Microsoft Corporation was, yet again, defeated when the United States Court of Appeal for the Federal Circuit the trial’s court’s decision in favour of the Toronto based software company i4i Limited Partnership (i4i). The dispute between the parties arose when i4i brought a patent infringement action against Microsoft in 2009. At issue was i4i’s invention for editing XML, a computer markup language.

i4i claimed that Microsoft had infringed its patent in certain versions of Microsoft Word, in particular Word 2003 and 2007.�� At trial, it was decided that i4i’s patent was infringed and i4i was awarded $200 million in damages and $40 million in enhanced damages. The court of appeal affirms these findings.

The $200 Million Figure:
Pursuant to damages awarded should be adequate to compensate for the infringement and should not be less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. Furthermore, the court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.

In this case the $200 Million figure was calculated by multiplying the royalty rate (estimated by i4i damage expert to be $98) by the number of Word products that were infringing (2.1 million). The royalty calculation was affected by the 15 factors set out in . The relevant factors to this case are:
(1)    the commercial relationship between the licensor and licensee, such as whether they are competitors;
(2)    the effect of selling the patented specialty in promoting sales of other products of the licensee;
(3)    the utility and advantages of the patent property over old modes or devices;
(4)    the extent to which the infringer has used the invention and the value of that use;

According to i4i’s damage expert the above factors increased the royalty amount because the two companies were in direct competition indicating that any license to Microsoft would limit i4i’s market. Furthermore, the patented XML editor played an important part in encouraging users to purchase new Word software. In addition Microsoft did not have any commercially acceptable, non-infringing alternatives to using i4i’s patent. Finally the patented software was a critical addition to Word.

The Federal court agreed with Microsoft that damages could have been calculated differently. However, it found the amount of damages were reasonable and did not modify the amount.

The $40 Million Enhanced Damages:
, in an event of willful infringement, the court may increase the damages up to three times the amount found or assessed by the jury. US law establishes that 3 conditions should be satisfied before willful infringement is established: (1) whether the defendant was aware of the infringed patent; (2) whether there was an objectively high likelihood that the defendant’s actions infringed a valid patent; and (3) whether this objectively high risk was either known or so obvious that it should have been known to the defendant. In deciding whether enhanced damages are appropriate the court considers whether the defendant acted in bad faith and infringed the patent intentionally.

In this case, the court of appeal was satisfied that enough evidence was presented to support that Microsoft willfully infringed i4i’s patent. Furthermore, the court also agreed that the Microsoft acted in bad faith since the evidence demonstrated that Microsoft knew about i4i’s patent before the production of the infringing software. Also, the court upheld the lower court’s finding that failure to obtain an opinion of counsel was a factor that supported enhancing the damages award. The court of appeal did not change the award of $40 million.

The appeal is not the for Microsoft. The court documents are now being sent to the other appeal court judges who will decide if Microsoft has grounds for a wider review of the case. This decision is due within the next six weeks. If refused, then Microsoft can appeal to the Supreme Court.

This decision affirms that patent law protects property and rights of the inventor and big corporations such as Microsoft are not to neglect the exclusive rights of the inventor to use and manufacture their invention and should think twice before targeting patent protected applications. Furthermore, this case seems to suggest that to avoid finding of willful infringement and to reduce the amount of enhanced damages, obtaining an opinion of counsel may help. In addition, the opinion may be helpful in choosing the litigation . For instance if the opinion suggests that finding of infringement is likely, then the defendant can either attack the validity of patent, try to make further design changes to avoid infringement, or may try to settle the dispute with the patent owner.

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A patent grants the owner of the patent the sole right to make, use, and/or sell the invention.�� By giving these rights and allowing patent owners to profit, patents arguably provide incentives for investing in research and being innovative.

Currently patents have temporal and geographical boundaries, which means, for instance, if a patent is obtained in the US that patent is not valid in Canada unless a patent application is also filed with the Canadian patent office and is approved. The cost of patenting a product is quite high, particularly if considering obtaining patent protection at global level and the process is time consuming. Gutierrez argues that a global patent system can overcome these problems and will promote innovation.

He further "in today's world of universal connectivity, global business and collaborative innovation, it is time for a world patent that is derived from a single patent application, examined and prosecuted by a single examining authority and litigated before a single judicial body. 
 
A harmonized, global patent system would resolve many of the criticisms leveled at national patent systems over unmanageable backlogs and interminable pendency periods".

Clearly the idea of having a single global patent system is appealing to giant corporations such as Microsoft whose products are manufactured globally. Having such a system will significantly reduce cost, will save time, and will make it easier to handle infringement issues. However, to critics, Gutierrez's arguments are not convincing enough.

Gene Quinn, Patent Attorney & IPWatchdog Founder, that a global patent system will hamper local and small businesses. He argues that, "what Microsoft wants is to kill software patents so that they cease to be punished for infringing patents owned by substantially smaller businesses who had the audacity to invent first and seek a patent". It is noteworthy that Microsoft was recently  in Texas for patent infringement regarding its Word application. Furthermore, according to another critic, Ron Katznelson, Gutierrez to explain the cause of the deficiencies in the current system and fails to address how harmonization might help. Ron Katznelson also supports Quinn's view and calls harmonization an "illusory" myth, which is "to abolish the American legal system".

Other critics have also raised their concerns regarding a global patent system; , by comparing patent harmonization to attempts to harmonize Copyright laws, states that harmonization would make it more difficult to realize the innovation process and would benefit those who "benefit most from being able to abuse such monopoly rights"; argues that such a system will make it easier for patent trolls to sue for damages; and states that Gutierrez is asking the world to adopt US patent laws.

Another criterion that concerns me is the position of developing countries.�� Many in these countries do not have sufficient assets to obtain expensive patented products or to get a licence for them.�� Thus, arguably, a global patent system - unless implemented in a way to address this problem - may lower living standards and hinder research.

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Abika and FTC

Abika.com is a Wyoming-based search service website which collects and sells individuals' personal information and also provides services such as selling "psychological profiles" of individuals. In 2007, the FTC a permanent injunction against Abika.com from the U.S. District Court, District of Wyoming, for collecting and disclosing confidential phone records without individuals' consent. Furthermore the court ordered Abika to disgorge $199,692.71, and to comply with some restrictive measures for the next five years. Recently, in June 2009, The United States 10th Circuit Court of Appeals upheld the District Court's decision against Abika. It is noteworthy that OPC also provided an amicus curiae (friend of the court) brief supporting the FTC and arguing that Abika's online search services violates Canadian privacy rights and harms Canadian businesses' reputation.

Abika and OPC -

In December 2004 and March 2005, the Canadian Internet Policy and Public Interest Clinic (CIPPIC), brought a case to the OPC against Abika under the Personal Information Protection and Electronic Document Acts (PIPEDA) arguing that Abika, was collecting, and disclosing Canadians' personal data without their knowledge and consent for inappropriate purposes.  In some cases, particularly in relation with Abika's "psychological profile" service, the disclosed information was inaccurate. OPC conducted a preliminary investigation and found that the case lacked evidence. OPC concluded that PIPEDA does not confer upon OPC investigative powers with respect to foreign companies beyond the border. Thus, accordingly, OPC lacked jurisdiction to compel U.S. organizations to produce the necessary evidence. In February 2007, CIPPIC applied for to get OPC to investigate Abika's business and the case was subsequently re-opened.

The OPC's

Based on the evidence provided by the FTC, OPC's recent decision affirmed that Abika collects and discloses Canadian personal information without their knowledge and consent for inappropriate purposes (such that the reasonable person would deem the purpose highly inappropriate). This violates principles 4.3 and 5(3) of PIPEDA.

On the accuracy of Abika's services, OPC concluded that it lacked evidence, although suspicions were raised in this regard.

The Assistant Commissioner has recommended Abika.com stop collecting, using and disclosing the personal information of people living in Canada without their knowledge and consent. The company has not provided a reasonable response within the timelines set by the Assistant Commissioner and the request from American counsel representing Abika.com for a further time extension has subsequently been refused.

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Australian Fast Track IP Litigation

In an with of Cameron MacKendrick LLP, , the Chief Justice of the , discusses the .

The Fast Track procedure, which was introduced after consultations with the IP bar of Australia, involves active case management and pre-trial scheduling conference. It relies on an  - in an individual docket system cases are randomly allocated to judges, who are responsible for managing the case until disposition - and limited discovery. The parties are allowed discovery only to the extent that they need it. The trial date is scheduled within 2 to 5 months of the scheduling conference and the trials do not exceed 5 days. The aim of the Fast Track procedure is to encourage parties to cooperate at the early stages of the commencement.

One of the major events in case management is the scheduling conference. Participants at the conference include a judge, parties' counsels, and one of the court's registrars with ADR qualifications, should ADR be needed. The parties or their representatives are also recommended to attend. At this conference, the judge hears the case, asks questions to narrow down the issues, and addresses issues regarding discovery. The result of this conference is a "blue print" for the trial. Ideally the judge present at the scheduling conference would be the trial judge.

The Fast Track Direction may to the following proceedings:

• proceedings arising from or relating to a commercial transaction;
• an issue that has importance in trade or commerce;
• the construction of commercial documents;
• an issue that has importance in personal insolvency; and
• intellectual property rights (excluding patents).

A proceeding may be carried out under the Fast Track Direction by the request of the plaintiff, agreement of the parties, or judiciary referral.

The Fast Track procedure has specific requirements for interlocutory applications. Before making such applications, parties are required to cooperate, meet and confer their issues, and try to resolve their dispute in good faith. If parties cannot resolve their issues then a certificate stating that the meet and confer was completed, though unsuccessful should be presented. Failure to do so will result in the application being refused immediately.

The interlocutory applications way of a written brief not exceeding five pages. The responding party provides an answering written brief, also not exceeding five pages. The judge decides the interlocutory application based on the documents, unless (s)he feels that an oral hearing would specifically add to, clarify or explain the written briefs.

According to the Honourable Chief Justice Black, IP attorneys love the Fast Track Directions because clients like it.  It gets disputes resolved very fast and reduces costs.

The supporting statistics also show that the Fast Track procedure has been quite successful so far. Out of the 70 cases that proceeded through the Fast Track Directions only 17 required judgment, 33 were resolved through ADR, and 17 were either settled or discontinued. Furthermore there have been no appeals on grounds of procedural fairness.

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I am a 2^nd year law student. I studied computer science before coming to law school. Naturally, as is the case with many other computer geeks, I am a true fan of open source software. The evolution of Linux and Firefox to what they are nowadays fascinates me. Obviously they would not have been what they are today, had it not been for the good will of the contributors, who voluntarily provided their codes.

As much as I adore open source software, it never occurred to me, that it may be rational to provide everything for free. To me it seemed that the open source software are what they are because there is a paid counterpart, which fuels the competition. I always wonder how far Linux would have gone, had Microsoft provided Windows Operating System and its source code for free? To me it seemed that a combination of free and paid counterparts would best foster creativity and innovation. This is, of course, slightly different than the , where the basic version of the software is provided for free and you have to pay to get the professional or advanced version, since both basic and professional version are provided by the same business. All this is said to give you an idea of my mindset when I started reading the book.

The book gives a history overview of successful businesses revolving around free products and services (such as Google). According to Anderson, it is possible to make lots of money and yet charge nothing if there is a free unlimited shelf space, which would accommodate an infinite number of choices. The Internet, by providing this infinite space, creates a highly competitive market. Thus, it has revolutionized the economy. To Anderson, free is not yet another option, it is the ultimate endpoint; he argues that it is possible to give away things and services for free because as technology advances production costs approach zero.

To Anderson the 20^th century's economy is different than the 21^st. The former, as Anderson states, is the "atoms economy" where things get more expensive over time and the latter is "bits economy", which refers to the online world where things get cheaper as time passes.

The first few chapters of the book, points out what most of us know already, about the ways you can make profit from free goods or services: giving away free samples, the Freemium business model, providing something for free in order to sell another thing, or by having a third party pay your costs. An example of the last form is what the publishing industry does. According to Anderson, the industry can make profit by providing free online newspapers/magazines because the advertisement pays more than the cost of production and online distribution of papers. Although, arguably, as this business strategy may not be quite profitable. For instance, James Moorney, the publisher of the Dallas Morning News stated that in order to license the content of his newspaper to the Kindle, Amazon's electronic reader, Amazon asked for 70% of the subscription revenue and the right to republish the intellectual property content to any portable device. In such a case, that the provider of the electronic reader would earn more than the provider of the expensive content.

Anderson also considers consumer psychology when choosing products. According to him, the cognitive load of having to process information affects what you choose to buy. Due to our laziness, we tend to choose things that require least thinking. Thus as Anderson argues, people will choose the free available option since when something is free you don't have to ask yourself "is this thing really worth the price?" To me it seems that Anderson fails to also include that you will choose the free option when there is a paid counterpart. However, in a scenario where everything is free then the question "is this thing worth the price?" is replaced by "is this thing worth my time?" Thus, the free economy Anderson proposes may now revolve around something else like reputation - businesses with better reputations will continue to make money and the new businesses with no reputation at all will, arguably, suffer unless they are providing something significantly better. This may be discouraging to many and thus may hinder both innovation and creativity. After all, as Anderson points out, at the end of the day there are bills to pay.

However, to Anderson, economy revolving around attention and reputation does not seem to be a threat to new businesses. He argues that, in such an economy, people will continue to provide services for free because being creative and giving away things for free makes them happy, sometimes even happier than their paid jobs.

Anderson also talks about how Internet, by allowing cheap distribution of information has revolutionized the economy. By considering Google's business model, Anderson proposes that any 21^st century business should follow Google's strategy, e.g. hand out many things for free and get paid for a few. According to Anderson, Google owes its success to combination of mass distribution of free services and paid advertisement, where advertisers create customized ads matching keywords and content and bid for the most prominent positions.

Anderson has been criticized for his reliance on Google's business strategy. Google provides an example "why free does not work"; Google's YouTube is a total money loser and Google has yet to explain how its new operating system is to generate profit. To me it seems too early to decide whether Google's strategy has been a total failure or success. Although I believe, in general, Google's success depends on the amount of free information available on the web, since more available data means better search results and more places to put advertisements, which, arguably, leads to more money from the advertisements. Although, video monetization is different from adding advertisements beside search results since, arguably, advertisers would want to be associated with popular videos. Thus more videos do not necessarily mean more money.

Furthermore, Mark Cuban, the billionaire owner of the Dallas Mavericks, that continuing to focus on free is a big mistake that growing internet companies make. "When you succeed with Free, you are going to die by Free," writes Cuban.

To further support his statement that we are moving towards the free economy, Anderson considers the media industry - how radio and television provide free or cheaper content to consumers by charging for advertisements. He points to the success of the gaming industry and Radiohead in providing certain content for free in the online world. He also considers free online books and states that as long as people want to read the books in the physical form, or "atom forms" as he calls it, they will continue to pay for it. However, I wonder how long people would continue to want to read physical books?! It is hard to compete with free, after all.

Anderson provides six reasons (borrowed from the entertainment lawyer Jonathan Handel) for the evolution to a free economy:

• Supply and demand: Due to Internet, supply is much greater than demand.
• Loss of physical form: It does not feel like stealing when you are stealing something intangible.
• Ease of access: Downloading something is easier than going to the store and buying the thing.
• The shift to ad-supported content: when things are free online what should be free in real life?
• The tech industry wants content to be free: Free content means you have to buy more products to host that content - e.g. Apple wants music to be free so sell more iPods.
• Generation Free: To the younger generation copyright seems irrelevant.

Anderson also talks about piracy in China's market. To him, it seems impossible to fight piracy. Thus, he proposes to embrace it. He argues that piracy can be beneficial to the music industry because through piracy more people will be exposed to an artist's works, and the artist can in turn make profit through personal appearances, product endorsement, concert tours, and/or charging for cell phone ring tones. Furthermore, he argues that piracy can be good for any business. According to him the fake goods that are sold in China, increase Chinese exposure to Western brands and fashion and thus in turn when people have the money to buy the real thing, they will buy it because the real thing has better quality.

Although Anderson states that free is the ultimate end point, he does say that he favours a variation of the Freemium business model because it can accommodate varying psychologies of a range of consumers. For instance, according to him, you may not have time to download music, yet you may have enough money to buy the music and you would prefer buying it.

Overall the book was an interesting read although repetitive at times and a bit one sided; throughout the book, Anderson tried to show that free will be the future because this business model worked in the past. To me, this argument does not have much merit. There are too many variables that need to be considered, each of which could contribute to the success of the free business model, and we cannot simply assume that they remain constant over time (parameters such as, economical status/situation, consumer's financial status, consumer's psychology, existence of paid counterparts, etc.). Although Anderson does not assume that these variables remain constant, he did not address the effect of their change.

Cory Doctorow, science fiction author and co-editor of the blog Boing Boing, also has stating: "to discuss "free" without taking note of the ways in which it both challenges and reinforces non-market ways of living just as much as it does for market-driven ones is to only tell half the story".

The post Free: the future of radical pricing – A book review appeared first on IPOsgoode.

In response, the Canadian Federal government has launched a modernization. The consultation started on July 20th 2009 and is to be concluded by September 13th 2009. The aim of the consultation, by Minister Clement and Minister Moore, is  "to ensure that all perspectives are taken into account in an open and transparent process, to help deliver new legislation in the Fall that is forward-looking, reflects Canadian values, and strengthens Canada's ability to compete in the global digital economy." The public discussion revolves around issues such as:

•       "How do Canada's copyright laws affect you? How should existing laws be modernized?",
•       "Based on Canadian values and interests, how should copyright changes be made in order to withstand the test of time?",
•       "What sorts of copyright changes do you believe would best foster innovation and creativity in Canada?"
•       "What sorts of copyright changes do you believe would best foster competition and investment in Canada?", and
•       "What kinds of changes would best position Canada as a leader in the global, digital economy?".

The consultation includes a series of roundtable and townhall meetings. Public voices can be heard through an online submission centre and online discussion forums. In addition the multimedia centre will provide audio and video transcripts of the townhall and roundtable meetings.

The consultation strategy has for its "by invitation only" meetings and bad timing. According to Howard Knopf, the given to stakeholders regarding the consultation may prevent certain groups who are not "full-time copyright lobbyists or copyright focussed special interest trade associations or collectives" to put forward their submissions. Furthermore, he argues that it for the government to pass legislation by Christmas, if the consultation is to be concluded by mid September.

, Canada's Research Chair in Internet and E-commerce Law at University of Ottawa, views the consultations as a "tremendous opportunity to get it right", yet he warns that "the same interests that pushed so hard for C-61 will be back and could push for even tougher laws."

Glen Bloom from Osler, Hoskin & Harcourt LLP, in an event hosted by IP Osgoode, lectured on "The Evolution of Copyright Reform in Canada". In his speech, he provided guidelines for effective copyright reform, advising that thoughtful analysis and principles supplemented with balanced voices from outsiders should drive the reform process. He favoured an approach that would move away from focusing on interest groups to drive development in the early stages. (You can see Glen Bloom's lecture here (Windows Media Video) and read a post covering the lecutre ). However, arguably it may not be possible with the current economy and political system to not involve interest groups in the early stages.

Thus, to me, the government's actions seem well intended and they do allow for Canadians to provide feedback as to what they want to see in the new copyright legislation. However, I, like others, am concerned about the short time span between the end of the consultation and the plan to pass the law by the end of this fall and the fact that the government may be rushed to make its decisions.

The post Canada's Public Consultation on Copyright appeared first on IPOsgoode.

Canada

A recent debate in Canada revolves around Internet Service Providers (ISPs) use of Deep Packet Inspections (DPI) technology. DPI provides a mechanism for scanning the content of every message sent over the Internet. DPI can go as deep as deep reading the message content, or it can be shallow, scanning only message headers. It is to the third party who opens and reads a letter sent by mail before the envelope reaches its destination.

Canadian Radio-television Telecommunication Commission (CRTC) is holding hearings in Gatineau, Quebec, to examine whether the way ISPs, such as Bell and Rogers, manage and manipulate traffic on the Internet is consistent with the . One common strategy used by ISPs is DPI throttling. By scanning messages ISPs can identify the types of messages that is sent over the net and prioritize them. This allows the ISPs to block or significantly slow down certain message transmission. , Bell use of DPI throttling technique is notable in case of peer-2-peer networking software such as bit-torrent.

The opponents of DPI technology criticize it because it fails to provide net neutrality, a principal that states every message sent over the Internet should be treated equally and with no interference from the ISPs. For them, it seems, DPI does not the Telecommunication Act since, by reading the content of every message sent, DPI intrudes on personal privacy. (S. 7(i) of the act defines as its objective the protection of the privacy of persons)
arguments against the current practices are: (See also and for more detailed discussions):

• The anti competitive nature of current practices: smaller ISPs who buy bandwidth from Bell and resell it are forced to follow Bell's policy regarding DPI throttling, for instance.
• ISPs should not act as gatekeepers to what people download
• The discriminatory nature of current practices against downloading of certain types of data
• Current practices dissuade investment, thereby reducing consumer choice
• They hinder freedom of expression

One issue that concerns me, is the combination of DPI technology with the recently introduced legislative package called the , which forces ISPs to disclose subscriber information, including transmission data, to the police. If the ISPs are to be equipped with DPI and the legislative package is enacted, then how much intrusion are we looking at? True that the government said the package does not allow access to content of a private communication without judicial order, but with ISPs equipped with DPI that information would be readily available.

However, Sandvine CEO, a company that provides ISPs with traffic controlling mechanisms like DPIs,  "the idea of net neutrality will be laughable in few years". For him Internet monitoring is a necessity. He calls for more competition to better regulate Internet traffic. "If Johnny comes home and he's scoring better on Halo at Bobby's house because Bobby has a different ISP, and that's the reason, Johnny is going to say, "Daddy, can we switch to Roggers? or whatever". When asked how deep is deep for DPIs, he said it goes as deep as it needs to, "if we limit how deep we are going, the malicious writer will go one byte deeper".

Iran

The aftermath highlights the power of the Iranian government in terms of limiting access to online content. According to , the Iranian regime has "one of the world's most sophisticated mechanisms" for restricting Internet use. Estimates from the press-freedom group Reporters Without Borders indicates that in the past few years the government has blocked approximately websites, including news sites, file sharing sites like Youtube, and social networking sites like facebook.

Furthermore, as WSJ reports, the Iranian government is equipped with Deep Packet Inspection (DPI) tools, which further allows for restricting communications. Since many web-based messages contain sensitive private information, for instance people's name or their location, the government uses this tool to track down protestors.

It is true that the government cannot completely monitor the Internet, as there are tools like that allow people to bypass filters, however, as reported, Internet access has in Iran, after the election.

The censorship in Iran started as a mean to stop viewing pornography, however, it seems that its role has evolved to monitoring and filtering political contents. For a private citizen government activities violate freedom of speech and are intrusive. However, if the online activities are regarded anti-Islamic and western propaganda then arguably the government is able to justify its action under the Iranian constitution (). Article 25 of the constitution forbids eavesdropping and censorship, unless prescribed by law. The preamble defines the mass media as "a forum for healthy encounter of different ideas which should strictly refrain from diffusion and propagation of destructive and anti-Islamic practices".

China

Another frontier with respect to monitoring and filtering online content is China. , reports from Xinjiang suggest some Internet and mobile phone services have been blocked during the ethnic clashes. However, Analysts are optimistic that dedicated Internet users will find a way to bypass the government's so-called Great Firewall of China, which it uses to block unwanted Internet material. The Great Firewall of China is, too, equipped with DPIs. However, according to the WSJ, unlike Iran, the use of DPIs is decentralized and is at the level of Internet Service Providers (ISPs), which requires the cooperation of all the ISPs for the Great Firewall to reach its full capabilities.

In addition to the Great Firewall, China is to require PC makers to preinstall Green Dam Youth Escort software, which filters pornography. However, experts warn that the software is capable of restricting some online political contents. Although, enforcing the requirement has been delayed, the Chinese Minister has indicated that the delay is only temporary.

The post Analyzing Net Monitoring/Filtering: Canada, Iran, China appeared first on IPOsgoode.

According to the  the proposal is both "constructive and sensible", and the Working Group has not shied away from problems.

Patents County Court (PCC):

Established in 1990 by Parliament, the PCC intends to provide cheaper alternatives for simpler IP cases to the Patents Court of the . The aim of the PCC is to meet the needs of small and medium sized enterprises. Although the name of the court is Patents County Court, this court also addresses cases regarding copyrights and trademarks. There are no restrictions on the complexity of cases that can be heard at this court or the amount of damages and costs awarded. Furthermore, cases can be transferred from the High Court to PCC and vice versa.

Although PCC was created with good intentions, it failed to meet its goals. IP litigations at PCC are both expensive and time consuming. According to the proposals for reform, there are numerous reasons for this. Firstly, the procedure of PCC is identical to the High Court and thus is costly. Secondly, since there are no limits on the awarded costs many enterprises, especially small ones, settle actions out of court due to fear of having to meet "substantial, and unpredictable, adverse cost awards if unsuccessful". Thus, it seems that the current structure and procedure of PCC denies small enterprises access to justice. Thirdly, long battles over transfer of forum makes litigation both costly and time consuming.��     

The Proposal:

To address the shortcomings of the system, the proposal aims at differentiating the PCC from the High Court and tries to provide incentives to stop forum shopping. The latter is done by limiting the costs and damages awarded. The proposal includes the following changes in procedure and cost recovery mechanisms:

• to require parties to present their cases by sequential written arguments;
• to impose robust case management;
• to permit or require disclosure, experiments, factual evidence, expert evidence, and cross-examination only where a cost-benefit test is satisfied, namely when the benefit of further material in terms of its value in resolving the issue justify its costs;
• to limit trials to one or at most two days;
• to limit recovery of costs to £50,000 in patent infringement actions and £25,000 in other IP cases;
• to limit available financial remedies to £250,000, this limit can be increased if needed;
• to change the name of PCC to Intellectual Property County Court, since PCC's operation is not limited to patents.

Reform in Canada:

Since Canada like the UK is a signatory to Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement, , it is obligated to provide effective protection for intellectual property rights. However, the time consuming and expensive nature of the current IP litigations in Canada could, arguably, be barriers to meeting this obligation. Furthermore, similar to England and Wales, the costly IP litigations may also prevent some enterprises from having access to justice. Thus, Canada may also need to reform its IP litigation system. However, adopting the exact same proposed reforms may not be appropriate in Canada as there are differences between the legal procedures and damages awarded. For instance, in Canada the provincial courts and the Federal Court have jurisdiction over patent disputes. However, the of patent litigation is heard at the Federal Court. Thus, it seems that forum shopping may not be a major problem in Canada.

The post Proposals to Reform the Patents County Court (PCC) appeared first on IPOsgoode.

A treaty to improve access to copyrighted materials for the visually impaired was recently introduced at World Intellectual Property Organization (WIPO) by Brazil, Ecuador, and Paraguay. The treaty received no direct objections, however, different opinions were expressed as to how to treat the proposal and other limitations and exceptions in the future.

For many this seems like a from 1982 when WIPO and UNESCO considered possibilities of using exceptions under the Berne Convention to expand access to copyrighted work for visually and auditory impaired persons. The debates are similar with respect to the issues discussed and parties involved in the negotiations. The only difference seems to be the current emphasis on the international transfer of works.

The Treaty

The aims at providing flexibilities in copyright laws that are needed to ensure full and equal access to information for persons who are visually impaired or otherwise disabled in terms of reading copyrighted works, in order to enable them to effectively participate in society on an equal basis.

The World Health Organization (WHO) indicates that there are more than 161 million visually impaired persons around the world. More than 90% live in developing countries.�� According to  it is estimated that at most 5% of published materials are globally available for visually impaired persons. Furthermore, it is reported that this figure is significantly lower in developing countries due to global copyright restrictions regulating the import and export of copyrighted works. However, there may be other factors contributing to the scarcity of formatted materials, for example, a lack of available resources in developing countries to produce and distribute formatted materials could be one factor.

In order to address the shortage of materials, the proposed treaty permits non-profit organizations to produce accessible formats of copyrighted works without the authorization of the right holder. The produced materials can be distributed by any means, for the benefit of the visually impaired persons. The treaty, by making possible for libraries and service organisations to share content, allows cross-border import and export and has provisions regarding “notice to rights owners and remuneration for commercial reproduction”, “a database on availability of works”, and on “orphan works”.

Views Regarding the Treaty

The proposed treaty is by a large number of civil society NGOs, the World Blind Union, the National Federation of the Blind in the US, the International DAISY Consortium, Recording for the Blind & Dyslexic (RFB&D), Bookshare.Org, and groups representing persons with reading disabilities all around the world. Furthermore, developing countries supported advancing work on the proposal.

The treaty was opposed by many developed countries.��According to , Director of Knowledge Ecology International, the developed countries' resistance to the treaty stems from the lobbying of a large group of publishers. The publishers oppose the treaty since they see it as a "paradigm shift, where the treaty would protect consumer interests, rather than expanding the rights of copyright owners".

Although the treaty was distributed last fall, Germany, (developed countries), stated that “deliberations regarding any instrument would be premature” as they are still in the fact finding and evaluation stage.

According to the , providing accessible formats of copyrighted material to the visually impaired is a challenging task and includes addressing a set of complex and intersecting factors, including application of copyright and disability laws and economical factors.

Canada supported a participant-based solution allowing multiple approaches for domestic production of accessible formats, which would include exceptions or compulsory licences. Canada stated that this would not refrain international exchange of accessible materials for visually impaired, however further discussions are necessary to address the issues regarding international transfer. It seems that Canada may be trying to block an agreement to discuss the treaty proposal at the next SCCR. Some Canadian authors, such as Cory Doctorow, have requested Canada to change its and support such discussions.

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The Federal court's decision in this case was in line with previous decisions made regarding counterfeit goods in cases such as , , and . This blog reported on the Louis Vuitton cases.

In this case, Microsoft Corporation was entitled to a default judgment. Although defendants' businesses have been dissolved, Microsoft was awarded statutory damages, punitive damages - amounting to $200,000 for copyright infringement -, $50,000 solicitor/client costs, and was given a permanent injunction against the defendants. Both retail stores and their named employees were liable for damages.

This case is noteworthy since it affirms Canada's stand regarding counterfeit products. It is interesting, for owners of intellectual property rights, to analyze the factors that led to the Court's decision and the damages awarded.

Default judgment:

On a motion for default judgment, where no Statement of Defence has been filed, Plaintiff should establish the following two criteria:

1.��    Plaintiff should show that the Defendants were served with a Statement of Claim and that they have not filed a defence within the deadline specified in .��

2.��    Plaintiff should put forward evidence that allows the court to find on a balance of probabilities that infringement has occurred within the meaning of the and the .

Criterion 1:

In this case, given the provided affidavits, the Court was satisfied that the defendants were served. Furthermore no Statement of defence was ever filed with the court within the deadline. Thus, the first criterion was met.

Criterion 2:

Copyright gives the owner of a literary work the exclusive right to produce or reproduce the work. of the Copyright Act defines infringement as doing anything reserved to the owner.�� It is also an infringement for a person to offer for sale, sell or distribute copies of a work that the person knows infringes copyright.�� A registered trade-mark in Canada gives the owner the sole right to use the mark throughout Canada for specified wares and services.

According to Microsoft's private investigator, there were 15 occasions where the defendants sold unauthorized copies of Microsoft software, containing Microsoft marks. This was sufficient to establish that on a balance of probabilities the defendants infringed on Microsoft copyrights and trade-marks.

Since both the criteria were satisfied and the timeline for filing a Statement of Defence had expired Microsoft was entitled to a default judgment pursuant to .

Statutory and Punitive Damages:

Statutory Damages:

, allows the copyright owner to seek statutory damages between the range of $500 and $20,000. assist the court in determining the amount.

(a) the good faith or bad faith of the defendant;

(b) the conduct of the parties before and during the proceedings; and

(c) the need to deter other infringements of the copyright in question.

In this case the defendants demonstrated bad faith. As stated by the private investigator, the defendants were well aware that their activities were illegal. They were previously put on a notice regarding the infringing nature of their activities. In addition, defendant corporations were dissolved voluntarily after Microsoft commenced its action. The Statement of Dissolution falsely stated that there were no proceedings in any court against the corporations. These factors led the court to decide that the defendant activities showed total disregard not only for Microsoft's copyright and trademark rights, but also for the Court and its processes.

Considering the factors present in this case, and in light of relevant case law (i.e. the cited Louis Vuitton and Microsoft cases), it was concluded that the damages awarded needed to be sufficiently high to deter defendants from future infringements. The amount set in this case was $10,000 for each infringement, which added up to $150,000 for the 15 infringements.      

Punitive Damages:

The fact that defendants' businesses had been dissolved did not stop the court from awarding punitive damages. According to sections 242 and 243 of the Business Corporation Act, the action against the defendant can be continued as if the corporation had not been dissolved. Thus, any property that would have been available to satisfy the judgment had the corporation not been dissolved remains available.

Due to the fact that the defendants demonstrated bad faith, Microsoft was awarded punitive damages amounting to $50,000 against all the defendants pursuant to .

Permanent Injunction:

Microsoft obtained a permanent injunction against all the defendants because the evidence advanced by Microsoft was suggestive of a continuing pattern of infringement.

The post Canada says no to counterfeiting: Microsoft Corporation v. PC Village appeared first on IPOsgoode.