Canada: Quarterly Copyright Blog #5

Last Updated: May 30 2019
Article by John McKeown

For those who are interested in recent cases and developments relating to copyright and related matters there have been a number of developments since the last entry. They are discussed below:

  • On October 29, 2018 the government tabled the Budget Implementation Act, 2018. The Government has said that the bill was intended to implement a 2017 Budget commitment to implement practical and important reforms to the Canadian IP system.

    Division 7 of the bill is entitled Intellectual Property Strategy. Subdivision C relates to the notice and notice regime and is intended to stop abuse relating to the content of claimed infringement notices. A notice of claimed infringement shall not contain an offer to settle the claimed infringement; a request or demand for payment or for personal information; a reference, including by way of hyperlink, to such an offer, request or demand; and other information to be prescribed.

    Subdivision E amends the Bankruptcy and Insolvency Act to provide that intellectual property users may preserve their usage rights when intellectual property rights are sold or disposed of in an insolvency proceeding or when an agreement relating to such property rights is disclaimed or resiliated in such a proceeding. It also amends the Companies' Creditors Arrangement Act to provide that intellectual property users may preserve their usage rights when intellectual property rights are sold or disposed of.

    Subdivision H relates to the reform of the Copyright Board as a result of consultations launched in August 2017. The Act has been amended to modernize the legislative framework relating to the Copyright Board to improve the timeliness and clarity of its proceedings and decision-making processes.

    The bill has received Royal Assent and the amendment relating to notices of claimed infringement was brought into force December 13, 2018.

  • In Levola Hengelo BV v. Smilde Foods BV, (13 November 2018) Case C 310/17 the Court of Justice for the European Union considered the plaintiff's claim that copyright subsisted in the taste a food product consisting of a spreadable dip containing cream cheese and fresh herbs. The court observed that the taste of a food product could be protected by copyright only if such a taste could be classified as a "work". The court said the subject matter protected by copyright must be expressed in a manner which made it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form. The taste of a food product could not be pinned down with precision and objectivity. The taste of a food product is identified essentially on the basis of taste sensations and experiences, which are subjective and variable since they depend, inter alia, on factors particular to the person tasting the product concerned, such as age, food preferences and consumption habits and on the environment or context in which the product is consumed. In addition, it was not possible in the current state of scientific development to achieve by technical means a precise and objective identification of the taste of a food product which enabled it to be distinguished from the taste of other products of the same kind. As a result, the taste of a food product could not be classified as a 'work'.
  • In Pyrrha Designs Inc. v. Plum and Posey Inc. 2019 FC 129 it was said that in determining whether there is a fixed expression of an idea, a court must consider whether a work has distinct features and appearance that were the product of an author's skill and judgment – similar to the test for originality. The distinct expression of an idea is necessary because copyright cannot exist in a generic idea or method. While the plaintiff succeeded on this issue, the judge applied a relatively higher threshold of similarity given the simplicity of the works in issue and in order to avoid limiting the use of designs and techniques in the public domain. As a result, it was concluded that none of the defendant's works copied a substantial part of the skill and judgment in the plaintiff's designs.
  • In P.S. Knight Co. Ltd. v. Canadian Standards Association 2018 FCA 222 the ownership of the copyright in the 2015 version of the CSA Electrical Code was in issue. The evidence before the Federal Court established that the amendments to the Code that were included in the 2015 version of the Code were developed by a committee set up under the auspices of the CSA. The members of that committee as well as representatives of the CSA expended time and effort to produce the 2015 version of the Code. Members of the committee included two CSA employees as well as several representatives of provincial, territorial and municipal electrical inspection authorities, certain federal departments and agencies and industry, labour and educational associations. The committee members who were not employed by the CSA had signed agreements, assigning to the CSA the copyright in the amendments developed by the committee that were incorporated into the 2015 version of the Code. The trial judge found that CSA was the owner of the copyright in the 2015 version of the Code.
  • On appeal the Federal Court of Appeal said that the fact that the amendments to the 2015 CSA Code were developed by committee did not prevent the 2015 version of the Code from being subject to copyright as the Act extends copyright to compilations. A compilation of literary works includes "a work resulting from the selection or arrangement of data" and "fact that a work is included in a compilation does not decrease or otherwise affect the protection conferred by the(sic) Act in respect of the copyright in the work."

    Although regulations share certain characteristics with statutes, orders-in-council and proclamations, they are a new legal concept that did not exist when the Crown's right to print and publish was recognized at common law and therefore fall outside the scope of the Crown's common law right. The prerogative should not be regarded as any wider today than it was three centuries ago. Further, the incorporation by reference of a standard into legislation is an entirely new legal concept, not a mere technological development and documents so incorporated cannot become subject to the Crown's common law right without considerably broadening it.

    The term "person", as defined by subsection 35(1) of the Interpretation Act, "includes a corporation" and if a corporation's name is printed on the work it is presumed by virtue of paragraph 34.1(2)(b) to be the owner of the copyright in the Code. The term "author" is not defined in the Act but refers to a natural person. A corporation cannot benefit from the presumption in paragraph 34.1(2)(a) of the Act.

    An application for leave to appeal this decision to the Supreme Court of Canada is pending.

  • In Shaver-Kudell Manufacturing Inc. v. Knight Manufacturing Inc. 2018 ONSC 5206 it was found that confidential information can include special knowledge about the employer's customers and knowledge of the employer's policies and procedures that would make it possible to undercut the former employer and induce the customers to change to the new supplier as well as customer lists. The courts have found a misuse of confidential information not only when an employee departed with a copy of the customer list, but also where an employee memorized the list.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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