A recent case from Texas demonstrates how the doctrine of “inevitable disclosure” can prevent departing employees from misappropriating an employer’s trade secrets and other valuable confidential information. In Brink’s Inc. v. Patrick, Case No. 3:14-cv-775-B (N.D. Tex., 6/24/14), the Court prohibited a departing employee from taking a job with his employer’s direct competitor on the grounds that, if he did so, he would inevitably disclose his employer’s proprietary confidential information.
Shift Law Blog
Recent years have seen an increase in trade secret theft and misappropriation of confidential business information throughout North America. This is probably due to a number of factors, including increased employee mobility, corporate downsizing and the growing recognition of the value and portability of confidential information. Departing employees may walk away with proprietary information on termination or misappropriate it in anticipation of being terminated to enhance their value to other prospective employers or to compete with their former employer. Whatever the reason, it is more important than ever for employers to identify and protect their confidential business information (“CBI” for short).
Canada’s Trade-marks Act is about to undergo its most significant amendments since it was first enacted in 1953. Even the spelling of “trade-mark” will change (to “trademark”).
Trademark practitioners and their clients should take note of the proposed changes (outlined below) as some will be relevant to trademark selection and prosecution strategy and enforcement decisions that should be made before the changes come into effect.
I recently argued a summary judgment motion on an interesting and somewhat novel issue relating to domain names: can someone other than the registrant of a domain name be its lawful owner - own title in it – where there is no evidence that the domain name was registered in bad faith or that it infringes someone else’s trade-mark? In Mold.ca Inc. v. Moldservices.ca Inc., the Ontario Superior Court answered this affirmatively – in our client's favour. The decision has received much attention in the media.
Our friends at Ink Tank posted a great blog the other day about how other businesses can “tread” on your brand – knowingly or not - from “borrowing” distinctive elements of your brand, to unwelcome parodying to blatantly infringing your trade-mark.
All of these things can do harm to your brand and to your business. And they can do so in different ways, some more obvious than others. Obviously, if a direct competitor is using a brand name or a logo that is very similar to yours in order to appropriate your goodwill and your customers, that’s going to be harmful (it can result in a direct loss of sales). Less obvious is the harm that can be done to your brand if a non-competitor – say, someone in a different part of the country or in a slightly different line of business – adopts a confusingly similar brand name or “borrows” the distinctive elements of your brand.
Understanding how your brand can be damaged when others “tread” on it is important to knowing when you should consider legal action. Enforcing your trade-mark rights (or “policing” as it’s sometimes called) is critical to protecting your brand. In fact, if you don’t police your brand, or if you do it ineffectively, you are not only jeopardizing the strength and integrity of your brand, but you are also jeopardizing your legal rights to protect it at all – that is, the ability to stop others from ripping it off.
The Ontario Superior Court’s recent decision in Rains v. Molea allegations of copyright infringement in a series of paintings of crumpled paper, is a fun read for an IP lawyer. And while the context is conceptual art the decision is likely to be cited in other contexts in the future – like cases dealing with copyright in software and reality TV shows.
The Court had to deal with some tricky issues like: Where do you draw the line between idea and expression in conceptual works? When is a “series” of works a compilation such that copyright protects the whole as well as the parts? Can copyright exist in a work that is randomly generated? Is a likelihood of confusion as to who created the work (the test for trade-mark infringement) relevant in determining copyright infringement?
When a photographer “tweets” her photographs on Twitter or a videographer posts his videos on Vimeo or YouTube, the works become available to be used by anyone in the world, right? After all, isn’t sharing the whole point of social media? In a legal sense, are the photographer and videographer not granting to the world an implied license to use their work by using social media to exhibit them?
That was essentially the argument advanced – unsuccessfully – on behalf of Agence France Presse (“AFP”) in Agence France Presse v. Morel, 2011 WL 147718 (S.D.N.Y.). The case, in which summary judgment was granted earlier this year, has garnered much interest. It is one of the only cases to address if, when and how user generated online content can be used for commercial purposes by third parties.
The facts of the case are as follows. Daniel Morel, the defendant and counterclaimant, was a photojournalist who took several iconic photographs of the aftermath of the 2010 earthquake in Haiti and then posted the photos on his Twitter account. Soon after he posted them, AFP obtained them from a third party, transmitted them to Getty Images which, in turn, then “licensed” the photos to news agencies like CNN. Morel accused the news agencies, Getty and AFP of infringing his copyright in the photos. AFP pre-emptively brought an action for a declaratory judgment that it had not infringed copyright, claiming that Morel had granted them an implied license in the photos when he posted them on Twitter. Morel counterclaimed for copyright infringement against AFP, brought third party claims against the news agencies and others and then sought summary judgment.
On February 13, 2013, the Supreme Court of Canada (SCC) heard the appeal of the now (in)famous copyright case of Cinar Corporation et al. v Robinson et al. [Cinar], concerning the infringement of one Robinson castaway (Robinson Curiosité) by another (Robinson Sucroë). The case has steadily worked itself up from the Quebec trial division, with the appeal court's decision (France Animation v. Robinson, 2011 QCCA 1361, [France Animation]) now being contested before the nation's highest court. The SCC has yet to release what is sure to be a rather interesting judgment, given that and lower courts have themselves engaged in some skilful maneuvering around issues that have extended beyond the realms of copyright law.
Recently, I’ve been following with interest two copyright infringement lawsuits in the U.S. that have been brought by regional MLSs (Multiple Listing Services) against American Home Realty Network, the operator of the real estate search engine and referral site, NeighborCity.com. The cases have been receiving a lot of attention south of the border, including in a recent blog post by intellectual property law professor, Eric Goldman, on how Anti-Scraping Lawsuits Are Going Crazy in the Real Estate Industry.
Like the Century 21 v. Zoocasa case here in Canada a couple of years ago, both of these cases address whether and how compilers of commercially valuable information (in all three cases, residential real estate listings) can protect it from being “scraped” from their websites by data aggregators and reproduced on competing websites. It is a longstanding issue in the real estate industry, particularly in Canada where the Canadian Real Estate Association has drawn the wrath of the Competition Bureau over its efforts to limit public access to MLS databases.
Registering and using a domain name that is similar to a competitor’s for the sole purpose of redirecting traffic to one’s website is a dirty practice. But like many other internet offenses, it does not always fit within traditional causes of action, including trade mark infringement or its common law cousin, passing off.
Dentec Safety Specialists Inc. v. Degil Saftety Products Inc., 2012 ONSC 4721, is the latest Canadian authority to consider when the use of a domain name exclusively for “redirect” purposes will constitute passing off. It almost certainly becomes the leading authority, among very few, on “the tort of domain name passing off” in Canada.
Every business, big or small, established or start-up, has intellectual property (IP). Business names, domain names, websites, customer lists, marketing plans are all types of IP. If managed properly, these can become valuable assets that can be licensed to others, sold or even securitized for loans – like inventory or equipment, but often more valuable. If it’s not managed properly, however, IP can depreciate quickly, evaporate or walk out the door. It can also become a liability if it turns out to belong to someone else.
The following are six ways in which most small businesses engage with, or ought to engage with, IP:
The new Copyright Modernization Act introduces some very significant changes to copyright law in Canada. Most, but not all of these changes, relate to digital media and the Internet and are intended to bring Canada in line with international treaties. Some of the major changes include: (a) prohibiting the removal, tampering with or circumvention of “digital locks” embedded in certain digital media to restrict unauthorized downloading or copying; (b) permitting reproduction of copyrighted works, for personal use, into another format (format shifting), for later use (time shifting) or for back-up purposes; (c) permitting reproduction of copyrighted works for the purposes of satire, parody and online educational purposes; (d) permitting the use of existing copyrighted works to create new, non-commercial “user generated content” (aka “mash-ups”); (e) entitling photographers to the same presumptions of ownership as other creators enjoys with respect to their works; (f) providing all copyright owners with the right to control how their works are made available online; (g) lowering statutory damages to $100 - $5000 for non-commercial copyright infringement (from the previous range of $500 - $20,000).
When it is thought of at all in the context of IP, confidential information is often thought of as things like secret recipes, codes or algorithms – less often as internal business processes, marketing strategies, supplier and customer lists and all that other critical information that a company and its employees acquire over time, through considerable effort and trial and error, that isn’t generally known outside of the company and that gives the company an edge over the competition. This kind of information is often called confidential business information or “CBI”.
Every company, big or small, established or start-up, has CBI. It can be one of the company’s most valuable assets. But if it isn’t identified and adequately protected, its value will depreciate quickly or, worse, it will simply walk out the door.
On May 12, 2012, I spoke at the second annual lawTechCamp at the University of Toronto on "Intellectual Property Rights in Social Media". I talked about how the rapid growth of social media is challenging some traditional conceptions of IP and the ability of companies to protect and control their IP in this still relatively new frontier. Some of the issues I addressed were:
- What kinds of IP are created and used in social media (e.g. usernames, content and "followers" or "friends")?
- Who owns rights in that IP?
- Are traditional IP laws adequately flexible to deal with issues arising from social media?
Here is copy of my presentation at lawTechcamp : IP Rights in Social Media