Dan Bereskin presenting. Photo by Prof. Pina D'Agostino

Pankhuri Malik is an IPilogue Writer, IP Innovation Clinic Fellow, and an LLM Candidate at Osgoode Hall Law School.

On August 31, 2022, IP Osgoode held its first in-person event in over 2 years and the first instalment of the IP Osgoode Speaks series since 2020. At the event, , the founding partner of the highly regarded IP Boutique firm , gave a lecture on balancing rights to freedom of expression with the rights of IP owners and users.

Being the first in-person event since the beginning of the pandemic, the lecture brought us back to an energised and inquisitive group addressed by Mr. Bereskin’s ease and sense of humour. Dr. Pina D’Agostino began with opening remarks, recognized the novelty of an in-person lecture in 2022 and acknowledged all the work that went into bringing it together.

Mr. Bereskin began his lecture by acknowledging the multitude of perspectives held by different IP enthusiasts, such as academics, IP owners and private practitioners. He recognized that the views he presents maybe termed as him “going over to the dark side.”

He proposed that in IP infringement cases where freedom of expression is a concern, an injunction should not be granted without proof of actual substantial harm or proof of likely actual substantial harm. This harm primarily consists of economic loss and reputational loss. It is noteworthy that, in the absence of proof of economic loss, Mr. Bereskin does not include mere rhetoric of reputational harm, without solid evidence, within the ambit of actual substantial harm.

To make his point, Mr. Bereskin used some interesting examples of how courts have treated parodies of IP rights around the globe. He discussed examples of corporate overreach by IP owners, such as Louis Vuitton and United Airlines.

Upholding Freedom of Expression

Most notably, Mr. Bereskin discussed two unsuccessful actions by Louis Vuitton (“LV”). The first was LV’s suit against artists Nadia Plesner. Plesner had used a sketch of an LV bag in her painting to showcase the commercialising of Darfur genocide victims to appease first world audiences. This painting was later reproduced on t-shirts which were sold to raise money for the genocide victims. LV sued Plesner alleging trademark infringement. Ultimately, Plesner won the case against LV and her rendition of the bag with the court upholding her right to freedom of expression over LV’s . Mr. Bereskin astutely noted that Plesner’s artwork would have been less popular if LV had abstained from legal action.

(Photo credits: )

Mr. Bereskin also discussed LV’s case against Haute Diggity Dog, a company that makes plush toys for pets to chew through parody of famous trademarks of luxury products. One such example is Haute’s “Chewy Vuiton” plush toys. LV sued Haute for trademark infringement and trademark dilution. The US Court of Appeals (4^th circuit), however, that Haute’s products are successful parodies of LV’s handbags, do not raise any likelihood of confusion and are therefore, not infringing.

Priortizing IP Rights over Freedom of Expression

On the flip side, we have the case of United Airlines and Mr. Jeremy Cooperstalk, a Canadian professor who catalogued complaints against United Airlines on the parody website “Untied.���dz�”. United Airlines filed a lawsuit in 2012 alleging IP infringement and confusion through the website which led people to believe that they are registering complaints with United Airlines themselves. This reasoning was dubious at best, since “���Գپ����’s” website denied any allegiance with United Airlines. The Federal Court however disagreed with Mr. Cooperstalk and held his website violative of United’s IP rights. Interestingly, Jimmy Kimmel’s amended slogan (“F**k You”) and accompanying ad for the airline in the US continue to be available due to the US’s stronger protection of freedom of expression.

Takeaways

Through these, and many more examples, Mr. Bereskin made a compelling case for not only recognizing creators’ IP rights, but also the limitations of those rights, especially when they conflict with the right to freedom of expression. Overexpansion of IP owners’ rights poses risks to freedom of expression and should be curbed before these rights go rogue.

For a student who did not get an opportunity to experience Osgoode and IP Osgoode pre-pandemic, the energy and fervour of the lecture hall, the brilliant insights by Mr. Bereskin and the surrounding conversations around his lecture, this lecture served as a unique insight into the power of hallway chatter. Surrounded by snacks and coffee, the lecture was a unique opportunity to learn from an IP legend. It also marked the first step in IP Osgoode’s next chapter where a hybrid system can bring together IP enthusiasts in a most enriching way.

Left to Right: Prof. Pina D'Agostino, Dan Bereskin, & Rhoda Gryfe. Photo by Ashley Moniz

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Photo by Pineapple Supply Co. ()

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

Given the power of Apple’s brand, it is no surprise that they actively challenge trademarks that resemble their own to protect the dilution of their trademark. But this raises some key questions: Should Apple have the right to challenge all trademarks relating to an apple? What about fruits that bear a resemblance to an apple? In its act of trademark enforcement, Apple seems to be casting the net as widely as possible. According to the , a research initiative seeking to hold large technology companies accountable, Apple filed 215 trademark oppositions, nearly two-thirds more than all the trademark oppositions of Microsoft, Amazon, Facebook and Google.

Apple’s numerous filings are targeting that are seemingly unrelated to the company’s brand, including but not limited to “an organization that supports families of children with autism, a school district in Appleton, Wisconsin, and an online test prep service for nursing students”.

The as “a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” ��Apple has taken issue with individuals and businesses trademarking anything related to apples, and even other fruits. Those targeted include individuals and businesses providing services that Apple does not, such as . , Apple also filed an opposition to the trademark of Stephanie Carlisi’s stage name “Franki Pineapple”, as they were “both the names of fruits, and thus convey a similar commercial impression”.

Apple’s argument against these companies in mainly emphasizes Apple’s ��significant brand value – as a business grows, so do its efforts to prevent the brand’s dilution. Many smaller parties are unable to respond to opposition because of the costs involved; it can often seem like they have no choice at all. With no opposing voice loud enough to fight back, arguments emphasizing brand values only encourage large companies to continue to enforce their trademarks aggressively and boundlessly.

However, brands attached with the term “trademark bully” can face negative consequences and be reprimanded by the courts for filing “weak” cases. In 2016, Louis Vuitton’s inability to pass off ’s parodical products as a “joke” led to . , the district judge stated that “[i]n some cases … it is better to ‘accept the implied compliment in [a] parody’ and to smile or laugh than it is to sue”. ��For this reason, trademark enforcement can be seen as a double-edged sword.

Image from United States District Court for the Southern District of New 91��ɫ

In the media, world-famous brands are often , and infringers are sympathized with. Still, ��many companies are simply trying to protect their brand’s dilution. Clarifying the thresholds for depreciation of value and distinctiveness of trademarks would be beneficial to ensure that smaller businesses and individuals are not silenced by nets cast too widely and prevent companies from enforcing their trademarks over-aggressively and falling victim to the double-edged sword of trademark enforcement.

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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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A has sent a clear message to US Internet Service Providers (ISPs) that they can be liable for secondary trade-mark infringement.�� All that is required is that the ISP knows or ought to have known that their customers were directly infringing or facilitating the infringement of a trade-mark via the ISP's services.

Akanoc Solutions, a California-based ISP provided website hosting solutions. Via a hosted website, one of Akanoc’s customers sold goods that infringed the trade-mark of Louis Vuitton. Despite Louis Vuitton providing multiple notices to Akanoc that their customer was infringing Louis Vuitton’s trade-marks, Akanoc did little to remedy the situation or take down the infringing content. At trial the jury awarded $31.5M and found that Akanoc willingly contributed to direct trade-mark infringement.

For Canadians this may seem a strange outcome given the current state of Canadian law. There is no right of action for contributory trade-mark infringement in Canada. Sections 19, 20, and 22 of the Canadian Trade-marks Act are the bases for trade-mark infringement actions. Section 19 provides protection for a registered trade-mark holder allowing them the “exclusive right to the use” of the trade-mark throughout Canada in respect of the particular wares or services covered by a registration. In contrast, the deemed infringement rule in section 20 is broader in application.�� Pursuant to section 20, infringement is perpetrated by a “person not entitled to its use under [the] Act, who sells, distributes, or advertises wares or services in association with a confusing trade-mark.”

Section 22 of the Act prohibits “use [of] a trade-mark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto.” Introduced in 1953, section 22 is the only enforcement provision that primarily favors the intangible rights of trade-mark owners rather than protecting the consumer.

Even if there was a cause of action for contributory trade-mark infringement in the Canada’s Trade-marks Act, it is unlikely that ISPs would be found liable for failing to take down allegedly infringing content. The closest cause of action for contributory infringement of intellectual property rights in Canada is found in the Canadian Copyright Act. Section 3 of the Act provides owners of copyright the sole right to authorize certain acts. In the leading case of , the Supreme Court of Canada judicially considered the word “authorization” and held that for there to be authorization, it needs to be shown that there is active encouragement, that somehow the defendant sanctioned or approved the infringing acts. Similarly in the SCC said that:

…notice of infringing content, and a failure to respond by “taking it down” may in some circumstances lead to a finding of “authorization”.�� However, that is not the issue before us.�� Much would depend on the specific circumstances.

The SCC in Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers also commented on the difficulty in finding an ISP liable under Canadian law for authorizing copyright infringement by failing to take-down infringing content when notified:

An overly quick inference of “authorization” would put the Internet Service Provider in the difficult position of judging whether the copyright objection is well founded, and to choose between contesting a copyright action or potentially breaching its contract with the content provider.�� A more effective remedy to address this potential issue would be the enactment by Parliament of a statutory “notice and take down” procedure as has been done in the European Community and the United States.

Despite this sound reasoning, US courts have had no issue finding secondary trade-mark infringement even without a specific “notice and take down” procedure for trade-marks. The first case to consider contributory infringement of trade-marks after the Lanham (Trade-mark) Act was passed in the US, was

In reaching its conclusion, the US Supreme Court re-affirmed the basic principle that:

“liability for trademark infringement can extend beyond those who actually mislabel goods with the mark of another.” Thus, “[e]ven if a manufacturer does not directly control others in the chain of distribution, it can be held responsible for their infringing activities under certain circumstances.”

The US Supreme Court also established a two-part test for evaluating contributory liability claims. Specifically:

if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorily responsible for any harm done as a result of the deceit.

This test has been adapted by other US courts to fit various factual situations. In Akanoc specifically, the court drew a parallel between hosting websites and providing real estate in a flea market as in the previous case of Fonovisa:

In this case, Defendants' activity as Internet service providers is more like the flea market proprietors in Fonovisa than the domain name translation service in Lockheed. Here, Defendants do not simply translate domain names into IP addresses. Defendants physically host websites on their servers and route internet traffic to and from those websites. This service is the Internet equivalent of leasing real estate. Defendants' services, combined with Defendants' ability to remove infringing websites, entails a level of involvement and control that goes beyond "rote translation." As with the flea market�� operators in Fonovisa, Defendants cannot remain "wilfully blind" to trademark infringement taking place on their servers.

The court reasoned that the guiding principle of holding a flea market operator liable for contributory infringement is that a host who permits others to use his premises cannot remain "wilfully blind" to their directly infringing acts.

Based on these comments, it would seem that the judge in Akanoc might not have had a complete understanding of website hosting on servers. An understanding of the technology is important since the policy reason for finding flea markets vicariously liable is vitiated in the case of website hosting because of the differences between the two. The physical acts involved in hosting websites couldn’t be any more different than leasing real-estate – even real-estate in a flea market. It is entirely possible for an ISP to be blind to the acts taking place on their servers. “Hosting” a website is usually just as simple as renting a certain amount of hard drive space on an internet facing server. Customers access and control their websites remotely via FTP or other similar protocols. This website information is stored in bits and bytes on hard drives located in secure data centers with hundreds or thousands of servers. These data-centers can be located anywhere around the world, and new technology from vendors such as now allows for virtual servers and virtual networks such that data for one website could be spread across many servers or data centers. If they have the capacity, ISPs can host millions of websites and in many instances the whole process can be automated so that an ISP need never have any human contact with the individual customers.

Despite the fact that the law in Canada is entirely different, one can’t help but wonder if Canadian ISPs will be caught by the decision in Akanoc. It is conceivable that if a suit is brought in a US jurisdiction, Canadian ISPs may find themselves with a $31.5M judgment against them.

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