On August 6, 2020, Trump issued , prohibiting the use of TikTok in the U.S. after September 20, 2020. The order stated that TikTok collects sensitive personal data from Americans that could be used by the Chinese government and thus poses significant security threats to the U.S. On August 14, Trump issued , demanding that ByteDance “divest all interests and rights” in TikTok’s American operations. Trump’s executive orders spurred to purchase TikTok’s operations in the U.S.

The fight over TikTok’s ownership raises at least two legal concerns for Canada to consider. First, the issue of the state’s regulatory power and interventions by the government due to national security concerns is noteworthy. As two MIT researchers , internet-connected products that collect personal data across borders are ubiquitous. Invoking national security concerns as the main reason for banning  trans-border products could quickly escalate into , which would not be in any country’s (or company’s) interest.

Due process is also a concern in this case. On August 24, 2020—soon after Trump’s executive order for divestiture—TikTok a lawsuit against the Trump administration, that its executive orders are unconstitutional. Notwithstanding its legal merits, the lawsuit alerts us to the necessity of scrutinizing a government’s regulatory discretion. On February 10, 2021, the Biden administration . Although the Biden administration did not completely call off political pressures on TikTok when it removed the immediate divestiture order imposed by the Trump administration, it gave the company some breathing room.

TikTok’s lawsuit against the Trump administration brings forth an important question about the regulatory relationship between the government and technology companies. Should a government  be allowed to unilaterally evict a company out of its market without due process? Should Canada follow the model set by the former U.S. administration or embrace a different regulatory scheme?

The second important issue in this story is the rights of TikTok users. For many, TikTok has become more than a lighthearted means of entertainment. The platform has provided income for many users. India, a geopolitical rival of China, where TikTok also happened to be wildly popular, on June 29, 2020. On March 11, 2021, Pakistan banned TikTok for the second time on the grounds that . These bans bring forth concerns about freedom of speech infringements. India’s ban has also cost many Indian citizens, whose self-made videos attracted tens of thousands of views, . The question is, should governments be held liable for losses of income resulting from their banning of a popular app such as TikTok?

Canada may have to confront similar questions, especially regarding technological products made by Chinese companies. It is not too early to start identifying the best legal tools to regulate Canada’s technology market, .

Written by Jingcai Ying, IPilogue Contributing Writer and J.D. student at Osgoode Hall Law School (Class of 2023).

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On September 22, 2011, the European Court of Justice handed down on a series of trade mark related questions spurred by the long running dispute between international flower delivery network Interflora and English retailer Marks and Spencer. The case stemmed from a complaint raised by Interflora that Marks and Spencer used Google’s “AdWords” service to create internet advertisements targeting keywords such as ‘Interflora’, ‘Interflora Flowers’, and ‘Interflora.com’.

This use of Interflora related keywords by Marks and Spencer meant that when users visited sites where the name Interflora appeared, ads for Marks and Spencer’s own flower delivery services would be displayed. Interflora Inc. owns a trade mark on the word ‘Interflora’, and as a result, brought an action against Marks and Spencer alleging that their use of words identical to Interflora’s trade mark is unlawful.

The High Court of Justice (England and Wales), Chancery Division, which heard Interflora’s case for trade mark infringement referred questions to the Court of Justice on a series of issues related to the use of keywords identical to a trade mark, without the consent of the trade mark proprietor, by a competitor within an internet referencing service. It is important to note that the European Court of Justice’s decision does not decide the case between Interflora and Marks and Spencer, it simply clarifies the law for the High Courts of each of Europe’s member states.

As outlined in a by the court, because the use of a keyword can only be prevented by a trade mark owner if it is liable to have an adverse effect on one of the functions of that mark, each of the functions of a trade mark were examined and outlined in the course of considering the case. These functions included the origin-indicating function, the advertising function, and for the first time, the investment function of a trade mark.

In dealing with the origin-indicating function of a trade mark, the court followed its decision in Google France (). The Google France case was previously covered by the IPilogue here. In Google France, the court observed that the test to determine whether a trade mark has been infringed should consist of an evaluation of whether a reasonably well informed and observant internet user is able, based on general market knowledge, to determine whether the goods or services referred to by an advertisement originate from the proprietor of the trade mark. Applied to the Interflora v Marks and Spencer case, this element of the trade mark evaluation becomes a question of fact for the lower courts related to whether Marks and Spencer’s advertisement enabled an internet user to recognize whether or not Marks and Spencer is a member of the Interflora network.

Considering the advertising function of a trade mark, the court ruled that a rise in the cost-per-click of advertising online due to a competitor’s use of a trade mark keyword was not sufficient in every case to conclude that the advertising function of a company’s trade mark had been adversely affected. The court also commented that there is nothing wrong with a company using an internet advertising service to create competition by offering alternatives to a particular product of service; however, the trade mark owner must not be prevented from using their mark to attract customers.

The European Court of Justice recognized the investment function of a trade mark for the first time in this judgement. The court ruled that the investment function of a trade mark is adversely affected when use of the mark by a competitor substantially interferes with the owner’s ability to create or preserve a reputation capable of attracting customers and retaining loyalty with the trade mark. This consideration of the investment function of a trade mark was followed by a clarification of the scope of “dilution” (detracting from the distinctive character of a trade mark) and “free-riding” (taking unfair advantage of the distinctive character of a trade mark). The court ruled that choosing to duplicate a trade mark without due cause when selecting keywords for internet advertising may be construed as “free-riding”; however, the court made clear that this was intended to deal with cases where internet advertisers were selling replica and imitation goods by using the trade mark as a keyword to attract potential customers.

Ultimately, the European Court of Justice ruled that the decision in this case would come down to a finding of fact by lower courts as to whether or not Marks and Spencer adversely affected one of Interflora’s trade mark’s functions. However, as re-iterated in the court’s , “Where [an] advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward an alternative to the goods or services of the proprietor of the trade mark with a reputation – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution of the trade mark or detriment to its repute, and without adversely affecting the functions of the trade mark – such use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned.”

It will be interesting to see how the High Court in the UK decides the case of Interflora v Marks and Spencer based on this ruling.

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