damages is not just a U.S. issue. Canadian courts have been wrestling for some time with the question of what damages look like in the context of privacy breaches, especially in class actions. While not definitive or binding north of the border, Spokeo may provide insight into how future statutory privacy breach actions are framed in Canada.

On May 16, the Supreme Court of the United States (“SCOTUS”) released its reasons in (“Spokeo”). The case is significant because it addressed the issue of what degree of damages are necessary in order to assert standing to bring such a claim, an issue that has long troubled “privacy breach” claimants in both Canada and the U.S. The existence of a private right of action under a U.S. federal statute does not automatically suffice to meet the “real” harm standard.

The court ultimately adopted a middle-ground position, allowing the action to proceed but maintaining a narrow approach to the type of injury that will give rise to standing. Of interest, the dissent raises new questions about the legal recourse available to those who allege injury from the mismanagement or inaccuracy of their personal information.

illustrates a contrast between privacy and consumer reporting law regimes in Canada and the U.S., and the associated legal risk exposure of organizations that manage the personal information of consumers, clients, or members of the public.

Background

Spokeo operates a “people search engine” that reviews a wide spectrum of databases to provide its users with information about individuals. The site markets itself as a mechanism for reuniting with lost connections, but can also be used for investigative purposes, such as evaluating job applicants.

The respondent, Thomas Robins, discovered that his Spokeo profile contained inaccurate information. He filed a federal class action complaint against Spokeo, alleging that the company failed to comply with its requirements under the (the “FCRA”). The FCRA requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy” of consumer reports and imposes liability on “[a]ny person who willfully fails to comply with any requirement [of the FCRA]” with respect to any individual.

(Canada does not have a “fair credit reporting act” per se, but provincial statutes such as Ontario’s require consumer reporting agencies to “adopt all procedures reasonable for ensuring accuracy and fairness in the contents of its consumer reports.[1] In additional, Canada’s privacy legislation incorporates the principle of accuracy and a right of correction.[2])

Robins alleged that Spokeo disseminated false information related to his education, family status, and wealth, causing Robins to fear that potential employers would rely on this inaccurate information and be disinclined to consider him for employment. Spokeo argued that Robins’ fear, without more, did not constitute actual harm.

The District Court dismissed the complaint, holding that Robins had not suffered an actual injury, and therefore had not properly pleaded “injury-in-fact”, as required by (“Article III”). As a result, he lacked standing. On appeal, a panel of the Court of Appeals for the Ninth Circuit reversed the District Court decision. The Ninth Circuit’s decision was appealed to SCOTUS.

The Decision

The SCOTUS panel filed a 6-2 split decision. The majority determined that the Ninth Circuit’s decision was incomplete for failing to satisfy the “injury-in-fact” requirement under the test for standing.

The test for standing before federal courts in the U.S. has a constitutional basis. establishes the judicial branch of the federal government. It gives courts the authority to adjudicate “any case or controversy”. The court has developed these principles fairly narrowly. A plaintiff only has standing in federal court if they suffer a concrete and particularized injury, that is�� “actual or imminent, not conjectural or hypothetical.” For an injury to be particularized, it “must affect the plaintiff in a personal and individual way”. A concrete injury must actually exist, though it can be either tangible or intangible.

Significantly, the court in Spokeo emphasized that violations of FCRA procedural rights do not necessarily result in concrete harm and that “not all inaccuracies cause harm or present any risk of harm.” SCOTUS held that a “bare procedural violation, divorced from any concrete harm,” will not “satisfy the injury-in-fact requirement of Article III.” This is likely to reign in attempts by lower courts which have taken a more lenient view of standing. In one regard, it represents a reiteration and clarification of SCOTUS’ position in , which stated that a “‘threatened injury must be certainly impending to constitute injury in fact,’ and that ‘[a]llegations of possible future injury’ are not sufficient.”

Clapper opened the door to much debate (and litigation) in respect of the scope of a “certainly impending” injury – a door which SCOTUS appears to be have incrementally closed. However, the court did not say outright that a plaintiff must have suffered concrete harm in order to sue. It noted that in some circumstances, a “risk of real harm” may be sufficient to satisfy the requirement of concrete harm.

In the end, the Spokeo majority ultimately concluded that the Ninth Circuit failed to fully appreciate the distinction between concreteness and particularization in its reasons, and it sent the matter back for the lower court to consider of whether “the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement.”

The dissent agreed with the majority’s analysis, but took issue with the need to remand the decision to the Ninth Circuit for an assessment of whether Robins’ injury was, in fact, particular and concrete. The dissent found that the evidence before the court had shown that Spokeo’s inaccurate information about Robins could jeopardize his candidacy for jobs he had or would apply for, and could cause potential employers to make negative judgments, based on inaccurate information, about his suitability for certain work demands. In the dissent’s view, this was far more egregious than an incorrect zip code (citing the majority’s example).

Privacy Damages in Canada

Spokeo raises a number of considerations for organizations that manage consumer and public data, both in the U.S. and Canada.

In the U.S., the decision raises questions about the ability of claimants to sue to enforce privacy-compliance requirements or other procedural matters under causes of action established by legislation like the FCRA. This is particularly so where the statutory right of action does not explicitly include requirements for concrete or particular injuries or where no clear harm has (yet) materialized that the plaintiff can point to.

Moreover, the split decision illustrates a divide on the SCOTUS bench over the harm that can accrue from the mismanagement of personal information and the growing importance of strong consumer privacy laws in a data-rich and networked world. While the majority characterizes the erroneous Robins profile as an error of no particular consequence, the dissent appears to be alive to the consequences and risks to individuals of poor data gathering, management, and publication where personal information is concerned.

These issues are very much alive in the Canadian privacy landscape as well. Canadian courts and legislators continue to grapple with the nature and quality of damages required to prove a claim.

Across Canada’s legislatures, there have been a patchwork of statutory suit provisions enacted for privacy complaints. For instance, the explicitly includes a statutory tort, actionable without proof of damage,[3] as do the privacy acts of , , and .[4]�� The creates only administrative offences, and contains no civil right of action.[5]

Under the personal information legislation of some provinces, the statutes create a right to sue for damages only after the statutory administrative processes have resulted in an order or conviction, and then only for “for damages for loss or injury that the individual has suffered as a result of the breach”.[6] Canada’s federal (“PIPEDA”), takes a similar approach, but permits a court to “award damages to the complainant, including damages for any humiliation that the complainant has suffered.”[7]

Canadian courts’ struggle with these issues are evident in decisions like :

The fixing of damages for privacy rights’ violations is a difficult matter absent evidence of direct loss. However, there is no reason to require that the violation be egregious before damages will be awarded. To do so would undermine the legislative intent of paragraph 16(c) which provides that damages be awarded for privacy violations including but not limited to damages for humiliation.

Privacy rights are being more broadly recognized as important rights in an era where information on an individual is so readily available even without consent. It is important that violations of those rights be recognized as properly compensable.[8]

An earlier decision, , addressed the issue as well, but took a more cautious approach:

Section 16 of PIPEDA provides that “[t]he Court may, in addition to any other remedies it may give … award damages to the complainant, including damages for any humiliation that the complainant has suffered.”�� This provides the Court with exceptionally broad power to award damages.�� Nevertheless, any damages awarded must be awarded on a principled basis, and be appropriate and just in the circumstances.[9]

Of note, the amendments to PIPEDA made under the regarding mandatory data breach reporting set the reporting trigger as “real risk of significant harm” and state explicitly that “significant harm includes bodily harm, humiliation, damage to reputation or relationships, loss of employment, business or professional opportunities, financial loss, identity theft, negative effects on the credit record, and damage to or loss of property”.[10] An organization which concludes that it must report a breach may, in doing so, be inadvertently conceding a measure of damages.

© McCarthy Tétrault LLP

[1] Consumer Reporting Act, R.S.O. 1990, c. C.33 at s. 9.

[2] See, for instance, Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5, Sch. I at “Principle 6 – Accuracy”.

[3] Privacy Act, R.S.N.L. 1990, c. P-22.

[4] Privacy Act, R.S.B.C. 1996, c. 373; Privacy Act, R.S.M. 1987, c. P125; Freedom of Information and Protection of Privacy Act, R.S.S. 1978, c. P-24.

[5] An Act respecting the Protection of Personal Information in the Private Sector, C.Q.L.R., c. P-39.1. In Québec, the right to privacy is also protected by several provisions of the Civil Code of Québec and by the Charter of Human Rights and Freedoms, and a breach of these rights to privacy can lead to broad damages awards.

[6] Personal Information Protection Act, SA 2003, c P-6.5, section 60. See Martin v. General Teamsters, Local Union No. 362, 2011 ABQB 412, at paras. 47-48, in which the Court struck portions of a Claim on this point; Personal Information Protection Act, SBC 2003, c 63.

[7] Personal Information Protection and Electronic Documents Act, S.C. 2000, c 5 at s. 16. Along with the statutory regime, there is the common law intentional tort of “intrusion upon seclusion”, developed in Jones v. Tsige, 2012 ONCA 32. However, this tort has been rejected in B.C. and Alberta, where the courts have found that the provincial privacy statute excludes a common law action for intrusion upon seclusion. See Ladas v. Apple Inc., 2014 BCSC 1821 at paras. 76-77 and Martin v. General Teamsters, Local 362, 2011 ABQB 412 at paras. 43-48.

[8] Chitrakar v. Bell TV, 2013 FC 1103 at para. 24.

[9] Nammo v. TransUnion of Canada Inc., 2010 FC 1284 at para. 66.

[10] Digital Privacy Act, S.C. 2015, c. 32 at s. 10.1(7)

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Leonard is a��photographer whose����is using an electron microscope to capture images of some of the smallest things imaginable, including cells, crystals, and tiny creatures. Stemtech is��a multi-level marketing organization with a����using adult stem cells.���ճ������by Leonard alleged that Stemtech initially approached him to licence one image for use in their publications, which Leonard agreed to, but that he was never fully paid for its use. Also, the agreement was for use only in their publications, and not on their website.

�ճ������further alleged that Stemtech used two images entitled "Scanned Electron Microscopy of Human Bone Marrow Stem Cells Images" on their website, and made them available to their sales and distribution network for use on their websites as well. When Leonard discovered the use by Stemtech, he sent them a cease and desist letter.�� Stemtech took��down the images, but refused to compensate Leonard. As such, Leonard started the action against Stemtech for copyright infringement.

The main form of relief sought by Leonard was damages suffered by him, and an accounting of profits by Stemtech. Or in the alternative, statutory damages.

The case was heard by a jury, which returned a����in Leonard's��favour��on all counts. In addition to a finding of liability for direct infringement, the jury also found Stemtch vicariously and contributorily liable for the infringement of Leonard's copyrights in both works. In this case, Stemtech was found vicariously liable for the use of Leonard's images by the company's independent contractors. The jury found that Stemtech had the right or ability to stop or limit their infringement, but��failed��to do so, while also having a direct profit or financial interest in the independent distributor's infringement. Furthermore, the jury found Stemtech had knowledge its distributors were directly infringing the works and intentionally induced them to do so.

Apart from the facts, the most interesting aspect of this case was the massive award of $1.6 million to the photographer. Leonard pled for actual damages, which would have been a combination of damage suffered by him as well as an accounting of��profits��by Stemtech. Under , Leonard could have elected for statutory damages, but was not able to do so, as he had not registered his works at the time of infringement. ��extends copyright protection to unregistered works, but requires registration upon commencement of an infringement action.

Damages under Canadian Law

The Canadian����operates in very much the same way. Under��, an infringer of copyright is liable for damages suffered by the owner, in addition to an accounting of profits not otherwise accounted for. Similarly to��, Canadian law allows for the copyright holder to elect for statutory damages instead of real damages at any time in the proceedings under��. The range of statutory damages in Canada is between $500 and $20,000 for all infringements by a commercial infringer of a single work. Unlike America, statutory damages are available in Canada without registration, and starting an action for infringement does not require registration of a work.

Implications

Without details of how the jury calculated the amount, it is difficult to comment on its appropriateness. However, another recent American decision resulted in a����for copyright infringement of another photograph, this time under statutory damages. These decisions beg the question of whether we will see a trend in enforcing copyright of photographs and if we will be seeing them enter the Canadian courts.

Alex Buonassisi is an IPilogue Editor and a JD Candidate at the University of British Columbia.

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Especially in high tech industries, it is possible to observe awards of damages that seem disproportionate to the infringement that occurred. A team of engineers at work on a problem may find many solutions to it. Is it reasonable to expect them to scour the patent registry to ensure every solution that is implemented does not fall within a claim in some obscure patent? With so many patents with so many broad claims on the register, a solution that a team independently arrived at may randomly overlap such a claim. The scenario is like buying a lottery ticket where patents are the winning numbers. If one buys enough tickets, the winning (or rather losing) number will likely come up. Chances are less for high quality inventions that represent a real advance in the art and that may be difficult to duplicate accidentally, but may be greater for lower quality patents that represent more modest advances or variants.

The way United States courts calculate damages in this situation is instructive. In and subsequent cases, the court adopted a “but-for” test where the damages are the profits the patentee would have made “but for” the infringement, having due regard to acceptable non-infringing alternatives (NIAs). In essence, the court calculates what the patentee would have lost if the infringer had not infringed, but instead had used a NIA. So in our example, had the engineers unwittingly stumbled on a patented technology by independent research where NIAs were also available, they would be liable only for the incremental damages the patentee suffered had the defendant used an NIA instead of the patented invention.

Recently in Canada, this approach was summarily rejected by the Federal Court in . The court acknowledged the US NIA principle, but held that in Canada NIAs were irrelevant in calculating damages. One merit of this approach is to remove the incentive a potential infringer may have to infringe on purpose, knowing that his damages liability from lost profits will be limited to the incremental lost profits. ��What some might think would be a flagrant abuse of the patent system is thus prevented.

Both the US and Canadian approaches have their merits. Can they be reconciled while maintaining their respective advantages? One way, inspired by such cases as , is to have regard to the intention of the infringer. While Qualcomm had infringed, the court’s finding that the infringement was not wilful significantly reduced the amount of damages awarded. The divergent US and Canadian approaches on NIAs may therefore be reconciled by making the infringer’s intention a threshold test in calculating damages: if infringement is innocent, NIAs may be considered as a more accurate assessment of damages; if wilful, they should not be considered. Deterrence is a legitimate aim of compensation schemes, and deterring wilful wrongdoers more than innocent ones seems logically justifiable.

One concern with this approach is that an infringer’s intention may actually serve to change the method of calculating damages. But, from an economic viewpoint, any assessment of the actual damages suffered by a patentee must inherently consider the availability of NIAs. From this perspective, the unavailability of an “NIA defence” may simply be considered as a punitive measure that is awarded to deter abuse of the patent system, instead of a different method of calculating damages.

Even though punitive damages have rarely been awarded in patent infringement cases in Canada, in the Federal Court of Appeal affirmed their availability, while noting that not every deliberate infringement case necessitates punitive damages. In cases where the court feels that the high standard of bad conduct required to award punitive damages is not present, it may still achieve a similar punitive effect by being “less generous” with the NIA deductions, as was done with the deductions in the US copyright case involving deliberate infringement. In such cases, upon wilful infringement, the strength of the NIA deductions may be lowered, even if the defence may still be technically available.

The interesting question remains: may this result be achieved judicially or is legislative action first required?

Pasan Hapuarachchi 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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After three days of deliberation, a Californian jury have made it clear who won the first round in what is expected to be a much longer bout in the ongoing legal battle between Apple and Samsung. To see past IPilogue Articles covering Apple v Samsung, click��, , , , and . Last Friday, ��to be paid by Samsung for its willful actions in copying Apple designs. While there is a lot that could happen before Samsung is forced to pay any kind of award, law and business professionals alike are waiting with bated breath to see how the legal landscape will change as a result of this monumental decision.

Even with the prospect of such a large award looming over Samsung, the uncertainty that the award will be upheld is giving the South Korean corporation some time to regroup. Samsung is planning on filing a����to have the decision overturned by Judge Lucy Koh, who oversaw the litigation. While the motion may be a boon for Samsung should they be successful,��. In addition, the post-verdict motions period could make a bad situation worse; the jury found that . According to the US Patent Act, a court can����when this is found to be the case. Another consideration for both parties is an����set for September 20^th��to see if Samsung’s infringing products will be banned for sale in the US.

An issue that is sure to be focused on by Samsung’s legal counsel is����with which the 9-person jury came back with a decision on a case of such complexity. Velvin Hogan, the foreman of the jury is an engineer with patents of his own and����that the group had reached a decision without the help of the instructions provided to them. While Hogan has said that the jury��, the suspicion for bias or a rushed decision is strengthened by the fact that the jury had��. While this was rectified by the court and reduced the award by roughly $2.5 million, Samsung may attempt to leverage this error in order to have the decision thrown out by the judge.

There were also some notable differences in results from the trial concerning the same issues that was decided earlier Friday in Samsung’s home territory of South Korea. In that case, the court ruled that Samsung devices had not copied the design of Apple devices but that����in various ways. While this was a minor victory for Samsung,����that the ruling concerning Samsung’s industry-standard patents will produce anti-trust and monopolization issues if rival companies ever attempt to sell their products in South Korea.

In the aftermath of the jury verdict,����issued responses as to their thoughts on the decision and their plans for the future. In many ways the statements of the two companies reflect the thoughts of legal theorists that are on either side of the ongoing discussion about patent law and how it is used in the tech industry today. Samsung’s comments refer to Apple’s verdict as a loss for consumers; that it will diminish innovation and provide consumers with fewer choices. It also mentions how��. On the other side of the coin, Apple’s statement focused on the fact that the lawsuits were not just about patents and money but about��. While it is difficult to say that either company is completely correct, it is clear that in the current market of smartphones and tablet computers, a market worth roughly��, the patent is a powerful weapon in any corporation’s arsenal.

Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School.

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The case centres around a video made by Bristol Film Studios (BFS) for one of Mr. Soloman's (aka Mr. Sullivan's) tracks. The video was uploaded to YouTube by BFS upon its completion. Mr. Soloman did not approve of the video and asked the company to remove it; it was taken down about 5 days after its initial posting. YouTube counted about 100 (non-unique) views of the video before it was removed. Mr. Soloman subsequently claimed that BFS owed him damages in the order of hundreds of thousands of pounds for those views. His claim was struck by the High Court, his appeal was dismissed.

In calculating the potential damages, the judge of first instance was generous: he assumed a maximum number of unique viewers (about 50), and that 80% of those might have bought the track had they not seen the video. He nonetheless dismissed damages for which there was no evidence.�� This led to a maximum claim of about £50.

At a first glance at the decision from the Court of Appeal, it might appear that Soloman's claim was struck out merely because of that court's agreement with the court below, that the most generous measure of damages on Mr. Soloman's claim would be in the order of about £50.�� Lewison L.J. points out that the high court is not required to use its resources to entertain claims of such magnitude, and the other Lords concur on this point. If the court's analysis were complete at this point, one might reasonably conclude that any small copyright claim may simply be seen by the courts as trivial or an abuse of process (as was found here). However, there are some important points made by the court in reaching its conclusion:

1. It is made clear early in the decision (though briefly) that Mr. Soloman has no remaining possibility for injunctive relief: the video was pulled upon his request, and BFS retained only one MP3 copy of his track (for litigation purposes). Additionally, BFS was willing to undertake not to make use of the track for any purpose other than litigation without leave of the court.

2. Much of the discussion in this decision focused on the idea of a proportional response. As Lewison L.J. put it "it is only if there is no proportionate procedure by which a claim can be adjudicated that it would be right to strike it out as an abuse of process." (Emphasis mine.) This comment has particular resonance in the current landscape of IP litigation: Sullivan was decided a short time after the UK's formation ofAs well, in January, the U.S. copyright office for suggestions on how to handle smaller IP claims in the U.S. In Canada, litigants already have this option.

3. Mr. Soloman agreed with the proposition that the court should strike his claim if the damages were in the order of £50.

One question that arises from the court's calculation is whether their methods of calculating the measure of damages may be used by future claimants as a way of maintaining a relatively large claim (in this case, for instance, if the video had gone viral, the judge might have been looking at 1,000s of presumed unique views). In fact, whether this calculation is used by a future claimant may have to be a deciding factor in whether her claim is tenable. In this case, the court points out that had Mr. Soloman known more realistically the scale of damages, he might have had his case streamed into small claims initially - a proportionate response.

In my reading this case, it seemed that another very important factor affecting the outcome of the case was the fact that BFS had complied with Mr. Soloman's requests in a reasonable amount of time. This was not a case where a copyright holder's rights were flagrantly disregarded by another party. Here, BFS complied with Sullivan's request to take the video down and agreed to limit their future use of the copyrighted material forming the basis of the dispute to litigation purposes only (or where the court was otherwise amenable). I was left with the feeling that any remaining possibility for injunctive relief would have meant that Sullivan's claim might have been deemed appropriate for the high court stream.

Hayden McGuire is a JD candidate at the University of Saskatchewan, Faculty of Law.

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A (Louis Vuitton Malletier SA v. Akanoc Solutions Inc.) has trumped Canada’s (Louis Vuitton Malletier SA v. Singga Enterprises Inc). While the company is arguably only protecting its market share as one of the world’s , one must wonder about the nature of these lawsuits, the practice of awarding compensatory, statutory and punitive damages all at once, and whether the Canadian courts might not be going perhaps a bit too far in their desire to prevent copyright and trademark infringement.

Professor David Vaver muses on precisely this point in his new book, , when he mentions two previous Canadian LVM lawsuits in the last decade — ), and — that led to substantial damages being awarded to the fashion conglomerate. ��While injunctions were not ordered, the court saw fit to award a total of $263,00 and $963,000 respectively to LVM. In Yang, a combination of deemed infringement of the Canadian ��and , as well as the defendants’ bad faith and conduct, led to the court to much higher.�� Additionally, it also held the defendants responsible for their disregard for court procedure, and their repeated and deliberate ignorance of three cease-and-desist orders were weighty factors in the ultimate issuance of punitive damages.

Similarly, 486353 B.C. Ltd. saw the BC Supreme Court use its power to rebuke the defendants in a stronger manner, by not only upping the ultimate compensation sum awarded to LVM, but also ensuring that the defendants’ dismissal of the court’s processes and their intentional and continuous breaches of statutory law raised the final monetary award considerably. Finally, Singga, decided in March 2011, built on the precedents set by the other two LVM cases and applied these principles to punish the defendants’ knowledge of wrongdoing, their willingness to continue with the illegal acts, their subsequent attempts to hide their counterfeiting operations and their disrespectful behaviour towards the court as a sign that substantial punitive, exemplary and special damages ought to be awarded to LVM.

South of the border, Akanoc extended contributory trademark infringement to a to run on its servers and online platforms, leading to a judgment of a whopping $10.5 million for LVM. While in this case, the defendants attempted to prove their efforts to prevent their online infrastructure from being used for illegal trademark and copyright infringement, the court simply was not convinced, since the defendants did not respond directly to the letters and correspondence sent to them by LVM itself. In short, this case might have made it possible for a for the actions of one of its offshore, online clients with respect to rights infringement.

Comparing the above cases, Professor Vaver critiques the lack of sufficient investigation of the Canadian statutory damages scheme, as well as the practice of awarding excessive punitive damages. He cautions courts to maintain the necessary balance between being fair to the rightsholder’s as well as the infringer’s interests. In the Canadian cases mentioned above, the scale seems to be tipped quite sharply in the direction of the plaintiff, with the defendants being forced to pay "sums way beyond anything the right-holder could possibly have lost (Vaver, 645)."

Moreover, LVM’s practice of trying to gain maximum compensation through individuals and groups or businesses jointly and severally also points to an abuse of the available means of preventing infringement. Ultimately, Professor Vaver’s critique that the application of statutory factors to infringement cases is in essence, criminal law masquerading as its civil counterpart, with not as many high thresholds to live up to, only highlights the indiscriminate free-rein that is being given to LVM as the rightsholder (Vaver, 644). While the company is certainly justified in having a , Akanoc is a cautionary note for Canadian judges. It does seem that the Canadian approach is somewhat more lenient than the American one, but the fact that the awards have been increasing steadily might serve as an indicator of what is to come in terms of protection of copyright and trademark.

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The Federal Court of Canada awarded significant damages in a , a suit for trade-mark infringement on August 18, 2011. The trade-mark in question was “The Queen of Tarts,” owned by Stephanie Anne Pick of Toronto, and the decision came as a default judgment after the Defendant failed to submit a Statement of Defence within the prescribed time.

The case is notable since the court awarded the Plaintiff $10,000 in damages plus costs for trade-mark infringement and the tort of passing off in violation of and of the . Also intriguing is the apparent lack of reasoning behind the quantum of damages awarded. This lack of specificity makes it difficult to assess whether a just result was reached given the high award and one-sided nature of the proceedings.

Ms Pick adopted “The Queen of Tarts” trade-mark on approximately February 14, 1999 and later registered the mark on March 31, 2005 with the Canadian Trade-marks Office for use in association with wholesale and retail store services specializing in baked goods. According to Ms Pick’s Affidavit, she used the trademark extensively throughout Canada in advertising, , product packaging, and at her retail store location in Toronto. As such, the court found that such use of “The Queen of Tarts” trade-mark resulted in the mark being well known throughout Canada for goods and services offered by Ms Pick.

Ms Pick initiated the action in November 2010 after discovering the Defendant operated a stall at the Farmer’s Market in downtown Edmonton, Alberta and had also opened a retail store under the name “Queen of Tarts.” In light of this, the court found the Defendant’s mark to be confusingly similar with “The Queen of Tarts” according to of the Trade-marks Act, and found infringement of the mark according to and passing off under .

The court found the Defendant personally responsible for damages since, as director, she had authorized or ordered the infringement and/or passing off of the mark by either failing to conduct a proper preliminary search, or did conduct a proper search but chose to ignore the results of said search. The Court awarded $10,000 in damages as compensation for lost sales and damage to the Plaintiff's reputation and goodwill.

Throughout the analysis, the only mention by the court as to any method of calculation other than judicial discretion, was a reference to conventional awards regarding counterfeit infringement in default judgments. With no baseline to base an opinion on, it is hard to consider the fairness of this outcome given its subjective nature.

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The PM(NOC) Regulations essentially serve as a link between the patent system and the drug regulatory approval system. The Regulations enhance protection for pharmaceutical patents by requiring generic companies to "clear" relevant patents prior to obtaining regulatory approval to produce and sell patented drugs. ��Section 8 outlines the liability of an innovator to generic manufacturers after an unsuccessful application for a prohibition order against a generic company. Section 8 states that innovators are liable for "any loss suffered" that occurs as a result of an application being discontinued, withdrawn, dismissed, or successfully appealed by the generic company. Some generic companies have argued that the wording in section 8 indicates that generic manufacturers are entitled to damages as a result of being held off the market, including disgorgement of profits/revenues from the innovators and future lost profits.

On October 21, 2008, the Canadian Federal Court issued the first trial decision in regards to section 8 in . Apotex, a major generic drug manufacturer, filed a Notice of Allegation (NOA) in respect of the patent on alendronic acid held by Merck, a multinational pharmaceutical company. Alendronic acid is used in the treatment of osteoporosis as well as other bone diseases.�� The drug inhibits bone resorption and is marketed by Merck under the brand name "Fosamax". Apotex claimed that Merck's patent was invalid for a number of reasons. Merck replied by initiating a proceeding for the issues Apotex raised in its NOA. Once proceedings are commenced by an innovator in response to a NOA, the Minister of Health is barred from issuing regulatory approval (NOC) to the generic company for 24 months or until proceedings are finished. Regulatory approval is required for generic companies to manufacture patented medicines.

Apotex was ultimately successful on some, but not all, of its patent invalidity claims in its NOA against Merck. Thus Apotex was able to bring a claim under section 8 for "any loss suffered" as a result of Merck's application against Apotex which prevented Apotex from manufacturing the drug for approximately one year. At trial, Apotex was awarded damages which included compensation for future losses, but was unsuccessful in obtaining a costs order against Merck. As well, Apotex's argument that it was entitled to a remedy of disgorgement of the innovator's profits was not accepted by the court, as it did not take into account the fact that Apotex is not in the position of a patentee and thus, the court states, should not be awarded the same types of damages as a patent owner seeking remedies for patent infringement.

On , Apotex successfully claimed some damages from Merck's proceedings under the PM(NOC) Regulations. However, Merck was successful in denying a large portion of damages. Apotex was successful in claiming damages for losing market share due to the fact that other generic drug manufacturers entered the market at the same time as Apotex. However, while the trial court included future lost profits in the damages award, the Court of Appeal decreased the damages award to only include profits lost during the time period that Apotex was unable to obtain a NOC. The Court referenced an analysis done by the Governor-in-Council in 1998 which stated that lost profits and compensation should not include future losses. The Court of Appeal also rejected Apotex's assertion that disgorging Merck's profits was necessary to uphold the purpose of section 55.2 of the . Section 55.2 states that it is not patent infringement to produce patented products for certain purposes prior to the expiration of a patent. For example, generic manufacturers are allowed to produce patented drugs intended for sale once the patent expires.

Apotex also failed to receive a costs award at trial because it was determined that both parties "largely" failed to succeed on the issues each party brought to the court. In order for a costs decision to be challenged, there must have been a legal error or misinterpretation of facts by the trial court. The Court of Appeal determined that there was no misapprehension of facts when the costs award was granted therefore the costs decision was not changed.

Would awarding future lost profits serve as a disincentive to litigate for innovators when a generic company files a NOA? Because the court determined in this case that only lost profits within the (maximum) 24 month time frame are recoverable by a generic manufacturer, it might be more profitable for the innovator to take a risk and challenge every NOA. Will there be a case where judges treat generic manufacturers more similarly to patent holders and award damages for future lost profits and/or disgorgement of an innovator's profits? Considering that recent amendments to the Regulations in October of 2006 eliminated the reference to profits in section 8, damage awards that include innovator's profits are highly unlikely.�� It seems as though only a highly unusual case with obvious malicious intentions by innovators could render such a result.

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